KT Fintech Blog

The KT Fintech Blog provides insights into how the emergence of fintech is fundamentally changing virtually every aspect of the financial services landscape and how traditional businesses navigate this rapidly evolving industry.

Category: Fintech Tools

Posted on Wednesday, December 13 2017 at 8:25 am by
Where Do Consumers Fit in the Fintech Stack?

Written by Eamonn K. Moran

Federal Reserve Board Governor Lael Brainard recently delivered a speech entitled “Where Do Consumers Fit in the Fintech Stack?” at “FinTech Risks and Opportunities: An Interdisciplinary Approach,” a conference sponsored by the University of Michigan.

Governor Brainard likened the new generation of fintech tools to the “financial equivalent of an autopilot.” According to Brainard, “[the powerful new fintech tools represent the convergence of numerous advances in research and technology – ranging from new insights into consumer decision making to a revolution in available data, cloud computing, and artificial intelligence (AI). They operate by guiding consumers through complex decisions by offering new ways of looking at a consumer’s overall financial picture or simplifying choices, for example with behavioral nudges.”

While she highlighted how fintech tools offer the potential to help consumers manage their “increasingly complicated financial lives,” she cautioned about the risks posed that will need to be carefully managed as the marketplace matures. “Consumers need to know and decide who they are contracting with, what data of theirs is being used by whom and for what purpose, how to revoke data access and delete stored data, and how to seek relief if things go wrong. In short, consumers should remain in control of the data they provide. In addition, consumers should receive clear disclosure of the factors that are reflected in the recommendations they receive. If these issues can be appropriately addressed, the new fintech capabilities have enormous potential to deliver analytically grounded financial services and simplified choices, tailored to the consumers’ needs and preferences, and accessible via their smartphones,” stated Brainard.

Brainard noted that consumers face complex financial choices. Given the complexity and importance of these decisions, she finds it encouraging to see the fast-growing development of “advanced, technology-enabled tools to help consumers navigate the complex issues in their financial lives.” She stated that these tools “build on important advances in our understanding of consumer financial behavior and the applications, or ‘app,’ ecosystem.” Read the rest of this entry »