US banking regulators must accelerate efforts to address the risks posed by fintech companies to the banking sector which could be “eviscerated” by these innovative new players, St. Louis Fed President James Bullard said on Thursday.
Growing competition from fintech players has become the “number one issue” for large financial firms and regulators are “fighting the last war” by focusing on tweaks to post-crisis financial rules, Bullard told Reuters in an interview.
“We need to speed up our consideration of the fintech issues and think harder about what is the regulatory environment that is going to be appropriate. I think we have been complacent so far,” Bullard said.
“That is the battleground for the next ten years. It is not the same as the battleground for the previous ten years.”
Technology-driven non-bank firms are increasingly moving into the traditional banking space offering services such as peer-to-peer lending, crowdfunding and robo-advisory.