Simplified Account Planning - Stay Ahead of Competition with SmartKarrot
Intense competition demands a strategic approach to account planning. Learn how SmartKarrot simplifies the process, tracks progress, and ensures collaboration for customer success. Break down objectives, capture customer priorities, monitor financial metrics, and identify risks early with SmartKarrot's effective account planning solution.
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Fintech and the Innovation Trilemma Georgetown Law Journal (forthcoming 2018) Chris Brummer & Yesha Yadav University of Fordham Business School March 2018
Fintech and Regulatory Trade-Offs Regulators confront difficult trade-offs in regulating financial innovation. Financial innovation can bring benefits: lower costs, inclusion, consumer choice. But they also come with familiar risks: are innovations safe for users? Will these innovations harm market integrity? More broadly, how should regulators develop rules and enforcement practices to capture the benefits but limit the risks of innovation? Simplicity v. Complexity.
The Trilemma The Trilemma posits that in seeking to balance openness to innovation, market integrity and rules simplicity, regulators can only effectively achieve two goals.
What is New about Fintech? Fintech broadly refers to the use of computerized processes to create efficiencies in the delivery of financial services and technology (Christophe Williams). While fintech encompasses a range of new innovations, most appear characterized by their reliance on: (i) algorithms and AI; (ii) reliance on big data; and (iii) disintermediation by smaller, non-traditional firms. These three features, combined, create new challenges for policymakers. This suggests that fintech is different from past eras of innovation.
Fintech through the Trilemma Fintech sharpens the trade-offs that regulators face in balancing innovation, market integrity and ease of rulemaking. Sophisticated algorithms bring information gaps e.g. robo-advising, digital lending, smart contracts. How should we understand harms to market integrity? What rules are needed? These gaps may not always be filled by reliance on big-data. Some data is new and untested and data may be less informative in the short-term. The costs of these risks can be amplified. Traditional Wall Street intermediaries are giving way to smaller, non-traditional firms that seek to disintermediate familiar functions. These upstarts may lack the resources to absorb the full costs of the risks they create.
Broadening the Regulatory Toolkit As the Trilemma shows, regulators will face gaps in overseeing fintech. These gaps will be more costly because fintech poses unique risks: algos, disintermediation and big-data. At present, regulators are relying on a spectrum of tried and tested tools to oversee fintech as well as innovating in some respects, notably in developing sandboxes. But more is needed. Because of the unique risks created by fintech, a broader set of tools is necessary. Regulators should consider: (i) international co-ordination; (ii) domestic agency co- ordination; and (iii) public-private regulatory co-operation in delivering oversight.
Thank you! Comments Welcome: chris.brummer@law.georgetown.edu; yesha.yadav@vanderbilt.edu Paper, Fintech and the Innovation Trilemma, is available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3054770
