Alternative Lending

Savings and Investment

The outgoing president of the United States of America has done much to support fintech over an eight-year period that has seen the emergence of marketplace lending, blockchain and many other disruptive forms of finance.

In his last few days as President of the United States of America Barack Obama’s Whitehouse team have called on the fintech industry as well as the future Trump administration to foster growth in the nascent industry.

In the past eight years Obama’s administration has been active in promoting fintech and alternative forms of finance, including establishing the Open Data Initiative, which unlocked over 200,000 government datasets as raw material for entrepreneurial innovation, the America Invent Act, which makes the U.S. patent system more efficient and responsive to innovators, and the Jumpstart Our Business Startups (JOBS) Act of 2012, which helps small businesses and emerging companies raise capital.

The US is now the leading beneficiary of investment into innovation in financial technology or ‘fintech’ and home to some of its most well-known and valuable companies. But with the advent of not just a new leader in the Whitehouse but also a new style of politics and economic policy, the Obama administration has set out its guide for the industry and government to further mature the sector.

“Fintech has tremendous potential to revolutionize access to financial services, improve the functioning of the financial system, and promote economic growth. For fintech to achieve its full potential, however, stakeholders must learn from the experiences of the financial crisis and collaborate to orient products and services toward broader objectives that benefit consumers, markets, and the economy,” the report said.

It makes for four reccomendations: "Foster Positive Financial Services Innovation and Entrepreneurship, Promote Safe, Affordable, and Fair Access to Capital, Strengthen Financial Inclusion & Health in the United States and Abroad and Address Financial Stability Risks."

The report later sets out 10 principles it says should serve as a guide to firms, politicians and regulators to achieve these. These are:

The ten principles encourage stakeholders to:

think broadly about the financial ecosystem start with the consumer in mind promote safe financial inclusion and financial health recognize and overcome potential technological bias maximize transparency strive for interoperability and harmonize technical standards build in cybersecurity, data security, and privacy protections from the start increase efficiency and effectiveness in financial infrastructure protect financial stability continue and strengthen cross-sector engagement.

Of course, with just days until the President Elect makes himself comfortable in the Oval Office, the report’s potential impact is questionable. Nonetheless, you can read the full report here.