Regulatory examiners need to be more comfortable with the ideaof banks using financial technology, some community bankers said at the OCC's MinorityDepository Institutions Advisory Committee meeting April 5.
Discussing experimentation in fintech "has got to be a conversationthat [examiners] are a little more comfortable having than I think they are rightnow today," said Preston Pinkett III, chairman and CEO of Newark, N.J.-basedCity National Bank of New Jersey.
The OCC releaseda white paper March 31 that outlines ways the agency plans to implement fintechregulation, including potentially opening a new office dedicated to innovation.
The advisory committee informs the OCC of issues that impactminority and women-owned banks and how the agency can help sustain minority institutions.The general consensus at the meeting among bankers and regulators was that fintechis here to stay, but some bankers expressed concern about the cost of technologyand keeping up with the rapidly developing field.
"You call it innovation, I call it the way banking willwork in the future," Pinkett said, pointing to the rapid emergence of smartphonesas an example.
Beth Knickerbocker, counsel for OCC, said at the meeting thatthe agency is supportive of innovation that is done in a responsive way.
"We want banks to know that you need to be open to new ideas,"she said. "You need to be receptive to what's going on in your communitiesand with your customers, because that's the way that the industry grows, that'sthe way that we make sure that there's a vibrant federal banking sector."
Innovation should be tied to a bank's long-term strategy andappetite for risk management, she said. The OCC is focused not just on new technologybut on innovations that are new for individual banks, she said.
Comptroller of the Currency Thomas Curry told bankers the agencydoes not intend to regulate individual fintech products. "That's really theindustry's role," he said. Instead, he sees the OCC as a "neutral clearinghousefor information and a sounding board" for questions that banks will have aboutinnovation and third-party collaboration with fintech firms.