For 150 years, banks in the United States have been financial anchors in their communities, and they continue to be. But the banking industry is not anchored to its own traditions and is moving in tandem with evolving technologies and consumer expectations. Unbundling and decentralization are transforming how the financial-services industry fulfills its role to undergird societal prosperity, with the OCC providing needed guidance in a time of continuous flux.
Digital ledger technologies and crypto-assets have evolved from obscurity to prominence in recent years, bringing with them opportunity and risk. Initially regulators focussed primarily on mitigating risks to consumers but as the applications of the technology have continued to evolve the principle of technological neutrality demands a more adaptive approach. The challenge now is to harness the benefits for EU citizens of scaling up business applications whilst continuing to effectively mitigate the risks. The EBA shows the way.
New players driving fresh business models, innovative products and increased adoption of the power of big data affect not only the provision of financial services but the fundamental structures of financial markets. As the tectonic plates shift, banks need to actively seek and embrace new opportunities. For the data economy to thrive, fintechs and bigtechs to provide client choice without affecting financial stability, and for crypto-assets to provide a viable option to traditional assets, regulators must master the art of balancing innovation with regulation.