ABA Aims to Throw a Regulatory Blanket on Fintech

The American Bankers Association today called for more regulation of financial startups.

In an interview on CNBC this morning, Rob Nichols, the new president and chief executive of the ABA, said there needs to be “a level playing field” between banks and fintech companies, and that more regulation of those fintech companies is the best way to achieve that.

“Well, we want to make sure we have a level playing field, Becky,” Nichols said to CNBC host Becky Quick, after she asked whether the ABA wants “those new industries that are popping up regulated the same way your members are regulated.”

Nichols added, “I would note that in 2013 there was about $3 billion of venture money going into fintech. In ’14, it was up to $12 billion, so this is a rapidly growing area where people are going to receive their financial products and tools in a very different way. We want it to be more efficient and effective. We need it to be safe and secure … there are cyber implications and security implications.”

Nichols was appearing on CNBC to “discuss key issues facing the banking sector.”

Nichols framed the call for more regulation as a safety and soundness issue.

“One of things I want to talk about, because I know I have limited time, is these future issues impacting banking sector that are really big and important,” Nichols said. “One is this issue of fintech and rapid convergence of banking and technology products. You know, I know that my children are going to receive banking products in a way very differently from the way the four of us on set do. I don’t know exactly what that will look like, but there will be regulatory implications there that we need to think about. This whole issue of mobile, you know there is so much that is going to the phone and to the smartphone. What will that look like in five or 10 years? What impact will that have on the banking sector?”

The ABA is by far the largest banking trade association in the United States, boasting that its membership controls $11 trillion of deposits. Nichols came to the ABA from the Financial Services Forum, an advocacy group representing 18 of the largest banks in the nation.

Learn more about the future of banking and hear from Vikram Pandit, ex-CEO of Citigroup, at Bank Innovation Israel, November 10-11. Click here for details.