How Fintech is Transforming Banking

Keynote Presentation by Julie Stackhouse

Presentation slides (pdf)

In this video, Julie Stackhouse explores how technological innovations and fintech firms are reshaping banking, creating new opportunities, and posing new challenges. Stackhouse, retiring executive vice president and officer in charge of supervision at the St. Louis Fed, looks at:

• How new payment options made possible by financial technology are changing the way we handle transactions with friends, family and businesses.
• How technology is changing small-business lending.
• Ways in which artificial intelligence widens access to credit and enhances personalization of financial services.

Segments include:

• (13:07) - Why two companies created new credit and payment options: Even Responsible Finance Inc. came up with a new way for employees to get paycheck advances and Square created one for retailers to accept payments.
• (18:49) - At the heart of changes in financial services offerings is computing power, including cloud computing, data aggregation and artificial intelligence.
• (26:00) - To assess creditworthiness, fintech lenders have used “nontraditional” data—such as borrowers’ social media activity, education level and type of cell phone owned. Is the lending fair?
• (33:33) - Digital wallets: Who’s using and accepting payments from them, and how secure digital wallet payments are.

Audience Q&A

After the keynote, Stackhouse was joined by Eldar Beiseitov, a business economist at the St. Louis Fed, and Mike Milchanowski, an assistant vice president in Supervision. In this video, they address topics including machine learning models the Federal Reserve System is considering; risks and security for the financial system; the Fed’s role in supervising fintech; and the Consumer Financial Protection Bureau.

Additional Resources

• The Basics of Fintech
• Fintech: How Digital Wallets Work