- ICBA supports a legal and regulatory framework, coupled with a supervisory process and operational environment, that allows community banks to deploy technologies without impeding innovation and that permits community banks to fairly compete against other bank and non-bank financial services entities.
- ICBA supports the use of data analytics to help community banks identify and eradicate fraud and provide customers with better, cheaper services.
- ICBA supports a regulatory, oversight and enforcement framework for financial technology (FinTech) firms that mirrors the banking system framework and protects customer funds, information and privacy preferences, while maintaining federally mandated consumer protections.
- ICBA supports initiatives to improve and enhance banking and payments technological infrastructure to meet the expectations of millennials and other customers.
Community banks depend on information technology to stay competitive, efficient, and profitable. Deployment of technology continues to alter the way that consumers and businesses conduct banking and commerce and influences the products that community banks offer. Additionally, technology deployment is altering the risk profile of community banks and subjecting them to a myriad of regulatory requirements and expanded oversight. The regulatory agencies play a valuable role in defining and identifying the risks of existing and emerging technologies for both community banks and their service providers. Any guidance should be crafted in a manner that does not hamper innovation or impose undue burden.
Data Analytics. Community banks are using data analytics to detect fraud, deepen customer relationships, and create efficiencies in the marketplace. Industry-wide, use of data analytics continues to evolve. ICBA strongly believes that consumer privacy is protected by the current legal framework that is woven together by federal law, state law, regulatory guidance, and industry best practices.
FinTech. Financial technology (known as FinTech) companies offer new channels to financial products and services for consumers and small business. These services disrupt traditional providers, particularly commercial banks, and bypass many consumer protections. Fintech companies can disrupt community banking by: providing a suite of banking services at the customer’s fingertips without the need for a branch visit; leveraging the customer’s data to deepen the customer relationship and target-market to specific segments like small business and millennials.
Regulators should enforce consistent compliance with consumer protection among bank and non-bank providers. Federal and state regulatory frameworks for the licensing and regulation of FinTech products and services should include consumer and data security protections consistent with those that apply to the banking industry.
Staff Contact: Cary Whaley