Balancing Regulation and Innovation

Does regulation hinder or help innovation? This is an age-old debate that continues to remain top of mind for financial leaders. Jane Barratt, Chief Advocacy Officer and Head of Public Policy at MX recently sat down with Adrienne A. Harris, Superintendent, New York State Department of Financial Services, at Money Experience Summit 2024 to get her take on this and more. 

Here are some of the key takeaways from the conversation.

You Need Both Regulations and Innovation

Jane kicked off the conversation with a question about whether regulation and innovation are at odds with each other, or if they can work together. Adrienne responded with a notion of interdependency saying, “You need to have them both. The narrative is often that you have too much regulation and it’s going to stifle innovation. This is the perfect place to prove you can protect consumers in markets and be good for businesses all at the same time.”

Regulation will not diminish innovation. It pushes businesses of all sizes to follow the same standards, which can help level the playing field among competitors. These requirements give businesses no choice but to begin to offer competitive products and services that will benefit the consumers.

New Trends Bring New Risks 

The fintech landscape is ever-evolving and characterized by new tech trends that create both new opportunities and risks. As technologies gain popularity, this — which  calls for regulation and standardized procedures that have not been necessary in the past. 

Adrienne explained that while innovation is great, especially when it comes to hot trends such as crypto and AI, regulation is important for progress. Any time that the assets of consumers come into play, there needs to be heavy regulations in place to protect them.

Creating a Strong Partnership Between Government and Businesses 

New regulations will continue to roll out faster than ever as technology continues to evolve, requiring quick adoption from financial service providers. Adrienne noted that she is a big advocate for cross-sectionalism. 

Our future and the good of the consumers need the government and private sector to come together to make decisions as one. With countless issues around data, privacy, and more that affect consumers, private banks and the government need to present a unified front to create and follow through on regulations that benefit the consumer.