Responsible FinTech will help in the growth of national and community banks.
That was the message of Keith Noreika, head of the Office of Comptroller and Currency (OCC), when he appeared on the initial podcast of Andrew Busch, the newly named Chief Market Intelligence Officer of the Commodities Futures Trading Commission (CFTC).
Answering a question about FinTech, Noreika said:
My own view is though FinTech and community banking aren’t mutually exclusive, I think they are actually quite necessary to one another. That’s the real sort of salvation of community banking in the future is to adopt FinTech to become, you know, incubators of innovation. And that’s really, not only will revolutionize the industry and make it more dynamic, but also really increase competition that will challenge, you know, the larger banks to be better and ultimately maybe make them a little bit smaller and more manageable.
As The Industry Spread has reported, the CFTC recently launched LabCFTC, an initiative to foster FinTech in the derivatives industry, but, as Busch noted, the OCC set the trend in FinTech innovation with their own program in 2015, as he explained to the podcast audience: “The OCC launched its innovation effort in 2015 and created the Office of Innovation, kind of ahead of its time a little bit I would say.”
In remarks made before to the Exchequer Club in Washington D.C. on July 19, Noreika laid out how his agency would foster FinTech innovation:
To implement that framework, the agency established an Office of Innovation that has been up and running since January. Its primary purpose is to make certain that institutions with federal charters have a regulatory framework that is receptive to responsible innovation and the supervision that supports it. The office, headed by Chief Innovation Officer Beth Knickerbocker, serves as a clearinghouse for innovation-related matters and a central point of contact for OCC staff, banks, nonbank companies, and other industry stakeholders.
Noreika is currently the acting head of the OCC – a lame duck head, as he noted to Busch: “I will only serve until the 31st Comptroller of the Currency is confirmed and takes the Oath of Office, and then that Comptroller will serve a five-year term.”
President Trump nominated Joseph Otting to head the OCC; his Senate hearing was held last month and he’s awaiting a vote.
Busch has had a two-decade career in trading and investments. He was head of Global Currency and Public Policy Strategist at the Bank of Montreal from 2009 to 2013. He also served as the Bank of Montreal’s Global Foreign Exchange Strategist and was an outside advisor to the White House, US Treasury, and Congress on the financial markets from 2005-2009. He began his career as a forex trader at Northern Trust Bank.