Lael Brainard: FinTech and the search for full stack financial inclusion

Speech by Ms Lael Brainard, Member of the Board of Governors of the Federal Reserve System, at the FinTech, Financial Inclusion - and the Potential to Transform Financial Services, hosted by the Federal Reserve Bank of Boston and the Aspen Institute Financial Security Program, Boston, Massachusetts, 17 October 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
18 October 2018

Thank you for inviting me to join today’s discussion. Like many of you, I have long been interested in the potential for innovation to improve financial access for families and small businesses who are underserved. The combination of smartphone apps, big data, artificial intelligence, and cloud technology holds out intriguing possibilities in financial services. But no single app is likely to be a silver bullet for the complex challenges faced by underserved households and small businesses. Achieving inclusion will require a holistic understanding of the challenges faced by underserved groups in order to develop full stack solutions to address them.

Fortunately, an emerging generation of metrics may offer a more complete picture of consumers’ financial needs. In addition, technological infrastructure is developing, such as faster payment systems, along with the potential for more transparent and simpler product offerings enabled by richer data and lower-cost processing. These new building blocks may make a difference on their own—and, more importantly, may be combined in powerful ways to bring end-to-end solutions to financial inclusion. I will briefly discuss each of these developments in turn.