The director of the Consumer Financial Protection Bureau, Richard Cordray, said Monday that financial technology offers a brighter financial future for everyone, especially the underserved.
“Creative new tools can help working families better manage their finances [by] empowering households to better anticipate and weather the inevitable income and expense shocks they face in an uncertain economy,” Cordray said at the “Money 20/20” fintech conference in Las Vegas.
He added that fintech tools can be valuable in making it easier for Americans to set up rainy day funds for emergencies.
He cited four ways this technology can be especially valuable for people underserved by traditional banking:
1. It offers new credit opportunities.
2. Mobile technology can make banking services affordable in urban areas where rents are too high for bank branches and in rural communities where the populations are too small to support them.
3. Computer-enabled data mining can lead to better understanding of the financial patterns of the underserved—their inflows and outflows and how they find ways to manage the gaps.
4.General-purpose reloadable prepaid cards and new forms of prepaid accounts provide the functionality to address people’s fundamental financial needs.