Fintech is turning smartphones into financial advisors and loan officers, Comptroller of the Currency Tom Curry said in a prepared speech on financial innovation Thursday.
Pointing to the rapidly rising growth in fintech, Curry said international investment in the sector has surged to $24 billion from $1.8 billion in five years with 4,000 companies in the U.S. and the United Kingdom.
While small compared to total domestic consumer and business loans, marketplace loan originations climbed to $29 billion in 2015, six-fold in two years, he noted.
He said calling fintech the "Uberization" of the financial system should not be scoffed at because banks are the taxis and highways of the global finance.
However, Curry said banks are likely to fare better against fintech than cab companies did against Uber because they are becoming part of the technological revolution instead of resisting it.
“Many banks have innovation laboratories of their own, are investing in promising start-ups, or collaborating in ways that creates synergy between fintechs and banks,” said Curry.
But while he said aggressive technology is vital for banks, he cautioned pilot projects are essential to test their viability and effectiveness in the retail marketplace.
He said he is against giving bank technology tryouts a temporary, regulatory-free “sandbox,” as has been suggested by some.
“Waiving compliance with consumer protection or safety and soundness never makes sense. It is the company’s responsibility to ensure products and processes are safe before rolling them out,” Curry said.
OCC is still deciding whether to create separate fintech charters, he added.