“Algorithms and technology are no longer optional. Because of smartphones, we are seeing magnitude increases in consumer banking and other financial services transactions on a daily basis,” stated Sultan Meghji, Chief Innovation Officer for the Federal Deposit Insurance Corporation (FDIC) Office of Innovation.
Meghji served as a panelist at a Duke in DC briefing for congressional staff and D.C. policymakers “Banking in the Digital Age: Developing Smart Policy Around Innovation in Financial Services.” Jimmie Lenz, director of the Master of Engineering in FinTech and the Master of Engineering in Cyber at the Duke Pratt School of Engineering, joined Meghji for the December 9th conversation.
The discussion arose from an announcement earlier this year that the FDIC established a strategic partnership with the Duke Pratt School of Engineering on risk management, FinTech and cybersecurity, led by Jimmie Lenz. Also, this discussion was a continuation of the conversation from Duke in DC’s September 14th event, “From Technological Advancement to FinTech – How Congress Should Think About Cyber Policy.”
Professor Lenz set the tone for the conversation by highlighting the global interconnectedness of the world’s financial services. He went on to note people make a mistake when looking at these systems on a country-by-country basis.
Meghji’s interest in these issues stems from his experiences in East Africa, where digital banking technologies servicing rural populations have existed for decades.
Looking now at the advancement of AI, quantum computing, crypto, and other technologies; Meghji thinks involving these technologies in the financial services systems, is no longer a choice.
Lenz and Meghji also discussed the advancement of these technologies in the banking sector, algorithmic bias, the importance of quality and valid data, risk, and accountability standards in the industry. Lenz pointed out that, “the federal government is now being asked to do the things that companies should have done all along. This isn’t a “government problem” this is an investment in [companies] infrastructure.”
Meghji noted in the U.S. regulatory model, “we want to make sure you have the systems in place so that you’re managing the risk appropriately.”
Lenz added that regulatory policy should, “always further innovation, not hamper it. And when I think of smart policies, I think of policies that are more dynamic, are more relative to an environment rather than specific situations.” He stressed the need to stay on the forefront of these technologies and noted, “we shouldn’t have more regulation simply to protect the stalwarts in the financial services industry who don’t want to invest in their own infrastructure.”
Meghji encouraged attendees to learn more and understand why some of these systems are important to protect the safety and soundness of the American financial system.