Consumer Protection

A core goal of financial regulation is to protect consumers. Accelerating innovation at both incumbent and fintech firms can help solve people’s financial problems, but also creates new risks.

On the positive side, new technologies can make financial services almost universally accessible, more affordable, and more understandable. It can help people qualify for well-priced loans by leveraging new kinds of data and powerful AI tools like machine-learning. It can reduce the need for high-cost services like overdrafts, payday loans and check-cashing. New apps can help people save, invest, pay bills and manage money. ‘Digital identity’ innovation can safely open the financial system to consumers who lack traditional documents. Worldwide, mobile banking has brought hundreds of millions of people into the financial system for the first time. Digital regtech tools, meanwhile, can equip regulators and risk managers to detect and instantly correct practices like credit discrimination and deceptive products.

If not well managed and regulated, however, new technology can threaten privacy and data security, exacerbate bias, and foster predatory products and scams.

AIR works with consumer advocates, agencies and industry to promote innovation that advances strong consumer financial protection.

The case for placing AI at the heart of digitally robust financial regulation

In a paper published by the Brookings Institution, Alliance for Innovative Regulation co-founder Jo Ann Barefoot lays out multiple use cases for government agencies to use artificial intelligence to power their innovation strategies.

Podcast: A Call to Action for Ukraine Refugees with Stuart Watkins, CEO of Zenoo

This is a special emergency episode of Barefoot Innovation with a call to action for helping to protect Ukrainian refugees from being preyed upon by human traffickers. Available as an audio podcast and video.

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Podcast: Regtech Comes of Age: ING Bank’s Ian Hollowbread

In this episode, Ian describes the vision that is driving ING’s new innovation group, Neo. He outlines its five value spaces, including the one he runs – safe and compliant. He describes how they are developing regtech solutions that meet both the needs of the bank and also an external market. In our conversation, Ian explains why regtech is the future of compliance.

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Podcast: Activism and Algorithms: Lisa Rice and Kareem Saleh on How to Make Lending More Fair

My guests today are Lisa Rice, CEO of the National Fair Housing Alliance, and Kareem Saleh, founder and CEO of Fairplay. Lisa is a civil rights activist. Kareem is a tech guy who founded a startup that uses AI analytics to deliver what he calls Fairness as a Service. They come from two different worlds, but they have teamed up to work on the problem of unfair lending.

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Podcast: Is Consumer Protection Working? A Bold Alternative from Corey Stone and Todd Baker

A half century ago, the US government embarked on an effort to protect financial consumers through proactive regulation. Starting with the Truth In Lending Act in 1968, Congress enacted an ever-growing set of laws, and regulators and industry undertook an ever-growing effort to implement them. So, how’s it going, 53 years later? Are consumers now well-protected? Is it a rarity for consumers to be harmed in the financial system, like it’s a rarity for planes to crash, or drinking water to make people sick. Do we have a situation where failures shock us and make news? Most of us -- certainly I -- would say no.. But, think also about this: we really have no idea how well we’re doing.

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