Blockchain technology is an exciting and new area for the financial services industry, but from an inclusion standpoint, there are many relevant concerns about whether it could lead to exclusion, said Carmelle Cadet, Emtech, founder and CEO.
Speaking at the Financial technology and its implications for financial inclusion panel at the FINRA Diversity Leadership Summit 2021, she said blockchain can be used across many different industries and sectors, with the ability to streamline manual processes and the need for intermediaries, and provides much better transparency and visibility around transactions.
“What we’re seeing right now is the focus on financial services to provide a more streamlined approach to how money is created, how money is accessed, and how money is used in the system. of payment. On top of that, you see use cases around the potential for creating new asset classes that would behave differently than a typical cash or bank deposit you might have, ”she said.
Cadet believes there is a role to play in how regulation can help ensure that diversity and inclusion are among the core values and core outcomes that we can turn to when we think about technology. financial.
She added that blockchain can be used across many different industries and verticals, with the ability to streamline manual processes and the need for intermediaries, and provides much better transparency and visibility around transactions.
Cadet further said the topic of conversation right now for regulators in the financial services industry is the emergence of new digital assets that are changing the way money flows and have the potential to create a whole new market outside of it. regulatory space. .
“But with that comes a risk. Technology can be designed to provide financial inclusion, it can also be designed to circumvent and launder money. So it’s a double-edged sword, ”she said.
“So far, regulators have approached us out of fear of losing control. Some of the work we do deals with the benefits and opportunities for regulators and for central banks in particular to be a catalyst for innovation, ”she said.
Melissa Koide, CEO of FinRegLab, added that there are some really important steps that not only the regulatory community, but also Congress are going to have to take, “in order to ensure that we have a confident financial system.”
The banking community and even FinTech, the non-banking community, would welcome advice from regulators on some of these fundamental issues regarding data used in financial services for particular financial purposes, ”she said.
During the session, panelists also discussed innovative applications involving artificial intelligence (AI), machine learning and gamification.
The use of gamification in financial services is in its infancy, said Jason Young, co-founder and CEO of MindBlown Labs.
“We see examples here and there. But I think fintechs are really still figuring things out, ”he said.
Meanwile, AI and machine learning in particular, are used for a variety of purposes in financial services, according to Koide.
She said the industry as a whole is thinking about adopting AI and machine learning in the many different use cases beyond what they use it in today.
“The power is in the ability to harness a lot of data,” she said.
But the use of machine learning is very sensitive to “considerations of equity, inclusion and disparate impact”.
“So it’s mandatory to be able to understand how models derive the outputs that they are and the ability to explain it,” she said.