A Q&A with Brian Tate, President of the IPA

Legislative action and regulatory rulemaking have fintech organizations in their sights for 2024.

What does the industry need to know about what’s happening in Washington and how they should adapt their strategies to keep pace? We spoke with Brian Tate, president of the Innovative Payments Association (IPA) to hear his view from the Capital.

If you have to pick three themes for fintechs to pay attention to this year, what would they be and why?

Legal, Compliance, and Fraud are the themes for 2024.  Fintechs in 2024 need to be aware of the regulations that govern the industry, they need to make investments in people who understand the rules, and then give those people the resources they need to be successful.  It’s clear that the bank failures that occurred in 2023 have motivated regulators on the federal and state level to step up their supervisory and enforcement role.  Compliance is a critical part of any fintech organization’s business plan.

Have we reached an inflection point for the industry? Is innovation now not enough to keep them profitable?

While innovation will always be at the core of the financial technology sector, we are entering into a phase where customer service is paramount.  Technology alone will not be enough to sustain customer needs.  Fintechs will have to tailor their products to meet the personal financial needs of individual customers. Thus, apps and products like EWA, BNPL, and P2P payment platforms that give the end user more flexibility in controlling their financial life will continue to play a big role in the market.  

We’re coming up on the one year anniversary of the collapse of Silicon Valley Bank  – what changes have you witnessed? 

SVB will continue to have an impact on the market in 2024.  I think it is clear regulators have become more aggressive in policing the market.  In addition, now more than ever, payment companies need to make sure they are identifying people with the right expertise to help them navigate the thicket of regulations fintechs and their bank partners need to manage in order to design, build, and market safe, compliant products to consumers. 

Historically, fintechs might have bypassed Washington as a significant place of influence. Has that changed in the past year? What particular events should be on their radar?

Fintechs need to engage in the political, legislative, and regulatory world that rests in Washington, D.C.  The market has grown to the point where it has caught the eye of Congress and the regulators, particularly the CFPB.  That is why it is critical that industry representatives come together in organizations like the IPA to develop positions and policies to respond to the questions and concerns raised by policymakers.  If the industry would be fully involved in the conversations in DC, that could have a direct impact on their business.  The burden is always on the industry to explain how their products work and the benefits for consumers.

How would you rate the health of the fintech industry? What check-ups do they need to schedule?

Overall I believe the fintech community is in a very good place.  The industry has changed a lot in the last 10 years and now has companies that are household names such as Chime.  The growth of the industry has brought down the cost of financial services products, increased financial inclusion, and given consumers more options.  The key for the future will be for the industry to keep innovating to meet the ever-changing needs of the American consumer.

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