As community banks continue to innovate—a task that has only become more important since the COVID-19 pandemic began—regulators play two key roles in that process, ABA President and CEO Rob Nichols said during a virtual industry event today. First and foremost, regulators “need to provide the clarity that banks need to adopt new technologies,” Nichols said, adding that the agencies “have done a nice job” in this area.
The second key role regulators play, according to Nichols, is ensuring “that the innovations are delivered responsibly in a way that protects consumers.” That includes taking a cautious approach to entities “that want to walk and talk like banks without being subject to same level of oversight and supervision,” he said. “This is where I think the regulators have an important role to be thoughtful and deliberate and be cautious so that we don’t introduce risk into the system.”
Nichols—who joined a panel of community bankers including Julieann Thurlow, president and CEO of Reading Cooperative Bank, Reading, Massachusetts, and Howard Jaffe, President and COO of Inland Bancorp, Oak Brook, Illinois—also discussed ABA’s initiative to encourage banks across the nation to to offer Bank On-certified accounts, as well as efforts to engage core providers to facilitate bank innovation.
