3 Questions with Kurt Helwig of the Electronic Funds Transfer Association

FintekNews is pleased to offer our weekly feature column “3 Questions With”. Each week, we feature a thought leader within a unique sector of fintech and ask them to answer just 3 questions for our audience in their vernacular. This week, we’d like to introduce you to Kurt Helwig, President & CEO of the Electronic Funds Transfer Association (EFTA). Now in their 5th decade, the EFTA is a professional association dedicated to the advancement of electronic payments and commerce. Their objective is to inform debate over the consumer, business and policy aspects of new and existing payments technology.

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What area/s of Fintech do you believe will grow the most in the coming 5 years?

In the coming 5 years, big data and analytics will continue to be used to create a better and more specifically tailored customer experience. Financial institutions will use this data to determine how their customers are using different channels including branches, online, mobile, ATM and call centers. These channels share data and provide the FI with the knowledge of when to send a follow-up text, email or special offer based on the customer’s actions or preferences.

Other areas that will continue to grow are payments authentication and cybersecurity. While financial technology thrives, so does the level of sophistication of the hacker and criminal. Technology, biometrics and rigorous payments authentication methods will all be used to combat this constant, ever - present threat. Given the Trump Administration’s desire to cut federal regulations, the extent to which they will pursue greater cybersecurity regulation remains to be seen. This leaves the industry to comply with a myriad of state, local and in some cases, international standards.

What are the biggest problems facing the Fintech industry in the future?

One of the biggest challenges facing Fintech is determining the appropriate level of regulation. Some regulation is necessary to ensure safety, soundness and security of a product or service. That being said, regulation must be flexible enough to enable, not stifle innovation in order to accommodate the evolving needs of the consumer and an ever changing marketplace.

A lack of uniformity in Fintech regulation has created some ambiguity around to whom those regulations apply. This regulatory environment often hinders innovators, financial services providers, the public and regulators themselves. The fragmented, if not competing nature of Fintech regulation in the U.S. has in some cases caused a turf war for Fintech oversight between not only the Executive Agencies but legislators as well.

One step Congress has taken to balance regulation and innovation is their creation of the Congressional Fintech and Payments Caucus. This group works to protect consumer privacy and security while also working to ensure the regulatory environment enables Fintech to reach its full potential.

How do you feel consumers (or if more relevant for your firm – businesses) are adapting to the facet of Fintech that your company operates within?

A number of EFTA members are investing in financial technology by creating internal innovation labs and investing in or partnering with Fintech start-ups. However, it is not yet certain that the Fintech providers that remain independent will face the same compliance burden as traditional financial service providers. In other words, will there be a level legislative and regulatory playing field between these competing entities?

This is where we will have to wait and see. Just as the traditional financial services industry has been awakened by what many call the Fintech revolution, so have the lawmakers. We are in the midst of a rapidly evolving financial services industry, which in many ways is beginning to redefine itself. Thus, the regulatory landscape will need to change and become more clearly defined as we move forward.

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Kurt Helwig is the President & CEO of EFTA. EFTA is the nation’s leading inter-industry trade association dedicated to the advancement of electronic payment systems and commerce.