Jo Ann Barefoot (LinkedIn) wants financial regulation to keep pace with the evolution of technology, which means using innovative technology needs updated regulation around this technology.
As co-founder and CEO of the Alliance for Innovative Regulation, she focuses on using technology to enhance the financial system. By adopting more innovation into regulatory processes, the financial system could be more equal, profitable and safe, Barefoot wrote to American Banker.
“By digitizing the data involved, we can level the playing field on regulatory burden between large and small banks, and between banks and nonbanks,” Barefoot said. “We can make financial services much more widely affordable and yet profitable. We can massively improve the accuracy of credit underwriting. We can catch terrorists and criminals who launder money to profit from crimes like human trafficking. We could very likely have averted the financial crisis and the Great Recession by detecting the buildup of risk contagion in subprime lending. We can make the whole system work better, cheaper and faster, all at once.”
Barefoot has spent more than 45 years working in financial regulation, including as deputy comptroller of the currency, a U.S. Senate staffer, senior fellow emerita at Harvard University’s Kennedy School of Government and a consultant for financial institutions. She also wrote “A Regtech Manifesto” in 2020, which argues for gradually overhauling the financial regulatory system into a digitally native, data-heavy framework.
Last year, Barefoot wrote in a column in American Banker that regulators had been enhancing their mindset around innovation, including by hiring more technology specialists, honing in on digital assets, AI-driven models for credit underwriting and faster payments capabilities.
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