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Raj Date, former deputy director of the Consumer Financial Protection Bureau, spoke on Thursday at American Banker's Marketplace Lending + investing conference. He gave some interesting advice for regulators in dealing with innovative financial technology startups: engage in dialogues, be assertive early, and be flexible.
Date, who is currently managing partner of Fenway Summer LLC, a venture firm that focuses on financial services, argued that we are currently in a "very unique and special time in the industry" that has enabled the rise of fintech startups in great numbers. "There's a real advantage in building process and technologies from scratch now, than trying to adapt patchwork existing technologies built in a different era," he said. Financial technology startups also benefit from low barriers of entry, and don't have the large fixed costs startups from 20 years ago might have had. "Back then, if you wanted to start a consumer-facing company, you had to own a server, which would shortly have to be replaced anyway," he said.
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