FinTech Innovation Lab: Understanding Regulation to Drive Innovation

The ability of fintech companies to understand and operate within the regulatory framework of large financial institutions is essential to their success. Over the last twelve years, the FinTech Innovation Lab (FIL) has been connecting emerging technology companies with major financial institutions that are looking for innovative tools to help meet the needs of their customers; and integrating these tools within the companies’ regulatory framework has been a key area of focus for all participants. Notably, there are 15 graduates whose products directly address a financial services regulatory requirement, including Alloy, Cutover, Ion Channel, LeapXpert and Theta Lake.

Core to the FIL’s model is the mentoring and feedback senior executives from major financial institutions provide to the entrepreneurs, including how to improve their value proposition, product viability and, importantly, if the technology meets their information security requirements and compliance with other regulations.

The Lab emphasizes the need for technology companies to understand the regulatory landscape in which their bank partner operates. The fintechs spend time with the regulatory departments of our partner institutions so those experts can ask tough questions and find areas of the technology that need to be enhanced.

The FIL also has two Regulators-in-Residence, Maria Vullo and Jonah Crane — who work one-on-one with the fintechs to help them understand which parts of the complex financial regulatory landscape are most relevant to them. Maria Vullo served as Superintendent of the New York State Department of Financial Services between 2016 and 2019 and Jonah Crane was a senior official at the U.S. Department of the Treasury during the Obama Administration. Fintechs also have access to a Chief Information Security Officer, Charles Blauner, who provides insights on cyber and information security. Charles has over 20 years of experience as a bank CISO.

We organize a trip every year for the cohort to meet senior officials at key financial regulatory agencies — both in Washington D.C. and Albany. Discussions with these officials provide valuable insights on areas of priority and concern for the regulators. The regulators also have an opportunity to learn where innovation is heading through discussions with the FIL entrepreneurs.

The FIL will be opening applications at the end of October for the 2023 cohort. We invite interested startups to visit in early October for virtual info sessions and application details. For those entrepreneurs looking to partner their innovative solutions with the banking sector, the FIL can help you put forward a product that brings innovation into the banking sector while meeting their regulatory requirements.



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