Fintech can speed recovery payments to businesses and individuals
Financial technology, commonly known as fintech, is the intersection of financial services and technology. Fintech services that have become popular in recent years include mobile payments, online lending, and digital currency.
Adrienne Harris, a Towsley Foundation Policymaker in Residence at the Ford School of Public Policy and Gates Foundation Senior Research Fellow with the U-M Center on Finance, Law, and Policy, says financial services touch every part of the economy and fintech can play a role during the COVID-19 pandemic. She was featured recently on the Michigan Minds podcast, and two financial podcasts: the Breaking Banks podcast released on April 14, 2020, and the Finovate podcast released April 15, 2020.
On Michigan Minds, Harris explains that fintech blossomed after the financial crisis of 2007–2008, and that part of the ethos of the industry was trying to make financial services cheaper and more effective for those on the lower end of the income spectrum.
“The unbanked, under-banked, and financially vulnerable people—that’s where a lot of fintech efforts have been oriented, but broadly it really does affect the entire financial services system and all of its users,” she says.
Harris says fintech has never been tested in a crisis. “There are a lot of open questions about liquidity and underwriting models that have been used and how they will adjust to these challenging circumstances. The tools have been developed in a period of growth so they haven’t been tested,” she told Finovate.
Harris discusses the positive role fintech can play to assist people during the financial hardship that can come as a side effect of the COVID-19 pandemic and the public health guidelines that have been put in place to help slow the spread of the virus.
“There have been numerous discussions around policymaking and financial technology to try to help people weather the economic storm we find ourselves in, and which I imagine will persist for quite some time,” Harris says on Michigan Minds. “One of the things we talk about are mobile payments. Those mobile payments now enable us to not have yet another vector for transmitting the virus. So, to the extent that you can pay for things online, and deposit checks without leaving your home, those are all innovations that fintech brought around.”
She adds that those in the financial technology industry are discussing how these innovations play a role in getting people money faster, including the checks from the government stimulus package.
Adrienne Harris is Professor of Practice at the Ford School and Towsley Foundation Policymaker in Residence and Senior Research Fellow with the Center on Finance, Law, and Policy. Prior to joining the Ford School, Harris was the chief business development officer and general counsel for insurance technology company States Title, Inc. She served as special assistant for economic policy to President Obama at the White House National Economic Council, focusing on issues including financial reform, financial technology, and housing finance reform. She had also served as a senior advisor to the deputy secretary in the U.S. Department of Treasury. She practiced law with the firm of Sullivan & Cromwell LLP. Harris earned her JD from Columbia Law School and her MBA with specializations in economics and Management from New York University.