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Fintech and the New Financial Landscape

Fintech and the New Financial Landscape

Federal Reserve Bank of Philadelphia

November 13–14, 2018

Fintech has been playing an increasing role in shaping financial and banking landscapes. Financial companies are benefiting from artificial intelligence and machine learning (AI/ML) technologies in their credit decisions, custom marketing programs, custom wealth management services, fraud detection, cybersecurity, anti-money laundering, Know Your Customers (KYC programs), and more.

The use of alternative data sources, big data, and complex AI/ML algorithms allows faster service and a lower cost of credit assessments and monitoring, creating savings that could potentially be passed on to consumers. Some examples of these alternative data sources include information drawn from utility payments, electronic records of deposit and withdrawal transactions, insurance claims, bank account transfers, use of mobile phones or the Internet, other personal data, such as consumers’ occupation or details about their education, and more. Public statements and reports from some lenders indicate that they no longer rely on the traditional credit risk measures when determining loan qualifications.  Concerns have emerged about the use of alternative data sources by fintech lenders and the impact on financial inclusion. These innovations could carry a risk of disparate treatment because some lenders may not fully understand the black box algorithms used through some AI vendors. The conference intends to provide a platform for industry practitioners, regulators, policymakers, business leaders, and researchers to come together and share their vision and wisdom.

We hope that the rich discussion from the conference will provide guidance in developing the best policy solutions that would result in greater efficiencies and benefits to all parties. Our in-depth understanding of the interplay among the various activities, rules, policies, and guidance would help to enhance policy effectiveness without potential unintended consequences.

Conference Organizing Committee:

  • Julapa Jagtiani, Federal Reserve Bank of Philadelphia
  • Rosalind Bennett, Federal Deposit Insurance Corporation
  • Christopher Feeney, Bank Policy Institute
  • Itay Goldstein, The Wharton School of the University of Pennsylvania
  • Richard Herring, The Wharton Financial Institutions Center
  • Aaron Klein, Brookings Institution, Center on Regulation and Markets
  • Kevin Werbach, The Wharton School of the University of Pennsylvania

Conference Advisory Committee:

  • Kelvin Chen, Federal Reserve Board
  • Carol Evans, Federal Reserve Board
  • William Spaniel, Federal Reserve Bank of Philadelphia

Fintech and the New Financial Landscape
Federal Reserve Bank of Philadelphia
November 13–14, 2018

Agenda
Tuesday, November 13
9:00 a.m. Registration
10:00 a.m. Opening Remarks and Introduction
Patrick T. Harker (President and CEO, FRB Philadelphia)
10:10 a.m. Opening Keynote
Lael Brainard (Governor, Board of Governors of the Federal Reserve System)
10:40 a.m. Session 1
Fintech CEO Perspectives: Using AI to Identify the “Invisible Prime”

Moderator: Patricia Hasson (CEO, Clarifi and Member of the Board of Directors, FRB-Philadelphia)
Speakers: 
Al Goldstein
(CEO, Avant)
Jeffrey Meiler (CEO, Marlette Funding)
Ken Rees (CEO, Elevate)
Jason Gross (CEO, Petal)
11:40 p.m. Break
11:55 a.m. Session 2
Fintech CEO Perspectives: Data Aggregation and Alternative Data

Moderator: Paul Saltzman (Partner, White & Case LLP)
Speakers:
Lowell Putnam (CEO, Quovo)
Paul Gu (Cofounder, Upstart)
Sanjoy Malik (CEO, Urjanet, Inc.)
James Wu (CEO, MonJa)
1:00 p.m. Lunch
2:20 p.m. A Conversation with Patrick Harker
Patrick T. Harker (President and CEO, FRB Philadelphia)|

Moderator: Richard J. Herring (Director and Cofounder, The Wharton Financial Institutions Center)
3:00 p.m. Session 3
Fintech Industry Research

Moderator:  Julapa Jagtiani (FRB Philadelphia)

Paper 1: “Fintech: Fact Versus Fiction”
John Wirth (TransUnion)

Paper 2: “Fintech Small Business Lending Efficiency”
Usman Ahmed (PayPal)

Paper 3: “Developing Transparent Credit Risk Scorecards More Effectively:
An Explainable Artificial Intelligence Approach”
Gerald Fahner (FICO)

Paper 4: “Trended Credit Data Attributes in VantageScore Model”
Nick Rose (VantageScore Solutions)
4:15 p.m. Break
4:30 p.m. Session 4
The Roles of Alternative Data in Expanding Credit Access and Bank/Fintech Partnership

Moderator: Christopher Feeney (Executive Vice President, Bank Policy Institute)
Speakers:
Nat Hoopes (Executive Director, Marketplace Lending Association)
Arlen Gelbard (General Counsel, Cross River Bank)
Brad Pennington (Chief Risk Officer, PayJoy)
TBD (JPMorgan Chase) – Invited
TBD (Goldman Sachs) – Invited
5:25 p.m. Evening Keynote
Jelena McWilliams  (Chairman, Federal Deposit Insurance Corporation)
Introduced by Patrick T. Harker (President and CEO, FRB Philadelphia)
6:00 p.m. Conference Reception
Wednesday, November 14
7:45 a.m. Breakfast
8:25 a.m. Session 5
Responsible Fintech Small Business Lending

Moderator: Ami Kassar (CEO, MultiFunding Business Loan Advisers)
Speakers:
Bernardo Martinez (Head of U.S. Operations, Funding Circle)
Christin Spradley
(Head of External Affairs, OnDeck)
Louis Caditz-Peck (Director of Public Policy, LendingClub)
Sam Taussig (Head of Global Policy, Kabbage)
9:25 a.m. Session 6
Legal Issues Around Fintech, Alternative Data, and Fair Lending


Moderator: Aaron Klein (Policy Director, Brookings Institution)
Speakers:
Scott Pearson
(Partner, Ballard Spahr LLP)
Frank Borchert (General Counsel, Marlette Funding)
Richard Neiman (Head of Regulatory Affairs, LendingClub)
Jonah Crane (Regulator in Residence, FinTech Innovation Lab)
Todd Baker (Senior Fellow, Columbia University)
10:20 a.m. Break
10:35 a.m. Session 7: More Recent Academic Fintech Research

Moderator: Itay Goldstein (The Wharton School of the University of Pennsylvania)

Paper 1: “Fintech Borrowers: Lax-Screening or Cream-Skimming?” 
Marco Di Maggio (Harvard Business School and NBER) and
Vincent W. Yao (Georgia State University)

Paper 2: “Consumer Lending Efficiency: Commercial Banks Versus Fintech Lenders”
Joseph Hughes (Rutgers University), Julapa Jagtiani (FRB Philadelphia), and Choon-Geol Moon (Hanyang University)

Paper 3: “Reintermediation in FinTech: Evidence from Online Lending”
Tetyana Balyuk (Emory University) and Sergei Davydenko (University of Toronto)
11:45 a.m. Session 8
Looking Ahead — Future Applications of Artificial Intelligence and Quantum Computing and Fintech Investments


Moderator: Kevin Werbach (The Wharton School)
Speakers:
Michael Perrone (AI Partnerships Program Director, IBM Thomas J. Watson Research Center)
Mark Jackson (Scientific Lead, Cambridge Quantum Computing)
Jose Penabad (Chief Investment Officer, HCG Funds)
Edward Conrads (Head of Investment Research, Colchis Capital)
12:30 p.m. Closing Remarks — William Spaniel (FRB Philadelphia)
Lunch (boxes available for takeaway)

Renaissance Philadelphia Downtown Hotel External Link (about a 10-minute walk)
401 Chestnut Street
Philadelphia, PA 19106

A block of rooms has been reserved at the Renaissance Philadelphia Downtown Hotel for the nights of November 12-15, 2018 ($229.00 per night). 

Due to limited availability, please reserve a room before October 12, 2018, by clicking the link above.

Click here for information on visiting the Philadelphia Fed.

Contact Us

For more information, contact:
Julapa Jagtiani
julapa.jagtiani@phil.frb.org E-Mail