Recent innovations have disrupted traditional practices in the financial services industry and started to expand access to various types of financial markets, products and services for all Americans, no matter their education levels, employment, wealth, or socioeconomic status. This disruption, however, has led many policymakers to question whether many Americans are capable of using these products and services responsibly to make their own financial decisions. AClI challenges this paternalistic way of thinking – governments can and should craft policies that promote free markets and the ability of all Americans to access the financial system, while at the same time protecting them from fraud and abuse.
Consumer Banking
Access to banking products and services, whether provided directly by traditional banks or via financial technology companies, is a critical component of creating financial stability. Consumer banking, also called retail banking, provides the tools Americans need to better understand and manage their personal finances, easily pay bills, transfer money, and save for major life expenses (such as buying a car or a home, paying medical bills, or sending a child to college). But not every American can access or afford traditional banking products and services, shutting them out of an important part of the financial system. Policymakers should implement solutions that protect customers while supporting financial institutions, including local and community banks and financial technology companies (which partner with traditional banks), that offer innovative and affordable products and services, particularly to underserved communities.
Securities
Long-term participation in the U.S. stock market is one of the best ways for Americans to build generational wealth. According to a 2021 study, investments in the stock market increased shareholder wealth on a net basis by $47.4 trillion between 1926 and 2021, but this wealth is still largely concentrated among the richest Americans. Innovative investing platforms are breaking down historic barriers to entry, such as high trading commissions and advisory fees, which have brought millions of new investors into the stock market. Regulators in Washington are now threatening to take this historic progress away by proposing new rules that would make investing more difficult and expensive for millions of Americans. AClI supports solutions that expand access to the stock market, not regulations that will close it off.
Cryptocurrencies
Cryptocurrencies and blockchain technology have the potential to make our financial system more efficient and inclusive, with high adoption rates among traditionally underserved communities. But significant uncertainty remains, particularly around the appropriate regulatory framework needed to govern the market for digital assets. The U.S. must continue to be a world leader in financial services innovation – for cryptocurrencies, this means implementing a practical and clear federal regulatory framework that offers robust consumer protections without regulating the industry out of business.
Recent surveys suggest that financial illiteracy is a growing problem that is costing some Americans thousands of dollars a year. This lack of financial literacy often functions as a barrier to participating in the U.S. financial system, which hinders the ability of many Americans to save and build wealth over time. Today, financial services companies and non-profit organizations are trying to change this troubling trend by broadly offering relevant and accessible financial education through new tools and channels designed to meet individuals where they are, including on their mobile phones. ACII believes that more accessible financial education, which the wealthy have had access to for decades, is crucial to ensuring that every American has the tools needed to make informed financial decisions.
Innovations in the way financial products and services are being delivered to consumers and investors are helping bring record numbers of Americans into the U.S. financial system. Americans today (particularly younger generations) demand the ability to bank and invest, as well as conduct countless other forms of personal finance and commerce, via apps on their mobile phones. Financial services companies have started to meet this demand through intuitive, modern apps that promote financial engagement and education, and eliminate traditional frictions – such as lengthy, paper-based account sign-up processes and slow, impenetrable websites – that have kept many individuals from participating in the financial markets. Now these apps are under attack by regulators and so-called consumer advocates who claim that they are “gamifying” investing and manipulating Americans into making financial decisions against their own interests. ACII rejects this false premise and supports the ability of tens of millions of capable Americans to access and consume financial products and services on their own terms.