March 1, 2019 — Report

The use of technology in financial products and services (fintech) is resulting in a wide array of new approaches to financial products and services. The internet, mobile devices, big data, computer algorithms, and other technologies are impacting the way we borrow, make payments, and manage our money. These technologies are also changing the way that entities from credit reporting agencies to debt collectors affect and interact with us.

Fintech products and services have the potential to provide important benefits to consumers. They promise to lower costs, promote financial inclusion, help people avoid fees and comparison shop, improve personal financial management, and build assets and wealth. But innovation and fintech approaches are not invariably positive. New products may have hidden or unintended negative consequences, or risks that are not obvious at first. The dangerous pick-apayment and exploding adjustable rate mortgages that fueled the foreclosure crisis leading to the Great Recession of 2008 were innovations. New technology enabled banks to encourage overdraft fees on debit cards that can turn a $5 cup of coffee into a $40 one.