On Nov. 21, the United States Congressional Task Force on Financial Technologies held a hearing on the role of big data in financial services.
The last major legislation focused on the subject was the Gramm-Leach-Bliley Act of 1999, which formalized a financial service firm’s obligations to clients — specifically, how they share client information. Given the field’s expansion over the past 20 years, the Fintech Task Force’s posture on Thursday was that of an early exploration of options and opportunities for new and major legislation.
The current conundrum
Obviously, the scene has changed remarkably since 1999. Financial services are more accessible than ever. Smartphones and powerful free apps have put financial capabilities previously reserved for industry professionals literally into the hands of everyday consumers. The flip side, as the task force seemed to acknowledge, is that many of those financial opportunities approach consumer data predatorily. The old axiom “if you are not paying for the product, the product is you” seemed to frame the conversation.
While the public eye was largely directed at the ongoing Trump impeachment hearings the same day, the members of the Fintech Task Force — led by chairman Stephen Lynch (D-MA) and ranking member Tom Emmer (R-MN) — questioned five expert witnesses who testified as to the state of the industry and appropriate measures to rein in big tech.
The five testifying
The witnesses espoused a range of views reflective of highly distinct professional backgrounds. Lauren Saunders, an associate director at the National Consumer Law Center, focused on minimizing firms’ legal right to use consumer data in ways beyond those that users would reasonably expect. She also expressed concern about the ways that machine learning was amplifying discriminatory financial practices in ways that would be harder to correct than in traditional systems.
An associate professor of computer science at Brown University and…