The Office of the Comptroller of the Currency (OCC) has published the white paper “Supporting Responsible Innovation in the Federal Banking System”. The paper describes the OCC’s vision for responsible innovation in the federal banking system and discusses the principles that will guide the development of our framework for evaluating new and innovative financial products and services asking all stakeholders for feedback on the proposed framework.
While innovation has many meanings, the OCC defines responsible innovation to mean:
“The use of new or improved financial products, services, and processes to meet the evolving needs of consumers, businesses, and communities in a manner that is consistent with sound risk
management and is aligned with the bank’s overall business strategy.”
The agency has formulated eight principles to guide the development of its frame work for understanding and evaluating innovative products, services, and processes that OCC-regulated banks may offer or perform, which are:
1. Support responsible innovation.
2. Foster an internal culture receptive to responsible innovation.
3. Leverage agency experience and expertise.
4. Encourage responsible innovation that provides fair access to financial services and fair treatment of consumers.
5. Further safe and sound operations through effective risk management.
6. Encourage banks of all sizes to integrate responsible innovation into their strategic planning.
7. Promote ongoing dialogue through formal outreach.
8. Collaborate with other regulators.
The white paper discusses each principle in detail and asks for comments on its proposal from all interested parties by 31 May 2016. The full report can be found here.