New FDIC CIO Sees Fintech as Path to Expand Banking
The Federal Deposit Insurance Corp. (FDIC) recently named Sultan Meghji as its first chief innovation officer. Meghji co-founded the fintech company Neocova in 2016, and is now tasked with heading the FDIC’s efforts to promote innovative technologies throughout the financial sector.
“Under his leadership, I am confident we will find innovative ways to utilize technology to modernize our bank supervision, enable community banks to adopt technological solutions, and bring more underserved people into the financial fabric of our nation,” said FDIC Chair Jelena McWilliams in a statement at the time.
According to an article appearing in Banking Dive, Meghji sees technology as critical to providing banking services to unbanked Americans, of whom there are 7.1 million comprising 5.4 percent of households in the United States.
“Technology is the best enabler of the unbanked,” he said, while noting that the COVID-19 pandemic has dramatically impacted this population.
“I think the vectors of success for dealing with the unbanked are going to be digital in nature,” he added. “The more you can get real-time digital platforms into the banking sector, the more opportunity we will have to move the needle. Bringing a customer on digitally where they can do three taps with their mobile device, versus going into a branch that may or may not be open⎯it’s night and day.”
Meghji has a long history in the digital banking space, previously working to implement digital banking in Kenya, Tanzania, and Uganda. In his early days at the FDIC, Meghji plans to figure out where there are pressures, opportunities, and demands in the banking ecosystem. He also stated that one of the main concerns for community banks is navigating the rapid growth of the financial services sector.
“Some are still struggling to deal with the pace of change,” Meghji said. “It’s been increasing for a while now and it’s going to continue increasing. It doesn’t matter where you are in this market, whether you’re a bank, a tech company or a regulator, technology is a de facto part of the discussion now and it has to be built into the organization.”
Community banks also face challenges like consolidation and competition from larger banks, credit unions, fintechs, and other lenders. McWilliams stressed at a 2019 conference at the Federal Reserve Bank of St. Louis the importance of keeping up with innovation technology in the financial sector.
“The survival of our community banks depends on it,” she said.