A large share of fintech lending is actually originated by bank partners working with fintech firms. Similarly, the funds that flow between a fintech lender and borrowers almost always travel across the payment services of a bank. So, while the changes in the market pose potential competitive threats to banks, the changes also raise potential new opportunities for banks.
This is especially true for community banks, which are frequently the banks working most closely with fintech lenders. 1  These remarks represent my own views, which do not necessarily represent those of the Federal Reserve Board or the Federal Open Market Committee.