William C Dudley: Opportunities for economic growth in Puerto Rico Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, to representatives of Puerto Rico's business and academic communities, San Juan, Puerto Rico, 29 November 2016. * * * Jason Bram, Tony Davis, Andrew Haughwout and Joseph Tracy assisted in preparing these remarks. I am very pleased to be here and to have this opportunity to speak with representatives of Puerto Rico’s business and academic communities. In my remarks, I will discuss the lessons learned from municipalities in the United States that have faced crises over the years―such as New York City―and what those outcomes might imply for Puerto Rico as it seeks to restore and sustain economic growth. I will also touch briefly on the Puerto Rico Small Business Survey, a new survey from the New York Fed that focuses on the business performance, financing needs and borrowing experiences of firms across the Island. As always, what I have to say reflects my own views and not those of the Federal Open Market Committee or the Federal Reserve System. My meeting with you today is part of the New York Fed’s continuing efforts to understand what is going on at the grassroots level within our Federal Reserve district. We plan these trips so we can interact with a diverse group of stakeholders.
The focus on the Internet as a distribution channel is eroding boundaries between financial service providers and technology firms. Banks are increasingly providing technology services to customers, such as providing account reconciliation software. Likewise, technology firms are making inroads into services once thought the domain of banks and brokerage firms, such as financial planning or paying  BIS Review 32/2000  2  bills. Banks and brokerage firms are also partnering with Internet “portals” such as Yahoo! and America Online to offer services to Internet users. It is still far too early to determine just how, or to what extent, the Internet will change the financial services sector. For instance, it is important to note that, with few exceptions, most banks view the Internet as an important supplementary distribution channel and not as a replacement for branches that give you a physical presence in the communities you serve. Moreover, the true value of cross-selling remains uncertain, and the ability to collect and use personal data will have to be balanced against the demand for more protection of consumer privacy. On the commercial side, the largest institutions are actively pursuing the emerging “business-to-business” e-commerce markets, but the experience there is still too fresh to offer much insight into how those markets will evolve.