Simple innovations – such as those that would bring the underbanked into the financial mainstream – are often stymied by regulation, says Bank of America CEO Brian Moynihan.


Hodgepodge: Regulations are "absolutely scattered whenever you get the things you're trying to take to broad scale," Bank of America CEO Brian Moynihan said. Bloomberg News

Speaking at the FinTech Ideas Festival on Tuesday in San Francisco, Moynihan said that the complexity of the current regulatory framework makes introducing new products difficult. The event was sponsored by the Financial Services Roundtable.

"How many countries have to make a decision?" he said, talking about typical anti-money laundering and Know Your Customer laws. "That's the issue about the regulatory scheme – it's not that it exists or doesn't exist in innovation, it's that it is absolutely scattered whenever you get the things you're trying to take to broad scale."

He gave the example of a small-dollar deposit account, one that would allow millions of people without financial access to enter the mainstream banking system, letting anyone store any amount of value in the account.

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"But you have to agree on one thing," he said. "That you're not going to do the kind of AML/KYC on the account" that leads it to be over-regulated.

"Simple ideas – a de minimis account that you can use to exchange value – become caught in these questions of money laundering and all this stuff that leads people to regulate it," Moynihan said. "So it's not technology. It's just that we have to agree we're going to let a company go on."

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