Economists and financial experts gathered at the Federal Reserve Bank of Boston for its 68th Economic Research Conference to discuss how technological advancements, such as machine learning and artificial intelligence, might reshape financial services. The event, titled "The Future of Finance: Implications of Innovation," examined potential impacts on financial inclusion, small businesses, bank regulation, and monetary policy.
Boston Fed President and CEO Susan M. Collins emphasized the importance of exploring both opportunities and risks associated with financial innovation. She noted that technology is rapidly evolving and will likely grow in significance. “We want to explore the potential impacts on traditional and nontraditional financial intermediaries, and, more broadly, on the public’s access to financial services,” Collins stated.
During the conference, researchers presented four papers addressing various topics related to technological innovation in finance. Two panel sessions focused on bank regulation technology and cryptocurrency.
Senior economists Wang and Landoni from Boston Fed discussed their findings on small businesses accessing Paycheck Protection Program loans during the COVID-19 pandemic. They observed that businesses with pre-existing relationships with banks secured loans more swiftly than those relying on fintech companies.
Adair Morse from the University of California's Haas School of Business delivered the keynote address titled “AI Innovation for Credit: Frontiers of Benefits & Red Flags.” Morse highlighted AI's role in enhancing profitability through targeted marketing and efficient underwriting models but warned against potential issues like deception, price collusion, and discrimination.
Morse questioned whether AI lenders would support small business needs or prioritize profits over community interests. She stressed a holistic approach towards AI adoption to navigate safely into this new era.
Further details about the conference participants, papers presented, and session recordings can be accessed at bostonfed.org.
For media inquiries or connections with Boston Fed experts, contact Amanda Blanco from the communications team at the Federal Reserve Bank of Boston.
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