Banking and Financial Services was a consolidated industry, with few big names. You could count the number of major players on your fingertips. Regulating financial services used to be simple as well. One financial institution offering products and services to consumers, who needed to be protected from possible abuse of the trusted relationship. The value chain looked simple enough for a business graduate to decode in his first year. This was before the disruptive players started coming in, the Paypal and Intuits of the world.
Now, with mobile wallets, bank accounts on J-hooks, Personal Financial Management tools and outsourced sales for pay-day loans...the regulated entity is usually different from the entity that interfaces with the consumer...and there may be several additional entities involved as well.
There are usually valid reasons for this separation, especially when new technology is involved (mobile), or when the service being offered is simply informative or educational (such as in PFM tools). However, in other cases there is widespread abuse such as in the pay-day loans space, where the regulated entities might be hiding behind other entities as a business strategy. Even in the rapidly innovating prepaid space, the convenience of picking up a "full-service" account in the grocery check-out lane must be weighed against the potentially high cost to the consumer because of the regulatory niche that prepaid enjoys. We might be moving towards a far more complex regulatory framework that encompasses the entire new payments value chain
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