FRB Governor Lael Brainard Highlights Benefits And Risks In The Evolving Digital Payment Market

Federal Reserve Board ("FRB") Governor Lael Brainard highlighted market benefits and risks as technology firms lead the digital transformation of payments.

Governor Brainard said customers can expect to see an increase in competition, improved product offerings and lower transaction costs. She also noted that the transformation expands financial inclusion and makes financial services more accessible and consumer-friendly. However, she cautioned that the integration of payments with consumer services creates risks. These involve (i) data security risks on payment methods, (ii) the potential for improper use of consumers' financial data, and (iii) unauthorized disclosure to third parties.