And it is helping to fuel consolidation by creating economies of scale. Competition and technological improvements are sparking the discovery of new, more efficient ways to fulfill basic functions such as pooling funds and managing risks. As with the Internet, we're only just beginning to imagine the possibilities of technology in banking. But technology also raises serious questions about the future of banking and its role in the economy. These are not easy questions to answer, but neither do I think they are insurmountable.
Technology is nothing more than an enabler.
Let me also emphasize that small banks should not consider themselves excluded from the benefits of technological innovation. While it does create challenges, technology also presents opportunities. Companies may choose to continue purchasing financial products and services from banks because the quality is high or the costs are low, not because the provider is a bank. In addition, banks may find new roles to fill. For example, if the volume of small business loan securitization increases, banks could play an important risk management role in evaluating and monitoring locally-based credits.