16 i thought one response to the csbs survey said it best. the banker wrote, “ [ t ] he future of consumer banking seems to be as a participant in the ecosystem of lifestyle technological solutions rather than as a standalone banking relationship. ” the problem is, as the banker continued, “ [ i ] t ’ s hard to imagine what exactly that will look like and how it will change the banking business model. ” 17 see, for example, the independent community bankers of america, fintech strategy roadmap for community banks ( washington : the independent community bankers of america, march 2018 ), https : / / www. icba. org / docs / default - source / icba / icba - fintech - strategy - roadmap - ( 03 - 12 - 16 ). pdf? sfvrsn = 6a0e7117 _ 4. fintech strategy roadmap. see csbs community bank survey in note 5. - 6what can the federal reserve do to foster prudent community bank innovation? i believe that if a bank has not started thinking about how innovation may impact its business, it is very late to the game. this does not mean that every bank has to run out this afternoon and partner with a fintech firm — there may be all kinds of thoughtful reasons not to engage with them. what matters is that banks, particularly community banks, have gone through the process of thinking about the relevant issues. 18 but there are many questions about how community banks are adjusting to the changing environment. for instance, about 40 percent of community banks say that they do not currently offer online loan applications and have no immediate plans to do so. 19 that 40 percent may represent bankers who have not gone through the process of thinking about the way innovation impacts their business. but it could just as easily include bankers who have looked at the issue carefully and concluded that online loan applications do not fit within their business model. most importantly, though, it may indicate that some community banks may feel that they are simply not able to leverage new technology. most small banks are dependent on partnerships with third parties to make use of new technologies. 20 i am concerned that some banks are not innovating because they feel they lack the ability to navigate the complex regulatory and compliance issues that may arise. among the national risk committee at the office of the comptroller of the currency ( occ ) warns that, “ [ f ] ailure to appropriately

frederic s mishkin : the importance of economic education and financial literacy speech by mr frederic s mishkin, member of the board of governors of the us federal reserve system, at the third national summit on economic and financial literacy, washington dc, 27 february 2008. the original speech, which contains various links to the documents mentioned, can be found on the us federal reserve system ’ s website. * * * as an educator myself, it's a pleasure to be here today to take part in this important event that brings people together from educational organizations all over the country, with the common goal of educating students and citizens in the fundamentals of economic and financial literacy. as many of you know, the federal reserve has had a long and fruitful relationship with the national council on economic education ( ncee ), through our many reserve bank collaborative efforts around the country, and through leadership at the national level. this leadership is evidenced, in part, by the involvement of my former and present colleagues on the federal open market committee, cathy minehan and gary stern, who currently serve as ncee board members. cathy, of course, is the former president of the federal reserve bank of boston, a bank that under her leadership has played a key role in furthering economic education in our new england states. gary is president of the federal reserve bank of minneapolis, from where he has served not only as a long - time member on ncee's board, but also as its chair. and they are just two of the many federal reserve bank presidents and officials who have worked to foster and improve economic education with the national council over the years. there can hardly be a better time to make the case for economic and financial literacy than right now. others have doubtless stood before an audience like you in years past and made the same case, but now we face a downturn in our housing industry fueled, at least in part, by unwise mortgage borrowing and, at times, abusive lending practices. improving consumers'knowledge of the home mortgage process will better equip them to avoid unsuitable mortgages in the future. our national economy has been strained by this housing slowdown and other forces, causing policymakers and others to debate what response is necessary. also, during this election season, we are reminded of the importance of economic issues. just a brief consideration of these three cases shows that a better - educated citizenry can not only contribute to a better functioning economy, but also to a more