Hilary J. Allen isn't sorry if you find her new book scary. In fact, she's hoping that Driverless Finance: Fintech's Impact on Financial Stability can spook enough people to create momentum for change.

Allen was involved in the Financial Crisis Inquiry Commission that was formed by Congress to study the causes behind the 2008 financial crisis. Now she sees the possibility of financial collapse on an even greater scale with AI technology being used in the financial industry; "smart contracts" that could bring down banks before human intervention is possible; cryptocurrency and non-fungible token sales being made for the purpose of speculation; and tech giants like Apple, Facebook, Amazon and Google contemplating offering financial services. In the future, she warns, banks might not be the only entities that become "too big to fail." 

While the public is concerned about the safety of driverless cars, there's much less awareness about driverless finance, and the dangers it could pose to the global financial system are real, says Allen. 

In this episode of the Modern Law Library, Allen speaks with the ABA Journal's Lee Rawles about the promise and downsides of some "cutting-edge" financial products, and why innovation is not inherently good. She suggests some avenues for regulation and oversight, urges that regulators be given the technology and access to expertise they need to keep up with new financial products and markets, and explains what an NFT is–and what it isn't.

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