Electronic Finance: Reshaping the Financial Landscape Around the World

Abstract:     
Because financial services are highly dependent on technology and well-suited to remote delivery, technological advances and the advent of the Internet are causing dramatic changes in the industry. This revolution could accelerate financial sector development by lowering the costs, increasing the breadth and quality, and widening access to financial services. This paper analyses the changes in the industry and their implications for public policy. It finds that, over the long term, there will be an opportunity to reduce the financial sector safety net and correspondingly prudential regulation and supervision. Over the short term, authorities should be wary to extend the safety net. In addition, competition policy, consumer protection, and consumer education will become more important. Though these issues are more advanced in developed countries, they are quickly becoming more relevant in emerging markets.

Number of Pages in PDF File: 36

Keywords: Financial services, emerging markets, electronic finance, public policy, regulation

JEL Classification: G20, G28, G15, G18, G10

working papers series