Fintech and Banking. Friends or Foes?

Abstract

We examine the impact of Fintech on banks. Digital innovations and technology based business models could provide new business opportunities for incumbents, by transforming how they create value and deliver products and services. Or they could disrupt the existing structure of the financial industry, by blurring its boundaries and fostering strategic disintermediation. By providing new gateways for entrepreneurship, Fintech can ease the access to financial services, fostering competition by new players. To survive, incumbent banks will have to react, face rising competitive pressure and adopt new strategies. What will be the implications for their business models? How will the banking industry evolve with Fintech? And, similarly important, what are the implications for financial sector regulation?

Keywords: banks, banking regulation, credit and liquidity risk, investment and lending platforms, FinTech

JEL Classification: G21, G24, G38