Technological Change and Financial Innovation in Banking: Some Implications for Fintech

34 Pages Posted: 8 Oct 2018 Last revised: 21 Feb 2019

See all articles by W. Scott Frame

W. Scott Frame

Federal Reserve Bank of Dallas

Larry D. Wall

Federal Reserve Bank of Atlanta - Research Department

Lawrence J. White

New York University (NYU) - Leonard N. Stern School of Business, Department of Economics

Date Written: 2018-10-01

Abstract

Financial intermediation has changed dramatically over the past 30 years, due in large part to technological change. The paper first describes the role of the financial system in a modern economy and how technological change and financial innovation can affect social welfare. We then survey the empirical literatures relating to several specific financial innovations, broadly categorized as new production processes, new products or services, or new organizational forms. In each case, we also include examples of significant fintech innovations that are transforming various aspects of banking. Drawing on the literature on innovations from the 1990s and 2000s informs what we might expect from recent developments.

Keywords: financial innovation, technological change, banking, fintech

JEL Classification: G21, G23, O33

Suggested Citation

Frame, W. Scott and Wall, Larry D. and White, Lawrence J., Technological Change and Financial Innovation in Banking: Some Implications for Fintech (2018-10-01). FRB Atlanta Working Paper No. 2018-11. Available at SSRN: https://ssrn.com/abstract=3261732 or http://dx.doi.org/10.29338/wp2018-11

W. Scott Frame (Contact Author)

Federal Reserve Bank of Dallas ( email )

2200 N Pearl Street
Dallas, TX 75201
United States
214-922-6984 (Phone)

Larry D. Wall

Federal Reserve Bank of Atlanta - Research Department ( email )

1000 Peachtree Street, NE
Atlanta, GA 30309-4470
United States
404-498-8937 (Phone)
404-498-8956 (Fax)

HOME PAGE: http://www.frbatlanta.org/econ_rd/bios/wall.htm

Lawrence J. White

New York University (NYU) - Leonard N. Stern School of Business, Department of Economics ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

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