On Fintech and Financial Inclusion

19 Pages Posted: 9 Mar 2020

See all articles by Thomas Philippon

Thomas Philippon

New York University (NYU) - Department of Finance; National Bureau of Economic Research (NBER)

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Date Written: February 12, 2020


The cost of financial intermediation has declined in recent years thanks to technology and increased competition in some parts of the finance industry. I document this fact and I analyze two features of new financial technologies that have stirred controversy: returns to scale and the use of big data and machine learning. I argue that the nature of fixed versus variable costs in robo-advising is likely to democratize access to financial services. Big data is likely to reduce the impact of negative prejudice in the credit market but it could reduce the effectiveness of existing policies aimed at protecting minorities.

Keywords: fintech, discrimination, robo advising, credit scoring, big data, machine learning

JEL Classification: E2, G2, N2

Suggested Citation

Philippon, Thomas, On Fintech and Financial Inclusion (February 12, 2020). BIS Working Paper No. 841, NYU Stern School of Business, Available at SSRN: https://ssrn.com/abstract=3549530

Thomas Philippon (Contact Author)

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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