Entry Barriers in Fintech

Chapter in "Fintech Competition," Konstantinos Stylianou et al. eds. (Forthcoming, 2023 London: Bloomsbury-Hart).

21 Pages Posted: 4 Oct 2022

See all articles by Ryan Clements

Ryan Clements

University of Calgary Faculty of Law

Date Written: August 24, 2022


Despite its disruptive impact on legacy financial institutions, processes, and services, the use of new technologies in finance has many potential consumer welfare benefits and market efficiencies. Yet new financial technology (fintech) firms often face significant barriers to entry. This chapter identifies the core entry barriers that new firms face when attempting to enter the market for technology-mediated financial services. Restrictive fintech entry barriers experienced to date across global markets include financial and human capital acquisition challenges, market concentration forces, economies of scale and scope, service-bundling, market integration and infrastructure access concerns, network effects from multi-layered platform enterprises, consumer financial data access, portability and control barriers, concerns relating to technology infrastructure, standardization and interoperability, regulatory imposed entry barriers and uncertainties, and consumer perceptions of stability and trust. This chapter concludes with policy recommendations to alleviate fintech market entry barriers while ensuring appropriate consumer and financial system protections and safeguards.

Keywords: Fintech, Entry Barriers, Network Effects, Platform Finance, Interoperability, Switching Costs, Concentration Risk

JEL Classification: K2, K21, K22, K29

Suggested Citation

Clements, Ryan, Entry Barriers in Fintech (August 24, 2022). Chapter in "Fintech Competition," Konstantinos Stylianou et al. eds. (Forthcoming, 2023 London: Bloomsbury-Hart)., Available at SSRN: https://ssrn.com/abstract=4199669 or http://dx.doi.org/10.2139/ssrn.4199669

Ryan Clements (Contact Author)

University of Calgary Faculty of Law ( email )

Murray Fraser Hall
2500 University Dr. N.W.
Calgary, Alberta T2N 1N4
4036191173 (Phone)

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