Working Paper: NBER ID: w22476
Authors: Thomas Philippon
Abstract: This paper assesses the potential impact of FinTech on the finance industry, focusing on financial stability and access to services. I document first that financial services remain surprisingly expensive, which explains the emergence of new entrants. I then argue that the current regulatory approach is subject to significant political economy and coordination costs, and therefore unlikely to deliver much structural change. FinTech, on the other hand, can bring deep changes but is likely to create significant regulatory challenges.
Keywords: Fintech; Financial Stability; Regulation; Access to Services
JEL Codes: G2; G38; L1; L4; O3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| High costs of existing financial services (G29) | Emergence of fintech firms (G29) |
| Political economy and coordination costs (P11) | Regulatory reforms (G18) |
| Fintech innovations (G21) | New regulatory challenges (L51) |