Banking Disrupted? Financial Intermediation in an Era of Transformational Technology

Kathryn Petralia, Thomas Philippon, Tara Rice, Nicolas Véron 24 September 2019



The provision of financial services is profoundly changing worldwide – so much so that many commentators are predicting the death of banking as we know it. The threat of banks’ extinction is not new; it has been heralded many times in the past.  For centuries, as banks have expanded and evolved, they have faced competition from other types of financial institutions. Despite high barriers to entry and as a result, relatively low turnover, many commentators have anticipated the end of the traditional banking business model.

Today, we are again experiencing radical changes in the way households and businesses transact. The primary drivers are rapid advances in technology and post-crisis changes in the financial regulatory landscape, both of which have fuelled increased competition and encouraged new entrants in the provision of financial services. Critically, today’s competition for big bank business models emanates from nonbank firms whose core strategy centres around technological innovation (‘Big Tech’ and ‘FinTech’ firms) and from nonbank financial institutions such as large asset managers.

The 22nd Geneva Report on the World Economy reviews the financial services landscape and how it has changed over the last several decades, discusses the competition from FinTech and Big Tech, and considers critical public policy questions surrounding the future of banking.

Download the PDF of the report here.

Listen to Kathryn Petralia and Tania Rice discuss the report here

President, Co-Founder of Kabbage

Max L. Heine Professor of Finance, NYU Stern School of Business and CEPR Research Affiliate

Bank for International Settlements

Senior Fellow, Bruegel and Peterson Institute for International Economics


CEPR Policy Research