Thorsten Beck, Yung Chul Park, 16 September 2021

The recent wave of financial innovation related to digitalisation has the potential to change the landscape of financial service providers quite dramatically, creating the need for a flexible regulatory framework that can accommodate these changes while safeguarding stability. This column introduces a new eBook that takes stock of financial digitalisation over the past decade and applies global lessons to the regulatory debates in Korea.

Josh Lerner, Amit Seru, 14 September 2021

Financial innovation is intensely controversial, yet we know little about where or by whom these new products and services are developed. This column looks at over 24,000 financial US patents applied for between 2000 and 2018 to analyse the nature of financial patents. A surge in financial patenting was driven by IT firms and firms in industries outside of finance. Financial regulatory actions seem to have adversely affected innovation by financial firms, while regions with the highest technological opportunities attracted financial innovation by IT and non-financial firms.

Dirk Niepelt, 07 September 2021

The research policy network on Fintech and Digital Currencies has an ever-expanding list of issues for its researchers. Dirk Niepelt of the University of Bern, RPN director, explains what's top of the agenda for central banks and policymakers, and how the RPN can influence their decisions.

Orkun Saka, Barry Eichengreen, Cevat Giray Aksoy, 09 July 2021

Although epidemics are frequently cited as inducing changes in economic behaviour and accelerating technological and behavioural trends, there may be important differences across socioeconomic groups in ability to utilise such new technologies. This column studies these issues in the context of fintech adoption and finds strong evidence of epidemic-induced changes in economic and financial behaviour, of differences in the extent of such shifts by more and less economically advantaged individuals, and of a role for IT infrastructure in spreading or limiting the benefits of technological alternatives.  The results highlight both the behavioural response to epidemics and the digital divide.

Giorgio Barba Navaretti, Alberto Pozzolo, 12 March 2021

It has been two years since Wirecard suddenly collapsed. Giorgio Barba Navaretti and Alberto Pozzolo explain to Tim Phillips why it is so hard to supervise global fintechs, and how regulators can do a better job next time.

Giulio Cornelli, Sebastian Doerr, Leonardo Gambacorta, Ouarda Merrouche, 02 February 2021

The rapid growth of innovative companies that use new technology has the potential to transform the financial sector fundamentally. This column shows that regulatory sandboxes – a prominent and widely adopted regulatory tool to spur innovation in the financial sector while staying alert to new risks – help these fintechs raise capital. They do so by reducing informational frictions and regulatory uncertainty.

Giorgio Barba Navaretti, Giacomo Calzolari, Alberto Pozzolo, 22 November 2020

The default of Wirecard highlights several problems in the regulation and supervision of Fintech companies, with regulatory holes in investor protection, customer protection, and financial stability. This column argues that since Fintech companies can be very complex, their oversight requires understanding their business model and combining regulation and supervision based on both entities and activities. The global reach of Fintechs also calls for better coordination at the European level and beyond, but the authors do not see the need for new regulatory body to oversee Fintechs in Europe.

Giulio Cornelli, Jon Frost, Leonardo Gambacorta, Raghavendra Rau, Robert Wardrop, Tania Ziegler, 20 November 2020

Credit markets around the world are undergoing a transformation. Fintech and big tech firms are providing more lending to households and small businesses. Using a new database, this column estimates that fintech credit flows reached $223 billion in 2019, while big tech credit reached $572 billion. Both forms of credit are larger where there is greater (unmet) demand for credit and where economic and institutional factors favour the supply of such lending. The Covid-19 pandemic represents an important test for these new business models.

Molly Lesher, 13 October 2020

Many new innovations do not fit neatly into the traditional definitions of markets as recognised by existing regulatory bodies. One way policymakers can define new regulatory frontiers for such technologies is to implement ‘sandboxes’ – frameworks that provide participant companies with some regulatory flexibility while insulating the impact on consumers. This column argues that while sandboxes can bring benefits, they are not always the best approach and policy experimentation can – and should – take many forms.

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CEPR and INSEAD are organizing a series of webinars discussing recent technology developments in financial markets. This initiative is part of the activities of the CEPR Research and Policy Network on Fintech and Digital Currencies.

The webinars will bring together two speakers to discuss a relevant policy issue. The sessions will be moderated by Antonio Fatás (INSEAD and CEPR) and questions from the audience will be possible.

  • Wednesday 2 September: Topic: Digital Currencies and Payments. Speakers: Christian Catalini (Libra) and Tara Rice (BIS).
  • Tuesday 15 September: Topic: Distributed Ledger Technologies and Financial Markets. Speakers: Hanna Halaburda (NYU Stern) and Raphael Auer (BIS and CEPR).
  • Wednesday 30 September: Topic: Fintech, Financial Inclusion and Competition. Speakers: Thomas Philippon (NYU Stern and CEPR) and Aaron Klein (Brookings).

Each webinar will start at 2PM London time, and last 45 minutes. 

Register for the 30th September: 

https://us02web.zoom.us/webinar/register/2015979976087/WN_5Y0wlngASUSR2A...

Christoph Basten, Steven Ongena, 15 August 2020

Recently, the debate around potential changes to financial intermediation with the introduction of new technology or FinTech has gained pace. Using data on bank responses to household mortgage applications through a Swiss web platform, this column contributes to the debate by showing how online platforms can allow smaller banks to expand to areas beyond their branch network. It finds enormous potential for web platforms to shake up local lending competition, open up new ways for geographical diversification, and facilitate automation of lending decisions.

Arnoud Boot, Peter Hoffmann, Luc Laeven, Lev Ratnovski, 21 July 2020

Technological change in the financial industry is accelerating. Recent developments include new innovations and improvements on past trends. This column distinguishes between the information and communication channels of financial innovation and analyses their implications for financial intermediation. It suggests that innovations in these two dimensions may lead to big changes in the traditional bank business model. New policy priorities should focus on accurately assessing the operational risks and ensuring the robustness of these technologies.

Elena Carletti, Stijn Claessens, Antonio Fatás, Xavier Vives, 18 June 2020

The Covid-19 pandemic has induced a deep global economic crisis. While so far banks have shown their resilience, partly thanks to major reforms after the crisis of 2007-2009, the crisis will put them under stress. Moreover, the traditional banking model was already being challenged pre-Covid by three trends: persistently low interest rates, enhanced regulation, and increased competition from shadow banks and digital entrants. This column introduces the second report in the Future of Banking series from the IESE Business School and CEPR, which provides a perspective on how the current crisis and these trends will shape the future of the banking sector.

Johannes Ehrentraud, Denise Garcia, 19 April 2020

Technological innovations in financial services are affecting every sector of the financial industry and generating a surge of new applications. This column takes stock of the policy responses to fintech developments in approximately 30 jurisdictions worldwide and proposes a novel conceptual framework – the ‘fintech tree’ – that distinguishes three categories: fintech activities, enabling technologies, and policy enablers. Designing a policy framework for fintech will require finding a balance that maximises its benefits while minimising potential risks to the financial system.

Antoinette Schoar, 28 January 2020

Tech developments have made many things more efficient, convenient and cheaper — but there’s also a downside.

Jon Frost, Leonardo Gambacorta, Yi Huang, Hyun Song Shin, Pablo Zbinden, 04 October 2019

BigTech firms are entering finance, and their access to massive amounts of information may give them an edge in areas like credit assessment and beyond. This column assesses the economic forces behind the adoption of Big Tech services in finance. It shows that BigTech lenders thrive in countries with less competitive banks and less strict regulation, and that they have an information advantage from the use of big data and machine learning.

Tara Rice, Kathryn Petralia, 24 September 2019

On 24 September the CEPR launched the latest Geneva Report on the world economy, called Banking disrupted? Financial intermediation in an era of transformational technology. Tim Phillips asks Tara Rice and Kathryn Petralia, two of the authors, whether fintechs and cryptocurrencies signal the beginning of the end for banks.

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

FinTech and Big Tech firms are both increasingly stepping on banks’ traditional turf. This column introduces the 22nd Geneva Report on the World Economy, which looks at the challenges generated by new technology-enabled entrants to the global banking industry and the public authorities that oversee it. It argues that to respond adequately to the FinTech/Big Tech challenge, authorities will need to raise their game and enter uncharted territories.

Tobias Adrian, Tommaso Mancini-Griffoli, 09 September 2019

New entrants are vying to occupy the space once used by paper bills. This column, part of the VoxEU debate on the future of digital money, proposes a simple framework to make sense of who is attempting to pry our wallets open. It argues that the adoption of new digital means of payment could be rapid and bring significant benefits to customers and society, but that the risks must be tackled with innovative approaches and heightened collaboration across borders and sectors. One approach is for central banks to engage in a public–private partnership with fintech firms to provide a safe, liquid, and digital alternative to cash: synthetic central bank digital currency.

Marlene Amstad, 21 March 2019

Two events have shaped the financial system over the past ten years: the Global Crisis and the rise of fintech. But while the lessons learned after the crisis have been widely discussed and the regulatory response broadly agreed upon, the question of whether and how to regulate fintech is a topic of an ongoing policy debate. This column discusses the three basic options that regulators have: ignore it, ‘duck type’ rules into existing regulations, or specifically tailor new regulations.

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