The BIS has today released Working Paper No 655 (the FinTech Opportunity) by Thomas Philippon.
The paper assesses the potential impact of FinTech on the finance industry. It documents first that financial services remain surprisingly expensive, which explains the emergence of new entrants. It then argues that the current regulatory approach is subject to significant political economy and coordination costs, and therefore unlikely to deliver much structural change. FinTech can improve both financial stability and access to services, but this requires significant changes in the focus of regulations.
BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS.