FinTech, BigTech, and the Future of Banks

René Stulz

No 26312, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Banks are unique in that they combine the production of liquid claims with loans. They can replicate most of what FinTech firms can do, but FinTech firms benefit from an uneven playing field in that they are less regulated than banks. The uneven playing field enables non-bank FinTech firms to challenge banks for specific products whose success is not tied to what makes banks unique, but they cannot replace banks as such. In contrast, BigTech firms have unique advantages that banks cannot easily replicate and therefore present a much stronger challenge to established banks in consumer finance and loans to small firms. Both Fintech and BigTech are contributing to a secular trend of banks losing their comparative advantage as they have less access to unique information about parties seeking credit.

JEL-codes: G21 G23 G24 G28 G51 (search for similar items in EconPapers)
Date: 2019-09
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-pay
Note: CF
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (75)

Published as René M. Stulz, 2019. "FinTech, BigTech, and the Future of Banks," Journal of Applied Corporate Finance, vol 31(4), pages 86-97.

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Journal Article: FinTech, BigTech, and the Future of Banks (2019)
Working Paper: FinTech, BigTech, and the Future of Banks (2019)
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