Bridging the Gap? Fintech and financial inclusion

Josep Gisbert and José E. Gutiérrez
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Josep Gisbert: IE UNIVERSITY
José E. Gutiérrez: Banco de España

No 2426, Working Papers from Banco de España

Abstract: The rise of FinTech lenders offers an opportunity to promote financial access but may disrupt banks’ banking efforts. This paper presents a banking model where an incumbent bank specializes in certain niche markets. When a FinTech lender enters, competition intensifies, reducing the bank’s gains from serving some of its niches. Although FinTech lending can help serve certain unattended niches, the bank may abandon others, creating an ambiguous impact on financial inclusion. Financial inclusion may even decline when the FinTech lender is less efficient at serving new niches and better able to compete with the bank for its customers.

Keywords: FinTech; financial inclusion; soft information; regulatory arbitrage; economic growth (search for similar items in EconPapers)
JEL-codes: G21 G23 G28 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2024-08
New Economics Papers: this item is included in nep-fdg, nep-fle and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:2426

DOI: 10.53479/37433

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