On Fintech and Financial Inclusion

Thomas Philippon

No 14221, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The cost of financial intermediation has declined in recent years thanks to technological progress and increased competition. I document this fact and I analyze two features of new financial technologies that have stirred controversy: returns to scale, and the use of big data and machine learning. I argue that the nature of fixed versus variable costs in robo-advising is likely to democratize access to financial services. Big data is likely to reduce the impact of negative prejudice in the credit market but it could reduce the effectiveness of existing policies aimed at protecting minorities.

JEL-codes: E2 G2 N2 (search for similar items in EconPapers)
Date: 2019-12
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