How asset transformation matters for the fate of technology-led banks?

Maxence Miéra (), Nicolas Bédu () and Viola Lamani ()
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Maxence Miéra: Univ Artois, CNRS, IESEG School of management, Univ Lille, UMR 9221, Lille Economie Management (LEM)
Nicolas Bédu: ART-Dev, Univ Montpellier, CNRS, Univ Paul Valéry Montpellier 3, Univ Perpignan Via Domitia, CIRAD
Viola Lamani: Univ Paul Valéry Montpellier 3, Univ Montpellier, Univ Perpignan, CNRS, CIRAD, ART Dev UMR 5281

Economics Bulletin, 2024, vol. 44, issue 1, 74 - 87

Abstract: This paper examines the efficiency of technology-led banks (i.e. internet banks, mobile banks or FinTech startups offering banking services) in a simple theoretical model using conventional banks as a competitive benchmark. We show that the fate of technology-led banks crucially relies on their level of asset transformation. We identify two critical thresholds of asset transformation in a general contractual setting. The first determines whether technology-led banks are feasible to set up, while the second determines when technology-led banks are at least as attractive as conventional banks.

Keywords: Asset transformation; internet banking; mobile banking; FinTechs (search for similar items in EconPapers)
JEL-codes: G2 (search for similar items in EconPapers)
Date: 2024-03-30
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