Financial Intermediation and Technology: What’s Old, What’s New?

Arnoud Boot, Peter Hoffmann, Luc Laeven and Lev Ratnovski ()

No 2020/161, IMF Working Papers from International Monetary Fund

Abstract: We study the effects of technological change on financial intermediation, distinguishing between innovations in information (data collection and processing) and communication (relationships and distribution). Both follow historic trends towards an increased use of hard information and less in-person interaction, which are accelerating rapidly. We point to more recent innovations, such as the combination of data abundance and artificial intelligence, and the rise of digital platforms. We argue that in particular the rise of new communication channels can lead to the vertical and horizontal disintegration of the traditional bank business model. Specialized providers of financial services can chip away activities that do not rely on access to balance sheets, while platforms can interject themselves between banks and customers. We discuss limitations to these challenges, and the resulting policy implications.

Keywords: WP; bank; firm; customer; financial service; provider; Bigtech firm; technology firms information; financial system; monetary policy; customer interface; adverse selection; market power; Communications in revenue administration; Technological innovation; Financial statements; Credit; Europe; Financial Intermediation; Financial Innovation; Fintech; Information; Communication; natural monopoly; legacy bank (search for similar items in EconPapers)
Pages: 32
Date: 2020-08-07
New Economics Papers: this item is included in nep-big, nep-fdg and nep-pay
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=49624 (application/pdf)

Related works:
Working Paper: Financial intermediation and technology: What’s old, what’s new? (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2020/161

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().