The impact of the FinTech revolution on the future of banking: Opportunities and risks

• Published in: International review of financial analysis Vol. 81; p. 102103
• Main Authors: Murinde, Victor, Rizopoulos, Efthymios, Zachariadis, Markos
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.05.2022
• Subjects: Banking; COVID-19; Financial regulation; FinTech revolution; FinTech-enabled services; COVID-19; O1; O3; FinTech revolution; FinTech-enabled services; Banking; G0; G2; Financial regulation
• ISSN: 1057-5219; 1873-8079
• DOI: 10.1016/j.irfa.2022.102103

The financial technologies (FinTech) revolution is in full swing globally. In this paper, we review the burgeoning literature on FinTech and FinTech-enabled services, focusing on the opportunities and risks for banks. Using high quality bank level data from 115 countries around the world for the past 16 years, we compute statistical moments of some key indicators of the changing banking landscape in the FinTech era. Our preliminary findings suggest that it is unlikely that FinTech lenders will replace banks, perhaps because banks are developing their own FinTech platforms or working with FinTech start-ups. We also showcase how regulation, global infrastructures and geopolitical frictions will shape the future of banking. We identify some promising research ideas; we also summarize some key implications, from existing research, for policy makers and practitioners. •We review the burgeoning literature on FinTech and FinTech-enabled services•We focus on the impact of FinTech on the future of banking, highlighting opportunities and risks•We compute key indicators using bank level data from 115 countries for 16 years and the FinTech era•We identify some promising research ideas, including the context of the Covid-19 pandemic•We summarize some key implications for policy makers and practitioners.