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Annual Review of Financial Economics

Volume 11, 2019

Digital Disruption in Banking

Abstract

This review surveys technological disruption in banking, examining its impact on competition and its potential to increase efficiency and customer welfare. It analyzes the possible strategies of the players involved—incumbents and FinTech and BigTech firms—and the role of regulation. The industry is facing radical transformation and restructuring, as well as a move toward a customer-centric platform-based model. Competition will increase as new players enter the industry, but the long-term impact is more open. Regulation will decisively influence to what extent BigTech will enter the industry and who the dominant players will be. The challenge for regulators will be to keep a level playing field that strikes the right balance between fostering innovation and preserving financial stability. Consumer protection concerns rise to the forefront.

Keyword(s): bank strategy, big data, BigTech, blockchain, competition, digital currencies, financial stability, FinTech, JEL G21, JEL G23, JEL G28, JEL L13, JEL L17, regulation
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2019-12-26
2024-04-25
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/content/journals/10.1146/annurev-financial-100719-120854
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Digital Disruption in Banking
Annual Review of Financial Economics 11, 243 (2019); https://doi.org/10.1146/annurev-financial-100719-120854
/content/journals/10.1146/annurev-financial-100719-120854
/content/journals/10.1146/annurev-financial-100719-120854
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