Fintech and Financial Services : Initial Considerations

Author/Editor:

Dong He ; Ross B Leckow ; Vikram Haksar ; Tommaso Mancini Griffoli ; Nigel Jenkinson ; Mikari Kashima ; Tanai Khiaonarong ; Celine Rochon ; Hervé Tourpe

Publication Date:

June 19, 2017

Electronic Access:

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Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary:

A new wave of technological innovations, often called “fintech,” is accelerating change in the financial sector. What impact might fintech have on financial services, and how should regulation respond? This paper sets out an economic framework for thinking through the channels by which fintech might provide solutions that respond to consumer needs for trust, security, privacy, and better services, change the competitive landscape, and affect regulation. It combines a broad discussion of trends across financial services with a focus on cross-border payments and especially the impact of distributed ledger technology. Overall, the paper finds that boundaries among different types of service providers are blurring; barriers to entry are changing; and improvements in cross-border payments are likely. It argues that regulatory authorities need to balance carefully efficiency and stability trade-offs in the face of rapid changes, and ensure that trust is maintained in an evolving financial system. It also highlights the importance of international cooperation.

Series:

Staff Discussion Notes No. 17/05

Subject:

English

Publication Date:

June 19, 2017

ISBN/ISSN:

9781484303771/2221-030X

Stock No:

SDNEA2017005

Format:

Paper

Pages:

49

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