IMF Working Papers

Curb Your Enthusiasm: The Fintech Hype Meets Reality in the Remittances Market

By Tito Nícias Teixeira da Silva Filho

December 2, 2022

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Tito Nícias Teixeira da Silva Filho. Curb Your Enthusiasm: The Fintech Hype Meets Reality in the Remittances Market, (USA: International Monetary Fund, 2022) accessed December 3, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Fintech has become one of the most popular topics among policymakers and experts. It usually comes with the qualifier “disruptive”. Thus, the hype is easy to understand: fintech would upend the financial system due to its disruptive nature, as it would allow financial services to be completed faster, cheaper, and more efficiently. Indeed, many have predicted that the remittances market was on the verge of being disrupted as remittances are considered too costly while remittance service providers inefficient, opaque, and outdated. Therefore, there seems to be no better setting for assessing the allegedly disruptive effects of fintech. Against that background, this paper investigates how those predictions have fared so far. Contrary to expectations, it found that instead of disrupting incumbents fintechs have increasingly been entangled with them. Therefore, not only there is no evidence of disruption, but it is unlikely to occur in the foreseeable future. Even so, the paper argues that fintechs play an important role in the remittances market.

Keywords: Bitcoin, Blockchain, Disruptive, Financial inclusion, Fintech, Innovation., Mobile money, Remittances costs, Remtech

Publication Details

  • Pages:

    45

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2022/233

  • Stock No:

    WPIEA2022233

  • ISBN:

    9798400225901

  • ISSN:

    1018-5941