{ "title": "Financial Intermediation and Technology: What’s Old, What’s New?", "publication": "IMF Working Papers, August 7, 2020", "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2020/08/07/financial-intermediation-and-technology-whats-old-whats-new-49624", "canonical": "https://www.imf.org/en/publications/wp/issues/2020/08/07/financial-intermediation-and-technology-whats-old-whats-new-49624", "overlayPath": "/en/publications/wp/issues/2020/08/07/financial-intermediation-and-technology-whats-old-whats-new-49624/index.md", "summary": "We study the effects of technological change on financial intermediation, distinguishing between innovations in information (data collection and processing) and communication (relationships and distribution).", "sections": [ { "heading": "Overview", "content": "- Authors: Arnoud W.A. Boot, Peter Hoffmann, Luc Laeven, Lev Ratnovski\n- Date: August 7, 2020\n- Series: Working Paper No. 2020/161\n- Summary:\n - We study the effects of technological change on financial intermediation, distinguishing between innovations in information (data collection and processing) and communication (relationships and distribution).\n - Both follow historic trends towards an increased use of hard information and less in-person interaction, which are accelerating rapidly.\n - We point to more recent innovations, such as the combination of data abundance and artificial intelligence, and the rise of digital platforms.\n - 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.\n - 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.\n - We discuss limitations to these challenges, and the resulting policy implications." }, { "heading": "Major findings and analysis", "content": "- Technological dimensions analyzed:\n - Information innovations: data collection and processing.\n - Communication innovations: relationships and distribution.\n- Key dynamics:\n - Historic trends toward increased use of hard information and less in-person interaction are accelerating rapidly.\n - The combination of data abundance and artificial intelligence represents a recent innovation with material implications for intermediation.\n - The rise of digital platforms changes the customer interface and distribution, enabling new intermediation structures.\n- Impacts on traditional banking:\n - New communication channels can lead to vertical and horizontal disintegration of the traditional bank business model.\n - Specialized providers of financial services can take over activities that do not rely on access to balance sheets.\n - Platforms can interject themselves between banks and customers, altering distribution and relationship dynamics.\n- Limitations and caveats:\n - The paper discusses limitations to the challenges posed by technology and platforms (details in the full working paper)." }, { "heading": "Policy implications and considerations", "content": "- Regulatory and policy focus areas highlighted:\n - Addressing the implications of disintermediation driven by communication innovations.\n - Considering the effects of data abundance and artificial intelligence on market structure and competition.\n - Assessing how platforms' intermediation between banks and customers affects consumer protection, market power, and financial stability.\n- Suggested orientation for policymakers (as discussed):\n - Evaluate how specialized providers and platforms alter the scope of bank activities that rely on balance-sheet access.\n - Consider policies that account for reduced in-person interaction and increased reliance on hard information.\n\n---\n\n Content in this bundle\n\n- Working Paper\n - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2020/08/07/financial-intermediation-and-technology-whats-old-whats-new-49624" } ], "bullets": [ "[Markdown version](/en/publications/wp/issues/2020/08/07/financial-intermediation-and-technology-whats-old-whats-new-49624/index.md)", "[Structured JSON version](/en/publications/wp/issues/2020/08/07/financial-intermediation-and-technology-whats-old-whats-new-49624/index.json)", "[Bundle manifest](/en/publications/wp/issues/2020/08/07/financial-intermediation-and-technology-whats-old-whats-new-49624/bundle-manifest.json)", "Authors: Arnoud W.A. Boot, Peter Hoffmann, Luc Laeven, Lev Ratnovski", "Published: August 7, 2020", "Series: IMF Working Papers", "DOI: https://doi.org/10.5089/9781513552491.001", "Authors: Arnoud W.A. Boot, Peter Hoffmann, Luc Laeven, Lev Ratnovski", "Date: August 7, 2020", "Series: Working Paper No. 2020/161", "Summary:", "Technological dimensions analyzed:", "Key dynamics:", "Impacts on traditional banking:", "Limitations and caveats:", "Regulatory and policy focus areas highlighted:", "Suggested orientation for policymakers (as discussed):", "**Working Paper**" ], "related": [ { "title": "Working Paper", "role": "paper", "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/2020/english/wpiea2020161-print-pdf.pdf", "summary": { "path": "/-/media/files/publications/wp/2020/english/wpiea2020161-print-pdf.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/wp/2020/english/wpiea2020161-print-pdf.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/wp/issues/2020/08/07/financial-intermediation-and-technology-whats-old-whats-new-49624/index.md", "json": "/en/publications/wp/issues/2020/08/07/financial-intermediation-and-technology-whats-old-whats-new-49624/index.json", "bundleManifest": "/en/publications/wp/issues/2020/08/07/financial-intermediation-and-technology-whats-old-whats-new-49624/bundle-manifest.json" }, "generatedAtUtc": "2026-09-18T17:29:47.549Z" }