{
  "title": "Is FinTech Eating the Bank's Lunch?",
  "publication": "IMF Working Papers, November 17, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2023/11/18/is-fintech-eating-the-bank-s-lunch-540817",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2023/11/18/is-fintech-eating-the-bank-s-lunch-540817",
  "overlayPath": "/en/publications/wp/issues/2023/11/18/is-fintech-eating-the-bank-s-lunch-540817/index.md",
  "summary": "This paper examines how the growing presence of FinTech firms affects the performance of traditional financial institutions. The findings point to a negative impact on profitability, primarily due to a reduction in interest income and a rise in operational costs.",
  "sections": [
    {
      "heading": "Summary and central findings",
      "content": "- The paper examines how the growing presence of FinTech firms affects the performance of traditional financial institutions.\n- Main finding: FinTech presence has a negative impact on bank profitability.\n- Mechanisms identified:\n  - Reduction in interest income.\n  - Rise in operational costs.\n- Diversification efforts by established financial institutions have been inadequate to offset losses from increased competition with FinTech firms."
    },
    {
      "heading": "Heterogeneous effects by FinTech business model and bank type",
      "content": "- FinTech business models considered include Peer-to-Peer (P2P) lending and Balance Sheet lending.\n- Effects by bank type:\n  - Cooperative banks: experience more significant profit deterioration under both P2P and Balance Sheet lending models.\n  - Commercial banks (larger): appear to benefit from partnerships with P2P platforms, shown by an increase in non-interest income."
    },
    {
      "heading": "Cross-country and regulatory heterogeneity",
      "content": "- The adverse effect of FinTech presence on banks is disproportionately larger in countries with more competitive, profitable, and developed financial systems.\n- Conversely, traditional financial institutions in countries with stronger regulatory frameworks appear to benefit from the expanding influence of FinTech firms."
    },
    {
      "heading": "Implications for bank strategy and policy",
      "content": "- Revenue diversification alone has not been sufficient to neutralize the profitability impact from FinTech competition.\n- Partnerships between larger commercial banks and P2P platforms can increase non-interest income for those banks.\n- Strengthening regulatory frameworks may allow traditional financial institutions to capture benefits from FinTech expansion rather than suffer net losses."
    },
    {
      "heading": "Publication and document metadata",
      "content": "- Authors: Sami Ben Naceur, Bertrand Candelon, Selim A Elekdag, Drilona Emrullahu\n- Date: November 17, 2023\n- Series: Working Paper No. 2023/239\n- Issue: 239\n- Volume: 2023\n- Pages: 64\n- DOI: https://doi.org/10.5089/9798400258107.001\n- Stock No: WPIEA2023239\n- ISBN: 9798400258107\n- ISSN: 1018-5941\n- Citation example included on page: Sami Ben Naceur, Bertrand Candelon, Selim A Elekdag, and Drilona Emrullahu. \"Is FinTech Eating the Bank's Lunch?\", IMF Working Papers 2023, 239 (2023), accessed 9/16/2026, https://doi.org/10.5089/9798400258107.001\n\nSource: IMF Working Paper landing page \"Is FinTech Eating the Bank's Lunch?\"\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/2023/11/18/is-fintech-eating-the-bank-s-lunch-540817"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2023/11/18/is-fintech-eating-the-bank-s-lunch-540817/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2023/11/18/is-fintech-eating-the-bank-s-lunch-540817/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2023/11/18/is-fintech-eating-the-bank-s-lunch-540817/bundle-manifest.json)",
    "Authors: Sami Ben Naceur, Bertrand Candelon, Selim A Elekdag, Drilona Emrullahu",
    "Published: November 17, 2023",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400258107.001",
    "The paper examines how the growing presence of FinTech firms affects the performance of traditional financial institutions.",
    "Main finding: FinTech presence has a negative impact on bank profitability.",
    "Mechanisms identified:",
    "Diversification efforts by established financial institutions have been inadequate to offset losses from increased competition with FinTech firms.",
    "FinTech business models considered include Peer-to-Peer (P2P) lending and Balance Sheet lending.",
    "Effects by bank type:",
    "The adverse effect of FinTech presence on banks is disproportionately larger in countries with more competitive, profitable, and developed financial systems.",
    "Conversely, traditional financial institutions in countries with stronger regulatory frameworks appear to benefit from the expanding influence of FinTech firms.",
    "Revenue diversification alone has not been sufficient to neutralize the profitability impact from FinTech competition.",
    "Partnerships between larger commercial banks and P2P platforms can increase non-interest income for those banks.",
    "Strengthening regulatory frameworks may allow traditional financial institutions to capture benefits from FinTech expansion rather than suffer net losses.",
    "Authors: Sami Ben Naceur, Bertrand Candelon, Selim A Elekdag, Drilona Emrullahu",
    "Date: November 17, 2023",
    "Series: Working Paper No. 2023/239",
    "Issue: 239",
    "Volume: 2023",
    "Pages: 64",
    "DOI: https://doi.org/10.5089/9798400258107.001",
    "Stock No: WPIEA2023239",
    "ISBN: 9798400258107",
    "ISSN: 1018-5941",
    "Citation example included on page: Sami Ben Naceur, Bertrand Candelon, Selim A Elekdag, and Drilona Emrullahu. \"Is FinTech Eating the Bank's Lunch?\", IMF Working Papers 2023, 239 (2023), accessed 9/16/2026, https://doi.org/10.5089/9798400258107.001",
    "**Working Paper**"
  ],
  "related": [
    {
      "title": "Working Paper",
      "role": "paper",
      "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/2023/english/wpiea2023239-print-pdf.pdf",
      "summary": {
        "path": "/-/media/files/publications/wp/2023/english/wpiea2023239-print-pdf.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/files/publications/wp/2023/english/wpiea2023239-print-pdf.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2023/11/18/is-fintech-eating-the-bank-s-lunch-540817/index.md",
    "json": "/en/publications/wp/issues/2023/11/18/is-fintech-eating-the-bank-s-lunch-540817/index.json",
    "bundleManifest": "/en/publications/wp/issues/2023/11/18/is-fintech-eating-the-bank-s-lunch-540817/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-16T23:18:54.487Z"
}