Description

This session focuses on financial technology (FinTech) and provides a range of insights relating to the implications of FinTech for retail customers, financial services firms as well as the entire financial system. We begin with a critical evaluation of the claim that digitization of finance leads to a more decentralized provision of financial services. In doing so we examine the geographies of centres of platform finance and find that in addition to a heavily concentrated landscape of platform finance, its main hubs overlap with traditional financial centres. Further interrogating the similarities and differences between traditional and digitized finance, we examine the development of financial institutions and financial instruments in the world of cryptocurrencies. This institutional development leads to a power struggle among the blockchain innovators, the incumbent financial services firms, regulators and the state. Interestingly, financial institutions emerging within the cryptocurrency world appear to resemble those seen in mainstream financial system. Various FinTech enabled consumer lending services have been proposed as viable means of consolidating personal debt. We critically evaluate the potential of these debt consolidation services to recapacitate as well as incapacitate financial citizenship. We then relate our understanding of the workings of FinTech to the financial system at large and draw implications for financial stability. In doing so we uncover that excessive financial innovation and liberalisation can have a destabilizing effect on the financial system, as it increases the exposure of retail investors to speculative markets. This brings us to the problem of governance of FinTech. We interrogate the governance of FinTech ecosystems by specifically examining the role of open system intermediaries, including science parks and accelerators.