Towards a geographical political economy of platform finance

Keywords: Platform finance, FinTech, financial centres, financial regulation
Session Type: Virtual Paper
Day: Friday
Session Start / End Time: 4/9/2021 01:30 PM (Pacific Time (US & Canada)) - 4/9/2021 02:45 PM (Pacific Time (US & Canada))
Room: Virtual 47

Abstract

Within the tech communities that underpin the digital platform economy there exists a pervasive belief that software and coding leads to radical decentralisation that disrupts existing economic geographies. According to this logic, platform finance – or fintech – has the potential to give rise to new spaces of money and finance. This paper examines the veracity of such claims. The locational geography of platform finance largely resembles that of traditional financial centres but its novel technological foundation creates opportunities for new smaller cities with technology clusters, for example, to become emergent centres of fintech. Platform finance has not led to radical decentralisation, but integration with established financial services firms located in leading financial centres. This is due to the capital investment requirements of fintech ventures and platform finance’s endorsement by financial regulators, for whom it has Goldilocks-like qualities. The centrality of data to platform finance business models means that they are suited to providing consistent, up-to-date, and even real time data in line with regulatory requirements. Platform finance business may be better able to design their systems to be ‘born regulatory compliant’ and, in being data focussed, to be adaptable to changing regulatory requirements, and welcomed into the existing centres of the financial system. The paper concludes by speculating on the relationship between traditional financial centres and emergent centres of platform finance, and their relative durability given the key role of financial regulation and tendencies toward capital concentration and monopolisation inherent within platform capitalism.