What is the impact of fintech development
Posted: Mon Feb 10, 2025 10:29 am
Of course, there are segments where consumers have been able to benefit financially from the development of new technologies in recent years. For example, tariffs for many types of domestic and cross-border transfers have fallen significantly. However, this does not change the overall picture.
itWeek : on the economy as a whole?
E.Kh.: As for national economies and the global economy as a whole, it is probably too early to draw conclusions about the impact of fintech on them. Most likely, on the scale of the national economy, thanks to new financial technologies, we will observe a reduction in transaction costs. However, the price for this may be an imbalance in the financial system and the emergence of unpredictable bubbles in the financial markets (like the recent story with GameStop), wide opportunities for abuse of market power and accumulated information about citizens by the largest players in the financial services market, critical consequences of hacker attacks on the australia whatsapp data infrastructure and the compromise of the personal data of millions of consumers. According to the latest research from the London Business School, the fintech industry is more susceptible to cyber risks than the traditional banking sector.
All these risks require the most serious attention from government authorities and civil society.
itWeek : How serious is the problem of competition with new financial "players" (technological platforms, fintech companies) for traditional banks and other financial institutions? Is the traditional bank threatened with extinction as an intermediary in financial and credit relations, insurance operations, etc.?
E.Kh.: Indeed, we can talk about a certain intensification of competition in the financial services market. In almost all segments, the positions of traditional financial institutions are being attacked by fintech firms and giants of the technology and Internet business. The competitive struggle is especially intense in the payments market, where new players have already managed to gain strong positions.
However, it is too early to talk about the disappearance of traditional financial intermediaries such as banks or insurance companies. The size of their business, their own capital, their market power and lobbying capabilities are such that in the foreseeable future they have a good chance of maintaining their leadership.
itWeek : on the economy as a whole?
E.Kh.: As for national economies and the global economy as a whole, it is probably too early to draw conclusions about the impact of fintech on them. Most likely, on the scale of the national economy, thanks to new financial technologies, we will observe a reduction in transaction costs. However, the price for this may be an imbalance in the financial system and the emergence of unpredictable bubbles in the financial markets (like the recent story with GameStop), wide opportunities for abuse of market power and accumulated information about citizens by the largest players in the financial services market, critical consequences of hacker attacks on the australia whatsapp data infrastructure and the compromise of the personal data of millions of consumers. According to the latest research from the London Business School, the fintech industry is more susceptible to cyber risks than the traditional banking sector.
All these risks require the most serious attention from government authorities and civil society.
itWeek : How serious is the problem of competition with new financial "players" (technological platforms, fintech companies) for traditional banks and other financial institutions? Is the traditional bank threatened with extinction as an intermediary in financial and credit relations, insurance operations, etc.?
E.Kh.: Indeed, we can talk about a certain intensification of competition in the financial services market. In almost all segments, the positions of traditional financial institutions are being attacked by fintech firms and giants of the technology and Internet business. The competitive struggle is especially intense in the payments market, where new players have already managed to gain strong positions.
However, it is too early to talk about the disappearance of traditional financial intermediaries such as banks or insurance companies. The size of their business, their own capital, their market power and lobbying capabilities are such that in the foreseeable future they have a good chance of maintaining their leadership.