Banking disrupted by FinTech and Big Tech | 9 October 2019

Bruegel event recordings

The provision of financial services is profoundly changing worldwide – so much so that many commentators are predicting the death of banking as we know it. The threat of banks’ extinction is not new; it’s been heralded many times in the past. For centuries, as banks have expanded and evolved, they have faced competition from other types of financial institutions. Despite high barriers to entry and as a result, relatively low turnover, many commentators have anticipated the end of the traditional banking business model. Today, we are again experiencing radical changes in the way households and businesses transact. The primary drivers are rapid advances in technology and post-crisis changes in the financial regulatory landscape, both of which have fuelled increased competition and encouraged new entrants in the provision of financial services. Critically, today’s competition to big bank business models emanates from nonbank firms whose core strategy centres around technological innovation (Big Tech and FinTech firms) and from nonbank financial institutions (NBFIs), such as large asset managers. This event, jointly organised by Bruegel, CEPR and ECARES will feature the presentation of the the latest Geneva Report on the World Economy, authored by Thomas Philippon, Kathryn Petralia, Tara Rice and Nicolas Véron. The report reviews the financial services landscape and how it has changed over the last several decades; discusses the competition from FinTech and Big Tech; and considers critical public policy questions surrounding the future of banking and concludes with suggestions of future work.