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The Fintech Opportunity, Thomas Philippon Dec 2018

The Fintech Opportunity, Thomas Philippon

Wharton Pension Research Council Working Papers

This chapter assesses potential impacts of FinTech on the finance industry. First we show that financial services remain surprisingly expensive in the U.S., which helps explain the emergence of new entrants. We then argue that the current regulatory approach is subject to significant political economy and coordination costs, and therefore it is unlikely to deliver much structural change. FinTech can improve both financial stability and access to services, but this will require important changes in the focus of regulations.