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Brave New Digital World? – Financial Technology and the Power of Information

Author

Listed:
  • Ádám Kerényi

    (Institute of World Economic, Hungarian Academy of Sciences)

  • János Müller

    (Hungarian Banking Association)

Abstract

In this paper we focus on the development of FinTech, how is it evaluated and managed in selected areas, in the European Union, in China and in Hungary. Some of the pertinent questions in this field are the following: How can regulators keep up with the rapid pace of development? Can regulation be based on a precise definition and can a level playing field be ensured between traditional banks and FinTech start-ups? What are the risks? How can they be handled by supervision and regulation? We can conclude that FinTech is in the initial phase of a “revolutionary” process, and the definition of this phenomenon is broad and changing. Regulators and supervisors must influence the conditions in a way that a level playing field and risk assessment should be the same for traditional banks and FinTech companies. All of the actors have responsibility, including central banks, regulators, supervisors, incumbent banks, consumers and FinTech companies. Information is power, and several economists claim that digital is the new normal. In our paper we partly justify the first part of the sentence and we put a question mark at the end of the second part.

Suggested Citation

  • Ádám Kerényi & János Müller, 2019. "Brave New Digital World? – Financial Technology and the Power of Information," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 18(1), pages 5-32.
    • Handle: RePEc:mnb:finrev:v:18:y:2019:i:1:p:5-32
    as

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    References listed on IDEAS

    as
    1. Guido Buenstorf, 2017. "Schumpeterian Incumbents and Industry Evolution," Economic Complexity and Evolution, in: Andreas Pyka & Uwe Cantner (ed.), Foundations of Economic Change, pages 283-297, Springer.
    2. Bence Varga, 2017. "Current Challenges Facing Chinese Financial Supervision and Methods of Handling these Challenges," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(Sepcial I), pages 126-139.
    3. Péter Fáykiss & Dániel Papp & Péter Sajtos & Ágnes Tõrös, 2018. "Regulatory Tools to Encourage FinTech Innovations: The Innovation Hub and Regulatory Sandbox in International Practice," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 17(2), pages 43-67.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Revolutions; Financial Institutions and Services; Technology; Diffusion Processes;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • N74 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: 1913-

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