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The Platform Political Economy of FinTech: Reintermediation, Consolidation and Capitalisation

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  • Paul Langley
  • Andrew Leyshon

Abstract

‘FinTech’ is the digital sector of retail money and finance widely proclaimed to be transforming banking in the global North and ‘banking the unbanked’ in the global South. This paper develops a perspective for critically understanding FinTech as a platform political economy that is marked by three distinctive and related processes: reintermediation, consolidation, and capitalisation. Through experimentation with the platform business model and building on the digital infrastructures and data flows of the broader platform ecosystem, a constellation of organisations – including start-ups, early-career firms, BigTech companies and incumbent banks – are engaged in processes of platform reintermediation. Changing the bases of competition in retail money and financial markets and encouraging oligopoly and even monopoly, the reintermediation processes of FinTech are presently manifest in strong tendencies towards platform consolidation. The imagined potential of FinTech has also triggered intensive processes of capitalisation, with platforms receiving significant prospective investment by venture capital, private equity funds, banks and BigTech firms.

Suggested Citation

  • Paul Langley & Andrew Leyshon, 2021. "The Platform Political Economy of FinTech: Reintermediation, Consolidation and Capitalisation," New Political Economy, Taylor & Francis Journals, vol. 26(3), pages 376-388, May.
    • Handle: RePEc:taf:cnpexx:v:26:y:2021:i:3:p:376-388
    DOI: 10.1080/13563467.2020.1766432
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    Cited by:

    1. Xie, Chengyuan & Huang, Lu, 2024. "How to drive sustainable economic development: The role of fintech, natural resources, and social vulnerability," Resources Policy, Elsevier, vol. 94(C).
    2. Erica Souza Siqueira & Isleide Arruda Fontenelle, 2024. "Bringing labor back: Financialized inclusion and survival struggles in the periphery of the periphery," Environment and Planning A, , vol. 56(3), pages 699-716, May.
    3. Kshitiz Jangir & Vikas Sharma & Sanjay Taneja & Ramona Rupeika-Apoga, 2022. "The Moderating Effect of Perceived Risk on Users’ Continuance Intention for FinTech Services," JRFM, MDPI, vol. 16(1), pages 1-16, December.
    4. Piotr Å asak, 2022. "The role of financial technology and entrepreneurial finance practices in funding small and medium-sized enterprises," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 18(1), pages 7-34.
    5. Guma Ali & Mussa Ally Dida & Anael Elikana Sam, 2021. "A Secure and Efficient Multi-Factor Authentication Algorithm for Mobile Money Applications," Future Internet, MDPI, vol. 13(12), pages 1-31, November.
    6. Sebastián Fernández Franco & Juan M. Graña & Cecilia Rikap, 2024. "Dependency in the Digital Age? The Experience of Mercado Libre in Latin America," Development and Change, International Institute of Social Studies, vol. 55(3), pages 429-464, May.
    7. Paul Langley & Andrew Leyshon, 2023. "FinTech platform regulation: regulating with/against platforms in the UK and China," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 16(2), pages 257-268.
    8. Hongjie Cao & Kexin Shen & Qifan Chen & Wen Wen, 2024. "Impact of Broadband China Infrastructure Strategy on Fintech: A Quasi-Natural Experiment," Sustainability, MDPI, vol. 16(4), pages 1-20, February.
    9. Matti Ylönen & Ringa Raudla & Milan Babic, 2024. "From tax havens to cryptocurrencies: secrecy-seeking capital in the global economy," Review of International Political Economy, Taylor & Francis Journals, vol. 31(2), pages 563-588, March.
    10. Malobi Mukherjee & Jacob Wood, 2021. "Consolidating Unorganised Retail Businesses through Digital Platforms: Implications for Achieving the UN Sustainable Development Goals," Sustainability, MDPI, vol. 13(21), pages 1-28, October.
    11. Nalluri, Venkateswarlu & Chen, Long-Sheng, 2024. "Modelling the FinTech adoption barriers in the context of emerging economies—An integrated Fuzzy hybrid approach," Technological Forecasting and Social Change, Elsevier, vol. 199(C).
    12. Parminder Varma & Shivinder Nijjer & Kiran Sood & Simon Grima & Ramona Rupeika-Apoga, 2022. "Thematic Analysis of Financial Technology (Fintech) Influence on the Banking Industry," Risks, MDPI, vol. 10(10), pages 1-17, September.
    13. Mann, Laura & Iazzolino, Gianluca, 2021. "From development state to corporate leviathan: historicizing the infrastructural performativity of digital platforms within Kenyan agriculture," LSE Research Online Documents on Economics 110725, London School of Economics and Political Science, LSE Library.
    14. Thomas Wainwright, 2023. "Rental proptech platforms: Changing landlord and tenant power relations in the UK private rental sector?," Environment and Planning A, , vol. 55(2), pages 339-358, March.
    15. Akon E. Ekpo & Jenna Drenten & Pia A. Albinsson & Sophia Anong & Samuelson Appau & Lagnajita Chatterjee & Charlene A. Dadzie & Margaret Echelbarger & Adrienne Muldrow & Spencer M. Ross & Shelle Santan, 2022. "The platformed money ecosystem: Digital financial platforms, datafication, and reimagining financial well‐being," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(3), pages 1062-1078, September.
    16. Laura Mann & Gianluca Iazzolino, 2021. "From Development State to Corporate Leviathan: Historicizing the Infrastructural Performativity of Digital Platforms within Kenyan Agriculture," Development and Change, International Institute of Social Studies, vol. 52(4), pages 829-854, July.
    17. Anna Davies & Betsy Donald & Mia Gray, 2023. "The power of platforms—precarity and place," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 16(2), pages 245-256.
    18. Christian Zeiß & Myriam Schaschek & Lisa Straub & Christoph Tomitza & Axel Winkelmann, 2024. "Re-intermediation of the crypto asset ecosystem by banks: An empirical study on acceptance drivers among the populace," Electronic Markets, Springer;IIM University of St. Gallen, vol. 34(1), pages 1-24, December.
    19. Jan Schwiderowski & Asger Balle Pedersen & Jonas Kasper Jensen & Roman Beck, 2023. "Value creation and capture in decentralized finance markets: Non-fungible tokens as a class of digital assets," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-16, December.

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