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Introductory Brief (Part 1): Challenges for Deposit Insurers

Author

Listed:
  • Rachel Youssef

    (Federal Deposit Insurance Corporation)

  • Rose Kushmeider

    (Federal Deposit Insurance Corporation)

  • Diane Ellis

    (Federal Deposit Insurance Corporation)

Abstract

Fintech is disrupting the traditional business model of deposit-taking institutions (DTIs), around which DIS have been designed and implemented. These new business models blur the lines between financial products and services offered within and outside the traditional financial system and have the potential to introduce confusion as to whether a product is guaranteed by the DIS. For example, in some jurisdictions, fintech firms directly compete with DTIs to provide lending and payment services, but are not covered by the deposit insurance system. In other jurisdictions, fintechs may offer their products and services in partnership with DTIs and as such may be covered by the DIS. Such innovation presents a challenge for deposit insurers around the issue of public awareness of deposit insurance coverage and ultimately brings into question the DIS’ role in supporting financial stability.

Suggested Citation

  • Rachel Youssef & Rose Kushmeider & Diane Ellis, 2021. "Introductory Brief (Part 1): Challenges for Deposit Insurers," IADI Fintech Briefs 1, International Association of Deposit Insurers.
    • Handle: RePEc:awl:finbri:1
    as

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    File URL: https://www.iadi.org/en/assets/File/Papers/Fintech%20Briefs/IADI%20Fintech%20Brief%201%20-%20Introduction%20-%20Challenges%20for%20Deposit%20Insurers.pdf
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    References listed on IDEAS

    as
    1. Juan Carlos Izaguirre & Timothy Lyman & Claire McGuire & Dave Grace, 2016. "Deposit Insurance and Digital Financial Inclusion," World Bank Publications - Reports 25707, The World Bank Group.
    2. World Bank [WB], 2018. "The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution," Working Papers id:12735, eSocialSciences.
    3. Jon Frost, 2020. "The economic forces driving FinTech adoption across countries," Working Papers 663, DNB.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    deposit insurance; bank resolution;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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