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On Fintech and Financial Inclusion

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  • Thomas Philippon

Abstract

The cost of financial intermediation has declined in recent years thanks to technological progress and increased competition. I document this fact and I analyze two features of new financial technologies that have stirred controversy: returns to scale, and the use of big data and machine learning. I argue that the nature of fixed versus variable costs in robo-advising is likely to democratize access to financial services. Big data is likely to reduce the impact of negative prejudice in the credit market but it could reduce the effectiveness of existing policies aimed at protecting minorities.

Suggested Citation

  • Thomas Philippon, 2019. "On Fintech and Financial Inclusion," NBER Working Papers 26330, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26330
    Note: AP CF IO PR
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    References listed on IDEAS

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    5. Buchak, Greg & Matvos, Gregor & Piskorski, Tomasz & Seru, Amit, 2018. "Fintech, regulatory arbitrage, and the rise of shadow banks," Journal of Financial Economics, Elsevier, vol. 130(3), pages 453-483.
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    More about this item

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G2 - Financial Economics - - Financial Institutions and Services
    • G5 - Financial Economics - - Household Finance
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • N2 - Economic History - - Financial Markets and Institutions

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