<abstract xmlns="http://www.w3.org/1999/xhtml">Since the last global financial crisis supervisory mechanisms and regulations have become more stringent which have significantly improved resilience of banks therefore positively affecting financial stability. Apart from traditional financial institutions which have been supervised according to strict regulations and standards technological development in financial services commonly called FinTech have introduced new trends providing fast peer to peer lending which directly matches lenders and borrowers thus putting more pressure to policymakers and supervisors.This paper presents potential implications of FinTech developments to financial stability, while explaining FinTech influence to market structure as well as benefits and risks of technologically driven financial innovations to financial stability.The paper stresses out an importance of international cooperation of regulators in order to preserve financial stability in the recent world of technological changes and innovations. FinTech has changed consumers’ expectations and preferences while increasing the number of users expecting fast and easily accessible services available on mobile phones and other electronic devices. The paper shows that new technology provides the space for expanding financial services but it also poses additional risks to financial system in terms of microfinancial and macrofinancial risks.</abstract>

Since the last global financial crisis supervisory mechanisms and regulations have become more stringent which have significantly improved resilience of banks therefore positively affecting financial stability. Apart from traditional financial institutions which have been supervised according to strict regulations and standards technological development in financial services commonly called FinTech have introduced new trends providing fast peer to peer lending which directly matches lenders and borrowers thus putting more pressure to policymakers and supervisors.This paper presents potential implications of FinTech developments to financial stability, while explaining FinTech influence to market structure as well as benefits and risks of technologically driven financial innovations to financial stability.The paper stresses out an importance of international cooperation of regulators in order to preserve financial stability in the recent world of technological changes and innovations. FinTech has changed consumers’ expectations and preferences while increasing the number of users expecting fast and easily accessible services available on mobile phones and other electronic devices. The paper shows that new technology provides the space for expanding financial services but it also poses additional risks to financial system in terms of microfinancial and macrofinancial risks.

Fintech and Financial Stability Potential Influence of FinTech on Financial Stability, Risks and Benefits

Journal of Central Banking Theory and Practice

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Since the last global financial crisis supervisory mechanisms and regulations have become more stringent which have significantly improved resilience of banks...

Fintech and Financial Stability Potential Influence of FinTech on Financial Stability, Risks and Benefits

Published Online: Jun 02, 2020

Page range: 43 - 66

Received: Dec 17, 2019

Accepted: Jan 28, 2020

DOI: https://doi.org/10.2478/jcbtp-2020-0013

Keywords
financial stability, FinTech, technological developments, financial innovations, market structure

© 2020 Milena Vučinić, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Fintech and Financial Stability Potential Influence of FinTech on Financial Stability, Risks and Benefits

Published Online: Jun 02, 2020

Page range: 43 - 66

Received: Dec 17, 2019

Accepted: Jan 28, 2020

DOI: https://doi.org/10.2478/jcbtp-2020-0013

Keywordsfinancial stability, FinTech, technological developments, financial innovations, market structure

© 2020 Milena Vučinić, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
financial stability, FinTech, technological developments, financial innovations, market structure