Series: Occasional Papers. 2214.
Author: Carmen Sánchez and Jara Quintanero.
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Abstract
In addition to generating new business models, applications, products and services with a material effect on financial markets and the institutions that comprise them, the application of technology to finance in areas such as cloud computing, blockchain and big data can improve access to financial services and enhance the sector’s efficiency. Many of these solutions are developed by companies specialising in the use of new technologies in finance (better known as fintech firms) and by large technological corporations (bigtech firms). Yet, this paper focuses only on the former. The number of fintech firms has grown significantly since 2010, often targeting specific market segments, such as payment, credit or wealth management. This circumstance has triggered the transformation of the financial ecosystem in many jurisdictions. For the time being, the scale of the fintech sector is small compared with the size of the entire financial sector. However, both the fact that these players are simultaneously covering several activities in the financial system’s value chain and exhibiting a rapid pace of growth, and globalisation (as fintech firms are found across almost all jurisdictions and bigtech firms have a global presence) call for its continuous monitoring. This is certainly a daunting task owing to the lack of appropriate and harmonised statistical information on fintech. Against this backdrop, this paper reviews several data sources in order to provide an overview of the fintech outlook across different jurisdictions. It then zooms in on those firms operating in Spain and examines some of the initiatives under way to address the challenges for regulators.