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FINTECH revolution: are we prepared?

Author

Listed:
  • Adina Teodora Paşa

    (The Bucharest University of Economic Studies, Romania)

  • Nicoleta Onofrei

    (The Bucharest University of Economic Studies, Romania)

  • Elena Mădălina Gherghina

    (The Bucharest University of Economic Studies, Romania)

Abstract

Financial Technology (FinTech) has brought a revolution in the financial sector including incremental technological innovations in financial services. FinTech has triggered significant changes in the way financial sector is designed and it operates in the digital era. By increasing speed and reducing costs, FinTech has strongly influenced consumers to move towards digitalization. This has had as result the development of more tailored financial services addressed to individuals. For this purpose, a minimum level of financial literacy is considered a key driver of consumer behaviour. The main objective of this study is to analyse the impact of FinTech revolution on the labour market. In this paper, we have performed the statistical analysis of secondary data for EU-28 Member States (including United Kingdom) within the interval comprised between 2017 and 2019 with the aim to identify which is the level of labour substitution triggered by FinTech and its short-and medium-term effects on the labour market in the financial sector. Conclusions of this study revealed that although a higher level of digitalization is associated with a lower number of individuals employed in the financial sector, especially in the countries with the highest degree of digitalisation in the EU-28 (Digital Frontrunners), there are still a number of IT professionals performing operational tasks.

Suggested Citation

  • Adina Teodora Paşa & Nicoleta Onofrei & Elena Mădălina Gherghina, 2021. "FINTECH revolution: are we prepared?," Journal of Financial Studies, Institute of Financial Studies, vol. 10(6), pages 113-126, May.
    • Handle: RePEc:fst:rfsisf:v:10:y:2021:i:6:p:113-126
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    References listed on IDEAS

    as
    1. Philippon, Thomas, 2016. "The FinTech Opportunity," CEPR Discussion Papers 11409, C.E.P.R. Discussion Papers.
    2. Georgios A. Panos & John O. S. Wilson, 2020. "Financial literacy and responsible finance in the FinTech era: capabilities and challenges," The European Journal of Finance, Taylor & Francis Journals, vol. 26(4-5), pages 297-301, March.
    3. Rainer Alt & Roman Beck & Martin T. Smits, 2018. "FinTech and the transformation of the financial industry," Electronic Markets, Springer;IIM University of St. Gallen, vol. 28(3), pages 235-243, August.
    4. Andreas Fuster & Matthew Plosser & Philipp Schnabl & James Vickery, 2019. "The Role of Technology in Mortgage Lending," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1854-1899.
    5. Itay Goldstein & Wei Jiang & G Andrew Karolyi, 2019. "To FinTech and Beyond," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1647-1661.
    6. Uuriintuya Batsaikhan & Maria Demertzis, 2018. "Financial literacy and inclusive growth in the European Union," Policy Contributions 25536, Bruegel.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Financial Technology; financial and banking sector; labour market; financial literacy;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

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