Finance, technology and financial education

Fintech may spur efficiency gains in the financial sector, offer better and more targeted products and services, and deepen financial inclusion in the developing world. However, it may also pose risks if its application undermines competition, trust, monetary policy transmission, and financial stability. Fintech also presents challenges such as cyber-related risks, data, consumer and investor protection issues and market integrity issues. In the present chapter we try to identify the risks associated to fintech innovations and discuss how these risks can be managed through an appropriate regulatory framework. Moreover, we examine the importance of financial literacy in developing a culture of risk awareness. Financial literacy is critically important regardless of whether financial services are delivered through traditional channels or smartphone apps. Digital delivery can expand the reach of traditional financial education systems by providing consumers with online and mobile education, just-in-time information, and interactive financial tools to evaluate their options. However, fintech is not a substitute for financial literacy. We should ensure that relevant financial education is available to future consumers and entrepreneurs through a variety of media, in order to reach also those without current access to digital tools.