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On Fintech and Financial Inclusion

Author

Listed:
  • Philippon, Thomas

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

  • Philippon, Thomas, 2019. "On Fintech and Financial Inclusion," CEPR Discussion Papers 14221, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:14221
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    File URL: https://cepr.org/publications/DP14221
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    More about this item

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • G2 - Financial Economics - - Financial Institutions and Services
    • N2 - Economic History - - Financial Markets and Institutions

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