The Regulation of Fintech Banks: Questions and Perspectives

Abstract

This analysis concerns the regulation of fintech banks, having regard to the possibility of a business model in which the production and delivery of banking products and services are based on technology-enabled innovation. We will go deep into European Central Bank’s definition of ‘fintech bank’, in order to understand the role and the scope of supervision. Indeed, this paper highlights the possibility that the software of fintech banks will unbundle banking into its core functions of settling payments, performing maturity transformation, sharing risk and allocating capital. Hence, we will consider both the benefit of machine-learning techniques in respect of credit scoring, and the risk of using self-executing software that may affect the supply and demand.