Key Findings
Competition Impact on Pricing
FinTech competition in payments can lead to either higher or lower bank payment service prices, depending on market conditions and consumer distributions
Financial Inclusion
FinTech competition promotes financial inclusion by providing electronic payment access to previously unbanked consumers
Data Value Trade-offs
Consumer welfare is generally higher under FinTech data sales compared to consumer data portability, despite both increasing bank lending
Bank Pricing Response to FinTech Competition
- When high credit type distribution has decreasing hazard rate, bank prices increase under competition
- With increasing hazard rate, bank prices decrease under competition
- Price changes reflect bank's strategic response to customer pool composition
Loan Market Impact
- High credit type consumers' loan surplus varies with signal quality (α)
- Bank information precision affects loan terms and consumer welfare
- Effects differ between bank customers and non-customers
Data Sharing Outcomes
- FinTech data sales allow negotiated value capture and consumer benefits
- Data portability leads to unraveling and forced sharing
- Market structure determines welfare distribution
Contribution and Implications
- Provides framework for understanding complex effects of FinTech competition on banking services and consumer welfare
- Highlights importance of market structure in determining outcomes of data sharing policies
- Demonstrates tension between financial inclusion benefits and potential disruption to existing bank relationships
Data Sources
- Price response chart based on numerical example in Figure 2 of the paper showing equilibrium prices under monopoly vs competition
- Loan market impact visualization derived from Figure C1 showing expected loan surplus for different credit types
- Data sharing outcomes based on theoretical predictions from Propositions 5 and 6
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