Fintech is introducing in the financial landscape new products, new business models, new players. In this paper we elaborate on the relationship between Fintech and banks, bearing in mind that in the past innovation triggered widespread financial instability. We argue that Fintech represents a serious challenge for the traditional banking business model. However, we build on the evidence on the development of shadow banking to caution against early predictions of an irreparable decline of banking institutions. We conclude that a flexible, pragmatic and open minded approach to Fintech regulation is the second best in a world of huge uncertainty about technology and consumer preferences.
Marcello Bofondi graduated with honours in Economics from the University of Bologna in 1997. He continued his postgraduate studies at the Universitat Pompeu Fabra obtaining a Master in Advanced Studies in Economics and Finance in 2000. He earned his Ph.D. in Economics from the Parthenope University of Naples.
In 2002 he joined the Bank of Italy and was assigned to the Financial Intermediaries Office of the Economic Research Department until 2007. Afterwards, he served as an economist with increasing responsibilities at the DG Economics, Statistics and Research where he was in charge of structural analyses of the Italian banking system. He represented the Bank on missions and in working groups at the Bank of International Settlements and the European Central Bank. During the 2014-15 academic year he was Visiting Academic at the Financial Market Group of the London School of Economics and Political Sciences.
From September 2017, Dr. Bofondi heads the Macroprudential Analysis Division.
His research appears in well-acknowledged peer-reviewed journals such as Review of Finance, Review of Industrial Organization, and The Journal of the European Economic Association.