资源描述
NBERWORKINGPAPERSERIES FINTECH,BIGTECH,ANDTHEFUTUREOFBANKS RenM.Stulz WorkingPaper26312 nber/papers/w26312 NATIONALBUREAUOFECONOMICRESEARCH 1050MassachusettsAvenue Cambridge,MA02138 September2019 IamgratefulforcommentsfromDonChew,HarryDeAngelo,MarkJohnson,LeandroSanz,and AminShams.Theviewsexpressedhereinarethoseoftheauthoranddonotnecessarilyreflect the viewsoftheNationalBureauofEconomicResearch. NBERworkingpapersarecirculatedfordiscussionandcommentpurposes.Theyhavenotbeen peerreviewedorbeensubjecttothereviewbytheNBERBoardofDirectorsthataccompanies official NBERpublications. 2019 by Ren M. Stulz. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including notice,isgivento thesourceFinTech,BigTech,andtheFutureofBanks RenM.Stulz NBERWorkingPaperNo.26312 September2019 JELNo.G21,G23,G24,G28,G51 ABSTRACT Banks are unique in that they combine the production of liquid claims with loans. They can replicate mostofwhatFinTechfirmscando,butFinTechfirmsbenefitfromanunevenplaying field in that they are less regulated than banks. The uneven playing field enables nonbank FinTechfirmstochallenge banksforspecificproductswhosesuccessisnottiedtowhatmakes banks unique, but they cannot replace banks as such. In contrast, BigTech firms have unique advantagesthatbankscannoteasily replicateandthereforepresentamuchstrongerchallengeto establishedbanksinconsumerfinance andloanstosmallfirms.BothFintechandBigTechare contributing to a secular trend of banks losing their comparative advantage as they have less accesstouniqueinformationaboutpartiesseekingcredit. RenM.Stulz TheOhioStateUniversity FisherCollegeofBusiness 806AFisherHall Columbus,OH432101144 andNBER stulzcob.osu.edu1 1. Introduction. In 1994, Bill Gates famously said that banks are dinosaurs. Since then, bank assets in the U.S. more than quadrupled (from $3.7 trillion to $17.4 trillion) while the number of banks fell by more than 50% (from 10,453 to less than 5,000). We have many fewer but now much larger banks. With the internet came many efforts to disrupt the banking industry, including the emergence of online banks. These banks did not supplant existing banks. Instead, existing banks made online banking available to their customers. After the global financial crisis, innovations made possible by digital technologies led to many claims that, again, banks were dinosaurs and would be replaced or fundamentally disrupted by FinTech firms. For example, a consulting firm announced in 2018 that “digitalization will make most heritage financial firms irrelevant by 2030.” 1 FinTech is defined by the Financial Stability Board as “technologically enabled financial innovation that could result in new business models, applications, processes, or products with an associated material effect on financial markets and institutions and the provision of financial services.” 2 With this definition, one might be tempted to say that the golden age of FinTech was the 1960s when banks started to use computers extensively and introduced ATMs. A more appropriate definition of FinTech for this article is financial innovation based on the use of digital technologies and big data. The use of digital technologies makes it possible to provide many existing financial services more efficiently and to enhance these services. BigTech firms are “technology companies with established presence in the market for digital services.” 3 They are firms that have successful digital platforms. In the U.S., they are firms like Amazon, Facebook, and Google. In China, they are firms like Alibaba and Tencent. The Chinese counterparts of the U.S. firms have already made big inroads in financial services markets. The U.S. firms have not. The challenges posed to banks by the entry of BigTech into finance are quite different from the challenges posed by FinTech firms. The typical FinTech firm is a specialized firm that challenges a specific product line of banks. For instance, a credit FinTech firm tries to take away market share from banks for a specific segment of the 1 “Gartner says digitalization will make most heritage financial firms irrelevant by 2030,” press release by Gartner, October 29, 2018. 2 See Financial Stability Board (2017). 3 See Frost, Gambacorta, Huang, Shin, and Zbinden (2019).2 loan market. BigTech firms have the ability to challenge banks across a large number of product lines, in other words, they can lead a frontal assault as opposed to attacking niches. Despite all the excitement about FinTech and the dire warnings about the threat it poses to traditional banks, from 2013 to mid-2019, the Dow-Jones U.S. Banks Index more than doubled and more than held its own with respect to the S by comparison, all FinTech investments in Europe and the U.S. amounted to $15.9 billion according to one estimate. 12 Its valuation is approximately the sum of the market capitalization of Goldman Sachs and Morgan Stanley together. Ant Financial has demonstrated how a platforms data can be used effectively to grant credit. Through MYbank, it grants credit to SMEs that sell on Alibabas Taobao platform. As described in Hau, Huang, Shan, and Sheng (2018), Ant Financial uses both historical data and real time sales data on the platform, including ratings by customers, to grant credit lines to SMEs. With the help of machine learning techniques, it uses the data available to assign credit scores to platform sellers. It has an automated process to offer credit lines to SMEs whose credit score exceeds a threshold. The sellers who are granted credit fill an online form to receive the credit. They can do so in a couple of minutes. The credit line is withdrawn if the score of the seller drops below a minimum threshold. The default rate is quite low at 1.2%. The credit granting process of MYbank to platform sellers shows the advantages that BigTech can bring to bear to compete with traditional banks. BigTech firms are heavy investors in data analytics that can be used across many activities. More importantly, though, these data analytics are of little use if data is sparse. These firms sit on huge amounts of data that they collect in real time. In the case of MYBank and Taobao, the data used is clearly richer than the data that is traditionally used to make credit decisions. The data available to platforms could be used more generally for loans to customers as well. BigTech firms have the customer base to operate a platform bank. A platform bank would not be competing with banks in a specific activity, but would be competing with banks across all customer- oriented activities, from deposits to payments and wealth management. In their current activities, FinTech firms typically rely on banks for many of their services. They put cash in bank accounts, have bank lines of credit, use banks for payments, and so on. A BigTech firm with a platform bank does not have to rely on 12 See “Chinas Ant Financial raised almost as much money as all US and European fintech firms combined,” by John Detrixhe, Quartz, January 30, 2019.21 existing banks. It could have its own affiliated bank through which it could have deposit accounts, provide customers with credit cards, and provide them with e-cash. It could also make available to its customers a great variety of financial services from third parties. It could help them make choices among these services. BigTech firms have potentially big advantages compared to banks and to FinTech firms. They have all the technical knowhow and up-to-date systems that FinTech aspires to. They have the scale that large banks have. They have access to data that banks and FinTech firms do not. They have neither the legacy nor the organizational issues that banks have. 4. Conclusion. FinTech firms compete with banks for specific activities. FinTech firms have the advantage of less regulation, of not being part of big inflexible organizations, and of not being saddled with legacy IT systems. However, banks are unique in a way that non-banks cannot replicate. FinTech banks, which are online banks, can compete with banks on interface with consumers and convenience, but legacy banks have the advantage of a big consumer base, of experience in dealing with regulators, and of offering a broader set of products. FinTech firms can make banks better as they have to compete harder, but greater competition does not make banks safer. As greater competition makes banks less special, they are likely to take more risks to attempt to be profitable with their current cost structure. If they cannot take more risks, they will have to reduce their costs sharply and become more like utilities. BigTech firms have unique advantages that allow them to replace traditional banks. A well-known blogger and author summarizes the difference between FinTech firms and BigTech firms (sometimes called TechFin firms) as follows: “fintech firms are making faster horses whereas techfin firms are working with airplanes.” 13 At the same time, however, the strength of BigTech in banking is in consumer finance and lending to SMEs. It is not in investment banking. JPMorgan earned in 2019 a $123 million fee for advising Allergan in its acquisition by AbbVie. This is in sharp contrast to the losses of most FinTech firms trying 13 Cited in “The future of banking: Fintech or techfin?” by Jim Marous, Forbes, Aug. 27, 2018.22 to gain market share. After having seen the U.S. banking system evolve towards the universal bank model, we may see it evolve towards a system with large investment or merchant banks and large consumer banks. Such an evolution could be problematic as a strong deposit base was an asset for banks during the global financial crisis and is likely to be so in other periods of stress.23 References Acharya, V. V., P. Schnabl, and G. Suarez, 2013. Securitization without risk transfer. Journal of Financial Economics 107, 515-536. Buchak, G., G. Matvos, T. Piskorski, and A. Seru, 2018. Fintech, regulatory arbitrage, and the rise of shadow banks. Journal of Financial Economics 130, 453-483. Carstens, A., 2017. Big tech in finance and new challenges for stability. Bank for International Settlements, Basel. DeAngelo H., and R.M. Stulz, 2015. Liquid-claim production, risk management, and bank capital structure: Why high leverage is optimal for banks. Journal of Financial Economics 116, 219-236. Diamond, D.W., and R.G. Rajan, 2000. A theory of bank capital. The Journal of Finance 55, 2431-2465. Financial Stability Board, 2017. Financial stability implications from FinTech. Foley, S., J.R. Karlsen, and T.J. Putnins, 2019. Sex, drugs, and bitcoin: How much illegal activity is financed through cryptocurrencies? Review of Financial Studies 32, 1798-1853. Frost, J., L. Gambacorta, Y. Huang, H.S. Shin, and P. Zbinden, 2019. Big Tech and the changing structure of financial intermediation. Bank for International Settlements, Basel. Gorton, G., 1994. Bank regulation when banks and banking are not the same. Oxford Review of Economic Policy 10, 106-119. James, C., 1987. Some evidence on the uniqueness of bank loans. Journal of Financial Economics 19, 217- 235. Hanson, S.G., A. Shleifer, J.C. Stein, and R.W. Vishny, 2015. Banks as patient fixed-income investors. Journal of Financial Economics 117, 449-469. Hau, H., Y. Huang, H. Shan, and Z. Sheng, 2018. FinTech credit and entrepreneurial growth. Mimeo, University of Geneva. Holmstrom, B., 1989. Agency costs and innovation. Journal of Economic Behavior and Organization 12, 305-327.24 James, C., 1987. Some evidence on the uniqueness of bank loans. Journal of financial economics 19, 217- 235. Laeven, L. and R. Levine, 2007. Is there a diversification discount in financial conglomerates? Journal of Financial Economics 85, 331-367. Li, C. and S. Ongena, 2015. Bank loan announcements and borrower stock returns before and during the recent financial crisis. Journal of Financial Stability 21, 1-12. Loderer, C., R.M. Stulz, and U. Waelchi, 2016. Firm rigidities and the decline of growth opportunities. Management Science 63, 3000-3020. Maksimovic, V. and G.M. Phillips, 2013. Conglomerate firms, internal capital markets, and the theory of the firm. Annual Reviews of Financial Economics 5, 225-244. Miller, M.H., 1992. Financial innovation: achievements and prospects. Journal of Applied Corporate Finance 4, 4-11. Minton, B., A. Taboada, and R.M. Stulz, 2019. Are the largest banks valued more highly? Review of Financial Studies, forthcoming. Navaretti, G.B., G. Calzolari, J.M. Mansilla-Fernandez, and A.F. Pozzolo, 2018. Fintech and banking: friends or foes? unpublished paper. Protivi, 2019. Modernizing legacy systems at financial institutions. en/insights/modernizing-legacy-systems-financial-institutions Stein, J., 2002. Information production and capital allocation: Decentralized versus hierarchical firms. Journal of Finance 57, 1891-1921
展开阅读全文