Potential impact of financial innovation on financial services and monetary policy
The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009.
Marek Dąbrowski examines the potential impact of financial innovation on financial services and monetary policy in his new paper.