Stay Competitive in the Digital Age: The Future of Banks

February 19, 2021

Preview Citation

Format: Chicago

Miss Estelle X Liu. Stay Competitive in the Digital Age: The Future of Banks, (USA: International Monetary Fund, 2021) accessed November 8, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The latest advancement in financial technology has posed unprecedented challenges for incumbent banks. This paper analyzes the implications of these challenges on bank competitveness, and explores the factors that could support digital advancement in banks. The analysis shows that the traditionally leading role of banks in advancing financial technology has diminished in recent years, and suggests that onoing efforts to catch up to the digital frontier could lead to a more concentrated banking industry, as smaller and less tech-savvy banks struggle to survive. Cross-country evidence has suggested that banks in high-income economies appear to have been the digital leaders, likely benefiting from a sound digital infrastructure, a strong legal and business environment, and healthy competition. Nonetheless, some digital leaders may fall behind in the coming years in adopting newer technologies due to entrenched consumer behavior favoring older technologies, less active fintech and bigtech companies, and weak bank balance sheets.

Subject: Digitalization, Emerging technologies, Financial markets, Financial sector development, Financial services, Technology

Keywords: Bank characteristic, Bank competitiveness, Bank concentration, Bank condition, Bank digitalization, Bank firm, Bank service digitalization, Banks, Digitalization, Digitalization progress, Emerging technologies, Financial sector development, Global, WP

Publication Details

Pages:

42
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/046
Stock No:

WPIEA2021046
ISBN:

9781513570051
ISSN:

1018-5941

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