Does FinTech threaten banking? Bengt Holmstrom: This viewpoint is obsolete!

Does FinTech threaten banking? During Shanghai Finance Forum 2018 jointly hosted by SAIF, CAFR and GFLF on December 15th, Bengt Holmstrom, Paul A. Samuelson Professor of Economics at the Massachusetts Institute of Technology and Nobel Prize laureate 2016 in Economic Sciences, pointed out that this viewpoint is obsolete. The point is whether FinTech and banking can work together, rather than whether FinTech threatens banking.

According to Bengt Holmstrom, banking has its licenses and plenty of capital. Therefore, in the future, FinTech and banking will complement each other instead of threatening one another. While regulators are increasing the stability of the financial markets, banks need to change their behaviors and partner with FinTech players.

“I used to talk to President of UBS, who revealed his concern on finding a new business model of future banking, rather than worrying about the threat of future technology”. For him, China is getting closer and closer to the right answer and the banking industry is almost finding the new business model.