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19 - The Challenge of Scale

Addressing Concentration and Dominance in Digital Finance

from Part IV - From FinTech to TechFin to BigTech to FinTech 4.0

Published online by Cambridge University Press:  09 November 2023

Ross P. Buckley ,
Douglas W. Arner  and
Dirk A. Zetzsche
Ross P. Buckley
Affiliation:
University of New South Wales, Sydney
Douglas W. Arner
Affiliation:
The University of Hong Kong
Dirk A. Zetzsche
Affiliation:
Université du Luxembourg
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Summary

The economies of scope and scale of finance combined with the network effects of data and technology create benefits and pose risks toccompetition within financial markets. The same FinTech economies that reduce costs and increase efficiencies often contribute to decreasing competition in FinTech market segments. This market concentration is at odds with key objectives of financial regulation, including market efficiency, investor/client protection, and systemic risk prevention, and may require regulators to intervene.

Keywords

Economies of ScaleNetwork EffectsCompetitionAntitrust RegulationObjectives of Financial Regulation
Type
Chapter
Information
FinTech
Finance, Technology and Regulation
 , pp. 297 - 310
Publisher: Cambridge University Press
Print publication year: 2023

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