Fintech: The Impact of Fintech on Economic Growth

It is evident at this point that the ongoing digital revolution and the ascent of fintech are persistently reshaping the financial landscape worldwide. When examining the present economic forecast alongside geopolitical tensions and a global deceleration in growth, it becomes intriguing to explore the enduring factors that could potentially mitigate the dire forecasts of sluggish growth attributed to inflationary pressures in the long term.

Fintech can potentially boost economic growth through technological and financial innovations that reduce the cost of financial services and increase financial intermediation. However, is there empirical evidence to show that there is indeed a positive correlation between GDP and fintech developments?

This recent study shows that there is indeed a positive correlation. However, a warning from the author indicates that excessive credit growth and the introduction of new financial products can instigate financial instability too, thereby undermining growth dynamics.

See this interesting working paper written by Serhan Cevik.

source: IMF Working Paper Series WP/24/20