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SUMMARY:FinTech Disruption\, Payment Data\, and Bank Information
DTSTART:20190322T103000
DTEND:20190322T120000
DTSTAMP:20260414T032128Z
UID:989cd4b816c7062a259870262aee4ca272a5e1d9e71f06e23e2a142c
CATEGORIES:Conferences - Seminars
DESCRIPTION:Haoxiang ZHU\, MIT\nWe study the impact of FinTech competition
  on a monopolist bank that bundles payment processing and lending. In our 
 model\, consumers' payment data contain information about their credit qua
 lity. This information is valuable to the bank when making loans. Surprisi
 ngly\, under mild conditions\, consumers in the loan market also benefit e
 x ante from the bank being informed. The bank internalizes the value of th
 is information when pricing its payment services\, as do consumers when ch
 oosing a payment processor. Competition from FinTech firms specializing in
  payment services disrupts this information spillover to lending decisions
 . We show that FinTech competition can reduce or increase the price of pay
 ment services charged by banks. Overall consumer welfare depends on the co
 nsumer's affinity for bank services. Those with a high affinity may be wor
 se off\, whereas those with a low affinity benefit from cheaper access to 
 payment services. Policies that give consumers complete control of their p
 ayment data break the bank's vertical integration of payment and lending\,
  but such policies can also harm consumers. Our results highlight the comp
 lex consequences of recent regulation such as PSD2 in the EU and the Open 
 Banking initiative in the UK\, especially their heterogeneous impact on co
 nsumers.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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