IMF Working Papers

Prometheus Unbound: What Makes Fintech Grow?

By Serhan Cevik

February 21, 2025

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Format: Chicago

Serhan Cevik. "Prometheus Unbound: What Makes Fintech Grow?", IMF Working Papers 2025, 044 (2025), accessed February 22, 2025, https://doi.org/10.5089/9798229001892.001

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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 rise of financial technologies—fintech—could have transformative effects on the financial landscape, expanding the reach of services beyond the confines of geography and creating new competitive sources of finance for households and firms. But what makes fintech grow? Why do some countries have more financial innovation than others? In this paper, I use a comprehensive dataset to investigate the emergence and spread of fintech in a diverse panel of 98 countries over the period 2012–2020. This empirical analysis helps ascertain economic, demographic, technological and institutional factors that enable the development of fintech. The magnitude and statistical significance of these factors vary according to the type of fintech instrument and the level of economic development (advanced economies vs. developing countries). Finally, these findings reveal that policies and structural reforms can help promote financial innovation and cultivate fintech ventures—particularly by strengthening technological and institutional infrastructures and reducing cybersecurity threats.

Subject: Credit registry, Digital financial services, Financial inclusion, Financial markets, Financial sector development, Financial sector policy and analysis, Financial sector stability, Financial services, Fintech, Population and demographics, Population growth, Technological innovation, Technology

Keywords: Commercial banks, Credit registry, Digital financial services, Europe, Federal Reserve Bank of Atlanta, Financial inclusion, Financial innovation, Financial sector development, Financial sector stability, Fintech, Fintech, Global, North America, Population growth, Technological change, Technological innovation, Technology, Western Europe

Publication Details

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