ABSTRACT
This study investigates banks–financial technology (fintech) sector relationships as well as digital financial inclusion mechanisms in emerging and developed economies and the roles that banks and fintechs play in it. Banks are often not able to fill the financial exclusion gap in low-income economies. Independent fintech ventures, owing to their unique business and technology competences, are providing these services instead of banks. However, in the future, more competition between banks and fintechs may arise in low-income countries. In contrast, in developed markets, the fintech sector is cooperating and competing with banks at the same time. While in some low-income economies, providing basic services remains a challenge, modern technology may be a tool for inclusion in developed financial markets, such as in the case of financing younger customers' needs. One cannot ignore the fact that digitalisation may have an ambiguous impact on inclusion. Unevenly distributed technology competences play a role here. More importantly, the trend of introducing automated alternative data-driven and machine learning-based credit decisions creates chances as well as risks, particularly related to unfairness, opacity, and discrimination.
