Digital disruption in financial markets


The financial sector has been the object of many innovations in recent years, with significant impact on consumers and on regulation. Retail banking is no longer solely branch-based, but can be conducted in many ways, including using mobile telephones. Banks have had to adapt their business models to deal with persistently low interest rates, low credit growth, and increasing competition in retail from FinTech and platform-based competitors, all which threaten the profitability of traditional banks. The use of algorithms, big data, blockchain, peer-to-peer lending and crowdsourcing, means that the role of the intermediary is changing: banks now face competition from other intermediaries in their core business. Digital disruption is changing the provision of services in the sector, but may also be solving some of the previous competition problems in financial markets, such as high switching costs, or high transaction costs.

Traditional banks have seen parts of their core business – ranging from payment services and credit to advisory services – encroached upon by digital competitors. The advantage held by FinTechs is that they can use state-of-the-art technology, operate a leaner business and focus on those business segments with higher returns. They also face disadvantages, such as a lack of reputation and brand recognition, the absence of a customer base, limited access to capital markets, and a starting point with not much information about customers in general. Now other players are also entering the market for financial services, namely the BigTechs: Apple and Google, but also retail giants such as Amazon and Tesco, are moving into the provision of financial services. BigTechs can use data garnered from clients, combined with their leading edge in the application of digital technology and artificial intelligence. On the other hand, the competitive impact of a third party’s right to access bank account data by virtue of open access regulation offers an opportunity to reflect on the competitive value of an economy based on the free-flow of data and on how to ensure a level playing field among competitors.

Historically, financial markets have seen tension between competition and stability. Regulation has not always been adequate to ensure stability and has periodically been superseded by innovations.

In June 2019, the OECD held a roundtable on the degree to which digital disruption from FinTech and BigTech impairs stability and whether these players need a different type of regulatory oversight. It also discussed the degree to which better regulation can solve the conundrum of competition-versus-stability, and debated whether new actors from FinTech and BigTech create systemic risks similar, or indeed different, to those inherent in the traditional banking model. View materials below.

In February 2020, the topic was again discussed during the 2020 OECD Competition Open day at the OECD in Paris. 


OECD Handbook on Competition Policy in the Digital Age 


Fintech and Bigtech was one of the topics of our OECD Competition Open Day held in Paris on 26 February 2020. A networking event open to all competition community and the media. 

Watch the replay of Panel 1. FinTech, Big Tech and Competition

Watch the entire event


Janos Barberis on how and why FinTech has been disruptive in financial markets and shares his thoughts on how these markets can be regulated. 



Xavier VIVES Bio
IESE School of Business, Spain

Janos Nathan BARBERIS  
Senior Research Fellow at the Asian Institute of International Financial Law and founder of SuperCharger

Jérémie ROSSELLI  
CEO of N26

Thomas DECKERS Bio
Innovations in Financial Technology Division at BaFin
Study: Big Data meets Artificial Intelligence

Stephen DURY 
Director of Innovation, Santander UK


Background note Note de référence

Executive Summary with key findings

Detailed Summary of the discussion 


Brazil l  Canada l EU l Israel l Lithuania 
Mexico  l  Peru l  Portugal  l  Romania l  
Russian Federation  l  Spain l Sweden l Turkey
United Kingdom l United States l BIAC l BEUC 




Roundtable on Co-operation between Competition Agencies and Regulators in the Financial Sector, 2017

Hearing on Disruptive Innovation in Financial Markets, 2015

Issues note for the Hearing on disruptive innovation in the financial sector, 2015

Summary of discussion from the Hearing on disruptive innovation in the financial sector, 2015

“Competition and open application programming interface standards in banking” from Financial Markets, Insurance and Private Pensions: Digitalisation and Finance, 2018

Hearing on Blockchain, 2018




OECD best practice roundtables on competition

More OECD work on competition


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