But it could also become more concentrated, and new risks to financial stability could emerge. Two extreme scenarios for the future are possible. Both come with regulatory implications. In the first one, banks rise to the digital challenge by upgrading their technological systems and teaming up with fintechs.
There are signs of this happening, as global banks’ IT expenses rose to $ billion in 2017, from $ billion in 2013.9 In this scenario, banks leverage technology to enhance their products, services and operations, allowing them to retain their customer relationships and core banking services.