That said, there is some good news for researchers on financial regulation and supervision: Your job is safe as there will always be a constant flow of new developments in the financial sector for you to research. So how do we move forward? Evolutionary theory not only highlights the problem, it also illuminates possible strategies.
At the same time, there is the need for these efficiency-inducing new technologies to be incentivised. Clearly, the entity based regulation of banks with its focus on health parameters like capital adequacy, leverage, liquidity or financial integrity requirements like KYC, AML/CFT requires to be adapted to the presence of fintech entities that are not subject to the same regulatory requirements.