They are more likely to result in higher inflation and consequently higher long term interest rates, which will impact negatively on the cost of government borrowing and the cost of capital. Under such circumstances, real long term interest rates are likely to rise even further because of a possible increase in the risk premium.
But even apart from radically transforming the payments and securities settlement infrastructure, digitalisation enables newcomers to mount a challenge against incumbent market players. Data-driven technologies can boost the transparency of the financial system and thus reduce information asymmetries. Big data analysis, for example, can improve the estimation of default risks even in the absence of a longstanding bank-customer relationship.