The hope of FinTech enthusiasts is that its spread will lead to much lighter financial regulation. However, new technologies generate new risks and do not eliminate the old ones which provide the rationale for financial regulation in the first place. Asymmetries of information and default externalities do not disappear with the introduction of new ways of supplying financial services.
FinTech does not provide an excuse for less regulation. It is the specific nature of finance in our economies that provides the rationale for financial regulation which is different from the one applied to other sectors, particularly those related to privatised former public utilities. In this case, it is insufficient competition that justifies the regulatory bias in favour of new firms entering the sector.