The Evolution of Financial Services in the Digital Age

19 Pages Posted: 8 Jul 2021

See all articles by Angela Lyons

Angela Lyons

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Josephine Kass-Hanna

University of Saint Joseph (Beirut) - Faculty of Business Administration and Management

Date Written: June 24, 2021

Abstract

This chapter provides an overview of how digital technologies are transforming the financial services landscape. We highlight the latest in digital financial product and service offerings related to payments and transfers, savings and investments, borrowing, and risk management. We then consider how digitalization is impacting the delivery of financial advice-including virtual advisors, robo-and hybrid advisors, and personal finance communities. While many of these digital innovations were underway prior to COVID-19, the pandemic accelerated the transition raising concerns that some individuals and families may be at risk of being excluded from financial services due to growing socioeconomic and digital divides. We look at barriers to access and usage and emphasize the need for digital financial literacy. Legal and regulatory challenges are also examined. Particular attention is given to recent efforts by regulatory and supervisory authorities to balance innovation and competition with consumer protection. The insights from this chapter provide a useful starting place for scholars and practitioners who are interested in exploring in greater detail how digital technologies are impacting the financial services industry.

Keywords: digital financial services, advisory services, digitalization, fintech, financial inclusion, regulatory challenges

JEL Classification: D14, G20, G50, O10, O33, R20

Suggested Citation

Lyons, Angela and Kass-Hanna, Josephine, The Evolution of Financial Services in the Digital Age (June 24, 2021). Available at SSRN: https://ssrn.com/abstract=3873370 or http://dx.doi.org/10.2139/ssrn.3873370

Angela Lyons (Contact Author)

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

440 Mumford Hall, 1301 W. Gregory Drive
Urbana, IL 61801
United States
1-217-418-6086 (Phone)

HOME PAGE: http://https://ace.illinois.edu/directory/anglyons

Josephine Kass-Hanna

University of Saint Joseph (Beirut) - Faculty of Business Administration and Management ( email )

Campus of Social Sciences, Huvelin Street
P.O. box 17-5208 Mar Mikhael
Beirut, 1104 2020
Lebanon
+9611421000 (Phone)

HOME PAGE: http://www.usj.edu.lb/

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