The Platform Political Economy of FinTech: Reintermediation, Consolidation and Capitalisation

ABSTRACT

‘FinTech’ is the digital sector of retail money and finance widely proclaimed to be transforming banking in the global North and ‘banking the unbanked’ in the global South. This paper develops a perspective for critically understanding FinTech as a platform political economy that is marked by three distinctive and related processes: reintermediation, consolidation, and capitalisation. Through experimentation with the platform business model and building on the digital infrastructures and data flows of the broader platform ecosystem, a constellation of organisations – including start-ups, early-career firms, BigTech companies and incumbent banks – are engaged in processes of platform reintermediation. Changing the bases of competition in retail money and financial markets and encouraging oligopoly and even monopoly, the reintermediation processes of FinTech are presently manifest in strong tendencies towards platform consolidation. The imagined potential of FinTech has also triggered intensive processes of capitalisation, with platforms receiving significant prospective investment by venture capital, private equity funds, banks and BigTech firms.

KEYWORDS:

• FinTech
• platform capitalism
• reintermedation
• consolidation
• capitalisation

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Paul Langley

Paul Langley is Professor of Economic Geography at Durham University, UK. His publications include Liquidity lost (Oxford University Press, 2015), The everyday life of global finance (Oxford University Press, 2008), and World financial orders (Routledge, 2002). His present research focuses on the emergence and stabilisation of new forms of finance in the wake of the global financial crisis, including ‘FinTech’, ‘green finance’, and ‘social finance’.

Andrew Leyshon

Andrew Leyshon is Professor of Economic Geography at University of Nottingham, UK. His publications include Money and finance after the crisis, co-edited with Brett Christophers and Geoff Mann (Blackwell-Wiley, 2017), Reformatted: code, networks and the transformation of the music industry (Oxford University Press, 2014), Alternative economic spaces, with Roger Lee and Colin Williams (Sage, 2003), and Money/Space, with Nigel Thrift (Routledge 1997). His present research focuses on crowdfunding and the platform economy.