Open Access

Adnan Kerim El-Masri

• This Bachelor Thesis provides an overview of the growing Fintech-sector and analyses banks’ reactions and impacts on the financial stability. The examined aspects include findings about differences between banks and Fintech-companies, main success factors, banks’ reaction to new market participants and consequences for the financial stability. Fintech describes the combination of innovative technology and financial services. Fintech-companies provide alternative financial services for private and corporate clients, which accelerate and simplify the access to financial resources, the investment of assets or the execution of transactions. Both Fintech-companies and banks show a high degree of willingness to cooperate, which enables to benefit from synergy effects. Fintech-companies are the innovative driver, whereas banks provide the necessary expertise and a big customer base. In 2016 banks’ venture capital subsidiaries invested $ 13.6 billion in cooperation projects with Fintech-companies. From today’s perspective, there are no concrete risks, which could imply foreseeable dangers for the financial stability. However, there are risks which could destabilize the financial system in the long-term, if the growth of the Fintech-sector continues steadily. At the same time, innovation in financial technology could have stabilizing implications for the financial system, because of higher efficiency, decentralisation, diversification and transparency.