The Fintech Revolution Is Finally Here— And So Are the Regulators

SPEAKING IN OCTOBER to his banking brethren at the world’s biggest payments confab—the annual Sibos conference— Jamie Dimon didn’t mince words.

ELISA MARTINUZZI

The rise of financial technology companies, warned JPMorgan Chase & Co.’s chief executive officer, will see some banks “go the way of the dinosaur.”

In the world of finance, as in many other parts of the economy, Covid-19 has accelerated a shift to digital interactions that was already under way. And it hasn’t gone unnoticed by regulators. In Asia, Europe, and the U.S., central banks and other regulators are increasingly focused on how technology companies could come to dominate financial services, undermining the stability of the systems the watchdogs are entrusted to preserve.

One obvious sign of the growing importance of fintech companies is their surging market value. The valuation of PayPal Holdings Inc., the U.S. e-commerce payments giant, had exceeded $225 billion as of early November—more than that of Europe’s top four banks combined and higher than all U.S. banks bar JPMorgan. In Europe, where lenders’ stock prices have plummeted to record lows this year, only HSBC Holdings Plc, with $3 trillion in assets and a history dating to 1865, was worth more than Adyen NV, a 14-year-old Dutch payments processor.