FinTech and household finance: a review of the empirical literature

Abstract

PurposeThis paper reviews recent advances in the empirical literature of FinTech and household finance.Design/methodology/approachWe survey the effects of FinTech on three different aspects of household finance: payments, lending and portfolio decisions. Specifically, we examine the impact of digital payments, mobile money, FinTech lending, marketplace lending, robo-advising and crowd-funding.FindingsStudies suggest that FinTech has positively benefited households by increasing consumption and borrowing. This allows them to smoothen their consumption across time. Furthermore, there is an improvement in their portfolio diversification. Nonetheless, there is also evidence that certain households overconsume and borrow beyond their means.Originality/valueDespite the importance of this topic, there has been a lack of empirical evidence until recently. In this paper, we take stock of the empirical evidence in the literature through the lens of household finance