Speaker: Isil Erel, The Ohio State University
New technology promises to expand the supply of financial services to small businesses poorly served by banks. Does it succeed? We study the response of FinTech to financial services demand created by the introduction of the Pay-check Protection Program. FinTech is disproportionately used in ZIP codes with fewer bank branches, lower incomes, and more minority households, and in industries with fewer banking relationships. It is also greater in counties where the economic effects of the COVID-19 pandemic were more severe. Sub-stitution between FinTech and banks is economically small, implying that Fin-Tech mostly expands, rather than redistributes, the supply of financial services.