FinTech Adoption Across Generations: Financial Fitness in the Information

Bruce Carlin, Arna Olafsson, Michaela Pagel

Research output: Working paperResearch

Abstract

This paper analyzes how better access to financial information via new technology changes use of consumer credit and affects financial fitness. We exploit the introduction of a smartphone application for personal financial management as a source of exogenous variation. FinTech adoption reduces financial fee payments and penalties, but differs cross-sectionally in the population. After adopting the new technology, Millennials and members of Generation X incur fewer financial fees and penalties, whereas Baby Boomers do not benefit from the technological advance. Millennials and Gen Xers save fees by using their credit cards rather than overdrafts to manage short-term liabilities. Moreover, Millennials shift some of their spending to discretionary entertainment, whereas members of Generation X remain more austere. Finally, while men tend to adopt new technology and access information at a higher rate, the economic impact of access is larger for women.
This paper analyzes how better access to financial information via new technology changes use of consumer credit and affects financial fitness. We exploit the introduction of a smartphone application for personal financial management as a source of exogenous variation. FinTech adoption reduces financial fee payments and penalties, but differs cross-sectionally in the population. After adopting the new technology, Millennials and members of Generation X incur fewer financial fees and penalties, whereas Baby Boomers do not benefit from the technological advance. Millennials and Gen Xers save fees by using their credit cards rather than overdrafts to manage short-term liabilities. Moreover, Millennials shift some of their spending to discretionary entertainment, whereas members of Generation X remain more austere. Finally, while men tend to adopt new technology and access information at a higher rate, the economic impact of access is larger for women.
LanguageEnglish
Place of PublicationCambridge, MA
PublisherNational Bureau of Economic Research (NBER)
Number of pages42
DOIs
StatePublished - Sep 2017
SeriesNational Bureau of Economic Research. Working Paper Series
Number23798
ISSN0898-2937

Cite this

Carlin, B., Olafsson, A., & Pagel, M. (2017). FinTech Adoption Across Generations: Financial Fitness in the Information. Cambridge, MA: National Bureau of Economic Research (NBER). National Bureau of Economic Research. Working Paper Series, No. 23798, DOI: 10.3386/w23798
Carlin, Bruce ; Olafsson, Arna ; Pagel, Michaela. / FinTech Adoption Across Generations : Financial Fitness in the Information. Cambridge, MA : National Bureau of Economic Research (NBER), 2017. (National Bureau of Economic Research. Working Paper Series; No. 23798).
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Carlin, B, Olafsson, A & Pagel, M 2017 'FinTech Adoption Across Generations: Financial Fitness in the Information' National Bureau of Economic Research (NBER), Cambridge, MA. DOI: 10.3386/w23798

FinTech Adoption Across Generations : Financial Fitness in the Information. / Carlin, Bruce; Olafsson, Arna ; Pagel, Michaela.

Cambridge, MA : National Bureau of Economic Research (NBER), 2017.

Research output: Working paperResearch

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Carlin B, Olafsson A, Pagel M. FinTech Adoption Across Generations: Financial Fitness in the Information. Cambridge, MA: National Bureau of Economic Research (NBER). 2017 Sep. Available from, DOI: 10.3386/w23798