Financial Innovation in Retail and Corporate Banking

Financial Innovation in Retail and Corporate Banking

New Horizons in Money and Finance series

Edited by Luisa Anderloni, David T. Llewellyn and Reinhard H. Schmidt

This valuable book discusses in detail, through a blend of theory and empirical research, the processes of innovation and the diffusion of new financial instruments.


Paolo Mottura

Subjects: business and management, corporate governance, economics and finance, corporate governance, financial economics and regulation, money and banking


Paolo Mottura Financial innovation has by now become a permanent and irreversible phenomenon, which therefore deserves to be continuously studied in order to understand its origins and drivers, to analyse its various forms, to evaluate its positive and negative externalities at the macroeconomic level and finally to investigate the organic relationship with the competitive strategies of financial intermediaries. The current and prospective context of financial globalisation – which involves both capital markets and financial intermediaries – is characterised by particularly intense competition, onto which financial regulatory authorities try to impose certain rules, without, however, imposing limits. Obviously the challenge lies in trying to achieve the dual objective of, on the one hand maximising positive externalities, in other words the benefits of innovation for the real economy itself, and on the other, limiting as far as possible the negative externalities that innovation inflicts on real economies and on the return/risk performance for stakeholders (financial intermediaries, firms, investors, public administrations and so forth). As far as the strategy of financial intermediaries is concerned, innovation has now become an instrument or, as some would say, a crucial competitive weapon. Process innovation, strongly supported and stimulated by new technologies, plays an essential role as a factor of differentiation between the single producer and his/her competitors. Process innovation is focused on obtaining results and levels of productivity and slashing the costs of production and distribution (cost leadership), as well as improving the quality and reliability of the procedures themselves for the benefit of...