High-Speed Internet, Financial Technology and Banking

Journal Article
Published on 17 February 2023

The published version of this paper is available here at Management Science


Exploiting the staggered arrival of fibre-optic submarine cables, we show that high-speed internet promotes the role of banks and credit in Africa. Variation within-country and across multi-country bank networks indicates that high-speed internet induced a 22% expansion in credit supply. We investigate the role of plummeting telecommunication costs in promoting the bank adoption of new financial technologies and study a specific technology used in the interbank market, the real-time gross settlement system (RTGS). We find that upon connecting to high-speed internet, banks adopt the RTGS more extensively, reduce inside liquidity and increase interbank transactions and lending. We also observe that high-speed internet particularly strengthens firms in countries with weak pre-existing interbank markets.


Nicola Limodio

Bocconi University

Angelo D'Andrea

Bank of Italy