The aim of this paper was to review existing literature on Fintech services and their potential impact on traditional financial intermediary practices. The review is significant and timely as banks and customers are gradually familiarizing with these services showing a significant growth of Fintech utilization in Sri Lanka in recent times. Utilizing a qualitative approach, the paper has examined two most significant usual practices of banks including: (a) banking practices on credit, deposits and capital raising and payment services, and (b) banking practices on clearing and settlement services, because of the emergence of two major Fintech services; namely, peer to peer (P2P) lending, and digital wallet and crypto currencies. The review considered both national and international studies on 'Fintech' adaptation in financial institutions. It is observed that there is no compelling threat from P2P lending to banking activities, in general, though there will be migration of lenders from banks to P2P platforms that will result in banks to lose some segments of customers in the future. The review also identified that growing usage of smartphones tends to replace physical wallets with digital wallets which will bring potential disruptions to traditional operations of the banking industry. Adoption of Fintech in the banking industry, however, will not result in a complete financial disintermediation given the monopolistic nature of money creation by the banks, and risky and unreliable nature of these innovations.
Credit exchange relations in the marketplace, according to Karl Marx, take two forms, namely, commercial credit relation and the monetary credit relation. The former explains buying commodities against a promise to pay, and the latter explains lending money with a view of earning interest. This, on the other hand, implies a movement of interest-bearing capital in which it is determined by the demand and supply of interest-bearing capital (Lapavitsas, 1991). The analysis of this paper is built around the second relation of credit, which is banks' monetary credit, as it plays a significant role in the process of economic growth and development.Generally, banks provide a significant amount of capital to both public and private sectors in the form of loans and therefore, the status of banks credit indicates the collective health of the markets and the economy. Since credit given to individuals and institutions is often converted into capital, and thereby used for productive economic activities, the growth of the credit market may also indicate growth of productive economic activities. Some economies therefore enhance credit growth as a catching-up strategy because easier access to credit paves the way to achieve their developmental targets (Bayoumi and Melander, 2008).
The unemployment among arts, humanities and social sciences graduates has been a significant phenomenon in many countries in the world including Sri Lanka, which has received intense attention from policymakers in recent times in which the fault is often directed at the universities that produce these graduates. According to the Labor Force Survey of Sri Lanka, overall unemployment remained at 5.1% while the youth unemployment rate remained at 23.3% in 2019, which included more than 50,000 unemployed graduates, most of whom were humanities and social sciences graduates. In this backdrop, this paper reviewed the causes of unemployment and the issues of the employability of humanities and social sciences graduates in Sri Lanka. The study revealed that the graduates in humanities and social sciences have not been employable mainly due to the fact that there has been a significant skills mismatch as graduates lack employable skills and attributes. Moreover, unemployment of humanities and social sciences graduates is caused by a number of factors including skills deficiency, occupational immobility, geographical immobility, technology change, a lack of sufficient jobs growth and various structural constraints in the economy. The study suggests that there is a need for significant structural reforms on both the supply side and the demand side to make graduates more employable and employed. While the government is required to play a leading role in these structural reforms to create more jobs for the graduates in humanities and social sciences, the higher education institutes need to undertake a major structural reform of study programmes through a vision that enables them to produce intellectually rich, and highly skilled graduates in humanities and social sciences.
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