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Towards an economic geography of FinTech

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Abstract

In this paper, we identify the ways in which the existing literature has examined financial technology (FinTech). Using the frame of the ‘FinTech Cube’, we examine how FinTech unfolds through the intersections of key actors, technologies and institutions. We demonstrate the relevance of FinTech for two areas of geographical enquiry: i) the reshaping of global production and financial networks, and ii) financial inclusion and poverty reduction in poorer countries. In doing so, we accord particular attention to the significance of FinTech for theoretical and empirical research in economic geography.
Towards an economic geography of FinTech

 
!"#$%&%&Progress in Human Geography
I. Introduction
'!!(!)**&
++,-'.",.!
/0++-'+
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+-'
/2-'
3,.)*$1,.
%&)4/-'
+""++
!!/'
-'+!!+
!5
/
-'/-+
%&)&6!+%&)&%&)$!-'
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!(2-9
++!+!
2-9/'-',.5
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:!/-
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!//<%&)*/
)
-'inter alia !
+,./
2-'.3
+,-'9!.:
/0+
-'+3=!
+-',.
,.!/2+
-'/
II. Making sense of FinTech
0+
!" 2!
!/ -'+,
.!!+
!3,".!
!+
-%&&1/ /%&)8,-'.
)**&9",-'9.
%&)&/'-'>?
@/A/%&)4+-'>?+
@/18/,'.
,.+‘to
improve’.+
/'-B%&)C!-'>!
DE+!@/C/'
5+-'
!/-'!!
"!!
-'/'!
+-'!
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/
2!-'+
,-'9!.+
+
!-)/'5!
5!-'/F!!
5/0-'!
:-'
/-!!!!
!,!.<%<
+/-!"!
,!". 2,!./2
!"!//!
!
-'!//
G'!B
%&)C/;+
-'+,.9!!+
5/'++++
++:
+++/-+5
++!:/
HH-)II
III. Emerging academic literature on FinTech
;+-'+!
/'5longue durée +
-/ /%&)8!)*!
-'%&&$,-'A/&./2
A
!!J+not
!/5+
!!"
+""
!3!","!""
!.%&&$!/2B
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-%&)%/
- #%&)4!+

<F !!!,.
!/-
9%&)4:+-'"+
9.,./'+"
9++!
!:interessement!:/9%&)4+
-'3,"./2+
tabula rasa "+
5!
!++92
!" -/
"-'
//M/, %&)$6%&)46K'%&)C/5
-'"
+!+,!.
-"'",./-5M/%&)$
5"-',".
1
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.!+!:-'
",.+!
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:5
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/M+K'%&)C9
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!-'"!"3
"/
!/'
!%&)&
,!./ +!
59et al/%&)*60et al/%&)*6KB%&)*/
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0et al/%&)*!
=5!!:
/':
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"!/-
%&)C!
+!
5+

!/M+
:/
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"+:!
+ /%&)86%&)%6%&)46'<
%&)C/-+!!(
!
8
'<%&)C=)))/G9%&)4+
"%&&$="!
"/'+-'9
+9"!
-'+"
,."+
0O(9%&)8/
-'%)!!+
"! /%&)8/
2+
-'//M!/%&)*6M/%&)$6%&)C

/25+
!5+/
IV. Economic geographies of FinTech: two themes
-'!+
+
-)/'
++=!+
,./
G!+
-'++!
!+
++!:!!
!5+3+-'
/'-'+
!+<N!+
-N/
2++
+"/
4
-'!!
/'":
F
/'<%&)C5
+,".+"//
!!+!!+"
!"!/'+
!!F++
!!/;+
+F
!./F"

!3+P!!
(+ %&)C/'
!.++"
+
+L%&)4/
'!!+,.,.!+
+
/-5+.
"++"+
!'<%&)C/B
!+.!
-5!+
!3/-5.!"
"+!"!
/'B%B"
+-5+/
-'!+!+/G
+
!3+
C
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/
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+'<%&)C=%6':%&&$6#
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//0
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formalB%&)$!
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++!!"
,.-.!+
+/0+
3+3/ 0B
%&)Cis !!+!
/'!"  +++
))V%&)1%)V%&)Cwithin  =
!!)8V9 G!CAV
/G+ 
,".A N 0B%&)C/F
"!-'!,.!-K
'%&)C/2%)V++! !
%--// /%&)C6#%&)462G9%&)$62-%&)$6
/, %&)$6B%&)$6;/%&)C/'!
+ 0B%&)C!-5/
A +!,.,".
/'!
/
)1
++!"
0B%&)C/'!+
,.!5,!.
,.!,!!.<%&&4/'
3=5+-!!
,:.!,:./03
!3/
B"
+!+!*V
%&)C!/+!
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/',".+
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1'"++59
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/
)8
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3"/',!.
!+
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,.-/B
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!B%&)$6/%&)$6B%&)$6
%&)46K%&)$/!B%&)C+-!
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T-<5@/1%1/'+"
:-',.
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!!++
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/ :+
;+T:
-'"+/9
5+/;
!,.3::
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B%&)C=1%*++-'!+
+,.+!B
%&)8/'!B%&)C=><+"
@/1%1/',!.!(

!(/
!B.5!
3P,./'-
!,:.++ 2
5
 /%&)$/2+!,.
-<%&&4:
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+::+5+
,./
;35+-+hegemonic
:+
+:/-:!
9%&)86M%&))6<<%&)&!+
-/.%&))-:>
++@/CC*
 and groups/ +
!(R0-
+/<B%&)*+
+!!:!+
-'.5
++/
3+-
!//:<%&)46<%&)A+
 , 9.//;
%&)C=8&1/G+"+
+!+!
-/-
5%&)C!
"+!2"+B" 
Reuters%&)*/
'33-
!/! 
!as defined by the World Bank
!/0!!,
.+':9++5!
P"3
!!!3/
Conclusions
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2+++5
-'/0!-' 2"
!!/0
,-'9!.+-'
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References
%&)* !%&)$+9
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... Yet the above studies either do not explicitly address AI, or they pre-date what most would consider the widespread appearance of AI (and more specifically machine learning) in financial labour markets. There is also an enormous interdisciplinary literature on AI in the financial sector (discussed in the next section) and an equally capacious array of studies on the proliferation of 'digital finance' and Fintech within a platform political economy of finance (Lai & Samers, 2020;Langley & Leyshon, 2017Lewin, 2018;Wójcik, 2021). These contributions address AI either explicitly, or implicitly by virtue of their object of study. ...
... Yet, save for a few theoretical (Clifton et al., 2020) or empirical studies of AI (Felten et al., 2021;Maslej et al., 2023;McElheran et al., 2024), there is virtually no research on the geographical implications of the intersection of AI and labour, based on quantitative or qualitative data over the last decade. Related studies on the spatial implications of digital platforms and technological innovation in finance (Haberly et al., 2019), and specifically FinTech (e.g., Hendrikse et al., 2024;Lai & Samers, 2020;Wójcik, 2021) are highly suggestive, but barely refer to AI and/or work. Thus, our brief comments are informed by these studies, but are mostly conjectural rather than evidential. ...
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This paper provides a critical conceptualization of the relationship between artificial intelligence and financial labour markets in the United States. In doing so, we ask first, what are the characteristics of 'actually existing AI' in the financial sector? Second, what are the various ways in which the relationship between AI and its effects on financial labour or employment over approximately the last decade are approached theoretically, conceptually, or methodologically? Third, what are the (spatial) consequences of AI for financial labour markets in the United States? In responding to these questions, we develop a combinatory approach that integrates a 'financial ecologies' approach and a 'platform financial ecologies approach' or stated differently, a combination of socio-institutional embeddedness and socio-technical assemblages. Within this conceptualization, we argue for the possible integration of quantitative and qualitative studies to understand the obstacles to implementing AI as well as their effects in terms of substitution and complementarity. Using the insights from the quantitative and heterodox literatures, we suggest tentatively that thus far, AI has had little centrifugal effect on the geography of the financial sector. The paper concludes with some suggestions for especially financial geographers and other heterodox scholars who seek to analyse this relationship.
... Fintech is a new phenomenon that has radically changed the traditional financial landscape (Abbasi et al. 2021). It has impacted important areas of the economy like banking systems, trading systems, and payment platforms which are leading countries to economic development and being a source of competitiveness (Jiao et al. 2021;Lai and Samers 2021;Guo et al. 2023). Today, cities are fighting to become fintech hubs rather than financial hubs, cities like London, New York, and Silicon Valley are well-known for being prominent FinTech hubs. ...
... So, this study started from scratch by developing a database for fintech companies, related industries such as the financial industry and the IT industry, and other components of the fintech ecosystem. For this study, the following definition of fintech is used; the use of technology to provide new and improved financial services (Thakor 2020), which is further explained by (Lai and Samers 2021) via fintech framework which says that fintech unfolds at the intersection of technologies and institutions with advanced financial products and services. ...
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This research delves into the complex landscape of the fintech ecosystem, specifically focusing on the Northwest City region of Ireland, employing a mixed-method approach. The study focused on the methodology used to identify and map the fintech clusters. Different methodologies have been used to map and identify clustering due to its evolving nature. In our case, due to the lack of fintech companies' records on publicly available databases, and fintech being an emerging phenomenon, our methodology relied on a combination of approaches like desk research, stakeholder engagement, geospatial analysis, and in-depth interviews which fall under the qualitative-dominant mixed method approach. Despite a diverse range of methodologies being used to identify clusters, some known studies have used mixed methods. This research aims to provide guidelines for identifying clusters by developing a database of the companies in the fintech sector and its validation in an evolving field like Fintech. It also highlights the importance of the use of geospatial analysis in clustering by mapping the fintech companies, however at the same time questions the simple agglomeration of the firms in the region. It’s not only the physical proximity that develops the clusters but the local linkages, collaborations, and networks that play a pivotal role in reaping the benefits of clusters. The detailed interviews with the fintech companies in the region and their relationship with different components of the fintech ecosystem using the triple helix model highlighted the strengths and weaknesses of the fintech ecosystem in the region. The application of mixed methods in this research highlights the value gained in exploring fintech clustering and ecosystems. This study further enhances our understanding of the emerging phenomenon of fintech clusters and ecosystems in cluster-based economies, specifically how a combination of approaches could be used to map and identify fintech clusters. It also furthers the boundaries of knowledge in business and management methodological literature by introducing a comprehensive qualitative-dominant mixed method approach with a consolidating knowledge base on methodological approaches to clustering.
... Likewise, for those studying the orchestration of global circuits of value, there is a growing recognition that clouds and digital technology matter (Trincado-Munoz et al., 2023). In financial geography there is growing scholarship on financial technology (FinTech) and its organisational, industry, and geographical implications (Lai and Samers, 2021). ...
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Witnessing the inroads of Big Tech into finance, this paper maps the growing dependence of incumbent banks on public cloud infrastructures. Although 'cloud interfacing' has become crucial amid platform finance, the intersections between what we conceptualize as Global Digital Technology Networks and Global Financial Networks have received little attention. We mobilize social network analysis to (i) map the geographically variegated patterns of public cloud adoption in banking and their geopolitical implications; (ii) the corporate networks supporting banks' cloud migration, and (iii) the urban networks of command-and-control undergirding cloud banking, connecting established financial centres with tech valleys old and new.
... The cost effectiveness, high output, techno-friendly, and customer orientated Fintech has made the financial sector more volatile and lucrative for investment and customer satisfaction. The journey of development has changed with the adoption of FinTech in low-income countries (Lai & Samers, 2021). ...
... The cost effectiveness, high output, techno-friendly, and customer orientated Fintech has made the financial sector more volatile and lucrative for investment and customer satisfaction. The journey of development has changed with the adoption of FinTech in low-income countries (Lai & Samers, 2021). ...
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In today`s digital era, it is all the more desirable that all businesses, whether gigantic or minor in operation, should adopt financial technology and grow their businesses within their region and outside of the region. The Micro, Small & Medium Enterprises (MSME) segment is the mainstay of the Indian economic environment thus it is crucial that MSME players adopt financial technology in their routine commercial transactions. The present research study was conducted to investigate the enablers of usage of a Mobile Wallet by MSMEs in rural areas of India using interpretive structural modeling. It aims to categorize the foremost enablers and assess the relative relations between the recognized ten key enablers and proposes a hierarchical outline of vital enablers on MSME entrepreneurs from several hill states of India. The most prominent enabler that promoted the use of mobile wallets among MSME entrepreneurs included risk factors and perceived cost. The study suggested that multi-dimensional determinations are required to make certain of the use of mobile wallets by MSME entrepreneurs so that they can assess maximum economic opportunities and support the fiscal expansion of the state and the country.
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This paper presents an exploratory regional analysis of legal business in Russia over the period from 2016 to 2021. The primary data source for the analysis is the Federal Tax Service (FTS) open data on small and medium-sized businesses and the number of employees of organizations. The paper proposes a reproducible methodology of working with FTS open data for regional analysis in service geography that was partially implemented in a specially designed Python command line tool. The analysis includes questions regarding the number of law firms and their employees by region, the proportion of organizations engaged in the regional legal business, the role of regions in the country’s legal business sector, the role of legal business in the regions’ economies, and the change in the number of law firms in regions over the observed period. Additionally, it briefly addresses the potential correlation between the location of district-level courts and the development of legal business. The analysis revealed that the legal business sector in Russia is highly concentrated in Moscow and St. Petersburg. These regions also occupy the top position in terms of the role of legal business within the region. However, there are other regions with relatively high levels of legal business development, which are primarily located in the European south of Russia, the Volga-Urals, and Siberia. A dichotomy emerges between regions where legal business is dominated by organizations and those where individual entrepreneurs prevail over companies. District courts are typically situated in regions with a high level of legal business development. However, the underlying mechanism of this co-location requires further investigation. The number of legal firms increased from 2016 to 2021 in the majority of regions. The year-by-year changes within the regions typically follow an inverted U-shaped pattern. This pattern is likely explained by the coronavirus (COVID-19) pandemic, which negatively impacted small and medium businesses and reversed the initial growth trend.
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We take stock of theory and explanation in financial geographies between 2001 and 2020. Our analysis confirms the lone ascent of financialisation to the status of leading theory and shows that economics, particularly the financial variety, has been gradually pushed away from financial geographies in a shift that accompanied the decline of quantitative research approaches. We explain how these developments are interrelated and argue that they pose challenges to the role of explanatory theory, particularly in terms of its practical adequacy, understood as analytical robustness in explaining empirical outcomes, and usefulness for the practice of positive social change. We propose that these challenges need to be addressed by strengthening relationships between financial geographies and varieties of economics. We illustrate opportunities for such engagement in three broad areas: quantifying financialisation, sustainable finance, and decentralised finance.
Chapter
Factors influencing consumer interactions with financial technology (FinTech) services, and obstacles experienced by consumers that limit their use, are reviewed. The influence of trust, security, ease of use, accessibility, cost-effectiveness, convenience, and speed on FinTech adoption are reported. Of these influences, trust and security are paramount, with consumers requiring assurance that their personal data are protected, and that their transactions are safe. Ease of use, driven by user-friendly interfaces and smartphone technology, also significantly affect levels of consumer adoption. Accessibility and convenience of FinTech services on various devices broaden financial service reach and promote use. However, security concerns such as cyber-attacks and privacy issues limit FinTech adoption, as do regulatory uncertainties and a lack of personal interaction. Robust technological infrastructure and effective risk management are required to mitigate these limitations. Strategies to improve FinTech adoption include strengthening regulatory frameworks, investing in cybersecurity, promoting financial literacy, and enhancing customer support.
Chapter
This chapter examines Portugal's fintech ecosystem within the global platform capitalism context, examining its role in urban development and regional disparities. The study addresses the theoretical implications of the global fintech revolution, emphasizing digital transformation and financial inclusion. It details Portugal's fintech evolution, regulatory challenges, and investment trends, noting the concentration of fintech activities in urban centers like Lisbon and Porto. The chapter concludes by discussing the opportunities and challenges facing Portugal's fintech sector, including regulatory navigation, cybersecurity, and the potential for economic inequality.
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The rise of Fintech challenges established financial centres and incumbent financial institutions to rethink their strategies to remain obligatory passage points in the age of digitizing finance. To appreciate these changes, it is important to maintain theoretical interchange between developments in financial geography and economic geography, its parent discipline. In this paper, we argue that the ways in which evolutionary economic geography impacts strategic coupling in global financial networks are crucial to grasp tomorrow’s geographies of Fintech. Through an in-depth examination of Brussels, we analyse the potential of Fintech opening a window of locational opportunity in financial services. Belgium has put together a strategy to seize this window by leveraging its politically neutral image and Brussels’ existing niche in financial collaboration and infrastructural plumbing. The latter status is exemplified by the presence of global players SWIFT and Euroclear. We analyse how Belgian entrepreneurs and politicians assess Brussels’ locational resources, and strategically couple big financial institutions with small tech startups in order to cultivate a Fintech ecosystem in the service of incumbent finance, constituting a Fin-Tech-State triangle. As such, we document and analyse how the coalescence of finance and technology offers new opportunities for second-tier financial centres, while highlighting the difficulties in reaping these in practice.
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While contemporary technological disruption is increasingly conceptualized in terms of the logic and paradoxes of the digital platform economy, discussions of “FinTech” have only engaged to a limited extent with these debates—particularly from an economic geographic standpoint. Here we fill this gap by proposing an adapted Global Financial Network (GFN) framework for conceptualizing the organizational and geographic logic of the digital platform economy in finance, and applying it to examine the impact of the digital platform model on asset management. As we will show, asset management is being profoundly disrupted by what we dub digital asset management platforms—or DAMPs—which encompass services including index fund and ETF provision, robo-advising, and analytics and trading support. Like other digital platforms, DAMPs do not so much leverage technology to enhance their competitiveness within markets, as to radically restructure the market itself. Also, like other platforms, their rise has produced a winner-take-all paradox of centralization through democratization that defies predictions of technology-enabled industry decentralization. However, the logic and implications of the rise of DAMPs diverges, in other respects, from non-financial digital platforms, as finance has long possessed an informational intensity and regulatory and organizational fluidity characteristic of the digital platform economy. Consequently, the digital platform model has mostly developed endogenously in asset management through incremental innovation by major financial firms—in a process that has reinforced the position of leading incumbent asset management centers, and above all New York—rather than being introduced from the outside by upstart technology firms and clusters.
Chapter
This chapter discusses how the strategic coupling of East Asian firms requires favorable structural conditions, of which renewed state efforts in the form of supportive policy initiatives are vital. Taken together, this shift in state-firm-GPN relations from state-firm to interfirm dynamics in global production networks (GPN) has profound implications in the understanding of the present and future developmental trajectories of South Korea, Taiwan, and Singapore. The chapter argues that the successful articulation of domestic firms from these economies into GPNs is dependent on the necessary process of strategic coupling through which these latecomer firms' emergent capabilities and organizational choices must couple with the evolving strategies and intents of global lead firms in their coordination and orchestration of production networks across different territorial ensembles.
Book
The geography of innovation is changing. First, it is increasingly understood that innovative firms and organizations exhibit a wide variety of strategies, each being differently attuned to diverse geographic contexts. Second, and concomitantly, the idea that cities, clusters and physical proximity are essential for innovation is evolving under the weight of new theorizing and empirical evidence. In this Handbook we gather 28 chapters by scholars with widely differing views on what constitutes the geography of innovation. The aim of the Handbook is to break with the many ideas and concepts that emerged during the course of the 1980s and 1990s, and to fully take into account the new reality of the internet, mobile communication technologies, personal mobility and globalization. This does not entail the rejection of well-established and supported ideas, but instead allows for a series of new ideas and authors to enter the arena and provoke debate.
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Digital platforms are a nearly ubiquitous form of intermediary and infrastructure in society. By positioning platforms in the geographical political economy/ecology literature, this paper provides a critical analysis of platforms as a dominant form of rentier in contemporary capitalism. In doing so, I extend this work on rent theory beyond applications to land and nature so that it also includes platforms and data. I argue that the rapid rise of the “X‐as‐a‐service” business model across nearly all sectors of the economy is creating rentier relations by another name. This model is premised on the platform latching onto and inserting itself into the production, circulation, or consumption process, thus creating opportunities to capture value. To better understand the operations and implications of platforms, I outline three key mechanisms: data extraction, digital enclosure, and capital convergence.
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Analysing the affective geographies of digitally mediated payday loans in the UK, this paper advocates and exemplifies an approach to cultural economy that focuses on how economic worlds are affectively animated and lived. Supplementing the two versions of ‘culture’ that cultural economy approaches have to date been organised around – culture as signifying system, or culture as assembled effect ‐ we propose a cultural economy of everyday space‐times which is attuned to the affective composition of forms of living. Drawing on empirical work with forty users of digitally mediated payday loans, we employ this approach to trace how their loans become part of three intersecting forms of living: relief, as a pressing concern is deferred to the immediate future; separation, as private spaces are created within ordinary life and obligations are felt as individual responsibilities; and pressure, as demands to pay intensify the sense that debt is spiralling out of control and already ongoing precarity cannot be sustained. In conclusion, we pose further questions for a cultural economy approach orientated to the analysis of forms of living.