Building Better Financial Systems

Internet of Things (IoT)–based financial systems leverage the capabilities of blockchain and artificial intelligence (AI) to enable seamless transactions and data exchange between devices. IoT‐based financial systems involve interconnected devices and services, such as payment terminals, wearables, and smart appliances, which collect, transmit, and process sensitive financial information. The study explores security methods incorporated in the financial systems designed using IoT and blockchain technologies to improve the background features. The study data were gathered from Complaint Data from the Consumer Financial Protection Bureau 2018–2022, and data‐based analysis is used in this study for detecting illegitimate interrupted transactions. Propensity Score Matching (PSM) is used for the robustness and endogeneity test; descriptive statistics is utilized in this study. Financial security systems are introduced to reduce the forging and breaching of intruders amid transactions. This study offers a novel contribution to the field of blockchain technology by furnishing a comprehensive analysis of the features of IoT‐based financial security systems from the perspective of the transaction, broadening the understanding of the feature focusing on financial security, and providing practical recommendations to address the features of IoT‐based financial security systems in blockchain technology. The study highlights how IoT devices can securely record and verify financial transactions by leveraging the blockchain's distributed ledger, preventing tampering or unauthorized access. The results of the study identify that the TS3 program relies on the transaction gaps between financial sessions, security requests between successive transactions, and sessions saved depending on the time delay. The study finds that sessions were analyzed for violations and fraud using information stored on the blockchain. The study suggests the design and building of devices and sensors in an IoT in financial security systems. Transparency should contribute to setting data privacy and safety problems in financial security systems.

The US-China trade war, the COVID-19 pandemic, and now the Russia-Ukraine conflict have led to a new consensus from developed economies that it is necessary to reduce interdependence... However, this process of lowering interdependence has led the world to rising inflation, labor shortages, rising protectionism, shocks to the global financial system,... Will this change the international monetary and financial system? The following article has analyzed the trend of globalization in the new context and its impacts on the World Monetary and Financial System, thereby recommending a trade scenario for Vietnam. The global monetary and financial system is undergoing drastic changes, as reflected in the increase in multi-currency trade activities and new technological platforms for cryptocurrencies. These are gradually becoming a challenge to the current monetary and financial system under the dominance of the US dollar (also known as the Petrodollar system). Looking back at the history of the global monetary and financial system, a new system will replace the current system to solve bottlenecks or inefficiencies over time. Recently, economists mentioned three significant vulnerabilities in the Petrodollar system, including a persistent US trade deficit, which causes long-term imbalances; the encouragement of mercantilism, thus stimulating the actions of currency manipulation by trading partners; assets and liabilities in countries outside the United States are denominated in dollars, leading to a more robust/weaker dollar, similar to quantitative tightening/easing in those countries, which means that these countries lose their independence in monetary policy. These vulnerabilities are being challenged by the US monetary and fiscal policy itself in the post-Covid period, as well as the rise of major economies. Therefore, perhaps it is time for the world to develop a new monetary and financial system to limit its inefficiency through self-regulation mechanisms or create an entirely new system to replace it. In our view, although there are no apparent signs of the collapse of the current system, there have been changes in the system's operation. On the one hand, these changes are manifested in the dollar's role in international trade, especially in the valuation of energy, which is gradually being replaced by other currencies; on the other hand, it is reflected in the shift from fiat currencies to cryptocurrencies. Cryptocurrencies are creating certain positive benefits in promoting international trade, but they also create considerable challenges in the monetary management role of central banks.

PurposeThis study aims to analyse the effect of borrower’s countries on syndicated loan spreads, featuring countries according to institutional factors, namely, financial systems and corporate governance systems.Design/methodology/approachThis study is an empirical investigation based on a unique sample of more than 85,000 syndicated loans from 122 countries. The paper uses standard and two-stage least squares regression analysis to test whether the types of financial and corporate governance systems affect loan spreads.FindingsThe paper finds that borrowers from countries with financial systems oriented towards the banking-based paradigm pay lower interest rate spreads than those from countries with financial systems oriented towards the market-based paradigm. In addition, there is evidence that borrowers from countries with more developed financial systems pay lower spreads. The results also show that borrowers from countries with an Anglo-Saxon governance system pay higher spreads than borrowers from countries with a Continental governance system.Research limitations/implicationsThis study does not consider potential promiscuous relationships that can arise at the ownership structure and governance level between banks and borrowers and may affect loan spreads.Practical implicationsThis study suggests that financial and corporate governance systems are essential factors in the financial intermediation process. Furthermore, the evidence indicates that corporates with higher potential agency costs and higher potential information asymmetry are requested to pay higher spreads. Therefore, the opportunities to such corporates invest optimally tend to be scarcer.Originality/valueThe paper highlights the impact of institutional factors on the cost of financing, characterising the countries according to the type of financial system and the type of corporate governance system. The study finds that borrowers from countries with bank-based financial systems pay lower interest rate spreads than those from countries with market-based financial systems. The paper also highlights how the level of financial development affects the cost of financing. The paper focusses on non-financial firms, unlike financial firms, which have been the focus of several empirical studies on topics relating to the cost of funding and corporate governance.

Although there is a growing number of scientific publications on financial monitoring, combating money laundering, the shadow economy, and the impact of corruption on economic development, further research needs to determine the stability of the national financial system in dynamics. The dynamic stability of the national financial monitoring system subjects will allow to adequately assess the effectiveness of the existing national financial monitoring system in each country and determine the influential factors. The article investigates an approach to identifying the dynamic stability of the national financial monitoring system subjects based on the calculation of the integrated indicator of the country's financial system propensity to ALM, vector autoregression (VAR) model taking into account time lag. The proposed integrated indicator allowed to adequately assess the existing financial monitoring systems of the countries (15 countries of the European Union for 2000-2020: Austria, Belgium, Cyprus, Estonia, Finland, France, Greece, Ireland, Italy, Latvia, Malta, Netherlands, Portugal, Slovak Republic, Spain). In addition, vector autoregression models (VAR) of the dependence of the country's financial system propensity to ALM on the regressors Government Integrity, Index of economic freedom, Monetary Sector credit to the private sector (% GDP), were built, taking into account time lags in general and for each studied country. According to the modeling results, the national financial monitoring systems in Austria, Belgium, Estonia, Finland, France, Ireland, Netherlands, Slovak Republic, Spain were resistant to money laundering. It is vice versa in Malta, Greece, Cyprus, Portugal, Italy, Latvia. These conclusions are also confirmed based on a binary approach. Such exogenous variables as Government Integrity (with a lag of 2 years) and the Index of economic freedom (taking into account the time delays of the regression reflection under the influence of this regressor for 1 and 2 years) have a statistically significant effect on the country's financial system. The general vector autoregression (VAR) model shows that the current value of the country's financial system propensity to ALM by 92.78% is determined by its previous value. With an increase of Government Integrity by 1%, the country's financial system's propensity to ALM will decrease by 0.000616 units with a lag of two years. The nature of the impact made by the Index of economic freedom on the performance feature was specific-when this indicator increases by 1% for a lag delay in one year, the PFSALM value will decrease by 0.001997 units, and for a lag delay of two years it will change the trend and increase by 0.003076 units per unit, respectively.

In nowadays financial and monetary system, the crisis frequently occurs and becomes a part of its internal system. It indicates the fragility of financial and monetary conventional system and becomes the stimulant of a better system, namely Islamic financial and monetary system. The development of Islamic financial and monetary system demands a rapid innovation, but it should not go beyond the authenticity of Islamic system. Without innovation, the Islamic financial and monetary system will always be left behind, but without based on authenticity it will bring Islamic label on conventional system. This paper tries to discuss about the behavior of Islamic money demand, especially the state of velocity of money. The state of velocity of money is highly depended on to the ongoing money and financial concept. This paper shows that the preservation of authenticity in developing innovations in Islamic money and financial system will usher to the constant velocity of money. Otherwise, it can be concluded that the innovation of Islamic financial and money system without keeping authenticity of Islamic system can produce a different velocity state of money. Some empirical researches confirmed both results namely constant velocity so that monetary policy by targeting money supply can become effective, and there are some empiric researchers found a different result. Based on this, the development of innovations in Islamic financial and money system must be followed by the preservation of Islamic authenticity system. It demands the development of Islamic financial and money system theories which are free form any business motive intervention. Therefore, Islamic University is the most appropriate place to take the intellectual role by conducting researches and teaching the Islamic financial and monetary system.

Досліджується незаперечна єдність і долається асиметричність таких понять як фінансова система і фінансово-кредитна система на основі двох основних інструментів – фінансів і кредиту. Обґрунтовується положення, що грошовий механізм разом з механізмом оподаткування і державних видатків, механізм кредитування, заощадження та інвестування визначають основні компоненти фінансово-кредитної системи і забезпечують фінансову активність суспільства. Головна увага приділяється дослідженню теоретико-методологічної основи фінансово-кредитної системи, які формують дві потужні наукові конструкції – кейнсіанство і монетаризм. Вони відрізняються між собою не так за суттю, як за засобами державного впливу на формування фінансово-кредитної системи. Зокрема теорія Дж. М. Кейнса передбачала найбільш дієвим інструментом державного регулювання економіки монетарні і фіскальні механізми з переважанням бюджетної політики. Передусім це прямі державні видатки на стимулювання ефективного попиту, а також вилучення державних заощаджень за допомогою системи податків і позик. Позиція ж монетаристів передбачала, що грошова сфера і прозиція грошей були основним предметом державного регулювання, згідно чого, інфляція – це грошовий феномен, а її основною причиною є форсована емісія грошей. Через це грошові інструменти вважалися головними у своєму впливові на національну економіку.Отже, кожна з цих теорій – кейнсіанство чи монетаризм – не могли довести свою перевагу у формуванні фінансово-кредитної системи та форм державного впливу на національну економіку. Дискусійні питання між ними дозволяє розв’язати теорія «великого неокласичного синтезу», яка узагальнила теоретичні і практичні досягнення різних наукових концепцій та усунула протистояння між кейнсіанством і монетаризмом. В результаті була подолана невідповідність в розумінні таких понять як «фінансово-кредитна система» і «фінансова система». Підтвердженням цього слугують різні моделі фінансових систем США, Японії та європейських країн, а також України.

One of the major reasons explaining the inefficiency and underdevelopment of Iran’s financial system—as well as its limited effectiveness in influencing macroeconomic variables in recent decades—may lie in the type of financial regulatory system in place. This issue has received little attention from researchers and policymakers in Iran, even though many countries have shifted their financial regulatory systems from traditional frameworks to more modern approaches such as the Twin Peaks model. Accordingly, this study seeks to explore Iran’s current situation by drawing on the experiences of successful countries and aims to answer the key question: What type of financial regulatory system should Iran adopt? In other words, which regulatory approach is best suited to enhance the effectiveness of Iran’s financial system? Findings from a covariance analysis conducted on 23 countries over the period from 1981 to 2020 indicate that changes in the financial regulatory authority’s approach (traditional, functional, integrated, and Twin Peaks) interacting with macro-financial characteristics (financial structure, interest rate repression, and generalized public trust) have, in most cases, led to changes in the performance of both the real sector (economic growth and inflation) and the financial sector (financial development and financial efficiency). The statistical results revealed the suboptimality of traditional and functional models, and confirmed the superiority of transitioning first to an integrated financial regulatory system, followed by the adoption of the Twin Peaks model. Due to the complexity of such systemic changes, it is recommended that an integrated financial regulatory system be implemented on a trial basis for a limited number of years before transitioning to the Twin Peaks model. From a broader perspective, it appears that Iran's economy is in need of a complete redesign of its socio-economic architecture.

In the context of increasing globalization and Ukraine's integration into the global economic space, studying the financial and credit systems of leading world economies, particularly the United States, is of utmost importance. This analysis allows for the identification of key development trends, best practices, and potential risks that may impact Ukraine's financial system. Understanding the functioning of developed countries’ financial and credit systems, such asthat of the U.S., is essential for creating a favorable investment climate in Ukraine. Therefore, the study of the financial and credit systems of Ukraine and the U.S. is highly relevant and holdssignificant practical value for the development of the national financialsector and economy as a whole. The object of the study isthe comprehensive analysis of the financial and credit systems of Ukraine and the U.S.to identify their characteristics, compare them, and determine development prospects. The subject of the study is the analysis of relationships between financial institutions, the state, enterprises, and the population, as well asthe processes and mechanismsthat shape the structure, functioning, and development of the financial and credit systems of Ukraine and the U.S. The purpose of the study is to gain a comprehensive understanding of the financial and credit systems of Ukraine and the U.S., identify their similarities and differences, and develop practical recommendations for improving Ukraine’s financial and credit system based on U.S. experience. Key research tasks: 1) сonduct a comparative analysis of the structure, functioning, and regulation of the financial and creditsystems of Ukraine and the U.S. ; 2)study the historical developmentstages of financial and credit systems in both countries; 3) Identify common and distinctive features in the development of financial systems in Ukraine and the U.S.; 4) develop recommendationsfor improving Ukraine’sfinancial and credit system considering U.S. experience; 5) determine the development prospects of financial and credit systems in the context of Ukraine’s integration into the global financial space. To achieve the research goals and tasks, the study employs comparative analysis, historical analysis, generalization, statistical analysis, document analysis, and financial analysis methods. Improvement of Ukraine’s financial and credit sector can be achieved by enhancing the autonomy of the National Bank of Ukraine, refining monetary strategies, stimulating the stock market, increasing cybersecurity levels, and improving the regulatory framework. The U.S. experience demonstrates that effective risk management, financial service digitalization, and the adoption of FinTech innovations contribute to market stability. The future of financial systems in Ukraine and the U.S. will be shaped by globalization, innovative technologies, and political influences. Integration into global financial markets, the use of artificial intelligence, and the advancement of digital assets will play a crucial role in transforming the sector.

In order to supervise and forewarn the sustainable operation ability of enterprises efficiently and accurately, this paper proposes an enterprise financial management and forecasting system based on SaaS model. First of all, in order to continue to effectively predict and analyze the enterprise finance, first analyze and extract the report data in the financial system. Then, by building a deep belief network model to predict the enterprise financial data, in order to reduce the cost of enterprises, the financial system designed in this paper chooses the cloud technology service framework based on SaaS model. Finally, in order to analyze the risk identification performance of the financial management and prediction system in this paper, the risk sample data of an enterprise’s financial system is selected for simulation test. The results show that the correct rate of risk identification of the financial management system designed in this paper is higher than other comparison systems, which speeds up the speed of risk identification of the financial information management system, and has certain practical application value.

Introduction. Thanks to the use of analytical methods, subjects of financial monitoring are able to promptly respond to the threats of legalization (laundering) of proceeds obtained through crime and the financing of terrorism, and minimize their destructive impact on the financial system and economic security of the country. Problem Statement. One of the unresolved problems in the field of financial monitoring remains the lack of a clear classification of methods for analyzing financial transactions carried out by business entities for the purpose of legalization (laundering) of proceeds from crime and financing of terrorism. At the same time, the classification of methods of analysis in the financial monitoring system is a necessary condition for ensuring the integrity and systematic analysis of actions related to the commission of a financial transaction or transaction with proceeds from crime. It determines the possibilities of rational application of methodological tools in accordance with the specifics of financial monitoring tasks and contributes to improving the quality of management decision-making in the field of preventing money laundering and terrorist financing. The purpose is to generalize the analysis methods used in the financial monitoring system, develop their classification in the context of preventing money laundering and terrorist financing. Methods. A set of methods of the empirical, theoretical and methodological levels was used. At the empirical level, observation, comparison and content analysis of regulatory legal acts on financial monitoring were applied. At the theoretical level, methods of analysis and synthesis, induction and deduction, modeling, abstraction were used to generalize the theoretical and methodological principles of analysis in the financial monitoring system. At the methodological level, the method of descent from the abstract to the concrete was applied, which allowed developing a classification of analysis methods in the financial monitoring system based on aspects of research into money laundering and terrorist financing. Results. The article summarizes the main analysis methods used in the financial monitoring system to identify suspicious financial transactions and prevent money laundering. The criteria for analyzing financial transactions subject to financial monitoring are considered. Particular attention is paid to the issues of conducting a comprehensive analysis of the business activities of PFME clients to form a judgment about the profile of their financial behavior; assessing the risks of PFME clients at the stage of establishing and maintaining business relationships; maintaining and analyzing national statistics in the field of ML/TF. Recommendations are formulated for the classification of analysis methods in the financial monitoring system based on the aspects of studying ML/TF activities into three groups: financial analysis methods, risk-based approach methods, statistical analysis methods. Conclusions. The developed classification of analysis methods in the financial monitoring system based on aspects of research into ML/FT/FPWMD actions ensures their organization, optimization of selection and application depending on the tasks of financial monitoring, which will increase the efficiency of analytical work.

We compare China's financial system to those of the developed countries, in particular, the US system dominated by financial markets, and the German system dominated by the banking sector. We examine financial systems' properties, including risk sharing, information provision, funding new and mature industries, financial crisis, corporate governance, and the relation between the financial and legal systems and economic growth. We find that there are many fundamental differences between China's financial system and the US system, and simply adopting the US system is not optimal. Understanding the German system and reform China's banking system should be as important as developing US-style financial markets. Our findings also suggest that China differs from most countries studied in the law, finance, and growth and comparative financial systems literature: Despite its poor legal and financial systems, it has the largest, and one of the fastest growing economies in the world. We find that there are effective, informal financing channels and governance mechanisms to support the growth of various firms in the economy. Therefore, it may be best for China to develop its existing financial system, and to ensure that the informal financing channels and governance mechanisms continue to work along with the development of the legal and financial systems.

The financial big data intelligent service system belongs to the technical field of financial data management. It is an innovation of the client and server of the financial service system, which promotes the electronic office of the financial system. This paper aimed to analyze the cloud computing means of the Internet of things (IoT), select a more suitable specific algorithm, and conduct an in-depth study of the financial big data intelligent service system so that it can better serve the current financial situation. This paper gave a general introduction to the cloud computing of the Internet of things, researched and analyzed the financial big data intelligent service system machine, and applied the cloud computing of the Internet of things to the research of the financial big data intelligent service system. Based on the experiments in this paper, it can be seen that among the students in the three colleges and universities in place A, 567 people thought that they can adapt to the intelligent financial system better than the already employed salesmen, and 245 people held a negative attitude. It showed that the intelligent development of financial systems is a trend, but at the same time, it is also a development trend to strengthen the business training capabilities of professionals. The experimental results of this paper showed that the process of studying the financial big data intelligent service system based on the cloud computing of the IoT is more scientific and effective than using other means to analyze the experimental data, and it has greater reference significance for the intelligent development of the financial system.

The article is devoted to the impact of artificial intelligence (AI) on financial management system, efficiency and feasibility of introducing mechanisms, technologies and programs based on artificial intelligence into the work of a financial structure. It describes the essence of artificial intelligence and its features. The article uses the following research methods: analysis, synthesis, observation, measurement, comparison, financial analysis, as well as data processing and interpretation. The relevance and scientific novelty of research consists in the analysis and determination of the relationship between the key performance indicators of financial management and the use of mechanisms, technologies and programs based on artificial intelligence; identification of the degree of influence of technologies based on artificial intelligence on the effectiveness of the financial management system of commercial organizations. A scientific research on the influence of AI on the financial management system in a commercial organization is conducted using the example of PJSC Magnit, the largest retail chain of stores founded in Krasnodar. The data for the study were taken from the official website of the organization and from the financial and non-financial reports and documents provided therein. The degree of digitalization of the company, the systems used based on artificial intelligence are studied, and the work of the company’s financial management system is analyzed. The efficiency of the financial system is studied, the indicators related to the company’s financial management system are analyzed. The relationship between investments in the creation of IT departments, AI systems and their use in the financial system with the company’s financial indicators is revealed. A conclusion is made about the positive impact of the implementation of mechanisms using artificial intelligence in the work of the financial management system to achieve its goals and maintain competitiveness. The measures are suggested for commercial organizations on the methods and forms of the use of artificial intelligence system.

The financial innovation system is one important part of the national financial system and plays a great role in harmonious development of finance and economy. Data envelopment analysis (DEA) is employed in empirical efficiency measurement of the financial innovation systems of thirty seven countries and regions in the world. It is shown that market-based financial systems are more favorable to financial innovation systems than bank-based financial systems; if financial outputs and economic outputs want to be increased, input of financial innovation system should be increased in developing countries with high growth and undeveloped finance.

Financial management is one of the most core tasks of a social team and an important link related to the survival of enterprises and the economic development of the country. Therefore, financial management is regarded as a top priority from the national tax and financial system to enterprises and individuals. However, with the rapid development of social economy and the extremely active economic activities in China, especially the complicated capital flows and the rapid changes in the market, even if the financial system is upgraded many times, it is still difficult to meet the requirements of enterprises. In recent years, computer network technology has been more and more widely used in all aspects of social production and life. It can replace people to complete complex, tedious, repetitive, and consumptive work. Therefore, the research and development of financial accounting management system based on computer network technology have important production significance and social value. Firstly, this paper summarizes the development process and current situation of the financial management system, points out the difficulties existing in the current financial accounting management, and investigates the development and application status of computer network technology. Then, it studies the shortcomings of current financial work and the necessity and feasibility of applying computer technology to financial management. Finally, it analyzes the beneficial effects of computer network technology in financial management, designs the overall structure of the financial accounting management system based on computer network technology, studies the characteristics of each subsystem of the structure, points out the technical and institutional challenges faced by computer network technology, and gives corresponding suggestions. This paper is an applied research on the application of advanced computer network technology in financial accounting management, which helps the rapid development of China’s financial accounting management system and provides a combination idea for the application of computer network technology in other traditional industries.