Financial Services Research Articles

A Systematic Review on Graph Neural Network-based Methods for Stock Market Forecasting

Financial technology (FinTech) is a field that uses artificial intelligence to automate financial services. One area of FinTech is stock analysis, which aims to predict future stock prices to develop investment strategies that maximize profits. Traditional methods of stock market prediction, such as time series analysis and machine learning, struggle to handle the non-linear, chaotic, and sudden changes in stock data and may not consider the interdependence between stocks. Recently, graph neural networks (GNNs) have been used in stock market forecasting to improve prediction accuracy by incorporating the interconnectedness of the market. GNNs can process non-Euclidean data in the form of a knowledge graph. However, financial knowledge graphs can have dynamic and complex interactions, which can be challenging for graph modeling technologies. This work presents a systematic review of graph-based approaches for stock market forecasting. This review covers different types of stock analysis tasks (classification, regression, and stock recommendation), a generalized framework for solving these tasks, and a review of various features, datasets, graph models, and evaluation metrics used in the stock market. The results of various studies are analyzed, and future directions for research are highlighted.

Understanding and Preferences of Islamic Finance Among Gen Z

This study explores the understanding and preferences of Islamic finance among Generation Z by referring to Surah Al-Kahf verse 46. Generation Z, as a growing cohort in the digital era and globalization, has an increasingly important role in global economic development. Qualitative research methods are used to gain in-depth insight into the financial perspectives and beliefs of this generation, while verse 46 of Surah Al-Kahf was chosen as the theological basis for interpreting Islamic financial values. Results showed that, despite exposure to global culture, Generation Z showed significant interest in the concepts and principles of Islamic finance, as described in Surah Al-Kahf verse 46. Their understanding of these values influences their preferences for financial products and services. The implications of these findings for the financial industry and policymakers are presented, highlighting the importance of understanding and accommodating young people's preferences in more inclusive sustainable economic development, in line with the teachings of Surah Al-Kahf verse 46. This research aims to contribute to a better understanding of how Islamic financial values, as stated in the Qur'an, can guide the transformation of the global economy towards greater sustainability and inclusiveness.

Cancer impact on lower-income patients in Malaysian public healthcare: An exploration of out-of-pocket expenses, productivity loss, and financial coping strategies.

Cancer patients often grapple with substantial out-of-pocket (OOP) expenses and productivity loss, with the ramifications being particularly crucial for lower-income households. This study aims to estimate OOP costs incurred by cancer patients, assess their productivity loss, and analyse the financial coping mechanisms employed by individuals within the lower-income bracket. The study employed face-to-face interviews among cancer patients aged 40 years and above, currently undergoing treatment, and belonging to the lower-income group. Participants were recruited from six public cancer referral hospitals. OOP expenses, encompassing medical and non-medical costs, along with productivity loss, were measured. A generalized linear model was applied to identify potential OOP determinants. Additionally, the coping mechanisms employed by individuals to finance their cancer OOP expenses were also determined. Among the 430 participants recruited, predominantly female (63.5%), and aged 60 or older (53.9%). The annual mean total cancer costs per patient were US$ 2,398.28 (±2,168.74), including 15% for medical costs US$ 350.95 (±560.24), 34% for non-medical costs US$820.24 (±818.24), and 51% for productivity loss costs US$1,227.09 (±1,809.09). Transportation, nutritional supplements, outpatient treatment, and medical supplies were notable cost contributors to total OOP expenditures. Ethnicity (β = 1.44; 95%CI = 1.15-1.79), household income (β = 1.40; 95%CI = 1.10-1.78), annual outpatient visits (β = 1.00; 95%CI = 1.00-1.01), age (β = 0.74; 95%CI = 0.56-0.98), and employment status (β = 0.54; 95%CI = 0.72-1.34) were identified as significant predictors of OOP costs among cancer patients. Notably, 91% of participants relied on household salaries and savings, while 15% resorted to interest-free borrowing, 11% sold possessions, and 0.5% borrowed with interest to finance their expenses. This study offers crucial insights into the economic impact of cancer on individuals and their families, providing policymakers with valuable information to tackle challenges faced in their journey. Despite substantial public healthcare subsidies, the study revealed that cancer costs can remain a potential barrier to accessing essential treatment. Therefore, there is a need for reinforced system-level infrastructure to facilitate targeted financial navigation services.

Is Schumpeter right? Fintech and economic growth

ABSTRACT The rise of fintech is revolutionizing the financial landscape, with products and companies advancing innovative technologies to improve and automate financial services. In this paper, I use a novel dataset to investigate the relationship between fintech and economic growth in a panel of 198 countries over the period 2012–2020. This approach – utilizing direct measures of fintech – provides interesting empirical insights. First, the impact magnitude and statistical significance of fintech on real GDP per capita growth depend on the type of instrument (digital lending vs. digital capital raising). While digital lending has a statistically significant positive effect on economic growth, digital capital raising has a large but insignificant effect. Second, the overall impact of fintech including all instruments is positive and statistically significant because of the overwhelming share of digital lending in total. Finally, while the positive relationship between fintech and growth is stronger in magnitude in advanced economies, the statistical significance of this effect is higher in developing countries. Taken as a whole, these results confirm Schumpeter’s prediction that financial innovation can promote growth, but not every type of fintech becomes an accelerator.

The impact of audit on IT governance: A study of the financial services sector in Ghana

AbstractIn recent years, IT governance has been a subject of discussion among academics and practitioners. The concern has been on the need to implement governance mechanisms and ensure the right balance of these mechanisms. However, the audit of IT governance mechanisms has received very little attention. This paper aims to analyse the overall impact of IT governance audits on the maturity and coherence of governance mechanisms. Guided by the configurational theory, the researchers argue that when governance mechanisms operate coherently and are regularly audited, there will be improvement in IT governance and the performance of financial institutions. In this study, seven financial services companies in Ghana were reviewed, and their IT governance maturity was assessed after seven months of auditing with a COBIT 5‐driven IT audit framework. Two surveys were conducted, one before and one after the auditing. The findings of the study confirm the claim that regular auditing improves IT governance maturity and coherence. Several governance mechanisms within the case organizations improved to one higher level of maturity on the Capability Maturity Model. This improvement was after seven months of auditing. Regular auditing also improved IT roles and responsibilities, empowered IT personnel and improved the IT budgetary control and architecture of the entities. This study has implications for practice. It emphasizes the importance of independent regular IT auditing and the need to ensure coherence among IT governance mechanisms if effective IT governance is to be achieved in financial institutions.

Does Digitization Affect Social and Financial Performance in Microfinance Institutions?

This research aims to explore the effects of the digitization of microfinance institutions (MFIs) on their social and financial performances, and on the trade-off between them given the double mission pursued by these institutions. To reach this objective, we performed ordinary least squares (OLS), logit, and two-stage least squares (2SLS) regressions on a sample of 331 microfinance institutions from the ATLAS database. Findings reveal evidence of significant mixed effects of digitization on social and financial performance indicators. They also show that there is no significant effect of digitization on trade-offs. The novel aspect of this research lies in the approach used to measure social performance which is proxied by the SPI4 -Social Performance Indicators-developed by Cerise and Social Performance Task Force (SPTF), while previous research on the topic have used social mission outcomes indicators. The SPI4 tool allows financial service providers to evaluate the implementation of Universal Standards for Social Performance Management (USSPM). This study also provides evidence on the effect that digitizing MFIs operations may have on trade-off between their social and financial performances. The findings have significant implications for institutions, especially on the way they can implement and interconnect their digitization process, USSPM and financial strategy. Firstly, the significant effect of digitization on social performance reveals synergies between the adoption and use of digital solutions and the implementation of good practices of SPM. Secondly, the mixed effects of adopting digital solutions on financial performance suggest that while this process appears to drive efficiency within institutions, it does not necessarily improve their profitability, since capital expenditure appears to increase more than profits. Finally, since digitization does not appear conducive to trade-off, MFIs should better align their financial and investment strategy with their social objectives when going digital.

FINANCIAL INCLUSION AND PERFORMANCE OF TOP 100 SMALL AND MEDIUM ENTERPRISES IN KENYA

Access to services such as credit, insurance, and savings enables SMEs to invest in growth, innovation, and operational efficiency. SMEs leveraging financial inclusion can enhance their revenue generation, cash flow management, and overall profitability. The study sought to find out what impact finance inclusion has had on the performance of Kenya's top 100 SMEs. This study was guided by finance intermediation theories, technology acceptance theory, TAM signal theory and pecking order theory. The study1was carried1out on the basis of a descriptive research design. The target population consisted of top 100 medium size enterprises in Kenya as shown in the annual survey carried out by KPMG and nation media group in the years 2020. Respondents ware financial officers from Kenya's top 100 mid-sized companies. Stratified sampling was used to interview respondents based on company category. Respondents were selected using a purposeful selection process. Data1was collected using structured questionnaire. A pilot survey was conducted with 10 respondents, but the final survey did not include these respondents. Validity of research instruments was measured using content validity. The study examined the effects of micro savings, micro credit, micro insurance, and digital banking on the performance of Kenya's top 100 SMEs, revealing that tailored financial products significantly enhance operational efficiency and growth. Findings indicated that micro savings improve financial stability, while flexible repayment options for micro credit support sustainable business practices. Additionally, awareness and customized solutions for micro insurance products were found to bolster risk management among SMEs. Digital banking was highlighted as a critical enabler of faster transactions and better cash flow management. The conclusions suggest that targeted financial services and educational initiatives are vital for empowering SMEs to optimize their performance. Recommendations include developing customized financial products, enhancing digital banking infrastructure, and providing financial literacy training to improve overall business resilience and sustainability.

Kinerja Keuangan BPR Syariah Ditinjau dari Aspek Pertumbuhan Ekonomi di Provinsi Lampung

This study aims to use financial indicators to determine the effect of regional gross domestic product on the performance of Sharia BPR in Lampung. This survey method uses a quantitative descriptive survey whether the performance of the Lampung BPR SYARIAH will be influenced by Lampung's economic growth between January 2020 to December 2021. The population and sample are all BPR SYARIAH registered with the Financial Services Authority (OJK), and there are 11 BPR SYARIAH in the Lampung study area. So it can be said that the influence of KAP (X1) NPF (X2) ROA (X3) BOPO (X4) FDR (X5) CASH RATIO (X6) triggers the GRDP (Y). %, the remaining 1% is caused by other unavailable factors. The result of the f-test is known as the probability statistic F (0.017600). Because (0.05), it can be said that KAP, PAP, NPF, ROA, BOPO, FDR, and CASHRATIO together have a major influence on GRDP. And the partial significance test shows the value of Prob. KAP Ha1 was rejected because 0.05 < 0.0731, indicates a negative relationship, Prob value. NPF Ha2 is accepted because 0.0191 < 0.05 indicates a positive relationship, Prob value. ROA Ha3 is accepted because 0.0681 < 0.05 indicates a positive relationship, Prob value. BOPO Ha4 is rejected because 0.1055 < 0.05 indicates a negative relationship, Prob value. FDR Ha5 is accepted because 0.0398 < 0.05 indicates a positive relationship, Prob value. CASHRASIO Ha6 is accepted because 0.0235 < 0.05 indicates a positive relationship.

ФОРМУВАННЯ НА СУЧАСНОМУ ЕТАПІ РИНКУ ФІНАНСОВИХ ТЕХНОЛОГІЙ В СВІТОВІЙ ЕКОНОМІЦІ

The current stage of development of the world economy is characterized by the process of increasing the role of the financial sector, as well as the transition to a new phase of development - innovation. Globalization in financial innovations is critical in international innovative development in today's conditions. The rapid spread of financial innovations under the conditions of financial globalization has become the main driver of the formation of the world economic system, contributing to the deepening of financial globalization. The formation of the financial services market is uneven because various factors influence it, including the level of development of information and communication technologies, the stability of the financial sector, and others. These factors have been studied by researchers, but the development of specific segments of the fintech market has its peculiarities. Fintech is a complex system that unites the sectors of new technologies and financial services, startups, and the relevant infrastructure. The financial services sector is increasingly actively using new technologies and tools to perform its functions and implement fundamentally new solutions in which consumers of services are interested. New technologies inherently changed not only the historically formed landscape of providing financial services, giving it freshness and dynamics, but also changed the attitude to such a concept as "money", realizing the transition from cash to virtual money in a reasonably short period. The industry provides subjects of financial relations with a wide range of innovative technologies, among which robotics, biometrics, remote banking, P2P lending, and many others have become vital. The fintech industry is expected to grow due to increased market penetration rates for existing services and their international expansion. The transition from the traditional financial services system to a digital one provides excellent opportunities for large financial companies and FinTech startups to work with banks or financial organizations. As more critical financial infrastructure projects come into production, more players will be interested in implementing digital financial technologies.

The Significance of a Financial System in the Economic Advancement of a Country

The financial system of a nation plays a crucial role in its economic development. It serves as a vital link between savings and investments, thereby fostering wealth creation. By facilitating the transfer of funds from households, which act as savers, to businesses that require investment, the system supports the growth and prosperity of both parties involved. Furthermore, the financial system is responsible for the effective allocation of savings, the provision of necessary funds, the facilitation of financial transactions, the development of financial markets, the establishment of a legal financial framework, and the delivery of financial and advisory services within the country. This system encompasses various components, including financial institutions, services, markets, and instruments, all of which are interrelated and function collaboratively. This paper addresses several issues pertinent to the Indian financial system.

Evaluating User Acceptance of Mobile Payment Systems in Uganda

Purpose: This research evaluates user acceptance of mobile payment systems. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Combining machine learning with DW systems provides significant advantages in different fields. This synergy boosts analytical aptitudes, allowing the organization to go a notch higher than descriptive analytics in predictive and prescriptive analytics. However, such a decision is not simple as it has implementation matters such as data quality problems, scalability, and real-time processing problems. Integration best practices include in-database machine learning processing, a feature store, and proper MLOps practices. Real-life examples from the healthcare industry, banking and financial services, retail, and manufacturing industries show that this integration brings operational enhancements for the business and positive effects on customers and overall organizational performance. Recommendations: Mobile payment providers should prioritize user-centric design principles, focusing on simplicity, usability, and intuitive interfaces. Policymakers should develop regulatory frameworks that establish clear standards for mobile payment systems, focusing on data protection, privacy, and security. Keywords: User Acceptance, Mobile Payment Systems

Influence of Socio-Economic and Institutional Factors on the Adoption of Conservation Agriculture in Bahi District, Tanzania

This study sought to establish the influence of socio-economic and institutional factors on the adoption of conservation agriculture in Bahi District, Tanzania. This study used a cross-sectional research design, using the sample of 176 farming households, where 89 households were CA adopters and the remaining 87 households were non-CA adopters. Data from a questionnaire was analyzed through a binary logistic regression model and descriptive statistics. The study concluded that gender, age market availability, credit accessibility and bylaw awareness influenced the adoption of Conservation Agriculture in the study area. If credit accessibility, extension service and bylaws are present, then adopting CA is done more easily. Therefore, before introducing CA, it is important to assess the presence of these factors for better results. Some of the recommendations are that collaboration between financial institutions and policymakers be encouraged as it is essential to increase farmers' credit accessibility by providing affordable loans and financial services. Extension services need to be improved and expanded by funding the extension programs and employing more extension workers. Information dissemination and training on CA should be tailored to consider the needs of female and young farmers. Additionally, cooperative farming groups or networks of young and female farmers should be created to facilitate resource pooling, knowledge sharing and collective investment in necessary equipment and inputs.

Financial Shared Service Centers and Corporate Misconduct: Evidence from China

Financial Shared Service Centers and Corporate Misconduct: Evidence from China

Legal Perspective on Consumer Personal Data Protection in Fintech Services

The development of science and technology has significantly affected the financial transaction system in Indonesia, especially with the emergence of the Fintech business model. The rapid growth of Fintech indicates the need for smart management in order to provide optimal benefits to society. However, the potential misuse of consumers' personal data poses a risk that needs to be considered. This research uses a normative juridical and analytical descriptive approach to understand the legal dynamics in the Fintech industry and legal measures aimed at Safeguarding user data security in Indonesia, in accordance with the provisions of Financial Services Authority Regulation Number 13/Pojk.02/2018. The results show that Fintech business organizers and users have a relationship that is regulated through an electronic agreement. The legal safeguarding of personal data for Fintech user is governed by Financial Services Authority Regulation Number 1/Pojk.07/2013 and other pertinent regulations, addressing aspects such as confidentiality, data security, and the governance and risk management of information technology.

Macroeconomic Factors and Policy Dynamics Influencing FDI Flows from Arab Countries to Malaysia: A Qualitative Analysis (2018-2023)

This study examines the macroeconomic factors and policy dynamics influencing Foreign Direct Investment (FDI) flows from Arab countries to Malaysia during the period 2018-2023. Employing a qualitative research design, the study utilizes semi-structured interviews with key stakeholders, analysis of policy documents, and examination of economic data to provide a comprehensive understanding of this evolving economic relationship. The research reveals that Malaysia's economic resilience, robust GDP growth, and effective fiscal policies have been instrumental in attracting Arab FDI, despite global challenges such as the COVID-19 pandemic. Strategic policy initiatives, including targeted FDI incentives and bilateral trade agreements, have played a crucial role in facilitating investment flows. The study identifies key sectors attracting Arab investment, including real estate, Islamic banking and finance, oil and gas, and tourism. Malaysia's position as a global hub for Islamic financial services and halal industries emerges as a significant factor in its appeal to Arab investors. However, the research also highlights persistent challenges, such as regulatory hurdles, cultural and language barriers, and increasing regional competition. The study concludes that while Malaysia has successfully positioned itself as an attractive destination for Arab FDI, continued policy refinement and focus on high-value, knowledge-intensive sectors are necessary to maintain this position. The findings contribute to the growing body of literature on South-South economic cooperation and provide valuable insights for policymakers, investors, and researchers. Future research directions, including the need for quantitative analysis and comparative studies with other Southeast Asian countries, are suggested to further enhance understanding of these complex investment dynamics.

Implication of Financial Services Marketing: A Study with reference to Behavioral Economics

Abstract Purpose – It has been argued that the insights provided by behavioral economics have profound Implications for the study and practice of marketing. The purpose of this paper is to provide a detailed analysis of how such insights help enhance understanding of aspects of marketing and consumer behavior in financial services markets. Design/methodology/approach – This paper looks at various facets of behavioral economics Which it is felt provide particularly important and salient insights in the context of financial services. In particular, it studies loss aversion and prospect theory, status quo bias and defaults, framing and anchoring effects, hyperbolic discounting, availability effect and salience and over-confidence. In doing so, it provides a number of examples from the financial services context which provide insightful and informative insights for both commercial practitioners and policymakers. In each case, relevant phenomena are introduced and explained before providing a number of applications and examples from the financial services domain. Findings – The authors find that the insights afforded by behavioral economics are useful in helping to explain various aspects of consumer behavior in financial services markets. It is shown that an understanding of the implications of behavioral economics may help in fashioning a choice architecture that is more likely to bring the desired consumer response, from either a commercial or policymaking perspective. Practical implications – This analysis provides important insights for those responsible for the Marketing of financial services, policymakers in the financial services domain, third sector agencies seeking to foster greater engagement with financial services and other interested parties. Originality/value – The paper adds value by drawing together various aspects of behavioral Economics, providing an analysis of their relevance to financial services marketing and offering Numerous examples and applications. Keywords-: Financial services, Behavioral economics, Consumer behavior in financial services, Marketing Paper type-: Conceptual paper

Ethical Implications of AI in Financial Services: Bias, Transparency, and Accountability

This article examines the ethical implications of artificial intelligence (AI) in financial services, focusing on issues of bias, transparency, and accountability. As AI adoption in finance grows rapidly, with 85% of institutions now using AI, it brings both tremendous benefits and significant ethical challenges. The article explores how AI can perpetuate biases in lending and credit scoring, the "black box" problem of opaque AI decision-making, and the complexities of establishing accountability for autonomous AI systems. It analyzes strategies for mitigating these issues, including developing interpretable AI models, implementing robust governance structures, and creating industry-specific ethical guidelines. The discussion highlights the critical need for evolving regulatory frameworks and ethical standards to ensure responsible AI use while harnessing its potential to transform financial services.

Evolution of Paytm's Business Model

This case study explores the evolution of Paytm's business model, highlighting its transformation from a mobile recharge platform to a multifaceted digital services powerhouse. Initially launched in 2014 by One97 Communications as a prepaid mobile recharge and bill payment platform, Paytm rapidly diversified its offerings to include e-commerce, financial services, and digital payments, capitalizing on India's burgeoning digital economy. The study examines key phases in Paytm's business model evolution, including its expansion into the financial sector with services such as Paytm Wallet, Paytm Payments Bank, and investment products.The analysis focuses on strategic decisions that fueled Paytm's growth, such as its aggressive market penetration strategies, partnerships with major retailers and financial institutions, and its adaptation to regulatory changes. It also highlights how Paytm leveraged technology and data analytics to enhance customer experience and streamline operations, contributing to its market dominance.Furthermore, the case study addresses the challenges faced by Paytm, including intense competition, regulatory hurdles, and the need for continuous innovation to maintain its competitive edge. By examining these aspects, the study provides insights into how Paytm's adaptive business model has enabled it to remain a leading player in India's digital ecosystem.The findings underscore the importance of flexibility and diversification in sustaining growth in the rapidly evolving digital services sector. This case study offers valuable lessons for other businesses seeking to navigate the dynamic landscape of digital transformation and innovation.

Trust in context: The impact of regulation on blockchain and DeFi

AbstractTrust is a key resource in financial transactions. Traditional financial institutions, and novel blockchain‐based decentralized financial (DeFi) services rely on fundamentally different sources of trust and confidence. The former relies on heavy regulation, trusted intermediaries, clear rules (and restrictions) on market competition, and long‐standing informal expectations on what banks and other financial intermediaries are supposed to do or not to do. The latter rely on blockchain technology to provide confidence in the outcome of rules encoded in protocols and smart contracts. Their main promise is to create confidence in the way the blockchain architecture enforces rules, rather than to trust banks, regulators, and markets. In this article, we compare the trust architectures surrounding these two financial systems. We provide a deeper analysis of how proposed regulation in the blockchain space affects the code‐ and confidence‐based architectures which so far have underwrote DeFi. We argue that despite the solid safeguards and guarantees which code can offer, the confidence in DeFi is still very much dependent on more traditional trust‐enhancing mechanisms, such as code governance, and antifraud regulation to address some of the issues which currently plague this domain, and which have no immediate, purely software‐based solutions. What is more, given the risks of bugs or scams in the DeFi space, regulation and trusted intermediaries may need to play a more active role, in order for DeFi to gain the trust of the next generation of users.

Customer Segmentation for Credit Card Customers : A Comprehensive Guide

This comprehensive article explores customer segmentation in the credit card industry, examining its theoretical foundations, methodologies, practical applications, and future trends. It discusses the evolution of segmentation techniques from traditional demographic-based approaches to advanced AI-driven models. The article highlights key segmentation criteria, data collection and preparation methods, and various segmentation techniques, including RFM analysis, clustering algorithms, and machine learning approaches. Case studies of successful implementations by American bankholding companies, multinational financial services corporations, and American bank-holding companies demonstrate the tangible benefits of effective segmentation strategies. The article also addresses common challenges in customer segmentation and provides recommendations for credit card companies to optimize their segmentation efforts. Finally, it explores future trends, including the increasing role of big data and AI in segmentation and the impact of evolving customer expectations on segmentation strategies.