Financial Services Technology Research Articles

FINANCIAL INCLUSION AND THE INFORMAL SECTOR DURING AND POST-COVID 19 ERAS: STATUS, CHALLENGES AND WAY FORWARD

COVID 19 is one of the major disasters that significantly disrupted the socio-economic statuses of various businesses and nations at large. The purpose of the study was to explore the extent to which COVID 19 affected financial inclusion in Zimbabwe. The quantitative research methodology and the purposive sampling technique were employed. Data was collected using in-depth and focus discussion group interviews from 35 participants. Data was analysed using thematic data analysis approach. Barred people in rural areas from accessing financial services which directly and indirectly increased the magnitude of poverty among people running informal businesses. Financial inclusion, is a key driver to poverty reduction; hence the negative impact of on financial inclusion significantly propels poverty in societies. Digitalizing financial services is one of the strategies which can be utilized to promote financial inclusion in the post- era. Financial institutions should use technology in financial services, so that those in rural areas do not incur transport and logistical costs for accessing financial services. Digital finance and other various financial innovations should be used to achieve financial inclusion in rural areas. Policies that encourage the delivery of formal financial services in rural areas should be developed. Governments should consider granting subsidy to providers of financial services so that they can offer basic financial services at low cost to the excluded population. Thus, governments ought to commit themselves to the delivery of accessible, affordable, appropriate and cost-effective financial services to unserved or underserved households. The study provides managers of financial institutions with various techniques of providing financial services to the informal sector in the post- eras in rural areas. It also provides managers with information pertaining to the risks in providing financial services in post-pandemic era in rural areas. Managers of internet service providers has a role in making sure that the rural folk have access to the facility so that digital banking systems become realizable.

Blockchain technology in financial services: enhancing security, transparency, and efficiency in transactions and services

Blockchain technology revolutionizes financial services by enhancing security, transparency, and efficiency in transactions and services. This paper examines the fundamental aspects of blockchain, including its core concepts and components, and explores its application in financial services. Blockchain's cryptographic hashing, decentralization, and immutability significantly improve security by preventing tampering and reducing fraud risks. Increased transparency through immutable audit trails, real-time updates, and open ledgers fosters trust among customers, regulators, and institutions. Furthermore, blockchain streamlines operations by automating processes, reducing intermediaries, and expediting transactions, resulting in substantial cost reductions and improved efficiency. Despite these advantages, challenges such as scalability, interoperability, regulatory uncertainty, and environmental impact must be addressed for widespread adoption. The prospects of blockchain in financial services are promising, with potential applications in decentralized finance, digital identity verification, and central bank digital currencies. This paper underscores the transformative potential of blockchain technology in creating a more secure, transparent, and efficient financial ecosystem.

The markets in crypto assets regulation: What should firms be doing now?

The Markets in Crypto Assets Regulation (MiCA) aims1 to create a harmonised regulatory framework for crypto assets in the EU. MiCA will provide legal clarity and certainty for developing and using crypto assets and distributive ledger technology in financial services while ensuring high consumer and investor protection and market integrity. MiCA will establish a harmonised pan-EU regime for crypto assets, bringing unregulated crypto assets outside the regulatory perimeter into scope.

Nigeria Start-Up Act, 2022 Disruption on Financial Services Technology Startups (Fintech): A Study of Moniepoint (Point of Sales) POS Agents in Anambra State

The study investigated the impact the Nigeria Startup Act, 2022 on Financial Services Start-ups, with a focus on Moniepoint agents in Anambra State. Time series research design was adopted in the study. Data for the study was secondarily sourced from Anambra state Moniepoint Periodic Reports, 2023. The time scope of the study was September 2021 to August 2023, which represents pre and post data on variables studied. The data from the study were analyzed using tables and frequencies. The hypotheses were tested using pairwise t- test. The study showed that the Nigerian Start-up Act of 2022 had a disruptive significant positive impact on number of Agents, number of transactions and volume of transactions of Moniepoint Agents in Anambra State; which is a measure of entrepreneurial growth in Nigeria digital technology sector. The study thus concluded that the Start-up Act, 2022 contributed significantly to the growth of Fintech Start-ups as was evidenced increase in number of agents, number of transactions and volume of transactions recorded in Moniepoint Agency, Anambra State.

Integrating Banking Fundamental Factors with Financial Technologies in Increasing Banking Performance

The existence of innovation involving the adoption of technology in banking has boosted financial performance, where banks get sizable benefits. The use of technology in financial services or known as fintech not only produces new products and models in financial services, but has created solutions. This research is a quantitative research with secondary data sourced from the Financial Services Authority and Bank Indonesia from April 2020 to April 2023. The object of this research is all banks in Indonesia whose data has been aggregated. The variables used in the research are fintech as the independent variable, and banking profitability as the dependent variable, then adding banking fundamentals as a control variable . Meanwhile the analysis technique to be used is Ordinary Least Square (OLS). Fintech can optimize its role in supervising customers which can have an impact on minimizing non-performing loans so that it can increase profitability. The next thing is that even though costs increase it can actually increase profitability. The role of fintech in this case is that although the adoption of fintech will increase costs, profitability will also increase. The level of financing represented by LDR can be maximized in percentage in order to increase profitability.

Relevansi Aplikasi Peer To Peer (P2P) Lending Student Loan pada Mahasiswa dalam Lingkup Hukum Islam

Advances in financial services technology in the form of Peer to Peer (P2P) Lending have had an impact on facilitating the public in financing activities and have penetrated all sectors, one of which is the education financing sector in tertiary institutions in the form of Student Loans. This study aims to analyze the contracts contained in P2P Lending Student Loans. This study uses qualitative methods by reviewing previous literature. The results of this study are that the credit agreement on P2P Lending Student Loans has a Qardh contract in it. However, in the Qardh contract, there are conditions for the addition of both additional loan principal and late fees that are given if the borrower cannot repay the loan in accordance with the agreement which is prohibited by Islamic law.

Authority and Dynamics of Compliance to Resolve Sharia Digital Finance Disputes in Indonesia

This article focuses on analyzing the urgency of authorities in adapting technology to modern financial services. Conventional financial institutions (existing institutions) are entering a new era, where all financial transaction activities are connected to technology. The development of digital financial services such as electronic money (digital payments) and digital funds (crowdfunding) creates very fierce competition in today's modern financial services industry. The main problem that arises in the adaptation of information technology in financial services is legal certainty and protection for parties involved in digital financial transactions. This research analyzes the development trend of digital financial services in Indonesia. In addition, this study shows the efforts made by regulators in anticipating legal problems. Views on Islamic digital financial dispute resolution approaches and procedures are also the focus of discussion in this article. The method used in this study is literature research. This research uses an exploratory normative legal approach. Data collection techniques are carried out by observing, reviewing, and analyzing textual information which is then adapted as the main data in the discussion of this research topic. Data was collected from a literature review in the form of library materials or secondary data related to digital finance. This research produced several findings, namely: 1) the urgency of the authority in controlling the implementation of Islamic digital finance by presenting special regulations to minimize disputes between the parties. 2) Sharia digital financial platforms are ensured to have maximum Sharia compliance tools through Sharia compliance audits under the control of the authority.

Exploring the Application of Blockchain Technology in Financial Services

Blockchain is a technology that operates on a decentralized and distributed ledger system. It has garnered significant interest for its potential to revolutionize numerous industries, particularly banking. This study employs literature review and analysis methods to examine the utilization of blockchain technology in the realm of financial services. The primary objective is to identify and analyze significant domains within financial services where blockchain can be effectively implemented. These domains include trade financing and asset management, remittances, cross-border payments, securities issuance and trading, interbank clearing and settlement, credit and lending. Additionally, the study aims to explore how blockchain can enhance transparency and regulation in financial markets. The paper additionally examines the benefits and obstacles associated with the integration of blockchain technology into the banking industry. The findings of the study suggest that blockchain technology possesses the capacity to enhance operational effectiveness, diminish expenses, enhance transparency, and foster creativity within conventional financial procedures. Nevertheless, the proper execution of this endeavor is still hindered by various obstacles pertaining to technology, regulations, and privacy that necessitate resolution.

SWOT Analysis of Blockchain Funding, Platform Finance, Financial Big Data and Financial Engineering Under the Background of Financial Innovation and Technology

This paper highlighted the Strengths, Weaknesses, Opportunities, and Threats to blockchain technology in financial services. Blockchain is still an evolving and therefore immature technology; it is hard to predict how successful it would be outside its only proven use domain of cryptocurrencies. History teaches us that radically new technologies take many decades to realize their full potential. Thus it is perfectly possible that blockchain would prove revolutionary in the years to come despite its patchy success so far. What is certain is that businesses should be looking at this technology and understanding it because its underlying ideas are powerful and likely to be influential. Policymakers might support the creation of teaching materials on blockchain technology. Users might be able to avoid frequent blockchain frauds, and businesses might find additional capacity to deploy the technology. Policymakers may use blockchain technology to accomplish their own unique goals. This could help organisations in public, and private sectors decide whether the technology can help solve particular issues. Organisations attempting to integrate blockchain technology with their current systems may find this to be more accessible as a result. Based on blockchain technology, policy- makers could explain current laws and regulations or create new ones. This paper presents a comprehensive overview on blockchain technology in the area of Blockchain funding, Platform finance, financial big data, financial engineering financial technology, Financial innovation, Digital economy. blockchain; FinTech; payment services; deposits and lending; financial services; Bitcoin; SWOT Analysis, Ethereum; Hyperledger, smart contract; digital wallet, Quorum, RippleNet and Stellar Network, Algorand Blockchain and Pundi-X. Blockchain technology is a mode of decentralization, which is the next key disrupting technology and worldwide computing paradigm following the mainframe, perso

The Future of Finance: Fintech and Digital Transformation

The realm of financial technology, or fintech, has been increasingly gaining attention and interest as it pertains to the integration of technology in financial services. This paper endeavors to provide an overview of various facets of fintech, including its impact on online payments, Peer-to-Peer (P2P) lending, Robo-advice, and blockchain technology. One significant effect of fintech is observed in the area of online payments, where traditional banking methods are being substituted with more advanced online payment systems. Fintech has emerged as a promising solution to the challenge of convenient, secure, and fast payment transactions for goods and services. P2P lending, another fintech innovation, enables borrowers to obtain loans without having to go through traditional financial institutions. This process has been simplified and made more accessible through the use of fintech platforms that connect borrowers with lenders. The paper also addresses the use of Robo-advice in fintech, which utilizes algorithms and artificial intelligence to provide financial advice to clients. Robo-advice technology has increased accessibility to financial advice for a more extensive range of people, reducing the barriers that might have limited access to this type of financial service. Finally, this paper examines the importance of blockchain technology in fintech, with its potential to streamline processes and ensure security in financial transactions. The decentralized nature of blockchain technology offers a robust solution to financial security, ensuring that transactions are secure, transparent, and immutable. In conclusion, the essay underlines the transformative potential of fintech in the financial industry with its numerous innovations.

Bank Record Storage using Blockchain

Abstract: Financial service providers find blockchain technology useful to enhance authenticity, security, and risk management. Several institutions are adopting blockchain in trade and finance systems to build smart contracts between participants, improve efficiency and transparency, and open up newer revenue opportunities. Blockchain’s unique recording capabilities make the existing clearing and settlement process redundant. Banks and other financial entities are adopting blockchain-enabled IDs to identify people. Better results come from organisations’ capacity to foresee emerging trends in financial blockchain applications and develop blockchain functionality. The transfer of asset ownership and addressing the maintenance of a precise financial ledger. Measurement, communication, and analysis of financial information are three significant areas to be focussed on by accounting professionals. Blockchain clarifies asset ownership and the existence of obligations for accountants, and it has the potential to improve productivity. This paper identifies and studies relevant articles related to blockchain for finance. This paper focuses on Blockchain technology and its importance for financial services. Further takes up various tools, strategies, and featured services in Blockchain-based financial services. Finally, the paper identifies and evaluates the significant applications of Blockchain technology in financial services. Credit reports significantly impact the financial lives of customers. Recent data breaches demonstrate the superior security of blockchain-based credit reporting over conventional server-based reporting. Blockchainbased systems enable the faster, more cost-effective, and more customised issuance of digital securities. With its adoption, the market for investors can be expanded, costs for issuers can be reduced, and counterparty risk can be reduced due to the ability to customise digital financial instruments to the demands of investors. It uses mutualised standards, protocols, and shared procedures to give network users a single common source of truth. Participants in the business network can now more easily collaborate, manage data, and agree with this technology’s application.

FinTech Investment and GDP Relationship: An Empirical Study for High Income Countries

Technology, the internet, and demographic change have started a rapid transformation in the financial services sector. The widespread use of innovation and technology in financial services in social and economic areas made these services more effective and companies called Fintech have emerged important economic actors. The Fintech sector has generated changes in the traditional financial service understanding and the delivery of these services. In this area, Fintech companies are developing new financial business models with the help of the latest technological developments and offering innovative financial products and services such as payment services, asset management, and insurance services. 
 This study investigates, the relationship between GDP and Fintech investment using panel causality methods from 2014Q1 to 2020Q4 for eight high-income countries: The United States, United Kingdom, Singapore, Australia, Canada, Germany, Israel, and France. The results indicate the existence of cross-sectional dependence among countries. According to Westerlund’s panel cointegration test results, a cointegration relationship between two variables has been found in the long run. In the short run, panel Granger causality variables have been found only in Germany. We find a positive effect of Fintech investment on GDP in seven countries, and we see a negative relationship in Singapore.

Role of technology in iinovative financial services as reflected in the breakthrough of BigTech companies

Fast digitisation can be observed in everyday life including financial services. The analytical tools of Big Data, such as artificial intelligence and machine learning are able to promote user awareness in terms of the characteristic features of financial products and can offer personally tailored information on how to utilise their financial products and the management of their financial sources. Financial service providers proactively apply artificial intelligence and machine learning in customer support (for instance, virtual assistants are added to telephone customer service). In addition, the appearance of BigTech companies triggers further turbulent development and service innovation in the financial services industry. Non-bank competitors appearing in the field of financial services and the proliferation of digital innovation and new technologies are a constant challenge and risk to banks’ everyday operations and clientele as they must face risks and fight competitor pressure while the regulatory environment places strict limitations on their operations. In this paper the authors offer a comparative status survey of banks and BigTech companies as they investigate the factors, development paths and operational areas that reflect the differences in cross-sectoral and industry regulation and have an impact on the cyber security risks of digitisation.

Profile of Mobile Money and Financial Inclusion among Micro-Entrepreneurs in The Central Business District of Lusaka

The aim of this paper is to profile the state of mobile money financial inclusion/exclusion among micro-entrepreneurs (traders) in the Central Business District. This paper uses a case study approach and is based on mono method quantitative approachAn assessment of mobile line ownership as a gateway to one aspect of financial inclusion shows that majority of micro entrepreneurs n = (88.4%) were Airtel subscribers and a minority n = 93 (31.6%) were Zamtel subscribers The number of lines in possession varied in the sample with n = 38 (12.9%) maintaining three lines being in the minority group and those maintaining two lines n = 161 (54.8%) were in the majority. There was no statistically significant difference in the number of lines in possession by gender as p was > 0.05 (0.397). Age as well did not show any significant difference as p was > 0.05 (0.682). Micro entrepreneurs were able to use mobile money services once in a week and almost every day. Use was influenced by the facts that was it less expensive to deal with the mobile money service provider, customer trust of the mobile money financial services provider was more than other service sources and the micro entrepreneurs had the money a priori to do business. The paper’s call to action is for the government to institute holistic financial frameworks that would cover the micro level by ensuring that mobile money service providers make their products more accessible, user friendly, quality and continue to be less expensive for the usage of not only micro entrepreneurs. There is need to expand the use of mobile money financial services technology to deliver financial services to enhance inclusion. This may require adding more features on mobile ups and firms owning mobile money financial services to consider franchising. We propose context specific products that could be appreciated by people in the Progress out of Poverty Index 1 and 2 categories that includes micro traders and this would require evidence based financial solutions. Hence more research is being proposed in this area. Keywords: Profile, Mobile Money, Financial Inclusion, Micro Entrepreneurs, Central Business District DOI: 10.7176/JESD/14-2-08 Publication date: January 31 st 2023

Сравнительный анализ правового регулирования цифровых финансовых активов в России и других странах

Today, a crypto economy is actively developing throughout the globe based on the use of cryptographic technologies for the creation of new digital products, including the issuance of digital financial instruments. The topic of regulation of digital financial assets (hereinafter referred to as DFA) is relevant in the world: since 2019, some countries, including Russia, began to introduce legal norms regarding the issuance of DFA, as well as the sale and turnover of such assets on the market. This article compares approaches to the regulation of DFA in Russia and globally, including the issue of determining financial instruments that will be related to these assets, aspects of the procedure for issuing, storing, and trading them, including the basic rights and obligations of issuers and investors in such assets, and the features of the operation of trading floors and platforms for issuing DFA. In general, two approaches to the regulation of DFA can be distinguished. The first approach is the application of existing rules to tokenized assets (for example, laws on securities and financial instruments); this approach is used in the United States. The second is regulation through the introduction of a new framework for the application of distributed ledger technology in financial services, for example, in Russia, Germany, Luxembourg, the European Union (EU), and Switzerland. This article examines the second approach, which is currently implemented in Russia, to identify differences with foreign regulation, for example, the use of custodian institution for accounting and storing digital assets, converting DFA into traditional financial assets, and creating rules for trading digital financial assets.

Demographic and Socio-Economic Factors as Barriers to Robo-Advisory Acceptance in Poland

Theoretical background: One manifestation of the use of artificial intelligence technology in financial services is robo-advisory. Automated assistants are used in the area of communication with consumers and the sale of financial products. The development of robo-advisory services may contribute to increasing the availability of financial services and the cost efficiency of banks’ operations. So far, however, robo-advisory has not been widely used in bank services, and the reasons for this can be seen in the lack of wide acceptance of robo-advisory by bank customers, among other things. Purpose of the article: The aim of this paper is to identify barriers to the acceptance of robo-advisory in the services of banks operating in Poland. Variables relating to the demographic and socio-economic characteristics of consumers were analysed. Knowledge in this area can provide banks with a practical guideline for activities aimed at increasing acceptance of artificial intelligence technology and wider use of robo-advisory in financial services. Research methods: The paper uses the results of a survey conducted in October 2020 regarding the application of artificial intelligence technology in the banking sector in Poland. The survey included a representative sample of 911 Polish citizens aged 18–65. A multinomial logit model was employed to identify variables that represent significant barriers to robo-advisory acceptance in financial services. Main findings: The conducted research helped identify the barriers to acceptance of robo-advisory among consumers in Poland. A low propensity to use robo-advisory in bank services is characteristic of respondents from older age groups, as well as those who do not show a predilection for testing new technological solutions. Lack of experience in using investment advisory services and customer concerns about the misuse of personal data by banks are also significant barriers.

Digital financial inclusion and energy and environment: Global positioning of Sub-Saharan African countries

The Bretton Woods institutions and the G20 have undertaken the initiative to promote financial inclusion in Sub-Saharan Africa and South Asia to reduce the high rate of economic poverty. Due to advanced technology in financial services, Sub-Saharan Africa and South Africa have included a lot of people in the financial system. Thereby digital financial inclusion influences energy consumption and the environment by their pass-through effect on economic growth. This paper evaluates the expansion of innovative digital services and financial inclusion on energy consumption and the environment in different countries according to their geographical position. Regarding socio-economic indicators and the proportion of people who claim to be owners of an account at a bank or financial institution, SSA is still stagnating in poverty and has the lowest percentage compared to other regions. Using the Global Findex data, we find that higher financial inclusion proxies are related to higher energy consumption and CO2 emission. At the same time, the relationship is not always linear between technology, energy consumption and CO2 emission.

The regulatory leap into big data and machine learning: Practical advice for compliance officers

The domain of big data encompasses several buzzwords, including artificial intelligence, machine learning, emerging technologies and big data itself. Across industries, new technology generates both fascination and fear, but factors that drive innovation vary widely from industry to industry. The financial services industry is characterised by an ambivalence toward innovative technology, with many financial services firms embracing it and many more regulatory compliance professionals resisting it. This paper is divided into two parts: Part 1 describes the state of regulatory technology in financial services and Part 2 offers practical advice for compliance officers seeking to implement innovative technology projects at their firms, particularly using machine learning applications. The paper concludes with suggestions for future research and practice.

Online Dispute Resolution as an Alternative Model for Dispute Settlement in The Financial Technology Sector

Financial technology (fintech) is the use of technology in financial services in the digital economy era. Digital payments, peer-to-peer lending, and crowdfunding are examples of fintech that is growing rapidly in Indonesia. However, the high number of disputes in the fintech sector is an indication of the need for a dispute resolution mechanism that is fast, simple, and low-cost. In this regard, online dispute resolution (ODR) is present as an alternative dispute resolution model. ODR has many challenges, such as the existence of a legal vacuum (rechtsvacuum) regarding the ODR mechanism, internet disruption, and the weak protection of personal data in Indonesia.

Blockchain technology acceptance by investment professionals: a decomposed TPB model

PurposeThe rapid emergence and acceptance of blockchain applications by investment professionals has made this study significant. The study aims to examine the degree of trust and acceptance of blockchain technology in the Indian financial services industry.Design/methodology/approachThe decomposed theory of planned behaviour (DTPB) model is investigated using responses from 200 investment professionals to an online survey on blockchain technology adoption, and partial least squares structural equation modelling using SmartPLS 3.0 is used to analyse the results.FindingsIn general, the results support a DTPB and offer the best fit to the data. This study may have significant drawbacks in predicting blockchain technology’s acceptance by investment professionals. Furthermore, the findings suggest that the research instruments used in this study, which engage users in business settings, are equally successful in the context of investment professionals.Research limitations/implicationsIn predicting blockchain acceptance by investing experts, this study may have significant drawbacks.Practical implicationsAs a result of TAM studies, it has been determined that perceived usefulness is more essential than perceived ease of use. Therefore, investment professionals may have discovered significant subjective normative impacts on behavioural intention. Management must devise techniques for implementing blockchain technology in digital financial services that are compatible with users’ workplaces.Originality/valueUsers may benefit from this research by concentrating on blockchain acceptance to improve digital banking services.