Financial Technology Research Articles

The Impact of Financial Literacy on Investment Decisions: The Moderating Role of Financial Technology

This study investigates the impact of financial literacy on investment decisions and explores the moderating role of financial technology (Fintech). Conducted among small and medium-sized enterprises (SMEs) in Bali Province, Indonesia, the research seeks to understand how financial literacy influences investment choices and how Fintech enhances this relationship. A quantitative approach was used, involving the distribution of questionnaires to 100 SME owners who received business legality through decentralization funds. The data, collected via primary sources and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) 4.0, included measures of financial literacy, investment decisions, and Fintech usage. The findings reveal that higher financial literacy positively impacts investment decisions, with SMEs demonstrating better investment management and decision-making capabilities. Additionally, Fintech was found to strengthen this relationship by providing real-time data and advanced analytical tools that enhance investment decisions for those with strong financial literacy. However, the benefits of Fintech were more significant for individuals with higher financial knowledge, indicating that technology alone cannot replace the need for financial education. This study underscores the importance of integrating financial literacy with technological tools to improve investment outcomes and suggests that future research should explore diverse geographic contexts and longitudinal studies to better understand the evolving dynamics between financial literacy, Fintech, and investment decisions

Pengaruh Adopsi Financial Technology Terhadap Profitabilitas Bank Umum Konvensional yang Terdaftar di Otoritas Jasa Keuangan Periode 2017-2022

This research aims to analyse the effect of financial technology (fintech) adoption on the profitability of conventional commercial banks registered with the Financial Services Authority for the period 2017-2022. This research is an associative research with a quantitative approach. The data collection method is a survey sample. The population in the study amounted to 93 banks. By using purposive sampling technique, 5 bank samples were obtained (30 observation data). Fintech services in this study are measured using Automated Teller Machine (ATM), internet banking and mobile banking. While profitability is measured using Return On Asset (ROA). The panel data analysis method in this research is multiple linear regression analysis using Eviews version 12. The results of this research indicate that Automated Teller Machine (ATM) has a positive and insignificant effect on ROA, internet banking has a negative and insignificant effect on ROA and mobile banking has a positive and significant effect on ROA.

Changes and Challenges of Financial Technology (FinTech) for the Banking Industry

With the rapid development of financial technology (FinTech), the traditional banking industry is facing unprecedented changes and challenges. This paper firstly discusses the definition, development history and key technologies of FinTech, and analyses its impact on the banking industry, including innovations in the areas of payment, lending and investment. At the same time, FinTech also brings challenges in various aspects such as regulation, security and privacy, competitive pressure and technological risks. To meet these challenges, traditional banks need to actively pursue technological innovation, optimise their business models, strengthen regulation and compliance, enhance their risk management capabilities, and continuously improve the customer experience. By establishing personalised services, optimising digital platforms and enhancing customer interactions, banks are able to better meet customer needs and enhance market competitiveness. This paper argues that in the era of fintech, traditional banks must respond flexibly to changes and seize market opportunities through innovation and cooperation to achieve sustainable development. Ultimately, the positive interaction between fintech and traditional banks will drive the continued progress of the entire financial industry.

Financial Technology and Literacy Shaping Students' Financial Management with Digital Literacy

Financial management behavior is crucial for students, particularly as they engage with evolving financial technologies. However, there is a limited understanding of how financial technology and financial literacy interact to shape financial behavior, especially when considering digital literacy as a moderating factor. This study addresses this knowledge gap by examining the roles of financial technology and financial literacy on students' financial management behavior, with digital literacy as a potential moderator. Using a quantitative research method, primary data were gathered through a questionnaire survey from a sample of 114 accounting students at Muhammadiyah University of Sidoarjo, class of 2020. The findings indicate a positive relationship between financial technology and financial literacy on financial management behavior. Furthermore, digital literacy was found to moderate the effect of financial technology, strengthening its influence on students' financial management behavior. However, digital literacy did not moderate the influence of financial literacy on financial management behavior. The novelty of this research lies in its exploration of digital literacy's role as a moderating variable. Implications suggest the importance of incorporating digital literacy into financial education programs to enhance students' financial management practices. Highlights: Positive Relationship: Financial technology and literacy improve students' financial management behavior. Moderating Role: Digital literacy strengthens the effect of financial technology on financial behavior. No Moderation: Digital literacy does not moderate the impact of financial literacy on behavior. Keywords: Financial Technology, Financial Literacy, Digital Literacy, Financial Management, Student Behavior

Research on the Cultivation of Innovative Talents for Professional Undergraduate Finance Majors from the Perspective of Digital Economy

Along with the arrival of the digital economy, the country’s financial industry ushered in the development of the “golden period,” under this background financial services, technology and others continue to optimize and perfect. To meet the needs of social development, the relevant positions need a large number of high-quality, skilled financial professionals, but the current personnel training model has been unable to achieve the established goals. Therefore, in the context of the new era, vocational colleges need to deeply analyze the new requirements of the digital economy on the ability of professional talents, then discuss the restrictive factors existing in the current training of professional talents, and put forward effective reform measures to improve the quality of talent training and effectively deepen the reform of professional teaching.

The impact of financial technology (Fintech) on economic growth: Evidence from Tanzania

The impact of financial technology (Fintech) on economic growth: Evidence from Tanzania

How does technology finance promote the high-quality development of firms? Evidence from China

By constructing the provincial technology finance development index for China from 2011 to 2021 and aligning it with data from Chinese A-share listed companies, this paper empirically examines the effect of technology finance on the high-quality development of enterprises. The findings indicate that technology finance substantially boosts a firm's total factor productivity by alleviating financing constraints and fostering innovation. Furthermore, in regions with advanced industrial structure upgrades, technology finance demonstrates a more pronounced positive impact on enhancing a firm's total factor productivity. Additionally, compared to the central and eastern provinces of China, the positive effect is more significant in the western region.

Digital health startups: growth financing and valuation drivers that signal strength for investors

PurposeThe study investigates the impact of various factors on the number of active investors in digital health startups. Through nine hypotheses, we examine the influence of metrics such as patents, online presence, financial aspects and company valuation on investor interest. The results reveal positive associations between these metrics and investor numbers, highlighting their role in signaling strength and attracting investment. This research enhances the understanding of investor valuation in digital health startups, emphasizing the importance of credible signals for building trust and securing funding. However, we acknowledge limitations in data analysis methods and suggest future research to explore industry signals, longitudinal trends and failed startups for comprehensive insights.Design/methodology/approachThis study delves into the design methodology and approach, aiming to fill gaps in understanding investor roles in valuing digital health ventures. We focus on deciphering factors driving valuations for these startups to secure growth financing. Using signaling theory, we investigate how entrepreneurs communicate their latent strengths to bridge information gaps, aiding investment decisions. We analyze a sample of 482 healthcare startups from the Pitchbook database using Poisson regression in SPSS.FindingsThis research sheds light on the factors driving investor interest in digital health startups. Despite the critical role of entrepreneurs in patient care innovations, the relationship between investor characteristics and funding for digital health technologies still needs exploration. We examine factors influencing investor valuation in healthcare startups and identify patents, social followers and financial disclosures as pivotal elements shaping investor interest. The findings show that all factors for active investors are significant for all variables except similar unique visitors.Originality/valueThese results significantly enhance our understanding of investor decision-making in digital health startups. They confirm the importance of various signals, like patent activity, online presence and financial performance, in attracting investor attention. We utilize unique data sources, offering insights into investors' behavior across different funding stages. In conclusion, these findings underscore investors' crucial role in the growth and funding of healthcare tech startups, emphasizing the need for robust signals to attract investment.

Research on the Measurement of Gold Green Total Factor Productivity in the Yangtze River Economic Belt under the Background of Green Finance

With the continuous growth of the economy, the contradiction between finance and the environment has become increasingly prominent, and green finance has attracted much attention due to its sustainable development function. This study integrates green financial efficiency into green total factor productivity based on the two-stage super efficiency unexpected SBM model, and constructs the financial green total factor productivity of the Yangtze River Economic Belt from 2013 to 2021. The convergence model is used to verify the convergence of productivity development. The research results indicate that, in terms of time dimension, the efficiency of green finance in the Yangtze River Economic Belt is relatively stable, the level of financial ecological performance first decreases and then increases, and the financial feedback ecological performance remains at a high level for a long time. The overall trend of financial green total factors is increasing, and financial green technology innovation is an important driving factor for the increase; In terms of convergence testing, no significant alpha convergence was found in the upper, middle, and lower reaches of the Yangtze River Economic Belt, and the regional differences did not significantly decrease. However, there was overall beta convergence, indicating a "catch-up effect" from low productivity provinces to high productivity provinces.

Do Financial Regulation and Technology Matter in Fostering Green Growth?

Effective regulation and technological innovation are key factors in driving the implementation of green growth initiatives. This research investigates how financial regulation and technological innovation influence green growth, proxied by carbon productivity, with data from 1996 to 2020 across ASEAN-5 Countries. A Panel Dynamic Ordinary Least Square (DOLS) model is conducted to analyze the long-run effect on each variable. The result showed that financial regulation, proxied by regulatory quality and economic freedom, positively and significantly influences green growth. Meanwhile, technological innovation has a positive but not significant influence on green growth. According to the findings, this study proposes adopting top-tier regulations and a step-by-step approach to realizing green growth. Meanwhile, the government can also open an investment as funding to improve innovation in green technology

An adaptive financial trading strategy based on proximal policy optimization and financial signal representation

Trading strategies play a crucial role in financial trading. However, due to the significant amount of noise present in financial signals, traditional trading strategies and those based on price prediction often fail to achieve optimal results in real market conditions. Nowadays, with the pervasive noise in financial signals, developing successful trading strategies to achieve high returns has become one of the most prominent and challenging research areas in modern finance. Therefore, an adaptive financial trading strategy, called proximal policy optimization based on financial signal representation trading strategy (FSRPPO), is proposed. This strategy employs financial signal representation technology (FSR), which combines complete ensemble extreme-point symmetric mode decomposition with adaptive noise (CEEMDAN) and modified rescaled range analysis (MRS), to accurately and robustly represent dynamic market states, enhancing profitability. Additionally, the designed reward function reduces trading frequency to lower costs, while the designed action space increases trading flexibility to reduce risks. The experimental results on real stock data demonstrate the outstanding profitability and good risk avoidance ability of our proposed trading strategy, which means that the proposed model can effectively filter out noise from financial signals, extract valuable information, and provide reliable decision support for investors.

Agri-SME managers' perception of financial management practices in Tanzania

Agribusiness Small and Medium Enterprises (Agri-SMEs) handle 60 % of all food production and trade worldwide. Despite their crucial contribution to developing economies, there is a widespread concern about their poor performance, largely due to poor Financial Management Practices (FMPs). This study used a survey of 427 Agri-SMEs in Tanzania to investigate managers’ perception towards FMPs and whether the implementation of FMPs impact the achievement of Agri-SME business objectives. Descriptive statistics were employed to characterize managers’ technological and financial backgrounds. Structural Equation Modeling (SEM) was employed to assess perceived ease of use of FMPs and perceived usefulness of FMPs. The findings revealed that managers' perceptions of financial management practices significantly and positively influence the organizational performance of Agri-SMEs. Specifically, the perceived usefulness and ease of use of financial practices were key drivers of improved performance. Additionally, about 62 % of Agri-SMEs have not adopted Enterprise Resource Planning (ERP) systems. Furthermore, 63 % of Agri-SME managers report limited exposure to financial management training. These findings imply that there is need for enhanced financial management technology adoption and managers’ frequency retooling on financial management practices.

The Fetters of Financial Neocolonialism in African Countries

African countries are actively involved in the formation of a multipolar world, gradually gaining political and economic independence from European states. Within the framework of the concept of neocolonialism, the main stages of the transformation of relations between former colonies and former colonizers are analyzed. In recent decades, financial dependence, which came to be called financial neocolonialism, has become an increasingly obvious and powerful instrument of economic pressure from metropolitan states. Thus, through transnational corporations and currency unions, European countries, on the one hand, pumped out rent from African countries in the sectors of extraction and primary processing of minerals, monopolized consumer markets, and on the other hand, actually took control of the financial development of many African countries, preventing the formation of financial sovereignty. Such unions primarily include two associations: the West African Economic and Monetary Union (WAEMU) and the Economic Community of Central African States (ECCAS). The development of financial technologies is considered by some researchers as a possible way to escape colonial dependence. However, aware of these risks, European countries are advocating a counter-attack strategy that extends to controlling or limiting the use of financial technologies and cryptocurrency markets in particular. Possible solutions have been proposed to overcome this dependence by strengthening economic ties between African countries and Russia and China. The BRICS+ association, which already includes several African countries, could serve as a basis for all future initiatives.

Do various financial resources ensure renewable energy production and environmental protection in OECD countries: modelling for insight.

The recent global energy crisis scenario echoes the past, and the vulnerability of traditional fuels remains the proximate cause of environmental degradation. The fundamental changes in mobilising finance resources are predominant in an energy transition. So, acknowledging finance and energy transition via financial and environmental technology is necessary to meet sustainable development goals. Accordingly, this study employs panel econometric models to investigate how financial resources can ensure the production of renewable energy and environmental protection in 38 OECD member nations over a time period from 2000 to 2021. The empirical finding shows that foreign direct investment and financial technology ameliorate environmental performance by alleviating CO2 emissions. Environmental technologies positively impact environmental protection by eliminating CO2 emissions. The financial resources ensure renewable energy production and environmental protection by reducing the environmental externalities and encouraging renewable energy consumption. Similarly, the consumption of renewable energy catalyses environmental improvement. Economic globalisation spurs environmental externalities. The D-H causality test also shows a reciprocal movement from environmental performance to financial technology, environmental technology and renewable energy consumption. The study's outcomes offer a new model of insight for governments as well as financial and energy policymakers to protect the environment. Enable sustainable development in OECD countries by empowering financial innovation through fintech and incentivising environmental technology to increase renewable energy production.

Critical development of Islamic financial technology ecosystem: lesson learned from financial technology literature

Purpose This study aims to draw lessons from the financial technology (FinTech) ecosystem literature through a systematic literature review. Design/methodology/approach This study systematically studied a sample of 134 articles from the Scopus database to assess the pattern of research development within the scope of the FinTech ecosystem over the last 15 years (2008–2023). Findings The results obtained indicated that the current research focus leads to several aspects: digital technology and financial inclusion, FinTech and customer behavior, FinTech ecosystem, business model, as well as aspects of governance and regulation. In the effort to develop Islamic FinTech, some aspects that might be targeted include aspects of business development and the Islamic FinTech ecosystem in general, extending financial inclusion to governance and managerial implementation of Islamic FinTech itself. Research limitations/implications This research has limitations because it did not focus on the study of more specialized sectors, such as insurance or microfinance institutions, in adopting FinTech, requiring the use of other specifications of institutions in addition to Islamic banking. Practical implications This research has substantial theoretical implications in mapping the intellectual structure of Islamic FinTech research, which has been underexplored by previous researchers, as well as providing essential information about which sectors should be prioritized to encourage inclusiveness and overall performance of financial institutions. Originality/value This research explores more deeply with a comprehensive approach so that it becomes a pioneer in the study of FinTech ecosystem literature for the development of Islamic FinTech.

Greenwashing in the FinTech sector: the role of the EU Corporate Sustainability Reporting Directive (CSRD)

FinTech companies, along with other financial institutions, face increasing pressure to take the lead in promoting a more environmentally sustainable future. The EU lately incorporated Corporate Sustainability Reporting Directive (CSRD) which offers both possibilities and challenges. This study examines the most recent modifications to Environmental, Social, and Governance (ESG) standards, identifying potential shifts that could affect FinTech firms. The problem of "greenwashing," a tactic used by businesses to misrepresent themselves as environmentally conscious, is especially concerning. Through literature analysis, this study attempts to explain terms related to greenwashing. While greenwashing instances were revealed so far within the confines of traditional banking, this study ventures beyond, including FinTech firms. FinTech companies are the focus of analysis because they are expected to play a significant role in the increased regulatory scrutiny starting in 2024. The paper addresses the opportunities and challenges that financial technology companies may face as they navigate this complex field. Relevant stakeholders looking for deep insights into the relationship between financial technology and environmental responsibility will find great value in the research's conclusions. This paper adds to an ongoing conversation on sustainability and regulation, enhancing the discussion of ethical financial activities.

COMPARATIVE ANALYSIS OF SMART ECONOMY DEVELOPMENT IN SELECTED COUNTRIES OF SOUTHEAST ASIA

Research subject. The development of the global economy indicates the formation of a new trend in the formation of the smart economy, which currently covers both developed and developing countries. According to the analysis, developed countries are leaders in economic development precisely because of the development of technologies that are the basis for the formation of the smart economy and the smart intellectualisation of economic activity. The smart economy in Asia is actively developing due to the intensive introduction of the latest technologies, innovative management approaches, and increased resource efficiency. Asian countries such as China, Japan, South Korea, Singapore, and India are leaders in the development of the smart economy. At the same time, Asian countries have been demonstrating one of the highest rates of economic development since the beginning of the XXI century, which is primarily due to the active technologisation of production and the spread of communication technologies in all areas of economic activity. Several technology centres are emerging in Asia, concentrating technology companies and creating a favourable environment for the development of the smart economy. Methodology. The article conducts a comparative analysis of the factors contributing to the development of the smart economy in individual Asian countries, identifies the most influential factors and the degree of their impact on each country. The purpose of this study is to identify the factors influencing the development of the smart economy and compare their impact in the economies of China, India and Singapore. To achieve this goal, the following research objectives are envisaged: to identify factors that have a significant impact on the development of the smart economy in different countries; to assess the impact of individual factors on the development of the smart economy in China, India and Singapore; to compare the impact of individual factors of the smart economy on the economies of these countries; and to assess the models of smart economy development in China, India and Singapore. Conclusion. The smart economy in Asia is characterised by unique features that reflect the cultural, technological and economic conditions of the region. The key features of the Asian smart economy include a high level of digitisation and technological integration, active development of smart cities, financial technologies (FinTech), a focus on automation and robotics, innovation hubs and support for start-ups, environmental sustainability and green energy, and the digitalisation of governance and public services. Asian countries are also distinguished by the integration of smart technologies into the everyday life of citizens and the support of innovation ecosystems at the state level.

Impact of digital financial inclusion on economic growth: a study on Bangladesh

PurposeThe purpose of the study is to find out the impact of Digital Financial Inclusion (DFI) on economic growth [(Industrial Production Index (INDP)] of Bangladesh.Design/methodology/approachUsing the monthly data over the period 2018 M12 to 2021 M12, this study applied the Auto-regressive Distributed Lag (ARDL) model to assess the effect of DFI indicators on INDP. The secondary data was collected from the Bangladesh Bank and CEIC Global Economic Data.FindingsThe study found that the majority of DFI indicators are positively associated with INDP. From the short-run ARDL, it is seen that one unit positive increase in Point of Sales Transactions (POST) can increase the INDP by 0.055 units. From the long-run ARDL, it is seen that POST and e-commerce transactions (ECOMT) have a significant positive impact, while Automated Teller Machine Transactions (ATMT) have a significant negative effect on INDP. One unit increase in POST and ECOMT increases INDP by 0.13544 and 0.11611 units, respectively.Research limitations/implicationsDuring the era of the fourth industrial revolution, the findings will be beneficial for policymakers, financial technology service providers, manufacturers, consumers, corporations and investors as they pave the way for a more inclusive approach to financial transactions for economic growth.Originality/valueThe study’s novelty is that it explored the influential DFI indicators and shed light on both short-run and long-run relationships between the indicators and macro-economy from the context of a developing nation.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-04-2023-0306

The effects of FinTech adoption on bank loan spreads

PurposeThis paper aims to examine the impact of traditional banks’ financial technology (FinTech) adoption on corporate loan spreads and lending practices.Design/methodology/approachThis study examines the impact of FinTech adoption by banks on corporate loan spreads and lending practices. By analyzing data from bank 10-K filings, we develop a novel metric to assess FinTech adoption at the individual bank level. Our analysis reveals a significant positive correlation between increased FinTech adoption and higher corporate loan spreads, particularly for loans that are relatively informationally opaque. This causality is further validated through a quasi-natural experiment. Additionally, we identify trends toward loans with smaller sizes and longer maturities in banks with advanced FinTech integration.FindingsUsing a sample of corporate loans issued from 1993 to 2020, this paper documents a significant positive relationship between a bank’s increased FinTech adoption and higher loan spreads. This correlation is especially noticeable for loans that are informationally opaque. Moreover, the paper reveals trends toward smaller loan sizes and longer maturities with advanced FinTech integration in banks. Overall, these findings indicate FinTech enhances efficiency in processing hard information and holds the potential to enhance financial inclusion.Originality/valueThis paper contributes to two significant strands of finance literature. First, it highlights how banks with advanced FinTech integration gain advantages through enhanced processing of hard information. Furthermore, it underscores the role of FinTech in promoting financial inclusion, particularly for those borrowers facing informational opacity.

Identification of Emerging Technological Hotspots from a Multi-Source Information Perspective: Case Study on Blockchain Financial Technology

In recent years, propelled by societal transformations and technological advancements, emerging technologies founded upon diverse disciplines such as financial and information technology have rapidly evolved. Identifying the trends associated with these emerging technologies and extracting their salient topics is crucial in order to accurately grasp the developmental trajectory of these tools and for their efficient utilization. In this study, we chronologically categorize information derived from five types of multi-source data, including journal articles, patent inventions, and industry reports, into distinct periods. We employ the LDA (Latent Dirichlet Allocation) topic model to identify emerging technological themes within these periods and utilize a dual-index theme lifecycle analysis method to construct a hotspot theme distribution map, thereby facilitating the extraction of significant themes. Through empirical research on blockchain financial technology, we ultimately identify 22 thematic areas of blockchain finance and extracted eight prominent themes, including financial technology, cross-border payments, digital invoices, supply chain finance, and decentralization. By analyzing these themes alongside their respective popularity levels, we validate that the methods above can be used to effectively identify emerging technological hotspots and illuminate their developmental directions.