Financial Technology Companies Research Articles

Can the Application of Fintech Promote the Adjustment of Bank Credit Structure? A Quasi-natural Experiment Based on the External Cooperation of Banks

Under the “dual circulation” development pattern, China’s financial system should pay more attention to inclusive finance and serve a wider range of long-tail customers. However, the highly fragmented market structure and long-lasting information asymmetry have restricted banks from providing them effective financial services. With the advancement of technology, Fintech has provided possible solutions for commercial banks to expand their long-tail customers efficiently. Whether and to what extent the development of Fintech can promote the adjustment of bank credit structure in a direction that is more in line with the “dual circulation” development pattern is a question worth exploring.This paper uses a theoretical model to analyze the mechanism of Fintech application on bank credit expansion. By collecting the public information to construct individual-level indicators for the cooperation between commercial banks and financial technology companies, and using the PSM-DID method, this paper selects the panel data of 220 Chinese commercial banks from 2011 to 2018 to explore the impact of Fintech application on the credit structure of commercial banks in China.The research results show that: (1) The application of Fintech is beneficial to improve banks’ ability to process soft information, improve information accuracy, incorporate more long-tail customers into the business scope, and promote the adjustment of bank credit structure and customer structure. (2) The heterogeneity results show that, compared with national banks, the application of Fintech under the external cooperation mode has a more significant impact on the credit structure adjustment of regional banks. (3) Expansion research finds that the high-risk premium for long-tail customers has improved the profitability of banks and promoted banks to further actively expand their retail business.Based on the results, this paper suggests that commercial banks should use Fintech to extend their service radius and achieve business sinking; different types of banks should formulate their own Fintech development paths to accelerate digital transformation; small and medium-sized banks should strengthen cross-regional cooperation and further strengthen the risk sharing and credit enhancement mechanism of inclusive finance.The possible marginal contributions of this paper are that: First, it links Fintech with the credit structure adjustment of commercial banks, explores the causal relationship between the two through theoretical models and empirical research, and makes further analysis from the perspective of bank heterogeneity and profitability, which enriches the research content in related fields. Second, it uses the cooperation between banks and Fintech companies to construct individual-level indicators that help to more accurately measure banks’ use of financial technology, and provide new ideas for empirical research in related fields. Third, compared with most literatures in this field, it has more sample banks and more comprehensive research objects, which helps to get more general conclusions.

FinTech i FinReg - nowe wyzwania dla systemu regulacji rynku finansowego w Polsce i na świecie

Skuteczna regulacja rynku finansowego jest kluczowa dla jego innowacyjności i przyszłej pozycji firm FinTech w branży usług finansowych. Przed globalnym kryzysem finansowym innowacje finansowe były postrzegane bardzo pozytywnie, co doprowadziło do deregulacji wielu rynków usług finansowych. W czasie kryzysu nastawienie regulatorów zmieniło się diametralnie. Szybkie zmiany technologiczne pobudziły rozwój firm z branży technologii finansowych (FinTech). FinTech i inni dostawcy usług finansowych otwarcie kwestionują obecny paradygmat regulacyjny. Organy nadzorcze coraz częściej starają się zrównoważyć tradycyjne podejście regulacyjne do stabilności finansowej i ochrony konsumentów z promowaniem wzrostu i innowacji. Wynikające z tego innowacje regulacyjne obejmują technologie, centra innowacji, piaskownice regulacyjne i inne indywidualne rozwiązania. W artykule przeanalizowano nowe podejścia regulacyjne, ustrukturyzowany eksperymentalizm (np. piaskownice regulacyjne) oraz perspektywę nowych ram regulacyjnych.

Legal Strengthening of Credit Agreement Based on Information Technology in Financial Technology Companies in Supporting Industry 4.0

Changes in the pattern of lending and borrowing also experienced growth over the development period. From a system that manually switches to digital. Since the existence of general information, technology-based credit services have been quite good in supporting industry 4.0, but there are still problems such as high-interest rates, and there are several debtor rights violated that need to be discussed regarding legal arrangements and legal strengthening. The research method is the type of normative legal research, how to collect data from library research and analysis of data with qualitative analysis. The results showed that financial technology regulation is regulated in the OJK Law, ITE Law, POJK, and PBI, and concerning legal reinforcement is needed for the problem of high-interest rates to debtors, electronic agreement standard clauses, threats, defamation, and violating customer privacy so that they can attract more many investors in supporting industry 4.0 with the use of financial technology, because the problem is only still regulated in the ITE Law has not been specifically applied in the implementation of financial technology.

The Interaction between Banking Sector and Financial Technology Companies: Qualitative Assessment—A Case of Lithuania

The role of financial technology companies increases every day. From one side this process generates more possibilities for consumers from other side it is related with new risks which arise in banking sector. At the beginning of FinTech era lots of analyst were discussing about disruptive potential in financial services. Later, however, we can see more discussions about cooperation between FinTech companies and banks. The other point which is very important to discuss about is a financial inclusion. The purpose of this study is to analyze the interaction between banking sector and FinTech companies. We use a case study of Lithuania because here FinTech sector is growing very intensively. First of all we try to analyze the scientific literature which analyzes the main aspects of FinTech sector. The second part of the article provides the progress of the FinTech sector and presents the main points of methodology. The research of the FinTech sector in Lithuania was focused on strengths, weaknesses, opportunities, and threats (SWOT) and political, economic, social, technological, environmental, legal (PESTEL) analysis and main statistical parameters. We also used a correlation and regression analysis together with qualitative assessments. Our results showed that in order to value the interaction between banking and financial technology better to focus on qualitative assessment because only statistical analysis can give different and wrong results. We identified that both sectors interact with each other and there is no a disruptive effect of FinTech in Lithuania.

Cybercrime and Cybersecurity: FinTech’s Greatest Challenges

The arrival of financial technology (“FinTech”) companies can be traced to a number of regulatory changes made after The Great Depression of the 1920s. Among others, the United States Banking Act—which separated commercial banking from investment banking (and thus, limited the interest that a regular bank depositor could get on his deposit)—spurred, in the 1970s, the emergence of asset management firms and other forms of shadow banks—or what is now called FinTech companies. However, it was the global financial crisis of 2008, and the near-collapse of the financial system, that caused the rise of FinTech companies and activated the FinTech transformation that the world is currently witnessing. From payments and remittances to lending and wealth management, FinTech continues to change the way we live and bank. But by virtue of their operations, FinTech companies constitute a particularly attractive target for cybercriminals. This article examines how cybercrime affects FinTech companies—mostly startups—and how these companies protect their data and infrastructure.

Securitizing the Climate Crisis: Racial Geographies of Empire and the Agri-Fintech Frontier

Securitizing the Climate Crisis:Racial Geographies of Empire and the Agri-Fintech Frontier Aaron Eddens (bio) I was at the 2014 World Food Prize Conference when I first heard about a novel insurance technology designed to cover millions of farmers on the frontlines of the climate crisis. I had gone to the conference—the annual gathering in Des Moines, Iowa, centered upon the bestowal of the self-described "Nobel Prize in food and agriculture"—to learn how, backed by the U.S. government and the Bill and Melinda Gates Foundation, the world's largest agricultural biotechnology/seed companies were working to cultivate a "Green Revolution in Africa." They were targeting the continent's tens of millions of "smallholder farmers," who farm small plots of land largely outside of commercial seed markets. The most important crop for these farmers—and the focus of the Green Revolution projects I had traveled to Des Moines to research—was maize. So I was particularly struck by the argument of a panel called "the smallholder's lifeline," that the key to bringing Africa's smallholders into commercial maize markets was to "bundle" seed sales with a kind of microinsurance called weather index insurance. Marco Ferroni, the executive director of the Syngenta Foundation, the philanthropic branch of the third largest ag-biotech company, described how farmers in rural Kenya used their cell phones to enroll in his organization's index insurance project. As he explained, when farmers bought a five-kg bag of maize seed from their local agro-dealer, they would now find a small card with a code that they could enter into their phone, linking their phone to a nearby weather station and activating the insurance policy. If the weather station measured less than a predetermined amount of rain during the growing season, the farmer would receive an automatic payment for the value of the seeds through Kenya's [End Page 63] mobile money system, M-Pesa. The Syngenta Foundation was finding that insured farmers were much more likely to buy hybrid seeds, such as those sold by Syngenta. Ferroni explained that index insurance could also prove lucrative for multinational reinsurance companies (insurers who insure insurers), such as SwissRe and MunichRe. Most of the "risk" captured in his foundation's project was transferred to these companies, in which it held the potential to be securitized as a tradeable financial instrument—pooled together with risk captured from thousands of other microinsurance policies to form an insurance-linked security. For farmers, seed companies, and insurers, index insurance promised to be a triple win. The Syngenta Foundation's pilot project led to two Nairobi-based for-profit companies, Agriculture and Climate Risk Enterprise (ACRE) and Pula. These agricultural financial technology (agri-fintech) companies use digital platforms such as M-Pesa to link millions of smallholder farmers to broader data and risk transfer markets. They have garnered industry awards and glowing coverage in Western media outlets, such as The New York Times, The Financial Times, and The Economist (Bird 2018; "In Africa, Agricultural Insurance Often Falls on Stony Ground" 2018; Mayersohn 2019). In the words of Pula's mission statement, it aims to use "technology and parametric insurance to insure the previously unbanked, uninsured, untapped market of 1.5 billion smallholders worldwide" (Pula n.d.). This approach exemplifies the broader development paradigm of "financial inclusion" in which an increasing number of financial companies are using new digital technologies to tap into frontier markets (Gabor and Brooks 2017). Pula and ACRE's agri-fintech expansion operates along two fronts: first, they transform large pools of previously uninsured "risk" into commodities that can be traded by reinsurance companies, and second, they harvest data from farmers' phones, which they can sell to their "upstream" agribusiness partners. To date, both companies have partnered with some of the largest seed companies working in the region, including multinationals such as Corteva (the agricultural branch of the company resulting from the 2017 mega-merger of Dow and DuPont) and Bayer (which became the world's largest agricultural biotechnology company when it acquired Monsanto in 2018). Both companies explicitly brand their financial services in terms of the climate crisis, marketing their insurance products as tools...

Фінтехнології в банківському бізнесі: реалії та перспективи

The article aims at studying the place of and prospects for financial technology development in the banking business during the digitalization process in the economy by using both the theoretical and empirical research methods. Having analyzed research works on the topic, the authors systematize the key trends in banking innovations in Ukraine and prove the relevance of financial technology in the banking business during the current digitalization. As a result, the current place of financial technology in the banking business is determined by identifying modern customers’ needs and current market conditions in the field of money services (the growing number of Internet users, gadgets, and hence the growth of the cashless money transfer turnover), and the following prospects are suggested: customer value and the quality of service provisioning (i.e., quickness, flexibility of the business structure and extensive use of various technologies). The results are based on the synthesis and analysis of the achievements of financial technology companies in the Ukrainian and world markets, their cooperation with banks, as well as their actions in the global pandemic, the latter reducing the financial inflow, but at the same time encouraging innovations. Research prospects in this context lie in suggesting the key trends of the future, such as including financial services in non-financial relations, the Internet of Things (seamless payments, where the focus shifts from payment to the service itself, providing long-term interaction between the seller and the buyer); the nature and consequences of changing the format of payment services in the domestic market (PSD2). Still, much will depend on further results of the work of the Ministry of Digital Transformation of Ukraine and the actions of the regulator, i.e. the National Bank of Ukraine, concerning the digital development of the financial sector

Exploring the relationship between corporate entrepreneurship and firm performance: the mediating effect of strategic entrepreneurship

PurposeStrategic entrepreneurship rejuvenates firms to achieve a competitive advantage in current markets. It is effective in forming corporate entrepreneurship and involves the simultaneous opportunity-seeking and advantage-seeking behaviors of firms. The aim of this paper is to investigate the mediating effect of strategic entrepreneurship in the relationship between corporate entrepreneurship and firm performance through the resource-based view.Design/methodology/approachAdopting a quantitative research method and structural equation modeling technique, structural models were developed to test the research hypotheses. To this end, a questionnaire survey was conducted among 103 financial technology companies in Iran.FindingsThe results support the proposed hypotheses. The findings indicate that corporate entrepreneurship and strategic entrepreneurship are positively related to firm performance. They also reveal the mediating effect of strategic entrepreneurship in the relationship between corporate entrepreneurship and firm performance. In the developing context of Iran, financial technology companies are more likely to employ corporate entrepreneurship and strategic entrepreneurship to achieve firm performance.Originality/valueThe current study contributes to the literature on strategic entrepreneurship by employing a resource-based view and exploring the relationship between firm capabilities (i.e. strategic entrepreneurship) and firm performance. Applying a resource-based view leads to a better understanding of strategic entrepreneurship. Finally, this study singles out and discusses the various features that characterize the implementation of strategic entrepreneurship by Iranian financial technology companies to reach a competitive advantage.

Digital Entrepreneurship in Finance: Fintechs and Funding Decision Criteria

After the 2007–08 global financial crisis, research flourished on entrepreneurship through digital innovation in the financial market as well as on investors’ influence on digital technology-based entrepreneurs’ funding decisions. This study combines these two research streams to analyze the decision-making criteria for funding financial technology companies (fintechs), hybrid companies that combine digital entrepreneurship, technology, and banking. The study first uses prior literature to derive important characteristics to define fintechs and then uses 12 expert interviews to elaborate on decision-making criteria in funding. Except for smaller peculiarities, fintech funding does not appear to differ from that of other digital entrepreneurship in different markets, and—as with most digital business models—scalability was identified as a key criterion. Additionally, by serving as a major provider of money for young companies, banks have changed their role and positioning in funding new financial technology entrepreneurs. Through developments in digital technology, banks have shifted from traditional money-lending activities (i.e., debt-financing) to becoming stakeholders in fintechs and, hence, equity investors. We also describe how these formerly distinct fields have converged due to regulatory requirements, digital newcomers, and a need for constant innovation, with their future sustainable development dependent on sharing and collaboration.

طراحی الگوی مدیریت ارتباط صنعت بانکداری ایران با فینتکها و استارتاپ-های فین تکی با رویکرد نظریه داده بنیاد

Todays, with the growth of competition in the banking industry, on the one hand, and the development and change of customer needs on the other hand, banks have been continuously seeking to provide modern banking services and to exploit new technologies. One of the new technologies that we have seen in the past few years in the banking industry is the Fintech and financial startups that have brought about widespread change in the industry. Therefore, the relationship between banks and Fintechs is of increasing complexity and needs to be reviewed, improved and managed. This paper, with a qualitative approach and with the method of foundation data theory, seeks to uncover the relationship management model for Fintechs with the banking industry in providing banking services. In this regard an open interview with 13 experts were performed. Analysis of data in three stages of open coding, axial coding and selective coding resulted in identifying 389 initial codes and 36 concepts in the form of 16 categories. Finally, based on that model, the paradigm model for linking banks with Fintechs and financial startups was formed. This pattern includes the causal conditions that have been classified into two categories of micro and macro factors, contextual conditions encompass the circle of environmental factors and organizational characteristics as mediator conditions. also the consequences of this relationship are categorized in three categories of financial, process, learning and growth. to the extracted model, the identified strategies for this relationship are: creation, purchase, investment alliances, or lease of financial services from the company - financial technology companies, as well as the central category of this research, a process of three solutions that include exploration and evaluation of financial technology, selection and development

Big Data, Artificial Intelligence and Machine Learning: A Transformative Symbiosis in Favour of Financial Technology

The financial technology revolution is a reality, as the financial world is gradually transforming into a digital domain of high-volume information and high-speed data transformation and processing. The more this transformation takes place, the more consumer and investor behaviour shifts towards a pro-technology attitude of financial services offered by market participants, financial institutions and financial technology companies. This new norm is confirming that information technology is driving innovation for financial technology. In this framework, the value of big data, artificial intelligence and machine learning techniques becomes apparent. The aim of this chapter is multi-fold. Firstly, a multidimensional descriptive analysis is shown to familiarise the reader with the extent of penetration of the above in the financial technology road-map. A short non-technical overview of the methods is then presented. Next, the impact of data analytics and relevant techniques on the evolution of financial technology is explained and discussed along with their applications’ landscape. The chapter also presents a glimpse of the shifting paradigm these techniques bring forward for several fintech related professions, while artificial intelligence and machine learning techniques are tied with the future challenges of AI ethics, regulation technology and the smart data utilisation.

Concentração e Competição no Mercado de Crédito Doméstico

RESUMO Contexto: o mercado financeiro tem vivenciado acentuadas reestruturações e concentrações nas últimas décadas. À medida que os bancos expandem o escopo de suas atividades, levantam preocupações quanto ao impacto sobre a competitividade do setor. Se as características da indústria financeira, que colaboram para tornar o setor mais concentrado, podem torná-la menos competitiva, implica avaliar a relação entre concentração e concorrência. Objetivo: o objetivo geral deste estudo consiste em promover diagnóstico da organização do mercado de crédito nacional mediante cálculo e análise de indicadores de concentração e de competição, entre 2000 e 2019. Métodos: para mensurar a concentração, são utilizados os índices de Herfindahl-Hirschman e a Razão de Concentração dos Cinco Maiores. O grau de competição é estimado via modelo econométrico de Lerner aplicado a dados dispostos em um painel com informações contábeis-financeiras de instituições financeiras. Resultados: os resultados sugerem que embora a concentração tenha se elevado no recorte temporal considerado, a competitividade não se deteriorou, reforçando o argumento de referências seminais de que concentração não necessariamente prejudica competição. Conclusão: diante de ausência de consenso acadêmico, este trabalho elucida a relação entre concentração e competitividade. Ainda, ganha relevância ao apontar o papel da regulação e das cooperativas de crédito no aumento da concorrência recente. O trabalho torna-se, assim, passível de apoiar políticas capazes de promover a contestabilidade, como iniciativas que flexibilizem restrições à entrada de instituições não bancárias e de empresas de tecnologia financeira.

ROBO-CONSULTANTS RESEARCH IN FINANCIAL TECHNOLOGY COMPANIES

While the scale of robo-consultants is only growing, there is very little research revealing the opportunities and threats of this technology. Literature analysis provides a thorough understanding of the threats and opportunities of robo-consultants usage in financial technology companies. The theoretical aspects of robo-consultants and fintech companies are discussed – definitions, activities, key functions. The main purpose of this work – make an expert assessment and highlight the most important opportunities and threats of robo-consultants usage. Kendall’s calculations of concordance and expert competence coefficients are used to assess the consistency of expert approaches and competence coefficients. In the following part of the study, TOPSIS multicriteria method is used. The Empirical research has shown that the most important opportunities of robo-consultants are the following: automated portfolio balancing between algorithms and the investment manager, lower commissions. The most important threats to the use of robo-consultants are following: people’s distrust of technology, the threat of regulatory authorities.

Spillover Effects of Peer-to-Peer Lending on the Loan Losses of Commercial Banks

Financial technology (FinTech) companies are increasingly important to the financial system. We investigate the effect of peer-to-peer (P2P) lending on traditional banks by examining whether and how P2P lending activity in a state affects loan loss provisions among that state’s commercial banks. When borrowers take out loans from both a bank and a P2P lending platform, they become more leveraged. Banks may signal their anticipation of bad loans due to overleveraged borrowers by increasing their expected future loan losses. Using a large sample of US single-state banks from 2010 to 2018, we find that banks in states with a higher P2P lending volume report higher loan loss provisions. This positive relation is stronger for banks with greater exposure to the consumer loan market and for those with consumer borrowers who are more leveraged. Our findings show that bank managers use loan loss provisions to signal expected credit losses in response to P2P lending. We also find that P2P lending is associated with higher future loan charge-offs, which validates the signaling channel. Overall, our study offers new insight into the interaction between FinTech firms and traditional financial institutions.

Shariah Compliance Analysis of Islamic Crowdfunding: Case Study of ethiscrowd.com

This paper aims to analyze the mechanism and implementation of crowdfunding on ethiscrowd.com and the evaluation of shariah compliance. Based on the parameters of shariah compliance proposed by Rosly (2010) it can be seen that the implementation of shariah crowdfunding of ethiscrowd.com has fulfilled the three parameters of shariah compliance namely ‘aqd, maqasid al-shariah and legal documentation. Meanwhile, in the case of financial and accounting reporting disclosed the ethiscrowd.com is not yet not fulfilling existing of regulations, where crowdfunding companies should publish detailed financial reports. The management of ethiscrowd.com only publishes project development reports funded by investors. This is because there is no specific provision for disclosing financial reporting and accounting for financial technology companies, especially those engaged in equity crowdfunding.

CONSUMER PROTECTION AND FINTECH COMPANIES IN INDONESIA: INNOVATIONS AND CHALLENGES OF THE FINANCIAL SERVICES AUTHORITY

The article has questions from the background of the research as follows: how to protect consumers fintech transactions from financial technology companies? What are the innovations and challenges of the financial services authority in overseeing and issuing regulations related to fintech? The research method used is normative with the statute approach and conceptual approach. The technique of collection primary legal is carried out by collecting OJK regulations regarding fintech companies, and consumer protection. Meanwhile, the technique of collection secondary legal is the concept or theories related to the main issue complete with bibliography. The Results that found are the fintech companies must be registered in the financial services authority by obeying and implementing OJK regulations. Innovation that OJK did enact Supervisory Technology (Suptech) to develop the financial technology (fintech) corporate ecosystem that is included in the realm of Digital Financial Innovation (IKD) on the OJK portal with the name Gerbang Elektronik Sistem Informasi Keuangan Digital. OJK also established the Innovation Center or Fintech Center in 2018. Challenges OJK must face: fintech lending is to create a balance between increasing financial inclusion and risk management, improving people’s understanding of fintech services, infrastructure, cybersecurity and data protection for consumers and fintech must collect more consumer data so that the lending and borrowing process becomes more efficient and effective.

DOMINANT IDEAS OF FINANCIAL TECHNOLOGIES IN DIGITAL BANKING

The purpose of the research is the definition of the dominant ideas of financial technologies in digital banking. The methods of theoretical generalization, qualitative, quantitative and correlation analysis, causality tests, description and explanation are used, which made it possible to establish the relationship between the volume of investments in financial technologies and the performance of the banking system, identify the areas of application of financial technologies in the activities of the bank, determine the dominant ideas of financial technologies in digital banking and to uncover the factors and prospects of intensifying the use of financial technologies in digital banking in Ukraine. Results of the research are to substantiate the impact of artificial intelligence, biometrics, cloud services, big data, blockchain and open banking services on digital banking. Due to financial technologies in digital banking, it is possible to generate and store large amounts of data, simultaneously analyze and apply the results of their analysis, provide personalized banking services, perform the functions of central storage of information about the client of financial and non-financial nature, which facilitates the effective investment and credit decision-making, as well as improving the level of information security of banking operations. Practical implications. Financial services markets are transformed by the impact of financial technologies. Development of financial technology instruments by non-banking institutions necessitates the identification of opportunities for their use in banks. The set of financial technologies used by banks forms the digital banking system, the development level of which is the main competitive advantage of the bank in the business environment. Digital banking is characterized by the continuity and security of banking services, which provide the consumer with the ability to receive them online anywhere around the clock, personalization of banking services, digital authentication of users and digitization of banking transactions with the replacement of paperwork. The use of financial technologies in digital banking enables to automate customer segmentation processes, reduce costs on payment transactions, optimize accounting, financial and tax accounting, improve customer service and expand your customer base while maximizing revenue in certain business segments. Value/originality. The basic spheres of the use of financial technologies in digital banking, as well as the factors and prospects of intensifying the use of their instruments in Ukraine are revealed. The main areas of use of financial technologies in digital banking are customer behavior analysis, transaction monitoring, customer identification and segmentation, fraud management, banking services personification, risk assessment and regulatory compliance, customer response analysis, process automation, financial advice, investment decision-making, trade facilitation, syndicated loan services, and P2P transfers. The prospects for developing financial technology tools in digital banking include strengthening the interaction between regulators, banks and financial technology companies, the increased use of biometrics, the development of neo-banking and open banking services.

Analysis of Customer Satisfaction Factors on e-Commerce Payment System Methods in Indonesia

e-Commerce companies are currently competing to make it easier for customers to make transactions with a variety of payment system methods that have been provided and developed. The research aims to find out the factors that influence customer satisfaction in using the payment system method. The variables used in the study are service, comfort, speed, convenience, benefits, active use and security in conducting transactions. The results of the study concluded what factors influence satisfaction to develop a payment system method. The research model and questionnaire use a modified research model of the successful information system model DeLone and McLane and technology acceptance by Tella (2012) and in analyzing the results of the questionnaire, researchers used descriptive statistics and Structural Equation Model (SEM) analysis using AMOS V.26. The results of the management of these data the researchers concluded that there is one variable that is perceived comfort does not significantly affect satisfaction. Results of this study are expected to provide a reference that can be used by digital business people, particularly financial technology or e-commerce companies in improving services in applying the Payment System Method by factors that influence the level of customer satisfaction to maintain customer loyalty to the company.

Explaining the intention to use social trading platforms: an empirical investigation

The enormous rise of financial technology companies has greatly challenged traditional financial institutions. One emerging innovation is “social trading” (ST), which combines the advantages of social networks and delegated trading. ST platforms represent a unique context of social media platforms, on which the impact of social influence on the potential customer’s intention to use is not well understood. Moreover, researchers and practitioners lack an understanding of the moderating role of the consumer’s previous experience regarding security trading. As research in the field of ST is rather young, our study aims to be the first to address these research gaps by developing and empirically validating a model from the potential customer’s perspective. We based our framework on the Unified Theory of Acceptance and Use of Technology and theory regarding social media and financial decision-making. Our results illustrate that performance-related aspects are the dominant determinants of behavioral intention for experienced users, whereas system-related and personal barriers affect behavioral intentions of the inexperienced group. Consequently, differences regarding performance expectancy, effort expectancy, security and risk aversion were identified. Our results indicate that current platform operators’ advertising approaches of communicating the simple functionality of the platform seem inappropriate to meet the consumer’s needs.

The Predicament of FinTechs in the Environment of Traditional Banking Sector Regulation – An Analysis of Regulatory Sandboxes as a Possible Solution

Abstract Recently, “Financial Technology-companies” (FinTechs) are increasingly changing the financial services industry worldwide and impose considerable challenges for regulators tasked to solve the arising trade-off between sound regulation and innovation support. In this regard, regulatory sandboxes, which were recently introduced in several jurisdictions, provide a promising solution, as they imply a liberalization of regulatory requirements in order to enable FinTechs to test their innovative services. However, we observe that no comparable initiative exists in Germany, even though the German regulator identified a need for action on this subject in order to maintain its international competitiveness. Thus, based on a detailed analysis of various sandbox models worldwide, this paper develops a set of own recommendations as a basis for the implementation of a sandbox concept which might be applicable in the German regulatory environment. In doing so, we identify current theoretical as well as practical regulatory issues within the context of the rapid FinTech evolution. To the best of our knowledge, this paper represents the first study on key international sandboxes as a basis to design guidelines specifically for the German financial market. Thereby, we contribute to the literature as we evolve an effective regulation within the new setting of innovative financial technologies. Moreover, our findings contribute to the practical solution of current challenges faced by both regulators and affected companies. Even though our derived implications focus on the German financial sector, the results may potentially be applicable in further jurisdictions with similar regulatory requirements. JEL Classification: G21, G28, M13