Fintech Service Research Articles

Optimization of Financial Technology as an Opportunity for Development of Islamic Microfinance Institutions

This study discusses the strategy of developing Islamic microfinance institutions facing the era of financial technology in West Java. The study examines internal strategy factors in the development strategy of Islamic Microfinance Institutions (LKMS), external strategy factors, and the formulation and alternative development strategies. In conclusion, the internal strategic factors include generally good financial performance, increasing trend of public deposits, suitable financing and supporting the strengthening of Micro, Small & Medium Enterprises (MSMEs), risk management implemented effectively and gradually, and digital-based services (savings, financing proposals) & payment), education and assistance, easy access, competency development of human resources and members, development of information technology organization tools, innovation in strengthening competitiveness (digitalization of services, development of human resources in the field of information technology), relations, collaboration with institutions others (sharia fintech/marketplace platforms, etc.), and digital marketing strategies. The external strategic factors include: relatively good investment realization, government support, fintech-based services (zakat and waqf), the performance of the national and Islamic finance industry is quite good, global and national economic growth is not conducive, and the market share of the Islamic finance industry is still low, other financial institutions in providing services to MSMEs or digital-based services, and household consumption activities have decreased. The formulation and alternative of SWOT analysis with EFAS and IFAS approach resulted in a weighted EFAS of 3.03 and a weighted IFAS of 2.95. BOS results in: eliminating barriers to inclusion, reducing investment of less productive funds, increasing assistance and excellent service, and creating fintech service innovations in the form of a crowdfunding platform.

FinTech Services and Factors Determining the Expected Benefits of Users: Evidence in Romania for Millennials and Generation Z

The purpose of this research is to define the level of significance for various indicators that influence the degree of consumer satisfaction regarding the use of FinTech technologies and services. The most important factors that influence the level of satisfaction when using FinTech services were considered: comfort and ease of use, legal regulations, ease of account opening, mobile payments features, crowdfunding options, international money transfers features, reduced costs associated with transactions, peer-to-peer lending, insurances options, online brokerage, cryptocoins options and exchange options. The study was conducted on a sample of 162 respondents, persons belonging to the Millennials and Generation Z generations. The values of the indicators for different categories of users of FinTech services and different categories of generations can be determined based on the statistical tests performed and the results obtained from the regression analysis. The values of the indicators are the basic elements for determining the regression model that will help the FinTech service vendors to make personalized decisions for each category of users so that the level of customer satisfaction is maximized. The study carried out within the present article is the first of its kind for Romania, because up to this moment in the specialized literature there are no such studies for Eastern Europe. The research we conducted aims to fill the gap existing in the literature and responds to the expectations and needs of stakeholders in the FinTechs’ business area. The results of the article are relevant to both stakeholders and the scientific community that is concerned about the impact of FinTech technologies.

Social Media Influencer Credibility and Social Influence on Intention to Use Fintech in Indonesia

Communication and information technology innovations have been applied to various fields of industry and utilized as an opportunity in financial business. One of these id Financial Technology (FinTech). FinTech companies mostly implement collaboration with social media influencers in their promotional and marketing strategies. This research aims to conduct investigate the impact of social media influencer’s credibility and social influence on the intention to use FinTech Service technology users. The quantitative research method used by distributing questionnaires online to 400 respondents and processed using Path Analysis. The result of this research indicate that social influence has significant impact compared to the source credibility of social media influencers on users’ intention to use of FinTech Service technology. Based on the results, concluded that the users of FinTech Service in Indonesia were more influenced by the suggestions and input from family and peers in choosing the type of FinTech Service application they used.

Factors influencing attitudes and intention to adopt financial technology services among the end-users in Lagos State, Nigeria

Financial technology (Fintech) innovation has brought a dynamic change to the financial sector as new products and services are offered by conventional banks and other companies offering banking services through various online platforms. The attitudes of the end-users tend to play a great role in the adoption of any technology. This paper investigated the factors influencing the attitudes and intention of the end-users towards using Fintech services within the purview of an expanded technology acceptance model (TAM). The study was conducted on 467 end-users in Lagos State, Nigeria, using structural equation model analysis. The results revealed that perceived usefulness, perceived ease of use, service trust and social influence have positive and significant impact on users’ attitude towards Fintech service with path weights of 0.55, 0.63, 0.27 and 0.41, respectively, at 1% level of significance. In addition to this, users’ attitude towards Fintech services is positively significant in influencing the adoption of Fintech service with path weight of 0.85 at 1% level of significance. The study suggests that more investment is made in Fintech innovations and that banks sensitize the general public using social media, TV and radio stations. Further, proper regulatory measures by the relevant regulatory agency must be implemented to instil confidence and trust in the end-users. This would boost the level of adoption of Fintech among the end-users in Nigeria.

FinTech in COVID-19 and Beyond: What Factors Are Affecting Customers’ Choice of FinTech Applications?

Accessing financial services is considered one of the main challenges facing communities during crises. This research studies the role of using FinTech applications to build resilience during the COVID-19 pandemic. The research empirically examines the factors affecting Jordanian citizens’ intention to use FinTech applications. The sample of the research comprised 500 potential FinTech service users in Jordan. Based on the research conceptual model, five hypotheses were developed and tested using structural equation modeling techniques (SEM-PLS). The research results indicate that perceived benefits and social norms significantly affect the intention to use FinTech applications. However, it has been found that perceived technology risks do not significantly affect the intention to use FinTech applications. Moreover, the results also indicate that customer trust is significantly mediating the relationship between perceived risks and intention to use FinTech applications. FinTech service providers should insure that their products are easy to use, fulfill needs and protect consumers’ data in order to ensure trust, hence positively influencing consumer adoption.

What drives FinTech adoption? A multi-method evaluation using an adapted technology acceptance model

PurposeConsidering the ubiquity of FinTech services, the study proposes a research framework to examine FinTech adoption and use from the technology acceptance perspective by adding sub-constructs of technology acceptance model (TAM), unified theory of acceptance and use of technology (UTAUT), ServPerf and WebQual 4.0. This study broadly classified these sub-constructs in three dimensions: adoption, behavior and technological and explores the relationship between these attributes. It also proposes that digital behavior (Internet experience and level of awareness) and demographic characteristics (age and gender) moderate the main relationships.Design/methodology/approachThe measurement scale for the study is developed through iterative discussion with domain experts. The data are collected from 439 active Internet users though a digital survey and analysis were done by applying structural equation modeling and multi-group analysis.FindingsPerceived usefulness and social influence are found to be the key determinant for behavior intention to use FinTech services, with social influence having significant negative influence. Actual use is significantly influenced by ease of use and social influence but is not determined by behavior intention and perceived usefulness. Behavioral attributes are significantly impacted by technological attributes and digital behavior. Also, age significantly affects the perception of security among older users.Practical implicationsThis study will help FinTech service providers to design FinTech services considering a wide spectrum of users. More consideration should be on enhancing the usefulness and security features to create social affirmations for the use of FinTech services. This will entice users for frequent use and attract nonusers to do their first online financial transaction.Originality/valueThe study adds to the technology acceptance literature by incorporating relevant technological and behavioral attributes and investigating the moderating effect of digital behavior and demographic characteristics. It contributes to the understanding of user beliefs and perceptions about actual use of FinTech services.

LEGAL PROTECTION OF CONSUMERS ON FINTECH-BASED BUSINESS LOANS FOR SMALL AND MEDIUM ENTERPRISES (UMKM)

Consumers loses have occurred in the practice of Fintech-based loans by non-bank financial institutions. The reports of losses arising from Fintech transactions has increased. This is because many Fintech organizers have not received permission from the OJK but are still able to conduct business activities in Indonesia. The problem in this study is: How is the supervision by the Financial Services Authority (OJK) of non-bank financial institutions providing fintech-based venture capital lenders for MSMEs? And how is the legal consequences of fintech-based business capital loan services for MSME entrepreneurs. The study used normative legal approach and the data analyzed by descriptive qualitative.The results of this study indicate that supervision by the OJK of non-bank financial institutions providing fintech-based venture capital lenders for SMEs as a form of legal protection to consumers. It is carried out in the form of preventive and repressive protection. Preventive protection is implemented by enacting OJK Regulation Number 77 / POJK.01 / 2016, OJK Circular Letter Number 18 / SEOJK.02 / 2017 and OJK Regulation Number 1 / POJK.07 / 2013 concerning Consumer Protection in the Financial Services Sector. Repressive protection is by applying sanctions against fintech organizers who commit violations in the form of written warnings and fines; restrictions on business activities; and revocation of permission. The legal consequences arising from fintech-based business capital loan services for SMEs to fintech providers are required to improve standards and meet consumer protection aspects. The legal consequence for MSMEs is the potential for fraud and misuse of consumer data by Fintech service providers.

핀테크 결제서비스 지속적 이용에 지각된 가치 및 신뢰의 영향

핀테크 결제서비스 지속적 이용에 지각된 가치 및 신뢰의 영향

A study on the user experience of mobile Fintech service in Z generation-Focused on KakaoPay and Toss-

본 연구는 Z세대의 모바일 핀테크 서비스 사용자 경험 연구이다. 과거 금융은 사용자가 어렵다고 느껴지는 산업 중 하나였다. 하지만, 디지털 환경에서 자란 Z세대들은 모바일 결제를 편안하게 느낀다. 본 연구에서는 대표적인 국내 핀테크 서비스인 카카오페이와 토스로 국한하고 연구하여 향후 국내 핀테크 서비스의 지향점을 제시하는 것에 목적을 둔다. 총 8명의 Z세대 피실험자들에게 FGI(표적집단면접법)을 하였고, 부가적으로 설문지 조사를 진행하였다. 연구 결 과 Z세대들은 경제적인 측면 이외에도 기업 브랜드나 이미지, 캐릭터, 이벤트와 같은 다양한 요인에 큰 영향을 받고 있었다. 또한, 신뢰성과 가치성 분야를 가장 고려하는 것으로 나타나 보안을 유지하기 위한 전략이 필요하다. 향후, 앞으 로의 소비 주도를 이끌 Z세대들의 니즈를 반영한 핀테크 서비스의 발전을 기대한다.

핀테크 결제 서비스에서 프라이버시 및 신뢰요인의 영향

핀테크 결제 서비스에서 프라이버시 및 신뢰요인의 영향

Analisis Penyalahgunaan Data Pribadi Dalam Aplikasi Fintech Ilegal Dengan Metode Hibrid

Penetration of internet usage in Indonesia has increased by 10.12% from 2017 to 2018. This has led to very rapid technological growth, such as the growth of online loan services or Financial Technology (Fintech). This condition makes the emergence of illegal fintech services built by certain groups to reap profits. Illegal fintech service providers stand building applications with a lot of personal data requested at registration. Starting from personal data, family, work up to banking are accompanied by photo evidence and contact numbers. Hybrid analysis is needed to see the extent in which the fintech application treats customer data. In this technique, there are static analysis and dynamic analysis. Static analysis is used to see the extent in which the fintech application runs on Smartphone devices with required data and other policies. Dynamic analysis is used to view the activity of tiles and permissions of fintech applications from source code, malware analysis, and permission analysis. Hybrid analysis results show that all fintech applications have a huge potential for misuse of customer's personal data. This is indicated by the existence of a data collection URL that can be accessed by the public, there are malware activities, READ_PHONE_STATE and READ_CONTACS permissions so that fintech application providers freely monitor all contact activities, locations on the customer's Smartphone. The results of the analysis can be used to recommend fintech service users to be careful of fintech applications. Moreover, it can be used as a reference for making illegal fintech detection frameworks.

E-Tailing with FinTech: Instant Return Credit

Problem Definition: Instant return credit (in short, return-credit) is a new FinTech service that offers a store credit immediately upon a return claim, without requiring the return to be received. Improving consumers’ budget, this helps convert online returns into new sales, but it also results in costly fake returns from consumers with low credit-rating. We study whether or not and how retailers should adopt return-credit and its implications on their optimal pricing strategy and profit and consumers’ welfare. Academic/Practice Relevance: This return-credit service is recently launched by a startup FinTech company, Returnly, and adopted by many retailers with impressive results. This paper is the first to provide some necessary guidance for this new practice. Methodology: We build a stylized economic model to capture the basic dynamics and tradeoff of return-credit. For a retailer selling two horizontally differentiated products, we study and compare three different cases: no, unconditional and conditional (on consumer-type) return-credit. For each case, we first optimize the consumers’ sequential decisions involving orders and return and then optimize the retailer’s strategy on pricing and return-credit. Results: The retailer should adopt the return-credit service; when adopt, she should make the return-credit conditional if no additional cost required, regardless of the product category. She should also prepare to switch to an asymmetric pricing, although the two products are symmetric (in cost and consumer valuation). This adoption, however, may hurt all consumers for low-cost products due to the retailer’s elevated pricing power by return-credit. But, making the return- credit conditional on consumer-type will almost always reward high credit-rating consumers, but penalize low credit-rating consumers. Managerial Implications: Our results provide retailers with an initial guidance and insights on how to implement return-credit and its major implications on the retailer (significant strategy change and what product-category to start implement), and consumers (both types of return-credit may hurt, but the conditional one is fairer).

Robo-Advisory in India: The Upcoming Game Changer in Indian Financial Markets

A Robo-Advisor is a digital platform that provides financial planning services which is automated and algorithm-driven and it has little or no supervision of a human. Globally the robo-advisory fintech service is expected to grow at a CAGR of 53.54% from 2020 to 2025. The primary advantage of robo-advisors is that the costs are very low (0.2%-0.5%) compared to traditional advisors (around 1%-2%). Another advantage is their 24x7 accessibility since it is on a digital platform. The clients can execute the trades by pressing a few buttons rather than calling the advisor, explaining the needs and the returns. The third advantage is there is no minimum client investment needed in robo-advisors since traditional advisors require minimum ticket size of atleast Rupees 2.5 Lakhs. With increased penetration of the internet in the country, faster growing population with expected share of more than 33% of the millennials and the youth in total population, shifting perspective of Indian investors from fixed deposits to mutual funds and equities, and growing acceptance of FinTech services, Robo-advisors are the perfect game changers in the Indian investment scenario in the next 20 years.

핀테크 결제서비스의 전환가치에 신뢰와 혁신저항의 영향

Fintech is a combination of financial and communication technologies, and it has emerged in response to changes in the growth limits of traditional financial industries. Fintech applications are spreading throughout financial services including payment, remittance and asset management. However, fintech applications are not successful because of user resistance to the innovation. The purpose of this study is to identity the antecedents of fintech service for customer. The results showed that perceived benefit had a significant effect on reliability and innovation resistance. In addition, perceived cost and perceived risk had a significant effect on reliability and innovation resistance. Finally, reliability had a significant effect on switching value, however, innovation resistance hadn

Can FinTech Development Curb Agricultural Nonpoint Source Pollution?

The green development of FinTech empowerment has become a compelling theme in economic development. In this study, based on the weighted least squares (WLS) and threshold regression methods of cross-sectional data, we empirically examine the impact of FinTech development on agricultural nonpoint source (NPS) pollution, a major cause of impaired surface water quality. Our results show that there is an inverted “U” shape relationship between the development of FinTech and agricultural NPS pollution. That is, after crossing a “threshold value”, the level of FinTech development can curb agricultural NPS pollution. At the structural level, the availability of FinTech services, the FinTech infrastructure, and the agricultural NPS pollution also have an inverted “U” shape relationship. At the threshold effect, in the developing stage of an agricultural economy, the overall level of FinTech development, the use of FinTech services, the availability of FinTech services, and the FinTech infrastructure have an inverted “U” shape relationship with agricultural NPS pollution. On the other hand, in the developed stage of an agricultural economy, the impact of FinTech development and its structure on agricultural NPS pollution is insignificant. Hence, we can conclude that FinTech development can help reduce agricultural NPS pollution in under-developed regions. However, due to the fact that a “U” shape relationship always exists between FinTech service quality and agricultural NPS pollution, the quality of FinTech service should be the main focus to reduce agricultural NPS pollution more effectively.

핀테크 결제시스템 특성이 신뢰 및 혁신저항에 미치는 영향

핀테크 결제시스템 특성이 신뢰 및 혁신저항에 미치는 영향

What determines customers’ continuance intention of FinTech? Evidence from YuEbao

PurposeThe purpose of this paper is to investigate the effects of trust in service and structural assurance on the continuance intention of FinTech services, and the roles of technical factors (i.e. situational normality and system quality) and social factors (i.e. herding and subjective norm) in developing trust in service and structural assurance. YuEbao is selected as the subject as it is a representative example of FinTech services in China.Design/methodology/approachA survey questionnaire was deployed and a ten-point sliding scale with two-decimal points was applied to improve the accuracy of the questionnaire. Partial least squares structural equation modeling was used to analyze the data.FindingsTrust in service and structural assurance can encourage continuance intention of FinTech service. System quality, situational normality and subjective norm can boost the development of trust in service. Both herding and subjective norm can affect structural assurance significantly.Research limitations/implicationsThe study highlights the important roles played by technical factors (i.e. situational normality and system quality) and social factors (i.e. herding and subjective norm) in developing the two levels of trust (i.e. trust in service and structural assurance). It also validates the influences of trust in service and structural assurance on encouraging customers’ continuance intention in the novel context of FinTech.Practical implicationsThe findings of this study can be used by practitioners to encourage customers to continue using their FinTech services. To encourage continuance, service providers can improve the quality of their system, design the system to be aligned with customers’ using habits and show customers that their close friends are also using the service.Originality/valueThis study adds to the existing body of trust literature by investigating the direct effects of trust in service and structure assurance on continuance intention and how these two levels of trust are developed from technical and social aspects. It generates interesting insights into customers’ continuance behavior of FinTech services.

Global Rules for a Global Market Place? – The Regulation and Supervision of FinTech Providers

Financial technology (FinTech) revolutionizes the way in which financial services are rendered. Although the phenomenon is not new, it has taken on a novel dimension. Markets which were once national are morphing into global ones. The interest in regulating them not only exists, but to some extent is even higher compared to traditional services. This article illustrates the many different needs for regulating FinTech providers, from the protection of investors and consumers to the fight against money laundering and tax evasion. The article demonstrates that these questions cannot be adequately addressed by a laboratory free space or by self-regulation. It also shows that idiosyncratic national rules would result in legal fragmentation and deprive the world of the benefit that digital services can provide. The paper suggests therefore that global standards would be the most adequate solution for the regulation of global services. It proposes to re-conceptualize the FSB and to transform it into a ‘Financial Stability and Innovation Board’. In light of the diverging customs, knowledge and practices of residents around the world, the global standards need to be complemented by tailored national rules. Also, global rule harmonization will not cause differences in supervision to disappear. Regulatory competition and arbitrage might give incentives to countries to lower their supervisory standards, accepting negative externalities for residents of other states in order to become a global FinTech hub. This tendency must be countered by a competition for the strictest quality of supervision. Since such a competition requires transparency, this article suggests requiring mandatory information about the competent supervisor in any marketing and customer communication by a FinTech service provider. Through experience and ratings of supervisors, a run for quality will be triggered.

빅데이터 기반의 핀테크서비스 모델의 변화 방향에 관한 연구

4차 산업혁명시대에 ICT의 발전과 스마트 모바일기기 보급의 대중화로 인터넷 모바일 환경에서 생성된 개인의 다양한 디지털 정보는 빅데이터 환경의 구축이 확대되고 있다. 또한 인공지능 등 첨단 ICT의 발전은 핀테크서비스의 발전을 더욱 앞당기고 있다. 2018. 1월에 도입된 유럽연합의 PSD2는 개인금융정보 자기결정권의 보장으로 다양한 빅데이터를 분석하여 소비자중심의 맞춤형 금융서비스를 제공할 수 있게 되었다.BR 본 연구에서는 빅데이터의 개념과 특성, 빅데이터 분석의 아키텍처와 요소기술, 빅데이터의 국내·외 활용 현황 그리고 금융업의 활용영역에 대해서 심층적으로 고찰하고 인공지능 등 핀테크서비스 주요기술의 특징을 분석하여 빅데이터 기반의 핀테크서비스 모델의 변화 방향을 제시하였다.BR 본 연구의 제안은 빅데이터 환경에서 인공지능 등을 활용한 혁신적인 핀테크서비스는 금융플랫폼 구축하여 편리성을 제고하고 P2P 대출서비스와 온라인자산관리서비스 등 차별화된 고객 중심의 맞춤형 금융서비스를 제공할 수 있을 것이다. 특히, 개인의 다양한 비 금융 빅데이터를 활용하여 새로운 신용평가모델을 개발·적용한 중 금리대출상품과 로보어드바이저(RA)을 활용한 온라인자산관리서비스는 금융소비자에게 편의성과 경제성을 제고함으로서 사회적 편익의 증대에 기여할 것으로 기대된다.

Financial Technology in Banking Industry: Challenges and Opportunities

An overwhelming interest is growing in financial technology (henceforth: FinTech) in recent years. This contemporary financial phenomenon characterized basically by heavy use of technology in communication, some called it network economics. FinTech service encapsulates – but not restricted to – wide range of financial services capitalising from the explosive developments in technology, it includes the payments, clearing and settlement category, followed by credit, deposit and capital raising services. Despite the fact that the FinTech players attract the global attention from the financial industry leaders and legislators, the issue as a subject of study still in infant stage, little scientific research has been conducted yet. The paper aims at first place to shed light on this wave of development in financial industry that combined with high technology, it aims also to clarify the role of FinTech in the financial industry in general and banking sector in particular. The paper obtained its goals in two main phases, firstly; background and definition of the FinTech, in addition to outlining the current FinTech market segments and landscape and some alternative financing FinTech platforms will be discussed. In the second phase, we will identify the influence of FinTech on banking industry and the required response to face it. The paper suggested also some future research proposals about the effect of FinTech on the financial industry and banking sector in the Arab countries.