Financial Technology Innovation Research Articles

Financial instruments of crisis reversal in the Russian economy

Aim. To study the economic crises that occurred in the Russian Federation (RF) from 1991 to 2022 from the point of view of analyzing the causes of their occurrence and the factors of reversal, as well as identifying the chances of overcoming the stages of slowdown and decline in economic dynamics, including those associated with digitalization.Objectives. To reveal the causes of economic crises by identifying the risks realized during this or that crisis; to determine the financial instruments of economic crises reversal in the Russian economy since 1991; to identify the chances of the economic system to overcome the stages of slowdown and decline in economic dynamics and to turn the economic system to sustainable growth.Methods. General scientific methods, including comparative, retrospective and analogy methods, were used as methodological tools.Results. The article identifies the realized risks of economic crises in the Russian Federation, from the crisis of 1991 to the crisis of 2022. As chances of economic growth in the period of digital transformation of the economy and the financial sector, the risks of innovative financial technologies, risks of digitalization of the banking sector, risks of insurance and financial services were identified. Financial and non-financial tools to turn the economic crisis to the recovery period and subsequent sustainable growth were identified.Conclusions. Any crisis is based not only on factors that aggravate and destabilize its parameters, but also on factors that present new chances for further economic development. When assessing economic dynamics during crises, one should take into account the realized risks, possible chances and tools for economic turnaround, including financial and non-financial instruments. Financial instruments, which allow to implement extraordinary management decisions, serve as instruments of turnaround. Additional state budget expenditures from the reserve fund (until 2017) or from the national welfare fund represent corrective financing in periods of uncertainty and are associated with emergency management decisions during crises, including during a special military operation. The main task of the regulator is to limit the negative effects of realized internal and external risks.

A case study of Waqf Institutions: reasons for not implementing crowdfunding

The crowdfunding industry in Malaysia has experienced rapid growth, with a variety of platform options available in the market. The increasing popularity of crowdfunding in Malaysia can be attributed to the support of information systems, particularly the internet and technology. The realm of financial technology innovations serves to enhance multiple facets of waqf fund management, particularly in addressing the challenges encountered by existing waqf models. As a result, waqf institutions can meet their liquidity needs for developing waqf properties without heavy reliance on government fund allocations by using the crowdfunding. Crowdfunding serves as a promising mechanism to achieve these objectives. Hence, the purpose of this study is to investigate why the waqf institution does not use crowdfunding to collect waqf funds. This study took a qualitative approach, analysing three chosen SIRCs in Malaysia's Northern Region. The data is subsequently subjected to thematic analysis. According to the survey, both WI1 and WI2 do not adopt crowdfunding owing to a lack of expertise and seek to increase the use of cashless waqf; however, WI3 already uses crowdfunding as a way of collecting waqf funds. The findings from this study will provide researchers with new information.

Fintech Innovation in Micro and Small Business Financing

This paper delves into the transformative role of financial technology (FinTech) innovations in facilitating financing for small and micro enterprises (SMEs), a sector historically marred by limited access to traditional financial services. Despite their significant contribution to economic growth and employment, SMEs often face substantial barriers in securing necessary capital due to stringent credit evaluations, lack of collateral, and the disproportionate costs of small-scale lending. FinTech innovations, leveraging cutting-edge technologies such as artificial intelligence, blockchain, and big data analytics, present a paradigm shift, offering more accessible, efficient, and tailored financial solutions. This study explores the evolution of FinTech, its impact on traditional banking, and its potential to bridge the financing gap faced by SMEs. Through an analysis of current financing challenges and the application of FinTech solutions, this paper highlights how digital platforms, alternative credit scoring models, and novel funding mechanisms are revolutionizing SME financing. Furthermore, it discusses the regulatory landscape, emphasizing the need for policies that support FinTech growth while ensuring financial stability and consumer protection. Looking forward, the paper outlines the anticipated trends in FinTech innovations and their continued influence on SME financing, advocating for a collaborative approach among policymakers, financial institutions, and FinTech firms to foster a more inclusive financial ecosystem. The conclusion underscores the critical role of FinTech in empowering SMEs, driving economic diversity, and promoting sustainable development.

Reconstruction of the Role of the Financial Services Authority in Overcoming Fraud in the Business Sector in Indonesia

The objective of this study is to investigate how the Financial Services Authority (OJK) is actively tackling fraud within the Indonesian business community. Fraud is a criminal act that poses a significant threat to corporate finances and undermines public confidence, ultimately jeopardizing the credibility of financial markets. Therefore, this research focuses on analyzing the role of the OJK in detecting, preventing, and overcoming fraudulent practices in the business environment. The research results indicate that the OJK's role should be reconstructed by increasing inter-agency cooperation, strengthening regulations, and implementing innovative financial technology. This research highlights the importance of enhancing OJK's capacity in several key areas such as fraud detection, employee training, and promoting awareness among stakeholders. It is essential to increase transparency, accountability, and active involvement of the private sector to mitigate the risk of fraud.

Risk Management in Islamic Banking: The Impact of Financial Technologies through Empirical Insights from the UAE

Financial technology (fintech) innovations are transforming banking globally. Their adoption poses new opportunities and risks for Islamic banks with unique requirements. This study examines fintech’s implications for risk management effectiveness in United Arab Emirates Islamic banks. A conceptual model incorporates factors like fintech adoption, emerging capabilities, digital maturity, and IT security influencing outcomes. Primary data were collected via survey from nine UAE Islamic banks and analyzed using PLS-SEM. Results show that fintech adoption and capabilities positively impacted effectiveness, while digital transformation alone did not. The findings also show that the regulatory environment did not moderate relationships as hypothesized. The findings provide empirical evidence on optimizing risk management through responsible fintech enablement and oversight alignment in the UAE context.

The Impact of Fintech Innovation on Bank’s Performance: Evidence from the Kingdom of Bahrain

This study investigates the impact of bank-level Financial Technology (Fintech) innovations on banks’ performance in the Kingdom of Bahrain from 2012-2021. Annual data of banks listed in Bahrain’s Bourse has been utilized to achieve this objective. In addition, bank-level FinTech indices have been constructed by a textual analysis method that assesses input dimensions through 32 keywords under four categories, including artificial intelligence, blockchain, cloud computing, and big data; FinTech output dimension is evaluated through payment and settlement, resource allocation, risk management, and channel construction technology. Using different panel data estimators, such as pooled OLS, fixed effects, random effects, and panel-corrected standard errors linear regression, results show that FinTech innovations increase banks’ performance. In addition, the findings demonstrate that banks' capital adequacy ratio, earnings ability, total assets, and annual GDP growth rate also significantly positively impact bank performance. Years in business have a significant adverse effect on bank performance. Interestingly, conventional and state-owned banks have a higher positive impact on returns on assets (ROA) than Islamic and privately owned banks. Policymakers and investors should pay close attention to facilitating ongoing FinTech innovations in the Kingdom of Bahrain to create opportunities and build a more inclusive and efficient financial sector.

Financial Technology Innovation and Non-Financial Performance in the Nigerian Banking System

The study investigates the relationship between financial technology innovation and non-financial performance in the Nigerian banking system, with a focus on the complex dynamics of FinTech adoption, the perception of innovation culture, digital security perception, and customer happiness in the Nigerian banking industry. The study used a descriptive survey research technique, with a specific focus on undergraduate students at Bamidele Olumilua University of Education, Science and Technology, Ikere Ekiti. The population of the institution consisted of around 7500 students, and a sample size of 380 students was estimated using Taro Yamale’s technique. The reliability study validated the coherence of the self-structured questionnaire, attaining a score of 0.82. The results emphasize the substantial influence of the rate at which Fin Tech is adopted on customer satisfaction inside the banking system of Nigeria. The Chi-Square value of 119.8 and a p-value less than 0.001 suggest a strong statistical relationship, highlighting the significant impact of FinTech adoption on overall customer satisfaction in the Nigerian banking system. Moreover, the research indicates that there is a notable impact of the perception of innovation culture on customer satisfaction within the banking system of Nigeria. This is supported by a Chi-Square value of 113.7 and a p-value below 0.001, indicating a robust statistical correlation. Furthermore, the research highlights a significant impact of Digital Security Perception on Customer Satisfaction in the Nigeria Banking System, as shown by a Chi-Square value of 192.3 and a p-value below 0.001. This highlights the substantial influence of the perception of digital security on influencing the overall level of consumer satisfaction in the Nigerian banking industry. In light of these findings, recommendations for the Nigerian banking sector include enhancing FinTech integration to meet evolving customer needs, cultivating an innovation culture, strengthening digital security measures, implementing regular customer feedback mechanisms, and undertaking educational initiatives to increase customer awareness and understanding. It is essential to implement these ideas in order to create a banking environment that prioritizes the needs of customers and guarantees long-term happiness in the digital age.

Research on Digital Currency and Financial Technology Innovation of the People’s Bank of China

Digital currencies are becoming increasingly important to governments and financial institutions around the world as advanced technology develops. The central bank of China has led research on digital currency around the world since China has one of the largest electronic payment markets. With this digital currency, the People's Bank of China is promoting inclusive financial growth, enhancing monetary policy transmission, and improving payment efficiency. As well as its impact on international monetary systems, financial security, privacy protection, and financial security protection will also be profoundly affected. In this paper, the focus will be on the Chinese central bank's digital currency development, technical foundation, and application status. As well as analyzing its impact on future innovations in financial technology, opportunities and challenges will also be discussed. By developing a digital currency, China has expressed its interest in the future of the modern financial system in a positive way with forward-looking and responsive layouts. DCEP, as a new payment tool, aims to replace some cash and improve the speed and security of fund circulation. Compared with traditional electronic payment methods, CBDC is expected to bring breakthroughs in user privacy protection, reduced transaction costs, and improved cross-border payment convenience.

Effects of Digital Credit on Small Business Performance in Obunga, Railways Ward, Kisumu County, Kenya.

Small and Micro Enterprises play an important role in economic development of any nation by harnessing human capital, use of raw materials and technology. They require enough funds to facilitate expansion of operations, develop new products, hire new staff and acquire new facilities. Lack of capital and financing conversely has been identified as a major factor affecting their performance leading to their failures. Innovations in financial technology in the form of digital credit have taken advantage of these financing gaps and have come up with powerful tools to mitigate financing barriers faced by small businesses. This study sought to address the effects of digital credit on small business performance in Obunga, Railways ward in Kisumu, Kenya. The business performance was determined through operating cash flow, Sales volume and Net profit margin. Asymmetric Information theory and Default Risk Theory of Credit were selected to anchor this study. The study adopted descriptive research design. The target population was 454 Small and Micro Enterprises while the sample size was 212 Small and Micro Enterprises. The study adopted both stratified and simple random sampling techniques. Primary data was collected using structured questionnaires and interviews. Secondary data was collected through reviewing available records regarding digital credit and small business performance. The study adopted content validity. The data collected was analyzed using the Statistical package for social sciences version 24.0. Data was analyzed using descriptive statistics. The study findings conclude that the performance of the SMEs could be seen from profit margins, sales when they access digital credit.The study in addition suggests that the fast growth of fintechs had increased the cost of borrowing to SMEs and their repayment problems even though they offer flexible loan contracts to SMEs who have the ability to determine their own preferred loan repayment schedule. The study recommends the managers and owners of SMEs in Obunga ward to adopt an entrepreneurial mind-set that would support their ability to better gain financial access from various financial institutions Based on the study findings, it is also recommended that the government mobile loan institutions should consider lowering the costs involved in lending the credit. Lastly, the study recommends the managers and owners of SMEs in Obunga ward to make use of available flexible repayment options to borrow what their businesses actually require.

Discussion on financial technology innovation and regulatory mechanism in the digital economy environment

Discussion on financial technology innovation and regulatory mechanism in the digital economy environment

Financial efficiency and CO2 emission in BRICS. Dose digital economy development matter?

When it comes to the environmental costs, environmental economists have tried to study the effects of the foreign direct investment-growth nexus, but they have ignored the crucial role that financial development and technical innovation play. Massive increases in energy consumption have contributed to environmental degradation in the BRICS nations, which have experienced rapid IND due to their robust economies. This study uses data from 1990 to 2021 to examine the relationship between carbon emissions in BRICS member nations and factors such as FDI, technological innovation, and economic growth. Within the panel nations, the results confirm a high cross-sectional reliance. The BRICS countries' financial development, technological innovation, and foreign direct investment all have a negative and statistically significant long-run association with CO2 emissions, according to the Augmented Mean Group (AMG) estimator. On the other hand, economic growth, TI, IND, and energy use all have positive and statistically significant associations with carbon emissions. This study's researchers choose to use the Dumitrescu and Hurlin panel causality test to look at the other way around. Economic growth (EG), Digital economic growth (DEG), Financial efficiency (FE), CO2 emissions (CO2), Industrialization (IND), Technological Innovation (TI), Foreign direct investment (FDI) and Inflation are all identified as having a bidirectional long-run causative relationship. In contrast, a unidirectional causal relationship is observed between FDI and CO2 emissions. To entice high-quality FDI, the BRICS member nations must advance their industries, financial institutions, and technological innovation. In addition, these nations need immediate legislative solutions because IND is a major cause of environmental damage.

СОВРЕМЕННЫЕ ТЕНДЕНЦИИ ПРИМЕНЕНИЯ ИННОВАЦИОННЫХ ТЕХНОЛОГИЙ В БАНКОВСКОМ БИЗНЕСЕ

The paper presents an analysis of the current trends in the development of banking activities and modern practice of innovative technologies application in the banking business. It is defined that nowadays the main consumers of banking services are representatives of the millennial generation, whose behavioral characteristics and preferences should be taken into account in practice. Authors show how innovative financial technologies influence the methods and approaches in the work of national banking organizations. Modern financial innovations are considered, which are gradually being tested, implemented and offered to clients by various Russian banks. It is emphasized that digital mortgage is one of the most popular banking products and the possibility of its digital registration has a beneficial effect on the development of that area in banking. Among the potential vectors for further development, an omnichannel approach to interaction with clients is highlighted. It aims to increase the efficiency of communication policy, service speed and the best possible satisfaction of the needs of users of financial products.

FinTech adoption in banks and their liquidity creation

Utilizing an innovative financial technology (FinTech) index based on media sources, we analyse the effects of FinTech adoption on bank liquidity creation for a sample of the top 300 United States banks from Q1 2015 to Q2 2021. Our findings reveal a consistent negative association between FinTech adoption and bank liquidity creation, even during the coronavirus disease (COVID-19) pandemic. This relationship remains robust after conducting multiple rigorous tests including propensity score matching and difference-in-differences tests to address endogeneity problems. Overall, these results underscore the transformative influence of FinTech on fundamental liquidity creation function within traditional banking.

The Challenges and Opportunities of Financial Technology Innovation to Bank Financing Business and Risk Management

The Challenges and Opportunities of Financial Technology Innovation to Bank Financing Business and Risk Management

EKOLOJİK SÜRDÜRÜLEBİLİRLİKTE FİNANSAL GELİŞME VE TEKNOLOJİK İNOVASYON ETKİSİ: TÜRKİYE’DEN KANITLAR

Son yıllarda artan çevresel deformasyonlar küresel çapta araştırmacılar ve politika yapıcılar tarafından giderek artan bir endişe haline gelmektedir. Başta geleneksel kaynaklarla sağlanan ekonomik büyümenin ve nüfus artışının meydana getirdiği sera gazlarının ve buna bağlı olarak karbon emisyonlarının artması, küresel ısınma ve iklim değişikliği, biyoçeşitlilik, hava-su kalitesi ve doğal kaynaklar üzerindeki etkileri, giderek artan bu endişenin önemli göstergelerini oluşturmaktadır. Bu kapsamda dünyanın sahip olduğu ekolojik dönüşüm, ülkelerin kendi ekolojik sınırları içinde kalma ihtiyacının artmasına neden olmaktadır. Bu amaçla çalışma, Türkiye’de finansal gelişme ve teknoloik inovasyonun ekolojik sürdürülebilirlik üzerindeki etkisini 1985-2020 dönemi için ARDL sınır testi ve FMOLS tahmincisi aracılığı ile incelemiştir. Elde edilen çalışma bulguları, her iki modelde de finansal gelişme ve teknolojik inovasyon ile ekolojik sürdürülebilirlik arasında pozitif bir ilişkinin olduğuna yönelik kanıtlar içermektedir.

Legal Aspects of Crypto Assets on Indonesian Digital Investment Development

This study aims to understand the legal aspect of digital investment in Indonesian crypto assets which is linked to the theories of legal certainty, justice, and benefit. Currently, Indonesian people are very fond of the cryptocurrency digital investment trend. The Indonesian government has provided several regulations regarding the physical crypto market mechanism. However, the rules regarding cryptocurrencies cannot guarantee that problems will not arise in the future. Moreover, cryptocurrency and its rules are still very new. There is still a lot of confusion in society about whether crypto investment is safe or not. This study is normative juridical study using a statutory and conceptual approach, which is summarized by examining statutory regulations and related legal doctrine. The results of this study explain that the Indonesian government is opening up opportunities by legalizing digital crypto investment activities to strengthen the economic sector. Crypto in Indonesia can only be used as an investment instrument, not currency. The implementation of crypto asset trading is regulated in the Commodity Futures Trading Supervisory Agency (Bappebti) Regulation Number 5 of 2019 concerning Technical Provisions for the Implementation of Physical Crypto Asset Markets. This regulation regulates the use of Good Corporate Governance principles in the context of carrying out buying and selling of crypto assets on the Crypto Futures Exchange (CFX). Bappebti's regulations were then changed with the enactment of Law Number 4 of 2023 concerning Development and Strengthening of the Financial Sector (UU P2SK) which expanded the authority and responsibility of the Financial Services Authority (OJK) to include digital financial assets, crypto assets and Financial Technological Innovation Sector. (ITSK).

Socioeconomic determinants of ownership of payment cards, mobile money account, and government remittances of digital financial services: evidence from India

Purpose This paper aims to measure the extent of digital financial inclusion (DFI) and examine the effect of socioeconomic characteristics on using government remittances and the adoption of digital financial services (DFS) during the COVID-19 pandemic. Design/methodology/approach The World Bank Global Financial Inclusion (Global Findex) database 2021 is used in this study, with a sample size of 3,000 Indian individuals. The study measured the demand-side analysis of DFI, namely, accessibility and usage of DFS with selected socioeconomic characteristics such as gender, age, income, education, being in the workforce and residential status of respondents. The dependent variable is binary in nature; therefore, the logistic regression model is used for the data analysis. Findings The results of the study reveal that individuals’ socioeconomic factors, such as female, all the age groups, tertiary education, third- and fourth-income quintile and workforce, are found to have a significant association with “accessibility,” an exogenous variable of DFS. Besides, respondents’ socioeconomic attributes, namely, female, tertiary education, income for all quintiles and workforce, are more likely to use DFSs in the COVID-19 pandemic. The study also finds the residential status of individuals is influencing the accessibility and usage of DFS. Practical implications The findings of the study provide valuable insights to the service providers and policymakers regarding the rapid expansion of DFS by digital infrastructure, simplifying the banking procedures and highlighting the importance of digital financial literacy to accomplish government goals through serving the unbanked population and also design strategies for achieving the objectives of Digital India: “Faceless, Paperless, and Cashless” of DFI across the country. Originality/value Notable studies used World Bank Findex survey data to explore the determinants of financial inclusion in general. This research is one among the few studies to explore the determinants of India’s DFI. Moreover, this study measured the effect of individual socioeconomic attributes on the adoption of DFSs during the COVID-19 pandemic, which has not been included in prior studies. Therefore, this study has added value to the existing literature on financial technology innovation and DFS for the sustainable development of emerging nations.

Evaluating the impact of technological innovation and energy efficiency on load capacity factor: empirical analysis of India.

The determinants of environmental degradation have been investigated many times by utilizing carbon dioxide emissions and/or ecological footprint. However, these traditional environmental degradation indicators do not consider the supply side of environmental problems. Therefore, this study focuses on the dynamic influence of financial development, energy efficiency, economic growth, and technological innovation on environmental degradation in India through the load capacity factor, including both the supply and demand sides of environmental problems. For that purpose, the recently developed dynamically simulated autoregressive distributed lag (ARDL) method is employed using the annual time-series data extending from 1980-2020. The dynamically simulated ARDL results demonstrate that financial development, economic growth, and technological innovation have a dynamic adverse impact on the load capacity factor, whereas energy efficiency has a positive dynamic influence on environmental quality. In addition, the results support the validity of the environmental Kuznets curve hypothesis as the negative effect of economic growth on environmental quality decreases over time. Based on the study findings, policy recommendations are provided for India. Finally, this study utilizing load capacity factor as an indicator for environmental quality will provide new topics in exploring the determinants of environmental degradation.

Analyze the Impact of the Digital RMB on International Payments and Financial Structure Based on Literature Review

With the development of network technology and digital economy, the demand for convenience, security, inclusiveness and privacy of retail payment is increasing. Central banks or monetary authorities in many countries and regions are actively exploring ways to digitize fiat money to meet this demand. The Chinese government has decided to introduce digital RMB as a digital form of legal tender to enhance the payment experience, strengthen financial supervision, promote economic transformation and financial technology innovation and application. The introduction of digital RMB helps to reduce the cost and risk of traditional cash flow, promote the upgrading of payment methods and the development of digital economy. Based on the comprehensive and systematic collection, collation and analysis of the relevant literature in the field of digital RMB, this paper explores the impact of digital RMB on international payment and financial structure. The study found that digital RMB has international security as a payment tool, which can promote cross-border transactions and change the global payment system. Digital RMB can enhance international financial security and affect the implementation of financial policies in various countries.

Evaluation of the coordinated development of China’s Forest Resources-Economy-Environment System

Forests provide enormous ecological, economic, and social benefits, as such forest development should be oriented toward resource-economy-environment harmonization. This paper constructs a comprehensive evaluation index system and uses the coupled coordination degree model to measure the coordinated development level of China’s forest resources-economy-environment system. The results show that, across 2006‒2020, the level of coupled coordinated development of China’s forest resources-economy-environment composite system fluctuates in an upward trend, thus gradually developing from an initial imbalance to a high degree of coordination; the level of coordinated development of each subsystem of the forest resources, economy, and environment also shows an upward trend. The factors influencing the coordinated development of the forest resource-economy-environment system are, in order, the government’s financial capacity, market environment, scientific and technological innovation capacity, level of economic development, and strength of policy implementation. Therefore, this paper proposes some measures to improve the coordinated development.