Innovative Financial Services Research Articles

Marketing, communication, banking, and Fintech: personalization in Fintech marketing, enhancing customer communication for financial inclusion

This paper explores the intersection of marketing, communication, banking, and fintech, with a focus on personalization in fintech marketing and enhancing customer communication for financial inclusion. Financial technology (fintech) has revolutionized the way financial services are delivered, offering innovative solutions that cater to diverse customer needs. One key aspect of this transformation is the emphasis on personalized marketing strategies, which enable fintech companies to engage with customers on a more individualized level, driving customer satisfaction and loyalty. Personalization in fintech marketing involves tailoring products, services, and communications to meet the specific needs and preferences of customers. This approach not only enhances the customer experience but also increases the likelihood of customer retention and acquisition. Fintech companies leverage customer data and advanced analytics to segment their audience and deliver targeted messages and offers, effectively addressing customer pain points and driving engagement. Moreover, effective customer communication is essential for promoting financial inclusion, particularly among underserved populations. Fintech companies can use various communication channels, such as mobile apps, social media, and chatbots, to reach customers who may have limited access to traditional banking services. By delivering relevant and timely information, fintech companies can empower customers to make informed financial decisions and improve their overall financial well-being. The paper also discusses the role of banking and fintech partnerships in driving financial inclusion. By collaborating with traditional banks, fintech companies can leverage existing infrastructure and customer networks to reach underserved communities. These partnerships enable fintech companies to offer innovative financial products and services to a broader audience, contributing to greater financial inclusion and economic empowerment. In conclusion, personalization in fintech marketing and effective customer communication are key drivers of financial inclusion. By adopting these strategies, fintech companies can better engage with customers, tailor their offerings to meet specific needs, and ultimately, contribute to a more inclusive financial system. Keywords: Fintech Marketing, Customer Communication, Financial Inclusion, Personalization, Banking.

Analysis of China's FinTech Regulatory Sandbox: Development History and Future Prospects

This article provides an in-depth discussion of the impact of the development of financial technology (FinTech) on the digital transformation of commercial banks, the regulatory challenges they face, and the practice of regulatory innovation. By comprehensively analyzing relevant literature, the article reveals the positive role of FinTech in promoting financial service innovation, improving the efficiency of the financial system, and satisfying consumer demand. At the same time, it points out the new types of risks and challenges brought by the rapid development of FinTech, especially in the areas of regulatory adaptability, data security, and consumer protection. In addition, the paper discusses the application of regulatory sandboxes as a regulatory innovation tool in achieving a balance between fintech innovation and risk management and emphasizes the importance of cooperation between regulators, financial institutions, and technology companies. The healthy development of FinTech in the future requires a closer dialogue and cooperation between technology innovation and regulatory innovation, while international coordination on regulatory frameworks and standards is also crucial. This study aims to provide insights for researchers and practitioners in the field of FinTech and help FinTech continue to develop in a safe and orderly environment.

The Link between Family Financial Socialization in Adulthood and Investment Literacy of P2P Investors

AbstractThis paper examines how family financial socialization in adulthood is linked to the development of investment literacy among individual family members within the context of innovative financial services, specifically peer-to-peer (P2P) lending. Our findings revealed that P2P lending investors engage in a moderate level family financial socialization suggesting that family, as a key financial socialization agent in childhood and adolescence, maintains its role in adulthood. Additionally, such investors possess a high-level investment knowledge, skills, and attitudes. Explicit family financial socialization has a significant and positive effect on the individuals’ investment knowledge, skills, and attitudes, while the effect of implicit financial socialization is significant but negative for knowledge and attitudes. Such findings suggest that family discussion among adult members result in higher, while observations of family members’ investment behavior led to lower investment literacy. Our study found no significant moderating effect of the strength of social ties indicating that dynamics of family relations neither strengthen nor weaken proximal socialization outcomes. The analysis of differences across demographic groups unveiled statistically significant distinctions concerning respondents’ gender, income, and education. These results provide important insights for stakeholders, underscoring the significant role family socialization in adulthood plays in shaping individuals’ investment literacy, particularly of those investing on P2P lending platforms.

The Challenges and Opportunities of Emerging Markets for Firm Internationalization

This study examines the challenges and opportunities of firm internationalization in emerging markets, using MTN Nigeria as a case study. Through a mixed-methods approach involving semi-structured interviews, document analysis, and a survey of 150 MTN Nigeria employees and managers, the study identifies the key challenges faced by the company, including weak and unstable regulatory environment, infrastructure deficiencies, intense competition, cultural differences, lack of skilled local talent, and corruption. The study also highlights the main opportunities capitalized on by MTN Nigeria, such as the large and growing population, liberalizing telecommunications sector, potential for innovation in digital and financial services, growing middle class, untapped market segments, and strategic partnerships with local firms. The findings are compared with existing literature, revealing consistencies, extensions, and implications for theory and practice. The study contributes to the understanding of firm internationalization in emerging markets by providing a nuanced analysis of the specific challenges, opportunities, and strategies in the Nigerian telecommunications industry. It also highlights the limitations of existing theories and the need for adaptation to the unique institutional, cultural, and competitive contexts of emerging markets. The study offers recommendations for future research, including comparative studies across different emerging markets and critical examinations of the broader societal and developmental implications of firm internationalization.

Investing in Rural Agriculture in the Face of Innovative Financial Services: Does Financial Literacy Matter in Nigeria?

The complex nature of formal financial products and services and the frequently associated innovations occasioned by disruptive technologies inform researchers’ calls for studies on financial literacy, particularly in African rural communities. As a response to the calls, this study explores how financial literacy relates to performance, access to credit facilities, and payment preferences among smallholder rural farmers in Nigeria. Further, the rural farmers’ financial literacy level on each of the four dimensions of the Standard and Poor Global Financial Literacy criteria was assessed. A random sample was drawn from the registered rural farmers in the Central Bank of Nigeria’s Anchored Borrower’s Program for the 2022 farming year. Quantitative data were collected from rural farmers using the Standard and Poor Global Financial Literacy questionnaire. The proposed hypotheses were tested with partial least squares structural equation modeling (PLS-SEM), while descriptive statistics were used to analyze the data. The outcomes show that financial literacy significantly predicts performance, access to credit facilities, and mode of payment preferences among smallholder rural farmers. Also, the analyses of the four dimensions of financial literacy show that the farmers are more literate in risk diversification and inflation than numeracy and compound interest. It is concluded that financial literacy is cardinal to profitable investments in rural farming, and as such, there is a need for the Nigerian government and financial authorities to embark on financial literacy drive with more emphasis on numeracy and compound interest where the rural farmers are more deficient.

Fintech: A Stepping Stone Towards Financial Inclusion

Digital transformation underscored as the fourth industrial revolution has led to the emergence of various sophisticated technology-enabled financial services in various fields. One such major innovation called Fintech took place in the field of commerce and management as well. Fintech as the term implies is the combination of two terms Finance and Technology which simply means application of technology in the field of finance. Fintech refers to all the digital technologies that have the potential to transform the provision of financial services spurring the development of new or modify the existing business models, applications, processes, and products. Global adoption of FinTech is rapidly increasing due to its disruptive nature and is largely embraced by the various participants in the financial sector who are under served by traditional financial service providers. There exists a gap in the literature and visualization research on impact and future pathway of FinTech innovations in payments and financial services and role of financial regulations. This study aims to enrich the understanding of FinTech innovations in payments and financing and investigate the correlation and significance of regulatory framework in maintaining a fair ecosystem where the under served sections of the economy are included in the main stream economy. For this purpose, data were collected by using a well-designed Personal Interview Schedule and was circulated to 100 respondents under convenient sampling technique. The collected data were then analyzed with the help of statistical tools like Simple Percentage Analysis, Ranking method and Mean Percentage Analysis. The results of this study imply that the under served sections of the economy still remains the same and also provide a holistic insight to innovations in FinTech

SUSTAINABLE SMART CITIES: THE ROLE OF FINTECH IN PROMOTING ENVIRONMENTAL SUSTAINABILITY

Sustainable smart cities are at the forefront of urban development, striving to balance economic prosperity with environmental sustainability. This Review delves into the critical role played by Financial Technology (Fintech) in advancing environmental sustainability within smart city initiatives. Fintech innovations are instrumental in optimizing resource management, enhancing citizen engagement, and fostering collaborative governance models, thereby contributing to the overarching goal of creating sustainable urban ecosystems. Through a historical perspective, this Review traces the evolution of sustainable smart cities, highlighting the transformative impact of technological advancements and the integration of Fintech solutions. From early urban planning concepts to the emergence of smart technologies in the 21st century, the evolution of sustainable smart cities underscores the importance of leveraging innovation to address urban challenges. The rise of Fintech has further accelerated this evolution, offering innovative financial services tailored to support green finance, renewable energy investment, and sustainable infrastructure development. Fintech platforms enable efficient allocation of resources, facilitate transparent and secure transactions, and empower citizens to participate in sustainable initiatives. By integrating Fintech solutions into urban development strategies, cities can unlock new opportunities for environmental sustainability while fostering economic growth and social equity. Looking ahead, the integration of sustainable smart cities and Fintech holds immense potential to address pressing environmental challenges such as climate change, pollution, and resource depletion. As cities continue to embrace digital transformation and adopt data-driven approaches, the role of Fintech in promoting environmental sustainability will become increasingly crucial. By leveraging historical insights and embracing emerging technologies, cities can chart a path towards a more resilient, inclusive, and environmentally sustainable future. This Review underscores the importance of collaboration among stakeholders, including governments, businesses, academia, and civil society, to drive collective action and accelerate the transition towards sustainable smart cities.
 Keywords: Sustainable, Smart Cities, Fintech, Promoting, Environmental.

Can digital finance development drive green transformation in manufacturing? Evidence from China.

Digital finance is a product of emerging technology-enabled innovation in financial services and has a critical impact on the green transformation of the manufacturing industry. We propose a new efficiency measurement model based on the slacks-based measure (SBM) to measure the efficiency of green transformation on regional manufacturing. Chinese interprovincial data from 2010 to 2019 were obtained for the study. In addition, we estimated the effect of digital finance on green transformation of manufacturing using a benchmark panel model. Finally, considering the regional heterogeneity and spatial effects of green transformation efficiency in the manufacturing industry, we constructed a spatial Durbin model based on an economic-geographic nested spatial weight matrix to analyze the spatial influence of digital finance on green transformation in the manufacturing industry. The results show that the green transformation of the manufacturing industry has significant positive spatial spillover effects owing to the existence of competition, demonstration, and economic correlation effects among regions.

Three-dimensional model of financial resilience in workers: Structural equation modeling and bayesian analysis

This work focused on evaluating financial health indicators, namely their perception, experiences lived during the pandemic, and actions carried out to face the financial crisis caused by the COVID-19. The eight financial health indicators proposed by BBVA bank and the Center for Financial Services Innovation were used for the study. These make up a 24-item scale and are often used to measure perception, experiences during the pandemic, and financial resilience. The sample included 357 workers from the Duxom Company, which has national coverage and operates in the private security sector. The validity test showed an acceptable Cronbach's alpha index for each construct (α; 0.848; α; 0.779; α; 0.818), denoting reliability and internal consistency. The values obtained from asymmetry (<2) and kurtosis (<7) justified the normality of the data. The research findings suggest that, while the perception of financial health indicators has a very low influence on financial resilience (.05), the experiences lived during the pandemic in relation to these indicators influenced (.74) the actions carried out to face the financial crisis caused by the COVID-19. The confirmatory model shows that the P-ISF construct is explained with 6 of the 8 variables; the Ev-ISF construct – with 3 of 8, and the financial resilience construct is explained with 7 of 8 variables (CMIN/DF:1.913; CFI:0.981; TLI: 0.973; RMSEA=0.05). The excluded variables show very low estimates; therefore, it is recommended to expand future studies to other populations and samples.

STUDENT PREFERENCE TO USE QRIS (QUICK RESPONSE CODE INDONESIAN STANDARD) AS A DIGITAL PAYMENT INSTRUMENT

Technological developments result in innovations in financial services called financial technology (fintech). The result of fintech development is the existence of QRIS (Quick Response Code Indonesian Standard) as an easy and practical digital payment system. QRIS attracts the attention of young people, namely students, to switch from cash to non-cash payments with QRIS. The problem in this study is how students prefer to use QRIS as a digital payment tool? is the seller involved in students' preferences in using QRIS as a digital payment tool? To answer this problem, researchers used a qualitative approach by collecting data through interviews with three types of informants, namely sellers, students who make cash payments, and students who make cash payments, and students who make payments with QRIS. The result of this study is that students' preferences in using QRIS depend on ingrained payment habits in the canteen. However, even so, the preference for QRIS convenience can support the efficiency of buying and selling transactions in canteens.

Psychological needs and financial well-being: the role of consumer spending self-control

AbstractFinancial service providers continually strive to develop innovative financial products and services that address customer needs and aim to improve customers’ financial well-being. Previous studies discovered that psychological need satisfaction is positively associated with psychological well-being and growth, while psychological need frustration is associated with problematic behaviour and ill-being. However, uncertainty still exists as to whether psychological needs are associated with financial well-being. Furthermore, whereas psychological need satisfaction is associated with positive day-to-day behaviours such as exhibiting self-control, psychological need frustration has been associated with irresponsible spending. Spending can be a psychological coping mechanism, and as such, the regulation of spending behaviour may aid financial well-being. Therefore, the main purpose of this article is to explore the relationship between psychological needs and financial well-being, and to assess whether consumer spending self-control can act as a regulating mechanism in this relationship. Data were collected by means of a self-administered questionnaire distributed via an online paid-for consumer panel to credit-active South African consumers. The results revealed that CSSC had a mediating effect on the relationships between psychological needs and financial well-being. This highlights the importance of developing and promoting consumer spending self-control as a strategy for financial well-being.

User acceptance of social network-backed cryptocurrency: a unified theory of acceptance and use of technology (UTAUT)-based analysis

Turbulent market conditions, well-publicized advantages, and potential individual, social, and environmental risks make blockchain-based cryptocurrencies a popular focus of the public and scientific communities. This paper contributes to the literature on the future of crypto markets by analyzing a promising cryptocurrency innovation from a customer-centric point of view; it explores the factors influencing user acceptance of a hypothetical social network-backed cryptocurrency in Central Europe. The research model adapts an internationally comparative framework and extends the well-established unified theory of acceptance and use of the technology model with the concept of perceived risk and trust. We explore user attitudes with a survey on a large Hungarian sample and analyze the database with consistent partial least square structural equation modeling methodology. The results show that users would be primarily influenced by the expected usefulness of the new technology assuming it is easy to use. Furthermore, our analysis also highlights that while social influence does not seem to sway user opinions, consumers are susceptible to technological risks, and trust is an important determinant of their openness toward innovations in financial services. We contribute to the cryptocurrency literature with a future-centric technological focus and provide new evidence from an under-researched geographic region. The results also have practical implications for business decision-makers and policymakers.

Decentralized Finance (DEFI) in the U. S. economy: A review: Assessing the rise, challenges, and implications of blockchain-driven financial systems.

This study provides a comprehensive analysis of Decentralized Finance (DeFi) within the U.S. economy, focusing on its rise, challenges, and implications. The primary objective is to unravel the concept of DeFi, delineate its role in the U.S. financial landscape, and explore its historical evolution from traditional to blockchain-based finance. Employing a systematic literature review and content analysis, the study synthesizes data from academic journals, industry reports, and regulatory publications. The methodology involves a meticulous selection process, adhering to specific inclusion and exclusion criteria to ensure the relevance and quality of the literature. Key findings reveal that DeFi, underpinned by blockchain technology and smart contracts, offers innovative financial services, enhancing inclusivity and efficiency. However, it faces challenges such as regulatory uncertainties, security concerns, and scalability issues. The study highlights the significant impact of DeFi on the U.S. economy, including technological advancements, economic integration, and regulatory shifts. It also underscores the implications for various stakeholders, including investors, institutions, and regulators. The future landscape of DeFi is poised for growth, marked by technological innovations and potential integration with traditional financial systems. The study concludes with recommendations for industry stakeholders and policymakers, emphasizing the need for clear regulatory frameworks, enhanced security protocols, and consumer education. Future research directions include exploring DeFi's integration with emerging technologies and its role in addressing global financial challenges. This study contributes to the academic discourse on DeFi and offers insights for policymakers, investors, and financial institutions navigating this evolving landscape.

Trading carbon credit tokens on the blockchain

Innovative financial services may help to reduce global carbon emissions. We examine the activity in trading of voluntary carbon credits on a new blockchain-based exchange, which reduces the amount of intermediation in this market. Over the years 2021 and 2022, about 3.8 million tCO2e tokens have been tokenized on the carbon token exchange, of which about 2.8 million tCO2e tokens have been burned, leaving 1.0 million tCO2 tokens available for purchase on the exchange. Over these two years, the total secondary market trading turnover has been $ 21.2 million. Trading liquidity is limited to only a few types of carbon credit tokens. The prices of these most liquid tokens move in line with prices of similar carbon projects available for purchase elsewhere.

The impact of network coverage on adoption of Fintech and financial inclusion in sub-Saharan Africa

Digital finance plays a major role in improving access to, usage and quality of financial services in developing countries. The use of these platforms has been associated with a positive impact on economic growth and people’s welfare. They allow for convenient, secure, and efficient transaction and are the crucial element of e-commerce. In this paper, we analyse the effect of mobile network coverage on adoption of financial technologies and financial inclusion using a survey data of 12,735 individuals from nine sub-Saharan African countries conducted in 2017. By combining survey data with information on the proximity of mobile network towers, we estimate a two-stage model. In the first stage, consumers decide to adopt a technology device, and in the second stage, they decide whether to use digital financial services or not. Results show a significant and positive relationship between network coverage and adoption of digital financial services. Considering that the whole population lives within 2 km radius from the LTE tower, financial inclusion would increase by 6% in Mozambique and 3% in Ghana, Rwanda and Senegal. In Tanzania, where mobile money is the common financial service, investment in GSM and UMTS would have a larger impact on financial inclusion than LTE. These results show that digital financial technologies such as mobile money, mobile banking and e-wallet, that do not necessarily require consumers to be connected to the Internet have a greater impact on financial inclusion in East African countries, where financial service innovations are mobile led. However, in countries where digital financial innovations are bank led, LTE coverage have a greater impact than GSM and UMTS coverage. The findings of this study can help policy-makers to understand the issues related to the expansion of digital financial services and effective strategies to deliver these services to the poor.

IMPACT OF INCOME, LIFESTYLE, AND BUSINESS MOTIVATION ON SURABAYA STUDENTS' USE OF PAYLATER

This research in-depth examines the impact of three key factors, namely income, hedonistic lifestyle, and business motivation, on the use of Paylater services by students in Surabaya. The results of data analysis show that student income plays an important role in determining the extent to which they tend to use Paylater services; Hedonistic lifestyles also influence decisions to use these services, with students seeking experience and enjoyment in consumption more likely to utilize Paylater's features. Business motivation, such as interest in entrepreneurship and understanding investment, apparently plays a positive role in the use of Paylater. These findings provide deeper insight into trends in the use of these innovative financial services among students and have important implications for Paylater service providers, governments, and universities in supporting financial literacy and wise financial management among students.

The impact of FinTech innovation on digital financial literacy in Europe: Insights from the banking industry

Within the evolving financial industry, characterised by the proliferation of FinTech and exacerbated by the Covid-19 , this paper investigates the unexplored relationship between financial, social, infrastructural factors and the level of digital financial divide (DFD) in Europe. Applying a difference-in-difference model, the study reveals that innovation in financial services correlates with a reduced DFD, further reinforced by improved digital infrastructure and social progress. However, the post-Covid environment has widened the gap in EU financially illiterate regions. Our results hold relevance for policymakers, governments, and supervisory banking authorities, indicating the most effective areas for intervention in lowering the country's DFD, but they could also support banks in the design of tailor-made digitalization strategies.

Exploring The Legal Landscape of Islamic Fintech in Indonesia: A Comprehensive Analysis of Policies and Regulations.

The rapid growth of Islamic fintech in Indonesia necessitates a comprehensive examination of the policy and regulatory framework from a legal perspective. This study explores the legal landscape of Islamic fintech in Indonesia, analyzing the current policies and regulations governing this emerging sector. Using normative legal research with a statutory approach and conceptual approach. The primary and secondary legal materials, including government reports and scholarly articles, this research evaluates recent policy developments and regulatory initiatives supporting Islamic fintech. It identifies gaps and areas for improvement, drawing from best practices and regulatory approaches adopted by other countries with successful Islamic fintech ecosystems. Based on the findings, this research proposes recommendations to enhance the policy and regulatory framework. These include collaboration between regulatory bodies and industry stakeholders, tailored licensing frameworks, enhanced consumer protection mechanisms, and promotion of innovation in Shariah-compliant financial products and services. This study contributes to understanding the legal landscape of Islamic fintech in Indonesia, offering a comprehensive analysis of existing policies and regulations. By addressing challenges and proposing solutions, it aims to facilitate the growth of Islamic fintech and foster an inclusive and sustainable financial ecosystem in Indonesia.

Organisational renewal model for leveraging a bank’s sustainability and continuity during periods of discontinuities: a perspective from the caribbean financial markets

As financial institutions are often faced with a series of turbulences that unfold in the Caribbean financial markets, frequent organisational renewal and self-regeneration become crucial for bolstering a bank's continuity and sustainability. In that context, this study uses a qualitative research method to evaluate the effectiveness of the organizational renewal strategies that are often used by Caribbean banks during periods of turbulence as well as the major impediments of such strategies. Through such analysis, the study aimed to discern the organisational renewal model that can be extracted and suggested for leveraging a bank's sustainability and continuity in the periods of discontinuities. During periods of turbulence, findings from different banks that were drawn from St. Lucia, Barbados, Bahamas, St. Vincent, Grenada and the Dominican Republic signified the organizational renewal strategies that are often used by Caribbean banks to encompass financial service innovations, digital transformation, value-based marketing and CSR-based banking model. But even if that is the case, the efficacy of some of the organisational renewal strategies to turn around the bank's performance during turbulence was still found to be undermined by the hefty costs of change that must be incurred and organisational inertia that limits the flexibility and agility required for the banks in distress to respond. To mitigate such constraints, the study suggests the Organisational Renewal and Self-Regeneration Model which the contemporary banks can adopt to bolster their adaptability, continuity and sustainability during periods of discontinuities. But even if usage of such a model will leverage a bank's sustainability and continuity amid the Caribbean financial markets' discontinuities, future studies must still explore the impact of organisational renewal on a bank's liquidity risks' mitigation during periods of turbulence.

The goal of financial inclusion in Zambia’s 8th national development plan

Zambia has not trailed behind other nations in promoting financial inclusion, one of its deliverables in its 2022-2026 Eighth National Development Plan. The analysis focused on the likelihood of reaching this goal and the implications for bank operating stability. A mixed research (quantitative and qualitative) approach was used and drew respondents from several remote areas in Zambia. A hypothesis test on the observed against the hypothesised mean (p-value = 1.93e-38 and <0.005) rejected the null to accept the alternative presupposition that banks have a relevant role in achieving financial inclusion, but they are not a necessary ingredient. The correlation test also aligned at both 95 and 99% confidence levels, that supported the null hypothesis to conclude that there is no correlation between the preferred channels of financial services and the adequacy of financial inclusion. Respondents felt that the financial inclusion services would still be offered at basic satisfactory levels regardless of the available form of financial service provider. The Kruskal-Wallis test supplemented the findings with p = 3.09667e-20(<0.05) that rejected null to conclude that any form of financial services is statistically significant in delivering basic financial inclusion in Zambia. The implications for banks are the risks for continuous survival because of the popular user-friendly alternative channels. It is recommended that the Bank of Zambia should sustain the relative relevance of formal banks by balancing their contributions with other innovative financial service channels. Banks should integrate with new market entrants, or the future will have a banking system without banks. Regulators must support banks’ survival traits such as the light set of criteria in their Know Your Customer (KYC) package.