Fintech Finance and Financial Fragility   Focusing on China

Lai, Rose Neng; Order, Robert A. Van

doi:10.2139/ssrn.3075043

Cited by 10 publications

(6 citation statements)

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“…As a result, model testing focuses primarily on performing loans. In an interesting, recent study examining Fintech lending/borrowing in China, Lai and Van Order (2017) claim that: 'loan originators and sellers, as well as borrowers, gamed the newly evolved automated underwriting systems by exploiting things not covered in the models... It is also clear that risk was often hidden in the complicated structures that were used to fund the pools' (p 29).…”

Section: )mentioning

confidence: 99%

Fintech and regtech: Impact on regulators and banks

Anagnostopoulos¹

2018

Journal of Economics and Business

340

159

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The purpose of this paper is to develop an insight and review the effect of FinTech development against the broader environment in financial technology and to offer perspectives in order to aid the understanding of the disruptive potential of FinTech and its implications for the wider financial ecosystem. By drawing upon very recent and highly topical research on this area this study examines the implications for financial institutions and regulation especially when technology poses a challenge to the global banking and regulatory system. It is driven by a wide-ranging overview of the development, the current state, and possible future of fintech. This paper attempts to fuse together both practitioner-led and academic research. While it draws on academic research, the perspective it takes is also practice-oriented. It relies both on current literature and insights from industry sources and other publicly available commentaries such as professional practitioners' roundtable discussions in which the author has been an active participant. We attempt to interpret banking and regulatory issues from a behavioural perspective. The last crisis exposed significant failures in regulation and supervision. It has made the Financial Market Law and Compliance a key topic on the current agenda. Disruptive technological change seems to be important in investigating regulatory compliance followed by change; we contribute to the current literature review on financial and digital innovation by new entrants where this has also practical implications. We also provide for an updated review of the current regulatory issues addressing the contextual root causes of disruption within the financial services domain aiming to assist market participants to improve effectiveness and collaboration. The difficulties arising from extensive regulation may suggest a more liberal and principled approach to financial regulation. Disruptive innovation has the potential for welfare outcomes for consumers, regulatory and supervisory gains as well as reputational gains for the financial services industry. For example, the preparedness of the regulators to instil culture change and harmonise technological advancements with regulation-as the financial services industry evolves-could likely achieve an orderly growth, aid further systemic stability and restore trust and confidence in the financial system. Our action-led research results have implications for both research and practice. These should be of interest to regulatory standard setters, investors, international organizations and other academics who are researching regulatory and competition issues and their manifestation within the financial and social contexts. As a perspective on a social construct, this study appeals to regulators and law makers, entrepreneurs and investors who participate in technology applied within the innovative financial services domain. It is also of interest to bankers who might consider FinTech and strategic partnerships as potential future strategic direction.

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Section: )mentioning

confidence: 99%

Fintech and regtech: Impact on regulators and banks

Anagnostopoulos¹

2018

Journal of Economics and Business

340

159

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“…Fintech finance is financial services that is offered by financial technology companies. Fintech companies use technology to enhance or automate financial services and processes which are then delivered to customers in a frontend user interface commonly referred to as user applications (Lai et al, 2017;Guild, 2017). Open banking is a type of digital technology application in banking and finance.…”

Section: Modern Developments In Digital Financementioning

confidence: 99%

Digital finance research and developments around the World: a literature review

Ozili¹

2022

IJBFMI

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This paper presents a concise review of the existing digital finance research in the literature, and highlight some of the developments in digital finance around the world. The paper reached several conclusions. Firstly, it showed that digital finance has become an important part of modern finance and the major application of digital finance can be found in Fintech, embedded finance, open banking and decentralized finance, central bank digital currencies, among others. Secondly, it identified some international determinants of digital finance which includes the need for efficiency in financial services delivery, the need to achieve the United Nations sustainable development goals using existing digital technologies, the need to increase financial inclusion through digital financial inclusion and the need for efficient payments and payment settlement finality. The paper also finds that digital finance research is growing fast, and recent studies have investigated contemporary issues in digital finance that are relevant for policy and practice. Regarding the digital finance developments around the world, the paper shows that the Fintech and mobile money industries are the largest beneficiary of investments in digital finance with the total number of users of mobile money services surpassing 1 billion globally. Also, the paper predicts that the future of digital finance is to create a digital environment that permits the offering of all kinds of financial product and services that can be customized and personalized to meet the unique needs of all users on a single digital platform and without requiring any form of human assistance or intermediary. The paper then suggest some areas for future research which include the need for more research on how regulators can keep pace with emerging digital finance transformation, the need for more research on user information security and compliance, the need for more research on how to deal with bias caused by bad data, the need for more research on how to deal with algorithmic bias, and the need for more research on how to combine a risk-conscious culture with a higher risk appetite for digital finance transformation.

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“…Due to the interlocking nature of FinTech products and services, the systemic risk of the sector has increased. Focusing on China, Lai and Order (2017) surmise that when the FinTech firms also start performing financial intermediation, they could act as a threat to the traditional banking system.…”

Section: Themesmentioning

confidence: 99%

Financial technology: a review of extant literature

Sangwan

Harshita

Prakash

et al. 2019

SEF

100

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Purpose This paper aims to undertake a thematic review of academic papers on financial technology (FinTech) to identify three broad categories for the purpose of classifying extant literature. The paper summarizes the research and findings in this emerging field. Thereafter, it identifies the gaps and provides directions for further research. Simultaneously, the paper collates technical terms related to FinTech that appear repeatedly in each category and explains them. Finally, the study highlights the lessons that growing FinTech firms and their regulators can learn from the experiences of their counterparts across the globe. Design/methodology/approach A systematic review of literature consisting of 130 studies (social science research network [SSRN]-29 papers, Scopus-81, other sources-20) on FinTech is carried out in this thematic paper. Findings This thematic paper divides FinTech into three themes, i.e. financial industry, innovation/technology and law/regulation. The paper suggests that a thorough impact of FinTech on various stakeholders can be understood using three dimensions, namely, consumers, market players and regulatory front. It is noted that FinTech is in its nascent phase and is undergoing continuous development and implementation through product and process innovation, disruption and transformation. Research limitations/implications The paper reports that FinTech promises huge potential for further study by various stakeholders in the FinTech industry – from academia to practitioners to regulators. Practical implications The paper summarizes lessons that could be of significance for FinTech users, producers, entrepreneurs, investors, policy designers and regulators. Originality/value The paper is believed to add value to the understanding of FinTech in light of the emerging threats and opportunities for its various stakeholders.

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Fintech Finance and Financial Fragility Focusing on China

Cited by 10 publications

References 0 publications

Fintech and regtech: Impact on regulators and banks

Fintech and regtech: Impact on regulators and banks

Digital finance research and developments around the World: a literature review

Financial technology: a review of extant literature

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