Topic: Fintech (Finance Technology)

Article 1: Fintech and banking: What do we know?

The author raised a lot of ground rules and crucial questions about how Fintech has
innovated banking, financial markets, and payments systems. He also discusses the
“modern” form of money- Cryptocurrencies, about the differences between
cryptocurrencies and traditional money. The author reached his main purpose by
pointing out and explaining about the current banking and Fintech system. Through
that, he wants his research to set the agenda for future research and raise other
researchers development research. The biggest limit in this paperwork is that
although a lot of questions are raised, the author has not analyzed all of its problems
at a deep level.

Article 2: Banking goes digital: The adoption of FinTech services by German

households

To begin with, according to the writer, Germany currently lags behind its global
peers, as many as developing countries, in adopting new digital technologies and
financial services offered by Fintech. The aim of the writer was to see which Fintech
services households are likely to adopt. He gathered information from an online
survey of 323 German households (the original figure was 643 included incomplete
questions and missing values) performed between 32 October 2017 and 11
November 2017. The dataset was divided into 183 men and 141 women with the age
between 19 to 70 years old. Their results showed that a household’s level of trust
and comfort with new technologies, financial literacy, and overall transparency
impact its propensity to switch to a FinTech. Specifically, households with low levels
of trust, good financial education, and preference for transparency are characterized
by a higher probability of adopting FinTech. In contrast, household price perceptions
do not appear to significantly impact switching probability. However, this article only
gathered data from a small group of people, but this data may not be enough to
conclude.

Article 3: Does bank FinTech reduce credit risk? Evidence from China

The writer’s objective was to examine how bank fintech affects credit risk measured
by the ratio of non-performing loans. Moreover, this article also questioned whether
bank heterogeneity moderated these effects. They used hand-collected data from 60
commercial banks (6 state-owned commercial banks, 12 joint stock commercial
banks, 33 city commercial banks, 9 rural commercial banks), accounted for more
than 90% of the total assets of all Chinese commercial banks between 2008 and
2017 to construct a bank index and indicate the effects of bank fintech on credit risk.
To analyze the impacts of bank Fintech on credit risk, they used the basic regression
model. The major findings are as follows. First, the development of Bank Fintech and
the subareas of bank Fintech show an increasing trend from 2008 to 2017.
Secondly, the development of bank Fintech is more rapid in state-owned banks than
in other banks. Among the subareas of bank Fintech, internet technology is the
fastest growing subarea, and artificial intelligence was the slowest growing. In
addition, their results showed that bank Fintech and bank FinTech subareas are all
negatively associated with bank credit risk, indicating that the development of bank
FinTech reduces credit risk. Consequently, they also found that the negative effects
of bank FinTech on credit risk were weaker in large banks, state-owned banks, and
listed banks. The benefits have been pointed out by the writer, in contrast, bank
Fintech also had some negative effects on commercial banks, namely technical risk
and regulatory risk. The limit of this article is the data that the writer collected was
only in China, not related to any other nations, hence, there is no evidence that bank
Fintech will reduce credit risk in other countries. Bank Fintech might help China
reduce credit risk but they can increase the level of credit risk in other countries.

Article 4: The effect of fintech on banks’ credit provision to SMEs: Evidence

from China

The main objective of this study was to examine the impacts of Fintech on the ability
of banks to offer credit to small and medium enterprises, with the focus on bank
sizes. They used the annual data of 31 provinces in the mainland for the sample in
the period of 8 years, from 2011 to 2018. Moreover, they analyzed provincial panel
data and adopted some variable setting from existing literature, they also
constructed a regression model to test their hypotheses. The results showed that
fintech can promote the overall supply of credit to SMEs from banks. Furthermore,
they found that fintech plays a stronger role in promoting large banks’ credit supply
to SMEs, mainly because of the decline in the original technical advantages of small
banks due to fintech development. The limit of this article is the data that the writer
collected was only in China, not related to any other nations, hence, there is no
evidence that Fintech will help small and medium enterprises gain more credit in
other countries.

Article 5: Fintech Integration Process Suggestion for Bank

The aim of the writer’s article was to create a framework to give guidance to other
financial institutions in Fintech Integration Process (FIP). FIP can be divided into
seven phases and each phase was constructed to minimize risks and increase the
awareness of Fintech in the departments. The writer used his own business
experience in Kuveyt Türk Participation Bank in Turkey to build the seven-step
guidance. The result of his work was the systematic fintech integration framework for
banks. The guideline gives the financial institutions a clear vision how to merge Bank
and Fintech, however, the seven steps are not perfect and there are many points to
improve. The data the writer collected was only his personal experience in one
particular bank in Turkey, which means the seven steps are not always suitable to
apply in other country’s banks.

Article 6: Do financial technology firms influence bank performance?

The aim of this article was to see whether the growth of Fintech firms negatively
influences bank performance or not. The writers studied the Indonesia market, they
gathered data from manifold sources. The data on Fintech firms was obtained from
Fintech Indonesia Association, other data obtained from the Global Financial
Database and all data are annual over the period of 20 years, from 1998 to 2017.
Furthermore, they also used a regression model to test their hypothesis. Using a
sample of 41 banks and data on FinTech firms, they showed that the growth of
FinTech firms negatively influences bank performance.

Article 7: Digital Marketplace and FinTech to Support Agriculture

Sustainability

According to the writer, agriculture always plays a crucial role in providing food
security and sustainability for the people in any nation. However, lack of fundings
and limited distribution channels to reach customers are the main issues that farmers
are frequently dealing with. In this article, the writer has proposed a digital
marketplace with Fintech enabled public funds and payment systems in order to
support agriculture’s sustainability and productivity. In their analysis, they examined
the business process of mobile commerce in agribusiness and used the results to
formulate the model and gave recommendations. The model namely ArgoPay
connects all actors (farmers, landowners, investors, and consumers) into a platform
that can promote transparency, empowerment, resourcefulness, and public
engagement in agriculture. Although ArgoPay has many positive factors, it also has
some drawbacks and limits. For example, ArgoPay can be difficult for the elder
farmers, they are not able to use smartphones or computers, ArgoPay is more
suitable for the youngsters. Moreover, ArgoPay may be hard to approach by low-
tech people.

Article 8: The effect of fintech on banks’ credit provision to SMEs: Evidence

from China

The main objective of this study was to examine the impacts of Fintech on the ability
of banks to offer credit to small and medium enterprises, with the focus on bank
sizes. They used the annual data of 31 provinces in the mainland for the sample in
the period of 8 years, from 2011 to 2018. Moreover, they analyzed provincial panel
data and adopted some variable setting from existing literature, they also
constructed a regression model to test their hypotheses. The results showed that
fintech can promote the overall supply of credit to SMEs from banks. Furthermore,
they found that fintech plays a stronger role in promoting large banks’ credit supply
to SMEs, mainly because of the decline in the original technical advantages of small
banks due to fintech development. The limit of this article is the data that the writer
collected was only in China, not related to any other nations, hence, there is no
evidence that Fintech will help small and medium enterprises gain more credit in
other countries.

Article 9: Fintech: Ecosystem, business models, investment decisions, and

challenges

Financial technology (fintech) is recognized as one of the most important innovations

in the financial industry and is evolving at a rapid speed, driven in part by the sharing
economy, favorable regulation, and information technology. Fintech promises to
reshape the financial industry by cutting costs, improving the quality of financial
services, and creating a more diverse and stable financial landscape (‘The FinTech
Revolution,’ 2015). The technological developments in infrastructure, big data, data
analytics, and mobile devices allow fintech startups to disintermediate traditional
financial firms with unique, niche, and personalized services. According to PwC
(2016), 83% of financial institutions believe that various aspects of their business are
at risk to fintech startups. Due to fintech companies already having a significant
impact on the financial industry, every financial firm needs to build capabilities to
leverage and/or invest in fintech in order to stay competitive

Article 10: Risk spillovers between FinTech and traditional financial

institutions: Evidence from the U.S

In this paper, the authors propose a novel approach to examine the risk spillovers
between FinTech firms and traditional financial institutions, during a time of fast
technological advances. Based on the stock returns of U . S . financial and FinTech
institutions, they estimated pairwise risk spillovers by using the Granger causality
test across quantiles. We consider the whole distribution: the left tail (bearish case),
the right tail (bullish case) and the center of the distribution and construct three types
of spillover networks (downside -to -downside, upside -to -upside, and center -to
-center) and obtain network -based spillover indicators. The result was linkages in
the network are stronger in the bearish case when the risk of spillover is higher.
FinTech institutions’ risk spillover to financial institutions positively correlates with
financial institutions’ increase in systemic risk. These results have important policy
implications, as they underscore the importance of enhancing the supervision and
regulation of FinTech companies, to maintain financial stability.
Article’s source:

1, Fintech and banking: What do we know?

https://www.sciencedirect.com/science/article/pii/S104295731930049X

2, Banking goes digital: The adoption of FinTech services by German households:

https://www.sciencedirect.com/science/article/abs/pii/S154461231930296X

3, Does bank FinTech reduce credit risk? Evidence from China

https://www.sciencedirect.com/science/article/pii/S0927538X19307607

4, The effect of fintech on banks’ credit provision to SMEs: Evidence from China
https://www.sciencedirect.com/science/article/abs/pii/S1544612320301148

5, Fintech Integration Process Suggestion for Bank

https://www.sciencedirect.com/science/article/pii/S1877050919313092

6, Do financial technology firms influence bank performance?

https://www.sciencedirect.com/science/article/pii/S0927538X18305638

7, Digital Marketplace and FinTech to Support Agriculture Sustainability

https://www.sciencedirect.com/science/article/pii/S1876610218310944

8, The effect of fintech on banks’ credit provision to SMEs: Evidence from China
https://www.sciencedirect.com/science/article/abs/pii/S1544612320301148

9, Fintech: Ecosystem, business models, investment decisions, and challenges

https://www.sciencedirect.com/science/article/pii/S0007681317301246

10, Risk spillovers between FinTech and traditional financial institutions: Evidence
from the U.S
https://www.sciencedirect.com/science/article/abs/pii/S1057521920301885