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Article
Publication date: 17 November 2022

Sungwon Oh, Min Jae Park, Tae You Kim and Jiho Shin

This study aimed to present the methodology of the text data analysis to establish marketing strategies for fintech companies in a practical way. Specifically, the…

Abstract

Purpose

This study aimed to present the methodology of the text data analysis to establish marketing strategies for fintech companies in a practical way. Specifically, the methodology was presented to convert customers' review data, which consisted of the text data (unstructured data), to the numerical data (structured data) by using a text mining algorithm “Global Vectors for Word Representation,” abbreviated as “GloVe”; additionally, the authors presented the methodology to deploy the numerical data for marketing strategies with eliminate-reduce-raise-create (ERRC) value factor analytics.

Design/methodology/approach

First, the authors defined the background, features and contents of fintech services based on a review of related literature review. Additionally, they examined business strategies, the importance of social media for fintech services and fintech technology trends based on the literature review. Next, they analyzed the similarity between fintech-related keywords, which represent the trends in fintech services, and the text data related to fintech corporations and their services posted on Facebook and Twitter, which are two of the most popular social media globally, during the period 2017–2019. The similarity was then quantified and categorized in terms of the representative global fintech companies and the status of each fintech service sector. Furthermore, the similarity was visualized, and value elements were rebuilt using ERRC strategy analytics.

Findings

This study is meaningful in that it quantifies the degree of similarity between customers' responses, experiences and expectations regarding the rapidly growing global fintech firms' services and trends in fintech services.

Originality/value

This study suggests a practical way to apply in business by providing a method for transforming unstructured text data into structured numerical data it is measurable. It is expected that this study can be used as the basis for exploring sustainable development strategies for the fintech industry.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 10 August 2021

Filomena Izzo, Viktoriia Tomnyuk and Rosaria Lombardo

In the intellectual capital literature, no studies have examined the causal relationship between Italian Fintech companies' performance and intellectual capital…

Abstract

Purpose

In the intellectual capital literature, no studies have examined the causal relationship between Italian Fintech companies' performance and intellectual capital, especially the impact of digital industrialization on human capital. This paper aims to fill this gap in measuring human capital efficiency in the Italian Fintech market.

Design/methodology/approach

The authors adopt Pulic's model and define the intellectual capital through three components (human capital, structural capital and capital employed) and perform an exploratory analysis of the Italian Fintech companies by using principal component analysis. Then the authors investigate the effects of the intellectual capital and its components on the Italian Fintech companies' performance by using parametric and nonparametric regression models.

Findings

Results of regression models reveal that human capital and employed capital are positively related to the companies' performance, except for the structural capital.

Research limitations/implications

The study focuses on the Italian level, and future research could be extended to different European countries or to the global Fintech market. Moreover, it is advised to explore more components that contribute to intellectual capital measurement inside the companies operating in the 4.0 industrial revolution, such as the innovative capital and the relational capital.

Practical implications

This study proposes a new vision for managerial procedures to find which features are critical for achieving profitability in this digital era. The study offers interesting reflections on the management decisions for both companies and public decision-makers. Results suggest that, among intellectual capital components, human capital plays a strategic role for the knowledge-intensive companies that are interested in potentiating their performance and competitiveness. Furthermore, this study finds that human capital is critical factor for achieving profitability in this digital era.

Social implications

The Fintech sector is one that most benefited from the Digital Revolution, and if it is adequately managed, it can bring great benefits in terms of major employment, especially for the young population, and bring major financial inclusiveness all over the world.

Originality/value

This is the first study that examines the Italian Fintech market and analyzes the dependence relationship between companies' performance and intellectual capital components, identifying the role of human capital in a new completely digital sector. The analysis findings are strategic for the business decisions-making process.

Details

International Journal of Manpower, vol. 43 no. 4
Type: Research Article
ISSN: 0143-7720

Keywords

Book part
Publication date: 22 November 2016

Inna Romānova and Marina Kudinska

Global economy, growing importance of innovations as well as wide use of technologies have changed the banking business worldwide. Financial technologies (FinTech) have…

Abstract

Global economy, growing importance of innovations as well as wide use of technologies have changed the banking business worldwide. Financial technologies (FinTech) have become an integral part of banking, and nowadays banks have started to compete beyond financial services facing increasing competition from nonfinancial institutions providing, for example, payment services. Start-up service providers, search engines, and social networks have expanded their services “interfering” in the fields traditionally covered by banks. The rapid rise of FinTech has changed the business landscape in banking asking for more innovative solutions. These recent tendencies require the banks to increase investment in FinTech, rethink service distribution channels, especially the business-to-consumers models, increase further standardization of back-office functions, etc. Some members of the financial services industry see the boom in FinTech as a threat to traditional banking industry. Others believe that FinTech has become a challenge that can be turned into an opportunity as it provides more flexibility, better functionality in some areas, and aggregation of services. The aim of the paper is to analyze the recent trends in banking, identifying opportunities and risks of FinTech for banks. A timely integration of FinTech into business allows banks to get an advantage in growing competition. This paper provides an extensive analysis of recent trends in FinTech and banking, examining experience of leading European and US banks, as well as surveys conducted among members of the financial services industry in different countries. The authors have studied the development of the financial innovation and technology market, assessed the existing practices applied in the field of FinTech, identified the main risks related to development of FinTech and financial innovations the banks are exposed to on the micro- and macrolevel. The paper provides recommendations for regulators and banks to ensure reduction of risks associated with development of FinTech. Analysis of FinTech market has shown growing competition, including from nonfinancial institutions. The paper provides practical recommendations to commercial banks for strengthening the position in financial innovations and controlling the risks associated with introduction of financial innovations.

Details

Contemporary Issues in Finance: Current Challenges from Across Europe
Type: Book
ISBN: 978-1-78635-907-0

Keywords

Article
Publication date: 23 December 2020

Khakan Najaf, Christophe Schinckus and Liew Chee Yoong

This study aims at determining the portfolio value at risk (VAR) and market value of Fintech firms and compare it with their counterparts.

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Abstract

Purpose

This study aims at determining the portfolio value at risk (VAR) and market value of Fintech firms and compare it with their counterparts.

Design/methodology/approach

By using on a dataset from 46 countries between 2009 and 2018, the authors use five measures of VaR to investigate their empirical dynamics in relation with the market value of Fintech and non-Fintech companies.

Findings

The empirical results indicate that Fintech firms' portfolios have a higher financial risk and a higher market value in comparison to non-fintech firms' portfolios. Furthermore, the authors also report that the Fintech firm portfolios experience more financial risk regardless of the holding period as long-term (one year) or short-term (quarter).

Research limitations/implications

There are some limitations in this research. This research does not segregate Fintech firms into their different types of services, such as direct financial investment services, loan provision services, insurance services (InsurTech), etc. The authors only aggregate the Fintech firms by country and region. Future research may consider analysing Fintech firms by differentiating the kind of financial services they offer

Practical implications

Given the importance of their market value, the results imply that Fintech companies might contribute significantly to financial fluctuations in case of large variations of the market. In terms of policy recommendation, this observation requires a particular attention from the regulatory bodies who need to find the best economic balance between promoting innovation/financial technology and regulating the Fintech companies.

Originality/value

This paper is the first study clarifying the relation of financial risk and market value for the Fintech firms, using the large enough database to obtain significant results. This article implies that Fintech companies require a robust risk management framework

Details

Managerial Finance, vol. 47 no. 7
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 18 January 2021

Ami Fitri Utami and Irwan Adi Ekaputra

This paper aims to examine about the nature and strategy of current competitive dynamics by FinTech lending Indonesia players.

Abstract

Purpose

This paper aims to examine about the nature and strategy of current competitive dynamics by FinTech lending Indonesia players.

Design/methodology/approach

This paper uses both primary and secondary data. Interviews of several executives of a FinTech lending firm are done to gain direct insight of how the firms strategize their business operation. On the other hand, secondary data from internet search (e.g., OJK’s Website, FinTech Lending firm’s websites) are used to grasp the overview of the industrial landscape.

Findings

The study confirms that differentiation, collaboration, compliance and strong internal resources (e.g. team and funding) are the most pivotal elements for FinTech lending success. The study also confirmed the FinTech lending industrial landscape as an emerging and fragmented industry.

Research limitations/implications

This paper offers an original and detailed solution about how the FinTech lending company strategies may survive in a dynamic competition. The paper also shows the industrial analysis of the FinTech lending industry, which is rarely discussed in previous research. However, this study only focused on the lending sub-sector of FinTech, and the sample for primary data is highly limited (only three interviews).

Practical implications

This paper proposes a strategy that can be conducted by FinTech lending companies to achieve their business goals, including business growth, profits and improve financial inclusion in Indonesia. This perspective can act as a means to create practical modus operandi for policymakers and practitioners, especially FinTech lending companies in Indonesia.

Originality/value

This paper offers an original and detailed solution about how the FinTech lending company strategies may survive in adynamic competition. This study also provides a theoretical framework for use in further empirical research into the process of resource mobilization from FinTech lending Indonesia companies.

Details

Journal of Science and Technology Policy Management, vol. 12 no. 2
Type: Research Article
ISSN: 2053-4620

Keywords

Book part
Publication date: 26 August 2019

Surianom Miskam, Abdul Monir Yaacob and Romzie Rosman

The global Islamic financial landscape is changing with rapid advances in technology. The increasingly tech-savvy demography is presenting both opportunities and…

Abstract

The global Islamic financial landscape is changing with rapid advances in technology. The increasingly tech-savvy demography is presenting both opportunities and challenges to the industry. With the advances in e-finance and mobile technologies, financial technology (Fintech) innovations emerged by combining the e-finance, Internet, social networking services, social media, artificial intelligence (AI) and big data analytics. Fintech promises to reshape the Islamic financial landscape by improving processes’ efficiencies, cost-effectiveness, increased distribution, Sharīʿah compliance and financial inclusion. As far as the Islamic fund management industry is concerned, AI seems to be the keyword. Islamic fund managers have recently started to incorporate AI and big data analytics into their strategy in the process of making accurate decisions based on facts and figures, which eliminates any biases and personal intuition. This disruption in status quo is raising new issues, new concerns and new exciting opportunities. While disruption may carry negative connotations, the industry players have been embracing the innovation and potential revolution the technology could offer. Thus, the objective of this chapter is to discuss legal aspects of Fintech and its impact on the Islamic fund management industry in Malaysia. This chapter introduces a historical overview of Fintech and its evolution in the Islamic fund management industry. This chapter further provides an overview of the legal and regulatory aspects of Fintech with regards to the industry. Finally, legal issues and challenges are identified and discussed. Being a legal research, this chapter adopts a qualitative method by analysing the relevant literatures on the subject. This chapter is expected to provide an insight into the application of Fintech and its impact on the Islamic fund management industry in Malaysia.

Details

Emerging Issues in Islamic Finance Law and Practice in Malaysia
Type: Book
ISBN: 978-1-78973-546-8

Keywords

Article
Publication date: 16 March 2022

Ascarya Ascarya and Ali Sakti

This study aims to design appropriate micro-fintech models for Islamic microfinance institutions (IMFIs), especially Baitul Maal wat Tamwil (BMT) in Indonesia, thus…

Abstract

Purpose

This study aims to design appropriate micro-fintech models for Islamic microfinance institutions (IMFIs), especially Baitul Maal wat Tamwil (BMT) in Indonesia, thus enabling BMT to combine Islamic social and commercial microfinance optimally.

Design/methodology/approach

This study uses the analytic network process and Delphi methods, with three groups of experts as the respondents, namely, academician-regulators, BMT practitioners and Fintech practitioners.

Findings

The first results show that the micro-fintech tools needed by IMFI/BMT are digital banking, payment, peer-to-peer (P2P) financing, P2P social and e-commerce. These could be developed by a BMT alone or with an APEX or Association, which could also collaborate with an existing fintech company that specialises in micro-fintech, applying the offline to online approach. This means that commercial funding, as well as social fundraising of zakat and waqf, would be conducted online, whereas commercial financing for micro and small enterprise customers and the disbursement of zakat and waqf would be conducted offline. The second results show that the limited open ecosystem and hybrid ecosystem are the most appropriate micro-fintech ecosystems for IMFIs/BMT, with various alternative models. In addition, the private closed ecosystem preferred by BMT would be feasible if all criteria show improvement in the future.

Research limitations/implications

This study is qualitative in nature. The methods used have limitations, meaning the models could be improved by incorporating other methods. Moreover, the case and respondents are all Indonesian, which means that the results may only be applicable to BMTs in Indonesia.

Practical implications

A BMT and/or BMT association could immediately apply micro-fintech with a limited open ecosystem, while in the future, they could apply micro-fintech with a private closed ecosystem.

Social implications

The micro-fintech model could be used to optimise the collections of zakat, infaq and waqf, meaning BMT could provide more social programmes for those in need.

Originality/value

The growth of fintech in Islamic microfinance has occurred only recently, while only a limited number of studies have been conducted; therefore, no study exists on the development of a micro-fintech model appropriate for IMFIs, especially BMT.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 15 no. 2
Type: Research Article
ISSN: 1753-8394

Keywords

Case study
Publication date: 12 October 2022

Ryan Schill, Ronei Leonel, Frances Fabian and David Frank Jorgensen

Following successful discussion of this case, students should be able to:▪ understand and apply the principles of effectuation;▪ understand the difficulty of obtaining…

Abstract

Learning outcomes

Following successful discussion of this case, students should be able to:▪ understand and apply the principles of effectuation;▪ understand the difficulty of obtaining traditional financing in Latin America;▪ determine the importance of matching new hire and company values, particularly in a small business; and▪ analyze some of the unique problems facing a business at the point of scaling up and provide suggestions for how the protagonist could address those problems.

Case overview/synopsis

This case provides an introduction to the Fintech industry in South and Central America, fruitfully combining tenets of the lean startup methodology, effectual principles of entrepreneurship and a novel method of managing personal finances via decentralized vehicles provided through fintech. In addition, Kuiki Credit and its use of fintech represent a compelling example of industry disruption by an entrepreneurial firm. Owing to its unique location, this case provides students with a lens into a part of the world rife with bureaucracy and, in some cases, corruption. The disruption is thus unique in that not only does one view traditional disruption of industry dynamics, but also government policy and cultural mores. This is evinced within the body of the case through direct quotes from founder Ernesto Leal and Eduardo Morán, one of the company’s first employees. This information highlights the market Kuiki Credit pursued, one underserved by traditional financing and thus lacking access to credit.Consistent with effectual entrepreneurship principles, Ernesto Leal, the main protagonist and a Nicaraguan entrepreneur, drew upon his significant corporate experience in financial institutions and as a franchise owner to create a new venture. Kuiki Credit is designed to increase access to capital and disseminate fintech throughout Central and South America, and in particular first in Costa Rica and later in Nicaragua. The case is set in 2018, when Leal faces a scaling issue. Specifically, he wonders how to maintain an entrepreneurial company with high levels of innovation and a culture of continuous improvement despite the need to grow. Near the end of the case, some specific issues relative to culture are briefly reviewed in relation to the sales department and Leal feeling the need to restructure the company, while being encouraged by the board to hit breakeven targets for three consecutive months prior to expanding to new markets.

Complexity academic level

This case most appropriately lends itself to discussions in entrepreneurship at the junior or senior undergraduate level. To engage in this case most productively, students should have a basic understanding of entrepreneurship, the equivalent of two to three weeks into the semester.

Supplementary materials

Teaching notes are available for educators only.

Subject code

CSS:3: Entrepreneurship.

Details

Emerald Emerging Markets Case Studies, vol. 12 no. 3
Type: Case Study
ISSN:

Keywords

Article
Publication date: 12 July 2022

Victor Ediagbonya and Comfort Tioluwani

In recent times, various governments in the developing and emerging markets are increasingly embracing financial technology to help improve financial inclusion and…

Abstract

Purpose

In recent times, various governments in the developing and emerging markets are increasingly embracing financial technology to help improve financial inclusion and integration within the governments' countries. One of the primary goals of using such technology is to reduce poverty. This paper explores Fintech innovations' effectiveness in developing and emerging markets in driving financial inclusion using Nigeria as a case study. The paper explores the challenges militating against financial inclusion and the role of government, financial institutions, and fintech companies in ensuring financial inclusion for the vast majority of the unbanked population in the developing and emerging markets.

Design/methodology/approach

This paper is based on doctrinal, sociological, and comparative research methodologies. The researchers conducted a content analysis drawing on data from both primary and secondary sources, including existing legislation, journal articles, newspaper reports, and policy documents.

Findings

The research showed that the financial inclusion gap has expanded despite the government, regulators, and financial institutions' various efforts by developing various digital platforms, including encouraging the use of smartphones for mobile payments and automated teller machines (ATMs) and mobile money. Several reasons are responsible for the gap in financial inclusion: illiteracy, poor infrastructural facilities, intermittent power supply, poor mobile receptions, especially in rural areas, constant banks' network failures, unnecessary charges, information asymmetry and data privacy breaches, amongst others.

Practical implications

Financial inclusion through fintech is essential in eradicating poverty in developing and emerging markets if adequately implemented. Therefore, this paper will be useful to researchers exploring how technology influences financial inclusion. The paper will also aid policymakers and practitioners in financial technology regulation to improve the effectiveness of policymakers and practitioners' policies and implementation strategies of financial inclusion in developing and emerging markets.

Originality/value

This research is significant, especially in developing and emerging markets, by exploring issues and challenges of fintech in promoting financial inclusion in challenging institutional contexts. This paper suggested potential areas for further research, particularly women's attitudes and expectations towards services provided by fintech companies and other financial institutions.

Details

Technological Sustainability, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2754-1312

Keywords

Article
Publication date: 6 March 2019

Luis Hernan Contreras Pinochet, Guilherme Tongnole Diogo, Evandro Luiz Lopes, Eliane Herrero and Ricardo Luiz Pereira Bueno

Given the large global investments made in FinTechs and the context of Brazilian credit (which has been suffering from the effects of the crisis in the last decade), the…

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Abstract

Purpose

Given the large global investments made in FinTechs and the context of Brazilian credit (which has been suffering from the effects of the crisis in the last decade), the purpose of this paper is to study the propensity of consumption of credit services offered by FinTechs of loans. In order to discover the factors that influenced the propensity to apply for FinTech loans, a theoretical model was designed, which was tested by means of a survey given to individuals who might contract loans.

Design/methodology/approach

The final sample consisted of 507 individuals whose data were analyzed through structural equation modeling (SEM), with estimation of partial least squares.

Findings

From the results of the research, it was possible to draw a profile of the FinTechs of Brazilian loans and also to estimate the antecedents of the propensity to utilize this type of service.

Research limitations/implications

The model proposed in this work was developed to measure the propensity to consume in relation to the credit services offered by lending FinTechs.

Practical implications

The consumer should intensify the use of these channels to shape financial products and services to their needs, thereby democratizing access to credit, which is often restricted in quantity and quality by policies of institutions that dominate the Brazilian lending market.

Originality/value

Aspects such as trust, personal innovation, perceived utility, ease of use and social influence, as well as the constructs that precede them like privacy, stigma and transactional distance, explain 41.5 percent of the propensity to use services from lending FinTechs in Brazil.

Details

International Journal of Bank Marketing, vol. 37 no. 5
Type: Research Article
ISSN: 0265-2323

Keywords

1 – 10 of over 1000