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Article

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. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2053-4620

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Article

Sumit Agarwal and Yeow Hwee Chua

This paper reviews recent advances in the empirical literature of FinTech and household finance.

Abstract

Purpose

This paper reviews recent advances in the empirical literature of FinTech and household finance.

Design/methodology/approach

We survey the effects of FinTech on three different aspects of household finance: payments, lending and portfolio decisions. Specifically, we examine the impact of digital payments, mobile money, FinTech lending, marketplace lending, robo-advising and crowd-funding.

Findings

Studies suggest that FinTech has positively benefited households by increasing consumption and borrowing. This allows them to smoothen their consumption across time. Furthermore, there is an improvement in their portfolio diversification. Nonetheless, there is also evidence that certain households overconsume and borrow beyond their means.

Originality/value

Despite the importance of this topic, there has been a lack of empirical evidence until recently. In this paper, we take stock of the empirical evidence in the literature through the lens of household finance

Details

China Finance Review International, vol. 10 no. 4
Type: Research Article
ISSN: 2044-1398

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Article

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…

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

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Article

Taofik Hidajat

This paper aims to highlight the existence of illegal peer-to-peer (P2P) lending in Indonesia, unethical practices of P2P lending operators to borrowers, regulatory…

Abstract

Purpose

This paper aims to highlight the existence of illegal peer-to-peer (P2P) lending in Indonesia, unethical practices of P2P lending operators to borrowers, regulatory weaknesses and offer recommendations to reduce unethical practices.

Design/methodology/approach

This paper is a general discussion through desk research using secondary data from journal papers, research reports, books and papers online.

Findings

There are regulatory weaknesses in regulating illegal P2P lending. There are no strict legal sanctions for P2P lending operators who act unethically to borrowers.

Originality/value

This paper discusses the unethical actions of P2P lending operators and the inability of regulations to take legal action against illegal P2P operators.

Details

Journal of Financial Crime, vol. 27 no. 1
Type: Research Article
ISSN: 1359-0790

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Article

Vikas Sangwan, Harshita , Puneet Prakash and Shveta Singh

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…

Abstract

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.

Details

Studies in Economics and Finance, vol. 37 no. 1
Type: Research Article
ISSN: 1086-7376

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Book part

Nugroho Saputro, Ariyanto Adhi Nugroho and Irwan Trinugroho

Financial technology has been growing significantly over the last few years all around the world. In this chapter, we study the impact of financial technology on the risk…

Abstract

Financial technology has been growing significantly over the last few years all around the world. In this chapter, we study the impact of financial technology on the risk and performance of commercial banks as the incumbent in the industry. The authors combine a cross-country dataset resulting in 336 country-year observations. The authors find that financial technology, more particular the growing of adoption in mobile money, has been considered to increase the risk of banks. However, the authors do not find any evidence that the performance of commercial banks has significantly eroded by the presence of financial technology.

Details

Recent Developments in Asian Economics International Symposia in Economic Theory and Econometrics
Type: Book
ISBN: 978-1-83867-359-8

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Abstract

Details

Understanding Financial Stability
Type: Book
ISBN: 978-1-78756-834-1

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Case study

Michael Ozlanski and Emma Marie Fleck

New entrepreneurial businesses are one of the key drivers of innovation and economic development. However, one of their greatest obstacles is accessing capital, especially…

Abstract

Synopsis

New entrepreneurial businesses are one of the key drivers of innovation and economic development. However, one of their greatest obstacles is accessing capital, especially since they are often initially unprofitable and lack tangible assets in the first few years of operation. Since debt financing from banks can be difficult for them to obtain, their capacity for growth can be limited. This case introduces students to Kabbage, a company that reduced the barriers associated with start-up and microbusiness lending by using a fully automated, data-driven platform. Kabbage made instant decisions on whether these businesses should qualify for a line of credit by reviewing its clients’ electronic data, analyzed quickly and accurately using specific algorithms.

Research methodology

Given the applied nature of the case, the data were gleaned from a wide range of secondary sources, specifically popular business press which was verified for authenticity.

Relevant courses and levels

This case can be used in a variety of undergraduate courses. Some course examples include small business management, introduction to entrepreneurship or entrepreneurial finance.

Details

The CASE Journal, vol. 14 no. 6
Type: Case Study
ISSN: 1544-9106

Keywords

Content available
Article

Craig Henry

Abstract

Details

Strategy & Leadership, vol. 44 no. 2
Type: Research Article
ISSN: 1087-8572

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Article

Caroline Stern, Mikko Makinen and Zongxin Qian

China is a country with the most number of operating peer-to-peer (P2P) lending platforms (approximately 2,000) worldwide. This study aims to provide an overview on…

Abstract

Purpose

China is a country with the most number of operating peer-to-peer (P2P) lending platforms (approximately 2,000) worldwide. This study aims to provide an overview on FinTechs in China. It was examined why payment services and P2P lending are so popular in China and what are the determinants for the emergence of P2P lending platforms in different provinces in China.

Design/methodology/approach

This study conducted a descriptive analysis of P2P lending in China and an empirical analysis of determinants of P2P lending in China.

Findings

This descriptive analysis shows that the surge in the number of the P2P platforms in China follows an inverted U-shaped phenomenon. However, the outstanding balances of P2P lenders is still increasing, while average yields of P2P lenders have sharply plunged. The empirical findings indicate that P2P lending is more extensive in the region with more mobile phone subscriptions; outstanding balance of P2P lenders in region is negatively associated with the size of traditional banking sector; and the number of the P2P platforms in negatively related to the fixed assets investments in region, whereas average yield is positively associated with the fixed assets investments.

Originality/value

Currently, almost no research papers with empirical analysis of FinTechs, especially P2P lenders, exist. This study estimates a simple model to find determinants of P2P lending.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 10 no. 3
Type: Research Article
ISSN: 1754-4408

Keywords

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