PROCESS INNOVATIONS IN FINANCIAL TECHNOLOGY: STRATEGIC APPROACHES AND ECONOMIC IMPACTS
DOI:
https://doi.org/10.22159/ijbm.2024v12.52869Keywords:
Financial technology, Bitcoin, Cryptocurrency, AI, Machine learning, Regulatory technology, Blockchain, Robotic process automation, Security and exchange commissionAbstract
Fintech refers to the use of technology to improve client use and delivery of financial services organizations’ offerings. It mostly works by breaking down the packages that these companies offer and creating fresh opportunities for them. Companies in finance-related industries that use fintech have used technology to lower operating costs and promote financial inclusion. Robo-advisors, transaction apps, peer-to-peer (P2P) financing apps, investment apps, and cryptocurrency apps are a few examples of fintech applications. In addition, this research article includes technical breakthroughs such as automation, artificial intelligence, and blockchain that have improved service delivery, reduced costs, and increased efficiency in the financial business. However, since banks may assist companies in more efficient resource allocation, the role of markets in providing financial operations is called into question. Therefore, statutory processes transform the global financial landscape, regulatory frameworks play a critical role in balancing process innovation with political aims. Consequently, it is recommended for future research that any upcoming studies in this area look at the possibility of a few significant economic variables influencing the relationship under investigation in the sector of financial technology.
References
Alt R, Beck R, Smits MT. Fintech and the transformation of the financial industry. Electron Mark 2018;28:235-43.
Ng AW, Kwok BK. Emergence of fintech and cybersecurity in a global financial centre: Strategic approach by a regulator. J Financ Regul Compliance 2017;25:422-34.
Leong K. Fintech (financial technology): What is it and how to use technologies to create business value in a Fintech way? Int J Innov Manage Technol 2018;9:74-8.
Haven EE, Molyneux P, Wilson JO. The Handbook of Post-Crisis Financial Modeling. United Kingdom: Palgrave Macmillan; 2016.
Erel I, Liebersohn J. Can FinTech reduce disparities in access to finance? Evidence from the paycheck protection program. J Financ Econ 2018;146:90-118.
Paddrik ME, Park H, Wang JJ. Bank networks and systemic risk: Evidence from the National Banking Acts. SSRN Electron J 2016;21:1-4.
Oranburg SC. A History of Financial Technology: From Corporations to Crowdfunding. 3rd ed. Vol. 2, Ser. 11. United Kingdom: Cambridge University Press; 2022.
Alam N, Zameni A. The Regulation of Fintech and Cryptocurrencies. 6th ed., Vol. 1, Ser. 10. United Kingdom: Routledge, Taylor & Francis Group; 2019.
Banna H, Rana MS. Fostering economic prosperity through fintech-driven banking expansion and financial inclusion: Strategies and innovations. In: Reference Module in Social Sciences. Netherlands: Elsevier; 2023
Kherbachi S. Digital economy under Fintech scope: Evidence from African investment. FinTech 2023;2:475-83.
Adam F. Fintech versus I-fintech: A dichotomy. In: Islamic FinTech. Vol. 1. New York: Springer International Publishing; 2021. p. 19-35.
Hausman A, Johnston WJ. The role of innovation in driving the economy: Lessons from the global financial crisis. J Bus Res 2014;67:2720-6.
Khuong ND, Sermpinis G, Stasinakis C. Big data, artificial intelligence, and machine learning: A transformative symbiosis in favour of financial technology. Eur Financ Manage 2023;29:517-48.
Piening EP, Salge TO. Understanding the antecedents, contingencies, and performance implications of process innovation: A dynamic capabilities perspective. J Prod Innov Manage 2014;32:80-97.
Zavolokina L, Dolata M, Schwabe G. The Fintech phenomenon: Antecedents of financial innovation perceived by the popular press. Financ Innov 2016;2:16.
Bauguess SW. The role of Big Data, machine learning, and AI in assessing risks: A regulatory perspective. SSRN Electron J 2017;21:1-6.
Murinde V, Rizopoulos E, Zachariadis M. The impact of the Fintech revolution on the future of banking: Opportunities and risks. Int Rev Financ Anal 2022;81:102103.
Ducas E, Wilner A. The security and financial implications of blockchain technologies: Regulating emerging technologies in Canada. Int J Canadas J Glob Policy Anal 2017;72:538-62.
Saule TO. Technology v technocracy: Fintech as a regulatory challenge. J Financ Regul 2020;6:75-124.
Chiu IH. The disruptive implications of Fintech-policy themes for financial regulators. SSRN Electron J 2016;21:1-10.
Prastyanti RA, Rezi R, Rahayu I. Ethical Fintech is a new way of banking. Kontigensi J Ilima Manage 2023;11:255-60.
Sardar S, Anjaria K. The future of banking: How neo banks are changing the industry. Int J Manage Public Policy Res 2023;2:32-41.
Scardovi C. FinTech innovation and the disruption of the global financial system. In: Springer Briefs in Finance. Cham: Springer; 2016. p. 21-49.
Jung JH. Regtech and SupTech: The future of compliance. FinTech. Cheltenham: Edward Elgar Publishing Limited; 2016. p. 369-96.
Kassim NM, Ramayah T. Perceived risk factors influence on intention to continue using Internet banking among Malaysians. Glob Bus Rev 2015;16:393-414.
Zeenat Z, Zhong R, Akbar MW. Analyzing the impact of the fintech industry and green financing on energy poverty in the European countries. Heliyon 2024;10:e27532.
Balbi G, John RR. Point-to-point: Telecommunications networks from the optical telegraph to the mobile telephone. In: Communication and Technology. Ch. 2. Boston: De Gruyter Mouton; 2015. p. 35-56.
Esheievr R. Public Budgeting and Finance. Washington, DC: American Public Administration; 2015. p. 325-50.
Phuoc NV. Evaluating the FinTech success factors model to achieve a sustainable financial technology business: An empirical study in Vietnam. Cogent Eng 2022;9:2109317.
Audu MA, Madawaki M, Oghoyone AS. Effects of customers experience on ATM refund system for failed bank transactions: A study of deposit money banks in Maiduguri, Borno State, Nigeria. IOSR J Bus Manage 2014;16:50-67.
Scott SV, Zachariadis M. The Society for Worldwide Interbank Financial Telecommunication (SWIFT). London: Routledge; 2014.
Hongzhen L, Lan J, Sleiman KA. An empirical study on investigating mobile payment effect on automated teller machine use. Open J Bus Manage 2022;10:1071-87.
Dinçer H, Hacioğlu U. Globalization of Financial Institutions: A competitive Approach to Finance and Banking. Berlin: Springer; 2014.
Chen Y, Kumara EK, Sivakumar V. Investigation of finance industry on risk awareness model and digital economic growth. Ann Oper Res 202;326:1-22.
Park H, Kim JD. Transition towards green banking: Role of financial regulators and financial institutions. Asian J Sustain Soc Responsib 2020;5:5.
Sethi, P, Manocha, R. Impact of Fintech adoption on select macroeconomic variables in India: An ARDL approach. IIMS J Manage Sci 2023;14:155-79.
Qamruzzaman M, Wei J. Financial innovation, stock market development, and economic growth: An application of ARDL model. Int J Financ Stud 2018;6:69.
Idun AA, Aboagye AQ. Bank competition, financial innovations and economic growth in Ghana. Afr J Econ Manage Stud 2014;5:30-21.
Yakovleva EA, Azarova NA, Titova EV. Innovation as a vector of regional economic development and a necessary condition for the progress of the World Economy. Asian Soc Sci 2015;11:90-6.
Bahrini R, Qaffas AA. Impact of information and communication technology on economic growth: Evidence from developing countries. Economies 2019;7:21.
Mohamed MM, Liu P, Nie G. Causality between technological innovation and economic growth: Evidence from the economies of developing countries. Sustainability 2022;14:3586.
Sohag K, Begum RA, Abdullah SM, Jaafar M. Dynamics of energy use, technological innovation, economic growth and trade openness in Malaysia. Energy 2015;90:1497-507.
Gao X. Digital transformation in finance and its role in promoting financial transparency. Glob Finance J 2023;58:100903.
Pece AM, Simona OE, Salisteanu F. Innovation and economic growth: An empirical analysis for CEE countries. Procedia Econ Finance 2015;26:461-7.
Li C, Khaliq N, Chinove L, Khaliq U, Ullah M. Perceived transaction cost and its antecedents associated with fintech users’ intention: Evidence from Pakistan. Heliyon 2023;9:15140.
Fenwick M, Vermeulen EP. Banking and regulatory responses to Fintech Revisited: Building the sustainable financial service “ecosystems” of tomorrow. SSRN Electron J 2019;34:1-56.
Jameaba M. Digitization, fintech disruption, and financial stability: The case of the Indonesian banking sector. SSRN Electron J 2020;35:1-44.
Boratyńska K. Impact of digital transformation on value creation in Fintech services: An innovative approach. J Promot Manage 2019;25:631-9.
Singhvi S, Dadhich M. FinTech revolution and future of sustainable banking: Opportunities and risks analysis. Int J Manage Dev Stud 2023;12:12-21.
Puri N, Singh H. Fintech disruptions in the financial sector: Opportunities, challenges, and future. In: Revolutionary Challenges and Opportunities of Fintech. United States: CRC Press; 2024.p. 33-51.
Vijai C. Fintech in India-opportunities and challenges. SSRN Electron J 2019;8:1-13.
DiAntonio F. As Fintech Expands, Opportunities and Challenges Lie Ahead. Forbes; 2024. Available from: https://www.forbes.com/councils/forbesfinancecouncil/2024/04/26/asfintech-expands-opportunities-and-challenges-lie-ahead [Last accessed on 2024 Oct 24].
Venaik A, Garg N, Agarwal V. Global revolutionary challenges and opportunities of Fintech globally. In: Revolutionary Challenges and Opportunities of Fintech. New York: Apple Academic Press; 2024. p. 187-203.
Vibha B. FinTech: A study of enablers, opportunities, and challenges in the banking and financial services sector. In: Research Anthology on Concepts, Applications, and Challenges of FinTech. USA: IGI Global; 2021. p. 24-31. Available from: https://www.igi-global.com/chapter/fintech/27632 [Last accessed on 2024 Oct 24].
Ballance R, Sinclair S. Industry strategies and national policies in a changing world. In: Collapse and Survival. London: Routledge; 2021. p. 178-99.
Feyen E, Frost J, Gambacorta L, Natarajan H, Saal M. Fintech and the Digital Transformation of Financial Services: Implications for Market Structure and Public Policy. BIS Papers No 117. Bank for International Settlement; 2021. p. 4-5.
Al-Ajlouni A, Al-Hakim M. Financial technology in the banking industry: Challenges and opportunities. SSRN Electron J 2018;33:1-18.
Kakhkharov J, Bianchi RJ, Akhtaruzzaman M. The impact of monetary and fiscal policy on Fintech firms during the crisis. Int Rev Econ Finance 2024;96:103556.
Mohan D. How banks and Fintech startups are partnering for faster innovation. J Digit Bank 2016;1:13-21.
Saksonova S, Kuzmina-Merlino I. Fintech as financial innovation - the possibilities and problems of implementation. Eur Res Stud J 2017;20:961-73.
Schindler J. FinTech and financial innovation: Drivers and depth. In: Finance and Economics Discussion Series. Washington, DC: Board of Governors of the Federal Reserve System; 2017.
Ramlall I. Fintech and the financial stability board. In: Understanding Financial Stability. Leeds: Emerald Publishing Limited; 2018. p. 71-81.
Vučinić M, Luburić R. Fintech, risk-based thinking and cyber risk. J Cent Bank Theory Pract 2022;11:27-53.
Boot AW. Understanding the future of banking scale and scope economies, and Fintech. In: World Scientific Studies in International Economics. Singapore: World Scientific Publishing; 2016. p. 431-49.
Licandro O, editor. Innovation and growth: Theory. In: Macroeconomic Modelling of R&D and Innovation Policies. Cham: Palgrave Macmillan; 2021. p. 23-61.
Pantielieieva N, Khutorna M, Lytvynenko O, Potapenko L. Fintech, regtech and traditional financial intermediation: Trends and threats for financial stability. In: Lecture Notes on Data Engineering and Communications Technologies. Cham: Springer; 2020. p. 1-21.
Olabanji SO, Oladoyinbo TO, Asonze CU, Adigwe CS, Okunleye OJ, Olaniyi OO. Leveraging Fintech compliance to mitigate cryptocurrency volatility for secure US employee retirement benefits Bitcoin ETF case study. Asian J Econ Bus Account 2024;24:147-67.
Keat J. How Square Revolutionized Payment Processing. UAB Collat School of Business; 2023. Available from: https://businessdegrees.uab.edu/blog/how-square-revolutionized-payment-processing [Last accessed on 2024 Oct 24].
Ediagbonya V, Tioluwani C. The role of Fintech in driving financial inclusion in developing and emerging markets: Issues, challenges and prospects. Technol Sustain 2022;2:100-19.
Barber BM, Huang X, Odean T, Schwarz C. Attention‐induced trading and returns: Evidence from robinhood users. J Finance 2022;77:3141-90.
Kovačević B. The development of a new SOFI model for performance management of medium-sized and large companies. Decis Making Appl Manage Eng 2023;6:95-125.
Levine R. Finance and Growth: Theory and Evidence. United States: National Bureau of Economic Research; 2018. p. 72-100.
Zhao Y. The Fintech revolution: Innovations reshaping the financial industry. Highl Bus Econ Manage 2023;15:123-8.
Stettner B. Impact of AI, data, and blockchain. In: Global Fintech Institute - World Scientific Series on Fintech. Singapore: World Scientific Publishing; 2022. p. 245-50.
Xu Z, Zou C. The Impacts of Fintech on the Financial System and Financial Regulation. In: Fintech. London: Routledge; 2022. p. 5-15.
Truby J, Brown R, Dahdal A. Banking on AI: Mandating a proactive approach to AI regulation in the financial sector. Law Financ Mark Rev 2020;14:110-20.
Crona B, Iacovides MC. Sustainable finance and Fintech: Market dynamics, innovation and competition. In: Fintech Competition. London: Bloomsbury Publishing; 2023. p. 229-50.
Peirce H. Regulating through the back door at the commodity futures trading commission. SSRN Electron J 2014;4:74.
Akpukorji IS, Nzeako G, Akinsanya MO, Popoola OA, Chukwurah EG, Okeke CD. Theoretical frameworks for regulatory compliance in Fintech. Innovation: A comparative analysis of Africa and the United States. Finance Account Res J 2024;6:721-30.
Buckley RP, Arner DW, Zetzsche DA, Selga E. The dark side of digital financial transformation: The new risks of FinTech and the rise of TechRisk. SSRN Electron J 2019;19:1-37.
Varma P, Nijjer S, Sood K, Grima S, Rupeika-Apoga R. Thematic analysis of financial technology (Fintech) influence on the banking industry. Risks 2022;10:186.
Stefan C. Tales from the Crypt: Might cryptocurrencies spell the death of traditional money? - A quantitative analysis. Proc Int Conf Bus Excell 2018;12:918-30.
Sureshbhai PN, Bhattacharya P, Tanwar S. Karuna: A Blockchain-based Sentiment Analysis Framework for Fraud Cryptocurrency Schemes. In: 2020 IEEE International Conference on Communications Workshops (ICC Workshops). IEEE; 2020.
Daniel D, Konadu-Yiadom E, Aawaar G. Financial innovations and economic growth: Does financial inclusion play a mediating role? Cogent Bus Manage 2022;9:34-56.
Sari M, Kulachinskaya A. Digital Transformation: What Are the Smart Cities Today? Cham: Springer; 2024.
Uña G, Bazarbash M, Griffin N, Verma A. Fintech Payments in Public Financial Management: Benefits and Risks. International Monetary Fund; 2023. p. 23-30. Available from: https://www.imf.org/en/publications/wp/issues/2023/02/03/fintech-payments-in-public-financial-management-benefits-and-risks-529100 [Last accessed on 2024 Oct 24].
Verma A, Uña G, Bazarbash M, Griffin MN. Fintech Payments in Public Financial Management: Benefits and Risks. IMF Working Papers; 2023. p. 36.
Höchtl J, Parycek P, Schöllhammer R. Big data in the policy cycle: Policy decision making in the digital era. J Organ Comput Electron Commer 2015;26:147-69.
Teece DJ. Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world. Res Policy 2018;47:1367-87.
Etinosa I, Adewusi AO. Financial law: Policy frameworks for regulating fintech innovations: Ensuring consumer protection while fostering innovation. Finance Account Res J 2024;6:515-30 91. Arslanian H, Fischer F. The Future of Finance: The impact of Fintech, AI, and Crypto on Financial Services. Palgrave Macmillan; 2019. Available from: https://books.google.com.pk/books?hl=en&lr=&id=u9kidwaaqbaj&oi=fnd&pg=pr7&dq [Last accessed on 2024 Oct 09].
Raymaekers W. Cryptocurrency bitcoin: Disruption, challenges and opportunities. J Payments Strategy Syst 2015;9:30-40.
Mohammed H, Hassnian A. Advanced praise for Blockchain, Fintech, and Islamic finance. In: Blockchain, Fintech, and Islamic Finance. Germany: Walter de Gruyter; 2018. p. 6-10.
Benjamin LB, Amajuoyi P, Adeusi KB. Marketing, communication, banking, and Fintech: Personalization in Fintech marketing, enhancing customer communication for financial inclusion. Int J Manage Entrep Res 2024;6:1687-701.
Al-Ababneh HA, Borisova V, Zakharzhevska A, Tkachenko P, Andrusiak N. Performance of artificial intelligence technologies in banking institutions. Wseas Trans Bus Econ 2022;20:307-17.
Begenau J, Farboodi M, Veldkamp L. Big Data in finance and the growth of large firms. J Monet Econ 2018;97:71-87.
Kiran S. Reinventing Cybersecurity with Artificial Intelligence. Capgemini, UK; 2019. Available from: https://www.capgemini.com/gb-en/research/reinventing-cybersecurity-with-artificial-intelligence [Last accessed on 2024 Oct 24].
Accenture. And what it Means for Banks: The Time is Right For. Accenture; 2017. Available from: https://www.accenture.com/t00010101t000000z__w__/gb-en/_acnmedia/pdf-71/accenture-where-fintech-lending-will-land.pdf [Last accessed on 2024 Oct 24].
Chaboud AP, Chiquoine B, Hjalmarsson E, Vega C. Rise of the machines: Algorithmic trading in the foreign exchange market. J Finance 2014;69:2045-84.
Kugell A. The Role of Fintech in the Financial Services Industry; 2024. Available from: https://trio.dev/the-role-of-fintech-in-the-financial-services-industry [Last accessed on 2024 Oct 24].
Julie Hooft G. OECD Education Working Papers. Paris: OECD; 2018. p. 1-10.
Adadi A, Berrada M. Peeking inside the black-box: A survey on explainable artificial intelligence (XAI). IEEE Access 2018;6:52138-60.
Published
How to Cite
Issue
Section
Copyright (c) 2024 DHAHER MOHAMMED ALSHAMMARI
This work is licensed under a Creative Commons Attribution 4.0 International License.
