Study note on FinTech

Study note on FinTech

References with extracted contents

Zavolokina, L., M. Dolata and G. Schwabe. 2016. "The FinTech phenomenon: antecedents of financial innovation perceived by the popular press" Financial Innovation 2, Springer: 1-16.

"There is no doubt that traditional financial technologies have undergone a huge transformation throughout the last decade, and the new types of financial technologies – FinTech – represent a currently innovative and emerging field, which has attracted attention from the media as well as investors. According to an Accenture report (Skan et al. 2015), the number of investments in FinTech companies and start-ups has risen dramatically within one year from USD 4.05 billion in 2013 to USD 12.2 billion in 2014";

"FinTech is a broad phenomenon that is evolving daily as more technology entrepreneurs enter the industry and transform it according to social needs. On the one hand, FinTech could be considered a financial service, which is intervened by innovative technologies to satisfy the requirements of tomorrow: high efficiency, cost reduction, business process improvement, rapidity, flexibility, and innovation (Dapp et al. 2014). On the other hand, FinTech also refers to companies – and, even more typically, to start-ups, which serve as enablers of these services. Currently, the term “FinTech” is ambiguous, and there is room for further discussion";

"FinTech has three dimensions – input, mechanisms, and output and acts as a transformation machine. This machine uses technology as an input combined with organization and investment flow. The transformation includes activities such as “create/change/improve” that are applied to information technology to finance, disrupt, and create competition. As the output of such transformation, new services, products, business models, or processes are created";

"Financial innovations that are influenced by taxes or regulations can be seen as both a socially positive or negative phenomenon (Frame and White 2004). For example, one prominent case which demonstrated how regulation may foster innovation is related to IBM, which controlled over the 70% of the computer market and was considered to be a monopoly. The United States Department of Justice forced the company to separate its hardware and software business, which stimulated competition and innovation in the industry, led to lower prices (“Regulation of IBM 1996). Another driver of financial innovation suggested by the literature is underlying technologies (e.g. telecommunications or data processing) that enable more accurate risk management";

Gomber, P., J.A. Koch and M. Siering. 2017. "Digital Finance and FinTech: current research and future research directions" J Bus Econ 87:537–580.

"Nowadays, customers in the financial sector demand intelligent, however easy-to-use financial services independent of location and time, and at continually decreasing costs. An increasing Internet-based economy, new usage patterns of digital (especially mobile) devices and media, as well as a decreasing reluctance to use online channels, not only for financial information search but also for financial transactions (even among the elderly, more wealthy Internet users) are key structural changes driving these developments. Digital Finance challenges existing financial service providers, such as established banks or insurance providers, due to new competition by FinTech companies (FinTechs) and, in parallel, offers new opportunities for the incumbents to reach their younger and more technology-savvy clientele";

"The term ‘‘FinTech’’ (sometimes: Fintech, Fin-tech, or Fintech) is a neologism which originates from the words ‘‘financial’’ and ‘‘technology’’ and describes in general the connection of modern and, mainly, Internet-related technologies (e.g.,

cloud computing, mobile Internet) with established business activities of the financial services industry (e.g., money lending, transaction banking). Typically, FinTech refers to innovators and disruptors in the financial sector that make use of the availability of ubiquitous communication, specifically via the Internet and automated information processing. Such companies have new business models that promise more flexibility, security, efficiency, and opportunities than established financial services (Lee 2015a). The innovator can be either a start-up (like iZettle), an established technology company (like Google), or an established service provider (like Commerzbank)";

"In the past, information technology has often only been viewed as a tool in the financial industries context. Now, FinTech start-ups or established IT companies entering the financial domain (in the following, these are collectively referred to as ‘‘FinTech companies’’) gain ground in the financial sector and seize customers that traditionally have been served by established providers. There are three main reasons for this to happen. Firstly, FinTech companies offer new products and solutions which fulfill customers’ needs that have previously not or not sufficiently been addressed by incumbent financial service providers...... Secondly, FinTech companies have created novel opportunities for selling products and services through the application of novel technologies and concepts..... Thirdly, companies with an IT background are relatively better suited to provide services in a highly innovative environment";

Hung, J.L. and B.J. Luo. "FinTech in Taiwan: a case study of a Bank's strategic planning for an investment in a FinTech company" Financial Innovation 2, Springer Open:15.

"A bank is no longer the only center for all financial services. E-commerce or telecommunication companies could create new forms of financial services using technology to replace the role of banks. To decrease the impacts of the coming trend, the TFSB [Finance Supervisory Commission in Taiwan] mailed an official order to all banks in Taiwan asking all domestic banks to propose a strategic plan to adjust the structure of human resources via training or career planning to meet the changes in human resource demands in the future. The coming trend of FinTech is a major cause of concern for the TFSB. This is because “FinTech,” a combination of “Finance” and “Technology” that refers to the combination of both domains that will lead innovative financial services to shift away from an in-house approach to relying on external providers to deliver online and mobile solutions in a timely manner";

"Wikipedia defines FinTech as “an economic industry composed of companies that use technology to make financial systems more efficient” (Wikipedia nd). FinTech weekly (nd) defines FinTech as “a line of business based on using software to provide financial services.” The TFSB defines FinTech companies as belonging to one of the following categories (Financial Supervisory Committee 2015c): * Using information or network technologies to aid the business development of financial institutions to gather, process, analyze, or supply data ...  * Using information or network technologies to improve the efficiency or security of financial services or operating processes .... * Designing or developing other digital or innovative financial services based on information or technology";

"Based on Venture Scanner’s report for the 4th quarter of 2016 (Venture Scanner 2016), FinTech companies can be classified into the following categories: * Banking Infrastructure ... * Business Lending .... * Consumer and Commercial Banking .... * Consumer Lending .... * Consumer Payments ... * Crowdfunding .... * Equity Financing .... * Financial Research and Data .... * Financial Transaction Security .... * Institutional Investing .... * International Money Transfer .... * Payments Backend and Infrastructure .... * Personal Finance .... * Point of Sale Payments .... * Retail Investing .... * Small and Medium Business (SMB) Tools ....";