Fintech and the future of financial services: What are the research gaps?

New financial technologies (FinTech) have erupted around the world. Consequently, there has been a considerable increase in academic literature on FinTech over the last five years. Research tends to be scantily connected with no coherent research agenda. Signi - cant research gaps and important questions remain. There is much work to be done before this area becomes an established academic discipline. This paper offers coherent research themes formulated through focus group meetings with policymakers and academics, and also based on a critical assessment of the literature. We outline seven key research gaps with questions that could form the basis of academic study. If these are addressed it would help this area become an established academic discipline

Evolution or revolution? Distributed ledger technologies in financial services

This paper is an examination of adoption of distributed ledgers in financial services. We review more than one hundred initiatives and a large practitioner literature, considering fourteen areas of application and seven case studies, in order to provide both a conceptual analysis of these technologies and to review their current and prospective adoption in financial services. There are several component technologies applied in distributed ledger, many offering substantial commercial and operational benefits even applied outside of a distributed ledger and best viewed as part of the broader picture of ongoing digitalization of financial services using various data technologies. Our findings suggest that decision makers can take a pragmatic approach to distributed ledgers, not be concerned about this technology upending their business but be open to cross industry co-operation where this is strategically justified and to then adopt what works to improve outcomes for customers and other stakeholders. Overall, distributed ledgers and crypto assets, are really a distraction from the wider and more important issues of ongoing digitisation and automation of financial services. Data sharing and cross industry co-operation – as well as well as enlightened public policy to promote adoption of new technologies, competition and prudential and systemic safety – are crucial to this digital revolution. This does not depend on widespread adoption of distributed ledgers

Artificial intelligence and digital transformation of insurance markets

Artificial intelligence (AI) is recognized as a strategically important technology because it has the potential to exploit human-like intelligence at machine scale and speed. However, the hype surrounding its business use masks the AI phenomenon and makes it difficult to analyze and evaluate in a systematic manner. Current approaches to defining AI tend to focus on its technical aspects and neglect the business, ethical, legal, and regulatory context. To remedy this deficiency, an AI systems approach is taken that defines AI within a broader systems framework. This is important because it provides a richer set of concepts that relate AI technology to business processes, business models, ethical considerations, and the legal and regulatory environment. A new framework of digital transformation is proposed, which is based on a synthesis of a new AI systems definition and business model concepts. The digital transformation model is illustrated with two global leaders in insurance markets, Ping An and Tesla insurance. In both cases, a similar causal model of digital transformation, continuous innovation, and rapid growth is identified that exploits the AI digital flywheel effect. The managerial and regulatory implications of the case study analyses and conclusions are described, and future research opportunities are outlined

Growing pains: The changing regulation of alternative lending platforms

We review the legal and regulatory framework covering alternative (‘peer-to-peer’ or ‘marketplace’) lending platforms in the US, China, the UK and more briefly other countries. The main regulatory concerns are (i) enforcing consumer credit rules for unsecured personal lending; and (ii) protection of uninformed retail investors from mis-selling and platform failure. Alternative lending was first established with little regulatory oversight, but there has been substantial reregulation – first in the US via the 2008 SEC decision that platform investments are securities; subsequently in the UK, China and other countries. We anticipate further reregulation to protect retail investors, limiting the funding of loans from the ‘crowd’. Promoting credit supply through alternative lending platforms requires also institutional investor participation and embracing the use of technology in platform regulation (‘RegTech’)