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technologies simply using the term "cookies".

 

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When visiting a website, it is possible to receive cookies either from the
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By default, when you first access the website, no cookies or other tools other
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However, it should be noted that the total or partial disabling of technical
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the complete disabling of cookies.

 

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As anticipated, the processing of personal data in the context of cookies takes
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subjects or categories of subjects indicated on the website
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and suppliers that BBS avail itself of for the purpose of the management and
maintenance of its site are designated as data processors and receive your
personal data.

 

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Without prejudice to the limitations to the exercise of data subjects' rights
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amended. ("Code regarding the protection of personal data"), you, as a data
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limits of Articles 15-21 of the Regulation, including the right to request from
the controller access to your personal data, the amendment or deletion of such
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You also have the right to revoke your consent to the processing of your data,
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consent before revocation.  Finally, you have the right to lodge a complaint
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data".

You may exercise the aforementioned rights by sending a written communication to
the office of the data controller indicated in paragraph 1 above or to the
e-mail address gdpr@bbs.unibo.it.

 

9. Policy update

This policy on the use of cookies will be constantly updated. Therefore, it is
recommended to check this page periodically to become aware of changes.

 

 

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FINTECH: A DIGITAL (R)EVOLUTION IN THE BANKING SYSTEM

5 September 2019



Fintech is a recent phenomenon that is challenging the traditional financial and
banking system. The first challenge that the system is facing is to find a
unique definition, that might be shared by the entire economic community. After
hundreds of research in the field, the common definition is that “Fintech is a
global digital phenomenon, where technology is used to support and implement
financial services”. The technologies that have supported the growth of the
phenomenon are cybersecurity, data analytics, blockchain, peer-to-peer and
robo-advising. The established areas of Fintech such as payments and lending
still grow and in the last years the number of investors and the volume of the
investments’ themselves have increased. Furthermore, businesses are now focusing
on the development of areas of Artificial Intelligence and Data Analytics.

The real challenge for the traditional system lays in the fact that financial
and banking sectors are highly regulated, consequently they tend to be quite
sticky and adapt slowly to changes. The traditional system is challenged by the
pace of Fintech development, which is really fast and by its effect, which are
disruptive for the system. Indeed, Fintech is a source of opportunities for
already established systems and for start-ups to reach a sustainable, long-term
development. The main challenge is not being able to adapt the business model to
this structural change and being left out of the market. The main opportunity
for the system is the increase in speed of financial and banking transactions
and the decrease in the costs of the transactions themselves. Indeed, Fintech
might bring to a more efficient and interconnected financial system. Fintech is
undoubtedly a source of value creation.

Nevertheless, Fintech is facing four challenges: trust, credit risk, innovation
risk and regulation. Although the great potential and benefits that Fintech
might bring to the financial system, these four elements might impede its
success. Trust is fundamental among economic actors and technology cannot
replace the role of trust. However, transparency and verification can be a
replacement of trust, indeed Fintech is a trump card in financial and banking
services where calculations or record keeping are involved. However, trust is
partly sustained by proper regulation. Because of the nature of financial
banking services, Fintech needs the support of regulation and governments to
increase transparency and, consequently, trust. Regulation strengthens the
relationship among consumers, investors and business, since with the right
regulation they all feel protected in transactions.

Therefore, regulation is an instrument for the safeguarding and trust in the
relationship between economic actors. Although many virtuous countries, such as
Estonia, Gibraltar, Hong Kong are working hard in order to implement the right
regulation and attract investments, many countries are struggling in finding a
common point for the development of the appropriate regulation. By the way,
United States and European Union are now making a few steps towards the creation
of apposite regulation. Especially in European Union the focus on the
development of regulation is leading to an increase in investments in Regtech
companies, i.e. companies that monitor and advise firms to make them compliant
to regulation. Then two other main risks are innovation risk and credit risk.
Innovation risk is directly stemming from the lack of regulation. Indeed,
Fintech can be successful only if the system is able to support it; therefore,
innovation risk is the risk that originates from a mismatch between the
innovation and the infrastructure supporting it, which is one of the risks
underlying Fintech implementation, but if governments collaborate with each
other can be overcome.

Credit risk is the risk that the borrower does not payback the future payments
to the lenders. When considering P2P platforms credit risk must be considered.
P2P platforms such as Lending Club or Prosper are working hard, in order to
decrease credit risk, basing the choice of funding on objective measures,
concerning the risk profile of an individual or business considering different
characteristics of the demander of credit.
Fintech is fascinating because of the potential enclosed in it and the huge
influence that has on financial and banking sectors. If the financial system
manages to overcome the challenges and to implement fully Fintech services,
protecting consumers, investors and business, then the value creation stemming
from Fintech might be really huge and it would be able to create value that
would have not been created otherwise.

This complex framework demonstrates how traditional financial institutions and
Fintech startups are increasingly in need of new professionals, in order to make
digital transformation a competitive advantage: it comes into contact with the
didactic coordinator of our Master in Finance and Fintech to become an actor key
to this process.

Author: Daniela Arzu

PHD Student at Alma Mater Studiorum Università di Bologna

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