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Submitted URL: https://bbs.unibo.eu/finance/fintech
Effective URL: https://www.bbs.unibo.eu/fintech-a-digital-revolution-in-the-banking-system/
Submission Tags: 7578918
Submission: On July 05 via api from DE — Scanned from NL
Effective URL: https://www.bbs.unibo.eu/fintech-a-digital-revolution-in-the-banking-system/
Submission Tags: 7578918
Submission: On July 05 via api from DE — Scanned from NL
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[#OOI_PERSONAL_INFORMATION#] Use technical cookies only Allow selection Customize Allow all cookies Powered by Cookiebot by Usercentrics * Bologna Business School * Education * Faculty & Research * Events * Highlights * Community * IT * BBS INITIATIVE FOR SUSTAINABLE SOCIETY AND BUSINESS DISCOVER MORE → MASTER'S DEGREE ISSUED BY THE UNIVERSITY OF BOLOGNA * Global MBA * Automation and Robotics * Design, Fashion and Luxury Goods * Food and Wine * Green Energy and Sustainable Businesses * Supercars, Superbikes and Motorsports * PROFESSIONAL MASTERS * Data Science and Business Analytics * Digital Marketing and Communication * Digital Technology and Innovation Management * Finance and Fintech * Finance, Control and Auditing * Business Management - Gestione d'Impresa * Asian Markets * Food & Wine * Green Management and Sustainable Businesses * Life Science and MedTech * Made in Italy * Italian Premium Brands * Retail Management and E-Commerce * Social and Cooperative Business * Tourism, Heritage and Events * HR & Organization * Marketing Management * Data Marketing and Analytics * Sustainability Transition Management (Part-time) * Wealth Management – Asset Management EXECUTIVE EDUCATION * Executive Masters * Business Innovation Design * Business Analytics and Data Science * Entrepreneurship * Executive MBA * Executive MBA English edition * MBA Part-time (Evening) * MBA Part-Time (Weekend) * Hybrid MBA * Hybrid MBA English edition * Public Management and Innovation * Sales and Marketing * Supply Chain and Operations * Sustainability and Business Innovation * Sustainability Transition Management * Technology and Innovation Customised programs * Open programs * Accounting & Finance * Artificial Intelligence & Machine Learning for business * Business Innovation Design * Business Plan * Business Sustainability & Circular Economy * Cyber Security Management * Data Strategy & Business Analytics * Digital Marketing and Communication * Executive Coaching Program * Finance for non finance manager * General Management Program * Human Resources Management & Development * KAM – Strategic Customer Management * Interpersonal Skills * IT Governance & Management * Leadership in action * Operations Management * Procurement Management * Project Management * Project Management Advanced * Project Management Certification * Service Management * Technology & Innovation Management * Trade Marketing & Sales Management * Public Speaking * Community Enter the community reserved to Alumni, teacher and members of Bologna Business School. Login * My Story, Our Story BBS Alumni talk about themselves: what was before, what came after and the memories of the student's life, to offer a personal story and a narration of one's own professional experience, for a history of our Community. * Student's Journal What is it like to be a student at BBS? Here is where they have their say on campus life, tips of Bologna, and much more. Written by and for the Students. * Dialogs Interviews and dialogues with guests and personalities. * Event Visita la sezione dedicata agli eventi organizzati da Bologna Business School e iscriviti per partecipare. * Quarantalks I QuaranTalks sono una serie di incontri nati con l'obiettivo di riflettere sul futuro, dialogando con ospiti italiani e internazionali. * Faculty * Research * Training the trainers 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 SHARE * * * APPLY SHARE * * * Back To Top * CONTACTS * TRANSPARENCY * CODE OF ETHICS * LEGAL * PRESS * WORK WITH US * Cookies preferences * MOODLE * WEBMAIL * BBS COMMUNITY PORTAL -------------------------------------------------------------------------------- Fondazione Bologna University Business School · info@bbs.unibo.it · P.I. - C.F. 02095311201