Disrupting Finance: FinTech and Strategy in the 21st Century
by Theo Lynn (Editor), John G. Mooney (Editor), Pierangelo Rosati (Editor), Mark Cummins (Editor)

About the Author
Theo Lynn is Professor of Digital Business at Dublin City University, Ireland, and is the Principal Investigator (PI) of the Irish Centre for Cloud Computing and Commerce, an Enterprise Ireland/IDA-funded Cloud Computing Technology Centre.
John G. Mooney is Associate Professor of Information Systems and Technology Management and Academic Director of the Executive Doctorate in Business Administration at the Pepperdine Graziadio Business School, USA.
Pierangelo Rosati is Assistant Professor in Business Analytics at DCU Business School, Ireland. He previously worked as Post-Doctoral Researcher at the Irish Centre for Cloud Computing and Commerce (IC4).
Mark Cummins is Professor of Finance at DCU Business School, Ireland. He holds a PhD in Quantitative Finance with specialism in the application of integral transforms and the fast Fourier transform (FFT) for derivatives valuation and risk management.

About this book
This book demonstrates how a variety of technologies act as innovation catalysts within the banking and financial services sector. Traditional banks and financial services are under increasing competition from global IT companies such as Google, Apple, Amazon and PayPal whilst facing pressure from investors to reduce costs, increase agility and improve customer retention. Technologies such as blockchain, cloud computing, mobile technologies, big data analytics and social media therefore have perhaps more potential in this industry and area of business than any other. This book defines a fintech ecosystem for the 21st century, providing a state-of-the art review of current literature, suggesting avenues for new research and offering perspectives from business, technology and industry.

Contents
1 Deciphering Crowdfunding 1
   1.1 The Crowdfunding Phenomenon: An Overview 2
      1.1.1 The European Market 3
      1.1.2 The US Market 4
      1.1.3 The Asia-Pacific Market 5
   1.2 Crowdfunding State-of-the-Art 5
      1.2.1 Investment Models 6
      1.2.2 Non-investment Models 8
   1.3 New Research Trends: The Language of Crowdfunding 10
   References 11
2 Addressing Information Asymmetries in Online Peer-to-Peer Lending 15
   2.1 Introduction 16
   2.2 Online Peer-to-Peer Lending Platforms 17
   2.3 Information Asymmetries and Peer to Peer Lending Platforms 20
   2.4 Conclusions and Future Directions for Research 25
   References 27
3 Machine Learning and AI for Risk Management 33
   3.1 Introduction 34
   3.2 Machine Learning and AI Techniques for Risk Management 35
   3.3 Machine Learning and AI Applications for Risk Management 40
      3.3.1 Application to Credit Risk 40
      3.3.2 Application to Market Risk 41
      3.3.3 Application to Operational Risk 43
      3.3.4 Application to RegTech 44
   3.4 The Challenges and Future of Machine Learning and AI for Risk Management 45
   References 48
4 What FinTech Can Learn from High-Frequency Trading: Economic Consequences, Open Issues and Future of Corporate Disclosure 51
   4.1 Introduction 52
   4.2 High-Frequency Trading: Definition and Data 53
      4.2.1 Methodology 54
      4.2.2 Descriptive Statistics 55
   4.3 Results 57
      4.3.1 Thematic Analysis 57
      4.3.2 Impact of HFT 57
         4.3.2.1 Effects on Market Quality 57
         4.3.2.2 HFT’s Trading Strategies and Speed 61
         4.3.2.3 Market Structure, Co-location and Regulation After the Flash Crash 62
      4.3.3 HFT Reaction to Corporate Disclosure 64
   4.4 Conclusion and Future Research Directions 65
   References 67
5 InsurTech 71
   5.1 Introduction 72
   5.2 How Does Insurance Work? 72
   5.3 The Big Data Paradigm 73
      5.3.1 Telematics 74
      5.3.2 Wearables 75
      5.3.3 Smart Homes and the Internet of Things (IoT) 75
      5.3.4 Big Data: Trustworthiness and Privacy Concerns 76
   5.4 Artificial Intelligence 77
      5.4.1 Machine Learning and AI in the Underwriting Process 77
      5.4.2 AI in Claims Management Process 78
      5.4.3 AI in Customer Interaction 79
   5.5 Distributed Ledger Technologies 79
      5.5.1 Improving Current Processes Using DLTs 80
      5.5.2 P2P Insurance 81
   5.6 Conclusion 81
   References 82
6 Understanding RegTech for Digital Regulatory Compliance 85
   6.1 Introduction 86
   6.2 Business Drivers of RegTech 87
   6.3 RegTech in Focus: Digital Regulatory Reporting 90
      6.3.1 Phase 1: Digital Regulatory Alerts 92
      6.3.2 Phase 2: Making Regulations Digital 92
      6.3.3 Phase 3: Performing Digital Regulatory Reporting 95
      6.3.4 Phase 4: Creating Meta-Data Models for Semantic Interoperability 95
   6.4 Discussion and Implications 96
   6.5 Conclusion 99
   References 100
7 Payment Service Directive II and Its Implications 103
   7.1 Introduction 104
   7.2 Background 105
   7.3 EU Initiated Review of the Effectiveness of PSD I 106
      7.3.1 Main Findings of Impact Study 106
   7.4 Payment Services Directive II 109
      7.4.1 Scope of the Directive and the Removal of Exclusions 109
      7.4.2 Authorisation of Payment Institutions 110
      7.4.3 Innovation 111
      7.4.4 Confirmation of Availability of Funds 112
      7.4.5 Enhancing Competition 112
      7.4.6 Customer Protection 113
      7.4.7 Security 114
      7.4.8 Complaints Handling 114
   7.5 European Banking Authority (EBA) Work on PSD II 115
   7.6 Secure Customer Authentication (SCA) 115
      7.6.1 Exemptions for SCA 116
   7.7 Commentary 116
   References 118
8 From Transactions to Interactions: Social Considerations for Digital Money 121
   8.1 Introduction 122
   8.2 Affordances of Digital Money 123
   8.3 Opportunities for Interaction 126
      8.3.1 Negotiating Payment 126
      8.3.2 Effects of Intermediation 127
      8.3.3 Collaborative Value Creation 127
   8.4 Social Impacts of Digital Transactions 128
      8.4.1 Sensitive Data Generation and Sharing 128
      8.4.2 Choice Proliferation 128
      8.4.3 Untangling Money and Payment System 129
   8.5 Conclusion 130
   References 130
9 Token-Based Business Models 135
   9.1 Introduction 136
   9.2 Native Digital Assets 137
   9.3 Crypto Tokens 139
   9.4 Token-Based Business Models 141
   9.5 Driving Forces Behind the Token-Based Business Models 142
   9.6 Crypto Tokens to Enhance the Sharing Economy 144
   References 146
10 Blockchain Beyond Cryptocurrencies 149
   10.1 Introduction 150
   10.2 What Is Blockchain? 151
   10.3 Payments and Remittance 155
   10.4 Credit and Lending 156
   10.5 Trading and Settlements 157
   10.6 Compliance 160
   10.7 Conclusion and Avenues for Future Research 162
   References 164
Index 171

Series: Palgrave Studies in Digital Business & Enabling Technologies
Hardcover: 175 pages
Publisher: Palgrave Pivot; 1st ed. 2019 edition (December 7, 2018)
Language: English
ISBN-10: 303002329X
ISBN-13: 978-3030023294