MBA ACCOUNTING & FINANCE (EVENING SESSION)

GROUP B
Name Index Number

Sandra Owusu Asamoah 10302208

Georgina Kwesi 10302343

Alhassan Abdul Aziz 10302861

Theresa Qua 10302330

Irene Ago Adjei 10302798

Ivy Sawiri 10302860

Krampah Kwesi Hagan 10302784

 FinTech

Introduction
Definition of Financial Innovation?
• Financial innovation refers to the introduction and
adoption of new financial products, technologies,
or services that enhance the efficiency,
accessibility, and functionality of financial
markets. These innovations can range from new
payment methods (e.g., mobile money systems) to
digital financial platforms that leverage big data,
artificial intelligence, and blockchain technology
to improve financial intermediation, risk
management, and financial inclusion (Piazza,
2010; IMF, 2020).
Definition of Fintech?

• Fintech, an acronym for financial technology,

describes how financial services firms are using
technology into their products to help customers
use financial services more effectively
(Puschmann, 2017)
EVOLUATION OF
FINANCIAL
INNOVATION
• Gomber, Kauffman, Parker and
Weber (2018) Financial innovations have
evolved significantly over the years, shaped
by technological advancements, regulatory
changes, and shifting consumer needs:

1. Early Innovations
2. Digital Banking:
3. Mobile Payment
4 Blockchain Technology

In general, technological advancements and

shifting consumer tastes are moving financial
innovations forward quickly, altering the
financial environment
IMPORTANCE OF
FINANCIAL INNOVATION
Financial innovation plays a crucial role in
the financial ecosystem for several reasons:

• Enhanced Efficiency:

• Access to Capital:

• Better Customer Experience

IMPORTANCE OF
FINTECH
With its many advantages that improve
productivity, openness, and decision-
making, fintech is essential to corporate
finance.
• Improved Financial Analytics
• Effective Cash Management
• Cost Reduction
 Historical Review
Financial Innovations of the Past:
• The Introduction of the Stock Market (1600s)
• The Development of Bonds (18th Century)
• Changes in Corporate Governance in the 2000s

Technological Influence on Finance:

• Early Innovations (19th Century)
• The Advent of Computers (1960s)
• Automated Teller Machines (ATMs) (1967)
EVOLUTION OF FINTECH

Over time, Fintech has experienced substantial

evolution because to breakthroughs in
technology, shifts in consumer behavior, and
developments in regulations

• Initial Years (1960s–1980s):

• Internet banking (1990s)
• Mobile Revolution (2000s)
 • Investment
Crowdfunding
CATEGORIES OF
FINANCIAL • Remittances
INNOVATION
• Mobile Banking
CAUSES OF
FINANCIAL
INNOVATION
There are various causes of financial innovations,
such as:
• Technological advancements and payment system
innovations.

• Competition.

• Financial globalization.

• Market failures, financial insecurity, domino

effects, potentially high systemic risks, etc., trigger
the need for innovation initiatives.
THE FINTECH REVOLUTION IN CORPORATE FINANCE

Zhou, Arner, and Buckley (2015) work provides an in-depth analysis of the rise of FinTech in China and its implications for
the financial sector. They define FinTech as the use of technology to transform financial services and identify several
factors driving its growth in China, including technological

The authors explore various FinTech applications in China, such as mobile transactions, peer-to-peer lending, online
investment platforms. FinTech is reshaping traditional banking, with competition in areas like mobile transactions, peer-
to-peer lending, and online investments which are driving innovation among traditional banks

While the authors primarily focus on retail financial services, it's crucial to note that FinTech is making substantial
inroads into corporate finance. FinTech companies are developing tools and platforms to facilitate capital raising,
financial management, and better investment decisions for businesses. For example, they offer crowdfunding platforms,
accounting software, payroll processing services, and investment research tools tailored to corporate finance.
SCOPE OF FINTECH
• Digital Payment: Fintech has revolutionized
the way payments are made. Enabling secure
and convenient digital transactions. This
includes mobile payment apps, digital wallets,
cryptocurrency etc (Moro-Visconti &
Cesaretti, 2023).
•Online lending and crowdfunding: Fintech has
disrupted the traditional lending industry by
providing online lending planforms and
alternative financing options (Dinardo, 2015)

•Insurtech: this area focuses on applying

technology specific to the insurance sector.
Insurtech innovations streamline underwriting
processes, claims processing, policy
management, and customer engagement using
technologies like artificial intelligence (AI) and
data analytics (Moloi & Mulaba-Bafubiandi,
2024)

• .
 Changing customers needs and expectations: with the
advancement of technology, customers requirements for the
financial services provided by the traditional banking system
have changed.

DRIVING The advancement of digital technologies: Emerging digital

technologies, from 5G, the internet of things, blockchain,

FORCE OF artificial intelligence, big data , and substantial developments in

data storage and management, are opening up new possibilities
to alter the way in which the financial sector is operating.

FINTECH Reduced barriers for market entry: one the factors that allowed
fintech companies to enter the financial services market is the
lower regulation for financial services provided by non banks.
IMPACT ON
TRADITIONAL
BANKING Customer-centric approach:
Fintech companies have shifted
Enhanced risk management:
fintech innovations introduce
Workforce transformation: As
technology becomes integral to
the focus from a product-centric unique risks that traditional banks banking operations, there is a
model to customer-centric must address. For instance, online growing demand for employees
approach. Traditional banks, lending planforms raise concerns skilled in digital technologies
which historically offered a limited about credit risk assessment and within traditional banks.
range of products, are now fraud detection.
compelled to reprioritize
customer needs and preferences.
 CORE FINTECH SOLUTION FOR
CORPORATES

BENEFITS FOR CORPORATIONS

FinTech has enhance corporate efficiency, economize

resources, facilitated more accessible capital acquisition and
risk management. (Chishti and Barberis, 2016)

The following are examples of how corporations are

employing FinTech to realize these benefits:

• Digital Payment Systems: These systems enable

corporations to reduce payment processing costs and
broaden their customer base.

• Robo-Advisors: They are digital platforms that provide

automated algorithmic investment services with minimal
human supervisions.

• Blockchain and Smart Contracts: These innovations

streamline business operations and lead to cost
reductions.

• Peer-to-Peer Lending: It is a payment platform through

which individual make payments, it allows corporations to
have instant payments and reduce in person customer
service expenses.
Benefits for Corporations

Reduction in Queuing Times: Online

Lower Transaction Costs: Fintech banking significantly cuts down the
AUTOMATION: Technologies such as
innovations have reduced transaction fees time customers spend waiting in line
robotic process automation and
by leveraging digital channels that overcome for transactions. This efficiency
artificial intelligence streamline
geographical barriers. This results in faster, translates into opportunity cost
operations reducing the time spent
more secure transactions at lower costs savings for consumers who can
on work. This can lead to cost saving.
compared to traditional banking methods allocate their time to other activities
Benefits for
Corporations
ACCESS TO CAPITAL

• Fintech Innovations: Financial

technology (fintech) has introduced
various platforms for obtaining loans,
such as peer-to-peer (P2P) lending and
crowdfunding. These alternatives often
provide faster access to funds compared
to traditional banks, especially for small
businesses and startups that may lack
collateral or a robust credit history
(Fenwick, McCahery &
Vermeulen, 2017).

• Digital Platforms: The digitization of

financial services has streamlined the
application process for loans, reducing
paperwork and processing times. This
efficiency not only saves time but also
reduces costs associated with loan
origination.
Benefits for Corporations

BETTER RISK MANAGEMENT

Data-Driven Insights: Technology enables the analysis of vast

datasets to uncover hidden risks and trends. Advanced analytics
tools facilitate loss forecasting, predictive modeling, and fraud
detection, allowing institutions to make informed decisions based
on real-time data(Shoetan, Oyewole, Okoye & Ofodile,
2024)

Holistic Risk Management: Technology provides a comprehensive

view of compliance requirements across various jurisdictions,
helping institutions manage regulatory risks more effectively
CHALLENGES
AND
CRITISICIMS
• Regulatory Challenges: The rapid evolution of FinTech makes
it difficult for regulators to keep up, leading to concerns about
regulatory arbitrage, where FinTech companies exploit gaps in
regulations for a competitive advantage.

• Potential Market Disruption: FinTech's disruptive influence on

traditional financial systems can lead to market upheavals and
concerns about financial system stability.

• Security and Confidentiality: Data handling by FinTech

companies raises concerns about data security and privacy, as
they deal with sensitive personal and financial information.

• Balancing Regulation and Innovation: Excessive regulations

might discourage FinTech innovation, potentially harming
consumers and businesses.
 Future of Financial
Innovation and
FinTech
• Big Data: for insights into customer behavior, leading to
more personalized financial solutions.

• Artificial Intelligence (AI): use of AI for robo-advisors

and fraud detection. AI is expected to play a more
prominent role, enabling innovative financial products
and services.

• Blockchain: enhancing payment processing, asset

management, and transactions.

• Digital banks and neo-banks are emerging as strong

competitors to traditional banking models due to their
agility, low-cost structures, and ability to offer a
seamless user experience

• Regulatory landscape: creating of frameworks that

support new technologies while managing associated
risks
Recommendations

For FinTech Enterprises

• Prioritize customer needs and deliver a positive customer

experience.

• Collaborate with traditional financial institutions to reach a

broader audience.

• Invest in robust security and privacy measures.

• Maintain transparency in data usage and privacy protection.

Recommendation

For Regulatory Authorities

• Develop adaptive regulations that encourage

innovation while safeguarding consumers and
businesses.

• Create regulatory sandboxes to test new

FinTech offerings safely.

• Collaborate with FinTech enterprises to craft

effective regulations.
Recommendation
For Consumers

• Conduct thorough research before using

FinTech products or services.

• Review terms and conditions to understand

benefits and risks.

• Be cautious when sharing personal and

financial data, choosing trustworthy FinTech
firms.
 Conclusion

Introduction of innovative products and services Disruption of traditional banking in areas like Future looks promising. Key trends include the rise
to help businesses raise capital, manage finances, mobile payments and peer-to-peer lending, of artificial intelligence (AI), which enhances
and improve investment decisions. compelling banks to innovate. financial offerings, the growth of blockchain for
efficient transaction processing, and the
development of new financial products and
services
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Business, 100, 7-25.

Arner, D. W., Barberis, J. N., & Buckley, R. P. (2016). The Evolution of FinTech: A New PostCrisis Paradigm?
University of Hong Kong Faculty of Law Research Paper.

Balbi, G., & Berth, C. (2019). Towards a telephonic history of technology. History and Technology. 35(2), 105-
114.

Chishti, S., & Barberis, J. (2016). The FINTECH Book: The Financial Technology Handbook for Investors,
Entrepreneurs and Visionaries. Wiley.

Referenc Fang, C. C. (2023). Finance and technology: why fintech is the future of finance–a case study of Singapore’s
financial sector.

es Frame, W. S., & White, L. J. (2014). Technological Change, Financial Innovation, and Diffusion in Banking.
Federal Reserve Bank of Atlanta.

Gomber, P., Kauffman, R. J., Parker, C., & Weber, B. W. (2018). On the fintech revolution: Interpreting the
forces of innovation, disruption, and transformation in financial services. Journal of management information
systems, 35(1), 220-265.

Jarvis, R., & Han, H. (2021). FinTech innovation: Review and future research directions. International Journal
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Karan, M. B., Westerman, W., & Wijngaard, J. (2024). A History of Banks. Contributions to Economics.

Kuyoro, M., & Olanrewaju, T. (2020). Harnessing Nigeria’s fintech potential.

Lerner, J., & Tufano, P. (2011). The Consequences of Financial Innovation: A Counterfactual Research Agenda.
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