The Routledge Handbook of Fintech

491 Pages·2021·10.392 MB·English

by  K. Thomas Liaw

THE ROUTLEDGE HANDBOOK
OF FINTECH
The Routledge Handbook of FinTech offers comprehensive coverage of the opportunities, chal-
lenges and future trends of financial technology.
This handbook is a unique and in-depth reference work. It is organised in six thematic
parts. The first part outlines the development, funding, and the future trends. The second
focuses on blockchain technology applications and various aspects of cryptocurrencies. The
next covers FinTech in banking. A significant element of FinTech, mobile payments and
online lending, is included in the fourth part. The fifth continues with several chapters cov-
ering other financial services, while the last discusses ethics and regulatory issues. These six
parts represent the most significant and overarching themes of FinTech innovations.
This handbook will appeal to students, established researchers seeking a single repository
on the subject, as well as policy makers and market professionals seeking convenient access
to a one-stop guide.
K. Thomas Liaw is a Professor of Finance in the Economics and Finance Department at
St. John’s University, New York, USA.

THE ROUTLEDGE
HANDBOOK OF FINTECH
Edited by
K. Thomas Liaw
First published 2021
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
52 Vanderbilt Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2021 selection and editorial matter, K. Thomas Liaw; individual
chapters, the contributors
The right of K. Thomas Liaw to be identified as the author of the
editorial material, and of the authors for their individual chapters, has
been asserted in accordance with sections 77 and 78 of the Copyright,
Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced
or utilised in any form or by any electronic, mechanical, or other
means, now known or hereafter invented, including photocopying and
recording, or in any information storage or retrieval system, without
permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks
or registered trademarks, and are used only for identification and
explanation without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Liaw, K. Thomas, editor.
Title: The Routledge handbook of fintech / edited by K. Thomas Liaw.
Description: Abingdon, Oxon ; New York, NY : Routledge, 2021. |
Series: Routledge international handbooks | Includes bibliographical
references and index.
Identifiers: LCCN 2020048981 (print) | LCCN 2020048982 (ebook) |
ISBN 9780367263591 (hardback) | ISBN 9780429292903 (ebook)
Subjects: LCSH: Finance—Technological innovations. | Financial
services industry—Technological innovations.
Classification: LCC HG173 .R684 2021 (print) | LCC HG173 (ebook) |
DDC 332—dc23
LC record available at https://lccn.loc.gov/2020048981
LC ebook record available at https://lccn.loc.gov/2020048982
ISBN: 978-0-367-26359-1 (hbk)
ISBN: 978-0-367-76008-3 (pbk)
ISBN: 978-0-429-29290-3 (ebk)
Typeset in Bembo
by codeMantra
CONTENTS
List of figures ix
List of tables xi
List of contributors xiii
PART I
FinTech innovations and trends 1
1 FinTech innovations and financial markets: an introduction 3
K. Thomas Liaw
2 FinTech venture capital 11
Douglas J. Cumming and Armin Schwienbacher
3 The future of finance: why regulation matters 38
Mark Fenwick and Erik P.M. Vermeulen
4 Digital currencies: what role in our financial system? 51
Grégory Claeys and Maria Demertzis
PART II
Blockchain and cryptocurrencies 67
5 Decentralized autonomous risk transfer on the blockchain 69
Alexander Braun, Niklas Haeusle and Stephan Karpischek
6 Distributed ledger technologies and blockchain for FinTech:
principles and applications 79
Raghava Rao Mukkamala and Ravi Vatrapu
v
Contents
7 Initial coin offerings: a statistical analysis of the main characteristics 99
Paola Cerchiello and Anca Mirela Toma
8 Initial coin offerings: a new trend in the market 108
Ana García Rodríguez
9 Price discovery in the Bitcoin futures and cash markets 128
Tatja Karkkainen
10 Trading and regulation of cryptocurrencies, stablecoins and other
cryptoassets 147
Anil Savio Kavuri and Alistair Milne
11 Cryptoassets and financial crime: a European Union perspective 163
Robby Houben and Alexander Snyers
PART III
FinTech in banking 191
12 FinTechs: unbundling and re-bundling in the open industry of banking 193
Anna Omarini
13 Is FinTech a threat or a promise to banks? 216
Krishnan Dandapani, Mohammad Hashemi Joo and Yuka Nishikawa
14 Virtual rush: the race for virtual banks in the Asia-Pacific region 232
Jackson Mueller
15 The restructure of China’s banking industry by artificial intelligence
and FinTech 263
Zhuming Chen, Jing Li, Xiangyu Zhang, Xin Li,
Jinghong Zeng, Shihan Wang and Weihan Zhang
PART IV
FinTech in payments and lending 303
16 Consumer payment preferences and the impact of technology
and regulation: insights from the Visa Payment Panel Study 305
Tom Akana
17 Meet people where they are: building formal credit using informal
financial traditions 322
Tom Akana
vi
Contents
18 Peer-to-peer lending risk management 336
Arianna Agosto
PART V
FinTech in other financial services 345
19 Rethinking automated investment adviser disclosure 347
Nicole G. Iannarone
20 Market risk for robot advisory 358
Paolo Pagnottoni and Gloria Polinesi
21 Financial technology in the U.S. Municipal Fixed Income Market 365
Timothy J. Stevens
22 PropTech: the real estate industry in transition 385
Marc Feth
PART VI
FinTech regulatory issues 393
23 Machine Learning implications for banking regulation 395
Lihong L. McPhail and Joseph E. McPhail
24 Regulating FinTech in Canada and the United States: comparison,
challenges and opportunities 416
Ryan Clements
25 Cryptocurrency market reactions to regulatory news 455
Raphael Auer and Stijn Claessens
Index 469
vii
.
Taylor & Francis
(
Taylor & Francis Group
http://taylorandfrancis.com
FIGURES
2.1 Total size of all VC rounds, scaled 2007=0 20
2.2 Number of VC rounds, scaled 2007=0 20
2.3 Number of investment rounds, scaled 2007=0 21
2.4 Annual volume of round investments, scaled 2007=0 21
4.1 A taxonomy of money 53
4.2 Market shares of the 10 most popular cryptocurrencies (market
capitalisation, October 2019, in %) 54
5.1 Generic structure of a decentralized autonomous organization 71
5.2 Decentralized insurance on the blockchain 72
9.1 Bitcoin spot and futures market 1-minute frequency 133
12.1 APIs as pivots between products and distribution 200
12.2 Possible scenarios of digital transformation and banks
and FinTechs collaboration 202
1 3.1 FinTech impact on banking operations 220
1 3.2 Banks prospects and challenges impacted by FinTech 222
1 3.3 Evolving FinTech possibilities and potentials 223
1 3.4 Disruption in retail banking sectors 225
15.1 Summary of bank technology subsidiary 264
15.2 Service model of Robo-Advisor 269
15.3 The application of AI in bank loans 270
15.4 The role of big data in the bank value chain 273
15.5 Athena platform 281
15.6 BaaS structure 284
15.7 YSA and COI trend 291
15.8 NIR and ROE trend 292
15.9 NIM, NPL and Tobing trend 292
16.1 Overall average monthly spending — by payment methods 308
16.2 Rates of card-based payment ownership and usage (among total) 308
16.3 Rate of card mention in banking solicitations 313
16.4 Index of average number of credit card accounts on file by consumer age 314
16.5 Payment method share of transactions by age range 315
ix