FinTech revolution: the impact of management information systems upon relative firm value and risk

Mitra, S. and Karathanasopoulos, A. 2020. FinTech revolution: the impact of management information systems upon relative firm value and risk. Journal of Banking and Financial Technology. 4, p. 175–187. https://doi.org/10.1007/s42786-020-00023-0

TitleFinTech revolution: the impact of management information systems upon relative firm value and risk
TypeJournal article
AuthorsMitra, S. and Karathanasopoulos, A.
Abstract

The FinTech or ‘financial technology’ revolution has been gaining increasing interest as technologies are fundamentally changing the business of financial services. Consequently, financial technology is playing an increasingly important role in providing relative performance growth to firms. It is also well known that such relative performance can be observed through pairs trading investment. Therefore pairs trading have implications for understanding financial technology performance, yet the relationships between relative firm value and financial technology are not well understood. In this paper we investigate the impact of financial technology upon relative firm value in the banking sector. Firstly, using pairs trade data we show that financial technologies reveal differences in relative operational performance of firms, providing insight on the value of financial technologies. Secondly, we find that contribution of relative firm value growth from financial technologies is dependent on the specific business characteristics of the technology, such as the business application and activity type. Finally, we show that financial technologies impact the operational risk of firms and so firms need to take into account both the value and risk benefits in implementing new technological innovations. This paper will be of interest to academics and industry professionals.

KeywordsFinTech, Financial technology, Operational risk, Relative firm value, Firm value, Risk management, Pairs trading, Shareholder value
JournalJournal of Banking and Financial Technology
Journal citation4, p. 175–187
ISSN2524-7956
2524-7964
Year2020
PublisherSpringer
Publisher's version
License
CC BY 4.0
File Access Level
Open (open metadata and files)
Digital Object Identifier (DOI)https://doi.org/10.1007/s42786-020-00023-0
Web address (URL)https://link.springer.com/article/10.1007%2Fs42786-020-00023-0
Publication dates
Published online06 Oct 2020
Supplemental file
License
CC BY 4.0
File Access Level
Open (open metadata and files)

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