Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/176466 
Year of Publication: 
2017
Citation: 
[Journal:] Financial Innovation [ISSN:] 2199-4730 [Volume:] 3 [Issue:] 26 [Publisher:] Springer [Place:] Heidelberg [Year:] 2017 [Pages:] 1-16
Publisher: 
Springer, Heidelberg
Abstract: 
Background: This study aims to clarify the role of FinTech digital banking start-ups in the financial industry. We examine the impact of the funding of such start-ups on the stock returns of 47 incumbent US retail banks for 2010 to 2016. Methods: To capture the importance of FinTech start-ups, we use data on both the dollar-volume of funding and number of deals. We relate these to the stock returns with panel data regression methods. Results: Our results indicate a positive relationship exists between the growth in FinTech funding or deals and the contemporaneous stock returns of incumbent retail banks. Conclusions: Although these results suggest complementarity between FinTech and traditional banking, we note that our results at the banking industry level are not statistically significant, and that the coefficient signs for about one-third of the banks are negative, but not statistically significant. Since the FinTech industry is young and our sample period short, we cannot rule out that our findings are spurious.
Subjects: 
Banks
Digital banking
Finance
FinTech
Innovation
Retail banks
Start-ups
Stock returns
Venture capital
Technology
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article

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