Fintech Adoption and Household Risk-Taking

Hong, Claire Yurong; Lu, Xiaomeng; Pan, Jun

doi:10.2139/ssrn.3727139

Cited by 15 publications

(19 citation statements)

References 43 publications

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“…The expansion of fintech is known to transform not only payments in daily household consumption activities, but also individual investment activities. In China, the increase in online payments through the proliferation of Alipay has lowered barriers to individual investment behavior and improved risk‐taking by households (Hong et al ., 2021). The more willing consumers are to adopt new technologies, the more willing they are to invest in risky assets in their investment activities.…”

Section: Current Status Of Fintech In Japanmentioning

confidence: 99%

Why Fintech Is Not Changing Japanese Banking

Iwashita

2022

Asian Economic Policy Review

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Several years have passed since fintech first attracted attention in Japan. Although various new fintech services have emerged due to deregulation and policies to promote fintech's development and adoption, the overall composition and functioning of Japan's financial industry has not changed significantly despite fintech advances in other economies. The industry in Japan continues to be dominated by face-to-face interactions and has experienced little digitization. In Japan, sophisticated financial services were available before the widespread use of the internet, and most people have resisted conducting financial transactions using their smartphones. In addition, there has been almost no progress in digitizing accounting work in corporations. However, this stagnation in digitization on the demand side of financial services is changing for several reasons. Digitization in the government sector and the introduction of a new invoice system in 2023 will provide an opportunity for change. This time, Japan's financial services should undergo a significant digital transformation.

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Section: Current Status Of Fintech In Japanmentioning

confidence: 99%

Why Fintech Is Not Changing Japanese Banking

Iwashita

2022

Asian Economic Policy Review

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“…Currently, digital finance has penetrated every aspect of household life, and digital functions such as mobile payment and online shopping are frequently used. Especially when households get used to the efficient services and rich products of digital finance, they may reduce their risk aversion and increase their risk-bearing level [ 14 ], thus promoting households to participate more in risky financial markets. Therefore, the following is hypothesized:…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…Third, with the rapid penetration of digital finance into every aspect of family life, households have various financial opportunities, such as mobile payment and online shopping [ 13 ]. In the process of using digital financial products and services, households have raised their risk-bearing level to some extent [ 14 ], thereby motivating them to participate in risky financial markets.…”

Section: Introductionmentioning

confidence: 99%

The impact of digital finance on household participation in risky financial markets: Evidence-based study from China

Yong-jian

Xiong

2022

PLoS ONE

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Chinese households have overinvested in risk-free financial assets, resulting in a single structure of financial assets. However, this proportion declined as digital finance developed. By combing the data from the China Household Finance Survey Data and the Peking University Digital Financial Inclusion Index of China, we find that digital finance significantly promotes household participation in risky financial markets. Further mechanistic analysis unveils that digital finance mainly affects households’ participation in risky financial markets by reducing the lack of investment channels, promoting households’ access to financial information and increasing the possibility of household risk appetite. In addition, the heterogeneity analysis suggests that digital finance effectively reduces the deterrent effect of wealth and cognitive thresholds on all households, reflecting the inclusive nature of financial development. Our findings provide an empirical basis for the mainstream positioning of digital finance in the development of inclusive finance, and display its positive impact on social welfare.

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“…On the one hand, financial literacy can change households' risk attitudes and prevent them from falling into poverty by choosing financial instruments such as insurance and credit for risk protection when facing external risks (Urrea and Maldonado, 2011;Kwon and Ban, 2021). On the other hand, through information analysis and screening of financial products, increasing social trust (Hansen, 2017) and risk-taking capacity (Hong et al, 2020), for example, by increasing households' willingness to purchase financial insurance, the insurance mechanism will work to help households diversify their risks when they are covered by insurance and other protection, thus reducing the probability of falling into poverty in the future. Based on this, this paper proposes the following hypothesis:…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 99%

Household financial literacy and relative poverty: An analysis of the psychology of poverty and market participation

2022

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Financial literacy is the significant human capital factor affecting people's ability to obtain financial services. Evaluating the relationship between financial literacy and relative poverty is of great significance to poverty reduction. This study investigated the impacts of financial literacy on relative poverty from the perspective of poverty psychology and market participation using data from the 2017, 2019 China Household Finance Survey (CHFS). The empirical findings showed that financial literacy can alleviate relative household poverty through household participation in entrepreneurial activities, commercial insurance participation and the choice of lending channels. Financial literacy has significant poverty reduction effect on households of continuous operation, reduces the likelihood of exiting operation. Further discussion showed that the poverty reduction effect of financial literacy is more pronounced among households with higher levels of financial literacy, under the age of sixty, low levels of indebtedness and in the eastern region. Our study provides empirical evidence for encouraging market participation and promoting financial literacy and provide valuable recommendations for the policymaker to improve poverty reduction effect in the developing country context.

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Fintech Adoption and Household Risk-Taking

Cited by 15 publications

References 43 publications

Why Fintech Is Not Changing Japanese Banking

Why Fintech Is Not Changing Japanese Banking

The impact of digital finance on household participation in risky financial markets: Evidence-based study from China

Household financial literacy and relative poverty: An analysis of the psychology of poverty and market participation

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