Smart City: Sharing of Financial Services

Abstract

Contemporary life is closely interconnected with numerous phenomena, which have appeared in our life in recent decades. The concepts of a smart city, digitalization of the economy, and the sharing economy are among them. These factors create new opportunities for businesses operating in modern markets. The article considers the sharing services in digital payment operations for achieving the Key Performance Indicators (KPI) of a smart city. The goal of the research is to determine the costs of sharing economy implementation in the financial sector of a smart city. The study takes the example of Rome’s experience. The authors consider KPIs selected by the municipality of Rome as a measure of smart city implementation and their provision by sharing services in financial operations. The authors specify the structure of the costs of shared financial services for a smart city and for Fintech companies operating with open banking, which is followed by the cost functions peculiar to these operations of Fintech companies. The authors demonstrate the point at which a Fintech company starts earning a positive profit on these services via operating leverage.

Risk-Based Approach for Selecting Company Key Performance Indicator in an Example of Financial Services

“…In areas such as accounting, marketing, entrepreneurship, and production, the digital transformation of the economy has unveiled new challenges for managing participating companies [10][11][12][13][14].…”

Business KPIs Based on Compliance Risk Estimation

“…The selected five Fintech companies represent 3 of four major groups of the Fintech business models(Popova et al, 2023) -Financial Fintech, Payment Fintech and Asset Management fintech. The Fintech companies of the fourth existing type do not deal with payments, and correspondently are beyond the scope of this study.…”

“…The Fintech companies of the fourth existing type do not deal with payments, and correspondently are beyond the scope of this study. Therefore, all areas of Fintech functioning according to the set goal are represented in the study.• All companies are supervised as -Credit institution, Electronic Money Institution, Virtual Assets management institutions, Payment Initiation Service provider (PISP in accordance with the PSD II(Popova et al, 2023)). Two of them are passported for the service providing across all EU countries.…”