Innovation is a crucial growth driver for the financial services sector. Digital financial technologies or fintech are the latest innovation in this space. The growth and proliferation of fintech technology and the entry of non-finance technical firms are transforming this sector resulting in new business models, processes, and products. Their application is still at a nascent stage and while there are success stories, there are also issues in widespread use both globally and in India. This has left the governments and regulators in a dilemma about how to counter the newly emerging risks without disrupting their innovation potential. The regulation is also evolving. The challenges in regulation relate to cyber security, data protection, and consumer protection. In this chapter, we discuss the emerging forms of fintech policy regulation and challenges with special attention to distributed ledger technology. The study also provides a case study of Indian fintech regulation to demonstrate the evolution of fintech regulation and the emerging policy challenges. We also discuss the introduction of regulatory sandbox models in the Indian context.
Shafiq Ur Rehman, Sajjad Nawaz Khan, Waseem Subhani, Iftikhar Mehboob · 6 authors

 
 
 Central banks confront enormous hurdles in preserving the efficiency of their monetary policies in the face of rapid technological improvements in the financial industry. The effects of Distributed Ledger Technology (DLT) adoption, fintech investment, and regulatory flexibility by central banks on the effectiveness of monetary policy is investigated in this paper. Data were gathered quantitatively through surveys of financial professionals, policymakers, and central bank officials. The findings demonstrated that DLT adoption, fintech investment, and regulatory flexibility have a considerable positive effect on the effectiveness of monetary policy. The study not only validates but also extends previous material and provides policymakers with practical consequences. Limitations and future research directions are also highlighted.
 
 
Abstract The personal lending marketplace, known as Peer‐to‐Peer (P2P) lending, has increased globally. However, providing unsecured loans to peers without requiring collateral remains a challenge. A platform called TrustLend is proposed to enable trustworthy transactions in the personal lending application. The platform attempts to eliminate or minimize the collateral requirement. The trustworthiness score adds to this platform's variable selection rules and can help lenders decide on reliable candidates as borrowers. The prototype implementing the TrustLend platform based on Ethereum smart contracts that use the trustworthiness score is also described and it is illustrated with a Decentralized Application (DApp) case study and customized smart contracts. The prototype demonstrates fundamental features and supports borrowers, lenders, and recommenders in establishing proposals and approvals. Finally, the prototype shows how end‐users can easily access loans with reduced collateral without hidden costs and swift transactions.
This paper aims to explore the concept of digital cryptocurrency and its potential role in achieving inclusive finance. By drawing on relevant studies conducted in both China and abroad, we delves into the history and development, nature and types, as well as the benefits and risks associated with digital currencies. Additionally, the impact of digital currencies on deposit money is thoroughly examined, focusing on three key aspects: deposit currency stock, credit creation, and payment and settlement methods. Furthermore, the study presents a compelling case study on financial inclusion, using Alipay as an illustrative example. Building upon this case study, the paper offers insights into the future development of digital currencies. Although the future development of digital currency remains somewhat speculative, this research provides valuable considerations and outlooks Overall, the emergence of digital currency technology represents a momentous milestone in the financial landscape. As we move forward, understanding its potential impact on inclusive finance becomes increasingly crucial. This paper aims to shed light on this fascinating subject, paving the way for further research and discussions in the field
This article explores the rise of cryptocurrency adoption in Pakistan and examines the promising future that lies ahead for this emerging digital asset class in the country. Pakistan, with its cash-centric economy and limited access to formal financial services for a significant portion of its population, has witnessed a remarkable shift in attitudes toward cryptocurrencies. Factors such as financial inclusion efforts, economic instability, and supportive government policies have contributed to this growing interest. The younger generation, in particular, is embracing digital currencies as a means of participating in the global economy and preserving their wealth in the face of inflation. The establishment of crypto exchanges and supporting infrastructure, along with educational initiatives and awareness programs, has further facilitated cryptocurrency adoption. The government's positive approach and efforts to develop a comprehensive regulatory framework have instilled confidence and encouraged individuals and businesses to explore the opportunities presented by cryptocurrencies. Moreover, partnerships with global crypto projects and the potential applications of blockchain technology in various sectors have contributed to Pakistan's promising future in the cryptocurrency space. As more individuals and businesses embrace cryptocurrencies, Pakistan is poised to leverage the benefits of this transformative technology, fostering financial inclusion, economic growth, and technological innovation in the years to come. Cryptocurrencies have garnered significant attention and adoption worldwide, and Pakistan is no exception. In recent years, Pakistan has witnessed a growing interest in cryptocurrencies, with an increasing number of individuals and businesses embracing this digital financial revolution. This article explores the factors contributing to the rise of cryptocurrency adoption in Pakistan and examines the promising future that lies ahead.
Fintech is the application of the technologies of the fourth industrial revolution in the financial field. In recent years, it has aroused growing interest from various financial actors and specialties, thanks to its relevant characteristics such as information security, increased performance, and decentralization. Despite the positive aspects of fintech, there are some trends in its application that require overcoming certain problems such as regulation, technological scalability, and hybridization. Therefore, a systematic overview is considered necessary in which information is collected to provide an overview of the state of the art related to the application of fintech and start-ups to serve as a reference for future research in this field. To this end, a systematic literature review was conducted using the PRISMA protocol in combination with the Tree of Science (ToS) algorithm. Articles published between 2016 and 2021 were found in the Web of Science, Google Scholar, Scopus and IEEE Xplore databases, where the Tree of Science (ToS) algorithm was then applied to identify the most relevant literature on the topic. As a result, 72 articles were analyzed. The analysis of the selected articles provided valuable information and answered the research questions posed in the PRISMA protocol. The results indicate as research trends on the topic: business financing, innovation and financial information, financial technology and finance and regulation. Fintech is a revolutionary innovation that creates opportunities in the market and in the financial world, which is why prototypes are being developed worldwide.
Digital finance emerges and grows along with the environment of the unlimited integration of information technology and finance. This led to a shift from the traditional way of performing finance in different areas to another digital one. With the ongoing evolution of technology, financial innovation has made new inventions. More intelligent digital finance has emerged, which creates new opportunities and facilities. The COVID-19 pandemic has accelerated global digital transformation by altering businesses' and consumers' relationships with digital technologies in months. Digital finance becomes a necessity and offers previously unseen opportunities. The digitalization process also poses new challenges and risks which require a continuous update of regulations set by supreme committees and institutions to safeguard national security. Strict legal law is needed to strengthen trust and confidence in using e-services. Progress in three key areas will boost the prospects for broader adoption of digital finance, crypto, and decentralized finance (DeFi) markets.
The article states that decentralization is one of the trends in the modern global finance market. The growth and active development of the Islamic finance and banking industry, the growth in the number of Muslims in the world and other factors determine the interest of researchers in digitalization issues. This paper is devoted to the study of the possibilities, approaches and views on the use of digital currencies from the point of view of Islamic finance. Methods of analysis and synthesis, comparative analysis is used. The approaches of various countries of the Muslim world to the introduction of digital currencies are analyzed, ongoing projects are considered. In the Islamic world, there has not yet been a consensus on the permissibility and scope of the possible use of digital currencies. The authors conclude that, in general, digital currencies can be harmoniously used within the concept of Islamic finance. This is facilitated by such factors as the transparency of decentralized finance and digital currencies, the contribution to the protection of the wealth of society, the focus on social benefits, which is in line with the good goals of Islamic finance and its social value.
The realm of financial technology, or fintech, has been increasingly gaining attention and interest as it pertains to the integration of technology in financial services. This paper endeavors to provide an overview of various facets of fintech, including its impact on online payments, Peer-to-Peer (P2P) lending, Robo-advice, and blockchain technology. One significant effect of fintech is observed in the area of online payments, where traditional banking methods are being substituted with more advanced online payment systems. Fintech has emerged as a promising solution to the challenge of convenient, secure, and fast payment transactions for goods and services. P2P lending, another fintech innovation, enables borrowers to obtain loans without having to go through traditional financial institutions. This process has been simplified and made more accessible through the use of fintech platforms that connect borrowers with lenders. The paper also addresses the use of Robo-advice in fintech, which utilizes algorithms and artificial intelligence to provide financial advice to clients. Robo-advice technology has increased accessibility to financial advice for a more extensive range of people, reducing the barriers that might have limited access to this type of financial service. Finally, this paper examines the importance of blockchain technology in fintech, with its potential to streamline processes and ensure security in financial transactions. The decentralized nature of blockchain technology offers a robust solution to financial security, ensuring that transactions are secure, transparent, and immutable. In conclusion, the essay underlines the transformative potential of fintech in the financial industry with its numerous innovations.
The world around us has become increasingly digital in recent years, from the quick adoption of mobile phones to the emergence of the Internet and, more recently, social media and big data. With profound effects on all productive sectors, the “digital revolution,” considered as the widespread use of digital technology, has fundamentally changed the financial sector. This is presently in the midst of a profound and unheard-of change known as FinTech, which is the direct outcome of the application of technology to finance. Among other things, blockchain has recently gained popularity in the financial services industry. Therefore, a greater comprehension of how this novel technology could affect the financial industry is necessary. In this paper, we explore how blockchain may impact on financial intermediaries and banks.
The notion behind Islamic finance is providing alternative Shariah-compliant financial services and products for those who do not willing to access conventional finance as it contravenes Shariah principles. Currently, Islamic finance is expanding throughout Muslim and non-Muslim countries. One of the most critical challenges of the Islamic financial sector is the extent of the compliance of Islamic finance practices with Shariah principles. Therefore, there should be a control mechanism for ensuring the compliance of the products and services provided by Islamic financial institutions with Shariah principles. Scholars argue that a Shariah governance framework should be applied by institutions engaged in Islamic finance in countries where Islamic finance is being practiced. Shariah governance framework is mainly categorized into two approaches centralized and decentralized Shariah governance framework. The availability of a centralized Shariah governance framework is essential in ensuring the application of Islamic finance in accordance with Shariah principles. Ethiopia is one of the countries that accommodated the application of Islamic finance through exclusively interest-free banking windows by conventional banks in 2011 and fully-fledged interest-free banks in late 2019. However, the National Bank of Ethiopia (NBE) did not specify any Shariah governance framework in any of its legislations. The unavailability of an established Shariah governance framework may expose the sector to Shariah non-compliance risk. This study investigates how to ensure Ethiopia's Islamic finance applications' compliance with the Shariah principles. Semi-structured interviews and document studies were conducted with 15 respondents, including experts in Islamic finance, Shariah scholars, and Islamic finance practitioners, to collect the needed data for this endeavor. The findings indicate that interest-free banks, especially interest-free banking windows, do not give the necessary attention to the issue of the Shariah governance framework. The presumed manifestations of Shariah compliance in Ethiopia are having Shariah advisory committee, using Arabic words and names for their products and services, declaring they are following the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Islamic Financial Services Board (IFSB) standards, and participating in corporate social activities. However, these claims are insufficient to argue that their products and services are Shariah-compliant, as long as an external authorized body should oversight and control their application. In addition, the results indicate that adapting the AAOIFI standards to the extent of industry development is recommended to ensure Shariah compliance in Ethiopia. Besides, considering responsible stakeholders in ensuring Shariah compliance, government/NBE and financial institutions engaged in Islamic finance are identified as primary stakeholders. On the other hand, the Ethiopian Islamic Affairs Supreme Council (EIASC), religious scholars and institutional Shariah advisors, interest-free professional associations, academicians in Islamic economics and finance, and educational institutions are considered secondary stakeholders. In addition, the findings also indicate that the policymakers' approaches of Türkiye, Malaysia, Kenya, and South Africa to the Islamic finance industry could be the best model for policymakers in Ethiopia. Establishing a centralized Shariah advisory committee under the NBE is recommended to ensure the compliance of interest-free finance applications with Shariah principles in Ethiopia. To this endeavor, all stakeholders such as government/NBE, financial institutions engaged in the Islamic finance industry, EIASC, religious scholars and institutional Shariah advisors, interest-free professional associations, academicians in Islamic economics and finance, and educational institutions should play a significant role by fulfilling their respective responsibilities.
Fintech has exploded since the Internet revolution. Today, fintech has given rise to numerous segments, and many financial technologies have gained wider application. Among which the most active fintech areas are: online payments via digital currency without the need for cash; P2P lending, which enables direct person-to-person lending without the use of intermediaries; robo-advice, which use algorithms to provide investment advice; and distributed ledger technology (DLT) blockchain. They are all widely used in some countries around the world, but have not yet undergone a complete replacement. These emerging financial technologies have undoubtedly revolutionary implications for traditional finance, providing new ideas for the development of the financial sector. The problems they generate deserve attention as well. This paper introduces the development history of these four financial technologies, compares them with the traditional way of operation in the financial field in which they applied, and analyzes the advantages and limitations of these financial technologies. Finally, reflections on the future of fintech development are presented.
A growing number of central banks are exploring the potential introduction of a central bank digital currency (CBDC), and authorities are conducting distributed ledger technology (DLT) proof-of-concept experiments and pilot programmes. While these pilot projects have confirmed the feasibility of using DLT platforms for large-value wholesale payments, it is not yet clear whether these platforms will provide major advantages in terms of speed and scalability for small-value/large-volume retail payments. In Turkey, the existing instant payment system has already demonstrated that it can settle as many as 1,980 transactions per second (TPS) and 11.5 million transactions per day, across its 25 participant institutions. Moreover, simulations in test conditions suggest that it has the potential to deliver thousands of transactions per second, and that it is scalable to hundreds of participant institutions. Any retail payment system built on a DLT platform must therefore, at the very least, perform at a comparable level. Using actual retail payment data from the day on which the peak TPS was observed, this paper describes a novel experimental investigation into the TPS and scalability performance of two open source DLT platforms (Hyperledger Fabric and Quorum) and Turkey’s instant payment system for retail payments, with the aim of providing valuable insights for the design of alternatives for future CBDC launches. The study presents several empirical findings. First, it demonstrates that the speed and scalability of selected DLT platforms are not yet mature enough to establish an enterprise retail payment solution. Secondly, the experimental design enables us to determine precisely which DLT platform is facing a performance and capacity bottleneck and under what circumstances. One of the most critical findings is that platforms with a modular architecture and more efficient transaction life cycle perform relatively better, although still lack the requirements for achieving reliable and efficient retail payments. Lastly, we suggest that it could be worth developing an integrated approach in which the central instant payment system and DLT-based digital currency solution communicate via a bridge platform.
The objective of this study is to provide a review and recommendations on enhancing agricultural productivity among small-scale farmers in Zambia. The paper also evaluates how small-scale farmers can better access inputs, value-added services, marketing, and export markets. This study is non-empirical and exploratory in nature with an extensive review of the literature. The paper analyzed small-scale farmers' access to finance, input supply, and high-value chain markets. The study also sought to understand the impact of lack of formal financial access on farmers’ welfare including their social lives. One of the recommendations the researcher makes is the need for the government to decentralize farmer support programs to community level, and task the local leadership with the purchasing and distribution of inputs so as to maximize the reach of intended beneficiaries on time, and avoid the impact of delayed input distribution such as late planting of crops. The research is a non-empirical study which relied on available literature to conduct research on this topic.
Prof. Rupali Jadhav, Sakshi Gawali, Ankita Khutwad
Abstract: This project uses blockchain technology to suggest a workaround for the drawbacks of conventional crowdfunding sites. The suggested platform, "Fund Future," is a decentralised platform for crowdfunding that enables people and organisations to raise money for their projects directly from their supporters. The platform is based on the Ethereum blockchain, which enables smart contracts to carry out the crowdfunding campaign's policies and processes automatically. The platform offers a clear, safe, and effective method of fundraising, making sure that money is delivered properly to the project developers. The project seeks to address the issues that traditional crowdfunding platforms have, like high fees, fraud, and a lack of transparency. With blockchain technology becoming more popular, Fund Future has the potential to completely transform the crowdfunding market.
ABSTRACT Peer-to-peer (P2P) lending enables individuals and small companies to finance and invest without the intermediation of financial institutions. However, this business model is also associated with high delinquency risk and a lack of risk monitoring and control capabilities. This paper explores the potential of the Internet of Things (IoT), blockchain, smart contract technologies, and the Continuous Risk Monitoring and Assessment (CRMA) framework to re-engineer risk monitoring and control for P2P lending. We conducted a case study of a large Chinese P2P lending company to identify problems in its current risk monitoring and control processes and to design an IoT-smart contract CRMA system to continuously monitor and respond to delinquency risk via real-time data collection, automatic loan settlement, and in-time risk disclosure. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M40; M41; M49.
The widespread use of innovative technologies in the Arab countries began relatively recently; the COVID–19 pandemic became a powerful impetus to their promotion. However, the crises experienced by global financial markets have forced investors to look for more «safe havens» for their investments. In this regard, the development of the (non–fungible tokens, hereinafter — NFT) in the last two years has become a relatively safe place to invest. NFT technologies were originally designed for the world of art, artists, clip makers, people of creative professions and admirers of their creations, but NFT went further and began to become popular in the world of finance becoming one of the instruments for making transactions. The Arab countries did not stand aside from such innovations actively participating in the development, testing and search for new innovative areas of NFT application. However, you should not forget about the strict rules of Sharia which apply to all types of financial activities. The necessary interconnection and problem points are yet to be analyzed by experts in the future as the market develops but at the same time it is already worth talking about the rapid introduction of NFTs into Islamic finance.
Kaustubh Anavkar, Ashish Vishwakarma, Rohit Sardar, Prof. Vivek Pandey
Abstract: A growing number of enterprises, including start-up firms, artistic activities, and charitable causes, are being funded through crowdfunding. Traditional crowdfunding websites, on the other hand, struggle with a variety of issues, including prohibitive pricing, a lack of transparency, and fraud concerns. These issues have led to an increase in the use of blockchain technology as a crowdfunding platform. A decentralized, open-source ledger using blockchain technology safely and permanently records transactions. It provides several advantages for crowdsourcing, including decreased costs, increased transparency, and improved efficiency. Blockchain technology has the potential to open up crowdfunding to a wider range of investors, particularly those in developing countries with limited access to traditional financial institutions. Blockchain technology can be utilised for crowdfunding and smart contracts as well. Numerous procedures associated with crowdfunding, such as fund disbursement and investor verification, can be automated thanks to these self-executing contracts. Automation allows for a significant reduction in administrative work and a faster, more precise crowdfunding procedure. The goal of this article is to advance understanding regarding the application of crowdfunding using blockchain technology. We'll review the body of literature on blockchain and crowdfunding, take into account the benefits and drawbacks of doing so, and offer a framework for implementing blockchain-based crowdfunding. Our study will contribute to the growing body of knowledge on blockchain and crowdfunding, which will be helpful to policymakers, company owners, and investors interested in using blockchain for crowdfunding.
Khaled Mahmud, Md. Mahbubul Alam Joarder, Kazi Sakib
Financial technology (fintech) has disrupted the traditional financial system by decoupling, decentralizing, and demystifying finance. Effective and scalable adoption of fintech, however, is key to financial inclusion and value creation through new business models. While theoretical frameworks and models in the literature investigate technology adoption in general, a measurement scheme for customer readiness specifically for fintech is absent. We conduct a National Citizen Survey in Bangladesh (N = 1282), review extant literature on fintech adoption factors and variables, distill major themes into seven dimensions. In this paper, we propose the Customer Fintech Readiness (CFR) index to assess readiness to adopt and use customer facing fintech product, platforms and services. We validate the index and establish its easy replicability, albeit with small contingent adjustments. We find that customers in Bangladesh lag behind in readiness for fintech. Our dimension specific scores provide important insights for policy intervention and planning. While our dataset remains gender-imbalanced and depends on customer self-reporting, we delineate ways to fine-tune its construction for better replication of CFR in other countries.
The financial inclusion of poor populations and/or refugees can be hindered by difficulties in proving or reluctance to disclose their identity. Bank accounts and mobile money services require that identities be provided. Financial digital services based on blockchain technology can provide anonymous authentication to poor/refugee populations and be a first step towards financial inclusion. We scrutinize several examples of such projects by comparing them with blockchain-based digital identity or financial inclusion programs that are not necessarily restricted to poor/migrant populations. We use social network activity as a proxy for the failure or success of such projects. We find that blockchain projects targeted to migrants and poor individuals are more likely to fail than are those targeted to all. We more closely examine one particular case to check the consistency of our proxy. We present plausible explanations for our result: the discrepancy between the needs of populations of low socioeconomic status and the proposed blockchain-backed financial services and the fact that maintaining such services is energy intensive.
Emerging technologies are revolutionizing the banking and financial services industry, with innovations such as blockchain, artificial intelligence, machine learning, cloud computing, and FinTech solutions reshaping financial transactions, security, and risk management. These advancements improve operational efficiency, reduce costs, and enhance customer experience. However, they also introduce challenges, including regulatory compliance, cybersecurity risks, and increased financial instability due to rapid technological shifts. Blockchain has the potential to increase transparency and security in financial transactions, while AI and machine learning optimize credit scoring, fraud detection, and personalized financial services. The integration of quantum computing, augmented reality, and decentralized finance (DeFi) presents further opportunities for financial transformation. Despite these benefits, financial institutions must balance innovation with regulatory and ethical concerns. This study explores the role of emerging technologies in reshaping banking, emphasizing their potential benefits and limitations. Strategic collaboration between traditional banks and FinTech companies is crucial for sustainable financial growth.
The study aims to investigate the financial technology (FinTech) factors influencing Chinese banking performance. Financial expectations and global realities may be changed by FinTech's multidimensional scope, which is lacking in the traditional financial sector. The use of technology to automate financial services is becoming more important for economic organizations and industries because the digital age has seen a period of transition in terms of consumers and personalization. The future of FinTech will be shaped by technologies like the Internet of Things, blockchain, and artificial intelligence. The involvement of these platforms in financial services is a major concern for global business growth. FinTech is becoming more popular with customers because of such benefits. FinTech has driven a fundamental change within the financial services industry, placing the client at the center of everything. Protection has become a primary focus since data are a component of FinTech transactions. The task of consolidating research reports for consensus is very manual, as there is no standardized format. Although existing research has proposed certain methods, they have certain drawbacks in FinTech payment systems (including cryptocurrencies), credit markets (including peer-to-peer lending), and insurance systems. This paper implements blockchain-based financial technology for the banking sector to overcome these transition issues. In this study, we have proposed an adaptive neuro-fuzzy-based K-nearest neighbors' algorithm. The chaotic improved foraging optimization algorithm is used to optimize the proposed method. The rolling window autoregressive lag modeling approach analyzes FinTech growth. The proposed algorithm is compared with existing approaches to demonstrate its efficiency. The findings showed that it achieved 91% accuracy, 90% privacy, 96% robustness, and 25% cyber-risk performance. Compared with traditional approaches, the recommended strategy will be more convenient, safe, and effective in the transition period.