How Valuable is FinTech Innovation? | Zendy

Mark A. Chen | Zendy; Qinxi Wu | Zendy; Baozhong Yang | Zendy

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How Valuable is FinTech Innovation?

Author(s) -

Mark A. Chen,

Qinxi Wu,

Baozhong Yang

Publication year - 2018

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.3106892

Subject(s) - disruptive innovation , business , financial innovation , value (mathematics) , blockchain , industrial organization , innovation management , disruptive technology , stock (firearms) , marketing , the internet , computer science , finance , engineering , mechanical engineering , computer security , machine learning , world wide web , manufacturing engineering

We provide large-scale evidence on the occurrence and value of FinTech innovation. Using data on patent filings from 2003 to 2017, we apply machine learning to identify and classify innovations by their underlying technologies. We find that most FinTech innovations yield substantial value to innovators, with blockchain being particularly valuable. For the overall financial sector, internet of things (IoT), robo-advising, and blockchain are the most valuable innovation types. Innovations affect financial industries more negatively when they involve disruptive technologies from nonfinancial startups, but market leaders that invest heavily in their own innovation can avoid much of the negative value effect.ReceivedMay 31, 2017; editorial decision September 30, 2018 by Editor Andrew Karolyi.

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