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Article

Sustainability in FinTechs: An Explanation through Business Model Scalability and Market Valuation

1
Department of Economics and Business Management Sciences, Università Cattolica del Sacro Cuore, 20123 Milan, Italy
2
Departamento de Economía y Empresa, Universidad de Almería, 04120 Almería, Spain
3
Departamento de Economía de la Empresa, Universidad Rey Juan Carlos, 28032 Vicálvaro, Spain
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(24), 10316; https://doi.org/10.3390/su122410316
Received: 15 September 2020 / Revised: 13 November 2020 / Accepted: 6 December 2020 / Published: 10 December 2020
Framework: Financial Technology (FinTech) is an industry composed of diversified firms that combine financial services with innovative technologies. The research question and main goal are attempting to answer whether they are more similar to traditional banks or trendy technological firms deploying their innovativeness to favor financial inclusion and sustainability. Justification: Evaluators may wonder if FinTechs follow the typical evaluation patterns of bank/financial intermediaries or those of technological firms. Preliminary empirical evidence shows that the latter interpretation is the one consistent with the stock-market mood. Objective: This study goes beyond the extant literature, analyzing the differences between FinTechs and traditional banks in market valuation, and showing the potential for digital interaction and cross-pollination of complementary business models. Methodology: The differences will be empirically analyzed with the stock market valuation and the multipliers associated with these firms. Results: The main contribution of this paper is that the appraisal approaches of FinTechs follow those of technological startups, having a revenue model much more scalable than that of a typical bank. FinTechs may so provide a solution for sustainable finance with microfinance and crowdfunding among others. FinTechs and traditional banks may eventually converge towards a common market exploiting co-opetition strategies. View Full-Text
Keywords: financial innovation; value chains; scalability; digital platforms; financial ecosystem; discounted cash flows; market value; Sustainable Development Goals financial innovation; value chains; scalability; digital platforms; financial ecosystem; discounted cash flows; market value; Sustainable Development Goals
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MDPI and ACS Style

Moro-Visconti, R.; Cruz Rambaud, S.; López Pascual, J. Sustainability in FinTechs: An Explanation through Business Model Scalability and Market Valuation. Sustainability 2020, 12, 10316. https://doi.org/10.3390/su122410316

AMA Style

Moro-Visconti R, Cruz Rambaud S, López Pascual J. Sustainability in FinTechs: An Explanation through Business Model Scalability and Market Valuation. Sustainability. 2020; 12(24):10316. https://doi.org/10.3390/su122410316

Chicago/Turabian Style

Moro-Visconti, Roberto, Salvador Cruz Rambaud, and Joaquín López Pascual. 2020. "Sustainability in FinTechs: An Explanation through Business Model Scalability and Market Valuation" Sustainability 12, no. 24: 10316. https://doi.org/10.3390/su122410316

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