FinTech

Extreme movements in financial time series pose challenges for risk management and forecasting, particularly when their timing is irregular and difficult to anticipate. This study aims to develop a probabilistic framework for detecting and predicting such events using daily Bitcoin returns as a case study. We first identify extreme positive and negative return events using the Isolation Forest algorithm and estimate their empirical recurrence patterns using a dynamic frequency table to derive baseline parametric probabilities. A 7-day Hawkes excitation kernel is then applied to capture short-run self-exciting dynamics, and both components are integrated using logistic regression to produce real-time probability forecasts. The results show that positive events occur more frequently than negative ones and that prediction accuracy improves over time: Brier scores, which measure the accuracy of probabilistic predictions, decrease as additional event data accumulate, and log loss values exhibit a consistent downward trend. Overall, by combining anomaly detection, empirical inter-arrival estimation, and excitation dynamics into a unified structure, the proposed framework offers a transparent and adaptable tool for forecasting extreme events in the financial market.

We examine whether aggregate “music mood” derived from globally popular songs can help forecast primary equity issuance. We build a Friday-anchored weekly panel that merges SEC EDGAR counts of priced Initial Public Offerings (IPOs) with features from the Spotify Daily Top 200 (audio descriptors such as valence, energy, danceability, tempo, loudness, etc.) and Genius-scraped lyrics. We extract lyric sentiment by tokenizing Genius-scraped lyrics and aggregating lexicon-based affect scores (valence and arousal) into popularity-weighted weekly indices. To address sparsity and regime shifts in issuance, we train a leakage-safe Long Short-Term Memory (LSTM) network on a smoothed target—the forward 4-week sum of IPOs—and obtain next-week forecasts by dividing the predicted sum by 4. On a chronological holdout, a single LSTM with look-back K = 8 outperforms strong baselines—reducing MAE by 13.9%, RMSE by 15.9%, and mean Poisson deviance by 27.6% relative to the best baseline in each metric. Furthermore, we adopt SHapley Additive exPlanations (SHAP) to explain our LSTM model, showing that IPO persistence remains the dominant driver, but music and lyrics covariates contribute incremental and robust signal. These results suggest that aggregate music sentiment contains economically meaningful information about near-term IPO activity.

Robo-advisors are evolving fintech solutions that ask potential clients about their investment purpose and time horizon and then offer investment strategies to reach different goals. This study aims to build on prior research and gain insights into the influence of innovation attributes (relative advantage, complexity, compatibility, and observability), perceived trust, and image regarding robo-advisor adoption by applying and extending the Diffusion of Innovation (DOI) theory. Data were collected using a cross-sectional survey approach. A total of 187 valid responses were obtained from an online participant recruitment website based in the United States and analysed using the partial least squares approach. The findings indicate that relative advantage and attitude influence an individual’s intention to adopt a robo-advisor, while all innovation attributes, perceived trust, and image of a robo-advisor influence an individual’s attitude towards it. By extending the DOI framework, this research advances understanding of its applicability to robo-advisor adoption. This study contributes to the literature by clarifying the influences on robo-advisor adoption and their relationships. From a practical standpoint, the findings and measures could help wealth management companies improve their promotional campaigns and technical design.