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Could RegTech and FinTech Play a Role in Supporting Green Finance and Promoting Sustainable Banking

A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (30 July 2023) | Viewed by 16039

Special Issue Editor


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Guest Editor
Centre for Financial Regulation and Risk Management, Eastern Mediterranean University, Famagusta, Cyprus
Interests: financial regulation; risk management
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

In the last few years, financial technology (FinTech) and regulatory technology (RegTech) have become central discussion points in the banking, securities and asset management industries, as well as in academia. At the same time, governments around the world have launched various initiatives in support of green finance and sustainable banking. FinTech and RegTech have the potential not only to transform the financial system, but also to build an equitable and sustainable society by promoting not only green finance, which is driven by increasing investment opportunities and developing infrastructure, such as green bonds, but also encouraging sustainable banking practices. If these technologies are applied in the right way, they could also help governments to overcome the social and economic gaps that exist worldwide.

However, there remain regulatory challenges with respect to greenwashing, reporting and disclosure practices, and climate risk, all of which damage investor confidence and harm the development of a fully functioning green finance movement. Combining both existing and new technologies, RegTech has the potential to play a crucial part in combating the regulatory challenges currently facing green finance and sustainable banking. As regulators continue to take the lead in the development of green finance and encourage market developments through adopting globally unified standards and benchmarks, recent years have seen not only green finance but also sustainable banking become almost operational and regulatory requirements for many firms in the finance industry, where companies that are not disclosing data are beginning to feel public pressure and face competitive disadvantages.

With the increasing demand for green finance and sustainable banking, impactful legal, regulatory and policy-related academic research on the role of FinTech and RegTech can be a catalyst for change. The need in the existing literature for both empirical and theoretical perspectives remains very high. It is against this backdrop that this Special Issue aims to encourage, stimulate, advance and broaden theoretical and empirical research on the role of FinTech and Regtech on green finance and sustainable banking, thereby filling an important gap in the existing literature.

I am looking forward to receiving your contribution to this Special Issue by the deadline below.

Prof. Dr. Mete Feridun
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

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Keywords

  • RegTech
  • FinTech
  • green finance
  • sustainable banking

Published Papers (4 papers)

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Research

13 pages, 272 KiB  
Article
Prediction of Micro- and Small-Sized Enterprise Default Risk Based on a Logistic Model: Evidence from a Bank of China
by Yuetong Zhao and Deqin Lin
Sustainability 2023, 15(5), 4097; https://doi.org/10.3390/su15054097 - 23 Feb 2023
Cited by 3 | Viewed by 1388
Abstract
This study selected factors influencing the default risk of micro- and small-sized enterprises (MSEs) from the perspective of both financial and non-financial indicators and constructed an identification model of the influencing factors for the default risk of MSEs by logistic regression, using the [...] Read more.
This study selected factors influencing the default risk of micro- and small-sized enterprises (MSEs) from the perspective of both financial and non-financial indicators and constructed an identification model of the influencing factors for the default risk of MSEs by logistic regression, using the data on loans borrowed by 2492 MSEs from a city commercial bank in Gansu Province as the sample. In addition, the robustness and prediction effect of the model were tested. The empirical results showed that the logistic model has good robustness and high predictive ability. The quick ratio, total asset turnover, return on net assets, sales growth rate and total assets growth rate had significant negative impacts on the default risk for the loans taken out by MSEs; the loan maturity and loan amount had remarkable positive impacts on the default risk; non-financial indicators (e.g., the nature of the enterprise, method of obtaining the loan and educational background of the person in charge) had significant impacts on the default risk. Based on the results, this manuscript provides solutions to address the default risk of MSEs and makes suggestions from the perspectives of database building, full-cycle management and dynamic assessment of guarantee capacity. Full article
16 pages, 306 KiB  
Article
Impact of Digital Finance on Green Technology Innovation: The Mediating Effect of Financial Constraints
by Decai Tang, Wenya Chen, Qian Zhang and Jianqun Zhang
Sustainability 2023, 15(4), 3393; https://doi.org/10.3390/su15043393 - 13 Feb 2023
Cited by 15 | Viewed by 3755
Abstract
Green technology innovation is crucial for achieving sustainable development. This paper establishes fixed effect and mediation effect models to study how digital finance influences corporate green technology innovation and the moderating role of financial constraints using the data of Chinese A-share public businesses [...] Read more.
Green technology innovation is crucial for achieving sustainable development. This paper establishes fixed effect and mediation effect models to study how digital finance influences corporate green technology innovation and the moderating role of financial constraints using the data of Chinese A-share public businesses from 2011 to 2020. The results show that, first, green technology innovation is facilitated by digital finance, and both the coverage breadth and use depth play important roles. Second, digital finance encourages business innovation in green technology by alleviating financial constraints. Third, in state-owned businesses and businesses located in the eastern regions, digital finance has a more visible driving impact on green technology innovation. The aforementioned findings offer insightful research to encourage the balanced growth of digital finance and better enable corporate green technology innovation. Full article
25 pages, 602 KiB  
Article
Can Fintech Promote Sustainable Finance? Policy Lessons from the Case of Turkey
by Orkun Bayram, Isilay Talay and Mete Feridun
Sustainability 2022, 14(19), 12414; https://doi.org/10.3390/su141912414 - 29 Sep 2022
Cited by 18 | Viewed by 4757
Abstract
This study contributes to sustainable finance literature by exemplifying promotion of sustainable finance through fintech solutions for emerging market economies by presenting the case of Turkey. Turkey is one of the largest emerging market economies in the world with a strong banking system [...] Read more.
This study contributes to sustainable finance literature by exemplifying promotion of sustainable finance through fintech solutions for emerging market economies by presenting the case of Turkey. Turkey is one of the largest emerging market economies in the world with a strong banking system and high adoption of technology, so it has great potential to benefit from fintech solutions to boost sustainable finance. For the case analysis, the data used came from a research platform for a Turkish start-up ecosystem, Turkish regulations, and documents released on Turkey’s sustainable finance strategies by Turkish and international institutions. We found that Turkey has made remarkable progress in increasing financial inclusivity for underbanked individuals and SMEs via providing contactless payment and contract systems and microfinance by mobile carriers and other online platforms. Turkey was also able to promote the responsible consumption goal for sustainable development by improving fintech solutions on payment systems with educational content on this goal. With upcoming developments such as the sandbox environment in Istanbul Financial Center, fintech solutions using Big Data, AI, and blockchain could emerge much faster with collaboration between banking and fintech sectors and regulatory institutions to better assess climate-related financial risks and form a national carbon trading mechanism. Full article
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20 pages, 491 KiB  
Article
Fintech and Financial Risks of Systemically Important Commercial Banks in China: An Inverted U-Shaped Relationship
by Baomin Chen, Xinyun Yang and Zhenzhong Ma
Sustainability 2022, 14(10), 5912; https://doi.org/10.3390/su14105912 - 13 May 2022
Cited by 14 | Viewed by 4900
Abstract
The past decade has seen impressive developments in financial technology (FinTech) in China. As a new technology and innovative method that competes with, and also supplements, traditional financial methods, fintech has had a significant impact on traditional financial businesses and has thus challenged [...] Read more.
The past decade has seen impressive developments in financial technology (FinTech) in China. As a new technology and innovative method that competes with, and also supplements, traditional financial methods, fintech has had a significant impact on traditional financial businesses and has thus challenged the role of commercial banks as credit intermediaries in the financial sector. This paper examines the potential risks that fintech brings to commercial banks in China, and collects data from 19 systemically important banks from 2011–2020 to analyze the effect of fintech development on commercial banks’ financial risks in order to achieve sustainable development in the financial sector. Using the Z value and non-performing loan ratio as the criterion variables, this study shows that the impact of fintech on the financial risks of systemically important banks demonstrates an inverted U-shaped pattern, with the financial risk increasing first and then decreasing alongside the further development of fintech. The results also show that commercial banks’ responses to fintech development has been comparatively slow. Managerial suggestions are then discussed on risk supervision for commercial banks and the financial sector in China and other emerging markets. Full article
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