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Banking FinTech and stock market volatility? The BIZUM case

Author

Listed:
  • Arenas, Laura
  • Vizuete-Luciano, Emili
  • Gil-Lafuente, Anna María

Abstract

This paper investigates whether and how the adoption of FinTech by incumbent banks affects their stock price volatility. BIZUM, a Spanish FinTech real-time digital payment solution was adopted by incumbent banks in 2016 and therefore provides new evidence of real-world ex-post implementation. The results indicate that the adoption of BIZUM by incumbent banks had a significant effect, reducing their stock price volatility after it was launched. This finding suggests that investors were informed of and acknowledged the advantages of BIZUM, thus, use their adoption of FinTech Start-up strategy to offset adverse market circumstances. This paper provides insights for investors and international institutions regarding the role of the pricing of banking related assets, implications for incumbent banks whose portfolios are exposed to investments in disruptive technology and for banking regulators and authorities vis-à-vis risk related considerations of the adoption by banks of FinTech strategies.

Suggested Citation

  • Arenas, Laura & Vizuete-Luciano, Emili & Gil-Lafuente, Anna María, 2024. "Banking FinTech and stock market volatility? The BIZUM case," Research in International Business and Finance, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:riibaf:v:71:y:2024:i:c:s0275531924002320
    DOI: 10.1016/j.ribaf.2024.102439
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    Keywords

    Stock market volatility; GARCH- M; BIZUM; FinTech; Digital payment; Banking;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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