The interconnectedness of finance and technology was on full display at the inaugural FinTech and Financial Institutions Research Conference on April 19 at the FinTech Innovation Hub at the University of Delaware. 

The four-session conference — sponsored by UD and the Federal Reserve Bank of Philadelphia — included research presentations and feedback from discussants followed by question-and-answer opportunities. 

Keynote speaker Manju Puri, professor of finance at the J.B. Fuqua School of Business at Duke University, shared her engaging research on India’s open banking system and its impact on credit access. 

Open banking systems have been adopted in 49 countries. They allow bank customers to own their data and share their bank accounts with other financial service providers. According to Puri, this system has created financial inclusion — increasing the accessibility of banking. 

In 2016, India’s government required its unbanked population to open accounts. Puri’s research found that this mandate and the established unified payment interface (UPI), which allows digital transactions to be quickly submitted and authenticated, are two key factors for why open banking expands access to credit. 

“It’s not enough to have a bank account. Take a bank account and leverage it with having a digitally verifiable payment history — that’s the superpower,” Puri said.

She shared her research data that reflects an increase in credit access for new bank account holders who also have access to affordable internet services and mobile devices. For example, she identifies “road-side kiosks” as India’s small business owners who use QR codes to receive payment for their goods and services instead of cash transactions. Because of the UPI system, these business owners are now able to show financial institutions that they have a consistent history of having a demand for their services and goods when applying for a business loan, said Puri.

“The credit market access expands due to the open payment infrastructure. In particular, there is an increase in credit for underbanked and marginal borrowers,” Puri said. 

In her remarks to help open the conference, Provost Laura Carlson shared her excitement and optimism that the gathering would facilitate more of these types of discussions and collaborations. 

“These vital discussions will hopefully help to inform the decisions and shape policies that will advance financial security and health for everyone — not just in Delaware and Pennsylvania, but in every community,” Carlson said.  

Some of the research topics presented at the conference included cryptocurrency, non-fungible tokens and artificial intelligence, as well as small-business lending and the high-risk mortgage market. All papers can be found on FinTech’s website. 

FinTech organizers Michael Gelman, assistant professor of finance, Paul Laux, professor of finance, and Vitaly Meursault, machine learning economist at the Federal Reserve Bank of Philadelphia, presented the Best Paper Award to Janet Gao, Hanyi Livia Yi and David Zhang for their work on Algorithmic Underwriting in High Risk Mortgage Markets.