Abstract
This chapter describes the challenges that the digitalization of the financial services industries is posing to traditional players. In particular, the Fintech revolution, Open Banking/Finance, and robo advisory are described, both on a practical and academic ground, focusing on how the transition from in-person financial services to automated ones affects the trust paradigm and, eventually, investors’ risk tolerance. The chapter also recaps the Payment Services Directive 2 and the role played by the European Regulator in contributing to the dissemination of digital solutions, instilling confidence in the use of digital services, and facilitating and encouraging competition in the finance industry. The chapter concludes with the revised Guidelines on Suitability issued by ESMA in 2018, where new requirements have been introduced to consider the increasing presence of robo advisors in the market for financial advice.
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Notes
- 1.
Artificial Programming Interfaces. See following sections for further explanations.
- 2.
APIs will be thoroughly described at paragraph 3.1.
- 3.
Application Programming Interfaces (APIs) are a set of functions and procedures (essentially, a code string) that allow an application to access the functionality, data, and/or audience of other applications or digital services. An API that is accessible to anyone is called “open. “Nowadays when talking about APIs, we often refer to what are Open APIs, those APIs that make it possible for anyone to access the functionality or data of another company (e.g., Google makes the APIs available to integrate Google Maps-based maps into other sites).
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Cruciani, C., Gardenal, G., Amitrano, G. (2022). The Digital Challenge: How Are New Technologies Shaping the Financial Industry?. In: Understanding Financial Risk Tolerance . Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-13131-8_4
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