Regional Development of Financial Innovation in Eastern European Countries

AuthorSumedrea S.
PositionTransilvania University of Brasov
Pages133-142
Bulletin of the Transilvania University of Braşov
Series V: Economic Sciences Vol. 12 (61) No. 2 – 2019
https://doi.org/10.31926/but.es.2019.12.61.2.17
REGIONAL DEVELOPMENT OF FINANCIAL INNOVATION
IN EASTERN EUROPEAN COUNTRIES
Silvia SUMEDREA1
Abstract. The paper analyses the development of fintech industry in a
regional context in an attempt to explain the u nequal development of
financial innovation in various markets. The development of crowdfunding,
digital payments and digital commerce d evelopment, but also the
development of asset management via robo-advisers will be analysed using
economic and social drivers o f the phenomena, particularly for the Eastern
European countries that are now members of the EU, but shared a common
communist history without a proper developed financial market. The
analyses and the conclusions are useful both for policy makers and business
developers but also for academia and researchers.
Key words: financial innovation, regional development, EU countries.
1. Introduction
The world economy experienced a major financial and economic crisis between 200 7
and 2011. According to some reputable specialists (Reinhart and Rogoff, 2014), another
is predicated within several years. The financial risks experienced during this period by
the world's economies have materialized, among other things, in drastic reduction o f
access to finance for SMEs, the slowdown in trade transactions, the decline of the asset
market (Reinhart and Rogoff, 2009) and drastic reduction of imports (Abiad et al , 2014).
Reducing bank liquidity during the crisis has led, in many cases, to reducing i nvestment
by firms (Kalemli-Ozcan et al, 2016). Banking and commercial credit have replaced each
other during the crisis to allow SMEs to continue their investment programs (Carbó-
Valverde et al, 2016; Bastos & Pindado, 2013). Sannajust (2014) found t hat during crisis
“small and young firms in Europe have more problems than the others” and Jacques et
al revealed that “financial turmoil had a substantial negative impact on lending t o small
businesses” (2016). Faced with difficulties in coping with current debts and payments,
SMEs have sought new methods of risk mitigation, requiring banks to offer new tools
and new financing technologies. Referring to the special financial needs of these entities
and the explosive development of IT, some entrepreneurs ventured into developing new
financial products and s ervices that later materialized in the emergence of new, non-
1 Transilvania University of Braşov, silvia.sumedrea@unitbv.ro

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