Fraud and Privacy Violation Risks in the Financial Aggregation Industry: The Case of Regulation

European Scientific Journal, Vol. 2, September 2014

11 Pages Posted: 25 Dec 2015

See all articles by Anastassios Gentzoglanis

Anastassios Gentzoglanis

Université de Sherbrooke

Avner Levin

Ryerson University, Ted Rogers School of Management

Date Written: September 1, 2014

Abstract

The financial aggregation industry is on the rise again. After having experienced high growth rates during the pre-financial crisis of 2007-2008, the industry has undergone significant changes in terms of structure, behaviour and performance. Plagued by lack of trust on behalf of the customers and under the pressure of changing technologies and in the absence of a regulatory framework, new entrants had difficulties in penetrating the market the way have originally anticipated. In the meantime, banks and other financial institutions refined their strategies and consolidated their positions in the new emerging industry. To survive, many early entrants developed new strategies and became suppliers of technology to the banks and other financial institutions. This study uses the SCP paradigm to analyze the emerging financial aggregation industry and the attitudes young customers have toward these services. The results show that customers are seriously concerned with the risks of violation of privacy and fraud associated with aggregation activity online and they are ready to pay a prime to get a more secure service. Nonetheless, regulating of the aggregation industry on the ground of these risks is premature. Yet, the existing regulatory agencies should increase awareness concerning the looming risks and provide incentives to financial aggregators to adopt technologies and operational strategies that minimize the potential for fraudulent behaviour online.

Keywords: Financial Aggregation, Disruptive Technologies, Regulation, Fraud, Privacy, Competitive Strategies

Suggested Citation

Gentzoglanis, Anastassios and Levin, Avner, Fraud and Privacy Violation Risks in the Financial Aggregation Industry: The Case of Regulation (September 1, 2014). European Scientific Journal, Vol. 2, September 2014. Available at SSRN: https://ssrn.com/abstract=2707834

Anastassios Gentzoglanis

Université de Sherbrooke ( email )

2500 Boul Universite
Sherbrooke, Quebec J1K2R1
Canada

Avner Levin (Contact Author)

Ryerson University, Ted Rogers School of Management ( email )

350 Victoria Street
Toronto, Ontario M5B 2K3
Canada

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