FinTechs and the Market for Financial Analysis
Journal of Financial and Quantitative Analysis
54 Pages Posted: 12 Mar 2018 Last revised: 6 Aug 2020
Date Written: May 7, 2020
Hundreds of equity market intelligence FinTechs have formed in the last decade. We assemble novel data to describe their capabilities, users, and consequences. Our data suggest that these FinTechs: (i) aggregate many data sources, including nontraditional ones (e.g., Twitter, blogs), and synthesize such data using artificial intelligence to make investment recommendations, and (ii) change internet users information discovery by serving as substitutes for traditional information providers. We evaluate some nontraditional data and find evidence suggesting that it contains valuable information or ``crowd wisdom'' that links to informational efficiency. Overall, our findings are consistent with this innovation benefiting investors and markets.
Keywords: Fintech, FinTechs (financial technology firms), Equity market intelligence, Artificial intelligence, Aggregators, Social media, Financial blogs, Information and price efficiency, Big data, Alternative data, Machine learning, Datamining, Data signal providers, Innovation, Startups
JEL Classification: D14, G11, G14, G23, O35
Suggested Citation: Suggested Citation