Financial Inclusion via FinTech: From Digital Payments to Platform Investments

73 Pages Posted: 30 Oct 2020 Last revised: 2 Apr 2025

See all articles by Claire Yurong Hong

Claire Yurong Hong

Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF)

Xiaomeng Lu

Fudan University, Fanhai International School of Finance

Jun Pan

Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF); National Bureau of Economic Research (NBER); China Academy of Financial Research (CAFR)

Multiple version iconThere are 3 versions of this paper

Date Written: September 30, 2021

Abstract

We study household finance in the age of FinTech, where digital payments are integrated with various financial services through all-in-one super-apps. We hypothesize that increased FinTech adoption via digital payments can lower the non-monetary costs (e.g., psychological barriers) associated with financial market participation. We find that higher FinTech adoption leads to greater participation and increased risk-taking in mutual fund investments. Using distance from Ant as an instrument for FinTech penetration, as well as the exogenous penetration of QRPay in Shenzhen, we further provide causal evidence from digital payment to risky fund investment. Moreover, the effect of FinTech is stronger among individuals who are otherwise more constrained,  those with higher risk tolerance, or those living in under-banked counties.

Keywords: FinTech, Digital Payment, Financial Inclusion, Household Finance, Risky Asset Investment

JEL Classification: G11, G50

Suggested Citation

Hong, Claire Yurong and Lu, Xiaomeng and Pan, Jun, Financial Inclusion via FinTech: From Digital Payments to Platform Investments (September 30, 2021). Available at SSRN: https://ssrn.com/abstract=3706709 or http://dx.doi.org/10.2139/ssrn.3706709

Claire Yurong Hong

Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF) ( email )

211 West Huaihai Road
Shanghai, China
Shanghai, Shanghai 200030
China

HOME PAGE: http://https://sites.google.com/site/claireyuronghong/

Xiaomeng Lu (Contact Author)

Fudan University, Fanhai International School of Finance ( email )

220 Handan Road
Shanghai, 100045
China

Jun Pan

Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF) ( email )

Shanghai Jiao Tong University
211 West Huaihai Road
Shanghai, 200030
China

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

China Academy of Financial Research (CAFR)

1954 Huashan Road
Shanghai P.R.China, 200030
China

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