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Journal Article
Network vulnerabilities and risks in the retail payment system
Changes in retail payments technology will impact the operational risk of commercial banks. This study provides a more in-depth discussion of the ramifications these changes have for bank supervision and policy makers. In addition to operational risk concerns identified by previous researchers, this paper identifies network vulnerabilities as a potential resiliency concern.
Journal Article
Three decades of banking
Journal Article
Meeting the challenges : community bankers' views
Dramatic changes are occurring in our financial system and the pace of change is increasing. These changes provide opportunities for community bankers, but they also create new challenges. To explore how community banks will respond to these challenges, we asked Tenth District community bankers for their views on how their banks will be affected over the next five years. ; Our survey focused on four broad areas--bank and nonbank competition, operational matters, ownership and human resource concerns, and banking regulation's impact. In the first area, survey respondents expect to face strong ...
Journal Article
Early warning models for bank supervision: Simpler could be better.
Can computer-based models, using publicly available information, be used as off-site early warning systems (EWS) to identify banks that will become inadequately capitalized in the near future? The EWS models analyzed in this article are able to detect the early onset of financial distress one year in advance with a reasonable degree of accuracy. Although simple EWS models do as well as or better than more sophisticated ones, more sophisticated models could provide detailed information about individual bank strengths and weaknesses.
Working Paper
The Roles of Alternative Data and Machine Learning in Fintech Lending: Evidence from the LendingClub Consumer Platform
Supersedes Working Paper 17-17. Fintech has been playing an increasing role in shaping financial and banking landscapes. There have been concerns about the use of alternative data sources by fintech lenders and the impact on financial inclusion. We compare loans made by a large fintech lender and similar loans that were originated through traditional banking channels. Specifically, we use account-level data from LendingClub and Y-14M data reported by bank holding companies with total assets of $50 billion or more. We find a high correlation with interest rate spreads, LendingClub rating ...
Working Paper
Do Fintech Lenders Penetrate Areas That Are Underserved by Traditional Banks?
Supersedes Working Paper 17-17 Fintech has been playing an increasing role in shaping financial and banking landscapes. In this paper, we use account-level data from LendingClub and Y-14M data reported by U.S. banks with assets over $50 billion to examine whether the fintech lending platform could expand credit access to consumers. We find that LendingClub?s consumer lending activities have penetrated areas that may be underserved by traditional banks, such as in highly concentrated markets and in areas that have fewer bank branches per capita. We also find that the portion of LendingClub ...
Journal Article
Agricultural lending: what have we learned?
Journal Article
Retail payments innovations and the banking industry
This study examines the impact of new payments technologies on the value of banking industry. Chakravorti and Kobor (2003) find that payment providers offer new payments products most often as a bundled service offering in order to retain their customers and with the expectation of increased long-term profits. Rice and Stanton (2003) estimate that payments revenue accounts for approximately 16 percent of operating revenue. According to Rice (2003), payments activities affect the value of the banking franchise and estimates of profit efficiency. A cross-section of bankers surveyed by Kellogg ...