Digital Transformation of the Financial Industry

Enterprise Resource Planning (ERP) is one of the popular information communication technologies (ICT) in the contemporary business environment, adopted by many companies around the world. It is usually considered that ERP allows rapid information flow, minimal response time to the requirements of buyers and suppliers, better interactions with business partners, higher quality of services, and increased customer satisfaction. It is also often found that ERP influences accounting information systems (AISs), the application of different accounting methodologies, and the accounting profession. We, therefore, aim at identifying the effects of ERP implementation on the AIS and accounting professionals. We use a questionnaire to investigate the attitudes of 37 persons working in accounting and related departments of 37 companies operating in Serbia. Our results show that accountants believe that ERP implementation strongly influences data processing and recording, as well as preparing and publishing financial reports. They believe that ERP increases accountants’ efficiency and work performance, although the level of accountants’ satisfaction with ERP is relatively weak. Our results also show that accountants do not find it difficult to adapt to the new working conditions in the ERP environment.

The goal of the paper is to provide a comprehensive insight into the implications that the process of business digitalization has on the roles and competencies of accountants. Due to current technological changes, all integral parts of accounting as a business function have undergone or will undergo corresponding changes shortly. Research is based on secondary sources of materials. A structured review of academic literature on the impact of digital technologies on accounting and corporate reporting has been performed by collecting peer-reviewed papers from the Web of Science and Scopus databases. The contribution of the paper is reflected in highlighting innovative ways of communicating accounting information, both internally and externally. In that sense, the paper points out the changes that have occurred in the financial reporting process and current regulations, then in the field of management accounting, as well as recent changes in the scope of integrated reporting. The accounting profession will continue to evolve, and accountants will acquire new knowledge and competencies to respond to numerous challenges adequately. These findings are important for accountants and management and other participants in the corporate reporting chain, such as investors, creditors, capital market regulators, and auditors.

Digital business starts with the development of a new business model using digital technologies. Technological development and digitalization have had considerable influence on the globalization of the business world and led to structural changes that also affect the audit profession. In the era of digital transformation, companies must be fast to adapt to new circumstances and rely on IT audits. The aim of this paper is to discover to what extent auditors use digitalization in performing audits in Serbia. The research was conducted using a specially designed questionnaire, filled in by a total of 110 respondents. Smart PLS analysis was used for processing and analyzing the data. The findings show that as a result of digitalization, audit quality in Serbia is significantly positively affected by audit users’ perception changes, auditors’ work changes, and also auditors’ professional profile changes. Audit regulation changes as a result of digitalization do not have a significant impact on the quality of audits in Serbia. Bearing in mind that digitalization represents a challenge as well as an opportunity for audit, the obtained results reveal valuable information to all interested stakeholders that rely on the results of audit work in decision-making.

The aim of this paper is to investigate the impact of investment in intangible assets on the companies’ business performances which are observed as profitability. Investment in intangible assets is one of the crucial activities and resources that contribute to achievement of competitive advantage, company growth, and development. According to previous research papers and significant impact of intangible assets on firm performance, the effect of intangible assets on companies’ profitability in Serbia was conducted. The research is based on the financial statements of 194 observations of companies listed on Belgrade stock exchange during 2017–2020. The sample consisted of small, medium, and large enterprises from manufacturing sector (Section C). The results of the models have clearly documented that there is a significant positive relationship between intangible assets and financial performance of companies measured as profitability ratios. Investment in intangible assets affects profitability of companies positively. This paper has helped to expand the theoretical concept of intangible assets and the impact of investment in intangible assets on profitability of companies. The results of research should encourage the managers of listed manufacturing companies to invest more in intangible assets in order to increase profitability.

Financial technology development is disrupting industries throughout the world. More and more companies are embracing some type of these innovative technologies because their executives believe that those technologies have value-increasing potential. But do investors share their point of view? Do investors react uniformly to the blockchain-related announcements globally? The purpose of this research is to determine, what is investors’ reaction to such changes in a corporate strategy. Investors’ reaction to corporate signals and announcements is best explored with the event study methodology. We focus our analysis on the large-cap publicly traded companies from the Central and Eastern Europe, more specifically, on the three companies from technology sector which are among the largest companies from this region. Our results show that there is a difference in the reaction between the investors in the emerging and developed markets. Cumulative abnormal returns are significant, but the investor reaction in Poland and the Czech Republic is positive, while investors in developed market’s reaction is a negative one.

The main goal of this paper is to analyze the impact of FinTech innovations on financial services industry in South-East Europe. The paper summarizes existing knowledge of banking services in the FinTech era and pays special attention to decentralized and embedded finance. Qualitative exploratory research was conducted using in-depth semi-structured interviews. Participants were bankers selected based on their experiences in the banking sector. In this study, we identified the most important factors driving the success of FinTech innovations in the banking sector: legal framework, impact of FinTech innovations on financial market and regulators, protection of personal and institutional data, major changes that happened with the use of FinTech innovations, advantages and disadvantages of FinTech innovations, competition in terms of embedded finance, and decentralized finance. According to the study results, it is not clear whether the FinTech innovations will disrupt traditional ways of working in the banking sector or lead to improved modern ecosystems of financial services. The FinTech industry is attractive and promising, and financial sector will experience great changes in the future. Additionally, most of the participants think that banks and FinTech should cooperate and find solutions together—expertise in banks is enormous, and FinTech brings agility and flexibility.

Although insurance industry is not seen as technology-driven industry by both scholars and practitioners, novel technologies are inevitably expected to reshape its landscape. As most of the extant studies examine startups in the context of the digitalization of the insurance industry, incumbent insurance companies have been left behind. The aim of this study is to fill this gap by examining the managers’ perspective on the digitalization of the insurance industry. The particular goals of this study are to investigate and explore how executive managers of incumbent insurance companies see (1) the use of technology, (2) available resources for digitalization, and (3) main challenges and opportunities for the use of novel technologies. Qualitative by nature, the study examines the potential of the digitalization of car insurance using primary data collected through semi-structured questionnaires with the C-level managers of Serbian insurance companies. Even though the Serbian insurance industry significantly lags behind more developed and technologically advanced markets, the results indicate that the managers of insurance companies are aware of digital transformation trends in the industry and the inevitability of a partial or complete transition to innovative insurance models in the near future.

Innovation, especially in the field of technology, is a key driver of competitiveness, economic growth, and prosperity. Contemporary technological changes, primarily information, and communication, are gradually transforming the economy and society, creating new ways of working and new types of jobs. These changes become challenges for insurance companies, which are conservative in terms of adopting innovations. Digitization has the ability to completely transform the insurance industry with the aim of realizing numerous benefits for the insurers and reinsurers, but also for the insured and for the economy. The aim of the paper is to analyze the importance of InsurTech as a new competition to traditional insurers and its impact on the economic growth. Given that the insurance sector contributes to the economic growth, data from the EU27 member states (for the year 2021) indicate economic recovery reflected in the GDP growth in comparison to pre-pandemic year 2019 and rebound of total insurance premiums.

The research subject of this paper is the intention to use mobile banking services by banking clients in Serbia. The aim of the research is to analyze the influence of the factors included in the TAM model on the intention to use mobile banking by banking clients in Serbia. The research used an extended TAM model, which includes: perceived usefulness, perceived ease of use, perceived risk, trust, social influence, lifestyle, and perceived self-efficacy. The data used in the research were collected by surveying banking clients in Serbia and processed through correlation and regression analysis. The correlation analysis showed that there is mostly a positive and statistically significant linear correlation between the variables of the used model. Only perceived risk has a statistically significant but negative correlation with all other variables. The univariate correlation analysis showed that perceived usefulness, perceived ease of use, trust, social influence, lifestyle, and perceived self-efficacy have a positive influence on the intention to use mobile banking, while the impact of perceived risk is negative. On the other hand, using multivariate regression analysis, perceived usefulness, lifestyle, and social impact were singled out as significant predictor variables.

Platforms became important ecosystems in the economic life after the end of the twentieth century. In order to operate more efficiently, platforms as an ecosystem and technology are now widely applied by the different national public administration systems. However, platforms are mainly used by the central administration; the municipalities started to build their own systems. There are several limitations of the application of the platforms in public administration—the majority of them are linked to a lack of resources and expertise. Platforms can be even tools of a latent, ‘stealth’ centralisation, mainly because of the required access to the central data systems. It should be emphasised that the platforms—especially in the business (private) sector—are linked to artificial intelligence (AI) tools. However, compared to the business sector, the government sector has several specialties by which the application of AI is influenced. Therefore, these specialties and the possibilities of the use of AI by the Hungarian public administration are reviewed in our chapter.

The aim of the chapter is to analyse measures against the abuse of the FinTech sector for the purpose of money laundering and fiscal fraud. The FinTech sector is developing dynamically in Poland. However, entities undertaking modern financial activities suffer from the problem of the lack of completeness and clarity of law. Despite the normative gaps, the FinTech sector in Poland stands out from other European Union countries. The main method used in the study is the formal-dogmatic method. This method includes, first of all, logical interpretation, as well as analysis, argumentation, and hermeneutics. The study showed that significant normative changes in the Polish legal system are necessary. First, it is necessary to adopt a law regulating the financial information system. This law should properly implement EU law. The EU legislator therefore proposes to establish centralised automatic mechanisms such as registers or data retrieval systems in all Member States. Essentially, the national legislator should also include the FinTech sector within the scope of this act. Secondly, the current anti-money laundering and fiscal fraud measures should be adapted to the dynamically changing financial market.

This chapter strives to provide a comprehensive overview of current digital payment systems and point out their key opportunities, benefits, and constraints. We will discuss the following methods and channels for digital payment: credit cards, online credits, vouchers, different types of P2P, recurring payments, social pay, micro payments, and others. We will address the importance and role of mobile technologies and services in mobile commerce. Opportunities and challenges in harnessing modern technologies such as blockchain and artificial intelligence in the context of digital payments will be discussed. For each of the listed concepts, we will discuss pros and cons as well as applications and challenges. Further, we will explore the role of those concepts in real e-commerce ecosystems. In addition, we will discuss changes in digital payment systems caused by global pandemic and perspectives in post Covid-19 era.

The main goal of this research is to examine the application of innovative open banking models and services through the lens of the end users. Many countries have already started the process of writing regulations for open banking and its assorted services. These regulations are often written before the technology is entirely embraced by its intended users, and for this reason acceptance studies are of crucial importance in ascertaining the user expectations and the intended scope of their use. For this purpose, we present an UTAUT-2 based acceptance study which deals with user acceptance of open banking coupled with other notable technologies such as blockchain. By enabling open banking through the blockchain, many benefits could be achieved, primarily when dealing with trust and privacy of user data. These benefits are expected to play an influential part in raising the acceptance levels of open banking as a whole. Through the analysis of the model, we have identified several notable influential factors that can play a large part in the behavioral intention of users, and as such can be used as a guideline for the development of new and innovative open banking services.

The COVID-19 pandemic has led to a sudden jump in the digitization of financial services. Today, the financial sector is the target of disruptive action by a number of FinTech companies that are innovating and changing financial services. Since 1995, the term disruptive innovation has become widely used to describe the way of operating and market conquest of many, primarily technological, start-up companies that have achieved global success. This chapter goal is to give a clearer view of the way FinTech companies are changing the financial industry and how FinTech innovations are disrupting financial markets and tend to eliminate existing established financial companies. FinTech companies offer services that reach neglected market segments and were initially perceived as a small threat to established companies. A significant market share is taken by fully digitalized financial institutions that offer products and services that provide high level of satisfaction and low costs. Although traditional financial companies try to keep pace with technological changes by introducing new digital services, the entry of global technology brands into the financial services market further complicates their position. Traditional financial companies tend to develop a collaboration strategy with FinTech companies to bridge the technology gap and survive in the market.

This paper describes cybercrime in the field of financial technologies. There have been significant changes in payment systems caused by the development of Fintech and the increasing use of various digital and mobile technologies. Methods of protection against cybercrime are being developed in parallel with the development of new technologies, but cybercrime is also progressing at the same pace. The perpetrators are constantly finding new ways to abuse financial systems. Users of financial technologies must be aware of the potential risks of using financial technologies, only in that way will they be able to recognize and prevent potential threats. The increasing use of cryptocurrencies and the lack of legal regulations have led them to become a valuable target for criminals, and the number of crimes connected to cryptocurrencies is constantly growing. This paper aims to acquaint readers with the dangers of cybercrime and methods of protection against them. The first chapter of the paper is an introduction in which the concepts of cybercrime and cyber security are defined. The second chapter identifies and describes the threats and dangers of cybercrime in financial technologies. Chapter 2 deals with the analysis of current threats to financial systems as well as modern ways of protecting financial systems from cybercrime. How cyber-attacks manifest themselves and how attacks can be prevented are defined and explained. Different types of cyber-attacks are described in detail. The analysis led us to the conclusion that it is best to prevent cyber-attacks and that employee training is a very important factor in protecting the system so that they know how to prevent potential attacks and accidental security breaches. Chapter 3 analyzes the literature dealing with cybercrime and cybersecurity in the field of financial technologies. The literature states that banks were the first to introduce technological innovations into their operations, which led to the revolution of technological progress in Fintech. Not only do banks participate in modern financial business, but a significant part of the business also consists of companies that specialize in the development and implementation of financial technologies. The fourth chapter deals with identified problems and potential solutions. Chapter 4 identifies problems and potential solutions in the field of financial technologies. The vulnerability of financial systems, how cyber-attacks take place, and their adaptation to modern business are analyzed. Based on the analysis, potential solutions to the identified problems are given and specific examples are given. The analysis led us to the conclusion that we must consider cyber risks in detail and give an adequate counter-response to each of their elements. The fifth chapter deals with cryptocurrencies. Blockchain technologies, their level of security, ways of endangering as well as their impact on financial operations are analyzed. The problem of lack of legal regulations in the field of cryptocurrencies is explained, as well as their impact on the growth of cybercrime in the field of financial technologies. The sixth chapter concludes the paper. The seventh chapter presents a list of references used in the paper. The main contribution of the paper is the systematic analysis of cyber threats and cybersecurity issues in the context of Fintech, resulting in a list of recommendations for various groups of stakeholders (banks, fintech companies, and end users).

This paper deals with the perspectives of accepting mobile application technologies in the function of personal finance management. The paper uses the UTAUT2 model, a technology acceptance model that focuses on observing technology acceptance, focused on the user-consumer, and the acceptance of technical devices, applications, and services. For measuring user behavior UTAUT2 model includes the following elements (constructs): Performance Expectancy (PE); Effort Expectancy (EE); Social Influence (SI); Facilitating Conditions (FC); Hedonic Motivation (HM); Price Value (PV), and Habit (H). The paper will examine the following elements from the UTAUT2 model: Performance Expectancy (PE); Effort Expectancy (EE); Social Influence (SI); Facilitating Conditions (FC); Hedonic Motivation (HM); Price Value (PV); Habit (H). This paper aims to examine the readiness of an individual to accept and use new technologies of available mobile applications and their functionalities in personal finance management. The results should indicate the satisfaction of potential and existing users of mobile applications for personal financial management and the acceptability of the mentioned applications from the UTAUT2 model, by users. The contribution of this paper is reflected in the fact that research on this topic is being conducted for the first time in Serbia.

The last twenty years have been characterized by the development of digital payment systems driven by innovations, deregulation, and the increased importance of technology users. This led to the appearance of many new products and actors in this field. This article reviews the current digital payment systems and their implication for SMEs (small to middle-sized enterprises) and entrepreneurs. The main objective is to identify and classify current payment technologies, and their trends, and explore their application in SMEs and entrepreneurs in Serbia. The following research questions are formulated: (1) what is the level of application of current payment methods in SMEs and entrepreneurs in Serbia, and (2) what prevents the spread of digital payment methods in these organizations? Research has been done on a sample of 108 SMEs and entrepreneurs from all regions of Serbia. The results show that digital payment methods’ usage depends on the transaction’s role. The biggest obstacle to the spread of digital payment technologies is the cost of implementation and use. The most significant benefits are improved administration, transaction speedup, and a reduced rate of errors. The research contributes by identifying the most frequently used digital payment systems and practical problems and suggesting possible solutions.

The subject of this research is the implementation of new digital payment systems and digital services on the newly built first high-speed railway in Serbia with a speed of 200 km/h between Belgrade and Novi Sad, which opened for traffic in March 2022, as well as on other Serbian railroads in passenger railway traffic today. The authors analyze the results achieved by selling train tickets via digital payment systems on the high-speed railway Belgrade–Novi Sad, nominally and by income, as well as passenger remarks on the functionality of this way of doing business. The paper quantitatively and qualitatively compares digital payment systems of passenger railway traffic on Serbian railroads today with the beginning of their implementation fifteen years ago, as well as the experiences of international railway administrations and organizations. The research aims to analyze the forms and means of applying digital payment systems on Serbian railways in the previous decade and define the level reached in the railway sector today. Based on all these analyses, the research describes and proposes the directions for further development of digital payment systems in the railway sector in Serbia.