The Scotiabank Digital Banking Lab was a paper sponsor at the recent 2019 Northern Finance Association Conference. The NFA 2019 Conference was held in Vancouver, BC, from September 13-15, 2019 and included 342 registered participants and featured 126 papers.
Michael King, former co-director of the Scotiabank Digital Banking Lab, handed out the award for the Best Paper on Fintech, selected by Prof. Shyam Venhatesan, to Prof. William Bazley of the University of Kansas for his paper “The Real and Social Effects of Online Lending”.
According to Dr. King, this FinTech study was both novel and interesting as it used a traditional financial technique to study a socially important question. Prof. Bazley used a natural experiment (natural disasters) to explore how access to credit through online lenders addresses the demand for credit. Unlike traditional financial papers that focus only on the economic effects, Prof Bazley looked at how the availability of credit affected crime in the regions where access to credit was alleviated by the supply from online lenders. (For more information, please see the abstract below.)
Congratulations to Prof. William Bazley on his award at the NFA 2019 Conference!
ABSTRACT: The Real and Social Effects of Online Lending by William Bazley (University of Kansas)
Technology-driven innovations in credit markets have real and social implications. Using data from the largest online, peer-to-peer credit market in the United States, I find that borrowing increases when access to traditional credit is restricted, such as after bank mergers and natural disasters. Consequently, online borrowing moderates the diminished growth in business establishments and the heightened crime growth associated with credit scarcity. A percent increase in online lending offsets about 0.25% (0.22%) of the diminished establishment growth and 0.11% (0.18%) of the rise in crime associated with bank mergers (natural disasters). The effects are concentrated among small enterprises and property-related crimes.