Three Waves of FinTech Innovations and Their Implications for Financial Frauds and Anomalies

ABSTRACT The main objectives of this study are two-fold: first, to survey the technological innovations adopted in the financial service sector during the last three decades, commonly termed as FinTech, by categorizing them into three waves; and, to elaborate their implications for combating financial frauds and abusive intermediation practices. To that end, the paper also documents a sample of real-world cases observed in Korea and other countries which demonstrate the fraudulent and problematic practices in trading financial products that harm the welfare of financial consumers. Given these discussions, the paper elaborates three sets of remedies to deal with the anomalies, i.e., combating the financial fraudsters, overseeing the abusive intermediaries, and nudging financial consumers to make sound decisions.