FinTech and AI in Finance (FinTAF)

A Review of the legal framework in Morocco as a hindrance to artificial intelligence adoption in the financial services industry

2025-03-07T17:09:30+00:00

Artificial intelligence (AI) is the revelation of a new era dominated by data, precision, and gains in terms of time, effectiveness, and relevance. These elements are the best precursors of a revolutionary evolution in all fields. The financial sector, the lifeblood of any society, is the first to be impacted by this disruptive revolution. To ensure a balance between technological development and the protection of fundamental rights and against the bias of technological disruption, international organizations are intervening to issue recommendations and legal guidelines that provide a basis of inspiration for countries around the world.

The evolution of the Moroccan financial system through AI, although timid, is beginning to gain momentum meanly because the opportunities it presents. The aim of this article is to propose an appropriate legal framework for AI for the Moroccan financial sector, based on the various guidelines and legal frameworks approved by international organizations. The results show that, although an initial legal framework already exists in Morocco, it remains insufficient in the face of the challenges posed by the use of AI in the financial sector. This framework can be supplemented by adjustments to hard and soft law

Bridging the Gap: The Impact of Open Banking on Traditional Banking and FinTech Collaboration

2025-03-07T08:43:22+00:00

Open banking is revolutionizing the retail banking industry by allowing customers to share their data with third parties. This facilitates the entry of new companies into the market, promoting increased competition, innovation, and improvements in processes such as customer registration and fraud management. The banking sector is shifting from traditional closed models to a more open and innovative framework, emphasizing the collaborative relationship between established banks and FinTech companies. As regulatory frameworks evolve, open banking disrupts traditional banking practices by promoting transparency, data sharing, and customer-centric services. This research paper examines the growing partnerships between traditional banks and FinTech firms, highlighting how collaboration enhances innovation, agility, and customer experience. By analyzing current trends and future implications, this study demonstrates how open banking is reshaping the financial ecosystem, ushering in a new era of collaboration that ultimately benefits consumers and drives industry advancement.

Blended Finance as a Catalyst for Sustainability and Economic growth in Emerging Economies: The case of Morocco

2025-02-10T12:06:45+00:00

Blended finance has grown significantly over the last decade. It provides a means to de-risk investments in sectors and geographies that are perceived as high-risk by traditional investors and could play a significant role in addressing global challenges especially in less developed economies. By mobilizing private capital for sustainable development, it can contribute to the achievement of the Sustainable Development Goals, which include a wide range of social, economic, and environmental objectives. In the case of Morocco, there is no research that addresses the impact of Blended finance on economic growth and sustainability in the country. In this qualitative exploratory study, the goal was to understand the role of Blended finance in attracting private capital needed to finance the substantial investment to boost economic growth in Morocco. Findings showed that blended finance could play a crucial role in attracting investment, particularly in the agricultural sector, technology, and sustainable development projects, despite the challenges posed by bureaucracy and transparency that hinders the use of blended finance mechanisms.

Empirical analysis of US bond market

2025-02-10T12:05:15+00:00

This dissertation provides a comprehensive analysis of U.S. fixed income instruments over the past decade, focusing on their performance and the implications for investment strategies. The study examines various types of fixed income securities, including Treasury securities, corporate bonds, and municipal bonds, analysing their risk-return profiles and the impact of significant economic events such as the COVID-19 pandemic. Utilizing data from Bloomberg Terminal, the research employs descriptive statistics, regression analysis, correlation coefficients, and event-based analysis to assess the performance of U.S. fixed income instruments relative to their U.K. counterparts.

The findings reveal distinct performance trends across different bond indices, highlighting the superior stability of U.S. Treasuries and the higher returns, albeit with increased volatility, of corporate bonds. The study also uncovers a moderate positive correlation between U.S. and U.K. bond markets, suggesting partial synchronization influenced by global economic conditions. Furthermore, the event-based analysis demonstrates significant shifts in bond prices and coupon rates during the pandemic, underscoring the importance of dynamic asset allocation in volatile market environments.

This research contributes to the field of investment management by providing evidence-based insights into the strategic role of fixed income instruments in diversified portfolios. It offers valuable guidance for investors seeking to optimize their asset allocation, particularly in the context of risk management and the pursuit of stable, predictable returns.

Utilizing A Deep learning approach to examine the consequences of Bank's Web -Based-Social Responsibility Disclosure

2025-02-10T12:03:12+00:00

Abstract

Corporate social responsibility (CSR) is a global research and practice topic that encompasses various values, corporate environment, and philanthropic behavior (Inekwe et al., 2021; Wirba, 2023). It plays a crucial role in businesses and governments' social and financial activities, pushing them towards sustainable development and promoting social welfare (Oware and Mallikarjunappa, 2022; Foroghi et al., 2018; Khatib et al., 2021; Staples, 2004). CSR information is essential for stakeholders like investors and analysts, offering insights into costs and benefits, minimizing information asymmetry, aiding in capital market valuations, and assessing firm performance and risk profile. The banking sector, including both non-Islamic and Islamic banks, significantly contributes to CSR activities by funding community development, supporting SMEs, mitigating inflation, and offering social and charitable services. Stakeholders demand transparency in financial and non-financial information, leading firms to shift disclosure attitudes towards CSR. The internet has become a crucial tool for businesses to disclose financial and non-financial information to stakeholders, offering unlimited space and cost savings. It enables corporations to communicate their objectives, missions, and strategies directly to stakeholders, increasing accountability and enhancing financial market effectiveness. The correlation between CSR disclosure (CSRD) and corporate cash holdings has recently gained interest due to its positive impact on cash holding levels. However, the study addresses the challenges of online CSRD due to its complexity and lack of quality. Businesses often prioritize quantity over quality, making CSR a critical concern in management and bank operations. The credibility of official company websites over social media accounts is also examined, highlighting the difficulty in distinguishing genuine and fake ones. Based on the aforementioned arguments, further research is needed to figure out the consequences (corporate cash holdings) of the quality and quantity of online CSRD. Additionally, the Islamic and non-Islamic banks' contexts lack this type of analysis. Consequently, this study aims to conduct a comprehensive analysis using empirical evidence to address existing gaps and provide valuable insights by answering the following main questions: What are the impacts of the quantity and quality of web-based CSRD on top global Conventional and Islamic banks’ corporate cash holdings? Could ISO 26000 moderate this impact?

Therefore, the current study aims basically to: (1) investigate the impact of the quality and quantity of web-based CSRD on corporate cash holdings in the context of top global Islamic and non-Islamic banks by using theories of stakeholder, legitimacy, and media richness; (2) examine whether ISO 26000, a standard for social responsibility, moderates the correlation between the quantity and quality of web-based CSRD and top global conventional and Islamic banks' cash holdings.

To achieve the main objectives, this study focuses on the largest 100 global Islamic and conventional banks based on their assets value. Data was collected through quantitative research and content analysis of their websites. Two indices were developed to assess the quality and quantity of online CSRD. A deep learning approach and descriptive statistics were used to study the consequences of these findings on corporate cash holdings.

This study explores the practices and consequences of online CSRD through theories of stakeholder, legitimacy, and media richness. Stakeholder theory explains the relationship between CSR and shareholder value, emphasizing the need for firms to disclose more information about CSR on their websites. Legitimacy theory suggests firms have a social contract with society, and managers must engage in CSR practices, maintain legitimacy, and disclose information to assess their impact. Media richness theory emphasizes visual communication, multimedia functions, and personal sources in effective communication.

The study's relevance and motivations are derived from that CSR research is expanding globally, benefiting businesses and governments by promoting sustainable development and aiding stakeholders in capital market valuations. The focus on CSR disclosures is crucial for companies and stakeholders. The importance of banks in the economy, as they fund CSR activities, support SMEs, and mitigate inflation. It emphasizes the need for official company websites to understand CSR reporting quality. The internet offers unlimited space and cost savings, enhancing financial market effectiveness and enabling businesses to communicate their CSR initiatives. The study provides insights for policymakers, investors, regulators, managers, and academics on web-based CSR reporting for global Islamic and conventional banks.

The findings indicate that CSRDs (including ISO 26000) were insignificant in impacting Islamic banks cash holdings, while they were significant in impacting conventional bank’s cash holdings.

This study, a pioneering and unique one, significantly enhances accounting literature, research methodologies, and practice by offering valuable theoretical, methodological, and practical insights to all interested parties. It investigates, for the first time, the correlation between the quantity and quality of web-based CSRD and global Islamic and conventional banks' cash holdings and whether ISO 26000 moderates this relationship. By moving to methodological contribution, this paper presents two comprehensive indices for analyzing corporate social responsibility (CSRD) practices on global Islamic and conventional banks' websites. The quantity index includes 62 items from CSR standards, regulations, and global initiatives, while the quality index has eight categories. The study uses a deep learning approach and descriptive statistics to examine how CSRD affects corporate cash holdings. Practically, this study provides stakeholders with real-time insights into the quality and consequences of web-based Corporate Social Responsibility (CSRD) for global Islamic and conventional banks. It suggests optimizing CSR initiatives, integrating social performance with financial performance, and using websites for comprehensive CSR information. The study also suggests considering a country's systems and policies when determining online CSRD information quality.

The study has some limitations that require careful consideration. It has limitations, including a sample size of 100 Islamic and 100 non-Islamic banks, reliance on databases like Banker and S&P, focus on the banking sector, time frame of CSRD quality and quantity data collection (second half of 2022 and first quarter of 2023), and method used (quantitative analysis of banks' websites). Meanwhile, its main limitation is its focus on corporate cash holdings as a consequence of the web-based CSRD quality and quantity of top Islamic and non-Islamic banks.

Despite the debate on internet CSR disclosure, which has garnered significant academic interest and extensive literature across various countries, regions, and sectors, further research is needed in the future. The paper examines the impact of online CSRD quantity and quality on corporate cash holding, suggesting future research should explore other factors influencing web-based CSRD quality and quantity like ESG scores, integrated reporting quality, corporate credit ratings and SDG disclosures. Investigating the impacts of online CSR disclosure quantity and quality on these variables is also needed.

The EU Anti Money Laundering Authority

2025-02-10T12:02:47+00:00

The EU has conferred legislative powers on a new regulatory body, the Anti Money Laundering Authority (AMLA). Companies in the EU are required by anti-money laundering (AML) law, to report suspicious transactions to Central Banks and law enforcement Financial Intelligence Units (FIU’s) who centralise those reports, and AMLA will have oversight.

The purpose of AMLA is to counteract the gaps noted by the EU relating to suspicious transaction reporting. Information sharing, collaboration, and insights into the outcomes from millions of suspicious transaction reports are lacking. There is a lack of connectivity between FIU’s and regulators.

The research in this report is a mix of methodologies such as literature review, investigation of existing public sector infrastructure and qualitative research by way of interviews of experts. This report discusses the above and makes recommendations on this rare opportunity for a digital transformation of a regulatory body which has just begun to operate.

Personality Traits: The link between women on upper echelon and financial performance

2025-02-10T12:02:06+00:00

This paper has explored how the personality traits of women in upper echelon impact the financial performance of FTSE 350 companies in the United Kingdom leveraging new insight from computational social scientist who adopted machine learning to extract personality traits scores from transcript of earnings call of women Chief Executive Officers and Chief Financial Officers with the analysts. The personality traits of these top executives will be automatically recognised from the transcript of their spoken communications during the earnings call. The Open Language Chief Executive Tool will be executed on Phyton to produce output of their personality scores. Subsequently, the impact of these top executives on company’s financial performance will be established using ordinary least square regression analysis to examine the relationship between the personality scores and financial performance using Statistical Package for the Social Science.