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Social Innovation Networks in Consumer Protection in Alternative Financial Services: a cross-national comparison

Thu, June 30, 1:30 to 3:00pm, Campus Ersta, Martasalen

Abstract

This paper aims at mapping and analysing the online communities arising around socially innovative projects in consumer protection in alternative financial services (AFS) and identifying the role of third sector organizations therein, especially compared to other actors such as public agencies or business firms. Generally, AFS can be described as any financial services provided outside the established traditional bank/insurance system. The AFS scene is incredibly diverse and there are several factors driving AFS growth and accessibility - the field exists in a stream of continual technological innovation. As new communication technologies advance, AFS providers find new ways to capitalize on those advances; services become more readily accessible and providers are flexible in their operations and working hours, circumstances that make AFS continually more convenient and accessible. Generally, AFS are not bound by the requirements for an existing banking system (Hermanson, Gaberlavage 2001). It seems that the recent recession has imposed a new dynamic to the field of AFS, which is in sharp contrast to the struggles of the standard banking sector (Wardrop et al. 2015). AFS attract both new customers, whose position in the traditional banking sector worsened and new entrepreneurs seeking business opportunities (Collins et al. 2013; Levy et al. 2013).

In our paper, we draw on the insights of the existing research on social innovations (Nicholls & Murdock, 2012) and attempt to identify the specific role of third sector organizations in the production of social innovations in the area of consumer protection in AFS. Based on previous research in the field (Navrátil, Placier 2015), we focus on a key segment of social innovations which focus on the raising of financial literacy of vulnerable social groups using online communication tools. These are typically web applications, online seminars or just interactive presentations providing consumers in AFS with information and guidance. Our research questions are:

• What are the structures of online communities clustering around consumer protection in AFS?

• What are the key brokers in online communities clustering around consumer protection in AFS and which specific traits do they have?

• What is the role of third sector organizations in promoting social innovation in consumer protection in AFS compared to private and public sector actors?

• Which role do national context conditions play in the outfit of online networks on consumer in AFS?

To answer these questions, we use a social network analysis (SNA) approach and analyse online networks that have arisen around the web-based educational platforms on AFS. In the first step, we aim at identifying a variety of such networks in the Czech Republic and classify them. For the purpose of identification, we aim at combining expert consultations with snowball method. After the identification of key online projects, we shall use SNA software for constructing maps of online interconnection between various actors and analysing them. The same approach will be applied in Denmark and Spain. With a focus on the Czech Republic as the main and original case, cross-national comparisons will be drawn as regards actors characteristics and national institutional frameworks and their influence on the social innovation.

References:

Collins, L., Swart, R., Zhang, B. (2013). The Rise of Future Finance: The UK Alternative Finance Benchmarking Report. London: Nesta.

Hermanson, S., & Gaberlavage, G. (2001). The Alternative Financial Services Industry. AARP Public Policy Institute. On-line paper, retrieved from: http://www.aarp.org/research/credit-debt/credit/aresearch-import-198-IB51

Levy, R., Wolkowitz, E. & Schütte, A. (2013). Financial Technology Trends in the Underbanked Market. On-line paper, retrieved from: http://www.fgda.org/dati/ContentManager/files/Documenti_microfinanza/Financial-Technology-Trends-in-the-Underbanked-Marketplace_Report_e-version_May_2013.pdf

McKernan, S. M., Ratcliffe, C., & Kuehn, D. (2010, November). Prohibitions, price caps, and disclosures: A look at state policies and alternative financial product use. Urban Institute Publication , Vol. 45.

Navrátil, J., Placier, K. (2016). Social Innovation Types in Consumer Protection in Alternative Financial Services after the Great Recession. Paper submitted for Current Trends in Public Sector Research Conference. Brno: Masaryk University, 2015.

Wardrop, R., Zhang, B., Rau, R., & Gray, M. (2015). Moving mainstream the european alternative finance benchmarking report. London: University of Cambridge and Ernst & Young.

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