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The Fintech Sector as an Investment: Old Wine in a New Bottle?

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  • Jarkko Peltomäki

Abstract

The Fintech sector is traditionally viewed as a convergence of finance and technology. This study examines its characteristics by analysing Fintech stock returns relative to traditional sector portfolios using stepwise regression. Our findings show that Fintech stocks align more closely with the business services sector than with the financial or technology sectors, challenging conventional classification. Additionally, while Fintech indexes initially generated positive alpha, this advantage diminished as the sector matured. These results offer new insights into sector benchmarking and portfolio diversification.

Suggested Citation

  • Jarkko Peltomäki, 2025. "The Fintech Sector as an Investment: Old Wine in a New Bottle?," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 54(2), July.
    • Handle: RePEc:bla:ecnote:v:54:y:2025:i:2:n:e70011
    DOI: 10.1111/ecno.70011
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    References listed on IDEAS

    as
    1. Yuan, Kaibin & Li, Wanli & Zhang, Weijun, 2023. "Your next bank is not necessarily a bank: FinTech expansion and bank branch closures," Economics Letters, Elsevier, vol. 222(C).
    2. Cornelli, Giulio & De Fiore, Fiorella & Gambacorta, Leonardo & Manea, Cristina, 2024. "Fintech vs bank credit: How do they react to monetary policy?," Economics Letters, Elsevier, vol. 234(C).
    3. Mark A Chen & Qinxi Wu & Baozhong Yang, 2019. "How Valuable Is FinTech Innovation?," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 2062-2106.
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