Disruptive Financial Innovation and Big Data Implications in Digital Finance

This chapter aims to analyze disruptive financial innovation and big data implications in digital finance. Innovation is the basis of creativity and continuous development in the twenty-first century. Also, financial innovations reduce risks and/or costs in financial markets and improves financial systems. Financial innovation or financial technology (fintech) is often intertwined with legal technology to change the way in which finance is carried out as a form of disruptive innovation. The term disruptive technology or disruptive innovation is used to mean the removal of other products or services that dominate the market as a result of the rapid spread and rise of a product or service that enters from the lowest level of the market. Financial technology has many destructive peaks and is constantly pushing the boundaries of disintermediation, re-intermediation, and automation, which focus on the customer's user interfaces and consumer experience. Big data, which is the main source of disruptive innovation, is an area that addresses the ways of analyzing, collecting, or dealing with data sets that are too big or complex to be handled by traditional data processing application software. Big data is usually characterized by 5Vs: Variety, Velocity, Volume, Veracity, and Value. Big data helps companies differentiate their products and services from their competitors. Also, data-driven strategies can be used to be innovative, competitive, and to capture value. The future is mobile and disruptive. This chapter analyzes disruptive financial innovation and big data implications in digital finance. Financial innovation or financial technology (fintech) is often intertwined with legal technology to change the way in which finance is carried out as a form of disruptive innovation. The term disruptive technology or disruptive innovation is used to mean the removal of other products or services that dominate the market as a result of the rapid spread and rise of a product or service that enters from the lowest level of market. The basis of the financial innovation is the formation of new financial instruments and establishment of the new financial markets. In terms of the relationship between financial innovation and efficient markets hypothesis, financial innovation is a central force in achieving a higher economic efficiency of the financial system. Data is physically stored in many different locations, integrated through various big data analysis applications such a