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[dr-alex-zarifis]

Central bank digital currency (CBDC) adoption in Latin America: From my report with the University of Cambridge

This research is on the state of central bank digital currencies (CBDC) in Latin America. This is the sixth chapter in my report with the University of Cambridge (Proskalovich et al. 2023). I have given a general overview of this report already, so I am just focusing on the chapter on CBDC adoption here.

A CBDC is essentially digital money, issued by a central bank. Unlike most cryptocurrencies that are decentralised, this currency is centralised. This is an important characteristic of the technology that has many implications. For example the central bank may be able to see all the user transactions.

CBDCs can be either wholesale and retail. The general public can use the retail version, while the wholesale version can move large amounts of money between banks. Our research findings suggest that Latin American central banks are focusing mainly on the retail version.

Retail CBDCs can operate with one tier or two tiers. A central bank can issue a one-tier retail digital currency directly to individuals. For the two-tier form, it issues the digital currency to a commercial bank who then offers them to individuals. Most existing implementations in Latin America are hybrid, offering both the one-tier and two-tier forms in parallel. In the hybrid scenario, the user has both a central bank digital wallet, and a retail bank digital wallet.

Figure 1: The motivations behind CBDC adoption in Latin America

These initiatives in Latin America are not completely new. There has been effort to develop and implement them for some time. The first initiative to explore CBDCs was actually back in 2014 in Ecuador. Most countries in Latin America have expressed interest in CBDCs, however, the extent of the engagement varies greatly from (1) exploring the opportunity, to (2) having concluded a pilot project, or (3) launched and available to the public.

There are several motivation behind creating this form of currency. The two main drivers are usually (1) financial inclusion, and (2) encouraging innovation in finance and improving the efficiency of payments. Other popular reasons are encouraging cross-border payments, monetary policy efficiency, reducing cash use, improving financial sector competition, de-dollarisation and reducing crime.

Challenges include (1) a large informal economy and the popularity of cash, (2) limited financial and digital knowledge, (3) lack of identity documents, (4) limited accessibility, (5) power outages and natural disasters, and (6) currency substitution and capital flight. Capital flight happens for several reasons including high inflation and unfavourable economic conditions.

If you want to learn more about this important part of the cryptoasset ecosystem, you can read the third chapter of the report.

Reference

Proskalovich R., Jack C., Zarifis A., Serralde D.M., Vershinina P., Naidoo S., Njoki D., Pernice I., Herrera D. & Sarmiento J. (2023) ‘Cryptoasset ecosystem in Latin America and the Caribbean’, University of Cambridge - Cambridge Center for Alternative Finance (CCAF). Available from: https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/crypotasset-ecosystem-in-latin-america-and-the-caribbean/

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The different speeds of cryptoasset regulation in Latin America: From my report with the University of Cambridge

This research is on the regulation of cryptoassets, such as Bitcoin, in Latin America. This is the fifth chapter of my report with the University of Cambridge, (Proskalovich et al. 2023). I have given a general overview of this report already, so I am just focusing on the chapter on regulation here.

Unlike a few years ago, most regulators in Latin America are now favourable towards cryptoassets. The prevailing belief is that cryptoassets, such as Bitcoin, are a valuable alternative to traditional finance, as they have different characteristics such as being decentralised. It is expected that cryptoassets can provide growth and a more inclusive financial landscape. They can provide easier cross-border payment, investments and loans. Cryptoassets can enable open-source collaboration reducing the barriers to entry for Fintech startups. Cryptoassets like NFTs can tokenise assets such as art, so that they can be offered to investors that may not be able to purchase the whole asset. In some scenarios, the way cryptoassets use blockchain can offer transparency in terms of what transactions have happened.

The main risks are believed to be misinformation, scams, and money laundering. Key challenges for regulators include (1) not enough staff with cryptoassets knowledge, (2) insufficient coordination between countries, and (3) lack of cooperation between the public and private sector.

Figure 1. Some countries in Latin America want to lead on crypto regulation, while others want to follow

There is an increase in regulators’ attention in the last few years with most countries either having or developing specialised rules. Despite most regulators agreeing that progress must be made, there is a large difference in the pace of progress. Some countries strategy is to lead with fast and comprehensive regulation to control the risk, and maximise the benefits. At the other end of the spectrum, some countries prefer to move more cautiously, keeping the uncertainty and risk low, and accepting that the benefit will also be lower. An example of a country leading is Mexico that is the first in Latin America to regulate cryptoasset trading platforms. Most local cryptoasset companies believe regulatory uncertainty is the biggest challenge preventing their growth.

Whether the regulators strategy is to lead, follow or something in-between, they need to follow the developments in the cryptoassets ecosystem both globally, and in Latin America, so that the right decisions are made at the right time, and friction between countries is limited.

If you want to learn more about regulation of cryptoassets like Bitcoin in Latin America, you can read the fifth chapter of the report.

Reference:

Proskalovich R., Jack C., Zarifis A., Serralde D.M., Vershinina P., Naidoo S., Njoki D., Pernice I., Herrera D. & Sarmiento J. (2023) ‘Cryptoasset ecosystem in Latin America and the Caribbean’, University of Cambridge - Cambridge Center for Alternative Finance (CCAF). Available from: https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/crypotasset-ecosystem-in-latin-america-and-the-caribbean/

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Decentralised Finance (DeFi) in Latin America: My report with the University of Cambridge

This research is about the business models of Decentralised Finance (DeFi) in Latin America. This is the fourth chapter of my report with the University of Cambridge (Proskalovich et al. 2023). I have given a general overview of this report already, so I am just focusing on the chapter on DeFi here.

DeFi refers to several software solutions that operate on a blockchain. These decentralised systems, supported by blockchain technologies, enable various forms of financial services. DeFi currently operates alongside the traditional financial system, thriving where the traditional system is either inefficient, or expensive, for users. It is unclear whether DeFi and traditional finance will continue in parallel in the future, or merge.

Figure 1. The Decentralised Finance (DeFi) services becoming popular in Latin America

DeFi services

DeFi is constantly evolving, and new use cases will emerge in the coming years. Some use cases of DeFi already identified are decentralised stablecoins, exchanges, lending, derivatives, and asset management.

Payments are an important part of DeFi. Payment can be just with a cryptoassets such as Bitcoin, or they can change bitcoin to a traditional currency and vice versa. Some key areas of the decentralised payments ecosystem are (1) traditional fiat currency-to-crypto services on exchanges, (2) cryptoasset ATMs that exchange traditional currency for cryptoassets and vice versa, (3) cards allowing users to buy and spend cryptoassets, as well as receive them as rewards in loyalty schemes, (4) digital wallets that allow users to send, receive and store cryptoassets, enabling cheaper cross border payments, and (5) both e-commerce and physical shops are increasingly accepting cryptoassets.

DeFi adoption in Latin America

The use DeFi is increasing dramatically, but despite this growth, the activity is very small relative to the use of commercial banks. Digital solutions are vital to overcoming the challenges associated with financial inclusion in Latin America. For example, mobile money use has grown significantly. As cryptoasset adoption in Latin America increases and users become more familiar with the decentralised ecosystem, activity will likely increase. There is a-lot of decentralised financial innovation in the region, such as cryptocurrencies, crypto mining, blockchain and NFTs, with consumers eager to learn more about this ecosystem. So far, Brazil, Argentina and Mexico have the highest adoption of DeFi among Latin American countries.

If you want to learn more about this important part of the cryptoasset ecosystem, you can read the fourth chapter of the report.

Reference

Proskalovich R., Jack C., Zarifis A., Serralde D.M., Vershinina P., Naidoo S., Njoki D., Pernice I., Herrera D. & Sarmiento J. (2023) ‘Cryptoasset ecosystem in Latin America and the Caribbean’, University of Cambridge - Cambridge Center for Alternative Finance (CCAF). Available from: https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/crypotasset-ecosystem-in-latin-america-and-the-caribbean/

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The business models of crypto mining in Latin America: From my report with the University of Cambridge

I am going to talk to you about the business models, and ecosystems, of cryptomining in Latin America. This is the third chapter in my report with the University of Cambridge, Judge Business School (Proskalovich et al. 2023). I have given a general overview of this report already, so I am just focusing on the chapter on cryptomining here.

The blockchain consensus mechanism used in Bitcoin, and some other cryptocurrencies, requires mining for the proof-of-work process. Mining, helps verify transactions and create new cryptoasset tokens. Activity from companies and individuals in this area can positively impact the cryptoasset ecosystem, by encouraging cryptoasset adoption, and providing an income stream.

Figure 1: The factors making Latin America popular for crypto mining

Cryptomining in Latin America happens in registered mining companies, mining pools, and so called ‘ant farms’. Mining pools are a form of cooperation in which people share the risks and returns from mining. ‘Ant farms’ are created by hobbyist that install mining equipment in a residential area.

Latin America has some characteristics that support cryptomining and allow miners to be competitive internationally. These features include relatively cheap electricity and renewable power resources, such as solar, hydro and geothermal. The electricity price is one of the most significant factors determining the profitability of cryptomining, and whether a country will become a cryptomining hub. Despite this, Bitcoin mining in this part of the world is still only a small part of the global mining volume.

The popularity of cryptomining varies across Latin American countries. Some of the leading bitcoin mining countries in this part of the world are Brazil, Paraguay, Venezuela, Mexico and Argentina. In addition to electricity prices, other determining factors are regulation, subsidies, climate, the level cryptoasset adoption, and the general state of the economy. Mining is not widespread in the countries of this region where cryptocurrencies are partially, or entirely, banned.

The crypto mining industry seems to be very sensitive to regulation and electricity prices, and does not appear to be as ‘sticky’ to a geographic location as other parts of the crypto ecosystem. Some miners even have their IT hardware permanently in shipping containers when they are operating, so they can transport it to another country relatively easily. Changes in how countries regulate crypto mining often have a knock-on effect. For example, when Venezuela made regulation stricter, some mining activity moved from there, to Brazil.

If you want to learn more about this part of the cryptoasset ecosystem, you can read the third chapter of the report.

Reference

Proskalovich R., Jack C., Zarifis A., Serralde D.M., Vershinina P., Naidoo S., Njoki D., Pernice I., Herrera D. & Sarmiento J. (2023) ‘Cryptoasset ecosystem in Latin America and the Caribbean’, University of Cambridge - Cambridge Center for Alternative Finance (CCAF). Available from: https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/crypotasset-ecosystem-in-latin-america-and-the-caribbean/

[dr-alex-zarifis]

Sustainability (Impact factor 3.9)

Special issue:

Information Systems in E-business: Digital Transformation and

Sustainable Management

Link:

mdpi.com/si/194499

Guest editor: Dr Alex Zarifis

Deadline:

30th November 2024

[dr-alex-zarifis]

Exploring the impact of country-of-origin image and purchase intention in cross-border e-commerce

New research on the role product country-of-origin is playing on consumers’ evaluation of Chinese products (Bao et al.,2022).

Reference

Bao Y., Cheng X. & Zarifis A. (2022) ‘Exploring the impact of country-of-origin image and purchase intention in cross-border e-commerce’, Journal of Global Information Management, vol.30, iss.2, pp.1-20. Available from (open access): https://doi.org/10.4018/JGIM.20220301.oa7

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Designing a talents training model for cross-border e-commerce: A mixed approach of problem-based learning

The four core requirements of cross-border e-commerce talents identified are business and market knowledge, technical skills, analytical ability and business practical ability.

Reference

Cheng X., Su L. & Zarifis A. (2019) ‘Designing a talents training model for cross-border e-commerce: A mixed approach of problem-based learning with social media’, Electronic Commerce Research, vol.19, iss.4, pp.801-822. Available from: https://doi.org/10.1007/s10660-019-09341-y

[dr-alex-zarifis]

New book: Business Digital Transformation: Selected Cases from Industry Leaders

Each case brings a different piece of the puzzle, but it also serves to test and verify our current understanding of digital transformation. There are common lessons across all cases, along with the specific lessons some cases offer for those specific sectors of the economy. The research presented here is practical, with directly applicable lessons for organizations, but it also raises broader questions about how digital transformation is shaping the workplace, our private lives and society in general. The cases of digital transformation in finance, tourism, transport, entertainment and social innovation inform this discussion.

Reference

Zarifis A., Ktoridou D., Efthymiou L. & Cheng X. (2023) ‘Business digital transformation: Selected cases from industry leaders’, London: Palgrave Macmillan. https://doi.org/10.1007/978-3-031-33665-2

[dr-alex-zarifis]

Report on the cryptoasset ecosystem in Latin America and the Caribbean, by the University of Cambridge

This report offers a balanced analysis of the opportunities, and challenges, caused by the many moving parts of the cryptoasset ecosystem in Latin America and the Caribbean. I am happy to have contributed to this as one of the co-authors. I found it particularly interesting how some countries want to lead in the adoption of cryptoassets while others want to be more cautious. The countries that lead believe in their ability to regulate cryptoassets and manage any risks that emerge. They want to have first mover advantage. Other countries do not believe being an early, enthusiastic, adopter is worth the risks, and prefer to wait until the industry and the regulation mature. Both approaches are valid, but in both strategies it is important to follow developments closely. This is where this report can be helpful in gaining insights into this sector’s development, market trends, challenges and opportunities, as well as regulation.

The cryptoasset sector has grown across Latin America and the Caribbean in recent years and this expansion has led to increased employment opportunities. Some cryptoasset firms are now full-service fintech providers. The regulatory views on digital assets have shifted, with around a third of public sector respondents being more positive towards cryptoassets. The private sector participants are also more positive now, and they collaborate more with regulators through innovation hubs and sandboxes. The private sector respondents also see growth opportunities in DeFi services and onboarding corporate clients.

However, there are also challenges to address with the most important one being the lack of regulatory clarity. Public sector respondents believe they need more expertise in cryptoassets.

Reference

Proskalovich R., Jack C., Zarifis A., Serralde D.M., Vershinina P., Naidoo S., Njoki D., Pernice I., Herrera D. & Sarmiento J. (2023) ‘Cryptoasset ecosystem in Latin America and the Caribbean’, University of Cambridge – Cambridge Center for Alternative Finance (CCAF). Available from: https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/crypotasset-ecosystem-in-latin-america-and-the-caribbean/

[dr-alex-zarifis]

Research develops a model of trust in Ethereum token ‘Ether’ payments (TRUSTEP)

My new research developed a model of trust in making payments with the Ethereum (Zarifis, 2023). I published the first peer reviewed research on trust in payments with Bitcoin in 2014 (Zarifis et al. 2014), and I wanted to apply my experience from that to understanding the consumer’s perspective to making Ethereum payments.

Ethereum is being utilised in various ways, including smart contracts and payments. Despite some similarities with Bitcoin, Ethereum is a different technology, with different governance and support.

Ethereum payments require digital wallets and the process is different to paying in traditional fiat currencies like the Euro. When a person wants to take an action without controlling all the parameters, and some risk is unavoidable, trust is necessary.

Figure 1. Model of trust in making Ethereum payments, TRUSTEP

The model demystifies how trust is built in consumer payments with Ethereum. The model starts with the individual’s predisposition and then covers the factors from the specific context of Ethereum payments. From the person’s individual characteristics, their willingness to innovate in finance and technology have a role. There are then five variables from the contexts: Adoption and reputation, stable value and low transaction fees, effective regulation, payment intermediaries and trust in the seller. The personal and contextual factors together influence trust in the Ethereum payment process and making a payment with Ether.

While the model has similarities to previous models of trust, such as the role of each individual’s psychological predisposition and the role of reputation, the role of institutions such as regulators and the importance of trust in the retailer, the distinct characteristics of Ethereum also play a role. In fact, the factors related to the distinct characteristics of Ethereum have the strongest support based on the average of the responses. This research can be added to a growing body of research in trust that illustrates how users’ beliefs in each cryptocurrency need to be explored separately.

Furthermore, the role of the organizations involved in the payment process are shown. While trust in the retailer is usually a factor in retail payments, the regulators and payment intermediaries are not always a significant factor, so it is a useful contribution to show that this is the case here.

That is what I want to share with you here. If you have experiences related to what I am talking about, please let me know, I would love to hear from you.

Reference

Zarifis A. (2023) ‘A Model of Trust in Ethereum Token ‘Ether’ Payments, TRUSTEP’ Businesses, vol.3, no. 4: pp.534-547. Available from (open access): https://doi.org/10.3390/businesses3040033

Zarifis A., Efthymiou L., Cheng X. & Demetriou S. (2014) ‘Consumer trust in digital currency enabled transactions’, Lecture Notes in Business Information Processing-Springer, vol.183, pp.241-254. Available from: http://link.springer.com/chapter/10.1007/978-3-319-11460-6_21#

[dr-alex-zarifis]

Petition to credit a co-author that was credited the first time his paper was published, but not credited as co-author the second time it was published

Please sign this petition for the editor to credit me for my work, by replying to this post or sending me a private message. This is a short overview of what happened to the best of my understanding:

I was given the task by a lecturer of UCLAN I had worked with in the past (I hired her for her first academic job) to turn a good student dissertation into a research paper. I am often given the task of turning research into a paper because my first language is English and I have a decent record at getting papers published.

It took many hours to turn it into a paper, I identified the most valuable parts and wrote several sections of the final paper. For example I strengthened the link to trust which is my specialist subject. The paper was published in a journal in 2018. The first author credited on the paper is the student, then the two supervisors from UCLAN and lastly me. I have an email from one of the co-authors from UCLAN expressing her gratitude for the publication and stating that based on the work I did, my name should not have been last on the list but further up.

In 2020 I came across the same paper published in a different journal, without my name as co-author. I contacted the editor and told him the paper is already published and not retracted when it was published a second time. Based on the ethics guidelines of the journal there were two options available to the editor as I understand it:

a) Based on the ethics guidelines of the journal, credit the author that was left out as he has the best evidence imaginable that he is a co-author, and the corresponding author belatedly acknowledged he should be credited. (I also have several emails, drafts etc. as evidence)

b) Based on the ethics guidelines of the journal, retract the paper the editor published in his journal because it was published before and not retracted.

He did not act on the evidence that the paper is already published, waited for the corresponding author to retract the original paper and then said he could not take into account the original version, despite it being published at the time it was published again, and only retracted when the co-author left out, used it as evidence. (the original paper has already been cited several times and is still widely available)

I contacted the corresponding author from UCLAN and he said in writing (I have the email) that he would ask the editor to add me and if the editor did not agree he would add me as co-author on another paper to make up for the mistake. Neither happened.

I have several emails, drafts and a published paper, that was not retracted when it was published a second time, that has been cited several times, proving irrefutably I am a co-author of that paper.

Neither the editor, the publisher or the co-authors have taken action to correct this. The action that has been taken so far is for some people to contact my work to try to make my life harder.

Please sign this petition for the editor to credit me for my work. You can sign the petition by replying to this article or sending me a private message with your name and if you want your affiliation.

Evidence

I provide here a small subset of the evidence, the papers that cite the original publication with me as co-author. If anyone wants to see the emails that prove everything I have said, I can show them.

Here is the citation of the original paper:

Michael P., Dimitriou S., Glyptis L. & Zarifis A. (2018) ‘e-Government implementation challenges in developing countries: The project manager’s perspective’, International Journal of Public Administration and Management Research (IJPAMR), vol.4, no.3, pp.1-17. Available from: http://www.rcmss.com/index.php/ijpamr

The original publication was published and not retracted for over two years before this:

‘Glyptis L., Christofi M., Vrontis D., Del Giudice M., Dimitriou S, Michael P. (2020) ‘E-Government implementation challenges in small countries: The project manager’s perspective’, Technological Forecasting and Social Change’

Here are some people that cited the original paper with me as a co-author:

An e-government implementation framework: A developing country case study A Apleni, H Smuts – Responsible Design, Implementation and Use of …, 2020 – Springer The implementation of Information and Communication Technology (ICT) is seen globally as a means to efficient and effective delivery of business and organisational mandates …

The role of political will in enhancing e-government: An empirical case in Indonesia SY Defitri – Probl. Perspect. Manag, 2022 – businessperspectives.org E-government is an issue that is widely discussed by several studies because it has an impact on improving government performance. Weak political will of the heads of state and …

Quality Evaluation of E-Government Services–The Case of Albania R Keco, I Tomorri, K Tomorri – Transylvanian Review of Administrative …, 2023 – rtsa.ro QUALITY EVALUATION OF E-GOVERNMENT SERVICES – THE CASE OF ALBANIA Remzi KECO Ilir TOMORRI Kejsi TOMORRI Page 1 20 Abstract Albania has passed a period of three …

Analysis of Information System Audit Using Control Objectives for Information and Related Technology 5 Framework on Permata Hebat Application MS Muryantoro, DA Efrilianda – Journal of Advances in …, 2023 – journal.unnes.ac.id Permata Hebat application is an application created as a service to develop micro businesses among housewifes in Semarang City. However, to fulfill this expectation, of …

Challenges in E-governments: A case study-based on Iraq NA Jasim, EM Hameed, SA Jasim – IOP Conference Series …, 2021 – iopscience.iop.org An effective and competent way to deliver business and organizational mandates is via deploying Information and Communication Technology (ICT). Parts of a government’s job is …

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Research on collaborative consumption for low and high trust requiring business models

Collaborative Consumption (CC) and the sharing economy, where consumers do not purchase a product or service, but share it, is growing in popularity. This is due to a trend away from ownership towards experiencing. The first two areas of the economy that this business model disrupted were fare sharing and renting rooms for short periods. Other areas are also influenced but it is unclear which sectors of the economy will be disrupted next. Smaller niches of the economy, or areas where more public-sector involvement is necessary, such as the elderly and the disabled may not be at the forefront and may be the laggards losing out on possible benefits for years.

This research evaluates the current CC business models and identifies 13 ways they add value from the consumer’s perspective. This research further explores whether CC business models fall into two categories in terms of what the consumer values. In the first category, they require a low level of trust while in the second category a higher level of trust is necessary. Our survey evaluates whether there was a difference between CC business models that require a low level of trust such as a taxi service and those that required a high level of trust such as supporting the elderly and disabled.

Figure 1. Comparative spider diagram of value added by collaborative consumption business models for low and high required trust

The analysis verified that the consumer requires 13 types of value added from the business model which can be separated into three categories which are personal interest, communal interest and trust building. It is important for organizations to acknowledge how they relate to these dimensions.

It was found that CC business models can be separated into those that require a relatively low level of trust such as fare sharing and those that require a high level of trust such as supporting the elderly and disabled, as we can see in the figure here. For the business models that only require low trust, the consumer considered the personal interest value added more important, while in the those requiring more trust the consumer rated the value added of trust building higher.

The findings suggest that changing CC business model from one that requires low trust to one that requires higher trust necessitates a significant improvement in how the organisation builds trust. This can be considered a ‘step’ change in trust-building which would have to be a consideration at business model level. Iterative improvements at operational level may not increase trust sufficiently.

Reference

Zarifis A., Cheng X. & Kroenung J. (2019). Collaborative consumption for low and high trust requiring business models: From fare sharing to supporting the elderly and disabled, International Journal of Electronic Business, vol.15, no.1, pp.1-20. Available from (open access): https://www.inderscienceonline.com/doi/abs/10.1504/IJEB.2019.099059

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Research on the six relative advantages in multichannel retail for 3D Virtual Worlds and 2D websites

Have you made a purchase from a three dimensional Virtual World (VW)? Probably not, only a small minority have. When VWs first became popular fifteen years ago, people jumped to the conclusion that they were the future, the new platform to socialise online. Their adoption however did not end up being exponential. So why do the experts often think VWs, with their additional functionality are the future, but that future has not come yet? We decided to ask the consumer. There is a degree of understanding on what each channel can offer but the relative advantage of each channel in relation to the others is less understood. By relative advantage we mean something the one channel, for example three dimensional VWs, have an advantage over two dimensional, traditional, websites. This research, evaluates the relative advantage between the channels of three-dimensional VWs, two-dimensional websites, and offline retail shops. The consumer’s preferences across the three channels, were distinguished across six relative advantages.

Figure 1 The three channels and six relative advantages in multichannel retail

In the figure, you can see at the top the six different relative advantages, and beneath them, how the three different channels perform, in relation to these relative advantages. Participants, showed a preference for offline and 2D websites, in most situations apart from enjoyment, entertainment, sociable shopping, the ability to reinvent yourself, convenience and institutional trust where the VWs were preferred. We can look in more detail at the fifth relative advantage, that VWs have higher institutional trust compared to 2D websites. Consumers value the role of the VW as an institution in relation to trust. One feature that is appreciated is that the buyer does not receive your banking details. Some participants value the role of the VWs administration in identifying and warning about specific threats. The findings illustrated in the figure, show that the consumer’s preference varies across the three channels, and six RAs. An organization pursuing a multichannel strategy, can adapt their offerings in each channel to fully utilize these different preferences. While on most issues VWs are the least appealing from the three channels, framing the comparison with the six relative advantages shows how they have a useful and complementary role to play in multichannel retail. For example, customer support can be done in VWs. An organization, can use these findings to shape their business model and strategy.

Reference Zarifis A. (2019) ‘The six relative advantages in multichannel retail for three-dimensional Virtual Worlds and two-dimensional websites’, Proceedings of the 10th ACM Conference on Web Science, June 19–21, Boston, USA, pp.363-372. Available from: https://dl.acm.org/doi/pdf/10.1145/3292522.3326038

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Research exploring the language of the sharing economy, how building trust and reducing privacy concern on Airbnb in German and English

Several countries’ economies have been disrupted by the sharing economy. However, each country and its consumers have different characteristics including the language used. When the language is different does it change the interaction? If we have a discussion in English and a similar discussion in German will it have the same meaning exactly, or does language lead us dawn a different path? Is language a tool or a companion holding our hand on our journey?

This research compares the text in the profile of those offering their properties in England in English, and in Germany in German, to explore if trust is built, and privacy concerns are reduced, in the same way.

Figure 1. How landlords build trust in the sharing economy

The landlords make an effort to build trust in themselves, and the accuracy of the description they provide. The landlords build trust with six methods: (1) The first is the level of formality in the description. More formality conveys a level of professionalism. (2) The second is distance and proximity. Some landlords want to keep a distance so it is clear that this is a formal relationship, while others try to be more friendly and approachable. (3) The third is ‘emotiveness’ and humour, that can create a sense of shared values. (4) The fourth method of building trust is being assertive and passive aggressive, that sends a message that the rules given in the description are expected to be followed. (5) The fifth method is conformity to the platform language style and terminology that suggests that the platform rules will be followed. (6) Lastly, the sixth method to build trust is setting boundaries that offer clarity and transparency.

Privacy concerns are not usually reduced directly by the landlord as this is left to the platform. The findings indicate that language has a limited influence and the platform norms and habits have the largest influence. We can say that the platform has choreographed this dance sufficiently between the participants so that different languages have a limited influence on the outcome.

Reference

Zarifis A., Ingham R. & Kroenung, J. (2019) ‘Exploring the language of the sharing economy: Building trust and reducing privacy concern on Airbnb in German and English’, Cogent Business & Management, vol.6, iss.1, pp.1-15. Available from (open access): https://doi.org/10.1080/23311975.2019.1666641

[dr-alex-zarifis]

New research: Understanding users’ negative emotions and continuous usage intention in short video platforms

Short videos are very popular but if they take up a-lot of people’s time, they gradually change people’s living habits. Therefore it is useful to understand the negative implications of short videos. The results show that users’ viewing many short videos can have negative emotions, and these negative emotions can affect users’ intention to continue to use short video platforms. The model developed in this research shows that there are three negative emotions caused by six factors. Two of these three negative emotions then influence the intention to continue using short videos.

Fig 1. Model of users’ negative emotions and continuous usage intention in short video platforms

From the six factors that cause negative emotions, the five are related to flow theory. Flow theory is relevant here because watching short videos is a flow experience. Flow theory is a state where someone is fully immersed in an activity, they are enjoying it and other things do not seem to matter as much.

The first of the five factors related to flow theory is the low efficiency the user has in their work and other tasks, due to watching short videos. The second is time distortion, meaning that the users perception of time is not as accurate during this activity. What might feel like a short amount of time can be much longer. The third is the harm to their health. Both mental and physical health can be harmed by spending a long time watching short videos. The fourth is the online addiction they experience, making them want to keep watching the short videos. The fifth is online procrastination, making the user watch more short videos to delay working and making decisions related to their work.

The sixth factor that can cause negative emotions is illusion of control. The theory of illusion of control suggests that in some situations a person can be overconfident about their control of a situation. A person can have a level of optimism that they will get the outcome they want, that is unrealistic. The negative emotions include anxiety, sadness and remorse. The research found strong support that sadness and remorse influence the users intention to continue using the short videos.

Reference: Cheng X., Su X., Yang B., Zarifis A. & Mou J. (2023) ‘Understanding users’ negative emotions and continuous usage intention in short video platforms’, Electronic Commerce Research and Applications, vol.58, 101244, pp.1-15. https://doi.org/10.1016/j.elerap.2023.101244

[dr-alex-zarifis]

AI is Transforming Insurance with Five Emerging Business Models

Artificial intelligence (AI) and related technologies are creating new opportunities and challenges for organizations across the insurance value chain. Incumbents are adopting AI-driven automation at different speeds, and new entrants are attempting to use AI to gain an advantage over the incumbents. This research explored four case studies of insurers’ digital transformation. The findings suggest that a technology focused perspective on insurance business models is necessary and that the transformation is at a stage where we can identify the prevailing approaches. The findings identify the prevailing five insurance business models that utilize AI for growth: (1) focus on a smaller part of the value chain and disaggregate, (2) absorb AI into the existing model without changing it, (3) incumbent expanding beyond existing model, (4) dedicated insurance disruptor, and (5) tech company disruptor adding insurance services to their existing portfolio of services (Zarifis & Cheng 2022).

Figure 1. Updated model of five business models in insurance with disruptors split into two types

In addition to the five business models illustrated in Figure 1, this research identified two useful avenues for further exploration: Firstly, many insurers combined the two first business models. For some products, often the simpler ones, such as car insurance, they focused and disaggregated. For other parts of their organization, they did not change their model, but they absorbed AI into their existing model. Secondly, new entrants can be separated into two distinct subgroups: (4) disruptor focused on insurance and (5) disruptor focused on tech but adding insurance.

Reference

Zarifis A., & Cheng X. (2022). AI Is Transforming Insurance With Five Emerging Business Models. In Encyclopedia of Data Science and Machine Learning (pp. 2086–2100). IGI Global. Available from (open access): https://www.igi-global.com/chapter/ai-is-transforming-insurance-with-five-emerging-business-models/317609

[dr-alex-zarifis]

A model of trust in Fintech and trust in Insurtech: How Artificial Intelligence and the context influence it

New Fintech and Insurtech services are popular with consumers as they offer convenience, new capabilities and in some cases lower prices. Consumers like these technologies but do they trust them? The role of consumer trust in the adoption of these new technologies is not entirely understood. From the consumer’s perspective, there are some concerns due to the lack of transparency these technologies can have. It is unclear if these systems powered by artificial intelligence (AI) are trusted, and how many interactions with consumers they can replace. There have been several adverts recently that emphasize that their company will not force you to communicate with AI and will provide a real person to communicate with are evidence of some push-back by consumers. Even pioneers of AI like Google are offering more opportunities to talk to a real person an indirect acknowledgment that some people do not trust the technology. Therefore, this research attempts to shed light on the role of trust in Fintech and Insurtech, especially if trust in AI in general and trust in the specific institution play a role (Zarifis & Cheng, 2022).

Figure 1. A model of trust in Fintech/Insurtech

This research validates a model, illustrated in figure 1, that identifies the four factors that influence trust in Fintech and Insurtech. As with many other models of human behavior, the starting point is the individual’s psychology and the sociology of their environment. Then, the model separates trust in a specific organization and trust in a specific technology like AI. This is an important distinction: Consumers have beliefs about the organization they bring with them and other pre-existing beliefs on AI. Their beliefs on AI might have been shaped by experiences with other organizations.

Therefore, the validated model shows that trust in Fintech or Insurtech is formed by the (1) individual’s psychological disposition to trust, (2) sociological factors influencing trust, (3) trust in either the financial organization or the insurer and (4) trust in AI and related technologies.

This model was initially tested separately for Fintech and Insurtech. In addition to validating a model for trust in Fintech and Insurtech separately, the two models were compared to see if they are equally valid or different. For example, if one variable is more influential in one of the two models, this would suggest that the model of trust in one of them is not the same as in the other. The results of the multigroup analysis show that the model is indeed equally valid for Fintech and Insurtech. Having a model of trust that is suitable for both Fintech and Insurtech is particularly useful as these services are often offered by the same organization, or even the same mobile application side by side.

Reference

Zarifis A. & Cheng X. (2022) ‘A model of trust in Fintech and trust in Insurtech: How Artificial Intelligence and the context influence it’, Journal of Behavioral and Experimental Finance, vol. 36, pp. 1-20. Available from (open access): https://doi.org/10.1016/j.jbef.2022.100739

This research was featured by Duke University:

Zarifis A. (2022) ‘Trust in Fintech and trust in Insurtech are influenced by Artificial Intelligence’, Duke University (Global Financial Economics Center). Available from: https://sites.duke.edu/thefinregblog/2022/11/11/trust-in-fintech-and-trust-in-insurtech-are-influenced-by-artificial-intelligence/