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FinTechs and the Market for Financial Analysis

Published online by Cambridge University Press:  11 September 2020

Jillian Grennan*
Duke University Fuqua School of Business
Roni Michaely
University of Geneva and Swiss Finance
* (corresponding author)


Hundreds of equity market intelligence financial technology firms (FinTechs) have formed in the last decade. We assemble novel data to describe their capabilities, users, and consequences. Our data suggest that these FinTechs i) aggregate many data sources, including nontraditional ones (e.g., Twitter, blogs), and synthesize such data using artificial intelligence to make investment recommendations, and ii) change Internet users’ information discovery by serving as substitutes for traditional information providers. We evaluate some nontraditional data and find evidence suggesting that such data contain valuable information or “crowd wisdom” that links to informational efficiency. Overall, our findings are consistent with this innovation benefiting investors and markets.

Research Article
© The Author(s), 2020. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

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We thank Brad Barber, Andriy Bodnaruk, Sudheer Chava, Zhi Da (the referee), Itay Goldstein, Jerry Hoberg, Harrison Hong, Russel Jame, Qian Jun, Adair Morse, Marina Niessner, Nagpurnanand Prabhala, David Robinson, and Paola Sapienza for helpful comments as well as seminar participants at the American Finance Association (AFA) Meeting, the Review of Financial Studies (RFS) FinTech Conference, the Swiss Conference on FinTech, the Credit and the Future of Banking Conference, the Federal Reserve Bank of Chicago, the Federal Reserve Bank of Philadelphia, the Bank of Ireland, Northeastern University, the University of Miami, the University of Washington, Temple University, the University of Utah, and Duke University. We thank William Song for excellent research assistance. Some of the data used in this study come from TipRanks, a firm in which Michaely has an equity interest and serves on the Board of Directors.


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