Does Financial Innovation Support Development of Pensions and Insurance? The Moderating Role of Green Technology

Does Financial Innovation Support Development of Pensions and Insurance? The Moderating Role of Green Technology

Authors

  • Nafis Dwi Kartiko Ministry of Finance of the Republic of Indonesia
  • M. Silahul Mu’min Diponegoro University image/svg+xml
  • Muhammad Syariful Anam Diponegoro University image/svg+xml

DOI:

https://doi.org/10.61459/ijfs.v2i2.76

Keywords:

Financial Innovation, Insurance Industry, Pension

Abstract

This study aims to assess the impact of financial innovation on the development of pension and insurance systems in ASEAN countries. Using secondary data analysis methods from 10 ASEAN member countries over the period 2004-2021, this study found that financial innovation has a positive and significant influence on operational efficiency and risk management in both sectors. The adoption of new financial technologies and innovative strategies is proven to promote sustainable growth, as well as strengthen financial stability, which has a positive impact on the welfare of people who depend on pension and insurance services. In addition, the application of green technologies in pension and insurance fund management also supports environmental sustainability and generates positive economic impacts. These findings confirm the importance of policies that support financial innovation as a key strategy in strengthening financial systems in the ASEAN region.

Downloads

Download data is not yet available.

References

Abaidoo, R. (2023). Regulatory Policy Uncertainty, Banking Industry Innovations and Financial Development Among Emerging Markets. Journal of Financial Economic Policy, 15(6), 613–627. https://doi.org/10.1108/jfep-07-2023-0180

Alda, M. (2019). Corporate Sustainability and Institutional Shareholders: The Pressure of Social Responsible Pension Funds on Environmental Firm Practices. Business Strategy and the Environment, 28(6), 1060–1071. https://doi.org/10.1002/bse.2301

Amjad, U., Abbas, Q., & Khan, M. A. (2023). Can the Interplay of Risk Management and Financial Innovation Affect the Bank’s Performance in Pakistan? International Journal of Trends and Innovations in Business & Social Sciences, 1(4), 136–145.

Bara, A., & Mudzingiri, C. (2016). Financial Innovation and Economic Growth: Evidence From Zimbabwe. Investment Management and Financial Innovations, 13(2), 65–75. https://doi.org/10.21511/imfi.13(2).2016.07

Baruti, B. H. (2020). Insurance Sector Development and its Effect on the Financial Markets in Developing Countries: The Case of Kosovo. European Journal of Business and Management Research, 5(1).

Bayar, Y., Gavriletea, M. D., Dănuleţiu, D., Dănulețiu, A. E., & Sakar, E. (2022). Pension Funds, Insurance Companies and Stock Market Development: Evidence From Emerging Markets. Mathematics, 10(13), 2335. https://doi.org/10.3390/math10132335

Berg, M. (2021). Value Judgments at the Heart of Green Transformation: The Leverage of Pension Fund Investors. Global Environmental Politics, 1–20. https://doi.org/10.1162/glep_a_00613

Bonizzi, B., & Churchill, J. (2017). Pension Funds: Conceptions of Risk and the Demand for ‘Alternatives.’ Revista De Economía Mundial, 46. https://doi.org/10.33776/rem.v0i46.3949

Chauhan, K. (2024). Effective Pension Fund Management Strategy: A Comprehensive Study With Methodological Insights From the Indian Financial Landscape. International Journal for Multidisciplinary Research, 6(2). https://doi.org/10.36948/ijfmr.2024.v06i02.15157

Chipeta, C., & Muthinja, M. M. (2018). Financial Innovations and Bank Performance in Kenya: Evidence From Branchless Banking Models. South African Journal of Economic and Management Sciences, 21(1). https://doi.org/10.4102/sajems.v21i1.1681

Croce, R. D., Kaminker, C., & Stewart, F. (2011). The Role of Pension Funds in Financing Green Growth Initiatives. https://doi.org/10.1787/5kg58j1lwdjd-en

Dayi, Y. E. T. U. F. (2020). Katılım Bankalarında İnovasyon: Türkiye Üzerine Bir İnceleme. Turkish Studies - Economics Finance Politics, Volume 15(Volume 15 Issue 1), 167–184. https://doi.org/10.29228/turkishstudies.37047

Dmytryk, O., Kobylnik, D., Sereda, O., Isaiev, A., & Kotenko, A. (2022). Improving the Governance and Legal Framework for Implementing Financial and Fiscal Innovation in a Digitalized Environment. Eastern-European Journal of Enterprise Technologies, 5(13 (119)), 108–116. https://doi.org/10.15587/1729-4061.2022.265780

Elgin, C., Özgür, G., & Cantekin, K. (2023). Measuring green technology adoption across countries. Sustainable Development, 31(1), 1–11.

Ikwue, U. (2023). Sustainable Investment Strategies in Pension Fund Management: A Comparative Review of Esg Principles Adoption in the U.S. And Nigeria. International Journal of Management & Entrepreneurship Research, 5(9), 652–673. https://doi.org/10.51594/ijmer.v5i9.547

Jungo, J., Madaleno, M., & Botelho, A. (2024). Financial literacy, financial innovation, and financial inclusion as mitigating factors of the adverse effect of corruption on banking stability indicators. Journal of the Knowledge Economy, 15(2), 8842–8873.

Karthika, M., Neethu, K., & Lakshmi, P. (2022). Impact of Fintech on the Banking Sector. Integrated Journal for Research in Arts and Humanities, 2(4), 109–112. https://doi.org/10.55544/ijrah.2.4.66

Kasri, R. A., Haidlir, B. M., Amin, M., & Prasetyo, M. B. (2017). Demand for Islamic Pension Funds in Indonesia: An Exploratory Study. https://doi.org/10.2991/icbmr-17.2017.44

Kasri, R. A., Haidlir, B. M., Prasetyo, M. B., Aswin, T. A., & Rosmanita, F. (2020). Opportunities and Challenges in Developing Islamic Pension Funds in Indonesia. Etikonomi, 19(2). https://doi.org/10.15408/etk.v19i2.16284

Kaya, M., Tunahan, H., & Şimdi, H. (2022). Determinants of the Export of Financial and Insurance & Pension Services. Sosyoekonomi, 30(53), 87–104.

Khan, A. B., Fareed, M., Salameh, A. A., & Hussain, R. Y. (2021). Financial Innovation, Sustainable Economic Growth, and Credit Risk: A Case of the ASEAN Banking Sector. Frontiers in Environmental Science, 9. https://doi.org/10.3389/fenvs.2021.729922

Kolodiziev, O., Telnova, H., Krupka, I., Kulchytskyy, M., & Sochynska-Sybirtseva, I. (2021). Pension Assets as an Investment in Economic Growth: The Case of Post-Socialist Countries and Ukraine. Investment Management and Financial Innovations, 18(3), 166–174. https://doi.org/10.21511/imfi.18(3).2021.15

Krišto, J., Stojanović, A., & Pavković, A. (2014). Impact of Institutional Investors on Financial Market Stability: Lessons From Financial Crisis. International Journal of Diplomacy and Economy, 2(1/2), 102. https://doi.org/10.1504/ijdipe.2014.060746

Кузнецова, Н. П., & Pisarenko, Z. (2019). Financial Convergence at the World Financial Market: Pension Funds and Insurance Entities Prospects: Case of China, EU, USA. https://doi.org/10.3846/cibmee.2019.037

Le, X. (2024). Has Green Finance Enhanced the Ecological Resilience Level in the Yangtze River Economic Belt? Sustainability, 16(7), 2926. https://doi.org/10.3390/su16072926

Lee, W. Y. (2023). Current Deficiencies and Reinforcement of Institutional Pillars for Reform in the Green Insurance Market: A Systematic Review. European Journal of Sustainable Development Research, 7(4), em0235. https://doi.org/10.29333/ejosdr/13634

Li, T., Yue, X.-G., Qin, M., & Norena-Chavez, D. (2024). Towards Paris Climate Agreement goals: The essential role of green finance and green technology. Energy Economics, 129, 107273.

Liu, T.-K. (2022). Financial Innovation, Financial Patents and Business Performance: An Empirical Study on the Banking Industry in Taiwan. Asian Economic and Financial Review, 12(11), 909–922. https://doi.org/10.55493/5002.v12i11.4634

Luo, L., & Liang, S. (2016). Study on the efficiency and regional disparity of green technology innovation in China’s industrial companies. Chinese Journal of Population Resources and Environment, 14(4), 262–270.

McDonnell, C. (2024). Pension Funds and Fossil Fuel Phase-Out: Historical Developments and Limitations of Pension Climate Strategies. International Environmental Agreements Politics Law and Economics, 24(1), 169–191. https://doi.org/10.1007/s10784-024-09626-0

Mustansar, T. (2023). Financial Innovation, Technological Improvement and Bank’ Profitability. https://doi.org/10.31219/osf.io/8wy95

Nazir, M. R., Tan, Y., & Nazir, M. I. (2020). Financial Innovation and Economic Growth: Empirical Evidence From China, India and Pakistan. International Journal of Finance & Economics, 26(4), 6036–6059. https://doi.org/10.1002/ijfe.2107

Odo, C. O., & Chinedu, O. (2016). The contributory pension scheme and the financial system development in Nigeria. Innovative Marketing, 12(2), 16–21.

Omollo, L. O., Karanu, J. W., & Wekesa, M. W. (2022). Contribution of Financial Innovations to Money Demand: A Case of Kenyan Financial Market. American Journal of Finance and Business Management, 1(1), 11–25. https://doi.org/10.58425/ajfbm.v1i1.21

Pu, C. (2024). Green Insurance, Technology Insurance, and Corporate Green Innovation. Frontiers in Environmental Economics, 2. https://doi.org/10.3389/frevc.2023.1266745

Qamruzzaman, & Jiang, W. (2019). Financial Innovation and Financial Inclusion Nexus in South Asian Countries: Evidence From Symmetric and Asymmetric Panel Investigation. International Journal of Financial Studies, 7(4), 61. https://doi.org/10.3390/ijfs7040061

Qamruzzaman, M., & Jianguo, W. (2017). Financial innovation and economic growth in Bangladesh. Financial Innovation, 3, 1–24.

Schelkle, W. (2019). EU Pension Policy and Financialisation: Purpose Without Power? Journal of European Public Policy, 26(4), 599–616. https://doi.org/10.1080/13501763.2019.1574871

Sievänen, R., Rita, H., & Scholtens, B. (2017). European Pension Funds and Sustainable Development: Trade‐Offs Between Finance and Responsibility. Business Strategy and the Environment, 26(7), 912–926. https://doi.org/10.1002/bse.1954

Taghizadeh–Hesary, F., & Yoshino, N. (2020). Sustainable Solutions for Green Financing and Investment in Renewable Energy Projects. Energies, 13(4), 788. https://doi.org/10.3390/en13040788

Wiß, T. (2014). Pension Fund Vulnerability to the Financial Market Crisis: The Role of Trade Unions. European Journal of Industrial Relations, 21(2), 131–147. https://doi.org/10.1177/0959680114530237

Yadav, V. K. (2023). Analyzing Opportunities and Obstacles of Fintech in Indian Financial Market. International Journal of Research in Education Humanities and Commerce, 04(01), 25–35. https://doi.org/10.37602/ijrehc.2023.4103

Yang, W., & Tapadar, P. (2014). Role of the Pension Protection Fund in Financial Risk Management of UK Defined Benefit Pension Sector: A Multi-Period Economic Capital Study. Annals of Actuarial Science, 9(1), 134–166. https://doi.org/10.1017/s1748499514000256

Zainab, H. A. (2023). Effect of Pension and Insurance Funds on Financial Deepening in Nigeria. International Journal of Economics Business and Management Research, 07(12), 191–204. https://doi.org/10.51505/ijebmr.2023.71212

Zwan, N. v. d., & Golka, P. (2023). Regulation From the Inside? Internal Supervision in Dutch Pension Funds. Competition & Change, 28(1), 93–122. https://doi.org/10.1177/10245294231167657

Downloads

##article.metrics##

Published

12/31/2024

How to Cite

Kartiko, N. D., Mu’min, M. S., & Anam, M. S. (2024). Does Financial Innovation Support Development of Pensions and Insurance? The Moderating Role of Green Technology. The International Journal of Financial Systems, 2(2), 379–418. https://doi.org/10.61459/ijfs.v2i2.76

Issue

Section

Articles
Loading...