Mobile Finance and Financial Risk A Study of Mobile Financial Services, its Value Model and the Distribution of Risk

Abstract: The aim of this study is to investigate the effects of mobile financial services on the behavior of young adults on the financial market, particularly how mobile financial services effect the distribution of risk amongst consumers. The risk examined are twofold; how the risk of a financial transaction looks like for both the consumer of the financial instrument and the distributor (Avanza) and how the risk assumed in a financial transactions differ for consumers in different geographies (core and periphery). The research question is: how has Mobile Financial Services affected frequency of utility and the distribution of risk among young adult consumers on the financial market? This is done through conducting a survey on users of Avanza´s mobile application. The results of the survey are then analyzed and both the results and Avanza´s business model are put into context with Brett Christophers value model of capital accumulation by financial firms and asymmetric information. The conclusions are that risk within transactions are primarily carried by consumer of the financial instrument and not the distributor. The survey shows an increased frequency of transactions by individuals using MFS. Furthermore, consumers of financial instruments via MFS in the core does in greater extent use information gained through social contacts as informational basis for transactions compared to the periphery. This is theorized to be an indicator of asymmetric information in transaction being larger in periphery than in core and as a result may indicate that individuals in peripheral regions carry greater risks within financial transactions.