Crowdfunding in the banking industry : adjusting to a digital era

2017

In the aftermath of the global financial crisis, the funding ability of banks has declined resulting in a financial void for riskier enterprises, such as startups and early-stage companies. New financial service providers have emerged in response to the capital deficiency. A particularly prominent incarnation of alternative finance is crowdfunding, where the funding is gathered directly from the market, from several individuals, who invest relatively small sums to compound the target amount. Financial institutions are contemplating the use of crowdfunding, not only for its business implications but also as a preparation for the potential threats it may impose on the traditional finance indu…