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Digital financial products

Definition and delimitation

Digitalisation in the financial sector fundamentally affects all financial services, i.e. all contracts and transactions in B2B, B2C and C2C relationships. However, citizens are primarily aware of the new business models in payment transactions (B2C and C2C) and digital investments. The corresponding digital financial products were initially mainly offered by so-called FinTechs (companies from the financial services and technology sector), but were soon followed by established financial service providers either directly or through the acquisition of the original start-ups (Oehler 2021a; Oehler 2017). Despite possible overlaps, InsurTechs (companies from the insurance sector), PropTechs (companies from the property sector) and comparison portals should be distinguished from this; however, InsurTechs at least offer digital financial products that are also classified as financial services according to previous market understanding and academic literature (Oehler 2006; Oehler 2017).

FinTechs in the area of payment transactions generally utilise the existing payment transaction infrastructure of traditional providers in order to offer only individual elements of the value chain, in particular information and cash management, mobile payment or accelerated/simplified online payments (Oehler 2015a; Oehler 2015b). From a technological perspective, cryptocurrencies can also be categorised as payment transactions – even if they are mainly used as an object of speculation and less as an everyday means of payment (Horn/Wendt 2021).

FinTechs in the field of digital investments have gained notoriety in particular with the products social trading (Oehler et al. 2016), robo advice (Oehler et al. 2022; Oehler/Horn 2021) and crowdfunding (Oehler 2016; Oehler 2020).

FinTechs are not only start-ups, but also companies that have been established on the market for some time, such as PayPal, Apple, Google and Alibaba in the area of payment services or traditional banks and fund providers in the area of digital investments (Oehler 2017).


The development and use of new, faster and more efficient information technologies is inextricably linked to the financial sector, as business models in the financial services sector rely heavily on the collection, processing and provision of information (Oehler et al. 2018; Oehler et al. 2020). A key innovation that enabled the first wave of financial globalisation dates back to the 19th century: the transatlantic cable, which enabled the rapid transmission of financial information across borders through new communication technologies such as the telegraph. Since then, the financial services sector has continuously developed new technological solutions to save costs and also to offer more convenient services, such as bank transfers instead of cash payments, self-service machines for transfers and statements, ATMs and, much later, online banking. Business processes were made more efficient, e.g. through the introduction of digital payment and billing systems such as SWIFT (Arner et al. 2016; Oehler 2021). The internet from the turn of the millennium and artificial intelligence since the early 2020s have provided further foundations and catalysts for the development of the latest generation of digital financial products.

Application and examples

Digital payment methods: e.g. PayPal, Google Pay, Apple Pay, Sofortüberweisung (Oehler 2017; Oehler 2015).

Cryptocurrencies: Also referred to as digital currencies or virtual currencies, have no tangible form of appearance, such as banknotes or coins, and exist solely as electronic signals and records using distributed ledger technology. Compared to traditional currencies, they are not managed and controlled by state institutions such as a central bank. Examples: Bitcoin, Ethereum. An overview of the cryptocurrencies currently available can be found at www.coinmarketcap.com (Horn/Wendt 2021).

Crowdfunding can be divided into crowdinvesting and crowdlending. In crowd investing, several private investors(crowd), possibly together with institutional investors, can invest in a project company, usually a start-up. The investment is brokered via a crowdinvesting platform. In crowdlending, loans are usually granted by private investors to private individuals, start-ups or project developers in the property sector (Oehler 2016; Oehler 2020; Oehler 2021b). Examples: Kickstarter, Indiegogo, GoFundMe.

Robo-advice refers to automated investment advice, possibly with additional automated financial portfolio management, in which private investors receive an investment proposal, a model portfolio or an investment recommendation based on simple investor profiles and risk tolerances previously determined on the robo-advice platform (Oehler et al. 2022; Oehler/Horn 2021). Examples: Cominvest, Quirion, Robin, Scalable Capital.

In social trading, private investors, who are often referred to as followers in this context, can automatically follow the trading signals of other market participants, so-called traders or signal providers, provided on social trading platforms in real time and have the transactions in their own portfolio executed automatically(copy trading) (Oehler et al. 2016). Examples: eToro, wikifolio, ayondo, ZuluTrade.

Criticism and problems

In the area of payment transactions, there are data protection concerns and fears that the market could concentrate on a few dominant providers, possibly even creating a monopoly (Oehler 2017; Oehler 2015a; Oehler 2015b; Oehler et al. 2016).

Regulation of the various business models in the area of digital investments is still very fragmented, making it difficult for consumers to understand and compare business models and products (Oehler 2017; Oehler 2021c; Oehler 2018; Oehler/Wendt 2017). The greatest danger is for private investors who misjudge their own financial situation and/or underestimate the risks resulting from the recommendations/products (Oehler et al. 2018; Oehler 2021). Empirical studies have shown, for example, that rebalancing in the course of automated financial portfolio management by robo-advisors is disadvantageous for private investors (Horn/Oehler 2020) and that most signal providers in social trading do not manage to beat the market (Oehler et al. 2016; Oehler/Horn 2021).


Research into digital financial products is mainly conducted at universities (e.g. the University of Bamberg’s “Consumer Finance and Consumer Education” research centre), supported by the federal states (e.g. the Baden-Württemberg Ministry of Rural Areas and Consumer Protection) and the federal government (e.g. BMJV, BMF); collective consumers (Stiftung Warentest, consumer advice centres) are also involved.


Arner, D./Barberis, J./Buckley, R. 2016. The Evolution of Fintech: A New Post-Crisis Paradigm?. University of Hong Kong, Faculty of Law Research. Paper No. 2015/047. UNSW Law Research Paper No. 2016/62.

Horn, M./Oehler, A. 2020, Automated Portfolio Rebalancing: Automatic Erosion of Investment Performance?. In: Journal of Asset Management 21 (6), 489–505.

Horn, M./Oehler, A./Wendt, S. 2020. FinTech for Consumers and Retail Investors: Opportunities and Risks of Digital Payment and Investment Services. In: Walker, T./Gramlich, D./Bitar, M./Fardnia, P. (Hg.). In: Ecological, Societal, and Technological Risks and the Financial Sector. Basingstoke, 309–327. 

Horn, M./Wendt, S. 2021. Bitcoin & Co: Kryptowährungen für alle?. In: Kenning, P./Oehler, A./Reisch, L. (Hg.). Verbraucherwissenschaften, 2., überarb. und erw. Aufl. 395–410.

Oehler, A. 2006. Zur Makrostruktur von Finanzmärkten – Börsen als Finanzintermediäre im Wettbewerb. In: Kürsten, W./Nietert, B. (Hg.). Kapitalmarkt, Unternehmensfinanzierung und rationale Entscheidungen. Berlin u. a., 75–91.

Oehler, A. 2015a. Digitale Welt und Finanzen. Zahlungsdienste und Finanzberatung unter einer Digitalen Agenda. Veröffentlichungen des Sachverständigenrats für Verbraucherfragen. Berlin.

Oehler, A. 2015b. Alles digital? Innovative Geschäftsmodelle im digitalen Zahlungsverkehr und Verbraucherpolitik. In: Wirtschaftsdienst 95, 817–821.

Oehler, A. 2016. Digitale Welt und Finanzen. Formen des Crowdfunding: Handlungsbedarf für die Verbraucherpolitik?. Veröffentlichungen des Sachverständigenrats für Verbraucherfragen. Berlin.

Oehler, A. 2017. „Digitalisierung bei Finanzdienstleistungen“ in den Bereichen „bargeldlose Bezahlmethoden“ und „Online-Beratungs- und Informationsangebote“. Im Auftrag des Bundesministeriums der Justiz und für Verbraucherschutz (BMJV). Bamberg/Berlin. [07.11.2023].

Oehler, A. 2018. Infos für den Schwarm: Werden Crowdinvesting-Kleinanleger mit VIBs gut informiert? Eine empirische Untersuchung im Auftrag des MLR Ministerium für Ländlichen Raum und Verbraucherschutz (MLR) Baden Württemberg. Bamberg/Stuttgart.

Oehler, A. 2020. Crowdinvesting. In: WiSt Wirtschaftswissenschaftliches Studium 49 (7/8), 4–10.

Oehler, A. 2021a. Der technologische Wandel: Herausforderungen in der Digitalen Welt. In: Kenning, P./Oehler, A./Reisch, L. (Hg.). Verbraucherwissenschaften, 2. überarb. und erw. Aufl. 33–46.

Oehler, A. 2021b. Crowdinvesting: Schwarmverbraucher?. In: Kenning, P./Oehler, A./Reisch, L. (Hg.). Verbraucherwissenschaften, 2. überarb. und erw. Aufl. 383–394.

Oehler, A. 2021c. Treiber und Widerstände bei der Online-Beratung zur Altersvorsorge. Studie für das DIA Deutsches Institut für Altersvorsorge. Frankfurt.

Oehler, A./Horn, M. 2021. Robo-Advisors – die besseren Vermögensverwalter? Vor- und Nachteile der Automatisierung von Finanzdienstleistungen. In: Uni.vers Forschung. Mensch und Maschine: Bamberger Beiträge zur Digitalisierung, 44–47.

Oehler, A./Horn, M./Wendt, S. 2016a. Benefits from social trading? Empirical evidence for certificates on wikifolios. In: International Review of Financial Analysis 46, 202–210.

Oehler, A./Horn, M./Wendt, S. 2016b. Digitale Zahlungsdienste: Chinese Walls 2.0 oder Trennung?. In: DIVSI Magazin, 23–25.

Oehler, A./Horn, M./Wendt, S. 2018. Neue Geschäftsmodelle durch Digitalisierung? Eine Analyse aktueller Entwicklungen bei Finanzdienstleistungen. In: Keuper, F./Schomann, M./Sikora L.I./Wassef, R. (Hg.). In: Disruption und Transformation Management, 325–341.

Oehler, A./Horn, M./Wendt, S. 2022. Investor Characteristics and Their Impact on the Decision to Use a Robo-Advisor. In: Journal of Financial Services Research 62 (1), 91–125.

Oehler, A./Wendt, S. 2017. Good Consumer Information: The Information Paradigm at its (Dead) End?. In: Journal of Consumer Policy 40, 179–191.