Research

Working Papers

Keeping Up in the Digital Era: How Mobile Technology Is Reshaping the Banking Sector (JMP)

• BC Brownbag*, BC-BU Green Line Macro Meeting*, Colorado Finance Summit 2022 (Job Market Session)*, MFA 2023*, EFA 2023*, FMA 2024*, Sydney Banking and Financial Stability Conference 2024*, FIRS 2025 (scheduled).

I hand-collect data on the roll-out of mobile banking apps in the U.S. over the previous decade and pair them with local positive shocks to the importance of mobile services. I find that digital competition among banks increases in response to these shocks. Specifically, small community banks without or with low-quality apps (SCBs) lose deposits and small business lending to nearby larger and better-digitalized banks (LBs). Additionally, I provide evidence of a paradigm shift in local lending practices. While SCBs decrease their branch-based small business lending activities, better-digitalized LBs increase small business lending only in areas where they do not operate branches. A significant gap in local economic growth arises as LBs do not seem able to fully compensate for the decrease in SCB lending under this paradigm shift. 

The Hidden Costs of Financial Services: Consumer Disputes and Financial Restitution

with Rawley Heimer (Arizona State University)

Financial disputes are a widespread but understudied feature of consumer financial markets. Using confidential data from the Consumer Financial Protection Bureau (CFPB), we analyze nearly two million consumer complaints filed since 2014, which have led to over $200 million in financial restitution, with an average payout of $1,470 per successful complaint. The volume of complaints and total restitution have increased substantially over time, suggesting significant scope for additional compensation. When understanding who secures restitution-and why-we find little evidence that differences across firms systematically drive restitution outcomes. Instead, product complexity and consumer engagement play key roles-consumers with higher income and education (high-SES) are more likely to explicitly request refunds, claim fraud, and submit supporting documentation, making firms more responsive. Leveraging previously unexamined CFPB investigations, where the agency systematically reviewed company responses and issued confidential report cards highlighting deficiencies, we show that regulatory scrutiny increases restitution but disproportionately benefits high-SES consumers, reinforcing individual-specific mechanisms. Our results highlight the complementary nature of regulatory interventions and suggest that financial sophistication and self-advocacy are critical determinants of consumer redress.

• This paper subsumes findings from a previous working paper called "The Financial Restitution Gap in Consumer Finance: Evidence from Complaints to the CFPB", presented at the MFA 2021*, SFS Cavalcade 2021*, FMA 2021*, EFA 2022*, Treasury-OCC*, and on MarketWatch, and the Business Scholarship Podcast.

Work-in-Progress

Who generates the predictability in the cross-section of intraday stock returns?

with Steven L. Heston (University of Maryland), Robert A. Korajczyk (Northwestern University), Ronnie Sadka (Boston College)

Heston et al. (2010) find a pronounced intra-day pattern in stock prices in which stocks with higher-than-average returns in half-hour time period of the trading day tend to have higher-than-average returns in the same half-hour time period of the trading day on subsequent days. The pattern in statistically significant for at least 40 trading days. We study the same phenomenon, out of sample, over the period 2010 to 2020. This allows us determine if the results are robust, as opposed to either subsequently arbitraged away or due to data snooping. We find that pattern persists. We expand the analysis to include the overnight period and investigate a set of possible causes of the pattern such as the influence of institutional and retail traders, short selling costs, periodicity of the news cycle.

Discussions