Research Development Grants
- Alternative Deposit Fund Sources, Funding Stability, and Safety and Soundness, Jack Brittain, Pierre Lassonde Presidential Chair, Pierre Lassonde Institute, and Robert Allen, School of Accounting, David Eccles School of Business, $5000.
- This proposal development grant is for the investigators to identify data on the major sources of alternative deposit funding, including brokered deposits and deposits raised from selling CDs through internet operations, and to develop a Phase II proposal for studying the stability of these funding sources, potential issues with these funding sources that might warrant additional “risk” premiums associated with these funding sources, and to propose research on the relationship between sources of deposit funding and the safety and soundness of the institutions that are funded with these alternative sources. This project will use the CIBFS database, including the GIS data integrated by the DIGIT Lab.
- Understanding the Role of Overconfidence in Small Business Lending, Nathan Meikle, PhD Student Management Department, David Eccles School of Business, $5000.
- Small business lending by community banks has a significant component of trust because the loans in many cases are to build a future business that is capable of repaying what a current business cannot. Humans, in assessing the trustworthiness of others, in part use confidence as an indicator of whether another will live up to their promises. This judgment is a judgment of whether the party believes their own promise, and it is this judgment that is prone to be influenced by the overconfidence of the promising party. Understanding the role of overconfidence in business transactions is an important consideration in many areas of business, but especially in areas like relational banking. This funding is for the development of a research program that will be funded based on a Phase II submission.
- Gamification in Financial Services, Daniel Shannahan, PhD Student Management Department, David Eccles School of Business, $5000.
- Gamification has been adopted by a variety of financial services providers, most extensively in the form of credit card rewards programs. The proposal for funding will develop a research program to study how participants in these rewards programs understand them, “game” them, and how they play multiple programs as a portfolio of activities. In addition to studying the maximization of monetary value, the research will also explore the hedonic intrinsic motivations that drive participants’ behavior and the implications for the structuring of reward systems. The funding provided will support the development of a detail research plan, including an identification of data sources, and a Phase II proposal for conducting the research.
- FDIC Practices and Policies: “De Novo Moratorium,” Industry Impact, Financial Deserts, and Local Community Impact. John Bessey, MBA Student, David Eccles School of Business under the supervision of Jack Brittain, Pierre Lassonde Presidential Chair, David Eccles School of Business, $7,000.
- In recent years the FDIC has only granted two new banking charters during a time of significant banking consolidation and significant exits by existing banks. This has had a significant impact on the availability of banking services in many communities, especially rural communities. This research studies the impact of the disappearance of financial services on rural communities, the evolution of technology options, and the creation of financial deserts in communities that have neither banks nor internet access due to their small size and remote locations.
- Financial Innovation to Address Housing Insecurity and Homelessness, James Wood, Ivory Boyer Senior Fellow, Kem Gardner Policy Institute, David Eccles School of Businss, $5,000.
- This project will document housing insecurity in Utah, its causes and impact on communities’ economic vitality, develop risk assessment tools, survey existing assistance programs, and explore the potential to create a CRA investment fund to prevent homelessness before it occurs. The resulting roadmap will provide a basis for creating a CRA-funded investment vehicle that both provides returns to investors and creates a community resource for those facing the prospect of homelessness.
- Trust in Banking Relationships, Andrew Soderberg, Professor Management Department, University of Wisconsin Whitewater, $5000.
- This is a proposal development grant. The requested proposal is for a study of trust in banking relationships, including the trust banks extend to recipients of loans, and the trust depositors and investors extend to the bank. The proposal will include a comprehensive literature review of studies of trust in financial relationships, the role trust plays in addition to contractual terms and collateral in financial relationships, and the value of cultivated trust for the parties. The proposal will also develop a methodology for studying the role trust plays in credit scoring, how it is assessed, and how it develops in the context of a business relationship. In addition, research will be proposed on the role trust plays in investors’ participation in non-traditional financial institutions like marketplace lenders, how this trust is established, and the factors that determine trust and the loss of trust.
- Applying Social Estimation Research to Banking Decision Making, Bryan Bonner, Professor of Management, David Eccles School of Business, $5000.
- There is extensive research in psychology on the influence of social factors on decision making that has great potential to inform decision making in banking, especially decisions about extending credit and developing collaborative business relationships in the syndication of loans. This proposal outlines the development of a research program based on the existing literature. For this phase of the project, the investigator will develop a review of the literature in psychology with relevance for bank decision making and develop a Phase II proposal, with budget, for extending this research in ways relevant to banking and other financial services.
- Financial Deserts and Technology Alternatives to Financial Services, Greg Robinson, PhD Student in Finance, David Eccles School of Business.
- Because IRS section 280E prevents marijuana-related businesses (MRBs) from accessing conventional financial services, Colorado effectively has a financial desert for an industry that will processed approximately $1.2 billion in transactions in 2016. This inability to access financial services is driving the development of novel alternatives to financial services and the engagement of emerging technologies, including blockchain technology and alternative media of exchange like Bitcoin. The proposed research includes a comprehensive literature review of alternative exchange options and a survey of MRBs to understand how they are adapting and what issues they face.
- Innovation Collaboration Research Process for Services Development, James Agutter, Professor Multi-Disciplinary Design Program, School of Architecture and Planning, $5,000.
- This proposal development project focuses on the challenges associated with developing innovative services in a multiple stakeholder environment where the parties’ interests are not fully articulated, where participants have varying levels of responsibility, influence and accountability, and there may be conflicting objectives, but the parties nevertheless have a shared interest in achieving a goal like the provision of financial services for those on government assistance programs. The proposed project, which will be articulated in the course of this initial phase of research, will develop both a conceptual framework for finding solutions in this environment and explore the use of virtual, asynchronous technologies for arriving at solutions that are difficult for face-to-face groups to achieve. The outcome of this exploration will be a proposal for more extensive research on these wicked problems.
- Demonstrability, Trustworthiness, and Credit Scoring, Michelle Chambers, PhD Student, Management Department, David Eccles School of Business, $5000.
- How do creditors determine who is worthy of receiving a loan? Traditionally, they have analyzed factors such as asset ownership and management, utilization of current lines of credit, and timely repayment of previous loans. However, these calculations are not useful for people with little or no credit history, like recent college graduates and immigrants. It is estimated that over 70 million people fit into these categories. These individuals represent tremendous opportunity for financial institutions and many organizations are actively trying to identify non-traditional methods for assessing the credit worthiness of these individuals. This proposal will review methods associated with behavioral decision theory for assessing individual’s future behaviors/trustworthiness and propose research for identifying behavioral indicators that can be used in making creditworthiness judgments.
- Brokered and Internet Funding and Safety and Soundness, Jack Brittain, Pierre Lassonde Presidential Chair, Pierre Lassonde Institute, and Robert Allen, School of Accounting, David Eccles School of Business, University of Utah, $40,000.
- This project is a comprehensive study of the impact of brokered and internet deposits on the financial health of the institutions that rely on these sources of funds. Using FDIC data, the researchers will test the “hot money,” “easy money” and instability arguments that have been used to characterize these funding sources. The research will determine if there is a basis for discouraging funding from these sources and imposing additional insurance premium costs on the institutions that are funded from these sources.
Technology Development Grants
- Information Technology Security Compliance Monitoring System, Josh Mortensen and Andrew Watanabe, Whistic and BYU students, $5000.
- Development of prototype of information technology security compliance system suitable for financial services firms. The platform developed by these students, which won the BYU business model competition, automates the process of collecting security compliance information from suppliers and departments under the umbrella of an organizations information technology operation.
- Innovation Tournament Process Design, James Agutter, Professor Multi-Disciplinary Design Program, School of Architecture and Planning, $5000.
- Professor Agutter will help the CIBFS develop an Innovation Tournament Process that can be used for a series of CIBFS Innovation Tournaments. The process will be flexible enough to use with various size groups and well enough documented that future student leaders can deploy the process template with little training and achieve effective results. The documentation may include examples from the first innovation tournaments in Fall 2016. This project leverages Professor Agutter’s prior experience and does not anticipate original, publishable research.
- GIS Data Integration Needs Assessment for CIBFS, Phoebe McNeally, Research Professor Geography Department, School of Social and Behavior Sciences and Director of the DIGIT Lab, $5000.
- The DIGIT Lab will provide CIBFS with a needs assessment evaluation of the CIBFS financial institution database compiled from federal regulatory data resources. This will include adding geographic coordinates to the database, evaluating the potential to integrate GIS data and population data into the database, and recommending GIS tools for use by CIBFS. The project will include a cost estimate for completing the recommended work as a Phase II project. CIBFS expects to have its basic database available by the end of May and would like to have the Phase II portion of the project begin at approximately that time.
- CRA Compliance Evaluation and Reporting Platform, Natalie Gochner, Director Utah Policy Institute, David Eccles School of Business, $5000.
- The Kem Gardner Policy Institute will research the CRA tracking, reporting and compliance challenges faced by Industrial Banks, develop a standardized reporting framework that can be used for audits and as a research database, explore the potential for this framework to be used as an internet enabled proposal generation system, and develop a second round proposal for developing this system. GPI will complete the initial planning work during 2016 and anticipates developing the online system in 2017.
- Database Development Consulting, Michael VanTyne, $10,000. The consultant will assist the Center for Innovation in Banking and Financial Services in establishing a research database that can serve the Center’s long-term research needs. This includes:
- Developing a low-cost database hosting option for the Center that is scalable over several years to the point it can store significant data (500 gigabytes) and up to 200 simultaneous users and 2,000 access accounts.
- Develop a data loading and downloading protocol for the Center initially using the FDIC’s call report data.
- Develop a data strategy for loading 15 years of quarterly FDIC call report data.
- 15 years of quarterly FDIC call report data loaded (or protocol in place for backloading data). CIBFS will provide assistance loading data as necessary.
- Operating database with capacity to download data into analyzable forms for standard analysis programs (csv or excel format).
- Database architecture defined for loading additional, non-call report data generated by the Center.
Phase 2 of the project, $20,000. The consultant will continue with the design, development and management of the CIBFS database platform with a specific objective of developing a robust Application Programming Interface (API) and basic User Interface (UI).
- API – a RESTful API for data querying and retrieval of data from the database. Datasets from the API will be available in JSON/XML with options for CSV. Beyond fundamental table and banking entity queries, specific API capabilities will be determined with the CIBFS team.
- UI – a basic website will be developed, using the API referenced above, to allow end-users to view, query and download FDIC data.
- Development plan for additional data
- Maintenance/expansion of GIS data
- Potential data loading of other data types