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Sanford's Mallory SoRelle has been granted the prestigious National Science Foundation (NSF) Career Award for her groundbreaking research into the societal impacts of financial technology (fintech). This award is NSF’s most prestigious award for early-career faculty, with a five-year total of $506,936.
"Recent innovations in fintech are dramatically reshaping the financial marketplace, especially with the rise of “fringetech”—digital financial technologies designed to compete with traditional fringe banking alternatives like payday loans. Yet, we know relatively little about who uses fringetech, why, and how relying on fringetech influences people’s financial security, policy preferences, and political behaviors," explains SoRelle.
SoRelle's work has garnered attention for its innovative exploration of how digital financial technologies, designed to compete with traditional alternative financial services (AFS), affect vulnerable demographics such as lower-income, racially minoritized, and younger individuals. These populations face ongoing challenges accessing reliable short-term financing solutions to meet their monthly financial obligations. Instead of mainstream banking options, these individuals often resort to costly AFS, such as payday loans, which can exacerbate their financial struggles by trapping them in cycles of debt. Her research delves into the complex dynamics surrounding fringetech usage, shedding light on its implications for financial security, policy preferences, and political behaviors.
The landscape of financial services has been dramatically transformed by the advent of fintech, leading to the emergence of "fringetech" – digital financial technologies designed to rival traditional AFS. Despite the proliferation of fringetech, a significant gap exists in understanding its impact, particularly on financially vulnerable populations.
Recognizing this gap, this new research and teaching grant aims to explore the intricacies of fringetech usage and its implications. The project will utilize a multifaceted approach, including analyzing large-scale survey data, conducting qualitative interviews with borrowers, and examining state policies related to welfare, financial protection, and wage laws.
Key objectives of the research include:
- Systematically describing the patterns of fringetech usage among different demographic cohorts facing liquidity challenges.
- Investigating how state-level policies influence the utilization of fringetech by various demographic groups.
- Analyzing the impact of fringetech usage on individuals' preferences for economic policies and political participation.
- Establishing a dedicated lab and course to foster inclusive research and education on fringetech policy and politics.
- Disseminating research findings to inform ongoing debates surrounding fringetech regulation at both federal and state levels.
By addressing these objectives, the project aims to advance political science theories related to the welfare state, political participation, and policy feedback effects. Additionally, the research endeavors to provide valuable quantitative, qualitative, and policy data to inform future research and policymaking efforts in the realms of financial regulation and consumer protection.
In accepting the NSF Career Award, SoRelle expressed her enthusiasm for delving deeper into the transformative landscape of fintech. She remarked, "This NSF Career award will support the formation of a new research lab where I will work with a diverse group of students to study the emerging politics and policy of fringetech markets. In addition to generating research that can help inform ongoing state and federal efforts to regulate these new products, I am excited that this project will also help train a diverse cohort of future scholars and practitioners in finance and fintech research."
Manoj Mohanan, Sanford's Senior Associate Dean for Faculty and Research, was excited to recognize the achievement.
“The NSF Career Award recognizes SoRelle's exceptional promise as both a researcher and educator. Her pioneering research on the politics of consumer credit, debt, and consumer financial regulation addresses one of the most important social policy challenges of our time. We are thrilled to celebrate this award with her.”