of Finance FinTech — Financial Innovation and the Internet 2019 Fall Kenji Saito Professor, Graduate School of Business and Finance, Waseda University [email protected] Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.1/25
Lecture 2 10/4 Overview of FinTech (2) • Lecture 3 10/11 Internet Technology and Governance (1) • Lecture 4 10/18 Internet Technology and Governance (2) • Lecture 5 10/25 The World of Apps (1) • Lecture 6 11/8 The World of Apps (2) • Lecture 7 11/15 Blockchain (1) • Lecture 8 11/22 Blockchain (2) • Lecture 9 11/29 Blockchain (3) and Smart Contracts • Lecture 10 12/6 Smart Contracts • Lecture 11 12/13 Other Ledger Technology and Applications (1) • Lecture 12 12/20 Other Ledger Technology and Applications (2) • Lecture 13 1/10 Cyber-Physical Society and Future of Finance • Lecture 14 1/17 FinTech Ideathon Lecture 15 1/24 Presentations and Conclusions Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.3/25
Technology Problems to solve and characteristics Evolution onward The Libra Blockchain Characteristics and discussion Assignment Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.4/25
and Future of Finance Discussion Changes in Economy and Labor Assignment International aviation business and FinTech This will be the theme for the ideathon and presentations Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.5/25
and FinTech Please select one from “settlement and remittance”, “asset management”, “deposits and loans”, “financing”, “insurance” and “capital market” Apply FinTech to it with respect to self-driving cars Deadline and how to submit January 8, 2020 at 17:59 JST From Course N@vi Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.7/25
Countermeasures . . . how to improve the class 12(+1) out of 16 students submitted (as of this morning) (better later than never) Don’t forget to submit, not just save your report Your choices insurance (4) sharing as common assets (3) . . . so “asset management” meant management of cars . . . interesting! driver’s expenses (2) logistics (2) optimization (1) deposit and loans (1) Some thought that self-driving cars will be personally owned . . . will they? Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.8/25
just like the e-wallet of the mobile phone nowadays 1) Fuel / charging dock expense 2) Car parking fee 3) Toll-fee 4) Drive-thru purchase 5) Maintenance and repairexpense 6) Auto-insurance payment ⇒ Some says so But will self-driving cars be personally owned? Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.9/25
safe and peaceful highways between China and Europe A fleet of self-driving trucks follows this route mainly delivering goods from one far end to the other However, cargo is picked up and delivered in the middle areas too The trucks not only drive themselves, they also select their own route One important concern would be fluctuations in currency exchange rates ⇒ Interesting! But it feels like this currency barriers are just obstacles for further innovation Is there a way to bring “frictionless economy” to the next level? Without introducing global currency like Libra? Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.10/25
of the financing of self-driving cars would be supported by express companies, for example Taobao&Jingdong in China, and in Japan Firstly, sending packages by self-driving cars can save those companies a large amount of money Secondly, with the development of fintech, self-driving cars can be part of the whole technology-led strategy If an express company can have the control of all the supply chain, using self-driving cars, server robotics, unmanned warehouses management, smart cities and so on,they can know better what a city, or what their customers need, and therefore make correct decisions using the Big Data ⇒ Sure! If we consider companies like Amazon though, perhaps express companies do not have that much of advantage, but they can try One thing about “alternative data” in finance Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.11/25
self-driving cars could develop an app allowing people to use the cars as a hybrid between “self-service cars” and taxis On the app, the user can choose whether they want to pick up a car where it is (they can locate it on a map available on the app) or if they want the car to come to where they are In the second case, the car will have no driver inside as the fleet of cars will be fully self-driving and require no driver Customers could pay for the service this way (pay-as-you-go), or purchase a monthly subscription of a certain amount of kilometers payable by direct debit This subscription method could work only if the company can offer low prices for high amounts of kilometers This can be done in this case because the company would not have to pay salaries to drivers Once the fleet of self-driving cars is bought, the costs of operating the cars are minimal ⇒ Sounds good, although this may be a nightmare for professional drivers ;) Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.12/25
and Cognitive Aim for future — like passing the ball to a moving teammate Life with Earth-Scale OS (Operating System) Changes of Economy Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.13/25
that animals, machines and other systems can be uniformly understood Reference to our nervous system → sensing and actuation (physical to begin with) Cyber-physical Apply cybernetics, physical to begin with, to the physical society Specific space, or the whole society functions by sensing and actuation Social infrastructures that support human lives and computer networks will be tightly connected through a variety of (AI-assisted) sensors, actuators, mobile devices such as smart phones, or even laws Today, we are always connected with information environments through smart phones and such, and therefore we are already at the entrance of the cyber-physical age Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.14/25
need to have “consciousness” → no need to be ASTROBOY ( ) Does “learn” and “infer” → can be like GIGANTOR (Tetsujin 28-Go; 28 ) Extension of human abilities of recognition and intellectual processing It really is off-the-shelf technology today Demonstration of hand-written number recognition (http://cs.stanford.edu/people/karpathy/convnetjs/) Perhaps, children’s work-place experience at a post office should start with something like above? It is not a question of machines taking people’s jobs It is a question of people sticking to jobs machines or machine-assisted users are better at ⇒ There is going to be an inevitable social shifts Important part of cyber-physical society : “Artificial Neural Network” Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.15/25
today → 30 years later? Even to aim a little ahead, we must be sure of the direction, because things are moving If you see things too closely to present, the business will be short-lived if social changes are rapid e.g. × Business assuming that self-driving cars are personally owned Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.16/25
to the physical world “Centers” are going to be automated → Rise of DeFi (Decentralized Finance) Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.17/25
soon be invisible Variety of monetary media, coupons and points can work underneath the visible shopping environments Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.18/25
as bitcoin Digitization of national currencies (“digital JPY” in Japan) MUFG coin, J-coin, S-coin (digital coins by banks and alike) Trials by communities Trials by central banks (CBDC : Central Bank Digital Currency) Local currencies, “cause-oriented economy” Making an entry to the world where a variety of digital currencies are in use We will be insensible of its complexity, and we will just clarify our policies We will not even care whether the mechanism underneath is monetary or not Agents (e.g. smart phone apps) will start suggesting actions according to the policies Sharing economy will join, too ⇒ Decline of Monetary Economy! cf. “Maneki Neko” Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.19/25
/ Industrial Society Economic Gaps, Exploitation, Bankruptcy Digital Currency, FinTech and further ENH REV RET OBS Domination and Obedience Hierarchy Profit Maximization (Money-less) Trust System, Gift Economy Omnipotence Hunting and Gathering Society ENH : enhancement OBS : obsolescence RET : retrieval REV : reversal New media revive what have been once made obsolete, but will “gift economy” and “omnipotence” be revived? Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.20/25
to stagnation of exchanges and consumptions → Rise of sharing economy Life style of running economy without specialization (also boosted by AI or digital fabrication) → Degeneration of taxable economic activities Changes in how public works are carried out ← opportunities for us → At that point, we have already seen decline of money, have we not? By pushing the principles of monetary economy forward, money would rather retreat from the front stage of our lives, because accommodation without needing money are preferred → Destroys “employments” and “separation of selling and buying” Distinction between “ruler and ruled” or “producers and consumers” will melt away Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.21/25
be like after 30 years from now? How are we going to live through the path leading to that economy? How do we begin? Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.22/25
FinTech to the international aviation business This includes anything that appears at international airports and beyond Examples : passports, visas, airline tickets, immigration, customs, airplanes, money exchange, duty-free shops, etc. Use of blockchain (or better versions of them) is recommended because of the need to handle legal or any rightful records across countries Deadline and how to submit January 15, 2020 at 17:59 JST From Course N@vi Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.24/25
workshop Please bring candies to share, and pens of your favorite colors Lecture 13 : Cyber-Physical Society and Future of Finance — FinTech — Financial Innovation and the Internet 2019 Fall — 2020-01-10 – p.25/25
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