Upgrade to Pro — share decks privately, control downloads, hide ads and more …

Overview of FinTech (1), Lecture 1 of FinTech

Kenji Saito
September 27, 2019

Overview of FinTech (1), Lecture 1 of FinTech

Slides I used at FinTech - Financial Innovation and the Internet, Graduate School of Business and Finance, Waseda University, on September 27, 2019.

Kenji Saito

September 27, 2019
Tweet

More Decks by Kenji Saito

Other Decks in Technology

Transcript

  1. Manifesto of Futurism.
    Lecture 1 : Overview of FinTech (1)
    FinTech — Financial Innovation and the Internet 2019 Fall
    Kenji Saito
    Professor, Graduate School of Business and Finance, Waseda University
    [email protected]
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.1/22

    View full-size slide

  2. The lecture slides can be found at :
    https://speakerdeck.com/ks91
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.2/22

    View full-size slide

  3. Brief Self Introduction
    Kenji Saito (Google Scholar citations)
    Professor, Graduate School of Business and Finance, Waseda University
    Senior Researcher / Lecturer, SFC (Shonan Fujisawa Campus), Keio University
    Chief Science Officer, BlockchainHub Inc.
    Representative Director, Beyond Blockchain
    Representative Director, Academy Camp
    Bio
    M.Eng in Computer Science from Cornell University, 1993
    Ph.D. in Media and Governance from Keio University, 2006 (on digital currency research)
    Researcher of P2P (Peer-to-Peer) and digital currency for 19 years at Keio University
    (Just started my career at Waseda this month)
    Holding Academy Camp for children in Fukushima with friends since summer 2011
    Last year at SFC, Academy Camp 2018 Summer - “OK Google, Do My Homework!”
    This year at SFC and in Yokohama, Academy Camp 2019 Summer - “REINVENT THE WORLD”
    → Inter-connected in my mind (society hereafter needs to be designed with children)
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.3/22

    View full-size slide

  4. In Academy Camp
    . . . (Do we live in the same era?)
    Last summer, we did Academy Camp 2018 Summer
    - “OK Google, Do My Homework!” term 1 and 2
    Children say “OK Google, do my homework” and
    Google Assistant answers “I do your homework”,
    generates math drills, answers all questions
    correctly, and prints the answered sheet
    Automates not only students but also teachers
    (provoking a fight against the whole school system)
    We said “Automate the boring homework with Python” and
    “That’s not what a human being should be doing” a lot
    Picture (left) is a university student succeeded in
    automating math drills (finished last)
    Begun, the age of automation has
    Handwritten kanjis and calculations ̸∈ common future skills
    From “floor mopping” to “Roomba”
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.4/22

    View full-size slide

  5. Other Classes (in Japanese language)
    At WBS, Waseda University
    “Managing Nonprofits”
    “Blockchain and Decentralized Finance” (seminar)
    https://speakerdeck.com/ks91 (just slides)
    At SFC, Keio University
    “Beyond Blockchain Basics/Advanced”(2019 Spring/Fall)
    http://gc.sfc.keio.ac.jp/cgi/class/class_top.cgi?2019_44979 (Basics)(with video)
    http://gc.sfc.keio.ac.jp/cgi/class/class_top.cgi?2019_44980 (Advanced)(with video)
    → Inter-connected in my mind, too
    (society hereafter needs to be designed
    . . .
    how?)
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.5/22

    View full-size slide

  6. Books (one example)
    “NEO in Wonderland — A Tale of Money That Changed
    Our Future” (2009)
    Genre : SciFi Monetary Fantasy
    Digital currency technology that overthrows today’s
    monetary economy
    A drama as its consequence
    NEO : New Economic Order
    English version is freely available
    http://grsj.jp/neo.pdf (CC-BY-SA 3.0)
    Science Fiction Prototyping : a research method
    (1) Depicts future reality with new technology
    (2) Extracts problems and search for a path
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.6/22

    View full-size slide

  7. Today’s Topics
    Orientation
    Objectives, overview and schedule
    What’s FinTech?
    Backgrounds and meanings
    Examples
    Information innovation and society (perhaps next week)
    Towards future history of finance
    Discussion : Does FinTech free people? (perhaps next week)
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.7/22

    View full-size slide

  8. Objectives and Goals
    In this class, FinTech, the fusion of finance and ICT (Information
    Communication Technology), is explained mainly from the technological
    viewpoint, and its impact on the society, applications and their governance are
    considered together with the students
    This class aims for non-engineers to understand the technological background
    of FinTech, and to discover their own problems in the social domain related to
    finance and the management and utilization of assets in a broad sense, and to
    plan the solutions as applications of the new technology, without being swayed
    by easy sales talks from the industry
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.8/22

    View full-size slide

  9. Schedule (provisional)
    Lecture 1 9 /27 Overview of FinTech (1) •
    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 Other Ledger Technology and Applications (1)
    Lecture 10 12/ 6 Other Ledger Technology and Applications (2)
    Lecture 11 12/13 Cyber-Physical Society and Future of Finance (1)
    Lecture 12 12/20 Cyber-Physical Society and Future of Finance (2)
    Lecture 13 1 /10 FinTech Ideathon (1)
    Lecture 14 1 /17 FinTech Ideathon (2)
    Lecture 15 1 /24 Presentations and Conclusions
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.9/22

    View full-size slide

  10. Structure of Lectures (2 consecutive lectures on 1 theme)
    Assignment and Review (10∼20min.)
    Homework is assigned for each theme
    At beginning of each theme, reviews some of your reports
    Lecture (90∼100min.)
    Explains the theme
    Questions are welcome at any time during the lecture
    Also some short discussions
    Discussion (60∼80min.)
    Let’s talk about problems on and surrounding the theme
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.10/22

    View full-size slide

  11. Assignments
    Submit your reports through Course N@vi
    No physical paper of any kind ← if you give me one, I will lose it
    Deadline is not very exactly handled
    Participation is checked by the reports (and speaking), not by your physical
    presence in the classroom
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.11/22

    View full-size slide

  12. Evaluation
    Reports
    You get points if your reports are picked up for the review
    Only some of the picked-up reports are actually reviewed in the class
    Active class participation
    Questions and comments
    Providing topics
    Commenting on reports by other students
    Overall, performance is evaluated by contributions and reports
    In addition, group work and presentations
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.12/22

    View full-size slide

  13. Lecture Materials
    Slides
    There is no textbook
    In addition to the references listed below, other references will be provided and
    instructed as needed
    References (some interesting readings)
    S. Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System,
    http://bitcoin.org/bitcoin.pdf (2008).
    V. Buterin, A Next-Generation Smart Contract and Decentralized Application Platform,
    https://github.com/ethereum/wiki/wiki/White-Paper (2014-).
    Libra Association, Libra White Paper,
    https://libra.org/en-US/white-paper/?noredirect=en-US (2019-).
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.13/22

    View full-size slide

  14. What’s FinTech?
    Financial Technology (the name doesn’t explain much)
    What technology?
    If we don’t ask, then coins, pencils, account books, clay tablets, languages, are all technology
    “The use of human technology began with making things in nature into simple tools”
    (automatically translated from Japanese Wikipedia)
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.14/22

    View full-size slide

  15. Industrial Tools, and Media and Governance
    B. Fuller, “Operating Manual for Spaceship Earth”, 1969
    Industrial Tool = “all the tools that cannot be produced by one man person”
    ⇒ Media (tools/extensions of human) and Governance (cannot be produced by one person)
    “Language” was the first industrial tool
    Today, technology is a system of industrial tools
    So, the language is technology anyways,
    Meaningful to this class when we think about communication-technology
    aspect of languages
    People naturally imagine, when they hear the word “technology”,
    the latest system of industrial tools of the era they live in
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.15/22

    View full-size slide

  16. Background : Digital Technology
    Processing power of computers and network is improved,
    Cost is reduced at the same time
    ⇒ Time has come where individuals always carry network computers with them
    A personal network computer = A smartphone
    Can you imagine lives and work styles 30 years ago?
    Showa era
    . . .
    In a way, it hasn’t changed at all in Japan ;)
    Superficially, it has changed a lot
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.16/22

    View full-size slide

  17. IDEA of FinTech
    Financial Inclusion
    Growing customer base (including those who have not)
    Financial Democracy
    Expansion of business entities (with the emergence of non-banks)
    User Experience
    Customers can easily leave if they are not satisfied
    Architecture as Law
    There is always an option to break the law, but it is impossible to do what
    the architecture does not allow
    As long as you can’t use hacking techniques
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.17/22

    View full-size slide

  18. Business Areas of FinTech
    Payments
    e-Money, credit/debit cards, mobile payments, digital currencies
    Asset Management
    Automatic asset management, robo-advisor
    Deposits and Loans
    P2P lending, pre-paid
    Financing
    Crowdfunding, ICO (problematic), STO, COE (Cause-Oriented Economy)(word coined by lecturer)
    Insurance
    Use of IoT, smart contracts (automation)
    Capital Market
    Securities trading system with LT
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.18/22

    View full-size slide

  19. FinTech Intrinsically “Destroys”
    It’s possible to maximize profits through an engineering approach under the
    current rules of financial capitalism (cf. financial engineering)
    But FinTech is inherently a game-changer, changing rules and creating
    changes that make traditional financial capitalistic society obsolete
    Blows the foundation itself
    New technology allows us to bypass the old ways
    The impact of this on “the foundation” is immeasurable
    Ex1
    : YouTube, Uber, Airbnb
    Separation from ownership of broadcasting stations, vehicles or real estates
    Ex2
    : Visa ↔ AMEX
    brand holder, issuer, acquirer
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.19/22

    View full-size slide

  20. Examples
    What can we learn from “developed countries”?
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.20/22

    View full-size slide

  21. Alibaba Group and Yahoo! JAPAN Group
    China’s largest e-commerce service (with 500 million buyers)
    ⇔ “Problem solving engine” to solve all problems in Japan using the Internet
    Alipay (ࢧ෇ๅ) (Payment platform)
    Payment by mobile phones using QR code
    Large amount of accumulated funds (more than 10 trillion yen)
    → Asset management service to deposit in MMF (༨ֹๅ)
    ⇔ PayPay
    Zhima Credit (ࣳຑ৴༻)
    Analyze 500 million people’s data to quantify credit scores
    Quality of service you receive depends on your score
    ⇔ Yahoo! Score
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.21/22

    View full-size slide

  22. See You Next Week!
    Lecture 1 : Overview of FinTech (1) — FinTech — Financial Innovation and the Internet 2019 Fall — 2019-09-27 – p.22/22

    View full-size slide