3.1: The Tech of FinTech Overview

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En provenance du cours de The Hong Kong University of Science and Technology

FinTech Foundations and Overview

4 notes

The Hong Kong University of Science and Technology

FinTech Foundations and Overview

4 notes

Our primary goal is to help you to understand FinTech and to become more confident and persuasive in your ability to analyze and make recommendations to executives within the finance industry regarding how to react to these changes. This FIRST MOOC ON FINTECH IN ASIA-PACIFIC offered by HKUST presents the views of several professors from the top business school in Asia as well as perspectives from industry professionals. HKUST has been ranked for many years as the number one EMBA program in the world, as the number one Finance program in Asia, and as the top MBA program in Asia by multiple independent rating and review journals and surveys. This course offers the combined strengths of HKUST in Business, Finance, and Technology as one the world's leading academic institutions on an important area of technology and business innovations. For students from outside Asia, this also gives an insight into changes happening in the most advanced FinTech markets of the world, since Asia leads worldwide in FinTech adoption and creative innovations. This course (FinTech Foundations and Overview) is part 1 of the HKUST FinTech specialization, there will be 3 other courses in the specialization including FinTech Security & Regulation (RegTech), FinTech Compliance & Assurance, FinTech Innovative Disruption: Implications for Society. The FinTech specialization will be launched in Fall 2018, stay tuned!

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The Tech of FinTech

The Technology enabling and supporting FinTech is important to understand, and this module provides a brief introduction to each of the areas of technology that enable FinTech business changes, including identity and privacy technologies, blockchain and encryption, big data analytics, AI and automation, and consumer tech innovations. This introduction is designed to be at a level appropriate for business managers or students of business, and is not intended to excite or engage tech geeks.

3.1: The Tech of FinTech Overview8:41

Rencontrer les enseignants

Theodore Henry King CLARK
Associate Professor
Information Systems, Business Statistics and Operations Management Department

Welcome back to our course on FinTech Foundations and Overview.

In this module we're going to look at the technologies of FinTech.

What is it that has enabled this revolution?

These new applications? These new ideas?

What's new? What's different?

What is it about tech that's not the same as it's been over the past 40 years?

What's new? What's enabling?

We're going to look at five technologies that enable

all the different FinTech applications or areas that we discussed on our last week,

are enabled by five fundamental areas of technological innovations.

One is the whole area of identity, privacy,

and anonymity in the digital world.

And what do we mean by digital identity?

Or what do we mean by privacy and anonymity when dealing

with a online digital world and market space, and transactions.

Second is blockchain and encryptions associated with,

or connected with, not necessarily part of a blockchain.

Although, it's hard to blockchain without that.

But encryption also being beyond just blockchain.

But blockchain and the encryption area that supports a lot of those technologies.

Third is big data and data analytics.

Big data has been with us,

so while data analytics is a more common new term being used.

But it's looking at large databases,

large data samples and how can we do something smart by being able to

analyze and understand the opportunities created by data and large data sets.

Forth is AI.

Artificial intelligence, decision support systems,

meaning computers making decisions kind of on their own in some ways,

or helping people make better decisions.

Sort of expert systems or maybe assistants,

or so augmenting of human intelligence in some way and automation.

Automation broadly in terms of a digital world

of enabling us to do things much more independently and faster,

than we ever could in the physical world.

And finally, smartphones and consumer tech.

This includes all aspects of consumer tech, not just smartphones,

it's also your Apple Watch,

it's also clothing that may interface,

it maybe a Google Glass which didn't work out real well.

But maybe Google Contacts or

somebody else's interface with customers that changes our world.

And so anything that is like a smartphone that

changes the interaction between technology and users,

I would put into this last area of consumer tech,

smartphones being the most visible and notable part of that over the past 10 years.

But not the only way that we may have changes in

our interfaces between the digital world and the physical human user,

of that digital world.

So these five areas of technology are opportunities.

Now one thing you might be asking in your mind is,

wait a minute we just went through a categorization of FinTech apps,

now we're taking a different view a FinTech technologies.

Is this just looking at the Fintech world and saying,

well there's a bunch of buckets we can dump things in?

How do I relate last module,

looking at the business of FinTech to this module looking at the technologies of FinTech?

Is there a link between this technology that enables this application?

The answer to that is there is a link between technology and

application but it's complex, and it's messy.

There are many different technologies underlying a number of these applications.

So, you would say wow,

if I look at how does lending get enabled by these techs?

A lot of tech go into lending,

or crowdfunding, or payments, or Cryptocurrencies.

And so, we don't have to trace every one of these links.

But let me just look at one link that you might think is pretty obvious.

Cryptocurrencies, like bitcoin and blockchain or other technologies.

So that's pretty easy, blockchain enables bitcoin.

True, but it's more than that.

If I looked at cryptocurrencies, obviously blockchain matters.

But also, issues of identity,

and privacy, and anonymity come in.

You have to know, does this person actually have these blockchains?

Can I verify the identity of the blockchain owner or of the bits?

And privacy and anonymity are so important for some users,

that they don't like bitcoin because it's not enough privacy.

They want more privacy or more anonymity.

Sometimes we'll have digital currencies with less privacy.

I'm happy with PayPal knowing who I am and how I link

to some technologies and having less privacy with PayPal,

but I have more convenience.

So that's a trade off,

and so we'll look at the links between and not that PayPal is a cryptocurrency,

it's a e-payment system.

But identity and privacy connect in with cryptocurrencies in some ways.

And finally, smartphones, and consumer tech matter for cryptocurrencies.

And you may say, Oh come on,

we can have bitcoin without that and that's true, you can.

We did, we got bitcoin completely independent of smartphones.

We don't need a smartphone to have bitcoin.

But, the smartphone technology,

the ability to link in a QR code,

the ability to relate to that.

Makes bitcoin much more convenient,

easy to trade, much more popular,

makes it a coin for the masses.

And that, makes there be more investors,

which makes bitcoin demand higher,

which makes bitcoin price higher.

So you could say the success of bitcoin,

the success of many cryptocurrencies is intrinsically

linked to the ability to connect with smartphones and user tech.

Not just security, you could have all the security in

the world and have this languish and not be adopted.

Without it being convenient,

without it being easy to use you may have no adoption.

So the success of bitcoin as a prototype and demonstration of the blockchain power,

also demonstrates the power of user interface and smartphones,

because both are interlinked.

So we can't just say there's one technology that led to bitcoin.

There's more than that.

At least if you mean that led to bitcoins broad adoption,

or success on the marketplace.

That requires smartphones.

That also requires interactions within considerations of,

how do you identify who owns a coin,

how do you deal with security,

how do you deal with privacy and anonymity

in that context which helped to make it more popular,

or less popular for different implementations of blockchain,

or implementations of cryptocurrencies.

So, at any rate we see these different technologies interfacing,

some more, some less,

but all being important to the success of your crypto app, your cryptocurrency system.

So for any of these areas,

we'll find there's more than one technology that leads to the revolution or opportunity,

there's some tie into multiple pieces.

But we come back we have

these five different technologies that we'll cover in this module,

looking at FinTech technologies,

and how they enable changes in our world. Thank you.

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