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
Theodore Henry King CLARKAssociate Professor
