Business Question

Required

This assessment is about recommending a robust and justified strategy for a selected FinTech, based in the UK.

I will be choosing Revolut as my Fintech Company

1. Introduction of the selected company and the FinTech industry in the UK – this

section must include facts and figures. [10%] 350

words

o Introduce the company, mission and vision

o Short background (optional)

o Product offering of the company, not very detailed but their main product

o Some financial / factual figures, use illustrations where possible

2. Macro UK Environmental Analysis which impacts the industry and therefore the

selected company. This section is essentially carrying out a ‘PESTEL’ framework,

identifying the Opportunities and Threats. [15%] 750 words

o Macro analysis is for the country which is UK in this case.

o Opportunities x 3 – 4

o Threats x 3 – 4

o If more than 4 – include in appendix and clearly refer

o Only the top factors to be included, not everything

o Also say which one is a key driver for change i.e. which one is pushing or

pulling the company to develop new strategy

3. Internal Analysis / Strategic capabilities (resources and competences) of the

chosen company using appropriate strategy tools (e.g. Value chain to discuss

company’s activities and identify their core competences OR resources and

capabilities) and identify Strengths and Weaknesses for the

firm

. Also discuss

company’s financial position. [15%] 750 words

o This is not 5 forces, do not get confused, five forces is not required

o Apply VRIO analysis

o Strengths x 3 – 3

o Weaknesses x 3 – 4

o Financial position i.e. good, bad, how much is funded through venture

capitalists and etc

o If you want, you can include some ratios such as ROCE, and etc. but don’t

forget to say whether that’s a Strength or Weakness; good or bad for the

firm

4. From the above (Questions 2 & 3), identify a series of generic and/or interactive

strategic recommendations for the company. Using TOWS Matrix. [20%] 825

words

o Create a TOWS matrix

? Don’t just create the matrix, also provide some kind of discussion

under the matrix. Without discussion you will not get marks just for

creating a table. Discussion of the important points are important

o Select and recommend a strategy

o Not just select it, also say what or why has that strategy been selected i.e.

the Justification of selecting the strategy

o As long as the strategy can be justified it is fine, but you must be able to

justify it i.e. defend the selection of that strategy – it has to be logicalo You can come up with 2 or 3 different strategies and provide justifications

of them but don’t get too wild on the word count

5. Justifying the recommendations made above (suggest several strategies, then

evaluate the strategies (max 2) using Suitability, Feasibility, Acceptability criteria).

[20%] 825 words

o For the selected or recommended strategies rank them and then make your

final decision at this stage as to which strategy you will be opting for. At this

stage you will have to select between the strategies and you will be left with

only 1 strategy to take further

o Once you have decided that, then carry out the Feasibility and Acceptability

analysis for that strategy

o The last part is to write as to how you will monitor whether the strategy is

working fine or not

? For e.g. numbers? Going up or down?

? Staff feeling happy unhappy?

? Reviews on the internet? Good or bad

? Finances, whether they make sense

6. Bloomberg Market Concepts – Click Here to sign up to Bloomberg. You must sign

up as ‘students’/’learners’. use Class Code: TBC.Once signed up and completed,

you must include screenshots of certificates all members of the group. [10%]

o Should be copy pasted at the end

7. Structure, presentation and referencing [10%]

o Harvard referencing

o Presentation neat and clean and tidy

o Structure should be like a story e.g. A – Z.. not the other way round..

ASSESSMENT

Details of the Assessment

Weighting – 100% of total module mark

Word count – 3,500 ±10% words total in report format (excluding – table of contents, executive summary, appendices, references, tables, figures, captions and etc)

Required

Introduction of the selected company and the FinTech industry in the UK – this section must include facts and figures. [10%]

Macro UK Environmental Analysis which impacts the industry and therefore the selected company. This section is essentially carrying out a ‘PESTEL’ framework, identifying the Opportunities and Threats. [15%]

Internal Analysis / Strategic capabilities (resources and competences) of the chosen company using appropriate strategy tools (e.g. Value chain to discuss company’s activities and identify their core competences OR resources and capabilities) and identify Strengths and Weaknesses for the firm. Also discuss company’s financial position. [15%]

From the above (Questions 2 & 3), identify a series of generic and/or interactive strategic recommendations for the company. Using TOWS Matrix. [20%]

Fintech Assesment will have to
have a Pestel table with 2-3
factors for each element
P – 3 (Opportunity or threat)
E – 3 example, rising in ation is a threat for the ntech industry because etc etc
S-3
T-3
E-3
L-3
fi
fl
Safe criteria table
Suitability example
Rank these from best to worst
SCHOOL OF BUSINESS AND LAW
Department of Business
FN7025 Developing Fintech Strategy
Academic Year 2023/24
Assessment Guide
Term 1, 2, 3
Module Leader
Dr Hammad Hussain
Contact Details
E-Mail: H.Hussain@uel.ac.uk
Assessment
Assessment methods which enable Weighting:
students to demonstrate the
learning outcomes for the module;
please define as necessary:
Learning
Outcomes
demonstrated:
Individual coursework (3500 words) 100%
1 – 11
Updated October 2022
1
ASSESSMENT
Details of the Assessment
This assessment is about recommending a robust and justified strategy for a
selected FinTech, based in the UK. This is an individual coursework.
Weighting – 100% of total module mark
Date and time of submission – 10th May 2024 @ 2359hrs via Turnitin link
Word count – 3,500 ±10% words total in report format (excluding – table of
contents, executive summary, appendices, references, tables, figures, captions
and etc)
Required
1. Introduction of the selected company and the FinTech industry in the UK –
this section must include facts and figures. [10%]
2. Macro UK Environmental Analysis which impacts the industry and therefore
the selected company. This section is essentially carrying out a ‘PESTEL’
framework, identifying the Opportunities and Threats. [15%]
3. Internal Analysis / Strategic capabilities (resources and competences) of the
chosen company using appropriate strategy tools (e.g. Value chain to
discuss company’s activities and identify their core competences OR
resources and capabilities) and identify Strengths and Weaknesses for the
firm. Also discuss company’s financial position. [15%]
4. From the above (Questions 2 & 3), identify a series of generic and/or
interactive strategic recommendations for the company. Using TOWS Matrix.
[20%]
5. Justifying the recommendations made above (suggest several strategies,
then choose two of these to evaluate using Suitability, Feasibility,
Acceptability criteria). [20%]
6. Bloomberg Market Concepts – Click Here to sign up to Bloomberg. You must
sign up as ‘students’/’learners’. use Class Code: TBC. Once signed up and
completed, you must include screenshot of your certificate at the end of
report. [10%]
7. Structure, presentation and referencing [10%]
The deadline for submission of the coursework is 10th May 2024 @ 2359hrs.
Deduction of 5% of the total marks for late submission, if within 24 hours of the
deadline, see below more details.
Updated October 2022
2
We strongly suggest that you try to submit all coursework by the deadline set as
meeting deadlines will be expected in employment. However, in our regulations,
UEL has permitted students to be able to submit their coursework up to 24 hours
after the deadline. The deadline is published in this assessment guide.
Coursework which is submitted late, but within 24 hours of the deadline, will be
assessed but subjected to a fixed penalty of 5% of the total marks available (as
opposed to marks obtained). If you submit twice, once before the deadline and
once during the 24-hour late period, then the second submission will be marked
and 5% deducted. This rule only applies to coursework. It does not apply to
examinations, presentations, performances, practical assessments or viva voce
examinations. If you miss these for a genuine reason, then you will need to
apply for extenuating circumstances, or accept that you will receive a zero mark.
The university may occasionally on a case-by-case basis support an on-line
conversation as part of this assessment.
Further information is available in the Assessment & Feedback Policy at
https://www.uel.ac.uk/Discover/Governance/Policies-Regulations-Corporatedocuments/Student-Policies (click on other policies)
a) Assessment criteria for each task
Assessment Criteria
Maximum Mark
Introductions of the industry and firm
10
Macro analysis
15
Micro Analysis
15
Strategy formulation
20
Strategy recommendation
20
Bloomberg Market Concepts
10
Structure, presentation, referencing
10
Total Mark
100 marks
b) Guidance on referencing
As a student you will be taught how to write correctly referenced essays
using UEL’s standard Harvard referencing system from Cite Them Right. Cite
them Right is the standard Harvard referencing style at UEL for all Schools apart
from the School of Psychology which uses the APA system. This book will teach
you all you need to know about Harvard referencing, plagiarism and collusion.
The electronic version of “Cite Them Right: the essential referencing guide” 9th
edition, can be accessed whilst on or off campus, via UEL Direct. The book can
only be read online and no part of it can be printed nor downloaded.
Further information is available at
https://uelac.sharepoint.com/LibraryandLearningServices/Pages/defa
ult.aspx
Updated October 2022
3
Notice is hereby given that all submissions of this Module must be submitted to
Turnitin.” If you fail to submit, to Turnitin, in accordance with the guidance
provided on the Virtual Learning Environment (Moodle), a mark of 0 will be
awarded for the component.
c) Presentation/Structure Guidance
– Text – Arial 12, 1.5 line spacing, Justified
– Report format with clear headings and sub-headings
– Make use of graphs, figures, tables and illustrations
– Captions for the above
– Table of contents
– Executive summary
– Appendices
– Assessment submissions must include Front Page
– Front Page must include student numbers of all members of the group
Submitting Assessments Using Turnitin:
Turnitin is required for coursework assessments, such as report/research papers
or projects in Microsoft Word, PowerPoint, and in PDF format. There are two
main reasons we want you to use Turnitin:
• Turnitin can help you avoid academic breaches and plagiarism. When
you use Turnitin before a submission deadline, you can use the
Originality Report feature to compare your work to thousands of other
sources (like websites, Wikipedia, and even other student papers).
Anything in your work that identically matches another source is
highlighted for you to see. When you use this feature before the
deadline, you will have time to revise your work to avoid an instance of
academic breach/plagiarism.
• Turnitin saves paper. When using Turnitin to electronically submit your
work, you will almost never have to submit a paper copy.
Late Submissions Using Turnitin
UEL has permitted students to be able to submit their coursework up to 24 hours
after the deadline. Assessments that are submitted up to 24 hours late are still
marked, but with a 5% deduction. However, you have to be very careful when
you are submitting your assessment. If you submit your work twice, once
using the original deadline link and then again using the late submission link on
Turnitin, your assignment will be graded as late with the 5% deduction.
Turnitin System Failure
Best advice: Don’t wait until the last minute to submit your assessments
electronically. If you experience a problem submitting your work with Turnitin,
you should notify your lecturer/tutor by email immediately. However, deadlines
are not extended unless there is a significant systems problem with Turnitin.
UEL has specific plans in place to address these issues. If UEL finds that the
issue with the system was significant, you will receive an email notifying you
of the issue and that you have been given a 24 hour extension. If you don’t
receive any email that specifically states you have been given an
extension, then the original deadline has not been changed.
Updated October 2022
4
Feedback and return of work – to include
i. Feedback will be available for students to view within 15 working
days of submission
ii. Feedback will be available to view via Turnitin, through the same
link where the assessment was submitted
Reassessment
The reassessment will be a resubmission of this report, with tracked changes
made in response to the feedback given.
Updated October 2022
5
Marking Criteria
Assessment
Criteria
Outstandin
g
Excellent
Very Good
Good
Satisfactor
y
Adequate
Marginal
Fail
Fail
45%
35%
25%
Introductio
ns of
company
and firm
substantiall
y below the
standards
Macro
analysis
substantiall
y below the
standards
Micro
analysis
Substantial
ly below
the
standards
Strategy
formulation
Substantial
ly below
75%
85%
100%
Introductions
No areas
of the industry for
and firm
improveme
nt
10%
65%
Excellent
introduction
s of
company
and firm
Very good
introductio
ns of
company
and firm
Good
introductio
ns of
company
and firm
55%
Satisfactor
y
introductio
ns of
company
and firm
Adequate
introductio
ns of
company
and firm
Introductio
ns of
company
and firm
below the
standards
Macro analysis No areas
for
15%
improveme
nt
Excellent
Macro
analysis
Very good
macro
analysis
Good
macro
analysis
Satisfactor
y macro
analysis
Adequate
macro
analysis
Below the
standard
macro
analysis
Micro Analysis
No areas
for
improveme
nt
Excellent
Micro
analysis
Very good
Micro
analysis
Good
Micro
analysis
Satisfactor
y Micro
analysis
Adequate
Micro
analysis
Below the
standard
Micro
analysis
No areas
for
improveme
nt
Excellent
strategy
formulation
Very good
strategy
formulation
Good
strategy
formulation
Satisfactor
y strategy
formulation
Adequate
strategy
formulation
Strategy
formulation
Below the
standard
15%
Strategy
formulation
20%
Updated October 2022
Missing /
Unanswer
ed
0%
Missing or
wrong
Missing or
wrong
Missing or
wrong
Missing or
wrong
6
Strategy
recommendati
on
No areas
for
improveme
nt
Excellent
strategy
formulation
Very good
strategy
formulation
Good
strategy
formulation
Satisfactor
y strategy
formulation
Adequate
strategy
formulation
Strategy
formulation
Below the
standard
Completed
and
certificates
provided
–
–
–
–
–
–
No areas
for
improveme
nt
Excellent
structure,
presentatio
n,
referencing
Very good
Good
Satisfactor
y
Adequate
Below the
standard
20%
Bloomberg
Market
Concepts
10%
Structure,
presentation,
referencing
10%
Updated October 2022
the
standards
Strategy
formulation
Substantial
ly below
the
standards
–
Substantial
ly below
the
standards
Missing or
wrong
Not
completed
no
certificates
provided
Missing or
wrong
7
Assessment Guide – FN7025
Required
1. Introduction of the selected company and the FinTech industry in the UK – this
section must include facts and figures. [10%] 350 words
o Introduce the company, mission and vision
o Short background (optional)
o Product offering of the company, not very detailed but their main product
o Some financial / factual figures, use illustrations where possible
2. Macro UK Environmental Analysis which impacts the industry and therefore the
selected company. This section is essentially carrying out a ‘PESTEL’ framework,
identifying the Opportunities and Threats. [15%] 750 words
o Macro analysis is for the country which is UK in this case.
o Opportunities x 3 – 4
o Threats x 3 – 4
o If more than 4 – include in appendix and clearly refer
o Only the top factors to be included, not everything
o Also say which one is a key driver for change i.e. which one is pushing or
pulling the company to develop new strategy
3. Internal Analysis / Strategic capabilities (resources and competences) of the
chosen company using appropriate strategy tools (e.g. Value chain to discuss
company’s activities and identify their core competences OR resources and
capabilities) and identify Strengths and Weaknesses for the firm. Also discuss
company’s financial position. [15%] 750 words
o This is not 5 forces, do not get confused, five forces is not required
o Apply VRIO analysis
o Strengths x 3 – 3
o Weaknesses x 3 – 4
o Financial position i.e. good, bad, how much is funded through venture
capitalists and etc
o If you want, you can include some ratios such as ROCE, and etc. but don’t
forget to say whether that’s a Strength or Weakness; good or bad for the
firm
4. From the above (Questions 2 & 3), identify a series of generic and/or interactive
strategic recommendations for the company. Using TOWS Matrix. [20%] 825
words
o Create a TOWS matrix
▪ Don’t just create the matrix, also provide some kind of discussion
under the matrix. Without discussion you will not get marks just for
creating a table. Discussion of the important points are important
o Select and recommend a strategy
o Not just select it, also say what or why has that strategy been selected i.e.
the Justification of selecting the strategy
o As long as the strategy can be justified it is fine, but you must be able to
justify it i.e. defend the selection of that strategy – it has to be logical
o You can come up with 2 or 3 different strategies and provide justifications
of them but don’t get too wild on the word count
5. Justifying the recommendations made above (suggest several strategies, then
evaluate the strategies (max 2) using Suitability, Feasibility, Acceptability criteria).
[20%] 825 words
o For the selected or recommended strategies rank them and then make your
final decision at this stage as to which strategy you will be opting for. At this
stage you will have to select between the strategies and you will be left with
only 1 strategy to take further
o Once you have decided that, then carry out the Feasibility and Acceptability
analysis for that strategy
o The last part is to write as to how you will monitor whether the strategy is
working fine or not
▪ For e.g. numbers? Going up or down?
▪ Staff feeling happy unhappy?
▪ Reviews on the internet? Good or bad
▪ Finances, whether they make sense
6. Bloomberg Market Concepts – Click Here to sign up to Bloomberg. You must sign
up as ‘students’/’learners’. use Class Code: TBC. Once signed up and completed,
you must include screenshots of certificates all members of the group. [10%]
o Should be copy pasted at the end
7. Structure, presentation and referencing [10%]
o
o
o
o
Harvard referencing
Presentation neat and clean and tidy
Structure should be like a story e.g. A – Z.. not the other way round..
Don’t forget to include a front page with the student id number
Fintech Assesment will have to
have a Pestel table with 2-3
factors for each element
P – 3 (Opportunity or threat)
E – 3 example, rising in ation is a threat for the ntech industry because etc etc
S-3
T-3
E-3
L-3
fi
fl
Safe criteria table
Suitability example
Rank these from best to worst
Developing Fintech Strategy
Lecture 1
Module Leader – Dr. Hammad Hussain
Industry 1.0 to 4.0
Learning objectives
• To familiarise with the module and the learning outcomes of the
module
• To understand the journey from industry 1.0 to 4.0
Introduction to the module
• Introductions
• What is the module about
• Expectations from students e.g attendance, participation and
engagement – during lectures and seminars
• Module Handbook detailed overview
• Assessment details to be released in Week 3
st
1 Industrial Revolution
• Began 18th century
• Steam power and mechanisation of production
• Produced atleast eight times more volume as compared to previous
production methods
• Increased production levels significantly
• E.g. looms weaving powered by machines rather than muscles
nd
2 industrial revolution
• 19th century
• Electricity and assembly line production
• Mass production – Henry Ford – idea from slaughterhouse
• Applied the production line process to automobiles
• Led to reduced costs and higher efficiencies
• Still it can be seen in many industries
rd
3 industrial revolution
• 20th century
• Partial automation
• Possible through memory programmable controls and computers
• Almost all production lines could be automated as a result
• Robots performing programmed sequences e.g. dyson vacuum testing
• Leading to even more cost efficiencies
Industry 3.0 to 4.0
• Industry 3.0 was about automation, computing, electronics
• Industry 4.0
• Industrial Internet of Things (IIOT)
• Cloud Computing
• Predictive Modelling
• Big data / Analytics
• Smart / Agile
• Machines work autonomously
• Even more efficiencies
Industry 1.0 to 4.0
The evolution of the web
Web 1.0
Green shots of Ecommerce
Desktop browser access
Dedicated infrastructure
Value Created
Web 2.0
?
“Social” Networks
“Mobile first” always on
Cloud-driven computing
Web 3.0
$5.9 trillion*
1990
$1.1 trillion*
Source: Fabric Ventures
*Internet Companies market cap as of 2000
2025
Al-driven services
Decentralised data architecture
Edge computing infrastructure
Web 3.0
Decentralized
Web
Environmental, Social
and Governance
Friendly ecommerce
Web 2.0
Mobile
The potential
evolution of the
World Wide Web
Web 1.0
Desktop
Browser
Banner Ads
Ecomm Checkout
Consumer Adoption
OS (App
Economy)
Rise of
Susbcription
Local experience
and commerce
Sharing
Economy
Creator economy
Streaming
Media
Rise of the
Scaled Platform
Augmented Reality and
Metaverse as the new
OS
Rise of Privacy
Source: Goldman Sachs
*The Financial Brand – March 2022
Anonymity
Current aspects
of Web 3.0
•
Different players and regions of the
world are moving at a different pace. For
example, the crypto community have
been dealing with blockchain and DLT
technologies from the start.
•
The gaming sector has been using digital
asset tokens, and tokenized avatars for
some time now.
•
Digital assets, payments and central bank
digital currencies (CDC). 28 million
people in China are on jd.com using ERenminbi the People’s Bank of China’s
CDC and it’s going more mainstream.
A more connected/intelligent world
for financial services
Improved
Customer
Journey
Trust
Accesibility
Faster
transactions
Uninterrupted
service
Conclusion
• Automation is here to stay
• Almost all industries have some sort of automation
• Finance is one of them
• This module is about Fin-Tech
• From next week we will deep dive into the core concepts
• Next week – How Fintech in changing Digital Finance
Week 2
Dr. Hammad Hussain
How Fintech in changing Digital Finance
Learning Objectives
• Intro to FinTech
• How Fintech is shaping the future of Digital Finance
Intro
• Technological advancement not new in the world of finance
• Digital innovation has brought major improvements previously as well
e.g. reconciliation, accounts and payments
• However this time digital innovation has brought major
improvements
• Connectivity of systems
• Computing power
• Cost reductions
• This has led to emergence of new business models and entrants –
disruptors
Business Model
Technology
Source: FINTECH Circle, 2020
Financial Sector
Financial Sector
•
•
•
•
•
•
•
•
•
•
Business Model
Technology
Source: The Fintech Cube
FINTECH Circle, 2020
Financial Sector
Retail Banking
Commercial/SME Banking
Corporate Banking
Investment Banking
Trading
Asset Management
Private Banking
Transaction Banking/Payments
Insurance
Foreign Exchange/Currencies
Business Model
•
•
•
•
•
•
•
Business to Consumers (B2C)
Business to Business (B2B)
B2B to Consumer (B2B2C)
Business to Government (B2G)
Platform
Crowdfunding
Peer to Peer (P2P)
Business Model
Technology
Source: The Fintech Cube
FINTECH Circle, 2020
Financial Sector
Technology
• Cloud computing
• Big Data
• Artificial Intelligence (AI)/
Machine Learning (ML)
• Blockchain/DLT
• Internet of Things
• Quantum Computing
• Virtual Reality
• Augmented Reality
Business Model
Technology
Source: The Fintech Cube
FINTECH Circle, 2020
Financial Sector
What changing
• Think of
• Payments
• Lending
• Insurance
• Wealth management
• Already there were advancements but Covid-19 has accelerated the
progress
• Digital finance helps the industry to become more
• Diverse
• Competitive
• Efficient
• Inclusive
• Increase concentration in market
What is market concentration
• According to OECD
• Market concentration measures the extent to which market shares are
concentrated between a small number of firms.
• Why is important? To ensure healthy competition
• OECD – In recent years changes in concentration have increasingly
been used to argue that the intensity of competition is falling, that
the growth of large firms with high market shares is driving up profits,
damaging innovation and productivity, and increasing inequality.
Why this is important? – Digital Finance
• Society changing habits, Covid added more fuel
• Moving towards less physical and more digital contact
• E.g. Barclays, customer services through web chat from few years ago
• Digital payments already norm, but Covid made the case stronger
• Think of countries with stricter Covid rules? How did money move
there?
• Lets not forget, all these have implications as well
What is it doing
• Players have bundled and unbundled financial services
• This lets customers find and assemble services as they like
• Other traditional aspects remain same such as
• Customer acquisition
• Compliance activities
• Costs still remain high
Unbundling of services
Technology advancements – Connectivity
• Increased connectivity – how was it before? 5 – 10 years back?
• Now the ability to share information is unbelievable
• Ability to transfer information, interact and share is easy
• Not just between consumers but also it is easier for businesses to get
in touch with their customers
• Direct delivery channels – lower costs and tailored services
Internet of Things (IoT) and Connectivity
1. Interconnected Devices and Sensors
• Use of sensors and embedded systems to collect real-time data from
machines and products.
• Interconnectivity allows for seamless communication and data exchange
between devices and systems.
2. Data-driven Decision Making
• Data generated by IoT devices enables data analysis and predictive
maintenance.
• Real-time insights and analytics improve decision-making processes.
Technology Advances – Mobile wallet
• Late 2019, GSMA estimated there are 5 billion mobile subscriptions
• 5 billion opportunities
• Around 1 billion mobile money accounts
• In general most of the financial services can be delivered through
mobiles / apps and etc = access to finance
Mobile wallet growth
Technology – Data
• Technology advancements have led to the cost of data storage to fall
• Its all about data today
• The more the data the more the information for analysis and predictability
• Leveraging through analysis – what will happen when
• With a very high degree of certainty
• Touch points are being recorded – cookies for example
• Storage and processing capacity allows data to be organized, validated, and
analysed, including through computationally intensive techniques such as
AI, including machine learning applications on vast troves of data
Big Data and Analytics
1. Data Collection and Storage
•
Massive volumes of data collected from various sources.
•
Advanced storage and processing techniques for handling big data.
2. Data Analytics and Insights
•
•
Data analysis techniques extract meaningful insights and trends from large
datasets.
Helps optimize production processes, supply chain management, and
customer experience.
Artificial Intelligence (AI) and Machine Learning
1. Automation and Robotics
•
•
Integration of AI and machine learning algorithms into robotic systems.
Enables autonomous decision-making and adaptive behavior in
manufacturing processes.
2. Predictive Analytics
•
•
AI algorithms analyze large datasets to identify patterns and predict
outcomes.
Predictive maintenance and quality control improve efficiency and reduce
downtime.
Generative AI
•
Generative AI refers to AI systems capable of creating original content or designs.
•
Interactions between FinTech and Generative AI can include:
1. Design Optimization and Innovation
•
Generative AI algorithms can automatically generate and optimize designs for workflow processes and product features.
•
Rapid iteration and exploration of design possibilities, leading to increased efficiency and innovation.
2. Predictive Maintenance and Anomaly Detection
•
Generative AI models can analyse sentiment data and identify patterns to predict workflow needs and detect anomalies in product
processes.
•
Early detection of potential issues can minimize sentiment and prevent costly delays.
3. Personalisation and Customer Experience
•
Generative AI can enable personalisation of products and enhance the customer experience.
Technology – Transactional costs
• Traditionally the costs of transactions were high, still are in some
parts of the world where the society is cash based
• Digital innovation helps alleviate transactional costs
• Also helps enable new and wide range of financial services which
firms can offer
• In finance this means easier and faster to
• Find lenders
• Transfer funds
• Find investment products
Example of cost reductions
• Insurance companies
• High costs of someone coming and checking damage and assessing
assets
• Now its done digitally through video, photos and etc
• Saves times and effort and offcourse money
• These savings are passed on to customers
• Blockchain – p2p markets, lending money, no need for banks
• Technology also helps reduce fixed costs and marginal costs – e.g.
physical infrastructure,
Efficiencies
• Reduced costs and increased efficiencies – isn’t this the best combo?
• Everything is just quicker and faster
• From registering to carrying out the normal activities
Blockchain
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Blockchain is a distributed ledger technology that enables secure and transparent record-keeping.
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Interactions between Transaction Costs and Blockchain can include:
1. Traceability and Transparency
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Blockchain allows for end-to-end traceability of transactions, ensuring transparency and reducing the risk of failed settlement.
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Immutable records on the blockchain provide a trustworthy source of information for auditing and compliance purposes.
2. Smart Contracts and Automated Transactions
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Smart contracts on blockchain enable self-executing agreements, automating payment settlements and other contractual obligations.
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Efficient and secure transfer of digital assets, such as intellectual property rights and digital certificates.
3. Data Integrity and Security
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Blockchain-based data storage and encryption techniques enhance data integrity and security.
Risks
• Fraud
• Credit
• Liquidity
• Market
• Operational risks
• Data breaches
• These are traditional risks and are relevant to FinTechs as well
• Cannot be completely eliminated
Issues to not forget
• Competition
• Concentration of clients and services
• Market composition – what is the market made up of
• Authorities are responsible for managing policy issues related to
• Regulation
• Competition
• Industry regulatory bodies
• Other points to note and be aware of
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Stability
Integrity
Competition
Efficiency
Consumer protection
Privacy
• Risk management – fraud, everything online, what if the internet goes down?
Issues
• Ok about technology, and everything digital
• But it also requires real resources such as labour, equipment,
premises
• Why? So that the back end tasks can be carried out
• Labour, physical, financial and trust capital
Reference
• https://www.bis.org/publ/bppdf/bispap117.pdf
• https://www.oecd.org/daf/competition/market-concentration.htm
Next week
• The importance of strategic management and its practice in real life
scenarios