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Lecture 7 - E-Commerce (FinTech)
Lecture 7 - E-Commerce (FinTech)
q Email template:
• Subject title: [ISOM 2010 session Lx]: your request
• Recipients: Professor and/or TA
• Student info: ID, Name
q Group project:
• 4-5 students per group
• Send group info to TA (Olivia Chan, imolivia@ust.hk) before 1 pm Sept 30.
• After Sept 30, students without a group will be randomly formed into groups by TA.
Last Class
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Today’s Game Plan
• Blockchain
• Algorithmic Trading
• Robo-advising
• Crowdfunding
What is FinTech?
q Financial markets (e.g., equity, fixed income, futures, options, and other derivatives)
q Businesses (e.g., corporate financials, commercial transactions, and credit card purchases)
q Individuals (e.g., credit card purchases, product reviews, internet search logs, and social media posts)
q Sensors (e.g., satellite imagery, shipping cargo information, and traffic patterns), and, in particular, The
Internet of Things, or IoT (e.g., data generated by “smart” buildings, where the building is providing a
steady stream of information about climate control, energy consumption, security, and other operational
details)
Such data together with analytics tools generates significant effect on how professional
investors approach financial analysis and decision-making processes.
Blockchain: Process of Purchasing a House
Ownership Change of
Verification Ownership
Sell Buy
Michael Jason
Money Financial
Transfer Status
Verification
Blockchain: Process of Purchasing a House
• Is it ok to get rid of
Ownership Change of government and bank
Verification Ownership in the transaction?
Sell Buy
Michael Jason
Money Financial
Transfer Status
Verification
Blockchain: Process of Purchasing a House
Security issue
Michael Transaction cost
Ownership
information stored in the
government ‘s centralized
database
Blockchain: Process of Purchasing a House
Financial
Status
Verification
Ownership Change of
Verification Ownership
Sell Buy
Michael Jason
Money Financial
Transfer Status
Verification
Algorithmic Trading
• Algorithmic trading provides investors with many benefits, including speed of execution,
anonymity, and lower transaction costs. Over the course of a day, algorithms may
continuously update and revise their execution strategy on the basis of changing prices,
volumes, and market volatility.
• Algorithms may also determine the best way to price the order (e.g., limit or market
order) and the most appropriate trading venue (e.g., exchange or dark pool) to route for
execution.
Algorithmic Trading: Renaissance Technology
Robot advisor
Collaboration
Robot advisor
• In your mind, what may prevent you from using crowdfunding to finance a
business idea?
Benefits & Costs of Crowdfunding
Benefits
• Access to funding
• Marketing
• Product development
• Subsequent financing
• …
Cost
• Intellectual property
• Signal of entrepreneurs’ capability
• …
Key Takeaways
• Blockchain (benefits)
• Algorithmic Trading
• Robo-advising (implications)
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Let me know if I can help!
Suggestions are always welcome!
Zhitao Yin
Office: LSK Room 4058
Email: zhitaoyin@ust.hk