Fintech: Introduction

Session 1

Prof. Sudarshan Kumar

 Evaluation
Components Weight Criteria

Class Participation 20% • Participation in the class discussion (10%)

• Incentive for the good behaviour (10%)
• No Phone, No earpiece
• No sleeping
• Punctuality
Group Project 30% Write an HBS standard case on one of the selected Indian Fintech
firm
• October 5: First draft submission (20%)
• November 15: Final Submission (10%)
Individual Assignment 20% Implement an algorithmic trading strategy and backtest on the
historical data and submit the report
or
Prepare a report on one of the given relevant topics related to Fintech
Submission: November 26th
End term 30%
Fintech: Introduction

Finance + Technology

Application of
Facilitation of
scientific
transfer/excha
knowledge to
nge of risk and
improve real
capital
world processes
 Payment system  Artificial Intelligence &
 Credit & lending Machine Learning
 Blockchain
 Investment management
 Big data
 Insurance
 Cloud Computing
 Trading & capital markets
 Open API
Fintech 1.0

Transatlantic Diners’ Club

Fedwire
cable Card
1858 1918 1951

Geography Technology
Developed Infrastructure and linkages, Telegraph
Fintech 2.0

Online
ATM NASDAQ SWIFT
banking
1967 1971 1973 1983 1998

Geography Technology
Developed Computer & Digitization
Fintech 3.0

• Global Financial Crisis : Lack of trust

in the financial system
• New wave of regulation Paytm
Bitcoin Alipay
• Mobile penetration
2009 2004 2010
• Ability to analyze large data set: “
Data is the new oil” Geography Technology
• Blockchain and cryptography Developing Mobile
internet
 Digital Disruption

• Customer is the King

• Cost Efficiency because of the digitization
• Value proposition because of the digital innovation
• Cost reduction because of the efficiency is usually passed to the customer
because of the competition
• Consolidation of the few players
• Digital disruption destroys value for the inefficient incumbents
• First Mover Advantage??
• Economy of scale
• Barriers to entry
• Sticky customers
• Dynamic technology

Silicon Valley is good at getting rid of pain points, Banks are good at creating them.” : Jamie Dimon CEO JP
Morgan
Financial Industry: Existing Pain points
Credit &
Payment Insurance Banking
Lending

Investment Trading & Capital

management markets
Regulation