Fintech Industry

A.Y. 2021/2022
6
Max ECTS
40
Overall hours
SSD
SECS-P/11
Language
English
Learning objectives
The course aims to give an in-depth overview of the FinTech Industry, a new part of the financial industry that is radically innovating the way financial services are built and offered. The course examines the FinTech characteristics, their activities and related risks. Additionally, the course provides an overview of the main strategies that incumbents are following in the new market conditions and the main challenges in FinTech security and regulation.
Expected learning outcomes
At the end of the course the student knows:
· Definitions, origins and the relevance of the phenomenon
· A taxonomy of the main Fintech Business Applications
· Equity based financing: pure equity crowdfunding, club deals
· Lending-based financing: lending crowdfunding, P2P lending, invoice lending, trade credit, club deals
· Traditional financial advice and robo-advice
· Cash management services, electronic moneybox
· Taxonomy of cryptocurrencies
· ICOs, market capitalization
· Currency transfer, payment solutions
· Technology innovation in insurance and business process transformation
· Global trends and government initiatives in RegTech
Course syllabus and organization

Single session

Responsible
Lesson period
First trimester
Lectures will be delivered online through MS Teams at the originally scheduled times. Slides and any additional material will be available on the course website (Ariel Platform).
Course syllabus
Module Description:
Financial technology (FinTech) is rapidly changing the financial services industry. This module offers an in-depth introduction to FinTech by examining its effect on a variety of banking and financial activities. Specifically, it discusses the effect of FinTech on lending activities (P2P lending, crowdfunding) and credit evaluation tools (big data, machine learning and artificial intelligence tools), investment activities (robo-advising), payments (crypto currencies and new payment tools), and insurance (InsureTech). Finally, this module provides an overview of the main strategies that incumbents are following in new market conditions and the main challenges in FinTech security and regulation.

Objectives
The course aims to provide students with an in-depth understanding of:
- recent FinTech developments and challenges in the financial services industry;
- technological innovations, such as machine learning, artificial intelligence and blockchain, and how they are influencing banking and financial services;
- developments in payments, such as cryptocurrencies and new services;
- alternative lending technologies tools and new techniques for assessing credit standing;
- an in-depth discussion on crowdfunding types; agency and signaling theory; rewards-based crowdfunding;
- an overview of the main strategies that incumbents are following in the new market conditions and the main challenges in FinTech security and regulation;
- ethical and regulatory issues in FinTech.

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:
- key aspects of FinTech, future challenges, analytic methods.
- the links between new technology and quantitative finance, as well as adapting to tighter market regulations and higher fiduciary standards;
- the rationale behind the many requests and challenges in the financial industry;
- the contribution provided by complex technological advances (as artificial intelligence and machine learning) to the assessment of a borrower's credit standing;
- be able to accurately and critically evaluate the pros and cons of robo-advising and new investment tools;
- have a sound understanding of cryptocurrencies and new payment services;
- the functioning and contribution provided to non-financial corporation alternative lending, as P2P lending, crowdfunding;
- ethical and regulatory issues in FinTech.
Prerequisites for admission
Basic knowledge of Finance is assumed. However, the module builds on results from a wide spectrum of disciplines outside of finance (economics, law, computer science) and includes practical examples and discussions of academic studies. The lecturer will provide additional material to help the students to familiarize themselves with basic financial terminology and concepts.
Teaching methods
Teaching and learning methods include lectures, short videos, numerical exercises, case studies, class discussion of relevant academic papers, and use of a student response system (Kahoot or Vevox) for comments and questions. All classes will follow an iterative approach.
Teaching Resources
Books:
- Crowdfunding, Edition 1Fundamental Cases, Facts, and Insights By Douglas J. Cumming, Sofia A. Johan
- Handbook of blockchain, digital finance, and inclusion, volume 1, volume 2 edited by David Lee (suggested)
- FinTech Innovation edited by Paolo Sironi (suggested)
- Disrupting Finance: FinTech and Strategy in the 21st Century Edited by Theo Lynn; John Mooney, Pierangelo Rosati, Mark Cumming (suggested)

Some academic papers:
-On the Rise of FinTechs: Credit Scoring Using Digital Footprints in The Review of Financial Studies by Tobias Berg, Valentin Burg, Ana Gombović, Manju Puri
-Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed through Cryptocurrencies? in The Review of Financial Studies by Sean Foley; Jonathan R Karlsen, Tālis J Putniņš
- Consumer credit-risk models via machine-learning algorithms in Journal of Banking & Finance, by Amir E. Khandani, Adlar J. Kim, Andrew W. Lo
- Fintech and banking: What do we know? in Journal of Financial Intermediation, by Anjan, V. Thakor
- Fintech and access to finance in Journal of Corporate Finance, by Helen Bollaert, Florencio Lopez-de-Silanes, Armin Schwienbacher
- How alternative finance informs central themes in corporate finance, by Hisham Farag, Sofia Johan
Assessment methods and Criteria
Module evaluation consists of a group presentation and final written exam.
SECS-P/11 - FINANCIAL MARKETS AND INSTITUTIONS - University credits: 6
Lessons: 40 hours
Educational website(s)
Professor(s)
Reception:
On appointment