Financial Technology: Case Studies in Fintech Innovation

Cover
Contents
List of figures and tables
About the author
Foreword by Dr Karen Elliott
Preface
Acknowledgements
Walkthrough of features and online resources
01 Networks, APIs and fintech banking platforms: How technology is decentralizing finance
	Learning objectives
	Introduction
	Harnessing relationships
	Open Banking
	Feature: Application programming interfaces (APIs)
	API-based business models in financial services
	The economics of platform banking
	Bank–fintech collaboration
	Case study: Starling Bank
	Networked financial services
	Case study: Harnessing mobile networks for financial inclusion
	Chapter summary
	Key takeaways
	Suggested answers to discussion points
	References
02 Disruption and disintermediation: How financial innovation and cloud computing gave birth to the fintech revolution
	Learning objectives
	Introduction
	Financial disintermediation
	Fintech and the financial crisis of 2007–09
	Regulation as a driver of fintech?
	Virtualizing IT infrastructure
	Feature: Cloud computing explained
	Banking as infrastructure
	Banking as a Service (BaaS)
	Disruptive innovation in financial services
	Case study: TransferWise
	Convenience as a business model
	Case study: Wealth Wizards
	Chapter summary
	Key takeaways
	Suggested answers to discussion points
	References
03 Behavioural economics and experience design: How to optimize user engagement
	Learning objectives
	Introduction
	User experience as a competitive advantage
	The drivers of technology adoption
	Feature: UI and UX design
	The principles of user interface design
	How users make decisions
	Communities, social norms and culture
	Engaging customers in the branch
	Case study: Lloyds Bank
	The ethics of nudging
	Case study: Applied nudging
	Chapter summary
	Key takeaways
	Suggested answers to discussion points
	References
04 Artificial intelligence and automation in fintech: AI and machine learning in practice
	Learning objectives
	Introduction
	A definition of artificial intelligence
	A brief history of artificial intelligence
	Big Data vs artificial intelligence
	Machine learning vs artificial intelligence
	Feature: Machine learning explained
	Decision trees and random forests
	Bayesian classifiers
	Case study: Bayesian classifiers and car insurance
	Nearest neighbours
	Genetic algorithms and genetic programming
	Neural networks and deep learning
	Practical and ethical issues regarding AI
	Case study: Zopa
	Chapter summary
	Key takeaways
	Suggested answers to discussion points
	References
05 Bitcoin, blockchain and cryptocurrencies: The applications of distributed ledger technology in finance
	Learning objectives
	Introduction
	The genesis of Bitcoin
	A decentralized currency system
	Bitcoin transactions in practice
	Authenticating Bitcoin transactions
	Feature: Hashing and its role in cryptography
	How the Bitcoin network reconciles differences
	How the Bitcoin network stays honest
	Alternative reconciliation mechanisms
	Why Bitcoin is useful as a cryptocurrency
	From Bitcoin to blockchain
	Smart contracts
	Case study: Generali Group
	Practical issues regarding blockchain and cryptocurrencies
	Case study: Facebook and Libra
	Chapter summary
	Key takeaways
	Suggested answers to discussion points
	References
06 Digitizing the price mechanism: The impact of automation and social media on financial markets
	Learning objectives
	Introduction
	Prices as a communication tool
	Mean estimates
	Liquidity in financial markets
	Market efficiency and passive fund management
	Sentiment mining with natural language processing
	Feature: Natural language processing
	Case study: Stocktwits
	Prediction markets
	Case study: Augur
	Chapter summary
	Key takeaways
	Suggested answers to discussion points
	References
07 Financial crime, cybersecurity and risk management: Pitfalls and opportunities in fintech
	Learning objectives
	Introduction
	Technology risk and opportunity
	Why care about risk management and financial crime?
	Security weaknesses in cloud systems
	Combatting cybercrime with machine learning
	Anonymization and data security
	Feature: Securing customer data with tokenization
	Risk management in a fintech context
	Forward-looking risk management
	Case study: RiskGenius
	Risk management and culture in fintech
	Case study: Robinhood
	Chapter summary
	Key takeaways
	Suggested answers to discussion points
	References
08 Regtech and regulatory compliance: Financial regulation in a fintech context
	Learning objectives
	Introduction
	Regulation and the global financial crisis
	Feature: Robotic process automation (RPA)
	Regulatory risks in fintech business models
	Fintech similarities to the pre-GFC years
	Regtech and sandboxes
	Case study: Digital Regulatory Reporting
	Data protection in an AI context
	A code of conduct for artificial intelligence
	Regulating blockchains and cryptocurrencies
	Anti-money laundering and cryptocurrencies
	Cryptocurrencies, ICOs and securities regulation
	Case study: Global stablecoins (GSCs)
	Chapter summary
	Key takeaways
	Suggested answers to discussion points
	References
09 Looking to the future: Optimization, decentralization and personalization
	Learning objectives
	Introduction
	Optimization and integration
	Real-time payments and a cashless society
	Case study: Banking by voice with Alexa
	The Internet of Things (IoT)
	Identity and the digital self
	Case study: ConsenSys’s uPort
	Decentralized financial institutions?
	The human touch: The edge in an automated economy
	Feature: Affective computing
	Chapter summary
	Key takeaways
	Suggested answers to discussion points
	References
Glossary
Index