Module Title: Banking Technology & FinTech
Module Director: Professor Alistair Milne
Elective Module : All Routes
The module addresses the current rapid changes in banking technology and the disruptive impact of new ‘fintech’ start-ups, challenging conventional bank business models. The focus is on the interaction of technology (cryptography, mobile banking, AI and machine learning), regulation (e.g. the EU PSD2) and changing business models. A broad issue will be the extent to which new technology is leading to disintermediation of traditional banking functions and to what extent resulting in a co-operation between banks and new non-bank technology-based companies. The lectures will focus on two business areas where the new technologies are having the biggest impact: (i) domestic and international payments; (ii) small business and unsecured personal credit, including trade and supply chain finance. They will also provide a discussion of the public policy and strategic issues in financial technology – in particular the interaction of regulation and innovation in banking technology; and the prospective change in co-operative and shared institutions such as the international card companies Visa and Mastercard and the international payments network Swift. The first three lectures will provide an overview of new payments providers, looking at international payments, and at the rapidly evolving landscape of domestic C2B and B2B payments. A supporting case study will examine the role of the major card companies Visa and Mastercard. The next two lectures will look at technology based ‘non-bank lending’ especially the role of P2P or market place lenders and also invoice and other forms of supply chain finance & the extent to which credit may be supplied entirely outside of the banking system. The final lectures will look at the changing financial technologies from a public policy and strategic perspective, critically examining the role of regulation in both support of and as a barrier to innovation; and the impact of technology on the banking landscape in the years ahead.
Module Aims & Objectives
On completing this module students will:
- Be aware of the leading technology-based companies in financial technology and how they are challenging banks in payments services and lending around the world
- Understand examine how technology, regulation and business context together shape the opportunities for technological innovation in banking
- Have critically examined the strategic and public policy issues raised by the new technologies, including the application of competition law and policy and the extent to which technology leads to new forms of industry competition and co-operation
There is no up to date textbook. Students will be guided to relevant research and industry analysis.
Means of Assessment
This module is assessed by means of a single mini project of 5,000 words in length
Unit One: Payment systems and new payment technologies
Unit Two: Credit technologies and alternative lending
Unit Three: The public policy and strategic implications of the new technologies