Technology and Alternative Finance - the Future
Over the last few years, information technology has disrupted a number of sectors including the entertainment, retail, hotel and taxi businesses. This one-day program looks to the future regarding how technology is disrupting the world of finance.
Since the global financial crisis, it has been apparent that banking is inefficient, costly, riddled with conflicts of interest, prone to unethical behavior and, most worrisome of all, able to generate huge crises. At its core, however, finance is an information business with three basic functions: it matches savers to borrowers, it provides a payment system and it provides insurance. Technology is the force that is allowing these functions to be disrupted by alternative finance organizations.
The term alternative finance means different things to different people. Investment bankers use it in the context of alternative investments, such as non-traditional asset classes, or in reference to shadow/ non-regulated banking activities. Economists studying developing economies use it to describe the sources of financing and payment channels that emerge to address the needs of individuals and businesses in economies lacking a functioning banking system. In this program, we discuss elements common to both uses of the term: specifically, the channels of finance that are emerging outside the regulated banking system in both developed and developing economies through the aid of technology, or fintech.
How you will benefit
- Gain an overview of the world of alternative finance through the two principles that underlie the basic fintech models
- Get up-to-date on the latest fintech developments globally, and who the winners and losers will be
- Understand how big data analysis enables players to draw conclusions on investor behavior in the aggregate
- Understand the future of distributed ledger technologies and monetary innovation: blockchain, bitcoin, cryptocurrencies, smart contracts, etc.
Session 1: A Basic Framework
The opening session reviews the framework of asymmetric information in which banks operate. We discuss contracting theory, explicit and implicit contracts, symmetric and asymmetric information, and agency problems. Finding solutions to these agency problems and inefficiencies is the basis for how alternative finance is making inroads into the formal financial sector. We then go through an overview of the alternative finance space today.
Session 2: Online Alternative Channels of Finance
In this session, we will discuss the technology-enabled online channels or platforms that act as intermediaries in the demand and supply of funding to individuals and businesses outside the traditional banking system. We will differentiate these fintech models on the basis of (i) Type of fundraiser (consumer, business, or non-profit); (ii) Source of financing (individual/retail or institutional funder); and (iii) Financing instrument (equity, debt or other). We will then discuss their viability and their disruptive threat to incumbents, banks and asset managers. Finally, we will discuss the challenges this activity introduces to policy makers and regulators.
Session 3: Credit Analytics and New Forms of data
Assessing the ability and willingness of borrowers to satisfy their debt obligations when due is fundamental to the business of lending. Does greater access to financial information about loan applicants provide banks with an unassailable comparative advantage, relative to alternative lenders? Is the key distinguishing factor uniting marketplace/ P2P borrowers that they represent the ‘poorest risk quality’ and were turned down by bank lenders? We will discuss the new forms of data being produced by our digitalized social and commercial engagements, and the claims by alternative lenders regarding the data’s predictive power regarding credit outcomes.
Session 4: Monetary Innovation and Distributed Ledger Technology
The invention of bitcoin in 2008 has sparked significant interest in alternative currencies and new monetary technology. Bitcoin and blockchain start-ups have attracted over $1 billion in venture capital investment over the last three years. We will discuss the uses, prospects, and obstacles to adoption faced by alternative currencies like bitcoin, as well as the emerging interest shown by governments and central banks in introducing alternative currencies. We will also discuss distributed ledger technology and its non-currency applications such as securities settlement, asset provenance, and ‘smart contracts,’ considered by many to be blockchain technology’s ‘killer app.’
Who should attend
This program is highly recommended for any professional who is interested in understanding how technology is likely to disrupt the finance business.
Dates & fees
Dates to be advised
Contact us to be informed of dates as soon as they are available firstname.lastname@example.org
Program fee includes all study materials, books and software that are required for the program as well as daily luncheons.>
Program fee is exempt from VAT for clients located in the Netherlands. For other EU and Non-EU clients, VAT may be due by client and will not be charged by AIF. Fees may be subject to change.
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