LEARNING OBJECTIVES
1 Define what FinTech is and its importance
Session 1
2 Explain the FinTech journey
FINTECH OVERVIEW
3 Define: FinTech and TechFin
Lecturer: Giang Vu
4 Explore the core technologies and challenges in FinTech
5 Introduce about group final project
Group forming + Introduction
1st thing: GROUP FORMING Please get into groups
Around 10 members per group is preferred
Let’s get to know each other When you’re done, please prepare a short presentation:
– Group name
– Team leader
– Whatever you feel comfortably sharing. We’ll listen
Show me your money Apps
How many money/ money-related apps on your cell phones?
What is Financial Technology
When was the last time you came to a bank?
When was the last time you used a money app? (FinTech)?
WHAT DO YOU THINK FINTECH STANDS FOR ?
What is FinTech? Understanding the Core
FinTech, short for Financial Technology, represents more than just an
FinTech: The Financial
emerging industry, it's a revolution in financial infrastructure. FinTech is
Revolution Transforming a dynamic industry comprising companies using technology to make
financial systems and service delivery more efficient.
Our World
The core difference lies in FinTech's focus on "unbundling" financial
The convergence of finance and technology has created an services. Rather than one bank providing everything from savings to
irreversible paradigm shift in how the global economy insurance, FinTech companies select specific links in the value chain
operates. FinTech revolutionized the core essence, evolution, and optimize them to perfection using technology.
and transformative impact on traditional banking systems
worldwide.
What is FinTech? Understanding the Core
Now imagine when you make a purchase on Shopee, what are The Three Pillars of FinTech
the involved parties?
– buyers/ customers
INNOVATION FINANCE TECHNOLOGY
– credit card agency
The primary driver, not just new The subject of transformation. Core The execution tool. Technologies
– customer bank technology, but new thinking about financial principles like risk like Blockchain, AI, Big Data, and
– credit cards’ bank - handling authorization and settlement problem-solving. Using behavioral management, capital flow, liquidity, Cloud Computing serve as levers to
data instead of credit history to assess and asset pricing remain constant, realize innovative ideas at scale with
– merchant’s bank – the bank of the seller on Shopee
lending capability represents a model
but their execution methods are low marginal costs.
– merchant
innovation enabled by technology.
being restructured.
The main objective of FinTech
The ultimate goal of FinTech, as reflected in the development of
companies like TransferWise or Lending Club, is to provide
financial services previously exclusive to banks but at a lower An overview of the
cost, faster, and with greater transparency. This transparency
comes from eliminating disintermediaries and hidden fees,
FinTech History
empowering end users with greater control.
The Strategic Implications
Banking's "E-Book Moment"
The Critical Threshold
Warren Mead introduced the "E-Book Moment" concept in The FinTech
When user experience on FinTech apps vastly exceeds waiting in
Book as a powerful metaphor for banking's current state. Just as
line at bank counters, customers shift behavior en masse. This
Amazon's Kindle revolutionized publishing by creating an ecosystem
places traditional banks in a dilemma: either "destroy" their old
connecting readers with vast libraries instantly, smartphones and financial
model to transform, or face replacement and become hidden
apps are doing the same for banking.
"infrastructure" behind the scenes.
For decades, banks relied on physical branch networks as an unassailable
competitive advantage. However, the emergence of smartphones and
seamless financial applications is playing the same role as the Kindle. This
is the moment when user acceptance of technology-driven financial
solutions reaches critical mass.
Why FinTech Emerged: The Perfect Storm Historical Milestones: The FinTech Journey
1998 - PayPal 1
Marked the breakthrough in electronic payments, proving
money could transfer via email without complex banking
procedures, paving the way for global e-commerce. 2 2005 - Zopa
Crisis of Trust Generational Shift Mobile Revolution
First peer-to-peer lending platform launched in UK,
The 2008 financial crisis exposed Digital natives view banking as a Smartphone proliferation transformed breaking banks' credit intermediation model by directly
2007 - M-Pesa 3
critical weaknesses in traditional smartphone app, not a marble- devices into pocket bank branches. connecting lenders and borrowers.
Launched in Kenya (is located in East Africa), revolutionized
banking: greed, lack of transparency, columned building. The Millennial This enabled emerging markets to
financial inclusion by enabling money transfers via SMS on
and systemic risk. The erosion of Disruption Index revealed 73% of "leapfrog" traditional banking 4 2008 - Bitcoin
basic phones, proving FinTech's power in developing markets.
public trust created a massive "trust young people are more excited about infrastructure, jumping straight to Satoshi Nakamoto published the peer-to-peer
gap" that FinTech filled. financial services from Google or mobile payments. cryptocurrency whitepaper, beginning the Blockchain era
2014 - Lending Club IPO 5
Apple than their bank. and promising a decentralized financial (DeFi) future.
Successful NYSE listing marked FinTech's maturation,
transitioning from small startups to financial institutions
recognized by capital markets.
Which ones are different from others?
FinTech vs.
TechFin
FinTech: Financial Technology
Definition & Characteristics
Typically startups or traditional financial institutions applying technology to improve,
FinTech vs TechFin: optimize, or transform existing financial service processes. They start with financial
products and use technology to make them better, cheaper and faster.
The Battle of Business Models Strategy
Focus on "unbundling" banking services. They don't try to do everything like
A common misconception equates all technology companies banks. Instead, they attack the most profitable segments or areas where banks
perform poorly, such as international transfers or small consumer loans.
doing finance as FinTech. However, distinguishing between
FinTech and TechFin is crucial for understanding market Examples
• Lending Club (optimizing lending processes)
players and competitive advantages.
• Wise/TransferWise (optimizing money transfers)
• MoMo (optimizing mobile payments)
• Revolut (digital banking)
TechFin: Technology in Finance
The Global FinTech Ecosystem
Tech Giants Enter Finance
FinTech doesn't exist in a vacuum. It's part of a complex ecosystem involving multiple stakeholders, each playing crucial roles in
Companies like Google, Apple,
driving or restraining innovation.
Facebook, Amazon (GAFA in US)
The Data Advantage
or Alibaba, Tencent (BAT in China) Banks
TechFin owns "upstream data"— Startups
entering financial services. They
behavioral, preference, and Awakening giants with capital,
start as technology companies The disruptors providing
lifestyle data, while banks only customer data, licenses, and trust, but
with massive user bases and rich breakthrough solutions, flexible and
possess "downstream data", constrained by legacy systems and
behavioral data. accepting high risks for rapid growth.
financial transaction data. Amazon risk-averse culture.
knows you're buying a house
Strategic Approach (through furniture search history) Regulators
Investors
No need to become a bank to provide before you apply for a mortgage. Playing referee, balancing innovation
financial services. They use finance to Including VCs, angel investors, and
complete user experience. Apple Pay
encouragement with consumer
corporate venture capital, providing
doesn't hold your money; it just makes protection and financial system
fuel for the ecosystem.
spending through Apple devices easier. stability.
COMPETITION or COLLABORATION?
Global FinTech Hubs From Confrontation to Partnership
London, UK Silicon Valley, USA Asia Rising Initially fierce competition, banks viewed FinTech as threats to
eliminate. However, the current trend is collaboration. Banks
Considered the world's FinTech capital Center of technology and venture Singapore and Hong Kong emerging as
realize they cannot innovate fast enough alone. FinTech
thanks to strong government support capital, producing the most gateways to dynamic Asian markets.
recognizes they need banks' scale, capital, and licenses to grow.
(Sandbox regulatory framework), breakthrough business models with China represents a special case with
Modern thinking embraces "Collaboration rather than
longstanding financial center status, and access to massive funding and talent. TechFin dominance through Alibaba and
Competition." Partnership forms include banks investing in
proximity to European markets. Tencent.
FinTech, acquiring FinTech companies, or strategic partnerships
to leverage FinTech technology.
The Utility Risk: Banks' Nightmare
This represents banks' greatest fear. Without innovation, banks risk being
Unbundling and Re-bundling
pushed to the back-end, serving only as "plumbing", processing
transactions, ensuring compliance, and holding capital. Meanwhile,
FinTech and TechFin companies control the front-end where direct
Re-bundling Future
customer relationships occur.
Unbundling Phase
Large FinTech platforms or Super
Whoever controls the user interface controls the customer and the Traditional Banking
FinTech "tears apart" bank services. Apps begin offering complete
highest profit margins. This fundamental shift threatens to reduce banks One bank provides everything: Customers use Wise for transfers, financial services on one platform
from customer-facing institutions to invisible infrastructure providers. savings, loans, investments, Lending Club for loans, Wealthfront again, but with superior experience
insurance, a complete financial for investments, specialized to traditional banks.
supermarket under one roof. solutions for each need.
Core Technologies: API
Application Programming Interface
Think of APIs as digital "sockets" and "plugs", bridges allowing different
software systems to communicate and exchange data securely.
Core technologies &
Role in FinTech
challenges of Fintech APIs are the heart of Open Banking. They allow personal finance
management apps to access your bank account (with permission) to
aggregate balances and analyze spending without requiring separate
logins to each bank app.
Key Technologies Powering FinTech Challenges Facing FinTech
Regulatory Uncertainty Cybersecurity Threats
Artificial Intelligence Big Data Navigating complex, evolving regulations across As digital gatekeepers of financial data, FinTech
jurisdictions creates compliance burdens and uncertainty companies face constant threats from hackers, requiring
Machine learning algorithms analyze patterns, predict Massive datasets from transactions, social media, and IoT
for scaling operations globally. massive security investments.
behavior, detect fraud, and personalize financial advice at devices provide insights into customer behavior, enabling
scale impossible for human analysts. better risk assessment and targeted services.
Trust Building Profitability Pressure
Despite innovation, many consumers still trust established Many FinTech companies prioritize growth over profits,
banks more than startups, particularly for large facing pressure to demonstrate sustainable business
Cloud Computing Mobile Technology transactions or savings. models to investors.
Scalable infrastructure allows FinTech startups to launch Smartphones serve as the primary interface for financial
without massive capital investment in servers, enabling rapid services, enabling banking anywhere, anytime, and reaching
growth and global reach. previously unbanked populations.
Group Project Guidelines
Group Final Project Form Teams (Today) Define Problem (Sessions 2) Build Solution (Session 3)
Create groups of 8-10 students. Begin Finalize idea or company. Analyze Develop solution and describe Minimum
brainstorming ideas or identify target market pain points and identify target Viable Product (MVP). Ensure solution
GUIDELINES companies for analysis. Balance team
strengths: technology, finance, and
customer segments. What problem are
you solving?
addresses identified pain points
effectively.
marketing expertise.
Business Model (Session 4) Financial Analysis (Sessions 8) Pitch (Sessions 9)
Create Business Model Canvas and Finalize idea or company. Analyze Present to class as strategic consultants.
Revenue Model. How will you make market pain points and identify target Demonstrate viability and competitive
money? What's your path to profitability? customer segments. What problem are advantage.
you solving?
The FinTech Revolution:
Key Takeaways
Paradigm Shift
FinTech represents an irreversible transformation in financial infrastructure,
not just technological adoption by banks.
Customer-Centric
Success comes from solving real pain points with superior user experience,
transparency, and accessibility.
Collaboration Over Competition
The future belongs to partnerships between traditional institutions and
innovative startups, combining strengths.
Global Impact
FinTech's greatest contribution may be financial inclusion, bringing billions
into the formal financial system. THANK YOU