The impact of technology on finance (FinTech) is one of the hottest topics in business, law, and regulation, with academics and practitioners considering a host of issues that include cryptocurrencies, robo-advice, initial coin offerings, and algorithmic analyses of big data. Yet very little analysis has been devoted to the world’s largest financial industry: asset management.
The Rise of Concentrations of Digital Technology: Financial Operating Systems
In a new paper, we identify and explore a topic of major significance in FinTech: the rise of financial operating systems (FOS) and their evolution in the global asset management industry. These digital technology ecosystems … Read more
In a new paper, we analyze the major disconnect between the theory of corporate governance, its legal expression, and the reality of corporate ownership structures, based on an “indirect holding system” (IHS), which has evolved from complex existing technological limitations. We argue that distributed ledger technology (DLT) offers the potential to redesign the company registry and securities clearing and settlement systems for public companies and realign them with theory. While doing so, we also seek to transcend the hype around DLT. While carefully considering the current financial market’s path dependence, we assess the actual and substantial potential of DLT … Read more
Fifty years ago, banking was a relationship business. Bank managers collected information about depositors and borrowers from all sorts of sources, formal and informal. In recent decades, credit decisions have become far more data-driven, with companies like Amazon and the Alibaba-affiliate, Ant Financial, taking the lead in the U.S. and China. This paradigm shift in finance, however, is only just beginning. We are entering a period in which the leaders in finance will have to focus intensely on data and its analysis. Banks and traditional financial institutions around the world are in the process of building ever-more sophisticated IT systems … Read more
In a new research paper, we consider the impact of a group of new entrants into financial services and regulation. These new entrants include technology, e-commerce, social media, and telecommunications companies with often large pre-existing bases of non-financial services customers. These firms (loosely termed “TechFins”) may be characterized by their capacity to leverage data gathered in their primary businesses into financial services by the use of Big Data analytics, machine learning, and artificial intelligence. Initially they often act as conduits linking their customers to regulated financial firms.
China’s Alibaba with its subsidiary Ant Financial is the frontrunner, and its founder, … Read more