1. Fintech Chapter 2: Disruption and Disintemediation in Financial Services and Products: Why Now?

2. FinTech: At the Center of Banking, Technology and Entrepreneurship

3. FinTech: Millennials, Technology and Entrepreneurship
Millennial Preferences
Startup Lifestyle
Technology Innovation
FinTech

4. Important Factors Millennials Technology Financing
Attractive startup ecosystem

5. Millennials Howe and Strauss 1992 Those born between 1982 and 2004
Or 1981 to 1997
Or years old in 2015.

6. Millennials Fact 1: Largest, most diverse generation
Fact 2: Shaped by technology.
Fact 3: Value community, family, and creativity
Fact 4: Invested in human capital
Fact 5: More likely to study social science and applied fields
Fact 6: Loans to pay for education
Fact 7: Focus exclusively on studies instead of combining school and work.
Source: 15 Economic Facts About Millennials. The Council of Economic Advisers, October, 2014.

7. Millennials Fact 8: More likely to have health insurance coverage
Fact 9: Effects of starting their careers during a historic downturn
Fact 10: Investments in human capital are likely to have a substantial payoff
Fact 11: Staying with their early-career employers longer
Fact 12: Millennial women have more labor market equality than previous generations
Fact 13: Marry later
Fact 14: Fewer homeowners
Fact 15: College-educated Millennials have moved into urban areas

8. Millennials
Fact 1: Largest, most diverse generation

9. Millennials

10. Millennials

11. Millennials Fact 2: Shaped by technology.
Source: 15 Economic Facts About Millennials. The Council of Economic Advisers, October, 2014.

12. Millennials

13. Millennials Fact 3: Value community, family, and creativity
Fact 4: Invested in human capital
Fact 5: More likely to study social science and applied fields
Fact 6: Loans to pay for education
Fact 7: Focus exclusively on studies instead of combining school and work.
Source: 15 Economic Facts About Millennials. The Council of Economic Advisers, October, 2014.

14. Millennials
Fact 8: More likely to have health insurance coverage

15. Millennials

16. Millennials
Fact 9: Effects of starting their careers during a historic downturn
Fact 10: Investments in human capital are likely to have a substantial payoff
Fact 11: Staying with their early-career employers longer
Fact 12: Millennial women have more labor market equality than previous generations
Fact 13: Marry later
Fact 14: Fewer homeowners
Fact 15: College-educated Millennials have moved into urban areas

17. Millennials Millennials are using money as a social network.
CFA Institute (2014): Millennials Use Money Differently
Millennials are using money as a social network.
Millennials are moving money more places faster.
Millennials are increasingly saving and investing money sooner.
Millennials are banking without a bank.
Millennials are investing in more than just return on investment (ROI).
Millennials are not intimidated by charitable giving.

18. Millennials FINRA (2016): Millennials as Investors
Robos: Millennials 38% vs 4% of >age 55
Crowdfunding awareness: Millennials 58% vs 2.2% > age 55
Are markets fair?: Millennials saying “yes” 42% vs 19%
Fear of being defrauded: Millennials 61% vs 28% > age 55

19. Technology Dramatic increases in processing power
Lower costs, smaller size
Cloud services
Open source software
Collaboration
Artificial Intelligence
Talent
“Pot of Gold”
“Geek Chic”

20. Moore’s Law has held for 50 years, now slowing

21. Growth in Cloud Services

22. Technology Benefits of cloud computing
minimize capital expense and lower operating costs
speed and agility
economies of scale

23. Technology Cloud Computing service models
Infrastructure as a Service (IaaS)
Platform as a Service (PaaS)
Software as a Service(SaaS)

24. Technology
Cloud Computing service models
Public
Private
Hybrid

25. Technology
Collaboration
Open Source software
Collaboration platforms

26. Technology Artificial Intelligence (AI)
the process whereby a machine learns to solve a given problem
have machines act in a “smart” way, using advanced decision making processes to go beyond specific instructions supplied by human operators

27. Technology Machine Learning
AI centers on designing and building machines which can act in an intelligent manner
ML focusses on getting those machines to perform tasks without explicit instructions
ML is a subset of AI

28. Technology ML example Offer index fund choices A,B,C to investors
Investors choose only B and C
Identify characteristics of those investors
Offer index fund choices B,C and D to future investors with these characteristics

29. Technology AI approaches Probabilistic or Bayesian models
Randomized decision trees
Commercial AI research
Baidu, DeepMind, Facebook, Google, Microsoft, OpenAI
Scotiabank: credit card default early warnings

30. Technology Humanistic AI Hathaway caution
Machine discovery: humans set parameters

31. Technology
Emerging applications of new cognitive technologies in capital markets
automation of routine tasks
Smart work flows
Machine learning: application of advanced algorithms to large data sets to identify patterns
Natural language processing: turning speech and text including legal documentation and client-service queries into structured, searchable data
Cognitive agents: computerized interaction with humans on help desks and in internal contact centers

32. Startup Lifestyle Not for everyone But attractive for many Millennials
Undefined roles
Low pay, long hours
High risk
But attractive for many Millennials
Responsibility/empowerment
Flat org structure
Energy/enthusiasm
Founder charisma
Minimal authority restrictions
Equity

33. Collabortion
Open source
Collaboration chat apps