Categories
FinTech / RegTech
  • WEBINAR: Fintech in India - Opportunities and Challenges

    Source: Anup Agarwal, Vidhu Shekhar, CFA
    Date Submitted: 10 Dec 2018
    Views: 17
    Downloads: 0
    This webinar qualifies for 1 CE under the guidelines of the CFA Institute Continuing Education Program. 
    We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. 

     
  • How can deep learning improve finance?

    Source: Larry Cao
    Date Submitted: 09 Dec 2018
    Views: 372
    Downloads: 0
    Larry Cao, Director of Industry Research at CFA Institute, talks about the promises and challenges of deep learning, and how artificial intelligence finds application in the investment industry, in an interview for MioTech.
     
  • Can a decentralized custody infrastructure help stabilize the cryptocurrency market?

    Source: Federico cristina, CFA, Marco Cora, CFA, Filippo Fanin, CFA
    Date Submitted: 12 Dec 2018
    Views: 201
    Downloads: 0
    Centralized exchanges constitute a weak point in the cryptoassets ecosystem, as the are vulnerable to hacking and theft. Although more secure, decentralized exchanges have been created, they languish in obscurity. Are they a solution that can bring better security and price stability?
     
  • Impact of mobile money on Sri Lankan financial industry

    Source: Shehan Senanayake
    Date Submitted: 21 Nov 2018
    Views: 32
    Downloads: 0
    In its Banking Quarterly Report for Q2 2018, Frontier Insights focuses on mobile money in Sri Lanka. The report analyses how mobile money will impact the financial industry. Is it a threat to brick-and-mortar banks or will it have a positive effect?
  • Market opportunities in the nascent digital asset paradigm  

    Source: Federico Cristina, CFA, Marco Cora, CFA, Filippo Fanin, CFA
    Date Submitted: 20 Nov 2018
    Views: 51
    Downloads: 0
    While a run-up in value of crypto-assets before the end of the year is unlikely, we present a brief analysis of short- and long-term market opportunities in crypto on which digital asset management protocols should be focusing.
  • FinTech 2018: The Asia Pacific Edition

    Source: Larry Cao, CFA, Various
    Date Submitted: 18 Dec 2018
    Views: 1351
    Downloads: 216
    This report qualifies for 2.5 CE under the guidelines of the CFA Institute Continuing Education Program. 
    We encourage CFA Institute members to login to the CE tracking tool to self-document these credits

    How will FinTech affect the future of financial institutions, careers of financial professionals and other stakeholders? CFA Institute's report covers the business and technology aspects of FinTech in Asia Pacific.
     
  • Digital Asset Management: A Newly Found Need

    Source: Federico Cristina, CFA, Marco Cora, CFA, Filippo Fanin, CFA
    Date Submitted: 08 Nov 2018
    Views: 533
    Downloads: 0
    Given the recent rise of interest in Blockchain technology and cryptocurrencies, it‘s quite clear that there is a growing unspoken need for professional portfolio management services and well-established investment techniques.

    The proliferation of investment opportunities and the increase in the sheer size of each investment in the cryptographic asset space requires the incorporation of concepts such as diversification, asset allocation and other basic and well-tested investment techniques. As the market grows, it’s obvious that there is a compelling need for both: professional portfolio management skills as well as a good understanding of the underlying information technology.
  • Building the technological and regulatory infrastructure of a 21st century international financial centre: Digital ID and KYC utilities for financial inclusion, integrity and competitiveness

    Source: FSDC
    Date Submitted: 05 Nov 2018
    Views: 904
    Downloads: 0
    Customer identification and due diligence are essential tools in maintaining confidence and trust in the financial system. The regulatory requirements that govern them must be balanced against objectives of financial inclusion, overall customer experience, financial competitiveness and economic growth.

    The FSDC outlines a strategy for technological and regulatory infrastructure of digital identification and eKYC that will support Hong Kong’s role as a leading 21st century international financial centre.
  • Fintech: The New DNA of Financial Services

    Source: T Mandy Tham, Pranay Gupta
    Date Submitted: 29 Oct 2018
    Views: 1835
    Downloads: 60
    Excerpts from a book about the merger of finance and technology (fintech), and how they impact each discipline within the financial services industry. An introduction to understanding the various areas of fintech and terminology such as A.I., big data, robo-advisory, blockchain, cryptocurrency, insuretech, cloud computing, crowdfunding and many more. 
  • 2018亚太金融科技概览

    Source: 曹实,CFA
    Date Submitted: 13 Nov 2018
    Views: 466
    Downloads: 19
    引言

    自CFA Institute 关注金融科技以来,如何定义金融科技的问题就一直存在着争议。

    不同的定义反映出人们不同的关注点与诉求。过去的几年中,我们所关注和研究的思路和目标一直在不断的变化。我们对于金融科技的定义也在不断更新。

    早年的经验

    在商业领域,人们总是矢志不渝地探寻尖端领域。正如 2016 年开始关注金融科技的研究一样,我们敲开了一扇令人激动而神秘的大门。

    彼时我们的目标是回答CFA 持证人的疑问:金融科技是否会取代自己?如果答案是肯定的,那么多久会发生?我们采访了许多该领域的从业人员,他们一致认为金融科技给行业带来的影响是:颠覆、颠覆、颠覆。

    我们很快就意识到我们参与的价值所在。当时金融科技还是一个全新的概念,所谓的“意见领袖”大多来自金融科技初创企业。颠覆性的观点反映出他们的使命,也是他们战斗的口号。但其中缺少了在金融科技生态系统中两个重要的利益相关方,即金融机构,以及可能更重要的监管机构。

    随着大家对金融科技生态系统理解的不断加深,我们曾在 2016 年 5 月的一篇文章中指出:“金融科技公司最理想的发展路径是与银行合作。”我们的这一判断包含了两层含义:
    1. 金融机构和技术创新者都具备着对方难以复制的技能,因此,对他们而言,最好的机会是共同合作,双方都关注于自身的强项。
    2. 事实证明,对于大多数金融科技初创企业来说,“企业对消费者”(B2C)模式的成本太高;

    相反,“企业对企业”(B2B)模式则是初创企业唯一的机会。换句话说,初创企业通过提供技术方案与金融机构合作,这种模式更为现实。

    在随后的两年中,我们的观点被多次证明是正确的,我们与该领域的从业者交流时对此感受颇深。对我们而言,最有趣的案例就是微软同华夏基金的合作(中国顶级公募基金之一)。2017 年夏,二者宣布在投资和投资顾问方面展开深入合作,这些领域都非常接近我们此前论述的核心。随后,几乎所有中国大型银行均与主要合作伙伴签订了类似协议。2018 年1 月,沃伦·巴菲特的伯克希尔哈撒韦公司宣布与亚马逊和摩根大通合作,共同进军在线医疗保险领域。

    可期的未来

    之前,我们对金融科技的定义是金融领域的新技术,主要是指区块链、智能投顾、移动支付与P2P 贷款

    目前,这一定义已经远远不能涵盖我们所讨论的内容。因为我们发现,上述新业务并非对传统业务构成威胁,而是对传统业务形成了有益的补充。我们怀着开放的心态去拥抱金融科技,这样一来,金融行业及金融机构便可以具备竞争优势。

    具体来看,大约一年前,我们就已经开始着手人工智能、大数据、云计算、区块链方面的研究,探究其对金融服务所产生的潜在影响,特别是在亚太地区的主要金融市场中贷款、支付、智能投顾以及保险这四大领域所受的影响如何。因而,目前我们对“金融科技”的定义粒度更细,包括“金融”与“科技”的多个方面。

    在过去的一年中,我们采访了很多服务于金融机构、技术创新公司、监管机构、投资者以及研究机构的专家,这本书就是我们合作努力的结果。全书的主要结论如下(剧透警报!):

    人工智能、大数据、云计算的发展使得拥有优势技术资源的团队领先没有技术资源的团队;
    区块链或将对金融机构未来的运营方式产生深远影响。但鉴于该技术尚未成熟,在形成可持续商业模式、获得监管部门批准方面仍存在许多障碍需要克服;

    中国在亚太地区金融科技领域的发展中处于领先的位置,在人工智能、大数据、云计算区块链领域均有涉及。而在其他亚太市场,金融科技目前仍仅局限于另类贷款、移动支付、智能投顾等;

    前瞻

    就在本书付梓之前,我们收到了2018 年普华永道独角兽CEO 调查的结果。调查表明,54% 的受访高管相信,合作是成功的关键;而只有23% 的高管认为内部开发是更好的方式。

    此外,近期普华永道发布的另一份报告中,研究人员发现,与此前广受欢迎的B2C 模式相比,当下采取B2B 模式的企业将成为主流。

    这听起来是不是有点耳熟?很高兴,我们正在正确的道路上前进。再次鸣谢所有对本卷顺利出刊做出贡献的人们。

    1曹实,CFA.FinTech以及金融业的未来.信报,2015. http://startupbeat. hkej.com/?p=29681
    2 FinTech 2017: China, Asia, and Beyond, CFA Institute, May 2017, p.3.
    3 https://www.pwccn.com/en/research-and-insights/pwc-unicorn-ceo-survey-2018.html
    4 https://www.pwccn.com/en/services/consulting/publications/new-trends-technology-enabling-to-b-services-whitepaper.html
  • VIDEO: The Future of Finance

    Source: Maria Wilton, CFA
    Date Submitted: 01 Nov 2018
    Views: 1259
    Downloads: 0
    Disruptive innovation refers to innovation that creates new markets and value networks that displace competitors and existing players. Given the disruptive innovation happening globally across markets, the financial sector is not spared. What does the future hold?
    A presentation by Maria Wilton, CFA, at the Philippines Investment Conference 2018. (52 min.)

    This article qualifies for 0.75 CE under the guidelines of the CFA Institute Continuing Education Program. 
    We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. 

  • CFAM-FDU - Initial coin offerings and platform building

    Source: Jiasun Li, William Mann
    Date Submitted: 07 Oct 2018
    Views: 834
    Downloads: 42
    As initial coin offerings (ICOs) explode in popularity in the startup world, they are surrounded by controversy. The response of market practitioners and regulators has varied, from enthusiasm to outright bans. Li and Mann offer an economic analysis of the role of ICOs in development of platforms. They analyze economic efficiency to pinpoint when token sales create value. Their findings have implications for regulators and practitioners in the booming ICO market.
  • Predictability, innovation, and competition in Bitcoin's mining market

    Source: Robert Parham, Einar Kjenstad
    Date Submitted: 05 Oct 2018
    Views: 57
    Downloads: 6
    Bitcoin mining has developed into an industry in its own right. But specialized equipment manufacturers (ASICs) now control the market, deriving most of the profits from it. Parham and Kjenstad analyse the economics of the Bitcoin mining market, showing that their model is able to predict energy consumption by miners and R&D expenditure by manufacturers. They then use the economics of this market to test whether more competitive industries invest more in R&D.
  • Venture Capital Certification in Product Market: Evidence from P2P lending platforms

    Source: Emma Li, Li Liao, Zhengwei Wang, Hongyu Xiang
    Date Submitted: 03 Oct 2018
    Views: 56
    Downloads: 3
    Venture capital (VC) helps startups succeed, not only by providing financing, but also by "certifying" their value to entrepreneurs and public investors. VC also helps firms in other ways, for example by helping them access new potential customers. Does this effect extend to the startup's products and potential customers? This paper analyses 154 startup companies in the peer-to-peer lending space in China, to measure how significant the effect of VC investment is on the companies' trading volume and number of lenders.
  • Individual Consumption Response to Expanding Credit Access: Evidence from online cash loan platform  

    Source: Emma Li, Li Liao, Zhengwei Wang, Hongyu Xiang
    Date Submitted: 03 Oct 2018
    Views: 35
    Downloads: 3
    How does expanding access to credit affect individual consumption? Authors use data from China's e-commerce platforms Taobao and Tmall to track the effect of increased credit limits on the borrowers' level of consumption. They find that expanding credit access increases the borrowers' propensity to spend, in particular on gaming-related products.
     
  • Tokenomics: Dynamic Adoption and Valuation

    Source: Lin William Cong, Ye Li, Neng Wang
    Date Submitted: 07 Nov 2018
    Views: 2547
    Downloads: 35
    We provide a dynamic asset-pricing model of cryptocurrencies/tokens on platforms and highlight their roles on endogenous user adoption. Tokens facilitate transactions among decentralized users and allows them to capitalize future growth of promising platforms. Tokens thus can accelerate adoption, reduce user-base volatility, and improve welfare. Token price increases non-linearly in platform productivity, users’ heterogeneous transaction needs, and endogenous network size. The growth of user base starts slow, becomes explosive and volatile, and eventually tapers off. Our model can be extended to discuss platform token supply, cryptocurrency competition, and pricing assets under network externality.
  • VIDEO: The Asian Battle Between Alibaba, Tencent, Amazon & Grab: Turning Rideshares into Bankshares

    Source: Dr. Paul Schulte
    Date Submitted: 01 Nov 2018
    Views: 1423
    Downloads: 0
    This article qualifies for 0.75 CE under the guidelines of the CFA Institute Continuing Education Program. 
    We encourage CFA Institute members to login to the CE tracking tool to self-document these credits. 

    The financial system is morphing as smart entrepreneurs find a back door into financial services and offer services that are easier, better, cheaper, faster and more efficient. Data analytics allows ride share companies to become banks. Retail is becoming a bank.  Payments companies are becoming banks. And now Amazon has entered banking. The Amazon moment for banks has arrived and the banks are only engaging in minor changes at the edges. A great disruption is ahead.
    Dr. Paul Schulte speaks at the Philippine Investment Conference 2018.
     

  •  智能投顾简介与算法层应用

    Source: Eric Chia, CFA, CAIA, FRM
    Date Submitted: 20 Aug 2018
    Views: 253
    Downloads: 17
    The slides:
    - Give a broad introduction of how China's robo-advisors work;
    - Present the case studies of WealthFront and Betterment.
  • PAPER SUMMARY: PORTFOLIO ALLOCATION MODELS’ QUESTIONNAIRE: INFERRING THE QUALITY OF POTENTIAL INVESTMENT PERFORMANCE THROUGH MODELS’ INPUTS ASSESSMENT

    Source: Elena Okhonko
    Date Submitted: 08 Aug 2018
    Views: 2004
    Downloads: 41
    Introduction
    Over the past nine years of low-interest rates and slow economic growth, retail investors have become increasingly sensitive to traditional wealth managers, who charge high fees for their financial advice. They are now turning to a new breed of advisors – robo-advisor: automated portfolio construction software that is fully distributed online. Robo-advisors usually rely on exchange-traded funds (ETFs) to construct clients’ portfolios but can sometimes incorporate more sophisticated asset classes such as smart beta funds, long equity funds, bond funds, long/short hedge funds, mutual funds, and leveraged funds. Since the first robo-advisors were introduced to retail investors, these automated solutions’ assets under management (AUM) have been steadily growing year-on-year. There are now more than 200 of them worldwide (Investopedia, 2018).

    With the advent of simplified coding, math, algorithms processing, and cloud computing, this number is now growing every day, showcasing retail investors’ unabated demand for the value for money robo solutions deliver and robos’ digital service convenience, compared to traditional wealth managers. However, AUM managed by robo-advisors around the world and in Asia has not taken off as much as expected. Both Hong Kong and Singapore robo-advisors have, so far, failed to reach the staggering growth rates projected at the start of 2015 (Collins, 2016) by digital wealth space observers. This is despite governments of both cities recognizing the trend and actively supporting fintech start-ups.
     
    Need for further research
    Few possible explanations according to Okhonko E., 2017 can be the areas of clients’ concerns that robo-advisors must still address: lack of trust and understanding of algorithms, preference for human touch and somebody to call, and uncertainty and lack of transparency of robo investment. The need for further research and information transparency in two related aspects of robo-advisory offering, investment models’ algorithms and investment performance results generated by them, was explicitly highlighted.
    The main issue in addressing this need lies in the fact that most robo-advisory solutions use an extremely scattered variety of investment algorithms and methodologies to construct clients’ portfolios. Nonetheless, few authors attempted to address this need by directly investing with several robo-advisors and then, reporting their cumulative performance. Some of the articles and reports along with their results can be found in the Internet (Lou, 2018), (Value Penguin Inc., 2018), (Scholz, 2017). These “studies” are limited to the available historical performance data, which, for the newly launched robos, have not crossed the financial industry standard of a 5-year horizon, which is required to calculate meaningful Sharpe and Sortino ratios. Besides, the majority of the “studies” only disclose returns data, leaving the readers guessing about the risk that was taken to produce it (YEO, 2017). Additionally, performance track record cannot be used as a criterion to evaluate B2B robo-advisory players, as they do not serve end clients directly.
     
    New methodology and paper scope
    This summary article aims to highlight all the key aspects of the white paper “Portfolio allocation models’ questionnaire: inferring the quality of potential investment performance through models’ inputs assessment”, which was written in order to present a new method that looks at robos’ investment performance without the need to invest in them directly. This method also provides a workaround that allows not to rely on historical returns and risks data, but at the same time, gives rich insights into the potential investment performance. Through analysing and evaluating the different types of portfolio asset allocation models, this paper presents the Portfolio Allocation Models’ Questionnaire that has been designed to distinguish major robo-advisory portfolio construction models and segment them according to the level of complexity and sophistication.
     
    View full report:
    https://store.kaplan.com.hk/kaplan/cart/ProductMixProductSingleServlet.do?actionType=courseDetail&productMixId=416
     
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  • CORDLESS GOVERNANCE WITH CARDS: FINTECH VS REGTECH  

    Source: Dr.G.V.SATYA SEKHAR
    Date Submitted: 21 Jul 2018
    Views: 667
    Downloads: 31
    Digitalization of government transactions is present phenomenon. Every citizen holds dozens of cards for cordless governance, cashless transactions and financial transparency. But we found that issues like hackers, fraudulent online transactions, insufficiency of technological up gradation hampers the fundamental objective of cordless transactions. Judiciary is also questioning the validity for “Aadhar” linking with all the transactions involved in welfare of people.  In this context, this paper aimed to examine the status and challenges in achieving financial transparency through digital India. 
    Digitalization of government transactions is present phenomenon. Every citizen holds dozens of cards for cordless governance, cashless transactions and financial transparency. But we found that issues like hackers, fraudulent online transactions, insufficiency of technological up gradation hampers the fundamental objective of cordless transactions. Judiciary is also questioning the validity for “Aadhar” linking with all the transactions involved in welfare of people.  In this context, this paper aimed to examine the status and challenges in achieving financial transparency through digital India. 
     
  • AI: Leading the way in investing

    Source: Ayman Nuhuman
    Date Submitted: 02 Jul 2018
    Views: 119
    Downloads: 19
    The commentary deals with the future of investing and how artificial intelligence will benefit asset managers.
  • Bitcoin as a safe haven: Is it even worth considering?

    Source: Lee A Smales, Dirk G Baur
    Date Submitted: 29 Jun 2018
    Views: 2262
    Downloads: 157

    Research in cryptofinance has continued to consider whether Bitcoin possesses a safe haven property as traditionally defined by its correlation with other assets during times of market stress. However, this neglects other attributes of assets that are important to investors during periods of crisis. Bitcoin is more volatile, less liquid, and costlier to transact (in terms of time and fees) than other assets (including the traditional safe haven of gold) even in normal market conditions. Until the market matures, it is therefore unlikely to be worth considering Bitcoin as a safe haven.

  • Adapting Career Paths to Evolving Financial Markets

    Source: Joanne Hill
    Date Submitted: 26 Jun 2018
    Views: 118
    Downloads: 8
    Using career of Joanna Hill, Chief Advisor for Research and Strategy at CBOE Vest Financial, as an example, this talk will discuss how changes in investment management and financial markets over the last several decades have impacted careers in these industries.  The talk will highlight some of the skills and career management techniques that have proven useful in developing a successful career path despite the rate of change from technology applied to investing and markets and from financial market volatility.  Examples of from quantitative finance and risk management will be used as illustrations.  The evolution of ETFs will be another example discussed with respect to how this new investment management and trading product has created career opportunities in several different functional areas that did not exist a decade ago.  The role of networking and her experience founding the Women in ETFs organization which now has over a dozen global chapters and almost 4,000 members will be discussed.  She looks forward to questions from the audience. 
  • ETFs as a FinTech Disruptor:  How Indexing and Quantitative Investing Packaged in ETFs Has Impacted Investing and Trading

    Source: Joanne Hill
    Date Submitted: 29 Jul 2018
    Views: 1153
    Downloads: 78
    Exchange-traded funds or ETFs have thrived in the U.S with an asset growth rate of 15% in the last decade and now regularly represent 25% or more of the dollar amount of U.S. exchange trading activity.  At the end of February 2018, assets in exchange traded products (ETPs), consisting of ETFs and exchange- traded notes (ETNs), reached $5 trillion globally according to ETFGI, of which U.S. ETF assets represent about 70% of the total.   This vehicle for packaging investment strategies is unique in that it is utilized by all categories of investors from large pension funds to hedge funds and individual investors. 
    To some investors ETFs are trading tools while to others they are long-term core investment holdings.  It is hard to think of any other financial product that has such a variety of uses and types of clients.    Because ETFs are accessed through exchanges and rely on low fees and transparent strategies, the success of ETFs as both investment and trading vehicles has been disruptive to both the fund management and trading businesses. 
    This talk will look at the history of index and quantitative strategies that apply technology and analytical rules to portfolio construction.  Today, these are primarily being applied through ETFs.  Technology and broad access to investment information and analytics has helped the broader group of investors access strategies that were historically used only by the largest institutional investors.   Technology has also facilitated the arbitrage that makes ETF market-making efficient and helps it serve a strong support for asset growth.  However, exchanges have infrastructure and regulatory policy that is more suited to stock than ETF trading. 
    Asset managers, are in the early stages of applying analytics to customize portfolio construction (robo-advisors).  Multi-asset investment strategies and other innovations are being adapted to the availability of a broad set of investment options made available through ETFs.  Also, smart beta strategies and factor investing are the latest iteration of quantitative investment strategies.  Risk management and option-based strategies are still in very early stages but are also being made available through ETF packaging.
  • Can Technology Undermine Macroprudential Regulation? Evidence from Peer-to-Peer Credit in China

    Source: Haikun Zhu, Fabio Braggion, Alberto Manconi
    Date Submitted: 31 May 2018
    Views: 140
    Downloads: 5
    We study whether and to what extent peer-to-peer (P2P) credit helps circumvent loan-to-value (LTV) caps, a key macroprudential tool to contain household leverage. We exploit the tightening of mortgage LTV caps in a number of cities in China in 2013 as our testing ground, in a difference-in-differences setting, and we base our tests on a novel, hand-collected database covering all lending transactions at RenrenDai, a leading Chinese P2P credit platform. P2P loans increase at the cities affected by the LTV cap tightening relative to the control cities, consistent with borrowers tapping P2P credit to circumvent the regulation. The granularity of our data allows us to separate credit demand from credit supply effects, with a fixed effects strategy. Our results also indicate that P2P lenders do not adjust their pricing and screening to the influx of new borrowers after 2013, despite the fact that their loans ex post have higher delinquency and default rates. Symmetric effects are associated with a loosening of mortgage LTV caps in 2015. Our test provides empirical evidence on the capacity of P2P credit to undermine LTV caps. More broadly, our analysis informs the debate on the challenges posed by the interaction between FinTech and credit regulation.
  • AsianFA: Forecasting Stock Returns with Model Uncertainty and Parameter Instability

    Source: Hongwei Zhang, Qiang He, Ben Jacobsen, Fuwei Jiang
    Date Submitted: 02 Apr 2018
    Views: 122
    Downloads: 7
    Paper for presentation at the 30th Asian Finance Association Annual Meeting to be held at Hitotshubashi Hall, Tokyo, Japan from June 25 - 27, 2018
  • Artificial Intelligence, Machine Learning, and Deep Learning: A Primer

    Source: Larry Cao, CFA
    Date Submitted: 05 Mar 2018
    Views: 1137
    Downloads: 0
    We are witnessing the beginning of the artificial intelligence (AI) era. So what do investment managers need to know about AI, deep learning, and machine learning? Larry Cao, CFA, weighs in.
  • How Data travel through the market?

    Source: Chie Mitsui
    Date Submitted: 23 Feb 2018
    Views: 1357
    Downloads: 41
    This is discussion for role and future of DATA from financial statement. 
    You may imagine that analysts read financial statements prepared by company, evaluate company’s value and compare with peer companies….BUT, in reality, financial statements are used in various ways. There are many quant analysts and passive investors using information as “data”, which is standardized in a database (DB), and they have become the majority of market participants globally. In such case, real time data distribution has important role on the impact on the stock price. Also, use of Artificial Intelligence (AI) in analysis and investment has become more common today. 
    First, financial statements have to be converted into “Data” and then the data can travel through the market. 
    We discussed how financial data are used, but from a different angle, and consider the role of future financial statements and accounting standards. 
  • Sex, drugs, and bitcoin: How much illegal activity is financed through cryptocurrencies?  

    Source: Sean Foley, Jonathan R. Karlsen, Talis J. Putnins
    Date Submitted: 02 Feb 2018
    Views: 400
    Downloads: 0
    Cryptocurrencies have grown rapidly in price, popularity, and mainstream adoption. The total market capitalization of bitcoin alone exceeds $250 billion as at January 2018, with a further $400 billion in over 1,000 other cryptocurrencies. Over 170 “cryptofunds” have emerged, attracting around $2.3 billion in assets under management. What was once a fringe asset is quickly maturing.
     
    The rapid growth in cryptocurrencies and the anonymity that they provide users has created considerable regulatory challenges, including the use of cryptocurrencies in illegal trade (drugs, hacks and thefts, illegal pornography, even murder-for-hire), potential to fund terrorism, launder money, and avoid capital controls. There is little doubt that by providing a digital and anonymous payment mechanism, cryptocurrencies have facilitated the growth of “darknet” marketplaces that trade illegal goods and services.
     
    In a recent research paper, we quantify the amount of illegal activity that involves the largest cryptocurrency, bitcoin. As a starting point, we exploit several recent seizures of bitcoin by law enforcement agencies to construct a sample of known illegal activity. We also identify the bitcoin addresses of major illegal darknet marketplaces. The public nature of the blockchain allows us to work backwards from the law enforcement agency bitcoin seizures and the darknet marketplaces through the network of transactions to identify those bitcoin users that were involved in buying and selling illegal goods and services online. We then apply two econometric methods to the sample of known illegal activity to estimate the full scale of illegal activity.
     
    We find that illegal activity accounts for a substantial proportion of the users and trading activity in bitcoin. For example, approximately one-quarter of all users (25%) and close to one-half of bitcoin transactions (44%) are associated with illegal activity. The estimated 24 million bitcoin market participants that use bitcoin primarily for illegal purposes (as at April 2017) annually conduct around 36 million transactions, with a value of around $72 billion, and collectively hold around $8 billion worth of bitcoin.
     
    To give these numbers some context, the total market for illegal drugs in the US and Europe is estimated to be around $100 billion and €24 billion annually. Such comparisons provide a sense that the scale of the illegal activity involving bitcoin is not only meaningful as a proportion of bitcoin activity, but also in absolute dollar terms. The scale of illegal activity suggests that cryptocurrencies are transforming the way black markets operate by enabling “black market e-commerce”. In effect, cryptocurrencies are transforming the black market much like PayPal and other online payment mechanisms revolutionized the retail industry through online shopping.
     
    In recent years (since 2015), the proportion of bitcoin activity associated with illegal trade has declined. There are two reasons for this trend. The first is an increase in mainstream and speculative interest in bitcoin (growth in the number of legal users), causing the proportion of illegal bitcoin activity to decline, despite the fact that the absolute amount of such activity has continued to increase. The second factor is the emergence of alternative cryptocurrencies that are better at concealing a user’s activity (e.g., Dash, Monero, and ZCash). Despite these factors and numerous darknet marketplace seizures by law enforcement agencies, the amount of illegal activity involving bitcoin remains close to its all-time high.
     
    In shedding light on the dark side of cryptocurrencies, we hope this research will reduce some of the regulatory uncertainty about the negative consequences of cryptocurrencies. Hopefully, more informed policy decisions that assess the costs and benefits will contribute to these technologies reaching their potential. Our paper also helps understand the intrinsic value of bitcoin, highlighting that a significant component of its value as a payment system comes from its use in illegal trade. This has ethical implications for bitcoin as an investment. Third, the techniques developed in this paper can be used in cryptocurrency surveillance in a number of ways, including monitoring trends in illegal activity, its response to regulatory interventions, how its characteristics change through time, and identifying key bitcoin users, such as “hubs” in the illegal trade network.
     
    For more information, download the paper at https://ssrn.com/abstract=3102645.
  • CE - AI / Machine Learning Using in Financial Industry

    Source: Jack Chao, Peter Lin
    Date Submitted: 10 May 2018
    Views: 217
    Downloads: 0
    CE Event - AI / Machine Learning Using in Financial Industry (CFA Society Taiwan/12JAN2018)
    Speakers: 
    Jack Chao (Founder and President of BravoAI Co. Ltd.)
    Peter Lin (Managing Director of Gamma Paradigm Capital)
  • #FHFinTech2018 report: "FinTech in 2018: The Fads, the Fears and the Future"

    Source: Claudia Bate
    Date Submitted: 20 Jan 2018
    Views: 2594
    Downloads: 213
    FleishmanHillard is pleased to launch our 2018 FinTech trends report – FinTech in 2018: The Fads, the Fears and the Future – featuring insight from some of the world’s most influential people in the banking, finance and FinTech community. Thirty experts from brands including Ant Financial, Citi, Ripple, Santander, Western Union, Starling Bank and Visa share their insights on the biggest opportunities for 2018 and lift the lid on their biggest fears for the year ahead.
     
  • CROWDFUNDING MALAYSIA'S SHARING ECONOMY - Alternative Financing for Micro, Small and Medium Enterprises

    Source: Dr Raymond Madden, Chief Executive Officer, Asian Institute of Finance, Kee Gek Choo, General Manager, Strategy, Policy Development and Research, Asian Institute of Finance
    Date Submitted: 27 Nov 2017
    Views: 4419
    Downloads: 90
    FOREWORD


    Although a relatively new phenomenon in Malaysia, crowdfunding has been greeted by the government and market alike as a part of disruptive financial technologies (FinTech) that add impetus to Malaysia’s move towards a 21st century digital economy. With the government’s policy commitment, financial assistance, regulatory supervision and other supportive measures, crowdfunding is expected to accelerate in the near future as a critical source of alternative financing for SMEs to create new employment, enhance social participation and help Malaysia adjust to the fast-shifting dynamics of the global economic and social landscape. In spite of its promising prospects, there are gaps in awareness of what crowdfunding is and the opportunities and risks it presents. There is a shortage of actionable information on: • the role of crowdfunding in the policy, business and financing environment for SMEs; • the level of understanding of crowdfunding among the public and small entrepreneurs; • their interest and willingness to participate in crowdfunded projects/activities; and • the effectiveness of the national ecosystem for crowdfunding. This report addresses these gaps to help realise the full potential of crowdfunding in Malaysia. It is based on a two-phase research study. The first consisted of a quantitative survey of the public and small entrepreneurs within the Klang Valley, and the second involved desk research and consultations with crowdfunding platform operators, national agencies/institutions, sophisticated investors and start-up entrepreneurs. The report describes a vibrant crowdfunding environment emerging in Malaysia following Bank Negara Malaysia’s policy support for alternative financing, and the Securities Commission Malaysia’s introduction of regulatory frameworks for equity crowdfunding (ECF) in 2015 and peer-to-peer crowdfunding (P2P) in 2016. Since crowdfunding continues to evolve rapidly around the world and is still at an early stage in the country, the insights offered by this report are an initial but comprehensive snapshot of the local crowdfunding environment and its future growth potential.
  • Can India get to 25 billion retail digital transactions in 2017–18?

    Source: Mahadevan Balakrishnan
    Date Submitted: 27 Nov 2017
    Views: 173
    Downloads: 0
    The government of India has set a target of 25 billion retail digital transactions for the year 2017–18 and is pushing all agencies to work towards this goal.

    This is an ambitious goal when one considers that India had only 9.6 billion retail digital transactions in the year 2016–17.

    Balakrishnan's paper examines the last 10 years of payment system data to establish trends and identify when India is likely to reach this target of 25 billion retail digital transactions. It also examines where India stands on the Rogers diffusion innovation curve with regard to the adoption of digital payments.

    Although India’s digital payments are growing, historical data and trend line projections suggest that the government of India’s target of 25 billion retail digital transactions in 2017–18 is unlikely to be reached.

    It is, however, conceivable that this might happen by 2019–20. With India still at the early adoption stage in digital payments and yet to reach a tipping point in terms of digital payments adoption, it will take a mighty effort to meet the ambitious target this (or indeed next) year.

    Government, regulators and other stakeholders can, however, adopt specific strategies such as appropriate pricing, reducing taxation, allowing white-label POS operators, supporting innovation and creating a level playing  field,  widening access, tapping the billions of transaction opportunities, standardising message formats and strengthening consumer protection to improve the digital payment infrastructure and speed up adoption to achieve the target of 25 billion transactions before 2019–20.

    While this paper focuses on India, the strategies are applicable to any developing country interested in strengthening digital payments.

    The full paper can be read at https://www.henrystewartpublications.com/jps/sample6
     
  • Machine Learning – A Simple Example for Stock Market Prediction

    Source: HC SHU, Jaccob Thomas
    Date Submitted: 16 Nov 2017
    Views: 516
    Downloads: 23
    http://mympcapital.blogspot.my/2017/11/machine-learning-simple-example-for.html
  • 人工智能风口下的量化投资

    Source: 任瞳,兴业证券研究所,总经理助理、首席定量分析师、定量研究团队负责人
    Date Submitted: 01 Nov 2017
    Views: 469
    Downloads: 10
            在2017年0月18日由CFA中国上海主办的量化金融分会中,来自兴业证券研究所总经理助理、首席定量分析师、定量研究团队负责人任瞳先生在主题为“A股金融工程卖方学术研究漫谈”的圆桌论坛中分享了其对“人工智能时代的大数据投资”的研究。
            任瞳先生首先从人工智能与量化投资的关系、人工智能维度下量化投资的部分成果、人工智能在量化投资领域应用前景几个方面阐述了两者之间的紧密联系。
            随后,任瞳先生重点介绍了其团队针对雪球网在大数据方面进行的研究。根据雪球网的用户大概有三种行为:讨论(用户的发帖行为)、 交易(用户的关注行为)、 调仓(投资组合调整行为) ,总共构建了三个选股因子,分别是关注度因子、价值变动因子和负面情绪因子。其团队根据这三个因子分别构建了一些投资策略(见PPT),证实因子还是非常有效的,包括负面情绪因子如果跟反转因子如果结合起来的话,效应会更强。
            最后,任瞳先生提到了机器学习,其团队是比较早开始相关研究的。首先第一步是做了很多常见算法跟多因子模型的结合,即在常见的机器学习的算法和多因子体系结合的情况。机器学习为量化投资提供了新的工具,初步研究结果显示相比传统方法其更灵活效果更好,应用前景十分广阔,但同时须对过度数据挖掘等问题保持警惕。 
  • AAM-CAMRI-CFA Institute Prize- Profit Sharing: A Contracting Solution to Harness the Wisdom of the Crowd    

    Source: Jiasun Li
    Date Submitted: 29 Aug 2017
    Views: 1058
    Downloads: 0
    Paper Submission for AAM-CAMRI-CFA Institute Prize in Asset Management
     
  • AAM-CAMRI-CFA Institute Prize - The Case of T-Mobile USA, Inc. & AT&T (2010-2014): Financial Stability, Corporate Governance and Failed Business Processes

    Source: Michael C. I. Nwogugu
    Date Submitted: 29 Aug 2017
    Views: 132
    Downloads: 0
    Paper Submission for AAM-CAMRI-CFA Institute Prize in Asset Management
     
  • AAM-CAMRI-CFA Institute Prize - The Case Of Apple, Inc., and Fintech: Managerial Psychology, Corporate Governance and Business Processes

    Source: Michael Nwogugu
    Date Submitted: 29 Aug 2017
    Views: 249
    Downloads: 0
    Paper Submission for AAM-CAMRI-CFA Institute Prize in Asset Management
     
  • Asian Link

    Source: Dr Raymond Madden, FRSA, Neil Smith
    Date Submitted: 20 Aug 2017
    Views: 563
    Downloads: 0
    "Ethical issues in the financial services industry affect everyone, as almost all of society are consumers of its products and services.  Given the vital role that financial institutions play, moral hazards may be more acute and it is therefore unsurprising that the industry should be subject to the highest ethical standards.  Ethical dimensions create an environment based on trust and make economic transactions more predictable for producers and consumers".
  • FinTech and RegTech in a Nutshell, and the Future in a Sandbox

    Source: Douglas W. Arner, Janos Barberis, Ross P. Buckley
    Date Submitted: 02 Aug 2017
    Views: 5177
    Downloads: 138
    The 2008 global financial crisis represented a pivotal moment that separated prior phases of the development of financial technology (FinTech) and regulatory technology (RegTech) from the current paradigm. Today, FinTech has entered a phase of rapid development marked by the proliferation of startups and other new entrants, such as IT and ecommerce firms that have fragmented the financial services market. This new era presents fresh challenges for regulators and highlights why the evolution of FinTech necessitates a parallel development of RegTech. In particular, regulators must develop a robust new framework that promotes innovation and market confidence, aided by the use of regulatory "sandboxes." Certain RegTech developments today are highlighting the path toward another paradigm shift, which will be marked by a reconceptualization of the nature of financial regulation.
  • The Business of Ethics

    Source: Dr Raymond Madden, CEO
    Date Submitted: 28 Jul 2017
    Views: 1588
    Downloads: 0
    "Restoring the trustworthiness of global business will be a long-haul and there are no short-cuts when it comes to trying to embed ethical behaviour in business DNA.  But the dialogue in global board rooms is beginning to change with the importance of corporate culture, behaviours and the causal links to incentives and rewards gradually being recognised.  Our international businesses will always have responsibilities that go way beyond compliance - you cannot regulate for good behaviour.  Sustainable improvements in culture and behaviour in banking and right across the business landscape can only be achieved if individual institutions, owners, investors and the people leading and managing them step up to the plate.  As Dr Madden's thought provoking book makes clear, responsibility and accountability have to move to the top of every Board agenda".  Dame Collete Bowe, Chairman, UK Banking Standards Board.
  • RMBI Newsletter Issue 13 (Financial Crime Risk: Anti-Money Laundering and The Rise of Text Mining in Financial Markets)

    Source: Tsang Chiu Yu, Derek, Wong Ching Ip, Venice, Chiu Hok He, Angus, Li Chin Wa, Chin
    Date Submitted: 26 Jul 2017
    Views: 711
    Downloads: 0
    In the latest issue (Issue 13 – August 2017), it covers the stories of:
     
    Financial Crime Risk : Anti-Money Laundering Practices in Banking
    To understand anti-money laundering, we have to understand what money laundering is. Money Laundering is the process of converting illegal funds into seemingly legitimate assets with the purpose of concealing the ownership or original source of these funds. This makes it difficult for the authorities to trace the origins of the funds. To counter this, the banking sector has established a set of internal regulations and system known as anti-money laundering. These are legal controls taken by financial institutions to investigate suspicious transactions to help prevent money laundering activities within the banking sector.
     
    The Rise of Text Mining in Financial Markets
    The world is awash in data. Financial markets are awash in data. We are generating around 2.5 quintillion (2.5×1018) bytes of information every day, and there is an average of 4,000 brokerage reports a day comprising around 36,000 pages in 53 languages. As market participants try to maximize their competitive edge from the growing mountain of information, the nancial world increasingly feels there is a need to harness the power of big data and it has been shaping the way they acquire, analyze and utilize data. The recent development is the rapid expansion of text mining. Hence, this article will focus on the development of Text Mining technology as well as Text Mining technique.
  • Fintech - Transforming Finance

    Source: Jimmy Greer
    Date Submitted: 20 Jun 2017
    Views: 920
    Downloads: 0

    Financial Technology (FinTech) is here – sweeping through finance and, if some are to be believed, threatening traditional edifices that have stood for centuries.

    This great surge is being fronted by a host of new start-ups taking their lead from the big tech innovators. Their maverick approach is helping to push the FinTech industry into new territory across the financial services landscape, raising billions of dollars and worrying the incumbents.

    So what are the main trends and driving forces shaping FinTech today? Fintech – transforming finance explores the features of this new landscape, highlighting the many ways in which this revolution is taking place.

    For professional accountants, this new terrain will provide many opportunities as it permeates deeper and deeper into the fabric of society. From the promise of blockchain, to the demands of valuation in a digital era, finance more than ever needs an experienced, knowledgeable guide to make the most of the opportunities ahead.

  • Two insightful reports on Fintech and Distributed Ledger Technology (DLT) by Financial Services Development Council (FSDC)

    Source: Financial Services Development Council (FSDC)
    Date Submitted: 13 Jun 2017
    Views: 1938
    Downloads: 0
    Given most of the FinTech innovations, in particular the DLT, are developed for providing services directly to consumers, FinTech has initially been regarded as disruptive to the established financial institutions. However, a more recent development is that increasingly FinTech innovations are developed by, and in collaboration with, the well established incumbents in the financial sector. There are two very insightful reports on FinTech and DLT published by the FSDC in May 2017; which covers extensively the following areas including cybersecurity, payment and securities settlement, digital ID and KYC utility, WealthTech and InsurTech (including data analytics, automation and artificial intelligence), RegTech as well as Distributed Ledger Technology.  

    Attached are the two links to these two reports by FSDC.  

    http://www.fsdc.org.hk/sites/default/files/FSDC%20Paper_FinTech_E.pdf

    http://www.fsdc.org.hk/sites/default/files/FSDC%20Paper_DLT_E.pdf
     
  • Fintech Survey Report PPT 2016

    Source: Alan Lok, CFA
    Date Submitted: 29 Jul 2016
    Views: 1205
    Downloads: 124
    Fintech Survey PPT 2016
  • China’s Money Market Reforms Aim to Stem Risk, Allow Funds to Thrive in Fintech Era

    Source: Alan Lok
    Date Submitted: 20 May 2016
    Views: 755
    Downloads: 12
    This is a blog posted on CFA Institute's website on 13 April 2016.