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Editor's selection of posts on financial technology, including artificial intelligence (AI), crypto-assets, distributed ledgers, big data, and relevant regulation.


Overview

Recent developments in financial technology (FinTech) have generated much excitement and some concern. They forced industry practitioners to envision a future where many of their tasks will be simplified or fully automated, upending the way financial advice, investment, and banking services are provided. Will artificial intelligence applications powered by machine learning better manage investments than humans do? Will the distributed ledger (blockchain) technology make global financial transactions instant, seamless, safe, and free? Will regulation keep up with the pace of innovation? How should investment professionals adjust their career paths to benefit from these developments? The Editor's selection of ARX posts sheds light on some of these issues.

Select "Research" in the upper left-hand corner of the page to find more FinTech content in ARX's repository of more than 4,000 posts. 


Sector Overviews

Fintech Overviews

The FinTech Dividend: How Much Money Is FinTech Likely to Mobilize for Sustainable Development?

Does FinTech offer a new way of funding sustainable development?  We find that roughly 3%-13% of funding required for the UN’s Sustainable Development Goals – or around $50 billion to $125 billion – could come from a FinTech dividend.

20 January 2021 | Bryane Michael

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WEBINAR: Digitising for A More Agile Capital Market

Chin Wei Min, Executive Director of Digital Strategy and Innovation at Securities Commission Malaysia, and Justin Ong, CFA, President of CFA Society Malaysia, discuss the digital and innovation agenda for the Malaysian capital market, and the road ahead to foster greater innovation in the industry through the use of technology.

5 November 2020 | CFA Society Malaysia: Chin Wei Min, Justin Ong, CFA | Video: 1 hr 4 min.

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Fintech Decoded: Tracking Investment Activity in Fintech Companies in Q1 2020

The impact of COVID-19 will reverberate across all sectors of the economy, fintech being no exception. In the sector, challenges are expected to surface on multiple fronts, but so are opportunities, as companies look to beat the odds and thrive.

10 July 2020 | Aranca: Ashish Rane, Bharat Ramnani

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Fintech 2020: Technological Innovations in the Financial Services Industry

This report highlights a handful of fintech innovators in Islamic finance from around the globe. It defines the fintech landscape, presents recent trends, and helps understand how fintech can revolutionize the industry and Islamic finance.

19 May 2020 | CFA Society Pakistan

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Digital Technology and Inclusive Growth: Luohan Academy Report 2019 (Executive Summary)

The first report of Luohan Academy — a research outfit founded by Alibaba’s Jack Ma — focuses on the contributions e-commerce has made to China’s growth and on the inclusiveness of e-commerce, mobile payments and digital financial services in China.

29 March 2020 | Luohan Academy

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The Race for Relevance: Technology Opportunities for the Finance Function

Technological advances give finance functions significant opportunities to play valued roles in maximizing organizations' strategic ambitions. Key technologies include: Robotic Process Automation, Analytics, Cloud Computing, Artificial Intelligence and Social.

18 April 2019 | Clive Webb | ACCA Global | 1 CE

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FinTech 2018: The Asia Pacific Edition

FinTech experts in Asia Pacific explore key issues in banking, robo-advice, insurtech and regtech, analyse recent progress in artificial intelligence, big data, cloud computing, and blockchain, and review major developments in key Asia Pacific financial markets: Australia, China, Hong Kong SAR, India, Japan, Singapore, and Thailand.

18 Dec 2018 | Larry Cao, CFA, et al. | CFA Institute

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WEBINAR: Fintech in India: Opportunities and Challenges

As a significant amount of capital is being invested in FinTech startups, this webinar helps investment professionals to understand the landscape in India. It covers the evolution of FinTech in India, new types of emerging businesses, opportunities and challenges of FinTech investing, and assessing potential investment opportunities. 

10 December 2018 | Anup Agarwal, Vidhu ShekharCFA, CIPM | CFA Institute | 1 CE | Webinar: 59 min.

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FinTech and RegTech in a Nutshell, and the Future in a Sandbox

FinTech has entered a phase of rapid development marked by the proliferation of startups 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. Regulators must develop a robust new framework that promotes innovation and market confidence, aided by the use of regulatory "sandboxes."

2 August 2017 | Douglas W. Arner, Janos Barberis, Ross P. Buckley | CFA Institute Research Foundation

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FinTech - Transforming Finance

FinTech start-ups span the spectrum of financial services, from lending and advice to foreign exchange and payments. For professional accountants, helping companies manage the regulatory, tax and financial implications of the FinTech surge offers considerable opportunity as they continue to provide analysis that helps companies understand the value they are creating.

20 June 2017 | Jimmy Greer | ACCA Global

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The Future of FinTech in Hong Kong

By taking proactive steps, Hong Kong could become the leading FinTech centre within the region and one of the leading centres in the world. A less proactive approach could cede business and employment to rival centres elsewhere.

1 May 2017 | Financial Services Development Council

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Artificial Intelligence

Artificial Intelligence

How to Build a Simple ML-Powered Stock Movement Classifier

We harness computing power and machine learning to build a classifier tool to predict whether a stock will go up or down on any given day. It helps investment managers boost their predicting power in their investment management practices.

5 January 2021 | Analytics Vidhya: Zain Farrukh

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WEBINAR: AI Ethics in the Corporate World

As the applications of artificial intelligence proliferate, will there be a radical shift in how people behave and make critical decisions? Will AI strengthen or weaken the role of ethics? A webinar presented by CFA Institute and Tencent Finance Academy (Hong Kong)

3 June 2020 | Alan Lok, CFA, Dorothy Chau, PhD, Laurel Teo, CFA, Justin Ong, CFA | Video: 1 hr 41 min

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The Impact of Artificial Intelligence on Accounting

The range of areas in which artificial intelligence (AI) helps humans continues to expand. How will it affect accounting and investment? Does the current accounting regime need to change? How will the role of accountants evolve?

2 February 2020 | Chie Mitsui

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Artificial Intelligence Pioneers in Investment Management

An examination of the trends and use cases of Artificial Intelligence (AI) and big data technologies in investments identifies three types of applications: using natural language processing, computer vision, and voice recognition to efficiently process text, image, and audio data; using machine learning techniques to improve the effectiveness of investment algorithms; and using AI techniques to process alternative and unstructured data for investment insights.

30 September 2019 | Larry Cao, CFA; Rhodri Preece, CFA; Gary Baker, CFA | CFA Institute | 1.25 CE 

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WEBINAR: Lessons from the Third Wave of Investing: Machine Learning and Alternative Data

The evolution of investing can be divided into three “waves”. The first and second waves of “fundamental discretionary” and “quantitative” investing, respectively, have been followed by an emerging third wave that involves sophisticated computing techniques and leveraging the power of machines

4 October 2018 | Michael Weinberg, CFA; Shreenivas Kunte, CFA, CIPM | CFA Institute | 1 CE | Webinar: 1 hr 3 min.

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Artificial Intelligence and Investment Management

As a result of technological advancements in artificial intelligence (AI) and machine learning, the current model of the investment management business is changing and will one day be rendered obsolete. What does the roadmap look like? What is the best strategy for finance professionals? A three-part series exploring the impact of AI on investment management.

Larry Cao, CFA | CFA Institute 

Part 1: Artificial Intelligence, Machine Learning, and Deep Learning: A Primer 
(13 February 2018)

Part 2: Portfolio Managers, Artificial Intelligence Is Coming for Your Jobs 
(9 March 2018)

Part 3: Artificial Intelligence and the Future of Investment Management 
(29 March 2018)


人工智慧應用於金融產業 (Application of Artificial Intelligence in the Financial Industry)

A seminar on the applications of artificial intelligence and machine learning in the financial industry, conducted by CFA Society Taiwan on 12 January 2018.

12 January 2018 | Jack Chao, Peter Lin | CFA Society Taiwan | Webinar: 1 hr 55 min.

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Deep Learning: A Basic Technical Guide

Deep learning is a method of machine learning that undertakes calculations in a layered fashion starting from high level abstractions (vision, language and other Artificial Intelligence related tasks) to more and more specific features. Deep learning algorithms attempt to model high-level abstractions of the data using architectures composed of multiple non-linear transformations. 

23 June 2016 | Syed Danish Ali

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Key Tools of Big Data for Transformation

Successful utilization of big data has to cope with four main challenges: volume, variety, velocity and veracity. What tools are available to deal with these challenges? How can machine learning be applied to data to arrive at actionable insights?

23 June 2016 | Syed Danish Ali

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Distributed Ledger Technology

Blockchain

Why Bitcoin and Digital Assets are Bullish (And Not a Bubble!)

Digital assets saw incredible gains towards the end of 2020 and in early 2021. Although the price will likely see a natural retracement, we look at the macro, the technicals, and the maturity of the assets, and see incredible synergistic forces.

15 February 2021 | Thomas A Kuhn, CFA

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How to Create a Digital Asset Portfolio: Ideas for investors in a new asset class

Digital assets are an exciting new asset class without consensus on how they should be treated.  We discuss various assets available to investors and consider how portfolios may be constructed in sound ways.

22 January 2021 | Thomas Kuhn, CFA

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How to Invest in Bitcoin: A look at Bitcoin's investment profile for institutional investment

At various times Bitcoin has been seen as a technology asset, a store of value, a hedging instrument and for pure speculation. We take a brief look at these use-cases for institutional investors.

22 January 2021 | Thomas Kuhn, CFA

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WEBINAR: The Rise of Decentralized Finance: Disruption or Opportunity?

Decentralized finance (DeFi) – financial products and services based on the blockchain technology – has seen a surge of interest and new developments in 2020. New applications in areas such as lending, insurance, derivatives, and exchanges, expand our understanding of what services DeFi can support. Experts from BCG Platinion and Crypto.com discuss trends, challenges, and opportunities in decentralized finance.

8 December 2020 | CFA Institute, BCG Platinion, Crypto.com | Video: 1 hr 14 min.

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WEBINAR: The Future of Blockchain - Blockchain Pushes Information Economics to the Next Stage, Trust Economics

Prof. Eric Maskin of Harvard University and Chen Long, Luohan Academy Executive Director, discuss the operation and mechanism design of blockchain technology, information asymmetry, signaling and other economic issues.

25 October 2020 | Luohan Academy: Ming Qiu, Ruobing Han | Video: 1 hr 3 min.

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WEBINAR: Understanding Cryptocurrency and the Future of Money

Aaron Tang, Country Manager of Luno Malaysia and Faridq Ridzuan, CFA, discuss the evolution of money and its value, cryptocurrency as an alternative asset class, and trading with cryptocurrency. 

11 October 2020 | CFA Society Malaysia | Video: 1 hr 5 min.

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The Sudden Rise of Decentralized Finance: Opportunities and Risks for Financial Services

Although decentralized finance has the potential to disrupt traditional finance, leaders in incumbent financial services also have the opportunity to participate in it and shape its impact on their businesses.

9 September 2020 | BCG Platinion: Igor Mikhaelev, Kaj Burchardi, Paul-Emmanuel Tasiaux. Crypto.com: Kendrick Lau, Erik Lie

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Predictability of ICO Success and Returns

The empirical study of 432 initial coin offerings identifies factors - such as investor sentiment, time horizon and correlation with other assets - that can predict an ICO’s success and its returns.

19 November 2019 | Tobias Dean, D Dulani Jayasuriya, Alastair Marsden

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Capital Flight: Evidence from Bitcoin Blockchain

Using Bitcoin blockchain data and known Bitcoin exchange addresses, the paper identifies trades that appear to circumvent Chinese capital controls. These trades represent a third of Chinese crypto exchange volume and are not arbitrage trades.

16 November 2019 | Maggie Hu, Adrian Lee, Talis Putnins

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Diversifier, Hedge & Safe Haven Properties of Cryptocurrencies: The Case Against Asian Fiat Currencies

The study examines the hedge and safe haven properties of cryptocurrencies against fiat currencies. The hedging property of Bitcoin is limited but reasonably strong for Stellar, Monero and Ripple. Safe haven is a common property among tested cryptocurrencies. Major cryptocurrencies are potential gateways for a capital flight when Asian foreign exchange markets are under extreme distress.

3 October 2019 | Ruzita Abdul-Rahim, Ling Pick Soon

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Tokenomics: Dynamic Adoption and Valuation

The paper develops a dynamic asset-pricing model of cryptocurrencies/tokens on platforms and highlights their roles on endogenous user adoption. The model can be extended to discuss platform token supply, cryptocurrency competition, and pricing assets under network externality.

7 November 2018 | Lin William Cong, Ye Li, Neng Wang

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See also: Practitioner's Brief: A Digital Currency Valuation Framework is Born by Rick Blake.


Predictability, Innovation, and Competition in the Bitcoin Mining Market

Bitcoin mining has developed into an industry in its own right. But specialized equipment manufacturers now control the market, deriving most of the profits from it. This paper analyses the economics of the Bitcoin mining market.

5 October 2018 | Robert Parham, Einar Kjenstad

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Cryptocurrency and Blockchain Technology: The Road Ahead

Blockchain can help lessen wealth and income inequality via digital asset sharing. Everyone including the poorest wherever they are in the world can register ownership of assets such as livestock in a country or outside of it using digital means with just a smartphone. This enables even the poorest to participate in income generating assets and undertake peer-to-peer transactions at a fraction of the cost if it were to be done via existing methods. 

17 April 2018 |  Apr 2018 Chan Fook Leong, CFA, Darren Chua, CFA | CFA Society Singapore

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Divided We Fall, Distributed We Stand: The Professional Accountant's Guide to Distributed Ledgers and Blockchain.

This report introduces and explores the concepts of distributed ledgers and blockchain, examining their commercial and economic potential, and how this relates to different aspects of professional accountancy.

20 June 2017 | Narayanan Vaidyanathan | ACCA Global

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Hong Kong: Building Trust Using Distributed Ledger Technology

Hong Kong with its large financial services sector has much to gain and also much to lose from distributed ledger technology. The territory’s exploration of blockchain needs to catch up with that of Singapore, Mainland China and other jurisdictions.

13 June 2017 | Financial Services Development Council, Hong Kong SAR

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Data Analytics

Data Analytics

The Firm as a Data-Generating Mechanism

Big data is a strategically important resource. It is more likely to be a source of competitive advantage if it is generated in-house. Firms will be larger and more diversified because data analysis benefits from economies of scale.

5 November 2020 | Mark A DeWeaver

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Eye in the Sky: Private Satellites and Government Macro Data

Relying on government announcements for macro information creates a potential conflict of interest and macro uncertainty. Many private entities have started using alternative data strategies to predict macro numbers.

22 October 2020 | Abhiroop Mukherjee, George Panayotov, Janghoon Shon

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Tagging of Non-Financial Information in XBRL: A new stage of digital reporting?

Japanese regulatory corporate disclosure system EDINET has started to tag non-financial information in XBRL, including the names of board members, compensation, audit fee, cross-shareholding, etc. How will this change company analysis?

18 June 2019 | Chie Mitsui

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WEBINAR: Algorithmic Trading: An Introduction to the Nuts and Bolts

Algorithmic trading encompasses a wide variety of trading methods, strategies, and time horizons. Portfolio manager Parijat Garg, CFA, provides a general introduction to algorithmic trading, gives some examples of what strategies look like, and discusses some of the operational realities of algorithmic trading.

10 December 2018 | Parijat Garg CFA; Shreenivas Kunte CFA, CIPM | CFA Institute | 1 CE | Webinar: 1 hr 3 min.

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Imputation of Missing Values in the Fundamental Data: Unleashing MICE framework

Revolutionary developments in the field of big data analytics and machine learning algorithms have transformed the business strategies of various industries. This study looks at the problems faced from missing values and errors in firms’ datasets.

5 February 2018 | Dr. Manish Kumar, Balasubramaniam Meghanadh, Lagesh Aravalath, Bhupesh Joshi, Raghunathan Sathiamoorthy

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eXtensible Business Reporting Language: A Guide for Investors

The eXtensible Business Reporting Language (XBRL) provides a standardized, interactive, computer-based framework for financial reporting and offers clear advantages to filers, investors, and regulators. Its adoption for financial reporting holds great promise as a source of efficiency, transparency, and comparability in the delivery of financial information.

15 April 2009 | CFA Institute Centre for Financial Market Integrity

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Regulation

Regulation

Data Regulation Implications for Robo-Advisory: A Framework for Protecting Investors and Their Data in an AI-Driven World

This paper highlights key focus points for regulators as they approach the growing segment of robo-advisors (or AI-driven investment algorithms). This includes privacy and protection of investor data, algorithm transparency, and model validation.

4 September 2019 | Alexander Helter, CFA, FRM, CAIA

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Building the Technological and Regulatory Infrastructure of a 21st Century International Financial Centre: Digital ID and KYC Utilities for Financial Inclusion, Integrity and Competitiveness

This paper presents a strategy aimed at putting in place the necessary technological (fintech) and regulatory (industry regulation) infrastructure for digital identification, to support Hong Kong’s role as a leading international financial centre.

5 November 2018 | Financial Services Development Council, Hong Kong SAR

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FinTech in the Modern Philippines: A Financial Regulation Adequacy Analysis

Cyber-threats and data privacy issues are the major concerns in the rapidly developing FinTech landscape. They demand a regulatory framework from the government's financial arms to mitigate risks and to promote innovation. This policy paper presents a comparison between the domestic regulations in the Philippines and the FinTech policies of other countries.

13 October 2017 | Abigael Espejo

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About the Author(s)

ARX Editorial Team

Director: Scott Lee
Content manager, Editor: Piotr Zembrowski, CFA
Coordinator: Natalie Yiu