Disrupting Finance with Digital Technologies
The financial sector has recently undergone many advances, which has had an immense influence on both consumers and regulations. To cope with consistently low-interest rates, low credit growth, and ever-growing competition in retail from FinTechs, banks, especially traditional ones, have to adjust their business models in order to guarantee their profitability. By the arrival of new algorithms, big data, Blockchain, peer-to-peer lending, and crowdsourcing, banks are doomed to confront rivalry from new types of intermediaries. Although some earlier competition problems in financial markets, e.g., high switching costs or high transaction costs, are resolved by these new technologies, these new digital technologies and business models affect the value proposition of existing goods and services. The core business of traditional banks, such as payment and credit services, is impinged by their digital competitors. The main reason why FinTechs have the edge over their traditional rivals is the fact that they utilize more modern technology, run a leaner business, and concentrate on business sectors with higher yields.
On the other hand, Fintechs suffer from the absence of a reputable brand and a customer base, inadequate access to capital markets, and the last but not the least lack of knowledge about customers in general. Moreover, these days, the BigTech companies, namely Apple and Google and retail giants like Amazon and Tesco have started to provide financial services. BigTechs collect their clients’ financial data by the use of AI and state-of-the-art digital technologies. Furthermore, to guarantee a fair playing field among competitors and to maintain an economy founded on free-flow of information third parties are given access to bank account data. Since the dawn of financial markets, financial stability has been persistently jeopardized by innovations. Insufficient regulation also breeds the tension between competition and financial stability.
The summer school will try to investigate the level at which the stability is harmed by FinTechs and BigTechs. In addition, the program will explore whether FinTechs and BigTechs require a more strict and different type of regulatory supervision. Furthermore, the summer school will strive to probe into the possibility of the fact that better regulations can resolve the dilemma of co-existence of competition and stability, and whether we can strike a balance between these two factors. Finally, the program aims to compare and contrast the risks posed by FinTechs or BigTechs and integral risks that already exist in traditional banking models.
The summer school will provide different courses, visiting startups, and pitching. The program will start by building different teams under the supervision of the coaches and mentors. The companies that are participating in this program will present different case studies. The student will learn how to write a business plan for their cases. At the end of the program, there will be pitching, and the best team will be awarded. The
program will offer a start-kit before the summer school to make the process clear for the participant who is not familiar with the program.
The summer school will take place at the Madrid CLC. Accommodation will be provided in the city center of Madrid. There will be special transportation for traveling to the center every day. During the weekend, we will have a trip to one of the most beautiful sites in Spain near to Madrid in order to see the fascinating Spanish history and enjoy one of the famous Spanish traditional food.
The programme is organised by EIT Digital Summer School and Polytechnic University of Madrid (UPM), Spain.