UNSW Business School

Banking, Finance and Technology

Implication of technological advances on current and future state of

financial industry

Trigger disruptive and innovative thinking process

Contemplate, adapt, innovate and shape an increasingly technology

driven world
UNSW Business School
Introduction
This course builds on basic
finance theory and capital
markets knowledge and
complements other finance
theory courses with a unique
technology and innovation
perspective.

Banking

Finance

Technology
 Week 3
FinTech Infrastructure

• Coding
• Python
• Use Cases
Week 3 FinTech Infrastructure
Learning Outcomes

• Understand links across development and operations in software

development – (DevOps)
• Understand minimum viable product (MVP) development and
operations lifecycle
• Discuss FinTech in terms of coding and use of software
infrastructure
• Gain introductory understanding of Python programming
language via applied use cases

Juraj Hric
Week 3 FinTech Infrastructure
Tech Stack

Tech Stack is a combination of hardware and software (mostly software these days) and
programming languages used to create internal user applications, web based or mobile
apps. Usually applications contain 2 sides: Client-side and server-side or simply front-
end and back-end

https://svsg.co/how-to-choose-your-tech-stack/

Juraj Hric
Week 3 FinTech Infrastructure
Tech Stack

Technological evolution – companies setting up Chief Architect roles reporting to CTOs

responsible for tech architecture and change management of legacy vs new platforms
across the organizations… overall flow of developments and directions towards AI…

Juraj Hric
Week 3 FinTech Infrastructure
Evolution of Tech Stack We Are Here

Mainframe

Client-Server

Hybrid
Growth of
TechFins
AI

Juraj Hric
Week 3 FinTech Infrastructure
Cloud
Evolution of Tech Stack Amazon AWS, Microsoft AZURE, Google GCP, Alibaba
Computing

Examples of computing capabilities… with pricing subject to change

https://aws.amazon.com/ https://azure.microsoft.com/en-au/

Juraj Hric
Week 3 FinTech Infrastructure
Cloud
Evolution of Tech Stack Languages Computing

Open source matters… access to powerful toolboxes for you to build on!!!

We will introduce
TensorFlow

https://www.tensorflow.org/

Juraj Hric
Week 3 FinTech Infrastructure
TechFin

One of the reasons to watch-out for the potentially raising TechFin is the technological advances made across
the tech stack in the past few years…

“China has been at the forefront of this change, with Alibaba raising the profile of its entry
in the financial services sector with the creation of Ant Financial in 2016 and with its
founder, Jack Ma, often said to have coined the term ‘TechFin’.”

“TechFins: they derive their influence

from access to data rather than
Money”

Based on Zetzsche D., Buckley R., Arner D., Barberis J.,(2017),”From FinTech to TechFin: The Regulatory
Challenges of Data-Driven Finance”

Juraj Hric
Week 3 FinTech Infrastructure
Disrupting the Disruptors…
TechFin

“TechFins start with technology and data and add financial services to their value-chain. They need to be
approached differently. They typically start with their data and access to customers. They then move into the world
of finance by leveraging their access to data and customers and seek to out-compete incumbent financial firms or
FinTech startups.”

“The provider with the most accurate, detailed and extensive

digitalised information about a customer is best placed to analyse that
information and data to price credit and insurance services for that
customer (through datafication: the process of analysing and using
data).

Traditionally that provider has been the customer’s bank, initially

armed with a detailed questionnaire completed by the customer as to
income, expenses, objectives, experience and risk tolerance, and
fortified by the bank’s knowledge over time of the customer’s financial
history.

However, banks may no longer enjoy this advantage, or at least not for
long.”
How about FinTech?
Juraj Hric
Week 3 FinTech Infrastructure
Disrupting the Disruptors…
TechFin

Strategically, can you partner with one of the potential TechFins now?

As a bank or financial institution or private fintech company it could be beneficial to be part of this change…?

Based on Zetzsche D., Buckley R., Arner D., Barberis J.,(2017),”From FinTech to TechFin: The
Regulatory Challenges of Data-Driven Finance”

Juraj Hric
Week 3 FinTech Infrastructure
Opportunities
TechFin

Disruption opportunities

Reducing Transaction Costs

• Tech can decrease cost per transaction
• Once off setup fee zero then pay per use via API

Improved Business and Risk Management

• Tech provides quality datasets back-end as well as front-end profiles
• Connecting the dots with alternate data points
• Correlations and associations are quantifiable

Financial Inclusion
• Unbanked are being exposed to banking & financial services!!!
• Personalized recommendations

Regulation
• Improvements are required to accommodate growth of TechFins
• Model risks
• Data oligopoly
• Privacy and Security
Week 3 FinTech Infrastructure
Survey

The 2017 PwC Global FinTech survey was

based on the responses of
1,308 participants, principally chief
executive officers (CEOs),
directors /department heads, heads of
IT/digital/technology,
and other top management involved in
strategy and innovation
from 71 countries and across six regions.

***News Bulletin***
Ant Financial signs third Chinese
bank technology deal
https://www.finextra.com/newsarticle/3
2173/ant-financial-signs-third-chinese-
bank-technology-
deal?utm_medium=newsflash&utm_so
urce=2018-5-30&member=91982
Juraj Hric
Week 3 FinTech Infrastructure
Survey Current
Perspectives…

See any changes in the future

NOW ???

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Week 3 FinTech Infrastructure
Survey
TECHNOLOGY USED or TO BE USED…

Where do you want to position your FinTech Shop ???

Juraj Hric
Week 3 FinTech Infrastructure
AI Strategy
YOU HAVE TO CONSIDER AI !!!

1. Execute Pilot Projects & fail fast

2. Build an in-house AI team
3. Provide broad AI training
4. Develop an AI strategy
5. Develop internal & external communications

Andrew Ng, Landing.ai

Where do you want to position your FinTech Shop ???

Juraj Hric
Week 3 FinTech Infrastructure
AI Strategy
YOU HAVE TO CONSIDER AI !!!

Setup AI group with the ability to cross

into other parts of your business matrix

Andrew Ng, Landing.ai

https://landing.ai/

Where do you want to position your FinTech Shop ???

Juraj Hric
Week 3 FinTech Infrastructure
Coding & DevOps

DevOps is a practice and tech routine that bring together software development (Dev)
and software operations (Ops). The focus is on

• Automation
• Continuous monitoring
• Integration
• Testing and regressions
• Release management with shorter development life-cycles
• Maintain DevOps Culture → AGILE METHODOLOGY

FinTech system infrastructure (…sever-client, hybrid, cloud, AI

tech stack…) is closely aligned with Coding and DevOps in
CLOSE proximity to business objectives!!
Week 3 FinTech Infrastructure
Coding & DevOps

JIRA
https://www.atlassian.com/software/jira

https://www.purelogics.net/blog/all-you-need-to-know-about-agile/
Juraj Hric
Week 3 FinTech Infrastructure We are here

Coding & DevOps

…Living Organism…
Juraj Hric
Week 3 FinTech Infrastructure
Coding & DevOps
Customer Co. Exec Team

Interface Visualization
Front tools Analytics
GUI Design
Latest on Demand

API

Enrichment Data
Live Streaming Live Scheduled Run
Lake Internal Ops,
Wechat, news,
Financials,
facebook…
Weather, Econ…

Scheduled Run

Engines
Algo design
application

Elastic and serverless

Juraj Hric
Week 3 FinTech Infrastructure We are here

Coding & DevOps

…Development…

Code: Code development and review, code merging

Build: Build status and controls …FinTech Idea…

Test: Tools that provide feedback on business risks – User Acceptance Testing (UAT)

Package: Application pre-deployment staging

Release: Change management, release approvals

Configure: Infrastructure configuration and management

Monitor: Monitoring and feedback and →end–user experience

…Production!
Juraj Hric
Week 3 FinTech Infrastructure
Minimum Viable Product (MVP)

Deliver product or a service with minimum functionality in workable “production” state

• Fail fast!
• Code
• Accelerate learning from your pilot customers
• Reduce waste in terms of tech resources
• Build brand quickly
• Build up your DevOps routine
• Build your agility framework
• Build your customer feedback mechanism

Used for DEMO or PILOT purposes

• Venture Capital providers
• Potential Customers
• Investors
• Change Management Decision Makers
Juraj Hric
Week 3 FinTech Infrastructure
Minimum Viable Product (MVP)
Lifecycle of a product/service delivery

1. Development / Coding
We are here… our python tasks and user stories / use cases…
2. Prototype MVP
Build workable “production” state product/platform
3. Demonstration
Use Prototype/MVP for marketing and presentation purposes
4. Pilot
Deliver workable solution to a customer/client
5. User Acceptance
Integrate Pilot solution into client’s infrastructure or;
Open platform to your customers to provide feedback
6. Production Rollout
Rollout into full production with full DevOps support & Data Governance
Juraj Hric
Week 3 FinTech Infrastructure
Coding & DevOps & Data Governance

Data management is an administrative process that includes acquiring, validating,

storing, protecting, and processing required data to ensure the accessibility,
reliability, and timeliness of the data for its users.

Best practices organizations and enterprises should strive to achieve

include:

➢ Simplify access to traditional and emerging data

➢ Get common denominator Unique ID
➢ Enrich core data on the way up – bottom up approach
➢ Scrub data to infuse quality into existing business processes
➢ Shape data using flexible manipulation techniques

Juraj Hric
Week 3 FinTech Infrastructure
Coding & DevOps & Data Governance

Data integrity is the maintenance of, and the assurance of the accuracy and
consistency of, data over its entire life-cycle and is a critical aspect to the design,
implementation and usage of any system which stores, processes, or retrieves data.

The term is broad in scope and may have widely different meanings depending on the
specific context – even under the same general umbrella of computing

Juraj Hric
Week 3 FinTech Infrastructure
Coding & DevOps & Data Governance

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Week 3 FinTech Infrastructure

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Week 3 FinTech Infrastructure

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Week 3 FinTech Infrastructure

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Week 3 FinTech Infrastructure

https://simplywall.st/company
Digital Finance & Digital Information

“Our goal is to empower retail investors to make profitable non-emotional long

term investment decisions. With the unique visual approach, we are making it
possible even for the beginners. Every day we produce hundreds of thousands of
infographics on companies and Portfolios.”

Juraj Hric
Week 3 FinTech Infrastructure

https://simplywall.st/company
Digital Finance & Digital Information
How does it work… for the FinTech Idea…

Juraj Hric
Week 3 FinTech Infrastructure

https://simplywall.st/company
Digital Finance & Digital Information
How does it work… for the FinTech Idea…

Juraj Hric
Week 3 FinTech Infrastructure

OPEN FORUM DISCUSSION

Use Case Story
Introduce Infographics tools to your customers (similar in nature to above FinTech
Example)
Do we have access to correct market data?
Can we analyze and explore and utilize the use this market data?
Can we LINK THIS DATA TO OUR CUSTOMER DATA?
WHAT DATA DO WE NEED AS RELATED TO CUSTOMERS? PRIVACY ISSUES?
Point of Sale | Trading History | Offers/Loyalty Programs | Client Demographics…

Do we have access to correct customer data now within Data Governance framework???

Juraj Hric
Fintech tools – python samples

USE CASES, LEARN DATA

SCIENCE, TENSORFLOW, MACHINE
LEARNINGBackend
Author: David Ellison, PhD Posted on August 9, 2018 CUSTOMER CHURN, LEARN
https://www.datascience.com/blog/fraud-detection-with-tensorflow
DATA SCIENCEustomer Churn
Author: Sowmya Vivek Posted on April 6, 2018
https://www.datascience.com/blog/predicting-customer-churn-
with-a-discriminant-analysis

LEARN DATA SCIENCE

Author: Su-Ming Wu Posted on March 18, 2019
https://www.datascience.com/blog/fashion-retail-
forecasting-size-profiles-maximum-likelihood

Juraj Hric
Week 3 FinTech Infrastructure
FinTech Idea… & OPPORTUNITIES… CONTINUED FROM LAST WEEK…

Can we use PYTHON to extract value here…

Juraj Hric
Week 3 FinTech Infrastructure
Summary and Key Terms

Key Terms
• DevOps Think FinTech Solutions in terms of
• Tech Stack
• Python
• Minimum Viable Product
• DevOps
• Development
• Prototype
• Pilot
• Python
• User Acceptance Testing
• Production Rollout
•
•
PaaS
Data Governance
• MVP

Juraj Hric
Week 3 FinTech Infrastructure
Summary and Key Terms

https://www.economist.com/science-and-technology/2018/07/21/python-has-brought-computer-programming-
to-a-vast-new-
audience?fsrc=scn/li/te/bl/ed/pythonhasbroughtcomputerprogrammingtoavastnewaudienceprogramminglang
uages
https://www.finextra.com/newsarticle/32451/finleap-moves-into-the-fintech-platform-as-a-service-space

Juraj Hric