I was recently at a FinTech event organized by HKUST called “How FinTech will impact financial services and your career”. The speaker was Prof Henri Arslanian (visiting scholar of finance).  I’ve been to many FinTech events but this one was still quite an eye-opener for me. Very informative material and and Prof Arslanian is a great presenter!

Here are my top 15 takeaways from the event:

1. The country that leads FinTech startups is China (I thought it was America). Globally, a total of 19 billion was invested into FinTech companies in 2015. That’s quite a lot of money!
2. Facebook now has 50 banking licenses! Check out this article on TechCrunch. Tencent’s Webank is an internet platform with a banking license. In the future, FinTech will become banking
3. The threat to banking now comes from tech companies like Alibaba, Facebook and Tencent
4. According to Citi, 30% of banking jobs may disappear in 10 years
5. FinTech companies are not deposit taking institutions. They prefer to tackle problems around the banking system through innovation on the front end. This article describes it best
6. Regulators are supporting FinTech companies. Take Australian Securities and Investment Commission (ASIC) for example. “The corporate regulator will allow FinTech start-ups to test their ideas with real customers for a period of six months without having to hold a financial services licence, under a new ‘regulatory sandbox’ proposed by Treasurer Scott Morrison in the May budget”. The Monetary Authority of Singapore (MAS) is funding a blockchain project
7. Banks are setting up innovation labs to offset the FinTech threat. (Some have these centers in India). See BNP, SCB and there are many others too
8. 50% of Tencent’s staff is now in technology! 1/3rd of GS staff are techies. There are 26,000 ppl in compliance in Citibank. With the advent of RegTech (using Artifical Intelligence for things like flagging dubious transactions, etc), these jobs are at risk
9. Biggest benefit of FinTech is introducing banking services to the ‘unbanked’ people – 400M people in India and more than 250M in China. Over 700M ppl went from being ‘unbanked’ to being banked due to FinTech. Those guys who make very little money and have to stuff what they earn under mattresses can now use FinTech for basic banking services
10. ATMs will become useless in the future as the cost base won’t support it. There are too many cashless transactions. Incidentally, 8% of Philippines’ GDP comes from call-center related businesses. What will happen when chat boxes take over?

There was one question that Prof Arslanian asked. “What’s the first example of a FinTech innovation?” Answer: ATM machine!

Apparently, Barclays was the first bank to come up with an ATM. The story is that their then CEO couldn’t withdraw money during a weekend and hence came up with the idea. After reading ‘Tearing down the walls”  I vaguely recall the idea coming from John Reed at Citi. Anyway, with the increasing cashless transactions of the future, maybe we won’t really need cash one day. My ‘dai pai dong’ lady needs to warm up to the idea of FinTech first!