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Handbook of Blockchain, Digital Finance, and Inclusion Cryptocurrency, FinTech, InsurTech, and Regulation Vol. I
Financial inclusion and impact investment are not viewed as main stream activities. Recent exodus of senior bankers and financial practitioners to inclusive FinTech companies has changed that perception somewhat. But perhaps it is still not enough to influence the stakeholders in the incumbents due to the lack of understanding of what these companies do, or a lack of good cases that demonstrate a good Returns on Investment (ROI). Increased awareness of ?good? disruptive opportunities in digital banking and Internet finance is important for policy makers and investors alike, so that regulation and investment are appropriately aligned to ensure sustainable world growth. Many are beginning to view the sustainability and success of both digital banking and Internet finance businesses as closely linked to the degree of financial inclusion and impact investing. Those at the lower end of the wealth pyramid almost always pay higher charges for services, especially financial services. However, businesses are prevented to take advantage of the higher rates because costs remain high to meet the diverse demand at the bottom. This is so until the emergence of FinTech. FinTech has the advantage of lowering cost and being an enabler for new and profitable business models. More recently, Blockchain, a technology that originated from cryptocurrency, is seen as an innovation that may propel financial inclusion to new heights. Blockchain has known to lower business costs, but more importantly, it has the potential to change the way business is conducted. It gives rise to new governance structure and how governance is being executed. It enables transparency in digital business models and may help to generate sustainable new revenue streams. Besides the awareness and interest in new inclusive financial technology, the mindset of investors is also changing because of the slowdown of the offline economy. This is especially true for businesses that are not fully plugged into the digital economy. They are finding it difficult to grow and are faced with profit margin squeezed. Financial institutions are at the frontline of being disrupted. Declining Returns on Equity (ROE) of financial institutions have pressured many financial institutions into rethinking their own business models and the ways they engage customers. There is now an increase in willingness to fund technology companies and to search for new business models that are data and computing power intensive. The listing of a peer-to-peer platform Lending Club that raised US$870 million in 2014 has heightened concerns that the use of smart data will further threaten profit margins. The increase in the assets under management of Robo-Advisors such as Wealthfront, Bettlement, and Sigfig have also alerted the wealth managers that some of these services are charged at 10% of current practices. However, what really threatens the financial institutions is not the start-ups that unbundled these silo services of the institutions. The real threat is coming from the large technology companies. Alibaba?s Ants Financial (Alipay) and Safaricom?s M-PESA, started off as trust agents for the Alibaba e-commerce platform and telecom service provider respectively, have begun to re-bundle financial services in a way that no one has done before. They have used data and computing technology to enhance the scope of services with a focus on customers? needs and user experience. They have embraced business models that provide not only financial services originally provided by incumbents, but beyond that into social media, entertainment, crowdfunding, credit rating, insurance, taxi services, delivery services, and other mass market services. It is important to note that with the new digital business models, not only being scalable is necessary, but the speed of scaling is even more important. Typically, it takes seven years for a tech company to break even. Sustainability is provided mainly by additional funding while building a large Hinternet consisting of hundreds of millions of customers. Hinternet is a large online or digital platform with a huge number of sticky customers. World?s top Fin- Tech companies are those with the ability to scale fast in large sparsely populated countries. It is not surprising that Ant Financial (Financial Services), Qudian (Qufenqi, Micro Students Loan), Lufax (P2P and Financial Services), Zhong An (Online Insurance), and JD Finance (Supply Chain Financing) are all originally located in China and among the top ten FinTech Companies in the world. Many of them are serving the underserved micro enterprises, underserved individuals and the unbanked in remote areas via Internet or digital devices. Many successful companies possess the LASIC characteristics, i.e., Low profit margin, Asset light, Scalable, Innovative, and Compliance easy. Their strategy was not plainly to take advantage of economies of scales, but also to take advantage of economies of scopes. Because of QE and after the steep run-up of equities, fixed income, real estate, and commodity prices, investors have also been searching for asset classes that exhibit negative correlation with the market. Digital banking and Internet finance that incorporate financial inclusion and impact investing will be an area worthy of attention. Ant Financial, with USD60b market valuation, is larger than American Express Bank, Morgan Stanley, and Bank of New York. The revenue of Ant Financial was RMB10.2b with a net profit of RMB2.6b in 2016. Profit margin of 26% was higher than Goldman, JP Morgan, Wells Fargo, Bank of America, Citigroup, and Morgan Staley that registered between 18% and 25.6% as at third quarter of 2016. Ant Financial has an annual profit growth rate of 64% from 2015 to 2017. Similar statistics are registered for M-PESA that has 24 million registered customers served by a network of over 100 thousand agents spread over Kenya. There are more M-PESA accounts than formal bank accounts of just over 5 million. M-PESA revenue continues to grow at over 20%. It is worth taking note of the 4Ds: Digitization, Disintermediation, Democratization, and Decentralization (see David LEE Kuo Chuen, The 4Ds: Digitization, Disintermediation, Democratization, and Decentralization, 2017, https://www.slideshare.net/DavidLee215/the-deepskill- of-blockchain-david-lee-27april2017-final, https://papers.ssrn.com/sol3/papers.cfm? abstract_id=2998093). The transformation of the traditional economies will go through the four stages and we are possibly into the second and third stage. Investors and financial institutions seeking for-profit opportunities and higher ROI/ROE in a low-growth environment flushed with liquidity will do well to take advantage of the digital revolution. Both Ant Financial and M-PESA provide good case studies of how businesses are taking a view on combining digitization and inclusion. Throughout the two volumes, prominent authors will share their technical knowledge, accumulated experiences, business views, political perspectives, and future scenarios. Many of them need no introduction as they are well known academics, practitioners and government officials that were and are still personally involved in the areas that they have written. Topics that are covered are FinTech, Digital Finance, Cryptocurrency, Digital Banking and Insur- Tech, FinTech Regulation, China FinTech, Security, Blockchain, Inclusion and Innovation, and Emerging Technology. The last few Chapters focus on the 3rd and 4th D: Democratization and Decentralization. The issues of mobile devices and digital identity are crucial to bring on democratization of technology and blockchain is potentially the driver for decentralization. For scalability and sustainability, financial inclusion is key as there are still more than 60% of world population that are still underserved or unserved by the financial system, and excluded from the economic, social, and financial system. It is therefore the editors? view that it is a right time to publish this two-volume handbook explaining and exploring the important concepts and opportunities in financial inclusion, impact investing, and decentralized consensus ledger..NULL.NULL
Ketersediaan
| Call Number | Location | Available |
|---|---|---|
| Tan 332. 178 Che H ( Vol. I ) | PSB lt.dasar - Pascasarjana | 0 |
| Penerbit | London Academic Press., 2018 |
|---|---|
| Edisi | - |
| Subjek | Buka di https://remote lib.ui.ac.id/menu |
| ISBN/ISSN | - |
| Klasifikasi | - |
| Deskripsi Fisik | - |
| Info Detail Spesifik | - |
| Other Version/Related | Tidak tersedia versi lain |
| Lampiran Berkas | Tidak Ada Data |