Where Finance Finds Its Future

Questions posed from the Open Banking and Open Finance discussion Part 1 in October 2020 and will provide the framework for the Open Data Part II discussion on 2 March.Why is data such a powerful tool for consumers?How exactly does consumer control of data put companies under pressure to cut prices, innovate and personalise?Is the data of sufficient quality and extent to achieve the vision of a digital economy driven by consumers granting access to their data?Are banks (and energy and telecommunications companies) resisting Open Data?What other sectors are vulnerable to an Open Data economy?How should price comparison websites evolve their business model?Can consumers be confident their data is transferred and held securely?Why is consumer uptake of Open Banking in the United Kingdom so slow?What other forms of data will become available (e.g. mobile telephone data, Internet searches etc.)?Which countries are getting data regulation right (if any)?Do we need a new international body to co-ordinate national data regulation? Hosted on Acast. See acast.com/privacy for more information.

Topics for discussion include: The relative importance of cost-cutting versus improved customer service Whether finance is especially well-adapted to RPA and AIWhether the projected savings are being achievedAttitudes of employees towards the technologiesImpact on levels of employment and skillWhether the IT department is a source of resistance to RPA and AI and MLHow it alters the threat of cyber-attacksCurrent natural language processing capabilitiesDifficulties in working with legacy systemsWhether RPA, AI and ML are merging into a single form of intelligent digital automationWhat RPA and AI cost Hosted on Acast. See acast.com/privacy for more information.

Programmable money is one of the technologies to have emerged from blockchain. In fact, its origins in the trustless promise of primitive blockchain are not hard to discern. It is, in essence, tokenised cash controlled by a smart contract rather than a bank or central bank. The smart contract decides, for example, to make a payment automatically when an invoice is received, and nobody can stop the payment from being made or reverse it once it is made. This creates an obvious hazard – if a smart contract can move money, it will be attacked by hackers – which some crypto-currencies experienced. Significant sums were lost or stolen as a result of vulnerabilities in smart contracts. There is a view that the current DeFi token boom, also driven by smart contracts, will end the same way. Yet programmable money is not dependent on blockchain technology and the possible applications are too intriguing to be constrained by any label. Payments could be triggered as soon as goods arrive at the factory or the doorstep. Digital services could be switched on as soon as a payment is received or postponed to a future date when payment will be received. VAT could be routed directly to HMRC at the point of sale rather than collected and paid on quarterly basis by a complicated accounting process. Programmable money has a multitude of applications to the Internet of Things, from refilling the empty refrigerator to paying for temporary insurance on a motor car. In theory, these benefits can be obtained by programming alternatives to fiat currency running on public or private networks, and the use of programmable money for peer-to-peer transactions on permissionless networks is a dream that has yet to die. But the adoption of programmable money would almost certainly be accelerated by the issuance of a central bank digital currency (CBDC) on a permissioned network. Central banks would not want to be involved directly in the operation of smart contracts, though they could set standards, and build them into a programmable CBDC. So the programmable money revolution could take more than one form, and happen sooner rather than later. The panellists at this Future of Finance webinar will explore what programmable money could do to our existing financial system and what sort of system or systems it might create. Hosted on Acast. See acast.com/privacy for more information.

The asset management industry has always consumed data. The quantitative investment management depended on plentiful supplies of the price data that financial markets produce. But prices and statistics are now being supplemented by social media, satellite and mobile telephone data that highlights investment opportunities rather than exploitable patterns in the markets. But data is no longer the preserve of portfolio managers. The growing quantities of digital information are now seen as vital to decision-makers in corporate strategy, sales and marketing, client service, risk management, distribution, operations and compliance as well. All large asset managers are now embarked on data projects designed to gather, normalise and integrate multiple internal and external data sources to raise process efficiency and employee productivity as well improve investment performance. The principal factor behind this growing interest is the need, as active investment strategies give way to lower margin passive investing, to control costs and lift output. This Future of Finance webinar will explore what asset managers are doing in data management, now and in the future.Asset management is not immune to the effects of the growing volume of data available in digital form, and the growing proficiency of Artificial Intelligence (AI) at analysing it. Portfolio managers have always relied on financial information and price data, and quantitative managers have used mathematical models and data to make money since the 1970s. Portfolio management has certainly not lost interest in new sources of data as a way of generating alpha, as the growing use of AI to read financial and research reports, of social media, satellite and mobile telephone data, and of algorithmic trade execution tools attest. What is new is that data management and analytics are now spreading from the front office to the back and middle, and into sales and distribution as well. Sales and marketing teams are using data to segment distributors by client profile, location, purchasing channels, technological sophistication and profitability, and to identify cross-selling opportunities. Risk managers are using data to assess client concentration risk and predict redemptions by client, investment strategy, asset class, share class and fund, so portfolio managers can plan liquidity needs more accurately. Compliance officers are using data to prove to regulators that funds are delivering value-for-money, treating clients fairly and not being mis-sold, and to automate trade surveillance. Heads of operations are using data to ensure distributors are paid the right amounts and the firm is not over-charged. In fact, virtually every function within an asset management firm can lift its performance through cleaner, broader and properly analysed data. But what all these techniques depend upon is the ability of an asset management firm to access data from multiple internal and external sources, normalise, standardise, store and analyse it, and then make it available to the users in a convenient format. In developing these capabilities, no asset manager can yet claim complete success. But some have certainly progressed further and faster than others. This Future of Finance webinar will bring together data scientists, technologists, consultants and asset managers working in the field of data management in the asset management industry to explore how current progress can be accelerated. Hosted on Acast. See acast.com/privacy for more information.

Questions posed from CBDC discussion Part I in July 2020 which will provide the framework for the January 12 discussion:1. Is a CBDC issued directly to retail consumers, and not via the banking system, a serious near-term or long-term possibility?2. Which entity (or type of entity) is best placed to resolve how CBDCs will interact with private sector crypto-currencies?3. Which entity (or type of entity) is best placed to develop the technical standards necessary to enable domestic CBDC systems to inter-operate across national borders?4. What are the drivers of and obstacles to multi-currency CBDCs?5. What product and service innovations are CBDCs likely to encourage? Hosted on Acast. See acast.com/privacy for more information.

As Blockchain makes its way out of the Trough of Disillusionment up the Slope of Enlightenment (© Gartner Hype Cycle) cynics forget it offered a valuable innovation: networks in which every participant sees exactly what every other participant sees. In any market where value is exchanged, everything that happens post-trade aims to reach that same point, by a laborious process of repeated reconciliation to identify errors followed by exception processing to correct them. Now "enterprise" blockchain is promising to fix those broken information exchanges. Dominic Hobson asked Yves Guillaume Messy, a Blockchain and venture capital mentor, to tell us more about it. Hosted on Acast. See acast.com/privacy for more information.

Covid-19 put the operational flexibility of the financial services industry to the ultimate test: could the business continue when nobody was in the office? The answer so far is an encouraging one, but the global pandemic also coincided with a consultation by the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and the Bank of England on new measures to further enhance the operational resilience of the financial services industry. Dominic Hobson asked Chris Freeman, a former head of operations at Aviva Investors, Nomura Asset Management and Royal London now consulting on operational issues, what the biggest operational risks now are. Hosted on Acast. See acast.com/privacy for more information.