A fintech future for finance and society
Economics of Financial Technology will see 73 new papers presented on the brightest new thinking about fintech from around the globe.
The aim is to identify innovations and big ideas that can make a real difference - not just to the financial world, but also to society and people’s lives.
“The event brings academics and the financial services industry together, to discuss exciting innovations and work out how to turn them into practical solutions, with positive impacts,” says Gbenga Ibikunle, Professor and Chair of Finance at the University of Edinburgh.
“The conference’s Scientific Committee has selected papers which could have a real, positive impact - generating discussions between research teams and companies that might be able to implement their ideas and the advances they represent.
“The focus isn’t just on creating technology to enhance financial outcomes for companies but to also address the challenges society faces. That's why there are specific sessions on financial inclusion, for example. That’s still a big problem. We want to examine this in different contexts - from the perspective of developed countries, and developing countries too.”
At least 60 of the scheduled paper presentations will be in person, which Prof Ibikunle says is significant: “By bringing people together in person, we hope to facilitate effective connections, conversations and networks that have been much more difficult as a result of the pandemic.”
Some big issues being discussed include consumer finance, the use of artificial intelligence in asset pricing and investment, sustainable finance and distributed ledger technologies and cryptofinance.
Another stream will examine the potential to link social media and other alternative data sources with financial information to identify and address issues, such as financial distress and to tackle challenges around credit ratings - especially when people move from one country to another.
“Credit information is still largely silo-ed across countries and it’s difficult for many professionals moving countries to prove their creditworthiness once they relocate across borders, even if they have never had any problems,” says Prof Ibikunle. “Hence, we’re looking to encourage research and discussions on how alternative sources of data could unlock the potential in consumer finance and improve how financial systems communicate with themselves.”
This links into broader conversations about the way financial data can be used to have a positive impact on social wellbeing, driving the opportunity for research that creates data-led
innovation for good. This will be addressed by one of the keynote speakers, Dame Julia
Unwin, Chair of Smart Data Foundry, the event’s headline sponsor.
Dame Julia says: “There is real potential if we can understand how people earn, spend and save and what they do with their money. It isn’t about benefit for individual companies, it has the potential to benefit society, and regional economies - to do really practical things.
“This event is a chance to really look at those big future impacts. We can already see how financial data can help examine issues like the poverty premium - the fact that poor people pay more for services. We’ve spent decades talking about it. We now have the ability to absolutely prove it, to test it, to ask why.
“Another example is putting reliable information into the public domain about how people are paying for and using energy. Data doesn’t hold the complete solution but it can have an impact.”
Another keynote speaker at the event is Sanjiv Das, Professor of Finance and Data Science at Santa Clara University's Leavey School of Business.
“We want the event to reflect global fintech hubs, so we have strong representation from the research clusters around Silicon Valley,” explains Prof Ibikunle. “But there are other significant hubs developing in other parts of the world - especially in China, but also Singapore, India, South Africa, Nigeria and more.”
Regulators - including the United States’ SEC (Securities and Exchange Commission) and Commodity Futures Trading Commission, and large analytics companies like Moody’s will also be represented at the conference.
Prof Ibikunle says regulators are a crucial piece of the jigsaw in the evolution of fintech as they increasingly step out of their comfort zones to engage in innovation.
“Their primary focus is to ensure fair competition and the integrity of the financial services sector,” he explains, “but they are now doing much more, becoming less risk-focused. The Financial Conduct Authority (FCA) blazed the trail with the sandbox to allow companies to innovate within a safe regulatory environment before presenting themselves for approval.
“Regulators are becoming braver, and helping to address big societal challenges through the regulatory power they have.”
So what are Professor Ibikunle’s hopes for the conference?
“We expect to see new connections being made, and great discussions of big ideas,” he says. “The papers scheduled for presentation have been peer-reviewed, but none have been published in journals yet, which means we are giving a platform to share the very latest research - and we want to see the innovations they represent adopted. We want industry to recognise the potential of the papers and reach out to work with the academics.
“These papers can be the precursor to new advances in the sector, so we hope to see positive impacts in the next few years.”
And what is the University of Edinburgh’s future role? “We want to be at the centre of the global fintech ecosystem,” Prof Ibikunle says. “We want to be seen as a leader in the global fintech network, helping to facilitate its growth and its positive impact on society.”
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