about banking, fintech, economics, platform theory, digital innovation
FINANCIAL MARKET TRANSPARENCY
Theory and Principles
Biological underpinnings of finance and banking
The history of capitalism is about growth, but the rude awakening of the Global Financial Crisis was a moment of reckoning that highlighted the flaws in our understanding of financial markets. Unbearable accumulated costs hidden by efficiently inefficient price mechanisms caused the collapse and may do so again. Meanwhile, environmental externalities caused by expectations of continuous growth are exceeding planetary limits. Solutions based on self-serving industry supplied forecasts don’t reconcile with economic reality and increase global instability. Only transparency creates a consequentialist ethic that changes our behaviour and reconciles short-term personal needs with long-term development goals to solve these problems. FMT’s breakthrough is in recognising homo sapiens as both rational and irrational while facing uncertainty. This biological approach overcomes both restrictive neoclassical hypothesis of rationality and behavioural finance’s incomplete attempts to nudge investors. FMT proposes novelmicro foundations that describe the biological nature of financial markets to increase antifragility. Readers will make better decisions under uncertainty that profit us all.
Digital is leading to a tectonic shift whereby investors and tech-savvy financial advisors can become the new price-makers in the global democratisation of banking. FinTech Innovation delves deeply beyond simply describing the disruption examining, in detail, the underlying processes to illuminate exactly what is happening and why its happening so that you can engage with and thrive in the new marketplace. Through a behind-the-scenes look at Robo-Advisors and their part in the turnkey, low-cost personalisation of Goal Based Investing, this cutting-edge guide opens a tangible path for using technology to gain a competitive advantage, establish your value as a human advisor and "rewire" investors' minds to positively engage with investing. This authoritative guide pulls back the curtain to reveal:
What Robo-Advisors are today and how they will evolve.
How human financial advisors can optimise their businesses in response to regulations, customer demand and technology.
What gamification has to do with investing, and why it can produce better investors.
Where you need to rethink what you know about investing and let technology do the work.
Which is the product or solution that justify the fees?
Investment management is on the verge of a sea change in financial advice due to new regulatory changes and the rise of Fintech . The onus is now firmly on financial institutions: adapting to the transformation is not enough to stay relevant and profitable at a time of unprecedented change. "VGI" provides a roadmap for the reader: we lay out a model which places the goals and preferences of investors (on-boarding) at the centre of the value-generation mechanism, enriching the design of financial products which create charges and costs (in-boarding). The analysis of MiFID only serves as a canvas to showcase how international best practices, grounded in goal-based investing and probabilistic scenarios, create a new compliant framework to evade the pitfalls of progressively commoditised investment solutions, and avoid disruption to their business by harnessing the "human element" and achieve sustained innovation with digital.
What truly matters to long-term investors is the probability to achieve their PERSONAL FINANCIAL GOALS through their life cycle (targets of total return or retirement income). "PSO" provides the principles and quantitative framework to feature the probability of achieving multi-period financial goals as the objective function, within a scenario-based and risk-constrained optimisation exercise. The adoption of Goal Based Investing principles leads to a change in perspective from MPT (Markowitz and Black-Litterman), based on the author's research and experience in Risk and Wealth Management.
The Fintech Book is your primary guide to the financial technology revolution and opportunity therein. Written by prominent industry experts and startup entrepreneurs in the global fintech investment space, this book aggregates diverse industry expertise into a single informative volume to provide entrepreneurs, bankers and investors with the answers they need to capitalize on this lucrative market.