Welcome to our course on FinTech Disruptive Innovations: Implications for Society In this video, we're going to give you an introduction to this course what we're going to look at what various modules entail as well as an overview of our first module in the course In this course, we're going to talk about the nature of evolution versus revolution and to what extent are we looking at a revolution here? Something that's going to transform and radically change the nature of the industry the nature of employment the nature of customer interactions with firms the nature of winners and losers or is this going to be more evolutionary where firms adopt and the names don't change that much but we do business differently So, we've seen a lot of change over time in finance in banking, and insurance, and investment banking We've seen a lot of changes and they have largely been evolutionary in nature The question is, to what extent is FinTech going to cause a revolution? A radical change that's different We're going to look at the nature of these changes in this first module and ask "Is this evolution or revolution?" In module two, we're going to look at how the impact is different Different across geography, different across ages different across types of firms large customers versus small customers large institutions versus small institutions and different in terms of haves and have nots in society and what does that mean for society? For example, the haves that are the wealthy versus the poor but also the digitally wealthy Those who have great Internet access versus those who don't and how is that going to have differential impact or diversity of impact from FinTech In our third module we're going to take what we've done in module one looking at evolution and revolution and what we've done in module two looking at diversity of impact we're going to build on that to make predictions for the future of FinTech and predictions are always challenging because actually it's easy to make predictions Everybody can do it. Anybody can do it It's hard to be right and so it's hard to make accurate predictions and we'll look at what some of the challenges are in predicting the future In particular, the challenge of getting timing right as well as what will change Its easier to predict that there will be a recession at some point in the future There're always recessions coming in the future and there's always booms that come after the recession There's business cycles Getting the timing right, that's much harder So, we could say this has been a long bull market and eventually it's going to call good things must come to an end but is it in 2018, 2019, 2020, 2021? I don't know There are many people that have predictions and it matters a heck of a lot whether you get that right not just the direction is such and that's particularly true in FinTech when we're asking "Is this evolutionary or revolutionary?" Because it's the pace of change that matters in many cases more than the direction of change or magnitude of change If the pace of change is slow enough, this is evolution If the pace of change is very fast we're looking at a revolution In module four, we'll take what we've done in the prior modules and ask "What does that mean for your job? What does that mean for your career? What does that mean for your future? What does that mean for employment needs and opportunities? What should you be thinking about? What should we learning about? Where should you be focusing? What kinds of firms should you be working for? Should you be changing jobs?" As kind of where the rubber hits the road for many people is what's that mean to my future income to my career, to my opportunities, to my wealth? Not from an investment point of view which is certainly important in finance but in our focus on FinTech we're not necessarily predicting what stocks will go up and what stocks are going down and how you're going to make a lot of money with your portfolio but rather who are going to be more likely to be winners and losers both as firms and as individuals So, what does that mean for the future of opportunities and your job prospects? In module five, for those who are paying for the course or those who are looking for a certificate in the course or in a specialization involving four courses there is a final project You can't do the final project unless you're paying for the course So, if you're just there to get the knowledge you can do everything but the final project But the final project is a project related to everything we've learned in modules one to four to help you bring it home and make it personally relevant to you A project about you, your future your company, your career where is it going? And so, we'll have you spend four to six hours doing a project related to your career your firm and your future So, that's it in terms of the course overview Now, let's look at the first module This module, we're going to be looking at evolution and revolution and we're going to start by talking about what is a disruptive innovation? What do we mean by the term disruptive innovation? This has become one of the most popular terms in business People love this idea this concept of disruptive innovation but it's often misused It's almost to that point that every innovation must be disruptive every technology must be disrupted and that's not true ATMs were a new technology They were anything but disruptive There was no disruption of banking per se simply because of ATMs A disruptive innovation might even not involve the technology So, for example, in Hong Kong ATMs did have a disruptive effect but it had nothing to do with technology The change came with the handover of government to China control from Britain where the government brought in a new policy into the MTR public transit, mass transit railway where that instead of one bank HSBC, having a monopoly on ATMs in that public transit that most people and Hong Kong go through at some point during the week often several times a day now there would be two Bank of China and HSBC That was disruptive That was a big change because Bank of China affiliates with every other bank and so now instead of a competitive advantage that HSBC had for decades now the market is more level That's disruptive, but it has to do with regulation not a new technology ATMs weren't new, but the policy about how you deploy it was So, we see that in some FinTech as well It may not be new technology in every case It may be just new regulations or new innovative ideas as to how to deploy that technology and those may happen very quickly When we look at disruptive innovation our next session is looking at how does disruptive innovation change industries? So, how and why, and what changes? In our following session we're going to look at evolution, revolution and disruption So, what is the nature of an evolutionary innovation or evolutionary change of an industry versus a disruptive change? And what's the key distinction? And when does something become evolutionary meaning that big firms can adapt or when does it become revolutionary meaning that big firms may become extinct? They may go out of business and sometimes the same change may be adaptable for some firms but not for others For some firms that may strike them as being like a revolution perhaps because they don't recognize it and don't see it We will look at a case study as we wrap up this first module of peer-to-peer lending and how that has some evolutionary aspects to it and some revolutionary aspects to it and we'll look at this case study and say "How are big firms adapting to what is a threat intrinsically to their business model of being banks, taking in money and lending money?" And this is what peer-to-peer lending does in competition with banks but some banks are learning to adapt and evolve and deal with a new environment So, we'll look at that as a case study an example and then we'll summarize where we've been That's where we're going in the first module evolution versus revolution, what is disruption? What is disruptive innovation? How does it change industries? What's the nature of when does it become revolutionary versus evolutionary? And looking at a case study. So, that's it We look forward to having you in our first module and throughout the course. Thank you
