Raffaele Zenti (raffaele.zenti@wealthype.

it)
Co-Founder, COO, Chief Data Scientist
Wealthype SpA

FinTech:
Intro
1
 Goals

• Develop a broad understanding of Fintech and its key trends – from a business perspective

• Grasping the main building blocks of business applications in this area:

• Tools, technical elements (models, methods, technologies)

• “Connecting the dots”, ie critical thinking skills, vision

• Grasp a strategic framework to apply within your professional role – in banks, wealth/asset managers,
insurance companies, consultancy firms, start-ups, Venture Capital funds

• Encourage your creative and entrepreneurial spirit

Models Applications
Best
Technologies
practice
Processes
The context: Fintech, a new landscape

3
ABC

Finance Technology FinTech

4
Why this Fintech?

5
Technology got much cheaper in the last decade

Source: Bloomberg
6
Growth in computational power

Extraordinary
increase in
computational
capacity in recent
years

7
Digitalization + demography = changing habits…

Source: World Economic Forum

8
“Netflixing” of financial advice drives personalization

«In 2030, up to 80 percent

of new wealth-
management clients will
want to access advice in a
Netflix-style model—that is,
data-driven, hyper-
personalized, continuous,
and potentially, by
subscription.»

Source: McKinsey

9
Regulation, regulation, regulation

Sustainable Finance
EU's Digital Finance Retail Investment
Disclosure Regulation MiFID III
(SFDR) Package Strategy

Capital Requirements
Directive (CRD VI) Digital Operational
European Single
and Capital GDPR Resilience Act
Access Point (ESAP) (DORA)
Requirements
Regulation (CRR III)

Artificial Intelligence
ePrivacy Regulation Cybersecurity Act AI Liability Directive
Act

10
More regulation: what does it mean?

MORE CONTROLS ON SOLUTION TO IMPROVE THE

FINANCIAL INSTITUTIONS ® COST / INCOME RATIO = USE
COST/INCOME RATIO TECHNOLOGY, MAKE
WORSEN PROCESSES MORE
EFFICIENT
 More and more data...

Brontobyte
≈ Our digital
universe tomorrow
Yottabyte
≈ The digital universe
today
(250 trillions of DVDs) 1027 Volume
+
Velocity
+
1024 Variety
1021 Zettabyte
Network traffic in 2016
=
Exabyte
1 EB = created
on the web every day
1018
1015 Petabyte
1 PB = CERN Large Hadron Collider
data production per second
Value
Terabyte 1012
500 TB = daily data 109 Gigabyte
intake of Facebook
106
Megabyte
12
The global datasphere will
grow to >160 ZB by 2026.

Key drivers:
internet traffic
social media
IoT devices
various industries (ie
finance, healthcare, and
manufacturing generate
vast amounts of data
through transactions,
patient records, and
operational data)
A perfect storm hit the financial industry: how to survive

Operational excellence
Increase effectiveness and efficiency of the process
F
I
Know Your Clients (KYC) N
Leverage on data and analytics: better customer intelligence,
segmentation, better client acquisition/retention T
E
Value proposition C
Re-orientation of products and services, focusing on the end user
(Customer-Centric Approach = “Consumerization”) H

14
But exactly, what is Fintech?

15
Technology innovations ® key transformations ® Fintech

16
Taxonomy of Fintech: somewhat traditional view

Payment and money transfer

WealthTech/InvesTech

InsurTech

RegTech

Peer2Peer lending

Crowdfunding/crowdinvesting

Blockchain/Cryptocurrencies
17
The variety of InvesTech/WealthTech: a cheat sheet
Digital
investments

Robo4Advisor
Investment services supporting
relationship managers (B2B2C)

Roboadvisor Trading

Investment services for retail

investors (B2C)
Digital
Pure Robo
brokerage

Testing/executing trading
Hybrid Algorithmic strategies on open
(+Humans) Trading platforms

Social Sharing of investment

Trading strategies (peer2peer or
B2C)

18
 Key common features

Customer-centric approach
Technology allows a deep
understand of customers - in
Broad consumer base order to serve them better
Investment services available to
a huge number of customers

Trasparency & control

Clients have visibility on
their investments and on the
associated costs
Omnichannel/Accessibility
Easy-to-access, easy-to-use,
anytime

Lower fees
Economies of scale and process
automation reduce fees

19
Fintech can deliver innovation in different ways

Product innovations

Process innovations

Organizational innovations

Business model innovations

20
Transformation can occur at different levels/depths
100% Digital
business
Digital
distribution
Channels
External focus

Digital
business model

Digital
internal
Processes

Internal focus
21
Discussion

What fintech companies do you know?

And what kind of innovation do you think they do?

22
Game of Fintech: main characters

Governments
& Local
communities
“Incumbents”
(traditional
banks, insurance
companies, asset
managers,...) Fintech companies
(startups, not-startups)

Regulators

Venture
Capital
funds & C.

23
Game of Fintech: narrative

Goverment, regulators

Set the
Incumbents
stage

Buy
innovation
Fintech companies
Buy Fintech
companies
Set the Acquisition
Innovate Scale-up
rules Or, will target
die

24
Summing up: Fintech = innovation

Data

Tecnology Task
• AI/Machine Learning/Big • Pay
data • Save/Invest
• Cloud • Borrow/Lend
• Cryptography • Protect people/things
• IoT • Manage risks
• API • ...
• ...

Data
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In the end

• Fintech is a soup

• Soup = liquid food,

generally served hot,
made by combining
many different
ingredients
Key ingredients
• Data
• Big Data, or Medium Data, or
Small Data

• Tools = Technologies
AI / Machine Learning,
blockchain, cloud computing,
APIs, cryptography, etc

Now let's talk about it…