Digital Finance & Alternative Finance (1) (1).pptx

digital finance

1. Md. Anhar Sharif Mollah Assistant Professor of Finance Daffodil International University . Digital Finance and Alternative Finance

2.   A Brief History of Financial Innovation  Digitization of Financial Services FinTech & Funds  Industry Showcase: How AI is Transforming the Future of FinTech Industry Showcase: Ensuring Compliance from the Start: Suitability and Funds Crowd funding - Regards, Charity and Equity  P2P and Marketplace Lending The Rise of Chinese TechFins - New Models and New Products   What is an ICO? Topics to be covered

3. What is Financial Innovation Financial Innovation

4. Digital finance is the term used to describe the impact of new technologies on the financial services industry. It includes a variety of products, applications, processes and business models that have transformed the traditional way of providing banking and financial services . Ex: ERP software, Online banking Digital Finance

5. Alternative Finance Alternative Finance is an umbrella term that covers any type of finance that does not come from a mainstream provider. Ex: pawnshops, and payday lenders Types of AF Crowd Funding P2P Lending Venture Capital Angel Investors Leasing Franchising

6.   Rewards-based crowd funding Donation-based crowd funding Equity crowd funding Profit-sharing / revenue-sharing Crowd Funding

7. Reach Presentation  Validation of Concept  Efficiency Benefits of Crowd Funding

8. P2P Lending Peer-to-peer lending is a form of direct lending of money to individuals or businesses without an official financial institution participating as an intermediary in the deal. P2P lending is generally done through online platforms that match lenders with the potential borrowers.

9. How does peer-to-peer lending work?

10. How does peer-to-peer lending work ? A potential borrower interested in obtaining a loan completes an online application on the peer-to-peer lending platform. The platform assesses the application and determines the risk and  credit rating  of the applicant. Then, the applicant is assigned with the appropriate interest rate. When the application is approved, the applicant receives the available options from the investors based on his credit rating and assigned  interest rates . The applicant can evaluate the suggested options and choose one of them. The applicant is responsible for paying periodic (usually monthly) interest payments and repaying the principal amount at maturity.

11. Digital Financial Inclusion Digital financial inclusion is a broad-spectrum that emphasizes digital access to traditional financial and banking services by those under-served societies. The deployment of the cost-saving digital means to reach currently financially excluded and underserved populations with a range of formal financial services suited to their needs.

12. Key Components of Digital Financial Inclusion Digital Transactional Platform:  Digital transactional platforms are those which store and process the user data electronically with utmost privacy and security . Devices: used by the customers can either be digital devices (mobile phones, etc ) that transmit information or instruments (payment cards, etc ) that connect to a digital device such as a point-of-sale (POS) terminal. Retail Agent:   Retail Agents are those that have access to resources for sending and receiving the funds, which converts the electronic stored value of the fund to hard cash .

13. FinTech Fintech refers to the integration of technology into offerings by financial services companies in order to improve their use and delivery to consumers . Ex: Mobile Banking. Fintech vs Digital Finance Digital Finance encompasses a magnitude of new financial products, financial businesses, finance-related software, and novel forms of customer communication and interaction—delivered by FinTech companies and innovative financial service providers

14. Tech Fin TechFin , refers to tech-based firms that intend to extend their operations into the financial sector . Apple Pay, We Chat Pay, Google Pay, and the yet to be completed What Sapp Pay, are classic examples of TechFin establishments . Techfin  refers to a technology firm that wants to deliver financial products on the basis of existing tech solutions . Fintech vs Techfin Fintech  is a space where financial services are delivered through a better user experience using cutting edge technology. TechFin on the other hand is where a firm that has been delivering technology solutions, launches a new way to deliver Financial services

15. Why Fintech? It’s Universal It’s Cheaper and reduces cost It’s More Secure and speedy It Creates Economic Growth It’s Empowering Businesses It Helps Companies Turn Big Data to Meaningful Data

16. Challenges of Fintech Data Security Compliance with Government Regulations Lack of Mobile and Tech Expertise User Retention and User Experience. ... Personalized Services. Quality of Software

17. Why Fintech?

18. Regtech Regtech is the management of regulatory processes within the financial industry through technology. The main functions of regtech include regulatory monitoring, reporting, and compliance . Regtech, or RegTech , consists of a group of companies that use  cloud computing  technology through software-as-a-service (SaaS) to help businesses comply with regulations efficiently and less expensively. Regtech is also known as regulatory technology.

19. Benefits of Regtech Regtech is a community of tech companies that solve challenges arising from a technology-driven economy through automation. Greater accuracy and comprehensiveness . Improved risk management . Efficiency gains

20. Block Chain Block chain is a specific type of database. It differs from a typical database in the way it stores information; block chains store data in blocks that are then chained together.  As new data comes in it is entered into a fresh block. Once the block is filled with data it is chained onto the previous block, which makes the data chained together in chronological order.

21. Real-Life Examples Ecoinmerce is a Washington-based e-commerce platform that allows its users to own digital assets like brands, stores, and crypto. These are block chain tokens that they can then use for trading across the marketplace.

22. Bit coin vs. Block chain The goal of block chain is to allow digital information to be recorded and distributed, but not edited. Block chain technology was first outlined in 1991 by Stuart Haber and W. Scott Stornetta , two researchers who wanted to implement a system where document timestamps could not be tampered with. The Bitcoin protocol is built on a blockchain .

23. Advantages and Disadvantages of Block chain Advantages Improved accuracy by removing human involvement in verification Cost reductions by eliminating third-party verification Decentralization makes it harder to tamper with Transactions are secure, private, and efficient Disadvantages Significant technology cost associated with mining bitcoin Low transactions per second

24. ICO An initial coin offering (ICO) is the crypto currency industry’s equivalent to an initial public offering (IPO). A company looking to raise money to create a new coin, app, or service launches an ICO as a way to raise funds.

25. Digital Financial Services (DFS) Digital Financial Services (DFS) include a broad range of financial services accessed and delivered through digital channels, including payments, credit, savings, remittances and insurance. Digital channels refers to the internet, mobile phones, ATMs, POS terminals etc. – DFS concept includes mobile financial services (MFS).

26. Why Digital Financial Services? ■ Reach larger audience of customers untapped by the existing banking infrastructure ■ Increases financial inclusion ■ Increase efficiency of delivery ■ Improve quality of service ■ Revenue growth – Reaching new market segments – Offering new products and services enabled by technology ■ Cost reduction to companies and customers

27. Artificial Intelligence in Finance It refers to the application of computational tools to complete tasks that normally required human intuition and judgment. Artificial intelligence in finance  is transforming the way we interact with money.  AI  is helping the  financial  industry to streamline and optimize processes ranging from credit decisions to quantitative trading and  financial  risk management.

28. What does AI mean for the financial industry ? Virtual assistants and chat bots Improved investment insights Smarter search results Personalized financial advice Fraud prevention and anti-money laundering "Reading" contracts and legal documents

29. Applications of AI in Financial Services AI in Personal Finance AI in Consumer Finance AI in Corporate Finance

30. HOW AI HAS TRANSFORMED THE FINANCE INDUSTRY 1. Risk Assessment 2. Fraud Detection And Management: 3. Financial Advisory Services : 4. Trading 5. Managing Finance