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In recent decades, the rate of technological innovation in financial services has accelerated, posing new challenges for regulators and regulated financial services firms around the world. This course will provide a brief introduction to the existing technologies and business models used by established financial services firms and the regulatory framework that applies to them, before examining how new technologies and new business models are transforming financial services around the world. Different law reform strategies adopted by regulators in different countries will be assessed, as will business strategies of regulated firms to accelerate their rate of innovation. As national regulators confront the challenge of protecting local consumers in global markets, they may respond by collaborating with other national regulators, with extraterritorial enforcement of their laws, collaboration with private regulators, or ceding the terrain to private regulators. Although cryptocurrencies, blockchain and distributed ledger technologies may receive the most media coverage, many other case studies of disruptive 'FinTech' innovation and its regulation in both advanced and emerging economies will be examined.
Principal topics include:
- Commercial banks and bank regulators
- Global harmonization of bank regulation
- Payment systems and payment law
- Legacy technologies and internal controls
- Economics of networks and platforms
- Economic drivers of innovation
- Better regulation and new governance
- The rise of smart machines
- Evidence-based problem solving
- 'RegTech' is the new FinTech
- Faster payments/immediate payments
- Bitcoin, blockchain, distributed ledger
- FinTech regulation in the United States; United Kingdom and European Union; China; and India.
Intended learning outcomes
A student who has successfully completed this subject will:
- Have a sophisticated understanding of the strengths and weaknesses of the modern business of banking, the conventional approach to banking regulation, and role of commercial banks in modern economies
- Have an advanced and integrated understanding the most important forms of technological innovations that are disrupting modern financial markets by making it feasible for start-up companies to compete with banks
- Be able to assess in a critical and sophisticated manner the functions of global governance institutions including how to distinguish them from conventional modern national regulation and multilateral coordination among national regulators
- Develop a specialised understanding of how the customers and consumers of conventional financial services are being converted into users and stakeholders by new service delivery models and channels
- Have a detailed understanding of how risks and rewards are allocated among the different participants in conventional and disruptive financial services under conventional regulatory frameworks, new governance frameworks, and private agreements
- Be able to assess in an advanced and integrated manner the strengths and weaknesses of public, private, global and local systems of regulating financial services
- Have a sophisticated appreciation of the major themes of the course and their relevance to the different topics in the syllabus.
Last updated: 16 September 2023