Open Finance and Payment Technologies

BMAN75452 Open Finance and Payment Technologies 15 Semester 2 Postgraduate Taught Level 7 Markos Zachariadis Unit coordinator 1 FHEQ level (Framework for Higher Education Qualifications) ' Masters/Integrated Masters P4 ' European Credit Transfer & Accumulation System Rating : 7.5 The course will look at the recent developments of FinTech innovation for accounts and payments, digital transformation in banking, new ways of value exchange based on new rails, digital tokens (e.g. cryptocurrencies, CBDCs, etc.) and shared-ledger (e.g. blockchain) technologies. Some of the relevant financial regulations in the UK and the EU (e.g. PSR, PSD2, GDPR, MIFIDII, etc.) will also be explored to understand how they affect developments in the sector. The module also addresses how banks and financial institutions adapt their internal structures and management processes to instil the culture and capabilities for continuous innovation and strategic agility in the face of technological disruption. Cases will be used to demonstrate how banking institutions can design a digital transformation strategy and use the latest technologies to stay ahead of competition.  The course will look at the recent developments of FinTech innovation for accounts and payments, digital transformation in banking, new ways of value exchange based on new rails, digital tokens (e.g. cryptocurrencies, CBDCs, etc.) and shared-ledger (e.g. blockchain) technologies. Some of the relevant financial regulations in the UK and the EU (e.g. PSR, PSD2, GDPR, MIFIDII, etc.) will also be explored to understand how they affect developments in the sector. The module also addresses how banks and financial institutions adapt their internal structures and management processes to instil the culture and capabilities for continuous innovation and strategic agility in the face of technological disruption. Cases will be used to demonstrate how banking institutions can design a digital transformation strategy and use the latest technologies to stay ahead of competition.  The unit aims to:The principle aim of the module is to provide the students with practical and theoretical understanding of how the financial services industry and payments have been transformed through the adoption and use of digital innovation and information technologies as well as access to data through relevant regulatory developments. The module takes both an external perspective on technological and market developments, as well as an internal perspective on organizational transformation and new ways of working for innovation and agility.By the end of the module, it is expected that the participants will be able to:- Appreciate digital innovation and information technology (IT) characteristics and their disruptive potential for the various sub-industries in the financial services sector such as payments and banking.  - Critically discuss the latest technological developments in finance (e.g. open APIs, artificial intelligence, etc.) and assess the impact of technology and big data on some of the processes and business models. - Assess fintech startup ideas and critically discuss how they make use of new technologies that provide a better customer experience or create efficiencies. - Understand the fundamental rationales for regulation and how these apply to different financial technologies and be able to explain some of the different financial regulations (e.g. PSR, PSD2, etc.) and how they relate to data and information technology in payments and banking.  - Evaluate the new and emerging business models that can be adopted by financial institutions as they digitize their processes and parts of their value chain and respond to new regulations around data portability. - Build and pitch a comprehensive mock-up for a fintech product/service and get a glimpse of how to strategize and develop fintech innovations in banking and payments leveraging open finance.The module also aims to encourage teamwork and communication skills via case study methods and group assignments.   Knowledge and understanding  KU1 Describe the various trends and technologies used in FinTech solutions. KU2 Explain the drivers of change in financial services sector and the importance of technology, regulation, and market dynamics. KU3 Explain the emerging business models in finance and how FIs can respond to new challenges, risks, and competition. KU4 Describe the opportunities and challenges associated with implementing FinTech innovations such as blockchain technology in payments. Intellectual skills  IS1 Relate key fintech phenomena to theory and concepts in economics and management.  IS2  Critically evaluate diverse perspectives, data, and viewpoints to develop informed stances on fintech innovations and commercial applications.   Practical skills   PS1 Collect and analyse evidence to support and recommend digital finance solutions.   Transferable skills and personal qualities  TS1 Persuasively communicate recommended open finance and payment technology strategies to a specialist and non-specialist audiences.   Syllabus (indicative curriculum content):Topic 1: The FinTech taxonomy and developments  Topic 2: Regulatory trends in Banking: Data portability and open banking Topic 3: Business model innovation and disruption in Banking Topic 4: Value-Transfer Systems & Payments Innovation Topic 5: Digital Identity & Financial Data Standards Topic 6: Central Bank-issued Digital Currencies (CBDCs) & the Future of Money Topic 7: The future of banking and finance    Lectures combined with group discussions of case studies. Interactive lectures (18 hours) Workshops on open finance and payment technology (12 hours) Guided independent study (120 hours) Total: 150 hours   3 Report 50% 7 Oral assessment/presentation 50% Group Project Presentation 20 mins  Written feedback provided on CLE (timing tbc).   Individual Report 2000 words After the end of the unit. Written feedback provided on CLE    N Coursebook(s):Susanne Chishti, Tony Craddock, Robert Courtneidge, Markos Zachariadis (eds.) (2020). The Paytech Book : the Payment Technology Handbook for Investors, Entrepreneurs and Fintech Visionaries . Chichester, West Sussex ; Wiley, 2020.Scott, S. V. and Zachariadis, M. (2014) "The Society for Worldwide Interbank Financial Telecommunication (SWIFT) : cooperative governance for network innovation, standards, and community", 83, Routledge, Taylor & Francis Group, London ; New York, NY. 9780415631648. FinTech Innovation; Open/Digital Banking; FinTech Ecosystems • Zachariadis, M. and Ozcan, P. (2017) The API Economy and Digital Transformation in Financial Services: The Case of Open Banking. SWIFT Institute Working Paper No. 2016-001. Available at SSRN: https://ssrn.com/abstract=2975199 • Zachariadis, Markos, Data-Sharing Frameworks In Financial Services: Discussing Open Banking Regulation for Canada (August 25, 2020). Available at SSRN: https://ssrn.com/abstract=2983066 or http://dx.doi.org/10.2139/ssrn.2983066  • Ozcan, Pinar and Zachariadis, Markos, Open Banking as a Catalyst for Industry Transformation: Lessons learned from Implementing PSD2 in Europe (September 1, 2021). SWIFT Institute Working Paper No. 2017-006, Available at SSRN: https://ssrn.com/abstract=3984857 or http://dx.doi.org/10.2139/ssrn.3984857  • Lin, Xiangyu and Zhang, Sarah and Zachariadis, Markos, The Effects of U.S. Open Banking Adoption. Available at SSRN: https://ssrn.com/abstract=4795398 or http://dx.doi.org/10.2139/ssrn.4795398  • Zachariadis, Markos (2019) Banking of the Future: Finance in the Digital Age. HSBC Global Report • Sironi, Paolo (2016) FinTech Innovation: From Robo-Advisors to Goal Based Investing and Gamification. The Wiley Finance Series. Digital Cash; CBDCs; Cryptocurrencies • Andrew Buckley, Vasileios Karountzos, Markos Zachariadis. “Paths to success for a Digital Pound: A research note on consumer attitudes to adoption”. https://www.alliancembs.manchester.ac.uk/media/ambs/content-assets/documents/news/ambs-fintech-digipound-white-paper-july-2024.pdf  • Zachariadis, Markos, Garrick Hileman, and Susan V Scott. “Governance and Control in Distributed Ledgers: Understanding the Challenges Facing Blockchain Technology in Financial Services.” Information and Organization 29.2 (2019): 105–117. • He, Chusu and Milne, Alistair K. L. and Zachariadis, Markos, Central Bank Digital Currencies and International Payments (May 17, 2022). SWIFT Institute Working Paper No. 2020-2, Available at SSRN: https://ssrn.com/abstract=4112382  • Zachariadis, M. (2017) Revolutionising cross-border payments with distributed ledger technology, World Finance, Jan-Feb, p. 173. International Payment Systems; Money Transfers; Financial Messaging Standards • Scott, S. V. and Zachariadis, M. (2012) "Origins and development of SWIFT, 1973–2009", Business History, Volume 54, Number 3, 462-482 • Zachariadis, Markos, Diffusion and Use of Financial Telecommunication: An Empirical Analysis of SWIFT Adoption (October 1, 2011). NET Institute Working Paper No. 11-10, Available at SSRN: https://ssrn.com/abstract=1952843 or http://dx.doi.org/10.2139/ssrn.1952843  • Geva, B. 2013. "Global Payment and Settlement Systems”, in Handbook of Key Global Financial Markets, Institutions, and Infrastructure, (Eds. Caprio, G.). Elsevier. • Scott, S. V., Van Reenen, J. and Zachariadis, M. (2017) "The long-term effect of digital innovation on bank performance : an empirical study of SWIFT adoption in financial services", Research Policy, 46, 5, 984-1004.    Lectures 18 Supervised time in studio/wksp 12 0 120