Last November, NYU Stern hosted “The Transformative Potential and Regulatory Challenges of FinTech” conference. An extensive forum brought together researchers, industry executives, alumni, and students to debate & discuss the future of FinTech, the latest research in this dynamic field, and how technology is reshaping the finance industry.
Explaining the two biggest drivers of FinTech, Vasant Dhar, Professor of Information Systems, NYU Stern, shares:
“The first big driver is the emergence of big FinTech platforms. And this is not new, it has been a key driver of the Internet economy. <…> Platforms have three properties, or component: they offer open access/free participation, they implement some key business process, which typically enjoys a network effect - the more people sign on, the more valuable the platform becomes, the more data it generates; and that business process is implemented through some key technology. And the automation is the kicker that turns the platform into overdrive.”
Dhar goes on to explain that historically, financial services have been incomplete – they have lacked one or more of these components. Either for technological or regulatory reasons. However, there is a framework that explains how modern platforms can become complete, and why the convergence of the trio is the most desirable spot.