20576 - BANK AND FINTECH: VISION AND STRATEGY

None, in particular. Although it is suggested that students have attended the basic course in Financial Markets and Institutions in order to fully exploit the value of the course.

The banking industry is changing widely and consistently. Financial digital technologies - such as Open-API, cloud, algorithms, and BigData - are playing an increasing role in the financial services industry, where FinTech companies are rapidly transforming the industry in terms of its regime and structure toward a broader ecosystem of different and interconnected businesses. In this process, FinTechs, Internet giants, and incumbent financial institutions are all changing the way the financial industry is developing and delivering its value and related services. The FinTech phenomenon has evolved from startups that want to take on and beat incumbents, to a broader ecosystem of different and interconnected businesses looking in many cases also for partnerships with financial institutions. The aim of the course is to provide an adequate representation of both visions and strategies and the ways they are all executed in the market of financial services, also outlining the most relevant managerial implications and consequences for the industry.

The course is focused on providing professional knowledge and effective tools to students by assuming a dual perspective of analysis, namely:

• Those working within banks (especially retail and private banks), and FinTech companies and also interested in developing their own FinTech company.
• Those who, for various reasons, are called to collaborate with banks as external partners (consultants, venture capitalists, technology vendors, and others).

The curriculum is organized by giving students a whole picture of the evolution of the financial services industry and a deep knowledge of what both Banks and FinTechs are facing new challenges.

The course is also organized by vertical-product areas that are the spectrum of concepts driving innovations of the principal financial intermediation functions (money and payments, lending, saving, and investment). For each area, we start by analyzing the marketplace, the incumbents, the new business cases, and the strategies of the incoming technology-driven players with an emphasis on the underlying economics, technology applied, and the way competition is changing its features.

Students will be able to develop a theoretical and a strong practical understanding of the forces transforming the banking and financial services industry at an international level.

To reach this goal, the course is going to be both interactive and interdisciplinary in order to deepen students' understanding of the economics of Banks and FinTech companies and encourage their critical thinking, as well as a creative entrepreneurial spirit.

In the course, we begin exploring the reasons why FinTech companies enter the market and move forward to know how they are transforming the industry and the market competition. 

The whole course is supported by examples, case studies, guest speakers, and live discussions on the main topics, for which active class participation is essential.

The course is developed over four parallel strands:

• The first analyses both Banks and FinTechs in their ways to change by understanding their main drivers (technology, regulation, customers’ attitudes, and competitive advantages), business models, and future trends.
• The second is understanding the market structure and its future transformation (supply-demand value chain, platforms, and ecosystems in the financial industries).
• The third is focusing on Banks' and FinTechs' frameworks of collaboration (competition versus collaboration) to learn how banks embrace the change.
• The fourth is developing a forward-looking approach to new banking realities (new layers of banking, new types of banks, new winning business models, the differentiation between players, etc.). Particular attention will also be devoted to describing open banking and open finance paradigms.

At the end of the course, students will be able to gain knowledge and a critical thinking perspective in the following areas:

• Identify the main forces of financial transformation.
• Explain the origins and drivers of the FinTech phenomenon and its hype.
• Understand and assess the main features transforming the banking industry.
• Discuss the impact of FinTech in the financial markets.
• Understand the unique features of banks and FinTech development.
• Explain the consistency of the FinTech companies’ business models.
• Reflect upon the role of digital platforms in the FinTech revolution and the evolving of business ecosystems.
• Compare different perspectives on the idea of FinTech leading the banking industry versus incumbents.
• Understand the true essence of disruption and transformation in the industry by outlining the shift from transactions to services-driven approaches with related managerial and entrepreneurial challenges.

• Evaluate critically the empirical evidence related to the evolving structure of banking as a business and the main strategies different actors are developing in the market.
• Appraise the role of banks and FinTech companies in a modern society (value propositions, customer relationships and risk assessment).
• Evaluate the impact of the main environmental forces of change on the strategies and performance of both banks and FinTech companies.
• Understand the regulatory challenges posed by FinTech companies and digital transformation.
• Conduct an independent search and review of specialized academic and non-academic literature on banking, and identify and evaluate relevant information.

• Face-to-face lectures
• Online lectures
• Guest speaker's talks (in class or in distance)
• Case studies /Incidents (traditional, online)
• Group assignments
• Interactive class activities on campus/online (role playing, business game, simulation, online forum, instant polls)

In order to propose a close link between theory and practice, exposure to fundamental theoretical concepts is supported by examples, business cases, and class discussions thanks to the presence of professionals from different institutions, such as banks, FinTech companies, consulting firms, and supervisory authorities. Each of them brings their own particular perspective to the course.

The course is designed to be interactive.

You are expected and encouraged to take part in class discussions.

We want to deepen your understanding of the economics of Banks and FinTechs also encouraging your creative and entrepreneurial spirit. Therefore, students are expected to read, whenever required, the materials before class.

• Face-to-Face lectures.
• Active readings. These sessions require students to read papers/articles/reports and similar and analyze them while making comments according to a set of guidelines.
• Guest speakers' talks. We have a number of sessions with outside experts including consultants, founders of early-stage start-ups, and executives in financial services, and venture capitalists.
• Groups projects. They are designed :
  • to help students upgrade their personal thinking
  • to evaluate the impact of FinTechs on the strategies and performance of banks
  • to assess the resiliency of FinTechs business models
  • to develop group work and collaboration and be able to present projects to the class.

Students can choose the attending status, and this option can offer different learning experiences and a different valuation process. In this case, the final evaluation takes into account the following learning components:

• Two group assignments (differently weighted but overall counting for 55% of the final grade). They are two different projects and are differently graded, as will be detailed in class. They are both designed for the purpose of verifying the student's ability to:
  • Apply the appropriate tools and methodologies learnt in class.
  • Work on a team and organize and present effectively the relevant outcomes.
• Final written exam (45% of the final grade), based on a mix of open questions (essay style)  aiming to assess the student’s learning level on a set of selected parts of book and articles. (Everything will be detailed in the syllabus and uploaded on Blackboard).

• Attending status and related scores will be considered for the exam sessions of December 2023 and January 2024.

The exam is written (100% of the final grade).

The contents refer to the textbook and the material made available on the Course website (technical notes, readings, and slides) as detailed in the syllabus.

The final evaluation is exclusively by written examination and it is not possible to integrate marks obtained in group work, which can only be carried out by attending students.

The written exam consists of a set of open questions essay style.

• Book:

Omarini A., 2019, Banks and Banking: Digital Transformation and the Hype of Fintech. Business impacts, new frameworks, and managerial implications, McGraw-Hill

The book is also available as eBook at

• https://www.bookrepublic.it/book/9788838695797-banks-and-banking-digital-transformation-and-the-hype-of-fintech/
• https://www.ibs.it/search/?ts=as&query=omarini+bank%20fintech&query_seo=omarini+bank%20fintech&qs=true
• Also available through the Bocconi Library.

• Other relevant materials (articles, cases, class notes, news articles, slides) are posted on the Bboard and/or handed out in class.

Further details on the fewer selected parts for the attending students will be provided at the beginning of the cours. 

• Book:

Omarini A., 2019, Banks and Banking: Digital Transformation and the Hype of Fintech. Business impacts, new frameworks, and managerial implications, McGrawHill

The book is also available as eBook at

• https://www.bookrepublic.it/book/9788838695797-banks-and-banking-digital-transformation-and-the-hype-of-fintech/
• https://www.ibs.it/search/?ts=as&query=omarini+bank%20fintech&query_seo=omarini+bank%20fintech&qs=true
• Also available to Bocconi Library.

• Other relevant materials (articles, cases, class notes, news articles, slides) are posted on the Bboard and/or handed out in class.