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Liao Li: Application and Innovation of Fintech Business Models

Time: 2021-06-28 10:14 Print

On May 29-30, Liao Li, Executive Associate Dean at PBC School of Finance (PBCSF) and Chair at the Institute for Fintech Research (IFR) gave a systemic lecture on global fintech operating fundamentals, business models and regulatory dynamics. Based on the sharing of industrial guests on entrepreneurial models and technology applications, Liao gave guidance on how to cultivate innovative and entrepreneurial ideas, international vision and internet thinking.

At the series lecture, Liao Li started with a brief history of fintech and briefed on the current trends of global fintech and the status and significance of fintech research. In regard to the development pattern of fintech, he gave an in-depth analysis and interpretation of fintech business models from four perspectives: traditional institutional innovation, product and channel innovation, financing model innovation, and data and information service innovation. 

The students also gained a deeper understanding of industry innovation practices and development dynamics through the sharing of a host of fintech firms followed, such as IdeaTech, Licaimofang, Waterdrop Inc., and BigOne Lab. 

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Liao Li

Traditional Institutional Innovation 

Based on the basic layout of the financial industry, Liao Li compared the banking technology, securities technology, and insurance technology in China and the US, and briefed on the development status and changing trends of the banking, securities and insurance industries in the internet era. He noted that, with the expansion of internet scenario-based applications and the improvement of related regulatory policies, business models in different industries are also evolving. As such, how to grasp the development trend of different industries and policies is essential to business development in the future. 

Considering that domestic players are using technology applications to strengthen active supervision, Xu Tao, CEO of IdeaTech, an account data management service provider, introduced the company's product solutions in bank account management and, based on the analysis of four major risk monitoring values of data computing, core technology, application scenarios, and government interoperability, combed through the trends in China's digital governance in customer, business, and risk dimensions. He noted that the key to building an open platform for future fintech innovation is to establish common guidelines and achieve continuous iteration and update of self-feedback models through digital governance. 

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Xu Tao, CEO of IdeaTech

With the rising cost in attracting customers over the internet, how to fully exploit the potential of customers has become an important subject for financial institutions to expand their business. After analyzing the current internet consumer industry and smart investment advisor industry, Liao Li explained the theory of financial institutions in conducting asset and liability-side business and analyzed the prospects for integrated financial management in China after a comparison of the US and Chinese systems. During the interaction, in answering the questions of the students, Liao Li explained the case study of channel innovation in different financial scenarios.

Yuan Yulai, founder and CEO of Licaimofang, an intelligent investment advisory firm, gave a comprehensive introduction of the design and operation concept of its AI wealth management system by combining the logic of internet operation. He noted that, compared to the internet, finance is a slow industry where the early development phase is very important. The application of AI wealth management system can enable full AI-driven investment consulting, including personalized accompanying service framework, intelligent client analysis and intelligent investment management, etc., thus guaranteeing the efficient replication of management capability at zero cost. 

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Yuan Yulai, founder and CEO of Licaimofang

Financing Model Innovation

As a new financing method arising from the development of internet finance, crowdfunding plays a key role in expanding the financing mode and in promoting social stability and cultural development. Liao Li gave a comprehensive analysis of the development status and prospects of debt crowdfunding, product crowdfunding, equity crowdfunding, and donation crowdfunding models in China and abroad. As regards the inadequate development of equity crowdfunding and product crowdfunding in China, Liao Li proposed a solution to their development in China by combining the co-investment culture in the US. In terms of donation crowdfunding, Hu Yao, partner of Waterdrop Inc., taking its charity project, Shuidichou, as an example, explained the evolution of major disease fundraising in China and Shuidichou's systematic solutions in this field. He noted that as a supplement to the national health insurance service, the value of Shuidichou in the field of medical donation has been gradually developed, while its risk control guarantee system has been improved, and a whole donation crowdfunding system of auditing, fundraising and monitoring has been formed.

Data and Information Service Innovation 

With the increase and refinement of data generation frequency and its granularity, both regulatory model and investment research are facing the pressure brought by the rapid accumulation of data. Based on the type analysis of alternative data, Liao Li sorted out and analyzed the roles of alternative data in driving changes in the financial industry from various perspectives, including the acceptance of financial institutions, the fund industry, and changes in the credit rating field, and guided the students to improve the data governance capabilities of the companies.

In the process of accelerating corporate digital transformation, how to improve data insight has become an important part. Based on the company's data service products, Chen Mu, CEO of BigOne Lab, a data technology firm, gave a comprehensive explanation of the analysis logic of its data dimension and data processing system, i.e., realizing multi-analysis scenarios by integrating rich data source types. He noted that alternative data covers a wider range of industries and more application scenarios than traditional financial data, and its application greatly facilitates the digital transformation of enterprises and empowers various traditional fields that rely on business decisions in a comprehensive manner, such as enterprise data services and investment research data services. 

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Chen Mu, CEO of BigOne Lab

In the end, Liao Li noted that a communication and cooperation mechanism will be gradually established between the project participants and various centers of the Institute, which will facilitate integration among the participants in terms of policy contribution, subject research, academic results conversion and other areas, to enable the complementary advantages of resources and improve the efficiency of the transformation of industry, academia and research, and promote the sustainable innovation-driven development of finance and related industries.