PolyU Open Forum - AI and Fintech Applications for Banking, Finance and Servicing Industries

The Open Forum named “AI and Fintech Applications for Banking, Finance and Servicing Industries” organized by Department of Computing, The Hong Kong Polytechnic University on 6^th July 2019.  The City University of Hong Kong Engineering Doctorate Society (CityU EngD Society) and Hong Kong Society for Quality (HKSQ) were supporting organization.  Recently, Hong Kong government has granted some 8 virtual bank licenses. New business models adopting such technologies disrupt the value chain and our way of living.  This open forum aimed to share experts’ views on how AI and Fintech can be deployed to benefit Hong Kong and its international business. During registration, I met CityU EngD cohorts and took photos for memory.

(Left: Dr. Walter Fung, Dr. Pang Yuen, Dr. Samuel Fung and I)

(Left: Dr. Keynes Chan, Dr. Samuel Fung, Dr. Rocky Lam, Dr. Pang Yuen and I)

I also met Mr. Coleman Tse (GM, HKQAA)

I took a photo with Mr. Harry Li (Founder, Circular Economy (HK) Ltd.)

I recognized Mr. Homa Ho (何湛康) (首席探索官, 深圳前海普佳商務服務有限公司) (middle) and PolyU graduate in building service.

In the beginning, Dr. Walter Fung (Teaching Fellow, COMP, PolyU) introduced the forum aim and speakers.

Prof. Li Qing (Chair Professor and Head of Computing, PolyU) gave opening remarks.  He introduced the only degree course of Fintech in Hong Kong named “The BSc (Hons) in Financial Technology and Artificial Intelligence”.

Then all guests and speakers took a group photo.

The first speaker was Dr. Allen Au (Associate Professor, COMP, PolyU) and his topic entitled “Blockchain, Again?”  He introduced Blockchain, Cryptocurrency ecosystem, Smart Contract, Application in Finance Industry and Challenges, etc.

Firstly, Dr. Au briefed the blockchain in three levels and they were applications (ledger), data structure and consensus. It transferred value digitally without trusted third party.  People had single view of history.  Blockchain transferred from trust someone (computation by responsible party) to trust the technology (verification by re-execution).

Then Dr. Au mentioned the cryptocurrency ecosystem using bitcoin. Miners built the block to service users’ transactions that they earn the bitcoin.  In traditional banking system, one ledger per user and trust the bank to verify consent.  However, in decentralized cryptocurrency, one shared ledger for all users, consent represented by digital signatures through the trust of the technology.

And then Dr. Au stated the smart contract that the code stored and synchronized in blockchain, which is triggered by user initialized special transaction, and executed concurrently by consensus nodes.  It can update the data stored in blockchain and the modified data remains synchronized among all nodes. That “Smart” means it responded by code without interrupted by owner.  

The following table showed the common blockchain platforms.  For standardization, ISO TC 307 was formed in 2016 to prepare for standardization in inter-chain communication. It is led by Australia, with 17 participating countries and 16 observing countries.

After that he briefed some applications in Government (e.g. Singapore – Digital Currency Project Ubin), Bank (e.g. JP Morgan – Interbank Settlement System) and IT Company (e.g. IBM – Cross-border payment with Stellar.org).  He also discussed some challenges of using blockchain in FinTech.

Finally, Dr. Au discussed Blockchain Trilemme included Decentralized, Consistent and Scalable (~efficiency). He said three factors could not optimize at the same time.  Lastly, he said Blockchain was not able to solve all problems and most organization didn’t need a blockchain.  But we were on the right track.

The second speaker was Mr. Jerome Luo (羅小江先生) (VP, Yonyou Group) and his presentation named “Digital enterprise and intelligent servicing business (數字企業智能服務)”. His talk included Fintech trend, Fintech Innovation and Application.

Mr. Luo introduced Fintech development from 2000 to now and separated into three stage and they were financial digitalization to financial network and mobility and then to financial automation and intelligence.  

Then Mr. Luo briefed the Blockchain from idea to application.  Before 2014, it is bitcoin era. From 2014 to 2018, smart contact era is arrived.  After 2018, scalable application era is coming.

After that Mr. Luo introduced their services included AI application, smart retail – customer analysis, management – HR talent pool, credit & risk management, enterprise health model, etc.

At the end, he showed different application and one of them was AI in industry smart inspection.  Mr. Luo said he mainly focused in cloud and built ecosystem for their customer. 

The third speaker was Mr. John Yau (Business Development Manager, O2O Payment) and his topic was “ePayment for retail and servicing industries”.  He briefed his company which was engaged in Smart Payment and O2O solutions development.  

He shared new e-payment in China and the world.

Finally, he introduced their 3 major products included Integrated Payment API & APP, Intelligent Mobile Payment and Integrated Multiplatform eCommerce System.

Mr. Curtis Chan (Founder and CEO, PolyDigi Limited) was the fourth speaker and his presentation entitled “How to speed up the Hong Kong fintech business?”  Firstly, he briefed PolyDigi which was founded in 2012 when Mr. Chan graduated from PolyU. It is also a HKSTP & Cyberport alumni.  Their business is in Cyber Security especially in Telecom Authentication.

In the beginning, Mr. Curtis Chan briefed the global fintech rankings that Singapore is number 1 and Hong Kong is number 10.  Eventhough in Singapore no.1 secure city, they were also under cyber-attack such as SingHealth lost 15M people information. 

Then Mr. Chan briefed current authentication methods included SMS One Time Password, Hardware Token, Software Token, Biometrics and USB key.  However, the information inputted by end-user (client) side is unreliable due to the phishing web middleman attack.

After that Mr. Chan briefed their product named “SimKeyGo” for the best 2 factor authentication method and could use in the mobile 2^nd SIM slot. He also demonstrated the comparison of different authentication \methods.

At the end, he expected eSIM enables remote SIM provisioning internet access of any mobile devices and it led the future economy disruption!

The fifth speaker was Mr. Harry Ngai (Head of Audit Department, Jetco) and his topic named “Risk assessment and audit for fintech business”.  Mr. Ngai separated Adult (in blue color) and Child (in yellow color) indicating that:

Adult: Finance, Understand the market, Don’t understand the technology, Mature, Adopt, Risk Assessment and Audit, etc.

Child: Technology, Don’t understand the market, Understand the technology, Energetic, Growth, Risk Assessment and Audit in Fintech Business, etc.

After that Mr. Ngai introduced JETCO which was ATM Switching for 30 Banks.  However, it changed to Gateway (2000), NFC Mobile (2013) and Open API (2019).

Lastly, he briefed the key risks included Strategy & Planning, Staff Development, Change Management, Risk Management and Monitoring. He said audit from “Checker, Challenger and Picker” to “Coach, Consultant and Partner”. He asked us to rethink on everything and concluded that Audit outcome was Customer Trust.

Dr. Thomas Chan Man Hung (陳文鴻) (Director of One Belt One Road Institute, Chu Hai College of Higher Education) was the sixth speaker and his presentation entitled “SWIFT and its challenges?”  He said it is all political problem not financial problem. 

Beginning, Dr. Thomas Chan explained how SWIFT work.  It is the messaging platform enabled financial institutions to send, receive and track information about financial transactions in a secure and standardized way that facilitated that smooth flow of funds across borders in the world.

However, SWIFT could be sanctioned by the US so that under US threat it had to comply with US request to sanction any targets requested such as Iran in 2012.  Dr. Chan also explained how secondary sanctions work such as US secondary sanctions to bolster UN and unilateral US sanctions against North Korea’s nuclear program.

After that Mr. Thomas Chan said eventhough Germany, France and UK had INSTEX under Special Trade and Finance Institute (STFI) for special purpose vehicle (SPV).  US still warned European banks, investors and businesses against engaging with INSTEX.   

Finally, he concluded that technology is not so important without politic.  

Mr. Joseph Chan (Founder and CEO, AsiaPay Group) was the last speaker and his presentation title was “Asia Payment Business beyond 2020s”.  He introduced payment’s method, infrastructure, channel and experience on digital payment development. 

Firstly, he briefed different digital payment in different areas in Asia including China, HK, Malaysia, India, Thailand, Singapore and Philippines. 

And then he mentioned payment innovation in their product 3-D Secure 2.0 that could delivers 10 times more data than previous version and sales dropoff lowered by 70%.  They adopted AI for Lending/Scoring, Investment Trading, Merchant Onboarding, Fraud/Risk Screening and Payment Authentication.

Lastly, he used their core values as conclusion that Simple, Convenient, Secure and Trust.

Q&A Session:

I asked Dr. Thomas Chan if Blockchain could bypass SWIFT and avoid US sanction.  He said it was no matter what technology used.  He added Donald Trump made “Lie becomes True” and “True becomes Fake News”. And the WWIII would become cyber war.

Participant asked Mr. Jerome Luo about privacy conflict in his service.  He said his company had already followed GDPR regulation in Europe. 

I asked a last question about future payment.  I referred a news about Huawei and Union cooperation to use NFC for payment and mobile could become POS. I asked if it would be disruptive innovation to break all your payment service.  Mr. Harry Ngai replied that we were not competition but partners to provide different channels for payment in digital world. 

Reference:

PolyU COMP - https://www.comp.polyu.edu.hk/

CityU Engineering Doctorate (EngD) Society - http://www.engd.org/  

Engineering Doctorate (Engineering Management) - http://www.cityu.edu.hk/seem/prg-engd.htm

HKSQ - www.hksq.org

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