All posts tagged: Finance

The Rise of FinTech and Compliance

Published by Tom Lin

An important transformation is happening in the financial industry. The rise of new technology and compliance has dramatically altered many of the key functions and functionaries of modern finance. Artificial intelligence, algorithmic programs, and supercomputers, instead of human actors, now constitute the core of many financial operations. At the same time, compliance officers have become just as critical to financial institutions as traders, bankers, and analysts. Finance as we knew it has changed and continues to change. My recent article, Compliance, Technology, and Modern Finance, offers a detailed commentary on these unfolding changes—the crosscutting developments in compliance, technology, and modern finance. It examines the concurrent and intersecting ascents of new financial technology and compliance as well as the potential perils linked with their ascents. It also highlights the larger implications of the changing financial landscape due to the growing roles of new technology and compliance. In particular, it focuses on the challenges of financial cybersecurity, the integration of technology and compliance, and the role of humans in modern finance. The modern financial industry is ostensibly …

Financial Weapons of War

Published by Tom Lin

A new type of warfare is upon us. In this new mode of war, finance is the most powerful weapon, bullets are not fired, financial institutions are the targets, and almost everyone is at risk. Instead of smart bombs, improvised explosives, and unmanned drones –– economic sanctions, financial restrictions, and cyber programs are the weapons of choice. This is the reality of modern financial warfare. This Article offers an early examination of this new mode of war. It explores the new financial theater of war, analyzes the modern arsenal of financial weapons, highlights emerging legal tensions, and proposes key recommendations for current and future financial warfare. The Article begins with a general survey of the modern financial infrastructure, the emerging battlefield of modern warfare. Next, it provides a more detailed inventory of the financial weapons of war. It accounts for traditional weapons like economic sanctions, anti-money laundering regulations, and banking restrictions, as well as cyber weapons like distributed denial-of-service attacks, data manipulation hacks, and destructive intrusions. It also explains how these weapons are used in …

Infinite Financial Intermediation

Published by Tom Lin

Intermediation is a fundamental fact of finance. Intermediaries like commercial banks, investment banks, stockbrokers, mutual funds, and stock exchanges form the fabric of modern finance. Yet despite all these financial links, entrepreneurs and innovators continue to endeavor towards the possibilities of fundamentally disrupting and disintermediating these existential financial ties, breaking apart from the financial main, and building new financial islands. This Article offers a studied commentary of those financial links and those disengaging endeavors, the ties that thread the fabric of modern finance and the efforts to tear those threads asunder. It presents an examination of the functional evolution of financial intermediation, explains the difficulties of true financial disintermediation by revealing the underappreciated links that remain when traditional links are decoupled, and highlights potential implications and recommendations arising from such a revelation. Building upon a rich literature that spans law, economic, finance, and sociology, it seeks to explain the strong adhesiveness of financial intermediation and explore the looming challenges presented by future financial intermediation. Collectively, this Article provides a different perspective for thinking about financial …