Financial Technology: Methods and Practice

FIN 550F/450F - Syllabus

Prof. Asaf Manela

Washington University in St. Louis
Olin Business School

Spring 2019

Section 01 Meets: Mon/Wed, 11:30am – 1:00pm @ Simon Hall 106

Section 02 Meets: Mon/Wed, 1:00pm – 2:30pm @ Simon Hall 106
Website (Canvas): https://mycanvas.wustl.edu/

Course Description

This course will provide an overview of financial technology and will cover specific top-
ics in this area. Topics covered include data-driven credit modeling, crypto currencies,
digital wallets and block chains, robo advising, high-frequency trading, crowd funding,
and peer-to-peer lending. The course will also discuss regulatory aspects of fintech. The
course will cover different methods as well as practical applications.1
Prerequisite: FIN 340 (BSBA)

Reading Material
• Teaching notes posted on Canvas

• Case studies available in the coursepack at bookstore

1. Cutting Through the Fog: Finding a Future with Fintech (UV7225)

2. Lending Club A and B (E-597 and E-597 B)
3. Lending Club: Time to Join? (9214-046)
1 Part of this course is inspired by a course taught by Shimon Kogan at Wharton.

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 4. Deutsche Bank: Pursuing Blockchain Opportunities A and B (9-817-100 and
9-817-101)
5. Dianrong: Marketplace Lending, Blockchain, and "The New Finance" in China
(9-218-043)
6. Quants in Utopia? Quantopian and Its Crowd Wisdom Hedge Fund Model
(HK1109)
7. Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advi-
sory Company (9-216-085)
8. Ant Financial (A) (9-617-060)
9. Domeyard: Starting a High-Frequency Trading (HFT) Hedge Fund (9-215-036)
• Other reading material will be posted on Canvas

Course Requirements
The course requirements consist of reading and preparing for class discussion of cases,
problem sets, a midterm exam, and a final project. I believe that a good way to learn the
new concepts we cover in class is to apply them to real-world problem. The problem sets
and final project will be done in groups that I will assign.
Students can expect to spend about 7–9 hours / week of study outside class.

Grading
Class contribution, problem sets, midterm, and final project are individually scored and
count towards the course grade according to the following proportions: 20%, 30%, 25%,
and 25%, respectively.
Your final grade will depend on your performance in the class relative to classmates in
your program (MSA or BSBA).
Class contribution means asking clarifying or insightful questions and answering ques-
tions which are posed to the class or arise during discussions. Reading and understanding
the assigned cases is key. Class attendance, while important for you personally, does not
constitute class contribution.
Regrading requests must be made within one week after the grade has been returned. In
making your requests, keep in mind the entire exam or assignment is subject to regrading.
Thus, it is possible your score may be revised upwards or downwards.

Olin’s Pillars of Excellence

Students taking this class will do all of the following:

1. Embody a values-based and data-driven ethos in their approach to all business situations

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 2. Understand the global opportunities and challenges facing businesses
3. Engage with business issues through the application of experiential knowledge, in addition
to the rigorous technical skills acquired in the classroom

4. Pursue world-changing initiatives with an entrepreneurial and innovative mindset and skillset

Assistants to the instructor

Assisting me with this course are

Vasudha Nukala nukala.v@wustl.edu

Leifu Zhang leifu.zhang@wustl.edu

They are available to answer questions on class material.

Office Hours
Mon 3:30-4:30pm @ Simon Hall 201
For long meetings, please send me an email to fix an appointment: amanela@wustl.edu
Although I am available weekly to see students to answer questions, many questions can
efficiently be answered by email. Please, try to ask your question by email first, and you
should usually receive an answer within a few hours. For clarifying questions this is
especially useful, as I can then forward your question to the whole class. Note that emails
received at 1am will probably not be answered before the following morning.

Course Policies
The following policies will be enforced to prevent distractions and even the playing field:

• Students should generally not use laptops, tablets, phones, or other electronic de-
vices during class
• We will use laptops in some classes. I will usually announce that ahead of time, but
bringing a laptop with you just in case is a good idea
• Students are expected to keep their mobile phones turned off during class. Students
should not answer phone calls and students should not read or send text messages
during class.
• Food is generally not permitted in class. Quiet beverages (requiring no can opening)
are allowed.
• Students are expected to arrive and be seated prior to the start of each class session.
They should display their name cards in all classes at all times.
• There will be no make-up exams unless disaster strikes.

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Disabilities

Reasonable accommodations will be made for students with verifiable disabilities. Stu-
dents who qualify for accommodations must register through Washington University’s
Center for Advanced Learning Disability Resources (DR) in Cornerstone. Their staff
members will assist me in arranging appropriate accommodations.

Academic Integrity

Students are required to abide by the Olin Code of Conduct. Academic dishonesty of any
form will not be tolerated. Please refer to the Olin Code of Conduct for responsibilities,
guidelines, and procedures regarding academic integrity. You may also consult with your
program’s Dean if you have questions or concerns.

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Class Schedule

The following schedule is very preliminary and will probably change as we go along.
Class Topic Notes Assignment Due / Comments
Overview
1/14 Introduction to fintech TN1
1/16 Introduction to fintech TN1 Case: Cutting Through the Fog
1/21 Martin Luther King Holiday – no class
1/23 Technological elements TN2 Guest: Sultan Meghji
1/28 Technological elements TN2
1/30 Technological elements TN2
2/04 Coding with Julia TN3 Bring laptops
2/06 Coding with Julia TN3 Bring laptops
2/11 Deep learning TN4 Bring laptops
2/13 Financial intermediation TN4
2/18 Financial intermediation TN4 Problem set: Deep learning
2/20 Financial intermediation TN4
2/25 Peer-to-peer lending TN4 Cases: Lending Club (A) and (B)
2/27 Midterm (must be taken in your section)
3/04 to 3/08 Travel Week – no class
3/11 to 3/15 Spring Break – no class
3/18 Data-driven credit modeling TN5
3/20 Data-driven credit modeling TN5 Problem set: Lending Club loan-level data
3/25 Data-driven credit modeling TN5
3/27 Algorithmic fairness TN5
4/01 Quantitative trading TN6 Case: Quantopian
4/03 Quantitative trading TN6 Guest: Drew Dennison
4/08 Blockchain: network and incentives TN7 Case: Dianrong
4/10 Crypto currencies TN7 Guest: Jim Huang
4/15 Machine learning in trading TN8 Problem set: Crypto
4/17 Machine learning in trading TN8
4/22 Final Project Presentations
4/24 Final Project Presentations