Owning Finance in the Digital Era – An Interview with Prof. Kaserer

Prof. Dr. Christoph Kaserer, professor of Finance at Technical University Munich

Digital disruption and digital finance go hand in hand. Personal finance like asset management and stock trading is undergoing a massive transformation. So what is next in digital finance? Prof. Dr. Christoph Kaserer is professor of Finance at Technische Universität München (TUM), co-director of the Center for Entrepreneurial and Financial Studies (CEFS) and expert in digital finance. He provides insights into the future of finance and shares his expertise in corporate finance, financial intermediation and asset management. Prof. Kaserer is one of our lecturers of the new master’s program in Finance & Information Management – enabling our students to develop own ideas of finance management and master the challenges of big data by using innovative strategies of information systems. In an interview he explains why financial economists need a good command of computer science methods in order to handle big data properly.

Prof. Dr. Kaserer, how has Fintech revolutionized the financial market?

PROF. DR. KASERER: This is a revolution involving all parts of the financial services industry. Payment services have already been fundamentally changed. Currently, we see that personal finance like asset management and stock trading is under huge transformation. The next step will be the tokenization of securities markets and corporate finance.

And what aspect of Fintech will have the greatest impact in the near future?

PROF. DR. KASERER: That’s pretty hard to say. Personally, I believe that digitization of personal finance will have long-lasting consequences. Positively speaking, it will further democratize securities markets giving a much larger fraction of population access to capital markets. However, this comes along with new risks arising with what is called the gamification of stock trading. This is why regulators have a close eye on what is going on in this area.

Cryptocurrencies such as Bitcoin are changing money. Will cryptocurrency be of importance in our everyday lives and how will their future look like?

PROF. DR. KASERER: Digital currencies will evolve – without any doubt. However, central banks will make sure not to lose control over their currencies. This is a significant boundary for how cryptocurrencies will develop. I’m personally skeptical about the future of cryptocurrencies that do not have an asset base – such as Bitcoin. Actually, this does not mean that cryptocurrencies will not evolve – I’m pretty sure that they will. However, I think it will be very hard to win this race without the support of central banks, as we have seen, for instance, in the case of Facebook’s Libra. Having said that, we should not forget that the cryptocurrency experiment will generate important spillovers to other segments of financial markets. Most importantly, blockchains facilitate tokenization. And this will fundamentally shape security markets. We already have digital assets in the marketplace – and there is much more to come.

Students of the Master in Finance & Information Management will learn how to think like computer scientists and entrepreneurs. Why is that important in order to become a forward-thinking finance expert?

PROF. DR. KASERER: Actually, they should continue to think like financial economists. However, a good command of computer science methods is necessary as many products and services are based on them. Moreover, these new methods shape finance research. In fact, empirical finance research is close to what might be called a big data problem. In many cases, structuring and analyzing this data will not be possible without methods from computer science. We want our students to be able to do this, and so they need access to faculty and fellow students from computer science. We will also train them to keep in mind the potential market impact of their research. Therefore, we aim to build strong connections with entrepreneurs and the entire surrounding ecosystem.

Are you interested in gaining insights into the current development in digital finance? Do you want to manage digital transformation and disruption at its forefront? Or do you see yourself applying data processing, analysis and preparation techniques or designing the power grid of the future? Our multifaceted Master in Finance & Information Management (FIM) welcomes excellent and outstanding talents into an international study atmosphere with small classes within a large network of business partners. Find out more about our new program here.

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