Evolution and Innovation of the Financial Systems. Can the Financial System be updated?

Finance has always been my Achilles’ heel. It was my weakest subject during my MBA, the subject in which I scored my lowest grades. Never understood anything about the subject, but now that I think about it, it was probably because finance never interested me. And, as fate would have it, the first job I got straight from college was with a bank, and a few years later, the second job was with an insurance company.

So, whether we like it or not, finance will always be a big part of our lives. And if you think about it, you have been involved with finance ever since that day your mother gave you that coin to buy that candy from that shop near your school. And today finance is part of everything we do.

In today’s world, without a financial medium there is very little that can be done – no shopping, no job, no entertainment, no companies, no products, etc., etc., you get the picture! Finance is one of the key fulcrums around which the human existence revolves.

Today’s financial system is a product of thousands of years of financial evolution. The world’s financial system is very complex, formed by the overlapping of multiple, global financial networks that move trillions of dollars a day to serve billions of people. People who in turn use it to improve their quality of life – purchasing, trading, and investing.

Like everything huge and complex, there are a number of drawbacks. The system’s size and complexity makes it slow, expensive, lacking in transparency, and hence open to fraud. It is a system that thrives on speculation and seems to create concentrations of wealth. In today’s age of information and globalisation, is it possible to create a more functional financial system?

A complex system, formed by the overlapping of multiple, global financial networks that move trillions of dollars a day to serve billions of people

So, what is a financial system?

Simply put, it is the information layer that records and mediates economic activity. Finance serves the function of accounting for, and exchanging of, economic value. Financial systems enable funds to be stored and moved between the people involved in an economic transaction. Enabling the economic players involved, be it individuals or organisations, to share in the ownership of the economic activity, with the associated risks and returns.

Evolution of the Financial System

A financial system has always existed, and throughout history it has evolved from a community based financial system, to an industrial age centralised system, to today’s new global financial institutions centred around information technology. There are of course a number of factors that have contributed to the development of the modern financial systems, from double entry accounting, to nations adopting a single, common economic system that spanned a relatively large geographic area, and finally, to capitalism and large investments in industrial infrastructure.

Capitalism and industrial investments lead to the amassing of great wealth, which in turn resulted in even greater investment in industry. This resulted in the need for bigger, more sophisticated institutions for the regulating, storing, investing, and distribution of financial assets. Due to industrialisation, organisations moved from a more local/regional level to a national level, as a result, small local community banks with their local financial systems could not meet the demands of the industrial age. This naturally resulted in a centralised national/federal/reserve banking system coming into existence, which was the driving force behind the industrial economy.    

Sophisticated institutions were need to facilitate capital investment into industry

With the world economy becoming more accessible and deregulated, financial systems have evolved to become more standardised at a global level, becoming a system that manages a large flow of capital, organising the assets and liabilities of people and organisations around the planet.

The financial system continues to evolve and innovate to serve customers better, and move money more efficiently – from credit cards, to SWIFT interbank exchange, to ATM’s, online and mobile banking, and finally to financial products that are heavily based on speculation.

While the modern financial system continues to innovate, evolve, and improve the lives of the people using the system, there are also a number of challenges that impact the system.

A large percentage of society today is only interested in making the “quick buck”. This has resulted in the creation of financial products that are based on speculation, and this is where most people are investing their money. As a consequence of this, the actual investment made to the economy, and industry is reduced, and makes the system unstable and prone to collapse.

  • Global financial systems, while having a digital façade of simplicity, are in reality very complex and expensive to create and maintain, requiring a number of intermediaries to keep the entire system functional. All of this adds to the cost of the system, making the system inaccessible to billions of people around the world.
  • The system is made closed on purpose to protect the data it contains, as a result it lacks transparency, which from time to time, results in people on the inside taking advantage of the system to commit crimes and abuse trust.

45% of financial services organisations have suffered frauds in the last 12 months

PricewaterhouseCoopers LLP, Sixth Global Economic Crime Survey – Financial Services Report
  • Like any system centred around information technology, security is a major concern, and back doors into the system can always be found by a determined hacker.
  • The modern financial system can be complex and difficult to understand, especially with the evolution of FinTech (finance + information technology). Technology companies have entered the world of financial services, offering a number of products along the value chain, but are still not able to offer the full services that a traditional financial service provider offers.

The financial system is once again starting to evolve with the internet driving innovation, pushing the financial system into a more decentralised model. Blockchain, distributed ledgers and tokens are showing the potential for the new forms of the financial system. With the internet providing the platform to record, store and exchange value independent of centralised institutions, resulting in an economy wide accounting system that is secure and transparent. Is this the future of the truly global financial system?

This is all truly complicated to be covered in a blog post, and especially not by me!

If you are interested in learning and being better prepared for the opportunities and challenges in the world of business, have a look at our list of programmes and see if we have anything that could help.

You can chat LIVE on WhatsApp with one of our Education Advisors for more information on all the programmes we offer, application process, and for information on discounts we might be offering at this time.

#DILO (A day in the life of) a master’s student – Nigel

As a former Education advisor, if I had to pick one of the most frequently asked questions by prospective students, it would definitely be “How many hours do I need to study?” 

The vast majority (if not all) of our students are working and leading remarkably busy professional lives. Some are motivated and have already decided to undertake a master’s, while others contemplate the unknowns of an online programme. In my experience, two things effect their decision the most.  

First – finances, and second, being able to strike the perfect work, study, and life balance. While I cannot completely help you with the finances (partially yes – check out the discount offers currently being offered on our online MBA, MSc, and LL.M programmes), I thought what I could do to help was to bring some facts to light about the other unknowns – what does a typical day in the life of an online master’s student look like? 

I asked a few of our students from different walks of life, occupations, and personal situations to answer a few questions on their study tactics and strategies, plans and reality, and so on. I thank each one of the respondents for taking the time to share their experiences and give valuable advice to you – possibly future students. In our ‘a typical day in the life of a master’s student’ blog series once a month, we will bring to you one of our real students or alumni sharing the insights.  

Today, we’re looking at Nigel’s typical study days. Nigel, an RKC & University of Cumbria soon-to-be graduate, offered us these answers: 

An Introduction 

Vidhi Kapoor (VK): Which programme did you choose and why? 

Nigel Lee Tranter (NT):  MBA – Leadership and Sustainability, I chose this topic for two reasons  

1. I have a passion and high degree of interest in both topics  

2. I wanted to study through a recognised programme and a recognised college/university, and I wanted something I could easily apply in the workplace 

The Study Plan  

VK : How did you plan to study each module, and what was the reality? How many hours did/do you have to put in each day/or in a week? 

NT: My initial plan was to commit the majority of study hours at a weekend, however, in reality what actual worked was daily early mornings (2 hours per day) with a supplemental number at the weekend which flexed between 4 – 6 hours depending on workload. 

VK: What part of the day did/do you find most suitable to study? (e.g. early mornings, lunch break, evenings, weekends?) 

NT: For me definitely early mornings starting at 5 or 5:30 

VK: How much time did you devote for each assignment? 

NT: I assessed the requirements after reviewing each assignment and built in an extra 30% as contingency to allow for extra reading, research and breaks as each assignment progressed, this was based on the evolving nature of discovering something new and interesting during the research phase. I set aside about 20 hours per week for studies.

Travelling and Communication 

VK: Did you travel for work? How did travelling impact your ability to study? 

NT: Only rarely did travel affect my study time due in part to the early morning start time plus mode of travel (usually train or airplane) allowed me to study while travelling also. 

VK: How were you able to interact with peers and/or professors given the time differences? 

NT: The use of virtual and collaboration technologies eradicated the time differences. During my dissertation my supervisor and I agreed to also supplement using WhatsApp also to support the learning experience. 

A typical day as a master’s student 

VK: What does a typical day as an Online Masters’ student look like for you? 

 NT: Start at 5 or 5:30am, study for 2 hours. Commence my normal business day around 8 am, finish my business day circa 6 to 7pm then depending on how I felt, perhaps another hour’s study, however this was always optional so as not to feel it was mandatory thus avoiding the learning experience becoming stressful. 

Any advice? 

VK: Any advice you have for students to better plan their studies. 

NT: Find your working space and condition yourself to prepare for learning when you enter this space. Build in contingency for holidays and breaks to avoid building pressure. Find your optimum study period of the day when you are most productive and experiment with this timeframe, learn how to research effectively to get the quality results you want, study productivity techniques that work for you and finally enjoy the experience. 

Alright folks, this was a sneak peek of a typical day in Nigel’s life as a master’s student. I hope you find it insightful and informative and that it gives you an idea of what to expect when you enrol for our master’s programmes. Watch this space as we have many more interesting insights coming up! 

Women in RKC – Jelly Offereins – One who found a perfect Master’s programme that seemed “too good to be true”

Allow me to introduce you to an RKC graduate of our MA Leading Innovation and Change programme, now working as the Director of International Affairs for a Business school in the Netherlands.  

Who is Jelly Offereins? A short profile: 

Vidhi Kapoor (VK): Who are you, really? 

Jelly Offereins (JO): I am an energetic, task-driven, positive personality with a passion for international interactions and collaboration. I studied, lived and work(ed) across borders and as the Director of International Affairs for a Business School in the Netherlands. I support students, staff and faculty in increasing their international exposure and competence.  

Husband Paul, dog Flynn and I live in an empty nest, which is luckily not really empty as the girls (21, 23) find their way ‘home’ well. 

Jelly Offereins

Getting back into education 

Your story of getting back to do a Master’s degree 

VK: What was the driving force behind your enrolling for an online degree? Who inspired you? What motivated you? 

JO: After having decided that I wanted to do an international master’s, with a broad focus, I specifically looked for a master (mainly) that was delivered online, for several reasons. As I travel for work quite regularly, I was afraid to miss class – and consequently dedication – required in a traditional master. Also, because being away from home regularly, I would not have liked to leave home on Friday evenings and Saturdays for school; remote learning gave me more flexibility in combining private life and studies /work. Last but not least: I was somewhat skeptical about an online master’s; could it be as good as a traditional one with regard to interaction, peer-learning, broad and deep investigation and reflection? 

VK: What were the thoughts/situations/people/challenges holding you back from starting (if any)? How did you overcome them? 

JO: For quite a while, I kept on postponing doing a master’s since work was demanding all my time and attention and I felt it would not fit in my professional and private schedule. The online master’s enabled me to plan/block bigger chunks of time (rather than scattered moments) that I could dedicate to the master’s, which worked better for me.  

VK: What surprised you the most when you started your studies? 

JO:  That I loved it right from the start!  

I loved that I could watch the videos and rewind them endlessly when I did not fully understand; 

I loved the diversity in the classroom;  

I loved that the group operated like a traditional class: there were people with lots of opinions and a strong voice, and people who brought in great sources and very well considered views, there where people like me – listening/reading carefully and posting moderately-, teachers mirrored, posed critical questions, etc. 

VK: Do you feel there are unique challenges women face when deciding to get back into education? 

JO: Yes, and that these challenges may vary in different parts of the world and in different (sub-)cultures, financial issues, access to (earlier) education, jobs and career path, self-confidence 

Getting the degree 

The work to get the degree – what did you learn, how did you balance, what would you do differently 

VK: Which programme did you do? Why? 

JO: MA Leading Innovation & Change 

My earlier degrees focused on resp. Hotel Management and International Marketing; I decided I wanted to do something broader and more strategic 

VK: What is the single most important thing you learned during the programme? 

JO: Self-confidence, self-knowledge, critical reflection 

I had never written academic papers in English, I had never interacted online-only, most of the content was new to me, and I discovered that I liked it and that I was good at it. 

VK: How did you balance work and studies? 

JO: What helped the most is that I really liked the programme and the way it was delivered (the videos, the sources) – asynchronously. 

I work full time, and was lucky to have 0.1 FTE from my employer to work on the master’s. My kids were happy and healthy teenagers.  

For the videos I blocked 2-3 hours. Every 4-5 weeks, I tried to take the Friday or Monday off. I used weekends and holidays and I told my family that I’d rather work on the master’s than watch TV or read a book (and they let me). 

VK: Any particular challenges to being a woman and studying online, or do you think all students face the same ones? 
JO: It works better if you are in the position that you can work on your study for some hours (or even a day, or even 2) more or less continuously. If other tasks at home/in the family also require attention throughout the day, the study work may be jeopardized.  

 Life post degree 

What changed, if anything? 

VK: What’s new in your life since graduating / starting your studies? Any visible impact already? 

JoI have more self-confidence and I feel proud 

The most important thing that Jelly learnt during the Master’s are – Self-confidence, self-knowledge, critical reflection

VK: Anything you are doing differently now because of the things you learned? 

JO: I am better in critical reading, critical questioning, reflecting 

VK: Do you feel that getting a Master’s degree or doing other online programmes can reduce gender discrimination in the workplace? 

JO: I would say getting a master’s may have a positive effect on the career chances for a woman; an online master’s programme maybe easier to fit in than a traditional master’s, however depending on the home situation and support. 

Advice for other women 

Or other students, really. 

VK: Imagine you could send a message back in time to your pre-degree self: what would it be? 

JO: Dear Jelly, I know that you want to have your master’s degree and I also know that you spend a lot of time on your demanding full-time job and that you also want to be a good and nice mother and that you do not want to spend evenings and Fridays/Saturdays away from home to go to school. I think I found the perfect the master programme for you: it is International, it is a UK degree, its is about Leading Innovation and Change and ….it is online, with one week in York, and it is not expensive! It is almost too good to be true. I have been looking for ‘the adder under the grass’ but cannot find it. Have a look at this link https://rkc.swiss/catalogue Kind regards, Jelly MA 

VK: Imagine you could send an object back in time to your pre-degree self: what would it be? 

JO: pair of headphones 

Closing thoughts 

VK: Anything else you would like to add that could help with the goal of increasing women’s participation/access to a Master’s degree? 

JO: Member gets member programme*; 

Mentors and mentees;  

Increase awareness of online: combine job with study, combine home-task with study 

[*Editor’s note: RKC does in fact have a referral programme in place, allowing current students to refer friends and relatives. Talk to our advisor to know about the benefits and discount offers of the referral programme].

I hope this blog brings much inspiration and encouragement to all our readers and motivate you to start the masters that you have always dreamt of.