Welcome back to our course on FinTech Security and Regulation. We're going to look at where are we going in module two, what are we going to cover? In this module on Risk Management and Government Control, we're going to focus on five different areas, five sessions, talking about AML and KYC in FinTech. If you don't know what those terms are, we'll define them. They're relatively easy terms if you work in the finance industry or hang around with people in the finance industry, you'll hear them talking about AML and KYC the way electrical engineers will talk about ASICs, or the way computer programmers will talk about object-oriented. If you don't know anything about programming, you won't know what object-oriented is. If you don't know anything about engineering, you may not know what ASIC is, but they're just common terms in those fields just like AML and KYC are common terms and finance. They're important terms, because if you don't do it right you can get fined for a lot of money. But they're fairly basic, so we'll look at them and why they matter and what they are, because they do incur a lot of cost to comply with these regulations and they're important regulations in FinTech. We'll look second regulations put in place as government controls to protect customers. So we'll look at this area of government regulations for consumer protection, or other ways of protecting customers from making bad decisions or taking excessive risk or being tricked by people who might not have their best interest at heart. Will look then at the third area or session is regulations put in place by governments on financial markets in general to increase tax compliance and control. This is something that ties back to AML and KYC. It's not all about regulations to increase tax compliance and control, but that is part of the motivation for AML and KYC as well as for other aspects of regulations of financial services firms. Governments want to know about tax and they're frustrated when things like U.S. government recently reporting that they believe that probably about 90 percent of Bitcoin investors are not paying taxes on their gains from Bitcoin, which had been substantial. Now, bitcoin investors may say, "We don't like governments and we don't want to give them any of our money. This is our money and it's free of borders." But that's actually not the law, and governments do have a legal right to tax capital gains in their country and investing in a cryptocurrency does create capital gains for citizen of a country and might be subject to tax. Not all countries would tax these, but some do. Then there's insurance risk and risk management and controls in insurance markets. Slightly different from other kinds of financial institutions, so specifically looking at insurance to help us to think about insure tech or insurance regulations. But why is insurance different and why is it a different category? So we'll look at that. Finally, we'll look at a company in financial services that cross the border between insurance and traditional finance AIG and took a high level of risk that nobody really understood at the time, the risk they were taking that led to a financial market meltdown. So the financial crisis of 2008 that led to a global economic downturn, led to a lot of profits being much lower by financial services firms, a lot of jobs being lost and a lot of jobs across all economies worldwide, almost all economies worldwide being lost. This financials market meltdown, was largely a result of unacceptable risk taking and speculation by a variety of financial institutions, but heavily facilitated by actions of an insurance company, in insuring banks and other financial instruments in creative ways that governments didn't really understand how much risk was being taken. So that's kind of a type of early FinTech here, if you think of FinTech as being innovation and new products and services, it's not exactly much Tech, but it was certainly Fin innovation that led to meltdown, because the regulation was not up to the new market activities. So, you can even have crises like this without any new technology, just innovation in finance that regulators haven't kept up with. But we'll look at AIG as an example, so that's the last session in this module. We look forward to having you in our sessions. Thank you.
