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Welcome to the Parnassus Blog!

By Lucy Thompson, on 5 October 2022

During the summer heat in Rome, Professor Francesca Medda, our Institute Director, likes to escape to the Vatican Museum. In this blog, she reflects on why we have named this platform Parnassus, in celebration of Rafael’s painting by the same name. Rafael’s work pictures a host of artists from Sappho to Dante, surrounded by the muses on the mythological mountain, Parnassus, where the arts and study are protected. This painting is our inspiration – a blog that will be a sounding board for new ideas and discussions on digital finance. 

parnassus mountain silhoette against an orange and red sky

We live in chaotic times. Covid-19 is not yet over, the war in Ukraine rages on, and the climate crisis is not only accelerating the digitalisation of the financial market, but also highlighting the chronic difficulties – of time and sometimes complex procedures – that we face to supply capital from conventional financial services.

The implementation of effective finance and economic solutions calls for responses to several preliminary concerns, including applicability, types of technology, time frame, budget constraints, acceptability and awareness of stakeholders, and declining central government revenues. Solutions must also correspond with levels of risk and the uncertainty posed by an unknown future. Importantly, however, these concerns cannot be resolved by ‘one-size-fits-all’ or ‘try-everything’ strategies for digital transition, particularly when future uncertainty is likely to exacerbate social and income inequality.

Given the interdependency characterised by the financial market today – and noting that digital silo-based solutions have fallen short of expectations – we can take the position of curatorship in this era of exponential change, as in The Parnassus of Rafael, where solving problems takes priority over incremental solutions.

From the perspective of a curator, we are indeed on the cusp of finance change and new technologies in digital finance that arise from the need for sustainable and efficient financial market systems. However, managing innovation for the financial market is not easy-peasy, given the current and predicted global trends. These include:

  • demographic and social imbalances, often dramatic and diverse in different countries, from sharp growth in migration patterns in many emerging economies, and aging and population decline in cities of several of the richer economies;
  • risks and hazards in the form of natural and human-caused disruptive events, particularly to infrastructure, and to assets that are complex systems and therefore potentially most vulnerable to threats; and
  • issues relating to resource protection and steady supplies required to maintain productivity and welfare.

Writing from the vantage point of IFT, it seems that these complex issues can be transformed from challenges into opportunities only if we focus on research and apply our knowledge towards enhancing access to information and communication technologies, to the better management of resources, and to improving our financial systems by reducing waste, to mention just a few. Fortunately, the research panorama is very fertile; scholars from a variety of organisations, not only from established academic institutions, are responding to these challenges by developing solutions and merging instruments that leverage excellence in research and knowledge and also within the social and environmental impacts they produce. In this context, our blog is indeed a sounding board, a protected area, as in The Parnassus, where we can benefit from the exchange and development of ideas.

This blog also aligns with the spirit of the Institute of Finance & Technology’s work and research generally. Three words encapsulate our objectives and vision.

The first is

Trust, whether in corporate, government, technology, media, or institutions, trust is at an all-time low. Trust in finance, in financial systems, and in financial professionals sometimes seems like an oxymoron. We have the opportunity here at UCL to work on building trust in financial systems and their myriad connections to society through rigorous, evidence-based collaborative research. The main vision of the Institute is to create, study and develop financial mechanisms and digital financial systems based on the notion that collective impacts will produce shared values, generate economic and social initiatives, and broaden the influence of their long-term financial success.

Central to these constructive ways to finance are creativity, knowledge, innovation, and access to- and for- wider communities as the fundamental drivers. Therefore, the Institute is creating a continuum between research, teaching and entrepreneurship.  The entrepreneur will find opportunities to exploit financially innovative solutions; the applied researcher will effectively gauge the practical potential of research ideas; and the financial specialist will harness the power of finance to achieve sustainable outcomes and desirable social impacts.

IFT offers, under one roof, an arena of unequalled opportunities to combine cutting-edge research, expertise and applied knowledge in finance and entrepreneurial creativity in a dynamic learning environment where trust has a central role.

The second is

Evolution, indeed, financial activity and homo economicus is much older than the established finance as a discipline of study and practice. Many historians and anthropologists have shown how our financial concepts, beliefs, myths, behaviour and language are deeply rooted in our ancient history.  If we consider the sacrifices of prehistoric communities, we can interpret human evolution as a constant series of exchanges where the creation of the Earth may be seen as having the first creditor impact in history, and the human being as the first trader.

I touch briefly on finance from an anthropological and theological point of view to emphasise the central role of data in the rapid evolution of the digitalisation of finance we are now observing. However, in this construction of the future I do not advocate the vision of the French philosopher, Saint-Simon, where the world is run by engineers, data and digital expects, technical entrepreneurs, and scientists. Worryingly, however, this vision of society, which Marx identified as utopian, is becoming prophetic, and perhaps it is not far from reality.

We need to evolve and adapt to facilitate a safe, secure and humane future. Yes, the digital finance revolution will alter our way of behaving and thinking, but this revolution is also inextricably linked with our past.

Third is

Network, our Institute of Finance & Technology is housed in the UCL Faculty of Engineering Sciences. So, to return to my earlier comment, are we proposing here a finance run by engineers as in the Saint-Simon way? Not necessarily.

I’d like to mention the beautiful book of John Henry Newman, The Idea of a University, written in 1852, where he concludes that all knowledge is one, and the sciences, including finance and engineering, form a circle of knowledge. In other words, there is connection among all things. Networks and interdependencies are a major focus in the research and work of IFT. Therefore, the study of networks and interdependence across disciplines is likely to impact and shape the technocratic vision of engineers, and data and digital experts (and thus of financial students), through addressing the complexity of our future challenges. We need critical, curious and innovative research and study approaches in the field of finance, and this is exactly how we are continuing to develop in our work.

One final comment in this first Parnassus blog: As we evolve in our own personal approaches to research and study, it is nevertheless crucial to evolve by building trust among ourselves and within our network of researchers, industry experts and other stakeholders. Trust to make mistakes, to return to the drawing board to refine and re-define our research, based on what the evidence shows. This is how we will recognise success and growth.

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