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Unit 1. Banks and banking > 1.3 Evolution Of Banking + Harnessing Of Technology > Flashcards

1.3 Evolution Of Banking + Harnessing Of Technology Flashcards

1
Q

World oldest bank

A

Monte dei Paschi de Siena
(1472)
Operates in Italy till this day

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2
Q

1472-1980

A

Historical, traditional banking, first ATM opened in 1967

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3
Q

1980-2007

A

Self services, home and online banking, access to bank services outside the usual bank hours

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4
Q

2007-2018

A

Mobile banking, fintechs, digital only banks

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5
Q

2017 onwards

A

Real time banking everywhere
Digital innovations

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6
Q

Uks Financial Conduct Authority 2022 review:

A

Innovation is a risk to vulnerable customers who still want to use ATM/branch

Weakening in historic advantages of large banks by digital innovation

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7
Q

Three key trends that is continuing to reshape the competitive environment:

A
  • shift from branches to innovation
  • consumers demanding more digital offerings
  • digital attackers taking a significant share of tradition banks revenue streams
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8
Q

Banks becoming more technology advanced by:

A
  • giving employees continuous training
  • assessing the skills required of their staff
  • reviewing their organisational structures
  • digitising their core processes
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9
Q

Technology that are having a major impact on banks and and their customers:

A
  • open application programming interfaces (APIs)
  • advanced analytics/AI/machine learning
  • Conversational user interfaces (CUIs) chargers, voice user interface
  • internet of thing (IOT)
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10
Q

Open APIs

A

Allows different applications to communicate and interact with each other.
Customers own their financial data and can share it with other providers and have instant access to a wide range of options and services.

Gives customer more choice and control on what to do with their money.

API cheaper and faster than traditional card based payments

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11
Q

Advanced analytics

A

Information technology (IT) that arw used to gather, examine and analyse data.

Banks can use this to predict customer behaviour and presences

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12
Q

Four part of advanced analytics solutions for banks

A

Descriptive
Diagnostic
Predictive
Prescriptive

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13
Q

Descriptive analytics

A

‘What happened’

(simple type of analytics)

  • convert raw data into meaningful information

E.g. bank can use this to see how many customers are using their products

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14
Q

Diagnostic analytics

A

‘Why did this happen’

Used for processing and summarising the information gathered from the 1st stage

Identify and compare patterns/trends and show correlation where these exist

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15
Q

Predictive analytics

A

‘Why might happen in the future’

Use historical date and patterns identified to make informed predictions on what could happen in the future

E.g. how customers may act

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16
Q

Prescriptive analysis (future)

A

‘What should we do next’

Use results of the above 4 to determine what is likely to happen and why and how the bank can take advance of future opportunity

17
Q

By banks use analytics to:

A

Offer customised products to customers

Identify and provent fraud

Result = improved customer satisfaction, loyalty and retention

18
Q

Artificial intelligent (AI)

A

AI = Branch of computer science that deals with the stimulation of intelligent behaviour in computers.

A machine intimidating humans behaviour and perform tasks that rely on an human doing

E.g. transactions of languages

19
Q

Machine learning

A

Computer systems learn from data,identify patterns and make decisions

20
Q

Conversational user interfaces (CUIs)

A

A facility like a chat box which allows the human user to interact and hold a conversation with a computer

21
Q

Two types of CUIs

A
  1. Voice assistant that responds when the user talk
  2. Chatbox that responds when user types
22
Q

Chatboxes

A

Help banks improve customer engagement
Constantly available and instance responses

Can access customers preferences and suggest products that suit their needs

23
Q

November 2022

A

Open AI launched the latest chatbox tec - CHAT GPT

24
Q

Other digital innovation in banking

A
  1. Internet of things (IOT)
  2. Cloud computing
  3. Wearable
  4. Block chain
  5. Augmented reality and virtual reality (AR + VR)
  6. Quantum computing
  7. Robotic process automation (RPA)
  8. Regulatory tech (RegTech)
  9. Cryptocurrencies
25
Q

Cloud computing

A

Delivery of computing services over the internet without direct active management by the user

Helps bank automate workflows, deliver new services faster, boost efficiency and cost savings

26
Q

Wearable

A

Digitally connected devices that people wear on them (smart watches, fitness trackers)

  • alternative way to do banking tasks (check bank balances, convenient for disabilities)
27
Q

Robotic process information (RPA)

A
  • computer software robots
  • can handle more complex functions and with machine learning can make decisions

Banks use RPA to automate some of the more repetitive task
E.g. carrying out mortgage processing, detecting fraud and checking identity of customers.

28
Q

Internet of things (IOT)

A

= network of devices that talk to each other (wearables, smartwatches) and connect to produce data.
- allows network devices to be controlled remotely

Bank use = collect information from customers from devices they use and with the data collected ➡️ offer them services that the data suggest to best meet their needs.

29
Q

Block chain (disturbed ledger)

A

= digital record of transactions (individual records ‘blocks’ are linked together in a chain)

All allows to pay each other without a central clearing point

30
Q

Blocked database

A

It’s spread across network of computers.

Can be used to pay each other without a central clearing point

Block chain allows bank and other payments provideres to process payments more quickly and accurately

31
Q

Quantum computing

A

Solves problems that would be too complex for a normal computer
- Store,process and manipulate very large amounts of data (can perform hard calculations very quick)

In banking ➡️ can analyse data to make financial predictions etc.

Keeps customers confidential info safe through strong encryption mechanisms

32
Q

Augmented reality and virtual reality (AR + VR)

A

AR - layering info on top of what the user is already seeing

VF - takes the user somewhere else
Can use apps to educate customers (e.g. stock market)

Banks can use for digital banking solutions

Tech being used to improve customer engagement

33
Q

Regulatory Technology (RegTech )

A

Use the power of AI, big data and block chain to increase regulatory compliance and reduce financial risk

34
Q

Cryptocurrency

A

Electronic means of payments (only exist in digital realm)

Value is very volatile and risky

Not accepted as a means of exchange and is illegal to use in China and Saudi Arabia

Not regulated or created by any central bank

Unit 1. Banks and banking (9 decks)

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