Chapter 19 Final Flashcards
Global Venture Capital backed fintech funding has
increased from 21.8 billion(2015) to 139.8 billion (2021)
What is fintech according to financial stability board FSB
technology enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on the provision of financial services
Fintech is used to describe
Firms whose business model focuses on these innovations
What are some Fintech advantages that are relative to banks
-they are unburdened by regulators, legacy IT systems and branch networks
-don’t have the need to protect existing businesses
- possess an innovation mindset, agility and a consumer centric perspective
Most fintech CEO’s expect
Increasing fintech bank partnerships in the future
How can fintech help banks
-they can have mutually beneficial partnerships
-fintech can leverage the banks reputation
- banks can leverage the fintech companies technology infrastructure
Banking as a service (BaaS)
process that allows fintech firms to coonect with bank systems directly via application programming interfaces
Open banking
A system that provides a user with a network of financial institutions data using APIs
- third parties have easier access to financial information for existing bank customers, which allows them to build new apps and services
what are the sectoral innovations for Fintech
-credit, deposit, and capital raising service ( crowdfunding, credit scoring)
- payments, clearing, and settlement services ( mobile wallets, value transfer networks)
- Investment Management services ) high frequency trading, copy trading)
Recent developments in payments, clearing, and settlement services
Mobile wallets- apps om mobile service that store payment information from a credit or debit card
Peer to Peer (P2P) Payments- allow customers to use a bank account or a credit/debt card to pay friends and family from their mobile phones
Digital currencies- combine new payments system with new currencies that are not issued by a central bank
cryptocurrency(pc&ss)
digital currency in which encryptions is used to regulate the generation of units of currency and verify the transfer of funds
Stablecoins(pc&ss)
pegged to reserve asset or currency
Central bank digital currencies(pc&ss)
Provide advantages of central bank money(in digital form)
Value transfer networks(pc&ss)
wholesale payment innovations and ecosystems that facilitate domestic and international transactions for corporate customers
Business to Business Payments(pc&ss)
allow for businesses to easily make payments and track expenses
Foreign exchange wholesale (PC&SS)
enables its B2B clients to reduce the risk of market volatility
Digital exchange platforms (pc&ss)
-crypto exchanges are creating systems to ensure the blockchain ecosystem remains stable
-serve as a bridge between the traditional business world and the new digital cryptocurrency world
Distributed ledger technology
-digital system for recording asset transactions
- ensures accuracy of ledger by comparing its copy with others on the network to ensure they are identical
Artificial Intelligence and Machine learning( mss)
-application of computational tools to address tasks traditionally requiring human sophistication
- algorithms which optimize automatically through experience and with limited or no human intervention
Internet of things IOT (mss)
-encompasses everything connected to the internet
- made up of connected devices from simple sensors to smartphones and wearables
Credit deposit and capital raising services (mss)
-fintech innovations include crowdfunding, lending marketplaces, mobile banks, and credit scoring
Crownfunding
method of raising money through the collective effort of family, friends, individual investors, and customers
Lending marketplaces
Part of a nonbank lending industry that makes loans to consumers and small businesses
Investment managment services (mss)
fintech firms provide solutions for high frequency trading, copy trading, e trading, and robo advice
