Week 7 - Financial Techologies (FinTech) Flashcards
Define FinTech (Financial Technology)
-the Application of Emerging Technologies, such as AI, blockchain etc to the Creation of New Products, services and Business Models with Financial Services
- these Technologies Drive Cost Reduction through Automation by Enabling Operational Excellence and Improved Customer Experience
State 5 Reasons for Using FinTech Innovations
- Easy to Set Up an Account
- More Attractive Rates/Fees
- Access to Different Products and Services
- Better Online Experiences and Functionality
- Better Quality of Service
State 4 Reasons why FinTech is Now on the Rise
- Financial Crises
- Banks, Fees and Obsolete Processes
- Growth of Mobile Devices and the Internet
- Technological Advancement
Explain FinTech Use Cases - BLOCKCHAIN
- Blockchain can be Described as a Data Structure that Holds Transactional Records while Ensuring Secuirty , Transparency and Decentralisation
- is the Technology that Enables the Creation of a Distrubuted Leger
- Permits Transactions to be Gathered Into Blocks and Allows the Resulting Ledger to be Accessed by Different Servers
Explain what Blockchain Is Not
- Isn’t Bitcoin But the Technology Behind Bitcoin
- Bticoin is the Digitial Token, and the Blockchain is the Ledger to Keep Track of Who Owns the Digital Tokens
- you Can’t have Bitcoin Without Blockchain, but you can Have a Blockchain Without Bitcoin
Explain the Link between Blockchain and Decentralised Peers
- Rather than the Centralised “Hub and Spoke” Type of Network, Blockchain is a Decentralised Peer to Peer Network. Where Each Node has a Copy of the Ledger
What is a Blockchain
is a System Comprised of
- Transactions
- Consensus Mechanisms
- Optimal Smart Contracts
- Encryption Processes
- Immutable Ledgers
- Decentralised Peers
Explain the 7 Steps for How a Distributed Ledger Works
- Users Initiate Transaction Using their Digital Signatures
- Users Broadcast their Transactions to Nodes
- One of More Nodes Begin Validating Each Transaction
- Nodes Aggregate Validated Transactions into Blocks
- Nodes Broadcast Blocks to Eachother
- Consensus Protocol Used
- Block Reflecting “true state” is Chained to Prior Block
Transactions - Explain how Blockchain is a Historical Archive of Decisions and Actions taken
Notable Transaction Use Cases :
- Land Registration
- Personal Identification
- Transportation
- Banking
- Manufacturing
- Food Distribution
- Audits
State 4 Reasons Why we Need Blockchain?
- Resilience
- Time Reduction
- Reliability
- Security
Explain the Reason Why we Need Blockchain - RESILENCE
- Blockchains is Often Replicated Architecture. The Chain is still Operated By Most Nodes in the Event of a Massive Attack Against the System
Explain the Reason Why we Need Blockchain - TIME REDUCTION
- In the Financial Industry, Blockchain can Plat a Vital Role by Allowing the Quicker Settlement of Trades as it Doesn’t Need a Lengthy Process of Verification, Settlement and Clearance Because a Single Version of Agreed-Upon Data of the Shared Ledger is Available Between All Stack Holders
Explain the Reason Why we Need Blockchain - RELIABILITY
- Blockchain Certifies and Verifies the Identities of the Interested Parties.
- This Removes Double Records, Reduces Rates and Accelerates Transactions
Explain the Reason Why we Need Blockchain - SECURITY
- Attacking a Traditional Database is the Bringing Down of a Specific Target. With the Help of a Distributed Ledger Technology, Each Party Remains Operative, Even a Large Number of Other Nodes Fall
