What is a challenger bank? Where are they mostly located? Two Examples. correct answers Tech-driven retail bank, created either as a start-up or a divestment from larger banks that use innovative systems and products to appeal to newer generations and directly compete with incumbents.
Mostly in...
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What is a challenger bank? Where are they mostly located? Two Examples. correct answers Tech-driven retail bank, created either as a start-up or a divestment from larger banks that use innovative systems and products to appeal to newer generations and directly compete with incumbents. Mostly in UK: Monzo & Revolut
Capital One: Disruptive or sustaining? Why? Mix of organic and inorganic innovations? correct answers Sustaining- They entered retail banking in early 2000s, extending their product offerings
throughout their life without causing disruption.
Nice portfolio of patents and multiple acquisitions of retail banks and cyber security companies have allowed them to become a dominant company in tech innovation.
What does it mean that regulatory barriers are a "double edged sword"? correct answers It is difficult for FinTech companies to gain entry into the market because of the regulation barriers, hindering the competition for traditional banks. However, it is also harder for traditional banks to
expand their business plan to include moire tech-driven applications.
What is PSD2? What is the relation to "Open Banking"? correct answers "Payment Services Directive 2"
An EU directive to regulate payment services and providers so that they can compete with traditional banks. The goal is to offer more financial transparency to clients and offer consumer protection.
How have tech companies in China entered Digital banking? correct answers - WeBank by Tencent
- MYBank by AliBaba
What is it meant by financial intermediary (for a bank)? What are the roles of banks? correct answers The bank is the middle man between borrowers and lenders, specializing in buying/selling financial contracts. Roles include: mitigate asymmetric info, act as delegated monitor, and ability to shift liquidity of assets.
What role did the financial crisis play in getting the FinTech revolution started? correct answers The crisis led to new regulations and a need for risk management and data collection. This required an innovative ways to address new regulations, leading to FinTech revolution. We are now seeing a disintermediation effect from it.
What is "disintermediation"? Give an example with FinTech firms. correct answers Disintermediation is the economic phenomenon in which the "middle man" or intermediary is bypassed. Robo-advisors and digital banks are great examples. What are two examples of digital banks here in the U.S.? correct answers Ally Bank (GMAC divestment)
Synchrony Bank (GE divestment)
What does "GAFAMA" stand for? correct answers Google, Amazon, Facebook, Apple, Microsoft, Ali Baba (Ant Financial)
What is the "three-legged stool" that Mr. Brady talked about? correct answers 1. Founders/Start-
ups
2. Investors/VCs
3. Corporates
What type of innovation is a corporate investing in FinTech firms? correct answers Inorganic Innovation
Mr. Brady said that. some of the best start-ups come out of a crisis. Why? correct answers There are fewer jobs in the economy- start-ups are able to recruit highly talented individuals for a good cost
What are the ways in which banks are vulnerable to disruption from the Big Tech firms? correct answers 1. Speed
2. Change is Hard
3. Legacy System
4. Customer Experience
5. Retail Branch Network
6. Scale
7. Margin Compression
What is Facebook's biggest impediment to entering FinTech at this moment? correct answers The company struggles with the trust of the public.
What is FinTech? correct answers FinTech is Financial Technology. Specifically, it is the implementation of new technology to financial solutions for both individuals and firms. It is still in its infancy stage and does not have a widely used definition. It forces firms to rethink their business models.
Why is innovation crucial to the growth and sustainability of FinTech? correct answers Innovation is the implementation of something new. Without it, FinTech would not exist. Thus, it is imperative for the growth and sustainability and is the main driver of FinTech.
According to Peter Drucker, what is innovation? correct answers Innovation is the implementation of something new. Specifically, it is doing something differently in order to better the outcome (or yield better results) than previously done. "Changing the value and satisfaction obtained from resources by the consumer"
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