Chapter 14.1: Supplement Financial Technology Flashcards
Four primary factors are credited with the increasing activity of fintech’s
- technological innovation (more apps and better webs) that improves access to financial products and services
- more knowledgeable, educated, and younger consumers, mainly the millennials
- potentially lower costs to the user / consumer
- lower amounts of regulation
What is Fintech
use of technology as the means to delivering financial products and services more efficiently, and more effectively, to individual and business clients
What is Fintech’s purpose
purpose of taking certain financial-transaction business out of the hands of current large financial institutions and making them available ( faster and cheaper) to users
What doed Fintech provide
provide primarily traditional products and services through non-traditional channels.
What is the negative expression fintech is called?
Distuptor / radical
-that takes business away from traditional financial institutions, such as banks
Why do millenials increase fintech activity?
growing portion of the economy, in terms of their earning, spending, borrowing, saving, and investing, and their collective preference to have more of a “self-directed” approach.
Do not expect to pay higher fees from traditional sppliers
How much impact does fintech have on the major bank’s profits?
20%-60%
How did the banks react to the threat of Fintech disrupots?
CIBC - slash the fees they charge to user of chequing accounts
RBC - “Voice Biometrics” (voice recognition of their clients) which is a high security from of moving money
BMO - “SmartFolio” a robo-advisor to access and professionally-manage investment portfolios online with low fees
TD - Money management system, enables clients to track spending habits
Who regulates Fintech Firms?
Nobody as of now.
They argue that fintech firms should grow, and the cost of regulation could be used to develop and expand Fintech firms
