Question

Write a short paragraph (up to 5 sentences) with your thoughts/reflection on these points in the lectures:

- Some fIntech models have a focus on finance (or financial services) others on technology services. Explain with an example.

- An Open Innovation unit is a more collaborative model than a bank's innovation labs. Explain

- Incuments are generally more concerned with the cyber security risks of fintechs they work with than the other way round. Explain

Answer 1

1.

Fintech now describes a variety of financial activities, such as money transfers, depositing a check with your smartphone, bypassing a bank branch to apply for credit, raising money for a business the startup, or managing your investments, generally without the the assistance of a person.

FOR EXAMPLE-Affirm seeks to cut credit card companies out of the online shopping process by offering a way for consumers to secure immediate, short-term loans for purchases. While rates can be high, Affirm claims to offer a way for consumers with poor or no credit a way to both secure credits and also build their credit histories. Similarly, Better Mortgage seeks to streamline the home mortgage process (and prevent traditional mortgage brokers) with a digital-only offering that can reward users with a verified pre-approval letter within 24 hours of applying. GreenSky seeks to link home improvement borrowers with banks by helping consumers avoid entrenched lenders and save on interest by offering zero-interest promotional periods.

2.

open innovation technology can be used to deliver anything from better financial health for customers and clients – for example by using artificial technology to help people better manage their money – to risk management tools to help the bank deliver better results and much, much more.

But just as the technology being used to change banking is constantly evolving, so too does how the bank partners with fintech.

3.

Incumbent banks know that to stay ahead of the curve - and provide the best service to customers - they need to select the right vendors and partners. They can't innovate on every front, and partnering with fintech can provide a quick way of adding a new customer-centric feature or service without building it from scratch.

This collaboration benefits everyone - fintechs can vastly increase their audience, banks can accelerate their own digital transformation, and (hopefully) customers get access to a a new feature that’s both secure and useful