FINTECH EXAM 1 PRACTICE
QUESTIONS
1. Build a foothold with a sole product in their domestic marketplace, serving both retail and
small businesses
2. Expand product services thru rebundling, adding products directly or partnering with other
fintechs to offer revolutionary merchandise the usage of APIs - ANS-What has been the
move-to-market method of challenger banks?
A multi-sided commercial enterprise can maximize income by means of losing cash on one set
of customers (subsidy-side) at the same time as generating revenues from every other set of
customers (cash-facet)
Subsidy-side: uses the platform at no cost or small fee; those agencies need to be at the
platform for it to be attractive to the money facet (ex: instagram customers) loss leaders
Money-side: are charged high enough costs to cross-subsidize the losses and maximize income
for the platform proprietor (ex: advertisers on instagram) income middle - ANS-What is the
counterintuitive pricing structure for a multi-sided platform? What are the subsidy-aspect and the
money-aspect of the platform?
Application Programming Interface (API): laptop packages and 'regulations of engagement'
permitting exceptional IT systems to speak; the API is the messenger that supplies a request
from one laptop to another and then returns with the asked records (transfers facts from one
point to some other); sender (incumbent) comes to a decision what records will be made
available —> receiver (fintech_ uses API to plug-in to sender's system —> enables
computerized information sharing; secret's that the records needs to be stable and permission
has to be granted; sets of guidelines that allow unique software program programs to
communicate and have interaction with every other
API may be closed (within an organisation) or open (publicly available once permission
granted); open APIs are vital to open banking — allowing fintechs to get entry to client data at
incumbent banks; many nations (Europe & UK) have legal guidelines that require open API,
selling seamless statistics tr - ANS-What are APIs?
Balance sheet lender: are ideas and act like a financial institution, supplying the investment and
retaining the loan on its balance sheet
, P2P/marketplace lender: suit debtors with lenders and acquire charges for this carrier -
ANS-What is a stability sheet lender and why are the incentives exceptional from a
P2P/marketplace lender?
Banks and financial intermediaries earn two forms of revenues:
Agency-based sales: non-interest earnings together with costs, commissions, and coverage
premiums
Principal-based totally sales: interest profits, funding earnings, and profits or losses on risk
taking
Fintechs in the main earn business enterprise-based sales, while coverage corporations earn
most important-based totally sales and banks commonly fee enterprise-based sales - ANS-How
does the breakdown of revenues for fintechs evaluate to traditional economic intermediaries?
Believers describe it as a revolution where the intention is to disrupt the existing economic
order. I believe fintech represents a revolution of the economic system due to the fact it's miles
challenging and disrupting conventional economic fashions. Innovations like peer-to-peer
lending and cryptocurrencies introduce totally new tactics to monetary transactions. In addition,
fintech has revolutionized how purchasers interact with monetary services. Mobile bills,
robo-advisors, and digital wallets have converted the manner humans manipulate and get
admission to their cash. - ANS-In your opinion, does fintech represent an evolution of the
financial gadget or a revolution? Why?
Borrowing:
Individuals can borrow as much as $50,000 and small organizations up to $500,000 for terms
up to 5 years.
Small organizations have an increasing number of turned to online creditors to get right of entry
to capital (as opposed to counting on dating lending with neighborhood banks)
Lending:
Original p2p structures raised cash from the crows, with man or woman buyers committing as
low as $a hundred each
Online platform would assign a credit score and interest rate on loan
As demand grew, portals grew to become to institutional traders for more deliver of funding -
ANS-Who is borrowing from on line lenders and who's presenting investment? How do creditors
determine the risk of default for online loans?
Build in residence, R&D (set up innovation lab), enter a strategic partnership (with fintechs,
competition, or atmosphere shareholders), buy a subscription to fintech product or service and
offer to end-patron both as white categorized or branded (license), put money into fintech,
purchase a fintech start-up (to gather its era, patents, and human capital), and goal fintechs as
a brand new purchaser phase by way of proving BaaS.
QUESTIONS
1. Build a foothold with a sole product in their domestic marketplace, serving both retail and
small businesses
2. Expand product services thru rebundling, adding products directly or partnering with other
fintechs to offer revolutionary merchandise the usage of APIs - ANS-What has been the
move-to-market method of challenger banks?
A multi-sided commercial enterprise can maximize income by means of losing cash on one set
of customers (subsidy-side) at the same time as generating revenues from every other set of
customers (cash-facet)
Subsidy-side: uses the platform at no cost or small fee; those agencies need to be at the
platform for it to be attractive to the money facet (ex: instagram customers) loss leaders
Money-side: are charged high enough costs to cross-subsidize the losses and maximize income
for the platform proprietor (ex: advertisers on instagram) income middle - ANS-What is the
counterintuitive pricing structure for a multi-sided platform? What are the subsidy-aspect and the
money-aspect of the platform?
Application Programming Interface (API): laptop packages and 'regulations of engagement'
permitting exceptional IT systems to speak; the API is the messenger that supplies a request
from one laptop to another and then returns with the asked records (transfers facts from one
point to some other); sender (incumbent) comes to a decision what records will be made
available —> receiver (fintech_ uses API to plug-in to sender's system —> enables
computerized information sharing; secret's that the records needs to be stable and permission
has to be granted; sets of guidelines that allow unique software program programs to
communicate and have interaction with every other
API may be closed (within an organisation) or open (publicly available once permission
granted); open APIs are vital to open banking — allowing fintechs to get entry to client data at
incumbent banks; many nations (Europe & UK) have legal guidelines that require open API,
selling seamless statistics tr - ANS-What are APIs?
Balance sheet lender: are ideas and act like a financial institution, supplying the investment and
retaining the loan on its balance sheet
, P2P/marketplace lender: suit debtors with lenders and acquire charges for this carrier -
ANS-What is a stability sheet lender and why are the incentives exceptional from a
P2P/marketplace lender?
Banks and financial intermediaries earn two forms of revenues:
Agency-based sales: non-interest earnings together with costs, commissions, and coverage
premiums
Principal-based totally sales: interest profits, funding earnings, and profits or losses on risk
taking
Fintechs in the main earn business enterprise-based sales, while coverage corporations earn
most important-based totally sales and banks commonly fee enterprise-based sales - ANS-How
does the breakdown of revenues for fintechs evaluate to traditional economic intermediaries?
Believers describe it as a revolution where the intention is to disrupt the existing economic
order. I believe fintech represents a revolution of the economic system due to the fact it's miles
challenging and disrupting conventional economic fashions. Innovations like peer-to-peer
lending and cryptocurrencies introduce totally new tactics to monetary transactions. In addition,
fintech has revolutionized how purchasers interact with monetary services. Mobile bills,
robo-advisors, and digital wallets have converted the manner humans manipulate and get
admission to their cash. - ANS-In your opinion, does fintech represent an evolution of the
financial gadget or a revolution? Why?
Borrowing:
Individuals can borrow as much as $50,000 and small organizations up to $500,000 for terms
up to 5 years.
Small organizations have an increasing number of turned to online creditors to get right of entry
to capital (as opposed to counting on dating lending with neighborhood banks)
Lending:
Original p2p structures raised cash from the crows, with man or woman buyers committing as
low as $a hundred each
Online platform would assign a credit score and interest rate on loan
As demand grew, portals grew to become to institutional traders for more deliver of funding -
ANS-Who is borrowing from on line lenders and who's presenting investment? How do creditors
determine the risk of default for online loans?
Build in residence, R&D (set up innovation lab), enter a strategic partnership (with fintechs,
competition, or atmosphere shareholders), buy a subscription to fintech product or service and
offer to end-patron both as white categorized or branded (license), put money into fintech,
purchase a fintech start-up (to gather its era, patents, and human capital), and goal fintechs as
a brand new purchaser phase by way of proving BaaS.
