FINTECH FINAL EXAM QUESTIONS WITH DETAILED
VERIFIED AND 100% ACCURATE ANSWERS
FinTech Correct Answers Fintech is the use of technology to improve
the efficiency of financial services, reduce costs, offer new financial
services, enhance accuracy, etc.
What problems does fintech address? Correct Answers 1. Unit Cost
2. Asymmetric Information
3. Agency Conflicts: It aligns incentives of service providers and
consumers
4. Trust
5. Search costs: It easily matches service providers with customers
6. Latency: It reduces processing time
2008 Financial Crisis: A Turning Point for FinTech Correct Answers 1.
Distrust in the traditional banking system and financial institutions
- created dreams of a "decentralized" and inclusive financial system
2. Massive job losses specifically in the financial sector
- financial professionals looking for new opportunities
3. Regulatory changes increasing the cost of compliance and decrease in
the profitability
4. Technology
- smart phone
- blockchain
- computing power
,- data availability
- cloud computing
2009: Bitcoin Genesis Block Created Correct Answers A peer-to-peer
electronic cash system
Lending Correct Answers The fintech lending market is large
- $1Trillion addressable market for online marketplace lending,
excluding mortgages
- Loan origination volumes is around $100 billion
Reasons for emergence and growth of fintech lending
- Technology rapidly developed and broadly adopted
- A reduction in available credit after the financial crisis
- Investors sought yield in the post crisis interest-rate environment
- Fintech lenders faced less-stringent regulation
- Technology helps solve two major problems facing lending: access and
convenience
Technological Trends in Investments Correct Answers 1. Using the
wisdom of crowds to:
- decentralize production or consumption of information
- democratize trading and investments
,2. Rise of quantitative investment and alternative data
Insurtech Correct Answers The use of technology to solve insurance-
related problems
Insurtech enables insurance industry growth by introducing new
products or services or by entering new segments
Insurtech can improve existing models through risk management and
reducing information asymmetry
Disruptive Technologies in FinTech Correct Answers Two of the most
important technologies disrupting the financial sector:
1. Blockchain and distributed ledgers can decentralize commerce and
control.
2. Big data, machine learning, and artificial intelligence use large sets of
data to predict consumers' behavior and preferences
What is a ledger? Correct Answers A ledger establishes a consensus
about facts.
- ownership: transferring assets
- identity: confirming existence
- status: establishing rights, claims, and obligations
, - authority: providing access
A ledger is a list of transactions that include:
- buyer/receiver
- seller/giver
- amount/information
Ledgers map economic and social relationships
What is a blockchain/distributed ledger? Correct Answers A distributed,
secure, and transparent ledger that establishes and transfers ownership of
an asset
- currency (e.g. bitcoin and ethereum), financial securities, real assets
(car, houses, etc)
Double-spending Correct Answers The biggest problem with digital
currency is the issue of double-spending: making sure that the owner of
coin does not spend the coin twice (or more)
- with credit cards and bank accounts, the issue is resolve by having a
central clearing house that makes sure the transaction is valid
- Bitcoin is a distributed ledger that solves the problem of double-
spending without a centralized clearing house
The potential of blockchain goes far beyond bitcoin or cryptocurrencies
in general
VERIFIED AND 100% ACCURATE ANSWERS
FinTech Correct Answers Fintech is the use of technology to improve
the efficiency of financial services, reduce costs, offer new financial
services, enhance accuracy, etc.
What problems does fintech address? Correct Answers 1. Unit Cost
2. Asymmetric Information
3. Agency Conflicts: It aligns incentives of service providers and
consumers
4. Trust
5. Search costs: It easily matches service providers with customers
6. Latency: It reduces processing time
2008 Financial Crisis: A Turning Point for FinTech Correct Answers 1.
Distrust in the traditional banking system and financial institutions
- created dreams of a "decentralized" and inclusive financial system
2. Massive job losses specifically in the financial sector
- financial professionals looking for new opportunities
3. Regulatory changes increasing the cost of compliance and decrease in
the profitability
4. Technology
- smart phone
- blockchain
- computing power
,- data availability
- cloud computing
2009: Bitcoin Genesis Block Created Correct Answers A peer-to-peer
electronic cash system
Lending Correct Answers The fintech lending market is large
- $1Trillion addressable market for online marketplace lending,
excluding mortgages
- Loan origination volumes is around $100 billion
Reasons for emergence and growth of fintech lending
- Technology rapidly developed and broadly adopted
- A reduction in available credit after the financial crisis
- Investors sought yield in the post crisis interest-rate environment
- Fintech lenders faced less-stringent regulation
- Technology helps solve two major problems facing lending: access and
convenience
Technological Trends in Investments Correct Answers 1. Using the
wisdom of crowds to:
- decentralize production or consumption of information
- democratize trading and investments
,2. Rise of quantitative investment and alternative data
Insurtech Correct Answers The use of technology to solve insurance-
related problems
Insurtech enables insurance industry growth by introducing new
products or services or by entering new segments
Insurtech can improve existing models through risk management and
reducing information asymmetry
Disruptive Technologies in FinTech Correct Answers Two of the most
important technologies disrupting the financial sector:
1. Blockchain and distributed ledgers can decentralize commerce and
control.
2. Big data, machine learning, and artificial intelligence use large sets of
data to predict consumers' behavior and preferences
What is a ledger? Correct Answers A ledger establishes a consensus
about facts.
- ownership: transferring assets
- identity: confirming existence
- status: establishing rights, claims, and obligations
, - authority: providing access
A ledger is a list of transactions that include:
- buyer/receiver
- seller/giver
- amount/information
Ledgers map economic and social relationships
What is a blockchain/distributed ledger? Correct Answers A distributed,
secure, and transparent ledger that establishes and transfers ownership of
an asset
- currency (e.g. bitcoin and ethereum), financial securities, real assets
(car, houses, etc)
Double-spending Correct Answers The biggest problem with digital
currency is the issue of double-spending: making sure that the owner of
coin does not spend the coin twice (or more)
- with credit cards and bank accounts, the issue is resolve by having a
central clearing house that makes sure the transaction is valid
- Bitcoin is a distributed ledger that solves the problem of double-
spending without a centralized clearing house
The potential of blockchain goes far beyond bitcoin or cryptocurrencies
in general
