Fintech and the Remaking of Financial Institutions

Fintech and the Remaking of Financial Institutions

by John Hill
Released May 2018
Publisher(s): Academic Press
ISBN: 9780128134986

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Book description

FinTech and the Remaking of Financial Institutions explores the transformative potential of new entrants and innovations on business models. In its survey and analysis of FinTech, the book addresses current and future states of money and banking. It provides broad contexts for understanding financial services, products, technology, regulations and social considerations. The book shows how FinTech has evolved and will drive the future of financial services, while other FinTech books concentrate on particular solutions and adopt perspectives of individual users, companies and investors. It sheds new light on disruption, innovation and opportunity by placing the financial technology revolution in larger contexts.

  • Presents case studies that depict the problems, solutions and opportunities associated with FinTech
  • Provides global coverage of FinTech ventures and regulatory guidelines
  • Analyzes FinTech’s social aspects and its potential for spreading to new areas in banking
  • Sheds new light on disruption, innovation and opportunity by placing the financial technology revolution in larger contexts

Table of contents

  1. Cover image
  2. Title page
  3. Table of Contents
  4. Copyright
  5. Acknowledgments
  6. Chapter 1. Introduction
    1. Abstract
    2. M-Pesa: Providing Some of the World’s Poorest With Financial Access
    3. Venmo: Effortlessly Split Dinner Tabs, Buy Concert Tickets With Friends
    4. Bitcoin, Ethereum and Other Cryptocurrencies
    5. Blockchain: A Protocol With Wide Application Potential
    6. Square: Mobile Payments
    7. Stripe: E-Commerce Payments
    8. Lending Club, SoFi, Kiva: Peer-to-Peer Lenders Disintermediate the Banks
    9. Transferwise: Matching Users for Remittances
    10. Chapter 2. Disruption and Disintermediation in Financial Products and Services: Why Now?
    11. Chapter 3. Money: A Medium of Exchange, Unit of Account and Store of Wealth
    12. Chapter 4. Financial Institutions
    13. Chapter 5. Bubbles, Panics, Crashes, and Crises
    14. Chapter 6. Bank Lending
    15. Chapter 7. Time Value of Money: Interest, Bonds, Money Market Funds
    16. Chapter 8. Equities, Efficient Markets, Exchanges
    17. Chapter 9. Foreign Exchange
    18. Chapter 10. Forwards, Futures, and Swaps
    19. Chapter 11. Commodities
    20. Chapter 12. Options
    21. Chapter 13. Startup Financing
    22. Chapter 14. Fintech in a Global Setting
    23. Chapter 15. Fintech and Government Regulation
    24. Chapter 16. Social Issues: Diversity and Inclusion, Unemployment, and Income Distribution
    25. Chapter 17. The Future Millennial Bank—Your Parents’ Bank Integrates With the Disrupters
  7. Chapter 2. Disruption and Disintermediation in Financial Products and Services: Why Now?
    1. Abstract
    2. Millennials
    3. Millennials are Using Money Differently
    4. Technology
    5. Quantum Computing
    6. Graphical Processing Units
    7. The Cloud
    8. Artificial Intelligence
    9. Fintech Application of AI
    10. Startup Lifestyle
    11. References
    12. Further Reading
  8. Chapter 3. Money: A Medium of Exchange, Unit of Account, and Store of Wealth
    1. Abstract
    2. How is Money Measured?
    3. Trends in Non-Cash Payments
    4. Financial System Plumbing: How Credit Cards Work
    5. Financial System Plumbing: The ACH
    6. How the ACH Network and ACH Payments System Works
    7. Fintech Applications
    8. Digital or “Crypto” Currencies
    9. How Bitcoin Works
    10. Silk Road
    11. Mt. Gox
    12. Bitcoin in China
    13. Bitcoin in Venezuela
    14. Bank of England
    15. Initial Coin Offering
    16. Blockchain: A Form of Distributed Ledger Technology
    17. BIS: Digital Ledger Technology
    18. R3
    19. Depository Trust and Clearing Corporation
    20. Digital Asset Holdings
    21. Chicago Mercantile Exchange
    22. Ripple
    23. Payments
    24. Adyen
    25. Apple Pay
    26. Square
    27. Stripe
    28. Venmo
    29. Zelle
    30. Zoop
    31. Alipay
    32. References
  9. Chapter 4. Financial Institutions
    1. Abstract
    2. Information Asymmetries, Moral Hazard, and Adverse Selection
    3. Commercial Banks
    4. Investment Banks
    5. Central Banks
    6. Insurance Companies, Finance Companies, Hedge Funds, Mutual Funds, Exchange Traded Funds
    7. Shadow Banking: Other Financial Intermediaries
    8. Historical Innovation in Big Financial Institutions
    9. Fintech Applications
    10. World’s Best Digital Bank
    11. References
  10. Chapter 5. Bubbles, Panics, Crashes, and Crises
    1. Abstract
    2. Selected Notable Events
    3. Tulipmania
    4. South Seas Bubble
    5. Mississippi Company
    6. Bank Panic of 1907
    7. The Great Depression
    8. Regulatory Responses to the Great Depression
    9. Stock Market Crash of 1987
    10. Tech Bubble: The Dotcom Crash in 2000
    11. The Global Financial Crisis
    12. Regulatory Responses to the Global Financial Crisis
    13. Common Features: Run-Up Phase and Crisis Phase
    14. Fintech Issues Relevant to Systemic Financial Risk
    15. Appendix: Timeline of Global Financial Crisis Events 2007–10
    16. References
  11. Chapter 6. Bank Lending
    1. Abstract
    2. Secured vs Unsecured Loans
    3. LIBOR
    4. Real Estate Loans
    5. Payday Lending
    6. Credit Scores: FICO
    7. Fintech in Lending
    8. References
    9. Further Reading
  12. Chapter 7. Time Value of Money: Interest, Bonds, Money Market Funds
    1. Abstract
    2. Future Value and Present Value
    3. Internal Rate of Return
    4. Credit Instruments
    5. Fisher’s Law
    6. Term Structure and Yield Curve
    7. Types of Debt Instruments: Money Market Instruments
    8. Types of Money Market Funds
    9. Types of Debt Instruments: US Treasury Securities
    10. Types of Debt Instruments: Agency Securities
    11. Types of Debt Instruments: Corporate Bonds
    12. Types of Debt Instruments: Municipal Securities
    13. Types of Debt Instruments: Sovereign Debt
    14. Fixed Income Trading Platforms
    15. Fintech Applications
  13. Chapter 8. Equities
    1. Abstract
    2. Risk, Return, and Diversification
    3. Capital Asset Pricing Model
    4. Efficient Market Hypothesis
    5. Random Walk
    6. Equity Indexes
    7. Types of Orders
    8. Equity Trading Venues
    9. Regulation
    10. Fintech in Equities
    11. Roboadvisors
    12. References
  14. Chapter 9. Foreign Exchange
    1. Abstract
    2. Exchange Rate Determination in the Long Run
    3. Exchange Rate Determination in the Short Run
    4. Effects of Relative Interest Rates on Exchange Rate Determination
    5. Currency Futures, Options, and Swaps
    6. Fintech Applications
    7. Anti-Money Laundering and Other Concerns
    8. References
  15. Chapter 10. Futures, Forwards, and Swaps
    1. Abstract
    2. Futures Mechanics
    3. Single Stock Futures
    4. Equity Swaps
    5. Total Return Swap
    6. Inflation Swap
    7. Stock Index Futures
    8. Interest Rate Swaps
    9. Interest Rate Futures
    10. Hedging Example: Locking in an Interest Rate
    11. Credit Default Swaps
    12. Hedging Example: Protecting a Bond Payment Stream With CDS
    13. Fintech Applications
    14. References
  16. Chapter 11. Commodities
    1. Abstract
    2. Evolution of Commodity Trading
    3. Central CounterParty
    4. Categories of Commodities
    5. Commodity Forwards, Futures, Swaps, and Options
    6. Trading Conventions and Terminology
    7. Participants in Futures Markets
    8. Hedging Example: Farmers and Corn
    9. Hedging Example: Airlines and Jet Fuel
    10. Commodities as an Asset Class
    11. Commodities Exchange Traded Fund
    12. Fintech in Commodities
    13. Blockchain in Post-Trade Processing
    14. Blockchain in Physical Commodities
    15. Artificial Intelligence in Energy Data Analysis
    16. References
  17. Chapter 12. Options
    1. Abstract
    2. Risks in Trading Options
    3. Basic Option Strategies
    4. Additional Option Strategies
    5. Option Pricing
    6. Theoretical Pricing Models
    7. Fintech Applications in Options
    8. References
  18. Chapter 13. Startup Financing
    1. Abstract
    2. Credit Cards and Cash on Hand
    3. Friends and Family
    4. Loans
    5. Crowdfunding
    6. Equity Crowdfunding
    7. AngelList
    8. Angels
    9. Accelerators
    10. Venture Capital
    11. Initial Public Offering: Is Going Public (IPO) the Founder’s Holy Grail?
    12. Initial Coin Offerings
    13. References
    14. Further Reading
  19. Chapter 14. Fintech in a Global Setting
    1. Abstract
    2. Fintech in the United Kingdom
    3. Fintech in the European Union
    4. Fintech in Germany
    5. Fintech in Canada
    6. Fintech in China
    7. Fintech in Singapore
    8. Fintech in India
    9. Fintech in Africa
    10. Fintech in Brazil
    11. References
  20. Chapter 15. Fintech and Government Regulation: If It Quacks Like a Bank…
    1. Abstract
    2. Financial Regulation Background
    3. Significant Legislation Governing US Financial Regulation
    4. Financial Regulators
    5. Office of the Controller of the Currency
    6. Federal Depositors Insurance Corporation
    7. Office of Financial Asset Control and Financial Crimes Enforcement Network
    8. Several Start-ups Have Been Found to Be in Violation of Regulations
    9. US Policies to Support Fintech Start-ups
    10. UK Policies to Support Fintech Start-ups
    11. EU Support for Fintech
    12. Regtech: Fintech Technologies Designed to Help With the Financial Regulatory Burden
    13. References
  21. Chapter 16. Social Issues: Diversity and Inclusion, Unemployment, and Income Distribution
    1. Abstract
    2. Lack of Diversity in VCs
    3. Is It a Pipeline Problem? A Bias Problem? Both?
    4. Unemployment and Income Distribution Effects
    5. Income Distribution Effects
    6. Who Reaps the Gains of Technological Advancement?
    7. References
    8. Further Reading
  22. Chapter 17. They are Not Dead Yet: How Big Financial Institutions Will Work with Fintech Startups to Define the Market Structure of the Future
    1. Abstract
    2. Incubators and Accelerators
    3. Big Financial Institutions Investing in and Partnering with Startups
    4. Card Startup Support Programs
    5. Distributed Ledger Projects
    6. Internal Bank Units
    7. Goldman Sachs: “We are a technology company”
    8. Altering Internal Banking Culture to Reflect Millennial Sensibilities
    9. For Banks, Disruption has Its Risks but also Opportunities
    10. References
    11. Further Reading
  23. Index

Product information

  • Title: Fintech and the Remaking of Financial Institutions
  • Author(s): John Hill
  • Release date: May 2018
  • Publisher(s): Academic Press
  • ISBN: 9780128134986