Topic 10: FinTech

BLOCKCHAIN 1600X900-How-does-blockchain-work .

Blockchain is a secure digital notebook where each page (block) is connected to the ones before and after, creating an unchangeable chain of transactions.

Decentralized Ledger: Blockchain is a decentralized and distributed ledger technology.

Transaction Record: Securely records and verifies transactions across a network of computers (nodes).

Blocks: Transactions are grouped into blocks, forming a chronological chain.

Linkage: Each block is linked to the previous one, creating a chain of blocks (blockchain).

Immutability: Once a block is added, it cannot be altered or deleted, ensuring data integrity.

Transparency: All participants in the network have access to the entire transaction history.

CROWDFUNDING crowdfunding

Crowdfunding is a way of raising money to finance projects and businesses. It enables fundraisers to collect money from a large number of people via online platforms.

Funding Method: Crowdfunding is a method of raising funds from a large number of people.

Online Platforms: Typically conducted through online platforms dedicated to crowdfunding.

Type of Crowdfunding

Reward-Based: Backers receive non-financial rewards or perks in return for their contributions.

Equity-Based: Backers receive a share in the business or project.

Donation-Based: Backers contribute without expecting financial returns.

ROBO-ADVISING AND STOCK TRADING APPS :

Stock trading apps download

Real-Time Trading: Users can execute trades in real-time, allowing for quick reactions to market changes.

Information and Research:These apps often offer research tools, news updates, and financial information to help users make informed investment decisions.

User-Friendly Platforms: Stock trading apps provide a user-friendly interface for buying and selling stocks, making investing accessible to a broader audience.

Fractional Shares: Some apps allow users to buy fractional shares, enabling investment in high-priced stocks with smaller amounts of money.

Definition:Stock trading apps are mobile applications that allow users to buy and sell stocks, as well as other financial instruments, directly from their smartphones or tablets. These apps often provide real-time market data, news, and various tools for analysis.


Blockchain is a secure digital notebook where each page (block) is connected to the ones before and after, creating an unchangeable chain of transactions.

Consumer budgeting Apps
bugeting-apps

Disadvantages:

  • Limited features: May not offer the same advanced tools and research capabilities as desktop platforms.


  • Security risks: Mobile devices can be more vulnerable to cyberattacks and hacking.


  • Overtrading: Ease of access and quick execution can lead to impulsive or overly frequent trading.


  • Potential for addiction: Constant access to market data and trading opportunities can lead to obsessive behavior.

Examples of Stock Trading App

  • Robinhood: A commission-free investing platform for ordinary investors who could open an account with no minimum balance.
  • E*Trade: offers a wide range of tools for both active day traders and long-term investors
  • eToro: focused on crypto trading, excellent for beginners, who are guided through the basics of crypto trading in the eToro Academy

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ROBO- Advising download

Definition: Robo-advisors are automated, algorithm-driven platforms that provide financial advice and manage investment portfolios. They use computer algorithms to create and manage a diversified portfolio for investors based on their financial goals, risk tolerance, and time horizon.

Passive Investing: Robo-advisors often follow a passive investment strategy, investing in a broad range of assets to achieve steady, long-term growth.

Minimal Human Intervention: Limited human involvement is required, as the algorithms handle portfolio rebalancing and adjustments.

Risk Assessment:They assess your risk tolerance through a questionnaire and recommend a diversified portfolio based on your financial goals.

Low Fees: Typically, robo-advisors charge lower fees compared to traditional financial advisors, making them cost-effective.

Automated Investment: Robo-advisors are automated platforms that use algorithms to create and manage investment portfolios.

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INSURTECH insurtech

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BITCOIN Bitcoin.svg :

Mining: New bitcoins are created through a process called mining, where powerful computers solve complex mathematical problems.

Blockchain Technology: Transactions are recorded on a secure, transparent, and immutable ledger called the blockchain.

Peer-to-Peer Transactions: Enables direct transactions between users without intermediaries.


Decentralized: Operates without a central authority, like a government or bank.

Digital Currency: Bitcoin is a purely digital or cryptocurrency.

Bitcoin, the renowned digital currency, enables direct peer-to-peer transactions without banks, recording all exchanges securely on the blockchain, and generates new bitcoins through a process known as mining.



Advantages:

  • Enable more competitive pricing of goods by leveraging technology such as data analysis, IoT, and AI.
  • The importance of Insurtech is to improve the efficiency of claims processing, risk evaluation, contract processing, and policy underwriting.
  • Use technological solutions to revolutionize their respective conventional industries.

Definition: The application of technological advancement to improve the efficiency of the current insurance industry.

Criticism: regulatory constraints, incumbent insurers’ willingness to collaborate with Insurtech, risk lack of privacy.

Insurtech companies: Lemonade, Dacadoo, Bdeo, Avinew

MOBILE PAYMENT MOBILE PAYMENT

Definition: Payment that uses mobile devices such as mobile phones and tablets to start, authorize and finish financial transactions.

Benefits:

  • Friendly user
  • fast transaction
  • contactless interaction between the buyers and seller
  • increased security feature (with tokenization & biometric authentication)

Weaknesses: fraud and hacking, limited internet connectivity, privacy concerns of the user

Example: QR code payment, mobile banking online, mobile wallets (e-wallets)

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Examples of budgeting application :

  • PocketGuard: offering detailed analysis of users financial overview and make informed decisions and adjustments of users spending habits.
  • GoodBudget: an envelope type of software which helps users to categorize their expenses.
  • Mint: enables users to set their own financial goals.

Consumer Budgeting Apps, is a software application which helps users to create budget and track the users income and spending.

How does the apps function?
Most of the application allow user to connect to their bank and investment account, loan and credit card to ensure users able to view their financial statement in one app.

Advantages :

  • Analyze the users spending habit.
  • Automatically provide the users budgeting overview.
  • The application comes with various tools to help users with their finance.

Disadvantages :

  • Application can cost money. (subscription payment)
  • Security concerns.
  • Inability to handle cash transaction