Fintech Glossary 2019

Fintech Glossary 2019

Blockchain

a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly.

  • cryptocurrency

a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

  • distributed ledger

is a database that is consensually shared and synchronized across network spread across multiple sites, institutions or geographies. It allows transactions to have public “witnesses,” thereby making a cyberattack more difficult.

  • smart contract

is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. … Various cryptocurrencies have implemented types of smart contracts.

challenger bank

a relatively small retail bank set up with the intention of competing for business with large, long-established national banks.

  • artificial intelligence (AI)

is the simulation of human intelligence processes by machines, especially computer systems. These processes include learning (the acquisition of information and rules for using the information), reasoning (using rules to reach approximate or definite conclusions) and self-correction.

  • digital bank

a retail financial services institution with no physical branch presence where all transactions and interactions happen through a digital platform.

  • digital native

a person born or brought up during the age of digital technology and so familiar with computers and the Internet from an early age.

  • machine learning

is an application of artificial intelligence (AI) that provides systems the ability to automatically learn and improve from experience without being explicitly programmed. Machine learning focuses on the development of computer programs that can access data and use it learn for themselves.

  • Millennial

a person reaching young adulthood in the early 21st century. Often considered a key demographic for digital banking.

  • Unbanked

not having access to the services of a bank or similar financial organization.

  • Underbanked

 is a characteristic describing people or organizations who do not have sufficient access to mainstream financial services and products typically offered by retail banks and thus often deprived of banking services such as credit cards or loans.

fintech ecosystem

the institutions and individuals that support and surround financial technology in a given region.

  • Accelerators

A business programme used to develop firms (especially start-ups) typically run for a short period of time and include mentorship and expert advice with the goal of creating fast-paced growth that allows it to reach a stable state.

  • angel investor

individuals who provide finance and professional experience at an early stage of incorporation, either as a down payment or a continuous subsidy to help the company during difficult times, to support promising new projects for a small shareholding.

  • venture capital

capital invested in a project in which there is a substantial element of risk, typically a new or expanding business.

  • Regulator

An institution that supervises financial institutions to ensure stability and integrity. Regulators often have limited experience dealing with disruptive fintech and many are working to adapt to this challenge.

Insurtech

is a portmanteau of “insurance” and “technology” that was inspired by the term fintech.

  • comparison site

a website that allows customers to evaluate multiple policies from different providers, often associated with finding the best price for the cover. Also known as aggregator sites

  • insurance on demand

policies were taken out to cover a narrowly defined risk, typically across a short time period. Offering customers improved flexibility e.g. car insurance for a particular date as opposed to a year-long policy

  • p2p insuranceis a risk sharing network where a group of individuals pools their premiums together to insure against a risk. … P2P insurance may also be referred to as “social insurance.”
  • Telematics

A form of insurance where the vehicle is fitted with a device that monitors and transmits driving characteristics such as speed branking and cornering habits. The methodology of real-time data collection is also being applied in the life insurance industry using wearables.

Payments

Financial instruments or systems allowing the transfer of value. Within fintech this typically relates to digital financial instruments

  • digital wallet

an electronic device or an online service that allows an individual to make electronic transactions. This can include purchasing items online with a computer or using a smartphone to purchase something at a store. An individual’s bank account can also be linked to the digital wallet.

  • payment gateway

is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers.

  • PCI compliance

Payment card industry (PCI) compliance refers to the technical and operational standards that businesses must follow to ensure that credit card data provided by cardholders are protected. PCI compliance is enforced by the PCI Standards Council, and all businesses that store.

  • Tokenization

is the process of replacing sensitive data with unique identification symbols that retain all the essential information about the data without compromising its security.

  • U-commerce

describes the generic term for all-encompassing business transactions through or by means of information and communications technology.

Regulation

In fintech this usually relates to government supervision of financial institution to ensure a  set of standards to protect customers and ensure consistency in the market.

  • AML

Anti-money-laundering refers to a set of procedures, laws, and regulations designed to stop the practice of generating income through illegal actions. 

  • KYC

refers to due diligence activities that financial institutions and other regulated companies must perform to ascertain relevant information from their clients for the purpose of doing business with them. … The KYC also refers to AML regulations and procedures.

  • RegTech

is a new field within the financial services industry that utilizes information technology to enhance regulatory processes. It puts a particular emphasis on regulatory monitoring, reporting, and compliance and is thus benefiting the finance industry.

  • regulatory sandbox

is a live-like testing environment used to ensure regulatory compliance and security checks for financial operations, including cryptocurrencies and blockchain-based systems.

Security

The software or processes that protect digital financial transactions or services from fraud, theft or other criminal activities

  • 2FA

2-factor authentication is the second layer of security to protect an account or system. … 2FA increases the safety of online accounts by requiring two types of information from the user, such as a password or PIN, an email account, an ATM card or fingerprint, before the user can log in.

  • Biometrics

is the measurement and statistical analysis of people’s unique physical and behavioral characteristics. The technology is mainly used for identification and access control, or for identifying individuals who are under surveillance.

  • Encryption

the process of converting information or data into a code, especially to prevent unauthorized access.

  • single factor authentication

is a process for securing access to a given system, such as a network or website, that identifies the party requesting access through only one category of credentials.

  • SSO

Single sign-on, allowing access to multiple application with a single authentication 

Sharing economy

an economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the Internet.

  • collaborative consumption

differs from standard commercial consumption in that the cost of purchasing the good or service is not borne by one individual. The cost is divided across a larger group as the purchase price is recouped through renting or exchanging.

  • CrowdFunding

the practice of funding a project or venture by raising money from a large number of people who each contribute a relatively small amount, typically via the Internet.

 

  • P2P Lending

Peer-to-peer lending is a method of debt financing that enables individuals to borrow and lendmoney without the use of an official financial institution as an intermediary.

 

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