Discuss about the Financial technology Innovations.
Financial technology also known as FinTech, is composed of the new technologies which are seen to be related to the use of technology with the available amount of the resources in order to deliver the required financial service. It has been seen to be different from the traditional practices of implementing technology in finance. The main areas of the implementation of the Fintech have been seen with the automation and trading risk (Finkle 2016). The various types of the services are seen to be originating from the independent service providers such as insurer and licensed bank. The various types of the interconnection have been further seen to enable the API and several innovations in terms of the Payment services directives. It has been predominantly observed that with the advent of the companies such as Paypal, Adyen, Robinhood, Kickstarter, GoFundMe and Envestnet, FinTech is already seen to be challenging the traditional financial institutions. It has been further seen that the total budget of the FinTech companies has exceeded USD 19 Billion in 2015. The main purpose of this report is to discuss the impact of the recent boom in the FinTech innovations in the market operators and exchange. The various discussions of the report will be able to support the growing trend of the FinTech in the industries. (Lee and Teo 2015).
FinTech for Market Operators and Exchange
FinTech companies that are leading in particular sector along with their challenges
Some of the main form of the FinTech companies has been further seen in terms of Stripe, YapStone, Braintree, Adyen, Lending Club, Addepar, Commonbond and Kabbage. Some of the main aspect of the challenges faced by the companies has been further seen to be based on the engineering problems. One of the primary challenges faced by the Fintech companies has been seen in terms of the redesigning online payments (and the associated tooling). Some of the main form of the challenges has been further identified in term of the various types of the perpetrators who are seen to be supporting the products. In various cases the main challenge has been seen to take place in terms of the attesting and writing the code. In several instances it has been seen that the codes are not free from errors. During the processing of the payments it has been seen load on the system has been seen to be much lower in compare to the companies with equivalent scale. One of the other primary problems has been further seen in terms of the availability and consistency of the information required to process the relevant data.
The risk of the security aspect of dealing with the information has been further seen to be considerably high. In several cases the system are seen to be prone to targeted by the attackers such as fraudsters. The company has been further seen to take into account the various types of the tools has been further seen to facing problems which are seen to be associated to the reduce the productivity of the developer.
In several cases the associated challenges are seen to be raised due to the increased cost of implementation of the technological aspects. In several cases ingesting and digesting is seen to be difficult challenge. Several systems are being worked upon for tailing production data into HDFS, where it can be queried via Impala or processed.
Challenges faced by the industry and regulators in the sector to cater for these change
Some of the main challenges of adapting to the FinTech have been seen to be evident in form of changes in the investments shake ups, regulation and the technology woes. Despite of Fintech being an effective tool, however the industry tends to get negatively affected by the amount of investment needed in this sector. The main form of the regulation has been further seen to be controlled based on the prevailing regulation. The technology woes has been identified in form of the adapting to the automated system, which is seen to be be not only a challenge in terms of the cost by also adequate manpower in handling the system effectively.
The influence of this technology in Malaysia is also evident with the central bank of the country (Philippon 2016). The main regulatory framework for the adoption of this technology in the Bank Negara has been identified with the application and the operation of with Financial Technology Regulatory Sandbox Framework. Some of the major challenges identified by Bernama have been recognized with increased risks for stability, integrity and market conduct.
In general, banks and financial institutions have been traditionally recognized for being at the centre of the broader range of using the financial data. The changing environmental explosion of the data has been seen to capture the various aspects of the financial report which are seen to be associated to the necessary trends of capturing the market elements such as lending, financial planning and investments. It has been commonly seen that in terms of the market operators and the exchange functions have been seen to play a major role in reacting to the challenges related to the application of this technology in complex situations. However, it needs to be also noted that the financial institutions and the banks has been seen to actively partner with the market operators such as PayPal, Bitcoin, Adyen, Robinhood, Kickstarter, GoFundMe and among various other service providers of Fintech for gaining a competitive edge over the traditional channels of finance (Finkle 2016).
The future exchange and the infrastructure of the market are seen to be controlled by the various types of the operations which are related to support and foster the future growth in the financial markets. The main implementations of the Fintech has been mainly identified in form of the using open service architecture such as application programming interfaces (APIs), beside using the general business model (Mackenzie 2015). The technological innovations have been further seen to be sourced from the structural changes in the recent years. This has been seen to be directly influencing the regulatory, capital, and business model associated to the financial ecosystem. The capital market structure has been seen to be influenced by the capital market FinTech structures. These components has been seen to be directly related to the core market infrastructure, AI & Analytics, alternative funding platforms, investment technology and post trade digitization (Philippe Gelis 2016).
The important features from the core market infrastructure have been identified in terms of the technology promoting the decentralization and reduction of the physical assets. The post trade digitization in the exchange operations has been further seen in terms of creation of robust operations, which is in compliance with the management, post trade technology and post trade technology (Arner, Barberis and Buckley 2015). The third important feature of the Fintech in the market operators and the exchange system has been seen with the implementation of the artificial intelligence and analytics. In big organizations, the data needs to be handled in multiple sets, which needs to be done precisely with the advancements made in the artificial technology. Whenever we think of the currency, market and financial service trends, the block chain technology has been seen to play a major role in terms of the streamlining the overall process. This technology in the exchange operations in the recent times has been seen with the significant implementation in the Bitcoin and other crypto currencies thereby increasing the efficiency of the overall exchange process (Philippe Gelis ceo of kantox 2016).
However, it needs to be noted that there has been some of the challenges which are seen to be associated to the implementation of this technology. It has been seen that in many situations the Bitcoin service is used by the hackers and the ransom ware for succeeding in incognito transactions. This has been further seen to influence major number of people who are seen to be associated to the various types of cyber crime activities. These activities have been further seen to influence a large number of people making encrypted transactions over the internet. In order to curb the various types of the illegal activities which taking place through Bitcoin transactions, the cyber crime law enforcement agencies are seen to be taking an active role for the tracking such illegal activities in the internet (Hung and Luo 2016).
The next important action in the exchange operations in the companies has been seen in terms of implementing the Fintech in market operator for changing the dynamics of the asset management business. This has been seen to create more demand in terms of the various types of the activities which are seen to be associated to the offering investment managers of all sizes tools for monitoring markets and allowing better decisions based on robust data analysis (Gimpel, Rau and Röglinger 2016).
Some of the various types of the other advantages of this platform have been seen in terms of reshaping of the traditional channel of the business has been seen to influence capital market operation in terms of the equity and the debt capital operations. A similar innovation of the technology has been further seen to benefit the various types of the operations which are seen to be related to the alternative funding measures associated to provide the capital and the liquidity for the corporate (Entrepreneur 2015). In Europe the consumers has been seen with the reliance on the technological advantages which are seen in European countries. The alternative funding platform has been seen to benefit the investors who are looking for higher yield opportunities from the exchange markets. The use of the Fintech has been further seen to influence the transformation process which is seen to be related to achieving of pioneering business model which in the proximity to the end customers and use of innovative technology. The FinTech firms has been further seen to influence the firms for a new capital market model which is based on a more collaborative approach associated to the capital provision, technology, work flow process and overall connectivity in the exchange operation in the market (Treleaven 2015).
The main form of the business model has been seen to be applicable in form of the incumbent market centres. This has been seen with scale, infrastructure and expertise. The scale of operations has been seen with access to capital, distribution and trusted intermediary. The infrastructure has been seen to be implemented with existing connectivity, access to the data and the technology. The Fintech implementation process for the market operations and the exchange has been seen to be based on the specific features which are seen to be associated to the business model and technology. The business model has been seen to be identified in form of the application innovative process in the transactions based on the FinTech applications (Accenture 2015). The business model has been further seen to make use of the new model for the access of data. The technological aspect of has been seen to be based on the application of the alternative model for the technology and inclination for lean cloud as a service offering (McAuley 2015). The core market infrastructure has been seen to be based on the various types of the features which are based on the implementation of the investment technology based on the digitization and the alternative platform for funding. The various types of the platforms of the study has been seen to be based on the types of the considerations made in form of the alternative funding platforms for supporting the necessary exchange operations. These platforms have been seen to be operating with the use of the alternative models such as capital formation across the capital structure related large organizations (Davies, Kashyap and Ruetschi 2016).
The present barriers in the adoption of the block chain system in the exchange system have been seen to be implemented based on the technology which is not mature enough to replace the present production system related to the financial services. The technology is further seen to be lacking the scalability and the potential to the conflict which exists in terms of the transparency and the confidentiality of the information (Haddad and Hornuf 2016).
Despite of the various types of the barriers which exists in the capital flow system based on the application of the FinTech. The report has been effective to identify the several types of the potential of the application of the technology associated to the lending, financial planning and investments in the market operators and the exchange service. The main form of the challenges of the implementation of this technology has been further seen to be based on the technology which is not mature enough to replace the present production system related to the financial services. The technology is further seen to be lacking the scalability and the potential to the conflict which exists in terms of the transparency and the confidentiality of the information. The advantages of the system in the marketing operators and the exchange services have been seen with seamless operations and the easy transactions across global scale. These components has been seen to be directly related to the core market infrastructure, AI & Analytics, alternative funding platforms, investment technology and post trade digitization.
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