According to a Satista survey in 2020, Fintech in the US is completely unknown by 63% of the population, 21% have only heard of fintech, and only 16% of the population has heard of fintech and has a clear idea of what it is. What else is unknown in the high growth industry of banking and finance?

Enjoy a scroll of the ‘A’ to ‘Z’ of banking and finance technology below!

A is for…

Accelerators
A venture or scheme that promotes and aids the rapid growth of selected new small businesses.

Anti-Money Laundering (AML)
A set of laws, regulations, and procedures that aim at preventing criminals from disguising illegally obtained funds as legitimate income. 

Artificial intelligence (AI)
Artificial intelligence refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. The term may also be applied to any machine that exhibits traits associated with a human mind, such as learning and problem-solving. The ideal characteristic of AI is its ability to rationalize and take actions that have the best chance of achieving a specific goal. 

Application Programming Interface (API)
An application programming interface, or API, often acts as a mediator that enables a software program to interact with other software. In the context of trading for example, an API often refers to the interface that enables software to connect with a broker to obtain real-time pricing data or place trades. 

Altcoin
Altcoins are primarily abbreviation of “Bitcoin alternative.” They are considered to be alternative cryptocurrencies that were launched after the success of Bitcoin.

Advanced Encryption Standard (AES)
The Advanced Encryption Standard (AES) is a symmetric-key block cipher algorithm and US government standard for secure and classified data encryption and decryption. It was originally known as Rijndael. In December 2001, the National Institute of Standards (NIST) approved the AES as Federal Information Processing Standards Publication (FIPS PUB) 197.

Automated Clearing House (ACH)
The Automated Clearing House (ACH) Network is an electronic funds-transfer system run by NACHA, formerly the National Automated Clearing House Association, since 1974. This payment system deals with payroll, direct deposit, tax refunds, consumer bills, tax payments, and many more payment services in the United States.

Amazon Web Services (AWS)
AWS is a secure cloud services platform, offering compute power, database storage, content delivery and other functionality to help businesses scale and grow.

B is for…

Basel III
Basel III is an international regulatory accord that introduced a set of reforms designed to improve the regulation, supervision and risk management within the banking sector. The Basel Committee on Banking Supervision published the first version of Basel III in late 2009, giving banks approximately three years to satisfy all requirements.

Bitcoin
Bitcoin is a digital currency that was created in January 2009. Also, known as a cryptocurrency, Bitcoins are not backed by any country’s central bank or government.  They offer the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.

Bitcoin Cash
Bitcoin cash is a cryptocurrency that was created in August 2017, arising from a fork of Bitcoin Classic. It is often considered to be an altcoin version of the popular Bitcoin cryptocurrency. Bitcoin Cash increases the size of blocks, allowing more transactions to be processed.

Bitcoin Wallet
A Bitcoin Wallet is a software program where Bitcoins are stored. Technically, Bitcoins are not stored anywhere; there is a private key (secret number) for every Bitcoin address that is saved in the Bitcoin wallet of the person who owns the balance. Bitcoin wallets facilitate sending and receiving Bitcoins and gives ownership of the Bitcoin balance to the user.  The Bitcoin wallet comes in several forms; desktop, mobile, web and hardware are the four main types of wallets.

Blockchain
A blockchain is a public ledger that records all Bitcoin transactions, eliminating the need for a third party to process payments. Blocks, or the most recent transactions being recorded, are like an individual banking statement. Each completed block is added to the chain, and another block begins, forming the constantly growing blockchain.

Blockchain ETF
Similar to any standard sector – or theme-based stock investments through exchange-traded funds (ETF), blockchain ETFs work by exclusively investing in a basket of blockchain-based companies that have business operations in blockchain technology or those which invest or profit from it. 

Blockchain operating system
An operating system that primarily uses blockchain as a support in the background. When a blockchain-based OS is installed on a device captures all commands and transactions from a user’s device but authenticating, executing, and recording them occurs on the blockchain.

BigTech
The major technology companies such as Apple, Google, Amazon and Facebook, which have inordinate influence.

Big data
The growth in the volume of structured and unstructured data, the speed at which it is created and collected, and the scope of how many data points are covered. Big data often comes from multiple sources and arrives in multiple formats.

Biometrics
Technology that aims to protect data and preventing data breaches. It is often defined as a method of data security used to prevent data breaches, such as credit card hacks. Biometrics uses any data that is physically unique to an individual that can prove identity, such as a fingerprint, rather than relying on passwords or PIN codes that can be more easily hacked.

C is for…

Cryptocurrency
A digital or virtual currency that uses cryptography for security and is often difficult to counterfeit because of this security feature. Many cryptocurrencies are decentralized systems based on blockchain technology; a distributed ledger enforced by a disparate network of computers. A defining feature of a cryptocurrency, and arguably its biggest allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation. 

Cryptocurrency exchange
A cryptocurrency exchange is any system that operates on the basis of trading cryptocurrencies with other assets. Like a traditional financial exchange, the cryptocurrency exchange’s core operation is to allow for the buying and selling of these digital assets, as well as others. A cryptocurrency exchange is also known as a digital currency exchange (DCE).

Crypto-token
Crypto-tokens represent a particular fungible and tradable asset or a utility that is often found on a blockchain.

Crypto Asset
Cryptoassets are digital assets which utilise cryptography, peer to peer networking, and a public ledger to regulate the generation of new units, verify the transactions, and secure the transactions without the intervention of any middleman.

Cloud computing
Cloud computing is the delivery of different services on external data centres and without direct management by the user. These resources include tools and applications like data storage, servers, databases, networking, and software.

Card-not-present fraud
Card-not-present fraud is a type of credit card scam in which the customer does not physically present the card to the merchant during the fraudulent transaction.

Card-not-present fraud can occur with transactions that are conducted online or over the phone. It is theoretically harder to prevent than card-present fraud because the merchant cannot personally examine the credit card for signs of possible fraud, such as a missing hologram or altered account number.

Commodity Futures Trading Commission (CFTC)
The US federal agency established by the Commodity Futures Trading Commission Act of 1974. The CFTC regulates the commodity futures and options markets. Its goals include the promotion of competitive and efficient futures markets and the protection of investors against manipulation, abusive trade practices, and fraud.

Consensus Protocol
Those protocols that create an irrefutable system of agreement between various devices across a distributed network, whilst preventing exploitation of the system. These protocols help to keep all the nodes on a network synchronized with each other, while providing an answer to the question: how do we all make sure that we agree on what the truth is?

Collaborative Finance
A category of financial transaction that occurs directly between individuals without the intermediation of a traditional financial institution. This new way to manage informal financial transactions has been enabled by advances in social media and peer-to-peer online platforms.

Core Banking
A centralized system established by a bank which allows its customers to conduct their business irrespective of the bank’s branch. Thus, it removes the impediments of geo-specific transactions. In fact, CORE is an acronym for “Centralized Online Real-time Exchange”, thus the bank’s branches can access applications from centralized data centres. Other than retail banking customers, core banking is now also being extended to address the requirements of corporate clients and provide for a comprehensive banking solution.

Cybersecurity
Cybersecurity is the protection of internet-connected systems, including hardware, software and data, from cyberattacks.

Cybercriminal
An individual who commits cybercrimes, where he/she makes use of the computer either as a tool or as a target or as both.

D is for..

Distributed ledger technology (DLT)
A digital system for recording the transaction of assets in which the transactions and their details are recorded in multiple places at the same time. Unlike traditional databases, distributed ledgers have no central data store or administration functionality.

Digital native
An individual who was born after the widespread adoption of digital technology. The term digital native doesn’t refer to a particular generation but is primarily a catch-all category for children who have grown up using technology like the Internet, computers and mobile devices. This exposure to technology in the early years is believed to give digital natives a greater familiarity with and understanding of technology than people who were born before it was widespread.

Disaster-Recovery-as-a-Service
A cloud computing and backup service model that uses cloud resources to protect applications and data from disruption caused by disaster. It gives an organization a total system backup that allows for business continuity in the event of system failure. DRaaS is often offered in conjunction with a disaster recovery plan (DRP) or business continuity plan (BCP). The other name for DRaaS is business continuity as a service (BCaaS).

Disaster Recovery Site
Otherwise known as a backup site, a disaster recovery site is a place that a company can temporarily relocate to following a security breach or natural disaster. The site is just one facet of the company’s larger disaster recovery plan.

Decentralized Autonomous Organization (DAO)
An entity in a digital system facilitated by smart contracts. Smart contracts involve digital tools and protocols that help support specific transactions or other contract elements. The decentralized autonomous organization works with popular cryptocurrency and digital ledger operations that many world governments and businesses are moving toward for more transparency and for evolving anti-corruption innovations.

Data Breach
An unauthorized access and retrieval of sensitive information by an individual, group, or software system. It is a cybersecurity mishap which happens when data, intentionally or unintentionally, falls into the wrong hands without the knowledge of the user or owner.

Distributed Application
Software that is executed or run on multiple computers within a network. These applications interact in order to achieve a specific goal or task. Traditional applications relied on a single system to run them. Even in the client-server model, the application software had to run on either the client, or the server that the client was accessing. However, distributed applications run on both simultaneously. With distributed applications, if a node that is running a particular application goes down, another node can resume the task.

E is for…

Encryption
A means of securing digital data using an algorithm and a password, or key. The encryption process translates information using an algorithm that turns plain text unreadable. When an authorized user needs to read the data, they may decrypt the data using a binary key.  

Encryption is an important way for individuals and companies to protect sensitive information from hacking. For example, websites that transmit credit card and bank account numbers should always encrypt this information to prevent identity theft and fraud.

Electronic Identity Verification (eIDV)
The use of public and private databases to quickly confirm whether an individual is who they claim to be. eIDV uses personal information such as name, date of birth, Social Security number and address. The result of trying to confirm an individual’s identity could be a match, non-match, or partial match.

ERC-20 & ERC-712
Ethereum technical standards, such as ERC-20 and ERC-712, are technical standards that are used for smart contracts on the Ethereum blockchain for implementing tokens. Most of the tokens issued on Ethereum blockchain are ERC-20 compliant. ERC-20 defines a common list of rules for Ethereum tokens to follow within the larger Ethereum ecosystem, allowing developers to accurately predict interaction between tokens. These rules include how the tokens are transferred between addresses and how data within each token is accessed.

E-payment
Paying for goods or services on the internet. It includes all financial operations using electronic devices, such as computers, smartphones or tablets. E-payments come with various methods, like credit or debit card payments or bank transfers.

E-Check
A form of payment made via the Internet, or another data network, designed to perform the same function as a conventional paper check. Since the check is in an electronic format, it can be processed in fewer steps. Additionally, it has more security features than standard paper checks including authentication, public key cryptography, digital signatures, and encryption, among others.

F is for…

Facial Recognition
A biometric software application capable of uniquely identifying or verifying a person by comparing and analysing patterns based on the person’s facial contours. Facial recognition is mostly used for security purposes, though there is increasing interest in other areas of use. In fact, facial recognition technology has received significant attention as it has potential for a wide range of application related to law enforcement as well as other enterprises. Facial recognition is also known as face recognition. 

Fintech
A financial services sector that emerged in the 21st century. Essentially, fintech is any technological innovation in the financial sector. This can include advances in financial education, retail banking, investment and crypto-currencies. Examples of fintech include: Stock trading apps and websites, Peer-to-peer lending sites that open competition for loans, thereby reducing rates, Robo-advisor services that provide online, algorithm-based portfolio management, All-in-one online personal finance management, and Budgeting tools. Fintech has four categories of users: Business-to-business for banks, Business-to-business for banks’ clients, Business-to-client for small businesses, and Business-to-client for consumers. The fintech industry is growing rapidly, and its growth is expected to continue. 

FIX Protocol
Financial Information eXchange (FIX) is a vendor-neutral electronic communications protocol for the international real-time exchange of securities transaction information, which is useful to funds, investment managers, and firms. The FIX Protocol messaging standard transfers accurate and timely financial information concerning securities trades through and across security exchange houses. Its use enables users to make timely and accurate decisions.

G is for…

GAFA (Google, Amazon, Facebook and Apple)
Google, Apple, Facebook, and Amazon — the four most powerful technology companies.

GDPR
The General Data Protection Regulation (GDPR) is a regulation in EU law on data protection and privacy for all individuals within the European Union and the European Economic Area. It also addresses the export of personal data outside the EU and EEA areas.

Global payment innovation (GPI)
An initiative by SWIFT that aims to streamline and increase transparency of cross-border payments. The initiative introduces a multilateral service level agreement across banks to create a common standard for processing cross-border payments, which in turn will transform correspondent banking. Through the first of these service level agreements, corporate treasurers will gain same-day use of funds, have access to rich payment information which is transferred between parties to a transaction, and have greater transparency and predictability of fees, including FX costs.

H is for…

Hadoop
An open source distributed processing framework that manages data processing and storage for big data applications running in clustered systems. It is at the centre of a growing ecosystem of big data technologies that are primarily used to support advanced analytics initiatives, including predictive analytics, data mining and machine learning applications. Hadoop can handle various forms of structured and unstructured data, giving users more flexibility for collecting, processing and analysing data than relational databases and data warehouses provide.

Hash Algorithm
A function that converts a data string into a numeric string output of fixed length. The output string is generally much smaller than the original data. Hash algorithms are designed to be collision-resistant, meaning that there is a very low probability that the same string would be created for different data. Two of the most common hash algorithms are the MD5 (Message-Digest algorithm 5) and the SHA-1 (Secure Hash Algorithm).

Hybrid cloud
A cloud computing environment that uses a mix of on-premises, private cloud and third-party, public cloud services with orchestration between the two platforms. By allowing workloads to move between private and public clouds as computing needs and costs change, hybrid cloud gives businesses greater flexibility and more data deployment options.

Hyperledger
An umbrella project, which offers the necessary framework, standards, guidelines and tools, to build open source blockchains and related applications for use across various industries. Using the available artefacts under the Hypeledger project, a business can apply various available blockchain solutions and services to significantly improve the performance of their operations and the efficiency of their business processes.

I is for…

Initial token offering (ITO)
An ITO distributes tokens, which are a digital unit designed to provide access to a system. Tokens are not designed as a store of value, instead they have programmable potential built in. In other words, new software can be programmed into them.

Identity verification
The automatic identification of living individuals by using their physiological and behavioural characteristics; “negative identification can only be accomplished through biometric identification”; “if a pin or password is lost or forgotten it can be changed and reissued but a biometric identification cannot”.

Insurtech
The use of technological innovations designed to squeeze out savings and efficiency from the current insurance industry model. Insurtech is a combination of the word’s “insurance” and “technology,” inspired by the term fintech. The belief driving insurtech companies and investments by venture capitalists in the space is that the insurance industry is ripe for innovation and disruption.

Internet of Things (IoT)
A system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers (UIDs) and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

Intraday trading
The market in which securities are traded during regular business hours. These securities include stocks and exchange-traded funds (ETFs). Intraday also signifies the highs and lows that the asset crossed throughout the day. Intraday price movements are particularly significant to short-term or day traders looking to make multiple trades over the course of a single trading session. These busy traders will settle all their positions when the market closes.

J is for…

JSON
JSON (JavaScript Object Notation) is a lightweight data-interchange format, based on a subset of the JavaScript Programming Language, Standard ECMA-262.

K is for…

KYC
A standard protocol driven by regulators and market participants that ensures bodies know detailed information about their clients’ risk tolerance, investment knowledge, and financial position. KYC initiatives aim to protect both clients and firms.

Knowledge based authentication (KBA)
A security measure that identifies end users by asking them to answer specific security questions in order to provide accurate authorization for online or digital activities. Knowledge-based authentication has become prevalent in many different types of network setups and across the Internet, where companies often ask users to answer these questions in order to gain access to personal, password-protected areas of a site.

Kickstarter
A funding platform where creators can share and gather interest on a particular creative project they’d like to launch. It’s entirely driven by crowdfunding, meaning that the general public is what sends these projects into production.

L is for…

Lendingtech
Lendingtech or lending technology is defined as a unique combination of primary information source, screening and underwriting policies & procedures, loan contract structure, and  monitoring strategies & mechanisms. 

M is for…

Match rate
The percentage of users from a file that an onboarder is able to find and anonymously tag with data. As data onboarding becomes a core part of every marketer’s toolbox, knowing the match rate for your user set is critical for understanding the size of your online audience.

Messaging commerce
Messaging commerce or conversational commerce is a term coined by Uber’s Chris Messina in 2015. The term refers to the intersection of messaging apps and shopping. Meaning, the trend toward interacting with businesses through messaging and chat apps such as Facebook Messenger, WhatsApp, Talk, and WeChat.

Matching systems
An electronic system that matches buy and sell orders for a stock market, commodity market or other financial exchange. The order matching system is the core of all electronic exchanges, used to execute orders from participants in the exchange.

Middleware
Middleware is the software that connects network-based requests generated by a client to the back-end data that client is requesting. It is a general term for software that serves to “glue together” separate, often complex and already existing programs. Middleware programs come in on-premises software and cloud services, and they can be used independently or together, depending upon the use case. While cloud providers bundle middleware into cloud services suites, such as middleware as a service (MWaaS) or integration PaaS (iPaaS), industry researchers note that many businesses still choose independent middleware products that fit their specific needs.

N is for…

Near-field Communication (NFC)
A short-range high frequency wireless communication technology that enables the exchange of data between devices.

Nostro Reconciliation Systems
An online, real-time system, designed to automatically reconcile incoming statements from a bank’s nostro accounts against internal general ledger statements, or directly against the general ledger database.

O is for…

Open Banking
Open banking is a system that provides a user with a network of financial institutions’ data through the use of application programming interfaces (APIs). The Open Banking Standard defines how financial data should be created, shared and accessed. By relying on networks instead of centralization, open banking helps financial services customers to securely share their financial data with other financial institutions.

Order Management System (OMS)
An electronic system developed to execute securities orders in an efficient and cost-effective manner. Brokers and dealers use order management systems when filling orders for various types of securities and can track the progress of each order throughout the system. An OMS is also referred to as a “trade order management system.”

P is for…

Payment Gateway
The front-end technology that reads payment cards and sends customer information to the merchant acquiring bank for processing.

Payment Card Industry (PCI) Compliance
The technical and operational standards that businesses must follow to ensure that credit card data provided by cardholders is protected. PCI compliance is enforced by the PCI Standards Council, and all businesses that store, process or transmit credit card data electronically are required to follow the compliance guidelines.

Point of Sale (POS)
POS a critical piece of a point of purchase, is the place where a customer executes the payment for goods or services, and where sales taxes may become payable. It can be in a physical store, where POS terminals and systems are used to process card payments, or a virtual sales point such as a computer or mobile electronic device.

Q is for…

Quick response (QR) codes
A type of 2D barcode that is used to provide easy access to information through a smartphone.

R is for…

Regtech
The management of regulatory processes within the financial industry through technology. The main functions of regtech include regulatory monitoring, reporting, and compliance. 

Robo advisor
Digital platforms that provide automated, algorithm-driven financial planning services with little to no human supervision. A typical robo advisor collects information from clients about their financial situation and future goals through an online survey, and then uses the data to offer advice and/or automatically invest client assets.

Reference data systems
Reference data is a catch-all term used to describe counterparty and security identifiers used when making a trade. As opposed to market data the reference data is used to complete financial transactions and settle those transactions.

S is for…

Securities Financing Transactions Regulation (SFTR)
European regulation that outlines new reporting requirements for securities funding transactions (SFTs). Transactions must be reported to a trade repository, with the phase-in of the new rules beginning in 2020. 

Software-as-a-Service (SaaS)
A software licensing model in which access to the software is provided on a subscription basis, with the software being located on external servers rather than on servers located in-house. SaaS is typically accessed through a web browser, with users logging into the system using a username and password. Instead of each user having to install the software on his computer, the user is able to access the program via the internet. Businesses commonly use SaaS in customer retention management, human resources, and procurement. 

Security Token
A portable device that authenticates a person’s identity electronically by storing some sort of personal information. The owner plugs the security token into a system to grant access to a network service. Security Token Services (STS) issue security tokens that authenticate the person’s identity.

Service-Level Agreement (SLA)
An SLA provides specific and measurable aspects related to service offerings. For example, SLAs are often included in signed agreements between Internet service providers (ISP) and customers. SLA is also known as an operating level agreement (OLA) when used in an organization without an established or formal provider-customer relationship.

Smart Contracts
Self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. Smart contracts permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism. They render transactions traceable, transparent, and irreversible. While blockchain technology has come to be thought of primarily as the foundation for bitcoin, it has evolved far beyond underpinning the virtual currency.

T is for…

Terminal value
Determines the value of a business or project beyond the forecast period when future cash flows can be estimated. This allows financial models to value a business with a greater degree of accuracy.

 

U is for…

Unicorn
A start-up company with a value of over $1bn.

Unified Payment Interface (UPI)
A smartphone application which allows users to transfer money between bank accounts. It is a single-window mobile payment system developed by the National Payments Corporation of India (NPCI). It eliminates the need to enter bank details or other sensitive information each time a customer initiates a transaction.

Unit Investment Trust (UIT)
An investment company that offers a fixed portfolio, generally of stocks and bonds, as redeemable units to investors for a specific period of time. It is designed to provide capital appreciation and/or dividend income. Unit investment trusts, along with mutual funds and closed-end funds, are defined as investment companies.

Universal Market Integrity Rules (UMIR)
A set of rules governing trading practices in Canada. These rules are set out by an independent regulator, the Investment Industry Regulatory Organization of Canada (IIROC). UMIR were established to promote fair, equitable and efficient markets. Prior to the formation of the UMIR, each individual exchange was responsible for governing its trading practices. By making these practices universal, Canadian exchanges ensure equal fairness and improve investor confidence in all the exchanges.

V is for…

Vendor
The term used to describe fintech service providers as they work with financial service firms. 

Volatility
A statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. In the securities markets, volatility is often associated with big swings in either direction.

W is for…

Weak AI
Weak AI, or Narrow AI, is a machine intelligence that is limited to a specific or narrow area. Weak Artificial Intelligence (AI) simulates human cognition and benefits mankind by automating time-consuming tasks and by analysing data in ways that humans sometimes can’t.

Wearable technology
A category of electronic devices that can be worn as accessories, embedded in clothing, implanted in the user’s body, or even tattooed on the skin. The devices are hands-free gadgets with practical uses, powered by microprocessors and enhanced with the ability to send and receive data via the internet. The rapid adoption of such devices has placed wearable technology at the forefront of the internet of things (IoT).


X is for…

eXtensible Business Reporting Language (XBRL)
A standard that was developed to improve the way in which financial data is communicated, making it easier to compile and share this data. eXtensible Business Reporting Language (XBRL) is a type of XML (extensible markup language), which is a specification that is used for organizing and defining data. XBRL uses tags to identify each piece of financial data, which then allows it to be used programmatically by an XBRL-compatible program. XBRL allows for easy transmission of data between businesses.

Z is for…

Zero Basis Risk Swap (ZEBRA)
An interest rate swap agreement between a municipality and a financial intermediary. A swap is an agreement with two counterparties, where one party pays the other party a fixed interest rate and receives a floating rate. This particular swap is considered zero-risk because the municipality receives a floating rate that is equal to the floating rate on their debt obligations.

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