chapter 19

The ______, which was first released in June 2007, is attributed with launching the mobile revolution. A) PayPal app B) iPhone C) Android D) USB E) NASDAQ

B) iPhone

In 2017, former Citigroup chief Vikram Pandit predicted that ______ percent of banking jobs could be wiped out by artificial intelligence by 2022. A) 15 B) 25 C) 30 D) 35 E) 45

C) 30

The number of bank branches in the U.S. grew steadily from approximately ______ in 1948 to over ______ in 2008. A) 575; 900 B) 1,995; 33,450 C) 4,200; 82,400 D) 5,000; 100,000 E) 8,000; 125,000

C) 4,200; 82,400

By 2019, global smartphone penetration reached: A) 53.8 percent. B) 60.9 percent. C) 66.9 percent. D) 72.2 percent. E) 77.6 percent.

C) 66.9 percent.

______ is a particular type of DLT that organizes data into batches of transactions which are held together in an append-only data structure. A) Starform B) Bitcoin C) Blockchain D) Treasurystock E) Walletpay

C) Blockchain

Which of the following is true regarding the digital crypto exchange platforms? A) Crypto-to-crypto exchanges are the most easy to establish of the platforms. B) An investor cannot lose his/her entire investment in a cryptocurrency exchange. C) Due to regulation, fiat exchanges have limited trading pairs. D) If an individual wishes to buy a niche altcoin, then he/she must purchase insurance. E) Crypto exchanges create systems that hinder stability in the blockchain ecosystem.

C) Due to regulation, fiat exchanges have limited trading pairs.

The partnership of Avant and Regions Bank to underwrite unsecured loans is an example of which stage of the evolving relationship between banks and fintech? A) The "rent a bank" stage. B) Banks taking stake in fintech startups. C) Fintech firms providing technology and infrastructure to banks. D) Banks developing in-house fintech arms. E) Banks divesting fintech arms.

C) Fintech firms providing technology and infrastructure to banks.

In September 2018, Bank of Lithuania launched its regulatory sandbox seeking fintech startups, which enabled startups to obtain an e-money or payment license in ______, which is two to three times faster than in other EU jurisdictions. A) 15 days B) 30 days C) 45 days D) 60 days E) 90 days

E) 90 days

What measures the fintech users as a percentage of the digitally active population? A) Fintech scale B) Fintech data usage C) Fintech popularity score D) Fintech ace rating E) Fintech adoption rate

E) Fintech adoption rate

In Europe, a fintech can get access to all bank APIs through registering as either an _____ or a _____. A) AISP; PISP B) EEIC; PPPE C) IOT; GDPR D) AISS; PSD2 E) IOT; TAB

A) AISP; PISP

Based on the BCBS survey discussed in the text, the category with the highest number of providers was which of the following? A) Payments, clearing and settlement services B) Credit, deposit and capital-raising services C) Investment management services D) Market support services

A) Payments, clearing and settlement services

The development of the relationship between Marlette Funding and Cross River Bank is an example of which stage of the evolving relationship between banks and fintech? A) The "rent a bank" stage. B) Banks taking stake in fintech startups. C) Fintech firms providing technology and infrastructure to banks. D) Banks developing in-house fintech arms. E) Banks divesting fintech arms.

A) The "rent a bank" stage.

In 1966, the ______ replaced the ______ as the standard for long-distance instantaneous communication of information. A) telex network; telegraph B) telegraph; telex network C) telex network; telephone D) telephone; telegraph E) internet; telegraph

A) telex network; telegraph

In a 2015 survey of global CEOs by PwC, ______ percent of the executives surveyed believed that some part of their business was at risk to fintech. A) 66 B) 76 C) 79 D) 84 E) 95

B) 76

BNP Paribas' acquisition of Compte-Nickel is an example of which stage of the evolving relationship between banks and fintech? A) The "rent a bank" stage. B) Banks taking stake in fintech startups. C) Fintech firms providing technology and infrastructure to banks. D) Banks developing in-house fintech arms. E) Banks divesting fintech arms.

B) Banks taking stake in fintech startups.

DLT can be found on the capital markets infrastructure value chain in all but which of the following? A) Trade execution B) Bid-ask spread setting C) Post-trade services D) Operations and technology E) Access to capital

B) Bid-ask spread setting

Open Banking standards do all but which of the following? A) Make it possible to pass on information to third parties B) Eliminate all risk in the online banking system C) Streamline access to bank data D) Make it easier to find banks with disabled access E) Enable comparison of the features of different personal and business accounts

B) Eliminate all risk in the online banking system

The Payment Services Directive 2 (PSD2) is a European regulation for electronic payments services. The purpose of the PSD2 is to regulate the emerging payment services industry and increase competition by: A) allowing investors to enter the market. B) allowing participation by non-banks. C) providing a way for stock traders to trade cryptocurrency. D) reducing restrictions on data privacy. E) eliminating the central banking system structure.

B) allowing participation by non-banks.

The two main monetization strategies of BaaS include: A) advertising to users and charging a la carte for each service used. B) charging clients a monthly fee and charging a la carte for each service used. C) charging clients a monthly fee and advertising to users. D) charging clients a daily fee and advertising to users. E) charging clients a daily fee and charging a la carte for each service used.

B) charging clients a monthly fee and charging a la carte for each service used.

Which of the following regarding banking-as-a-service is/are true? 1.I. It has restricted the financial transparency options for account holders. 2.II. It is an end-to-end process that allows fintechs and other third parties to connect with banks' systems directly via APIs. 3.III. The process begins with a fintech or other third-party provider paying a fee to access the platform. A) I only B) II only C) II and III only D) I and II only E) I, II, and III

C) II and III only

The term ______ refers to the billions of physical devices around the world that are now connected to the internet, all collecting and sharing data. A) worldwide web B) intermatrix C) internet-of-things D) web-of-goods E) internet marketplace

C) internet-of-things

A ______ is an application that runs exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. A) hyperledger B) no-fault contract C) smart contract D) robo-advisor E) tested contract

C) smart contract

The OCC fintech charter would do all but which of the following? A) Allow non-bank fintech companies to become special purpose national banks B) Allow non-bank fintech companies to pay checks C) Allow non-bank fintech companies to lend money D) Allow non-bank fintech companies to take deposits E) Allow non-bank fintech companies to be preempted from state laws

D) Allow non-bank fintech companies to take deposits

The launch of Marcus by Goldman Sachs is an example of which stage of the evolving relationship between banks and fintech? A) The "rent a bank" stage. B) Banks taking stake in fintech startups. C) Fintech firms providing technology and infrastructure to banks. D) Banks developing in-house fintech arms. E) Banks divesting fintech arms.

D) Banks developing in-house fintech arms.

The advantages of the establishment of the NASDAQ include which of the following? 1.I. It helped reduce the bid-ask spread. 2.II. It ended fixed securities commissions. 3.III. It led to the proliferation of ATMs. A) I only B) II only C) II and III only D) I and II only E) I, II, and III

D) I and II only

The 2018 Cryptocurrency Crash rocked the crypto market. Experts said that this dramatic drop was due largely to the speculative nature of cryptocurrency and point out that cryptocurrency differs from money on three main accounts. Which of the following are noted as the main differences? 1.I. Cryptocurrency is not a good means of payment. 2.II. Cryptocurrency is not a good unit of account. 3.III. Cryptocurrency cannot be held as an investment. 4.IV. Cryptocurrency is not a suitable store of value. A) I and IV only B) I and II only C) II, III, and IV only D) I, II, and IV only E) All are noted as differences.

D) I, II, and IV only

The financial crisis of 2008 eventually led to the growth of fintech. Which of the following is a true statement regarding this causal relationship? A) Mobile technology retreated due to the crises, which allowed banks to regain footing and resulted in fintech companies exiting the marketplace. B) Deregulation led to more banks competing and fewer, newly-established fintechs having success in the marketplace. C) The high interest rate environment put upward pressure on profits, which decreased the incentive for fintech companies to enter the marketplace. D) The pullback of banks during the crises was due to increases in regulatory burdens and risk aversion, which allowed new fintech players to enter the marketplace. E) Subprime mortgages defaulted, which led to fintech companies retreating from the marketplace.

D) The pullback of banks during the crises was due to increases in regulatory burdens and risk aversion, which allowed new fintech players to enter the marketplace.

The application of computational tools to address tasks traditionally requiring human sophistication is broadly termed: A) smart contracting. B) cryptocurrency. C) robo-advising. D) artificial intelligence. E) digital distribution.

D) artificial intelligence.

Since gaining a high level of interest in 2015, the interest in ______ has cooled. A) wealth management B) mobile wallets C) cryptocurrency D) blockchain E) real estate investment

D) blockchain

Bitcoin and other digital currencies are underpinned by ______ technology, which is an electronic ledger or database that records and verifies transactions made using the currency. A) hidden matrix B) complex drafting C) bitmap D) distributed ledger E) ethercode

D) distributed ledger

Open Banking and PSD2 have catalyzed the development of ______ which provide financial APIs to help incumbent banks comply and compete. A) recourse networks B) adjoined fintechs C) discoverable networks D) fintech utilities E) unstructured fintechs

D) fintech utilities

The Financial Stability Board defines fintech as "technology-enabled innovation in financial services that could result in new business models, applications, processes or products with an associated ________ effect on the provision of financial services." A) undeterminable B) minor C) moderate D) material E) negative

D) material

Which of the following is not one of the advantages that retail banks maintain over fintechs? A) Banks have tens of millions of trusting customers who interact with them daily. B) The cost of capital for banks is close to zero. C) Banks have decades of compliance experience. D) Banks have more experienced legal teams. E) Banks are known for having greater agility and a more innovative mindset.

E) Banks are known for having greater agility and a more innovative mindset.

______ are online services that use algorithms to automatically perform many investment tasks done by a human financial advisor. A) Fintechs B) Copier traders C) Computer drones D) Investment techs E) Robo-advisors

E) Robo-advisors

In 2011, the introduction of Google Wallet (which later became Google Pay) allowed consumers to use smartphones equipped with near-field communication chips to make: A) hit payments. B) calls to banks. C) instapayments. D) bump transfers. E) tap payments.

E) tap payments.