FinTech 3.0 and the Post-2008 Financial Landscape

This set of vocabulary flashcards covers the transition to FinTech 3.0, the impact of the 2008 Global Financial Crisis, and the subsequent regulatory and economic shifts that allowed for the emergence of new technological players in finance.

FinTech 3.0

The era of financial technology from 2009 to the present, characterized by a democratization of digital financial services and a mindset shift regarding the legitimacy of service providers following the 2008 Global Financial Crisis.

Behavioural legacies

A term echoing 'IT legacy systems' of banks, referring to systems that are too-old-to-upgrade and too-expensive-to-replace, which prevents banks from fully digitizing their processes.

FinTech 3.5

The specific designation for China's FinTech development, which is noted as having a different origin than the general FinTech 3.0 era.

$8.7$ million

The estimated number of American workers who lost their jobs as the financial crisis morphed into an economic crisis.

Universal banking model

A banking model that has been challenged post-2008 by ring-fencing obligations and increased regulatory capital, changing the capacity of banks to originate low-value loans.

Collateralized debt obligations (CDOs)

Financial innovations regarded as a contributor to the 2008 crisis by detaching the credit risk of the underlying loan from the loan originator.

Recovery and Resolution Plans (RRPs)

Documents banks are required to prepare to ensure an orderly failure, involving stress tests to evaluate their viability within financial institution resolution regimes.

Basel 3

A set of regulatory obligations that increased capital requirements for banks; while intended to enhance market stability, it also diverted capital away from SMEs or private individuals.

Jump Start Our Business (JOBS) Act

A 2012 United States act intended to increase job creation and economic growth by improving access to public capital markets for emerging growth companies.

P2P lending platforms

Online platforms that provide alternative funding and credit sources, allowing start-ups to raise finance directly in lieu of equity when bank credit is contracted.

The 'perfect storm'

The alignment of financial, political, and public factors since 2008 that catalyzed the growth of FinTech 3.0 and allowed new market participants to establish a new paradigm.