Category: Fintech.

The diagram below shows how 𝐝𝐞𝐦𝐚𝐧𝐝 𝐚𝐧𝐝 𝐬𝐮𝐩𝐩𝐥𝐲 make the prices go up or down, using Meta’s stock as an example. All the buy/sell orders are placed into a 𝐂𝐋𝐎𝐁 (Centralized Limited Order Book). Green ones are buy orders, and red ones are sell orders. At each price level, there are several orders queued up […]

The diagram below shows the 4 models. ▶️ 1. 𝐂𝐨𝐫𝐫𝐞𝐬𝐩𝐨𝐧𝐝𝐞𝐧𝐭 𝐛𝐚𝐧𝐤𝐢𝐧𝐠 𝐦𝐨𝐝𝐞𝐥 The correspondent bank holds deposits owned by other banks from other countries. This allows banks to access financial services in different jurisdictions. Under some international card schemes (Visa, Mastercard), participating banks typically rely on correspondent banking for settlement. [1] ▶️ 2. 𝐈𝐧𝐭𝐞𝐫𝐥𝐢𝐧𝐤𝐢𝐧𝐠 𝐦𝐨𝐝𝐞𝐥 […]

The diagram below shows the overall flow. There are 3 parts: 🔹 Trading 🔹 Clearing 🔹 Settlement ▶️ 𝐓𝐫𝐚𝐝𝐢𝐧𝐠 Steps 1.1 – 1.3: The stock buyer and seller place orders via brokers or custodian banks. Step 2: The brokers execute the orders in the exchange. ▶️ 𝐂𝐥𝐞𝐚𝐫𝐢𝐧𝐠 Step 3: The exchange sends execution reports to […]

Why is it called 𝐩𝐫𝐨𝐠𝐫𝐚𝐦𝐦𝐚𝐛𝐥𝐞 𝐦𝐨𝐧𝐞𝐲? The diagram below shows a typical retail 𝐭𝐰𝐨-𝐭𝐢𝐞𝐫 CBDC architecture. Tier 1 is the 𝐜𝐞𝐧𝐭𝐫𝐚𝐥 𝐛𝐚𝐧𝐤, which is in charge of 𝐢𝐬𝐬𝐮𝐢𝐧𝐠 CBDC. Unlike cash, the issuing doesn’t involve printing out money, rather it is just a digital currencies that exist in the central bank’s system. Tier 2 is […]

Why is a credit card called a “𝐜𝐫𝐞𝐝𝐢𝐭” card? Why is a debit card called a “𝐝𝐞𝐛𝐢𝐭” card? 👇 An example of a debit card payment is shown in the diagram below. 🔸 Each transaction in the business system is transformed into at least two journal lines in the ledger system. This is called 𝐝𝐨𝐮𝐛𝐥𝐞-𝐞𝐧𝐭𝐫𝐲 […]

What is the revenue model for BNPL providers? The growth of BNPL has been dramatic in recent years. The BNPL provider represents the primary interface between the merchants and the customers for both eCommerce and POS (Point of Sale). The diagram below shows how the process works: Step 0. Bob registers with AfterPay. An approved […]

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is the main secure 𝐦𝐞𝐬𝐬𝐚𝐠𝐢𝐧𝐠 𝐬𝐲𝐬𝐭𝐞𝐦 that links the world’s banks. The Belgium-based system is run by its member banks and handles 𝐦𝐢𝐥𝐥𝐢𝐨𝐧𝐬 𝐨𝐟 𝐩𝐚𝐲𝐦𝐞𝐧𝐭 𝐦𝐞𝐬𝐬𝐚𝐠𝐞𝐬 per day. The diagram below illustrates how payment messages are transmitted from Bank A (in New York) to Bank B (in […]

Identify, assess, and mitigate operational risk with this practical and authoritative guide

In the newly revised second edition of Operational Risk Management: A Complete Guide for Banking and Fintech, accomplished risk executive and expert Philippa Girling delivers an insightful and practical exploration of operational risk in organizations of all sizes. She offers risk professionals and executives the tools, strategies, and best practices they need to mitigate and overcome ever-present operational risk challenges that impact business in all industries.