Index

2007/8 financial crisis, 1, 5, 64

accrual interest patterns, contracts, 101-102 aircraft development, 270-271

alternative borrowers, 47

alternative data, 280-281, 285

Amazon, 62

analytics, 57-58, 117-118, 252-255 standardization, 299-301 unified analytics, 289-302

API see Application Programming Interface Apple Pay, 69

Application Programming Interface (API), 118

Asia, 7, 9-10, 85, 279

asset-based credit enhancements, 162-165 ATMs (automated teller machines), 84 Australia, credit outstanding to households/

NPISHs, 8-9

backtesting, 191

balance sheet lenders, 33, 34-35 banks

always-on banking, 281-282

analytics, 252-255, 295-296

antipathy towards, 63

ATMs, 84

Barclays Bank, 26

buying vs.

challenges to, 1, 11, 26, 66 collaboration, 75, 271-272 cooperation vs. competition, 256-258 core competencies, 77, 78-79 credit access, customers’, 64-65 credit sector disruptions, 267-268 customer service, 64-65, 282, 284 data mining/selling, 26 data standards, 284-286 digital competencies, 252-255 digital dilemmas, 255-260 digital separation vs. integration, 259 digital strategies, 69, 216, 263-275 disruptions in credit sector, 267-268 disruptive innovation, 72 disruptive vs. defensive strategies, 255-256

diversification vs. concentration, 258-259 economic role of, 83 expected loss calculation, 45 financial laboratories, 296 future of, 81, 85, 286 guarantors, 121, 122

HSBC, 64 ‘imprisoned’ resources, 77 innovation

adoption of, 57, 84, 215 approach to, 72-73, 215-216 by-passing banking sector, 69-82 difficulties with, 76-79, 269-271 Innovator’s Dilemma, 269-271 interest rates, 65 as intermediators, 253 know-your-customer process, 63 lending process, 30-31 Lending as a Service, 282-283 licenses, 25 loan characteristics, 117 loan investments, 283-284 loss calculations, 45 low-margin products, 72-73 marginal thinking trap, 80

banks (Continued)

marketplace lending comparison, 45 mobile banking, 19, 21, 84-85 mudslide hypothesis, 71

and online lending, 30-31, 45, 51-52 premium services, 284

privacy concerns, 26

producer to supplier switch, 271-272 protection sellers, 121, 122 regulation, 64

resource ‘imprisonment’, 77 role of, 83, 251

Santander, 75 straight-through processing, 252 streamlining of financial services, 284 technology mudslide hypothesis, 71 threats to, 1, 11, 26, 66 transformation of, 83-84 treasury, 206, 209, 212 unexpected loss calculation, 45

U.S.

Wells Fargo Bank, 45, 64

Barclays Bank, 26

behavior

borrowers, 153

elements of, 140, 148

financial contracts, 103-104

behavior risk, 107-108, 139-149, 224 defaults, 144-145

downgrading, 144-145 draw-downs, 141-142 facilities/credit lines, 142 prepayments, 140-141 recoveries, 146-147 sale of assets, 143-144 withdrawals, 143

Big Bang Disruption, 266-267

Big Data, 23, 49, 57-58, 252, 280-281, 290

Bitcoin network, 18

Blockbuster, 80

bond markets, 40-41

book trade, 38

borrowers

alternative borrowers, 47

analytics, 293-294 behavior of, 153 credit scores, 242

defaults, 122, 179

fees, 34

market allocation, 134-135, 136 onboarding, 41-43

quality overestimation, 240-245

risk allocation, 133

business models, 15-28, 33,40-41, 278, 279 business units, strategic, 77 businesses, buying/shedding dilemma, 259-260

cash flows

contracts, 94-99

defaults, 161, 162

discounted cash flows, 116 CD see certificates of deposit CDS see credit default swaps cell phones, 51-52, 172-173 centralized systems, 36-37, 40 certificates of deposit (CD), 283 China

collaborations, 279

credit outstanding to households/NPISHs,

7, 9-10

Christensen, Clayton, 70-71, 72, 80, 269 close-out netting, 163 coin-flipping analogy, 108 collaboration, 75, 217, 271-272, 279 collateral, 163-164, 246 collections accounts, 33 community lending, 292 companies, tree model, 76 comparability of services, 60 competition, 256-258, 277-280 computers, 57-58, 60-62 concentration risk, 184-188, 290 counterparties, 185-186 credit exposure, 184-185

contracts, 89-106

see also counterparties

accrual interest patterns, 101-102 behavior patterns, 103-104 cash flow patterns, 94-99

fixed principal amounts at fixed PIT and TTC, 95, 96

fixed principal cash-flows paid within variable PIT and TTC, 95, 97

variable principal amounts at fixed PIT and TTC, 97-98

variable principal amounts at variable PIT and TTC, 99

counterparty evaluation, 90 credit enhancements, 102-103, 170, 171 credit exposures, 154 defaults, 161 derivative contract agreements, 166-167 elements of, 89-90 financial events, 91, 92-106

example, 104-106

interest patterns, 99-101

fixed interest at fixed PIT and/or within fixed TTC, 100

variable interest at fixed PIT and/or within fixed TTC, 100-101 interest rates, 99-101 liquidity, 191 mechanisms, 92-106 mobile phone contracts, 172-173 parameters, 93 phone contracts, 172-173 point in time events, 91, 93-106 rules, 93

cooperation vs.

behavior risk, 139-149 characteristics of, 123-124 concentration risk, 185-186 correlations analysis, 180-181 credit enhancements, 165-167, 170, 171 credit exposures, 157-158 credit ratings, 129-130 credit risk, 124-130, 223-224 credit spreads, 130-131 credit status, 153 default probability, 124-130, 144-145 descriptive characteristics, 123-124 evaluation of, 90 market linkage, 131-136

obligor market allocation, 134-135, 136 obligor risk allocation, 133 prepayments, 140-141 probability of default, 124-130, 144-145 real-world probabilities, 130-131 risk elements, 122, 137 roles of, 121-123 systemic risk, 180-183 types of, 121-123 use at default, 145-146 withdrawals, 143

counterparty-based credit enhancements, 165-167, 170, 171

credit access, 64-65 credit cards, 23, 46-47 credit default swaps (CDS), 166 credit derivatives, 166-167 credit discount spreads, 114-115 credit downgrading, 180, 181 credit enhancements, 161-176 asset-based, 162-165 collateral allocation to credit exposures, 163-164

contracts, 102-103, 170, 171 counterparty-based, 165-167, 170, 171 default credit events, 178, 179 double default, 168-169 guarantor systems, 174-175 life insurance, 174 loyalty points, 173-174 marketplace lending, 167, 170-175 maturity mismatch, 170 payment times, 170 phone contracts, 172-173 real estate titles, 172 structure, 162 types, 162 wrong way risk, 169-170 credit exposures, 151-159

chain reactions after default credit event, 178-180

collateral allocation, 163-164 concentration risk, 184-185 counterparties linkage, 157-158 credit losses, 156-157 distribution of, 155-156 evolution of, 152-155 gross exposure, 151, 152-155 guarantee allocation, 165-166 credit exposures (Continued)

net exposure, 152-155

portfolios, 225-226, 227, 243, 244, 246

systemic risk, 177-180, 183-184 credit lines behavior, 142, 145-146 credit losses, 156-157 credit outstanding to households/ non-financial companies, 5-10 credit ratings, 129-130 credit risk

behavior, 139-149

counterparties, 124-130

intensity models, 127-128 measurement, 290

real-world default probabilities, 128-129 risk-neutral default probabilities, 128-129 structural models, 125-126

credit scores/scoring, 47, 48-49, 242, 280-281

credit sector disruptions, 267-268 credit spreads, 234 credit status, 153

crime, 59 crowdfunding, 17 cryptocurrencies, 18 currencies, virtual, 18 customer needs/service, 64-65, 78-79, 282, 284

cybercrime, 59

data

alternative data, 280-281, 285

analytics standards, 300-301

Big Data, 23, 49, 57-58, 252, 280-281, 290

data science, 22

fringe alternative data, 280-281, 285 mining of, 26

mobile user tracking, 61

online lending, 29-30

selling of, 26

standards, 284-286, 295, 299-301

transparency, 66 default credit events, 178-180, 181, 182 default probability, 124-130

counterparties, 144-145

credit ratings, 129-130

impacts of default and non-default statuses, 125

intensity models, 127-128

real-world default probabilities, 128-129 risk-neutral default probabilities, 128-129 structural models, 125-126

defaults

behavior risk, 144-145

counterparties, 122 double default, 168-169 time factor, 234, 235, 236 use at default, 145-146

defensive strategies, 255-256 derivative contract agreements, 166-167 diffusion of innovation, 264-265 digital competencies, 252-255 digital currencies, 18 digital dilemmas, 255-260

cooperation vs.

diversification vs. concentration, 258-259 digital integration, 21 digital strategies, 69, 216, 263-275

leadership, 273-274

purpose of, 263-264

disclosure, online lending, 50 discount brokerage industry, 22 discount rate curves, 110-111 discounted cash flows, 116 discovery-driven planning, 73 disintermediation, peer-to-peer networks,

38-39

disruptive innovation, 20-22, 70-73, 74, 269-270

disruptive strategies, 255-256 diversification vs. concentration, 258-259 double default, 168-169

draw-downs, behavior risk, 141-142

DVD rental business, 80

e-business, 216, 279

ECOA see Equal Credit Opportunity Act economic capital allocation, 202-203 economic scenarios, 109-110 economic shocks, 231-233

Equal Credit Opportunity Act (ECOA), 49 equity-based crowdfunding, 17

ExOs see Exponential Organizations expected loss, banks, 45

Exponential Organizations (ExOs), 270 exposures see credit exposures

Facebook, 62 facilities/credit lines behavior, 142 failures, 74-75, 270 fair lending laws, 49 farms, loans to, 64, 65 file sharing, 37 financial advisors, 18-19, 24 financial analysis of portfolio model, 219-249

financial collateral, 163 financial contracts see contracts financial crisis (2007/8), 1, 5, 64 financial events, contracts, 91, 92-106 financial innovation, FinTech contrast, 3-4 FinTech (financial technology innovation) advantages of, 1 banking licenses, 25

Big Data overestimation, 23 business models, 15-28 challenges for companies, 24-26 core competencies, 79-81 crowdfunding, 17 cryptocurrencies, 18 data science overestimation, 22 definition, 2-3 digital currencies, 18 digital dilemmas, 255-260 digital integration, 21 disruptive innovation, 20-22, 73, 74 dynamic/fragmented nature of, 19 existing infrastructure use, 21, 215, 278, 289-290

financial advisors, 18-19, 24 financial innovation contrast, 3-4 human interface deficiency, 24-25 importance of, 23-24 industry standards, 21 innovation

breakthroughs, 73-76 disruptive potential, 20-22, 73, 74

outside banking sector, 69-82

themes, 15-20

long-term focus, 26-27

mobile-first banks, 19

mobile point of sale, 18

online lending, 15-17

payment processing, 17

Personal Financial Management, 17-18 pitfalls, 22-23 potential of, 20-22

privacy concerns, 26

regulation, 23

roadblocks for companies, 24-26 robo-advisors, 18-19, 24

service unbundling, 21-22

startup areas, 4

streamlining user experience, 21 sustaining innovation, 73

transactions, 17

virtual currencies, 18

forward rates, 111-113

fringe alternative data, 280-281, 285

FTP see funds transfer pricing funding accounts, 33, 34

Funding Circle, 75

funds transfer pricing (FTP), 205-210 profit centers, 207, 208 transfer rates, 207-209

GAPreports, liquidity, 195, 231, 232, 241, 242

Germany, credit outstanding to households/ NPISHs, 7-8

global credit, peer-to-peer loan comparison, 51

Google, “p2p lending” searches, 10 gross credit exposure, 151, 152-155 guarantees, 165-166, 174-175 guarantors, 121, 122, 295

haircuts, 184

hedge funds, 48

hedging exposure, 246

historical model scenarios, 110 households, credit extension, 5-10 HSBC, 64

human interface, 24-25 hybrid financial sector, 5-10, 75, 277-287 alternative data, 280-281 always-on banking, 281-282 collaboration, 217

competition, 277-280 credit scoring, 280-281 data standards, 284-286 fringe alternative data, 280-281 future prospects, 286

Lending as a Service, 282-283 near-real-time credit, 281-282 new ideas, 280-286 service unbundling, 284 streamlining of financial services, 284 transparency, 284-286

hype cycle, 265-266

incentive systems, 74-75 income, 197-203

economic capital allocation, 202-203 elements of, 197, 211

estimation of, 198-199

portfolio performance, 226-229 profit and loss analysis, 199 risk, 199, 202-203

stochastic process, 201-202 stress testing, 200-201

infomediaries, 39-40, 61-62 information value chain, 39-40 innovation

analysis of, 264-267 autonomy of innovators, 270-271 banks, 57, 72-73, 76-79, 84, 215-216

Big Bang Disruption, 266-267 buying innovation, 75-76 centers of, 3, 12 challenges of, 76-79 diffusion of, 264-265 disruptive innovation, 20-22, 70-73, 74, 269-270

FinTech breakthroughs, 73-76 frameworks, 264-267 hype cycle, 265-266 in-house vs. buying-in, 75-76 Innovator’s Dilemma, 71, 72, 269-271 marginal thinking trap, 80 new markets, 271 open services, 272-273 overview, 15-20 performers vs.

technology catch-up dangers, 216 themes, 15-20

Innovator's Dilemma, 71, 72, 269-271 institutional investors, 48

insurance, 174 intangible assets, 163 intensity-based credit risk models, 127-128 interest rates

cash flows, 116 contracts, 99-101 drivers of, 116 forward rates, 111-113 low rate environment, 65 pricing models, 107 risk-free interest rates, 116 saver behavior, 108 stress scenarios, 200 intermediary-oriented marketplaces, 39-40 intermediators, 253 internet, 58-60, 279 investors, 48

know-your-customer process (KYC), 63

LaaS see Lending as a Service leadership, 273-274 legislation, 49 lender-agnostic marketplaces, 33, 35 lenders

balance sheet lenders, 33, 34-35 expectations of, 121-122 onboarding, 43-44

Lending Club (online lender), 29, 45, 46, 48,

49, 124, 279 portfolio model analysis, 219-249 Lending as a Service (LaaS), 282-283 licenses, banking, 25 life insurance, 174 liquidity, 190-196 analysis types, 191-192 contracts, 191 elements of, 190, 211 measurement, 195 portfolio performance, 227-228, 230, 231

reporting, 195 risk, 192-195,210,211 spreads, 115 time factor, 191-192 loans, characteristics of, 117 Lockheed, 270-271 Long-Term Capital Management (LTCM), 183 losses

profit and loss analysis, 199 systemic risk, 183-184 low-margin products, 72-73 loyalty points, 173-174 LTCM see Long-Term Capital Management

M-Pesa (money transfer service), 17, 173 marginal thinking trap, 80 margins, 209, 277-278 mark-to-market, 164 market risk, 192-195, 222-223, 290 marketplace lending, 31-34

see also peer-to-peer...

analytics, 292-295

bank credit comparison, 45 bond markets, 40-41 borrower onboarding, 41-43 business model, 40-41 challenges, 42 collections accounts, 33 credit card debt comparison, 46-47 credit enhancements, 167, 170-175 credit scores, 47, 48-49 funding accounts, 33, 34 investors, 48 lender onboarding, 43-44 new ideas, 280-286 onboarding process, 41-44 origination process, 33 platform notes, 34 profitability, 219-249 regulation, 49-50 risk, 219-249 underwriting, 48-49 unified analytics, 292-295

markets, 107-119

coin-flipping analogy, 108 counterparties, 131-136 credit discount spreads, 114-115 discount rate curves, 110-111 discounted cash flows, 116 economic scenarios, 109-110 elements of, 108, 119 evolution of, 153 forward rates, 111-113 liquidity spreads, 115 low-margin products, 72-73 new markets, 271 peer-to-peer lending, 117-118 prices, 111-113 real-world expectations/probabilities, 108-110

risk factors, 107

risk-neutral default probabilities, 114-115 risk-neutral expectations, 108-113 spreads, 114-116 yield curves, 110-111

maturity mismatch, 170 Metcalfe’s law, 59 micro investments, 283 minimills, 72 mobile banking, 19, 21, 84-85 mobile devices, 60-62 mobile payments, 17, 18, 173 mobile phones, 51-52, 172-173 mobile point of sale (mPOS), overview, 18 modeling of portfolio performance, 226-244

see also business models money transfer services, 17, 173 monitoring practices, 50 monopolies, 38, 61-62 Monte Carlo approach, 201 Motorola, 52 mPOS see mobile point of sale mudslide hypothesis, 70-73 music business, 38

Napster, 37 net credit exposure, 152-155 net present value (NPV), 164 Netflix, 80

network effects, 40, 58-60

new production, 203-205 non-default status, 161 non-profit institutions serving households

(NPISHs), credit extension, 5-10 NPV see net present value

obligors see borrowers onboarding process, 41-44

online balance sheet lenders, 33, 34-35 online financial advisors, 18-19, 24 online lending

actions, 32

alternative lending, 47

analytics, 57-58 balance sheet lenders, 33, 34-35 and banks, 30-31, 45, 51-52, 75

Big Data, 49, 57-58 business models, 33 challenges, 32, 33 characteristics, 32

collaboration with banks, 75

data reliance, 29-30

definition, 11

disclosure, 50

disruptive potential of, 4-5 lender types, 31-35 lender-agnostic marketplaces, 33, 35 marketplace lending platforms, 31-34 monitoring practices, 50

online balance sheet lenders, 33, 34-35 oversight, 50

overview, 15-17, 29-55

peer-to-peer networks, 36-40 regulation, 49-50

reporting requirements, 50 security, 59

social factors, 58, 62-63 structural factors, 58, 63-65 technology, 29-30, 57-62 terminology use, 3 transparency, 50 trends, 66-67

types of lender, 31-35

open innovation, 272-273 operational risk, 239-240 oversight standardization, 50

P2P see peer-to-peer

partnerships, 279 payments

credit enhancements, 170 mobile payments, 17, 173 processing, 23

PayPal, 17

PCs (personal computers), 57-58, 60-62 PD (probability of default) see default probability

peer-to-peer (P2P) lending

global credit comparison, 51

Google searches for, 10 markets, 117-118 terminology use, 2 treasury, 209-210 uses of loans, 47

peer-to-peer (P2P) networks, 36-40 bilateral linkage, 38 central directories, 40

direct and indirect connections, 36 disintermediation, 38-39 infomediaries, 39-40

information value chain, 39-40 intermediary-oriented marketplaces, 39-40

re-intermediation, 38-39 personal computers (PCs), 57-58, 60-62 Personal Financial Management (PFM), 17-18

physical collateral, 163

PIT see point in time planning

discovery-driven planning, 73 new production, 203-205

platform notes, 34 plug-and-play business models, 278 point in time (PIT) events contracts, 91, 93-106 prepayments, 140

portfolios

borrower quality, 240-245

buying vs.

construction of, 224-226, 227 diversification of, 187

exposure, 225-226, 227, 243, 244, 246

hedging exposure, 246

income performance, 226-229 liquidity performance, 227-228, 230, 231

maturity mismatch, 170 model analysis, 219-249 assumptions, 220-222 construction of portfolio, 224-226, 227 layout, 221 modeling, 226-244

returns performance, 234-236, 239-244 risk, 222-224, 236-246

operational risk, 239-240 optimization, 245 performance modeling, 226-244 restructuring of, 245 risk, 187, 222-224, 236-246, 291 selling vs. buying businesses, 259-260 stress testing, 228-244 systemic risk, 187 premium services, 284 prepayments, 140-141, 234 prices, 111-113,277-278 privacy concerns, 26 probability of default (PD) see default probability profit centers, 207, 208 profit and loss analysis, 199 profitability, marketplace lending, 219-249 Prosper (online lender), 29, 49 protection sellers, 121, 122, 295

railroads, 71 re-intermediation, peer-to-peer networks, 38-39

real estate titles, 172

real-world expectations, 108-109 real-world probabilities counterparties, 130-131 defaults, 128-129 economic scenarios, 109-110

recovery behavior, 146-147 regulation, 23, 49-50, 64 reporting, 50, 195 resource ‘imprisonment’, 77, 78 retail investors, 48, 293 reward-based crowdfunding, 17

risk

see also risk management

analysis of, 291-292

behavior risk, 107-108, 139-149, 224

concentration risk, 184-188, 290 counterparties, 122, 223-224 credit risk, 290

credit spreads, 234

default probability, 124-130

definition, 107

income, 199, 202-203

liquidity, 192-195, 210

market risk, 192-195, 222-223, 290

marketplace lending, 219-249 measurement, 290 portfolio performance, 222-224, 291 systemic risk, 177-184, 187-188 value, 199, 202-203

wrong way risk, 169-170

risk-free interest rates, 116

risk management

key points, 203

liquidity, 211

portfolio performance, 236-246 understanding of, 291

risk-neutral default probabilities, 114-115, 128-129

risk-neutral expectations, 108-109, 110-113 robo-advisors (online financial advisors), 18-19, 24

sale of assets, behavior risk, 143-144 Santander, 75

SBUs see strategic business units scenarios

credit exposures, 155, 158

stress testing, 200, 231-244

Securities and Exchange Commission (SEC), 50

security, online, 59

services

comparability, 60

customer service, 64-65, 282, 284 open services, 272-273 premium services, 284 streamlining, 284

unbundling, 21-22, 66, 284

shadow banking sector, 39, 183

Simple (mobile bank), 19 simulation, stress testing scenarios, 234 SIVs see Structured Investment Vehicles

Skunk Works program (Lockheed), 270-271 Skype, 37-38, 279

small and medium enterprises (SMEs),

64-65, 294

smartphones, 58, 60-62

SMEs see small and medium enterprises social factors, online lending, 58, 62-63 social networking, 62-63 spreads

credit discount spreads, 114-115

credit spreads, 130-131

liquidity spreads, 115

markets, 114-116

static analysis, 191-192

statistics, behavior risk, 139

steel mills, 72

stochastic process, 201-202

stochastic scenarios, 110

straight-through processing (STP), 252 strategic business units (SBUs), 77 strategies

buying vs. selling portfolio businesses, 259-260

cooperation vs. competition, 256-258 digital separation vs. integration, 259 digital strategies, 263-275

disruptive vs. defensive strategies, 255-256

diversification vs. concentration, 258-259 streamlining

financial services, 284

user experience, 21

stress testing

canonical conditions in ideal world, 231-233

income and value, 200-201

portfolios, 228-244

scenarios, 231-244

simulation of scenarios, 234

structural models, credit risk, 125-126

Structured Investment Vehicles (SIVs), 84 supplier-oriented marketplaces, 39 switching costs, 4 systemic risk, 177-184, 187-188 counterparties, 180-183 credit exposures, 177-180, 183-184 losses, 183-184

portfolio diversification, 187

TBS see Time Bucket System technology, 57-62

adoption rates, 58 computers, 57-58, 60-62 mobile devices, 60-62 mudslide hypothesis, 70-73 network effects, 58-60 online lending, 29-30 security, 59 trust, 59

telephony, 51-52, 172-173, 279 testing, 191

through the cycle (TTC), contracts, 91, 93-106

Time Bucket System (TBS), 92

time factor

contracts, 90-92, 93 credit enhancements, 170 default scenarios, 234, 235, 236 liquidity, 191-192

transactions, overview, 17 transfer rates, 207-209 transparency, 50, 60, 284-286 treasury, 205-210 tree model of corporations, 76 trust, 23, 26, 59

TTC see through the cycle

Uber, 40

underwriting, 48-49, 242 unexpected loss, 45 unified analytics, 289-302 bank advantages, 295-296 benefits of, 298-299 borrower advantages, 293-294 drivers of, 301 functions, 298-299 guarantor advantages, 295 lender advantages, 292-293 marketplace lending, 292-295 need for, 290-296

overview of, 296-301

protection seller advantages, 295 stakeholders, 297, 298-299

United Kingdom (UK), credit outstanding to households/NPISHs, 6-7

United States (US)

credit outstanding to households/NPISHs,

5-6

Federal Reserve Bank, 144

FinTech investment, 12

loans to SMEs and farms, 64, 65

venture capital, 12, 13

use at default, 145-146

user experience (UX) streamlining, 21

value, 197-203

economic capital allocation, 202-203 elements of, 197, 211

estimation of, 197-198

principles of valuation, 199

risk, 199, 202-203

stochastic process, 201-202

stress testing, 200-201

valuation principles, 199

Value at Risk (VaR), 201

venture capital, 4, 11-12, 13

video rental business, 80

virtual currencies, 18

Vodafone, 17, 173

voice over P2P (VoP2P), 37-38

VoIP (Voice over Internet Protocol), 279

VoP2P see voice over P2P

Wells Fargo Bank, 45, 64

what-if scenarios, 110 winner-takes-all dynamics, 278 withdrawals, behavior risk, 143 wrong way risk, 169-170

yield curves, 110-111

Zopa, 29

Compiled by INDEXING SPECIALISTS (UK) Ltd., Indexing House, 306A Portland Road, Hove, East Sussex BN3 5LP United Kingdom.

Rebundling won't happen overnight, and FinTech companies will need several years to gain enough maturity and strength to become a serious threat. A short-term focus or even a medium-term view is hardly doing justice to the future of the hybrid financial sector. Nevertheless, banks should be aware that their business model will undergo massive change in the next five to ten years. To stay relevant with their customers, banks must take a more