ICM314-Digital Banking and Payment Systems

Module Provider: ICMA Centre
Number of credits: 10 [5 ECTS credits]
Level:7
Terms in which taught: Autumn term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2019/0

Module Convenor: Prof Brian Scott-Quinn

Email: b.scott-quinn@reading.ac.uk

Type of module:

Summary module description:

In this module, you will learn about entrepreneurship, intrapreneurship, how technology makes some business models obsolete and introduces new ones, how banking is transitioning toward digital forms of financial intermediation and how payment systems are evolving with the deployment of new technologies.  We will explore the role of banks, central banks and money in the economy, how technology is reshaping the role of banks. New business models for banking services will be discussed. Examples and case studies will be used to illustrate the key aspects of digital banking. 


Aims:

The module focuses on (1) entrepreneurship, intrapreneurship, change management and business models and  (2) the services  financial intermediation provides (3) types of money and central banking (4) new payment systems (5) peer to peer lending, crowdfunding and other forms of disintermediation (6) Tech platforms and banking services (Tencent, Alibaba, Google, Facebook etc.)  (7) new bank start-ups (8) and new banking models. 


Assessable learning outcomes:

By the end of the module it is expected that students will: 



Understand the purpose and benefits of financial intermediation and the role of different financial firms 



Understand the functions of central banks, the concept of money creation and the new forms of digital money in the economy 



Understand how banking services are performed by non-banks and tech start-ups and the trend towards the elimination of intermediaries via, for example, blockchain technology and P2P lending 



Be aware of new digital banking solutions such as BaaS, BaaP and white label banking. 



Be familiar with the regulatory and ethical challenges posed by the new digital banking environment 


Additional outcomes:

The module will use a number of in-class case studies to illustrate key aspects of digital banking 



 


Outline content:

1.Why banks exist and what they do (covered only in summary as students expected to attend ICM106 in the first 5 weeks of the autumn term):



a)Financial intermediation and its benefits



b)Maturity transformation, leverage and the fragility of banks



c)Retail and investment banks



2.Central banking, money and digital currencies:



a)Monetary policy, lender of last resort, foreign reserves and bank supervision



b)Theory of money, digital money and cryptocurrencies



c)Payment system technologies and infrastructures



3.Disintermediation:



a)Peer to peer lending and crowdfunding



b)Alternative payment and banking services: Big techs (Amazon-JP Morgan, Alibaba –Ant Financials, Tencent’s Wechat, Apple pay, Facebook) and smaller techs (Stripe, Lending Club, Commonbond, Kabbage, Robinhood, Wealthfront)



4.New digital banking solutions and business models.



a)BaaS - Banking as a Service



b)BaaP - Banking as a Platform



c)White label banking



  


Global context:

The module explores global trends. International examples are used to illustrate key aspects of digital banking. 


Brief description of teaching and learning methods:

The core theory and concepts will be presented during lectures. Problem sets will be solved in workshops. 


Contact hours:
  Autumn Spring Summer
Lectures 10
Seminars 5
Guided independent study:      
    Wider reading (independent) 30
    Wider reading (directed) 10
    Preparation for seminars 10
    Essay preparation 25
    Reflection 10
       
Total hours by term 100 0 0
       
Total hours for module 100

Summative Assessment Methods:
Method Percentage
Written assignment including essay 50
Class test administered by School 50

Summative assessment- Examinations:

Summative assessment- Coursework and in-class tests:

Students will be asked to complete an in class multiple choice test (50%) in week 1 of the spring term and an essay (50%) to be submitted in week 2 of the spring term. 


Formative assessment methods:

Seminar questions are assigned for each class. The seminar leader will facilitate discussion and offer feedback. 


Penalties for late submission:

Penalties for late submission on this module are in accordance with the University policy.

Please refer to page 5 of the Postgraduate Guide to Assessment for further information:

http://www.reading.ac.uk/internal/exams/student/exa-guidePG.aspx


Assessment requirements for a pass:

50% weighted average mark


Reassessment arrangements:

Re assessment of individual essay


Additional Costs (specified where applicable):

Last updated: 8 April 2019

THE INFORMATION CONTAINED IN THIS MODULE DESCRIPTION DOES NOT FORM ANY PART OF A STUDENT'S CONTRACT.

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