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: 2020/1

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.Ìý 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.Ìý

Aims:

The module focuses on (1) entrepreneurship, intrapreneurship, change management and business models andÌý (2) the servicesÌý 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.)Ìý (7) new bank start-ups (8) and new banking models.Ìý

Assessable learning outcomes:

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

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

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

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 lendingÌý

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

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

Additional outcomes:

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

Ìý

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 sup ervision

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, Weal thfront)

4.New digital banking solutions and business models.

a)BaaS - Banking as a Service

b)BaaP - Banking as a Platform

c)White label banking

ÌýÌý

Global context:

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

Brief description of teaching and learning methods:

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

Summative assessment- Examinations:

Summative assessment- Coursework and in-class tests:

Students will be asked to complete an in class multiple choice test (50%) Ìýand an essay (50%)ÌýÌý

Formative assessment methods:

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

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: 27 August 2020