Module: | MODULE A: INTERNATIONAL BANKING
Q222: Consider the following statements regarding the classification of technology entities under the centre's regulatory framework:
Statement 1: Under the framework, entities classified as Financial Technology firms are those providing direct technological solutions that result in new business models, applications, or products within regulated financial services like digital banking or wealth management.
Statement 2: Entities classified as Technology Finance firms are those providing advanced or emerging technology solutions, such as artificial intelligence or data analytics, that act as allied support systems for financial institutions rather than acting as direct financial products.
Statement 2: Entities classified as Technology Finance firms are those providing advanced or emerging technology solutions, such as artificial intelligence or data analytics, that act as allied support systems for financial institutions rather than acting as direct financial products.
✅ Correct Answer: C
The unified regulator legally distinguishes between companies whose core business is finance versus those whose core business is technology.
Statement 1 is correct.
A Financial Technology firm uses technology to directly deliver a financial service.
Common examples include automated investment advisors, digital-only banks, and crowdfunding platforms; these entities are directly involved in the actual flow of client funds or financial advice.
Statement 2 is also correct.
A Technology Finance firm is primarily a pure technology or data company that provides advanced technical tools to support the financial industry.
Examples include companies providing artificial intelligence for fraud detection, biometric security systems, or massive data analytics.
While they serve the financial sector, they do not directly manufacture or sell financial products to the end consumer.
Statement 1 is correct.
A Financial Technology firm uses technology to directly deliver a financial service.
Common examples include automated investment advisors, digital-only banks, and crowdfunding platforms; these entities are directly involved in the actual flow of client funds or financial advice.
Statement 2 is also correct.
A Technology Finance firm is primarily a pure technology or data company that provides advanced technical tools to support the financial industry.
Examples include companies providing artificial intelligence for fraud detection, biometric security systems, or massive data analytics.
While they serve the financial sector, they do not directly manufacture or sell financial products to the end consumer.