Question

Digital Wallets (wallet-based solutions) 1. Companies such as Apple, Samsung, and Google are all racing to develop a digital wallet. Why would they do this? 2. Provide and describe two advantages of digital wallets. . Provide and describe two disadvantages of digital wallets. 1. Should bitcoins be regulated? Provide support for your response 2. Provide and describe two advantages of bitcoins 3. Provide and describe two disadvantages of bitcoins. Robo Advisors 1. How are robo advisors currently being used in the financial services industry? 2. Provide and describe two advantages of robo advisors, in comparison to human advisors, within the financial services industry. 3. Provide and describe two disadvantages of robo advisors, in comparison to human advisors, within the financial services industry.

Answer 1

Digital wallets :

1. Now-a-days the usage of digital wallets has exponentially increased across the world for all types of commodities. Many multinational companies are devising their own digital wallet in order to provide an easy way for payments for their customers. For example samsung pay, google pay etc,. The reason behind creating their own digital wallet is that the network of company particulary increases by entering into agreements in to retail vendors and gaining commission on transactions that happen through their gateways. It also urges the consumers to spend more by offering various discounts and promotions on payments through the wallets which in turn boosts up their business.

2.Advantages : 1. It would enable accountability and audit trial in each of the transactions which is not possible in cash based payments . 2. The ease of payments are greatly improved and it also enables payments in the form of other currencies for overseas payments and transferring monies to related parties

2. Disadvantages : 1. One of the threats is the security measures as there are always hackers that can exploit the private information 2. The amount of initial investment is huge in technology and outreach, and many of the payement banks wont make profits in the initial years of business

Bitcoins :

1. The bitcoins work on a decentralised system of settlement known as blockchain.Every time a transaction occurs, the network records both the sender’s and the receiver’s Bitcoin addresses, and the amount of money into the end of a “Ledger” or a record called Blockchain. Any currency operating in the world should be regulated by any agency otherwise there would be volatility in the exchange rates, risk of money laundering and increase of illegal payments for unapproved activities. "Self-regulation by the industry was always intended to be a starting point - this must now be matched by government action.

2. Advantages : 1.

• With Bitcoin it is very possible to be able to send and get money anywhere in the world at any given time.
• There wont be any settlement delays or bank holidays or strikes etc., and there is clear accountability trial

3. Disadvantages :

• Bitcoin is mainly used for payemnts through dark web which involves hiring hackers, assassins etc., which is clearly illegal
• As it is decentralised and not regulated anyone who takes control of 51% would take control of the whole network which is dangerous.

Robo advisors :

Modern-day robo-advisors are automated, algorithm-driven digital platforms that provide investment management solutions, requiring little to no human intervention. The rules, however, remain the same. Robo-advisors, similar to their human counterparts, are required to register with relevant authorities in order to conduct business. As the technology upgraded, functions like dedicated fund management, risk-based portfolio allocation, and algorithm-based adjustments became part of the robo-advisor suite. The current crop of robo-advisors come equipped with self-learning algorithms and are capable of completely automating the process of investing

1. Advantages :

• As to the common knowledge, if the robo advisor's algorithm and coding is correct it can advice multiple clients at the same time and has comparitively less cost than a human advisors
• They have at their disposal huge amounts of data analytics capabilty which humans surely are not possible to have, so it improves the decision making and advising skills

2. Disadvantages :

• As it operates on technology there is a threat to sensitive and private informaiton from hackers and other malwares
• Another problem is the lack of human judgment. While the elimination of human interference has its upsides, the removal of human emotional judgment means that it does not fully understand its human clients.