CPA Australia - Digital Finance (DF) Exam Index/Study Notes/ Cheat Sheet
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Course
CPA Australia - Digital Finance
Institution
CPA Australia - Digital Finance
Get ahead of exam preparation with this comprehensive and easy-to-navigate cheat sheet for CPA elective Digital Finance.
Condensing all module material into under 40 pages, this cheat sheet/index is colour-coded and provides page number references, detailed explanations and examples to save you ...
1.1 TECHNOLOGICAL EVOLUTION ANALYSING THE DIGITAL FINANCE LANDSCAPE USING THE Digital Finance-focused online communities and so
NETWORK AGE (pg. 2) DIGITAL FINANCE CUBE (pg. 5 – 11) Financial media platforms facilitate discussion and sh
Network age is characterised by interconnectivity, enabled by The Digital Finance Cube helps explore and analyse digital Advice of info.
the internet, smart devices, mobile communications and the finance concepts through the interrelationships of three key (pg. 9) Review sites, comparison portals, online
communities and social media provide adv
rapidly diminishing cost of technology. dimensions:
Another development is robo-advisers algor
Network effects are positive returns to scale; as participant 1. digital finance business functions
that generate investment proposals based
numbers grow, the value of participating also grows. 2. digital finance technologies and technological concepts inputs or data analysis of investment goals
Industry 4.0 refers to the use of Network Age technologies in 3. digital finance institutions. financial background and risk aversion
industry — esp. the combination of analytics, artificial
intelligence and automation Digital Finance Technologies and Technological Conce
Big Data (pg. 2) EXPLORED IN MODULE 3 (pg. 9 – 10)
Big data refers to datasets that arise from the pervasive Types Summary
creation and capture of data in the Network Age. Blockchain Type of distributed ledger — a platform that
(pg. 10) provides an ordered, timestamped and highl
THE TRANSFORMATION OF ACCOUNTING AND FINANCE
secure record of transactions
(pg. 3) Has applications in digital currency transactio
Key digital technologies re-shaping the finance function the Bitcoin cryptocurrency), contracting,
crowdfunding and e-wallets.
Social Connectivity that characterises the Network
Networks enables interaction and the development of
(pg. 10) networks via social media platforms.
Near-Field Is wireless (using radio frequency) and opera
Digital Finance Business Functions (pg. 6 – 9) Commun point-to-point over a distance of up to about
Types Summary -ication The NFC protocols identify the payer, initiate
Digital Mindset (pg. 3) Digital Includes: (pg. 10) payment transaction and immediately arrang
Involves rethinking entire org and operating models in addition Finance • Invoice financing and invoice factoring transfer of money from the payer’s account t
to the adoption of new technology. (pg. 6) • Electronic invoicing payee’s account
Does not mean that finance professionals need to become • Lease-financing P2P Tech- Intended to share resources and data in such
computer programmers or data scientists, but they do need a • Crowdfunding nology that avoids reliance on a central intermediar
Digital Includes B2C: (pg. 10) Built on a technology architecture in which
firm foundation in digital literacy.
Investments • online brokerage participants (peers) enable other participant
Digital literacy requires knowing enough about the access and interact with their technology
applications, benefits, costs and limitations of technologies to (pg. 7) • mobile trading - refers to the trading of
securities using mobile devices infrastructure and data processing power
be able to assess their value to the org and support their Big Data Network Age is characterised by big data — t
• social trading - refers to securities trading via
effective implementation. internet platforms that combine social media Analytics enormous volume and variety of data genera
Enabling Skills (pg. 3) networking with investment strategies (pg. 10) pervasive interconnectivity.
Examples include: Includes B2C: Further Important enablers include fast and mobile in
Behavioural Communication, relationship management and • high-frequency and algorithmic trading - Enablers connections, AI, worldwide connectivity, intu
skills strategic thinking automatically initiates and manages orders on (pg. 10) user interfaces, security technologies (such a
Data Data modelling and visualisation, design thinking electronic trading platforms, enabling biometrics) and automation technologies.
analysis skills and programming institutional investors to trade at high frequency Digital Finance Institutions (pg. 10 – 11)
Finance Org modelling, process design and financial analysis and without human intervention
skills Types Summary
Digital New forms of digital money may operate
FinTech Have emerged either as FinTech start-ups or
CREATING A FUTURE-READY FINANCE FUNCTION (pg. 4) Money independently from government-issued currencies,
Orgs technology orgs without a history in financia
Accounting and finance professionals can create a future-ready (pg. 7 – 8) bank accounts and the transactional detours
(pg. 11) services that have developed FinTech offerin
, 1.3 IMPACT OF TECHNOLOGY ON BANKING/ FINANCIAL 1.4 DIGITAL ECOSYSTEM EVALUATING A DIGITAL ECOSYSTEM (pg. 25 – 26)
MARKETS Introduction (pg. 20) An evaluation of a digital ecosystem should address t
The structure of the financial system is provided by (pg. 14) A digital ecosystem is defined as a dynamic integration of org questions, issues and approaches:
• financial markets facilitating creation & exchange of assets departments, suppliers, tools, systems, customers and 1. How is the org utilising technology?
• financial institutions providing financial services external partners, brought together to increase data flow 2. Does current software and data tools enable a con
HOW FUNDS FLOW THROUGH THE TRADITIONAL FINANCIAL throughout an org and drive org performance. customer experience?
SYSTEM (pg. 15) In cooperative networks, participants share info and expertise 3. How do employees and depts engage with ecosyst
while remaining independent and only interact when 4. What software and data tools need to be impleme
necessary to harmonise efforts. 1.5 DIGITAL FINANCIAL SERVICES ECOSYSTEM
In collaborative networks, participants are interdependent, Overview (pg. 26 – 27)
thus requiring a mutual commitment to working with other The digital financial services (DFS) - describes the digita
members of the network. of the financial industry in general.
Characteristics and components of a customer-centric digital The DFS ecosystem consists of (pg. 26 – 27)
ecosystem (pg. 21)
A CHANGING LANDSCAPE (pg. 15 – 16)
A series of events and trends beginning around 2007
triggered the start of major changes in the banking and GOALS OF DIGITAL FINANCIAL SERVICES (pg. 27)
financial services industries: It should offer a large range of financial instruments an
• global financial crisis of 2007 to 2008 institutions to assist investors balance risk, liquidity, re
• consequent damaged profitability, reduced trust and Financial inclusion provides:
changed regulatory environment Safety And Ability to store and manage value withou
• technological advances and trends, such as: Security needing to protect cash as a physical asse
- high levels of smart-phone penetration and; Speed And Ability to avoid the delays, leakage and fr
- development of sophisticated APIs that allow different DIGITAL ECOSYSTEM COMPONENTS (pg. 20 – 22) Transparency that can affect cash payments, by moving
technology systems to exchange data. Software Ecosystems (pg. 20 – 21) traceable digital payments with stringent
Other key trends Are created by the interaction of orgs via a common identification procedures, immediate fun
Financial Use of mobile smart phones and mobile wallets to technological platform to produce software and services. transfer and digital record-keeping
Inclusion bring financial services to billions of people who Is built on a common technological platform Increased Ability to access a wider range of paymen
were previously unserved by financial institutions Flexibility savings, credit, information and other fin
services at low cost
Social Increasing power of consumers to communicate with
Networks each other, moving control of communications from Savings Access and interfaces to saving products
org to consumer Incentives improve ability and willingness to save
Emerging Use of technologies to create new mediums and Credit Creation of transaction histories to suppo
Digital pathways of exchange that diminish the role of Histories future borrowing by consumers and merc
Currency traditional intermediaries Data-Oriented Ecosystems (pg. 21 – 22) Women’s Digital financial remittances empower wo
Platforms Provide orgs with data that is relied on to understand Empowerment within their households and enable the re
Interconn- Proliferation of internet-connected smart devices customers and to make better decisions. to keep financial transactions private, eve
ectedness known as the Internet of Things Analytic platforms, along with AI, machine learning and other within a family.
NEW MODEL OF INNOVATION- WORKING TOGETHER (pg. 16) tools, can integrate many data sources to search and REQUIREMENTS FOR A DIGITAL FINANCIAL SERVICES
FinTech 1.0 characterised by: FinTech 2.0 characterised by: summarise the habits and preferences of individual customers ECOSYSTEM (pg. 27 – 30)
• payment processing • increasing collaboration to anticipate their next actions, thereby creating opportunities A DFS ecosystem (pg. 28)
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