The financial technology sector has revolutionized banking, obscuring the traditional understanding of where money is held during transactions. Instead of simple bank accounts, funds now reside in various forms, including unnamed accounts, digital wallets, virtual accounts, ledgering systems, and For Benefit Of (FBO) accounts. Each account type caters to different needs, ranging from individual privacy to streamlined business operations, and each account type also comes with associated risks regarding execution, clearing, and settlement. These application-layer accounts create an illusion of traditional banking, where the infrastructure complexity is invisible to the end user and there is the dependency between the financial application and any banking partners. While open banking has improved reconciliation, it excludes unbanked individuals, creating a divide in financial services that highlights the trade-offs between inclusion and efficiency. As fintech advances, understanding the underlying infrastructure is crucial for businesses and consumers alike, and financial services must ensure robust financial infrastructures that can handle innovation.

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