ity and control, leading to larger investments in client servicing systems. Corporate banks, on the other hand, are putting money into IT as a means of gaining greater insight into lending decisions, which should reduce risk and increase responsibility.
DIGITAL FINANCE 2.0—EMERGING BUSINESS OPPORTUNITIES
If we consider the 2.5 billion unbanked, in the next stage of global financial inclusion, these markets cannot be reached economically and feasibly/efficiently by conventional and legacy banking solutions. This is where the new hybridized delivery models will come into their own, converging digital banking, cryptocurrency offerings, and mobile transactions, via the internet of value exchange. This will involve a meshwork of centralized, decentralized and distributed financial networks and delivery platforms, with substantial integration and compliance requirements.
This is a quick checklist of upcoming opportunities for startups and investors, in the next phase of development and deployment: Tax declaration, blockchain ledgers, triple entry accounting, and auditing and financial reporting
Compliance—regulatory, verification and ‘Bitlicensing’
Governance and risk management
Merchant and agent solutions at POS
Customer facing—UX, KYC, CRM, AML, fraud prevention, privacy (identity management)
Legal and investment advisory services; mergers and acquisitions
VC and crowdfunding advisory services
Security, at all levels—from customer to financial services providers to securitization
Storage—multi-key versus cold storage versus secured devices
Integration—Banking; Mobile transactions; DAZ protocols
Gareth Murphy, director of markets for the Central Bank of Ireland, summed up the future challenges for service providers and regulators from a Eurocentric perspective as follows:
Build Operate Deploy (BOD), e.g., inter-exchanges, Build Operate Manage (BOM), e.g., Ripple gateways
“Who
Business Process Management, e.g., ITIL, ISO4217
Interestingly, according to the Ovum report, there is a desire for established financial institutions to move toward more centralized banking functions, which is further driving up IT spending in this sector. By using technology to consolidate functions, firms hope to improve their efficiency. Account holders demand visibil-
How safe is the payments infrastructure?
How much economic activity is denominated in virtual currencies?
To what extent is the ‘virtual currency economy’ connected with the ‘euro-denominated economy’?
How do we distinguish between transactional activity and speculative/investment activity?
and, from a monetary policy perspective, there is also the fundamental question of understanding the supply of the virtual currency, and its impact as a form of money.”
In conclusion, there is a lot of work ahead, for many players, at many levels, to address and deliver the promise of Digital Finance 2.0. —S
Crypto Biz Magazine
Considering the currently addressable market opportunities in e-commerce and digital banking, the IT investment into this sector is substantial. In the bigger picture, Ovum projects a compound annual growth rate (CAGR) of 6.4 percent, from 2014 to 2018. By the end of this period, global IT spending in financial markets is predicted to surpass $100 billion (Increase in financial markets IT spending points to end of credit crunch, Ovum, March 19, 2014).
is transacting (to address AML concerns)?
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