For many decades since the establishment of the finance industry, banks, insurers and other related sectors have relied on relatively similar business models. While such traditional practices have proven to be profitable for a time, the new demands of today’s modern society require a more advanced and digitally dominated industry. Here are some examples of the leading digital transformations that are shaping the industry at present.
Blockchain trade finance platform
Today, digital innovations and technological tools are set to disrupt how the industry does their business. China is leading a digital transformation in finance like no other, and it includes one of the biggest newcomers in technology today: blockchain.
The Hong Kong Monetary Authority (HKMA), the country’s central bank, will launch a live blockchain trade finance platform in September 2018. The main goal of this transformation is to boost transparency to data sharing, reduce frauds and increase credit availability among its participating financial institutions.
A current total of 21 banks will take part as participating nodes in the said platform, and it includes internationally renowned institutions like Standard Chartered and HSBC.
The blockchain is the same technology that is responsible for the birth of the latest craze in the finance world: digital money, popularly known as a cryptocurrency. Bitcoin (BTC), Ethereum (Ether), and Ripple (XRP) are just some examples of the most popular digital currencies today.
Last year was a huge year for cryptocurrencies, boasting a market capitalization from its humble $18 billion to the current $800 billion in January 2018.
The presence of robots in plant operations and manufacturing scenes is nothing new, but how about in the finance industry? One of the new services offered in finance is an automated “robo-advisor” assists clients in money management, asset allocation, tax-loss harvesting, and automated rebalancing. However, this AI-controlled technology is still at its infancy and its efficiency as compared to that of actual financial advisors is yet to be determined.