World Finance Digital Banking Awards 2017
Long gone are the days when IT was confined to siloed divisions within a bank. Today, digitalisation impacts every branch, at every level and across all departments of any financial institution worth its salt. As the past year has demonstrated, banks have little choice but to embrace the digital revolution wholeheartedly. An ongoing transformation is the result, while those that continue to be slow to adapt are now suffering the consequences.
Nowadays, consumers demand the utmost in convenience. They can purchase pretty much anything online at the touch of a button, at any time – day or night – and they expect no less from their financial service provider. But with this mammoth rush in online banking comes the pressing and growing need for security. Recent years have demonstrated the danger of the cloud’s double-edged sword, and everyday consumers are all too aware of the ease with which organisations can be hacked. Consequently, in 2017, we saw major advances in banking security, with the use of biometric authentication and iris recognition providing a much-needed additional level of security for customers. That said, despite their importance in today’s digital world, such developments are not yet ubiquitous.
Over the past year, the continued march of banking’s digital transformation has forced many to rise to associated challenges and evolve with the times, while others gradually fade away, soon to be forgotten in the brick-and-mortar branches they seem so reluctant to leave behind. In this year’s World Finance Digital Banking Awards, we celebrate those that lead the way with digitalisation, while meeting consumer demands and mitigating against accompanying risks along the way.
Rise of the cryptocurrency
Fintech firms are continuously finding new and innovative ways to make managing, investing and spending money easier than ever before. In this vein, perhaps the biggest change that we have seen in the past 12 months has been the rising popularity of digital currencies. In 2017, we witnessed something that few would have predicted just a few years ago: cryptocurrencies going mainstream.
The continued march of banking’s digital transformation has forced many to rise to associated challenges and evolve with the times, while others gradually fade away
While bitcoin remains the most well-known cryptocurrency, a growing number of rivals are proliferating at an astonishing rate. The second in popularity is Ethereum, while others following closely include Litecoin, Zcash, Dash and Ripple. Aptly demonstrating the current trend is their growth in value witnessed over the past year. For instance, in the months from January to July 2017, Ethereum increased its value fiftyfold to $300 a coin. By August, Litecoin reached just above $64.20 per coin, exploding in value by almost 1,383 percent from the start of the year, when it was trading at just $4.33.
Unsurprisingly, amid such news, bitcoin had its biggest ever year in 2017, reaching over $15,000 per coin in December. Meanwhile, the volume of daily bitcoin transactions took off in May, from an average of $200m in the months prior to more than $700m being common for the rest of the year.
Against this backdrop, big banks have started to act, all too aware that they could easily miss a beat that could one day make them obsolete. By the summer, Ashok Vaswani, Chief Executive Officer for Personal and Corporate Banking at Barclays, revealed that discussions were underway with British regulators to introduce digital currencies.
“We have been talking to a couple of fintech companies and have actually gone with them to the [Financial Conduct Authority] to talk about how we could bring an equivalent cryptocurrency, not necessarily bitcoin, into play,” Vaswani told CNBC at a fintech conference in Denmark.
Barclays is not alone in this endeavour; central banks throughout Asia and Europe are also exploring digital-only currencies. Denmark’s central bank has been deliberating a digital-only e-krone for over a year now, while the People’s Bank of China has already run trials on its own currency. Meanwhile, in June, tech giant IBM announced a new deal to construct a digital trade platform with the Digital Trade Chain Consortium, a group of European banks comprising Societe Generale, Deutsche Bank, KBC, Rabobank, Natixis, Unicredit and HSBC.
As such snippets – which are by no means indicative of the whole story – show, 2017 has been a monumental year for digital currencies. And it seems this is only the start: financial institutions all over the world are now scrambling to latch onto the trend, something we can expect to see long into 2018 as well.
