Those who look ahead, get ahead. Today, banks that are searching for the next growth opportunity may find it in the up-and-coming virtual economy. This economy is as confusing as it is varied, so banks need to build institutional understanding before plunging into the virtual asset market. Like any new frontier, this one carries risks, but the potential rewards are vast—and the opportunity to start building a leadership position is now.
Digital ledger technologies and crypto-assets have evolved from obscurity to prominence in recent years, bringing with them opportunity and risk. Initially regulators focussed primarily on mitigating risks to consumers but as the applications of the technology have continued to evolve the principle of technological neutrality demands a more adaptive approach. The challenge now is to harness the benefits for EU citizens of scaling up business applications whilst continuing to effectively mitigate the risks. The EBA shows the way.
Discussions regarding the pros and cons of issuing central bank digital currency continue around the world, and discussions evolved into issuance of digital collector coin in, Lithuania. In July, the Bank of Lithuania released the LBCOIN, “the world’s first blockchain-based digital collector coin”. Now that its first-of-its-kind digital collector coin is out, the BoL is setting an example to other central banks in an experiment that is exciting but immersed in its share of yet-to-be-answered questions.
The COVID-19 pandemic has placed immense stress on businesses of all sizes and all sectors across every part of the UK. The rapid response by government and industry has helped companies survive the initial economic impact, but looking ahead, it is clear that many businesses – particularly SMEs – will need help to tackle a debt burden that could hold them back or drag them under. To avert this crisis, an urgent and coordinated effort on the part of government and industry is a must. TheCityUK, supported by EY and over 200 financial experts from 50 firms across the financial and related professional services industry, developed a strategy that if implemented, may provide the lifeline that SMEs urgently require.
Banks exist to securely enable customers to conduct their financial affairs, but this requires changes in practices as customers change. While serving older customers who are comfortable with tried-and-true methods, legacy banks are being confronted with young clients who prefer to transact via their smartphones. In our fluid, tech-driven society, providing omnichannel solutions that meet customer expectations without compromising security is crucial for all banks competing in the “new norm”.
If one word defines the last decade, it is disruptive; but if the events of 2020 so far are any indication, we “ain’t seen nothing yet”. No sector is more likely to be disrupted by the pandemic than banking; however, those that see opportunity in crisis can outmatch this major threat to their bottom lines. Resilience, adaptability and vision are must-haves for banks that choose to lead out of turmoil.
The pre-pandemic world had its share of risks, but they were predictable, and risk managers knew how to use data to measure and manage them. Mid-way through 2020, the finance sector finds itself thrown into a grave new world marked by great uncertainty, a reality for which it was not well prepared. Being ready for the unknowns is now a must for survival, but how can banks accomplish that feat?
A sale isn’t a sale until the money actually changes hands, whether the payment occurs in a retail store or online. As consumers increasingly turn to cyber-space, it behooves CFOs to seal any cracks in their digital-payments systems. Central areas to consider include competitive advantage and business model innovation; optimization and streamlining costs; localization return on investment and new market growth strategies; and connected finance, cash flow and treasury management.
Crisis forces change, and often positive, enduring change. Witness banking’s recent response to the COVID-19 crisis. The luxury of slowly unrolling digital transformation was abruptly replaced by the urgent need to provide the bulk of bank services via online or mobile channels. The future for banks lies in maximizing their omnichannel capacity, even after the crisis subsides. They need to reimagine themselves to provide the best service imaginable to customers.
The pandemic has left its mark on all sectors of every economy, including real estate. Prime London property hasn’t been spared, although the reality of buyers’ hoped-for price drops may not be as dramatic as sales data indicates, with shortages of some sought-after residential properties shoring up values. Camilla Dell of the buying agency Black Brick shares her experiences from representing buyers of London properties in the midst of COVID-19.