Bitcoin Remains Resilient Despite Establishment Backlash

Just this week, JP Morgan Chase CEO Jamie Dimon came out strongly against Bitcoin.  Calling it a “fraud“, claiming that “it is worse than tulip mania”, and declaring that he will fire any employee who trades the cryptocurrency for being “stupid”. (While somewhat amusingly admitting that his daughter invests in Bitcoin.)

Also this week, several China-based Bitcoin exchanges including BTCC, ViaBTC, Yunbi, OKCoin and Huobi have been ordered to stop trading by the end of September. This news follows a decision by Chinese authorities earlier in the month to ban fundraising through Initial Coin Offerings (ICOs).

The price of Bitcoin dropped by around 32% during September, before rocketing 27% in a single day on Friday.

What’s going on here?

At least three things.

Firstly, Bitcoin can function without a trusted financial intermediary, which means it may take business away from established financial institutions like JP Morgan. Bitcoin is a cryptocurrency; that is, a digital currency which records transactions in the blockchain, a decentralised shared public ledger stored on computers connected to the Bitcoin network, and secured using cryptography. As a result, transactions can take place between any users on the network without needing to pass through a trusted financial intermediary. As it happens, JP Morgan Chase often plays the role of a financial intermediary, from which it earns substantial revenues [pdf]. This may help to explain why Jamie Dimon, the firm’s CEO, has been so critical of Bitcoin. It is a technology which could disrupt his bank’s business model, which makes it a potentially serious threat that needs to be squashed.

Secondly, Bitcoin allows anonymous transactions worldwide, which makes it difficult for governments to monitor and control. Jamie Dimon is skeptical that authorities will ever allow a currency to exist without state oversight, and this may explain China’s crackdown. China is likely concerned that people are using Bitcoin to shift money out of the country in violation of its capital controls.  China is also likely worried, and legitimately so, that Bitcoin and ICOs could be used for things like terrorism financing, money laundering, and organised crime. As cryptocurrencies like Bitcoin become more mainstream, we should expect increasing levels of government oversight and regulation. America’s SEC, Australia’s AustracJapan’s Financial Services Agency, and others have already started to do this. My feeling is that the crackdown in China may be a temporary measure, which could be followed by the People’s Bank of China issuing a brand new government backed cryptocurrency that the government is able to control.

Thirdly, unlike fiat currency, Bitcoin is designed to have a strictly limited supply. No more than 21 million Bitcoins are ever expected to be issued. Assuming people continue to have confidence in Bitcoin, this artificial scarcity will help to guarantee its value. This may explain why Bitcoin’s price increased by 27% on Friday, even though there has been a lot of negative news coming from China and Jamie Dimon.

In response to Jamie Dimon’s comments, John McAfee, CEO of MGT Capital Investments, responded by saying, “you called Bitcoin a fraud? … I’m a Bitcoin miner. We create Bitcoins. It costs over $1,000 per coin to create a Bitcoin. What does it cost to create a U.S. dollar? Which one is the fraud? Because it costs whatever the paper costs, but it costs me and other miners over $1,000 per coin. It’s called proof of work.”

Bitcoin’s artificial scarcity could encourage investors to buy Bitcoin as a hedge against inflation rather than buying dollar denominated assets like government bonds. If the market for Bitcoin becomes big enough, this could make it more costly for some governments to borrow. Traditional currencies usually experience inflation because central banks tend to print more money than is required to facilitate economic activity, leading to higher prices. Inflation allows governments to borrow money today, and repay debts in future with money that is worth a little bit less. If Bitcoin becomes a global reserve currency, some governments may face pressure to issue debt denominated in Bitcoin. As a result, they would no longer be able to print money to repay their debts. For a country like America, which controls the world’s reserve currency and runs consistent budget deficits, this would represent a significant change from the status quo.

Bitcoin remains resilient despite this week’s establishment backlash.  However, the biggest risk for Bitcoin in the short to medium term would appear to be regulatory risk. Will other governments follow China’s lead by banning Bitcoin exchanges and seeking to establish their own state backed cryptocurrencies?

My feeling is that in Western countries, the free market will prevail. However, even if this is the case, we should anticipate much more government scrutiny, supervision, and regulation going forwards.

Image: Pexels

Blockchain as Monetized Infrastructure

 

For those struggling to understand blockchain, think of it this way. It will be the digital connection between people as well as between machines – starting with your cell phone.

It will be used to tell your washing machine when to run. It will also be used to bill you for the electricity and water it uses. In turn, it could also deduct that amount from your solar positive mortgage.

Blockchain tends to be easier to understand if you think of it as a piece of infrastructure than as the backend ledger for all cryptocurrency. However, questions about payments are always present when talking about blockchain. In particular, blockchain is a system which enables micro-payments, in some cases in increments of less than a penny.

Why is this important?

Basically, in an Artificial Intelligence and Internet-of-things world, the transfer of digital tokens is what will make the system go. Machine processing does not happen in a vacuum. There are costs involved. Who pays and how is a fascinating part of the banking system, which will very soon incorporate blockchain.

Blockchain as a form of infrastructure has become a serious topic in a world filled with cybercurrencies and fundraising networks. One example of a company making interesting choices in this area is a Dutch innovator called Quantoz. They got their start as experts in decentralized energy and transportation. They have subsequently branched out in several intriguing directions, winning not only recognition for their innovations but also industrial clients.

Quantoz has developed their own cryptocurrency exchange called happycoins. However, they are absolutely not interested in cryptocurrency speculation, nor are they aiming to raise vast sums via a crowdfunding sale – known as an Initial Coin Offering. Their sights instead are set on a part of the market that is still coming into its own but where blockchain and cyber currency are likely to have their biggest influence.

Digital Payment Networks

Quantoz recently launched a new consortium to create something they are calling QPN. The Quasar Payment Network is intended to enable a peer-to-peer micro transaction network between consumers, enterprises and IoT. In other words, the firm is using blockchain not to become a traditional bank but to build a payment gateway that enables enterprise.

QPN creates a gateway between traditional bank accounts and digital wallets required for interacting with blockchain controlled systems.

It means that there is a direct two way exchange between traditional cash and the tokens that power the network. For example, an automobile could pay a sensor to understand current driving conditions. This information could then be used by the car to help the driver handle the road better. In turn, this safety feature and the driver’s use of it could be factored into insurance premiums, even if you are only renting a shared automobile.

In this kind of scenario, the digital tokens that are being transferred in the system are valued by the cost of machine time, which itself depends on the cost of electricity. They are a kind of currency, although the best way to understand them is as digital tokens.

Automated, controlled environments are coming fast. By looking beyond short term speculation, and understanding blockchain as an enabling infrastructure for a connected world, firms like Quantoz will have an important role to play.

Marguerite Arnold is the founder of MedPayRx, a blockchain healthcare startup in Frankfurt. She is also an author, journalist and has just obtained her EMBA from the Frankfurt School of Finance and Management.

Image: Pexels

Blockchain For Managers

No matter one’s professional background, these days it is almost impossible to escape at least a very basic introduction to “blockchain.”

At its core, blockchain has the potential to give every individual access to data, processes, and the ability to transact with others on a scale that was never before possible. From a strictly mid-20th century point of view, the introduction of blockchain is the next step in a future foreseen by Peter Drucker. Many individuals will be self-employed, and the value creation process will be overseen and managed in a way that no longer requires multiple layers of other human beings to be part of the process. It is likely to be implemented by HR departments for employee record and compensation management, and will almost certainly be the final nail in the coffin of mandatory centrally located physical workplaces. It could also be used for proof of work, and as a means of payment using virtual currency such as Bitcoin.

For professional managers, a discussion about blockchain opens up several landmines, none of which are easily dealt with. The reason? The technology will wreak havoc on the managerial class. Many things managers do – and in many industries – are about to be automated out of existence.

Blockchain will create the same kind of career obsolescence for managers in many industries as the self-driving car, automated manufacturing, and automated supply chains will produce for “blue-collar” workers.

Unlike the less educated, lower skilled part of the workforce, however, managers will be tasked with planning their own extinction.

How to embrace that future?

Firstly, as a manager, you need to become an expert on how blockchain can be implemented in your industry. And secondly, you need to step up to the plate, and lead the change in whatever area it is that you work.

For anyone who comes from a non IT background, this might sound like a daunting proposition. However, for the current batch of MBA graduates, usually somewhere between their late twenties and early fifties, this is the task currently at hand. It will be impossible for this group to escape further formal education or work experience that requires them to understand, deal with, or implement blockchain in some form or fashion.

While a good technical background will of course be helpful, understanding how blockchain will impact your industry is much more about understanding your industry, the needs of your customers, and how this new technology might be able to solve problems in new and more efficient ways.

One of the most important things to remember about blockchain is that it is uniquely suited to tracking, monitoring and creating data in process-heavy parts of an industry. As a result, blockchain will initially be useful in banking and financial services, but will also quickly take hold in supply chain management.

Digital natives and those who have adopted this new technology because of the demands of working life (Gen X in particular), will have little trouble understanding how blockchain can be applied to these kinds of use cases.

What Are Concrete Steps I Can Take Now?

Human work and organization is in the early stages of being redesigned in a way that will be every bit as transformative as the industrial revolution was in the 19th century.

Revolutions, by definition, cannot be managed. Change, however, certainly can be.

One of the first steps to riding the wave of change is to accept that the world is rapidly transforming and that blockchain is one of the key drivers.

To that end, there are a few things you can do to prepare yourself.

  1. Take a course on blockchain. Consider a specialized course offering for managers in a banking or finance center where you will have access to the best teachers and thought leaders in this space including but not limited to IT experts (which often include lawyers, academics, regulatory agencies, and people in leading industries) where this is hitting first.
  2. Look on Meetup for groups interested in tech. This is a good way to meet other professionals who have a common interest.
  3. Think about vital processes in your industry and how blockchain might be used to improve them.
  4. Design a flow chart with one process you believe can be improved by a blockchain application.

Embracing blockchain will help you to understand the technology and identify ways that you can manage change within your industry, and be a positive driving force for innovation.

Marguerite Arnold is the founder of MedPayRx, a blockchain healthcare startup in Frankfurt. She is also an author, journalist and has just obtained her EMBA from the Frankfurt School of Finance and Management.

Image: Pexels

What Does Blockchain Mean For HealthCare?

There are many people who cringe when they think about what is going to happen to healthcare under a Trump administration. Healthcare is a subject which has wormed its way into everyday conversation since Ronald Reagan was in office. Back then “entitlements”, specifically social security, were a supposed “third rail” that could not be touched, whittled down or even frozen.

Fast forward to the present.

Regardless of what you think about immigrants, poor people, old people, sick people or children, there is one fact that is inescapable. The basic notion of the “welfare state” is being re-examined. It is not just the United States where this is a hotly contested issue.

The drivers? Exploding costs and aging demographics along with creaky infrastructure and outdated service models.

The scandal facing the NHS in mid May over a massive hack made possible by outdated software is just one example of how fragile established western healthcare systems currently are.

That the system needs to be fixed is not controversial. How to fix it is another issue.

In the United States, there is huge pressure on Republicans to overhaul Obamacare. And it is fair to say that there are no easy fixes to a system in the United States that is unbelievably complex, expensive, and which has gaping holes in it. Out of desperation, one proposal to cut costs in the United States is to incorporate blockchain technology. In Europe, where the social state as a concept has not died, blockchain has already begun to be examined as a cost-saver in both the public and private insurance industry.

Blockchain could help to reduce healthcare costs. One of the biggest drivers of healthcare costs in the United States and other places is the administrative time, cost and paperwork necessary to run a regulated industry. A key benefit of using blockchain will be lower costs of healthcare administration due to economies of scale that will provide much needed relief to state and national budgets. This means that the forecast explosion of costs might be better contained.

Rising healthcare costs are further complicated by privacy laws that aim to protect health related information. In the United States, this falls under HIPAA. Otherwise known as the Health Insurance Portability and Accountability Act, this Clinton-era legislation has very strict rules about how health records can be shared. Blockchain in this environment provides a secure way for databases to talk to each other, and offers a solution to the privacy conundrum laid out for IT professionals in this space since 1996.

For this reason, introducing blockchain represents one of the first true opportunities to “fix” a horribly broken system – in the U.S. and elsewhere.

In Europe, where the concept of inclusive healthcare is akin to a sovereign right, this conversation has already started.

Implementing blockchain will not simply be a matter of sending “bitcoins” to doctors for payment. It will be about the widespread use of “smart contracts”. The earliest use cases across the industry are mostly related to health record management and access, as well as insurance claims.

Blockchain may be a secure technology, but creating a fully digitised healthcare system raises serious privacy concerns. If people are enrolled in systems where they can be tracked for life, what happens to that information and who has the right to access it? How will such interactions be designed to protect the individual in a world where nothing, suddenly, is truly private. How can people with pre-existing medical conditions be sure that their information won’t fall into the hands of insurance companies who will use the information to charge higher insurance premiums or to deny coverage?

These new healthcare systems will need to be designed with privacy issues kept firmly in mind. An old and crumbling system is about to be replaced with a technology whose impact is as yet largely unfelt. And for the most part, it will be Generation X and Y who will be tasked with building these systems. The privacy rights of young people and many voiceless individuals on the fringes of the system will be affected. This could serve as a clarion call to those who have long been left out of the healthcare debate, but more likely it underlines the importance of safeguarding the privacy rights of groups who are presently unaware that their fundamental rights are hanging in the balance.

In sum, blockchain will absolutely play a defining role in healthcare reform. How and where it will be applied is still unclear. However, it is likely to play a central role in redesigning healthcare systems for the 21st century in America and beyond.

Marguerite Arnold is the founder of MedPayRx, a blockchain healthcare startup in Frankfurt. She is also an author, journalist and has just obtained her EMBA from the Frankfurt School of Finance and Management.

Image: Flickr

What Is Blockchain? A Beginner’s Guide

The year 2017, for everything else it may or may not be, is already heralded as “The Year of Blockchain.” But what exactly is “blockchain” – and why is it slated to be the debutante of the ball across multiple industries?

Essentially blockchain is a way of connecting distributed databases to each other. In other words, it connects databases on machines that are not otherwise connected to each other in one firm or location. Further, it is also a way for these databases to “talk” to each other – to issue and receive commands and data in both encrypted and hashed form to accomplish functions or tasks. Blockchain is, in effect, a new kind of database, which writes “ledger entries” in different locations, but which can then be accessed by the network of computers to confirm that transactions did occur and reconcile these transactions.

It creates what is widely known as a “trustless” network – in other words, it removes the need for trusted third parties like banks or financial institutions to “enter” or reconcile entries, however this is a bit of a misnomer. The role that was formerly played by trusted third parties is now being played by the blockchain network itself. The “trust” that is implied is that the network is stable and the code – or protocols – of the network can in fact function as they are intended to. While blockchain may remove the need for trusted third party institutions, some of the newer blockchains (including Ripple) are based on the idea of “trusted” or “authorized” parties transferring data to one another. This allows a preselected group of “trusted parties” – in this case banks – to lower transactions costs, reduce the chance of fraud and remain competitive while creating in effect a private network.

The most revolutionary aspect of blockchain is that it moves the role of verification (of a task, payment or other action) from a single entity (such as a government or corporation) to multiple computers along its network. While a government or corporate entity (or even single person with enough wealth and power) could conceivably buy the majority of Bitcoins on the Bitcoin network and then hire programmers to change the rules of the network according to its own mandate, this is currently seen as a remote possibility.

The medium of exchange in the world of blockchain is cryptocurrency – tokens that have some value determined either by (a) direct market forces as in the case of Bitcoin or Ether, or (b) by the cost of the computing power required to produce them – in which case they is known as either a “tokens” or “altcoins”.

The workhorse of blockchain is the “smart contract” – which is just another way of saying that after a token has been “paid” for a particular purpose, then a certain action or transaction is triggered. For example, if Jane wants to send Bob five Bitcoins, she can utilize the Bitcoin network to do so (as long as she and Bob both have “wallets” connected to the network) and further, a record of that transaction will be recorded in all the computers in the network. If Jane is expecting to receive, in exchange for those five Bitcoins, ten shares of Bob’s company stock, he will be required to send her the digital token assuring her that the shares have been transferred to her before he can accept the five Bitcoins.

According to Nick Szabo, a cryptographer and “father” of smart contracts, an idea which he explored in a paper published in 1998, smart contracts are “a set of promises agreed to in a meeting of the minds [which] is the traditional way to formalize a relationship.”

Said another way, smart contracts work within the protocols (or algorithms) created to link the chain of databases together, to execute how such computers communicate with each other.

There are many different use cases for this kind of technology – although it has made its first impact in the world of finance. According to the Chamber of Digital Commerce, which has just published a report “Smart Contracts: 12 Use Cases for Business and Beyond” the industries (beyond finance) which are likely to see rapid deployment of the technology in the near future range from a further development of the concept in the financial industry to insurance and the healthcare industry.

What deployment of blockchain technology really means in the immediate future, is that the world will become more interconnected, that manual processes in many industries will be automated, and that the “costs” associated with these transactions will fall dramatically.

That said, it is far too early to predict what the adoption of blockchain will accomplish – just as it was essentially impossible to see where and how the Internet would change the nature of communication and community.

Suffice it to say, however, that by 2020, the world will already be a very different place because of blockchain’s deployment. By 2025, according to top consultants like Deloitte [pdf], the banking industry (at a minimum) will be profoundly disrupted.

Marguerite Arnold is an entrepreneur, author and third semester EMBA candidate at the Frankfurt School of Finance and Management.

The Far Reaching Impact of Blockchain

Blockchain, the underlying technology used by Bitcoin, has implications that reach far beyond the financial services community and banks. This is where new development and implementation may have focussed so far. However, as the technology and its implications become better understood, it will rapidly expand to new industries and verticals.

Blockchain systems operate as a kind of distributed database that store immutable (that is, non-changeable and verifiable) transactional records stored as “blocks” of information. Each block contains a timestamp and is linked or referenceable to a previous block and hence forms part of a larger “block chain”. Blockchains can either be public, private, or a combination of the two, with information accessible to users via “keys”.

Blockchain also works very much like a large distributed, non-centralized network. Each “node” of the network is a processor (or computer server in other words) that stores each block of information processed by that node. Once processed or verified, a transaction record can then be shared with other nodes in the network. This could be anyone in the case of a public blockchain, or only authorized users in the case of a private blockchain.

Blockchain technology has been applied in the finance industry in the payments space. Ripple, for example, allows banks to transact between themselves and with individuals globally by creating a payment platform that allows banks to settle payments in different currencies in real time. Individual payments and currency settlement calculations are made by a decentralized network of processors located at the banks and clients all over the world using Ripple’s payment protocol.

However the technology has many other uses – starting with the ability to better monetize alternative energy to the digitisation of insurance contracts. The insurance industry, in particular, is starting to get serious about investigating, if not yet implementing, blockchain solutions in order to streamline paperwork, manage supply chain issues if not insurance contracts overall, accelerate the processing of insurance claims, and improve the auditability of transaction records.

In fact, the real juice behind blockchain is not bits and bytes, but in fact how events are triggered by electronic code that translates contractual relationships into action – or so-called “smart contracts” that are executed within blockchain networks.

Smart contracts – or the computer protocols that facilitate, verify and enforce agreements – are actually the heart of this revolution. They represent a unique blending of technology and law, usually with regard to payments – but not limited to them. Smart contracts are actually coded binary language triggers along the network that cause certain things to happen when specific conditions are met. For example, Customer A authorizes payment to buy a convertible bond. When market conditions warrant, the bond “smart contract” will then automatically pay Customer A the required coupon payment, convert the bond into a certain pre-determined number of shares, or take some other required action.

Despite the hype, however, there are still vast unknowns – namely the ability of coders to accurately translate legal requirements into transactions that can be understood and retranslated by people – starting with regulators. In terms of payment or other easily defined contractual obligations (such as trade confirmations), the concepts are relatively straightforward. However, as anyone who has looked at even the simplest contract knows, there are many parts of a contract that are not easy to translate into code from natural language – much less decipher downstream. This includes everything from indemnities, warranties, covenants, confidentiality, digital signatures and enforceability if not other pieces in between.

What happens, for example, when the convertible bond bought by Customer A does not react to the right market conditions? Or what happens if the electronic triggers in the smart contract for this convertible bond are activated by the wrong set of market conditions? How will lawyers without coding experience be able to catch such errors? And how will coders without a legal background know what to look for to find them?

While understanding whether payment has been made (for example) is relatively easy to understand by all parties, understanding whether a service has been correctly provided, particularly when translated into and out of digital code, represents a quagmire that is already coming – and with no easy answers.

The legal enforceability of at least part of what smart contracts represent is not far away. Payment and exchange of services or data is the easy part. Redefinition of contractual relationships, however, is where the entire conversation starts to get murky. That is nowhere more obvious when applied to a specific part of “contract” law – namely civil rights.

For those who do not believe that civil rights are in fact a contractual relationship relating to basic property rights (including payment), values, and perhaps even the meaning of citizenship itself, then look no further than perhaps one of the most overlooked parts of civil rights and contract law in the United States.

The Civil Rights Act of 1991, also known as 42 U.S. Code §1981, is a United States labour law and the most recent codification of civil rights in America. In effect, it equates the contractual value of minorities and people with disabilities with that of white men.

In other words, civil rights are the mandatory equalizing of the contractual value of individuals enforced by the state. But that state is only one country.

What happens if there is a contract, for example, between an English multinational and an American citizen for work being performed in Hong Kong?

Do American civil rights laws apply?

Which set of laws should govern a smart contract?

If smart contracts expressly choose New York law, for example, this could mean that the best of American labor and civil rights laws are automatically exported to other countries. But it could also mean that contractual inadequacies, due to a failure to expressly choose a governing law, lead to unexpected results and ultimately undermine basic notions of equality and civil rights.

Further, what is the appropriate forum for resolving disputes under a smart contract?

In a world where contracts that affect payments as well as the terms of employment are becoming increasingly undecipherable, will smart contracts, which can also be used to govern labour agreements, be literally rewritten to eviscerate the concept of equal pay, access to healthcare, and perhaps even the right to negotiate a contract in the first place? And if smart contracts hide or distort important contract terms, how will consumers actually be able to tell if they have gotten what they paid for?

These are some of the big issues which face the entire discussion around blockchain. They are not widely part of the vernacular so far. However, just as bitcoins are electronic “digital currency”, block chain, the master regulator of such systems, could easily become a place where the contractual elements of pay, consumer and civil rights are either enshrined, or eviscerated.

Marguerite Arnold is an entrepreneur, author and third semester EMBA candidate at the Frankfurt School of Finance and Management.

Bitcoin, Digital Currency and The Future of Banking

bitcoin-digital-currency-and-the-future-of-banking-2

This is a guest post from Marguerite Arnold.

When news broke in late October that some of London’s largest banks were investing in Bitcoin, cryptocurrencies in general got another boost. According to reports, however, this latest move to embrace Bitcoin was not a positive embrace of the digital currency per se, but rather a move to stockpile Bitcoin to fend off denial of service attacks from hackers.

Beyond hoarding digital currency as a defensive move in the age of DDOS bank robbers, banks are beginning to think about ways that bitcoin could be used within the banking industry globally. This is not limited to thinking about how Bitcoin could function as a new kind of currency – although that is an ever-present idea on the horizon. Bitcoin itself was created by technologists and programmers with a deep-seated mistrust of central banks themselves. These days, central banks in places including the US, UK and China, are also considering how the underlying technology – blockchain – might be used to record transactions in the real economy more efficiently and with greater transparency.

Blockchain – a system of distributed databases that exist on either private or relatively “public” decentralized computer nodes all over the world – may in fact be the most powerful and influential legacy of Bitcoin. The technology allows multiple users, including competitors, to keep an accurate tracking of events or financial transactions in a way that can be accessed and tracked by multiple users at any given time. The technology is frequently referred to as a “digital ledger”.

The time is ripe for innovation both on the digital currency front and in the use of “digital ledgers” for everything from basic currency tracking and F/X transactions to more sophisticated clearing and reconciliation processes. According to a recent report in the New York Times, the Bank of England has recently produced a report that the economic benefits of issuing a digital currency tracked by a blockchain could add as much as 3% to a country’s economic output. During a time of unprecedented globalization as well as new business models that look set to disrupt entire industries, including banking, the idea of having a digital currency that offers both greater accuracy as well as independence from central banks and government interference is also gaining greater and greater appeal.

There is also the issue of reducing costs as well as the larger question of how to transform banking service provision in the age of “digital” personal services. Everything from sourcing loans to personal banking services, particularly in an age of negative interest rates, is potentially up for grabs – enabled by digital services and the technological backbone they rely on.

According to most industry analysts, the impact of all of these forces is likely to create a tipping point within the next 10 years, leading to wide ranging transformation of all banking services and the companies that provide them. Cryptocurrencies and blockchain are likely to be major pieces of the puzzle, however they are ultimately configured, integrated and used. What is still uncertain at this juncture is exactly how this future world will look – from consumer interactions to the most sophisticated back office clearing procedures and reconciliation measures at the world’s largest banking institutions.

What is certain however, is that digitalization has hit the banking sector – and there is no turning back.

Marguerite Arnold is an entrepreneur, author and third semester EMBA candidate at the Frankfurt School of Finance and Management.

(Image Source: Flickr)