According to a new research report titled ‘Horizon Scan: ICT and the Future of Financial Services‘, the potential for industrial disruption within the financial services industry is increasing as new entrants use digital technologies to enter adjacent markets through payment schemes. As a result, it explores the implications and provides an in-depth understanding of the emerging ‘Networked Society.’ The rise in popularity of cryptocurrencies is an indication of the early stages of the aforementioned Networked Society.’
The recurring theme of cryptocurrencies not serves as a great backdrop for the research, but, also fulfills the purpose of evidence in this research. Originally published by Ericsson, the global leader in communications, the research was conducted in collaboration with Imperial College of London.
The 44 page research report explores the amalgamation of information technology and financial services industry in great detail. It points out that although, the advancements in technology have so far been utilized to increase productivity within financial services industry, there’s a change in trend. Digital technologies are now capable of disrupting the very foundation of the financial services industry.
Before fully dwelling into cryptocurrencies, the report also gives an overview of mobile payment systems like M-Pesa. It is pointed out that new mobile payment systems only create a ‘certain level of disruption’ to the existing industrial structure. This is mainly because many of these payment systems offer an innovative and a cheaper solution to perform transactions. Yet, they still remain within the realms of existing financial system.
It has been stated in the report that, due in part to the loss of trust in the existing financial system, a new system enabled by digital technology will emerge where the element of trust will be almost terminated. This new financial system will provide alternative solutions to the customers by allowing them to becoming their own banks. According to the research report, a digitally transformed financial system not only only holds the potential to disrupt banking or money, but the very basic foundations of society. From the roles of government in currency to how goods and services are valued and paid for.
This newly transformed financial system is then compared to the existing Bitcoin payment network and an in-depth conclusion is drawn towards the end. In the conclusion, it has been highlighted that a ‘significant transformation is emerging’ through the use of cryptocurrencies. Throughout the research, a fair warning is given out to competitors and regulators. They are advised to carefully assess how to respond to this burgeoning digital transformation.