Trust has always been a major factor throughout the development of finance. In using a currency, traders put trust in its liquidity and guaranteed value. In using a payment system, merchants trust that as long as they are paying gatekeeping fees to a central authority, they can have an insurance against fraudsters. Read More
In a previous post we discussed the plausibility and benefits of a government-backed digital currency, particularly one based on the cryptocurrency model. We found that while the available technologies and protocols are highly promising, central banks still need to overcome some big hurdles before they could truly roll out the concept. On one side, such system will need to prove its efficacy in terms of performance to businesses and banks. On the other side, it also needs to show consumer-level users how it would be more secure and convenient to use in everyday transactions than current forms of money.
– It is undeniable: in this information age, cash is becoming more and more unfavorable to regulators. Indeed its alternative – the digital currency – has all the advantages that regulators want: real time settlement, little transaction cost, absence of counterfeit money and reliable traceability (which renders tax evasion and money laundering near impossible). However, a lack of suitable and practical technology has been holding central banks back from realising these benefits, and for the most part of the decade we have only seen private application of the digital currencies. It was not until the rise of the cryptocurrency (a subset of digital currency) that central banks really started to consider adopting an official government-backed digital currency – one that utilise the innovative model of distributed ledger
In our most recent post we discussed the disruptive nature of new technologies to the financial service landscape. This week let’s take a closer look at one of the most lucrative segments in the business: payments.
Payment has always been an integral part of a successful business, be it the local coffee shop or a continental air carrier. As more and more transactions move to mobile devices, so do payment systems. But is payment a process due for major upgrades? And which system(s) would be dominating the field?
We have previously blogged about the effect of disruptive technologies on the banking industry. As we speak there is an ongoing battle to determine the future of banking as an industry. Today’s news is densely populated with comments about company’s developing mobile payment solutions and alternative methods to borrowing money. Speculation has arisen as to how companies like the tech giant Alibaba might cooperate or even challenge financial institutions. FinTech startups are getting ever increasing funding and support in the UK. With the introduction of new technologies, it would appear as if the race to find the next financial success story has begun. However a question arises: does this highly competitive market reflect the future of banking? Read More
Perhaps this is a mad idea, but I see the decision on cloud like the decision on buying a coffee machine for the office. It is a basic management decision, pros versus cons, investment versus benefit, running cost versus opportunity. Lets use this as a simple example to see how cloud compares to coffee as a service (CaaS if you will).
The other week I was considering if we should get a machine for the office. Lets face it, with the sophistication of the machines available, you can easily invest a four figure sum in a great coffee maker to match the quality of the coffee from one of the big chains. Now add supplies for a year for the whole team. This includes not just the cost of great coffee, milk etc., but all those hidden extras like cups, filters; not forgetting extra work for the cleaner or one of the staff to clean it all; then potential service costs and spares…
In my last post I hinted at the dilemma of who covers the costs for a cloud project. There would appear to be few issues and some major advantages to scaling out to the Public Cloud, as you can pay as you go or pay for what you use. But is this really the case? The problem with transitions to any shared platform is that nasty subject of who pays. Typically organisations will allocate shared service costs with an allocation key for the costs to various groups using the shared service. This allocation key will determine how much each person pays. It is obvious that as the shared service grows the unit price will trend downwards and will eventually level to a free market unit price but the first or last user may for an interim period pay much higher prices. This “first man in” or “last man out” problem causes all sorts of grief for projects in the real world, not only for cloud but for many wider IT projects.
There is a lot of discussion in the big companies out there of the benefits of creating their own private clouds using their own server farms; whether it is worthwhile versus the full move to use external shared Public Cloud environments. Of course, SMEs don’t have this dilemma: they do not own as much hardware, generally do not have the internal expertise to even consider a private version, and so just use externally available services with no other option. Cheaper, more scalable, more efficient – let us watch some of the leading medium-sized firms leverage the technology to jump ahead of their bigger, less nimble peers.
Over recent years we have seen a number of trends among large corporations trying to get clarity on their real IT costs and squeeze efficiency from their resources. It is interesting to compare some of the approaches, and how they restrict the value that can be gained.
Some companies tried to ring-fence their IT by creating a management services company, forcing financial rigour on the supply of services. Great idea… or was it? Clearly there were some benefits from the transparency on what was being purchased (at least in theory), but there were also management overheads and investments needed to gain this rigour; it is unclear whether or not these were ever compensated for in efficient savings.
Those that know me well would be surprised to find me preaching about the cloud. However, I am not an evangelist. For me, it is clear that the cloud is not just a trend, but a fundamental shift in the way IT is provided that no business can ignore. So I genuinely believe that every business (however large or small) should be facing up to the challenges it brings.
To do this they should be making carefully considered judgements and rational decisions on what to do and when to do it: setting their strategy and planning for adoption.