Dear Mr. Taeed, could you please introduce yourself to our readers?
I am Director of the leading not-for-profit think tank on the movement of value (measurement, transaction, delivery) at the Centre for Citizenship, Enterprise and Governance with 200,000 members worldwide. I was the world’s first professor in blockchain based at Birmingham City University in the UK, and currently sit on the Chinese Ministry of Commerce ‘China E-Commerce Blockchain Committee’ with oversight of 70% of the $103 trillion global market. I am Chief Editor of Frontiers in Blockchain, the international peer reviewed academic journal with 514 editors.
In your opinion, which are the main trends that shape the fintech and the digital banking industries nowadays?
The major trend is the replacement of money as the currency of the world with data, sentiment and ideology. Tracking these have become more powerful than tracking cash, and leading to greater value, hence the success of Facebook, Amazon, Google, Apple, etc. Overlay this with the rise of Fourth Industrial Revolution (4IR) technologies of DLT, AI, IoT and 5G which are revolutionizing fintech and digital banking industries. The blending of these 4 resources make for a sophisticated future overcoming barriers impossible to navigate without them.
How do you think does Covid-19 influence them?
C19 altered the landscape on 2 levels. Practically digital payments including cryptocurrency (bitcoin), touch cards, mobile peer to peer, etc enjoyed a resurgence as handling cash became difficult. Bitcoin went from c. $3500 in 2019 to it’s current $66,000. More importantly, however, our health, our supply chains, our travel, our work patterns, etc … ie. non-financial value superseded our financial value. Of course this has always been the case but it’s the first time that as a society we have recognized it. We also saw cross overs between our value and our values which will impact banking irreversibly; in fact banking had almost no play or contribution during the pandemic which was a contrast to the 2008 global crisis which was banking led.
Which are the essential innovations, related to fintech and digital banking?
There are 2 major areas of innovation. Areas like open banking have nudged us towards innovation but not been instrumental to change. The first major innovation is tokenization of assets which is gaining mainstream adoption. Some 82% of central banks are now working on country digital currencies with China having released their own. More recently bitcoin ETF adoption in US has allowed the price to surge to an all time high. Stable coins, Defi, NFT, etc are all receiving public media attention and become part of Fintech lexicon. The second innovation is the arbitrage of financial hard tangible assets alongside with non-financial soft intangible assets through a common DLT platform. This allows, for example, financial transactions based on achieving a certain set of values – something unheard of before and which ESG, impact investing, etc failed to deliver on.
How do you think will fintech industry and digital banking evolve in the next few years?
Value based fintech and digital banking peaked at the 2008 banking crisis and since then the sector has struggled to come up with a new paradigm losing direction and respect as society considered the industry to be based on a lost set of values. The future points to the amalgamation of value and values where they co-exist alongside each other and integrated with common platforms. This underlies many projects we lead on including a bank where you can bank valuable assets like money, diamonds, gold, land …. as well as love, happiness, kindness, goodwill … which also are valuable assets. Similarly our latest fintech project for the disabled community that represents 20% of the world’s population – Purple with Purpose. Values based and ideological fintech represents the new frontier in data currency and transaction.