Tech

The increasing scope for digital currencies

The central banks across the world are planning on looking for the possibilities of introducing the digital currencies as the economies move towards the digitization in many sectors. The popularity Bitcoin and other crypto currencies are receiving has created a developed interest in the central banks digital currencies (CBDCs) and it only seems to be growing in 2021. Even the year 2020 saw an upsurge in digital currency activity from the central banks worldwide. In the month of October 2020, the small nation of The Bahamas became the first country to release their first CBDC- the sand dollar. The sand dollar is a digital currency which is designed to bring more “inclusive access to regulated payments and other financial services”, and is in circulation now replicating the country’s existing dollar. Since the release , it has gained interest of MasterCard recently and Is set to collaborate with the Central Banks of the Bahamas to give people the option of instant conversion of the digital currency into the traditional Bahamian dollars which will allow them to pay for goods and services in every place, the master card is accepted on the Islands and even outside in any part of the world. The Sand dollar is surely the pride of the Bahamas, but the progress being made in the bigger economies is the actual topic of discussion. According to a survey of 65 central banks conducted by the Bank for International Settlements (BIS), 86 per cent are fetching some or the other form of work on CBDCs, with nearly 15 per cent stirring towards research for their pilot projects. Without a doubt, central banks are now discovering whether CBDCs could help them to achieve their public-good intentions, the BIS noted, including the protection of public trust in money, upholding price stability and guaranteeing safe and resilient payment systems and infrastructure. The BIS also noted that there might be an issue of the ‘retail CBDC’ or a ‘Wholesale CBDC’ which can be used to pay up for goods and services, businesses and shops or even each other and to be transferred between fin corps to manage trade and businesses in the financial markets, respectively.

China has been working on creating a digital currency since 2014 to replace their paper Yuan which is currently in circulation. Yan Xiao, project lead for digital trade at the World Economic Forum (WEF), recently told CNBC that the use of cash is declining. Eventually, cash will be substituted by something in digital format and that is one of the big drivers behind this. To support with the testing, it has already gave out millions of dollars’ worth of digital Yuan for users to pilot throughout major cities such as Shenzhen, Chengdu and Suzhou. And to observe the use of CBDCs in cross-border payments, the People’s Bank of China (PBoC) has allegedly been involved in exploration in an ongoing Hong Kong-based inventiveness called Project Inthanon-LionRock, which includes the Bank of Thailand (BoT) and Hong Kong Monetary Authority (HKMA). Japan is also changing mechanisms in its mission to roll out its CBDC. Rendering to a March 16 report by Reuters, the governor of Japan’s central bank, Haruhiko Kuroda, has suggested that plans to roll out a CBDC remain on course, and experiments will begin this spring. But while such testing looks likely to go ahead, the final launch of a digital currency is unlikely to happen this year.

CBDC will mostly be available on mobile aps shortly and be accessible, and not having to carry physical currency all the time is such a relief as it eliminates the risk of thefts and helps avoid the multiple visits to banks and ATMs.

Related Topics:Crypto currency Digital Currency Technology

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AI role in customer experience in banking

The concept of banking first sprung up around 8000 BC. Then, there came various drastic changes to expand their services and innovate their business models. Artificial Intelligence (AI) and Machine Learning (ML) are applied to help banks and financial institutions nowadays. A survey by the Economist Intelligence Unit (EIU) showed that 77% of banking executives believe that the use of AI will ultimately differentiate between winning and losing banks.

This pandemic has triggered a sudden socioeconomic shift from physical to digital. There is a rapid switch to digital channels. Recent research by YouGov was conducted in June 2021. And that revealed that digital services have become the de facto way of conducting business and access services during the pandemic. EIU’s survey showed that enhancing the user experience through better personalisation ranked first in the most valuable uses of AI.

Customer propositions are no longer fit-for-all. It involves both banking and non-banking products and services. To identify the customers’ needs the banks must take an entirely new approach to innovation. They should adopt a customer-centric view. This starts with understanding the customer needs. AI makes it much easier to analyse customer preferences. The redesigning of customer loyalty program gives banks an accurate understanding of customer. Effective personalization offers customers not only better leads but also a more unique experience. The customer experience can be improved by applying AI. Banks must also build out their capabilities to strike new partnerships.

Businesses across all industries are working hard to retain their customers, including banks. AI can become a banking institutions’ superpower. This can take the customer experience to new heights, resulting in happier and more loyal customers. It will also reduce a bank’s operating costs and enable increased revenue per customer. To become AI First, banks must focus on streamlining their technology layer. They also require a strategy to engage customers through channels owned by them and their non-banking partners. Business and technology must work hand in hand, with cross-functional teams breaking up organisational silos.

Tech

Amazon to offer insurance to UK businesses

The technology giant’s first foray into business insurance in the country, broker Superscript said that Amazon is going to start offering insurance to small and medium-sized UK business customers. Members of Amazon’s Business Prime program will be able to buy cover from superscript such as contents insurance, cyber insurance and professional indemnity insurance. Superscript spokesperson said that those would be underwritten by major UK insurers. A discount of 20% will be offered to current rates. This is to entice the businesses over to them.

50% of customers are prepared to buy insurance from non-traditional players. A recent survey of 12,000 people globally by consultants Capgemini showed this. Cameron Shearer, co-founder and CEO of Superscript, said in a statement that the insurance industry needs to bridge the divide between insurers and customers. Amazon’s move into UK business insurance comes after U.S. insurtech Next Insurance said that it was offering cover to U.S. small businesses. And that too via Amazon Business Prime. Molly Dobson, Country Manager for Amazon Business UK & Ireland, said in the statement that as the businesses come out of the pandemic, they want customers to have the best-in-class tools to run their business.

Financial institutions are worried that tech firms will steal their business. But industry sources said that the insurers and tech firms are more likely to forge partnerships. Because of the given difficulties and expense for outsiders in entering the highly regulated finance sector. Amazon also offers warranty insurance and “buy now, pay later” services in Britain.

Tech

In NFT fantasy soccer game, SoftBank leads funding

Blockchain-based fantasy soccer game Sorare has raised $680 million. This is through a funding round, which is led by SoftBank. According to the company, it includes players such as ex-England international Rio Ferdinand and Spain’s Gerard Pique. Paris-based Sorare said that the investment valued the company at $4.3 billion. Sorare is an online game, since 2018. Here players buy officially licensed cards that represents soccer players. They can build teams and play against each other. This is based on the players’ performance in real-life games.

The cards are traded in the form of non-fungible tokens (NFTs). The market for NFTs has seen major growth in 2021. Michel Combes, president of SoftBank Group International, said that they think NFTs represent a new paradigm in the collectability, usability, and engagement with assets. This evolution from physical assets to digital assets is very powerful. This also creates a lot of exciting potential business models. NonFungible.com is a website that tracks NFT market data. According to them, Sorare is the largest sports-based NFT platform by sales volume. They are planning to open an office in the United States. So that they can expand into other games out of Sorare.

Nicolas Julia, CEO and co-founder of Sorare said that they saw the immense potential that blockchain and NFTs brought to unlock a new way for football clubs, footballers, and their fans to experience a deeper connection with each other. They believe that this is a huge opportunity to create the next sports entertainment giant. Since January 2021, there have been $150 million of sales on Sorare. The fundraising round was SoftBank’s first time investing in Sorare. SoftBank’s Latin America fund also contributed. Other investors in Sorare’s raise are such as venture capital firms Accel and Bessemer Ventures, Pique, Ferdinand, Antoine Griezmann and Spain’s Cesar Azpilicueta.