The last few decades have seen global finance completely revolutionised by digital technology. Wealth, increasingly, is transferred not using physical assets, like gold, but in the form of zeros and ones, stored electronically.
International money transfers have been made much faster, safer, and cheaper as a result of this transition. But what further technological progress might the future have in store? Let’s take a look at some key things to consider.
Blockchain: Revolutionising Cross-Border Transactions
A blockchain is basically a form of distributed digital ledger. A transaction that takes place on the chain can be seen and verified by a large group of people, which makes it extremely difficult to tamper with. This has been the basis of cryptocurrencies like Bitcoin – but it’s also a way to build trust when making traditional cross-border payments.
Artificial Intelligence: Enhancing Security and Efficiency
Fraud can be a difficult thing to spot. Sometimes, it’s difficult to define exactly what patterns of transactions are fraudulent and which are not.
This is something that modern machine-learning algorithms can address. Having been trained on a vast corpus of fraudulent and non-fraudulent transactions, fraud-detecting AI is capable of raising red flags for human agents to investigate. This means that payment processes can be made more secure, more quickly. The end result is less waiting around for the end user.
Digital Wallets: Facilitating Instant Global Payments
A digital wallet is a way to store many different kinds of assets, including currencies, in a form that can be instantly transferred from one country to the next. This can be especially useful if money needs to be sent abroad as a remittance, to support family members in a different country.
For those dealing with many different territories, and dealing in many different currencies, global payment solutions can be hugely useful. They can lower the cost of sending and receiving money internationally, which means that lower amounts can be dealt with.
Central Bank Digital Currencies (CBDCs): Shaping the Future of Money
Many central banks, including the Bank of England, are looking at issuing their own forms of digital currency, as an alternative to traditional, printed money. This would lead to greater efficiency, as there would not need to be a process for converting traditional currency into a digital form – it could simply exist solely as numbers, stored on computer storage drives!
