So, what IS the future of… Money?

For nearly a decade, the Future of Money session at Sibos has been one of the most eagerly anticipated and keenly attended. It’s the forum where wise words have been shared and debated. It acts as a crystal ball, with top industry figures identifying and discussing the major disruptive trends likely to shape the financial services landscape and the notion of money itself. If you’re curious about what’s over the horizon, read on…

This year’s Innotribe sessions will take place in the team’s visually-striking space at the heart of the Discover Zone, where the world’s most  innovative fintech startups will be exhibiting and networking with potential banking partners. It’s a perfect setting to discuss and develop the future of the industry.

The four-day Innotribe programme is packed with thought-provoking, sometimes controversial, sessions that revolve around the concept of trust. The opening keynote will be provided by rock star physicist Professor Brian Cox, who will pave the way for a series of insightful, provocative speakers from across the fintech, big tech and academic communities. But the now-famous Future of Money session, on Wednesday 25 September at 9.45am, is the jewel in Innotribe’s crown.

London, long the centre of international currency markets and a hotbed of payments innovation, will be the welcoming host for this complex discussion. It will bring together a panel of leading industry thinkers to debate
the notion that cash will soon be redundant. Does this mean that we’ll see a proliferation of new digital currencies enter the mainstream – or will we simply continue along the path of pure digitisation, with an emphasis on mobile money and its like?

Many commentators in the financial industry believe that crypto is the future, predicting that the anticipated development of a regulatory framework will drive further innovation and spark growth. In line with the central Innotribe theme of trust, the speakers will explore how we can work together to shift crypto from a financial ‘wild West’ to a more regulated, stable and integrated place.

Exploring a third variable

One of this year’s panel is Tony Fish, Founder of AMF Ventures. He believes that the question we should start with is ‘what are the new characteristics of money?’.

“Money was, and remains, among other things, a method of exchange,” explains Fish. “If money had stayed as only a mechanism of exchange, we would not be where we are today with the economy we have and the freedoms we enjoy. Money had to, and has, become an object or an entity. An entity is a thing with a distinct and independent existence.”

He believes that, today, we have exchange and entity as the two key characteristics of money. Both are necessary. The coins in the pocket of someone crossing a desert are worthless unless they can be exchanged with someone else for water. Money requires exchange for its value to be asserted. In isolation, despite its accumulation, it has no worth.

The three new characteristics of money

According to Tony Fish, founder of AMF Ventures, money will be defined by:

1 Responsibility and accountability New money will be accountable, traceable and trackable – the counter to consumerism, throw away, disposable. We need to think sustainability. No longer can you as a person or corporate abdicate responsibility for the actions of your money.

2 Humanity The exchanges you make using money become data and data, over time, enables insights. Insights become knowledge and, from knowledge, comes wisdom. The owners of the data (eventual wisdom) will know lots about us and so will we demand that they have a duty of care to us? Knowing something about me and doing nothing will not be an option. The owners of that data will have a duty of care; new money means more humanity.

3 Programmable Money can come with terms and execution. Trust in the institutions is not necessary as the money itself becomes the code, process and execution.

“What are the other new characteristics which are divergent from the two of exchange and entity?” continues Fish. “Can money become something else? What if money has a new third characteristic which is its future?”

In academic circles, this is known as the third variable. The thinking behind the third variable is uncovering things that don’t necessarily belong together but can exert influence. Fish has identified three options for new characteristics that need to be unpacked: responsibility and accountability, humanity and programmable money (see box, p57).

The future of money is, he believes, more exchange (think Bitcoin) and more entity (think a distributed ledger technology (DLT) crypto linked to FIAT), but it’s also importantly about adding these new characteristics into the mix.

Divided demographics?

Scarlett Sieber, managing director and chief strategy and innovation officer at CCG Catalyst, will be joining Fish on the panel.

Sieber puts more emphasis on exchange than entity. She thinks that the younger generation, in particular, is moving away from viewing money as a tangible object and seeing  it as a more abstract idea that ebbs and flows as money flows in and out of their accounts. And they want advice and context around their past and future purchases.

“Cash use is certainly declining – the number of ATMs in the world decreased for the first time ever in 2018 – but it depends on the geography and users’ behaviour,” says Sieber.

“In Norway, for example, the entire country is essentially cashless, whereas in the heart of New York City, I recently ate at a ramen place that only accepted cash.”

Another panellist – Dr Leda Glyptis, chief of staff of 11:FS and CEO of 11:FS Foundry – has a similar view.

“I’m a big believer that we will be seeing cash less and less in the future, with wearables, mobile and contactless payments, and digital cash, taking centre stage,” she says. “This is hardly a prediction, it’s already a global trend with infrastructure being developed and refined to support real-time global payments, clearance and settlement – crossborder and calendar-defying. The main drivers are regulatory frameworks, ease of use and traceability and we will see more and more innovation in this space as the art of the possible is taking hold.

“In general, younger customers favour cards and mobile for payments,” adds Sieber.  “Whatever currency is easily accessible via mobile devices will be the one that many will choose. Outside of that, cash will always have a use for purchases where privacy is at a premium. We see this in the US with the quasi-legal status of cannabis as an example. Consumers are wary of using cards for the purchase of something that’s legal in one jurisdiction but illegal in another. And many disenfranchised consumers are forced to use cash because they are paid that way, and may lack accounts to safely store their funds and access it in another form.”

The role of crypto

When it comes to crypto, Sieber thinks it’s early days in terms of mainstream use.

“Interest in cryptocurrency closely follows the fortunes of Bitcoin. Right now, Bitcoin is up from where it has been for several years, so interest is high. But crypto is viewed as an investment, and is still complex to use at the point of sale, as well as risky – Bitcoin may experience a price jump, so the cost of your coffee could triple overnight!”

She points out that banks are still slow to embrace cryptocurrency because its legal and regulatory status is less than certain. That said, investors are on board, and interest in crypto continues to broaden in the general population. So, banks will eventually follow, once there is more regulatory certainty around it.

Glyptis also plays down the role of crypto in the short term:  “Although I don’t think it will go away, I do expect to see digital cash becoming more prevalent than crypto as we move forward.”

She sees London as the ideal place to discuss this future.  “The fact that we are in London this year will undeniably have an impact on the energy in the room,” she says. “Not only is London the home turf of most of the incumbents attending Sibos, but it’s the global capital of fintech. It’s not just the level of creativity and innovation that calls London home, but also the fact that London’s ecosystem has achieved a higher degree of maturity by virtue of having been going longer. The learnings and insights should be valuable for the entire community.”

The arrival of CBDCs

This year’s Future of Money session will be moderated by James Lloyd, partner and Asia Pacific fintech and payments leader at EY (Ernst & Young). He’s also excited by the prospect of Sibos’ debut in London.

“If anything, I expect our session to be even more popular this year!” says Lloyd. “As perhaps the leading global financial services and fintech hub, London is the perfect location to consider not just the future of money, but also its changing nature.

“A recent speech by the governor of the Bank of England, for example, in which he suggested that a new ‘synthetic hegemonic currency’ could conceivably emerge to ‘dampen the domineering influence of the US dollar on global trade’, has brought to the fore one of the most intriguing developments in this space – the emergence of central bank digital currencies (CBDCs).”

Lloyd agrees that the penetration of cash is declining globally, and expects this trend to continue. He thinks that what will replace it will differ from market to market – from mobile wallets to bank-to-bank transfers, to cryptocurrencies.

“While customer demand will help shape outcomes, so too will the supply side,” he explains. “In particular, the changing regulatory landscape. Consider, as an example, the pushback we’ve seen following just the announcement of the digital currency proposed by a certain social media company.”

As with many areas of fintech, Lloyd believes that China is the most advanced when it comes to developing crypto for the masses, with the People’s Bank of China suggesting that its own CBDC is nearing deployment and may replace cash.

“No matter which way this goes, expect to hear more about the seemingly inevitable rise of CBDCs,” adds Lloyd. “The future of money is nearly here – but are we ready?”

The Future of Money line up

Tony Fish, Founder, AMF Ventures Fish is a seasoned executive director with more than 25 years of experience in investment, innovation and high growth businesses. His professional life has cut across a diverse range of sectors, including venture capital, health, finance, digital fabrication, media, mobile, sport and education. His attention is currently focussed on AI, voice, ethics, DLT and cryptocurrency.  He has founded, cofounded, sold and listed many businesses but remains passionate about highly disruptive technology that has the capability to scale fast and is at an early stage. A visiting lecturer and speaker on innovation, entrepreneurship, digital trends and early-stage growth, he has authored and published three books.

Scarlett Sieber, Managing Director & Chief Strategy and Innovation Officer, CCG Catalyst Sieber is a respected leader, driving organisational change at startups and global enterprises alike. She is currently MD and chief strategy and innovation officer at the consultancy CCG Catalyst, where she advises financial institutions and fintechs on next-generation financial services. She is also a senior advisor for NASA’s Cross Industry Innovation Summit. Previously, Sieber was a vice president at USAA where she led the newly-created business development initiative. Prior to that, she was chief innovation officer for Opus Bank, where she led the digital strategy and transformation for Opus and its trust subsidiary, Pensco. She was a chief operating officer and co-founder of data visualisation tech startup, Infomous, whose clients include The London Olympics, Super Bowl
XLVII, NFL Films, The Economist, The Guardian and USA TODAY.

Dr Leda Glyptis, Chief of Staff at 11:FS and CEO 11:FS Foundry Glyptis is responsible for the 11:FS revenue-generating businesses and leading the growth of Foundry, the firm’s modular core banking offering. She describes herself as a recovering banker, with a long career in operations and IT across major banks, products and geographies. She is a renowned speaker, writer and academic in banking and fintech, and an expert in digital disruption, strategy and execution in financial technology.

Michael Moon, Managing Director for Payments, Trade and Communications, Asia Pacific, SWIFT Moon joined SWIFT’s Singapore office in 2012 and leads its payments, trade and communications functions in Asia Pacific. He partners with the payments and banking industry to deliver next-generation payment and settlement solutions. Moon manages SWIFT’s strategic initiatives in Asia Pacific, many of which are reshaping the payments landscape globally. These include SWIFT gpi for crossborder payments and SWIFT’s instant payment system solutions in Asia Pacific (including the New Payments Platform in Australia for domestic real-time payments). He joined SWIFT from American Express, where he led group strategy and business development for its network, merchant and B2B businesses in Asia Pacific.

James Lloyd, Partner and Asia Pacific Fintech & PaymentsLeader, EY (moderator) James is a partner at EY, specialising in strategy and transaction advisory. He leads the firm’s dedicated fintech capability across Asia Pacific, with a particular focus on growth-stage and non-traditional financial services. He is also APAC leader of the firm’s payments practice. Prior to EY, James helped build and scale a venture-backed alternative-finance platform enabling banks to profitably offer short-term unsecured loans to underserved small businesses. Before that, he supported a bootstrapped ecommerce payment gateway in combining direct-to-market customer acquisition with white-labelled full-service delivery for partner banks. Based in Hong Kong, James sits on a variety of governmental advisory panels and is regularly quoted in local and international media.


This article was published in The Fintech Finance Magazine: Issue #13, Page 54 & 55.

Author: Yash Hirani

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