Change must be made sensibly to avoid irreversible damage caused by biased and irresponsible technological advancement.
Across the globe, rapid technological change is transforming the world in which we live. A major challenge for consumers, businesses, and governments alike is the significant innovation taking place in the payment’s ecosystem. As consumers swap cash for cards, the usage of contactless payment devices, including smartphones and smartwatches, proliferates. In the future, it is possible that emerging technologies such as Blockchain, Big Data, and Artificial Intelligence will be fully integrated into the industry. Such a shift offers perceived and subjective benefits for consumers, including greater convenience and security, while enabling financial institutions to profit. But for all the convenience that digital banking and digital payments bring, does the transition to a cashless world have major ramifications for the most underserved segments of society?
As financial institutions all over the world shut down cash machines and close physical branches, it is clear that they are trying to push consumers towards digital Payments and digital banking infrastructure. Just as Google wants consumers to access and navigate the broader internet via its privately controlled search portal, it can be argued that financial institutions want consumers to access and navigate the broader economy through their systems. What must be questioned, however, is the authenticity and motivation behind this fundamental change in distribution channels. Are financial institutions seeking to maximize profit through efficient use of technology, or are they responding to changing consumer preferences in an increasingly digital age?
Are We Being Nudged?
In behavioral economics, the concept of 'nudging' refers to the process of a powerful institution encouraging consumers to choose a certain option by making the alternatives difficult to choose. Can it be argued that financial institutions are nudging us towards digital banking infrastructure? As financial institutions increasingly limit access to physical money, while simultaneously promoting the use of online channels, do consumers shift their consumption patterns in light of the enhanced utility provided by digitalization, or as a result of the increasing scarcity of physical banking infrastructure that makes traditional banking procedures increasingly more inconvenient?
The concept of interpellation by Louis Althusser argues that human behavior and consumption patterns are a manifestation of a multitude of ideologies that an individual is exposed to and that humans 'accept' these ideologies because they are 'encouraged' to do so. Presuming that the general consensus within society is that digital banking is more convenient and that cash is simply too inconvenient, one cannot discount the fact that this may be the case simply because financial institutions advertise cash in a particular way, with the outcome being a reverse-engineered belief within society. Twenty years ago, the idea of cash being too inconvenient would have been dismissed immediately. Therefore, is digital banking actually more beneficial?
Digital banking systems may be 'convenient,' but there is little doubt that they often fail, with the consequences of a failure being significant. On June 1, 2018, shoppers in the United Kingdom were left stranded, unable to make purchases with their Visa cards. The outage, which lasted for several hours, caused significant disruption and exemplified the problems of monopolized reliance on digital infrastructure. In another example, TSB, a leading British retail and commercial bank, recently faced scrutiny for its mishandling of the migration of its digital infrastructure, that left thousands of customers unable to access their online and mobile banking accounts for up to five days. According to the Financial Conduct Authority, financial institutions in the United Kingdom have reported a 138 percent increase in technology outages and an 18 percent increase in “cyber incidents” this year to date.
Cash Does Not Crash
A cashless society brings dangers. Those without digital banking services or unable to access credit will find themselves further marginalized; disenfranchised from the cash infrastructure that previously supported them. Is it, therefore, possible that gentrification through cash exclusion ultimately drives out the bottom of the pyramid, minorities, or people with poor credit scores? And for those that are able to participate, do current financial products and institutions account for the poorly understood psychological implications regarding self-control that are inevitable when intangible money is so easily accessible? Cash does not crash. Its existence is not reliant on computer infrastructure. Cash is less able to be 'controlled' by financial institutions, and it provides more anonymity to consumers. Is digital infrastructure really more convenient and secure?
As transactions move online, the amount of data available about one’s finances and purchasing habits increases. Does the current digital infrastructure have appropriate safeguards to protect against data breaches? Using cold storage for cryptocurrencies as an example, is it not paradoxical that the safest form of digital currency is the digital currency whose existence is offline? Does the current digital infrastructure balance privacy with commercial and public concerns? Does current legislation appropriately allocate liability between individuals, financial institutions, and governments?
In recent years, the world has seen an alignment between governments and financial institutions. Governments often argue the negative elements of cash – associating it with crime and tax evasion – and while this is not incorrect, they fail to acknowledge the negative implications of digital payments. Ultimately, in a world where the needs of market segments differ significantly, and each distribution channel from a banking perspective offers numerous advantages and disadvantages, is it wise to shift towards cashless economies without fully addressing the implications and ensuring inclusion for all parties within the economy?
Ultimately, it is inevitable that the nature of economies and banking within those economies will shift over time, and that the right innovation is essential in order to ensure progression within the industry. However, it is imperative that change is made sensibly, in order to avoid irreversible damage caused by biased and irresponsible technological advancement.
Nir Netzer is the Founding Partner of Equitech Financial Consulting and Co-Founder of the FinTech-Aviv community.
Across the globe, rapid technological change is transforming the world in which we live. A major challenge for consumers, businesses, and governments alike is the significant innovation taking place in the payment’s ecosystem. As consumers swap cash for cards, the usage of contactless payment devices, including smartphones and smartwatches, proliferates. In the future, it is possible that emerging technologies such as Blockchain, Big Data, and Artificial Intelligence will be fully integrated into the industry. Such a shift offers perceived and subjective benefits for consumers, including greater convenience and security, while enabling financial institutions to profit. But for all the convenience that digital banking and digital payments bring, does the transition to a cashless world have major ramifications for the most underserved segments of society?
As financial institutions all over the world shut down cash machines and close physical branches, it is clear that they are trying to push consumers towards digital Payments and digital banking infrastructure. Just as Google wants consumers to access and navigate the broader internet via its privately controlled search portal, it can be argued that financial institutions want consumers to access and navigate the broader economy through their systems. What must be questioned, however, is the authenticity and motivation behind this fundamental change in distribution channels. Are financial institutions seeking to maximize profit through efficient use of technology, or are they responding to changing consumer preferences in an increasingly digital age?
Are We Being Nudged?
In behavioral economics, the concept of 'nudging' refers to the process of a powerful institution encouraging consumers to choose a certain option by making the alternatives difficult to choose. Can it be argued that financial institutions are nudging us towards digital banking infrastructure? As financial institutions increasingly limit access to physical money, while simultaneously promoting the use of online channels, do consumers shift their consumption patterns in light of the enhanced utility provided by digitalization, or as a result of the increasing scarcity of physical banking infrastructure that makes traditional banking procedures increasingly more inconvenient?
The concept of interpellation by Louis Althusser argues that human behavior and consumption patterns are a manifestation of a multitude of ideologies that an individual is exposed to and that humans 'accept' these ideologies because they are 'encouraged' to do so. Presuming that the general consensus within society is that digital banking is more convenient and that cash is simply too inconvenient, one cannot discount the fact that this may be the case simply because financial institutions advertise cash in a particular way, with the outcome being a reverse-engineered belief within society. Twenty years ago, the idea of cash being too inconvenient would have been dismissed immediately. Therefore, is digital banking actually more beneficial?
Digital banking systems may be 'convenient,' but there is little doubt that they often fail, with the consequences of a failure being significant. On June 1, 2018, shoppers in the United Kingdom were left stranded, unable to make purchases with their Visa cards. The outage, which lasted for several hours, caused significant disruption and exemplified the problems of monopolized reliance on digital infrastructure. In another example, TSB, a leading British retail and commercial bank, recently faced scrutiny for its mishandling of the migration of its digital infrastructure, that left thousands of customers unable to access their online and mobile banking accounts for up to five days. According to the Financial Conduct Authority, financial institutions in the United Kingdom have reported a 138 percent increase in technology outages and an 18 percent increase in “cyber incidents” this year to date.
Cash Does Not Crash
A cashless society brings dangers. Those without digital banking services or unable to access credit will find themselves further marginalized; disenfranchised from the cash infrastructure that previously supported them. Is it, therefore, possible that gentrification through cash exclusion ultimately drives out the bottom of the pyramid, minorities, or people with poor credit scores? And for those that are able to participate, do current financial products and institutions account for the poorly understood psychological implications regarding self-control that are inevitable when intangible money is so easily accessible? Cash does not crash. Its existence is not reliant on computer infrastructure. Cash is less able to be 'controlled' by financial institutions, and it provides more anonymity to consumers. Is digital infrastructure really more convenient and secure?
As transactions move online, the amount of data available about one’s finances and purchasing habits increases. Does the current digital infrastructure have appropriate safeguards to protect against data breaches? Using cold storage for cryptocurrencies as an example, is it not paradoxical that the safest form of digital currency is the digital currency whose existence is offline? Does the current digital infrastructure balance privacy with commercial and public concerns? Does current legislation appropriately allocate liability between individuals, financial institutions, and governments?
In recent years, the world has seen an alignment between governments and financial institutions. Governments often argue the negative elements of cash – associating it with crime and tax evasion – and while this is not incorrect, they fail to acknowledge the negative implications of digital payments. Ultimately, in a world where the needs of market segments differ significantly, and each distribution channel from a banking perspective offers numerous advantages and disadvantages, is it wise to shift towards cashless economies without fully addressing the implications and ensuring inclusion for all parties within the economy?
Ultimately, it is inevitable that the nature of economies and banking within those economies will shift over time, and that the right innovation is essential in order to ensure progression within the industry. However, it is imperative that change is made sensibly, in order to avoid irreversible damage caused by biased and irresponsible technological advancement.
Nir Netzer is the Founding Partner of Equitech Financial Consulting and Co-Founder of the FinTech-Aviv community.
FinTech Innovation Strategist, FinTech Transformation Advisor and a keen leader of the Israeli FinTech ecosystem. Nir is an expert Strategic and Financial Consultant, advising FinTech companies, global financial institutions, institutional and private investors, regulators and governmental entities on FinTech aspects and digital transformation processes. Nir is a seasoned manager and speaker, frequently curating and hosting FinTech events, moderating professional panel discussions and delivering keynote performances in local and global FinTech Summits as well as serving as a desired FinTech lecturer in several Israeli Academic institutions.
Nir is a certified CPA, holds a B.A in Accounting and in Law as well as an MBA Specializing in Financing and Financial Management.
Unlimit Jumps into Indian Payments Arena, Clinches RBI Approval
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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