The Banking Executive Magazine - July 2024 Issue

Introducing the Finternet In the wake of unprecedented ad- vancements in communication tech- nologies, the financial services sector stands on the brink of an era defined by efficiency and inclusivity. The evolution of the internet and smart- phones has redefined the global communications landscape, and now, the financial industry must adapt to maintain pace with these developments. This adaptation in- volves conceptualizing a future where financial transactions are as simple and intuitive as sending a text message or booking a hotel online. THE NEED FOR A SEAMLESS FINANCIAL NETWORK Today’s financial systems operate in a fragmented landscape, often bogged down by outdated processes that hinder efficiency and accessibil- ity. The concept of the 'Finternet'—a sophisticated, interconnected net- work akin to the internet—promises a change in how we think about and manage financial interactions. This network would not only streamline existing operations but also extend fi- nancial services to underserved pop- ulations, particularly in emerging and developing economies where access to such services remains lim- ited. TECHNOLOGY AT THE FOREFRONT With mobile devices now possessing more computing power than ever, the potential to leverage these tech- nologies in financial services is im- mense. The vision for the Finternet is to create a global ecosystem where financial assets can be transferred swiftly, securely, and at minimal cost. Whether it involves small daily trans- actions or large-scale business deals, the Finternet aims to facilitate finan- cial activity that is bound by neither geographical nor monetary con- straints. Innovations such as tokenization and programmable ledgers are at the heart of this new system. Tokeniza- tion allows for a digital representa- tion of assets, making it possible to secure and uniquely identify owner- ship and the rules applicable to those assets. Programmable ledgers, on the ISSUE 187 JULY 2024 the BANKING EXECUTIVE 35