In a pervasively electronic world, the flow of money can interconnect cities, energize economies and galvanize communities. As online, mobile and network advances continue to rapidly integrate digital money into our socioeconomic fabric, we are presented with attractive opportunities to open digital commerce to one and all. But how ready are we? Sandeep Dave Tomasz Smilowicz GETTING READY FOR DIGITAL MONEY: A ROADMAP Ashwin Shirvaikar, CFA Llewellyn D W Thomas Greg Baxter Antoine Vernet January 2014
33
Embed
GettInG ReAdy foR dIGItAl Money: A RoAdMAp · suitability for you of any transaction, series of transactions or trading strategy. The Firm is not acting as your advisor, fiduciary
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
In a pervasively electronic world, the flow of money can interconnect cities, energize economies and galvanize communities. As online, mobile and network advances continue to rapidly integrate digital money into our socioeconomic fabric, we are presented with attractive opportunities to open digital commerce to one and all. But how ready are we?
The adoption of digital money can have tangible benefi ts for government, business and consumer. Doing nothing simply means allowing the system to develop dysfunctionally and delaying the tremendous socioeconomic benefi ts that adoption can bring.
$100Bn
$600Bn
$200Bn
$700Bn
$300Bn
$800Bn
$400Bn
$900Bn
$500Bn
$1Tn
Reduction in the informal economy 1
Estimated increase in tax collections 1
* Based on an average 10% increase in digital money readiness score and commensurate increase in adoption.1 Based on regression against GNI across 90 countries, which is estimated to be $81Tn (source: World Bank, 2012).2 Size of deposits and loans estimated using average savings and loan sizes in microfi nance; average MF deposit across 90 countries: $620; average MF loan value across 90 countries: $2,500 (source: MixMarket).3 Based on regression against 15+ population across 90 countries, estimated to be 4.6Bn (source: Global Findex database, World Bank, 2012). 4 Average loan rate for informal sector: 41%; average loan rate for formal sector: 8% (source: World Bank); cost of fi nancing estimated assuming 60% reduction in loan rate on moving to formal FI sector.5 Interest from savings computed using average savings rate (4.45%, source: World Bank) and assuming that current savings outside formal FI does not attract any interest.
Benefi ts to Government* Benefi ts to Consumer*Benefi ts to Business*
$10Bn
$60Bn
$20Bn
$70Bn
$30Bn
$80Bn
$40Bn
$50Bn
Associated increase in deposits 2
Associated increase in loans 2
$10055 million $10
$20
$30
$200110 million
$300165 million
$400220 million
$500
$600
Lower annual cost of fi nancing per individual 4
Number of individuals likely to enter the formal fi nancial sectorl 3
Additional interest from savings per individual 5
What factors affect the outcome of a digital money initiative?
Source: Citi-Imperial Digital Money Readiness Index.