Stepping into the future of money

But what should you do next?

Below we set out eight recommendations for your consideration:

• First, we should all prepare for significant change. In each of the scenarios posited, we outline near-term material shifts that demand urgent consideration. Substantial disruption is definitely possible, if not probable, and assessing your readiness for change is a good place to start.
• Next, given the technological and human-focused transformation likely to accompany the future of money, it would be wise to review your investments in skills and infrastructure – especially in areas such as cloud, analytics, artificial intelligence (AI) and Software-as-a-Service (SaaS) delivery – to get a better sense of your preparedness for change. Part of the challenge will be to invest for sustainability as well as business development, so having a view on the energy intensity of your available options, as well as your ability to measure their impact, will be important. In addition, tailor the scope and scale of infrastructure investment to the size and nature of your business operations. Smaller enterprises, for example, might wish to outsource complex blockchain-related processes to specialist suppliers rather than bringing them in-house. And, beneath the surface layer, there will be myriad options and choices to be made, all of which will determine your readiness for the future of money.
• Keeping abreast of innovations, particularly in distributed ledger technology (DLT) and web3 is good practice, as is maintaining your awareness of the changing regulatory environment and developments at relevant monetary authorities. It can also be highly valuable to contribute to policymaking and the wider debate through consultations and other appropriate channels. Seize these opportunities to interact and incorporate what you’ve learned into your strategy.
• At the same time, don’t forget to prioritise regulatory compliance, data security, privacy, identification and verification. As the change needed to deliver the future of money arrives, maintaining full compliance may feel like trying to hit a moving target. It is essential therefore to review your processes regularly and ensure they remain fit for purpose as the nature of the value you lend, store and manage on behalf of customers evolves.
• It is also essential to develop the capabilities of your employees, including managers, executives and non-executive directors. It may be necessary to promote younger staff more quickly and broaden access to advisors. Doing so can ensure that awareness and understanding at the highest levels of your organisation keep pace with the rate of change.
• Take a view on when and how digital assets – and smart contracts in particular – might impact your supply chains, as well as those in retail and other consumer markets. How might this present challenges and opportunities for you and your suppliers, and how might wider change alter the demands of your customers? And, for financial services firms, ensure you consider any potential balance sheet implications closely.
• As you begin to plan and effect change, monitor the impact that innovation is having internally, as well as on your customers and competitors. Recognised tools such as return on investment (ROI) modelling will be useful, though it may also be necessary to review the utility both of the metrics reported and the analytical models employed to ensure they remain fit for purpose.
• Finally, invest in systems that are flexible and will support adaptation down the line. In the face of an uncertain future, it is always best not to limit your options.
   

Many of these recommendations will be familiar to those already engaged in the transition to digital payments. As we have indicated elsewhere, we have not tried to predict the future with absolute accuracy, but these suggestions could address many of the impacts we can see from our vantage point here in 2023.

Uncertainties remain though – those we can see now, and those we cannot – and the future of money will be shaped in part by forces that we are not yet able to comprehend. It would be rather like trying to forecast the internet revolution in the mid-1980s. Most of us would have been completely unaware of the work being done by visionaries like Sir Tim Berners-Lee at the time, not realising that, just around the corner, was a scale of change that would, in only a few years, revolutionise every facet of human life. Trying to describe with confidence what the financial landscape will look like in 20 years therefore presents a similar challenge.

Our purpose with this series has been to provide clarity about the things we know today, to highlight areas of uncertainty that will influence the future, and to provide a robust base from which to explore the scenarios we have provided. Each describes a plausible future of money and its associated implications, and each adds context to this overarching framework of ideas.

Deloitte’s FutureMoney project is an invitation for us to work together to devise strategies, plan investments and position you, your businesses and your stakeholders for what is to come. We hope you will use our scenarios as well as your own expertise and experiences to think about what your own future of money might be.