In a cashless economy, it is easier to track the black money and illegal transactions.

Another advantage
of cashless economy is that since all transactions will be done through organized channel that is through
banks and financial institutions it results in increase in tax revenue.

However, it is very difficult to implement cashless economy in the country where many sections of the
society are illiterate and poor. Digital transactions also involve some transaction fees which is not the
case with cash transactions. Another major disadvantage of cashless economy is the privacy concern.

Interest rates fluctuate mostly as a result of things that central bank does to keep our economy stable.
Fluctuation in interest rates has direct impact on inflation and unemployment. Decrease in interest rates
increase consumer spending which results in more employment. Central bank also increases interest
rate to slow down the economy when inflation is high.

https://www.youtube.com/watch?v=lBYt8Axmt8I

Like a casino, the market at times can be filled with speculators placing their bets
on what they think will happen in the future. This typically occurs during market
extremes when either negative or positive momentum takes hold of a particular
commodity, currency or stock.

Before placing your bet perhaps it is worth asking what happens if any of these
outcomes fail to materialize. Hedging your investments by taking the other side,
as a commercial trader would, might be the best bet of all during such market
extremes.
http://business.financialpost.com/investing/how-to-avoid-getting-sucked-in-by-soaring-market-
speculation

There are a number of ways we can control speculation, or at least keep it within bounds that
might diminish its harm. Perhaps first among these is tax reform. Establishing a punitive capital
gains tax regime for flipping an asset too quickly and something approaching tax relief for
longer-term holdings, ideally on a sliding scale, would go a long way toward eliminating non-
economic “investments.”

http://theconversation.com/financial-speculation-the-good-the-bad-and-the-parasitic-33613

http://www.theaustralian.com.au/business/business-spectator/financial-speculation-the-good-the-bad-
and-the-parasitic/news-story/9e9bf627002341a9939acb19b5c63fee
Several leading experts point out that the current monetary system is bound to
undergo significant changes in the years to come because it is
compromised by issues such as inflation, the illicit economy and
counterfeiting.

The indication is that traditional banknotes, currencies and transactions will

one day disappear. It is merely a matter of time, because it is not supported
by the younger generations. Currencies and physical money will die out
together with their current fan base.
https://www.weforum.org/agenda/2015/11/what-is-the-future-of-money/

Dealing with environmental risks must be high on the agenda in the financial
sector. But many banks and institutional investors have yet to develop the
capacity to identify and quantify the credit and market risks that will arise
when environmental aspects are factored into the valuation of their assets.
Financial institutions must recognize the upcoming transition to a low-carbon economy as a
promising long-term business opportunity. Given the fact that many banks are desperately
searching for new business opportunities, experts are convinced that it will be worthwhile for
management boards to put more effort into exploring green finance.

https://www.weforum.org/agenda/2017/07/green-finance-risk-and-opportunity

Wage theft is directly related to the ways in which industries and companies are
structured. Industries that are characterized by strong downward price pressures and
insufficient resources are also highly susceptible to wage theft. But where government
and unions lack resources to tackle wage theft and exploitation, certification programs
can create commercial reasons for companies to do the right thing.

Creating an incentive for lead businesses to participate is the key, as they hold sway over the rest
of the supply chain through their purchasing power. This, combined with regulatory
enforcement and trade union campaigns provides a comprehensive approach to the problem of
exploitation and wage theft, with the potential to generate change on the scale required.

https://theconversation.com/how-to-stop-businesses-stealing-from-their-employees-83363
Institutional investors have a pivotal role to play in the global fight against corruption. Through
their investment policies, they help set corporate standards, create incentives for businesses
and influence the market valuation of companies. Responsible investing means not only green
investing; it means investing in ways that do not reward fraud, bribery and other underhand
practices.

There are three promising financial mechanisms that can change the incentives of firms,
especially those operating in developing countries. First, credit agencies need to integrate
corruption as a core determinant of sovereign risk. Second, philanthropic foundations need to
make corruption a key concern of their investment policies. Third, sovereign wealth funds need
to integrate corruption risk in their investment strategies, too.

https://www.weforum.org/agenda/2016/10/3-ways-for-institutional-investors-to-fight-
corruption

The negative nominal rates that have been in the news as central banks seek to stimulate their sagging
economies. The central bank's overnight interbank lending rate is the basis for nearly every other
interest rate including those on retail bank deposits, certificates of deposit (CDs), mortgages, auto loans
and yields on corporate bonds. A negative nominal rate could serve to bring down all of those rates as
well. If the central bank sets the nominal rate at 1% annualized and inflation is 2% a year, the real rate
would be effectively negative 1%. The goal is that depositors would rather spend or lend those funds
rather than have their value slowly erode over time.

Japan now joins the European Central Bank (ECB), Sweden, Switzerland and Denmark in enacting a
negative interest rate policy in order to kick-start the economy. The goal is to discourage financial
institutions from hoarding cash and instead to lend or invest it. At the same time, such a move to
negative rates may imply that central banks are out of ammunition in combating recessionary pressures
in the economy and that, if this fails to produce good results, there may not be anything left to do.

http://www.investopedia.com/articles/investing/021016/how-interest-rates-can-go-negative.asp
It is often human capital, more than financial or physical capital that enables effective adaptation
to these new realities. And it is often human capital that is at greatest risk of sudden
depreciation or outright obsolescence within a business.

The approach to HC risk involves statistical modeling of the running record of business
performance (e.g., profitability, revenue growth, workforce productivity, etc.) to identify and
quantify their sources of variation and the specific workforce characteristics and practices that
affect them. Understanding which people factors most influence these variations and how to
optimize can help a management team expose and contain HC risks to the business. The
approach to HC uncertainty involves institutionalizing strategic workforce planning as a business
process. It combines rigorous analytics with disciplined process to engage HR, operations, and
finance around a common goal, rooted in future business requirements and realities.

Finance needs to raise its game by finally recognizing Human capital management as a form of
asset management and displacing the standard accounting view of human capital, with its focus
on expense, with an economic view that emphasizes workforce productivity and value.

http://ww2.cfo.com/risk-management/2017/10/human-capital-risk-vs-uncertainty/

Companies historically have pursued value creation by focusing only on growth or profitability,
or both. What they should be deploying today, in order to best position themselves for
competitiveness later, is an “interdependent” strategy focused equally on growth, profitability,
and a third dimension: sustainability and trust. This interdependent strategy can yield far greater
revenue and EBITDA improvement than one that focuses on just one or two of the dimensions.

Leading companies are quantifying how sustainability generates tangible value and taking
action to reduce waste, improve labor conditions, and invest in causes that their customers care
about and that their brands stand for. Companies that don’t adopt an interdependent strategy
that integrates the three competitive dimensions are at risk of being overestimated by the
market — or worse, succumbing to the competition.

http://ww2.cfo.com/benchmarking/2017/08/sustainability-key-future-competitiveness/
Most CFO’s don’t have the technology or processes to paint an accurate portrait of the
business or, if they do, they can’t generate it quickly enough for it to be of great use.
What is needed at these companies? Nothing less than a transformation of the way
finance handles and uses the data the organization generates. Such a transformation is
heavily dependent on better use of technology.

For CFOs dealing with the issues of today, that lack of technological support can cause bad or
knee-jerk decisions, as the finance chief struggles to detect the root cause of an issue. For
CFOs dealing with tomorrow’s issues, a lack of support prevents the ability to re-forecast,
course-correct, and make strategic decisions about customers and product lines. In both
instances, the CFO’s core role in supporting growth and innovation is effectively stymied. For a
CFO willing to make the investment, transformational finance technology is clearly a trip worth
taking.

http://ww2.cfo.com/technology/2017/08/road-finance-transformation/

Just as private wealth is increasingly being concentrated in a relatively small

cohort, the real winners in the wealth management industry will most often be
the wealth managers who can access these families, provide powerful solutions to
them while making the experience exceptional, and do so profitably. Behavioral
best practices regularly differentiate the winners from the rest.

The complication is that the great majority of wealth managers and other
professionals are not using behavioral best practices like street-smart
networking. By not using proven-effective methodologies such as these, most
wealth managers are going to find it increasingly difficult to excel, and many will
find it quite hard to even succeed. The result is that quite a few of them will likely
be forced out of the industry. On the other hand, those wealth managers who can
deliver viable solutions and are adept at these behavioral best practices will
probably create tremendous wealth for their clients and themselves.
https://www.forbes.com/sites/russalanprince/2017/10/03/the-winner-take-most-in-the-wealth-
management-industry/#5da77d5135dc

Volatility and risk are two of an investor’s biggest dreads. While risk is quite self-explanatory since stock
investing is inherently risky due to the losses that can occur, volatility in this field is a little trickier to
perceive fully.

Warren Buffett, one of the most prominent investors of all time, said volatility and risk are not
synonymous. The former represents the range between ups and downs, and the latter is the chance of
not getting the expected returns. Despite their differences, both are crucial for a successful investment
and necessitate a great deal of analysis and professional approach.

https://themarketmogul.com/line-volatility-risk/

An algorithm is a self-contained sequence of actions to be performed. It specifies the inputs needed and
the exact calculations to be performed to calculate an output. Algorithms have fundamentally changed
how financial markets operate and soon they will change the face of regulation. These technologies can
have a material impact on the work that we do in financial services regulation –

- Artificial intelligence (AI)

- Automated fraud detection

- Blockchain

- Data scraping

- Natural language processing

- Sentiment analysis (or opinion mining)

The people impact (for individuals and organizations as a whole) from algorithmic regulation will be
equally profound – not least in terms of the type of work that we humans will perform and the skills we
will need to do it. With the pace of technological change ever accelerating, it may be time to start
thinking about how best to enhance your own skills to this new regulatory framework.

https://www.willistowerswatson.com/en/insights/2017/09/The-algorithmic-future-of-regulation
When it comes to online banking, customers are prepared to trade security for convenience. But when
customers think there is a threat to their security, this feeling reverses. As our banking shifted into apps
and websites, we faced the same problem as chatbots currently do – the internet was undoubtedly
more convenient but at the expense of a feeling of safety.

Research has found consumers feel more secure when a system generates a unique password for each
login, than they do when they are allowed a permanent password. Even seeing the initials of an
employee in a Tweet can humanise the interaction and instil trust. All of these design aspects evolved to
signal trust and security. But chatbots do not have access to these same design capabilities.

A World Retail Banking Report found that while 51% of consumers still prefer face-to-face interaction for
more complex products and services, they also demand greater levels of digitised customisation and
personalisation from financial institutions.

All of this means chatbots could work for banks. On the back end, chatbots can be secured just like
websites and apps – using two-factor authentication and encryption etc.

http://futurestartup.com/2017/08/16/banking-chatbot-battle-vonvenience-security/

Alibaba’s Ant Financial Services Group has brought people with low income and limited to no credit
history onto the financial grid by incorporating digital payments into existing e-commerce and social
media platforms. By using the customer data from those transactions, Ant has been able to give them
access to other financial services its created that look a lot like typical core banking products — savings
accounts, credit assessment and loans for consumers and small businesses. Ant Financial launched in
2014 and as of September 2016 had loaned $107.3 billion in loans to more than four million small
businesses over its Alipay platform to date, according to the UN report. Grameen Bank, the Nobel Peace
Prize-winning microfinance organization and community development bank, has lent $17 billion since its
inception in 1976.

There are also accessible ways for people to save and invest their money. Alibaba’s Yu’e bao lets
customers invest the money “left behind” on digital wallets into a money market fund, earn interest on
that spare change daily and still have the freedom to withdraw the funds when they want.

http://www.tearsheet.co/payments/how-ant-financial-is-transforming-the-chinese-payments-industry
It is certainly tempting to think that simply learning about money management could improve financial
well-being. But the reality is there are a whole host of economic, political and cultural issues that play
into whether someone fits the definition of “financially literate”.

For example, some researchers have proposed that those on low incomes have the same “attitudes and
natural proclivities, weaknesses and biases” as those from other walks of life, their margin for error is
just lower. Someone living in poverty may also find it hard to change their financial circumstances (by
landing a higher paying job, for instance) despite being financially literate.

Perhaps, financial literacy should be thought of as more about an individual’s capacity to acquire
financial knowledge, critically reflect on what influences their financial decision-making and their ability
to apply their knowledge to “financial dilemmas”, such as unemployment or a sudden expense.

Digital payment has lots of upsides. It reduces corruption, is less risky, and
frictionless. India, our neighboring country has taken dramatic measure to encourage
cashless transaction. The country’s demonetization move has made it difficult for its
people to get cash which is pushing the growth of payment apps like Paytm and
Freecharge. In Bangladesh, in order to promote digital payment we need more than
MFS (mobile financial services). Solid product innovation is the foremost requirement
in the space. We have a couple of products that enable digital payment but none is
doing well or considers inclusion.
Unless we have a real innovative product in the market like bKash in MFS that
enables frictionless experience growth in digital payment will struggle. Digital
payment will contribute to the significant economic growth and will push the standard
of living forward for countries like Bangladesh claims a report by Mckinsey, however,
current data suggests Bangladesh has a long way to go to make digital payment a
common thing.
https://futurestartup.com/2016/12/27/the-state-of-digital-payment-in-bangladesh/
The lack of transparency increases the risk in our financial system overall, making it vulnerable
to the types of shocks that caused the 2008 global financial crisis.

One of the key challenges for regulators now is to devise rules and standards requiring shadow
markets to hold enough liquidity to be sufficiently sensitive to risk. However, where investors
and financial intermediaries fail to identify new risks, it is less likely that the regulators – who
have fewer resources – will succeed.

Raising capital requirements can limit the capacity of financial intermediaries to expand risky
activities, although monitoring overall bank leverage may be better. This is because credit
ratings cannot be relied upon in the presence of neglected risks. Similarly, monitoring rising
exposure of regulated banks to shadow banking or untested financial innovations can also
become part of the regulator’s arsenal.

https://theconversation.com/shadow-banking-increases-the-risk-of-another-global-financial-
crisis-65328

The fintech revolution has reached critical mass in Asia. India has seen the total
value of digital wallet transactions skyrocket from $180 million in 2012–2013 to
$7.5 billion in 2015–2016, and the monthly number of transactions increase more
than 400 percent in just the past year. In China, online payments now account for
38 percent of all settlements, led by Ant Financial Services Group’s Alipay and
Tencent’s Tenpay. Fintech also is remaking Singapore, home to 200 banks with
assets of more than $2 trillion.

The fintech revolution will lead to the creation of technology-first companies that
will replace many traditional brick-and-mortar financial institutions. As Asia’s capital
markets become increasingly dominant, some of the new enterprises will be among
the largest companies on the planet. Although Asia currently represents only 30
percent of global GDP, it is expected to account for more than 60 percent by 2037,
powered by the huge growth in financial technology and backed by the world’s
fastest-growing middle class. Western institutions and investors that want to
remain relevant would be wise to look to the East!

https://www.weareworldquant.com/en/thought-leadership/the-asian-fintech-revolution/

Discipline in the banking sector is apparently under strain. At the same time criminal activities in banks
have increased. In the absence of proper guidance, many banks have indulged in irregular activities and
corruption. Sensational stories are emerging from the banking sector. As a result, customers are losing
confidence.

For effective and enforcement of legal financial system related to banking, the requirements are:
• Providing punitive punishment to corrupt bankers.
• Publication of the list of the name of the defaulters.
• Cancellation of parliament or any other membership, if he/she turns out to be a loan defaulter after
election.
• Ensuring ethical standard and effective cooperation among bankers, legal advisers and many others.

It is exposed that in the financial regulation should be emphasized and further needed reforms should be
carried out. In addition, an ombudsman may be engaged in the financial sector. The ombudsman can act
freely to investigate any charge regarding financial services and must work independently. Better
financial services and various financial products would be the natural outcome of competitive financial
industry. An emphasized regulatory environment and extra much needed financial sector reforms. A
better and more efficient financial sector may originate over time and serve up better the development
imperious of the country.

http://www.rafiahmedecoru.com/importance-discipline-financial-sector/

In a world where criminals are becoming smarter, what can be done? The answer resides in the
applied power of innovation in technologies – like biometrics, predictive analytics and artificial
intelligence – while being forward-thinking on what’s around the corner.

As technology evolves, it’s vital that these layers are flexible and adaptable so security
measures can be continually updated. A perfect example of this is biometrics. The technology
has been seamlessly added as an authentication measure, often working alongside traditional
passwords to provide greater levels of security.

But all this is pointless if we forget to strike the right balance between security and delivering the
simplicity and convenience that people demand in today’s digital world. So embedding next-
generation security solutions in an effortless and imperceptible fashion is critical in driving
adoption of these tools. For example, gesture-based security technologies that identify behavior
and can’t be easily mimicked or replicated have huge potential in securing our digital future.

https://www.weforum.org/agenda/2017/11/cybercrime-how-we-should-fight-criminals
Given the constraints on revenue growth, banks must seek to cut costs—and they have been
trying to do so. Adopting new technologies allows banks to overcome the tradeoff between
providing good service and minimizing operating costs. Banks must facilitate online banking
transactions. Digital processes enable entirely new level of efficiency. The seven rule of cost
excellence is –

1. Set bold targets.

2. Tailor data and analysis to each business
3. Ensure budget accountability.
4. Target costs at their source.
5. Get quick wins.
6. Manage the interdependencies.
7. Communicate

The ultimate goal is to create an organization that is permanently self-optimizing and therefore
cost conscious. This can be achieved only with a culture that encourages open communication
and discusses costs regularly.

https://www.bcg.com/publications/2017/financial-institutions-seven-rules-cost-excellence-
banking.aspx

Healthy financial habits are the backbone of long-term financial success. However, as a full-time web
professional it’s easy to drop the ball when it comes to day-to-day money management.

By adding these five suggestions to the mix, you’ll find yourself naturally boosting your overall financial
stability and transforming your relationship with money.

1. List your full assets and liabilities going into each new financial year

2. Clarify your credit score and make debt elimination a priority

3. Streamline your invoicing setup

4. Commit to conscious spending and budgeting

5. Establish and nurture your emergency fund

https://www.godaddy.com/garage/5-key-financial-stability-habits-you-need-to-cultivate/
Financial inclusion expanded 8 percentage points year-on-year in 2015, driven by growth in mobile money.
About 43 percent of Bangladeshis are financially included, according to a recent study.

Financial inclusion is higher among those who are using mobile phones to send and receive text messages: 64
percent financially-included people have their own handsets, 32 percent were using mobile phones by
borrowing from others and the rest 4 percent had no mobile connections, the report said. On the other hand,
37 percent of Bangladeshi adults can send a text message and 49 percent of this volume are financially
included. Of the 63 percent of Bangladeshi adults who have never sent a text message, only 39 percent are
financially included.

However, account access and usage remain a problem – while the number of active mobile money account
users doubled in the past year, according to the report, known as the Financial Inclusion Insights.

http://www.thedailystar.net/business/mobile-money-drives-financial-inclusion-1328455

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