Topics In Demand
Notification
New

No notification found.

What is “Finternet” now?
What is “Finternet” now?

93

0


Listen to this article



 

“Finternet” is multiple financial ecosystems interconnected with each other – much like the internet. It would lower barriers between different financial services and systems, drastically reducing the complex clearing and messaging chains and other frictions that hinder today’s. financial system. Finternet would be built on unified ledgers which will bring multiple financial markets such as tokenized assets, shares, bonds, real estate, on a single programmable platform. This has the capability to enable individuals and businesses to transfer any financial asset they like, in any amount, at any time, using any device, to anyone else, anywhere in the world. Financial transactions would be cheap, secure, and near-instantaneous.

What is the need of Finternet?

Financial asset transactions such as real estate and bonds are still taking days to settle. The absence of interoperability among siloed proprietary databases often delays the speed of transactions, particularly among cross border payments. Legit payments are suffering because of proliferation in compliances to deter illicit activity such as those related to anti- money laundering, terror funding etc.

Government transfer to banks is taking longer than expected for Individuals that prompts them to take short term loans often at high interest rates. External verification system and auditing mechanisms and back-office costs are additional costs of financial systems. The cost of cross-border remittances is high as well.

Credit period is itself a huge cost among companies across borders. Sometimes, immense hidden costs engage in terms of potentially worthwhile transactions and products that never materialize.

Multiple shortcomings and their impacts along with certain drivers are unveiling a transformative shift in the ecosystem of financial systems.

Some drivers: 

1. The landscape of economic activity is expanding at a remarkable pace fueled by digital interventions. These interventions are leading to multiple layers of innovation which are proliferating to unlock markets around the world.

2. Active participation of regulatory activities in bringing out open finance, open banking, tokenization shows an optimistic intent to harness the potential of financial innovations.

3. The expansion of internet access among all demographics and universal adoption of smartphones has cleared paths enables every digital application. The advances in cryptic technology, decreasing compute cost and artificial intelligence are set to bring a revolution in financial systems.

 

 

 


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


images
Madhumay
Deputy Manager - Research

© Copyright nasscom. All Rights Reserved.