The future of digital money: Business School academic shares his thoughts

The technological, social and economic future of digital money will be discussed at a symposium led by an Imperial College Business School academic.

The technological, social and economic future of digital money will be discussed at a symposium led by an Imperial College Business School academic.

Professor David Gann, head of Innovation and Entrepreneurship and Deputy Principal, Research and Business Engagement, at the Business School will work with Citigroup, the world’s largest financial services network, to co-host the A Citi and Imperial College Symposium.

The symposium, entitled ‘Delivering on the Promise of Digital Money Capturing the seeds of growth’, is the first of its kind and will be held today at Millbank Tower, London.  It will bring together some of the leading thinkers in this field to discuss how digital money can evolve in the face of new technology.

Ahead of the conference we speak to Professor David Gann about today’s symposium and his thought on digital money.

 1)   What is digital money?

Digital money is the means to make transactions and manage finances on the internet and through mobile, virtual payment systems. 

2) What has been the impact of digital money?

The impact of digital money is just being felt.   A project to encourage people to use digital money in Kenya has contributed to bringing more people into the formal economy providing the means to develop businesses, creating jobs and growth. The global impact is likely to be profound in the next ten– twenty years, as more transactions take place online. Our symposium is exploring these issues and will ask questions about transparency of money flows, implications for business, individuals, institutions and government. For example, will it be possible for the Central Bank to manage money supply if more takes place virtually?

3) In your opinion how do you see digital money evolving?

I think digital money will evolve in all sorts of ways. The use of credit cards is already something that people in advanced economies are very familiar with. Charge cards will probably become more common as we see the use of near-field communication chips allowing payments to be made by swiping past card readers – a bit like using the Oyster card. Mobile phones and devices will increasingly be used in a similar way. But I think the wider implications will be in the ways that money flows within and between businesses. There are likely to be many innovations to smooth the flow of money and to find more secure, faster and cheaper ways of transacting. Citigroup is at the forefront of some of these developments. 

4) What are some of the challenges facing digital money?

There are a number of major technical challenges such as establishing standards, managing identity and managing security. New biometric readers are likely to be developed. There will also be different patterns of adoption depending upon demographic profiles. In the longer term, digital money could have huge implications for the ways in which the economy works, but it takes time for systemic changes like this to diffuse.

5) One of the topics that will be discussed at the symposium is the social promise of digital money, how important is this topic to digital money?

There are many ways in which the ‘social promise of digital money’ might unfold. For example, there are around seven billion people in the world but only two billion people have bank accounts. The rest of the world's population does not have the formal means to interact in the economy and society in ways that people in the UK do. Five billion people have low cost mobile phones. If they were able to access payments and savings and make transactions using their mobile phones then it may improve their living standards.

6) What upcoming projects and research are you working on in relation to digital money?

We are working on projects to understand 'inclusive innovation' that explore how systems such as mobile payments could help individuals and communities develop their own businesses and solutions with micro-finance. We are also interested in how digital money might ease the ways in which cities operate – this is one of the questions in our Digital City Exchange research project. Finally, we are interested in the security and identity issues relating to digital money and exchange using the internet.

7) What is your involvement in the A Citi and Imperial College Symposium

I am a co-host with our colleague Naveed Sultan, who is the CEO of Treasury and Trade and global head of treasury and trade solutions at Citigroup.