ITS AN IMPERATIVE : FINANCIAL 4.0
Finance is key row of digital transformation
Financial Tech Revolution
The first industrial revolution occurred with the rise of steam power and manufacturing using iron and steel. The second revolution started with the assembly line which allowed specialisation of skills, represented by the Ford motor assembly line at the turn of the 20th century.The third industrial revolution came with Japanese quality controls and use of telecommunication technology. The Fourth Industrial Revolution, or first called by the Europeans Industry 4.0, is all about the use of artificial intelligence, robotics, genomics and process, creative design and high speed computing capability to revolutionise production, distribution and consumption. Finance is a derivative of the real economy – its purpose is to serve real production.
We are now on the verge of Finance 4.0 and it may be useful to explore what it really means. Welcome to the technical innovation called cyber-currencies, which was made possible for peer-to-peer (P2P) transactions across a distributed ledger system (commonly known as blockchain). In architectural terms, this is a bottom-up system which technically can avoid any official oversight. Indeed, cyber-currencies or tokens were invented precisely because the users do not trust the official system.
As the populist philosopher Stephen Bannon said, “central banks are in the business of debasing the currency”. Hence, those who want to avoid the debasement of their savings prefer to deal with either cash or cyber-tokens like bitcoin.
What is happening in the rapidly evolving Finance 4.0 is that as the world moves from a unipolar order to a multi-polar world in which other reserve currencies also contend for trade and store of value, the top-down architecture is fusing (or merging) with a bottom-up architecture in which trade, transactions and stores of value are shifting towards the P2P shadow system.
Smart financing for sustainable development
Another prespective from Jonathan Andrew, CEO Commercial Finance, Siemens Financial Services. Realising complex projects that matter. What are the building blocks of smart financing? Discover how risk management, insurance and innovative financial-structuring models enable impactful technology projects worldwide.
Turning risks into opportunities
Faced with an interdependent global economy and a growing diversity of investors, key actors in projects are increasingly adopting a “life-cycle” approach, which uses vast tranches of data to consider risk across a project – from its outset, throughout the construction stages and on to the full lifespan of returns to investors. Central to this holistic approach is an acknowledgement that some risks should be passed on to bodies better equipped to cope with them not just of the industry but of the technology involved and the potentially competitive position of the project.
Embracing digitalization to remain competitive
Digitalization is the key differentiator that will enable manufacturer’s company to remain competitive into the future. Increasingly shorter innovation cycles mean that industrial enterprises need to shorten their development and production times to reduce time to market. This requires seamless integration of data from the value chain, which also enables improved productivity, planning and forecasting and financial stability. Financing options that go beyond classic loans are needed to adjust to unexpected developments, such as changes in market dynamics or technology leaps. Discover how businesses are embracing digitalization through smart financing to enhance their competitive capabilities.
Access to finance for the scale of investment
The second-greatest challenge to Industry 4.0 adoption, according to respondents was a need for access to finance for the scale of investment over time in digital and automated technology platforms. Even where the economies of retrofit are possible, or the transformation can be divided into a logical series of steps, the pace and size of investment is nevertheless often considerable. A proportion of respondents used the phrase “capital load” to describe this challenge. All interviewees believed that without access to appropriate and sustainable third-party finance, company are precluded from acquiring the required digitalized technology for effective digital transformation.
Financing requirements were positioned as the second most important issue on the road to Industry 4.0. While many company may have a clear view of what technology is needed to achieve Industry 4.0, the question is how to do so in a financially sustainable way that allows them to compete effectively in an Industry 4.0 world.
In conclusion, In this 4.0 era, digital innovation is one of important strategy for grab extraordinary opportunity. And financial is key row for make it happen in success way. Risk management, Planning and forecasting strategy, production, research and development all of them need choice in doing with financial balance. Some company would invest or other would build, it depends on company “sustainability” scenario planning. But 4.0 its imperative! Just warned it!
Source :
-http://fintechnews.sg/10715/fintech/fintech-90-hype-10-revolution-okay/
-https://tradeshift.com/resources/fintech-brink-business-commerce-revolution
-https://www.thestar.com.my/business/business-news/2018/05/26/from-industrial-40-to-finance-40/#lpvfzed8YIwRedBX.99
-https://new.siemens.com/global/en/products/financing
About Post Author
shifting to the new era, Finance 4.0 from the earlier version is the arrival of Blockchain or distributed ledger technology. nice share , tam 🙂
Thanks for great information of 4.0 financial revolution, but what is your opinion about the frequent accident happened recently such as financial fraud, personal confidential thievery, and money laundry by using modern financial technology right now?
Youre welcome. In my opinion, nowadays digital era is built our (company) behaviour in this digital ecosystem era and as in my article thats not the option,its an imperative. Welcome 😄