An analysis of the most pressing concerns based on insights from 1,000 UK business leaders.
Whitepapers
Executive summary
The march towards cashless economies remains inevitable, with numerous advantages to be gained, including greater convenience and a reduction in crime. But resilience shouldn't take a backseat to efficiency.
In this second part of the series, opens up three potential risk scenarios as we consider the threats and opportunities associated with the shift towards digital financial systems.
- Risks for vulnerable and marginalised groups
- Increased powers for the state
- Cyber risks and power outages.
The scenarios presented are relevant to business owners, risk managers, and policymakers considering the potential risks associated with purely digital financial systems in order to test business continuity plans and implement mechanisms to reduce the likelihood and impact of systemic threats.
Insights
- Within societies, some groups will likely experience sizeable transition pain as they don't have either the technological or financial means to participate in the new, cashless world.
- The abolition of cash is strengthening the position of the government in several ways. At one extreme, undesired consumption patterns could be punished.
- Natural disasters, malicious cyber attacks and simple software failures could bring down electronic payment infrastructure, causing significant disruption in cashless societies.
- Credit reference agencies could punish citizens with a bad score for higher-risk consumption patterns, such as purchasing alcohol, cigarettes or unhealthy foods. Such a scoring model would make access to credit more expensive for parts of society and is a questionable development in data privacy rights.