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Making Central Bank Digital Currencies bulletproof with business process intelligence

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This article was contributed by Torsten Hoffmann, chief technology innovation officer at SAP Banking

Central Bank Digital Currencies (CBDCs) are quickly gaining traction across the traditional finance landscape. Currently, more than sixty central banks are exploring the possibility of launching CBDCs. China is actively working on its plan to connect its central bank digital currency to Hong Kong’s Fast Payment system, and Israel is accelerating its study and preparations for the possibility of a digital shekel.

While these innovative moves have the potential to completely alter the banking landscape, it is clear that to truly ready themselves for this new digital reality, CBDCs need to remain at the forefront of adopting new technology. By implementing business process intelligence (BPI) for continued improvements and changes to processes, the possibility of a new, centralized banking system may not be far away.

The roadblock

A recent study from OneSpan showed that nearly half of financial institutions have reported that regulatory compliance has slowed additional digital transformation. However, despite the security and regulatory challenges that were faced in 2021, 84% of banking leaders are still taking steps to prepare for CBDCs over the coming year. Recognizing the need for increased security, half of all banks are attempting to implement mobile app shielding technologies, anticipating these upcoming CBDC initiatives.

While banks have always spearheaded adopting and implementing new technology, the OneSpan study shows that financial institutions face roadblocks when it comes to strategic process transformation. If traditional banks are unable to manage the continuous internal steps across multiple siloed departments (creating delays and the potential for additional bottlenecks), it will be extremely difficult to implement the critical technologies needed for the deployment of CBDCs. It is against this backdrop that business process intelligence tools can be utilized to help establish a streamlined process.

The question is, “Why?”

Many might be wondering why countries are toying with the idea of replacing traditional banks, which have arguably helped to build civilization as we know it today.

A central bank digital currency is a digital version of any country’s national currency, issued and regulated by the country’s “central bank”. A CBDC would ideally be designed to facilitate transactions across borders, including cross-currency payments and remittances. By reducing dependency on physical currency (cash), lowering transaction costs, and reducing settlement risk, CBDCs would essentially be safeguarding monetary and financial stability for a nation.

CBDCs can also provide the ability to reach citizens of respective countries directly. For example, in the case of a crisis, CBDCs would provide an avenue for direct interaction, through bypassing the complex and indirect approach the private bank sector takes — which often delays payments at a time when speed can literally save lives.

However, all of this does not come without problems. It is clear that the mainstream adoption of CBDCs is not going to happen tomorrow, as there are issues that must be addressed before a worldwide rollout. Process gaps such as scalability, security, and stringent regulatory requirements are all major concerns that need to be tackled, and business process intelligence is the key to accelerating CBDC’s digital transformation.

Zero downtime and the need to be bulletproof

Business process intelligence provides end-to-end capabilities for strategic process transformation and the reinvention of customer experiences. Essentially, when it comes to CBDCs, the implementation of BPI would allow the analysis of each of the process gaps (scalability, security, regulatory requirements) based on real-time data. This is absolutely necessary to streamline the digital transformation of CBDCs and create a seamless rollout plan, as it must be 100% secure with zero downtime.

For example, if the stock or cryptocurrency markets crashed, it would (realistically) negatively affect only a select few wallets. However, if a CBDC were to be hacked or crash for any reason, it has the potential to massively damage the economy of an entire country. Consequently, if CBDCs were to become the main financial currency in any country, it (along with all the processes) would need to be absolutely bulletproof.

Business process intelligence is the bulletproof vest in this scenario. It would evaluate the entirety of a CBDC’s processes, roles, systems, and data involved in every single action, even the most minuscule. BPI also would monitor and optimize operations with clear responsibilities including onboarding, wallet rollouts, compliance lifecycles, and most importantly, security and safety, leaving no stone unturned.

Central Bank Digital Currencies: Accelerating the transformation for tomorrow

As we look towards a more digitally transformed future with one-click banking options through CBDCs, it all lies in managing banking connectivity. Accelerating the growth and adoption of CBDCs across the traditional finance sector is important, and data-driven process management discipline will allow digital banking to truly focus on the future of technology, operations, and culture.

If and when CBDCs begin utilizing BPI, it will have a real shot at transforming itself into the foolproof payment and banking system of the future.

Torsten Hoffmann is the chief technology innovation officer at SAP Banking

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Rumors confirmed, Street Fighter 6 kicks off in June 2023

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Fighting Game fans are excited now that Capcom announced that Street Fighter 6 is coming to PS5, PS4, Xbox Series X/S and PC on June 2, 2023. The game was initially announced in February 2022, but that reveal did not include a specific release date beyond 2023.

The trailer at The Game Awards focused on new mini games and the international setting. In addition to the 18 previously announced fighter, the trailer also confirms that several new fighters — Dee Jay, Manon, Marisa and JP — that will join the game’s roster.

Notably, the June 2 release date for Street Fighter 6 may be a strategic choice for Capcom. June is the very beginning of Q3.

The last installment of the franchise — Street Fighter V — released nearly seven years ago so fans have been eager for another installment. A day before The Game Awards, the game’s June release date was leaked via the PlayStation Store.

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5 Things to Do Now to Propel Your Business in 2023

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Opinions expressed by Entrepreneur contributors are their own.

Entrepreneurship is a daily leap of faith. In times of economic uncertainty, that leap may feel like a dive off a cliff. We are in one of those times. It likely will take months to fully re-adjust to the forces that have pummeled the world’s economy, and to entrepreneurs, months can feel like years.

With the right playbook, entrepreneurs can survive and thrive in whatever economic scenario. Here are five things you can do to propel your business ahead now and through the difficulties of business cycles for years to come.

1. Learn the lessons of more challenging times

A rocky economy presents a unique opportunity to make tough decisions about the business plan. Everything is open to reexamination. How has the market changed? Are your customers facing challenges that create new opportunities for your solutions? How do new conditions change your assumptions, and what actions do you need to take in response?

Critically evaluate your product roadmap. Is this the time to pivot or become more aggressive with your current plans? Prioritize the highest margin features that are achievable in the next twelve months. Push out projects that don’t make that list, and re-assign resources accordingly. Re-assess pricing. Even as inflation tiptoes back from the highest levels in forty years, raw material and transportation costs remain way up. What will impact your customers if you adjust the pricing or add surcharges to offset these costs, at least temporarily?

It’s been a rough year for hiring. Many companies took the talent they could get. If there are employees or gig workers who would fare better in a different job, now is the time to let them go. Make tough-minded corrections that will pay off overall — corrections that might be avoidable in less challenging times.

Related: How to Turn Inflation and Recession into Your Largest Business Opportunity

2. Tighten your grip on cash

Venture capitalists are pulling back. In the third quarter, Crunchbase reported that funding for startups in U.S. and Canada fell 50% year-over-year. Valuations are down across the board. If you are fortunate enough to be a later-stage startup that benefited from VC largess in 2021, make your last raise last longer than intended.

Keep your dry powder dry, and put off going for another round until the markets even out. Reemphasize the basics for early-stage companies with less market validation and greater distance between now and a potential exit. Delay all capital expenditures. Leverage the hybrid work model if possible, to reduce rent and other office expenses. Continue with Zoom or Google Meet. Now is not the time to rack up travel costs. Re-negotiate fees and terms with service providers. Seek credit terms with key suppliers, in a word, bootstrap.

3. Talk to customers, in person. Now.

How have the business needs of your customers — whether paying or beta — changed over the last 18 months? Are there benefits to your solution that have more recognized value now? Nearly every business, for example, from corporates to startups, has been forced to re-learn the lessons of supply chain management. Startups that can help their customers make better business decisions based on artificial intelligence (AI), reduce costs by improving inventory management or protect against out-of-stock scenarios by identifying and building relationships with new, more local sources of supply will have an edge.

Related: Finding Validation in Serving Customers

4. Non-dilutive capital

According to PitchBook, venture capitalists are showing greater interest in portfolio companies “whose satellite, robotics and software tools can do double duty” in military and commercial markets. International conflicts are one reason, of course.

Another is that the defense and military security industries are generally viewed as recession-proof. Our firm routinely encourages portfolio companies to consider non-dilutive funding from the Small Business Administration — grants to support cutting-edge technologies range from $150,000 to more than $1 million.

Navigating the application process isn’t for the faint of heart. A startup must be realistic about the work involved, but in many states, there are resources to help. Besides the funding, severe responses to agency requests for proposals are reviewed and evaluated by technologists. At a minimum, this can be terrific feedback and a great source of industry contacts.

5. Blue-chip cultures attract blue-chip talent

Company culture can be an asset or a liability. An inclusive, rich culture helps key hires say yes. Finding stakeholders that believe what you believe and are aligned with your team’s values significantly improves the odds that they will stick with you in good times or bad.

After months of “great resignation” fever, the over-heated demand for talent may be cooling off. Maybe offers aren’t as fast or grand as they were a year ago. Maybe Twitter won’t be the only advanced technology business to let people go. Regardless, the search for great talent isn’t a faucet that a young company turns off and on. A startup might modulate the timing or the number of hires but stand at the ready to recruit and filter for culture fit.

Related: 3 Ways to Stay Competitive in the War for Talent

With the right mindset and intentional approach, an entrepreneur can make 2023 a year to strive and thrive. As Yogi Berra, my favorite baseball player of all time, said, “Swing at the strikes.” In business, like baseball, the right swing can turn even the most challenging pitch into a hit.

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Akros Technologies, an AI-powered asset management platform, raises funding from Z Holdings • TechCrunch

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Artificial intelligence is taking over almost every industry. The investment and finance industry is no exception. In Deloitte’s 2019 report, the firm reveals that AI is transforming the financial ecosystem to reduce costs and make operations more efficient by providing automated insights and alternative data, analysis and risk management.

Technology such as AI has digitized the finance sector, ranging from payments and remittances to lending. However, asset management is still in the nascent stage of digitization, according to the chief strategy officer and co-founder of Akros Technologies, Jin Chung.

Akros Technologies wants to disrupt the current asset management industry via its AI-driven asset management software platform that mines market data for stocks. Akros just raised $2.3 million from Z Venture Capital, the corporate venture capital wholly owned by Z Holdings, which also owns the Japanese messaging app Line and internet portal Yahoo Japan.

Akros intends to strengthen strategic ties with Z Holdings via strategic investment, the startup said. The latest funding, which brings Akros’s total amount raised to $6.1 million since its 2021 inception, will help Akros to scale its software platform and asset management products and ramp up its users, including local and global financial institutions and fintech companies.

The outfit is already in discussions with potential partners to expand its AI-powered product called portfolio management as a service, or PMaaS, an all-in-one operating system for portfolio management. Chung explained to TechCrunch that PMaaS “enables B2B clients such as financial institutions, fintech startups and robot-advisors to launch their own exchange-traded funds (ETFs) without having to set up ETF teams and infrastructure.”

He added that it expects to secure more than five B2B clients in the first quarter of 2023.

The startup claims that its AI-powered portfolio management platform can reduce “the overall cost structure [of] the traditional fund development,” including management fees and unnecessary fees involved in the investment process, by more than 80%. The outfit aims to maximize the finance management performance of data-driven ETFs and offer a portfolio management solution via the PMaaS for Akros’s users to help them compete with global ETF institutions like Vanguard or JPMorgan.

In August, Contents Technologies launched Korean pop music, also known as K-pop, and Korea Entertainment ETF, on the NYSE Arca Exchange under the ticker KPOP, using Akros’s PMaaS solution to develop the ETFs. In addition, Akros listed an AI-driven target income ETF, called Akros Monthly Payout ETF (ticker: MPAY), on the NYSE in May with monthly distributions at an annualized target rate of 7%, according to the startup.

To build a slew of investment strategies that lower the cost of portfolio modeling and generate scores of investment portfolios, Akros applies a generative AI model based on a decision transformer, which predicts future actions through the sequencing model, Chung said, adding the company also employs GPT-3 natural language processing (NLP) to analyze unstructured language data.

Akros plans continuously to enhance its engineering technology by bolstering its business to disrupt the asset management market and attract new partners across the globe, including Japan, Singapore and the U.S., co-founder and chief executive officer Kyle Moon said in a statement.

Founded by CEO Moon, CSO Jin and chief marketing officer Justin Gim, Akros employs seven people.

Co-founders of Akros Technologies: (Left to right) Justin Gim, Kyle Moon and Jin Chung. Image Credits: Akros Technologies

Moon previously worked for Qraft Technologies as head of AI research and CSO and had experience listing four ETFs on NYSE. Before co-founding Akros, Gim had more than nine years of experience in the asset management industry; Chung did research work for Bayesian deep learning in autonomous driving cars at Oxford Robotics Institute.

In March, Akros raised $3.75 million in funding from PeopleFund, a South Korean peer-to-peer lending platform. The company declined to provide its valuation when asked.

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