WILL THE BANKS SURVIVE THE YEAR 2025?
That is the question speakers, leading personalities of the Czech economy, were answering at the Banking Outlook conference that took place on 21 April 2015 in Prague. What were the most interesting ideas posited?
The Czech National Bank Governor Miroslav Singer spoke on the topic of “Security of the Internet Payments and Virtual Currencies from the CNB Point of View”. He said that “the security of the internet payments on the technological level has been emphasized in Europe.” As far as virtual currencies go, the Governor pointed out that currently, there are more than 540 virtual currencies, registered, the best-known of which are Bitcon (BTC), Ripple (XRP) and Litecoin (LTC).
Islamic Banking on the Rise
The economist Michal Mejstřík mentioned that banking is following its clients into more populated countries. According to the biggest and most complex global survey, “Global Survey 2014”, which gathered data from 298 banks from 127 countries, international trade growth has dramatically increased in contrast to the years preceding the financial crisis, which is associated with the trade finance availability. He also took interest in possible ways of regulation and monitoring of services that are subtle and hard to monitor. Such services have been established only recently, they are homogeneous, digital and appeal to various types of clients. “It is a grievous question. Simultaneously, the regulation of global versus fragmented, regional activities also has to be considered. The problem is that Chinese banks have entered the market as well. The state is their majority owner, and it utilizes them as their instrument,” Mejstřík added. Michal Mejstřík also focused on Islamic banking that is coincide with Islamic values. “Banking that is based on traditional religious and moral precincts of the Muslim world, on sharia, bans speculations. The International Monetary Fund has also recognized the increasing demand for Islamic banking as it is also expanding to a big part of the world. At the same time, it supported Islamic financing principles by saying that it could be potentially safer than common ways of financing. Inasmuch as Islamic banking bans speculation and stresses that agreements should be based on the real economic activity, it can represent less of a risk for stabilisation of financial system than conventional banking does. At the same time, the IMF warned Islamic bankers that they ought to make the rules stricter and proceed more diligently. Islamic financing does not always have to be successful and, consequently, can turn out to be more destabilizing unless regulations are designed more thoroughly and obeyed rigorously. There are disturbing discrepancies in assessing regulators’ activities in the field of Islamic financing, in particular where this field is relatively new,” Mejstřík said.
Jan Műhlfeit, vice-president of the Czech Management Association, came up with quite an interesting speech. His was the thesis that “technology does not change what is done in any economy, however, it changes how it is done.” He coined a phrase for this, digital paradox, that he describes as follows: “the more technology there is in the world, the more important the human brain and people are, technology will become a commodity.” He pointed out that working with people and their development will have to improve and said that life-long learning is more significant then we might think, it is not just a hackneyed phrase connected with technical abilities. By the end of 2018, more than 90% of job positions will require elementary computer skills.