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Money rarely changes hands any more: few transactions actually use cash. In fact, hard currency represents only 11% of the money supply in the U.S. The rest of our "money" flows digitally from a paycheck to a bank to a retailer, and then through the retailer's supply chain, to be deposited in another business's account... to start the journey over again.
That means our money has been transformed into zeros and ones. It's intangible, invisible. It's information. Which is central both to the problem we face—and to its solution.
For smarter money, we have to start with smarter technology. By applying unprecedented computing power such as stream computing software, deep computing visualization and advanced analytics, we can turn this numerical ocean into actionable insight and intelligence. That technology is already in play with sensors ubiquitously embedded across other industries. Sensor technologies are in use to improve supply chain performance (US), healthcare network efficiency (US), city management (US) and even the monitoring of natural systems like rivers (US) by capturing information that can lead to better decision making.
These trillions of transistors also have great potential in the global financial system to provide new information that can drive growth and mitigate risk.
We can see intelligence making an impact with the emergence of smart banks. For example, the Operational Riskdata eXchange Association (ORX), a consortium of 52 leading financial institutions, uses blinded data to improve statistical modeling, more accurately quantify risk exposure and address regulatory compliance needs. We even see intelligence transforming entire global markets. Consider foreign currency exchange, the world's largest single market: Intraday settlement risk of more than $2 trillion in daily volume—more than 50% of foreign exchange transactions—has been reduced to zero.
This new kind of high-speed, high-security, high-transparency system is how smarter IT can lead to smarter money.
