FT Transact is an FT video series on the future of money. It explores in detail the technologies, people, companies and sectors behind transactional transformation, including the corporate innovators working to build the future of finance.
With insightful but accessible reporting and analysis from FT journalists who are specialists in their fields, FT Transact brings additional expert commentary from UBS in the form of paid posts on the future of capital.
In 2017 initial coin offerings, the latest tech craze, raised more than $6bn. But there is little regulation for these digital tokens, and they can be risky investments. So how do you judge if an ICO might be worth putting money into?
There’s a macro-micro divide in emerging markets. The IMF and BIS are warning against rising corporate debt, yet P/E ratios are soaring. Where does the debt lie, how long can this dichotomy last, and will the ultimate impact be on equities and government balance sheets? These and other key questions are answered by Bhanu Bhaweja, Head of EM Cross Asset Strategy at UBS Investment Bank.
The rise of cryptocurrencies, contactless cards and mobile payments has led to predictions that we are at the dawn of a cashless society. Cash use may be declining in many developed economies, yet much of the world is tied to physical transactions, and ATMs are still an essential utility. But ATM manufacturers are preparing for a world where cash will be less important.
Some of the world’s most important central bankers are leaving their posts, and their successors will have to deal with fast-growing technological innovations such as cryptocurrencies. These are penetrating the financial system but operate beyond its regulation, and there are concerns a crash in these volatile currencies could leave banks in trouble.
Global eSports revenues are predicted to hit $1.5bn by 2020. Fans are young, passionate, and given they’re 38% female, a marketer’s dream. In 2017, the finals of 'League of Legends’, owned by China’s Tencent, had a total of 1.2 billion views. Research from UBS Evidence Lab shows Chinese gamers play for longer, more often, with more people, and an increasing focus on commercialisation is likely to drive further growth in this booming sector.
With consumption rising, the only way humanity can maintain or improve its standard of living is to do more with less. That requires innovation and productivity. Diversity is absolutely essential for this. Monocultures rarely generate innovative thinking, while prejudice inhibits the potential of human capital. For real economic growth, diversity is critical.
Nasdaq’s technology pairs buyers and sellers of financial assets at lightning speed. Now it is exploring ways to enable trade beyond its traditional markets - from ticket sales to container space. The challenge for Nasdaq is to proving its technology can work outside the market it is best known for.
In the US and Asia, capex has been driving improvements in corporate performance. Now, after 6 sluggish years, a positive trend has emerged in Europe as well. Capex correlates highly to innovation and profitability, but what’s behind its return and how will it impact economies worldwide?
Just over a year ago the renminbi passed a significant milestone when the IMF included it in its Special Drawing Rights currency basket, along with the dollar, pound, euro and yen. But Jamil Anderlini, the FT’s Asia editor, explains there are big obstacles in its path to becoming a true reserve currency.
Robo-taxis are coming. Singapore will be testing vehicles as early as next year, and ultimately they could prove significantly cheaper and more popular than current mass-transit systems. Serious disruption is looming for the transport industry, and car sales may be negatively impacted, but if carmakers and other industry players approach the transition wisely, new opportunities will arise.
By 2021 women will be in charge of $18tn worth of the world’s wealth. Their control is rising more quickly than men, but what is behind this growth? The FT’s investment banking correspondent Laura Noonan examines how demographics and culture have fuelled the increase and the effect it will have on the banking sector.
The ECB’s quantitative easing programme is still expanding and has now reached more than €2tn. Next year it is expected to wind down, but as the FT’s Claire Jones explains, economies like Italy’s are still weak and there are fears gains made through QE could go into reverse.
These are uncertain times for global trade, and not just because of Donald Trump’s protectionist rhetoric. Shawn Donnan, the FT’s world trade editor, argues that current rules are too complex and the global system is turning into a massive “noodle bowl” of deals. The rise of China threatens only more complications.
Tech giants Alibaba and Tencent are now ranked inside the world’s top ten companies by market cap and are looking for new fields to expand their profits and power. As Louise Lucas, the FT’s Asia technology correspondent, explains, their battle for dominance is drawing them into finance and fintech.
Visit the Transact hub for more: https://transact.ft.com/en-gb/?play=china-tech-titans
Asia's R&D spend is on track to exceed Europe and the US combined by 2020. But which countries are innovating, what are the implications and are investors pricing in the potential? These and other key questions are answered by Niall MacLeod, Head of Asian Equity Research Strategy at UBS Securities Asia.
Many of the core ideas behind Adam Smith’s vision of capitalism are being ignored. Gillian Tett, the FT’s US managing editor, argues that four basic concepts need to be relearned if we are going to replace the opaque and exclusive system modern finance has created.
By 2025, cross-border data flows could be worth $20tn, more than current global trade in goods. But as the FT’s world trade editor Shawn Donnan explains, that will likely bring increased cyber risks, and governments are taking measures to combat the challenges.
There’s been a boom in passive investment since the turn of the millennium, channeling the flow of capital away from mutual funds into hedge funds and sector specialists. But how far can beta go, and will alpha undergo a renaissance? UBS Investment Bank’s Paul Winter, Head of Quantitative Research - Asia Pacific, and Shane Edwards, Global Head of Structured Solutions, look at the future of investment.
For the past three decades western multinationals have been outsourcing production to low-cost countries such as China. But are executives turning to localisation? The FT’s US managing editor Gillian Tett explains how automation, wage costs and political risk are driving businesses away from globalisation.
2017 promised to be a strong year for the US economy, driven by the Trump trade. But things have gone off the boil and the dollar has remained weak. FT currencies correspondent Roger Blitz explains why that is good news for emerging markets. But there are risks on the horizon.
In an effort to stamp out unethical behaviour and cut costs, banks have cut staff and – in many cases – robots are taking their places. Robots are much maligned as a potential source of flash crashes, but Katie Martin, head of FastFT, asks whether inexperienced traders should be a greater cause for concern.
The drive towards a cashless society may eventually eliminate cash-based crimes, but there are myriad ways our digital life can be exploited by criminals and even governments. Fraud, transaction laundering, hacking - the digitisation of commerce and banking has left us vulnerable in new ways. Martin Wolf, the FT’s chief economics commentator, tells us why going cashless isn’t the answer to preventing crime.
Read more: are we on the verge of a cashless society? http://on.ft.com/2vSytbw
Since the global financial crisis, major central banks have printed money and bought assets worth $12tn. But can we now return monetary policy to something like normal? FT economics editor Chris Giles examines the difficult road ahead..
Read more: the US intends to start unwinding QE http://on.ft.com/2htHimf
22 fintech companies around the world are now worth more than $1bn and bankers are becoming worried about these upstarts, especially since new legislation in Europe may force them to share precious customer data with their fintech rivals. FT Special Reports’ Maija Palmer looks at how banks are scrambling not to be left behind.
Read more: what fintech is going to do to banking http://on.ft.com/2uFOQ8w
More and more governments are aiming to phase out cash, ostensibly to curb tax avoidance and criminal activity, while some countries are making leaps and bounds towards a cashless future without a backwards glance. But for the more than two billion people globally still without a bank account, cash remains a vital part of daily life. Martin Wolf, chief economics commentator, explains why rapid demonetisation can do more harm than good.
Read the latest news on India's demonetisation here: http://on.ft.com/2tJ0i6l
Electric Vehicles are going mainstream, but when will they become profitable for manufacturers, and which sectors and firms are set to benefit the most? UBS strips down a 2017 Chevy Bolt and lets a team of 39 analysts loose on its 563 parts to find out where the profits lie in what’s set to be a major industrial disruption.
Read more on ubs.com/microsites/future-of-capital/en
The cryptocurrency that was invented to disrupt traditional banking through its decentralised model is under increasing strain as it grows in popularity. The ever-growing number of transactions is forcing its administrators into a difficult and controversial decision. Izabella Kaminska of FT Alphaville, asks the multibillion-dollar question - to fork or not to fork?
As the process of Brexit continues, the UK’s neighbours are eyeing up the business they can take from London, and the City’s banking sector is the real prize. Patrick Jenkins, finance editor, talks us through which cities stand to gain – and why they may even be outside Europe.
What if the traditional approach of treating labour as a cost, rather than an asset, was turned on its head? In today’s world workers hold large amounts of organisational knowledge and insight that can prove hugely beneficial to employers. Rana Foroohar, global business columnist, tells us why companies that know and value this are cashing in.
If the US put tariffs on Chinese goods, the impact would be felt way beyond the borders of both countries. China is the world’s biggest exporter, but it’s also the second biggest importer, with many of those imports coming from other Asian countries.
Ben Rhodes, Former US Deputy National Security Advisor and Dr. Tao Wang, Chief China Economist at UBS discuss the economic and geopolitical ramifications of potential US protectionism.
How will we finance the future? Read more on ubs.com/microsites/future-of-capital/en
A number of governments, central banks and even some economists now advocate a switch to all-digital currencies. With the rapid rise of mobile payments, the long-term survival of cash seems precarious. But what would be the consequences of removing cash from society altogether? Martin Wolf, the chief economics commentator, gives his view on the cashless society.
