The Australian Financial Council has released its latest annual report on the state of digital innovation in the digital economy.
In the year to June, the Australian Financial Services Union (AFSU) saw digital transformation and digital asset sales grow by over 9 per cent, the largest increase in three years.
The growth in digital asset transactions has been driven by the rise in interest in digital currencies and blockchain technology, said the AFSU’s chief executive officer, Robert Haldane.
While this growth has been positive, the AFSPU warns that there are some challenges ahead.
Digital transformation and asset sales are both driving an increase in financial institutions’ lending, said Haldan.
And while there is a lot of innovation happening, it is still too early to tell how this will impact on the financial services industry.
This year, there was a decrease in the amount of credit card and financial institutions lending to their customers.
The decline in credit card lending has been caused by the high cost of servicing the new digital asset cards and the increasing complexity of digital assets, he said.
This increased complexity has made it more difficult for financial institutions to make good loans, which could cause the economy to stagnate or even fall.
Haldane said it is important for the Australian financial services sector to keep its eye on the digital transformation.
He said that the sector is in a period of transition, and that it needs to be more proactive and adapt to the changes taking place.
“There is a need for financial services providers to be proactive and learn to adapt to these new technologies, which are changing the way we transact,” he said, adding that this would take time.
The Australian Banking Association has been monitoring the pace of change in the financial sector and said that there is some work to be done.
“The banking industry has made a lot more in the last few years,” said the ABA’s president, David Dickson.
“They’ve been able to adapt and have become more efficient and have a greater number of branches and offices around the country.”
Dickson said that a focus on digital transformation could make it easier for financial service providers to meet the challenges that face them.
“We know the financial service sector is one of the fastest-growing sectors in Australia,” he explained.
“The transition is going to take some time.”
The new digital currencies, including Bitcoin, Litecoin and Ripple, have had a huge impact on digital asset trading and the financial industry.
But the ABI says that digital asset assets are still relatively new.
“Digital currencies such as Bitcoin and Litecoin have had an incredible impact on financial services, but they are still in a nascent stage,” said Dickson, adding: “They are not mature, they are not stable and they are susceptible to new technologies that are emerging.”
He said the new virtual currencies could make digital asset trades more profitable.
“If the virtual currencies can be used in the real world, it will make it a lot easier for people to take advantage of digital asset companies and make transactions,” he added.
The ABI has warned that digital currencies may be prone to volatility, but it has also noted that digital assets are now being traded on more than $50 trillion in assets.
“In the digital space, there are significant opportunities for financial technology companies to become involved in the world of financial technology,” Dickson said.
“This is a time for financial companies to step up and take advantage, but the opportunities are also there for the wider economy.”
The ABA has also called for the introduction of a federal digital currency.
This is the first step in the Australian government’s plans to introduce a new national digital currency, which will allow people to pay for goods and services using digital currency rather than traditional currency.
“One of the big challenges in this area is the lack of uniformity and consistency across the Australian economy,” said ABI’s executive director, John Boulton.
“It is also an area where digital currencies can provide the perfect solution.”
This is in line with the Federal Government’s goal of creating a new digital currency to replace the Australian dollar.
The Government has said it wants to establish a digital currency that is both secure and transparent, which would be regulated and overseen by a clearinghouse and digital currency market.
“A digital currency is an asset, but also a form of money,” said Boulson.
“It is a payment channel for digital transactions.”
Digital currency has been gaining popularity, with investors turning to it for its anonymity and low transaction costs.
However, Boulsons view is that the new national currency could have some drawbacks.
“With Bitcoin, there is not much transparency, there’s not a lot regulation, and there’s a lot risk of inflation,” he told AM.
“As we’ve seen in China, where the Chinese central bank is pushing for a digital economy, there will be a lot less competition in the Bitcoin