Digital Transformation of

Financial Services
Capstone

Smart Money – Restricted Cash

 Diagnosis
Smart Money - The Concept

• Enhancing the medium of exchange to ensure there are controls

to enforce requirements
– Traceability – Full end to end picture of the money flow
– Auditability
– Know your customer / GDPR – Anti-Money Laundering
concepts built into the flow
– Not to be confused with the traditional definition of “smart
money” meaning institutional investors
• Can be used on a variety of scales
– Core banking – decreases likelihood of confusion as seen in
2008
– Corporate – AML checks built in, due diligence support
– Personal – budgeting support, parental oversight of child
spending (this will be the concentration of the next 2 slides)
 Prescription
Smart Money – Implementation
(Personal)
• Platform – Blockchain
– The concept of an immutable decentralised database would suit
this.
– Smart money is a re-use of an old term but is close to the
Ethereum cryptocurrency concept of Smart Contracts
• Payment systems
– This may require an update to the protocol between retailers
and the back end, to ensure smart funds are available for the
purchase
– Potential to be supported by mobile technology, smart phones
can give required control
• Individual gets notification to show the spend compared to
previous spends, budgets etc
• Parent gets notification to allow purchase
 Prescription
Smart money – challenges
(Personal)
• Will companies want to sign up to a process that looks to restrict
spend?
• Will additional technology requirements increase price, processing
time, likelihood of failure?
• What to do when the parent isn’t available? Timeouts? Transaction
limits?
• What other parallels already exist? Is there something that can be
partnered with?
– Swish
– Paypal