Banks are exploring setting up digital assets labs as a locus for broadening and deepening such functional experience, while also setting up clear governance for digital assets product roadmaps and commercialization.
Finally, a digital assets lab would also provide the initial technology assets and sandboxes required for bank stakeholders to tangibly explore CBDC and digital assets use cases, e.g., using the EY tokenization platform, and the Starlight platform for managing privacy and security issues. The EY global organization has been at the forefront of digital assets industry collaboration, for example, with the CBDC Tracker initiative, as well as through collaborations with technology providers, through which we can enable clients to rapidly set up and operationalize digital assets lab infrastructures.
Steps for banks to harness digital assets
Digital assets represent one of the most far-reaching opportunities for innovation in financial services, with the potential to upend established regulatory and commercial models. Identified financial institutions, in particular, need to take action to assess both the commercial opportunities from digital assets and CBDC, and to assess the threat posed by a potentially disruptive change. Banks should embark on this journey with five key steps:
- Define your digital assets operating model: Options to build digital asset capability, either through an internal dedicated team, or a standalone entity focused on digital asset offerings.
- Identify promising product opportunities: Address and review the digital asset products catalogue based on the alignment with overall Bank objectives.
- Assess the case for investment: Assess market dynamics and assess potential impact (e.g., potential upside, decrease in operational cost).
- Identify gaps in execution capabilities: Examine practical aspects of the approaches and capabilities required to recommend a target state in line with industry due practices.
- Bring executives, staff and clients along on the journey: Align stakeholders and assess demand from clients. Actively drive client understanding of products, services and approaches.
The immediate starting point should be targeted education and alignment sessions with both senior executives and functional leaders within the Bank, as well as with key clients, to establish a common understanding of digital assets and their implications for different areas.
How EY can help
The global EY organization assists in designing and providing leading class learning programs for executives and functional leaders at financial institutions. As EY organization has developed a bespoke approach, provided through engaging face-to-face learning events, with optional activation sessions designed to drive the right outcomes for your senior and board level executives. We can outline specific technical learning in line with the agreed topics to develop the pathway further. This includes:
- Case studies and challenges: Leaders will be asked to work with real life problem situations to drive the objectives of each of the workshops and to make the learning impactful and personally relevant.
- Continuous learning: Leaders can engage with other training collateral and resources, identify a small forum to connect with each other through a learning hub, test ideas and collaborate.
- Access to EY subject matter resources: Leaders will have access to the most up-to-date and thought-provoking insights through the group of regional and global subject matter resources (SMRs) in each area.
This level of alignment and education is critical, given the potential for a significant transformation of a bank’s strategy, risk and operations. The global EY organization offers multidisciplinary capabilities and services to support you through the different stages of this journey. These include distinctive capabilities in digital assets strategy, change management, regulation, legal matters, risk management, control and technology.