Technology and finance: The electronic markets

Change is afoot in the land of global finance, driven in large part by rapid technological advances. The convergence of computers, telecommunications that link computers and related devices, and applications software has enabled the birth of a whole new financial products and services. Finance is now a 24-hour-a-day, seven-day-a-week, nearly instantaneous marketplace. The advantages are seen in lower unit costs, broader financial access, and more rapid transaction times. Diasdvantages also abound. The investment costs of keeping technologically up to date are huge. As a result, the number of bank mergers is increasing, and the financial industry job market is contracting. Rapid, often virtual markets have created regulatory headaches around the globe. Both commercial financial institutions and government central banks find it harder and harder to manage the pace of technological and market change. The implications for social change are many. For individual firms and for industry in general, the opportunities and tensions attributable to this change are beginning to be well defined. But, there is no clear indication of how far or how fast change will affect society overall. The capacity of society to absorb major changes in monetary mechanisms may, in fact, act as a brake on the uptake of technological change.