Understanding Digitalisation Terms


When we look back at our long list of blogs, it becomes very apparent that a number of new phrases and terms have entered the vocabulary of those involved in the wonderful world of trade.


Not surprisingly, a considerable number of these relate to digitalisation. As such, we have consolidated a number of the meanings that we provided previously and list below a short summary.



  • The European Commission defines FinTech as technology-enabled innovation in financial services, which is spurring new business models, applications and processes, such as payment applications for mobile devices.


Distributed Ledger Technology (Blockchain)

  • Blockchain can be regarded as a decentralised or distributed ledger for validating and recording transactions. As in the physical world, whenever a transaction is initiated, it requires validation and authentication. However, as opposed to the physical world where such authentication is handled by a trusted third party (often a financial institution), the pending transaction is broadcast to a network of decentralised users (defined as ‘miners') who, using specialised software, compete to verify and authenticate the cryptographic key added to a transaction. In essence, the ‘miners' are verifying and confirming a bookkeeping record. For this activity, known as ‘proof of work', they receive a reward in bitcoins.


Smart Contracts

  • Having access to real-time data would facilitate the formulation of contracts and documents on an automated basis provided that the underlying required criteria is verified by the blockchain, thus producing what is known in blockchain terminology as a ‘smart contract'. Smart contracts include programmable activation once certain criteria have been met, i.e. ‘if this happens, then do that'. A smart contract would not require the intervention of an intermediary such as a bank or a lawyer, as it has removed the need for the trust of a ‘third party' by basing the trust element upon a secure mathematical code. The code underlying the contract would execute when a triggering event occurs rather than drafting a contract on a case-by-case basis.


Internet of Things (IoT)

  • The IoT embeds sensory and wireless technology within objects, making it possible to digitally transfer ownership of all kinds of physical property. The technology has an additional benefit in that it also provides the ‘object' with the ability to transmit data in respect of identity, existing condition and the environment in which it is based.


Artificial Intelligence (AI)

  • The FSB (Financial Stability Board) defines AI as the theory and development of computer systems able to perform tasks that traditionally have required human intelligence. AI is a broad field, of which ‘machine learning' is a sub-category. Machine learning may be defined as a method of designing a sequence of actions to solve a problem, known as algorithms, which optimise automatically through experience and with limited or no human intervention


Big Data

  • Depending on the sources used, it is estimated that as much as 99% of all available data has been generated in the past two years. The essence of this new era is a distillation of data, transforming data into information, using information to gain knowledge, and ultimately using knowledge to achieve wisdom. It is not a giant leap to realise that having the ability to interpret data in new ways will lead to improved product development, speedier time to market, enhanced risk mitigation, superior market and client evaluation, and better innovation. The FSB uses the term to describe the storage and analysis of large and/or complicated data sets using a variety of techniques including AI.


Industrial Revolution 4.0

  • In this fourth revolution, we are facing a range of new technologies that combine the physical, digital and biological worlds: these new technologies will impact all disciplines, economies and industries, and even challenge our ideas about what it means to be human. As explained in Wikipedia, Industry 4.0 is the current trend of automation and data exchange in manufacturing technologies. The term ‘Industrie 4.0' originates from a project in Germany that promotes the computerisation of manufacturing. The European Commission defines the term "Fourth Industrial Revolution" as referring to technologies and concepts of value chain organisation which aim to leverage differences between the physical, digital, and biological sphere.


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