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Human organizations are subject to disappearance if they don’t called upon to adapt to
their immediate environment in order to maintain durably both the relevance of their
existence and their operational efficiency. Subject toIn this regard that, they are
requiredneed to implement a continuous process of adaptation of their businesses,
culture, structures, processes, strategies, skills or resources. This adaptive capacity,
more or less conscious, is certainly essential. But, as it has been demonstrated evidenced
by sudden disappearance bankruptcy of some iconic companies, it is no longer a
sufficient condition for enjoying their continued peaceful existence in front of “hidden
competing threats” hanging around to pull you down. We areWe think of referring here
to once successful companies that have gone bankruptcy or suffered huge losses due
most of the time to lack of anticipation of sudden economic changes or disruption.
In other words, given the volatile, uncertain, complex and ambiguous nature of the
current environment, any organization is no more able to maintain continuously, in the
long run, a completive performanceadvantage. To see light trough chaos, he global
environment requires from organizations are deemed to develop two crucial, even
special skills, namely which are the ability to anticipate and the ability to influence.
These skills are key factors for success to find one’s way trough chaos. In particular, they
make possible to renew constantly the potentialities of the organizations.
Indeed, nowadays, the ability to anticipate changes, not only from major trends but also
from weak environmental signals, has become crucial, as evidenced by a survey
conducted in the United States on more than 300 companies. According to this survey, a
successful company is one that is able to anticipate strategic changes over 5 years. As
for the capacity to influence, it refuses requires no more defensive strategy but to
underto take an attentive stance towards changes (changes undergone) and promotes a
voluntarily attitude toward themactions in order to impose its own strategy.
What then are these three drivers of change in the central bank universe? Formatted: Font: Bold
After several debates on the objectives pursued by central banks, a consensus emerged
that the main objective of central banks is the stability of the generalto maintain price
stabilitylevel, which can be measured by inflations rate. Some central banks have a
direct or indirect role in supervising the banking sector. Others central banks have
explicit mandates to support growth and full employment as a key contribution to their
government's economic policypolicies. They also provide various financial services to
the State and other public entities and operate financial market infrastructures that are
critical for the successful completion of payment transactions, monetary policy
operations and credit lendingdistribution. At first sight, the central banks'
businesscentral banking is not directly at threat. However, three forces, to which
insufficient attention is paid, have in reverse a significant impact on central banks’
objectives. These three forces are the volatility of the components of the financial
ecosystem, the speed of technological innovation and stakeholders' expectations in
terms of the institution's profitability.
In a market economy, since the price of a good or service depends on the law of supply
and demand, the question arises: (i) as to how a central bank can preserve themaintain
price stability of the general price level without directly constraining constrain whether
on the supply or demand for goods and services (prices control). or The same applies
toon the distribution of credit (credit containment. )? How can we central banks
improve the financing of the economysoundness of the financial system in an
environment where , when lending credit institutions do not have the assurance of
obtaining loan repayments face high default or counterparties risks, or are struggling
pain to collect savings that are becoming increasingly scarce due to a lack of wealth
creation? The answer to all these questions and many others about the effectiveness of
monetary policy and banking supervision lies in the state of the financial ecosystem.
A financial ecosystem includes financial markets, public policies and institutions, the
judiciary because of its impact on the administration of justice between parties in
transactions involving financial instruments, legal rules on financial transactions,
infrastructure, educational structures related to financial, legal and monetary training,
the production system in that it allows the monetization of assets, the removal of
barriers to domestic production, etc. A financial ecosystem thus allows the
transformation of assets into financial assets and guarantees the transformation,
without high transaction costs, of these assets into cash.
The financial sector has become the field of experience for technological innovation. This
innovation can be displayed as process innovation, product innovation or market
innovation. Considerable gains are made for the entire community users financial
services by these technological innovations: speed of transactions, low intermediation
costs, suppression of territorial constraints and market atomicity (number of actors and
operations). Technological innovation has a significant impact on the central banks'
business, including monetary issuance, monetary policy, banking supervision, foreign
exchange reserve management, supervision of the stability of the financial system and
the operation of market infrastructures. Central banks are nowadays strongly involved
in the development of digital financial services (Fintech) as part of financial inclusion,
are concerned about the development of crypto-currencies and remain perplexed by the
rise of artificial intelligence. On the organizational level, all these innovations put under
pressure the digital maturity of central banks in the use of technologies and their ability
to keep pace with technological change. They are therefore called upon to be the central
banks of their time.
To sum all it up
The forces driving the aforementioned changes are representative of the enormous
pressure on central banks today and situate the effectiveness of these institutions in
their ability to manage increasingly complex changes. There are also links between them
so that they can be strengthened to keep a central bank in a quasi-vegetative situation.
To reverse the trend, changes must be made. But what strategic changes are we talking
about? These changes concern the strategic orientation that has taken place in the
organization and functioning of central banks, leading them to put in place critical
processes, more or less explicit, for the continuous improvement of the financial
ecosystem to which they belong, for IT governance and operational excellence and at the
same time strengthening their adaptive, prospective or influential capacity, as shown in
the following table.
These induced changes are therefore of several kinds that affect the tangible dimension
of the organization, i.e. structures, tools and resources, and the non-tangible dimension
of the organization, i.e. processes, skills and culture. Establishing a change management
process that can strengthen internal capacities and deliver the results expected by
stakeholders is therefore critical for central banks.
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