Bye-bye bank notes? Here's how prepared the UK is to go cashless, according to the Citi Digital Money Index

Lynsey Barber
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Bye-bye bank notes? Not quite yet for the UK, but we're more prepared than others (Source: Getty)

The UK is the fourth most prepared country in the world to ditch physical cash and go digital.

The annual research from Citi and Imperial College London found the world continues a steady march towards towards digital money, but, even in the most ready countries such as the UK, the unbanked and underbanked are still being left behind.

The bank estimates that just a 10 per cent increase in the adoption of digital money would bring 220m people across the world into formal financial services and bring in an additional $1 trillion of new flows into the formal economy, $100bn of that as potential tax revenues each year.

Read more: The most powerful man in tech believes the world will become cashless

Singapore was ranked the most prepared of 90 countries in the Digital Money Index, based on four factors: support from government and markets; technical and financial infrastructure; solutions for digital money and propensity for adoption. The US and Finland came in second and third place, with the UK ahead of other Scandinavian countries, Hong Kong, Switzerland and the Netherlands in the top 10.

The UK came second in terms of digital money solutions, behind only Finland, and third for propensity to adopt, behind only Sweden and the US. But it came only thirteenth in terms of infrastructure and seventh for support from markets and government.

The digital scores of emerging countries showed the biggest improvements, led by India's 9.7 per cent rise and Bangladesh at eight per cent. Tanzania, China and Vietnam's digital readiness grew by just under five per cent each.

There was a rise across the board of two per cent since 2014, with 90 countries ranked, while the affordability of financial services fell by more than three per cent in countries deemed digitally ready compared to a 2.3 per cent improvement in emerging locations.

Read more: We're closer than ever to being a cashless society

India's leap forward has come after a significant push by the government. It banned large 1,000 and 500 rupee bank notes to tackle corruption and counterfeiting, while also playing into its existing digitisation plans. It has launched a country-wide digital identity scheme which already has 1.1bn citizens signed up. Along with the huge uptake of mobile in the country, it's bringing many more into formal financial systems.

India is targeting 25bn digital transactions over the next year and figures from Google and Boston Consulting Group expect the value of such transactions to hit $500bn by 2020, more than 10 times current levels.

"Developing countries, it seems, have salutary lessons to offer even the world's digital money leaders," said Citi global head of digital Greg Baxter.

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