Digital transformation in finance

To embrace the promising potential of the emerging information technology (IT), organizations need effective digital transformation (DT) strategies to be developed, which require subtle understanding of the disruptive IT and its source of value creation. However, an obstacle in this regard is absence of a common language between financial experts and IT professionals, exacerbated by the intricacy of distributed ledger technology (DLT). While this lack is alleviated for large financial companies with powerful IT sectors, it is more serious for SMEs due to their limitations in allocating resources to such issues. Also, a review of the extant literature shows that although DLT potential for the financial sector is the core subject of a large number of recent articles, many of them just emphasize the disrupting quality of such potential without providing a clear delineation of the subject. One of the areas that suffers from such vagueness is corporate finance despite its high potential of being disrupted by the emerging IT according to DLT’s capability to serve as an efficient informational backbone for corporations. While almost every function/process of corporate finance is capable of being enhanced in terms of transparency, traceability, and efficiency by DLT-based innovative solutions, conduction of effective research on DLT potential for corporate finance by the academia can highly affect the pace and quality of DT strategy development and thus value creation in the financial sector especially by its SMEs. One of the promissing developments we will focus on in this project is the emergence of initial coin offerings (ICOs). This blockchain-based financing means is rapidly developing as an alternative financing channel for start-ups and as such remodeling the financing field.