These days, when people talk about business assets, in many cases they are talking about much more than the physical or tangible assets that have long been the primary measuring stick of a businesses value. More and more often, businesses, especially those that engage in ecommerce, have significant "digital assets" that have a great deal of bearing on their bottom line. As a result, effective digital asset management is becoming increasingly important.

Digital asset management is reaching a point of what some experts call "critical mass" and a potentially volatile time in the brief existence and history of managing digital assets. It is precisely because it is such a new area of business and expertise that it can be difficult to manage at times. One of the reasons for this is that as digital, current assets have become increasingly important to businesses, the solutions for asset managers to use to effectively manage these unique assets have not been at all standardized.

Due to this factor of not yet having standardization in place, digital asset management, while increasingly important, is still "technically" in its infancy. Industry insiders expect that consolidation of both technology solution tools and management tools will result in the smaller, and often more innovative players either joining forces with larger competitors or simply being driven out of business.

The current definition of a good, digital asset management system includes a combination of software and hardware technology solution tools for businesses of all sizes and also includes the work flows that make use of those digital assets. This includes the complete array of digital files, digital storage devices and digital communication pathways that allow for the use, sharing, integration and flow of the information.

Digital asset management is also a category of specialized software that has seen explosive growth in recent years, most particularly as the popularity of digital multimedia has flourished. Without a doubt, most every type of organization today has a great deal of time, cash flows and resources invested in the work that has been produced in some type of digital format and which have added significant dividends to the organization.

At the core of asset management software for digital assets is the establishment of a secure, electronic "clearinghouse" for the storage, daily use, archiving, and distribution of the digital data assets. This "clearinghouse" is essentially a powerful database structure which is carefully constructed around a company's file organization scheme, naming conventions, and daily work flow patterns. Such digital management software is also often referred to as media asset management (MAM), content management, and digital asset warehousing.

In the near future, digital asset management is expected to become a multi-billion dollar industry as increasing numbers of companies, organizations and even individuals continue to migrate from traditional formats of all kinds of information and media to digital formats. This creates unique opportunities for investors and developers, and also for individuals who hone their skills in this important area, which will only continue to expand.

It should be noted that digital asset management is not only related to making sure that equipment, software and work flows are accounted for and in place. Just as important, and sometimes more so, is having well-qualified people to not only produce high-quality digital assets but also to know how to properly manage those electronic assets.

In a world of national currencies, the forex (foreign exchange) market provides the mechanism for making payments across borders, transferring money (and thus purchasing power) from one currency to another and of course determining exchange rates.

The forex market has seen profound changes since the early 1970s, not only in its size but also in the way in which it operates, as a result of structural shifts in the world economy and in the international financial system. Some of the main changes which have occurred in the world's financial environment include:

1. A fundamental change in the international monetary system from the fixed exchange rates arising out of the Bretton Woods agreement to a much more flexible system in which countries can float their exchange rates or follow other exchange rate practices of their own choosing.

2. Major financial deregulation across the globe including the elimination of government controls and restrictions in almost every country, which has resulted in far greater freedom in national and international financial transactions and hugely increased competition among financial institutions.

3. A fundamental change in savings and investment, with funds managers and investment institutions around the world diversifying their investments across international borders and into multiple currencies.

4. Major changes in, and liberalization of, international trade as a result of a series of trade agreements including the Tokyo and the Uruguay Rounds of the General Agreement on Tariffs and Trade, the North American Free Trade Agreement, and US bilateral trade initiatives with the European Union, China and Japan.

5. Technological advances which have made it possible to achieve the real-time transmission of huge amounts of market information worldwide and to analyze that information rapidly so that market opportunities can be identified and exploited. In addition, financial transactions can now be executed quickly and safely, with a level of efficiency which allows costs to be kept at level well below those which were possible previously.

6. New thinking in terms of both the theory and practice of finance which have resulted in the development of many new financial instruments and derivative products. Advances in thinking have also served to change our understanding of the international financial system and the techniques we need to use to operate within it.

As markets have grown and developed since the 1970s in a climate of much greater freedom and competition, the role of the markets themselves has changed and we have developed the tools and techniques to allow us to exploit these growing markets to the full. One major beneficiary of these changes has been the forex trader who has an investment vehicle available today which was undreamt of a few years ago and which will continue to provide the small investor with an excellent trading opportunity for many years to come.

Most countries have their own national currency such as the US dollar, the UK pound, the Japanese yen and the Thailand baht and these are of course necessary for making payments for goods and services within each country's borders. However, in a world where we are traveling more and more and where countries are increasingly trading with one another, foreign currency is required to pay for cross-border sales of goods and services. This means that there must be some mechanism in place to provide access to foreign currencies, so that payments can be made in a form that is acceptable to the seller, and thus the need for a foreign exchange market (or forex market which is simply short for FOReign EXchange).

In its simplest form foreign exchange refers to money which is denominated in a currency other than your own. For example, if an individual exchanges his own currency for the currency of another nation then he acquires foreign exchange. Of course we often think of foreign exchange in terms of tourism and most of us will have traveled abroad either on holiday or for business and exchanged currency on arrival at our destination to pay hotel and restaurant bills and for taxis, sightseeing and shopping. However, foreign exchange is not simply limited to the relatively small sums of money handled by tourists, but applies equally to larger transactions such as the exchange of hundreds of millions of US dollars when a US company buys another company which is based overseas.

Broadly speaking, in the US any money which is denominated in the currency of another nation would be termed as foreign exchange and it is important to remember that we are not necessarily talking here about cash. Foreign exchange can also consist of money which is available through a line of credit (such as a credit card) or that is held in the form of traveler's checks. In other words, we still talk about foreign exchange for any negotiable instrument which is denominated in a currency other than the US dollar.

When we talk however about the foreign exchange market we are not really concerned with the exchange of small sums of currency by tourists, but are looking at foreign currency which is exchanged between an international network of foreign exchange dealers and is normally exchanged in what most of us would see as being very large sums of money. For example, one of main players in foreign currency trading is the major banks and here a US bank might need Japanese yen and thus deposit several million US dollars with a Japanese bank in exchange for Japanese yen.

Today an increasing number of small investors are able to participate in the foreign exchange markets and benefit from the profits to be made as the prices of national currencies rise and fall against one another. In general however the private forex trader does not himself trade in large sums of money but is able to trade by working through brokers who are themselves major players in the market.

An exchange rate is simply a score for one currency against another and represents the number of units of one currency that need to be exchanged for a single unit of another currency. The exchange rate is thus the price of one currency against another and, given the number of world currencies today, within the US alone there are literally dozens of exchange rates. Now that seems simple enough but, unfortunately, it is not quite that easy.

Quite apart from these simple exchange rates, which are sometimes referred to as 'spot' rates, there are also a whole range of 'trade weighted' or 'effective' rates which show the movement of one currency against an average of several other currencies. There are also exchange rates which are used in markets such as the forwards markets in which delivery dates are set at some point in the future, rather than at the time of the initial transaction. In other words, there is no such thing as an exchange rate, but are in fact a series of different exchange rates depending upon the nature of the transaction.

The foreign exchange market is driven largely by supply and demand and the exchange rate between any two currencies at any moment in time is influenced substantially by the interaction of the various players in the market. In a few cases currencies are still fixed, or the exchange rate is set by the monetary authorities, and when this is the case the country's central bank will normally intervene if required and either buy or sell the currency to keep its exchange rate within a narrow and defined band. In the vast majority of cases however, and certainly in the case of the US, currencies are allowed to float and central banks do not normally, and certainly not routinely, intervene to support their currency. Accordingly, the exchange rate for a particular currency against other currencies is determined by players, large and small, who are buying and selling the currency at any particular moment in time.

The mix of participants in the market is important and will affect different currencies to varying degrees. Some buyers and sellers deal in the market purely in support of international trade and are operating in the 'goods' market buying and selling currency to pay for merchandise being traded across national borders. Other dealers are buying and selling currencies in support of 'portfolio investment' and are trading in bonds, stocks and other financial instruments across national borders. Yet another group of currency traders are operating in the 'money' market and are trading short term debt across international borders.

As if this were not complicated enough, this mix of traders whether they are paying for imports, investing, speculating, hedging, arbitraging or simply seeking to influence exchange rates are also focusing their attention of a variety of different timeframes in their trading which will range from a matter of minutes to several years.

Against this background it is no wonder than predicting exchange rates is a complex business. Doing so however is vitally important since exchange rates influence the behavior of all of the participants in the market and, in today's open market, also influence interest rates, consumer prices, economic growth, investment decision and so much else. It is for this reason that the forex market plays such a critical role in determining exchange rates.

Every forex (foreign exchange) transaction involved the transfer of funds between two nations and that means that it also involves the payment and settlement systems of the two countries concerned in the transaction. For this reason national payment and settlement systems play a key role in the day to day operations of the forex market.

Today there are a wide variety of payment systems which are legally acceptable within the United States and payments can be made for example in cash, by check, using an automated clearing house or using an electronic funds transfer.

In terms of the sheer number of transactions the vast majority of payments in the United States today are made in cash or by check, however, in terms of value, the greatest amount of money is paid by electronic funds transfer. For this reason the electronic funds transfer system is a key component of the Unites States payment and settlement system and it is this system which is used to make inter-bank transfers between dealers in the forex market.

There are two main electronic funds transfer systems operating in the United States today. The first is the Clearing House Inter-bank Payments System (CHIPS) which is a private system operated by the New York Clearing House and the second is a system operated by the Federal Reserve Bank and known as Fedwire.

Using Fedwire a regional Federal Reserve Bank debits the account of the sending bank and credits the account of the receiving bank so that the transfer is effectively immediate and this is often referred to as a RTGS (real time gross settlement) system. By contrast individual transactions are not settled during the course of the trading day using CHIPS but are settled at the close of each day's business as a net settlement for each individual CHIPS account holder. Final settlement of CHIPS obligations is made using Fedwire.

Other countries operate systems similar to those in the United States. In the United Kingdom for example settlement is made through the Clearing House Association Payments System (CHAPS) with settlement being made through the Bank of England, while in the European Community a system linking the banks of member states and known as Target is used to settle transactions involving the Euro.

The United States settlement system is particularly important in the world of forex trading because the majority of global foreign exchange transactions involve the US dollar with daily settlements running into trillions of dollars. Indeed, the bulk of the transactions processed through CHIPS every day are foreign exchange transaction settlements.

Although modern technology has done much to transform foreign exchange trading one element which still concerns many people is that of 'settlement risk'. In other words, the risk that you will pay out the currency you are selling but not receive the currency you are buying. Considerable efforts have been made in recent years to reduce settlement risk in the foreign exchange markets and today the vast majority of forex traders would consider this risk to be minimal.