Cultural Shifts Driving Financial Change And Digital Transformation
Culture is not static. It’s always evolving.
Sociologists reason that:
“Culture shifts or changes when something new (e.g. applications, cloud, etc.) opens up new ways of living and when new ideas enter it (because of outside influence or pressure e.g. COVID, globalization).”
It is these new ideas or cultural shifts that we want to examine below.
Here are 4 cultural shifts that have massively impacted the financial sector and are the key drivers behind the ongoing financial change and digital transformation that’s taking place.
Culture shift #1 Cash is out. Contactless payment is in.
The idea of a cashless society has been around for a while now. However, it’s taken the pandemic to really push more people into adopting contactless forms of payment.
More than a quarter of U.S. businesses — 27% to be exact, saw an increase in the number of contactless payments made because of COVID.
Already, 74% of the global contactless payment consumers have expressed their desire to continue using this digital form of payment.
Culture shift #2 Mobile apps are the new digital banking halls
Standing in line in a physical brick-and-mortar establishment became virtually impossible in 2020 as banking halls were closed in line with COVID-19 regulation.
As the need for agile and resilient financial technology manifested itself, the number of downloads for mobile finance apps rose by 15%. In fact, a record 44% of retail banking clients turned to these apps to transact.
Culture shift #3 Coronavirus and the insurance industry
How did COVID disrupt the insurance industry?
To set the stage, according to the World Economic Forum, the resulting COVID lockdowns caused 114 million to lose their jobs globally, with 22.2 million of these jobs being lost in the U.S.
Job losses meant people had less disposable income so the insurance industry had to adapt in order to survive.
Auto insurers, for example, gave people discounts and some were forced to refund clients owning to reduced driving.
Health insurers revised and restructured premiums as the entire medical landscape was adapted to handle COVID patients as a top priority.
Culture shift #4 Off-site from-home trading floors
One of the biggest cultural shifts that many never saw coming was the closure of corporate trading floors and exchanges. And yet, it happened.
All the contingency plans these exchanges have, including their disaster recovery sites (places where traders can retreat to should the main floor be inaccessible) were no match for the gravity of the situation.
It was an unprecedented moment that saw traders working remotely from their homes relying on technology such as zero-trust networks to keep operations running.
Conclusion
As the financial industry rallies to come to grips with these cultural shifts and subsequent digital transformation, it’s clear to see that technology will be pivotal moving forward.
Scalable, agile, and secure solutions are required in order to adapt and meet people’s financial needs.
If you would like to read more about such technology, head on over to my blog Why Decentralized Banking is Taking The World By Storm.