A change of mindset is needed in the financial market to ensure a standard growth in the field Jessica Chew, deputy governor, Bank Negara, Malaysia, made this the theme of her speech at the international Head of retail Finance annual meeting. The message of her speech at the convention goes as follows:
She cited Kodak as a case study of the lessons needed to be learnt by the financial industry. She noted that the case of Kodak is attributed to digital disruption whereby the film technology was still much of relevance even at the turn of the century, but with the introduction of digital camera that gained grounds almost immediately due to its advanced technology, just a matter of few years, the film phased out and consequently, the Kodak was put out of business. And still just with time as the digital technology improves most people can now take quality pictures with their mobile phones. And that is how the phrase we all are familiar with, “KODAK OF THE MOMENT” just got forgotten in a matter of few years.
She made it clear that digital revolution is something the financial market needs to embrace and not back out from for it cannot be quenched, as she used the words “real” and “inevitable”. Pointing out that the case study of Kodak may sound outdated but the message will forever be relevant. Digital revolution is so unpredictable that we do not know how much it has affected our lives and the way we live.
A basic change in assumptions in may be the way we see business, social, political situations accounts for the most important to note change triggered by digital revolution in our immediate environment. It has simply shaped our thoughts to see things differently from the way used to in the past; this is what digital revolution has brought.
Today the relevant questions being asked in the world of finance includes what a bank does that makes it bank, the tendency of digital currency to replace central bank issued money, or may be central bank will issue its own digital currency and in the process remove smaller banks mediating activities, we still wonder if banks are selling financial products or offering a lifestyle, we ask, what business are banks really into.
It can be difficult for now to admit, but right now, there is a shakeup of the financial industry. This was predicted by McKinsey some three years ago, when he noted that the scope of finance will be redefined by the expected advancement in technology, he buttressed that a space of five years are given to the incumbents to either adjust or become obsolete.
For the finance industry to spend an estimated total of $200 billion on a yearly scale across Europe, North America, Asia, in Information Technology, it simply means that to a reasonable extent, the finance industry has been responding to the predicted changes in technology. To be able to bank without visiting any bank branch, and making payments without physical cash, are some of the noticeable effects of such investments in Information Technology.
Technological advancements are also redefining the landscape of finance that we are only beginning to understand.