Is digitization our last resort with COVID-19 calamity? | Investera | Investment Management Solution

Is digitization our last resort with COVID-19 calamity?

14April, 2020

The advent of digital technology has shaped every aspect of our lives. Integrating technology and digital solutions into our daily activities has become inevitable. Correspondingly, the financial sector is one of the major sectors that was tremendously impacted by digitization. More importantly, the current situation we are facing involving the COVID-19 outbreak leads us to a crucial question;  is digitization inescapable? Will the outbreak of coronavirus bring us to the era of digitization?

Digitization, digitalization, and digital transformation

Firstly, what is digitization? Is there any difference between digitization, digitalization and digital transformation? Digitization is transforming the data from an analog structure into a digital structure. Thus, it’s the converting of analog data to binary digits, zeros, and ones, so that computers can process the data. However, digitalization is the process of handling converted digital information to attain a digital business environment that deals with digital business processes. On the other hand, digital transformation involves the whole organization and not only the process of using digital technologies. Hence, organizational change is required to achieve digital transformation. [2] 

Benefits of going digital

In today’s fast-paced life, why are digitization and digitalization important? Many organizations tend to approach digital technologies in their daily processes. By doing this, companies can improve the effectiveness and efficiency of their operations. One of the major aspects in adopting digital technologies is enhancing business productivity. Indeed, handling analog data in the form of paper files will consume more time and effort than dealing with files in digital form. In addition, information availability and accessibility will be assured from any spot in the world. Therefore, the time taken to respond to any customer’s request will be significantly reduced. [1]

On top of that, the cost required to perform the business including business operations will dramatically decrease. As seen in companies that rely on traditional processes such as paper files, their activities of maintaining, storing and handling information will be more costly in comparison to businesses that support digital forms. Moreover,  digitizing assists in utilizing business data and analytics to estimate the performance of the business and identifying undesirable implications that could be avoided. With this in mind, the plan for broadening and continuity of the business will be improved and expanded. In fact, digitizing will ensure that precautions are well placed to avert any challenge facing the company. [1]

Meanwhile, digitization affects different sectors and industries coupled with FinTech. Thus, what is the effect of digitization on FinTech? The expansion of digitization embraced the financial sector. Subsequently, financial services were prone to the emerging digital technologies which in return led to the growth of FinTech. Simultaneously, blockchain technology is part of this digital technology revolution as it is referred to as distributed ledger technology. Blockchain involves cryptocurrency, bitcoin and an enormous variety of other fields. Certainly, it is an interesting innovation as dealing with blockchain provides high transparency and establishes user trust. [3]

While digital technology is approached to facilitate financial activities, it is pursued as well as for safety measures. In fact, artificial intelligence (AI) and machine learning are used for the processes of discovering and exposing fake activity via complex algorithms. Likewise, organizations such as banks and credit card lenders depend on AI to expose spam activity. [3]

At the same time, many companies have shown interest in integrating digital technology into their day to day business activities. Hence, those companies may be in a more favorable position in coping with the outbreak of COVID-19 than non-digitized organizations. Thus, will coronavirus enforce digitization in the business world? What is the effect of coronavirus on Fintech? Is digitization our last resort? As the spread of COVID-19 is accelerating, the need for digital technologies is in more demand than ever. For instance, banks are forced to depend on digital solutions and smart deals as their branches were temporarily shut down due to the current pandemic crisis. Furthermore, due to the current situation, various people with different roles in society are obligated to digitize their activities by using mobile FinTech apps, e-Learning solutions, and digital technologies that facilitate working remotely. [4]

All in all, digitization became prominent even for the simplest actions in our daily activities. Essentially, in this critical situation, we are facing, going digital is essential to resume and carry on with the necessity of life. It is no longer an option to avoid the adoption of digital solutions; rather than a luxury, it has become a necessity. 

 

Shaden Khaled Saleh

Quality Assurance at Investera

 

[1] Blog, U. (2018, February 8). Importance of Digitizing Data in Today’s World – Outsource …. Retrieved April 4, 2020 from Unisoftdatatech: https://www.unisoftdatatech.com/importance-digitizing-data-todays-world/

[2] Bloomberg, J. (2018, April 29). Digitization, Digitalization, And Digital Transformation: Confuse Them At Your Peril. Retrieved April 3, 2020 from Forbes: https://www.forbes.com/sites/jasonbloomberg/2018/04/29/digitization-digitalization-and-digital-transformation-confuse-them-at-your-peril/#8358c012f2c7

[3] How is Digital Changing the Financial Industry? (n.d.). How is Digital Changing the Financial Industry? Retrieved April 4, 2020 from Digital Marketing Institute: https://digitalmarketinginstitute.com/blog/how-is-digital-changing-the-financial-industry

[4] Mclntosh, R. (2020, March 25). Coronavirus: New Challenges and Opportunities for Fintech. Retrieved April 4, 2020 from Finance Magnates: https://www.financemagnates.com/cryptocurrency/news/coronavirus-new-challenges-and-opportunities-for-fintech/