Is digitization a hype?
If you believe SEB’s (one of the major banks in the Nordics) CEO Annika Falkengren it is a hype, at least when it comes to the banking sector. This can be read in an article in Dagens Nyheter (in Swedish).
The press clip above says:
Her view: “The much talked about digitization of the banking sector is a “hype”. “It’s almost the same as during the dot.com boom. What it actually comes down to is relationships with customers.” She points out that banks can find new paths themselves, as with Swish.
“Anything that can be digitized will be digitized”
The above expression has been used extensively in recent years and it is probably very few people that think it is an incorrect observation. That some areas are digitized faster than others are only natural, for example, regulations and legislation can pose some obstacles. But see how quickly the regulated taxi market has changed, as a result of new digital ways to meet the customer. So in the long run even industries that are protected by strict rules, such as banks, will probably be exposed to Digital Darwinism*.
Once upon a time the phrase “Kodak moment” referenced to an occasion or moment that was worth to perpetuate by taking a photograph, while the contemporary interpretation could be seen as the moment when a company opts out of the future and clings on to the old. Kodak chose to turn their back on the digital photo technology as it would cannibalize on their existing analog business, a decision that made the company go bankrupt. The company has since resurfaced, but are far from their golden days.
“Banking is necessary, banks are not”
The above statement is from 1994, when Bill Gates predicted that technological advances would change the banking sector. This applies as much today as then. The banking sector has obviously changed a lot over the last 20 years, but the actors are in many respects the same. In my opinion, Annika Falkengren’s statement could be a modern-day “Kodak moment”. Stating that digitization is a hype, while saying that it is about customer relationships, is like saying we continue with analog film rolls because it is all about customer relations. Digitization can absolutely create new conditions and opportunities for better customer relations and it is in exactly that intersection where the risk of Digital Darwinism exists; when you are no longer relevant to the customer the downhill journey can go fast.
1) Do you think that digitization is a hype?
2) Could this be a “Kodak moment”?
* Digital Darwinism i a term found in the ebook ”The rise of Digital Darwinism and the fall of business as usual” by Brian Solis.