Since its inception, cryptocurrency has been regarded as technically fascinating but fundamentally unreliable. Those who invested £10 in Bitcoin eight years ago would have £1.6 million today — a fluctuation which, while mind-boggling, further undermines the notion that digitally created currency is a stable store of value. At first, it was dismissed as a toy for geeks. Then it was seen as a threat, used by criminals to buy drugs and guns. Some, like Lloyds Bank, have refused to carry out any cryptocurrency transactions on behalf of customers. But its popularity has kept growing.
The technology such currencies are based on, blockchain, has allowed other Bitcoin epigones to be set up. In theory, Bitcoin poses a threat to the current world order: if governments lose their monopoly over the ability to print money, what then?
Mark Carney, Governor of the Bank of England, has been particularly excitable on the topic. He has said the volatility of cryptocurrency last year was 25 times that of equities — something he sees as such a problem that it justifies regulation. Yet the fact that a commodity, or currency manifesting as a commodity, is the subject of irrational speculation is not in itself a reason for governments to ban or control them. Governments did not ban railways during the years of ‘railway mania’ in the 1840s, or tulips during the tulip mania of the 1630s. Neither did they attempt to ban the internet on the grounds that the dotcom boom was doomed to lose many imprudent investors their shirts.
Central banks can’t seem to decide whether to suppress cryptocurrency or to join in. Carney talks of regulation, the former chair of the Federal Reserve, Janet Yellen, has floated the idea of an official cryptocurrency, the crypto dollar. Officials in the Bank of England have looked — and quickly discarded — the same idea.
Central banks like to think that they can control the supply and value of money, and see cryptocurrency as a threat to that. Why the rest of us should see these currencies as a concern is another matter. They could serve to protect individuals against over-zealous central bankers who are happy to use inflation as an economic tool. We are still in the middle of an unprecedented monetary experiment, quantitative easing, which for the past decade has had substantial distorting effects on the economy.
Such thinking is based on the premise that the public’s money is really the government’s to play with. But if savers and investors choose instead to store their wealth in alternative currencies — be it the Swiss franc or a cryptocurrency — it should not be the business of governments to stop them. On the contrary, politicians should be asking whether cryptocurrency can add variety and stability to the global financial system. So far, this debate has been seen as the preserve of cranks and conspiracy theorists. But it is harder to dismiss now there is $200 billion of value stored in these virtual currencies.
And it’s not just currency that is being challenged, digital change and transformation (across all sectors) is here and must be embraced. Most companies today are already running digital transformation programs. Many of those programs, however, are internally focused on improving processes in silo’d channels like website updates, mobile, and social platforms – and therein lies the challenge – technology programs alone will not help organisations adapt to the sweeping changes being brought about by the emerging digital society.
Digitisation has lowered entry barriers and brought in new competition across many other industries too. Netflix created entire new ecosystems in the entertainment industry. Blockbuster ignored the big changes in the way people viewed home entertainment and ended up being sold in a bankruptcy auction to Dish Network. Netflix, on the other hand, has continued to innovate and evolve, shifting their focus from movies-by-mail to a streaming model and launching their own programming. Other tech giant’s like Hulu, Amazon, YouTube and Apple also play in this arena of personal entertainment that encompasses mobile computing, wireless communications, human-computer interaction, intelligent systems and whatever comes next.
Organisations that have focused their business models around their customer’s digital lifestyle have been able to generate tremendous value from the digital wave. And it need not be only for the new age digital businesses. The promise equally applies to traditional organisations. Disney’s incredibly resilient business model has allowed them to deliver relevant, timeless and unmatched experiences that span many generations. Disney has used technology to improve the customer experience, incorporating wearable technology, fast passes and wait time indicators and Magic Bands that allow guests to buy food, merchandise, and unlock their hotel rooms, all in one device.
Proctor & Gamble is very successfully using a digital-first approach to emotionally connect with and deliver more value to its customers as can be seen in their Always Like Girl campaign. With up to half the world’s viewing time spent on digital, P&G embraces emerging technologies to shape its business model, expand its creativity, and further enhance its brand.
B2B value chains are impacted as well, the prime example being how Salesforce has completely disrupted the CRM software market by putting the sales person at their center of their focus.
Digital adoption by the broader society has leapfrogged organisations; digitally savvy consumers are creating their own ecosystems to meet their specific needs. Organisations that are leveraging digital technologies to reinvent their business models and processes to establish closer customer connection and drive innovation will be the winners. Digital technologies enable businesses to engage more deeply with customers in the context of who they are, what they prefer and what they need. Companies can use these insights to implement enterprise-wide changes that enable them to quickly and cost-effectively deliver more useful, meaningful experiences.
How is your organisation leveraging digital technologies to drive innovation and closer customer connection? Is your company willing to rethink and disrupt itself in order to deliver improved experiences across the customer journey? Are you ready to disrupt, rather than be disrupted?
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