The Era of Digital Capital Ecosystem

Published by Pankaj Sharma and Raunak Jain on

Digital Capital Ecosystem

Uncertain times for Global Economy – Will it be another Big Push for Digital Adoption by Capital Markets?

These are difficult times for Global Economy

There have been unpleasant events disrupting economic activity and businesses since last few weeks and this includes an outbreak of the deadly coronavirus, the fear spreading quickly and now, the massive price war on oil. It is hardly a surprise that the global equity markets have been declining due to the widespread concerns and potential impact on global supply chains, tourism and travel industry along with a broader concern on the trickledown effect on everything else. We now face a global emergency which poses a major threat to trade linages. Business and personal travel between nations has been put to a halt, and as a result, hotel chains and other ‘tourism-dependent’ companies are now facing a huge challenge. The impact on multiplex chains and shopping malls is already visible and if the situation deteriorates further, people will refrain even more from dining and shopping outside.

When the environment changes, the behaviors change

Amidst all this, the largest impact has been to those who rely on face-to-face conversations and other direct networking methods which involve physical presence or meeting at once place. When people are avoiding even handshakes and the traditional Indian method of ‘Namaste’ (greetings with folded hands still popular in many geographies) is being advocated as a better option, this is where digital methods of interaction can fill in as they still do not affect the quality or ‘look and feel’ of direct discussions. This has been a major catalyst for customers to adopt digital tools for their personal and professional uses.

India Demonetization – drawing parallels

There are interesting parallels we can draw with the impact of demonetization in India and what it did to the adoption of digital payment systems. In November 2016, India decided to withdraw higher denomination currency notes of Rs1,000 and Rs500 from circulation. Since the announcement was made all of a sudden, the Reserve Bank of India didn’t get enough opportunity to print and distribute the new Rs500 and Rs2,000 currency. It took months before things came back to normal, but in the interim, it was difficult for people to find cash and use it for their regular daily needs. This led to a significant pick up in digital currency in two ways,

  1. customers became more open about using digital payment options
  2. more and more businesses started to accept payment through these methods

And as it happens in most cases, the habits stick even after the original reason was no more valid. It has happened to a large extent exactly the same way in case of digital payments in India.

 

Digital is not replacing but it can certainly complement

In the present-day context, it is very likely that Digital techniques like webinars, video calls and e-conferences will now become the most preferred way to carry out capital market interactions. Using a strong and effective platform, users can participate in e-meetings and e-conferencing to give presentations or conduct interviews. As technology advances, the meetings can be customized in various ways so as to motivate the use of such mediums. Inviting guests and joining from remote locations are now done easily. Also, online meetings are completely secure and do not hamper efficiency, making them a viable alternative to the traditional options.

The Advantages – Significant cost-saving and efficient use of time

It is plain and simple. The convenience digital interactions offer in terms of efficiency (both time and cost-saving) is unmatched. The physical meetings can’t be substituted entirely but the advantages digital methods offer can’t be dismissed depending on the kind of meetings you are doing. There are several situations when digital would simply score over physical face-to-face meeting. It is very likely that even after this storm gets over, the users will be left wondering why didn’t they switch to digital earlier?

Efficiency drives the digital adoption and it is the right time for this change

When the future beckons, we have to respond, and it is better if we are proactive than reactive. The time has come to adopt digital for interactions in capital markets and this will be the harbinger of the change which is win-win for all stakeholders in the ecosystem.

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