Digitization is an unstoppable trend sweeping across the world and permanently changing industry dynamics, investment considerations and even financial careers. Keep reading to discover key risks and opportunities to earn more. (reading time 6 minutes).

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3 Important Ways Digitization Impacts Finance & Investing

Digitization involves the conversion of analog information into digital or computer readable formats. It typically also involves the integration of digital technologies into business processes which is sometimes referred to by a slightly different name – digitalization. Both impact finance & investing in many ways of which 3 selections are below.  

1. Greater Digital Expectations & Needs Of Clients 

A report by Deloitte – Building a Future Ready Investment Firm – highlights the significant change in expectations clients have of their financial providers:

• $15 trillion of wealth passing from older to younger generations by 2030.
• 74% of Gen Y and Z expect their digital experiences to be on par with leading digital companies.
• 42% of investors feel digital apps, channels and platforms are the most important criteria when selecting investment providers.
• 61% of investors want providers to supply better digital tools so they can manage investments directly.

With clear implications for attracting and retaining clients, financial organizations urgently plan expenditure for digital transformation or risk being left behind. Statista estimates over $3 trillion will be spend on digital transformation by 2027. Organizations with leading digital experiences may have the opportunity to charge a premium and generate incremental revenue from new clients.

 Organizations can accelerate their digital transformation and save cost by using Capnote on a private-label basis. According to McKinsey, the majority of in-house digital projects in financial organizations fail, going over time and budget. To find out how Capnote can help your organization, use the meeting link below. Investors can also benefit from this trend by backing companies that support digital transformation like Capnote. 

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Also Read: Accelerate Digital Transformation

2. More Data To Process, More Quickly  

In an increasingly digital world, financial performance closely correlates to the ability to process data quickly and accurately. However, there’s more data to consider than ever before – driven by new capabilities to track metrics, globalization, great regulation, changes in technology and more. Those able to use advanced technology for this, secure an information advantage. However, the vast majority of organizations and professionals are underserving. That’s why 62% of investment firms are making their biggest investments in data analytics.

 Capnote was created by experienced financial and technology professionals to help with this issue. It’s core function is to constantly aggregate and interpret data for financial purposes. Read more about Financial-Processing-As-A-Service.

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3. New Asset Classes 

There’s clearly tremendous opportunity and risk from new digital asset classes like cryptocurrency. Traditional risk management processes have struggled to cope with these new asset classes. However, they do not seem to be going away any time soon. Blackrock’s Bitcoin ETF (IBIT) was launched in January 2024 and already has a market cap of $159 billion. 

The below extract from Capnote’s indicator module highlights the huge volatility of bitcoin given its 5 year average of $30,946 and standard deviation of $18,401. This can be seen even more clearly in the below chart from trading economics.   

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