Digital Disruption, What’s your next move?

The flow of Digital Transformation and Tech Startup has played a vital role in today’s business strategy. Highly advanced countries use varying capacities to stay ahead of the game. According to a study by KPMG, one of the largest audit firms in the world, one common denomenator among the world’s superpowers today is digital applications to business operations, i.e., the employment of innovative technological mechanisms and connectivity to solve and improve various business problems for the customer and advance core competencies for projected growth in the future.

For example, China has laid out comprehensive guidelines for digital infrastructure preparations to support technological innovation in administrative and financial systems as well as collaborative consumption. Regulatory, compliance and related policies are in place to facilitate the development throughout the 2016-2020      term. Holding the promise to bring various benefits to banking systems, a key area of focus that has become one of the fastest-growing areas for venture capitalists is FinTech, or the combination of Finance and Technology applications, i.e., not to be confused with digital currencies or Blockchain technology application, itself. The term is used to indicate the application of various technologies to optimize and synchronize categories of online banking and financial services through ATM machines and other platforms that make financial activities more convenient and cost effective as well as faster.

FinTech has ruffled banking and financial feathers, not only in China, but also, unsurprisingly, Thailand. The provision of Fintech has led to consumers handling financial transactions, that would otherwise be taken to the bank, from their smart handheld devices or PCs, instead. As less and less see the need for making bank runs and fiddle with parking lots, the result is a closing of 42 banking branches nationwide in 2016. Mr. Don Nakharak, Senior Dir. to The Bank of Thailand shared his thoughts that, “In the past period, we have seen closures of commercial banks and expect to see more throughout the fiscal year as well as next year. Brick and mortar branches have endured higher overheads than that of it’s electronic counterparts. Thus, this is the normal course as they adjust to new directions in the digital economy.”

A key contributing factor that drove the rise of financial tech today is growth in the online commerce business, or e-commerce. As  more and more consumers turn to online shopping on a daily basis in Thailand, Fintech will play a larger role in facilitating payments of goods or services. The fact that e-commerce models today cater to buyers gaining access to transact with all available sellers with special incentives to becoming business partners, as oppose to regid relationships with limited sellers that come with longer obligatory terms or limited promotions during specific time periods, only; thus, consumers enjoy significantly more options to select from, more transactional transparency, clarity of to whom business is conducted with and therefore significantly more consumption power. All of these previously unavailable qualities lead to brand loyalty development between trusted partners. Given today’s rigorious online requirements, complexities and details, however, e-commerce platforms need to be even more accomodating and flexible than predesecor models, as well.

Unmistakably, Digital Transformation is the key driving force behind the ongoing transition from traditional wholesale-retail to the more leaner and forgiving collaborative e-Commerce platforms today. More and more businesses channel trade through digital hubs according to growth in demand and new bars of customer satisfaction that has become a requirement. Aside from optimized convenience, no business is immune to disruption. From 5-star veteran companies to family scale part timers, everyone is subjected to the same level of customer feed back which, as it turn out, Likes and Number of Views are the strongest differenciation consumer loyalty and repeat purchases are queqed by. “You snooze, you lose”, there is no such thing as loyalty for slackers and antiquated deals with unreasonable price tags. On the other hand, there’s always room of flexible players willing to adjust legacy practices. A great example is Walmart, the American multinational retail giant that had capital and iinefficiencies tied up in bricks and mortar and lost major market shares to Nothing is as certain as change it’s self, yet, Walmart opted to alter conventional infrastructure to support digital capacities with a chain of hypermarkets, discount department stores, and grocery stores tailored to e-Commerce operations and is now back in the game as a leading competitor in quality retailing., nevertheless, remains the epitome of retail in the age of the Internet of Things (IoT) and collaborative consumption. Poles apart from Walemart in terms of net sales and market capitalization, it has different mission statement and infrastructure blueprint altogether. The e-renaissance is the world’s largest provider of cloud infrastructure services (IaaS and PaaS), along with the largest internet-based retailer in the world title, that also competes in innovative electronics, notably, Kindle e-readers, Fire tablets, Fire TV, and Echo.

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