Because of digital technology, nearly all areas that are essential for business, science, public or private life are nowadays controlled technologically: security, healthcare, energy supply, production, mobility, communications and media. The more areas we leave to the control of data technology, the greater the importance for its reliability.
Globally industries are rapidly molding into new shapes due to fast improvements to digitalization and technology. The trend of digitalization in the traditional sectors is impacting heavily on cost-saving potential and even creating new revenue streams.
Digitalization and digital transformation are current topics in today’s rapidly developing business world as consumers are moving to a digital form faster than ever. The growing number of smartphones and home computers is forcing companies to move into a digital form of serving customers and therefore changing their organizational cultures and value chains forever.
What Is Digitalization?
Digitalization can be defined as the use of digital technologies in order to create new business models and to provide new revenue and value-producing opportunities.
It is the process of moving into a digital business and the integration of digital technologies into everyday life.
Digitalization is a modern trend that has been argued to start from the 1980’s when home computers were introduced to consumer markets which then opened new channels for consumers to become more communal and aware of civil democratic issues than ever before.
The modern technology and digitalization have removed barriers off the modern society, such as time, space, data acquirement and involvement, which allows consumers to have more freedom to interact with other parties regardless of time or space.
Digitalization is an opportunity for companies and organizations to improve their business activities. Due to the technological advances and digitalization, the interaction between companies and official authorities to consumers and citizens has also been improved and created new ways of reaching one another.
This can easily be seen in the banking sector, where digitalization has given the people more ways of reaching potential financing instruments, helped them to improve their financial literacy.
The Internet and Decentralized banking have become the single biggest channel at the moment of reaching customers and for customers to handle their bank errands.
The Effect of Digital Technologies on Customer Behaviors
The behavior of the consumerist society is changing with the unlimited communication provided by digital Technologies some of which are social media, mobile computing, artiﬁcial intelligence and analytics, cloud computing, VR-AR, chatbots create changes for both consumers and companies. Customers now expect unlimited communication from businesses and expect more responsibility from companies in purchasing services and products.
Increased comfort with technology and high utilization of online channels feed this change faster. Digitalization has also changed the way consumers interact with ﬁnancial providers. In traditional methods, face-to-face communication has created many different channels with the development of technology.
In addition to digital channels such as telephony, ATM, kiosks, internet and mobile, now instant Public ﬁnancial services are provided that is supported by virtual assistants assisted through artiﬁcial intelligence and make the customer journey perfect.
Digitalization allows ﬁrms to identify the strengths of solving problems that arise in customer journey, and to proactively address complaints and potentially even before they occur. For example, widespread adoption of social platforms makes services and products increasingly transparent. Nowadays, a customer is able to share its bad experiences with hundreds of potential customers instantly and the effect can spread to millions of people by clicking a button. The impact of this digital ascent does not only punish a company for poor services. Through positive messages from satisﬁed customers, a company adds value to its reputation for good service or excellent products.
The digital era began relatively slowly. The first programmable computer using binary code was the Zuse Z3, designed and built by Konrad Zuse and Helmut Schreyer in Berlin in 1941.
Brief History Of Digitalization
In 1971 the first microprocessor was patented; it contained 8,000 transistors. Within ten years, nearly ten times as many transistors were being used; by 2016, the number was around 8 billion.
This exponential growth in complexity and power of digital computers was predicted by Gordon Moore in 1965. Moore’s Law, a rule of thumb to which he gave his name, is generally held to mean that the number of transistors that fit into an integrated circuit of a specified size will double approximately every 18 months. While the law’s interpretation and durability may be the subject of debate, it nevertheless provides a fairly accurate description of the dynamics of the development of digital technology.
But the development momentum is also reinforced by the fact that technological fields of application are expanding equally quickly. The need for digital systems appears inexhaustible, because they contribute to improvements in nearly every area regarding performance, quality and (resource) efficiency of products and processes. The developmental leap is so all-encompassing that we can justifiably speak of a “digital revolution”.