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Digitalization of Finance

By the year 2020, an entire generation, Generation C (for “connected”), will have grown up in a primarily digital world. Computers, the Internet, mobile phones, texting, social networking — all are second nature to members of this group. Their reliance on technology, and increasing demands for things that are fast, easy, and mobile is driving a movement toward digitalization.

Digitization is the process of converting information of any type into a digital format. Digitizing information makes it easier to preserve, access, and share. Once information is digital it can help automate processes and systems that were previously manual or in-person.

The experts at PwC believe that digitalization will reach a high point in the next few years due to three significant forces:

Consumer Pull: Consumers, and particularly Generation C, are already fully adapted to the digital environment. They naturally expect to always be connected, willing to share personal data, and are more likely to trust referrals from their closest friends than well-known brands.

Technology Push: Digital technology continues to expand its influence. The infrastructure backbone of the digital world is bringing affordable broadband to billions of consumers. In parallel, low-cost connected devices are being deployed in every industry, and cloud computing, and the vast information- processing machinery it requires, is developing quickly.

Economic Benefits: The economic benefits captured through digitization are real. A wave of capital has poured into the new digitization technologies and companies, and the public markets reward early movers with unprecedented valuations.

Digitalization is extremely important within financial units. Historically, the finance and accounting teams have been early adopters of technological tools because they already rely on high-level IT to optimize business processes and interactions.

Organizations with strong financial leadership are investing in digital capabilities to meet both compliance and strategic initiatives. More and more CFOs are turning toward digitization, not only as a means to increase cost-effectiveness and efficiency in operations, but also as a platform to develop additional high-margin products and services.

Firms on the leading edge of the digitized trend reap benefits including greater customer insight and reach, higher productivity, and the creation of new business models.