Let’s start this article with a pop quiz.

Name the country with the highest digital engagement in 2023. You have to choose from a list of 11 countries including the US. United Kingdom; Australia; the five largest economies of the European Union, France, Italy, Spain, Germany and the Netherlands; two Asia-Pacific countries, Japan and Singapore; And A Latin American country, Brazil.

Now, unless you guess Brazil, you’d be wrong. Yes, Brazil. It is the only developing economy on the list. But that’s just one of the many surprising insights from “How the World Does Digital,” a landmark study of the digital behaviors of 67,000 consumers in 11 countries representing 817 million people and 1.5 percent of global GDP. It is about half. The study was conducted by PYMNTS Intelligence in the quarter in 2023 and released on June 24.

We’ve been doing this study every year since 2021, but 2023 was the report we were most anxious to see. It was the first full year that users everywhere re-entered the physical world. Give us a chance To see how they use digital to perform 40 core activities, including how they pay, bank, shop, live, work, have fun, live well, communicate Do, travel. And eat It has insight. To be obtained Here and now for digital change, And More Important thing What can business leaders and innovators do to bring more consumers of every generation into the digital economy?

To start this discussion, PYMNTS CEO Karen Webster assembled a panel of experts who bring first-hand knowledge of the country, culture, dynamics. And The economic impact of going digital. The panel included Ruben Salazar Genovese, president of cross-border payment enabler TerraPay. Odelin Almeida, Managing Principal of AJ Holdings and Operating Partner at Advent International; Cyril Chiche, CEO and co-founder of Lydia Solutions; and David Evans, economist and chairman of Market Platform Dynamics, who designed the study’s methodology and analytical framework and served as its senior economic advisor.

one of the Key Results — beyond the country-by-country classification — is that while digital transformation varies from country to country, the key paths to doing more online are in place. All 11 of these markets have had impressive mobile device penetration, Genovese said Digital content may be used Anytime and anywhere. Beyond personal use of media, games, andOf course, Social interactions, it has become possible to run your business from an embedded device Palm of someone’s hand

Evans noted that business managers in older generations, particularly Generation X and even Boomer generations, need to fully embrace digital possibilities and multitasking to realize the potential for productivity. connected to Moving more processes online. Evans pointed out. That creates a clear divide between these generations and their millennial and Generation Z counterparts.

Evans argued that this distinction is important because older workers often occupy decision-making roles that influence a company’s digital strategy and adoption of new technology. Their level of digital engagement can accelerate or hinder the implementation of productivity improvements in organizations.

Evans added that while younger workers are more digitally savvy, a larger segment of the workforceEspecially in higher positions, Consists of Gen X and baby boomers. Their digital expertise, or lack thereof, can significantly impact a company’s ability to launch new digital initiatives. Effectively.

“If you have a workforce that’s not used to using digital,” he said, “it’s going to slow things down.”

In fact, as the data shows, Boomers engaged in the lowest number of “activity days” per month at 160, while Gen Z logged more than 413 days.

Brazil as a Beacon

But with the right tools in handFor both digital infrastructure and mobile apps — and even top-down access to digital engagement, all generations of users Be a part of digital transformation.

It is part of the dynamic sport in Brazil. Among the 11 countries surveyed, Brazil stands out as a beacon of digital engagement. According to the data, Brazil had a total of 361 digital activity days, the highest number of all countries in the study. Gen Z members showed approximately 411 activity days, but even Gen X (On 335 days) and Boomers (On 272 days) far surpassed the respective averages of 257 and 161 days.

With the spread of what Genovez calls “device dependency,” consumers, two-thirds of whom are owners. smartphones, Demanding that everything be done. real time and online.

“The developer community,” he told Webster, “knows about these traits, And They keep making apps we didn’t need … until we started using them.

Introduction to Pix, a Immediate payment The app, launched by Brazil’s central bank in 2023, was a force that “lit up” Brazil, according to Genovese.

“In many ways, Pix is ​​an enabler of this impressive digital adoption in Brazil,” he said. “The gig economy, content creators, gaming, streaming services like Netflix or marketplaces like Mercado Libre, all need an efficient payment infrastructure. So Pix is ​​the backbone of this digital adoption in Brazil today.

Pix, Genovez said, allowed more businesses and consumers to engage in digital markets and opened up the field to FinTechs and other digital-only innovators — so much so that the country accounts for 45% of FinTech revenue in the region as a new bank. As Nubank has acquired land.

“Nothing like this happened by chance,” Almeida said. The central bank in Brazil (and similarly, in India) has mandated participation in instant payments for banks and other financial services firms to support gig economy workers, content creators and marketplaces. has access to effective Payments Speed ​​of payments has been a key way to counter the effects of hyperinflation, the infrastructure panelists said, because money received today is worth more than money received yesterday.

The need for innovation and competition

Even in countries lagging behind Brazil Digital transformation is evident among young consumers.

For example, France has seen Gen Z participate in 465 digital activity days per month. Cheche said that companies like Lydia, Working as A mobile payments company with over 700,000 users among millennial and Gen Z users, Is Take a cue from Kenya’s M-PESA money mobility service.

As a financial services market, France has been dominated by large banks.but one Under the leadership of Govt As part of the digital initiative – 2030 of the European Union The “Digital Decade” program – has broadened the competitive landscape. Lydia, Chiche said, “started on a university campus and then spread like wildfire.” He said that these same customers will be the leading companies in the near and long term, so the chain of digital innovation is firmly established.

What is happening in Europe and Latin America?the panelists said, That’s in stark contrast to the United States, where Almeida believes the digital revolution will be merchant-led. Here, the Federal Reserve Not able to Mandate that all financial institutions should be connected to the fast payment rail. The private sector is taking initiatives to move consumers and businesses onto these rails – and billers, towards the path of Example, are The offer Discounts for customers who accept bank options through payment.

Impact on banks and the role of AI

Banks it will have to be done Follow that, improving their offerings and competitive playbooks, Cheche predicted. Digital upstarts, he said, are “coming out with new products, better products at cheaper prices,” while banks are still constrained by capital requirements and dividend policies. Lydia, They said, is offering interest at 4% on checking accounts, which has helped attract customers.

Evans said that most of the countries surveyed for digital engagement have ample opportunities for access. He noted that cConnected household appliances are not used. A staggering 75% of people, mainly because the technology and user experiences have been disappointing. Banking, Healthcare And even shopping is still there Ready for a greater pivot to digital channels.

“One of the interesting observations from the study is how many opportunities there are for digital entrepreneurs to find better ways to engage people,” Evans said. “Why aren’t people using voice-activated devices at home? Well, I guess it’s probably because they’re not very good. But now with AI there are so many opportunities where that’s going to change. My I think you have the same situation with telehealth. It makes a lot of sense that it would be successful, but it hasn’t been successful yet because people haven’t come up with the right business model.”

Almeida said AI will transform financial services, incl Across the border Remittances, removing some of the shortcomings of the related banking system; Cheche said that his company is using advanced technology to build. “Network networks” for digital wallets to transfer money instantly. As Genovez told the panel, in all 11 markets continuously monitored by PYMNTS, “You’re seeing a lot of opportunities for cash movement — and digital money movement involving those billions of people. will help those who are still in service.”

How the world does business models.

In summary, the panelists came back Either within your financial ecosystem or within your companies to the basics of driving digital transformation. For example, Terrapay’s Genovez is focused on other emerging markets. For use Technology to remove cash and drive financial inclusion in the process. Consequently, the adoption of digital remittances Important to his company, as are. Partnership with digital wallet providers.

Chiche called the continued acceleration of digital transformation Is “Unstoppable.” He illustrated this point with examples from France, noting a significant change in consumer behavior over the past five years. Contactless payments, he said, once faced resistance, especially among the older population. now They become so attached that their absence leads to despair.

Cheche also emphasized the role of acceleration in the pandemic. Movement of cashEspecially in traditionally cash-strapped economies like Germany. He noted that the pandemic achieved a In the level of A change in the use of cash that neither technological advances, political initiatives, nor public preferences had previously accomplished.

In Chiche’s view, while adoption rates can vary between countries and can impressed From various factors including Market conditions and technological developments, the overall trend towards digital financial services is irreversible. He suggested that unexpected events can sometimes act as powerful catalysts, driving rapid digital adoption. has been obtained Only through planned actions.

For Evans, it comes down to how the world deals with business models and innovation. He emphasized the business opportunities detailed in the study. Behavior has improved. Already in their early days. He noted that the study Originally 70 activities were offered, for example, but settled on 40. which had a high level of engagement.. The remaining 30 hold clues to Evans’ vision of the future.

“We’re at a very early stage of digital transformation, where we have a lot of opportunities to improve what we already have, but also a lot of opportunities to come up with new things,” he said. “Maybe it’s gaining traction with transactions, but I suspect, a lot of it is refining and perfecting these business models.”


PYMNTS MonitorEdge May 2024



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