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Thinking outside the box for a better world

As our world becomes increasingly digital, consumers are demanding slicker, quicker, more personalized experiences that fit conveniently into their lifestyles. At the same time, it’s no secret that our world is facing fundamental challenges such as climate change and disruption from new technologies. 

These were among some of the themes that were explored at the Swedish-British Summit: Outer Thinking in London in December. The event brought together representatives from major Swedish and British companies and organizations, all contributing with various perspectives to the discussion. 

One question that was brought up was whether we’re at the tipping point between global and local – has globalization peaked? 

The global system of rules and regulations has governed world trade for decades but has slowly come under threat in recent years. A rise in barriers and trade stand-offs between countries and regions have become commonplace, disrupting supply chains and whole industries. While we live in a very interconnected society, there are now tendencies of deglobalization, or regionalisation, as local influences are being more heavily relied on. 

What does this shift mean for business? Will the emphasis going forward be on protecting local economies, and that the moves to address important challenges to international trade be made to that end? And what is technology’s role here? 

Here are two highlights from the day’s discussion.  

1) The need for speed vs ethical use of data

The digital economy is developing at lightning speed. In fact, the tech industry is growing six times faster than the rest of the economy in the UK. The pace of technological development is intertwined with the perpetual need to be more profitable, faster to market, and offer more personalized services. 

It is well documented that today’s consumers are demanding more personalization from the modern businesses they buy from, but we must carefully consider if consumers know what impact that will have on the data they will need to share. 

But what is the impact of this development, is it going too fast? Speed brings with it a set of concerns, as technological development is leading us into unknown territory. Increased reliance on data, how it impacts personal integrity, and the increased usage of artificial intelligence and machine learning means that the regulations we have in place quickly become outdated. 

With data underpinning so many of our relationships and becoming more important in our world every day, how can we manage the associated risks? Are we moving in a direction where everybody should own their data?

From a business perspective, there’s a tug of war between different interests occurring as consumers want personalized experiences but companies need to have GDPR in mind. There must be a balance – how far can you go in your personalization efforts before crossing an ethical line? The ethical dimensions of the use of data, means that governments will be required to regulate the direction of growth when it comes to using data. 

The COVID-19 pandemic has accelerated the discussion around data sovereignty as consumers are increasingly aware of the value of their personal data and the risks involved. Governments are beginning to step up and address some of these challenges. For instance, the UK government had just published outlines for the use of algorithms to protect consumers when shopping online and using online banking services.

2) Tech as a financial bridge 

Following on the discussion of where the world is going – global or local – and how to handle the ethical dimension of technological development, there must be a discussion about how to make sure that people don’t get left behind. 

Tech can be both the bridge and the cause of the chasm for people to take an active part in society. For instance, there's a part of the population who are unbanked or underbanked. Access to basic banking services is one such gap that impacts more than two billion people around the world. The unbanked are those who do not use any banking services at all, including the following that many people consider essential: debit cards, checking accounts, and savings accounts. With heavier reliance on digital payment solutions (ever heard the term cashless society?) there is a definite need to make sure that this system is viewed through a global lens. 

Open Banking has the power to inspire a better relationship between consumers and businesses through finance. With its popularity growing amongst consumers, Open Banking Payments are expected to grow by more than 460% by 2024*. 

Better UX and reduced costs being the main drivers, many merchants in the UK are starting to add it to their payment mix. But, there are several limitations when it comes to various Open Banking service providers and what they can offer. 

Open Banking is often talked about in conjunction with PSD2 (the Second Payment Services Directive). This piece of EU payments legislation came into full effect in September 2019 and is aimed at improving digital payments capabilities and enabling consumers in the EU to have greater control over their financial data. 

Open Banking is one of the key initiatives helping to address both consumer and merchant needs when it comes to finance and payments. It offers a secure way for consumers to give merchants or service providers access to their financial information or to authorize a payment directly from their bank account, usually via a third party. Today and in the near future, Open Banking has the potential to revolutionize the way we move and manage money.

Want to know more about Open Banking?

 

*Juniper Opportunities, Challenges & Market Forecasts 2020-2024

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