Since the disaster brought about by COVID-19, we decided to throw every business handbook we had out the window. After all, who needs a bunch of books on outdated models now that the world has – dare I say it – entered ‘the new normal’.
With that said, it’s pretty clear that things are no longer ‘business as usual’. If there is one important lesson we need to learn from the pandemic, it’s that change is inevitable and we all have to adapt to it no matter how irritating or painful it is. In just a matter of months, we went from having constant in-person interactions with coworkers, clients, and partners to simply talking to faces on a computer. This has been good news for platforms like Zoom which saw its user base grow rapidly from 10 million to 300 million.
So what point am I trying to make exactly? Well, as lockdowns around the world continue to limit the amount of interpersonal contact we have with others, the show must go on; and for most of us, it has been possible. In fact, a lot of us have started to enjoy the merits of digital work environments where we are able to conduct high-value work in our pajamas while picking out groceries on Amazon for the coming week.
Welcoming Change Means Introducing New Systems (That Work)
While the pandemic has been no less than tragic, many startups have taken the opportunity to build the future they want to see. Some are even creating decentralized organizations that make use of digital solutions to disrupt a financial system that has long been hounded by inefficiencies and lack of innovation. Nothing like times of hardship to incentivize us to adapt and come up with great ideas not just for survival, but to thrive.
One interesting observation I have made during the course of the pandemic is that the economy was designed to serve markets but was never intended to withstand a global shutdown. In the last few months, we have witnessed COVID-19’s catastrophic impact on major stock indices around the world and SMEs gasping for air as markets dry up. Some governments attempted to use temporary fixes by handing out stimulus packages to restart the economy; but as we all know, this is simply a band-aid solution that will not be enough to weather the storm.
A complete reform of the financial system has been discussed for many years which first started with the introduction of Bitcoin in 2009 as a direct reaction to the Subprime Crisis which later evolved into a multi-million dollar fintech industry that made the likes of Alipay, GCash and Kakao Pay. With fintech turning the financial system on its head, we are starting to witness central banks around the world pushing for ‘Central Bank Digital Currencies’ (CBDC) in an attempt to keep up with the industry.
Making Finance Great Again
It’s no accident that digital currencies have become the desired alternative for our dysfunctional financial system. Digital currencies allow us to transact safely, pay efficiently across borders, and interact with a financial system that is more stable. It is also significantly easier to implement changes in monetary policy without the costs associated with increasing the supply of cash in the market.
This has been demonstrated in Thailand where a bank employee got infected with COVID-19 after handling a contaminated bank note. The case resulted in a greater push towards the use of the Thai QR code system for domestic bank-to-bank transfers as well as e-wallets like Line Pay and True Wallet as a way of preventing contact. The government is also pushing towards implementing its very own CBDC.
Will these new changes last and make a lasting impact on the economy? As with all good things, this will take time to implement on a mass scale and get users to adopt the technology. But as more users, particularly in retail, start getting used to contactless payments and the use of private e-wallets, this could truly be the new face of the financial industry.
As the saying goes, “the only constant in life is change.” Now it’s time to ride that wave.