Epidemics have precipitated the transition to a purely digital economy. Cashless transactions, decentralized cryptocurrencies, e-wallets, digital banks and e-commerce are all common.
The digital number seems to provide the main explanation for the nature of the changes around us, but in fact it hides the basic essence. Let’s take cryptocurrency for example. Few people understand the differences and purpose of cryptocurrencies. A Dodge coin was minted for a “Doge” prank online. However, they have liquidity and great demand from investors, but the market value of this joke reached $ 31 billion at the end of 2021.
The size of the NFT market has exceeded $2.5 billion, and banks do not service these transactions at all. Cryptocurrency investors and NFT artists generate huge fortune in months but struggle with traditional banking. And as the Metaverse develops, this market will only grow because the true digital economy is just beginning. Are financial companies ready for this challenge?
Essence hides in experience
How do all the confusing news like crypto overcapitalization pranks, billion-dollar startups with no sales, and crowdfunding campaigns relate to sustainability?
It’s very simple – it’s all part of the same phenomenon. It’s not about developing a digital economy, it’s about creating an experience-based economy. The essence of the changes is that digital has changed the market model to one where business relationships are built through experience, putting attention, emotions and human values first.
Experience becomes the determining factor in the value of the business, which is why sustainability policies have become just as important to many consumers as the company’s products. In the experience economy, individuals buy and trade experiences, emotions, or even expectations rather than items, services, or features thanks to global digital access.
This is why someone on the other side of the planet who does not understand investments, after watching YouTube or TikTok, downloads an investment app and buys cryptocurrencies or Tesla shares in seconds to participate in the hype. Or a 12-year-old who creates an NFT collection of digital artwork only becomes a millionaire in a month.
CryptoPunk 7523 from Larva Labs, sold at Sotheby’s for $11,754,000
Digital technology turns experience into money
As we can see, in the experience economy powered by digital technology, experience can be directly monetised. And it’s not just about encrypted stuff.
Millions of ordinary people now have easy access to amazing opportunities. The primary concern is whether they have an exciting experience to share with the rest of the world. Nowadays, everyone can print books without hiring publishing companies, manufacture items without using factories, and provide services without institutions. They just need a smartphone and a bank account. This also applies to any business because the market entry threshold has never been so low.
Emotions lie at the heart of the digitally driven global experience economy. As a result, companies focus on delivering unique, innovative, engaging and fun experiences through their digital services. And even financial brands.
Billionaire Elon Musk has already become a legend in the experience economy. He’s a great visionary, engineer, and entrepreneur who creates innovative products and cares about sustainability. He’s also a hype genius who affects millions of people.
For example, the reason for the Shiba Inu coin’s growth was Musk’s tweet about the existence of a Shiba Inu puppy. The 7 million percent growth of the Shiba Inu cryptocurrency made the man who invested $8,000 a year ago a billionaire.
Sustainable banking will help adapt to the experience economy
The impact of digitization and the network in general has become the most powerful driver of the experience economy. From a human-centred point of view, sustainable banking can provide a holistic view of the humanization of industry in line with the demands of an experience economy.
According to a Mobiquity study conducted in 2021 with 300 bank CEOs in the UK, Germany and the Netherlands, 80 percent of CEOs in the Netherlands and 72 percent of CEOs in the UK recognize the beneficial impact of digital on sustainability.
Sustainable Banking is concerned with operating in accordance with Environmental, Social and Governance (ESG) requirements. The ESG Sustainable Standards are a set of operational requirements for a company that socially responsible investors use to analyze potential investments.
Environmental standards take into account how a company affects the environment. Social norms look at the experience delivered to customers, employees, suppliers, and surrounding communities. Governance is concerned with corporate leadership, taxation, audits, internal controls, and shareholder rights. According to a Cone Communications study, 64% of millennials will not accept a job from a company that does not operate in accordance with strong corporate social responsibility.
KMPG data shows that 80 percent of the top 100 companies in 52 countries currently include sustainability in their financial reports. According to a Deloitte survey of Nigerian banks, 95 percent of respondents have undertaken environmental and social initiatives in the past three years. As a result, 83% of these banks have gained non-financial and financial benefits through sustainable banking services, including revenue growth.
It may seem that money has no value in the experience economy. However, this is not the case. We must accept that consumer psychology has changed. In today’s market, the value and power of experience far outweighs the power of money, which often leads to unexpected consequences.
To match digital requirements, advanced financial firms focus on customers, and develop cutting-edge digital services. Sustainability, as well as digital technology itself, is ultimately about focusing business efforts on human needs and values. This results in long-term profits for all parties.
To better adapt to the new economy, companies must become more human-centric and provide an experience beyond the virtual boundary to outperform the crowd of millions of one-day products. Think about how to offer creative experiences that attract demand or, better yet, create hype. In the digital age, as well as the next decade, only a human-centric business leads to the best customer and employee experience to ensure profitability.