So, let’s start with the beginning. What is technosocialism? Well, the term was first brought up in the book “The Rise of Technosocialism” written by Brett King and his co-author Richard Petty. King is also known for creating the Breaking Banks podcast, founding a challenger bank Moven, and writing the book “Bank 2.0”. He has appeared on CNBC and BBC, delivered a speech at TEDx, Wired, Web Summit, The Economist, CES, and advised the Obama administration on Fintech.
As you see, he’s pretty far-famed in the world of the financial industry, and that’s why “The Rise of Technosocialism” has become a bestseller and attracted so much attention. The book pushes a variety of issues that the 21st century is facing or will have to face: climate change, pollution, protests, inequality, economic uncertainty, famine, unemployment, and many more. Is technosocialism a solution to all these problems? It might be, according to Brett King and Richard Petty.
What is certain is that business owners and entrepreneurs should start looking at technosocialism more attentively if they don’t want to be left out in the cold. DashDevs has analysed the issue of technosocialism from the fintech perspective, so below you’ll find out all about new opportunities through innovative business models, banking transformation trends, and the future of financial markets. Intrigued? Then let’s get it started!
What Is Technosocialism?
Let’s dive into the history of appearance of the notion technosocialism has appeared so you can better understand the term. The thing is, as Brett King and Richard Petty claim, the 21st century will be the most challenging and most transformative period that humankind has ever lived through. It’s going to question the world’s most long-present doctrines and beliefs in terms of politics, economics, and social norms. Here are just a few of the challenges they lay emphasis on:
1. Inequality. During the pandemic, the capital of all American billionaires skyrocketed by $1.763trln, while about 150m people fell into severe poverty. Moreover, today the total wealth of the richest people in the world like Elon Musk, Jeff Bezos, Mark Zuckerberg, and Bill Gates is bigger than the total wealth of about 90% of Americans.
2. Unemployment. Surveys show that AI and robotisation can eliminate about one-quarter of jobs in the US. Yes, new industries are created which means more job opportunities. But no one is training modern students with the right skills for those industries.
3. Economic uncertainty. This is one of several reasons why protests are rising (they doubled in the first 20 years of the 21st century). People show their concern about the future more than ever.
Because of it all and a number of other issues like climate change, famine, and pollution, a logical question arises: how to stop it? There are 2 main opinions. Some believe it’s better to go back to the way things were in the past. This is obviously because it felt much more stable years ago. However, many experts claim that humanity has to adjust to the changes and come up with a new system that will have tools to fix the current problems. And technosocialism seems to be that new system.
So, finally, we have come near the technosocial definition. It can be defined as a type of socialism that highlights and embraces futurism as well as advancements and progress in science, technology, engineering, and medicine. According to the authors, technosocialism is 1 out of 4 possible outcomes for humanity. It’s characterised by broad equality, sustainable prosperity, ubiquitous technology, and high automatization. The other 3 possible outcomes are:
- Luddistan — prioritization of humans, rejection of technology, AI banning.
- Failedistan — global depression, resource wars, too-late response to climate change.
- Neo-feudalism — massive inequality, corporations ruling, digital divide.
Which system do you think is better for you as a business owner and a human? It seems that technosocialism is quite a good option. But how will it affect the banking industry? And is there anything banks can do to enhance technosocialism? DashDevs have figured it all out for you!
Role of Banks in Social Development
What does social development mean? This is a process of promoting and increasing the prosperity and welfare of every person in society. It’s believed that the well-being of each citizen leads to the success of the whole civilisation. This idea is deeply rooted in the concept of technosocialism. But what does the financial industry have to do with it all? And what’s the role of banks ethics and values in social work? Let’s see how they can help and, as a result, benefit.
Corporate social responsibility in the banking sector
Simply put, Corporate Social Responsibility (CSR) is the idea, initiative, or strategy that makes businesses act in a socially responsible way. By sticking to it, enterprises can control their influence on society, the economy, and the environment. Implementing CSR is crucial for financial organizations. Why? Here are the reasons:
1. It creates a certain level of trust between a business and a client. And this means a lot in the modern consumer-driven world. How to achieve that? Try local, targeted approaches. For example, initiate public education days so that anyone can come to get free financial advice. Let the community see your efforts.
2. It provides positive customer outreach. Participate in events that attract the attention of the community and mass media. It helps to drive a great deal of brand awareness.
3. It builds trust within the personnel. Moreover, employees at socially responsible companies show much better results in customer service and support, creativity, and engagement.
Environmental and social risk management in banks
Banks practicing environmental and social risk management (ESRM) refuse to finance any corporations and organizations that somehow harm the planet and threaten the safety of society. For instance, oil, gas, coal, alcohol, or tobacco companies or manufacturers of weapons. Instead, in many cases, such financial enterprises invest in businesses that contribute to positive environmental and social outcomes (decreasing carbon emissions, planting trees, etc.).
Also, ESRM in banks serves as a basis for ESG (environmental, social, and governance) evaluation. Why is it important for you as a business owner? Because investors use it to assess firms in which they’re planning to fund. According to the statistics, over $17trln were invested in assets chosen on the grounds of ESG. By the way, younger generations are among those who pay lots of attention to ESRM. How to implement all that in your business? Through innovative business models. Find out more about it all right below!
New Opportunities through Innovative Business Models
A business model is a plan or a strategy a company needs to become successful and to make a profit. In short, you need to identify what you sell (services and products), who you sell it to (your target market), and what the expenses for that are. Therefore, an innovative business model is the deliberate modification of a current business model with a purpose to meet the customers' needs better. Note that it’s not always interconnected with new technology. It’s about changes your company and clients benefit from.
What’s the best example of a corporation successfully implementing innovative business models? Any ideas? Of course, this is Amazon. 26 years ago it was just an online bookshop. Now it sells everything (including films, music, and grocery) and provides access to world-class entertainment and the broadest set of cloud services. Pretty impressive, don’t you think?
The new business model implementation isn’t always that easy. It requires effort, time, and money. But this is a part technosocialism. Moreover, if you don’t pursue new opportunities, the outcomes might be disastrous:
- losing customers who’ll start choosing your competitors;
- losing staff;
- decreasing productivity and performance;
- reducing earnings;
- going out of business.
So, how to create a new business model to help your company grow? Here are a few tips:
1. Analyse your target market. What new or improved products & services does it need? How can you be even more helpful? What does your business lack to satisfy clients? What value can you add? By the way, customer interaction is strongly recommended to find answers to all those questions.
2. Assess the competition. Learn what you can about your competitors, their products, quality, prices, and think how you can outshine them.
3. Study your industry trends. Involve your team, suppliers, and consumers. Brainstorm more to produce and develop creative ideas. To make it a bit easier for you, DashDevs have researched some digital transformation trends in the banking industry. Find them out further!
Banking Transformation Trends for 2022
Nowadays new technologies appear so fast you can hardly catch up with them all. It inevitably leads to the change of the clients' demands and expectations. As a result, banks have to adapt and change themselves. So if you want to keep ahead of the competition, inform yourself of the emerging trends below to act quickly and decisively.
Here’s what to bear in mind in terms of developments in software:
1. Mobile banking. Today there are about 2bn people using online banking and this number is expected to reach 2.5bn by 2024. Lots of users are inclined to change the financial institution if it can’t offer a good mobile banking experience. So yes, accelerating the transition to mobile banking should be your priority if it still isn’t.
2. Robo-advisors in investment banking. This is a big trend lots of fintechs are already implementing. Robo-advisors (or digital advisors) can manage clients' investment assets and develop their portfolios. Moreover, this is much cheaper than traditional advisors.
The use of fintech depends a lot on the company’s digital transformation. Here are the trends you can try to adapt to succeed.
1. Digital capabilities at branches. Include this point in your bank digital transformation strategy for 2022. Even though the number of mobile banking users grows, clients still expect personalized help at branches. Why don’t you think of AR/VR to retain and engage your customers?
2. Biometrics. Facial recognition and fingerprint verification are already well-known digital transformation banking tendencies. A few other biometric modalities to try to implement are voice recognition, finger or hand vein recognition, and iris scan.
Artificial intelligence technologies
Benefits given by AI seem endless in banking. Just a few examples are:
1. Fraud control and cybersecurity. AI can help to find and eliminate payments with elements of fraud. Moreover, due to predictive analytics, cyber-attacks can be detected even before they occur. Remember, security is usually the most important thing customers think of when choosing a bank.
2. Customer services. This is one of the most common ways for AI to be applied in banking. Let’s imagine a standard situation — client service specialists receive, read, and respond to hundreds if not thousands of emails every day. Now imagine another situation — AI does it all so that the customer support experts can just review and submit the responses. It saves lots of resources!
What’s the Future of Financial Markets and How to Be Ready for It?
No one can fully predict how our civilisation will evolve and what will happen to the banking industry. No one really knows if technosocialism is our future. But we can make forecasts. Thus, it’s quite definite that the global economy will be greatly influenced by the growth of digital technologies and the importance of sustainability. And if banks, fintechs, and other businesses want to survive, they have to not only bear those 2 trends in mind but to take action.
But where to start and what to do? Is that a question now bothering you? Well, yes, this all might seem overwhelming and difficult. Research, time, and effort are required for a positive outcome that technosocialism is promising. But if you divide your big goal into smaller tasks, it’ll become more manageable and achievable. Follow the tips given above, consider an innovative business model, seek new opportunities, and think how you can implement AI in your business. If you need professional advice or experts' guidance, you’re always welcome to contact DashDevs! We’re here to assist you with any of your requests!