Pete Townsend speaks with Peggy Van de Plassche from ROAR Growth on the New Normal
Peggy Van de Plassche from ROAR Growth hosted an interview with Pete on 24-Sep-2020 on his views on the “new normal” of finance and the working world. Here’s the video on YouTube, and see below for some of the highlights:
Digital is accelerating, with the old-guard's resistance to change slipping away out of necessity and to keep growing. We're already past the "green-shoots" stage of the capital markets becoming digital, and what I'm most excited about is 1)the entire lifecycle of a financial transaction becoming 100% digital (because I'm a techno-efficiency geek), and 2) new revenue streams for financial firms to provide services that could not exist in the analogue world (because I love profit!).
I'm watching the European and UK landscapes slowly unfold, and I think that the winding trend towards CBDC (central bank digital currency) will result in a significant overhaul in the regulation of money that we're already seeing applied to providers of digital asset services, i.e. crypto exchanges and wallets. That's at the retail level. What's going to be really interesting is how things change at the institutional level, which is more "love blockchain / hate crypto" (a shortsighted dismissal, IMHO) comapred to the retail level.
For example, will CBDC be in the hands of consumers first, or in the hands of the capital markets first? Crypto went consumer-first, and then entered the capital markets. That meant that the systemic risk (one of the main things that regulators are looking to prevent) created by the usage of crypto was relatively slim, and still is to an extent. But, if CBDC ends up being applied to the capital markets first, where the volumes of money moved every day is outlandish, then CBDC will take longer as it will take longer for instiutions to adapt to the new regulations.
The debt levels assumed will have a long term impact, especially in the US, but with the ability of the US to just print money and the trust in the US dollar worldwide, some of it all just feels like "cartoon economics". Developing nations will feel the biggest pain and I'm jsut worried that we're not going to see the worst of the impact on those least prepared to handle it for a good 3-5 years. On cyber, it's a law of probabilities - the more online you are, the bigger the cyber threat, so pressure is on the reformed hackers of the world to deliver some bomb-proof cyber tech.
Those that had already started down the path to digital transformation 3 years ago or more, with their intentions far surpassing that of just making sure there was wifi in their offices, will benefit.
The fact that Microsoft Teams kind of came out of nowhere since March was a positive sign, but digital transformation is more heavily weighted towards "transformation" than "digital". You're changing an entire way of working, up and down an organization. The collapse of airline traffic makes me think "how are the large financial institutions that flew sales executives all over the world to do deals actually coping?". It takes a different personality to do deals without a physical handshake. Many of their compensation structures are linked to sales, as is that of product development, so there's just a massive strategic undertaking underway (or in the offing) by the smart firms, with those that won't make it saying "things will go back to normal". Firms won't be able to do this themselves, they'll need some sharply objective views from the outside either through collaborating with fintech or with well-placed experts, and a resistance to political corporatism that can water down their best intentions.