To understand the future of digital transformation, it’s essential to look back on its history.
Payments have changed a lot. We used to use cash and coins, but now we trade value digitally. The move to digital payments sped up during the COVID-19 pandemic. Let’s look at this transformation.
Digital value is any currency or asset managed on digital systems. Key elements include security, accessibility, transferability, and transparency. Companies can use digital value to develop strategies, enhance value creation, and drive digital transformation.
Examples of digital value include cryptocurrencies, central bank digital currencies, and various virtual currencies like gift cards and loyalty points. These gift cards and currencies are linked to many well-known brands, appealing to consumers’ interests and preferences. Firms across industries are increasingly adopting digital assets to remain competitive and innovate in a rapidly changing market.
Assets can be stored in online databases or ledgers and owned by various entities. Digital value uses advanced technology, separate from traditional currency systems.
Analog Payments vs Digital Value
The decline of analog payment methods has increased the use of digital assets in the economy. With online shopping, consumers are seeking alternatives to cash and checks, and Business Insider predicts checks may disappear by 2026 as digital options grow in various markets.
Payment apps like CashApp, Zelle, Venmo, and PayPal are common for consumers, but businesses still rely on paper checks for B2B transactions, with 81% globally and 41% in the U.S. using them.
One reason for this lag is the significant costs associated with transitioning from analog to digital payment systems, which can impact operational decisions and investment priorities. Additionally, businesses relying on outdated analog payment methods face increased risk, such as higher chances of fraud and inefficiency, compared to those adopting digital solutions.
Right now, digital value focuses on consumers, but B2B is falling behind.
Definition of Digital Value
Digital value refers to the economic benefits and worth derived from digital assets, including digital products, services, and data. It encompasses the value created through digital channels such as websites, social media, and mobile apps.
Digital value is crucial to digital transformation, as it integrates digital technologies into all business areas. This integration enhances operational efficiency and drives innovation and growth. Effective leadership is required to lead digital transformation initiatives, ensuring that organizations can successfully create and capture value. By leveraging digital value, businesses can unlock new revenue streams, improve customer experiences, and stay competitive in an increasingly digital world.
The State of Digital Value
Today, digital value has increased significantly and can be divided into four categories:
Digital cash (e.g., central bank digital currencies, stablecoins)
Digital securities (e.g., tokenized stocks, bonds)
Digital collectibles (e.g., NFTs)
Fractionalized and tokenized assets (e.g., real estate, art)
Fractionalized and tokenized assets have expanded access to investment opportunities by allowing individuals to own portions of high-value assets. Industries such as insurance are also leveraging tokenized assets and digital value to modernize their services and improve operational efficiency, integrating digital infrastructure to serve their clients better.
1. e-Gift Cards, Digital Cash, and Branded Currencies
This is the largest digital value class. It includes open-loop and closed-loop prepaid cards, airline miles, loyalty programs, and gaming points. Combined, these are valued at over $2 trillion. Amazon gift cards, for example, offer convenience and added benefits like fuel points, making them a popular gift choice. The global market for open- and closed-loop prepaid cards is expected to hit $3 trillion by 2027.
2. Cryptocurrencies
The fastest-growing digital asset class, cryptocurrencies are projected to reach a $3 trillion market cap by 2030.
3. Web3 Assets
These include DAOs, NFTs, DeFi, and GameFi. Together, they represent a shift toward decentralized ownership, redefining how people think about value, work, and exchange.
4. Fractionalized and Tokenized Assets
Think fractional shares, ETFs, and public REITs. These are expanding access to investment and are forecasted to grow from $310 billion in 2022 to $16.1 trillion by 2030. By the end of the decade, tokenized assets could represent 10% of U.S. GDP.
The 2020 pandemic sped up the shift to digital payments as consumers sought contactless options and faced limited access to cash. Since lockdowns, 76% of consumers have increased their use of mobile wallets, and 90% plan to continue using them frequently post-COVID-19.
By 2021, 76% of adults worldwide had accounts with banks or mobile money providers, making digital payments mainstream globally.
However, digital currencies often face challenges in everyday use due to their isolated systems, creating friction for consumers. The biggest hurdle is making digital currencies interoperable with traditional cash systems.
For example, using airline miles to pay a restaurant bill requires converting them into another currency, like a gift card, highlighting the complexity of using digital value in daily transactions.
Strategies for Creating Digital Value
Creating digital value requires a strategic approach that aligns with business goals. Here are some effective strategies for creating digital value:
Invest in Digital Marketing: Enhance your online visibility and reach a wider audience by investing in digital marketing efforts such as search engine optimization (SEO), pay-per-click (PPC) advertising, and social media marketing. A collaborative marketing team plays a crucial role in creating digital content and driving your online presence. These tactics can drive traffic to your website and increase brand awareness.
Develop a Strong Brand Reputation: Build a strong brand reputation by creating high-quality content, engaging with customers on social media, and providing excellent customer service. A positive brand image can foster customer loyalty and attract new customers.
Leverage Data Analytics: Utilize data analytics to gain insights into customer behavior, preferences, and needs. This information can inform business decisions and help tailor products and services to meet customer demands.
Invest in E-commerce: Invest in e-commerce platforms and technologies to provide a seamless online shopping experience. This can enhance customer satisfaction and drive sales.
Develop a Growth Strategy: Formulate a growth strategy that includes expanding into new markets, developing new products and services, and acquiring new customers. A well-defined growth strategy can help businesses scale and achieve long-term success.
Form Strategic Partnerships: Establishing partnerships with other IT providers or technology companies can enhance your digital transformation initiatives and expand your service offerings, especially in areas like cloud computing and cybersecurity.
Examples of Digital Value
Here are some tangible examples of digital value:
Gift Cards: Gift cards are a popular form of digital value. They can be purchased online and sent to recipients via email or text, making them a convenient and versatile gift option.
Digital Products: Digital products, such as e-books, music, and software, represent another form of digital value. These products can be easily distributed and accessed online, providing value to creators and consumers.
Online Services: Online services like streaming and software-as-a-service (SaaS) platforms are prime examples of digital value. These services offer convenience and accessibility, enhancing the user experience.
Digital Payments: Digital payments, including mobile wallets and online payment platforms, are a significant aspect of digital value. They provide a secure and efficient way to conduct transactions, benefiting businesses and consumers.
Big Data Analytics in Digital Value
Big data analytics has become a cornerstone of digital transformation, empowering businesses to unlock the full potential of their digital assets. By harnessing vast amounts of data, companies can gain actionable insights that drive more intelligent decision-making and fuel growth strategies.
Leveraging technologies such as cloud computing, artificial intelligence, and the Internet of Things (IoT), organizations can process and analyze data at scale, uncovering trends and patterns that were previously hidden.
Big data analytics helps businesses improve digital marketing, personalize customer experiences, and boost website performance. It reveals popular products, user interactions, and effective marketing channels, allowing companies to adapt quickly to market changes.
Industry Applications of Digital Value
Digital value is transforming industries across the board, enabling businesses to innovate, streamline operations, and deliver superior customer experiences.
In the telecommunications sector, digital value is used to boost network performance, enhance customer engagement, and support new service offerings. By leveraging digital technologies, telecom companies can better manage their infrastructure and respond to evolving customer needs.
In the utilities industry, digital value helps optimize energy use, improve grid management, and strengthen customer connections through smart meters and data analytics. Similarly, the automotive sector enhances vehicle performance and sales, while defense and transportation use digital solutions for better security and logistics.
The finance sector improves risk management and offers personalized services through digital platforms and big data analytics, helping institutions understand customer needs and drive revenue growth.
Across these industries, digital value is a catalyst for improved management, enhanced performance, and stronger cybersecurity, helping businesses stay competitive in a rapidly evolving digital landscape.
Assessing Digital Value and Security
Assessing digital value requires a comprehensive approach that considers various metrics and factors. Here are some key ways to assess digital value:
Revenue Growth: Measure revenue growth from digital channels like e-commerce and online services. This metric indicates the financial impact of digital initiatives.
Customer Engagement: Track customer engagement metrics, including website traffic, social media interactions, and customer satisfaction. High engagement levels often correlate with increased digital value.
Brand Reputation: Evaluate brand reputation metrics, such as brand awareness, loyalty, and customer advocacy. A strong brand reputation can enhance digital value by attracting and retaining customers.
Return on Investment (ROI): Calculate the ROI of digital investments, such as digital marketing campaigns and e-commerce platforms. This metric helps determine the effectiveness and profitability of digital initiatives.
Overcoming Challenges in Digital Value Adoption
Many businesses face challenges with digital transformation, including a shortage of skilled professionals like data scientists and cybersecurity experts, which can slow progress.
The costs of new technologies, infrastructure upgrades, and employee training can also be significant. Companies must navigate complex data governance issues to protect sensitive information.
To tackle these challenges, organizations often partner with managed services providers for expertise in areas like cybersecurity and digital marketing. Investing in employee development and adopting a phased approach to transformation can help minimize disruption, manage costs, and ensure a successful transition to a digital-first strategy.
Best Practices for Maximizing Digital Value
To maximize digital value, businesses should adopt several best practices. First, ensure a seamless user experience across all digital platforms, including intuitive design and responsive customer service. Utilize data-driven decision-making to optimize performance and identify opportunities.
Invest in strong digital marketing strategies, such as SEO and targeted advertising, to enhance brand visibility. Lastly, prioritize cybersecurity by implementing advanced protections to safeguard digital assets. By focusing on user experience, data management, marketing, and security, businesses can strengthen their market position and achieve long-term success.
Aligning Digital Value with Business Goals and Growth Strategy
Aligning digital value with business goals requires integrating digital initiatives with the company’s overall business strategy. Here are some steps to achieve this alignment:
Define Business Goals: Clearly define business goals and objectives, such as increasing revenue, improving customer satisfaction, and expanding into new markets. These goals will guide your digital strategy.
Identify Digital Opportunities: Identify digital opportunities that align with your business goals. This could include developing a new e-commerce platform, launching a digital marketing campaign, or adopting new technologies.
Develop a Digital Strategy: Create a digital strategy that aligns with your business goals and objectives. This strategy should outline the steps and resources needed for your digital initiatives.
Measure and Evaluate: Continuously measure and evaluate the effectiveness of your digital initiatives. Use metrics and feedback to make data-driven adjustments and improvements.
By following these steps, businesses can ensure that their digital value initiatives are aligned with their overall business goals, driving growth and success in the digital age.
The Future of Digital Value in Digital Transformation
The economy is shifting to a digital-first world, and this change is driving the future of digital value.
The Boston Consulting Group forecasts that $16.1 trillion in physical assets will be digitized and tokenized by 2030, making digital value more accessible. Gift cards are becoming increasingly popular, with 62% of customers preferring digital options.
The global gift card market is projected to hit $1 trillion by 2027, but consumers want more flexibility, like cryptocurrency and fractional shares.
Corporations are adopting APIs to improve payment processes, potentially reducing new providers’ onboarding times by 90%. This shift creates opportunities for platforms that can integrate with various payment providers.
As digital payments advance, a strong infrastructure is essential to back all digital assets. Runa is creating a system to facilitate B2C, C2C, and C2B transactions, enabling individuals to maximize their earned value.
