The digital revolution is fundamentally changing our relationships: the world of work, society, economy, culture and politics. In every country, across every continent, around the world, digitization has touched all industries, disrupted existing value chains and placed questionmarks over established business models. This profound change is taking place so rapidly that it is, at once, difficult to keep pace and difficult to imagine our lives in the near future – let alone in the distant future. Will cars already be driving themselves next year? Will I no longer need physical cash? How will we communicate with each other in ten years’ time? Will robots look after me in my old age?
So, what does the future of digitization hold for us? There are no definitive answers but the consequences of this all-encompassing transformation juggernaut will be felt acutely at all levels of humanity and human activity.
SIX – almost 50 years of digitization
In its narrowest sense, “digitization” refers to the conversion of physical and analog objects (like gold) and media (like share certificates) into digital information and data. One advantage of this approach is that “things” can be more quickly and universally bought, sold, processed, registered and distributed. They require far less space than their analog equivalents, are much more “durable” and secure. Cases in Switzerland – and elsewhere, I do not doubt – are plentiful. Take, for example, the case of SIX Securities Services. As the Central Securities Depository (CSD) for Switzerland , the foundation for today’s post-trade powerhouse was laid in 1970 by the creation of SIS Ltd (today part of SIX Securities Services), which had as its mandate the “dematerialization”, “immobilization” and registration of all physical securities issued in Switzerland – digitization in its purest form.
For the Swiss stock exchange – now part of SIX – however, it was 1995 that marked the start of a new age. This was when the Swiss exchange became the first stock exchange in the world to switch from open-outcry to fully-electronic trading. By digitizing its exchange trading, the exchange was responding to increased globalization witnessed in the early 1990s, when many companies began to increasingly obtain financing from capital markets around the world. Securities issues rose so sharply that it was no longer possible to deal with the trading volumes using traditional methods. The solution was obvious: The analog data had to be digitized. By firstly electronically integrating foreign, and then Swiss equities, stock trading virtually exploded. In 1997 alone, the Swiss Market Index (SMI) rose by 59%. This marked the entry of the Swiss financial center and SIX into the “digital age”, even before it had officially begun to take hold.
Indeed, year 2002 is seen as the year digitization came of age – this was the first year in which more information was saved digitally than in an analog format. By 2007, 94% of the world’s information storage capacity was already digital.
Digitizing bills, wallets and land registries: SIX is at the heart of Digital Switzerland
SIX is one of the leading providers of infrastructure for digital financial transactions and is actively pioneering greater digitization across Switzerland. This has seen the company digitize paperbills, for example. „eBill by SIX” is a fast, simple, cost-effective and secure billing method. In 2018, eBill has gone one step further along the road to digitization and is now optimized for mobile devices.
SIX also launched an innovative solution as an addition to the traditional cash payment system: a digital wallet in the form of the TWINT app for payments. TWINT can be used to make payments using a smartphone, whether at a supermarket check-out, a pizza courier, at a farm shop or online. Users can also use the mobile payment solution to easily send each other money.
Another exciting platform that SIX has developed as part of its drive towards digitization is Terravis, the electronic portal for land registry and cadastral survey data in Switzerland. The platform already provides access to data on around 4.5 million properties. Terravis can be used to electronically process mortgage, property and commercial registry transactions via a single interface. This speeds up the relevant processes, reduces errors and supports the economy and public administration.
In the pipeline: digital identities
Digital transformation will soon bring another fundamental innovation for Switzerland. This innovation is based digitizing people’s identities. In our day-to-day analog lives, we can use our ID cards or passports to easily prove who we are. On the Internet, however, this simple process is currently extremely complex. Together with eight other companies, SIX is working on developing an eID that can be used both in Switzerland and abroad. An officially recognized means of electronic identification will make shopping and paying for things via the Internet more straightforward and secure. Contracts can be legally concluded online. In future, it will also be possible to submit tax declarations completely digitally. While it has been possible to complete them online for some time now, it is still necessary to provide an analog signature. Digitized identities will make a huge change to people’s day-to-day lives, making them more straightforward in the process.
And the digital revolution continues...
What began several decades ago with the electronic recording of images, texts, audio files and films, has now grown into a revolution on an unfathomable scale. The opportunities – as well as the challenges! – are huge, both for individuals as well as companies and governments. Digitization has resulted in an explosion of information, a flood of data that has enormous potential, but must also be managed as well. Countless production processes have been and continue to be automated; tireless robot workers are increasingly replacing human employees. However, the possibilities presented by the Internet have also given rise to new industries and companies, new types of work and business models.
For SIX, as a provider of infrastructure that guarantee the flow of information and money across the globe between banks, traders, investors and service providers, the digital revolution is challenging in a number of respects. To succeed going forward, the company is focusing on the two main pillars of innovation and stability. Experienced, future-oriented employees are optimizing existing services and are continually developing new systems and offerings for the financial technology of the future. However, these innovations can only be successful in an environment that offers long-term planning security. Switzerland must remain stable as a business location and its financial center must function smoothly – even in crisis situations or when the financial markets are hectic. It is therefore just as critical for SIX to also focus on what it does well in order to strengthen the competitiveness of the Swiss financial center over the long term.
And the digital revolution continues. Every company is faced with the challenge of fundamentally rethinking its internal structures and processes, its employee culture, business strategy and, in particular, the relationship with clients. The challenge lies in adapting all of these things to the changing environment while remaining flexible – in short, more than just a change but a “digital business transformation”. Ever more areas of our day-to-day lives are being affected, with new applications being launched daily. With the „Internet of Things” – the networking of physical and virtual objects – digitization has now spread beyond our large and small screens. This gives rise to a number of questions: Will digitisation ultimately lead to a completely changed world? Or will the analog, the physical, the sensory, the "real" suddenly take on a new value? Does digitization have limits? And if so – when, where and how will they become apparent? It’s certainly an interesting time.