Digital transformation is becoming increasingly critical for almost every company looking to enhance its productivity. It is not only essential for start-ups to consider what’s next for digital transformation but also important for scale-ups and long-established companies to consider the impact of digital transformation too. New competitors are harnessing the benefits of digital transformation, leading long-established companies to explore what the future of digital transformation will mean for them. That is why it is essential to stay ahead of the upcoming trends in digital transformation and understand the predictions for the upcoming year…
Artificial Intelligence and Machine Learning
Artificial Intelligence (AI) has been the biggest talking point among digital transformation conversations and it will only continue to grow. As more businesses integrate AI and machine learning into everyday practices, we will see more automation, predictive analytics and personalised user experiences in the upcoming year. Generative AI such as ChatGPT and Google Bard will continue to improve its knowledge with more users from various industries effectively training the AI. AI art – such as the product Bing has already made available – will continue to have an effect on creative industries.
Cloud Computing Adoption
In recent years, many companies have increasingly adopted cloud computing services such as Amazon Web Services, Microsoft Azure and Google Cloud for scalable and flexible infrastructure. This is likely to continue growing in 2024, especially with the continued exploration of quantum computing capabilities with cloud services. With the aim of providing access to quantum computing resources for certain applications, it is clear cloud computing will continue to grow. We may also see more personalised and industry-specific solutions tailored to the unique needs and compliance requirements of different sectors, fostering more widespread adoption across various industries. More companies will also adopt hybrid cloud environments. This will combine on-premises legacy infrastructure with public and private cloud services. Multi-cloud strategies are likely to become more prevalent as businesses leverage services from multiple cloud providers in order to avoid vendor lock-in and optimise performance.
5G Developments
The widespread rollout of 5G will cause further developments for enhanced connectivity. Further possibilities for the Internet of Things (IoT) will be explored in 2024. The IoT refers to a network of interconnected physical devices that communicate and exchange data with each other through the Internet. These devices can perform various tasks without direct human intervention. While the development of IoT still presents challenges related to security, privacy and interoperability, which need to be addressed for widespread and secure adoption, it is likely these problems will be addressed throughout the upcoming year. The further development of 5G is also likely to have an effect on Edge computing. Localised computational power and data storage will be elevated by 5G as it provides the necessary infrastructure for high-speed, low-latency, and reliable communication, which is crucial for applications demanding real-time processing and rapid data exchange.
Focus on cybersecurity
As digital systems such as AI and cloud computing become more common in our lives with more sophisticated systems, the call for more robust cybersecurity measures is likely to increase. Regulators will likely focus on protecting user data, privacy and digital assets. Worldwide, we are likely to see governments bring in laws to regulate the use of digital systems, especially AI.
Companies such as CrowdStrike and Darktrace already offer sophisticated threat detection systems which use AI and machine learning algorithms to identify and respond to evolving cyber threats. These systems are likely to advance and see more investment over the next year in order to face developing cyber threats.
Decentralised Finance
Blockchain technology will develop and find broader uses beyond its original foundations for cryptocurrencies. One of these further developments will be for decentralised finance (DeFi). While it’s still in relatively early stages, we are likely to see more prominence for DeFi. Decentralised lending, borrowing and trading are already becoming more commonplace, and this is likely to see more use in the upcoming year. DeFi company Aave is already innovating with “Flash Loans” which allows users to borrow without collateral as long as the borrowed amount is returned within the same transaction. DeFi is another sector of digital transformation which will see stricter regulatory scrutiny and compliance but once the legal frameworks are in place, it could represent the future of finance.
Real-world asset tokenisation
Another upcoming digital transformation trend is focused on Real-world asset tokenisation. Real-world asset tokenisation involves representing ownership or rights to actual assets such as art and property digitally using blockchain technology. It has the ability to be a major disruptor in real estate and art dealing, as tokenising allows for fractional ownership, enabling individuals to own a fraction of an asset. Real-world asset tokenisation also supports a globalised economy as investors can own and trade tokenised assets from anywhere in the world. It also leverages the blockchain for more efficient and streamlined process without intermediaries. Enhanced security is also promoted by the transaction history of tokenised assets which are securely recorded and verifiable. Real-world asset tokenisation is a major contribution to the larger landscape of digital transformation in the financial and asset management sectors.
Overall, it’s essential to understand and keep track of digital transformation trends to both scale and future-proof your business. Many of these trends have the ability to majorly disrupt these industries and it is important to know how to leverage these new technologies to improve your business rather than get left behind in this era of change.
Rafael is CEO of ReachX and is responsible for driving the company's vision to be the trusted platform for institutional investors and corporates. Prior to founding ReachX, Rafael worked in consulting with Fortune 500 companies with McKinsey and as an investor with JP Morgan.