Digital Transformation Trends in 2022

A McKinsey survey has found that in 2021, AI adoption increased the most in emerging economies, with companies headquartered in India being at the forefront – ahead of even those in China.

Today, most Indian companies are realising the importance of digital transformation in staying relevant and growing their business. You can see that even among the neighbourhood kiranas. Businesses must realise that in the coming years, there will be no non-digital business. Ideally, they must embrace digital transformation to become more resilient.

This is where a secure, composable business model comes in – the first of several trends we are likely to see among Indian businesses in 2022.

• Trend 1: Emergence of Composable Businesses

The concept of composable business stands on four basic principles:

• Resilience
• More speed
• Greater agility
• Better leadership

Gartner describes the composable model as the ‘future of businesses’, which enables a business to survive – and even flourish – in times of great disruption. A composable enterprise is designed to plan for many futures, in the sense that it can adapt to different scenarios. This allows it to deliver seamless digital experiences. Indian companies must understand this and how it impacts the customer experience. For instance, the world moved quickly from Uberisation – where many people shared a cab for a cheaper ride – to isolation, as personal health and safety became more important.

• Trend 2: More Focus on Employee Experience

The second trend that will gain traction in 2022 is more hybrid workplaces, with companies becoming more amenable to technology transformation to improve the employee experience. The lockdown has shown us that work-from-home (WFH) can be just as productive as working from office. Technology gives women workers the flexibility to be both primary caregivers at home and work professionally while there. This will plug workforce leakage of women employees.

At SBI, I introduced a two-year sabbatical for our women staff for personal commitments, such as the education of their children or taking care of their elderly parents or in-laws. This facility was later extended to single male parents as well.

Today, such employees can be treated as ‘remote employees’ and given tools by their employers to stay connected. This will not only drive employee productivity but also retain talent.

• Trend 3: Digitising PSUs

The third trend that we could witness in 2022 would be increased spending on digital transformation by state-owned companies and government agencies. I have always believed that all companies will have to become tech-based sooner rather than later, and that was why I pushed digital initiatives at SBI as well. And now Gartner says India’s central and the state governments will focus on furthering the digitalisation efforts on concerns such as ‘citizen experience’ and ‘digital inclusion’. As a result, public sector spending on digital transformation is expected to rise 8.6% during the year.

The government has already progressed very well on the digital journey, considering its Aadhaar and the Unified Payments Interface (UPI) platform and the India Stack introduced a few years ago. At the same time, I feel PSUs and other traditional legacy industries also need to think very seriously about adopting new digital platforms.

• Trend 4: Embedded Finance

Another trend for 2022 that the pandemic has laid, is the foundation for is embedded finance, or the seamless integration of financial services into a traditionally non-financial service. Traditional banks have longevity and trust. But fintechs are important in closing the gaps that the big global financial organisations do not cover.

One example of closing the gap is seeing how they respond to the local languages. A regular app by a global player will be in English or Spanish, leaving the rest unaddressed. This leaves a huge chunk of the population unbanked due to language barriers. And fintechs can address them.

I believe fintechs are here for good, and they can be banks’ ideal partners. Banks will bring in their wide customer base and the trust they enjoy, while fintechs with their agility can be locally relevant by reaching remote people where brick-and-mortar banks can’t reach.

• Trend 5: Advent of AI Ethicists

The fifth trend in digital transformation in 2022 is related to Artificial Intelligence (AI). It is going to be as ubiquitous as electricity; it will become such an integral part of everything; you just need to buy into the story. This is because its impact in a country like India, with the size of our population, will be humongous. AI is sure to change the way populations receive customised services. However, this will not be possible unless we use AI, and that too at a cost that is affordable. This will bring the spotlight on AI ethics for responsible use of AI, and the rise of the AI ethicist’s role to oversee this. AI ethicists are people with an understanding of AI, the vision to harness its power, and an awareness of what ethical issues businesses may confront. As AI gains traction, so will people with these qualifications. Indian businesses can be at par with the rest of the world in tech adoption. But a top-down approach is essential, particularly among small businesses. Leaders must provide robust policies and start making fundamental changes in their approach to digital transformation.?