By : Neill Malcolm Harris
August 31, 2017 08:00 AM
If there is one thing the digital revolution has taught us - not only in financial services but in all industries - it's that innovation is inevitable. Going a step further, it could be argued that innovation is vital for any sector that wants to continue expanding, evolving and delivering the best possible experience for consumers.
However, it's important to remember that innovation and the development of new technologies and customer experiences
For proof of this, look to the music industry, which has recently witnessed a startling resurgence in a format that many predicted would die out a long time ago: vinyl.
Since the turn of the century, we have witnessed some major changes in the music industry. Services such as Napster and Audiogalaxy helped to pioneer peer-to-peer (P2P) sharing of digital music, and since then we have seen the likes of iTunes and Spotify transform how people buy and listen to music.
However, amidst all this exciting change and progress, a fascinating trend has been quietly gathering pace in the background: the revival of vinyl.
Over the course of 2016, vinyl sales in the UK increased by 53 percent to more than 3.2 million units - the highest number of records sold since 1991, according to the British Phonographic Industry. Demand for vinyl has now been rising for nine years running, driven by factors such as expanding retail floor space, events like Record Store Day and a new, younger audience.
At the same time, consumers have embraced the newest ways of consuming music, with some 45 billion audio streams served in the UK last year by providers including Spotify, Apple, Deezer
What this shows is that people value choice and diversity in the various products, services
As far as the ongoing popularity of vinyl is concerned, aficionados will tell you that records provide a certain level of audio quality that digital music can't match. But going further than this, it seems there is great significance in the physicality of a record - its aesthetic appeal, the sleeve design, how it feels, even the smell. All of these things are part of the experience of not just owning a piece of music, but being able to hold it in your hand.
So what does this have to do with
Just as there is a certain unique appeal in purchasing and owning a vinyl record, cash offers something that electronic payment methods can't emulate: physicality.
Cash is the only form of payment - with the possible exception of checks - that has an inherent physical value. Credit and debit cards can be replaced, while electronic payments have no physical presence at all. Cash has a reassuring tangibility that allows consumers to physically see and feel how much money they have at any one time, which in turn can help with spending awareness and budgeting.
Looking at the sector as a whole, there are clear comparisons to be made between payments and the music industry. Just as the availability of digital downloads and online streaming hasn't prevented a resurgence in vinyl, new services like Zelle, the P2P money transfer system recently launched in the US, and other instant payment options won't stop people from using cash. The simple reason for this is that consumers want maximum choice and convenience, and continue to appreciate the unique benefits of physical currency.
The digital transformation in music buying and consumption around the turn of the century was a wake-up call to major corporations and record labels. To stay in business, they had to embrace change and open themselves up to collaboration with the smaller, more innovative firms that were redefining the industry.
Established financial institutions need to adopt the same attitude towards working with