Finance businesses are almost always born digital!
Background: Over more than half a century Banking, Financial Services and Insurance (BFSI) or Finance (for short) has been the undisputed biggest spender on IT. A very superficial and overly simplistic reason for this is: Finance deals with money and so they have money and hence they have the budgets to spend on IT (both internally and through partners/vendors). But, given the number of large banks that have needed a bailout (especially in North America, Europe) it would clearly suggest that at best this overly simplistic reason is only partly true.
They key reason why Finance is big on IT spends is that Finance has been always born digital— at least since the advent of fractional reserve banking. The word digital is being used synonymous with virtual and the word digital is being used as the antonym of the word physical. Banks are highly leverage entities that deploy most of their deposits. So, the tracking of transactions is crucial in the digital or non-physical world. Risk management is at the core of its business. This has been true for many centuries. Financial Services and Insurance too are born-digital as the tracking of transactions and of course risk management is core to their business too.
Now, when the advent of IT: BFSI has always been a natural fit as they were already born digital businesses. There are a few exceptions: cash management is one such function but even here even though it may not be born-digital it was always a business that was apt for digital transformation as at its core cash management can be modelled as a Computer Science problem (an Optimization problem; usually an intractable problem for which IT will usually offer a relatively more optimum approach than possible without IT).
But, one may ask that why does Finance (almost always) continue to be a top spender on IT. I think this is the case because of a very competitive market, M&A, attempts to innovate and of course the need to sustain the existing IT operations.
Are there other industries that are born digital? What do you think?
Aniruddha M Godbole is an inter-disciplinary expert. He is a continuous learner. These are his personal views.