- The Australian technology sector is in the sweet spot, with more focus now shifting towards the adaptation of technology across various industries, as the pandemic has reshaped the way businesses owners/operators think about technology.
- The changing consumer trends and the drift towards the digitalised infrastructure have together catalysed technology stocks to boom.
- The pandemic has triggered an unprecedented demand for fulfilling various technological needs of sectors like Healthtech, FinTech, Neobanking, etc and also for people working from remote locations.
The pandemic has brought the global economy to its knees wrecking businesses and economies across the world. But every cloud has a silver lining; coronavirus has emerged as an impetus for individuals, businesses, and governments to reinforce their trust and belief in the power of technology.
Technology has assisted companies to thrive and helped them sail through the coronavirus storm; entities rode on a wave of increasing digital platforms and contactless payments.
The S&P/ASX 200 Information Technology (Sector) index hit its all-time high of 1,741 points on 10 July 2020. As on 20 July 2020, XIJ closed at 1658.50 points, up by 1.34% from its last close, after hitting an intra-day high of 1661.40 points. While the Australian benchmark index S&P/ASX200 ended the trading session at 6001.6 points, marginally decreasing by 0.53% compared to its previous close.
The home-grown technology market darlings, WAAAX stocks have also made astonishing gains and weathered the storm successfully to a large extent.
Let us deep dive and acquaint ourselves with five major reasons that Australian Tech stocks will keep up with the boom:
Tectonic shift in many sectors through technology
Picture this. You want to apply for a personal loan, but instead of going to a physically setup bank, you simply type in your requirements on your phone, and services are provided by a mere touch of your finger.
Have you ever thought how the concept of digitalisation applies to a bank?
Neobank such as Wisr Limited (ASX:WZR) is Australia’s only ASX listed digital bank, which is operating exclusively online, and possesses a tech-savvy demographic customer base; comprising majorly of millennials and the younger generation as they are more inclined towards use mobile applications, and less accustomed to visiting physical branches of banks.
To help manage one’s finances, Neobanks utilises big data primarily to disclose the behavioural standards of both potential and existing consumers; Artificial intelligence (AI) is used to develop strategies that are more personalised and can further enhance customer experience.
Furthermore, technological advancements in the healthcare sector are overhauling the way doctors interact with patients. Hospitals have been embracing digitisation to better address patient flows and management. Robotics is being applied to deliver superior surgery outcomes. Alcidion Group Limited (ASX:ALC) provides intelligent informatics software for high-performance health care solutions.
Insurance companies are also encompassing technology and are using sensors to check the health and accordingly suggest the insurance facilities. Moreover, with the application of algorithms, premiums can be calculated automatically.
Inflated contactless transactions
In the aftermath of COVID 19, replacement of cash, card, paper, cheques, etc. would be witnessed partially or entirely.
Further, Wuhan, China originated virus has acted as a catalyst for the rapid adoption of contactless payments. These payments are secure, hygienic and require minimum physical contact between the seller and the customer.
Lately, there has been a soared demand for contactless payment methods in various forms comprising of - digital wallets such as AmazonPay, ApplePay GooglePay to name a few; checkouts utilising facial recognition; embedded payment systems in cars, etc.
Buy now pay later services (BNPL) space in Australia is boosted by high mobile phone penetration, online commerce, Artificial Intelligence (AI), high contactless payment penetration, blockchain capabilities, etc.
As per FinTech Australia, above 800 fintech businesses are operating in the country, which is pegged to be an AU$4 billion industry this year.
Remote working - the new normal of the workplaces in future
COVID-19 has led to relying more on the remote working tools to maintain business continuity. Earlier, housing apartments were based on bedroom and kitchen requirements, those are now expected to change with an inclusion of the individual’s workroom.
Large office spaces are likely to dwindle, and more and more companies would shift to a contactless digital world. Also, many of them would be experiencing collaboration, operation, and communication virtually for the very first time.
Remote working has bolstered the need for various video conferencing apps for meetings, conferences, and cloud-based applications.
Of late, cloud services have emerged as a partner for businesses amid the unprecedented times. The cloud services are fabricating a digital workplace wherein; employees can work collaboratively, efficiently, agilely and securely.
The US based companies such as Google, Facebook, Amazon and Twitter are looking at various options to extend work from home for a longer period of time; Australian entities are expected to follow suit and extend virtual working for longer period of time, leading to a swelled demand for cloud services and virtual collaboration tools.
Did you read; A glance at post-COVID-19 future of work
Social Media in the time of social distancing
Amid COVID-19, social media platforms have been the only connecting thread between people and the outside world. Facebook, Instagram, YouTube, Twitter, etc - the social media platforms could be cited as one of the robust resources of the twenty-first century.
Additionally, social media is serving as an avenue for entities to brand, sell and market their businesses.
Numerous digital companies are also gathering data via social media platforms to enhance their products, build a customer base, and promote loyalty.
Of late, Facebook launched Shops to aid small businesses to survive through the pandemic by allowing them to create digital storefronts for free.
The pandemic has made people worldwide more health-conscious than before, and wearables and fitness apps are used at a large scale by the everyone including Aussies to analyse and track their daily activities.
Technology is bridging a gap between exercising and gauging the metrics of individuals fitness progress via fitness wearables.
Moreover, wearable sensors apps are used extensively to surveil and gather data on the vital signs of patients and people. The technology embedded in the wearables enable doctors to gather a full picture of potentially serious injury among other things.