New trends emerge all the time.
Turning them into investment
opportunities is the real trick.

The digital trans­formation is changing our lives radically. The rapid pace of digi­tisation is affecting almost all business processes and can be described as nothing less than a new industrial revolution. Global corporations are re­inventing them­selves or are being re­placed by more innovative providers. Start-ups with smart solutions are growing to become global market leaders in the space of just a few years. However, a good idea alone is never enough. To enable change, it is also necessary to have (venture) capital.

Ulrich Graner, Senior Relationship Manager at VP Bank (Luxembourg) SA, explains what oppor­tunities are opening up for investors who are already investing today in digital topics of the future and in the market leaders of tomorrow.

Taking advantage of the digitalisation potential

There are long-term developments, often referred to as mega­trends, which have a significant influence on many areas of our lives. However, such lasting trends are not only increasingly determining what happens in our day-to-day lives but are also developing strong economic dynamics and driving the capital markets. One of these mega­trends is digitisation, which is trans­forming all aspects of our lives. In future, everything will be both smart and inter­linked. As a key driver of global economic growth, investors need to keep an eye on the digital transfor­mation as a crucial long-range trend.

Digital innovation is taking place at an increasingly faster pace. Existing market leaders such as the big tech companies Alphabet (Google), Amazon, Facebook, Apple and Microsoft, as well as new emerging tech companies, will continue to irrevocably change the way we live, work and consume. Entire occu­pational categories will disappear, and new ones will emerge. As consumers, we will take up contact and interact with businesses in entirely new ways. The new business models emerging from digitisation are profound. The term disruption usually comes up when people talk about digitisation, with this term being used to refer to the destruction of current business models. The more a technology can be considered to be “disruptive”, the greater importance the financial markets attach to it.

Digital innovation will
continue to irrevocably
change the way we live,
work and consume.

The COVID-19 crisis has further accelerated the digital trans­formation. As the pandemic drags on, businesses are in­creasingly relying on digital technologies to address the challenges of working from home as well as supply-chain disruptions. Since the corona­virus outbreak, there has been a massive increase in the number of people working from home, shopping online and using digital enter­tainment. Companies that provide the corresponding infra­structure and product offerings are benefiting from this enormous surge in demand.

Intelligent data management and key technologies

The enormous increase in global use of the internet and digital networks represents an important basis for the dynamics of digital trans­formation processes. Digitisation depends on data and innovative data management as both its source and the fertile ground on which it grows. It is imperative to collect and classify data as well as to create transparency. The aim is to use analytical evaluation to recognise and optimise methods of action and decision-making. This requires the capacity to store extremely large amounts of data and to make the knowledge gained from it available in new virtual forms and applications. Cloud computing and rapid improvement of mobile processors enable easy and cost-effective access to large amounts of computing power. The invest­ment experts at VP Bank have identified five key tech­nologies that are crucial for digital transformation:

In their own study on digital transformation, the investment experts at VP Bank summarised the growth potential that can be derived from these technologies and the key aspects of digitisation. We published this study on our VP Bank website, and you can access it by following this link: Digital Transformation. The “Digital Transformation – The path to the future” series explains how digitisation is shaking up business models and how investors can participate.

In the currently volatile markets driven by fears of recession, we would like to use our study as an opportunity to look to the future and train our eyes on the big picture. We identified for our readers seven areas that will undergo significant transformation in the coming years and that are expected to deliver above-average growth for the industry as well as for investors. Attractive investment opportunities that we present include the areas of education, healthcare, data security and mobility.

Taking advantage of investment opportunities of the digital future

One of the most important factors for the selection of invest­ment opportunities today is recog­nising the dynamic nature and potential for change in economic trends at an early stage. This makes it of urgent importance to integrate mega­trends into invest­ment processes.

The digital transformation is undoubtedly one of the most promising invest­ment trends of the coming years. With these dis­ruptive, digital inno­vations, attractive opportunities that can be exploited by investors are opening up. In this regard, VP Bank is offering selected thematic areas that enable diver­sified exposure with promising opportunities for excellent returns.

Disruptive, digital
open up
attractive opportunities.

Ulrich Graner

Ulrich Graner

Senior Relationship Manager,
VP Bank (Luxembourg) SA

As Senior Relationship Manager in Private Banking in Luxembourg, Ulrich Graner advises international private clients and family offices on all issues relating to wealth management. After studying in Regensburg, Germany, and Los Angeles, California, Ulrich joined a Munich-based financial technology start-up seeking to digitally transform the investment advisory processes of banks and financial service providers. He then worked in wealth management at a major bank in Luxembourg for several years. As a trained psychologist, his focus has always been on people and not technology.