Millions of dollars are spent to understand the impact of market forces on the banking sector, but says DARREL ORSMOND, Financial Services Industry Head at SAP Africa, it is worthwhile to consider which ones could have an impact to avoid being caught off-guard.
A range of models and millions of dollars in consulting hours are expended to understand the potential impact of a range of market forces on the retail banking sector. While the potential outcomes are fraught with unpredictability, it is worthwhile to pause and consider some of the forces that could have an impact to avoid being caught off-guard.
Some of the major forces potentially playing out in the retail banking sector include:
· The rise of the individual and the independent economic, social, and political power that this has brought to individuals;
· The individual as the centre of the universe, marked by a “don’t do anything to diminish me or my rights without my consent” worldview;
· The rise of the collective, which paradoxically puts groups – including anything from the state to social movements, supporter clubs, and alumni organisations – as aggregated participants in decision-making;
· The ease of access to massive computing power for anyone who wants it;
· The use of collateralised logic to make decisions and deliver insights, driven by big data learning and insights with predictive capabilities;
· Massively synthesised delivery to users on devices anywhere, anytime;
· Rapidly emerging and disintegrating business models for the creation of value, often accompanied by equal destruction of value, such as those of Google, Airbnb, and Facebook; and
· The commoditisation of historical value-added processes such as risk assessment and payments, and thus of human logic and variability.
Two main forces of change in retail banking
In financial services, the two key forces that are set to fundamentally influence the sector are the rise of the individual (and by extension of groups), and the data-originated insights and collective individual rights inferred and accorded by a business model.
These two forces are set to change the retail banking industry by removing banks’ ownership of the payment – or financial services ‘offer’ – to customers. Customers no longer come to the bank to make their financial arrangements: they do them wherever they are through a number of channels, conducting all manner of purchasing activities whether it’s travel, medicine clothes, capital goods, music, transport, and more. Here, customers are simply relying on the process of delivery to give them their goods, without caring whether a bank is involved at all.
Banks therefore need to collaborate with providers in new business models and networks using all the collective data at their disposal to originate pre-prepared offers in real time in response to customer generated activities, or because of external events. Considering the dramatic increase in the customer’s rights and decision-making power, banks can expect customers to begin ‘owning’ their digital identities and asserting their rights and terms over contracts, usage, payments and more. Customers will assert their digital identity in explicit ways – such as putting customer-defined limits on content purchases – as well as modelled ways, for example automatically approving certain purchases because previously modelled or inferred behaviour shows customers agree with that type of purchase timing and value.
A shift in power
This shifts power from corporates to individuals, equalising the relationship between the bank and the customer, and forcing banks to apply insights and timeliness in a range of personalised offers to seduce the customer. Here, the brand name takes a back seat to the importance, timing, quality and relevance of the offer. Customers will also negotiate and leverage their group power – for example by associating with certain support clubs, alumni organisations or social causes, customers will expect banks and financial services providers to know this and adapt offers accordingly.
These are no doubt uncertain times and banks face a very different world to what the sector has been used to. It is important therefore to hedge bets by building new capabilities so that banks are well-placed to outmanoeuvre their competitors.
Banks’ first priority should be a systematic analysis of gaps in current development spend, followed by the development of a roadmap with specific business cases and deliverables.
Now download a bank account
Absa has introduced an end-to-end account opening for new customers, through the Absa Banking App, which can be downloaded from the Android and Apple app stores. This follows the launch of the world first ChatBanking on WhatsApp service.
This “download your account” feature enables new customers to Absa, to open a Cheque account, order their card and start transacting on the Absa Banking App, all within minutes, from anywhere and at any time, by downloading it from the App stores.
“Overall, this new capability is not only expected to enhance the customer’s digital experience, but we expect to leverage this in our branches, bringing digital experiences to the branch environment and making it easier for our customers to join and bank with us regardless of where they may be,” says Aupa Monyatsi, Managing Executive for Virtual Channels at Absa Retail & Business Banking.
“With this innovation comes the need to ensure that the security of our customers is at the heart of our digital experience, this is why the digital onboarding experience for this feature includes a high-quality facial matching check with the Department of Home Affairs to verify the customer’s identity, ensuring that we have the most up to date information of our clients. Security is supremely important for us.”
The new version of the Absa Banking App is now available in the Apple and Android App stores, and anyone with a South African ID can become an Absa customer, by following these simple steps:
- Download the Absa App
- Choose the account you would like to open
- Tell us who you are
- To keep you safe, we will verify your cell phone number
- Take a selfie, and we will do facial matching with the Department of Home Affairs to confirm you are who you say you are
- Tell us where you live
- Let us know what you do for a living and your income
- Click Apply.
How we use phones to avoid human contact
A recent study by Kaspersky Lab has found that 75% of people pick up their connected device to avoid conversing with another human being.
Connected devices are becoming essential to keeping people in contact with each other, but for many they are also a much-needed comfort blanket in a variety of social situations when they do not want to interact with others. A recent survey from Kaspersky Lab has confirmed this trend in behaviour after three-quarters of people (75%) admitted they use a device to pretend to be busy when they don’t want to talk to someone else, showing the importance of keeping connected devices protected under all circumstances.
Imagine you’ve arrived at a bar and you’re waiting for your date. The bar is busy, and people are chatting all around you. What do you do now? Strike up a conversation with someone you don’t know? Grab your phone from your pocket or handbag until your date arrives to keep yourself busy? Why talk to humans or even make eye-contact with someone else when you can stare at your connected device instead?
The truth is, our use of devices is making it much easier to avoid small talk or even be polite to those around us, and new Kaspersky Lab research has found that 72% of people use one when they do not know what to do in a social situation. They are also the ‘go-to’ distraction for people even when they aren’t trying to look busy or avoid someone’s eye. 46% of people admit to using a device just to kill time every day and 44% use it as a daily distraction.
In addition to just being a distraction, devices are also a lifeline to those who would rather not talk directly to another person in day-to-day situations, to complete essential tasks. In fact, nearly a third (31%) of people would prefer to carry out tasks such as ordering a taxi or finding directions to where they need to go via a website and an app, because they find it an easier experience than speaking with another person.
Whether they are helping us avoid direct contact or filling a void in our daily lives, our constant reliance on devices has become a cause for panic when they become unusable. A third (34%) of people worry that they will not be able to entertain themselves if they cannot access a connected device. 12% are even concerned that they won’t be able to pretend to be busy if their device is out of action.
Dmitry Aleshin, VP for Product Marketing, Kaspersky Lab said, “The reliance on connected devices is impacting us in more ways than we could have ever expected. There is no doubt that being connected gives us the freedom to make modern life easier, but devices are also vital to help people get through different and difficult social situations. No matter what your ‘connection crutch’ is, it is essential to make sure your device is online and available when you need it most.”
To ensure your device lifeline is always there and in top health – no matter what the reason or situation – Kaspersky Security Cloud keeps your connection safe and secure:
· I want to use my device while waiting for a friend – is it secure to access the bar’s Wi-Fi?
With Kaspersky Security Cloud, devices are protected against network threats, even if the user needs to use insecure public Wi-Fi hotspots. This is done through transferring data via an encrypted channel to ensure personal data safety, so users’ devices are protected on any connection.
· Oh no! I’m bored but my phone’s battery is getting low – what am I going to do?
Users can track their battery level thanks to a countdown of how many minutes are left until their device shuts down in the Kaspersky Security Cloud interface. There is also a wide-range of portable power supplies available to keep device batteries charged while on-the-go.
· I’ve lost my phone! How will I keep myself entertained now?
Should the unthinkable happen and you lose or have your phone stolen, Kaspersky Security Cloud can track and protect your device from data breaches, for complete peace of mind. Remote lock and locate features ensure your device remains secure until you are reunited.