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Data is the key asset for dot.com success

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There isn’t a silver bullet to make your business “the next Uber”, but one vital aspect of the Uber culture these businesses have instilled in their employees, customer service and operations, is understanding and using data, writes SEKETE PATRICK MAPHOPHA of NetApp Africa.

Nowadays, if you watch Dragon’s Den or The Apprentice, the majority of the proposed business ideas – not necessarily those that receive investment – are online-based businesses or apps. At the very least, budding entrepreneurs are advised to ditch the traditional retail store. Therefore, it’s no wonder that companies like Amazon.com, Uber and AirBnB, the fastest-growing companies in their respective fields, are both the inspiration and envy of SME owners.

There isn’t a silver bullet to make your business “the next Uber” as so many claim, but one vital aspect of the Uber culture these businesses have instilled in their employees, customer service and operations, is understanding and using data.

Mantras like “Data is the new currency”, “Data = profit” and “Data holds the key to our future” are bandied about, and it can hardly be denied that for a company that does not produce any products of its own, data is arguably its most valuable asset. Central to this mantra needs to be a cloud storage solution like NetApp, aimed at simplifying data control and mobility across on-premises, hybrid cloud, and public cloud infrastructures.

Fostering a ‘sharing economy’

The ubiquity of technology in our daily lives and the growing digitisation of services means that our lives are becoming more and more “connected”, in terms of being connected to the internet and to data from multiple sources which are linked together and used to make another service relevant. Now it’s time for SMEs with an appetite for growth, or that want to increase their value proposition to existing customers, to make data a key part of their business culture.

The proof of the success of data for driving business growth can be seen in the “Sharing Economy” trend, which began in the early 2000s. As consumers, we’re constantly connecting intelligent cars, speakers, watches, lightbulbs and more to the Internet. Experts are therefore predicting a 4300% increase in data production in 2020 compared to 2012. In order to address the data overload, SMEs need to rather invest in a hybrid cloud solution, such as one built on a Data Fabric, to place the control in their hands. With that solution they can:

  • Synchronize data between on-premise and cloud storage for data analytics purposes;
  • Back up data securely to on-premises, hosted, or public clouds by using cloud-integrated storage;
  • Gain insights into their cloud workloads across on-premises and cloud environments with.

By having full control over data workloads, connecting to consumers can be made easier than ever before.

Building out the necessary infrastructure to take data to definitive success

By utilising the data at a company’s disposal from any and every relevant channel, SMEs stand to gain in two key ways.

Firstly, they can use the data for their own strategy, improving competitiveness and operational efficiency, while being able to create new products and services with real, actionable insight into the target customer. This is crucial for SMEs who have much smaller budgets than their enterprise rivals with which to develop and research new offerings, and can be a key driver in allowing SMEs to compete on a larger scale.

In order to fulfil this, SMEs will have to consider their IT infrastructure and look into storage and analytics solutions that can support both the volume of data required, and the processing capability necessary to transform huge amounts of raw actionable data into useable insights. The NetApp ONTAP storage operating system is one such example, and can be used across cloud and on-premises infrastructure to create a Data Fabric that acts as a single system, meaning that data is more easily managed and controlled.

Secondly, for SMEs who either can’t or don’t want to use data directly, there is also a financial opportunity presented by the growth in data. Data sets can be sold on to third parties who may be able to transform it into exciting new innovations and services.

We are living in a data-powered world, where data, devices and systems are unifying to produce the best products and services for customers, and the best ROI opportunities for businesses – SMEs and enterprises alike. As more devices become connected, we are moving towards a future powered entirely by data – and SMEs can’t afford to miss out.

* Sekete Patrick Maphopha, NetApp Africa CTO and Technology Evangelist

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VoD cuts the cord in SA

Some 20% of South Africans who sign up for a subscription video on demand (SVOD) service such as Netflix or Showmax do so with the intention of cancelling their pay television subscription.

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That’s according to GfK’s international ViewScape survey*, which this year covers Africa (South Africa, Kenya and Nigeria) for the first time.

The study—which surveyed 1,250 people representative of urban South African adults with Internet access—shows that 90% of the country’s online adults today use at least one online video service and that just over half are paying to view digital online content. The average user spends around 7 hours and two minutes a day consuming video content, with broadcast television accounting for just 42% of the time South Africans spend in front of a screen.

Consumers in South Africa spend nearly as much of their daily viewing time – 39% of the total – watching free digital video sources such as YouTube and Facebook as they do on linear television. People aged 18 to 24 years spend more than eight hours a day watching video content as they tend to spend more time with free digital video than people above their age.

Says Benjamin Ballensiefen, managing director for Sub Sahara Africa at GfK: “The media industry is experiencing a revolution as digital platforms transform viewers’ video consumption behaviour. The GfK ViewScape study is one of the first to not only examine broadcast television consumption in Kenya, Nigeria and South Africa, but also to quantify how linear and online forms of content distribution fit together in the dynamic world of video consumption.”

The study finds that just over a third of South African adults are using streaming video on demand (SVOD) services, with only 16% of SVOD users subscribing to multiple services. Around 23% use per-pay-view platforms such as DSTV Box Office, while about 10% download pirated content from the Internet. Around 82% still sometimes watch content on disc-based media.

“Linear and non-linear television both play significant roles in South Africa’s video landscape, though disruption from digital players poses a growing threat to the incumbents,” says Molemo Moahloli, general manager for media research & regional business development at GfK Sub Sahara Africa. “Among most demographics, usage of paid online content is incremental to consumption of linear television, but there are signs that younger consumers are beginning to substitute SVOD for pay-television subscriptions.”

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New data rules raise business trust challenges

When the General Data Protection Regulation comes into effect on May 25th, financial services firms will face a new potential threat to their on-going challenges with building strong customer relationships, writes DARREL ORSMOND, Financial Services Industry Head at SAP Africa.

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The regulation – dubbed GDPR for short – is aimed at giving European citizens control back over their personal data. Any firm that creates, stores, manages or transfers personal information of an EU citizen can be held liable under the new regulation. Non-compliance is not an option: the fines are steep, with a maximum penalty of €20-million – or nearly R300-million – for transgressors.

GDPR marks a step toward improved individual rights over large corporates and states that prevents the latter from using and abusing personal information at their discretion. Considering the prevailing trust deficit – one global EY survey found that 60% of global consumers worry about hacking of bank accounts or bank cards, and 58% worry about the amount of personal and private data organisations have about them – the new regulation comes at an opportune time. But it is almost certain to cause disruption to normal business practices when implemented, and therein lies both a threat and an opportunity.

The fundamentals of trust

GDPR is set to tamper with two fundamental factors that can have a detrimental effect on the implicit trust between financial services providers and their customers: firstly, customers will suddenly be challenged to validate that what they thought companies were already doing – storing and managing their personal data in a manner that is respectful of their privacy – is actually happening. Secondly, the outbreak of stories relating to companies mistreating customer data or exposing customers due to security breaches will increase the chances that customers now seek tangible reassurance from their providers that their data is stored correctly.

The recent news of Facebook’s indiscriminate sharing of 50 million of its members’ personal data to an outside firm has not only led to public outcry but could cost the company $2-trillion in fines should the Federal Trade Commission choose to pursue the matter to its fullest extent. The matter of trust also extends beyond personal data: in EY’s 2016 Global Consumer Banking Survey, less than a third of respondents had complete trust that their banks were being transparent about fees and charges.

This is forcing companies to reconsider their role in building and maintaining trust with its customers. In any customer relationship, much is done based on implicit trust. A personal banking customer will enjoy a measure of familiarity that often provides them with some latitude – for example when applying for access to a new service or an overdraft facility – that can save them a lot of time and energy. Under GDPR and South Africa’s POPI act, this process is drastically complicated: banks may now be obliged to obtain permission to share customer data between different business units (for example because they are part of different legal entities and have not expressly received permission). A customer may now allow banks to use their personal data in risk scoring models, but prevent them from determining whether they qualify for private banking services.

What used to happen naturally within standard banking processes may be suddenly constrained by regulation, directly affecting the bank’s relationship with its customers, as well as its ability to upsell to existing customers.

The risk of compliance

Are we moving to an overly bureaucratic world where even the simplest action is subject to a string of onerous processes? Compliance officers are already embedded within every function in a typical financial services institution, as well as at management level. Often the reporting of risk processes sits outside formal line functions and end up going straight to the board. This can have a stifling effect on innovation, with potentially negative consequences for customer service.

A typical banking environment is already creaking under the weight of close to 100 acts, which makes it difficult to take the calculated risks needed to develop and launch innovative new banking products. Entire new industries could now emerge, focusing purely on the matter of compliance and associated litigation. GDPR already requires the services of Data Protection Officers, but the growing complexity of regulatory compliance could add a swathe of new job functions and disciplines. None of this points to the type of innovation that the modern titans of business are renowned for.

A three-step plan of action

So how must banks and other financial services firms respond? I would argue there are three main elements to successfully navigating the immediate impact of the new regulations:

Firstly, ensuring that the technologies you use to secure, manage and store personal data is sufficiently robust. Modern financial services providers have a wealth of customer data at their disposal, including unstructured data from non-traditional sources such as social media. The tools they use to process and safeguard this data needs to be able to withstand the threats posed by potential data breaches and malicious attacks.

Secondly, rethinking the core organisational processes governing their interactions with customers. This includes the internal measures for setting terms and conditions, how customers are informed of their intention to use their data, and how risk is assessed. A customer applying for medical insurance will disclose deeply personal information about themselves to the insurance provider: it is imperative the insurer provides reassurance that the customer’s data will be treated respectfully and with discretion and with their express permission.

Thirdly, financial services firms need to define a core set of principles for how they treat customers and what constitutes fair treatment. This should be an extension of a broader organisational focus on treating customers fairly, and can go some way to repairing the trust deficit between the financial services industry and the customers they serve.

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