Connect with us

Featured

Digital banking can be more than just digital

Published

on

Providing a banking service that fits within the fabric of every individual lifestyle may be a far-away dream, but by effectively using data, and listening to customers, a bank can at least set off on the right trajectory, writes SHIONA BLUNDELL.

For most of us, banking is a ‘grudge purchase’. We don’t wake up in the morning and look forward to paying accounts, drawing cash from the ATM, or buying airtime. Our interactions with our bank’s call centres or branch staff generally relate to some type of problem that’s occurred.

Since the collapse of the global economy in 2008, and the multibillion dollar bailouts that ensued, our faith in banks has been shattered. Almost a decade later, they’re still struggling to regain lost trust. In the years since 2008, much has been said about the possibilities that digital presents –  to enhance distribution, address new markets, and optimise back-end processes.

Exposing transactional services in new and different ways – such as a smartphone app – is a small component of digitisation. However, in order to maximise the benefits that digitisation delivers, it is vital to capture the real opportunities that new digital technologies and platforms deliver moving forward.

So, what are the opportunities?

While all our major banks are quick to reach for catchphrases like “customer-centricity” and “user-centred design”, how many times have you received a call from your bank, asking what you would actually like from your banking relationship? How many banks are heading out ‘into the field’: understanding customer behaviours at taxi ranks, shops, community centres, offices, and everyday places that punctuate the lives of most South Africans?

We’re infatuated by the limitless possibilities of technology, but we’re failing to listen to what customers really want.

The real value of digital lies in the opportunity to move far closer to the customer, to engage in in-depth ‘customer discovery’ sessions, and at scale. It’s in analysing customer activity across all channels, challenging archaic regulation, removing complexity from customers’ experiences, and building services that provide greater convenience and address real needs.

It’s not about simply finding ways to improve internal efficiencies, or maximise external revenue streams. And it’s certainly not about rolling out the latest, new digital interfaces that we can showcase.

In the quest to become more relevant to their customer, perhaps the biggest opportunity for banks is in providing far more personalised services. Static approaches like segmentation models and LSM definitions simply do not capture the dynamic, multidimensional nature of the modern customer.

For instance, the same money transfer product may be used by mass market customers to send funds to unbanked family members, and by high net worth customers to send money to their children at school or varsity. Though it’s the same product, it’s being used by two very different customers, to satisfy very different needs. It’s only by considering the broader context that we can truly understand the customer behaviour.

Put simply, one size does not fit all. We all have a unique definition of what is acceptable in areas like security, convenience, customer service response times, or data privacy. From a technology perspective, we have different device and connectivity constraints. We have different language capabilities. From province to province, from urban to rural, our daily lives are starkly different.

Providing a banking service that perfectly fits within the fabric of every individual lifestyle may be a far-away dream, but by effectively using data, and listening to customers more closely, a bank can at least set off on the right trajectory.

As a parting thought, there’s a great example of a bank that actively listened to its customers on social media, noticing when one of its clients broadcast to his followers that he was extending his holiday. The bank took the opportunity to recommend a local accommodation provider, and arranged for a discounted stay. This kind of point-in-time, value adding engagement helps elevate the way the bank is seen by its customers – showing a caring and responsive brand personality, and generating increased customer loyalty in return.

This example represents just one of the many ways in which financial services players can use digital advancements to move closer to their customers – and ultimately elevate the relationship away from that of ‘grudge purchase’, towards more personalised, more enjoyable and valued experiences.

* Shiona Blundell, Head of Banking, Africa, Wipro Limited and Gavin Holme, Business Head, Africa, Wipro Limited

Arts and Entertainment

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.

Published

on

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.”

Continue Reading

Featured

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.

Published

on

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.

Continue Reading

Trending

Copyright © 2018 World Wide Worx