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How digital revolution will change financial services

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People have different views on the impact of technology, with some welcoming it and some fearing it. Despite this, it has made our live easier and CHRISTOPH NIEUWOUDT, CEO: FNB Consumer Segment explains the impact it will have on the financial industry.

People have strong views on the impact of digital technology on their lives, from the excitement of getting a new gadget to the satisfaction of doing in minutes what used to require a trip or a long phone call. Contrary perspectives include the fear of being left behind or even what technology will do to their employment prospects over time.

One thing we can all agree on is that digital progress is inevitable. The implications of the use of technology by society are immensely profound, with terms such as “The Second Machine Age” or the “Fourth Industrial Revolution” being used to give this evolution a name.

Let’s takes a closer look at the impact of digital transformation on consumers and the broader financial services industry:

Digital revolution is already at an advanced stage

In 2016 FNB customers had over 10 billion interactions with the bank, of which only 120 million (just over 1%) was on a face-to-face basis. Roughly 8.5 billion (85%) was purely on digital channels and the rest via point-of-sale (card swipes or online purchases) and ATM transactions.

The number of FNB customer interactions has tripled since 2010, growing at more than 20% per annum every year, based on the growth in digital channels. Meanwhile at branches, customers are making significant use of in-branch digital zones.

The reasons for the growth and migration of volumes to digital are obvious as almost every customer knows they can do basically any payment transaction, account or card service function and get most products, including loans, overdrafts, credit card upgrades, savings products and insurance on a 24/7/365 basis via the FNB app, online or cellphone banking. Customers can also buy airtime, pre-pay electricity, play lotto, trade stocks, get a homeloan approved, order a car licence renewal, buy forex, send money to any cellphone in SA, buy stuff via eBucks and the list goes on.

What does this mean for branches and do we still need them?

Branches and branch personnel are no less critical than before, but their role has changed from performing transactions to re-focussing on sales and advising customers on how to bank. In spite of the powerful digital technology, today the bulk of banking consumers still want to talk to someone when opening a new account and even for most product categories.

Additionally, consumers often need help with the new technology, even just to get going and start using it. In my view this leads to much richer and meaningful client interactions. In most cases, branches can be much smaller, but with more room for digital zones and self-service devices such as ATMs and ADTs (deposit taking machines).

This journey is not unique to banking – virtually every sales or service business is or will be going through some elements of digital transformation.

The important effect of such changes is the opportunity to continuously upskill a workforce. At branch level, it’s important for consumers to interact with consultants who understand how the technology works. On this end, we now have e-Bankers who help customers get to grips with banking digitally

Broadly, banking is also seeing a large contingent of specialised roles – IT specialists, analysts, actuaries, engineers, who play a significant role in ‘re-inventing’ solutions all the time

Automating credit decision making and fraud prevention

Today, only a very small percentage of credit decisions are made by people – rather statistical models are used to make fully automated decisions instantly at low cost and with accuracy not achievable by a person. For consumers, this means your risk profile and behaviour determines your loans size and pricing. Importantly, technology has helped reduce fraud loss rates for card and digital transactions.

Move from product-centric to a customer-centric model

FNB has been through a major mind-shift to consistently put the customer at the centre of the universe like never before. Interactions through all channels need to be considerate of making the customer’s experience the best possible by providing a consistent experience across all products and services.

The future for financial services

Often, the question is which banks will “win” the race, or will Apple/Amazon/Facebook/Google or other ‘fintech’ players win?

There are two simple thoughts in this regard. Firstly, due to the massive (data analytical, channel & customer experience) advantages a customer centric approach offers, I believe an integrated player like FNB with a compelling offering across transactional, lending, save/invest, insurance (and in our case telco also) has a major competitive advantage over any player with a limited offering.

Secondly, financial services players that embrace technology and data analytical capabilities in a customer centric manner can and should be the beneficiary of the digital revolution. However, at the end of it all, it comes down to a philosophical decision around business strategy – rather than falling prey to fintech disruptors, banks can unlock the incredible power of innovation for their customers to fulfil the ever changing needs of bank customers.

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Wannacry still alive

One and a half years after its epidemic, WannaCry ransomware tops the list of the most widespread cryptor families and the ransomware has attacked 74,621 unique users worldwide.

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These attacks accounted for 28.72% of all users targeted by cryptors in Q3 2018. The percentage has risen over the last year, demonstrating more than two thirds growth against Q3 2017, when its share in cryptor attacks was 16.78%. This is just one of the main findings from Kaspersky Lab’s Q3 IT threat evolution report. 

A series of cyberattacks with WannaCry cryptor occurred in May 2017 and is still considered to be one of the biggest ransomware epidemics in history. Even though Windows released a patch for its operating system to close the vulnerability exploited by EternalBlue 2 months prior to the start of the attacks, WannaCry still affected hundreds of thousands devices around the globe. As cryptors do, WannaCry turned files on victims’ computers into encrypted data and demanded ransom for decryption keys (created by threat actors to decipher the files and transform them back into the original data) making it impossible to operate the infected device.

The consequences of the WannaCry epidemic were devastating: as the victims were mainly organisations with networked systems – the work of businesses, factories and hospitals was paralysed. Even though this case demonstrated the dangers cryptors pose, and most of PCs around the world have been updated to resist the EternalBlue exploit, the statistics show that criminals still try to exploit those computers that weren’t patched and there are still plenty of them around the globe.

Overall, Kaspersky Lab security solution protected 259,867 unique users from cryptors attacks, showing a substantial rise of 39% since Q2 2018, when the figure was 158,921. The growth was rapid yet steady, with a monthly observed increase in the number of users.

The rising share of WannaCry attacks is another reminder that epidemics don’t end as fast as they start – there are always long-running consequences. In the case of cryptors, attacks can be so severe that it is necessary to take preventive measures and patch the device, rather than deal with encrypted files later,” said Fedor Sinitsyn, security researcher at Kaspersky Lab.

 To reduce the risk of infection by WannaCry and other cryptors, users are advised to:

  • Always update your operating system to eliminate recent vulnerabilities and use a robust security solution with updated databases. It is also important to use the security solution that has specialised technologies to protect your data from ransomware, as Kaspersky Lab’s solutions do. Even if the newest yet unknown malware does manage to sneak through, Kaspersky Lab’s System Watcher technology is able to block and roll back all malicious changes made on a device, including the encryption of files.
  • If you have bad luck and all your files are encrypted with cryptomalware, it is not recommended to pay cybercriminals, as it encourages them to continue their dirty business and infect more people’s devices. It is better to find a decryptor on the Internet – some of them are available for free here: https://noransom.kaspersky.com/

·         It is also important to always have fresh backup copies of your files to be able to replace them in case they are lost (e.g. due to malware or a broken device), and store them not only on the physical object but also in cloud storage for greater reliability (don’t forget to protect your cloud storage with strong hack-proof password!)

·         If you’re a business, enhance your preferred third-party security solution with the newest version of the free Kaspersky Anti-Ransomware Tool.

·         To protect the corporate environment, educate your employees and IT teams, keep sensitive data separate, restrict access, and always back up everything.

·         Use a dedicated security solution, such as Kaspersky Endpoint Security for Business that is powered by behaviour detection and able to roll back malicious actions. It should also include Vulnerability and Patch management features that automatically eliminates vulnerabilities and installs updates. This reduces the risk of vulnerabilities in popular software being used by cybercriminals.

·         Last, but not least, remember that ransomware is a criminal offence. You shouldn’t pay. If you become a victim, report it to your local law enforcement agency.

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Nokia 6.1 gets slice of Pie

HMD Global has announced that the Nokia 6.1 will start receiving Android 9 Pie – the second smartphone in the portfolio to receive the latest version of Android less than a month after the update arrived on the Nokia 7 plus.

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Packed with Google’s newest software and building on the features of Android 8.0 Oreo, Android 9 Pie’s focus on artificial intelligence and machine learning gives owners a more customised and tailored experience.

Powered by the Qualcomm Snapdragon 630 Mobile Platform, the Nokia 6.1 is over 60% faster than its predecessor. Also, now offering enhanced Dual-Sight, ZEISS optics, USB-C fast-charging, Nokia spatial audio and pure, secure and up-to-date Android Oreo.

The Nokia 6.1 has been selected by Google to join the Android One family and therefore users get exclusive access to Apps Actions – a feature only available to Android One and Google Pixel devices.  App Actions helps users get things done faster by predicting their next move and displaying the right action on right away.

Now with Android 9 Pie, the Nokia 6.1’s already impressive battery life is further complimented with the introduction of Adaptive Battery, an update that uses deep learning to understand usage patterns and prioritise battery power on the most important apps.

Other key features of Android 9

·       Slices – Identifies relevant information on favourite apps to make them more easily accessible when needed

·       Adaptive Brightness – Automatically adapts phone brightness by learning from interactions with different settings

·       New system navigation – Features a single home button that provides intelligent predictions and suggestions (user enabled)

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