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How IoT can make the world a better place

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The IoT, promises tremendous uses: from smart autonomous cars, to home automation, to smart farming, and millions more. However, the success of it resides in if and how people adopt it. RICHARD BARRY, CEO of Polymorph, expands in three elements that will drive IoT.

The Internet of Things (IoT) has caused unprecedented hype among technologists, software developers, futurists and industrialists. Estimates of the adoption of IoT vary from anywhere between 2.38-billion devices shipped in 2017 (Gartner) to 50.1-billion devices connected by 2020 (World Economic Forum). McKinsey projects that IoT will be a $6.2-trillion industry by 2025. The public and private sectors have started investing heavily in IoT to capitalise on its uses and (projected) exponential growth: software company SAP plans to invest $2.2-billion in IoT by 2020, while India has announced a package of $2-trillion to connect 100 cities around the country.

The uses of IoT – from smart autonomous cars that self-direct to less congested roadways during peak traffic hours, to home automation, to smart farming, and millions more – all have one thing in common: they are designed to make the world a more efficient place to live and work in. This efficiency is driven by access to quality data that did not exist before and matching this to data analysis and automation to deliver insights and solutions faster than has been possible before.

Pundits are quick to point to IoT-enabled clothing that can track the wearer’s fitness and health and inform nearby connected devices when it’s time to replace the piece of clothing (in an ideal world, per the pundits, the piece of clothing in question would interact with a connected device to order a replacement garment without the wearer even being aware of the need therefore in the first place). The combination of IoT and automation (enabled by AI/machine learning) is humanity’s surest step yet to the world imagined by the great science fiction writers of the past century.

Amid all this excitement and hype, we are at risk of missing one critical component to the success of IoT – and any other technology: the human element.

Whatever the inherent potential of a new technology, its success ultimately resides in if and how people adopt it. For IoT to live up to its promise of efficiency, safety and convenience, human beings – not processors and data – should be the focal point.

I believe there are three key elements that will drive IoT as the catalyst of the Fourth Industrial Revolution, namely:

1.       Using smart connected devices to enable people to make smarter decisions – core to the premise of smart cities, smart cars, smart manufacturing and all manner of smart devices is that you can only manage what you can measure. Millions – billions – of connected devices generating real-time data give decision-makers unprecedented amounts of accurate information that enables them to identify and act on the best possible option at any given time. While the devices that generate the data are invaluable, it is ultimately the human ability to determine context and extract value from the data that will realise the true benefits of the technology.

2.       Providing real-time information to people and business to improve the customer experience – user experience (UX) is a concept nearly as hyped as IoT. The core premise is to make technology interfaces and processes as intuitive as possible to improve the experience of using software, products or services. IoT adds a deeper layer to this – instead of waiting for the user to interact in a certain way and accommodating their preferred way of interaction through clever design, IoT can proactively introduce information or guidance to users before they are consciously aware that they need or want something. For example, a small-scale farmer can deploy sensors to his crops that feed critical information to a mobile app, advising him of optimal watering of his crops to produce a bigger yield while limiting water consumption.

3.       Complete dedication to solving human problems – in essence, all technology needs to be useful, accessible and available for it to become part of mainstream consumer and business culture. IoT is no different. Through a combination of data analysis and automation, IoT should be able to remove day-to-day frustrations such as traffic congestion or queueing at the bank. It however needs to be consciously designed for this purpose, or IoT will remain an unfulfilled promise to people and businesses alike.

Without a focus on the human element, IoT is simply a solution looking for a problem. As with all truly transformative technologies, its success will ultimately depend on how well it adapts to the needs of a rapidly evolving and developing human population. All the fundamental elements are there to make IoT the technology that shapes this generation (and many generations to come) – if we remember that, in the end, it is ourselves – not the technology we invent – that needs to be the priority.

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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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