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Internet of Things: Simpler than you think

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The Internet of Things is one of the latest buzzwords in the IT industry. It promises to transform how we live and work, but for some its still very difficult to understand. VINCE RESENTE, Enterprise Technology Specialist at Intel attempts to demystify the IoT.

Ah, the Internet of Things. It’s the topic on everyone’s lips – the buzzword of the year. It promises to transform the way we live and work, to free us from mundane tasks, and create entirely new jobs in entirely new industries.

Ask anyone in technology to explain the IoT and they’ll probably use words like sensors, big data and networks, and tell you how, together, these produce real-time insights and business intelligence.

No wonder the man on the street isn’t as excited about the IoT as those in the industry are. For something that is expected to have massive impacts on the lives of every person on the planet, the IoT should be easier to understand.

Demystifying the IoT

The high-level definition of the IoT is a collection of sensors that feed information into a database to make sense of things.

That’s not the most user-friendly explanation.

Let’s rather think of the IoT as a human body – we’ll call him John.

John’s central nervous system is the database and his senses (sight, smell, touch, etc) are, well, the sensors.

When information enters John’s nervous system (database) through his senses (sensors), he interprets it immediately and responds accordingly – he pulls his hand away from a hot stove; he sidesteps an uncovered manhole; he turns down the volume on the TV if it’s too loud.

The heat from the plate, the sight of the open manhole, and the TV volume is all data, which John analyses in real-time, allowing him to make instant decisions. He uses this information to protect himself by predicting outcomes before they occur – like falling into the manhole and seriously injuring himself.

Making businesses smarter

This is, in essence, how the IoT works.

Businesses in any vertical can monitor and analyse just about any variable. This analysis allows them to make better business decisions in response to changing conditions, in real time. They can also predict what is likely to happen in the future and put measures in place to protect themselves from financial loss or to better position themselves to leverage future opportunities.

These decisions – or business intelligence – keep them ahead of their competitors, help them save time and money through unnecessary downtime, and ensure their systems always perform optimally.

Let’s consider some of the variables a courier company – we’ll call it ABCDeliveries – might monitor. By monitoring traffic patterns through apps like Waze, GPS data and traffic light sensors, ABCDeliveries can calculate the fastest route between destinations, saving it time on the road and allowing it to complete more deliveries in a day, which equates to more revenue. By monitoring the weather, ABCDeliveries will know when to move packages undercover to prevent damage from rain or hail, saving it money in insurance claims.

A key aspect of the IoT is that big data is time-stamped. Traffic information from yesterday is useless to ABCDeliveries today. It needs to know what is happening right now so that it can react appropriately.

Humans as sensors

Thousands of South Africans use the IoT every day, possibly without realising it. Anyone who travels with the Waze navigation app is essentially part of a bigger IoT ecosystem.

Users opt in to share their movements and to report road hazards, faulty traffic lights and police sightings, meaning they are, essentially, the sensors that submit data – of John’s senses. This information is disseminated to other Waze users travelling on the same route.

If 20 people give a hazard report a thumbs up, it’s likely still there. If 10 give it a thumbs down, it’s probably not and Waze will remove it from the hazard list. That’s a big data decision made in real time in response to data coming in from thousands of sensors.

The effects? People are able to avoid congested roads and discover new routes that get them to work faster. Imagine how much simpler our lives will be when we can look inside our fridges from our phones while doing grocery shopping, or when we can turn on the heaters from work to arrive to a warm home in winter?

There is not a single vertical that will not benefit from the IoT, but we first need to understand how it works so that we can get more people excited about it – and more people developing for it – so we can all realise these benefits sooner.

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.

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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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