People and businesses will always need banking, but, asks PETER ALKEMA, FNB Business CIO, will they always need banks?
People and businesses will always need banking, but will they always need banks? This question is driving a wave of disruption and new thinking in the industry. Discovery has recently announced plans to enter the local retail banking market; telco and tech companies are making similar moves. Fintech is offering completely new ways of doing business and customers are embracing exponential start-ups who offer frictionless, mobile services. Banks are responding with increased digitisation, new lines of business and highly innovative channels. What’s really happening, how will the banking landscape change and when will it take place?
The reason that non-traditional players are getting into main account banking is because of the customer intimacy and insight that comes with a transactional bank account. It’s the one place that all the money goes into and comes out of; businesses put their main account on all their invoices and many married couples don’t even share one! A home loan or insurance policy is important but still just a monthly debit order that doesn’t generate any behavioural insight about a customer. The relationship is also typically low key; you will only hear from your insurance broker on your birthday and only home loans collections department if you miss a payment.
Some banks have taken advantage of this and created additional stickiness through rewards programmes, improved channels and ecosystems of value-adds. Core transactional platforms are at the heart of a bank’s operations. Regulation and banking license approval ensures that banking platforms are robust and well managed. In addition, financial aspects such as capital adequacy and risk controls such as anti money-laundering mean the requirements for running a bank are significant barriers to entry.
The local banking industry is consistently rated very highly and its world class resilience and regulatory oversight provided a shock absorber for South Africa during the global financial crisis of 2008. Internationally, large banks have relied on these barriers to entry to block new entrants but the rise of fintech and trust-disintermediating technologies such as Blockchain is changing this mindset. Looser regulation in the UK is seeing a wave of banking license applications from start-ups and in the US, firms such as Google, Facebook and Amazon are actively launching financial services products.
Arguably much of this activity is still peripheral and the core business of running a large scale bank relies on well established processes. This was true for Kodak in the mid nineties when it employed 140,000 people, sold 85% of the world’s photo paper and was the fourth most valuable brand in the United States. In 2012 it filed for bankruptcy; it got left behind in an industry that was turned upside down by technology and its impact on their customers’ lives and the market. Kodak invented digital photography but they failed to embrace the disruption to their own business model that it caused to the industry. Similarly, the Walkman was the first portable device for listening to recorded music; Sony could have digitised it but Apple’s iPod eventually obliterated it.
In 2000, Blockbuster was the biggest video rental chain in America, and at the time internet startup Netflix offered to run its fledgling online business. Blockbuster turned this down and went bankrupt 10 years later, having failed to move its business from bricks to clicks while Netflix has become a global leader in streaming movies.
South African banks have been very successful at moving processes off of paper, out of physical locations and onto digital channels. FirstRand’s 2016 results indicate that overall electronic volumes increased 13%, while manual volumes grew only 2%. New ways of working are also extending beyond channels to back office operations.
The next decade is likely to be pivotal for the banking industry and it will be driven by the race for the customer and not by the fintech on its own. Digital is just the enabler of new business models built around improved customer centricity that according to Dimension Data’s Digital Advisory is something that banks should avoid just doing, they have to become digital in their thinking, operating models and execution.
Customers expect frictionless processes that are available where they are and not only where the bank is, the transport and accommodation industries have already delivered this with Uber and Airbnb. According to Google, the tipping point to mobile in South Africa happened in 2014 when internet searches from mobile devices exceeded desktops. Millennials don’t stand in queues or fill in forms, they build trust through convenience and they reward customer delight with loyalty and peer group recognition. By 2020 there will be 500 million people in Sub Saharan Africa with connected smartphones; these people will still need banking but it will probably look very different from today.
Naspers feeds into Latin America’s tech funding
Movile will get $400m funding from the SA-based technology investment giant for iFood expansion.
Movile is to receive US$500-million in funding for iFood in the largest tech funding in Latin America to date. Naspers and Innova Capital have committed to invest $400m of new capital into Movile to use for further investment in iFood, the leading online food delivery platform in Latin America, of which Movile is a majority shareholder.
Movile and Just Eat have already invested $100m in iFood during 2018. iFood’s extraordinary growth and the vast market opportunity in Brazil and more broadly in Latin America has driven the increased investment commitment.
iFood’s monthly orders in Brazil have fed more than 9 million customers in the past twelve months, 16 times the nearest online competitor, in terms of daily active users. This means its partner restaurants are serving the biggest population of consumers ordering food in Latin America. iFood has 50 000 restaurant partners and uses 120 000 couriers.
The increased investment commitment from Naspers, Innova and Movile is expected to accelerate growth, speed up product development and innovation, and fuel geographical expansion for iFood across the region. The company’s vision is to gain deeper knowledge of consumers through artificial intelligence technology, to personalise the food delivery experience – and at a reduced price, because of improved logistics.
“Movile is very fortunate to have long-term investors who have supported us for the past decade to help achieve our goal of transforming the lives of more than one billion people and thus we are able to continually back iFood to ensure it remains the market leader,” said Fabricio Bloisi, Movile CEO.
“Our entire ecosystem of companies is focused on allocating resources and energy towards our one billion people goal. iFood is leading the way, fueling unprecedented growth through its innovative technology platform, providing consumers, couriers and restaurants with the best experience in food ordering and delivery.”
Larry Illg, CEO of Naspers Ventures, said: “iFood has established itself as a technology leader in Latin America and its success stacks up with some of the most innovative food companies that are leading regions in North America, Europe and Asia. We have been impressed by their execution in Brazil and remain committed to backing the company on its path to transform the entire food chain to better serve consumers.”
Online food delivery is experiencing massive expansion globally. According to latest reported results, Grubhub grew daily average orders 39% year-on-year, reaching over 416 000 orders per day. In Latin America, iFood has reached 390 000 orders per day just in Brazil in the last week of October, compared with 183 000 in October 2017, representing 109% growth.
iFood CEO Carlos Moyses said: “We want our consumers to have an amazing delivery experience from the moment they order their food to the moment it arrives. Our partners – the restaurants and delivery fleet – make that happen by living our purpose of improving people’s lives using our services.
“iFood exists for our customers and, with an increased investment commitment of this size, we will be able to build out our state of the art technology platform, and increase our courier and restaurant partners to even better serve our current and future customers in Latin America.”
Hide your sheep, Spyro is reigniting
Spyro, the iconic purple dragon that entertained living rooms worldwide in the late ‘90s, is making a return with the release of Spyro Reignited Trilogy.
Spyro Reignited Trilogy introduces players to a fully remastered game collection with a re-imagined cast of characters, animations, environments, new lighting and recreated cinematics—all inHD. Now fans can explore more than 100 lush environments filled with new detail, that brings the Dragon Realms and Avalar to life . The trilogy is available for PlayStation 4, PlayStation 4 Pro and the family of Xbox One devices from Microsoft, including the Xbox One X.
South African distributors Megarom provided the followjng information:
In Spyro Reignited Trilogy, lead developer Toys For Bob is giving fans an all scaled-up version of the original three Spyro games that started it all, Spyro the Dragon, Spyro 2: Ripto’s Rage! and Spyro: Year of the Dragon, but with a modern-day feel that makes it fresh and fun for today’s player. Adding to the fun, voice actor Tom Kenny is returning to the franchise as the voice of Spyro in all three remastered games. Longtime fans will be treated to Toys For Bob’s reimagined version of the classic soundtracks, in addition to an all-new title-screen theme from original soundtrack composer Stewart Copeland.
Additionally, the new game brings an in-game audio feature that allows players to switch between the original and the newly remastered soundtracks, for those who want a more classic gameplay experience. Players can simply fly in to the “options menu” at any time during gameplay, unleash their preferred nostalgic or scaled-up groove, and glide right back into the Spyro action without losing saved data.
“It’s been a real pleasure to bring back one of most iconic video game characters of all time through the Spyro Reignited Trilogy,” said Paul Yan, Co-Studio Head at Toys For Bob. “We’ve poured everything we’ve got into making sure every detail was done right to deliver a great Spyro experience for fans. We hope players will have as much fun revisiting the Spyro world and characters as we did remastering them.”
In the road up to the official release of Spyro Reignited Trilogy, Activision Publishing, Inc., a wholly owned subsidiary of Activision Blizzard, created a first-of-its-kind, life-sized, fire-breathing and talking Spyro Dragon drone. The drone took off from “Stone Hill” castle near New York City, spreading his wings across the U.S. to explore the cities and iconic landscapes that resemble levels and themes from the original Spyro games. As part of the tour, the Spyro drone chased sheep, fired up some BBQ and delivered an early copy of Spyro Reignited Trilogy to fellow O.G. and entertainment icon, Snoop Dogg. Highlights from the Spyro drone’s delivery to Snoop Dogg can be found here.
“Fans have been asking Activision to bring Spyro back for some time now. The response to Spyro Reignited Trilogy has been great thus far, and we’re absolutely thrilled that we’re able to continue to reimagine and reinvigorate some of the most iconic videogames and characters of all time with our remastered experiences,” said Steve Young, Chief Revenue Officer at Activision. “With this year being the 20th anniversary of Spyro, there’s no better time to pay homage to everyone’s favorite purple dragon.”
The Spyro community is invited to geek out and elevate their fandom even further through the elite global partnerships from the Activision Blizzard Consumer Products Group (ABCPG). Collaborations with Funko, Traly Pins, Exquisite Gaming, KidRobot, USAopoly, Trends International, Rubber Road, and Changes have created new avenues for fans to share their love for the return of Spyro, the original roast master. Spyro consumer products across apparel, collectibles, figurines and more are now available at retailers worldwide. Fans can also take advantage of the GameStop exclusive Spyro TOTAKU Collection.