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Machines shape ‘golden ratio’

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In his third blog post, NIRAL PATEL, Oracle South Africa MD, discusses the relationships businesses need to aim for a ‘golden ratio’ of people, data and machines, where each is adding value and complementing the value of the other in harmony.

Tim Berners-Lee, the inventor of the World Wide Web, had this to say in 2007 about how data should flow in a modern business:

Any enterprise CEO really ought to be able to ask a question that involves connecting data across the organisation, be able to run a company effectively, and especially to be able to respond to unexpected events. Most organisations are missing this ability to connect all the data together.”

Berners-Lee’s point was that the value of data is not being fully realised if it is sitting in silos and people are making decisions based only on a partial view of all the data that could be available to them. If businesses lack the people and the technology to bring data together for a more comprehensive view of their business and their opportunities, then its’ worth is a fraction of its potential value. This is why businesses need to aim for a ‘golden ratio’ of people, data and machines, where each is adding value and complementing the value of the other in harmony.

Technology’s role in this balancing act certainly cannot be underestimated. The ability to collect, collate and connect that data at scale simply did not exist until the onset of cloud computing which is breaking down the silos Berners-Lee was alluding to.

The connectivity that cloud provides across businesses, supply chains, customers, platforms, applications and databases means organisations can gain a single view of their operation. The power and flexibility of cloud means they can process unprecedented volumes of data at speed through cloud applications, platforms and infrastructure. Cloud is also enabling machines to work more autonomously and to communicate with one another as we are seeing with the rise of technologies such as artificial intelligence (AI) and machine learning. Such technologies are bringing speed and scale to areas of the business that otherwise would be labour intensive and time-consuming processes.

For instance, retailers looking to improve customer experience and satisfaction are turning to the Internet of Things (IoT) and interconnected sensors spread through the supply chain to uncover new ways of increasing efficiency, reducing cost, improving product availability and providing more accurate product information.

In the back office, companies are experimenting with technology powered by AI and machine learning, such as self-service chatbots to improve the HR experience for employees. Rather than having to wait on HR to answer routine questions, workers can simply interact with a chatbot linked directly to the organisation’s HR systems that can answer many questions automatically. There is a clear business benefit here in addition to improved employee satisfaction – HR teams who spend less time on these admin tasks can focus on more projects that require their unique expertise.

But automation is certainly not about replacing employees with machines. Rather, it’s about speeding up tasks that take more time than businesses can afford to give to them as they seek to innovate at pace and achieve greater profitability through efficiency and by enabling people to focus on more valuable tasks. It is about improving the decision-making capabilities of people by arming them with a richness of highly relevant, topical and timely data that otherwise would not be possible to collect.

This is why it comes back to this idea of a ‘golden ratio’ of the right people, using the right data and machines in perfect balance. No business wants too many, or an unprofitable amount of either, but will always need all three in pursuit of data-driven success.

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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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