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Prepare now for 2025

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A recently published book written by STEPH VERMEULEN, takes a look at if we are ready to embrace some of the exponential changes over the next decade or if we will be thrust out of our comfort zones into a world of uncertainty.

In 2015 a diverse range of thinkers – known as the London Futurists – met to ponder the exponential change likely to take place over the next decade.  The book –  Anticipating 2025: A guide to the radical changes that may lie ahead, whether or not we’re ready – is a compilation of their papers.  The book leaves one questioning whether we’re ready to embrace such extraordinary changes in citizenship or are we so caught in the present that these shifts will thrust us right out of our comfort zones?

Some roadblocks:

To take advantage of the scientific marvels to come, a reboot will be necessary in the economic, political and social systems that run commerce, education, healthcare and human wellbeing. We know change is inevitable so the million-dollar question is; will global institutions shift by evolution or will they rapidly be made redundant through disruptive revolution?

The catalyst:

Artificial Intelligence (AI) is already changing everything.  Not only is this being felt in business – and in the way we work – but it’s also blurring the lines between human and machine.  Instead of using devices, we will soon be able to answer complex questions in our heads by silently interacting with information sources; it could be how we end up relating to one another too.  Although full AI-human interface is unlikely by 2025, progress will make us all a lot smarter and – potentially – these deep changes could lead to ‘superintelligence’ determining the future of humanity.

Redesigning humanity:

Disruption in medicine will provide quick personalised and cheap alternatives to today’s expensive choices making health an option for the poor.  The combined potential of the Internet of Things (where everything is smart and connected), data collecting wearable tech, AI, robotics and virtual healthcare – such as a diagnostic ‘Doc in your Pocket’ – will soon make today’s hi-tech medical practices appear old and outdated.

 

  • Designer genes:  The building blocks of life are nano-sized and advances in nanomedicine allow scientists to target treatment at a molecular level providing the ultimate in personalised care. Wellness is likely to be exponentially improved by the following: self-editing genomes (DNA) that fine-tune our genetic inheritance; biosensing for diagnosis and biomedicine for treatment; surgical nanorobotics (built from DNA but can be programmed like a computer), bionic limbs that are operated by our nervous system; medical computer chips embedded in our heads and – if what you’ve got is incurable – cryonics is becoming sophisticated enough to preserve you in a frozen state until a cure becomes available.
  • Prolongevity:  Aging itself will not be slowed but the physical wear-and-tear can be mended making us more youthful and healthier as we age.  At a nano level, scientists understand in principle how to remove, repair and replace damaged cellular ‘machinery’.  Popping some ‘refurb’ capsules containing such nano-bots could delay experiencing the effects of aging of a 60-year-old to 90.  If the same process is repeated at 90, the aging experienced at 60 potentially could be delayed until we’re 150 years old.  This will mean having to rescript retirement and ‘work’ will involve sandwiching periods of productive contribution with periods of learning.  Breakthroughs in speed-learning will assist us to keep up with the speedy pace of progress.

 

Social Futurism:

Our traditional socio-political and economic systems are incapable of solving many of the world’s serious problems and – right now – we’re at the crossroads of unprecedented promise or total catastrophe.

  • Politics: A shift towards group problem solving could move us from competitive power-driven political hierarchies (á la DJ Trump) to more collaborative Ubuntu-style social structures where democratic, decentralised institutions will evolve naturally from mutual support networks.  Could it be that governments will end up having no greater power than administrating the money generated by these collaborative structures?
  • Economics: Capitalism is the only system not grounded in natural principles which is well illustrated by the gross inequality of 1% of the population holding the same amount of wealth as the remaining 99%. To avert catastrophe, calls for a universal basic income echo those made by many presidents, philosophers and economists since the 1600s.  If you’re concerned about producing idleness, then take note of economist John Kenneth Galbraith’s question: “why is leisure uniformly bad for the poor but uniformly good for the well-to-do?”
  • EmPowerment:  Poor people’s income and time are consumed by fuel – either gathering wood or buying it. On average, kerosene (paraffin) costs $8 per kilowatt hour while Brits pay only 20c for the electrical equivalent. Solar power makes sense on a continent awash in sunshine as the extra time and incremental money saved can be used to make an income.  Mass literacy initiatives using digital media will also give people access to information so expect an explosion of creativity from Africa and Asia as people find new, appropriate solutions to their pressing problems.
  • Environment: The other side of the coin is the extraordinarily high level of consumerism needed to sustain capitalism.  99% of materials used in the US end up in landfills six weeks after production.  3D printing could relieve some of this environmental pressure and it could also put an end to cargo-based trade. Instead of end-products, trade will involve moving the raw materials needed to feed 3D printers.

These massive social shifts will in turn have implications for our financial future and it is predicted that disruption will wipe out and/or replace most of today’s more traditional investments.

Survival kit:

Using our imagination creatively is what’s needed to see beyond the restraints of the known and having a mindset of lifelong learning will help us stay healthy and sane.  With many jobs being taken over by machines, it is anticipated that by 2025 most of us will occupy ourselves providing services to some of the planets 8 billion or so inhabitants – much of this will involve helping people to manage change.

Oh… and there’s just one last thing:  it won’t be too long before robots will be so convincing that many people will choose a relationship with a robot over a human partner… and, when we’ve programmed the ‘bot to our liking, we may even marry them.

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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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