Those strange little square barcodes now popping up everywhere represent a quiet rebirth of QR Codes, once left for dead, writes ARTHUR GOLDSTUCK.
A funeral director in Gauteng uses it to help mourners find the right funeral; a shopping mall in Cape Town employs it to help shoppers build wish lists for gifts; and across the country, it’s beginning to appear on business cards.
Its called a QR Code, which stands for Quick Response Code, but most people will know it as a square, barcode-like pattern seen at points of sale or in apps like BlackBerry Messenger. The latter represented many South Africans’ first exposure to QR Codes, when it became the quickest way to add a friend on BBM.
The upcoming release of the Online Retail in South Africa 2015 study by World Wide Worx will shed light on the take-up of QR Codes, providing the first insight into one of the most mysterious emerging area of ecommerce: the QR Code.
In the past year, QR Codes have quietly gained new life as mobile apps like SnapScan roped it in for payments at small merchants, flea markets and the like.
By the end of 2014, more than 2,1-million South Africans were using QR Codes, even as a debate raged around the question, “Are QR Codes dead?” Of these, 1,1-million were male, with female users only marginally behind, at 1,04-million.
Mobile payment systems are quickly becoming mainstream, and it will be fascinating to see how the more mechanical systems like QR Codes compete. Ideally, there should be room for any system, with each one finding its ideal niche. But there are no certainties in a sector that is moving so fast.
One aspect of QR Codes that is achieving consensus is where it does NOT work. Billboards along a highway probably represent the single most bizarre category of QR Codes. They carry the assumption that motorists will activate a QR Code app on their phones, focus on the billboard and follow the relevant link that is opened, all in the time it takes to drive past the billboard.
Better examples abound. In the USA, Wal-Mart uses it in store to guide shoppers to virtual “pop-up stores” that exist for a specific promotion. In Germany, bus passengers use them to simplify route planning. In the United Kingdom, supermarkets use it to provide additional nutritional information on food – including an edible QR Code used on rice paper.
QR Code usage is strongly age-related, with 673 000 users in the peak age group of 25-34. In contrast, the 15-24 segment amounts to only 471 000, while 494 000 are aged from 35 to 44. A similar amount – 425 000 – makes up the 45-65 age group. Usage drops significantly with retirement age: the 65+ age group comprises 88 000 users.
The report is based on primary research by technology market research leaders World Wide Worx, as well as collaboration with Ask Afrika, the leading market research organisation on the continent. Data from Ask Afrika’s Target Group Index (TGI), a research project with a sample of more than 15 000 respondents annually, will provide demographic and behavioural components of the report.
“TGI is a single-source database that provides brand and product consumption trends for South African consumers, coupled with detail around spending and retail shopping habits of South Africans that can be tracked over time,” says Andrea Rademeyer, CEO and founder of Ask Afrika. “It allows us to build benchmarks and currency data which are both reliable and up-to-date.”
World Wide Worx is partnering with Ask Afrika to refine the communications, electronics and technology elements of TGI, in order to produce the most detailed picture yet of the digital habits of South Africans. The TGI research is conducted in two six-month “waves” every year, with a nationally representative sample of more than 7500 respondents in each wave.
The resultant data will be included in World Wide Worx’s annual reports on Internet Access, Online Retail, Social Media and Online Banking in South Africa, among other. World Wide Worx will also collaborate with Ask Africa on a Digital Barometer, to provide a clear understanding of the digital evolution of the South African consumer.
* Online Retail in South Africa 2015 will be released in June 2015.
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.
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.”
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.
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.