The next wave of digital technologies like chatbots and augmented reality are on their way and the promise to change our lives as dramatically as the smartphone did, says ERNST WITTMANN, Regional Manager – Southern and East Africa at TCL
We’re seeing technologies such as chatbots, augmented reality and video that has transformed the way we use our mobile devices. Here are a few of the mobile and digital trends that are likely to unfold during 2018.
- Artificial Intelligence and chatbots
Artificial intelligence and chatbots will continue to mature next year, making it easier than ever for people to interact with technology and to carry out complex tasks. Powered by machine learning (computer systems that learn from experience without being programmed) and Artificial Intelligence, natural language processing allows us to speak or type to computers in our usual sentences, simplifying our interface with devices and apps.
Robo-advisors are already a hot trend in financial services—these are smart bots that give wealth management advice on a website or mobile app. Gartner forecasts that such chatbots will power 85% of all customer service interactions by 2020. Virtual assistants that live on your smartphone are also becoming increasingly popular. One example is Google Assistant, which lets you ask for directions to the nearest Chinese restaurant, send messages, check appointments, and so on, using your voice.
We’ll use voice recognition and chatbots for applications as diverse as seeking technical support for a new washing machine to making a mortgage application to seeking investment advice. And virtual assistants on mobile phones will become ever more powerful and allow us to automate more tasks. For example, what if Google Assistant could not only tell you where the Chinese restaurant is, but also make a booking for you?
- Augmented and virtual reality
IDC forecasts that global spending on augmented and virtual reality (AR/VR) will nearly double from $9.1 billion in 2017 to $17.8 billion next year. AR/VR traffic on the Internet will increase 20-fold between 2016 and 2021, according to Cisco. Both technologies have been around in some form for several years, but companies have struggled to find practical uses for them.
When it comes to consumer VR, the technology remains expensive and gaming dominates the landscape. Consumers today need to buy expensive, dedicated hardware to get a true VR experience. Prices of this equipment are likely to fall in 2018, while smartphone VR headsets will also get cheaper and better. Apps will become more diverse—we’ll see a healthy mix of educational, simulation, virtual tourism and entertainment applications come to market.
AR captures the world through a mobile device camera and puts a digital overlay on the video and image the user sees on the display. Applications are numerous—from seeing how furniture you’re browsing on a retailer’s website might look in your lounge to providing labels and information about the parts in your car when you’re trying to find out why it won’t start in the morning.
In 2018, the technology looks set to build on the popularity of crazes such as the Pokemon Go AR game a couple of years back, and AR lenses for Snapchat. Cool apps are starting to come to market—there’s a great AR feature in the Google Translate app that lets you point your camera at text in a foreign language (a street sign, for example) and view the translation on your display.
We can expect to see great strides in 2018, for applications ranging from marketing to corporate learning and training. Google’s ARCore tools for building AR apps for Android will help fuel growth—every Android smartphone beyond Nougat with a camera is essentially ready for advanced AR apps. ARCore is a platform that simplifies the development of augmented reality apps on Android. It uses:
· Motion tracking to understand and track the phone’s position relative to the world.
· Environmental understanding to detect the size and location of flat horizontal surfaces like the ground or a coffee table.
· Light estimation allows the phone to estimate the environment’s current lighting conditions.
- The Internet of Things
Gartner estimates that there are more than 8.4 billion “Things” available on the internet today, up more than 30% from a year ago. Sensors and devices are taking over in smart homes, cities, offices, cars and factories, ranging from control instrumentation to streetlights to smoke detectors. These devices can monitor themselves and the environment around them (temperature or GPS location, for example), and share this data with other devices and services.
They can use this data to automate actions—for example, a shelf sensor could request inventory when stock is running out—and provide humans with real-time data for better decision-making—for example, a shop floor manager can get info about machine uptime and potential maintenance issues in a factory. This enables companies to drive down operational costs and improve productivity.
- Visual search
This trend is closely related to the growing maturity of technologies such as image recognition. With visual search, you simply point your smartphone’s camera at a work of art, a building, a household appliance or even a part for your car. The visual search app will be able to identify the object, and possibly even direct you to sites where you can purchase it online if it’s for sale or find more information.
Google is currently trialling visual search in its Google Lens feature. Pinterest also has a similar feature called Pinterest Lens, and Amazon’s CamFind can helps shoppers locate a real-world item in Amazon’s inventory by snapping a photo.
- More and more video
People will increasingly watch more video content online—especially on their mobile devices—in the years to come. Cisco’s research indicates that IP video traffic will be 82% of all consumer Internet traffic by 2021, partly driven by a doubling of video-on-demand traffic between 2016 and 2021. Live Internet video will enjoy especially strong growth, growing 15-fold from 2016 to 2021 and accounting for 13% of Internet video traffic by 2021.
Social media networks such as Facebook, YouTube and Instagram have all launched live streaming video, and adoption is rapidly growing among consumers and brands alike. People are beginning to share experiences such as concerts and holidays in real-time with their friends and families; companies are likely to use live video to supplement brand activations, for virtual launch parties and even candid behind-the-scenes looks at their offices and factories.
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.