Information technology has had the blame for many disasters laid at its door, but the area in which it fails most consistently is in the very lock on the door: the password. Poorly chosen key words, poorly protected user databases and the immensely powerful arsenal of the hacker have combined to make the password an absurdly vulnerable form of information protection.
Clearly, the password as a form of defense must die. Phones with fingerprint and facial recognition spell the beginning of the end, as they represents the device responding to who the user is rather than who the user claims to be. However, the PIN code is still at the heart of phone security.
Fingerprint recognition itself has proved dodgy, with numerous techniques developed to get around it. It’s possible to remain relatively secure if one follows a set of procedures that, in combination, make it seemingly impossible to be breached. However, the fatal flaw in this approach is that it depends on human reliability, an oxymoron on a par with military intelligence.
The answer is that we should not have to be trying hard at all, but merely go about our daily business, while our devices figure out who we really are. It sounds like science fiction, but that is exactly what a new trend, termed “passive security”, represents.
It is encapsulated in a new laptop, the Dell Latitude 7400, showcased at Dell Technologies World in Las Vegas this week. It is the first laptop to use chipmaker Intel’s Context Sensing Technology, in effect a proximity sensor that works with facial recognition and artificial intelligence (AI) to sense a user’s presence, wake up the device from sleep mode, validate the user, and log on to the appropriate account. When you step away from the machine and forget to lock the screen, the Latitude detects your absence and locks itself.
In a keynote address at the event, Dell Technologies founder Michael Dell put the broader issue succinctly when he suggested that, in future work would no longer be where we go, but what we do. Security should therefore be about behaviour and not about place.
Later, Dell senior vice president Anja Monrad said in an interview that technology had to “grow out of trying to fight human nature”, like leaving laptops on without locking the screen. The next step, she said, would be “recognising specific actions we perform in specific ways”.
“The thinking is similar to the technology now built into our storage systems, where we use AI to look at all patterns of data that move through the system, and the moment the pattern changes, we get a red alert that something has intruded, rather than anti-virus systems that try to identify breaches based on known threats.
“Future systems will recognize you by the angle at which you hold your smartphone, the strength with which you press keyboards, the speed at which you type. That will all be part of a profile that AI builds into a database. In milliseconds, it has to make a decision that it’s you at the end of a device. The expectations were there for a long time; now the technology is catching up.”
- Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee
The shape of the SME future
What does the future of technology look like for South Africa’s SMEs? COLIN TIMMIS, general country manager of Xero SA and a professional accountant, looks into the tech crystal ball
Over the past decade, technology has radically changed the way businesses operate. Now, even small businesses have access to powerful tools that were previously expensive or complicated.
The pace of change has been rapid – and it’s unlikely to slow down. Businesses must keep up with technology to stay competitive. According to research conducted by Citrix, 92% of companies across South Africa’s key industries agree that digital adoption directly affects company profits. However, 54% still feel unprepared for the future.
So, what does the future of technology look like for South Africa’s small businesses? How can the other 46% of companies prepare?
5G and WiFi 6 – faster internet speed
In the foreseeable future, we will see a rapid increase in the use of fibre across South Africa. According to Xero’s State of Small Business Report produced with World Wide Worx, 49% of small businesses surveyed used ADSL connections and only 37% used fibre. When asked to describe their internet connections, 45% said they were ‘great’, while 43% said they were ‘okay but not 100% reliable’. 57% of those who said their connection was ‘great’ were fibre users.
South Africa is still playing catch-up in terms of internet connectivity and speed. However, WiFi 6 is set to improve the way routers distribute traffic to connected devices and increase the transfer speeds by around 30%. For when you’re on the go, 5G is the next generation of mobile data standard. It’s already being trialed by South African carrier Rain, and a broader rollout is expected in 2020.
Machine learning and Artificial Intelligence – more efficient software
Even if you aren’t aware of it, you’re probably already using smart software which leverages machine learning (ML) and artificial intelligence (AI) in your business. While only a tiny proportion of respondents (0.25%) from Xero’s State of Small Business Report say they are using them, most businesses are aware of how important they are.
AI and ML are great at taking large amounts of data and spotting patterns that humans might miss. They help businesses cover some of the more routine tasks so they are freed-up to focus on the most important priorities. For example, tedious tasks like bank reconciliation, can now be completely automated.
Blockchain – safer, more secure transfers
If you hear ‘blockchain’ and think ‘cryptocurrency,’ you’re not alone. However, the technology also has something to offer when it comes to existing payment technologies. Through its complexity and high level of encryption, integration with blockchain can make transferring valuable assets more secure. It can also be used for more effective fraud prevention and other security-focused tasks.
The cloud – access data everywhere
Cloud computing is starting to become a standard part of life for many small businesses in South Africa today. According to Xero’s State of Small Business report, 19% of respondents surveyed make use of cloud technology. Of these respondents, 98% reported a significant increase in profit thanks to adopting this technology – and 99% identified an increase in efficiency.
The trend towards cloud adoption is likely to continue as we see the development of technologies, like faster speed through fibre, WiFi 6, 5G, and machine learning powering it.
Integrated financial software
When it comes to accounting in a small business, these new technologies will enable much smarter ways of working. Take bank reconciliation, for example, where cloud storage and machine learning will search through documents and expenses on your behalf to compile reports.
Eventually, we will be able to access everything we want in one integrated, seamless hub. We can see this development through the use of app integration. Xero has 800+ apps already compatible, which enables small businesses to automate, gain better insight and grow their businesses all through one ecosystem of partners.
Access to capital
Open banking, the process of banks and financial services opening their APIs to the market, will shape how businesses access funding. By sharing their financial data instantly, potential investors have immediate access to a company’s revenue, profits and cashflow – enabling them to make fast, informed decisions.
Platforms like Xero keep all of a company’s financial data up to date. That way, when the company needs to file for a loan their documents are ready to go. Xero is also continuously pursuing new partnerships to help fuel small business growth. Earlier this year Xero partnered with three new alternative lenders, to help improve access to funding.
Digital adoption offers an island of stability in the volatile South African economy. Technology allows businesses to run more efficiently, remain globally integrated, and maximise their profits. Companies which keep up with the latest technology, from incorporating it into their processes to training staff, will have a real advantage over their competitors.
Cash is here to stay, and other trends shaping payments
As we enter the next decade, local and African merchants should support payment methods that suit their customers, rather than following global trends just for the sake of it. Peter Harvey, MD of payment service provider, DPO SA, looks at five trends we can expect over the next few years.
- Cash is here to stay – for now
Despite common perceptions, South Africa still has more than 11 million unbanked individuals and cash remains the preferred payment method for these and many other customers.
Harvey says: “As we enter 2020, we can expect a host of new digital payment technologies that sound like excellent options – and they may well be for some – but merchants need to carefully monitor their customer behaviour before they rush to try the latest gadget or fad.”
According to Harvey the banks and card companies like Visa and Mastercard will be placing a large focus on enticing consumers to move from cash to card-based payments in the coming years.
“Overcoming the reliance on cash will take a fair amount of time and effort,” says Harvey. “For merchants trading in a cash-based community, depositing money into a bank that tracks your spending, charges you to store your money, and then charges you again to withdraw it can seem unattractive. At the end of the day consumers will make their decision based on convenience, cost and risk.”
Card payments are expected to morph over the coming years. In South Africa the tap and pay method is becoming more commonplace. Harvey believes this and other near field communication (NFC) methods of card payments will continue to grow in use as shoppers become more trusting of the technology and retailers see the efficiency benefits of moving customers through their purchase cycle more quickly and easily.
- Mobile is still king
There is no doubt that the means to facilitate most digital payments in Africa will depend on mobile technology.
According to South African communications regulator, ICASA, South Africa has a smartphone penetration of 80%. In Sub-Saharan Africa meanwhile, the mobile phone penetration is 50% and the GSMA expects smartphone penetration to grow from around 40% to 66% in 2025.
Harvey says smartphone technology and wearable technology will allow for the growth in some of the newer payment tech, like Apple Pay and Samsung Pay, but these payment methods will remain in the hands of the top LSMs and have little effect on the bottom of the pyramid customer base.
“For the moment USSD technology will still underpin the majority of mobile payment methods. Until smartphones increase in penetration, payments like m-Pesa will continue to dominate. Customers know and trust the solution and its these types of offerings that will need to be beaten by any new entrant over the next two to three years at least.”
- New decade, new banks
Harvey is upbeat about the new digital-only bank offerings like Tyme Bank, Bank Zero and Discovery Bank.
“It appears that 20Twenty was two decades too soon,” says Harvey. “The local markets are now finally ready for a new digital offering without the fuss and cost of the traditional offering. These banks stand a good chance of making an impact and making headway towards financial inclusion in the country.”
Harvey believes, that in order to boost the number of people using digital payments, the banking institutions, merchants and payment service providers need to start incentivising consumers to make the switch. Loyalty and Rewards will start playing an even bigger role in the near future.
- New services for the payment ecosystem
Based on demand, Harvey believes forward thinking payment service providers will work closely with their banking partners to focus on providing their mutual merchants with a ‘fully managed service’. This service includes: instant sign-up; a full suite of payment products; risk screening; account reconciliation; anti money laundering checks; access to shopping cart plugins; and a variety of other value-added services in the online digital payment space.
These services will enable digital retailers to quickly and easily start selling their services online, while protecting them from the associated risks.
The service benefits the banks as well as the broader digital ecosystem, as the payment service provider actively monitors and manages merchants and transactions, removing risk from the process and facilitating ‘good’ transactions.
- Identity technology takes centre stage
Looking at newer technologies, Harvey believes biometrics will continue to be the key focus.
Harvey says voice and facial recognition are set to take off in South Africa in 2020 and 2021 and he believes the key driver in this regard is the increasing use by the government.
“Banks and Home Affairs teaming up for the renewal of ID documents and passports is a major win for the average citizen,” Harvey says. “This falls neatly into the ‘convenience’ motivator and as people use and trust the biometrics used by the banks for this service, they will become less afraid to try it for payments.”
As technology rapidly improves, the payments ecosystem can expect some exciting advancements over the coming decade. Chat commerce and even augmented and virtual reality developments will almost all come with payment features. However, Harvey cautions against over exuberance.
Harvey says “Make sure you cater for what your customer actually wants, not what you think they should want. If working closely with African merchants, banks and customers has shown us anything, it’s that the fastest way to drive away business, is to dictate how customers pay. Provide the options and let them choose.”