Millions of dollars are spent to understand the impact of market forces on the banking sector, but says DARREL ORSMOND, Financial Services Industry Head at SAP Africa, it is worthwhile to consider which ones could have an impact to avoid being caught off-guard.
A range of models and millions of dollars in consulting hours are expended to understand the potential impact of a range of market forces on the retail banking sector. While the potential outcomes are fraught with unpredictability, it is worthwhile to pause and consider some of the forces that could have an impact to avoid being caught off-guard.
Some of the major forces potentially playing out in the retail banking sector include:
· The rise of the individual and the independent economic, social, and political power that this has brought to individuals;
· The individual as the centre of the universe, marked by a “don’t do anything to diminish me or my rights without my consent” worldview;
· The rise of the collective, which paradoxically puts groups – including anything from the state to social movements, supporter clubs, and alumni organisations – as aggregated participants in decision-making;
· The ease of access to massive computing power for anyone who wants it;
· The use of collateralised logic to make decisions and deliver insights, driven by big data learning and insights with predictive capabilities;
· Massively synthesised delivery to users on devices anywhere, anytime;
· Rapidly emerging and disintegrating business models for the creation of value, often accompanied by equal destruction of value, such as those of Google, Airbnb, and Facebook; and
· The commoditisation of historical value-added processes such as risk assessment and payments, and thus of human logic and variability.
Two main forces of change in retail banking
In financial services, the two key forces that are set to fundamentally influence the sector are the rise of the individual (and by extension of groups), and the data-originated insights and collective individual rights inferred and accorded by a business model.
These two forces are set to change the retail banking industry by removing banks’ ownership of the payment – or financial services ‘offer’ – to customers. Customers no longer come to the bank to make their financial arrangements: they do them wherever they are through a number of channels, conducting all manner of purchasing activities whether it’s travel, medicine clothes, capital goods, music, transport, and more. Here, customers are simply relying on the process of delivery to give them their goods, without caring whether a bank is involved at all.
Banks therefore need to collaborate with providers in new business models and networks using all the collective data at their disposal to originate pre-prepared offers in real time in response to customer generated activities, or because of external events. Considering the dramatic increase in the customer’s rights and decision-making power, banks can expect customers to begin ‘owning’ their digital identities and asserting their rights and terms over contracts, usage, payments and more. Customers will assert their digital identity in explicit ways – such as putting customer-defined limits on content purchases – as well as modelled ways, for example automatically approving certain purchases because previously modelled or inferred behaviour shows customers agree with that type of purchase timing and value.
A shift in power
This shifts power from corporates to individuals, equalising the relationship between the bank and the customer, and forcing banks to apply insights and timeliness in a range of personalised offers to seduce the customer. Here, the brand name takes a back seat to the importance, timing, quality and relevance of the offer. Customers will also negotiate and leverage their group power – for example by associating with certain support clubs, alumni organisations or social causes, customers will expect banks and financial services providers to know this and adapt offers accordingly.
These are no doubt uncertain times and banks face a very different world to what the sector has been used to. It is important therefore to hedge bets by building new capabilities so that banks are well-placed to outmanoeuvre their competitors.
Banks’ first priority should be a systematic analysis of gaps in current development spend, followed by the development of a roadmap with specific business cases and deliverables.
Huawei Mate 20 unveils ‘higher intelligence’
The new Mate 20 series, launching in South Africa today, includes a 7.2″ handset, and promises improved AI.
Huawei Consumer Business Group today launches the Huawei Mate 20 Series in South Africa.
The phones are powered by Huawei’s densest and highest performing system on chip (SoC) to date, the Kirin 980. Manufactured with the 7nm process, incorporating the Cortex-A76-based CPU and Mali-G76 GPU, the SoC offers improved performance and, according to Huawei, “an unprecedented smooth user experience”.
The new 40W Huawei SuperCharge, 15W Huawei Wireless Quick Charge, and large batteries work in tandem to provide users with improved battery life. A Matrix Camera System includes a Leica Ultra Wide Angle Lens that lets users see both wider and closer, with a new macro distance capability. The camera system adopts a Four-Point Design that gives the device a distinct visual identity.
The Mate 20 Series is available in 6.53-inch, 6.39-inch and 7.2-inch sizes, across four devices: Huawei Mate 20, Mate 20 Pro, Mate 20 X and Porsche Design Huawei Mate 20 RS. They ship with the customisable Android P-based EMUI 9 operating system.
“Smartphones are an important entrance to the digital world,” said Richard Yu, CEO of Huawei Consumer BG, at the global launch in London last week. “The Huawei Mate 20 Series is designed to be the best ‘mate’ of consumers, accompanying and empowering them to enjoy a richer, more fulfilled life with their higher intelligence, unparalleled battery lives and powerful camera performance.”
The SoC fits 6.9 billion transistors within a die the size of a fingernail. Compared to Kirin 970, the latest chipset is equipped with a CPU that is claimed to be 75 percent more powerful, a GPU that is 46 percent more powerful and an NPU (neural processing unit) that is 226 percent more powerful. The efficiency of the components has also been elevated: the CPU is claimed to be 58 percent more efficient, the GPU 178 percent more efficient, and the NPU 182 percent more efficient. The Kirin 980 is the world’s first commercial SoC to use the Cortex-A76-based cores.
Huawei has designed a three-tier architecture that consists of two ultra-large cores, two large cores and four small cores. This allows the CPU to allocate the optimal amount of resources to heavy, medium and light tasks for greater efficiency, improving the performance of the SoC while enhancing battery life. The Kirin 980 is also the industry’s first SoC to be equipped with Dual-NPU, giving it higher On-Device AI processing capability to support AI applications.
Read more about the Mate 20 Pro’s connectivity, battery and camera on the next page.
How Quantum computing will change … everything?
Research labs, government agencies (NASA) and tech giants like Microsoft, IBM and Google are all focused on developing quantum theories first put forward in the 1970s. What’s more, a growing start-up quantum computing ecosystem is attracting hundreds of millions of investor dollars. Given this scenario, Forrester believes it is time for IT leaders to pay attention.
“We expect CIOs in life sciences, energy, defence, and manufacturing to see a deluge of hype from vendors and the media in the coming months,” says Forrester’s Brian Hopkins, VP, principal analyst serving CIOs and lead author of a report: A First Look at Quantum Computing. “Financial services, supply-chain, and healthcare firms will feel some of this as well. We see a market emerging, media interest on the rise, and client interest trickling in. It’s time for CIOs to take notice.”
The Forrester report gives some practical applications for quantum computing which helps contextualise its potential:
- Security could massively benefit from quantum computing. Factoring very large integers could break RSA-encrypted data, but could also be used to protect systems against malicious attempts.
- Supply chain managers could use quantum computing to gather and act on price information using minute-by-minute fluctuations in supply and demand
- Robotics engineers could determine the best parameters to use in deep-learning models that recognise and react to objects in computer vision
- Quantum computing could be used to discover revolutionary new molecules making use of the petabytes of data that studies are now producing. This would significantly benefit many organisations in the material and life sciences verticals – particularly those trying to create more cost-effective electric car batteries which still depend on expensive and rare materials.
Continue reading to find out how Quantum computing differs.