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How digital revolution will change financial services

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People have different views on the impact of technology, with some welcoming it and some fearing it. Despite this, it has made our live easier and CHRISTOPH NIEUWOUDT, CEO: FNB Consumer Segment explains the impact it will have on the financial industry.

People have strong views on the impact of digital technology on their lives, from the excitement of getting a new gadget to the satisfaction of doing in minutes what used to require a trip or a long phone call. Contrary perspectives include the fear of being left behind or even what technology will do to their employment prospects over time.

One thing we can all agree on is that digital progress is inevitable. The implications of the use of technology by society are immensely profound, with terms such as “The Second Machine Age” or the “Fourth Industrial Revolution” being used to give this evolution a name.

Let’s takes a closer look at the impact of digital transformation on consumers and the broader financial services industry:

Digital revolution is already at an advanced stage

In 2016 FNB customers had over 10 billion interactions with the bank, of which only 120 million (just over 1%) was on a face-to-face basis. Roughly 8.5 billion (85%) was purely on digital channels and the rest via point-of-sale (card swipes or online purchases) and ATM transactions.

The number of FNB customer interactions has tripled since 2010, growing at more than 20% per annum every year, based on the growth in digital channels. Meanwhile at branches, customers are making significant use of in-branch digital zones.

The reasons for the growth and migration of volumes to digital are obvious as almost every customer knows they can do basically any payment transaction, account or card service function and get most products, including loans, overdrafts, credit card upgrades, savings products and insurance on a 24/7/365 basis via the FNB app, online or cellphone banking. Customers can also buy airtime, pre-pay electricity, play lotto, trade stocks, get a homeloan approved, order a car licence renewal, buy forex, send money to any cellphone in SA, buy stuff via eBucks and the list goes on.

What does this mean for branches and do we still need them?

Branches and branch personnel are no less critical than before, but their role has changed from performing transactions to re-focussing on sales and advising customers on how to bank. In spite of the powerful digital technology, today the bulk of banking consumers still want to talk to someone when opening a new account and even for most product categories.

Additionally, consumers often need help with the new technology, even just to get going and start using it. In my view this leads to much richer and meaningful client interactions. In most cases, branches can be much smaller, but with more room for digital zones and self-service devices such as ATMs and ADTs (deposit taking machines).

This journey is not unique to banking – virtually every sales or service business is or will be going through some elements of digital transformation.

The important effect of such changes is the opportunity to continuously upskill a workforce. At branch level, it’s important for consumers to interact with consultants who understand how the technology works. On this end, we now have e-Bankers who help customers get to grips with banking digitally

Broadly, banking is also seeing a large contingent of specialised roles – IT specialists, analysts, actuaries, engineers, who play a significant role in ‘re-inventing’ solutions all the time

Automating credit decision making and fraud prevention

Today, only a very small percentage of credit decisions are made by people – rather statistical models are used to make fully automated decisions instantly at low cost and with accuracy not achievable by a person. For consumers, this means your risk profile and behaviour determines your loans size and pricing. Importantly, technology has helped reduce fraud loss rates for card and digital transactions.

Move from product-centric to a customer-centric model

FNB has been through a major mind-shift to consistently put the customer at the centre of the universe like never before. Interactions through all channels need to be considerate of making the customer’s experience the best possible by providing a consistent experience across all products and services.

The future for financial services

Often, the question is which banks will “win” the race, or will Apple/Amazon/Facebook/Google or other ‘fintech’ players win?

There are two simple thoughts in this regard. Firstly, due to the massive (data analytical, channel & customer experience) advantages a customer centric approach offers, I believe an integrated player like FNB with a compelling offering across transactional, lending, save/invest, insurance (and in our case telco also) has a major competitive advantage over any player with a limited offering.

Secondly, financial services players that embrace technology and data analytical capabilities in a customer centric manner can and should be the beneficiary of the digital revolution. However, at the end of it all, it comes down to a philosophical decision around business strategy – rather than falling prey to fintech disruptors, banks can unlock the incredible power of innovation for their customers to fulfil the ever changing needs of bank customers.

Arts and Entertainment

Deezer to host Hotstix’s Mandela tribute playlist

Deezer is celebrating Nelson Mandela on the centenary of his birthday by hosting a tribute playlist created by music legend Sipho “Hotstix” Mabuse.  

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Mabuse, a legendary figure in African music, first rose to prominence in the 1970s with his band Harari and later developed a name for himself as a solo artist. One of his best known songs was the global hit BurnOut in the 1980s.

The playlist takes the listener on a captivating musical journey through the life of Nelson Mandela.  It was compiled by Mabuse, who consulted with Mandela’s family and friends to ensure that the music would be relevant and accurate. The playlist also features commentary by Mabuse, which was recorded in his Soweto home.  

“I have tried to tell the story of the music that Madiba loved,” says Mabuse. “The Playlist excludes the time in prison obviously, as Madiba would not have had exposure to music in that time.  We have focused on the music we know he loved before and after that period. This recording was really an emotional journey for me, but an incredible opportunity to document these memories.”

The playlist features the music the young Mandela loved, such as The Manhattan Brothers, Solomon Linda, Brenda Fassie and Miriam Makeba.  It includes struggle songs from Chicco, Johnny Clegg, Hugh Masekela and Yvonne Chaka Chaka.  The playlist also includes Mandela by Zahara, one of the younger artists who caught Madiba’s ear.

Mabuse also offers stories of his own songs, such as Shikisha, a song greatly beloved by the former President.

“I was delighted to share my thoughts and hope the listeners enjoyed the musical journey,” says Mabuse. “Madiba did enjoy music immensely and we all have a purpose wherever we are in the world to celebrate culture and to learn from different cultures and music forms and styles.”

This playlist was inspired by the Nelson Mandela 100 campaign, calling on corporates and individuals to act as sources of inspiration and engage in conversation and action.

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Sports streaming takes off

Live streaming of sports is coming of age as a mainstream method of viewing big games, as the latest FIFA World Cup figures from the UK show. Africa isn’t yet at the same level when it comes to the adoption of sports streaming, but usage is clearly moving in the right direction.

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England’s World Cup quarter-final against Sweden was watched by just under 20 million viewers in the UK via BBC One. While this traditional broadcast audience was huge, it was streaming that broke records: the game was the BBC’s most popular online-viewed live programme ever, with 3.8 million views. In Africa, the absolute numbers are lower but the trend towards streaming major sports events on the continent is also well under way.

According to DStv, live streaming of sports dominates the usage figures for its live and recorded TV streaming app, DStv Now. The number of people using the app in June was five times higher than a year ago, with concurrent views peaking during major football and rugby games.

Since the start of the World Cup, average weekday usage of DStv Now is up 60%. The absolute peak in concurrent usage for one event was reached on 26 June, during the Nigeria vs Argentina game. The app’s biggest ever test was on 16 June with both Springbok Rugby and World Cup Football under way at the same time, resulting in concurrent in-app views seven times higher than the peaks seen in June last year.

The World Cup has also been a major reason for new users to download and try out the app. First-time app user volumes have tripled on Android and doubled on iOS since the start of the tournament.

“While we expected live sports streaming to take off, it’s also been pleasing to see that the app is really popular for watching shows on Catch Up,” says MultiChoice South Africa Chief Operating Officer Mark Rayner. “Interestingly, some of the most popular Catch Up shows are local, with Isibaya, Binnelanders, The Queen and The River all getting a significant number of views.”

With respect to app usage, the web and Android apps are the most popular way to watch DStv Now, with Android outpacing iOS by a factor of 2:1.

“We’re continuing to develop DStv Now, with 4k streaming in testing and smart TV and Apple TV apps on their way shortly,” says Rayner. “The other key priority for us is working with the telcos to deliver mobile data propositions that make watching online painless and worry-free for our customers.”

The DStv Now app is free to all 10 million DStv customers in Africa. The app streams DStv live channels as well as supplying an extended Catch Up library. Two separate streams can be watched on different devices simultaneously, and content can also be downloaded to smartphones and tablets. The content available on the app varies according to the DStv package subscribed to.

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