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.
Epic Games brings a Nite-mare to Android
Epic Games’ decision to not publish games through Google Play inadvertently opens a market to Android virus makers, writes BRYAN TURNER.
Epic Games, the creator of Fortnite, decided to take the high road by skipping Google Play’s app distribution market and placing a third-party installer for its games on its website. While this is technically fine, it is not recommended for the average user, because allowing third-party installers on one’s smartphone opens up the possibility of non-signed and malicious software to be run on the smartphone.
In June, malware researchers at ESET warned Android gamers that malicious fake versions of the Fortnite app had been created to steal personal information or damage smartphones. A malware researcher demonstrated how the fake applications works in the Tweet below.
While the decision to bypass Google Play was a bold move on Epic Games’ part, it has been a long time coming for app developers to move their premium apps off Google’s Play Store. The two major app distributors, Google Play and Apple’s App Store, take a 30% cut of every purchase made through their app distribution platforms.
The App Store is currently the only way to get apps on a non-modified iOS device, which is why Epic Games had no choice for Fortnite to be in the App Store. On the other hand, Android phones can install packages downloaded through the browser, which makes the Play Store almost unnecessary for the gaming company.
The most interesting part of this development is that Google is not the “bad guy” and Epic Games is no saviour to other game developers. Epic Games is a company with a multi-billion dollar valuation and has resources like large-scale servers to distribute and update its games, a big marketing budget to ensure everyone knows how to get its games, and server security to protect against malware.
Resources of this scale allow the game company to turn a cold shoulder to Google’s Play Store distribution and focus on its own, in-house solution.
That said, installing packages without the Google Play Store must be done carefully, and it is essential to do homework on where a package is downloaded. Moreover, when a package is installed outside of the Google Play Store, a security switch to block the installation of third party apps must be turned off. This switch should be turned back on immediately after the third party package is installed.
This complex amount of steps makes it less worthwhile to install third party apps, in favour of rather waiting for them to reach the Play Store.
From a consumer perspective, ESET recommends not installing packages outside of the Google Play Store and to ignore advertisements to download the game from other sources.
How to take on IoT
The Internet of Things (IoT) is coming, whether you like it or not and organisations today will look to platforms and services that help them manage and analyse the streams of data coming from connected devices, says RONALD RAVEL, Director B2B South Africa, Toshiba South Africa.
Today, we are witnessing an explosion in IoT deployments and solutions and are moving towards a world where almost everything you can imagine will be connected. While this opens the door to many possibilities it also comes with its own challenges such as privacy and security.
The Internet has become an integral part of everyday life; it has been a free for all on a daily basis. IoT is a difficult concept for many people to wrap their minds around. Essentially, nearly every business will be affected.
Managing vast quantities of data across increasingly mobile workforces can be tremendously beneficial if done well, but equally can be cumbersome and ineffective if not managed properly. This is why technologies such as mobile edge computing are becoming increasingly popular, helping to increase the prevalence of secure mobile working and data management in the age of IoT.
The evolution of IoT, despite rapid and ongoing technological innovation, is still very much in its fledgling stages. Its potential, though, is demonstrated by the fact that by 2020, Bain anticipates a significant shift in uptake, with roughly 80 per cent of adoptions at that point to have progressed to the stage of either ‘proof of concept’ or extensive implementation. This means that technological innovation in IoT for the enterprise is progressing at a similarly fast rate with many of these solutions being developed with utilities, engineering, manufacturing and logistics companies in mind.
Processing at the edge
For IoT to be adopted at the rate predicted, technology which does not overwhelm current or even legacy systems must be implemented. Mobile edge computing solves this. Such solutions offer processing power at the edge of the network, helping firms with a high proportion of mobile workers to reduce operational strain and latency by processing the most critical data at the edge and close to its originating source. Relevant data can then be sent to the cloud for observation and analysis, thereby reducing the waves of ‘data garbage’ which has to be processed by cloud services.
A logistics manager can feasibly monitor and analyse the efficiency of warehouse operations, for example, with important data calculations carried out in real-time, on location, and key data findings then sent to the cloud for centrally-located data scientists to analyse.
The work of wearables
The potential of IoT means it not only has the scope to change the way people work, but also where they work. While widespread mobile working is a relatively new trend in industries such as banking and professional services, for CIOs in sectors where working on the move is inherent – such as logistics and field maintenance – mobility is high on the agenda.
Wearables – and specifically smart glasses – have started to gain traction within the business world. With mobile edge computing solutions acting as the gateway, smart glasses such as Toshiba’s assisted reality AR 100 viewer solution have been designed to benefit frontline and field-based workers in industries such as utilities, manufacturing and logistics. In the renewable energy sector, for example, a wind turbine engineer conducting repairs may use assisted reality smart glasses to call up the schematics of the turbine to enable a hands-free view of service procedures. This means that when a fault becomes a barrier to repair, the engineer is able to use collaboration software to call for assistance from a remote expert and have additional information sent through, thereby saving time and money by eradicating the need for extra personnel to be sent to the site.
The time is ripe for organisations to look to exploit the age of IoT to improve the productivity and safety of their workers, as well as the end service delivered to customers. In fact, Toshiba’s recent ‘Maximising Mobility’ report found that 49 per cent of organisations believe their sector can benefit from the hands-free functionality of smart glasses, while 47 per cent expect them to deliver improved mobile working and 41 per cent foresee better collaboration and information sharing. Embracing IoT technologies such as mobile edge computing and wearable solutions will be an essential step for many organisations within these verticals as they look to stay on top of 21st century working challenges.