People and businesses will always need banking, but, asks PETER ALKEMA, FNB Business CIO, will they always need banks?
People and businesses will always need banking, but will they always need banks? This question is driving a wave of disruption and new thinking in the industry. Discovery has recently announced plans to enter the local retail banking market; telco and tech companies are making similar moves. Fintech is offering completely new ways of doing business and customers are embracing exponential start-ups who offer frictionless, mobile services. Banks are responding with increased digitisation, new lines of business and highly innovative channels. What’s really happening, how will the banking landscape change and when will it take place?
The reason that non-traditional players are getting into main account banking is because of the customer intimacy and insight that comes with a transactional bank account. It’s the one place that all the money goes into and comes out of; businesses put their main account on all their invoices and many married couples don’t even share one! A home loan or insurance policy is important but still just a monthly debit order that doesn’t generate any behavioural insight about a customer. The relationship is also typically low key; you will only hear from your insurance broker on your birthday and only home loans collections department if you miss a payment.
Some banks have taken advantage of this and created additional stickiness through rewards programmes, improved channels and ecosystems of value-adds. Core transactional platforms are at the heart of a bank’s operations. Regulation and banking license approval ensures that banking platforms are robust and well managed. In addition, financial aspects such as capital adequacy and risk controls such as anti money-laundering mean the requirements for running a bank are significant barriers to entry.
The local banking industry is consistently rated very highly and its world class resilience and regulatory oversight provided a shock absorber for South Africa during the global financial crisis of 2008. Internationally, large banks have relied on these barriers to entry to block new entrants but the rise of fintech and trust-disintermediating technologies such as Blockchain is changing this mindset. Looser regulation in the UK is seeing a wave of banking license applications from start-ups and in the US, firms such as Google, Facebook and Amazon are actively launching financial services products.
Arguably much of this activity is still peripheral and the core business of running a large scale bank relies on well established processes. This was true for Kodak in the mid nineties when it employed 140,000 people, sold 85% of the world’s photo paper and was the fourth most valuable brand in the United States. In 2012 it filed for bankruptcy; it got left behind in an industry that was turned upside down by technology and its impact on their customers’ lives and the market. Kodak invented digital photography but they failed to embrace the disruption to their own business model that it caused to the industry. Similarly, the Walkman was the first portable device for listening to recorded music; Sony could have digitised it but Apple’s iPod eventually obliterated it.
In 2000, Blockbuster was the biggest video rental chain in America, and at the time internet startup Netflix offered to run its fledgling online business. Blockbuster turned this down and went bankrupt 10 years later, having failed to move its business from bricks to clicks while Netflix has become a global leader in streaming movies.
South African banks have been very successful at moving processes off of paper, out of physical locations and onto digital channels. FirstRand’s 2016 results indicate that overall electronic volumes increased 13%, while manual volumes grew only 2%. New ways of working are also extending beyond channels to back office operations.
The next decade is likely to be pivotal for the banking industry and it will be driven by the race for the customer and not by the fintech on its own. Digital is just the enabler of new business models built around improved customer centricity that according to Dimension Data’s Digital Advisory is something that banks should avoid just doing, they have to become digital in their thinking, operating models and execution.
Customers expect frictionless processes that are available where they are and not only where the bank is, the transport and accommodation industries have already delivered this with Uber and Airbnb. According to Google, the tipping point to mobile in South Africa happened in 2014 when internet searches from mobile devices exceeded desktops. Millennials don’t stand in queues or fill in forms, they build trust through convenience and they reward customer delight with loyalty and peer group recognition. By 2020 there will be 500 million people in Sub Saharan Africa with connected smartphones; these people will still need banking but it will probably look very different from today.
Low-cost wireless sport earphones get a kickstart
Wireless earphone brands are common, but not crowdfunded brands. BRYAN TURNER takes the K Sport Wireless for a run.
As wireless technology becomes better, Bluetooth earphones have become popular in the consumer market. KuaiFit aspires to make them even more accessible to more people through a cheaper, quality product, by selling the K Sport Wireless Earphones directly from its Kickstarter page
KuaiFit has an app by the same name which offers voice-guided personal training services in almost every type of exercise, from cardio to weight-lifting. A vast range of connectivity to third-party sensors is available, like heart rate sensors and GPS devices, which work well with guided coaching.
The app starts off with selecting a fitness level: beginner, intermediate and advanced. Thereafter, one has the ability to connect with real personal trainers via a subscription to its paid service. The subscription comes free for 6 months with the earphones, and R30 per month thereafter.
The box includes a manual, a USB to two USB Type B connectors, different sized soft plastic eartips and the two earphone units. Each earphone is wireless and connects to the other independently of wires. This puts the K Sport Wireless in the realm of the Apple Earpods in terms of connection style.
The earphones are just over 2cm wide and 2cm high. The set is black with a light blue KuaiFit logo on the earphone’s button.
The button functions as an on/off switch when long-pressed and a play/pause button when quick-pressed. The dual-button set-up is convenient in everyday use, allowing for playback control depending on which hand is free. Two connectivity modes are available, single earphone mode or dual earphone mode. The dual earphone mode intelligently connects the second earphone and syncs stereo audio a few seconds after powering on.
In terms of connectivity, the earphones are Bluetooth 4.1 with a massive 10-meter range, provided there are no obstacles between the device and the earphones. While it’s not Bluetooth 5, it still falls into the Bluetooth Low Energy connection category, meaning that the smartphone’s battery won’t be drastically affected by a consistent connection to the earphones. The batteries within the earphones aren’t specifically listed but last anywhere between 3 and 6 hours, depending on the mode.
Audio quality is surprisingly good for earphones at this price point. The headset style is restricted to in-ear due to its small design and probable usage in movement-intensive activities. As a result, one has to be very careful how one puts these earphones, in because bass has the potential of getting reduced from an incorrect in-ear placement. In-ear earphones are usually notorious for ear discomfort and suction pain after extended usage. These earphones are one of the very few in this price range that are comfortable and don’t cause discomfort. The good quality of the soft plastic ear tip is definitely a factor in the high level of comfort of the in-ear earphone experience.
Overall, the K Sport Wireless earphones are great considering the sound quality and the low price: US$30 on Kickstarter.
Find them on Kickstarter here.
Taxify enters Google Maps
A recent update to Taxify now uses Google Maps which allows users to identify their drivers, find public transport and search for billing options.
People planning their travel routes using Google Maps will now see a Taxify icon in the app, in addition to the familiar car, public transport, walking and billing options.
Taxify started operating in South Africa in 2016 and as of October 2018 operates in seven South African cities – Johannesburg, Ekurhuleni, Tshwane, Cape Town, Durban, Port Elizabeth and Polokwane.
Once riders have searched for their destination and asked the app for directions, Google Maps shares the proximity of cars on the Taxify platform, as well as an estimated fare for the trip.
If users see that taking the Taxify option is their best bet, they can simply tap on the ‘Open app’ icon, to complete the process of booking the ride. Customers without the app on their device will be prompted to install Taxify first.
This integration makes it possible for users to evaluate which of the private, public or e-hailing modes of transport are most time-efficient and cost-effective.
“This integration with Google Maps makes it so much easier for users to choose the best way to move around their city,” says Gareth Taylor, Taxify’s country manager for South Africa. “They’ll have quick comparisons between estimated arrival times for the different modes of transport, as well as fares they can expect to pay, which will help save both time and money,” he added.
Taxify rides in Google Maps are rolling out globally today and will be available in more than 15 countries, with South Africa being one of the first countries to benefit from this convenient service.