By Gerhard Greyling, head of financial services at Wipro Limited.
We have already seen huge changes in the world of banking. Digitalisation means that people are banking from their mobile phones, making payments via barcode scanning and even in some cases transacting using cryptocurrency. Home loans can be approved in almost real-time, and a selfie can be used to open a bank account – all without ever physically entering a branch.
However, this is just the tip of the iceberg: the banking world is about to be shaken up, thanks to a legislation known as the European Union Payment Services Directive 2, or PSD2.
PSD2 and the concept of ‘open banking’
PSD2 is not a new concept, having been adopted by European Parliaments in 2015 with the express purposes of contributing to a more integrated and efficient payments market, levelling the playing field for payment service providers, driving competition which lowers the cost of payments, and protecting consumers by making payments more secure. South Africa will not remain unaffected by this legislation, and local financial institutions, their customers, and the payment industry stand to benefit as much as those across the seas.
The growing adoption of PSD2 is paving the way for a concept known as ‘open banking’. Open banking refers to the use of APIs and open source technology to enable third party developers to access data traditionally held by financial service providers, or banks, and build applications or services around this data. It also allows consumers to control the transparency of their data, equipping them with the power to allow the sharing of their data with selected third-party providers to offer them services based on their financial information.
Open banking has been fuelled beyond the borders of Europe as regulators of more than half of G20 countries being expected to create open banking API standards by the end of this year.
The rise of third party FSPs
Essentially, PSD2 means that banks will no longer be the only, or main, stakeholders in both the control of consumer financial data and initiation of payments. The legislation gives rise to the inception of two new types of players that will create a more competitive banking environment by lowering payment costs and providing more choice for consumers.
Account Information Service Providers (AISPs) are emerging as new operators in a world traditionally dominated by banks. AISPs are able to access consumer financial information from multiple financial institutions at the express permission of consumers.
They analyse this data in order to determine a consumer’s spending habits, financial behaviour, and financial history. This data is then collated and consolidated into a single overview on the consumer, which the consumer can then request to be shared with third parties who can tailor services around their specific profile.
Payment Initiation Service Providers (PISPs) are providers who initiate payments on behalf of a consumer. Although we currently have many payment options, they all still pass through a bank. PISPs will enable services such as peer-to-peer payments and bill payments without touching a traditional financial institution.
The rise in competition for both banks and competing PISPs means that the cost of payments will lower significantly, and consumers will be able to better control how they make payments.
Click here to read more benefits and challenges of open banking.
3D printed room-service? Visit the hotel of tomorrow
To mark its 100th birthday, Hilton predicts the trends that will change travel and hospitality in the next 100 years.
Intergalactic getaways, fast-food nutrient pills, 2-3 hour working days and adaptable, personalised rooms that can transport guests everywhere from jungles to mountain ranges. These are some of the predictions for the next 100 years that the Hilton hotel group has put together in celebration of its 100th anniversary.
In a report supported by expert insight from the fields of sustainability, innovation, design, human relations and nutrition, findings reveal the impact of the growing sophistication of technology and climate change on the hotel industry in the future.
Key predictions for the hotel of the future include:
Personalisation is King
- Technology will allow every space, fitting and furnishing to continuously update to respond to an individual’s real-time needs – the Lobby will conjure up anything from a tranquil spa to a buzzy bar, giving every guest the perfect, personal welcome
- From temperature and lighting, to entertainment and beyond, microchips under the skin will enable us to wirelessly control the setting around us based on what we need, whenever we need it
The Human Touch
- In a world filled with Artificial Intelligence, human contact and the personal touch will be more critical and sought after than ever
- Technology will free up time for hotel staff to focus on what matters most: helping guests to connect with one another and building memorable moments
‘Sustainable Everything’ – The Role of Responsibility
- Only businesses that are inherently responsible will survive the next century
- Sustainability will be baked into everything about a hotel’s design – from weather-proofed domes, to buildings made from ocean-dredged plastic
- Hotels will act as the Town Hall of any community, managing local resources and contributing to the areas they serve with community-tended insect farms and vertical hydroponic crop gardens
Menu Surprises and Personalisation
- Our diets will include more plant-based recipes and some surprising sources of protein – Beetle Bolognese, Plankton Pies and Seaweed Green Velvet Cake will be menu staples!
- Decadent 3D-printed dinners and room service will provide unrivalled plate personalisation
- Chefs will be provided with biometric data for each guest, automatically creating meals based on preferences and nutritional requirements
Futuristic Fitness and Digital Detoxes
- Outswim a virtual sea turtle in the pool, or challenge yourself to climb the digital face of Mount Everest, your exercise routine will be as unique as you are. What’s more, exercise energy generated from workouts will be used to power the hotel, providing a zero-impact, circular system. Guests could even earn rewards based on reaching workout targets
- Pick up where you left off with trackable workouts and holographic personal trainers
- Offline will be the new luxury as we seek to find moments of tech-free time
“Since its inception in 1919, Hilton has pioneered the hospitality industry, introducing first-to-market concepts such as air-conditioning and in-room televisions. Last year, Hilton also became the first hospitality company to set science-based targets to reduce its environmental impact,” said Simon Vincent, EVP & President, EMEA, Hilton. “We enter our second century with the same commitment to innovation, harnessing the power of our people and technology to respond to guest demands. Our research paints an exciting future for the hospitality industry, highlighting the growing importance of human interaction in an increasingly tech-centric world.”
Futurologist Gerd Leonhard said: “In 2119 we will still be searching for unique experiences, but they will be more personalised than ever. As technology shapes our lives we will seek out moments of offline connection with others, including hotel team members who will help us truly get what we need from our stays. 100 years from now hotels will have to create opportunities to converse, collaborate and connect, delivering moments that matter, individually, to each and every guest.”
Gadget ed to chair Digital Council
Specialist financial services provider Sasfin Bank has established a Digital Advisory Council to provide the market with industry-leading expertise and insights on trends shaping the use of technology in financial services.
Digitalisation is one of the most powerful forces for change shaping Finance today. This has turned Fintech into one of the most vibrant sectors in both information technology and among start-ups, generating billions of dollars in investment and development globally. The South African fintech space is dynamic, and Sasfin is playing a leading role in the transformation of local financial services and the resulting enhancement of customer experiences.
“We have been investing in fintech development in-house and acquiring or integrating fintech start-ups,” says Sasfin CEO Michael Sassoon. “Over the last year we have built further digital offerings, integrated via APIs into leading businesses and invested in fintechs. We built and launched B\\YOND, an innovative digital business banking platform and SWIP, a digital wealth and investing platform. We have invested in Payabill, an online SME lender and DMA, a digital trading platform. We recently announced our alliance banking relationship, leveraging open banking, with Hello Paisa to offer seamless banking to the unbanked. We feel that there is a huge opportunity to improve the experience of South African businesses and savers through using technology. We have therefore created an independent forum to assess how to even better improve financial services for South Africans by leveraging the digital economy.”
Arthur Goldstuck, founder of high-tech research consultancy World Wide Worx, editor-in-chief of Gadget, and a globally respected technology analyst has accepted Sasfin’s invitation to head up the Sasfin Digital Advisory Council, an independent think tank that will help Sasfin and its clients decipher the fintech present and future.
“The Sasfin Digital Advisory Council is broader than providing only the bank with a source of insight on how digital services are evolving and lessons from across the world,” said CEO Michael Sassoon. “Sasfin has been involved in fintech investing for many years and we are leveraging this experience as well as the experience of independent experts such as Arthur to provide insights and guidance to interested stakeholders in this space.”
The team appointed to the Digital Advisory Council is being selected for the breadth and range of knowledge they would bring to the table, with further appointments to the Council being announced soon. There will also be room for the Council to co-opt specialist expertise as it is required.
Goldstuck, who has been covering the fintech sector as an analyst, commentator and columnist for many years, says he sees the role as a welcome challenge.
“There has been a long-standing need for a clear understanding of the impact being made by fintech today, and the exponential change it will cause tomorrow,” said Goldstuck. “My role will be, partly, to curate the wide spectrum of fintech and digitalisation knowledge and insights that the members will bring to the Digital Advisory Council, and help create scenarios that businesses and policymakers may use to navigate the future – both inside and outside Sasfin.”