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‘Open banking’ is coming to SA

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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.

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Three words transform addresses

From roaming Airbnbs in Mongolia to the positioning of emergency locations, what3words is flipping addressing on its head, writes BRYAN TURNER.

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A collective of nomads in Mongolia wanted to offer a taste of their way of living on Airbnb. They had one problem: they regularly pack their houses up and take everything to another location. 

This was until Airbnb started accepting what3words as a form of address. The service has mapped the world, including the oceans, into 3 meter x 3 meter blocks. Each of these blocks is represented by three dictionary words.

“Traditional addressing systems are not fit for purpose,” says Lyndsey Duff, South African country manager of what3words, speaking to gadget this week. “Addresses don’t cater to everyone. This represents tens of thousands of people who cannot talk about where they live. This restricts their ability to get e-commerce deliveries, and becomes life-threatening when they need to request emergency services.”

There are numerous examples in South Africa. For instance, just outside Durban, Kennedy Road is represented by one street on Google Maps, but looking at a satellite view reveals many more unmapped houses.

“Not having an address is a massive barrier to economic prosperity,” says Duff. “If you think about FICA and RICA in South Africa, trying to open a bank account or obtaining a SIM card becomes very difficult. Even registering a birth without an address becomes problematic. 

“This also opens people up to fraudulent actors and makes their lives a lot more difficult than it needs to be. The UN estimates that four billion people don’t have formal addresses. Four billion people don’t have an accurate, reliable way to talk about where they live.”

Even those who have addresses may sometimes have issues with being found.

“There are 7 Joubert Streets in Johannesburg,” says Duff. “Repeated street names are not only a problem in South Africa, but around the world. There are 14 Church Streets in London, there are 365 Juárez Streets in Mexico City. This makes it really difficult to represent where you are, and makes it very difficult for those who are unfamiliar with the area to find where they need to be.

“Office parks and complexes can be difficult to navigate, especially when you need to get to a specific building and Google Maps only knows the centre of the office park. Someone could tell you, quite confidently ‘I’m in Block C’, but this doesn’t help someone who’s never been there before.”

But aren’t co-ordinates enough?

“Co-ordinates are the best way for one machine to talk to another machine about positioning. But how many people know there are three different types of co-ordinates? Remembering three words is a lot more convenient than remembering 16 digits. It’s also less likely that you’ll swap two numbers around to end up an hour north of Pretoria when you’re supposed to be in Johannesburg CBD.”

Who’s going to use it?

what3words began operations in South Africa in 2017, and is now accepted across a number of platforms, including the iStore, for deliveries. It is also used by the Automobile Association of South Africa to help locate its members needing roadside assistance. Zulzi now allows customers to get groceries delivered within one hour to their what3words address, and The Platter’s Wine Guide has listed the 3-word address for over 700 wineries in its 2019 guide. 

Mercedes Benz has even integrated what3words into its navigation system to assist drivers in getting to unmapped roads.

Download the what3words app for free for both iOS and Android, or by browser, and check your exact address even while offline. 

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Robots will be cobots, not competitors

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Modern efficiency technologies in the workplace are often the source of stress and anxiety as they have now reached a level where they are able to take over some of the work previously done by people. This leads to a natural fear that jobs and livelihood are at risk.

One of the more topical of these technologies is robotic process automation (RPA). It is often positioned as the holy grail of internal optimisation and is a prime candidate for entrenching these job risk fears.

The RPA rhetoric is all about how it, and similar technologies can improve the bottom line by reducing headcount and doing tasks faster than people. IT departments then bring these technologies in and impose them on workers, exacerbating this fear that robots will take our jobs.

But there is another way to approach the optimisation challenge.

This same technology can be introduced to individual employees, and they can be taught how to train their own personal robot or collaborate with a and one, this allows them to choose what gets automated.

This changes the rhetoric from “The robots are coming to take our jobs” to “My time is so valued that the organisation has hired me a personal assistant”. I like to term this use of the technology ‘co-bots’.

Programming the co-bot is easy as RPA robots can often be taught by a simple “drag-and-drop” process and employees don’t have to be coders.

These automation processes are very good at repetitive tasks where there is a clear and predictable outcome, a type of work often dreaded by knowledge workers.

Recently, a team at Dimension Data needed to move 8000 video files from one place to another. This mundane task required that files were individually downloaded and then uploaded elsewhere. It would have taken a human a month and a half of full-time work, but it took half an hour to program a bot to carry out this process.

As employers, we need to consider how much of our workforce is doing mundane repetitive work.

Travel recons, leave recons, bonus calculations are not core to the employee’s job and not core to the business either. They are more likely to leave a knowledge worker feeling frustrated rather than fulfilled.

Outsourcing this type of work to co-bots, could help alleviate this frustration, while at the same time, freeing up the individual’s time focus on strategic, creative and valuable tasks.

The increasing use of co-bots in the workplace does lead to some interesting scenarios, as they work alongside humans and become more independent.

Recently, Dimension Data rolled out a bot to assist with client contract renewals. The bot was required to run a report in our ERP solution, reformat the report, and upload it back into our sales pipeline management tool.

In order to access these platforms, the bot required a standard user account for the platforms, which meant it needed an active directory account. Our active directory account is linked to our HR system which meant a new employee record needed to be created in our HR system – effectively creating a new employee.

As expected, the bot performed wonderfully, but it was also automatically enrolled in our induction programme, causing some consternation when it didn’t arrive on the scheduled day.

There can also be cultural challenges with RPA co-bots, in that they are not programmed to manage social nuances, but rather to carry out work efficiently. The same system ran into trouble because some of the people dealing with it via email didn’t know it was a bot and found it to be quite abrupt and impersonal. For example, “How are you today?” was met with silence.

I like to compare a co-bot in the workplace to an intern or a fresh graduate. They are enthusiastic, with endless energy, and will take on all the mundane tasks. However, you shouldn’t leave them unmonitored for too long, as they will probably break something due to inexperience.

Very often, business leaders build robotic business use cases on where they see value rather than where the individual employee could see value.

Automation take-up can suffer when too few people are involved in the rollout and when employees sense it is being imposed upon them. But by involving every business unit and function in the process, with each one able to define their own journeys, more employees will embrace it as it makes their own lives easier. 

In a recent Gartner study of companies using artificial intelligence and robotics, 16 percent of companies reported job decreases, while a surprising 26 percent reported an increase in jobs as a result of their efforts.

The advent of the motor car is a good parallel to this. Henry Ford’s model T car put a lot of farriers and street cleaners out of business, but instead, now we have mechanics, panel beaters, auto electricians and car washers.

While it is true that these disruptive technologies could take over several tasks currently assigned to unskilled labour, for me, that simply highlights our responsibility as companies to encourage the continuous personal development of our people.

By giving employees an automation tool and encouraging them to find uses for it, we can start them on a journey to find their niche in this new digital economy.

As unskilled vacancies are replaced by skilled vacancies, It is up to us as a society to ensure our people are making the same transition and are able to fill the new roles required of them .

It’s a daunting future, but an exciting one, with the potential to positively impact all of us.

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