Software AG foresees five probable changes in the banking industry locally and globally that will have a key impact from a competitive and operational perspective, writes GARETH WHITAKER, Presales Director at Software AG South Africa.
Digital transformation is a challenge for all sectors in South Africa, and increasingly so in the banking and financial services industries. This industry has seen an influx in innovative fintech and digital banking competitors, causing the existing players in the industry to reassess their business models.
This year will see the banking sector adapt to keep up with the competition. Banks will continue to find ways to steer away from conventional banking and adapt their approach in a more technologically suitable way for their customers.
Software AG foresees five probable changes in the banking industry locally and globally that will have a key impact from a competitive and operational perspective. Fintechs and digital banks will see conventional banks adapting to the practices of their competitors, and in some cases, acquiring them.
Client data will become a key decision driver
Client data will become the most valuable asset. Annually collecting data in banks receives significant investment but very few have capitalised on or operationalised this data to generate revenue. Moving forward banks will employ approaches such as predictive analytics and machine learning to achieve this. This provides banks with real-time opportunities to increase revenue by offering solutions to clients that are customised to their unique needs or to their needs at that specific moment. This mass-customisation approach also uses the data collected to continuously learn and provide automated responses to their customers.
Mergers and acquisitions
Banks are likely to start acquiring fintechs and digital banks that are disrupting their business. Banks have the balance sheets, distribution and greater trust with a broader range of consumers whilst fintechs and digital-only banks have newer and more agile technologies. These make for a powerful combination, though the cultures are significantly different. It will be an uncomfortable union at first, but the result of this collaboration could prove to have greatly beneficial result.
Rising interest rates will drive consolidation in mid-tier banks as well as divestitures, as large banks exit less profitable business lines. At the same time, active asset management is losing market share to the index providers. Automated advisors, offered by long-standing competitors as well as fintechs, pose a further threat to traditional asset management. With the rising interest rate environment, which few active portfolio managers have experienced, there will probably be more automation and consolidation in asset management as well.
Less branches, more value
Bank branch closings will accelerate as customers increasingly adopt mobile and online banking services. Most banks will maintain smaller, anchor branches to provide a reassuring brick and mortar presence versus purely digital competition. However, as they transform and focus on costs, they will transition remaining branches to low volume/high value activities.
Regulatory and market forces will ultimately change the way people bank. Competitive forces globally are seeing leading banks leapfrogging regulation to open up their systems and data, and begin to develop ecosystems of partners. The result will be greater choice and competition for customers, and the possibility of entirely new revenue lines for retail banks.
Banks will operationalise their data, open and partner up with their competitors and scale back on the physical world to invest in the digital world. These changes will impact the way everyone approaches banking in the future.
AppDate: DStv taps Xbox, Hisense for app
DStv Now app expands, FNB gets Snapchat lens, Spotify offers data saver mode, in SEAN BACHER’s apps roundup
DStv Now for Xbox and Hisense
Usage of DStv Now, the online DStv service available free to DStv customers, is increasing rapidly with more than two million plays of live and Catch Up content per week. In addition to using DStv Now to watch TV on tablets and smartphones, an increasing number of DStv customers are also opting to use it as their primary method of getting DStv on additional TVs in the house. This is set to increase with the release of two new big-screen TV apps, one for Xbox gaming consoles (Xbox One, Xbox One S, Xbox One X) and another for Hisense smart TVs (2018 and newer models).
Expect to pay: A free download.
Platform: Any of the Xbox One range of gaming consoles and 2018 or later Hisense smart TVs.
Stockists: Visit the store linked to your Xbox console or HiSense smart TV.
Santam Safety Ideas
Start-up businesses that have a FinTech or InsurTech business venture brewing are called to enter the third annual Santam Safety Ideas competition. Safety solutions or InsurTech ventures that are ready for piloting could win up to R150 000 worth of incubation support and R200 000 in seed funding.
The Safety Ideas competition was launched two years ago in partnership with LaunchLab, Stellenbosch University’s startup incubator that facilitates valuable connections for corporates and startups sourced from the startup ecosystem and partner universities in South Africa. The previous winners are Herman Bester and Anton Swanevelder, co-founders of MyLifeLine – a wearable panic device that won the competition last year; and Ntsako Mgiba and Ntandoyenkosi Shezi, co-founders of Jonga – a cost-effective security system for low income families, which won the competition in 2017.
Entries close on 28 February 2019. For more information on how to enter, visit: www.santam.co.za/safetyideas/
Click here to read about the FNB Snapchat lens, Spotify Free with data saver, and 00:37.
Fortnite fixes hackers’ hole
Epic Games has repaired a vulnerability that exposed Fortnite, the world’s most popular game of the moment, to hackers. The hole, which was left in Epic’s web infrastructure, allowed hackers to target players with email that appeared to come from Epic Games, but would have led them to a phishing site, where their log-in details would have been stolen.
Researchers at cyber security solutions provider Check Point Software alerted Epic to vulnerabilities that could have affected any player of the hugely popular online battle game.
Fortnite has nearly 80 million players worldwide. The game is popular on all gaming platforms, including Android, iOS, PC via Microsoft Windows and consoles such as Xbox One and PlayStation 4. In addition to casual players, Fortnite is used by professional gamers who stream their sessions online, and is popular with e-sports enthusiasts.
If exploited, the vulnerability would have given an attacker full access to a user’s account and their personal information as well as enabling them to purchase virtual in-game currency using the victim’s payment card details. The vulnerability would also have allowed for a massive invasion of privacy, as an attacker could listen to in-game chatter as well as surrounding sounds and conversations within the victim’s home or other location of play.
While Fortnite players had previously been targeted by scams that deceived them into logging into fake websites that promised to generate Fortnite’s ‘V-Buck’ in-game currency, these new vulnerabilities could have been exploited without the player handing over any login details
Click here to read how the Fortnite hack worked
To win a set of three Fortnite Funko Pop Figurines, click here.