Over recent times great advances seem to have been made with the technology behind Intelligent Personal Assistants like the Amazon Alexa however this has been brewing for at least 15 years since search improved from knowledge based and semantic to Artificial Intelligence using natural language. Only now however are we entering a period where this technology can be leveraged across numerous product lines offering a seamless experience.
One of the starting points on this journey dates back to 2002 when Google launched “Google Voice Search” which enabled users to access the internet via voice commands and later in 2007 True Knowledge launched its Knowledge Answer engine. In 2011 we saw the launch of Siri by Apple and in 2012 True Knowledge launched a major new product called Evi which was an artificial intelligence program which could be communicated with using natural language (The company was acquired in 2012 by Amazon and the technology became a key part of the Amazon Alexa assistant which debuted in the Amazon Echo). Over the next few years the full set emerged which we know today (Google Now 2012, Microsoft Cortana and Amazon Alexa in 2014 and Samsung Bixby in 2017) until the technology found a new home outside of the mobile handset.
The issue with the Intelligent Personal Assistant technology however was that it was handset dependant so you were reliant on carrying your mobile device when you needed that injection of inspiration. One solution was the creation of an always on device which could be placed in open spaces like the Amazon Echo and Google Home. These however are also reliant on placement but if situated in a prominent place in the house with them constantly listening for command words they certainly can start to bridge the gap although instead of being a mobile device with software loaded they are now a speaker. So where will this technology go next? Alexa is already being placed in alternative objects like a lamp (GE Sol is launching the C which is a lamp with Alexa built in – although Dyson may be interested in the similarities to the Cool Desk Fan) and numerous other devices which are Alexa compatible like the Ecobees thermostat are entering the market. Amazon is also launching a new device called the Amazon Look which also has a camera although initially I am sure there will be concerns on its placement and if this could be hacked like a PC camera to spy on you. The premise however is that you can take selfies or videos and one use could be to show you how you look in an outfit or for security.
The Innovation is also not coming just from the usual suspects either and the Israel-based Intuition Robotics is developing the virtual assistant specifically for the elderly called ElliQ to deal with users who may experience social isolation and physical inactivity where it will suggest a walk when the weather is nice or say when it’s time to take medication.
Even though the technology is now moving at a tremendous pace there is still one hurdle to overcome before it migrates to the mainstream; verification. Because the devices are located in open spaces, constantly on and linked to a user’s account with no bio-metric verification unless you live alone you would not want to link the devices to sensitive information like financial or health as anyone could request information. However once voice verification is cracked the uses will be endless and in addition to the previous what if you could connect to wearables, specific IOT devices and pay for things from nominated accounts, everyone would want one. This day will not be far away though so dust off those Business Cases and think of the possibilities.
If you ask anyone about Fintechs they will inevitably refer back to the Dot Com bubble (1995 – 2001) which fuelled the rapid growth of the Internet.
However, back then the investment was funding the building blocks of web technology with the most of the money going into Web Infrastructure, Security, Portals, Consulting, Marketing and Content. Unbelievably during this time there was no broadband and we were all having to deal with “Dialup” (In the UK Broadband was first introduced in 2000 and even by 2006 it only had 13 Million users compared to 2016 where 87.9% of adults have access i.e. 45.9 Million users), no real smartphones or tablets existed (The first iPhone arrived in 2007 and the iPad in 2010) so the main access to these technologies was via the desktop. The frenzy also saw massive investments in companies who were filing for IPOs without any revenue.
If we skip forward over 15 years we are now seeing an enhanced level of funding once again in FinTechs however this time its very different. In 2015 we saw the total level of Global deals reaching $14.8Bn and by Qtr. 3 2016 this had increased by 27% (this is in sharp contrast to only 5 years prior where only $2.59Bn was invested (2012)). In the UK $191m was invested in 2012 and by 2015 this had also increased to $1Bn (60% of investment in the UK are going to Challenger Banks, SME Financing, Money Transfer, FX, Digital Currencies and Blockchain). Also companies filing for IPOs are now showing revenues in excess of $100m.
So why is it different this time? There are numerous reasons why a perfect storm is brewing and I will explain a few below.
- FinTech Technology – During the Dot Com Bubble you needed to procure Servers, understand security and have funding to support and develop your offering. Now with the rise of Cloud Service like AWS, Azure, Google etc. anyone can build an application with a credit Card and pay by the hour.
- Building Block Technology – Fintechs no longer need to create everything as you can plug and play the payment, billing, map software etc. (Think UBER)
- Consumer Technology – During the Dot Com Bubble the barrier to entry was also on the consumer side as you needed internet connectivity (Dial up) and a Desktop. Now technology is widespread and its commonplace for people to carry multiple devices all with Internet Connectivity (Tablets, Smartphones, Wearables etc.)
- Generational Changes – During the Dot Com Bubble 40 Million Gen Xers came of age. Now there are 85 Million Millennials, all of whom are digital natives.
- Global Social Community – We are all now a global community over one world wide web
- Regulation Changes – The regulators are now embracing emerging technologies and offering sandboxes and incubation to start-ups
- Data is King – With the emergence of data Science and open data initiatives, Big Data and new modelling techniques are changing how we cost propositions and offer/sell insight.
In a recent report from McKinsey & Company entitled “Bracing for seven critical changes as fintech matures” they cite 30 emerging areas which are seeing Fintech growth.
So what should everyone do? Another article from Mckinsey & Company Cutting through the noise around financial technology suggests to some of the capabilities Banks should be making.
It’s all not doom and gloom though for the incumbents. Anyone can adopt FinTech methodologies and the Financial Services industry still needs regulation, oversight and to engender trust. Everyone therefore needs to become fighting fit, embrace change and not forget a lot of these new technologies will come with a lower price point and enable greater automation with insight for the future.
As technology continues to evolve and the realisation that those pesky unicorns are not so easy to find, most organisations are now starting to embark on a digital journey to embrace what the tech companies have been doing for years. You can see this manifested in numerous industries where more announcements are being made at technology events like CES than the traditional venues. One recent example is the automotive industry where in 2017 more Innovation was announced at CES (The Consumer Electronics Show) than their traditional venue of the Motor Show. These disruptive vanilla applications will certainly ripple across the whole ecosystem so it is important to not just “look down” at the specific Innovation but also look laterally for the “aftershock”. If we look at a few examples it will become apparent how any Innovation can disrupt all industries.
Transport – This may be a way away however just think if there were autonomous cars driving around 24×7; why would you ever buy a car (it is also believed that children being born now may never learn to drive). If you then think laterally at the aftershock there would be a knock-on into how you insure yourself, why would you need a garage in your house or even a drive, cities wouldn’t need car parks. What effect would this also have on the logistics businesses if these vehicles could also deliver shopping or purchases?
Self Help – The wearable market is expected to be worth $34.6 Billion by 2020, so imagine what could happen if everyone became proactive to health rather than relying on the traditional reactive Doctors surgery? Health insurance would change, hospitals and doctors would certainly change, a new product line of self testing and DNA would emerge plus the whole pharma industry would shift into preventative medicine. Also 200 million consumer virtual reality head-mounted displays are predicted to be sold worldwide by 2020 so this will cause disruptions right cross industries from Health, to Training, Gaming etc.
UI – What will be the interface of the future? I have already mentioned above about VR however what about AR (Augmented Reality), Voice and Touch. The Qwerty keyboard has been around since the 1870s so maybe a change is due. What would this do to the world if interaction with a computer was no longer by a keyboard?
As you can see from the few examples above its not just the individual Innovations which will cause disruptions but also the aftershock, so look up, look around and suddenly the opportunities will be plenty.
When Innovation is mentioned it always makes you think of disruptive or incremental change which then drives sales or increases consumption however one thing that is rarely accepted as Innovative is the removal of services or technology. Most companies tend to keep their head in the sand with this and pay the extra costs to support an aging offering rather than to cannibalise their existing product lines for the good of everyone. However sometimes having the power of your convictions for the greater good of the market not only increases customer perception but also allows for additional innovation. A glass half full is always better than one half empty.
There are numerous types of removal which are necessary ranging from the need to move the Industry forward, new standards set with counteract your products future and following a failed innovation.
The recent release of the Apple iPhone 7 showed this with the removal of the headphone socket where the media focussed on the loss rather than the benefits which were due to the increased space being available inside the body of the Mobile Phone. The headphone jack has surprisingly been around since 1964 so maybe it was overdue for removal. However sometimes its better to move the market rather than sweat technology way beyond its useful life. Just think of the auto industry, the engines and designs are constantly refreshed which are not that visible but how long was it before the cassette player was changed to the CD, the FM radio to DAB and manual controls or dials to touch screen and LED.
Some change can also just be cultural and cost nothing however even this can perceptionally move the dial. In the UK to receive fixed line broadband you have to pay a line rental charge which is never mentioned in the cost of broadband. This year Vodafone is advertising that it has abolished the line rental where in effect it has just increased the Broadband cost by the cost of the line rental, so even though it costs nothing, more transparency is can also be seen as innovative.
In this new digital era Innovation should cover everything from Automation to Eradication as by only doing both will you leverage the greatest economies of scale.
In the first world economy, we tend to automatically think high tech when we try to solve any problem and with regards to a cashless society (ignoring contactless cards) we always start talking about Apple or Android pay via a smartphone as being the way forward. Over the summer I visited a brand new theme park (Land of Legends Aqua) in Southern Turkey and was pleasantly surprised at its use of technology and the simplicity it offered. The theme park will eventually be vast and currently only the Aqua park is finished however it is totally cashless which is good for a waterpark and enables you to lock away all of your valuables when you arrive. As you enter the park you are given a wristband (nothing special and the throwaway type you have at a festival) however it contains the technology which allows you to swipe in/out of the park, charge up with funds and pay for anything you need plus if you require a locker you just swipe the wristband on the reader of a flat screen monitor in the locker area, select you need a locker from the options on display and you are then allocated locker which will automatically open for your use. The use of this throwaway technology reduces all the stress of damage and as it is attached to your wrist the issue of theft is removed. Over the summer similar types of technology (albeit ones that actually debit your bank account) were also announced in other part of the world.
The RioCard was announced with its waterproof Celego Contactless wristband and its Celego Contactless Sticker both embedded with a contactless chip from Gemalto and certified by Visa and MasterCard enabling all the secure functionalities of traditional contactless EMV cards (Contactless transit cards were first adopted by RioCard in Rio de Janeiro in 2003 and they are now a part of daily life for millions of users) and in Greece a PayBand (which is a first for the Mediterranean island nation) which uses the Optelio Contactless MicroTag, which is easily inserted in the wristband’s slot by consumers, and is linked to the user’s existing payment card.
Over the last few years there has been lots of talk around Smartphone payment applications and smart watches however will we now see a new era where the banks start offering alternatives to the standard debit card which will not only make peoples lives easier but also reduce fraud if our cards are around our wrists. Imagine if this could also be used in conjunction with Nymi Band technology which uses biometric authentication events as this would prevent others using it if it was lost or stolen.
Over the last decade the acceptance of electric vehicles and solar power has gone from scepticism to approval by the consumer. In part this has been due to the vision of Elon Musk and Tesla. 10 years ago Elon detailed his initial plan and last month he announced his updated Part Deux. The original plan consisted of creating a low volume car which would necessarily be expensive, use that money to develop a medium volume car at a lower price and then using that money to create an affordable high volume car whilst providing Solar power (this has been evidenced by the evolution through the Roadster, Model S, Model X and the forthcoming Model 3). The plan now is to create stunning solar roofs with seamlessly integrated battery storage, expand the electric vehicle product line to address all major segments which will include a future compact SUV and pickup truck, develop a self-driving capability that is 10X safer than manual via massive fleet learning and enable your car to make money for you when you aren’t using it through the sharing economy. Interestingly this next plan does not seem that unachievable and as the rest of the world wakes up to the global acceptance of electric cars will it actually take 10 years to come to fruition? In the last month alone Mercedes-Benz has unveiled the world’s first all-electric big rig truck prototype, Solar Impulse 2 completed its epic round-the-world journey, powered only by the sun’s energy, luxury carmaker Porsche says it is creating 1,400 jobs to develop its electric car – the Mission E and Tesla and Solar City agreed to a $2.6 billion merger. These announcements will incrementally improve the whole adoption of electric vehicles and in tandem disruptive advances in battery technology are been seem using Graphene over lithium-based batteries where charge time is being reduced to just seconds compared to the minutes or hours. These innovations have the power to change a number of supply chains over the next decade which will not only transform the way we live our lives but disrupt numerous Business lines so is it time for everyone to draw up their 10 year plans in response to this exciting period of change.
Over the last decade social media and collaborative platforms have not only become popular for the masses they have also been seen as an easy win for corporates to extend market share and maintain relevance. It all started in 2006 when Google purchased You Tube and continued with further major purchases like Facebook buying Instagram and Whats App, Twitter buying Vine and Microsoft purchasing Skype, Yammer and this year LinkedIn for $26 Billion. From the consumer point of view it shows exactly how valuable our data is to corporate’s and indicates how important it is to ensure that our privacy settings are correct as no one can guess who will purchase the platforms in the future (especially as most people have dormant personal data littered across the internet). However from the corporate perspective there are 2 benefits for making a purchase. The first is to secure a pre-built user base to whom you can sell and the second is to hopefully obtain a platform that will continue to grow and innovate. The problem with most Social platforms is that it’s very hard to know if you are buying dormant users and what percentage of the data is correct. The interesting thing about the Microsoft purchase of LinkedIn (which apparently was also wanted by Sales force) is that this data source is one of the few which is believed to be accurate due to it being continuously updated with Career, Education, Training and content preferences.