With today’s Internet of Things (IoT) and artificial intelligence (AI) combining to facilitate disruptive technologies in more and more industries, traditional industry has found itself left with one of two options – adapt or die.
Simply put, IoT is the concept of linking any gadget to the internet to facilitate the exchange of data both internally and with other connected devices. Artificial intelligence is applied when a machine assumes the cognitive functions normally associated with humans.
Traditional industry is increasingly faced with the question of how to incorporate the combination of IoT and AI into existing business models and use it to its advantage rather than view it as a threat. But exactly how “disruptive” has disruptive technology proven to be when it comes to traditional businesses and industries, and the economy as a whole?
This question was put into perspective at the Banking on Disruption breakfast, hosted by Moneyweb and Nedbank CIB. Stuart van der Veen, disruption lead at Nedbank CIB, said that in 2017, $17bn was spent on fintech globally. Bringing it closer to home, he says Nedbank has committed a significant capital allocation on balance sheet “for investing in tech teams where we see significant opportunities”.
As to whether or not the shift towards fintech is a threat to traditional financial institutions, Pieter Geldenhuys, director at the Institute for Technology Strategy and Innovation, believes the technology provides banks with an opportunity to improve client service.
Geldenhuys believes that in order to embrace change effectively, South Africa will need to adjust its education system by welcoming more competitive forces; something which has worked well in Scandinavian countries.
Gareth Rees, director of partnerships at IoT.nxt, said the required shift in the education system should be geared towards the provision of new skill-sets designed to meet the requirements that AI and other technologies pose on us, to remain relevant as a population. “Mindsets have to change, away from technology to business strategy, to efficiently use new technologies to unlock business value.”
Of all the influence technology has had on big business, perhaps the most evident is in how it has democratised traditional barriers to entry and reduced the bureaucracy associated with doing business within certain industries, especially in the developing world. This, Geldenhuys feels, is due to what he believes is the ability of local start-ups to create solutions that are better suited for the developing world.
Using Nigeria as a case in point, Van der Veen said rapid advancements are already taking place in Lagos as “more development code is being written there than in San Francisco. Their tech skills are increasing and flourishing.” When it comes to AI, however, the question of technology replacing humans is almost always in the forefront, along with the impact it may have on people’s ability to provide for themselves.
While the panelists agreed that a shift in the traditional method of exchanging skills for remuneration will take place, as has happened in the past with other business revolutions, humans will simply adapt their skills to higher order administrative functions, which require the sort of human input which AI cannot provide.
Disruptive technology is shaking up the banking industry and giving rise to unexpected players. In this recent Moneyweb video, Stuart van der Veen, disruption lead at Nedbank CIB, shared his thoughts on how banks are responding to these emerging threats and what Nedbank is doing to remain relevant.
As disruptive technology looks set to shake-up the banking industry, Nedbank has created a venture capital fund within the bank to leverage off such technology and better serve clients. The bank aims to advance its tech ecosystem, implement experimentation and commercialisation capabilities and plug into global venture capital deal flow.
It’s not just the banks that need to meet this call for digital disruption – it’s business throughout SA, says Gareth Rees, head of Global Partnerships at IoT.nxt. Interestingly, SA’s position of having to innovate as well as support a developing economy means they’ve started to solve problems the developed world has yet to encounter. It’s presented local businesses with a rather unique opportunity, to pave the way for future global fintech trends.
All-in-all, a lot of change and innovation is just around the corner, particularly in the fields of machine learning and language analysis, says Prof Pieter Geldenhuys, founder and director, Institute for Technology Strategy and Innovation. It’s going to lead to new ways to interact with digital devices and businesses, and increase ways to generate value across every industry.