Personal Finance

Disruption: What lies ahead in New Year

Companies that are well prepared cash in on new technological changes in their industry. FILE PHOTO | NMG
Companies that are well prepared cash in on new technological changes in their industry. FILE PHOTO | NMG 

On the global scene If you were to pick the three most prominent fads of 2017, they would definitely be fidget spinners, artificial intelligence and, cryptocurrencies.

The underlying concept behind these fads are quite impressive and I am quite bullish on the long-term prospects of this disruptive technologies as we move into 2018.

As the disruption purge drifts on, driven by consumers, technologies and regulatory landscape, we expect key shifts in leading industries and new entrants into the corporate scene. This disruptive wave is poised to elevate those that are paying attention to the emerging trends and deploying the appropriate strategies.

On the contrary, there will be Kodak moments for the organisations that fail to pay attention to the new realities. To provide clarity into the disruptive landscape, I focus on the three pillars driving it — the consumers shifting expectations, technological advances and regulatory environment.

Consumers are increasingly dictating how they access various services and products, and as evidenced by Uber, which has shown us that a mobile phone has functionality beyond communication, read enabling mobility.

Firms that spent the time to study changing consumer behaviour patterns and tweak the packaging of the products and services to harp on the consumers preferred user experience are poised to succeed in 2018.

This is lent impetus by the increasingly more consumers getting connected to mobile as evidenced by a recent Communications Authority of Kenya report, where we note the upward trajectory as we torpedo towards 40 million mobile phones.The industries that will be most exposed to disruption will be the consumer-facing businesses in retail, media and hospitality industries.

The possibilities that exist for these industries will be guided by a focus on providing a the last-mile experience by creating interfaces of self-service platforms to tap into the gravy train of a more informed consumer. This will call for innovations beyond the core business.

Media houses, for instance, will be forced to consider backward integration and launch products that are not media related but share similar characteristics with the content distribution model as an answer to the declining revenue legacies.

The New Year is perhaps the one that most technological advancements that have been in the experimentation stage will start having solid uses cases.

Technologies such as machine learning and artificial intelligence (AI) have only but been a preserve for a few within organisations. This is certainly bound to change. For instance, we shall see the use of the blockchain technology evolve as the grip on cryptocurrencies takes hold.

Banks will start deploying on large-scale machine learning tech through roboadvisory and credit score algorithms will ingest more data thanks to AI. This will impact most organisations immensely including staff rationalisation, distribution channels and customer service.

We will experience an incumbency of IT staff as the demands on them to be versatilists, the role will cease to be a support function but a key function that drives business performance.

As technology evolves, we expect to see more disintermediation of technology platforms as the cut off the IT support This will drive the movement of most traditional companies from product and service offering into platforms. Perhaps one of the key happenings in 2017 that points to a glaring gap of the shifting regulatory space was the Supreme Court orders to the Independent Electoral and Boundaries Commission to grant access to the servers as part of the court evidence.

As we noticed, in the absence of a policy on data protection and residency, we are left with various interpretations of court orders as we witnessed and this poses a grave risk to corporates and businesses that have valuable data sitting with technology vendors and domiciled in servers abroad.

In that light, we expect in 2018 the ICT ministry to fast-track the adoption of the Data Protection and Data Residency Policy Bill that has been lying in Parliament for some time now to attenuate the adverse risks of exposure due to a lack of regulations.

The other sectors that whose potential would be unlocked due regulatory intervention is drones and whitespace broadcast.

Besides, we have the general data protection regulation policy coming into effect in Europe in 2018 and considering the European anchorage of key technology companies; we are bound to be affected by the new guidelines.

For those who considered the interest capping to have impacted the banking industry, you are yet to gauge the impact of new accounting rules, IFRS9 and IFRS 17. It will be interesting to observe how we navigate around net neutrality laws that are taking shape in the west and bound to have ripple effects on how ISPs and telco’s package their products. On the regulatory front, the most affected will be financial services — banking and insurance technology and telecommunications.