‘How much for your coffee?’ 5 euros, 6 dollars … whatever the price, we might pull out local money, swipe a card, or maybe tap a smartphone to settle the bill. Someone watching from another century in the past would think it were magic.
December 2019 - at the end of each year, The Paypers team gathers to discuss what has happened the previous year and tries to anticipate what will happen next. Last year we were talking about drone delivery, replacing customer facing services with virtual assistants, cashless societies, mainstream cryptocurrency adoption (the birth of stablecoins and Central Bank Digital Currencies), increased use of virtual cards in travelling, and the innovation that would take place within the industry. And we also wondered how long it would take for all these hot things to happen: 5 or 10 years?
March 10, 2020: ‘starting with tomorrow, the kindergarten is closed’ this was the first sign of life disruption for me personally, the beginning of the #coronavirusoutbreak. But this was just a small hint of what was about to happen the next days/weeks for the whole world.
People are being locked down to stop spreading the virus, schools are closed, non-essential businesses put on hold, medical systems overwhelmed. As governments around the world attempt to fight the new virus, financial institutions, ecommerce providers, tech companies, and many more are facing significant operational disruption, a rapidly deteriorating business climate, and as a consequence are experiencing an urgent need to identify the positive aspect of all these. The Covid-19 pandemic has sped up technology, thinking, and reaction time which made me realised that innovation might happen more quickly than we have even thought of. Of course, with some downsides …
Banking, fintech, payments
Over the past couple of weeks, banks have had to adapt a lot to the new conditions. Bank workers had to work remotely, with communication and payments systems shifting online. Concerns about bank stability as a result of the crisis caused financial institutions to experience peak loads on banking systems and infrastructures. Consequently, in March 2020, Nationwide delayed all incoming faster payments due to a fault in its system.
As this wasn’t enough, many consumers and SMEs have started feeling increased financial distress, leaving banks and FIs immediately to decide between who might need a loan to bridge a gap or is most at risk of becoming delinquent on a loan. Central banks in Europe and the US, plus governments have promised financial help, however it might take some time until the money reaches the end users (e.g. small SMEs that don’t have enough liquidity to support their business or freelance/self-employed workers that are unable to register themselves as furloughed workers and therefore, cannot qualify for relief from their government).
All these challenges can be the push which banks needed to step into the digital banking world. The threat of infection through physical contact will make the industry shift gears toward the cashless and frictionless payment. So, in order to avoid contact with payment terminals, banks in several European countries have raised the spending limit. And what if the next step in achieving full digitalisation is adoption of Central Bank Digital Currencies (CBDC) to go cashless once and for all?
Banks have now the opportunity to develop their digital channels, roll out virtual assistant services, encourage conducting video chats with a banker instead of visiting branches for different services, assist clients to remotely cash a check, conduct person-to-person or intrabank transfers. As people are being required to stay at home to contain the virus, digital banking and online shopping have surged this period and so has the pool of customer data.
Vendors see an opportunity in helping FIs make sense of it and incorporate real-time indicators of borrowers’ financial health to facilitate better decision-making that helps both consumers and banks who are suddenly faced with financial insecurity. Obviously, with data privacy and data protection measures viable and active.
Now is the moment for banks to create truly digital identities for new customers and charging them with all things required to deliver the requested service. Via chat bots, advanced, facial recognition, behavioural biometrics, gamification, robotic advice based on machine learning, and other emerging tech, traditional banks can introduce a consistent digital account opening/managing, KYC/KYB experience in order to enable users to continue their financial routines.
Unified commerce
From Iasi (my hometown), Romania to London and cities in the US, concerned shoppers wanting to stockpile essential goods like personal hygiene products, flour, toilet paper, yeast, and medical care products have been emptying stores shelves for one reason or another.
Besides groceries, at-home fitness gear like dumbbells, stationary bikes, and treadmills saw a 55% boost in sales between March 11th and 5th. However, the flipside to these increases is that apparel is struggling to gain traction, with retailers such as Urban Outfitters, Primark, Edinburgh Woollen Mill Group (EWM), and New Look writing to suppliers to cancel orders until further notice. As this wasn’t enough, ecommerce giant Amazon suspended shipments from independent merchants apart from medical supplies or ‘high-demand’ products.
Yet, there is a bright side to these. In order to avoid physical contact with other shoppers, customers went online to buy essential stuff or order food. This has caused a spike in internet traffic of 30% in March 2020, which could enable retailers to access copious stores of data that can help them optimise the user experience.
To ensure that people have access to food and other goods and make it easier for citizens to limit human contact, drones have started to be used in China. In fact, in remote areas, these were deployed even before the virus outbreak. Ecommerce company JD together with the local government deployed a drone team. That team quickly conducted ground surveys, designed flight corridors, requested airspace access permission, and conducted final flight tests. In just a few days, several drone delivery corridors were put in place, replacing hours-long drives with a 2 km flight that could be completed in just 10 minutes.
Travel, restaurants, entertainment
‘As countries have imposed social distancing, shelter-in-place or total lock-down orders, domestic spending, most notably in travel, restaurants, entertainment and fuel, has sharply declined week on week’, Visa said in a statement. Disney closed its domestic parks — Disney World and Disneyland, along with several stores, hotels, and studios. The Tokyo Olympic Games have been postponed for 2021 and many football matches cancelled. Not to mention music concerts and film festivals.
But even as they take drastic steps to cut costs, reduce capacity and conserve cash, travel and tourism companies need to look to the future. They know so many things about what we like in terms of travelling and they have so much experience with providing great user experience, why not take advantage of these data and make it digitalised/technologised? I like to call it the VR (Virtual Reality) experience. You probably received recommendations from friends these days to take some virtual tours of famous museums, or see interesting places from the warmth and comfort of your house. During the Global Stage for Innovation - CES 2020, an event focusing on innovation that takes place annually in Las Vegas, Panasonic presented a prototype of VR glasses – they are regular-ish glasses with a dash of steampunk aviator style, have high resolution micro OLED panels, with almost no hint of the ‘screen-door effect’, dynamic sound, cameras, they can accommodate 5G network, and more. These glasses can be used to play virtual games, explore new worlds, or visit places.
‘EduTech’, Medicare, automotive
A segment affected by the pandemic and not so much talked about is the educational sector. With schools being closed and many parents working from home, children are spending more time online and may be feeling increasingly lonely or anxious because of the lockdown. This could leave them vulnerable to online abusers and of course take their attention away from studying.
What they need most is attention and someone to talk with. Maybe an educational robot? Educational bots include a wide range of products, from robots that truly aim to educate children, to devices focused on entertaining people of all ages. Take for instance Miko 2, a robot available in Asia and North America, that uses AI and voice recognition to see, hear, sense, express itself, recognise faces, remember names, identify moods, and learn from its own environment to engage with children.
No doubt that the most important segment affected by the pandemic is the medical care sector. Hospital workers are strained under long working hours, strict hygiene conditions, fear of catching the virus, protecting their dear ones, and coping with family life. But robots can sometimes be applied successfully for administering medication, treatment monitoring, and taking care of people. By using smart devices, sensors, bespoke applications, and bots, tech companies are providing solutions for these tasks. A hospital in Italy for instance has been starting using a fleet of six child-size robots, dubbed Tommy, that are left by patients’ bedside to monitor parameters from equipment in the room, record messages and send them to the doctors, and limit the amount of direct contact doctors and nurses have with patients, thus reducing the risk of infection.
Now, hospitals need medical equipment such as ventilators, sanitiser, special clothing. So car manufactures such as Ford and General Motors have started making ventilators, with Tesla’s CEO Elon Musk offering to ship to hospitals the critical piece of medical equipment in short supply during the ongoing coronavirus pandemic.
And since we mentioned Tesla, what I found also interesting, is the concept of a hospital-grade air conditioning system the company is developing within its Tesla Model S or Model X. This superior system offers the option of a Bioweapon Defense Mode that keeps a virus or bacteria — or other polluting air particles — out of your car and creates an atmosphere around you that is inspired by hospital AC systems.
March 2220 - remember my story with buying coffee at the beginning? Now, let’s go to 2220, what if someone just thought about a coffee and a virtual coffee shop would pop up, serving you your favourite latte on the spot, with you not even bothering about paying? This scenario seems Sci-Fi now, but with the advancement of technology and innovation one might never know. We just need the right spark to make it happen.
These are tough times we are living, but it is the way of the world, of life. As J.R.R. Tolkien once wrote in The Fellowship of the Ring:
‘From the ashes a fire shall be woken,
A light from the shadows shall spring;
Renewed shall be blade that was broken,
The crownless again shall be king.’
About Mirela Ciobanu
Mirela Ciobanu is a Senior Editor at The Paypers and has been actively involved in covering digital payments and related topics, especially in the cryptocurrency, online security, and fraud prevention space. She is passionate about finding the latest news on data breaches, machine learning, digital identity, blockchain, and she is an active advocate of the need to keep our online data/presence protected. Mirela has a bachelor degree in English language and holds a Master’s degree in Marketing.
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