Business
Slow but steady: Understanding the smart home revolution
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Gavin Miller, CEO, Asurion Europe
As a society, our reliance on digital devices continues to grow as we find new ways to weave connected technology into all manner of products. In the past decade or so we have seen TVs, speakers, doorbells and more incorporating ‘smart’ elements, adding to our network of home devices. Consumers are keen to adopt tools that save time and money, and strengthen safety. The proof is in the numbers: the global smart home appliance market, for instance, is set to more than double in value – from $59 billion in 2022 to $143 billion by 2030.[i]
All this technology is changing the way we go about our daily activities. We are able to do chores like our weekly food shop without leaving the home and enjoy entertainment via multiple platforms. But this is not to say we have disregarded the old ways completely. Book consumption has risen[ii] and for some items we still prefer to go to a physical store. To take advantage of emerging opportunities, technology manufacturers and retailers must be able to understand changing behaviours and anticipate future trends.
The current state of play
In 2016, around two thirds of the population were familiar with the idea of smart home technology, but that number has grown over the last seven years – driven in part by the popularity of items like smart speakers.[iii]
According to one 2023 analysis, the percentage of UK adults owning at least one connected home device sat at around 80%, a three percent growth from 2022 – reflecting the leisurely but reliable increase in uptake in this sector.[iv] This ownership is reasonably consistent through different age groups, though differences emerge when we look at multi-device ownership. 43% of 16-24 year olds and 45% of 25-34 year olds own three or more devices, a significant increase compared to the overall UK multi-ownership average of 34%. These groups are key to the future adoption of these devices; as they continue to gain spending power and move into their own homes, it is likely they will acquire more smart products.
While awareness of connected products has certainly grown, there is a mixed picture when we attempt to understand how frequently we are purchasing and using these products. To gain a clearer understanding, Asurion Europe’s recent study investigated the adoption and usage rates of smart home devices in the last few years.
Measuring growth: Adoption & usage
Asurion’s Adoption Index reflects the population’s access to devices and channels, based on factors such as: internet users, adult social media users, mobile internet users, wearable owners and the penetration of smart home devices. Meanwhile, the Usage Index displays the amount of time we actually spend using these products, for activities like browsing the internet and social media, streaming TV, playing on games consoles, and online shopping.
There is an important distinction between the two. Though someone may have a social media account or own a smartwatch, it is not necessarily the case that they using the account or smartwatch. In fact, YouGov found that around one in ten smart watch owners do not use their device[v]. For platforms like social media accounts which are free to acquire, this number is likely to be much higher.
This explains why usage rates typically lag behind adoption, as Asurion found in the study. When a new smart home product enters the market, there is often a gap from the point where it is an item of novelty to when it has become a well-used part of the furniture.
The opportunity gap
With that in mind, the Adoption and Usage indices below give us two very different but useful insights. The Usage Index demonstrates our current dependency, while the Adoption Index indicates our potential future dependency. Monitoring these indices in the coming years should shed light on the speed of usage, and when we are likely to see the latest home tech truly take off. The current gap between adoption and usage therefore represents an opportunity for technology firms, highlighting crucial points for promoting products, stimulating further usage or encouraging eventual device replacement or upgrades.
Technology companies who are acutely aware of these changing trends and demands from their customer base will be best placed to develop offerings that capture the imagination of consumers. However, as we become more reliant on the connected functionality of our devices and their ability to perform a range of tasks, the inconvenience of device failures will only become greater. In fact, our recent survey of over 2,000 consumers found that at least once a quarter, over a third of respondents experience a significant issue with one electronic device in the home. This means support from comprehensive and affordable tech protection services will be increasingly valuable to ensure the full collection of devices in our connected homes remain up and running.
As CEO of Asurion Europe, Gavin Miller is leading the expansion of the global tech care company in the region. Gavin started his career at global customer experience company Sitel (now Foundever) before moving on to C-suite roles supporting rapid growth and acquisition in a range of businesses, including the largest telephone fundraising specialist in the UK, a commercial contact centre business and a provider of debt management services.
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Business
Building Compliance into Business Culture is Essential in Fintech
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Source: Finance Derivative
Tetyana Golovata, Head of Regulatory Compliance at IFX Payments
Regulation plays a critical role in shaping the fintech landscape. From Consumer Duty and FCA annual risk reporting to APP fraud, the tectonic plates of the sector are shifting and whether you consider these regulations as benefiting or hindering the industry, businesses are struggling to keep up.
According to research by fraud prevention fintech Alloy, 93% of respondents said they found it challenging to meet compliance requirements, while in a new study by Davies a third of financial leaders (36%) said their firms had been penalised for compliance breaches in the year to June. With the FCA bringing in its operational resilience rules next March, it is more important than ever to ensure your company makes the grade on compliance.
Lessons from history
Traditionally, FX has struggled with the challenge of reporting in an ever-developing sector. As regulatory bodies catch up and raise the bar on compliance, responsible providers must help the industry navigate the changes and upcoming deadlines.
Fintechs and payments companies are entering uncharted waters – facing pressure to beat rivals by offering more innovative products. When regulators have struggled to keep up in the past, gaps in legislation haveallowed some opportunists to slip between the net, as seen in the collapse of FTX. Because of this, implementation and standardisation of the rules is necessary to ensure that innovation remains seen as a force for good, and to help identify and stamp out illegal activity.
Culture vs business
Culture has become a prominent factor in regulatory news, with cases of large fines and public censure relating to cultural issues. As the FCA’s COO Emily Shepperd, shrewdly observed in a speech to the finance industry, “Culture is what you do when no one is looking”.
Top-level commitment is crucial when it comes to organisational culture. Conduct and culture are closely intertwined, and culture is not merely a tick-box exercise. It is not defined by perks like snack bars or Friday pizzas; rather, it should be demonstrated in every aspect of the organisation, including processes, people, counterparties, and third parties.
In recent years, regulatory focus has shifted from ethics to culture, recognising its crucial role in building market reputation, ensuring compliance with rules and regulations, boosting client confidence, and retaining employees. The evolving regulatory landscape has significantly impacted e-money and payments firms, with regulations strengthening each year. Each regulation carries elements of culture, as seen in:
- Consumer duty: How do we treat our customers?
- Operational resilience: How can we recover and prevent disruptions to our customers?
- APP fraud: How do we protect our customers?
Key drivers of culture include implementing policies on remuneration, conflicts of interest, and whistleblowing, but for it to become embedded it must touch employees at every level.
This is showcased by senior stakeholders and heads of departments facilitating close relationships with colleagues across a company’s Sales, Operations, Tech and Product teams to build a collaborative environment.
Finance firms must recognise the trust bestowed on them by their customers and ensure the protection of their investments and data is paramount. Consumer Duty may have been a wake-up call for some companies, but progressive regulation must always be embraced and their requirements seen as a baseline rather than a hurdle.
Similarly, the strengthening of operational resilience rules and the upcoming APP fraud regulation in October are to be welcomed, increasing transparency for customers.
Compliance vs business
Following regulatory laws is often viewed as a financial and resource drain, but without proper compliance, companies are vulnerable to situations where vast amounts of money can be lost quickly.
A case in point is the proposed reimbursal requirement for APP fraud, which will mean payment firms could face having to pay compensation of up to £415,000 per case.
Complying not only safeguards the client and their money, but also the business itself. About nine in ten (88%) financial services firms have reported an increased compliance cost over the past five years, according to research from SteelEye. Embedding compliance earlier in business cultures can be beneficial in the long run, cutting the time and money needed to adapt to new regulations and preventing the stress of having to make wholesale changes rapidly.
Building a cross-business compliance culture
Compliance is a key principle at IFX, and we strive to be a champion in this area. In response to these challenges, the business restructured, establishing dedicated risk and regulatory departments, along with an internal audit function.
Regulatory compliance aims to support innovation by developing and using new tools, standards, and approaches to foster innovation and ensure product safety, efficacy, and quality. It has helped the firm to navigate the regulatory landscape while driving growth and maintaining high standards.
This organisational shift allowed each business line to own its own risk, with department partaking in tailored workshops designed to identify existing, new, and potential risk exposure. Shared responsibility for compliance is the only way to create a culture which values it. We see this as a great way for organisations to drive innovation while sticking to the rules.
Business
How AI virtual assistants are transforming education and training
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By Gregor Hofer, CEO and Co-founder at Rapport
What separates good doctors from excellent doctors, the type that might get five-star reviews if, like an Uber driver, their services were supported by a smartphone app?
Medical knowledge, expertise, and better outcomes are, of course, the most important factors. But – particularly when dealing with patients’ relatives, discussing risk assessment and imparting bad news – we shouldn’t underestimate the importance of bedside manner.
This might come naturally to some doctors but there are none for whom training isn’t useful, whether at medical school or on the job.
There will always be a place for real human interaction in this training, the type that involves role-play, with actors or colleagues playing out different scenarios that explore the most effective ways to handle difficult situations.
But what if this could be supplemented by more readily available and less resource-intensive experiences that simulate these training environments? And what if it could be applied across numerous sectors, industries and professions, of which there are a great many that could benefit from such an opportunity?
What might that mean for those instigating tricky conversations and, perhaps more importantly, those at the receiving end of them?
Advances in generative artificial intelligence – or GenAI – mean that these are no longer hypothetical questions.
There’s no limit to the type of person this technology could help, but we’ll review three – doctors, those working in corporate HR, and online students – to give a flavour of the benefits it brings.
Before we do, a quick word on how such applications work.
An overview of the technology
It all starts with data. With access to enough content, the type that you store and curate on your internal systems, large language models (LLMs) can be trained to find the most appropriate response to whatever user input they’re exposed to, whether in writing or spoken, and then you as a user can respond to that response, and so the cycle continues.
You’ll have experienced something similar using the likes of CharGPT, but because this is based on your own content, you’re more in control. (For simpler and more prescriptive scenarios, though, I’d add that with the best solutions, you can alternatively import predefined branching dialogue to keep your conversations on track.)
It doesn’t stop there, though; by tapping into a solution that’s supported by experts in linguistics and computer-aided animation, your colleagues can interact in real-time with avatars equipped with believable facial expressions, accurate lip-synching capabilities, natural gestures and the ability to detect emotions.
All of this adds to the user’s willing suspension of disbelief that they’re interacting with a real person, or AI avatar, thereby enhancing the effectiveness of their learning.
These innovations are reshaping how we approach learning and skill development in so many critical fields. We said we’d look at three. We’ll start by returning to medicine.
Medical training
AI assistants can supplement the way doctors are taught to break bad news to patients, one of the hardest things they’ll face in practice and, given its subjectivity, something that can’t easily be looked up in a textbook on anatomy or physiology.
As we said from the outset, this is easier for some doctors than others, but given the literal life-and-death nature of such conversations and the shattering impact that the death of a loved one can have on a relative, there’s always room to improve medics’ empathy and communication skills – which is exactly what this technology delivers.
By utilizing experiential AI tools, clinicians can better use their time, alleviate pressure, fatigue and burnout symptoms, and ultimately allow them to better serve their patients.
Corporate HR
In corporate HR, virtual assistants can significantly streamline and enhance the hiring and firing process, as well as any difficult conversation; whether it’s a tough review, a disciplinary hearing, letting down an employee about a promotion they’d applied for or any other scenario that might bring a bead of sweat to your forehead, it’s all about providing safe and cost-effective practice before doing it for real.
Tech research consulting firm Gartner recently found that more than three-quarters (76%) of HR leaders believe that if their organisation doesn’t adopt and implement AI solutions, such as generative AI, in the next 12 to 24 months, they’ll lag in organizational success compared to those that do, while 34% of HR leaders participating in their January benchmarking session said they were exploring potential use cases and opportunities when it came to generative AI.
If they do manage to adopt the right technology, the impact will be massive among those who deploy it wisely. After all, which company wouldn’t want to upskill its HR professionals in tangible soft skills such as empathy, communication, problem-solving, and conflict resolution in a controlled setting?
Online education
AI-powered tools can hugely boost student engagement in remote learning environments, and the research suggests that it comes close to rivalling in-person experiences. When you consider the staff-to-student ratios common in most educational settings, this should be no surprise – think how many students can fit into a lecture hall (even if they don’t always turn up!).
But we’re not necessarily talking about formal education; this applies equally to any informal setting in which someone needs to improve their education in some way.
With this technology, you can invent new ways to educate your students – or staff – by transforming lessons into experiences, using interactive characters reflective of the subject. This means you can increase user satisfaction and performance without compromising on content.
Whatever the scenario and whatever the use case, the chances are that if you have the right content in sufficient quantities, you can tap it for interactions that would otherwise be lacking in uniqueness or prohibitively expensive.
With AI virtual assistants, everyone’s a winner.
Business
How GenAI is Shaping the Future of Compliance
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Gabe Hopkins, Chief Product Officer, Ripjar
Generative AI or GenAI uses complex algorithms to create content, including imagery, music, text, and video with amazing results. Less well known are some of the ways in which it can transform data processing and task performance. This groundbreaking technology not only saves time, effort, and money, but has become a game-changer in enhancing operational efficiency and fostering innovation across various sectors.
However, some industries like anti-financial crime compliance – have been slow to adopt new innovations like GenAI, predominantly due to concerns over potential risks. In fact, they can even see it as a risk in itself. Legal, Compliance and Privacy leaders rank rapid GenAI adoption as their top issue in the next two years, all while other, less risk-averse organisations enjoy the upside of implementing GenAI in their systems.
This delay means many compliance teams are not taking advantage of AI tools that could revolutionise their processes and help them save up to 200 hours annually per user.
Entering the New Era of GenAI in Compliance
Teams in largely regulated sectors like banking and fintech face enormous pressures. Their responsibilities include identifying risks, such as sanctioned individuals and entities, updating policies to keep up with ever-evolving regulations, and handling expansive datasets. The high volume of this data makes manual reviews exhausting and susceptible to errors, which can lead to financial and reputational damage.
One way to overcome these challenges is by leveraging GenAI. For example, false positives – where a risk is raised incorrectly or false negatives, where a real risk is not flagged, are common issues caused by trying to deal with very high volumes of alerts and risk matches. Implementing GenAI can reduce these inaccuracies, significantly enhancing the efficiency and effectiveness of customer and counter-party screenings.
In practical terms, GenAI can reinvent how compliance tasks are performed. For instance, in drafting Suspicious Activity Report (SAR) narratives, where analysts need to justify suspicions in transactions, GenAI can help automate this writing process, combining human oversight with artificial efficiency. Platforms using GenAI excel in summarising vast amounts of data— crucial for tasks like screening adverse media, where they assist in identifying potential risks linked to negative information about clients.
Understanding the Opportunities of GenAI and Overcoming Fears
For the compliance sector, it’s a crucial time to explore how to incorporate GenAI effectively and securely without undue risks. Dispelling fears about data misuse, the high costs of initial model setups, and the ‘black box’ nature of AI models are central to this transition. Teams are particularly cautious about sharing sensitive data and the hidden biases that AI might carry.
Yet, some strategies can counter these challenges. By choosing suitable models that ensure robust security and privacy and adjusting these models within a solid statistical framework, biases can be mitigated. However, organisations will need to turn to external expertise – whether data scientists or qualified vendors – to support them in training and correctly deploying AI tools.
The latest advancements in GenAI suggest that virtual analysts powered by this technology are achieving, and sometimes surpassing, human-level accuracy. Despite ongoing concerns, which may slow adoption rates, the evident potential benefits suggest a bright future for compliance teams using GenAI. These technological innovations promise not only to improve speed and efficiency but also to enhance the capability of teams to respond and adapt swiftly.
Embracing GenAI will not only significantly elevate the effectiveness of compliance operations but also safeguard organisations against potential pitfalls while maintaining trust and integrity in their industry practices.
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Building Compliance into Business Culture is Essential in Fintech
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How AI virtual assistants are transforming education and training
![](http://www.futuresparity.com/wp-content/uploads/2023/04/b-5-80x80.jpg)
How GenAI is Shaping the Future of Compliance
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