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The Voice of Technology and Finance in Africa
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November / December 2013 ÂŁ3.99
Ecobank: Champions of Technology Innovation Data Protection
A move into the cloud isn’t just about technology, it raises key questions about client data and its privacy.
Data Transformations
Exploring the ways in which data is set to transform the finance industry.
Tackling the Cloud
Is the cloud inevitable or is it just an option? We ask whether African companies can afford to ignore the cloud?
Human Capital Performance Improvement Audit Are you completely satisfied with the Return on Investment (ROI) from your current training? Are your training budgets driven by business goals and Key Performance Indicators (KPIs)? Are you holding training vendors accountable for quantifiable business improvements? Based on over 25 years of providing the BEST! Training, Communication and Consulting Solutions to the banking industry worldwide, the leaders of Global Bankers Institute have designed the Human Capital Performance Improvement (HCPI) Audit. The HCPI Audit is the first-of-its-kind service to offer the following benefits: 1) Ongoing Performance Improvement Plan based on cascading Strategic and Operational Goals. 2) Comprehensive Training Plan with behavioral outcomes aligned to Key Performance Indicators (KPIs) and Key Performance Measures (KPMs) resulting in a concrete Return on Investment for all training. 3) Effective Training showing measurable benefits in Sales, Customer Satisfaction, Operations Productivity and Quality, Employee Motivation, Risk, and Compliance, as well as any other identified bank goal. 4) Efficient Use of Training Budget through improved curriculum priorities and vendor selection and negotiation. 5) Holding Training Vendors Accountable by making them partners in the HCPI Audit process and requiring that they accept responsibility for delivering measureable improvement through their programs. Please contact me to let us know how we may best serve you. Global Bankers Institute brings experience, innovation and value, providing the BEST! Training, Communication and Consulting solutions to the financial services industry.
Dr. Linda Eagle Founder and President Global Bankers Institute 245 Park Avenue New York, NY 10167 +1.212.579.5500 ext. 3106 +1.646.236.7538 (mobile) linda.eagle@globalbankersinstitute.com www.globalbankersinstitute.com
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FROM THE EDITOR
Welcome to Technology Banker – Where technology and finance collide! It’s so easy to get swept up in the excitement surrounding new technologies but when it comes to the cloud, it’s imperative that financial services companies take a step back, look at the landscape, weigh up the costs and benefits, and ensure all compliance needs are understood and achievable. Cloud computing has brought about a sea change in the nature of enterprise IT, which means it should be at the top of every IT practitioner’s agenda. In this issue of Technology Banker, we take a long look at the cloud, examining both the pros and cons. Not only do we explore the benefits but we look at the challenges that banks and other financial services companies face when they consider moving services into the cloud. Our new series, “Technically Talking”, aims to provide help as well as information. This week an expert walks you through the technical challenges behind adopting a cloud architecture. Cloud isn’t just about the technology, the movement and storage of data pose regulatory issues, so we take a look at one the main challenges: data protection regulations. As well as the cloud, we peer ahead into the future of the mobile payments industry and look at the opportunities created through the analytical capabilities of the big data revolution. With opportunities come threats and we ask whether the banking industry’s lack of agility could create pressure from some surprising quarters.
Contact Details: Publisher - Stefan Grossetti stefan.grossetti@technologybanker.com Editor - Kirsten Morel kirsten.morel@technologybanker.com Deputy Editor - John Bennett john.bennett@technologybanker.com Sales & Marketing - Jenny Howard jenny.howard@technologybanker.com Managing Editor - Remi Akinjomo remi.akinjomo@technologybanker.com Head of Operations - Monika Derfinakova monika@technologybanker.com Technology Banker Website www.technologybanker.com Technology Banker is a registered trademark of Technology Banker Group. All rights relating to the content of the publication are reserved to the rightful owners.
Technology Banker Offices: Head Office: 10th Floor, 88 Wood Street, London EC2V 7RS Tel: +44 (0) 208 528 1536 Fax: +44 (0) 208 528 1001
I hope you enjoy this issue of Technology Banker. The team always wants feedback so we can continue to improve and give you the information you need to take your business forward. Please feel free to email me with comments or stories at kirsten.morel@technologybanker.com Kirsten Morel, Editor
The contents of this publication are subject to copyright protection and reproduction in whole or part, whether mechanical or electronic is expressly forbidden without prior written consent of the editor. Views expressed in the publication do not necessarily reflect those of the editor or publisher. We welcome contributions, however, publication is at the discretion of the editor. We also take no responsibility for the return of materials. Whilst every care is taken to ensure accuracy, we cannot be held liable for any inaccuracies. All rights reserved. ©Technology Banker 2013 ISSN 2051-9443
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CONTENTS
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Mobile Payments: Maintaining Momentum Is mobile set to become the main channel for payments? We find out what the future holds for mobile payment technologies
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NEWS 5 6 7
COVER STORY 10
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20 24
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Mobile Payments: Maintaining Momentum Tackling the Cloud: Can companies afford to ignore the cloud? Behind the Cloud: what is it and what does it mean? Cloud Protection: examining cloud legislation
INSIGHT 22
Behind the Cloud: what is it and what does it mean? You’ve heard of the cloud but is it suitable for the finance industry and will it replace on-premise systems?
Ecobank: Champions of Technology Innovation
FEATURES 8 14
Connecting Africa Mobile technology has given Africa access to communications technology like never before. This infographic looks at the mobile picture across the continent.
Banking News Telecom News Technology News
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Waking up to Nigeria: Analysis of Nigeria’s economy Choosing a Satellite Platform Technically Talking: cloud & enterprise architecture Data Transformations: How data is changing finance
INFOGRAPHIC 17
Connecting Africa: A look at Africa’s communications infrastructure
Technically Talking An in depth, step-by-step guide to switching your enterprise systems into the cloud.
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Events for Your Diary
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Vendors’ Directory
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BANKING NEWS Access Bank launches Primus Nigerian lender, Access Bank, has launched an internet banking solution for the corporate market that is believed to be the first of its kind in Nigeria. Known as ‘Primus’, the product is intended to simplify the complexities of daily supply chain and financial management for large companies.. “The internet banking solution is not just a secure multi-transaction management platform that removes the complexities around daily financial management of multinationals and large corporations but also facilitates easy transactions with suppliers and distributors, as well as employees in the value chain by simplifying the processes involved in executing payment, managing receivables and treasury services in the daily dealings of organisations,” said Herbert Wigwe, Access Bank Group’s Deputy Managing Director.
AfDB grants VoLo US $284 500 for credit bureau initiative in Senegal and The Gambia The African Development Bank (AfDB) and VoLo have signed a grant agreement for US $284,472 to facilitate financial inclusion and improve the efficiency of micro, small and medium-sized enterprise (MSMEs ) financing in Senegal and the Gambia. The grant will help with the piloting of a new technology-based solution for collecting and disseminating credit information on MSMEs to prospective creditors. This innovative project will enhance the region’s financial structures by improving credit information, thereby aiding access to lending for local entrepreneurs. VoLo is a privately-owned company registered in Senegal and the Gambia that aims to improve financial inclusion and reduce poverty through the establishment of credit reference service providers that use VoLo’s Trust Information Platform. The technology ensures that information on individuals and firms is credible, up-to-date, independently verifiable, timely and accessible.
“First Finance Africa” takes place in Bonn Companies are gathering in Bonn for the First Finance Africa conference which takes place on 5th November. Organised by the German-African Business Association (Afrika-Verein der deutschen Wirtschaft) and the European Investment Bank (EIB), the event is designed to raise awareness of the investment opportunities available in subSaharan Africa by helping participants better understand the rapidly growing African market. According to the German Foreign Ministry, German trade with Africa is growing at a double-digit rate but many companies are put off investing in Africa for fear of corruption, excessive bureaucracy or a lack of finance.
World Bank’s IFC launches Corporate Governance Network International Finance Corporation (IFC), a member of the World Bank Group, has launched the African Corporate Governance Network (ACGN) to encourage best practices in corporate governance among African institutions and to contribute to capacity building in corporate governance. “Strong international practices in corporate governance are an important factor in attracting investment,” said Chinyere Almona, Head of the IFC Africa Corporate Governance Program. “Through the African Corporate Governance Network, IFC encourages the adoption of good corporate governance practices across Africa to increase investor confidence, boost private sector development, and create sustainable businesses that will provide employment and reduce poverty.” The ACGN, which includes members from nine African countries, was formed to develop the institutional capacity of members, enhance effective corporate governance practices and build better governed and more accountable private and public sector organizations in Africa.
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TELECOM NEWS YahClick broadband thrives in Uganda YahClick, the Abu Dhabi – based satellite broadband Internet provider says it has been “received well in Uganda” and is now looking to increase take up by offering a number of new customer promotions. Launched in late 2012, and now operational across 12 markets, YahClick provides connectivity to businesses, home users, government entities, and non-governmental organisations. In Uganda, YahClick business subscription prices start from as low as $185 - for speeds ranging from 1 Megabit per second up to 15 Megabits per second, with free equipment and reduced installation charges on most business subscription plans. Andrew Jombwe, YahClick Project Manager and Chief Operations Officer for truIT, a YahClick service partner, said that “Internet penetration in Uganda is still emerging and with YahClick, businesses can rest assured that their connectivity will be reliable, wide reaching and great value for money.”
SA mobile charges set to fall South African mobile subscribers can look forward to lower bills following the intervention of the country’s telecoms regulator. The Independent Communications Authority of South Africa (ICA) has proposed cutting mobile termination rates (MTR), the rate telcos charge each other to access their networks, by up to 75% over the next three years. The intervention comes as part of a drive on the part of the South African government to reduce the cost of mobile calls. If all goes to plan, the ICA should oversee the reduction of MTR from 40 cents today, to 10 cents by 2016. Three years ago, the ICA reported that a lack of competition in providing call termination services had resulted in market inefficiencies. It then imposed rates on the main players in the market. However, this action appears not to have been sufficient, with the ICA saying in a statement that it “finds that the market remains ineffective with extremely high levels of concentration.”
Over 70% of Africans own mobiles A report from research organisation, Afrobarometer, has found that 72% of Africans own their own mobile phone. The report entitled, “Partnership of Free Speech & Good Governance in Africa”, surveyed 34 countries and found that their figures for mobile phone ownership exceed those of the UN. When those people who have access to a mobile phone in their household are included, 81% of Africans have easy access to a mobile. Whilst “greater openness in the last decade has allowed Kenya to leap ahead, becoming a continental – and global – leader both in use of and innovation with cell phone technologies,” the report found that the East African nation was not alone in having high mobile penetration rates. It said that essentially universal access was also found in Algeria, Senegal, South Africa and Cote d’Ivoire.
Pyramid doubles African research Market Research and Consulting firm, Pyramid Research, has doubled its telecom coverage of Africa and the Middle East, expanding the number of countries and operators tracked to offer insights into market trends to the firm’s growing client base in the region. “Given the market trends occurring in the region, we are anticipating the demands of our growing client base by now offering market sizing and demand forecasts for 33 countries in Africa spanning the fixed, mobile, media and devices sectors,” says Leslie Arathoon, Research Director at Pyramid Research. “In the Middle East, Pyramid now offers products covering 11 countries. Our product coverage now encompasses over 95% of the AME region’s GDP and tracks KPIs for more than 200 service providers operating in the region.”
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TECHNOLOGY NEWS Kaspersky launches online banking protection Security firm, Kaspersky announced that it plans to launch a new solution for the banking industry, aimed specifically at protecting their online customers. Safe Money for Banks, which is designed to protect customers from online theft and fraud, was presented to the audience at the Gitex Technology Week 2013 conference in October, by the company’s Chief Technology Officer, Nikolay Grebennikov. “In an online banking system, customer computers make up the most vulnerable element, which is exploited by cybercriminals to conduct most of the thefts. We kept this in mind when developing Safe Money for Banks. Our product can effectively block all types of threats that bank customers may face while working with their finances online,” said Grebennikov.
Google Glass Payment solution revealed Etisalat Group, the Middle East, Asia and Africa telecoms operator, celebrated its ongoing partnership with MasterCard at GITEX Technology Week 2013 by announcing the development of a payments solution that integrates with Google Glass, Google’s wearable computer. “Over the last few years, Etisalat has used GITEX as a platform to launch innovative solutions that are now being used by millions of people all over the world,” said Khalifa Al Shamsi, Chief Digital Services Officer at Etisalat Group. “We’re now looking at ways to build on this successful partnership with MasterCard using the technologies of tomorrow such as this innovative payment product.” To showcase their partnership, Etisalat and MasterCard demonstrated the solution which browses, selects and pays for products and services via Google Glass. The two companies hope that they will be able to use innovative machine-to-machine technology to bring the solution to market. GITEX 2013 marked the first international demonstration by MasterCard of Google Glass as a next generation payments solution.
Airtel Ghana & Ecobank offer M-Banking Bharti Airtel has entered into a partnership with Ecobank to deliver Airtel Money across nine African countries where Airtel is already established Airtel and Ecobank customers across Africa will be able to access secure, convenient and instant mobile financial services. The partnership between Airtel and Ecobank is already effective in seven African countries, namely Burkina Faso, Chad, Democratic Republic of Congo, Ghana, Niger, Zambia and Kenya. Airtel Money will also be rolled out in Gabon and Sierra Leone later this month. It will also enable Airtel customers to conduct a variety of mobile transactions. This offering, which is subject to regulatory approval in each market, enables Airtel Money deposits and withdrawals at any Ecobank branch and two-way money transfers between Airtel Money and Ecobank. Customers will also be able to view their bank account balances and statements in real time via Airtel Money.
Polaris FT named ‘Leader’ by Gartner India’s Polaris Financial Technologies has been placed into the Gartner Leaders Quadrant of the recently released ‘Magic Quadrant for International Retail Core Banking (IRCB)’ report, for the fourth year running. According to the report, the group of 20 included in the Leaders Quadrant “represent the major movers in the retail core banking system market.” Gartner sees innovation as being key to defining those vendors that made it into the Leaders group, with the report stating that they “tend to possess high-order market understanding -- they make it their business to monitor market trends, funnelling progressive innovation into their product road maps. “
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FEATURE
Mobile Payments: Maintaining Momentum The growth of the mobile payment sector has been dizzying in its speed but is the market sustainable? Scott Temple examines the industry’s future.
Cash-based financial systems are being challenged by the rise of mobile payments, which according to IDC Financial Insights, are set to hit $1 trillion in purchase volumes by 2017 and this trend is particularly well illustrated across Africa and the Middle East. A new market brings with it significant opportunities for anyone involved and, in the case of the mobile payments industry, that means banks, retailers and card associations, all the way through to the end consumer and even the economies of some countries. “Mobile financial services are becoming increasingly important throughout the developing world,” says Paul Edwards, Executive Chairman of payment services provider, EMP Holdings. “In Africa alone, over 360 million subscribers have been added since 2000.The availability of formal financial services has been limited in the past as banks
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have not invested sufficiently in bricks and mortar to reach the larger population, nor have they fully utilised new disruptive technologies, often leaving the majority of the population to rely on unreliable and costly informal channels.” This gap in access to financial services has created an opportunity for mobile network operators with companies free to realise its potential. The success of M-Pesa in Kenya has shown that mobile financial services can benefit not only mobile operators but also the wider ecosystem including banks, the distribution network, merchants and companies and of course, the customers. Furthermore, because important social and economic benefits cascade from mobile financial services, governments and international institutions are publicly encouraging their development.
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Edwards says that the major benefit to stakeholders of deploying mobile payments technologies can be found in the “low incremental cost of reaching consumers and the huge benefits of scale by being able to reach millions of people now savvy enough to use smartphones and other devices.”
EFFICIENCY AND INNOVATION M-commerce, as a whole, is delivering new efficiencies to the industry, creating a virtuous circle that should,
in time, bring reductions in the cost of credit. Merchants, for example, are delivering a much higher level of value to customers enabling them to offer a more targeted engagement with the consumer. “Hundred’s of millions of people in emerging markets are already comfortable using mobile technology - getting them to adopt mobile payments services should not be difficult. As an example, look at the take-up of Safaricom’s M-Pesa mobile payment service in Kenya, where 80-90% of the adult population have used the service,” said Edwards. Previously, it was the e-commerce giants like Amazon and Wal-Mart who dominated but now, bricks-andmortar merchants are able to offer the same service standards via mobile, giving consumers a much better experience and adding value. The outlook is promising, with the total value of mobile money transfers in Africa set to exceed US$200 billion in 2015, almost eight percent of Africa’s nominal GDP. This is due to users’ growing trust in mobile payments. By 2015, it is expected that more than one in five Africans will be registered to use mobile money services. While the mobile market is currently dominated by digital goods purchases such as music and apps, there are three areas showing potential: contactless NFC, mobile
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money transfer and physical goods purchases via mobile devices.
ENABLING GROWTH Significant investment in infrastructure and technology has accelerated growth in Africa over the decade, establishing it as the secondfastest growing economic region in the world, with an annual growth rate of 5.1%. This poses growth challenges for the continent and the focus will need to shift from technological innovation to the delivery of solutions that place a greater emphasis on customer service and on helping businesses fulfill their potential, in order to overcome them. The M-Pesa service is an impressive solution by most standards, but there are a number of local market factors, particularly liberalization, that worked in its favour. In its absence, it may be difficult to replicate elsewhere. Regulations vary country by country and impact which services can be offered, by whom and in which way. Ultimately, sustained growth in mobile money is likely but the rate will depend not only on how the banks and their customers respond and embrace these new technologies but also on how the regulators and legislators facilitate their adoption.
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COVER STORY
Ecobank: Champions of Technology Innovation Technology Banker spoke to Eddy Ogbogu, Ecobank’s Group Executive Director Operations and Technology and Managing Director of eProcess International S.A, about the challenges he faces in preparing for the future at this time of unprecedented change within the banking industry.
The last couple of years have been really tough for the banking industry globally. What has been your role in developing the Operations and Technology strategy to help Ecobank through this challenging period? Operations & Technology has played a transformational role in completely transforming the operations & technology policy, processes and practices in particular and the Group in general, for better efficiency. The strategy includes the following initiatives: •
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Centralized technology infrastructure in Accra. This has reduced the cost of hosting IT in-country, with respect to staff and infrastructure costs Standardizing operations procedure and policies and using this framework as a template groupwide. This reduces the cost of reinventing the same elements over and again across all countries. Harmonized Core Banking Application. This has assisted in
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achieving a consolidated chart of accounts thereby making consolidation and analysis easier. It has also given direction to the business units with respect to MIS reporting, enabling them to focus more on areas of need. Straight through processing (STP): This has been a major achievement for the bank, making payments fully automated. The automations ensure both speed and security of transactions, positioning Ecobank in the league of automated banks across the continent.
What steps are you taking across your business to drive innovation to realize operational efficiencies and reduce risk while improving customer retention?
taken and we are still driving this to bring efficiency: • •
•
• • • •
The following are the innovative steps taken across the Ecobank business: Centralization of Operations & Technology is the main program we have
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Centralized data center instead of various data centers in affiliates. The migration of all banking subsidiaries to one core banking application, hosted centrally. Standardized processes across the group as much as possible, adopting global best practices. Adopted centralized architecture for all group business applications. Centralized procurement to benefit from scale. Centralized shared services to reduce cost. Group Switch: Ecobank boasts of being the ONLY bank in Africa with its own switching infrastructure, handling transactions across its 34 countries of operation. The implication of this is that wherever you travel within the continent, transactions can be done online and in real-time across Ecobank ATMs using an Ecobank card. Core Banking Application Code
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Harmonization: As part of the rollout of the ONE core banking application, we thought of the code harmonizing initiative. With the harmonized code, it has made it possible to work from anywhere within the Ecobank network with little or no knowledge issues. This has created operational efficiencies such that staff from highly skilled countries can be easily sent to lesser skilled countries to assist in operations. •
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Payment Card Industry Data Security Standard (PCIDSS): This is the highest data security standard with respect to cards. Ecobank, in a bid to secure its environment and reduce the risk of card fraud, has invested significantly to comply with PCIDSS. This means that customers holding Ecobank cards are sure their funds are safe and secure, using global security standards. Enhanced communication network: Ecobank has invested substantially in upgrading its communication network enabling its affiliates and customers to have access to its value added services hosted in its centralized location.
As a unique and successful pan-African bank, what is the foundation of your business model? Focus on Africa and the commitment to provide fast and reliable services to our customers. The goal is to be a world class pan-African bank. The unique model on which the pan-African business is built is the ONE BANK Strategy. This includes the: • •
One chart of accounts One core banking application
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•
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across the group One operations strategy (the same look and feel wherever you go) Shared services center model.
The idea of the ONE BANK strategy is to have the same experience in any Ecobank branch in any country, the same people, the same process and the same technology. So far, we are way into this journey with the next phase being the setup of the centralized shared processing centers. How is cloud computing having an impact on your organization? It is in the fast implementation of solutions and reduced management cost. Moving applications and infrastructure to the cloud, where both would be hosted and managed by the cloud provider, is the next step in the commoditization of corporate IT. The ongoing growth and significance of cloud computing, along with the complexity it adds to the organizations’ technical environments, is causing workloads and responsibility inside
corporate IT departments to increase. The initial concerns about the impact to jobs have made the case for needing to articulate a clear cloud vision and explain how the move is going to improve our day-to-day work experiences. Security concerns, of course, have been a factor, slowing down the moving of some critical banking applications to the public cloud. Data loss or leakage can have a devastating impact on a business. Beyond the damage to one’s brand and reputation, a loss could significantly impact employee, partner, and customer morale and trust. Loss of core intellectual property could have competitive and financial implications. Worse still, depending upon the data that is lost or leaked, there might be compliance violations and legal ramifications. What benefits do you see cloud computing offering your organization / the industry? Cloud-based offerings are transforming the customer banking experience. The rise of cloud-based financial ser-
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vices is a threat to the existing banking model at a time when investments in customer service are tightly constrained and when consumer trust has been damaged by the financial crisis. Also, regulatory, market and customer pressures on their interest-based revenue (e.g. loans) mean they need to rebalance away from interest-earning revenues and towards revenues from services (e.g. fee-based).
cost; fast deployment of solutions; Flexibility for the users; creation of a center of excellence and more efficient management of technology are further benefits.
Already, a new generation of cloudbased online personal financial management applications are gaining traction among customers. At the same time, cloud-based applications such as peer-to- peer lending and crowdsourcing of loans (often microloans) are gaining momentum, especially in emerging markets.
For us in Ecobank, we believe that cloud is the way to go. It is still evolving in a way that will provide more options for better adoption. There are still security concerns as access is through the Internet. When cloud computing hype escalated to a fever pitch in 2009, some technology industry pundits were forecasting widespread layoffs inside IT organizations. People have argued that cloud computing would eliminate the need for certain IT professionals that had previously overseen those infrastructure components. As cloud adoption continues to sweep across IT organizations, we have seen that cloud computing simply changes the skill sets of people to be hired going forward. Instead of hiring a coding engineer (or two or three), we hire analysts and program or product managers to work with a technology provider.
Banks’ role in payments—including in the emerging area of m-commerce and mobile wallets—is being challenged by online heavyweights like PayPal, Google and Facebook. If we don’t enhance our two-way relationships with customers, we run the risk of being relegated to a back-office utility running bank accounts behind these third-party cloud- based frontends, to serve merely as regulatory gatekeepers for activities such as antimoney laundering. Smart cloud-based bundling (offering of several products for sale as one combined product) puts the customer in control. Core banking products such as checking accounts are increasingly undifferentiated. The real differentiation lies in the pricing and bundling for consumers. Further opportunities exist when providing customers with digital storage safes in the cloud, bundled with value-added services like tax, financial and wealth management advice. In addition to all of the above, reduced
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What are the main issues cloud computing raises? Are these being overcome or are solutions still insufficient for further cloud adoption by your organization?
In your opinion, does cloud provide sufficient security in all areas or only certain areas? Please say which. Cloud provides security on the hardware, network, databases etc. However, the concern is with access, as cloud services are accessible through the Internet. There is also a concern on data security because this is now in 3rd party hands. Cloud, like any other convergence technology, isn’t 100% safe. The threat of a malicious insider is well-known to most organizations. This threat is amplified for consumers
of cloud services by the convergence of IT services and customers under a single management domain, combined with a general lack of transparency into provider processes and procedures. For example, a provider may not reveal how it grants employees access to physical and virtual assets, how it monitors these employees, or how it analyzes and reports on policy compliance. To complicate matters, there is often little or no visibility into the hiring standards and practices of cloud employees. This kind of situation clearly creates an attractive opportunity for an adversary — ranging from the hobbyist hacker, to organized crime, to corporate espionage, or even nationstate sponsored intrusion. The level of access granted could enable such an adversary to harvest confidential data or gain complete control over the cloud services with little or no risk of detection. The impact that malicious insiders can have on an organization is considerable, given their level of access and ability to infiltrate organizations and assets. Brand damage, financial impact, and productivity losses are just some of the ways a malicious insider can affect an operation. As organizations adopt cloud services, the human element takes on an even more profound importance. It is critical therefore, that those consumers of cloud services understand what providers are doing to detect and defend against the malicious insider threat. What are the top three things you would do to increase the performance of your IT investments? Enterprise Architecture is enough to guarantee Return on Investment (ROI) and we have already taken this initiative, working with a global reputable
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partner in this area to implement it within the Group. a) Making Innovation real: Innovation should be based on practical technology that can deliver business objectives within reasonable time and cost, which can be absorbed by the business. It’s not enough to just plan for innovation – it needs a robust foundation. The foundation is built on visionary actions and practical actions: •
•
b) •
•
•
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Key Visionary actions are: to push business/technology integration, champion innovation and expand CIO influence. Key Practical actions are: to enable the corporate vision, make working together easy and concentrate on core competencies. Raising the ROI on IT Our goal is to make business processes faster and cheaper. This is a twin engine approach. Value creation and cost reduction. By value we mean devising better solutions by understanding customers’ needs, while the Relentless Cost Cutter is vigilant about trimming expenses wherever possible. Key value creator actions are to make data reach customers in new ways and to enhance integration and transparency. Key cost cutter actions are: to standardize to economize, centralize the infrastructure and keep cost reduction a top priority.
c) Expanding Business Impact: Proven expertise in both business and technical matters is vital in order to contribute the most to the organization. We would engage with the enterprise as collaborative business leaders, to drive new business initiatives and deliver superior IT performance.
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•
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Key Business actions are: to know the business, get involved with business peers in non- IT projects and present and measure IT in business terms. Key IT actions are: to cultivate truly extraordinary IT talent, lead the IT forces and enhance the business.
Would you consider yourself a role model with state-of-the-art expertise in at least one IT domain? We were able to centralize our Technology for all the 35 countries in 2 Datacenters (Accra & London) with a single Core Banking system; a single card system, one transaction switching system; a single retail Internet banking platform; one corporate Internet banking platform, one image-based workflow processing platform etc. Centralization was really a success in the Group and we can claim to be expert in the centralization of technology platforms. How are you leveraging business relationships throughout the enterprise to expand your scope of responsibilities beyond the IT organization? We have introduced, within our technology organization, a function of business relationships, reporting directly to the Group CTO/CIO. This is to better communicate with the business and make sure we are a true partner to the business. IT is engaging the businesses by the use of business managers for each business unit.
What new collaboration tools are you using – and how are you using them to enhance knowledge sharing among employees, partners and customers, and thus stimulate innovation? We have implemented an online learning system where all our procedures, processes, trainings materials and user guides are stored in order to improve the skills of our staff. The collaboration tool being used by the bank is LYNC by Microsoft. This fantastic new tool is available on windows PC and Phone, iOS and Android operating systems. It is replacing Windows Messenger which was previously being used throughout the organization. LYNC is used to share knowledge and troubleshoot across the organization. Files are shared between colleagues at one location or several countries apart. Another collaboration tool being widely used across the group is Cisco WebEx. As of today, WebEx is used to host over 65% of meetings across the group. These meetings are held internally between staff, between staff and vendors or customers. Presentations can be shared and screens can also be shared while using Cisco WebEx. Video conferencing is the third collaboration tool in use in Ecobank. The advantage of video conferencing is the ability to see the meeting participants across various locations in the group as if they were physically present in the same location. This is however, restricted to some senior level staff.
As of now, Ecobank is cut across two business lines (Domestic and Corporate & investment bank). The role of these officers is to act as a liaison between IT and the business units, interpreting IT to them and vice versa. This strategy will assist in bridging the gap between technology and the business units.
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FEATURE
Tackling the Cloud Can African companies afford to ignore the cloud? Lauren Copley discovers that cloud adoption is a question of when, not if.
Paige Leidig, Senior Vice President, CipherCloud
While banks in Africa recognise the need to capitalise on moving trends, many are reluctant to implement cloud-based options, primarily due to regulatory concerns about privacy and data security. Cloud-based IT infrastructure is expected to become a major part of the banking industry, with analysts predicting financial services firms will spend between £15bn and £20bn ($20bn to $30bn) on the cloud in 2015, according to Daniel de Bruin,
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Managing Partner at business intelligence firm, Modelling Design Partners (MDP). Steve de Blanche, Senior Manager: IT Strategy and Transformation at Accenture South Africa, believes that all the major banks in Africa are currently exploring how cloud technology can assist in facilitating cost reduction across the board as a critical business priority. He adds that “most financial service companies are exploring SaaS (Software-as-aService), which is already mainstream in the global financial services industry.”
MOVING TOWARDS CLOUD ADOPTION De Blanche says despite cloud’s promised benefits – such as little to no up-front capital requirements, shared service delivery capabilities, pay-foruse models and agility – most financial services companies are still apprehensive about the risks of their data being compromised in a public cloud environment amid increasingly innovative cyber threats.
The consequences of security related incidents, he explains, could be significant from both a reputational and financial perspective. Risks may include malicious loss of specific types of data (like credit card information), cloud vendors monetising their customer data, hackers gaining control of assets, the threat of data leakage to competitors and intellectual property theft. De Blanche defines a public cloud as an environment in which a service provider provides off-site services and infrastructure over the Internet while carrying the primary responsibility for managing the security and privacy relating to that infrastructure. A private cloud maintains the same services and infrastructure on a private network with the client retaining full control over security and privacy, while a hybrid cloud entails adopting a combination of public and private models. “For now, the focus for many African financial services companies is in
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designing and deploying private cloud capabilities in their own data centres. In some cases, Hybrid models are being tested for business capabilities that are less sensitive,” says de Blanche. Cloud security expert, Emmanuel Mashandudze, who works as a Business Intelligence (BI) support engineer in the BI Division at the University of the Witwatersrand (WITS) agrees, saying the lack of standardised cloud security frameworks are resulting in most companies opting for private and hybrid deployment. “As a whole, the infrastructure in Africa is not fully equipped to cater for world class cloud computing adoption despite Mediterranean undersea cables having improved bandwidth issues. In addition, the biggest headache for African financial companies is reliable, affordable connectivity,” asserts Mashandudze. With cloud computing models each having different challenges relating to security, data privacy, compliance, availability and a lack of standards, de Blanche anticipates that, “as issues relating to security, privacy and standards gain maturity,” many financial services institutions in Africa will position themselves for public cloud adoption within the next two to three years.
BEING INFORMED KEY TO COUNTERING RISKS Paige Leidig, Senior Vice President at CipherCloud says the need to “protect customer information is still a barrier for many firms in moving to the cloud.” Yet Simon Paris, Global Head of Financial Services for SAP insists that
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fears about the security of a bank’s data in the cloud are unfounded and are driven by misunderstanding, since “banks are already operating in the virtual world.” Without standards to govern certain aspects of cloud computing, South African companies cannot be blamed for being uncertain about the best way to implement or adopt cloud capabilities. Nevertheless, there are some encouraging signs. Privacy legislation is getting increasing
attention via the upcoming Protection of Personal Information (POPI) Bill, while the National Cyber Security Advisory Council (NCAC), inaugurated by Communications Minister Yunus Carrim in October, will “advise the government on cyber security policy and technical issues.” Even though several financial services firms have adopted the cloud for its undisputed benefits such as greater flexibility, increased mobility, faster deployment and reduced cost, Leidig
SUCCESS IN THE CLOUD Steve de Blanche (Accenture) and Richard Broeke (Securicom) offer the following general guidelines to financial service companies wanting to successfully adopt cloud technologies: •
With Symantec predicting an increase in attacks on cloud providers in its 2013 Internet Threat Report, it’s vital to do your homework when choosing a credible and trustworthy cloud provider.
•
Compile a cloud strategy that defines the company’s future goals and a plan on how to get there. Consider aspects such as investment into existing infrastructure and assessing the current capability landscape in terms of core vs. non-core issues.
•
Focus on functions such as customer analytics, CRM and application development and testing.
•
Develop a cloud policy and governance that deals with cloud technology and how services should be procured.
•
Never sign up with a cloud provider that cannot offer multiple levels of security to secure the cloud environment. Ensure the provider employs numerous security technologies at every other level. This includes establishing where its data centres are and what measures it has to protect data in transit, as well as authentication and access control technologies to ensure that only authorised personnel are able to access, use or change data.
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ALREADY IN THE CLOUD •
About 18% of CIO’s in financial firms in South Africa interviewed by FinMail have already incorporated cloud computing into their IT strategy.
•
South Africa’s Standard Bank announced its plans in July this year, to move its human resources system to the cloud within the next six months, as a low-risk exercise. If all goes well, it will place its core banking services in the cloud.
•
Taiwan’s Sinopac bank has reduced its IT infrastructure costs by nearly 50% by moving from a mainframe computer to a private cloud.
•
With a presence in 32 countries, Global retail financial group BBVA migrated its entire 110,000-strong workforce to Google Apps (a public cloud managed by Google) in January 2012, partly due to the increasing mobility of its workforce.
•
VISA is offering secure online payments by hosting their customer’s e-wallet in the Visa cloud. This retains the details of all cards in one secure location so clients never have to enter them again.
•
Modelling Design Partners is currently implementing cloud-based solutions for a large Australian bank through its consultant teams based in Johannesburg and London.
notes they still “remain ignorant or believe they don’t need to worry about the risks involved.” Accenture’s de Blanche agrees, saying “a lack of education fuelled by misinformation” means that many companies automatically (and sometimes mistakenly) assume their ‘own in-house security and privacy capabilities are superior to those on offer from public cloud providers.” “Notwithstanding the fact that the data policies of some cloud service providers are not suitable for the level of compliance and regulatory requirements that are required by financial services institutions, others have arguably adopted security and privacy capabilities that are superior to those deployed by most financial services companies today,” he remarks. Leidig’s recommendation to financial services companies? Employ
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encryption, which he describes as “one of the most effective methods to keep vital data safe from hackers”, regardless of where it is stored or moving in transit. Another option to easily resolve most data-security and privacy concerns, according to Daniel de Bruin of MDP, is to remove sensitive data prior to transferring the data to a hosted solution. Mashandudze’s take – that there is “no one-size-fits-all” approach when it comes to cloud computing – is pertinent in view of the fact that risks differ and each organisation has its own ways of mitigating them. While de Blanche anticipates cloud will become mainstream in many African countries by 2015, Mashandudze believes that, based on the prioritisation matrix for most African financial firms, this is more likely to
happen within five to 10 years. “Kenya, South Africa and Nigeria could be a step ahead but the rest of Africa, it will take longer,” he remarks. Richard Edet, SAP Africa’s Regional MD for West Africa put it in a nutshell when he stated in a recent BiztechAfrica article that moving to the cloud is often about change management, adding that the cloud serves a strategic purpose in helping organisations in Africa accelerate innovation. Some large financial services companies are yet to make the shift, but the bottom line is that if banks want to remain competitive they will need to find ways to work within the cloud. For them, it’s not a question of if, but of when.
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INFOGRAPHIC
Connecting
Africa
Communications infrastructure is vital to the social and economic health of any country. The infographic overleaf, shows the state of play in 2012 across nine African countries. The story is simple….African nations failed to build traditional, fixed line networks but the rise of the mobile phone has put communications straight into the pocket of populations across the continent.
There are many reasons as to why African countries failed to construct fixed line communications networks – poverty and geography being just two. The result however, has been that every nation on the continent has been held back from vital social and economic development. When you look at those countries selected overleaf, you’ll see that Morocco and South Africa top the rankings for fixed line connectivity but they have only managed to reach 10% and 8% fixed line penetration, respectively. The story for almost all other nations is one where a less than 1% penetration rate is normal. Few predicted the impact that mobile networks would have on Africa. When the technology first grew in consumer popularity towards the end of the last century, prices for both network technologies and mobile handsets were still high, beyond the reach of people living on limited resources. Technology however, can be a great leveller, particularly with regard to its
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ability to drive down prices as adoption increases. The enormous take up of mobile handsets in the west has ultimately spilled over and as prices have fallen and refurbished handsets have become available in lower income markets, so Africans of almost all incomes have been able to own or access their own mobile phone. ONLY ONE WAY TO GO Today, we can see over 100% mobile penetration in Morocco and South Africa, and extremely encouraging penetration rates in those subSaharan countries that were unable to build comprehensive fixed line networks. Senegal has a mobile penetration rate of almost 90% and Kenya, the pioneer of mobile banking, enjoys a rate of nearly 72%. Even countries like Rwanda and the Democratic Republic of Congo, scarred by war and poverty, enjoy rates of 50% and 27% respectively. The nail in the coffin for fixed line networks can be seen in the broadband take up rates which reach
little more than 2% in South Africa and Morocco, contrast this with Internet usage rates of 41% and 55% in these two countries and it becomes clear that the story of the Internet in Africa is a mobile-only tale. Mobile communications are breathing new life into the continent, providing access to communication and information that would always have remained out of reach if fixed lines were the only way to go. With such a focus on mobile technologies, it is no surprise that mobile innovation is emerging and can be most clearly seen in the meteoric rise of Kenyan mobile banking. It is safe to say however, that mobile money will only be the first of the continent’s mobile innovations. With so many people and businesses reliant on ever better mobile connectivity, there will undoubtedly be more pioneering technology stories to come. ‘Connecting Africa infographic, see overleaf’
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MOROCCO
MOROCCO Current Population estimate - 32,878,400 Fixed Telephone subscribers per 100 inhabitants - 10.06 Mobile subs per 100 inhabitants - 119.69 Internet use per 100 inhabitants - 55.00 Fixed (wired)-broadband subscriptions per 100 inhabitants - 2.09
NIGERIA NIGERIA Current Population estimate - 174,507,539 Fixed Telephone subscribers per 100 inhabitants - 0.25 Mobile subs per 100 inhabitants - 67.68 Internet use per 100 inhabitants - 32.88 Fixed (wired)-broadband subscriptions per 100 inhabitants - 0.01
SOUTH AFRICA
Current Population estimate - 52,981,991 Fixed Telephone subscribers per 100 inhabitants - 7.94 Mobile subs per 100 inhabitants - 134.80 Internet use per 100 inhabitants - 41.00 Fixed (wired)-broadband subscriptions per 100 inhabitants - 2.18
All statistics are for 2012 Sources: ITU / African Economic Outlook
SOUTH AFRICA
DEMOGRATIC REPUBIC OF CONGO
DEMOCRATIC REPUBLIC OF CONGO Current Population estimate - 75,507,308 Fixed Telephone subscribers per 100 inhabitants - 0.08 Mobile subs per 100 inhabitants - 28.01 Internet use per 100 inhabitants - 1.68 Fixed (wired)-broadband subscriptions per 100 inhabitants - 0.00
KENYA
KENYA Current Population estimate - 44,354,000 Fixed Telephone subscribers per 100 inhabitants - 0.59 Mobile subs per 100 inhabitants - 71.89 Internet use per 100 inhabitants - 32.10 Fixed (wired)-broadband subscriptions per 100 inhabitants - 0.10
UGANDA Current Population estimate - 35,873,253 Fixed Telephone subscribers per 100 inhabitants - 0.88 Mobile subs per 100 inhabitants - 45.92 Internet use per 100 inhabitants - 14.69 Fixed (wired)-broadband subscriptions per 100 inhabitants - 0.11
UGANDA
FEATURE
Behind the Cloud Cloud computing promises flexibility, scalability and reduced costs. Partha Srinivasan looks into the cloud and uncovers its many forms.
As a technology, cloud computing is not as new as it may seem. In fact, its history can be traced back to the 1950’s when “dumb terminals” worked off mainframe servers in universities and large corporations to save the investment of buying individual CPUs and their required infrastructure. Over time, this evolved into being able to run applications remotely thereby improving the efficiency of international business and trade.
the result is called a virtual private cloud. Private or public, the goal of cloud computing is to provide easy, scalable access to computing resources and IT services. “In the enterprise, cloud computing allows a company to pay for only as much capacity as is needed, and bring more online as soon as required. Because this pay-for-what-you-use model resembles the way electricity, fuel and water are consumed, it’s sometimes referred to as utility computing,” says Taj El Khayat, General Manager MENA, Riverbed Technology.
DEFINING THE CLOUD
Looking back more than 5 years, cloud was thought to be limited to either “storage services” or private connectivity solutions which came in the form of Virtual Private Networks (VPN). Today, as Sarwan Singh, Director of Business Development at Prologix puts it, cloud can be categorised as “the de-centralization of IT infrastructure, processing and applications so as to make them available ‘on-demand’ and without the typical scalability, upgrade and provisioning concerns that are the hallmark of traditional on premise IT deployments.” Examples of typically straight-forward cloud setups include famous names such as Google or Amazon Web Services. Both companies survive in a 100% always-online state, offering services or applications to
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Julian Box, CEO, Calligo subscribers via the internet.
DIFFERENT TYPES OF CLOUD
The cloud has a lot to offer the business world, particularly the finance sector. Coming in private, public or hybrid varieties, companies are able to choose the form of cloud that suits them best. A public cloud sells services to anyone on the Internet. A private cloud is a proprietary network or a data centre that supplies hosted services to a limited number of people. When a service provider uses public cloud resources to create their private cloud,
Importantly, the cloud is malleable to the needs of the vertical it has to cater for and does not discriminate one from the other. However, given the strict compliance directives and regulations that banks and financial institutions need to comply with, certain precautions must be adhered to. Prramhod Shetty, Regional Sales Director of Dubai-based public cloud provider, Brams, explains that “there are easily available products for core banking, customer services, email services and collaboration as well as security services on the public cloud. As the financial sector embraces the deployment of cloud services, governments and governing bodies
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Once you get past the connectivity challenges, selecting a cloud service involves the same level of diligence as selecting a vendor to install on-site services. You need to ensure that the people involved in the delivery of the service and the processes that facilitate the delivery of these services justify the investment. This involves security and jurisdictional issues as well as overcoming the many misconceptions associated with cloud computing.
IS IT SECURE? IS IT SAFE?
globally are working towards creating the right information security and regulatory framework that will help the growth and adoption of cloud technology.” Multiple factors need to be given due diligence before jumping into the cloud. For example, in Africa, given the poor quality of internet penetration, companies needs to ensure that connectivity can be relied upon, even if it is slow. The lack of speed can be concealed using solutions such as Wide Area Network Optimisation that improves the performance of slow networks. It can further be optimised using Application Data Controllers that allow systems to manage and prioritise applications. Many of these solutions can be easily deployed irrespective of the hardware they are to run on. Stuart Cheverton, Business Development Consultant at Hitachi Data Systems, believes “the major challenge that cloud faces at the moment is the relatively high cost of bandwidth in Africa. If a company uses a public cloud for any computing, the data centres are typically located in the US or Europe, this can add an additional expense due to the bandwidth required and [can also] introduce latency issues.”
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Given the recent history of spying and data mining that we’ve seen in the news, there is understandable apprehension with regard to trusting companies with critical and confidential customer information and data. Technology however, does keep up with most threats and cloud providers are aware of the importance of security to their customers. “The security issues that plague the inception of cloud computing into a business environment are misconceptions,” says Julian Box, CEO of cloud provider, Calligo. “All cloud service providers today provide state-of-the-art security in the form of enterprise-level firewalls and the latest software that improves the performance of the cloud.” Jurisdiction, on the other hand, is a point of contention when it comes to safety and security. The United States’ Foreign Intelligence Surveillance Act (FISA), allows the US Government to collect data on non-US citizens pertaining to terrorist activities. In the process, however, the US Government has access to all the financial and socially linked data that is publicly available.
that the office is present in. Box continues to say that “locating and using the nearest Data Safe Zone for the company in question will ensure that there is absolute control as far as the information being shared is concerned. A Data Safe Zone is a necessity as companies and individuals will prefer to host their data where they are assured that no one will access their data without their permission.” This is confirmed by Prrahmod. “As a vendor, we are able to provide the same enterprise-level security found in Fortune 500 companies for a fraction of the cost. We also take the time to acquire security certifications (SAS 70, SSAE 16) that simplify the funds’ investor due-diligence process. Cloud services also save money on real estate and cooling by eliminating the need for a large, dedicated, cooled server closet.”
THE FUTURE
In spite of connectivity issues and data security concerns, cloud computing could have a big future in Africa. Given the continent’s vast expanse and the level of development of the finance industry, cloud is an ideal technical solution. With its proximity to the EU and the fast-developing Arab nations, African financial services companies are well positioned to engage with the latest technologies and in doing so, adopt best practice. Doing so will not only benefit the organisation, its customers will enjoy the benefits of streamlined and scalable IT, as well.
This situation can be remedied through the compliance and data access laws that govern the region
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INSIGHT
Waking up to Nigeria Long seen as a sleeping giant, the Nigerian economy has roared into life since the turn of the century, enjoying economic growth rates that average 7.2% since 2004. Today, it is one of Africa’s most developed economies but it is still plagued by its international image as a haven for Internet fraudsters and the like. Technology Banker takes a closer look at the Nigerian economy.
Historically, Nigeria has relied on agriculture for the majority of its economic output and whilst this is slowly changing, over 70% of the workforce remains engaged on the land, mostly in subsistence farming. Unfortunately, for the country, 70% of the population remain living below the poverty line but with an enormous youth population bulge and a government committed to economic diversification, Nigeria’s prospects are looking good. It is this diversification which is set to bring the most rewards for the country’s 165 million people. Until recently, the nation has relied on its oil and gas reserves for the majority of its foreign investment but recent growth in the technology and telecommunications sectors, as well as the wholesale and retail trade have some analysts viewing Nigeria as the next leader for attracting investment. Rand Merchant Bank’s, “Where to Invest in Africa” report, is published
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annually and for the past three years has seen South Africa comfortably at the top. However, this year, whilst the number one spot hasn’t changed hands, Nigeria has risen above Egypt into second place and has cut the scoring gap between itself and South Africa quite significantly. “Now one would argue that Egypt has fallen down a couple of places because of its political unrest, but that’s not necessarily the case based on our ranking,” Nema RamkhelawanBhana, Africa analyst with Rand Merchant Bank, told Voice of America News. “It is in fact because of Nigeria’s expeditious growth rates and also its growth in market size, with the potential to actually overtake South Africa in the next couple of years.” Growing within Africa is important for Nigeria but this growth is also making its mark on the world stage where in 2012, it lay 38th in the World Bank’s GDP rankings, two places ahead of Egypt and ten behind South Africa.
When looking at investment, particularly infrastructure investment, organisations look beyond the short term and focus on the medium to long term and it is here that Nigeria’s demographics play a crucial role. About 44% of the country’s population is under the age of 14, which means there is huge economic potential that will be coming online in the next decade. Like young people around the world, Nigeria’s young will be far more comfortable with mobile and digital technology, than their elders, which is an exciting prospect for a country that already has a rapidly growing technology sector. Today, the country’s most rapidly growing sectors – wholesale and retail, telecommunications and post account for nearly 35% of GDP. This provides a clear indication that the country’s reputation and skills as a major location for trade are combining successfully with its rise as a centre for technology. All of which confirms Nigeria’s position as an
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attractive prospect for inward investment. So what about the oil? Petroleum products remain critical to the economy, providing up to 95% of Nigeria’s exports but the ongoing unrest in the Delta region and attacks on oil pipelines have made the government look for alternative export resources. Unusually for a developing nation, Nigeria has a trade surplus. In 2012, the country exported $27 billion more than it imported. This was down to oil exports and is a reminder of just how important the resource is to the country. However, the government is rightly unhappy with having so many eggs in one basket. Its diversification policy makes sense to investors who would not be keen on moving their own resources into a nation that is reliant on such a volatile commodity.
As well as having a demographic and economic make-up that is ideal for future growth, the Nigerian government has maintained a simple tax structure which provides certainty for investing companies. Both corporate and personal taxation is set at 30% whilst sales tax is 15%. Although lower rates can be found elsewhere, the government’s commitment to these rates is an attractive proposition for investors who like to know, as far as possible, what lies ahead.
Nigeria Fact box Population: 166 629 000 Land area (thousands of Km2): 924 Population Density (pop / Km2): 180 GDP based on PPP (USD Millions): 450 535 GDP per Capita (PPP valuation, $): 2704 Annual real GDP growth (average 2004 – 2012): 7.2% Foreign Direct Investment Inflows (USD): 1.014 billion Diversification Index: 1.3 Annual export growth (2007 -2011): 13.7% Export commodities: Petroleum and Petroleum products (95%), Cocoa, Rubber Exports (USD): $97.46 billion (2012 est.) Source: African Economic Outlook
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FEATURE
Cloud Protection A strong legislative framework is essential if CIOs are going to consider using the cloud. Matthew White discovers whether Africa is prepared.
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The world market for public cloud services will grow 18.5% to US$131 billion this year, according to IT research and advisory company Gartner Inc., but many, if not most, African countries are expected to lag behind more developed economies. Financial institutions are particularly nervous about entrusting data to the cloud despite the advantages it promises of cheap processing power, massive storage capacity and the ability to access new capacity quickly, when demand rises. “Technological development brings great opportunities for companies to derive benefit from using information technology to process personal information, but it also introduces greater risks to individuals that their information may be used in an improper or incorrect manner,” wrote Barclays Africa Group’s Information Risk Management (IRM) division in response to our enquiries. “The finance industry faces data protection issues in the context of a unique set of business, risk management, legal and regulatory requirements. Regulatory, client confidentiality and data protection rules provide the finance industry with a legal framework within which it must process and protect personal information.”
CRUCIAL PROTECTION First National Bank South Africa’s Chief Information Security Officer, Grant Hassett states bluntly that data protection laws are important for the financial industry because of “the catastrophic damage that can be
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inflicted on customers of the industry as well as the financial institutions themselves. This in turn, can destabilise the entire financial industry and will ultimately have a negative impact to the economy of a country.” Such laws are needed, he said, to protect all involved parties and to ensure that the associated risks are managed accordingly, to ensure a safe financial environment for all. He added: “I find it incomprehensible that a country would not have data protection laws. The only reason that I can think of is that the ruling government does not fully comprehend the risk of not having these laws in place or does not care too much about the wellbeing of the financial industry and ultimately the economy of the country.”
“Regulatory, client confidentiality and data protection rules provide the finance industry with a legal framework” Barclays Africa Group
Thus the legal framework, or rather the lack of it, is at the crux of the issue of adopting cloud technology in Africa. However, it is less a matter of African governments’ reluctance to pass appropriate legislation than the lack of available skills, according to telecommunications lawyer Justine Limpitlaw, who works with government and private-sector clients in 10 sub-Saharan countries. “Producing sophisticated laws such as those for data protection is a complex process requiring numerous skilled
Justine Limpitlaw, Telecoms Lawyer
people at a range of levels — within government ministries at the policy development level, within parliaments at the legal drafting level, within regulators at the implementation level,” she said. “Such skills are extremely scarce in government, and are probably localised in operators only. While service providers are generally slow to self-regulate, such regimes could form the basis for more formal legislative oversight, in due course.” Despite this, there is progress. According to Barclays, there has been a noticeable increase in the adoption of data protection laws within Africa. “A number of African countries have specific data protection laws in place, including Angola, Benin, Burkina Faso, Cape Verde, Ghana, Senegal and Zimbabwe,” said the IRM statement. (Zimbabwe’s legislation applies only to the public sector). In addition, Mauritius and Seychelles (traditionally closely associated with Africa from a geographical perspective) also have
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Mike Jarvis, CEO, Oversight Solutions
undertaken by the Department of Communications might result in proposed changes to a range of ICT-related information, so people who are involved in this and want to see changes need to respond to both the Green and White Papers which are to be published soon in the Government Gazettes.
UNDERSTANDING THE RISKS
existing data protection laws in place, although in the Seychelles they are not fully in force. Several other countries are developing laws, including Kenya, Madagascar, Mali, Niger, Nigeria and Tanzania. South Africa has had data protection laws on the statute books for many years and plans to add to them with the Protection of Personal Information Bill, which is now awaiting Presidential assent. There is also a forthcoming opportunity to improve existing laws, such as the Electronic Communications and Transactions Act, 2002, which Limpitlaw said has been controversial “because it is poorly drafted and confusing.” Importantly, she said, the ICT Policy Review Process currently being
Aside from the need for sound data-protection laws, another issue worries CIOs of companies doing business in Africa — abuse of interception laws passed ostensibly to reveal evidence of serious offences, threats to public health and safety, or to national security, etc. There have been a number of recorded abuses in South Africa, notably by the country’s intelligence services.
Another issue worries CIOs of companies doing business in Africa — abuse of interception laws
Elsewhere in Africa, confidence is hardly inspired by the rumoured largely secret establishment in Ethiopia, Kenya, Nigeria, Zimbabwe — and possibly Swaziland and Zambia, among other countries — of sophisticated electronic “spying
“The key issue today is what specific data can be entrusted to the cloud” Mike Jarvis, Oversight Solutions
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centres”, most of them built by Chinese companies. So, taking into account the pros and cons of adopting cloud technology, what should CIOs be paying closest attention to? “CIO’s must understand the risks associated and must be confident that the cloud-hosting service provider will enforce information security controls at the same level or better than if they were to do it themselves,” said FNB’s Hassett. According to former FNB CIO Mike Jarvis, now CEO of Oversight Solutions, a company that helps executive and IT management identify and deliver value from information technology: “The key issue today is what specific data can be entrusted to the cloud.” It is important to realise, he said, that different jurisdictions offer different levels of security and information protection. “This is so even in the USA, where some states have excellent protection based on solid legislation, while others are lagging. This is also true of Africa, and CIOs need to be very wary. Incidentally, this is one of the reasons that the South African government has adopted a policy of permitting none of its sensitive data to be stored outside the country’s borders.” It is essential, said Jarvis, that personnel involved in making decisions relating to the cloud study the security parameters carefully and, in particular, gain a solid grasp of the legislative conditions that prevail in the jurisdictions where it is proposed that their data is to be stored.
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INSIGHT
Choosing a Satellite Platform In the last issue of Technology Banker, we took a close look at the VSAT industry and the options it offers for reaching rural areas. Here, David Bettinger, CTO of satellite communications provider, iDirect, looks at the ten considerations you need to take into account when choosing a satellite platform.
The satellite communications industry is at a critical inflection point today with increasing demand for bandwidth, a variety of new market opportunities and service revenues growing exponentially worldwide. While the appetite for satellite communications escalates, the industry is also set to enter a new phase of innovation. Next-generation high throughput satellites (HTS) are coming online. HTS will fundamentally change the economics of satellite communications – delivering higher data rates at a lower cost and launching a new era of performance and affordability for end users. When you choose a satellite technology provider, you need to ask: What platform capabilities will maximize my business opportunities today and prepare my operations for key requirements going forward – all while lowering my risk of increasing my cost of ownership?
of satellite communications customers. This is even more important as HTS networks bring new and diverse complexities to satellite networks.
2. Modular Design for Scalability:
Consider a hub chassis and line card combination to ease start-up costs and enable growth with demand.
3. Wide Range of Terminals: Service
providers need to meet applicationand industry-specific requirements and make satellite easier to manage. A wide range of distinct remotes is key to capturing broad market opportunity.
8. Integration with Terrestrial Networks: Seamless integration means
sure the platform you choose has the processing power to support HTS data rates, while also providing economical gear for narrowband applications.
a satellite platform must withstand heavy data traffic, guarantee bandwidth levels, utilize QoS protocols down to the application level, and stay in step with advances in terrestrial networking.
5. Bandwidth Efficiency: Understand
9. Mobility Capabilities: A versatile
your options beyond DVB-S2 to increase bandwidth efficiency on both the inbound and outbound channel.
6. Advanced Quality of Service: The
1. Flexible Core Architecture: A
7. Data Security: A satellite platform
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respecting SLAs and maintaining data throughput.
4. Data Throughput Capabilities: Be
Below, you’ll find the 10 key considerations for choosing the right satellite communications platform for your business, all of which will make a critical difference to your immediate and long-term success. platform that supports multiple network technologies and works in any satellite band can serve a diverse array
David Bettinger, CTO, iDirect
ability to tailor highly customized SLAs enables service providers to create new pricing models, differentiate their service and improve the end user experience. that utilizes the Advanced Encryption Standard (AES) provides security that mirrors a terrestrial network, while
platform should include advanced mobility capabilities to handle communications on the move and compete in the growing maritime, military defence and aviation markets.
10. Operational Efficiency: An
advanced network management solution is what enables a service provider to run an efficient, reliable and profitable business. Giving customers visibility to network data is critical to maintaining customer satisfaction and understanding and resolving performance issues.
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TECHNICALLY TALKING
Cloud & Enterprise Architecture In our new series, ‘Technically Talking’, we’ll be looking under the bonnet of new technologies. In this first article, Swaminathan Mahalingam, Technology Architect, shows how, step-by-step, The Open Group Architecture Framework (TOGAF) can be employed to guide the enterprise when moving away from a traditional on-premise solution and into the cloud.
CLOUD COMPUTING AND EA Cloud computing is characterised by virtualised computing resources, incredible capacity and scalability, dynamic provisioning, multitenancy, self-service and a pay-peruse pricing model. For businesses to adopt cloud computing in a way that aligns with their business strategy, enterprise architecture (EA) is an absolute necessity. The EA Maturity Index ranks organisational maturity levels by assigning them a score of between one and five. Interestingly, the index shows that business value is only realised when EA maturity is
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H Architecture Change Management
G Implementation Governance
Require Manage
F Migration Planning
E Opportu & Solu
“standardised”. It is only at this point that cloud computing becomes a good fit.
identified new product and service offerings that are in line with the firm’s strategy.
In order to reach this point, the business will have had to define and layer the different architecture domains: • Business Architecture • Data Architecture • Application Architecture • Technology Architecture
As a result of the standardised EA maturity, TOGAF Architecture Development Method (ADM) iterations should now be “cloud aware” and the enterprise architecture team will be in a position to drive the architecture development process, working collaboratively with both the business and IT.
In addition, the organisation will have well defined interoperability guidelines, identified the Internet as the target as well as the relevant cost issues. It will also have
A Archite Visi
CLOUD AWARE TOGAF ADM The TOGAF framework provides a model and process that is capable
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Creation of a strategy for the consumption and management of cloud services Identify who owns cloud in the business from a user perspective and a service provider management perspective
Preliminary
A ecture ion
ements ement
E unities utions
Consider a Cloud reference model
B Business Architecture
Relocation of Business processes, applications, data, technical services Implement security
C Information System Architectures
Determine data and privacy classification
Provide operational expenditure outlines D Technology Architecture Identify candidate services in the Cloud
of incorporating both business-led and IT-led cloud requirements in a holistic framework.
from both a user and service provider management perspective.
PHASE A PRELIMINARY PHASE In the Preliminary Phase, you should consider including a strategy for the consumption and management of cloud services (public/private/hybrid clouds, semantic management, security, transactions). The governance framework will also need to include the processes and roles and responsibilities related to cloud services and operations. At this stage, it’s also important to identify the business’ cloud owners
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During Phase A, you might engage in a workshop and business scenario to help you identify the business problems, the business requirements and ultimately, a potential business solution. Stakeholders in the workshop are likely to come from various business areas including: IT operations, procurement, PMO, data centre, development and CxOs. Interoperability is an important element of this phase. The enterprise architecture team will collaborate with
the business to understand and scope the needs and align them with the strategic enterprise architecture. Given the relatively low barrier to market entry, in the scenarios where the business is not sure of the viability of their proposal, it is possible to go straight to the cloud instead of “experimenting” before finalising the requirements. At this point, there’s no turning back, so make sure that the business scenario is complete and only refer to business solutions without referring to any architecture style (as this will be discussed during Phase E) and signed off.
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PHASE B During Phase B, some variations are needed to make the business architecture cloud aware. While the overall business goals of a Software as a Service (SaaS) enabled application will not change, the business users themselves will vary within a multitenant scenario so this view may need to be adjusted for the different user groups. Particularly important questions to ask will be: “Who does it?” and “What do they do?” The answers will be different for cloud applications compared to traditional on-premise enterprise applications. Cloud reference models come in very handy at this stage, so it’s worth considering the following: • IBM Cloud Computing Reference Architecture • The Accenture Cloud Reference Model • The Open Cloud Consortium Cloud Reference Architecture Please note that TOGAF security activities will have to be applied to all phases, taking into account the company’s security strategy.
PHASE C In Phase C, as in the previous phase, variations are required. The core entity relationship modeling of a cloud application may match that of its traditional on-premise enterprise application counterpart, however, multi-tenancy aspects will introduce new variations to the Logical Data Model. The process models for the data security view will be different to those for an on-premise application. Data integration may also be an issue for cloud computing as it pushes information back into siloes to which the IT function may not have direct access. It is also worth determining the data and privacy classifications, and
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prioritising the risk criteria of both the data going into the cloud and that staying on-premise.
PHASE D Within the application architecture, the Platform as a Service (PaaS) will abstract several traditional components that are part of the Application Architecture View, making this view different to a traditional enterprise application. The majority of changes will be to the technology architecture. As can be seen in the fact that concerns around the acquisition of commercial off-the-shelf hardware and software will be different for cloud architecture, when compared with its on-premise counterpart. The nature of cloud deployment means that you will need to consider many factors including: a virtualised server environment, PaaS platform, on demand instances, dynamic provisioning of virtual storage and scalability (both vertical and horizontal).
in many ways and it certainly does not only mean the financial values of Total Cost of Ownership (TCO) and Return on Investment (ROI). It includes customer value, seller provider value, broker value, market brand value, corporate value, as well as the technical value of the investment.
PHASE G In this, the Governance phase, it is worth considering the inclusion of the following activities on top of the standard ones: • Business processes (Process-as-aService) • Applications (Application-as-aService) • Data (Information-as-a-Service and Database-as-a-Service) • Technical services (Storage-as-aService and Infrastructure-as-aService) • Security and operations implementation will have to be taken into consideration during the relocation. Security can also be considered as “Security-as-aService”.
PHASES E & F In these phases, it’s important to fully understand the cloud’s available resources and then to identify those services which are candidates for deployment in the cloud. Instead of providing standardized ROI or cost-benefit analysis justifying the products that need to be bought or charge-backs for shared assets that need to be agreed upon in advance, the business can provide operational expenditure outlines and may go out to the cloud to source their requirements. Overall, what matters is a clear definition of the value that cloud will bring to the business. It’s important to remember that value can be defined
The design and development team now need to be familiar with, and conform to, the Cloud API and services. This makes it easier to govern architecture usage within the enterprise. Although the enterprise architecture team hasn’t traditionally been relevant to the operational side of the organisation, this does seems to be changing with the cloud. Ultimately this is because the common cloud management platform provides the relevant tools for management and reporting and takes away the onus of patch management, version upgrades, high availability, disaster recovery and so on.
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INSIGHT
Data Transformations Data has become the currency of the digital age, providing insights into markets, customers and businesses that were previously unavailable. Kirsten Morel takes a look at ways in which data is set to transform the finance industry.
There is one by-product of digital technology that has quickly gained value and become the lifeblood of the digital world. With every press of a key or click of a mouse, we leave a data trail that provides insights that businesses could previously only dare to dream about.
Ori Pekelman, Data Consultant
These data trails follow us everywhere and whilst marketers have been quick to find uses for them by analysing customer trends and activities, it is not only the power to increase the chances of a sale that makes data important. “The first use of data is giving better customer service,” says Ori Pekelman, Data Consultant at Paris-based Constellation Matrix. “Banks have extremely precise data on the cash flows through the banks. They have the transaction data but most of the rich data is about understanding the data behind the flow.”
“Being able to understand a customer’s cash situation creates an opportunity to provide better services.”
By understanding what is driving those transactions, Pekelman believes that banks will improve customer service.
However, to provide these, financial services companies will have to open
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OPENING UP TO INNOVATE
up their data to other firms better placed to innovate. “If you open up your data then you’re able to have third parties work with it and you’ll be able to offer predictive banking such as notification of when a
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He sees a real danger in the banking industry’s habit of keeping their data to themselves.
themselves and they see the customer’s identity as key. “The interesting thing about banking is that there are many operators vying for the identity card [that will offer access to financial services]. Telephone companies, Google, Amazon and so on, want to be identity providers and they are now in a position to replace banks.”
Andrius Ojeras, Head of Sales, FOBISS customer is likely to go overdrawn.” One firm that is innovating in just this way is Fobiss, a Dutch ATM cash management company.
increases customer satisfaction whilst also minimising the security risk as ATM’s will only have minimum cash in them for the upcoming period.
IDENTITY IS KEY “Too much money is lost with current processes,” says Andrius Ojeras, Head of Sales at FOBISS. “Currently, about $3000 can be lost per ATM, every year.” Their solution uses a “small brain” that is placed in each ATM. Fobiss’ algorithms analyse trends and, perhaps most importantly, recognise outlying events which disrupt the normal cash flow situation. By feeding the data through a server, which can be held either in house or in the cloud, the demand for cash can be managed more precisely with events being recognised and predictions about future use made. By ensuring ATMs have the cash they need throughout the year, even when extra demand is created by events and festivals, banks can ensure just the right amount of cash is placed in the ATM at just the right time. This
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According to Pekelman, there is an obstacle standing between banks and the provision of innovative services and that is the cultural aversion to risk, which slows them down. “Banks are often too slow to leverage their data in better ways,” he says. “Banks know that they should be wary, they’re a trust industry and the risks are extremely high. However, he goes onto say that, “a lot of security talk can be theatre…it has to look secure!” Of course, the thing with data is that the companies making best use of it are not traditional financial services companies. The likes of Google, Facebook and others have designed their businesses around the collection and application of data and data insights, and for the first time, nonfinancial firms are looking at the industry as a new market for
Banks do however, have one of the strongest forms of identity key currently in use, the payment card, with the mobile phone being the other, and this in itself could be used to create opportunities. “In this game, if banks play their cards right by leveraging this trust, they can provide identity and anonymised transactions. Anonymity is a valuable commodity and if banks can insert themselves into this identity chain, they could create added value.” If they don’t, then banks could see themselves being too late to capitalize on the opportunities that innovative data analysis and use can provide. “If not, they could see themselves losing to other players very fast,” warns Pekelman. He sees a real danger in the banking industry’s habit of keeping their data to themselves. “Banks often play this wrong by creating a walled garden of their own clients. If they continue, then they won’t be able to work with Google, Amazon and so on, because they will see the banks as their competitors.”
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NOVEMBER / DECEMBER EVENTS FOR YOUR DIARY What: Mobile Money and Digital Payments When: 5 - 7 November 2013 Where: Dubai, United Arab Emirates Website: http://www.mobile-money-gateway.com/event/mobilemoney-global-2013
What: Retail Solutions Asia 2013 When: 12 -13 November 2013 Where: Mid Valley Exhibition Centre, Kuala Lumpur Website: http://www.retailsolutionsasia.com/
What: Cloud @ Africa When: 13 November 2013 Where: CTICC, Cape Town, South Africa Website: http://africa.comworldseries.com/cloudafrica/
What: AITEC East Africa ICT Summit 2013 When: 20 - 21 November 2013 Where: Oshwal Centre, Westlands, Nairobi Website: http://aitecafrica.com/event/view/95
What: Telecoms Tech World When: 26 - 27 November 2013 Where: Olympia Central, London Website: http://www.telecomstechworld.com/
What: 5th World Islamic Retail Banking Conference When: 26 - 27 November 2013 Where: Shangri La Hotel, Dubai, United Arab Emirates Website: http://finance.mdi-me.com/world-islamic-retail-bankingconference
What: Big Data in Retail Financial Services Conference When: 27 - 28 November 2013 Where: London, United Kingdom Website: http://www.microfinancegateway.org/p/site/m/template. rc/1.11.192567/
What: India ATMs 2013 When: 3 - 4 December 2013 Where: Renaissance Mumbai Convention Centre Website: http://www.rbrlondon.com/events/india
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Contact Jenny Howard on: +44(0)208 528 1536 or email jenny@technologybanker.com
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