CES 2021 goes virtual: 5G, AR among trends on day one
The annual consumer electronics convention CES kicked off yesterday, albeit in a fully virtual capacity due to the ongoing COVID-19 pandemic.
As a result, exhibiting companies are using video conferencing to stream their presentations.
Connectivity was one of the trends guiding the technologies this year, with much being made of the possibilities of 5G. Verizon’s Chairman and CEO Hans Vestberg said: “Our world has experienced significant change since we last took the keynote stage at CES in 2019. There’s been an extreme acceleration in the digital revolution, and at the heart of that transformation is 5G technology. The future of work, learning, telehealth, retail and streaming are very much our current realities. And we are just getting started. 5G isn’t just another tech innovation, it’s the platform that makes other innovations possible.”
Another trend was augmented reality, as with Lenovo’s announcement of ThinkReality A3 Smart Glasses for tasks including immersive training. In a press release, Jon Pershke, Lenovo Vice President of Strategy and Emerging Business, Intelligent Device Group, said: ““The A3 is a next generation augmented reality solution – light, powerful and versatile. The smart glasses are part of a comprehensive integrated digital solution from Lenovo that includes the advanced AR device, ThinkReality software, and Motorola mobile phones. Whether working in virtual spaces or supporting remote assistance, the ThinkReality A3 enhances workers’ abilities to do more wherever they are.”
Intel used the occasion to reveal its next generation of processors, with 50 products in four families. “Only Intel has the breadth of products spanning multiple architectures; the large, open ecosystem; sheer scale of manufacturing footprint; and deep technical expertise customers need to unlock opportunities in this era of distributed intelligence,” said Intel Executive Vice President Gregory Bryant.
The event is continuing for the next three days, with announcements from the likes of General Motors, Microsoft, AMD, and Nvidia still to come.
'Doing digitalisation wrong and risk being left behind'
Research has shown that 55% of bank executives view non-traditional players as a threat to traditional banks. The fear is justified, as digital banks could have a cost base approximately 60-70% lower than theirs. If this looming threat from innovative and digital-minded industry disruptors has not been enough to trigger a digital rebirth of legacy financial institutions, surely the biggest disruptor of them all – the pandemic – would force change?
It seems that despite studies showing COVID-19's long-lasting effects on the global economy to be of the likes of a substantial one-year reduction in worldwide GDP of more than 6%, the necessity of cost-cutting in 2021 is still not a stake high enough to steer legacy financial service CFOs in the same digital direction that the world is heading to.
Modern living now operates online, both professionally and personally. Distributed working, retail, and socialising are all the ‘new normal’, and the financial services sector is no different; the pandemic has resulted in 71% of global consumers now using digital-banking channels weekly – with contactless and digital payments at the forefront of this shift.
Due to this demand, many banks are experiencing a 50% increase in the use of their digital services. Research has shown that accelerated consumer adoption of digital banking tools has led to the growth of new digital banking users by approximately 20% over the last year alone. The decision-makers at legacy banks now have a choice to make: understand and adapt to the modern consumer’s needs and lifestyle or watch them leave.
This is different from the threat legacy banks saw in the 1990s with the rise in internet banking or even the financial crisis of 2008. Consumers now have a plethora of options available to them with a click of a touchscreen button in the palm of their hands. In order to remain a noticeable competitor in the industry, legacy financial institutions will have to cut costs by 25-50% in the next 3-5 years, which simply won’t happen. A lot needs to change.
Transformation in various forms
This transformation can materialise in various forms, from introducing operational efficiencies and superior customer experience by leveraging AI, modernising legacy systems and processes to allow for cloud-native end-to-end experiences, to building digital onboarding, quick loan disbursements, and real-time payments. With studies finding that firms could digitise many activities 20-25 times faster than previously thought possible, it’s a convenience simply waiting to happen.
It would be wrong to imply that all legacy financial institutions have not thought about accelerating their digitisation. Research has shown that 45% of banking executives are keen on transforming their existing business models into digital ecosystems right now. So, if sentiment and plans to pivot are beginning to take shape, where are legacy banks going wrong and why are changes not being made?
It’s simple. They have their priorities all wrong. Data looking at the top banking priorities for post-pandemic FS shows the three lowest priorities mentioned are instrumental to achieving digital transformation success: innovation, operational excellence, and culture development. This lack of focus on technology, operations and culture will ultimately derail most digital banking transformation efforts, rendering these legacy banks obsolete.
Changes need to be made for these institutions to stand a chance of surviving against their disruptor counterparts. As Jack McCullogh, founder of the CFO Leadership Council, astutely said: “Few, if any, investments can give an organization a sustainable competitive advantage like an investment in technology”.
In every crisis there is an opportunity, and the pandemic is a perfect time for legacy banking to reassert themselves as a viable option for consumers and as noticeable competition in the industry. The world has been forced into digital, and these legacy firms are no exception. It is now or never.