However, many retailers have discovered that a technology solution decision is far more complex than it would seem, and, instead, they should be investing in self-enablement.

Consider this, a retailer in a city hub, complete with its own power backup and fast connectivity, can deploy a fully cloud-based solution. This is not much unlike the markets that international vendors understand.

However, we are speaking about our unique South African context. redPanda Solutions can say unequivocally that you do not want a cookie-cutter approach that says: “I can do the same thing everywhere”.

A retailer outside of the major city regions, with smaller stores in some of the more remote areas, needs the flexibility to work in the cloud and have in-store servers. They need full redundancy to deal with connectivity and power challenges. Retail is unforgiving – an inability to trade can close doors.

A loss of skills

Unfortunately, when a retailer invests in a new software vendor there is often an acknowledgement that they are going to lose a significant number of staff because they need to be replaced with new skills to deal with new technologies.

Essentially, the retailer needs to move a substantial portion of the services to the vendor, who is that technology stack expert.

This gives rise to Software-as-a-Service (SaaS) environments and, in many cases, the loss of valuable skills and IP within a retailer. This causes a cascade of problems later on when there is no one in the organisation who knows why something was configured a certain way… until it’s too late.

This is not to say SaaS is not the right solution – in many cases it absolutely is, however, it depends on how the SaaS solution is designed and run. When a retailer finds itself in a situation where it no longer retains valuable IP, it loses the ability to do what it once could. If processes fail, no one can remember why something was done in a specific way. There most likely is a very good reason things are as they are — but because the IP is gone, no one can answer why.

Let’s look at the alternative. A retailer that retains its critical skills, and vital institutional knowledge, ensures continuity, productivity, and the ability to make informed decisions. This helps prevent knowledge gaps, process inefficiencies and an increased reliance on external vendors, which can ultimately undermine a retailer’s competitiveness.

By establishing centres of excellence or competency hubs, internal teams can develop deep expertise in core systems and processes, enabling them to troubleshoot issues, optimise performance, and drive continuous improvement.

Effective IP management also protects the organisation’s unique competitive advantages, prevents vendor lock-in, and ensures the long-term viability of the technology ecosystem. It ensures skills retention, business continuity, supports customer satisfaction and boosts employee morale, and, importantly, it protects the employer’s reputation.

Vendor lock-in

On the other hand, many retailers in South Africa are dependent on international vendors. Relying on international vendors to provide critical technology solutions and support can further compound many uniquely South African challenges that retailers face.

Unfavourable vendor dependencies can lead to significant business continuity issues, revenue losses, customer dissatisfaction and reputational damage, especially during high-volume periods such as Black Friday.

However, switching vendors when not self-enabled can turn into a costly affair which, in turn, locks organisations into suboptimal relationships.

The case for self-enablement

A retailer is self-enabled when it can take control of its technology ecosystem, reducing its reliance on external vendors. Retailers can achieve this by working with a self-enablement partner on a few, key strategies.

They should adopt open, modular architectures and develop in-house expertise and maintain control over core systems and processes.

A good self-enablement partner will help them negotiate vendor contracts that protect against excessive termination fees, price escalations, and other lock-in mechanisms. Importantly, they will be advised to diversify their vendor relationships which enables flexibility to transition to alternative providers without significant disruption to the organisation.

A self-enablement partner will ensure that retailers continuously invest in upskilling and retaining internal teams. This ensures the organisation has the necessary expertise in-house to manage the technology ecosystem and any future transitions.

This, by design, reduces a retailer’s reliance on external support.

In other words, the business maintains control over its technology stack.

Self-enablement, then, protects retailers from both suboptimal dependencies and the high switching costs and disruptions associated with switching between vendors.

The net effect of this is a retailer that’s able to take advantage of the rapid advancements in retail technology more effectively and efficiently.

These include advancements in areas such as cloud computing, edge computing, artificial intelligence, and the Internet of Things.

The result is improved agility, scalability and innovation as retailers adapt to changing customer behaviour, demands and market conditions.

The study further reveals that AI is driving faster and more accurate decisions, personalised offers, and instant access to support.

Francois Grobler, the chief of Decision Analytics at Experian Africa, has this to say;

“Today’s consumers have more options and less patience than ever before. In this highly competitive landscape, we believe that high-quality digital customer experience provides a competitive advantage and our latest research explores how AI is turbocharging this process.”

The research shows that AI and Machine Learning (ML) can significantly improve the accuracy of models used to assess creditworthiness and affordability.

This improvement leads to more inclusive lending and more personalised terms based on a better understanding of behavioural insight into financial circumstances.

Grobler adds,

“Our AI-powered solutions are not only helping businesses make faster and more accurate decisions but also enhancing fraud detection. We’re seeing great strides in identity verification, virtual assistance, automated onboarding, and early warning systems for vulnerable customers.”

Experian’s research indicates that the top two customer onboarding priorities for 75% of senior leaders are investing in new data sources to better understand risk and affordability, and implementing a fully digital customer experience.

“Access to data alone is not enough to improve creditworthiness and risk assessment. Having the right AI tools to analyse this data and turn it into actionable insight is a critical next step,” he adds.

The crucial role of cloud technology in unlocking AI potential

As many Financial Services and Telcos look to improve the accuracy of their credit risk and fraud models through the adoption of AI, cloud has become an essential enabler of this process.

The performance uplift provided by AI is dependent on the ability to link and collate data from multiple sources in a fast and secure way.

Cloud makes it easier to connect data feeds, allowing different internal departments to safely work with data from a variety of sources.

Grobler explains that cloud provides the computing capacity required to ingest and manage the high volume of data that is needed for AI and ML.

It provides the flexibility and scalability to enable the software capabilities needed to develop, deploy, and operate models, which ultimately integrates AI into the credit decisioning process.

According to the research, investing in Software-as-a-Service (SaaS) and cloud technology is a top priority for nearly 4 out of 5 senior decision-makers (79%).

This is unsurprising in light of the benefits that cloud provides – such as improved security, faster processing power, reduced maintenance costs and the elastic flexibility to scale as required.

AI is undoubtedly enhancing our ability to assess creditworthiness and prevent fraud. But taking advantage of the improved accuracy that AI models deliver requires a solid cloud foundation from both an infrastructure and software viewpoint.

“As the race to reduce risk and provide faster digital decisions is turbocharged by AI, the adoption of cloud becomes an essential stepping-stone in realising AI’s potential”, concludes Grobler.

While this has opened banking services to the population, it also makes the sector an attractive target for ransomware and malware attacks.

Data protection has become a key element of success in a digital world, a fact that is highlighted by the Nigeria Data Protection Regulation (NDPR), which was issued in 2019 and is the principal regulation and framework for data protection in Nigeria. With ransomware attacks on the rise, an attack is a matter of ‘when’, not ‘if’.

The NDPR means that ignorance can no longer be used as an excuse for not protecting data.

More aware of the risk

Although digitalisation and open banking have changed the way financial services in Nigeria operate to a certain extent, the risk to data remains essentially the same as it ever was.

If malware breaches occur, or data is lost or deleted, there is a risk to business that can have detrimental consequences.

The NDPR recognises the critical nature of data and provides legal safeguards for the processing of personal data. The draft Data Protection Bill 2020, which will replace the NDPR if passed into law, will add to this by creating a regulatory framework for the protection and processing of personal data.

In line with global trends and best practices, there is now increased awareness around the need to protect data. While it has always been important, it is becoming mandatory because it is regulated.

From the inside out

Data security is a significant challenge for financial services organisations in Nigeria, and gaps in data protection mean vulnerabilities that can be exploited by malicious actors. With ransomware and other attacks on the increase, it has become imperative to address these gaps in a more proactive manner.

This starts from the inside, with internal processes and education on the risks and the need to safeguard data, particularly personal information.

Financial services and other organisations need to become stricter in how their internal users interact with data and become more proactive on monitoring, detecting anomalies, blocking suspicious activity, and essentially protecting data as a whole.

Becoming more proactive in approach

The first step in protecting data is the ability to identify critical and/or sensitive data as well as the risk that it is exposed or potentially exposed to. This requires an intelligent solution to help identify and highlight sensitive data that is either at risk or stored incorrectly.

Once it has been identified, it can be proactively protected or moved to more appropriate storage to avoid exposure and data leakage.

Once again, however, this begins with awareness, because if organisations do not know what data they have or where it is, it cannot be protected effectively. Proactive solutions are also essential, because reacting to an event after the fact means that it is more difficult to recover efficiently or at all.

Financial services are the foundation

Trust in financial systems is imperative for the stability of countries, and the trust of customers is the number one determinant of success.

These businesses are also large enterprises entrusted with extremely sensitive personal information. This not only makes them attractive targets for ransomware, it means that the reputational damage of an attack can have catastrophic consequences.  Having a trusted partner that is a specialist in data protection is essential in helping financial services organisations in Nigeria keep up with the dual challenges of increased attacks and a growing body of legislation.

A complete protection solution, offered via Software as a Service (SaaS) through a trusted partner, helps financial services organisations to identify sensitive information and security gaps, be proactive in preparing for an attack, react efficiently and effectively protect data, their most important business asset.