Five top trends in finance and technology from KPMG's Frank Rizzo
What are the five hottest tech trends that finance teams should be aware of? Frank Rizzo is revealing all during a thought-provoking presentation at the Finance Indaba Africa (13 October 13.30 - 14.15 in Ballroom 4 of the Sandton Convention Centre). Here's an exclusive taster for readers of CFO.co.za.
"I have always had a passion for technology," says Frank Rizzo, who is in charge of the technology sector and of data & analytics at KPMG across Africa. "In my school days I was already messing around with computers. When the internet just started, I was one of the few people in my environment who saw the possibilities." Frank, who was wise enough to first qualify as a chartered accountant before specialising, is a popular speaker at CFO South Africa's events, combining ultra-current insights with an easy presentation style that will be on show at the Finance Indaba Africa 2016. We asked him about his love for technology and discussed the five 'new wave' technology trends finance teams cannot afford to ignore.
- Hear Frank speak at the upcoming Finance Indaba Africa. Use invitation code FB2016 and register for FREE!
Frank is excited about the work KPMG has started doing with start-ups, an approach borrowed from the UK. "We are part of a technology hub in Braamfontein, Johannesburg with Wits University. It is a place to meet, work and share notes. We have a desk there where people can come with questions and request assistance around registering a business, tax and other practical issues." He believes the next giants will be future clients "if we build relationships with them now. Often start-ups have great ideas, but no business insights."
As start-ups and corporate finance teams alike need to stay ahead of the curve, Frank is happy to list the five most exciting trends of the moment:
1. The Internet of Things
"The prediction from Gartner is that there will be 20.8 billion devices by 2020, whether they are in the car, iPads, mobile phones. All these devices will generate data. On a personal level, we are moving towards the quantified self, on a business level towards the quantified consumer, which has great ramifications for supply chain and the production process."
2. AI & cognitive computing
"This is the next level of data & analytics. Think about the things that IBM Watson, Facebook and Google are doing already, or the suggestions that Amazon provides you with of books you should read. The forecast is that this will be a five-billion-dollar industry by 2020. In South Africa a lot of companies are involved in data & analytics, but they are still in the descriptive phase: reporting and visualising."
"Only a few companies are using the predictive power of cognitive computing, for example Discovery, which is using telematics and predictive models to link driving behaviour to determine the likelihood of claims and pay-outs."
"The most relevant example is blockchain, with Bitcoin being the most famous example. It is about info that needs to be trusted, that is stored in the cloud and cannot be messed with. All South African banks are doing proof of concept on Bitcoin. They don't want FinTech companies to eat their lunch, but it is also an offensive move as the banks can explore working without their current big in-house systems. A prediction from the end of last year was that large financial institutions would spend $1 billion on blockchain in 24 months."
"There are two different stories. The industrial application of robotics is not new. But now we can use AI in robots, like Baxter from Rethink Robotics, and show it what to do at a production line. It can learn, which is very cool. The cost of one Baxter is just below minimum wage in the US. We are also seeing robotics at a digital level, which can revolutionise customer service as robots can be used in chat boxes and call centres."
5. Virtual and augmented reality
"We all know this now from Pokémon GO. The most exciting aspect of this for business is augmented reality, whereas virtual reality is very much aimed at gaming and entertainment. With augmented reality you can walk into your warehouse with special goggles on, linked to your ERP system, and see how old your stock is. Engineers can see which part of a machine is going to break next when they use their goggles."
"Today, the key challenge is the data deluge, especially when you work with data from outside your own organisation,. Executives need to filter what is relevant."
"When describing the properties of data & analytics, experts talk about the three Vs: volume, velocity and variety. From the beginning, KPMG has added two other Vs to that: value and veracity. There is also a lot of rubbish data around and you cannot rely just on Twitter feeds. You need to be asking the right questions and be able to test the data and you need people who have the technological background, understand the data cycles, but also understand the business. That is still quite difficult to find."
Finance departments need to transform to deal with the changes, says Frank. "The CFO needs access to different skills. Younger people who have grown up with a different mindset can gather information from many different sources and analyse data on the fly." Good external advice is also crucial, with KPMG offering a package that not many can. "Our biggest asset is our multidisciplinary approach," says Frank. "For a number of clients, we have been able to use data & analytics to look at their tax and find savings, for example. Tapping into the skills from our different departments is what sets us apart from other big firms."