Disruption and Disruptors, Part 2: Disruption of the established way of thinking
This post illustrates how Japan’s mobile carriers, which have disrupted the mobile phone industry, are creating technology businesses that will form the core of the mobile Internet era. This is instructive in that it illuminates elements that will be essential for creative destruction. Ultimately, the challenges undertaken by mobile carriers should serve as a significant catalyst for the financial services industry.
The first addresses the initiatives of management. This second post discusses the application of the latest technology to disrupt existing paradigms.
2. Disruption: Cutting-edge technologies that Create and Disrupt (Ken Miyauchi keynote session):
President Miyauchi spoke about Pepper and Watson as both agents of disruption and creation in the context of customer service and how people work.
Customer service revolution:
- The time when robots will offer customer service is only a few years off. SoftBank is planning to deploy Pepper robots as store staff at more than 3,000 SoftBank and Y!mobile shops nationwide.
- Monthly rental rates for Pepper robots are around 50,000 yen (about $420). Not being subject to labor and overtime regulations, robots offer the benefit of being able to work around the clock. This is seen greatly enabling some business to cut costs. In addition, all information is processed in the cloud and robot-offered services can be expected to lead to optimal customer service because cameras and sensors record interactions, noting customer characteristics, interaction time, and can survey customers about their opinions—all without bias.
Revolution in work style:
- AI will trigger a revolution in how people work. Working with IBM, SoftBank will help further develop Watson in Japan to create cognitive computing business powered by AI. Watson, with its ability to learn from experience (so-called deep learning) and draw on a vast pool of information for hypotheses and verification will open the door to a revolution in business possibilities.
- SoftBank will develop business applications using Watson including what has been dubbed SoftBank Brain—an internally housed version of Watson that will offer business support. Coupling SoftBank’s data with that of Watson will spawn a revolution in operational efficiency through devices such as smartphones.
SoftBank’s management was clear in its approach: they intend to create and spread something that will contribute to greater productivity. Some SoftBank devices are already outfitted with features that allow advice to be given based on statistical data. Moving forward, the company will move to introduce this technology across a broader scope, including call centers and at corporate clients. The targets of their disruptive activities are equally clear: established paradigms and business processes inside companies. Miyauchi explained that since its founding, the company has sought out and aggressively adopted cutting-edge technology even if doing so was potentially disruptive to its existing business operations.
The need for a revolution in customer service and working style is something that applies to all companies. Celent believes that the ensuing creative destruction resulting from the combination of IoT, AI, and smart robots could well reshape the world in a way that rivals the industrial revolution. Of course, financial institutions in Japan are also beginning to sit up, take notice, and undertake initiatives.
Disruption is already manifesting itself at financial institutions amidst the preconceived ideas and existing paradigms of the financial industry. The disruptors of this are entrepreneurs and companies that are well versed—more so than the financial services sector—in the disruptive capacity and have demonstrated what this technology can do.