1. Retailers build competitive advantage through the Internet of Things
With Hong Kong retailers still struggling in the face of falling tourist numbers, restricted spending from Mainland Chinese shoppers and fierce competition from e-commerce channels, I believe that bricks and mortar operations will focus on building competitive advantage through the Internet of Things (IoT) in 2017.
Connected devices such as beacons and retail sensors are already helping some shopping mall operators to track footfall and visitor flow in order to determine optimal mall and store layouts, and to maximise rent yields.
IoT technology also has the potential to enhance customer loyalty. For customers that have opted in, there’s an opportunity for retailers to send personalised coupons or limited-time deals that bring more value to the traditional, in-store shopping experience.
As more retailers explore the possibilities of IoT, consumers will no doubt take an interest in what personal data companies are accessing and how they plan to keep it safe. Already, there have been major news stories about security vulnerabilities in IoT devices. Smart retailers will embed security protocols at the heart of their IoT services and processes to protect the data they harvest.
As the need for IoT security emerges, businesses may also reconsider other cybersecurity vulnerabilities in terms of operations, finance and more. Many enterprises are not yet prepared for unexpected, malicious attacks, and might consider outsourcing cybersecurity management and adopting trusted cyber insurance solutions to stay one step ahead of the threats.
2. Blockchain drives financial service innovation
In 2017, we can expect blockchain to firmly establish itself as a financial technology worth getting excited about, distinct from the hype – and the hitches – of bitcoin.
Blockchain is a simple and elegant technology that can track the movement of money, authenticate transactions and validate ownership of financial assets. At its core, blockchain is a distributed database composed of blocks of transactional information, each one containing data about every transaction that came before, to form a chain. Fast and efficient, it’s also secure by design – a hacking event might affect one block, but the chain won’t be broken.
In the coming year, I expect entrepreneurs – especially in the financial services industry – to look more closely at the type of businesses that can be built on blockchain.
The Hong Kong Monetary Authority (HKMA) is already leading the way with its FinTech Supervisory Sandbox initiative, announced in September 2016. By promoting an experimental space with less regulation, the HKMA is opening up new possibilities for Hong Kong innovators to spearhead pioneering fintech services. Commercial centres in Asia and worldwide are already positioning themselves to be at the forefront of fintech, making 2017 an important year for Hong Kong to assert its own leadership in this space.