NEW YORK; June 5, 2018 – Refiners are gaining financial benefits from digital technologies but are missing out on the additional value that the most cutting-edge technologies could provide, according to new Accenture (NYSE: ACN) research.
“The Intelligent Refinery,” Accenture’s second annual study on digital technology in the refining industry, is based on a survey of approximately 170 executives, functional leaders and engineers at refiners globally. In addition to addressing the financial benefits that digital technologies can provide, the research also suggests that refiners are not investing sufficiently to address the increasing number of cyberattacks resulting from the proliferation of digital technologies.
Forty-one percent of respondents reported that their company can now determine the financial value of using digital technologies, including 30 percent who reported that the technologies increased their refining margins by more than 7 percent in the last 12 months. One-fifth (20 percent) of respondents said digital technologies are adding US$50 million to US$100 million or more in value to their business, with another one-third (33 percent) of respondents citing between US$5 and US$50 million.
This tangible financial benefit may explain why more than half (59 percent) of companies surveyed — approximately the same proportion as in last year’s survey — are spending more or significantly more on digital technologies than they were 12 months ago. Additionally, three-quarters (75 percent) intend to increase spending in the next three to five years, up from just over 60 percent in last year’s survey, indicating that demand for digital technologies remains strong.
Likewise, almost half (48 percent) of refiners now rate the use of digital technologies within their company as mature or semi-mature (up from 44 percent in last year’s survey). At the same time, however, most refineries have yet to move beyond deploying well-established digital technologies, such as analytics.
Indeed, when asked to identify the digital technologies driving the greatest margin improvement in refining operations, respondents most often identified advanced process control and advanced data analytics, cited by 61 percent and 50 percent of respondents, respectively. These are also the technologies to which refiners expect to allocate the largest proportion of their digital budget over the next 12 months. Cutting-edge technologies that could unlock additional value – including internet of things sensors and edge computing, mixed reality, mobility and blockchain/smart contracts – are only seeing partial adoption or pilot programs and are likely to receive less investment than the other well-established technologies over the next year.
In light of this, there is a need for more effective management of refiners’ digital strategies, with one-quarter (24 percent) of executives saying there is currently no clear role within the organization driving the digital strategy. In fact, 43 percent reported that this lack of a clear digital strategy is a barrier preventing further adoption of digital technologies in their refineries.
However, change is afoot. While only 11 percent of respondents said their company currently has a chief digital officer driving the digital agenda, many refiners are making governance changes to drive greater digital transformation and address the convergence of information technology and operational systems. Specifically, one-third (34 percent) are creating new organizational structures, more than one quarter (28 percent) are launching a steering committee, and 15 percent are creating new C-level positions.
“Refiners are currently reaping just a fraction of the value that digital can yield,” said Tracey Countryman, managing director for Global Resources Industry X.0, Accenture. “The next step will be to combine and deploy multiple technologies at scale to totally reinvent business processes and drive plant-wide transformational change. Our recent Accenture Disruptability Index pinpointed the energy industry as the most susceptible to future disruption. Increased and tactical digital investment can better enable the efficiency and performance improvements to help refiners weather the storm. There are signs refiners have realized this and are taking action to capture these benefits.”
Rising number of cyberattacks requires greater investment to bolster cyber defenses
With a growing number of cyberattacks, there comes the associated need to constantly upgrade cybersecurity resilience and response. Indeed, 28 percent of respondents said they are seeing more or significantly more cyberattacks than last year. Most worryingly, at a time when operations are becoming increasingly connected and exposed to these kinds of threat, one-third (33 percent) of respondents said they don’t know how many attacks they are experiencing.
The need becomes more pressing considering that 38 percent of respondents said they see data security as a barrier to adopting digital technologies in their organization. Among the risks respondents most often associated with cybersecurity are operational impact (67 percent), impact on workforce health and safety (39 percent) and data breaches (39 percent).
However, only 28 percent of executives cited digital tools to improve cybersecurity in one of their top three priority areas for investment in digital technologies. Respondents were more concerned about how lack of digital investment will affect their competitiveness (cited by over 67 percent), how digital can support cost reduction and improve their margins (64 percent) and how weak digital investment might affect their operational reliability (58 percent).
“With the increased exposure and risk from ever-greater connectivity of digital technologies comes a need to invest to stay at least a step ahead of the growing threat,” said Jim Guinn, a managing director at Accenture who leads the cybersecurity practice within the company’s Resources operating group. “In order to do that investing now in fundamental security capabilities will be crucial to safeguard future operations.”
The online survey was conducted in March 2018 by PennEnergy Research in partnership with the Oil and Gas Journal. The survey was developed with HSB Solomon Associates LLC, a benchmarking and global advisory services company for the global energy industry. Respondents are subscribers to PennWell publications and comprised 169 refining industry professionals across 48 countries, including executive and mid-level management, business unit heads, engineers and project managers from a cross-segment of the industry.
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 442,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.
Apple tries to take a bite out of credit card industry
Apple is rolling out a credit card that it says is designed to do things no other card can. So how does it actually stack up?
It looks different from a traditional credit card — there’s no number on the front and the users’ name is etched in metal. The card expands the company’s digital Apple Pay services, marrying the physical card to a virtual one and integrating both with the iPhone. And it comes with a bevy of perks — quick sign-up, elimination of most fees, strong security protections and cash back. But industry experts say they aren’t impressed — the financial benefits mirror many of those already out there for consumers.
WHAT DOES IT COST?
Apple says there are no fees associated with the card. That means no late fee, no annual fee, no international fee and no over-the-limit fees. It also said it aims to have among the lowest interest rates in the industry. Users must have an iPhone to use the card, which comes at a cost. But they will earn cash back on their purchases — 3 per cent on Apple purchases, 2 per cent on those with the virtual card and 1 per cent with the physical card.
“I’m underwhelmed,” said Ted Rossman, industry analyst at Creditcards.com. “People will sign up for it, but that will be mostly because they love Apple, not because this card is better than anything that already exists.”
He points to the Citi Double Cash card, which offers an easy-to-use 2 per cent back on any purchase. Or the U.S. Bank Altitude Reserve Visa Infinite card, which offers 3 points per dollar on mobile-wallet spending –worth 3 per cent cash back or 4.5 per cent off travel. Rossman said even another branded credit card, the Uber Visa card, comes out on top with 4 per cent cash back on dining purchases.
Apple points out that it is the only card to provide those rewards in real time, so that cash earned can be used immediately. Other companies often make users wait a statement cycle or until the bill has been paid. But WalletHub CEO Odysseas Papadimitriou is dubious people who can afford an iPhone and qualify for the card will need that cash so quickly. He also reiterated that there are better rewards out there, particularly for people with strong credit.
“There are other cards that have better rewards and no annual fee,” he said. “There is a healthy market there, so from that perspective there is nothing unique.”
A note on the interest rates as well — the card doesn’t come out until summer but Apple has said that as of March, the variable annual percentage rate on the card could be anywhere from 13.24 per cent to 24.24 per cent based on creditworthiness. That’s right in line with the rest of the market, Rossman said.
WHAT ABOUT SECURITY?
Apple prides itself on privacy and security, so no surprise, the card sets itself apart here.
The physical card has no numbers so purchases are made with the embedded chip and the digital version lives in your Apple Wallet on your phone, where it’s protected by Face ID or Touch ID. That means that even if someone steals your phone they won’t be able to use the card to buy things.
Apple says it won’t get information on what you buy with the card or where or for how much. And it says Goldman Sachs, which Apple is working with to provide the card, will use your data only to operate the card — such as help with purchases or fraud protection — but your Apple Card data will not be used for any other purposes.
Even critics concede that the Apple Card technology provides a new layer of protection not available with other cards. And mobile payments, such as Apple Pay, are generally more secure than traditional credit cards.
However, consumers already have zero fraud liability with credit cards, said Papadimitriou. Federal law limits a consumer’s fraud liability to $50 but all the major credit card networks — Visa, Discover, American Express and Mastercard — provide zero liability for consumer cards. Apple is working with Mastercard to create the Apple Card. So, he said, the added protection may be more perception than reality for most.
HOW EASY IS IT TO USE?
Apple says users will be able to sign up for the card in the Wallet app on their iPhone and begin using it almost immediately. It also tracks spending on the phone in a more user-friendly format, eliminating some of the gibberish that fills a traditional credit card statement.
It also includes some budgeting tools, such as tracking spending and providing estimates of how much interest could be charged on a purchase to help people make an informed decision. It allows users to set up weekly or biweekly payments to better match up with their paychecks. While these perks are nice, there are similar budgeting tools on other cards and the information only incorporates purchases and payments for Apple Pay and the Apple Card, so it’s not providing a full financial picture. All the same, Apple users often enjoy the seamlessness of having the information at their fingertips.
There is still some sense of wait-and-see, as the power of the Apple brand and its fan base is strong. In general, though, credit card industry experts say this is a bid by Apple to expand its Apple Pay services. While Apple Pay is the most common of mobile-wallet payment services, only 13 per cent of smartphone users have tried it, according to industry tracking site PYMNTS.com.
“Apple makes great software, but I’m not sure they truly understand consumer needs on this,” Papadimitriou said.
LAGOS TO HOST BIANNUAL AFRICA FINTECH SUMMIT FOR THE FIRST TIME IN NOVEMBER
|The Summit, organized by Dedalus Global, gathers innovators, investors, policy makers and other key stakeholders in the Fintech sector to discuss technologies transforming finance on the continent, debate regulatory policies, compare best practices, and forge new ventures|
|LAGOS, Nigeria, September 17, 2018/ — Africa’s premier fintech event, the Africa Fintech Summit, (www.AfricaFintechSummit.com) will be held for the first time in Lagos, Nigeria, onNovember 8-9, 2018. This event comes on the heels of the earlier edition in Washington D.C. which featured leading policy makers, c-suite business executives, start-ups, and investors.
The Summit, organized by Dedalus Global, gathers innovators, investors, policy makers and other key stakeholders in the Fintech sector to discuss technologies transforming finance on the continent, debate regulatory policies, compare best practices, and forge new ventures.
Speaking on the decision to bring the Summit to Lagos, the Chairman of the Summit, Leland Rice, said, “Lagos is an ideal host city; it’s an epicenter of Africa’s fintech revolution and the driving force behind the continent’s entrepreneurial spirit. The successes of companies such as Paga, Flutterwave, Mines.io, and Paystack have strategically positioned Lagos as the destination of choice for investors.”
“The first edition of the Summit in D.C. was a launch pad for several milestone fintech deals struck among its delegates in the months after the event. We plan to build on these successes in Lagos, with a focus on bringing innovators and policy makers together to move the needle on fintech regulation and bringing founders and investors together to facilitate further capital raises,” added Leland.
The two-day event will feature investor missions from the US, UK, and UAE, an Alpha Expo featuring the most exciting startups and entrepreneurs in Nigeria, a half-day blockchain masterclass, and an awards ceremony.
Reacting to the decision to host the Summit in Lagos, the Senior Special Assistant to the President on Technology, Lanre Osibona, stated, “This reflects the progress Nigeria is making in the areas of technology and financial services. The event is very important as it comes at the heels of the Vice President Osinbajo’s trip to Silicon Valley to promote Nigeria’s tech sector. We look forward to collaborating with the organizing committee and to a successful event in Lagos.”
In similar vein, Tayo Oviosu, the founder of Paga—a payment company that recently raised $10 million in Series B2 funding—said that “the Africa Fintech Summit in Washington D.C. provided valuable insights into the fintech space and connected me with key players in the industry. I look forward to the Lagos edition.”
Speakers lined up for the event include Chief Economist of PwC Nigeria, Dr. Andrew S. Nevin; Managing General Partner of EchoVC, Eghosa Omoigui; CEO of Diamond Bank, Uzoma Dozie; Founder of Flutterwave, Iyinoluwa Aboyeji; and CEO of PayStack, Shola Akinlade, whose company recently raised $8 million Series A funding
Distributed by APO Group on behalf of Dedalus Global.
For more information, please contact:
About Dedalus Global
Dedalus Global (https://VC4A.com/dedalus-global/) is an investment and strategy advisory firm focusing on emerging markets and emerging technologies. With networks throughout Africa and the Middle East, we leverage granular market knowledge to drive innovation, accelerate capital deployment, and create value for our clients and the economies where they operate.
About Africa Fintech Summit (AFTS)
The Africa Fintech Summit (www.AfricaFintechSummit.com) is a biannual event that brings together leading disruptors, tech and finance professionals, regulators, and investors from around the globe to debate policies, compare best practices, and forge Africa-focused ventures. AFTS leverages the growth of the fintech sector in Africa to bring key stakeholders to discuss the technologies transforming finance on the continent.
To learn more about AFTS, please visit www.AfricaFintechSummit.com
View a recap from the AFTS Washington: https://www.youtube.com/watch?v=ZIdDS-u0rXE
COMPETING IN THE NEW ERA OF OPEN PLATFORM BANKING
We evaluated the relative maturity of global banks based on the channel environment and developer experience of their portals, their API offerings, and the adoption of Open Banking across their developer community.
Who is leading the way in the open platform ecosystem?
Based on our research findings, ecosystem engagement initiatives of global banks and card services are ahead of other financial institutions.
Non-financial services platforms can offer over 100 APIs for 3rd-party consumption while major card services offer at least 25 API products that enable core business services access to data insights.
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