There are some glaringly obvious gaps in digital communication processes. Big companies and industries that fail to adopt new technology are vulnerable to ever-increasing compliance demands and new legislation.
The 11th hour rush to comply is the norm. And why leave it till the last minute when registered digital communication will help you sleep better at night?
Here are some glaringly obvious examples.
#1 The Legal Fraternity
These guys are simply screaming for a technological makeover. The lengthy processes ingrained in changing legislation has created a huge barrier to innovation. This vital pillar of any country is still using the most absurdly archaic processes.
For example, take the concept of “serving” a person. Law firms still employ people who actually have to drive to a physical address, find the correct person and hand over a physical document while stating “John Smith. You have been served.”
Never mind that John has two mobile phones, a laptop and tablet, various social media accounts and is connected to the internet almost all of his waking time!
This absurd practice happens locally and internationally. In the United Kingdom (according to the Landlord and Tenant Act 1927 (“1927 Act”) – section 23) serving notices effectively “must be in writing and may be served by personal service, or by being left at the last known place or abode or posted by registered post (which includes recorded delivery)”.1
What’s worse is that “if the landlord serves by registered post, there is a risk that the notice will not be accepted by the tenant and returned.” 2
What kind of “service” is that?
Why are we not sending electronic notifications that provide proof of delivery? The ECT Act (Electronic Communications and Transaction Act 25 of 2002)3 enables us to move from the dark ages and into a digital world. Registered digital processes would save a lot of wasted time, effort and money.
Tech-based legal offerings are going to force legal firms to make changes and the firm facilitating the electronic wave will have first-mover advantage.
#2 The Insurance Fraternity
The insurance industry is a web of brokers, agents, consumers, banks, service providers and other intermediaries. Who is going to be responsible when PASA (Payments Association of South Africa) or another international regulatory body comes in with the big stick?
Current legislation requirements such as FICA4 (Financial Intelligence Centre Act) have already seen the banks receiving huge fines5 from the South African Reserve Bank (SARB) in 2014 and again last week12. It is only a matter of time before the insurance industry is in the spotlight.
The challenges that new legislation such as POPI6 (Protection Of Personal Information Act) and RDR7 (Retail Distribution Review) bring will stretch resources even further. The pressure to have the correct processes in place, simply to operate as a financial service provider, is huge.
A recent study by Accenture8 finds short-term insurers are not taking advantage of digital opportunity.
Simply stated, it is a massive opportunity for digital disruption.
#3 The Banking Fraternity
As mentioned previously, non-FICA compliance has already cost the banks big time. But what’s next?
KYC (Know Your Customer), which is important to prevent fraud and abuse of the banking systems, has all and sundry in the banking sector scrambling to meet the requirements.
“If you have to do KYC properly, you may have to invest between $15,000 and $50,000 [to achieve adequate due diligence on a single client]. For smaller banks, this can affect relationships. If you have a limited number of transactions it can reduce the appeal of working in a country.” 9
How do you handle potentially disastrous audit findings that show negligence?
By putting your best foot forward in attempting to communicate with a customer via registered digital communication.
#4 The Collections Fraternity
In the current economic climate, which collections department is not suffering? Barclays Africa recently reported a 77% surge in soured home loans10.
Credit strain is rampant. Outsourcing to a third party or using a call centre to collect is costly. The most interesting benefit of using registered digital communication via Registered emails and Registered SMSs, besides saving time and money, is that the recipients respond proactively.
Yes, they call us back. See our debt collection case study for further information.
# 5 The Human Resources Fraternity
Companies are simply not communicating effectively with their employees. Archaic processes (we even encountered a company using telegrams in 2016!) mean that companies are vulnerable to CCMA (The Commission for Conciliation, Mediation and Arbitration) rulings. Fines can amount to months of an ex-employees salary, simply because the communication used was insufficient.
See more on this in our case study.
Why would you not use registered SMSs to communicate with employees when:
- SMS has “a read rate of 97% within 15 minutes delivery”11
- Registered SMS provides proof of delivery to that number.
- Every man and his dog has a mobile phone in South Africa.
#6 Government, Mining, Agriculture, Manufacturing…
Did I say 6 industries? I mean 600.
The truth is that all industries need to comply with ever stricter regulations. But there is no need to panic.
According to The ECT Act (Electronic Communications and Transaction Act 25 of 2002, Section 12):
“Where documentation is required to be delivered in writing is met if the document or Information is:
a) in the form of a data message, and
b) accessible in a manner usable for subsequent reference”
Whether it is electronic mandates, changes in terms and conditions of a contract, on-boarding a customer, sending a message to an employee or simply replacing traditional registered mail, there are far more efficient ways of communicating.
Welcome to the registered digital era!
1 Sit up and take notice – Serving notices effectively
2 Are You Being Served?
3 Electronic Communications and Transaction Act 25 of 2002
4 Financial Intelligence Centre Act, 2001
5 Banks to pay R125 million in fines
6 POPI Commencement Date or POPI Effective Date
7 Status Update: Retail Distribution Review Phase 1
8 Insurers to miss R115bn digital opportunity
9 Rising compliance costs rupturing banks’ trade finance relationships
10 Barclays Africa hit by bond arrears
11 6 Benefits of SMS Marketing
12 Sarb fines 5 SA banks a whopping R30m