One of my books, Nanotechnology and Microelectronics, made it into Clarivate Analytics’ Book Citation Index. This is part of an email from IGI Global, the publisher, informing me of the addition.

Greetings! I hope this email finds you well. I would like to inform you that your publication Nanotechnology and Microelectronics (https://www.igi-global.com/book/book/40290) was recently indexed by Clarivate Analytics’ Book Citation Index, a part of the Web of Science Core Collection. Please take a moment to view the IGI Global Newsroom post, “Web of Science Indexes 46 IGI Global Titles” at this link: https://www.igi-global.com/newsroom/archive/web-science-indexes-igi-global/3323/.  We take great pride in receiving commendable endorsements and indexing and we appreciate your hard work and dedication!

….

Part of the Web of Science Core Collection, the Book Citation Index is one of the largest citation databases covering books in the sciences, social sciences, and arts and humanities. The index ensures that each reference is meticulously indexed and that only the most elite research is included. Inclusion in Web of Science, Book Citation Index provides greater discoverability, which leads to measurable citations and more transparency in the selection process. The new IGI Global publications selected for indexing include:

Information and Communication Technology (ICT) is facilitating the process of socio-economic development in Nigeria. It has offered new ways of exchanging information, and transacting businesses, efficiently and cheaply. It has also changed the dynamic natures of financial, entertainment and communication industries and provided better means of using the human and institutional capabilities of the nation in both the public and private sectors. Increasingly, ICT is rapidly moving Nigeria towards knowledge-based economic structures and information societies, comprising networks of individuals, firms and states that are linked electronically and in interdependent global relationships.

This ICT worked in the Nigerian banking sector. It brought into existence a new generation of banking institutions, about thirty years ago. About three decades ago, some Nigerian entrepreneurs saw opportunities that they could use better service delivery, anchored on technology, to redesign the structure of Nigeria’s banking industry.

But behind the mess, there is something good from that period. We ended up having great companies which are still very critical in modern Nigeria. Sure, most of those companies survived and flourished through innovation,…

These are some samples of companies starred during this time. In short, the phrase “New Generation Banks”, came into the lexicon during that era.

• Diamond Bank Plc – born 1990
• Zenith Bank –  1990
• Fidelity Bank – 1988
• Access Bank – 1989
• GTBank – Jan 1990
• (STB for modern UBA) – 1990
• Access Bank – 1989

These new banks grew as they competed effectively in the sector. They anchored their businesses on the use of technology to accelerate productivity. They thrived and took market shares from the old banks like First Bank, Union Bank and the defunct Afribank.

The Power of ICT on Productivity

Before the advent of the new generation banks in Nigeria, people waited for hours to collect money from their accounts. Going to bank was largely an all-day affair. But through automation, the new generation banks brought productivity which reduced that time significantly. That process made it possible that people could get into a bank, and within minutes, they are out. By automating their routine banking processes with ICT, the new banks brought new dimensions of service in the industry. They won hearts, did well and  created superior values, monetarily, for their investors.

Also, because the banks were using technology, they used lesser number of staff to execute their jobs. They employed fewer people, compared with the older banks, using business process automation systems. (Sure, the older banks had more branches and could have needed more hands.) The efficiency in their operations helped in improving their profits. Today, the most formidable banks in Nigeria are members of those new generation banks. Some of the old banks have gone while the remaining ones are shadows of their previous pedigrees.  In this early part of the 21st century, the best of Nigerian banking is seen through the lens of the new banks.

Productivity is a very important business construct. In the banking sector, ICT has cushioned it in all dimensions of the business processes. One of the finest products ever launched in the Nigerian banking sector is Diamond Bank Integrated Banking System (DIBS). ICT made that product a possibility and that generated huge productivity in the industry as it was being copied.

For the realignment of this observation, innovation is very critical.  In the early 1990s, Diamond Bank was one of the most innovative banks in Nigeria. Its pioneering Diamond Integrated Banking System (DIBS) which made it possible for a bank customer to put money in one branch and access it from any other Diamond Bank branch, gave it market share, from the old generation banks . That was a golden era in Nigerian banking with so many innovations, including in pricing. The invention of COT (commission on turnover) provided capital that funded growth and transformed the sector as they made good profits, and they invested in modern technology. But ever since, disruption has been muted and innovation is largely incremental.

The Challenge from Internet: Fintech

While ICT provided unprecedented productivity in the Nigerian banking sector, Internet is seriously “destroying” value. This is a “problem”. ICT made them, Internet could destroy some of them. Internet is bringing the construct of creative destruction in the Nigerian banking sector where values are destroyed and new opportunities unlocked. But those new opportunities are not going to be, exclusively, within the controls of the banks.

What Internet is doing today is expanding distribution of banking services thereby putting pressure on banks to control pricing on their own terms. Before Internet, they could charge huge fees to transfer money for clients to foreign accounts via their treasury departments, but today, with internet, there are options. The customers could simply use their debit and credit cards to settle the bills without first spending money on bank fees.

Internet created the fintech and that is not necessarily a good thing for most of the banks. Fintech brings competition to the banks. Fintech offers lending, remittance, payment, transfer and other services which banks used to be the only institutions handling. This means with expanded access, the absolute power on pricing moves away from banks.

Brilliance of ICT, the Burden of Internet

ICT provided huge value, through industry-level productivity in the sector. It was good business overall because the banks generated value by few employees to do many things. But by expanding the distribution, Internet offers many challenges to them.

It is not just the banking sector that is going through this value-shattering redesign. We have seen the impact of Internet is restructuring how  business sectors operate over the last few years. I provide the following examples:

• Movie Theater: By Internet making distribution accessible  and also expanding its scale, the movie theaters have lost the control to dictate, absolutely, on when to release movies. This has affected their business models reducing their overall pricing powers and values. With companies like Netflix, iROKOtv and Youtube, the channels have since widened. That is why the industry is largely struggling.
• Airlines: Airlines made so much money through information asymmetry. The travel agent and customer had limited scale to compare prices across airlines. But with arrival of Kayak, Internet has made the distribution of that pricing easier at scale. Immediately, the power moves to the users who have access to compare ticket prices, putting pressure on airlines to price to remain relevant
• Library: We used to have libraries that had opening hours. Today, with Google and Wikipedia, we have expanded distribution, where from our homes, we can simply access dossiers of work. Libraries are losing their impacts and influence because of Internet
• Education: Most people do not even  bother spending money going back to school to re-learn. They take quality materials online to educate themselves. Most for-profit universities in U.S. have been collapsing because their demand has dropped significantly.
• Media: I have written extensively on the law of diminishing abundance of Internet where having more readers does not mean more success. Internet has made distribution of content easier thereby making every newspaper and magazine a global business. With that, power has moved to the aggregagors like Google and Facebook who control access to contents.

In this videocast, I discuss what I am calling the Law of Diminishing Abundance of Internet. It is a construct that some companies become poorer even when they are growing in numbers of customers reached.That applies to industrial sectors like publishing and telecoms. The lesson here is that risk in any business model must be examined from the lens of this mirage abundance which Internet has provided in some sectors.

• Commerce: As Amazon.com shows the world, Internet had demonstrated that it can attack any industry it wants. We have seen many U.S. malls gone because Amazon has made it harder for the retailers to compete. Internet has shaped commerce by making distribution accessible and that reduces competition to operational efficiency and pricing. It commoditizes many elements of our retail business processes, making it harder that retailers with huge real estate burdens, cannot compete against Amazon.

The Future: Unbounded Internet

Internet has unleashed competition in the Nigerian banking sector. They do not just compete among themselves, they are competing with global institutions. With Stripe, a Nigerian entrepreneur can bank with a bank in U.S. through the Stripe Atlas which makes it possible to operate a U.S. business bank account without even living in U.S. This would not have been possible without Internet. This unbounded capability of the Internet is the reason why the future, of financial services, could be uncertain because new challenges will come.

With Stripe Atlas, entrepreneurs can easily incorporate a U.S. company, set up a U.S. bank account, and start accepting payments with Stripe. Starting today, it’s available to developers and entrepreneurs globally.

The promise of the internet is that location matters less. However, geographic barriers and associated complexity make it difficult to start a global business in many parts of the world.

With distribution model that is technically free, Internet will continue to put pressure in the banking sector, as new models of competitions will keep evolving.

Yet, what Internet is doing today may be tip of the iceberg. There are still many ways we can see immense dislocation in the Nigerian banking sector:

• Robotics/Automation: Nigerian financial sector, very soon, will begin the process of having robots do many lending decisions as they do in U.S. It could be the banks or the fintech that will do this,  but irrespective, automation of lending using data from BVN and other sources will happen. The implication is that more workers will be cut. Most credit card applications decisions in U.S. are evaluated by machines. Internet will massively accelerate the scale of this automation.
• Machine Learning/ Artificial Intelligence + blockchain: No one could bound the potential of these emerging technologies in the financial sector. There is the inherent risk that we may not even need banking the way we have it today especially if you combine AI with blockchain. With blockchain, the Central Bank of Nigeria may not have a lot of work to do because the people will be the custodians. This product of the Internet, blockchain, is another element on the possibilities and challenges of the future which Internet is bringing to the financial sector
• Poor Value Transfer: Under limited construct, Internet is not good in transferring value. The money MTN is losing over Skype and WhatsApp is not going to the OTT services. The value is destroyed, in the industry. Sure the consumers save and can use it for something else. The implication is that Internet can destroy most of the value we have in today’s banking. And that is a possibility. How? read below
• Removing Friction in Commerce: The essence of firms is to make sure that demand and supply have lesser friction. If you can use internet to remove that friction between demand and supply ( i.e. they can come together, with ease), you do not need firms. For example, if a saver can efficiently find a borrower, there is no need, partly, to go to a bank to put money to earn interest. If Internet attacks that, the heartbeat of most business sectors will be damaged.

The Winning Consumers

The good news about everything is that consumers will win. Financial services will become affordable owing to the Internet. That means the principle of creative destruction is working. That is one thing the Internet is sure of providing – great value to consumers. As I have noted, there will not be fintech without Internet. We are happy for that. The implication is that no one should wish that we go backward – everyone has to figure out how to survive and succeed in the new Internet redesign of the financial industry.

All Together

ICT provided productivity, making old banking business processes better. Internet is unbounded and no one knows what the future will bring. But one thing is certain: it offers huge expansions in distribution channels. That always puts pressure on incumbents on pricing power. Nigerian banks must ferociously redesign themselves to live in the age of Internet because what is constant is change and unprecedented level of competition, which is unbounded and unconstrained as none can quantity the future scale.

Simply, Internet commoditizes business processes in the financial sector. The implication is that price competitiveness is what matters. Any bank that cannot figure it out, i.e.  how to price competitively within the abundance of Internet, will see erosion of values. When consumers have unbounded access through unlimited distribution channels to immense product supplies, price falls, because information asymmetry is gone. Add the fact that consumers can easily compare prices and product quality, at scale, you will see that commanding hefty fees will go.

For our banks, the future is full of possibilities. There is no going back to pre-Internet age. The promise lies ahead. But the challenges will be huge. The unbounded nature of Internet provides many factors no one can easily ascertain what the implications will be. The best thing to do is to be prepared: understand the trend and be on top of it. Just as Google became the most important “media” firm by aggregating contents online, while not creating any, thereby commoditizing whatever anyone creates online, as the only true gateway for people to discover contents, banks have the unique positions to also assert themselves that for whatever the web brings, banks will be paid their taxes. You become the entry point into the financial world for many consumers and that position has enormous strength.The future cannot be unborn tomorrow and yet dead yesterday.

This is a Short Note.

Facebook is making sure no one has a chance to challenge its dominance in social media. Any social media app or ecosystem that shows any element of competitive capability must be nipped at the bud. So, it copes Snapchat and it does it so cleverly that you cannot mistake the bravado. The good news is that Facebook copies legally and that is what matters. You should not be ashamed to copy; I do copy, legally.

Fortune email newsletter summarizes the latest efforts to copy Houseparty, a video meeting app, thus:

Like earlier tech giants, Facebook maintains its dominance in part by buying, copying or otherwise disrupting smaller upstarts that start to horn in on its turf. Wall Street Journal reporters take a look at how the social network keeps tabs on small startups with a report on the experiences of video meeting app Houseparty.

Facebook may already be trying to copy the app’s features, the paper reports: At an all-hands meeting last summer, Facebook Chief Executive Mark Zuckerberg told employees they shouldn’t let pride get in the way of serving users, another way of saying they shouldn’t be afraid to copy rivals, according to someone who was at the meeting. The message became an informal internal slogan: “Don’t be too proud to copy.”….

Facebook is being aided by an internal “early bird” warning system that identifies potential threats, according to people familiar with the technology.

There are three lessons here:

• Copying is not bad, provided you do it legally. Most times, the best strategy is to copy what works provided you see a path of creating value after copying it.
• Facebook has limitedo ego, when you examine how it has kept Snapchat in check by carefully copying its features. In a largely patent-free sector, Facebook has the upper hand. Size is an advantage and network effect is a huge competitive advantage.
• Be watchful at the flanks: Facebook is doing all it can do to ensure it remains the category-king of its sector. It is watching its flanks, as Sun Tzu recommends in The Art of War,   making sure that no company comes to dislodge it. This is the way to play defense by running a good offence as that means putting pressure on the people coming after your sector.

Few years ago, it was reported that Google tracks promising startups with good stats on its cloud and then invests in them. What these big U.S. tech companies are doing is the very reason it will be challenging to disrupt them. They buy, copy or disrupt new startups, and they do not care. Mark Zuckerberg, Facebook CEO, noted that copying criticism does not worry him: ” I guess I’m not that worried about that,” Zuckerberg said in response to criticism about Facebook copying Snapchat.” I think it should not worry you too. The key is making sure you do so legally.

The smartphones of the future will be data harvesters.  They will harvest data on the activities we perform with them, in order to improve them and make them smarter. The path to artificial intelligence (AI)-anchored smartphones world cannot happen if smartphone makers do not use users’ data. They need the data to improve the navigational systems, recommendation engines and also build some core features on what we have as apps as part of the phone functions, right at the operating system level.

Most people will see the data collection as invasion of privacy. I disagree. Over the years, the smartphone companies have been lackluster on the ways they manage data flowing through their pipelines. Google knows most things about you as you use their search engine, relying on that data to improve its products. The world has come to understand that Google needs that data to do business, more efficiently. Few people worry that searching on Google will reveal to the big algorithm what they are thinking in their minds. The only alternative, of course, is not to use the product because you know that Google search has a memory.

For the AI-first world, now is the time for smartphone companies to participate in that data competition if they want to make products that will win markets. User privacy cannot be left only for software companies to decide. Just as Facebook harvests our data, Tecno can do the same to make better products, provided it is the metadata that is aggregated at population level, instead of at individual level.

We cannot call the hardware devices “smartphones” if the smartness cannot use data to evolve. The only way to make that happen is to utilize the data from users to continue to perfect and improve them. What makes a smartphone smart is not that it can do Facebook, it is that the hardware and operating system can have elements of memory and do many things beyond what the typical feature phone does. But to continue to elevate that engineering vision, phone companies need data. And finding a balance to tap into the data coming from the solutions running on the phones will help them.

The Coming Change

Consider a scenario where you have a smartphone and the phone can harvest all the activities in what you are doing on Facebook, Google, WhatsApp and more. The hardware company will use that data to improve how it makes processors and other elements of the phones including the operating system that powers that phone. At the moment, the hardware companies have avoided that, leaving the software companies to be ones harvesting the data. I do think in near future, they will see the immense opportunities to improve products and will then look for data to do just that.

Data harvesting power cannot just rest with only software firms. The future competition is going to be driven by data because the more data, the better algorithms. Phone companies may decide to have two versions of their products and price them differently. For people that want the status quo, the price will go higher. For those that do not care, the price should be lower. They must not collect people’s private and personal data, rather aggregated metadata of activities.

Also, they cannot sell the data to any third party. For example, Tecno cannot sell data it has collected to Konga which can help the e-commerce company to improve its business by understanding what users are searching, discussing and more. Simply, the data can only be used within Tecno to improve its products.

We need to see this from the same lens as Google (maker of Gmail) which used to harvest users’ data to improve its products. Hardware makers need to do the same. If Google could do that legally (it was doing so until it decided to stop), a phone company could also glance through user data to see how it could make its systems to make that process better.

The Paradox of Ford and Windows

As I have written in the past, the brilliance of Microsoft Windows is not just the product, but also the pricing model. You buy a software and you never own it – you must keep paying for license to own it legally, especially if you are company.

Microsoft is one of the finest technology companies in the world. It has IPs and it is a respected innovator in the technology world. But for me, I respect Microsoft, not just for Windows, but for perfecting Licensed Pricing of its products. When it scaled the constructs that buying a piece of Windows does not mean absolute ownership, it shaped the software industry.That singular vision was one of the most consequential factors that transformed Microsoft into a global icon, and rewarded the founders with tickets into the billionaire club. Not many people like paying licensing fees; unfortunately, that is the default strategy of modern software pricing.

With this strategy, you cannot resell most software. That model has generated huge returns  for software companies. Now, imagine if Toyota, GM, Ford and other car companies never allow you to own your cars. You must return every 4 months to service the car in their outlets.  You have to pay for that service. If you do not, you have ceased to own that vehicle legally. Also, you cannot resell your car. The reality is that hardware firms have not been stellar in their pricing models; software firms have always been smarter. So, that is why Tecno cannot collect data while Facebook is allowed to do so, even though Facebook runs on Tecno. That has to change and hardware companies need to modernize their constructs.

The Balancing Act

Making phones is not necessarily a great business unless you are Apple, Samsung and Huawei. But when data is embedded into these phones, they can do more. Bringing AI which does rely on data can see more smartphones perform better thereby pushing the phones from where they are at the moment, providing tools and pipelines for Facebook and Google to reap huge benefits, to where they need: deliver more value to users on their own terms. This is one of the reasons why Apple is peerless – it differentiates on hardware to deliver industry-leading experience via software. It has all under its construct, using the data from iOS to improve the Apple A microprocessors.

Using the Smiling Curves, I explain why phone companies need to get into the data business. By using more data and improving the solutions, they can abstract more things into the hardware, giving themselves opportunities to compete in the higher value areas which are at the edges.

The Evidence is Here

Do not think my argument is a mere theoretical construct: the fact is that my points are here. Our smartphones will be data harvesters. From Fortune newsletter and WSJ, we have the case of Huawei collecting data of WeChat users and Tencent (the owner of WeChat) is not happy. But understand that Tencent is not saying users’ data should not be collected, its point is that only Tencent should be the one collecting the data.

Huawei and Tencent’s data dispute. Chinese phone maker Huawei has been collecting data from users of its Honor Magic smartphone to bolster its artificial intelligence functions, but Tencent contends that unauthorized use of information seized from their WeChat app infringes on the privacy of WeChat users, and has asked the Chinese government to intervene

This is going to be a huge fight as we move forward. As the constructs of privacy erodes, the software companies like Facebook and Tencent may be surprised that phone makers like Samsung and Tecno could decide to feed on their data. While a user is a Facebook customer, Facebook is a customer to a phone maker which means the phone maker can claim rights to user’s data as well. I personally believe that if Facebook can collect it, the phone companies should also collect provided they make it VERY clear to users that they will collect data on their activities (they already partly do), to improve the smartphone development. Understand that as you use your phone, it understands you, that means it is keeping data about you. Samsung phones will know when you are driving to work and can predict how long it will take you to get there. They know the words you use a lot and will suggest to auto-fill. So, they do collect. But in the near future, they will start harvesting deeper data which the social media firms are already collecting from us.

All Together

Anyone that thinks of assured privacy once he/she is on Facebook, Twitter and LinkedIn is certainly wrong. Over the years, the phone companies have been dumb terminals relaying data which help software firms like Facebook and Tencent to improve their products. But as modern phones evolve, phone makers will need some data insights to make phones of the future. I do think they have the rights, if properly disclosed to users, to have access to some limited data going through their ecosystems. We need smartphones of the future to be smarter and we will be unable to have that without data. That explains why they need to have a framework so that between the social media firms and the phone makers, they use this data without hurting the user. For the software companies to think that only them should have access to the data implies that the only way phones can improve is through software. Making better microprocessors and improved operating system can only happen with better data insights. So as you use Facebook, expect in near future for Samsung, Tecno, etc to collect metadata on what you are doing to help make better phones of the future.