Friday 29 Mar 2024
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This article first appeared in Digital Edge, The Edge Malaysia Weekly on March 28, 2022 - April 3, 2022

Lockers became an increasingly popular way for people to get their online purchases during the pandemic, primarily because they allowed users to go contactless. Users could use various methods to access their goods securely, from inputting a one-time password (OTP) sent to their mobile phones to scanning a QR code or even using identification cards, if the locker is assigned to a specific person.

Bryan Kam Wai Yuan, founder and CEO of Malaysian-based aiFlows Technologies Sdn Bhd, points out that the traditional method of verification was via email or a token code. Sophisticated technology now enables multiple hardware and software authentication methods to be programmed into a locker system to make it functional and secure, such as facial recognition and fingerprint terminal.

“With these new technologies, lockers can protect parcels more efficiently. The current smart locker system supports web applications and mobile apps with a cloud database. Therefore, delivery partners and customers can receive live updates, respond to queries or make an arrangement instantly,” he says.

Parcel Santa, a Singapore-based parcel delivery solutions provider, uses facial recognition technology at its lockers to verify and authenticate couriers that deliver parcels to its lockers. Jim Huang, its founder and CEO, says security is a big concern as there is a need to ensure no unauthorised persons can access the lockers with a simple username and password. The technology adds further security to the lockers and prevents any illegal activities.

"Some corporations want to integrate a smart locker system with their accounting or warehouse management system too. We have received a request from a client who wants a report at 8pm every day on how many lockers are still in use, or perhaps they want the lockers to open at a specific time so the cleaner can clean and sanitise the lockers. This is called task automation.” - Kam

The company partners with courier companies and logs the biometric information of their delivery personnel for authentication. The technology used at its parcel lockers encrypts a person’s facial biometrics into a code, which becomes that person’s identity. It is the code that gets recorded, not the picture.

Huang says during the pandemic, there has been greater demand for lockers in Singapore as consumers shopped online more frequently and property owners were looking for solutions to implement safe-distancing measures for high-frequency activities such as deliveries. So much so that capacity is starting to be an issue, where a single locker station is no longer sufficient to serve the community.

“We notice parcel sizes increasing steadily as people tend to buy more things now. We foresee the need to adjust the compartment mix to have a higher percentage of larger compartments to cater for this shift in trend,” he says.

“In such instances, we have begun installing multiple locker stations in larger estates to serve the volume demand. We envision that eventually, there will be a locker at the lobby of every block of high-rise flats and apartments.” 

He adds that the company has expanded its network to 350 condominium developments in Singapore, covering 500,000 people. 

“As more customers use the lockers, there needs to be a more efficient way to deliver notifications to users other than via SMS. SMS ages as a technology and there is a stigma attached to scams being associated with SMS messages. I think the industry needs to explore a better way of delivering notifications to users,” says Huang.

aiFlows’ Kam says although his company is based in Malaysia, it primarily provides products and services in Singapore. It was only in recent years that he saw an uptick in interest locally. The demand is still very niche in Malaysia, he adds, as most requests come from private companies and corporations. Government offices do have lockers, but they are not open to the public, unlike in Singapore.

“In Singapore, there are public libraries on campuses, where they can reserve a book and collect it from the locker anytime,” he says. “We haven’t seen this in Malaysia yet but there is definitely potential in the market. Perhaps we need specific sectors and institutions to use lockers widely before they become a public service that can be deployed properly.”

Parcel Santa also launched an outbound deposit service with FedEx so that residents who want to send shipments via the courier can simply deposit their parcels in the company’s lockers and FedEx personnel will collect them on the same day, without the residents having to be home.

“This means residents who operate small businesses out of their homes who want to send FedEx parcels can now put them in the locker and FedEx personnel will come and collect them,” explains Huang.

“We started this last year with FedEx as the anchor partner and so far, it has been going well. But this is just a fraction of the overall volume that we have. The majority of the volume is still from e-commerce platforms putting parcels in lockers for residents to collect.”

To use this feature, the home business needs to contact the delivery partner to gain access to the locker, he says. The courier company itself will carry out the electronic Know Your Customer (eKYC) verification to allow them access to the locker.

"We notice parcel sizes increasing steadily as people tend to buy more things now. We foresee the need to adjust the compartment mix to have a higher percentage of larger compartments to cater for this shift in trend.” - Huang

“Here in Singapore, we work with SingPost, DHL and FedEx, where we are already integrated with them,” he adds.

Singapore’s Infocomm Media Development Authority (IMDA) launched the Locker Alliance to consolidate parcel locker operations on the island republic, promoting interoperability and coming up with operating standards for parcel locker services nationwide. Parcel Santa is a member of the alliance, so couriers and small businesses can integrate their operations with its services. 

“Instead of a courier company integrating with locker companies one by one, they can just integrate with the Locker Alliance and gain access to all the players on the island,” says Huang.

“The Singapore government is trying to build a very agnostic, interoperable platform that any e-commerce or courier company can integrate with and gain access to the parcel lockers on the whole island.”

Ensuring security 

Protecting the hardware and software of lockers is also important, to ensure that illegal activities and theft are kept at bay. Kam says there have been incidents in other countries where people used public lockers to trade drugs, highlighting the importance of IT and operational technology (OT) cybersecurity to the industry.

“IT is for data-centric computing and OT is for monitoring and controlling device performance. These are important in the Fourth Industrial Revolution (IR4.0), which includes the Internet of Things, cloud computing, data analytics, artificial intelligence and machine learning,” he adds.

“With the convergence of IT and OT, systems can complete monitoring of complex systems, giving real-time visibility and better analysis to minimise criminal or misuse cases.”

Kam says he typically advises clients to use existing cloud services such as Microsoft Azure and Amazon Web Services, which already have a solid cybersecurity infrastructure in place. While it may be a bit costly, the ensured protection is worth the investment.

“We let our clients choose which services they want to use based on their needs and budgets. Some clients may not have much of a budget to spare, then we will help them find the best solution. But in most cases, like with corporations and governments, budgets are not a constraint as security is more important.”

As for Parcel Santa, since it works with courier companies and needs to deliver to each consignee, receiving personal data is inevitable, says Huang. But the company does not share that data with any third party and it is protected by encrypted access as well as a very detailed audit trail to ensure no abuse of data occurs. The company also complies with industry standards, he adds.

The lockers are on a closed loop network and do not have a public web address. They are connected directly to a server that is stored in the cloud, says Huang.

“We do have disaster recovery and contingency programmes. But since the lockers are not on a public network, they cannot be hacked,” he says.

“In that sense, there is sort of a cut-off to public access and our data is more secure compared with other digital services. However, it is understood that security is a general concern.”

On top of that, Parcel Santa lockers are in gated communities with security facilities, hence security has been assured in a way, says Huang. The company always ensures that the lockers have 24/7 CCTV surveillance as well as front-facing cameras to generate a detailed and meaningful audit trail should the authorities require assistance in criminal investigations.

Greater demand in private use

In the last two years, there has been growing demand from corporates looking for lockers to automate the material transfer of various applications. Parcel Santa has been working with government agencies and private corporations to provide various types of smart lockers.

aiFlows’ Kam saw a similar demand among private companies and corporations as well as a demand for real-time remote access to lockers. Businesses have also been asking for customised automated tasks, such as routine locker checks, user notification and detailed live reports.

“Some corporations want to integrate a smart locker system with their accounting or warehouse management system too. We have received a request from a client who wants a report at 8pm every day on how many lockers are still in use, or perhaps they want the lockers to open at a specific time so the cleaner can clean and sanitise the lockers. This is called task automation,” he says.

Real-time access is a popular request, says Kam. This means a person does not need to be at the locker to view or grant access to others to access it. This is commonly used by apartments or private buildings.

“Let’s say in a condominium, the guard’s station is far away from the locker and someone wants access to it to get his parcel. The guard will be able to view the person on the other side via CCTV and verify the person before remotely unlocking the locker for him,” he explains.

Huang says the company has received requests from security agencies that want to transfer products or samples from one department to another, or to return them to their owner. This replaces the over-the-counter experience, which could be time-consuming.

“For example, if I request for a sample and need to collect it, the other person can just deposit it in the locker outside my building or department and I can take it at my convenience,” he explains.

“This can be applied to many scenarios, such as getting a mobile phone or a SIM card, when redeeming items from shopping malls or perhaps same-day collection of items at malls. Instead of waiting for next-day delivery, a person can shop online and opt to collect the item on the same day at the locker at a mall. It is much more convenient because the locker can be placed in the car park and there is no need for a person to clear security or park to get the items.”

Technology is constantly improving and this should result in cheaper and faster production. As Parcel Santa goes into its fifth year, the end-of-life management of existing lockers becomes an immediate concern, says Huang.

“We try to minimise waste and reuse as much of the material as possible, hence refurbishment of the digital hardware components would give the locker a new lease of life. That is what we have already done to our first-, second- and third-generation lockers,” he adds.

“Most of the things that need to change are related to the motherboard, the CPU and so on. One of our oldest lockers is working perfectly and the technology is actually on a par with the most recent lockers that we purchased.”

The company has launched its advertising business, which provides targeted advertising of the lockers for use by e-commerce shoppers in an area. So far, the company has managed to secure Carousell, FedEx and StashAway as its first clients, says Huang.

“We are also looking to offer this to local businesses — for example, tuition centres — so they can have targeted advertising that reaches the people directly.”

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