Edited by Prof. Dr. Peter Scholz; published by Palgrave Studies in Financial Services Technologies. Buy a copy here
Congratulations to Peter Scholz for publishing this excellent book on new technological investment methods. It was an honour for me to write the foreword and I wish every reader enriching insights into this new field of investing in the digital age.
This book is the first to provide comprehensive answers to these questions in a fundamental, decisive, detailed and nuanced way. It clarifies the basics, the technology and the tactics behind those clever, financial machines, gives insights into their previous track record to date and much more. Looking ahead, it provides a preview of what is and may be yet to come. As a matter of fact, so far only a relatively small percentage of the global investment community have more or less relied on robo-advisors, depending on their respective culture. It is also a fact that we are only at the beginning of development. We have all borne witness to how exponentially fast things can move forward. One such example is the evolution of smartphones—which by the way have been around for just a little longer than robo-advisors.
The possibility to buy Bitcoins with cash in a regulated process at a designated ATM intelligently combines the best of both worlds. As Germany’s market leader in cash transport and processing, Prosegur guarantees secure cash handling for Europe’s largest operator of Bitcoin ATMs.
Find details about the project in this article from t3n, translated with Deepl.com. Find original HERE
Sutor Bank has announced a number of cooperations in the fintech sector in recent years. In the future, the tradition-rich bank will set up Bitcoin ATMs in Germany. The project will be implemented as a cooperation with the Hamburg-based Sutor-Bank, the Austrian Kurant, which claims to be Europe’s largest operator of Bitcoin ATMs, as well as the startup Spot9 with the participation of IDnow, Coinfirm and Prosegur. According to the participants, this is a unique cooperation that meets all the requirements of the German banking supervisory authority Bafin – and the number of participants already suggests how high they are. Their rules include, for example, compliance with money laundering guidelines and the secure identification process of customers, which IDnow takes over. Finally, Prosegur is involved as a security service provider in the area of cash transport and processing and is supposed to guarantee secure cash handling.
Last week, the first machine was set up in Berlin – in the medium term, a nationwide network of Bitcoin machines is to be set up. “Spot9’s vision is to enable everyone, even without extensive prior knowledge, to use our Bitcoin ATMs. That is why it is very important for us to understand exactly how customers behave at the vending machine before we open the additional locations,” says Johannes Gorski, CEO of Spot9.
Vending machine solution: Easier than buying bitcoin via an exchange
The vending machine solution is intended to be a safe and easy-to-understand alternative to buying online and carries fewer risks than buying cryptocurrencies on Bitcoin exchanges, the parties involved explain. The purchase process works via cash and is similar to the operation of a conventional ATM. Thus, the offer is aimed at customers who want to buy cryptocurrencies in their normal everyday life.
After the first vending machine has been set up in Berlin, but can be used by a selected test group for the time being, the primary goal is to get to know the user behaviour of the customers better and thus ensure an optimal user experience. The opening of further locations is to take place in the course of the first quarter of 2021, whereby the Corona Factor will of course still have an impact.
It should be possible to use the Bitcoin ATMs with any digital Bitcoin wallet. The user is thus independent of an ATM-specific wallet. However, in order to use the Bitcoin ATMs, the customer must first go through the registration process with verification on the Spot9 website.
The Tyto Tech 500 Power List is an objective, data-based survey of various technology sectors in Germany, France and the UK. The study is the first of its kind to measure who has what influence in the tech sector on the basis of various key figures from the online and offline world.
It is a special pleasure to be ranked #35 (Jochen Werne / Prosegur) in the just published Top50-List 2020 of the most influential Germans
DIE 50 EINFLUSSREICHSTEN DEUTSCHEN DER TECH-SZENE
Die Tyto Tech 500 Power List ist eine objektive, datengestützte Untersuchung verschiedener Technologie-Bereiche in Deutschland, Frankreich und dem Vereinigten Königreich. Die Studie ist die erste ihrer Art, die auf Basis verschiedenster Kennzahlen aus der Online- und Offline-Welt misst, wer welchen Einfluss im Tech-Bereich hat.
Es ist eine besondere Freude in der soeben veröffentlichten Top50-Liste 2020 der einflussreichsten Deutschen den Rang #35 (Jochen Werne / Prosegur) zu belegen und dies neben Persönlichkeiten wie (nach Ranking): Sascha Dolling, Jens Pöppelmann, Oliver von Wersch, Sven Bornemann, Sven Stuehmeier, Carol Starr, Bastian Krüger, Norman Wagner, Miriam Thome, Maike Abel, Nico Winkelhaus, Naren Shaam, Robert Jacobi, Ramin Niroumand, Claudia Kemfert, Mallikarjun Rao, Matthias Reinwarth, Ben Shaw, Tessa Niemann, Maren Wulf, Miriam Wohlfarth, Karin Libowitzky, Afseneh Afsaei, Dr. Oliver Vesper, Tim Sievers, Milos Rusic, Felix Falk, Markus Forster, Martin Schmid, Alen Nazarian, Hartmut Giesen, Peter Altmaier, Murat Vurucu, Chris Bartz, Eduard Singer, Alexander Schott, Ritavan ~, Joachim Hensch, Tim Höttges, Dr. Jan Kemper, Andreas Schierenbeck, Hans-Dieter Kettwig, Jost Backhaus, Jens Spahn, Paul Gauselmann und Frank Puscher
About this whitepaper This paper was prepared by the Work/Qualification, Human-Machine Interaction working group of the Learning Systems Platform. As one of a total of seven working groups, it examines the potentials and challenges arising from the use of artificial intelligence in the world of work and life. The focus is on questions of transformation and the development of humane working conditions. In addition, it focuses on the requirements and options for qualification and lifelong learning as well as starting points for the design of human-machine interaction and the division of labour between man and technology.
Original published in German. Translation made by Deepl.com
Authors: Prof. Dr.-Ing. Sascha Stowasser, Institut für angewandte Arbeitswissenschaft (ifaa) (Projektleitung) Oliver Suchy, Deutscher Gewerkschaftsbund (DGB) (Projektleitung) Dr. Norbert Huchler, Institut für Sozialwissenschaftliche Forschung e. V. (ISF-München) Dr. Nadine Müller, Vereinte Dienstleistungsgewerkschaft (ver.di) Dr.-Ing. Matthias Peissner, Fraunhofer-Institut für Arbeitswirtschaft und Organisation (IAO) Andrea Stich, Infineon Technologies AG Dr. Hans-Jörg Vögel, BMW Group Jochen Werne, Prosegur Cash Services Germany GmbH Authors with guest status: Timo Henkelmann, Elabo GmbH Dr.-Ing. habil. Dipl.-Tech. Math. Thorsten Schindler, ABB AG Corporate Research Center Germany Maike Scholz, Deutsche Telekom AG Coordination: Sebastian Terstegen, Institut für angewandte Arbeitswissenschaft (ifaa) / Dr. Andreas Heindl, Geschäftsstelle der Plattform Lernende Systeme / Alexander Mihatsch, Geschäftsstelle der Plattform Lernende Systeme
The introduction of artificial intelligence (AI) in companies offers opportunities and potential both for employees, for example in the form of relief through AI systems, and for companies, for example in the form of improvements in work processes or the implementation of new business models. At the same time, the challenges in the use of AI systems must – and can – be addressed and possible negative accompanying implications dealt with. The change in the companies can only be mastered together. All in all, it is a matter of shaping a new relationship between people and technology, in which people and AI systems work together productively and the respective strengths are emphasised. Change management is a decisive factor for the successful introduction of AI systems as well as the human-centred design of AI deployment in companies. Good change management promotes the acceptance of AI systems among employees, so that the potential of new technologies can be used jointly for all those involved, further innovation steps can be facilitated and both employees and their representatives can be made the shapers of technological change.
The participation of employees and their representatives makes a significant contribution to the best possible design of AI systems and the interface between man and machine – especially in terms of efficient, productive work organisation that promotes health and learning. Early and process-oriented participation of employees and co-determination representatives is therefore an important component for the human-centred design and acceptance of AI systems in companies.
The introduction of artificial intelligence has some special features which also have an impact on change management as well as on the participation of employees including the processes of co-determination in the company. The authors of the working group Work/Qualification, Human-Machine-Interaction pursue with this white paper the goal to sensitize for the requirements of change management in Artificial Intelligence and to give orientation for the practical implementation of the introduction of AI systems in the different phases of the change process:
Phase 1 – Objectives and impact assessment: In the change processes for the introduction of AI systems, the objective and purpose of the applications should be defined from the outset with the employees and their representatives and information on the functioning of the AI system should be provided. On this basis, the potential of the AI systems and the possible consequences for the company, the organisation and the employees can then be assessed. A decisive factor for the success of a change process is the involvement of the employees and the mobilisation for the use of new technologies (chapter 2.1).
Phase 2 – Planning and design: In a second step, the design of the AI systems themselves is the main focus. This is primarily concerned with the design of the interface between man and AI system along criteria for the humane and productive implementation of man-machine interaction in the working environment. Of particular importance here are questions of transparency and explainability, of the processing and use of data and of analysis possibilities by AI systems (including employee analysis) as well as the creation of stress profiles and the consideration of employment development (Chapter 2.2).
Phase 3 – Preparation and implementation: The AI systems must also be integrated in a suitable way into existing or new work processes and possibly changed organisational structures. This means preparing employees for new tasks at an early stage and initiating the necessary qualification measures. It is also important to design new task and activity profiles for employees and to adapt the work organisation to a changed relationship between man and machine. A helpful instrument in the introduction of AI systems are pilot projects and expert phases in which experience can be gathered before a comprehensive introduction and possible need for adaptation with regard to AI systems, qualification requirements or work organisation can be identified (Chapter 2.3).
Phase 4 – Evaluation and adaptation: After the introduction of the AI systems, a continuous review and evaluation of the AI deployment should take place in order to ensure possible adaptations with regard to the design of the applications, the organisation of work or the further qualification of the employees. In addition, the regular evaluation of AI deployment can make use of the experience of the employees and initiate further innovation processes – both with regard to the further improvement of (work) processes and with regard to new products and business models – together with the employees as designers of change (Chapter 2.4).
These practice-oriented requirements are aimed at all stakeholders involved in change processes and are intended to provide orientation for the successful introduction of AI systems in companies. In addition, these requirements should also inspire the further development of existing regulations – for example in legislation, social partnership or standardisation – and thus enable an employment-oriented, flexible, self-determined and autonomous work with AI systems and promote the acceptance of AI systems.
by JOCHEN WERNE published in DER BANK BLOG (30 October 2020) – For the original version in German please follow this LINK – English version translated by Deepl.com
“Disposal power” or “authority to dispose” are legal terms which are of great importance in the discussions on cash and book money. It also concerns the freedom of choice of citizens. The German language today is much more extensive than the 100,000 words used by Goethe in his time. We hardly use many of these words, which are so characteristic of our language, despite their meaning. Perhaps some readers feel the same way about the word “Verfügungsmacht” as I did when I consciously read it for the first time in a quotation from the former president of the Federal Constitutional Court, Prof. Dr. Udo Di Fabio. And perhaps it is like with many things in life that one only realises the deeper meaning at the moment when one deals with it in more detail. In our modern times, hardly anyone will visit the university library to quickly get to grips with a topic. Instead, people google the library to get an overview. And while less than 20 years ago we would have found our first little research happiness about the term “power of disposal” or also “authority to dispose of property” in the library of the law faculty, Internet research reveals in seconds a glance at a litany of legal forums.
Definition of power of disposal What is striking here is that the focus is not on the definition of control, but that the topic of regaining control dominates the first page on Google. Inevitably, this reminds me of my first visit to the Munich Google office many years ago. Almost rapturously in his remarks about the power of the algorithm, a sales employee of the world’s most powerful search engine asked the group if we knew where on the Internet they hid a body. With a glance into his head-shaking auditorium, he solved the riddle with a smile and said: “On the second page of Google search. Inevitably, of course, one then asks oneself – albeit only rhetorically – whether the Google business model works in particular because many have simply relinquished control over their data. The power of disposal or also power of disposition is defined as the “legal power to dispose of an object”. Which is banal, meaning that I should also have the power of disposal over what belongs to me – in other words, what is legally my property. However, the success of my own research on the first Google page suggests one thing above all else to the reader: that the power to dispose of property can be lost. For example, also of your own money? In order to answer this question, one should basically distinguish between cash and book money.
Cash, book money and the power of disposal With cash, I have direct unlimited physical control over my money in the form of coins or notes. This power of disposal can of course be lost if I am robbed or simply lose my wallet. Without entering into the legal depths of “normal” debt and the right to dispose of money, citizens have in principle all the means guaranteed by the state at their disposal to recover their property. The same applies to book money, if, for example, money is lost through credit card fraud when shopping online. The limits of non-physical power of disposal would, however, quickly become apparent if a bank went bankrupt and the money parked in the account in excess of the deposit guarantee was no longer available. Cash, book money and free availability It is utopian and not at all sensible to hoard all one’s “money” as cash. But it is certainly important to make clear what it means to no longer have the freedom of choice between cash and book money and thus to completely give up one’s right to physical availability of money. In the concluding sentence of his speech at the 2018 Cash Symposium of the Deutsche Bundesbank, Udo Di Fabio underlined what is probably the most important point in the current discussion surrounding this election. He said that it should not be “disregarded” in principle that every citizen should be able to freely dispose of his money – his “exchangeable assets”. He further added that this was particularly true when “financial privacy” was considered a legal requirement. This means that a society whose entire assets would only be managed digitally in book money could also only exercise limited individual power of disposal over its money and would have to face the question “whether the state, through its central bank, would be entitled to carry out a controlled devaluation through negative interest rates, booking discounts or fees on credit balances”. Prof. Di Fabio further points out that this would then not only be an encroachment on ownership but, as a result, possibly also the imposition of a special levy, which is only permitted under strict conditions in the German legal system.
Conflicts of interest and trust It is easy to see that this issue can give rise to considerable conflicts of interest in the triangular relationship between citizens (- how can I protect and increase my money), government (- how can public debt be reduced) and central bank (- how can economic and monetary stability be ensured). This is particularly true in the light of the continuing challenges posed by the Corona pandemic. It is thanks to the excellent work of the Deutsche Bundesbank since the Federal Republic of Germany came into existence and the confidence it has built up in our currency that the confidence of the public in both cash and book money is so high in this country. Freedom of choice between cash and book money Of course, another decisive aspect of this trust is the freedom of choice between cash and book money, which the Bundesbank also advocates. This freedom of choice also offers banks the opportunity to deal flexibly with the funds. For example, instead of charging 100 percent negative interest on book money to citizens or companies, banks could also physically hold it or have it held in safekeeping as cash. Since it is not part of a bank’s core competence to operate high-security systems and one certainly does not want to expose one’s own employees to the risk of a robbery or the blackmailing abduction of a family member, there is of course the possibility of outsourcing such a service in a LCR-compatible and MaRisk-compliant manner. A service that supports the customer in parts of his liquidity management and does not make it difficult for him to possibly maintain his own safe in his own four walls and without a security concept and thus endanger himself and his family. “Money is coined freedom” In his prose work “Records from a House of the Dead”, the Russian writer Fyodor Mikhailovich Dostoevsky describes his own experiences in Siberian captivity and formulates the later much quoted sentence: “Money is coined freedom”, thereby describing the vital relevance of a free exchange of goods in an unfree environment – and this through coined cash money. For the young Dostoyevsky, the changeover to a pure book money system in Siberian prison would have meant the withdrawal of his individual power of disposal over money, so that in reverse he would no longer have any assets which he could have used for the exchange of goods and other things. He describes this situation in the quintessence as follows: The suffering of prisoners who do not have money is “10 times greater”. It is therefore reasonable to assume that the intellectual, serious discussions about the freedom of choice between cash and book money and the freedom of citizens in a constitutional state, which is freely consolidated in its constitution, would please Dostoevsky with his experiences in an unfree society. And it is characteristic of our open society that, especially in a crisis like the present one, we are conducting and continuing the debate on freedom of choice and power of disposal at this level, and not only with regard to our money.
Does cash have a future? An article by Dunja Koelwel, editor in chief of gi Geldinstitute | 20.10.2020 – 13:02
Please follow this LINK for the original source in German. Translation made by DeepL.com
Cashless payment is on the advance worldwide, only the Germans hang on to cash. gi Geldinstitute therefore wanted to know from Ralf-Christoph Arnoldt (Bundesverband der Deutschen Volksbanken und Raiffeisenbanken BVR), Jochen Werne (Prosegur Germany), Dr. Harald Olschok (BDSW) and Leif Wienecke (Solarisbank) Does cash still have a future?
Signs such as “Cash only” should be a thing of the past in Germany, according to the digital association Bitkom. Wherever customers can pay, at least one digital payment option that can be used throughout Europe should be offered on a mandatory basis, according to the “Bitkom theses on freedom of choice in payment”.
“Cash shows itself to be an anchor of trust in uncertain times. With increasing concern about the corona virus, the amount of physical cash in circulation in the USA, for example, has risen,” says Jochen Werne, member of the management of Prosegur Cash Services Germany. gi geldinstitute therefore asked: What is the current situation regarding ‘war on cash’?
Since the Corona crisis, more and more people have been paying with cards or smartphones instead of with coins or notes. Is this a trend that is slowly eliminating cash? What is your perception?
Ralf-Christoph Arnoldt: Indeed, in recent months we have seen gains in card payments, especially in payments with Girocard. In the first half of 2020, transaction figures have increased by 20.7 percent compared to the same period last year. However, cash still plays an important role in everyday life in Germany, even if this love is eroding.
According to the Eurohandelsinstitut (EHI), the share of cash in turnover in 2019 was still 45.5 percent. Cash offers some advantages from the customer’s point of view. Paying with cash is convenient for the customer, anonymous, immediately final. Cash is freedom for customers. Regulators and business circles involved in the cash circle should accept this as a fact and not force them to change it.
Dr. Harald Olschok: Without doubt, a new phase of “war on cash” began during the Corona crisis. 75 percent of the member companies of the BDGW expect sales next year to be up to 20 percent lower than in the past. We assume that the proportion of cash payments in the retail sector will fall from around 48 percent at the beginning of 2020 to well below 40 percent. However, the crisis has also shown that Germans continue to have great confidence in cash as a secure means of payment and store of value. According to a survey by YouGov, Germans also cannot imagine living in a cashless society.
Leif Wienecke: Since the Corona crisis, we have seen an acceleration of many trend developments, some of which were already foreseeable before. This also includes contactless payment. This customer behaviour, which is relatively new in Germany, fits in well with corona-related hygiene measures. Basically, it can be said that, in addition to hygiene considerations, end customers are primarily looking for speed when choosing a means of payment. This is where digital and contactless payment methods come into play. Over the next few years, we will see a further decline in cash payments and an increasing use of digital payment methods such as mobile wallets.
Jochen Werne: What is important to people when it comes to their money – the “fruits of their labour”? Certainly its unlimited availability. If they can have confidence that they can get their money at any time, people choose the payment option that is most convenient for each individual. Some prefer to pay by smartphone, while for others it’s “only cash is true”. It is fundamental that we as consumers are free to decide from which means of payment we can freely choose. Freedom of choice is the key word.
A “per cash” argument often made is that technology is vulnerable and that in a crisis the value of security is always the highest good. This is why many people have been hoarding cash at the beginning of the lockdown. Do you believe that this money will now come back into circulation? And what do you think about the technological error potential of digital payment options?
Ralf-Christoph Arnoldt: The fact that cash was hoarded at the beginning of the lockdown was more due to the fact that people thought the cash supply could be endangered because of the Corona crisis. But that quickly proved to be incorrect. In the meantime, the hoardings have been continuously disbanded. We can see this, among other things, in the fact that the payout volumes at ATMs are still about 25 percent below the pre-corona level. If you want to compare the security of cash with card payments or digital payment options, you don’t get very far. If cash is stolen, for example, it is gone for good. If a payment card is stolen, the bank is usually liable.
Jochen Werne: It is undeniable that cash is seen by many as an anchor of trust in uncertain times. Electronic payment methods always risk a loss of trust due to technical failures. One of the last of these incidents was not long ago: during the pre-Christmas business on 23 December 2019, of all days, EC card payments were not accepted at many terminals. Many consumers who rely solely on digital payments have probably already had similar experiences of lesser consequence. Such situations can be observed time and again at the cash desks in department shops and supermarkets – for example, when the NFC chip on a card or simply the card reader does not work. Soon the eyes of the people standing around in the shopping queue turn to the payer, impatient and interested, trying to find out the name on the card of the supposedly insolvent unlucky person. Nevertheless, modern technologies are becoming more and more stable over time and a balance will be established between the various payment methods. Just as the “hoarded” will be returned to consumption or investment after the crisis. A cycle that, soberly, has always existed historically.
It became apparent that banks would no longer be able to offer free cash withdrawals from ATMs in the long term. This affects in particular people on low incomes, the elderly and, in general, all those who do not have access to digital forms of payment. Which solution do you think makes the most sense?
Leif Wienecke: Indeed, an accelerated dismantling of bank branches has been observed in recent months, but also before. The cost-benefit ratios seem to be out of proportion. Many end customers, especially older people, are suffering as a result. At the same time, however, one can also read about the creative solutions that savings banks, for example, are using to offer customers in rural areas the service they are used to (e.g. branch on wheels, transfer bus). I believe that other companies will fill the gap left by the banks. For some years now, supermarkets and petrol stations, for example, have been offering free “withdrawal” of cash. This trend to integrate banking services into the context of everyday life is known as contextual banking. The end customer wants to have access to cash or transactions wherever he or she is. As Solarisbank, we see the future in banking here.
Jochen Werne: Making an individual’s assets available as cash causes costs, just as paying with a card costs consumers money. The latest evaluation of 294 account models of 125 credit institutions in Germany by Stiftung Warentest shows that 55 models already charge fees for payment with the Girocard. It is the task of the institutions not only to manage their customers’ money, but also to meet the customer’s wish to make these assets available to them again in the form of cash or book money. The current practice of offering cash or accounts without fees and cross-subsidising them in return is a German phenomenon. The former head of BaFin, Dr. Elke König, already raised the question critically more than five years ago at the “Bank of the Future” event.
Today’s pressure on margins at banks now demands this adjustment. It is undisputed that, according to the German Bundesbank, ATMs are the most popular source of cash, accounting for 84 per cent of all cash withdrawals. Their number has risen by a good 18 per cent in Germany in recent years. On average, there is one ATM per 1,415 inhabitants. ATMs are therefore of enormous social and economic importance. It is not surprising that the area of “cash supply” is expressly listed as a “critical service” in Section 7 of the Critical Service Ordinance of the Federal Office for Information Security (BSI-KritisV), as a “service for the supply of the general public (…), the failure or impairment of which would lead to considerable supply bottlenecks or to threats to public security”. The fact that banks have to provide cash and cards to their customers, but are generally not able to do so profitably without charging is a long-term problem and needs to be improved. However, there is room for debate as to whether charges are the right way forward for consumers.
For US economics professor Kenneth Rogoff, the abolition of large banknotes is a first step. According to Rogoff, cash is synonymous with crime and the shadow economy – and in this respect it is a threat to the general public. Is cash really more “crime-sensitive” than digital payment methods?
Dr. Harald Olschok: As a “learned” Freiburg economist, I am always appalled by the populist and simplistic theses of the former chief economist of the IMF. It is much worse than you suggest. For Rogoff, “there is no question that cash plays a vital role in criminal activities, including drug trafficking, organised crime, extortion, corruption of authorities, trafficking in human beings and money laundering. (Der Fluch des Geldes, Munich 2016, p. 11). Oh yes, and undeclared work and illegal immigration are also owed to cash. Unfortunately, it has also been heard in the euro area. The 500 euro banknote has already been abolished. At the heart of the Rogoffian theses is the abolition of cash in order to impose negative interest rates. People should not save, but spend their money. This ignores the fact that fraud with non-cash means of payment, such as crypto-currencies, is booming. I expect that these forms of fraud will continue to increase. We must therefore assume the opposite.
Ralf-Christoph Arnoldt: Passing on a USB stick with millions of dollars in crypto-currencies, for example, is as easy as passing on a banknote. Criminals and the black economy are also part of the trend towards digitalisation, unfortunately sometimes even ahead of the investigating authorities.
Leif Wienecke: There is a lot of discussion on this topic and also conflicting studies. The Federal Government’s decision to tighten the reporting requirements for notaries, for example in real estate transactions, underlines Rogoff’s thesis. Nevertheless, I believe that it is not possible to generalise. Certainly, the anonymity of cash brings some advantages for criminals and money laundering can be curbed by switching to more strongly regulated, digital payment procedures.
And what about security? With cash, the problem is counterfeiting, with digital payments, for example, the tapping of identities and data. What is easier to protect?
Ralf-Christoph Arnoldt: I don’t see a big difference. It is always a mutual arms race. New security features for cash require more know-how and greater investment for counterfeiters. It is becoming more difficult, the number of offenders is getting smaller, but the sums that a counterfeiter puts on the market are bigger. The situation is similar for digital payments. As a financial group, we are doing everything we can to stay one step ahead of criminals through new cryptographic procedures, hardened systems and so on. It is not without reason that our experts are already working on cryptographic solutions that will be able to withstand the coming era of quantum computers. The challenge here is to maintain the convenience for the customers.
Jochen Werne: By its very nature, cash is without doubt the most robust payment method. This is regularly demonstrated in extreme scenarios such as disasters, failure of a digital infrastructure due to cyber attacks, natural disasters or technical failure. Cash is not tied to electricity, digital infrastructure, passwords or other technical features. In addition, the introduction of the second series of euro banknotes has enhanced security features and made banknotes more secure and more counterfeit-proof. As the Bundesbank reported at the beginning of the year, the number of counterfeit banknotes has fallen by a further five percent. With digital payment methods, consumers themselves have a responsibility to protect themselves. At the beginning of the Corona crisis, for example, the payment limit for contactless payments, such as in supermarkets, was increased. At first glance, this sounds harmless. But as a result, anyone can use a card – and it does not have to be their own – to pay for higher-priced goods without further security checks, such as by entering a PIN. And as far as data protection is concerned: with every cashless payment, consumers disclose personal information. Data that many companies use commercially.
Dr Harald Olschok: The risk of coming into contact with counterfeit money in Germany is still low. Most counterfeits are easy to detect. The security features of the current Euro series make it difficult for criminals. However, if digital payment methods are attacked, consumers should be aware that they lose much more than just their money.
China wants to take a step in this direction from 2021 onward at the state level as well. The aim is to link the Alipay payment solution with all private and state databases, including those in which cashless payment transactions are stored. The aim is to record and evaluate consumer behaviour. Subsequently, either rewards are offered or sanctions are threatened. Anyone who accumulates too much debt or fails to pay it back is no longer allowed to use express trains or planes in China. Although such a development is completely out of the question in European democracies in the foreseeable future, do you also expect consumer behaviour to play a much greater role in credit rating in the future?
Jochen Werne: Harvard history professor Niall Ferguson coined the term “new cold war” over a year ago. This “Cold War” is mainly about one technology leadership in artificial intelligence and takes place between the United States and China. Technologies are not good or bad, but how and for what purpose they are used by us humans, determines the outcome. Just because something is now technically possible, it does not necessarily make sense for a society. It is a great value of liberal democracies that these issues are discussed, that privacy is protected and that the state cannot act on its own authority.
On the question of creditworthiness, it can be said that the better a credit institution knows the borrower, the better a risk assessment can be made in order to quantify credit default risks. When assessing creditworthiness, the institution is required to use all relevant and available data for the decision. Today, it is technically possible to enrich the data provided by the future borrower with information about him/her from the Internet and social media and to round off the data with the help of AI algorithms and peer group comparisons. However, there is a high risk that private personal data may be processed here if inadvertently and the protection of privacy may be violated. This must be prevented. However, it remains to be seen how this will be dealt with in the future.
Leif Wienecke: First and foremost, it is a matter of making sensible use of the many possibilities of generated data to create added value. Companies such as banks primarily face the challenge of preparing their customers’ data in a meaningful way and integrating it for new applications. The ecosystems of the “GAFAs” or Alipay are “data first” companies which are integrated into the everyday life of their users. In principle, they only make decisions based on data and empirical findings. The above description from China, however, does not go hand in hand with our understanding of data or consumer protection, so we do not see this coming either.
On the other hand, it is of course essential to pursue data-driven innovation. Even the credit rating system that exists today can certainly be extended via relevant, contextual data points, in the interests of consumers and credit institutions. The topic of “social scoring”, i.e. the use of customer data from social networks, is controversial in Germany and is discussed above all in the context of consumer protection. This is correct, because the consumer should not only have to give his consent for such scoring, but should also be able to understand the algorithm and complain in case of discrimination.
Recently, initiatives have been heard repeatedly to make a CBDC (Central Bank Digital Currency) accessible to all citizens and not to limit an e-euro to institutional participants in the financial markets. What do you think about this?
Leif Wienecke: The CBDC issue is still in its infancy and has many facets. It is mostly about increasing the efficiency of payment transactions. End customers also benefit from this. In principle, innovation processes and initiatives to transform the financial industry are to be seen as positive. As with all topics with a European or international scope, it is important to create a uniform regulatory framework. Precisely because the introduction of a digital central bank currency for the public would not be accompanied by a change in the existing monetary system. At Solarisbank, we have been dealing with the block chain and crypto currency industry for over two years. Last year, we founded the subsidiary Solaris Digital Assets to realise our vision of the broad use of digital assets.
Ralf-Christoph Arnoldt: Unfortunately, very different things are mixed up here. Firstly, there is the technology on which most crypto currencies are based: the block chain. It is highly interesting because rights (to money, benefits from contracts, etc.) can be transferred securely and traceably. This technology has its use cases and will increase in importance. To issue a currency based on this digital solution is certainly forward-looking but not without risks. The speed with which sums of money can be transferred would in itself increase the speed at which money circulates to an extent at which we lack economic experience. Questions also remain to be answered about the security of the currency and who is responsible for the counter-value. It is therefore to be welcomed that we are dealing with this issue at an early stage so that we can learn with manageable and calculated risk.
The concept of the euro, on the other hand, suggests a digital currency as a means of payment. In my view, it is still too early for that. Not only because the overall economic effects can only be estimated to a limited extent at present, but also because this technology is geared to the security and distribution of data, not to transaction efficiency. The number of transactions is technically limited. There are concepts such as the Lightning technology to circumvent this and allow more transactions. However, the latter again functions as an intermediary according to principles similar to those of traditional payment transactions. Transactions are executed and then “booked” in the block chain – similar to a central bank transfer.
Likewise, too little attention is paid to the ecological aspect. According to estimates, Bitcoin alone consumed around 74 terawatt hours in one month at the end of 2019. By way of comparison, Germany’s total electricity consumption over the same period was around 47 terawatt hours.
And now the crucial question at the end: How do you make cashless payments?
Ralf-Christoph Arnoldt: With the Girocard – as far as possible contactless of course, and with pleasure also by mobile phone.
Leif Wienecke: I use Google Pay with my debit cards from our partners Tomorrow, Vivid Money and Bitwala. Offline I use the corresponding Visa cards. And online I also use PayPal.
Jochen Werne: Of course with cash and cashless.
Dr. Harald Olschok: In food retailing and gastronomy regularly with cash. For larger expenses, including refuelling, with credit cards.
Prosegur transports cash and gold bars. Not an easy task when the gold price rises and fluctuates as it did in the Corona crisis.
The blue fence is over four meters high, with a layer of barbed wire at the top. Anyone wishing to enter the building must pass through several locks and doors. No door opens without the one behind it closing. At the reception, visitors must identify themselves. Only then does the next locked door open. Behind it stands Jochen Werne, a tight-fitting suit, his hair as short as his beard, and says: “Welcome to Fort Knox.”
Es war uns ein Vergnügen Frau Goebel bei Prosegur in Hamburg zu Gast zu haben. Den gesamten Bericht ihres Besuchs können sie in der WirtschaftsWoche unter oben stehendem Link lesen. Ein Auszug findet sich hier:
„Prosegur transportiert Bargeld oder Goldbarren. Keine einfache Aufgabe, wenn der Goldpreis so steigt und schwankt wie in der Coronakrise. Doch Entwicklungsvorstand Jochen Werne hat einen ganz eigenen Blick auf den Markt.
Der blaue Zaun ist über vier Meter hoch, ganz oben eine Lage Stacheldraht. Wer in das Gebäude hineinwill, muss mehrere Schleusen und Türen passieren. Keine Tür öffnet sich, ohne dass sich die dahinter schließt. Beim Empfang müssen sich Besucher ausweisen. Erst dann öffnet sich die nächste verriegelte Tür. Dahinter steht Jochen Werne, eng anliegender Anzug, die Haare ebenso kurz wie der Bart, und sagt: „Willkommen in Fort Knox.“
Original in German published online in the Cicero – Magazine for political education. Please click here
Translation made by DeepL.com
In the first half of digitisation, the USA and China have mercilessly left Europe behind. But nothing is lost yet: a plea for sovereign data infrastructures and a transformation to service-oriented value creation.
Europe is at a crossroads – once again. This time it is about nothing less than the preservation of the continent’s sovereignty, at least in technological and economic terms. It is therefore not surprising that “Digital Sovereignty” is a focus topic of the German EU Council Presidency. Europe’s largest economy exemplifies the current challenges in the midst of a global trade conflict and quasi-monopolies of American and Asian platform companies: because Germany’s strength as the world’s equipment supplier is under scrutiny.
Since the 1970s, the first wave of digitalization has been underway, characterized by the use of electronics and IT as well as the automation and standardization of business processes. It has been driven by exponential growth in performance parameters such as communication networks, memories and processors, which is typical for the IT industry. As a manufacturer of machines, plants, vehicles or process technology, Germany has benefited considerably from this. “Made in Germany” is a worldwide promise of quality. But for how much longer? Or to put it another way: How can we transfer this promise into the digital age?
The real and virtual worlds are merging, an Internet of things, data and services is emerging in all areas of work and life. Automated systems driven by artificial intelligence learn during operation and increasingly act autonomously, as collaborative manufacturing robots, robo-advisors or intelligent harvesters.
Europe is falling behind
Consumer platforms such as Amazon, Alibaba and Facebook have dominated the first half of digitisation. With the exception of the streaming service Spotify, Europe is hardly present in the B2C platform markets. The second half includes the industrial sector, both the digitisation and networking of production (Industry 4.0) and the expansion of products and services to include personalised, digital services (digital business models).
So far the stocktaking – what is still outstanding, however, is the comprehensive implementation, without which Europe will fall further behind in the global race. What levers are there for Europe to score points in the second half and thus maintain competitiveness and self-determination? Two aspects seem particularly important:
Without a sovereign data infrastructure
Once developed, software platforms have process costs that approach zero. This makes it easy to aggregate huge amounts of data, learn from data with Artificial Intelligence and use it to develop digital business models that can be scaled exponentially across countries and industries. Google’s search engine with a 95 percent EU market share is an example of both innovation leadership and quasi-monopoly. In order to gain sovereignty over data and data infrastructures, digital sovereignty is needed: from hardware and software components to communication networks, cloud infrastructures, data rooms and platforms.
European efforts such as the policy- and business-driven project “GAIA-X” deserve broad support, even if success is by no means certain. Self-determination does not mean self-sufficiency or the exclusion of dominant competitors. On the contrary: Europe’s path must be determined by diversity, openness and decentralization, not by isolation. A glance at the regional distribution of medium-sized world market leaders is enough to understand that Europe’s technological and entrepreneurial pound is not in the hands of a few large companies.
Germany has domain expertise
Appropriately, Europe should focus on building open digital ecosystems based on a common reference architecture and defined standards, enabling technological interoperability, providing distributed cloud and edge services and relying on European values such as trustworthiness, security, privacy and fairness. In the industrial sector, the race is still open, since production-strong and product-centric countries like Germany have domain expertise and industrial data such as machine, process, user and product data to which hyperscalers like Google and Amazon have so far had only limited access.
But to achieve sovereignty, Europe needs access to the cloud and data infrastructures, whether in the mechanical engineering or mobility sector. And it needs European regulation as well as state and companies as active consumers of European technology and business offerings. To do so, they must be secure, high-performance, cost-effective and competitive. A high standard! However, if Europe chooses the passive path, this endangers economic competitiveness, entrepreneurial freedom and, in the medium term, our prosperity.
Value creation shifts in favour of the platform operators
We know from the consumer world that investor-financed technology start-ups attack established business models in all domains, act as a platform operator between supplier and customer, define rules, standards and interfaces and benefit from network and economies of scale. As a result, value creation shifts in favour of the platform operators, traditional providers of products and services are degraded to suppliers. Operating and controlling platforms and marketing digital products and services on them is therefore a core prerequisite for Europe’s survival in a digital economy.
Since no single company in the industrial environment has the know-how and data to be successful in the digital age, digital value-added networks are the solution. The “Learning Systems” platform, led by the Federal Ministry of Education and Research and acatech, recently highlighted a dozen success stories of digital ecosystems in Germany. One example shows how resilient manufacturing is created when machine builders can minimize production stops with the help of IoT and AI service providers by means of data-based prediction.
Process optimization is scalable
If the machine nevertheless comes to a standstill, a contingency insurance policy is taken out. In an Industry 4.0 logic, this creates a flexible production line that almost never stops and is therefore even more profitable. And: This process optimization including the digital business model is scalable and does not remain an isolated solution. Another example shows how agricultural APPs and IoT platforms enable cross-manufacturer data exchange with agricultural machinery, even if farmers and contractors use machines from different manufacturers.
The entire vehicle fleet can thus be optimized via one platform. This reduces complexity and enables medium-sized technology leaders for sensor systems, seeds or harvesting machines to scale in a trustworthy platform environment without having to take a greater entrepreneurial risk in building their own platforms.
Europe must speak with one voice
Many more such examples are needed – and they are also emerging in federal Europe. The realization is there, after all. But: In order to play an important role in the world, Europe should not only become faster, but should also speak with one voice, whether in enforcing a level playing field or in international standardization.
Completing the digital single market is also important to enable what China and the US have ahead of us: huge consumer markets in which domestic providers can scale. Europe is at a digital crossroads. Let us take the fork in the road to self-determination!
Hauptstadt-TV reported on August 6, 2020. Coverage here
Today, on 6 August 2020, the time had come for a world premiere, the first armoured money transport vehicle with an electric motor. This project was only made possible by a collaboration between the MAN vehicle and engineering group and the special protection vehicle manufacturer Stoof and the security service provider Prosegur. Together, they have succeeded in making the heavily armoured vehicles more environmentally friendly. As this report shows.