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.
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.
An expedition supporting the creation of international understanding and the creation of awareness for the UN sustainability goal No.14
THERE HAS BEEN AWAKENING
We are living and experiencing a time where we are globally opening borders again. It’s a time of hope and a time to celebrate the great achievements mankind made throughout cooperation, diplomacy and exchange.
Like in the days – many of us do record very well – when the Cold War ended and borders opened, brave women and men worked intensively in many projects to overcome also the barriers in the minds of the people. Fear was replaced by the hope for a better future for mankind. Adversaries became friends and as a result nationalism and populism were disarmed.
With Expedition Baltic Sea Hawk we want to commemorate with a ceremony on sea all those who were engaged for international understanding because we’re convinced that in these days it’s more than ever important to create understanding for the continuation of the historically longstanding period of peace in Europe. The GOST ceremony supporting international understanding will take place at the historical site, where sailors of the navies of NATO and Warsaw Pact operated with a sober attitude in closest distance during times when political tensions were on the edge.
In addition to that we will support the UN sustainabilityGoal 14 by creating awareness for the BALTIC SEA AS A TIME MACHINE predicting the impact of human activities on our oceans.
Overfishing, warming, acidification, pollution, eutrophication, loss of oxygen, intensive use of coasts—all these are phenomena that we observe around the globe. Because they have been particularly drastic in the Baltic, but also because some key problems were successfully addressed, the region can, for good and for bad, tell us what to expect and how to respond to the challenges of the future.
The Baltic Sea, as a model region, can contribute to achieving the United Nation’s Sustainable Development Goal 14— THE CONSERVATION AND SUSTAINABLE USE OF THE OCEANS, SEAS AND MARINE RESOURCES
It‘s a great privilege commanding the flagship of Expedition „BALTIC SEA HAWK“ during this offshore challenge through the Baltic Sea to the North and hence crossing twice one of the planet’s most exciting waterways: the Kattegat. With a commemoration ceremony supporting international understanding we will remember and honour the sailors of the navies of NATO and Warsaw Pact who operated during the Cold War in these waters always with a sober attitude in closest distance, even when political tensions were on the edge. Their professional engagement has been instrumental for the long-standing period of peace in which we have the comfort to live in.
JOCHEN WERNE EXPEDITION LEADER & CO-FOUNDER GLOBAL OFFSHORE SAILING TEAM
Bei sorgfältiger Betrachtung unserer Vergangenheit stoßen wir auf eine faszinierend und teilweise schizophren anmutende Menschheitsgeschichte von partiellem Wahnsinn und absoluter Brillanz – nicht nur, wenn es um den Einsatz neuer Technologien geht. Werfen wir einen Blick in einige dieser Geschichten.
1961 HAVANNA, KUBA: Die Welt steht am Rande eines nuklearen Holocaust. Eine Realität entstanden durch die Auswirkungen des kalten Kriegs, politischer Doktrinen, harter Grenzen und nicht zuletzt technologischen Fortschritts. Nur Diplomatie und der reine Instinkt für das Wesen der menschlichen Existenz auf beiden Seiten verhinderten das Schlimmste.
Eine Geschichte, die die prekäre Lage der Welt zu jener Zeit besonders gut widerspiegelt findet sich in dem indirekten Angebot Fidel Castro an die Sowjetunion, „das Problem“ zu lösen und die kommunistische Revolution durch den Abschuss von Atomraketen von kubanischem Boden, zum Sieg zu tragen. Sein Kampfgefährte Che Guevara ging sogar noch einen Schritt weiter, indem er sagte: „Wir sagen, dass wir den Weg der Befreiung beschreiten müssen, auch wenn er Millionen von Atomkriegsopfern kosten kann. Im Kampf auf Leben und Tod zwischen zwei Systemen können wir an nichts anderes denken als an den endgültigen Sieg des Sozialismus oder seinen Untergang als Folge des nuklearen Sieges der imperialistischen Aggression.” 1962 antwortete der ehemalige Erste Sekretär der Kommunistischen Partei der Sowjetunion, Nikita Chruschtschow, in einem Brief an Fidel Castro, dass er mit der Idee nicht einverstanden sei, weil sie unweigerlich zu einem thermonuklearen Krieg führen würde und dass es doch noch eine Welt bräuchte, in die die Revolution getragen werden könnte.
1961 NEW YORK, USA: Im selben Jahr ratifizieren 12 Nationen einen Vertrag zur gemeinsamen Verwaltung eines ganzen Kontinents. Ein Kontinent, der größer ist als die Vereinigten Staaten. Ein Kontinent, der 90% der Süßwasserreserven der Welt beheimatet und für das Klima unseres Planeten von außerordentlicher Bedeutung ist: die Antarktis. Es ist das Jahr, in dem einer der ermutigendsten Verträge der Menschheit unterzeichnet wurde – der Antarktis-Vertrag.
OPEN-SOURCE-KONZEPT: Der Vertrag – beinhaltet mehrere Kapitel zur ausschliesslich friedlichen und wissenschaftlichen Nutzung der Antarktis. Damit einhergehend regelt der Vertrag auch die gemeinschaftliche Nutzung aller Forschungsergebnisse und Daten. Ein Konzept, das für die damalige Zeit revolutionär erschien und das für die Findung von Lösungen für die großen Herausforderungen unserer Zeit – wie Klimawandel oder die effektive Bekämpfung einer Pandemie – von entscheidender Bedeutung sind.
2020 PLANET ERDE. In der Geschichte haben wir oft die positiven wie auch die negativen Auswirkungen auf die Gesellschaft unterschätzt, die von revolutionären Technologien ausgehen. Doch kann Technologie selbst nicht mit den Begriffen gut oder schlecht beurteilt werden. Vielmehr muss beurteilt werden, wie die Gesellschaft diese nutzt. Heute stehen wir wieder am Rande einer solchen gesellschaftlichen Herausforderung.
Wir leben in einer global vernetzten Welt. Technologischer Fortschritt hat Daten zu einer der wichtigsten Ressourcen gemacht. Der Mitbegründer von Twitter, Evan Williams, erklärte in einem Interview der New York Times 2017 überraschenderweise das Folgende: „Ich dachte, wenn alle Menschen frei sprechen und Informationen und Ideen austauschen können, wird die Welt – automatisch – zu einem besserer Ort. Ich habe mich geirrt“.
Man könnte leicht den Eindruck gewinnen, dass dieses Phänomen neu ist, aber Niall Ferguson, Geschichtsprofessor und Senior Fellow des Hoover Institutes ist davon überzeugt, dass der heutige technologische Fortschritt und seine Auswirkungen auf die Gesellschaft mit der Erfindung des Buchdrucks durch Johannes Gutenberg im 15. Jhdt. vergleichbar sind. Die Druckerpresse hatte viele positive Auswirkungen auf den Fortschritt der Menschheit und katapultierte die Bibel 200 Jahre lang auf den ersten Platz der Buch-Bestsellerliste. Leider machte die gleiche Technik “Malleus Maleficarum”, auch bekannt als der „Hexenhammer“, für dieselbe Zeit zur Nummer 2 auf dieser Liste. Das Buch war die Grundlage für die Hexenjagd und brachte so vielen Unschuldigen den Tod. Sicherlich würde man heute die Inhalte des Buches als „Fake News“ bezeichnen.
GEGENWART & DIE WELT VON MORGEN
Wir alle gestalten heute die Welt von morgen, und unser Streben hat bereits zu viel Gutem geführt. Technologie und menschliche Kreativität haben bspw. dazu beigetragen, die Armutsquote weltweit massiv zu senken. In den letzten 25 Jahren wurden hierbei mehr als eine Milliarde Menschen extremer Armut befreit.
Betrachten wir den Moment so kommt man nicht umhin der aktuellen COVID-19-Pandemie einige Zeilen zu widmen. Es ist eine globale Herausforderung und könnte gleichzeitig die nächste Geschichte des menschlicher Brillanz und Wahnsinns sein. Wir werden dank der KI-basierten Analyseelemente enorme Fortschritte in der medizinischen Forschung und bei den Maßnahmen zur Pandemiebekämpfung erleben. Wir werden aber auch Zeugen einer Rezession werden, die historisch gesehen immer ein Element für Populismus und Nationalismus war. All dies in einem Umfeld von Angst und geschlossenen Grenzen. In diesen Situationen, in denen sich viele von hilflos fühlen, ging Wandel immer von fortschrittlichen Denkern aus, die von ihren Ideen überzeugt waren, von Kant über Ghandi bis zu den Vordenkern der heutigen Zeit.
In unserer offenen Gesellschaft und mit Machine- und Deep Learning Technologien in unseren Händen haben wir die Möglichkeit die Welt zu einem besseren Ort zu machen. Wir können in unseren Berufen viel Neues bewegen, und wir können gegen polarisierende Bewegungen und Ungerechtigkeit in jeder Hinsicht aufstehen und uns Gehör verschaffen. Wir können unsere Kreativität und unseren Intellekt einsetzen, um „den Fortschritt des Denkens” zu verteidigen, der schon immer das Ziel hatte, den Menschen von seiner Angst zu befreien“, genau wie es eines der Ziele des Zeitalters der Aufklärung war.
Unlimited availability of our money and its ability to be used as a medium of exchange create certainty and lead to personal freedom. But which payment method is proving to be the most robust in any crisis? A reflection on the value of cash in a free society.
By Jochen Werne, Management Board member, Chief Development & Chief Visionary Officer (CDO/CVO) of Prosegur Cash Services Germany GmbH
In times when our life is being affected significantly by the effects of the situations like the COVID-19 pandemic, we become more aware of the basic needs in our lives. However, the COVID-19 crisis, which hits us globally so hard that we are even prepared to give up some of our civil rights and liberties guaranteed by the constitution, also reveals what certainty means and gives us and what we rely on in order to overcome a crisis and regain our freedom. We live in a world of exponential leaps in technology – and the technological progress has traditionally always resulted in a global improvement in living standards. The international community can be rightly proud of its achievement of reducing the percentage of people who have to live in absolute poverty from 35% to 8% in the last 30 years thanks to global trade. However, it is in times of crisis that we see just how sustainable the goals that have been achieved are. Here prudent and decisive action from political and business leaders is called for. Confidence gained in people and instruments is the greatest asset in times of uncertainty.
Cash: always available
The same applies for payments. While the independent good work over decades of many central banks such as the Deutsche Bundesbank, the European Central Bank and the US Federal Reserve is making itself noticeable in the crisis and the citizens rely on the stability of the euro and US dollar, cash is also showing itself to be an anchor of confidence in uncertain times. With growing concerns due to the coronavirus, in the USA for example the volume of physical cash in circulation has increased. In the week before 25 March this increased by 1.8% to 1.86 trillion dollars in absolute figures. This represents the biggest weekly increase since December 1999, when the fear of the so-called Millennium Bug was the reason for the rise. As we see today, the technological meltdown did not happen. However, 20 years later we are now more aware than ever of the vulnerability of technology and that in times of crisis the value of certainty is always the greatest asset. The increase in demand for cash, including in Germany, at the start of the corona crisis is probably attributable to this legitimate need of citizens for certainty and their great confidence in cash. According to the Bundesbank, the volume on Monday 16 March alone, the first day upon which schools and nurseries were closed, was 0.7 billion euros above the average.
Electronic payment methods, which are essential in so many areas such as online trading for example, repeatedly risk a loss of confidence due to technical failures. One of the most recent of these incidents occurred during of all times the Christmas shopping period on 23 December 2019, when EC card payments were no longer accepted at many terminals. It is a little like the situation described by the Roman poet Ovid: “People are slow to claim confidence in undertakings of magnitude.” Most certainly our savings – the fruit of our labour – are of this magnitude for us. It is for this reason that the availability of our money is so important. If this availability were restricted, we would start to feel that we might no longer be able to access our money, and a bank run would most likely be the result. It is not without reason that the “supply of cash” is expressly defined as a “critical service” in Section 7 of the Regulation on the Identification of Critical Infrastructures (BSI-Kritisverordnung – BSI-KritisV) of the Federal Office for Information Security (BSI). That is to say a “service to supply the general public […], the loss or impairment of which would result in significant supply shortages or risks to public security.”
Certainty in uncertain times
In the COVID-19 crisis, anxiety about health and the economic consequences of any crisis dominate our daily life. While fear is clearly caused by an external threat, anxiety is indeterminate. As the Greek stoic philosopher Epictetus wrote in his Enchiridion of stoic morals: “People are not disturbed by things, but by the view they take of them.” It was therefore also absolutely consistent that the World Health Organization (WHO), the European Central Bank, the Bundesbank and the Robert Koch Institute have been stressing repeatedly in the corona crisis that there is no documented case that would suggest there would be an increased virus risk due to the use of cash as opposed to card payment. They refer here to corresponding scientific studies and underline repeatedly that no information on such a risk has been documented.
Freedom established by the constitution
John Stuart Mill, one of the most successful liberal thinkers of the 19th century, defined freedom as the “first and strongest desire of human nature.” Accordingly, all governmental and social action must be directed towards granting the individual free development, while his freedom, as Mill formulates it in a principle known as the “principle of freedom,” may be limited under one condition: to protect himself or another person. Now, during a serious crisis, all citizens are forgoing some of their fundamental constitutional rights of freedom. This massive intervention is certainly consistent with Mills’ theory in this time of corona. In his novel The House of the Dead, Fyodor Mikhailovich Dostoevsky describes his own experiences of life in a Siberian prison camp and writes the subsequently oft-quoted sentence: “Money is coined liberty,” whereby he describes the vital relevance of a free exchange of goods in an environment where people are deprived of freedom – with cash in the form of coins. Although not in the same way as Dostoevsky, we are also living in a time of extreme change: on a social, economic and political level. We are living in a time when, due to exponential technological developments, whole industries and business models are changing radically and countries are competing for supremacy in areas such as Artificial Intelligence (AI). It is a time in which transformation is the new norm and an agile corporate culture has to be the key to success. It is currently the case in many traditional industries that “anything that can be digitised, will be digitised.” And inevitably this also raises the question of whether this is also the case for the first “instant payment” solution, one of the earliest and longest-lasting achievements of human civilisation – for our cash? Our current free choice of payment method is certainly good, as long as we can choose freely as consumers the payment method appropriate for the respective situation. Discussions about the possible restriction of the freedom of choice of citizens regularly prompt intellectuals to issue warnings. For example, the poet Hans Magnus Enzensberger is of the opinion regarding the issue of “restriction”: “Those who abolish cash, abolish freedom.” This opinion is also shared by Carl-Ludwig Thiele, a former member of the Executive Board of the Deutsche Bundesbank: “Abolishing cash would hurt consumer sovereignty — the free choice of citizens about their payment instruments […] Government agencies do not have the right to tell citizens how they should pay.“
Technological vulnerability, fall-back option and data protection
Particularly in extreme scenarios such as disasters, failures of a digital infrastructure due to cyber attacks, natural events or simply due to technical failure, it is made clear that cash, by its nature, is currently the most robust payment method. The fact that the contactless payment limit has been increased without further ado, for example in supermarkets, at first sounds harmless. However, as a result, anyone can pay for higher-priced goods using a card, and it does not have to be their own card, without any further security checks such as entering a PIN. Everyone has to examine and question critically for themselves the possible consequences of such a payment method. Also not to be disregarded is the issue of data protection. More cashless payments also mean more personal information disclosed by everyone. Data which numerous companies use for commercial purposes. At the latest since the introduction of the EU General Data Protection Regulation (EU GDPR), the sensitivity of the population of Europe with regard to data protection and privacy has been rising gradually. Klaus Müller, Germany’s top consumer protector and Executive Director of the Federation of German Consumer Organisations (vzbv), describes cash as “data protection in practice”. Anyone who pays with cash does not leave any traces to create a consumer profile, purchasing and payment behaviour cannot be manipulated. Cash also helps to protect financial privacy. This was emphasised by Udo Di Fabio, who was a judge of the Federal Constitutional Court for twelve years, at the Cash Symposium 2018 hosted by Deutsche Bundesbank. He explained that every citizen can dispose freely of their money. In his view this freedom would be restricted if financial management were completely digitised.
Smart cash management alleviates the workload of banks
Crises such as the current corona pandemic always bring to light new approaches and act as accelerators of transformation processes that have already been set in motion. With regard to cash-related industries, the banking world has already been in a transformation process for some time. A company such as Prosegur, which, with over 4,000 employees and 31 branches, is a market leader in Germany in the transportation of cash and valuables, is increasingly becoming a full payment-platform provider. Several banks have already taken the path of fully outsourcing their cash management for synergy and cost-saving reasons. Here, cash processes are becoming not only much leaner, but also more cost-effective. This is the case not only for banks, but also for retail customers. With smart machines installed by Prosegur at its customers, cash can be disposed of directly and credited to the customer account on the same day. The smart infrastructure, including dynamic monitoring and forecasting, optimises the logistics and reduces costs in cash logistics. This is the next step towards an efficient, digital and integrated cash management.
Coined Liberty 2.0 and the justification for and rightfulness of cash
In view of the technological progress and the associated social changes, it can be seen that key values from the human perspective are still valid. Based on an intellectual, serious discussion, the relevance to today of the theories of for example Dostoevsky with his experiences in an unfree society is clear: The discussion about the civil rights and liberties of citizens is always very closely related to their ability to use cash freely, to their freedom of choice of payment method and ultimately to the rightfulness of their actions with regards also to effiency and impact. Our open and liberal society is characterised by the fact that we are discussing and most certainly will continue to discuss “Coined Liberty 2.0” at this level.
It has been a privilege contributing as co-author for the fifth time to an inspiring book project. “CRM goes digital“ has been initiated by Dr. Martin Stadelmann, Mario Pufahl and David Lauch and is part of the Springer Gabler Edition Sales Excellence book series (ESE)
Artificial Intelligence meets Homo Sapiens – Possible applications and limits of artificial intelligence
Author: Jochen Werne
Werne J. (2020) Artificial Intelligence meets Homo Sapiens – Einsatzmöglichkeiten und Grenzen Künstlicher Intelligenz. In: Stadelmann M., Pufahl M., Laux D. (eds) CRM goes digital. Edition Sales Excellence. Springer Gabler, Wiesbaden
A special encounter. Algorithms developed by humans meet everything that man and nature embody – from industrial processes to our very own behaviour. A race between countries and companies has begun to decide the enormous potential of AI and its impact on our consumer behavior, as well as on our society. However, despite all the euphoria, it is important to understand the topic, its possible applications and also its limitations well, so as not to succumb to the danger of losing oneself in technology-believing magic.
About the book: CRM goes digital
Consistent customer orientation and digital transformation lead to completely new approaches in management: the focus is on omnichannel or mobile CRM concepts, big-data and social media instruments, and automation. But what does this mean in concrete terms for marketing, sales and service? What effects does digitalization have on product and service optimization or on sales management and customer loyalty? How can methodical customer orientation contribute to an improvement in sales performance? Answers to these and other questions are provided by the contributions from science and practice in this book. The authors illuminate the requirements and possible solutions of CRM systems along the concept of the customer journey using selected industry examples. They provide concrete recommendations for action and offer managers and users from customer-oriented business areas valuable orientation aids for the implementation of digital customer management.
From the content
CRM: strategies, organisation, controlling and employees
Concepts in digitisation
Best Practices in CRM: Case studies of customer-centric companies
Topics of CRM research
Published: Werne, Jochen (2019, December 1). The nature of society: Are certain cultures less predisposed to cyberthreats than others? An examination using the example of Germany. In the Cyber Security: A Peer-Reviewed Journal, Volume 3, Issue 2.
Successful ransomware attacks and thefts of data and passwords have unequivocally demonstrated that technical defensive measures are to be considered as merely basic moves in the protection against cyberattacks, and that security concepts, if to be effective, must take ever greater account of the human factor. Several examples prove that attack vectors which belong to the area of ‘social engineering’ are menacingly successful. Employees of enterprises, especially SMEs, frequently underestimate their importance when assessing security risks and the defence against them. As a consequence of these findings, a company-wide risk management should respect cultural and psychological peculiarities. Another promising approach are AI-based concepts, both as a technical defence against cyberthreats and in respect of processes specific to the company, as well as culture-specific characteristics of its employees. Both approaches are based on understanding human behaviour in its sociocultural context. Within the scope of this paper, this cultural aspect of cyber security is examined with regard to whether certain cultures may be less predisposed to cyberthreats than others. This is analysed using the example of Germany and also considers the question whether more or less authoritarian company cultures play a role in this context. How can phenomena such as German angst and similar cultural peculiarities be adequately taken into account? The remarks are mainly targeted at an audience which is concerned with organisational and technical countermeasures again cyberthreats. They focus on the importance of incorporating findings from psychology and social sciences when designing and realising such measures.
Jochen Werne is the Chief Development and Chief Visionary Officer (CDO/CVO) and executive committee member of PROSEGUR Cash Services Germany Ltd. Prior to that he was director and authorised officer of the Bankhaus August Lenz & Co. AG. Jochen is also member of the Federal Ministry of Education and Research Initiative ‘Learning Systems’ — a platform for artificial intelligence, member of the expert board of Management Circle, as well as a member of one of the most important think tanks worldwide: Chatham House, the Royal Institute of International Affairs. Jochen is a keynote speaker at various banking, innovation and executive conferences as well as an author and co-author of several textbooks and professional articles.
ABOUT Cyber Security: A Peer-Reviewed Journal
Cyber Security is the major peer-reviewed journal publishing in-depth articles and case studies written by and for cyber security professionals. It showcases the latest thinking and best practices in cyber security, cyber resilience, cyber crime and cyber warfare, drawing on practical experience in national critical infrastructure, government, corporate, finance, military and not-for-profit sectors.
Each quarterly 100-page issue analyses significant current and emerging cyber security threats and the latest strategies, techniques and technologies available to detect, manage and react to them, helping to uncover potential weaknesses in your current systems which could be open to attack. Its detailed articles and case studies – all of which are peer-reviewed by an Editorial Board of leading cyber security experts – provide in-depth, actionable advice and ‘lessons learned’ from fellow professionals, showing how cyber security programmes have been specified, designed, implemented, tested and updated in their organisations, as well as how data breaches and exercises have been managed in practice.
Cyber Security does not publish advertorial or advertising but rather in-depth articles on key topics including:
Cyber security risk assessments, platforms and frameworks
Building cyber response programmes
Threat surface analysis and detection
Incident response and mitigation
Training ‘red’ teams
Crisis and reputation management
Recovering from a data breach
Employee and customer awareness, education and training
Workforce analysis and programmes
Reporting to senior executives and getting sufficient funding
Scenario planning, penetration testing and cyber security exercises
Reducing insurance premiums
Cyber security in the supply chain
Cloud security risk
Cyber warfare, cyber terrorism and state-sponsored attacks
Safe disposal of sensitive data
Cyber security investigations and digital/analogue forensics
It is a great pleasure giving a keynote at the WIWO Digital Suite 2020 and to discuss the topic „Back to the roots. How technological progress and artificial intelligence is influencing international affairs and business today.“ with Germany‘s leading CFO‘s.
ABOUT THE KEYNOTE
The length of stay of market-leading companies in the DAX, NASDAQ and other leading indices is decreasing rapidly. The planning cycles in companies and for CFOs are becoming shorter and shorter and the planning uncertainty with regard to the effects of international tensions on exports is increasing. The keynote will provide information on the relationship between the phenomenon of exponential technology leaps and the resulting innovations in the field of artificial intelligence and its impact on the geopolitical situation and international cooperation in general, and customer behavior and communication in particular.
A successful digitization strategy can only be implemented with and by the CFO. CFOs are drivers of change in the company and at the same time have to change themselves and the finance function. This is a balancing act in which the prioritization of digitization projects in particular becomes a challenge in day-to-day business and again increasing cost pressure. With the CFO Digital Suite, WirtschaftsWoche offers a creative space for your own assessment and inspiration. Where do other CFOs stand with their digitization roadmap? The data driven company – process mining in practical test Restructuring and cost management vs. future projects – mastering the balancing act Upskilling – wish or reality?