Publication: For the good of all – Why standards are so important

gi-Geldinstitute published „For the good of all – Why standards are so important“, A plea for future-oriented minimum standards in the CIT industry, underlining Prosegur‘s frontrunner role as resilient infrastructure provider in the security and cash management industry.

Find Original in German HERE. Translation generated with deepL.com

A plea for future-oriented minimum standards in the CIT industry. The neighbouring banking industry (and often the customers of CIT companies) is already protected by standards such as MaRisk and BAIT. However, cash-in-transit companies that work closely with their customers (banks) have less high standards in IT, whereby the industry is becoming increasingly digitalised. Prosegur argues for higher standards across the CIT industry.

Emeritus professor of literature Hans-Dieter Gelfert, who has spent many years researching German, British and American mentalities, expressed in an interview with Deutsche Welle that the orderly society of modern Germany has a long genesis. “Order is one of the sacred words in Germany, and that has something to do with the German emphasis on security as opposed to freedom,” he said. “For the last thousand years, security has always been the supreme value and order is a mainstay of security.” Part of Germany’s success is built on norms. It is not without reason that the encyclopaedia “Brands of the Century” lists more than 200 German brands such as Hipp or Tempo as examples of entire product categories. The entire title is: “German Standards – Brands of the Century”. Aha, standards then – a coincidence?

Without rules, norms or minimum standards, a modern society would be almost inconceivable. They structure, make things comparable and act as a control mechanism. Cultural imprints and regional differences come into play in their design. For example, many an EU citizen groans about the General Data Protection Regulation when a form has to be filled out for consent to the use of personal data. On the other side of the Atlantic, people certainly pay respect to the GDPR for the standards it sets. Standards that reflect the values of an enlightened Europe.

Own rules in the business world

Beyond social norms and local legislation, there are other rules in the business world. There is hardly an industry that has not already given itself a catalogue of minimum standards. This is an advantage for many, because the complexity on the supply side is often reduced for those asking. But the question must be allowed whether minimum standards are sufficient and whether they all focus on the well-being of customers and society. Too often the focus is on the providers. Yet there are standards that need to be established today in order to prepare for future challenges.

Prosegur is committed to more than minimum standards to position the entire industry for the future and to ensure society’s trust in this system-critical industry. An industry that does nothing less than ensure the unrestricted supply of central bank money to the population and the safe return of several million euros of cash income daily to the accounts of businesses to ensure their liquidity.

A look at the customer environment reveals that the related banking industry is leading the way: with MaRisk (Minimum Requirements for Risk Management) or BAIT (Bank Supervisory Requirements for IT), credit institutions have positioned themselves for the future. Since banks usually cooperate with a cash-in-transit company, it is only logical for Prosegur to apply these already existing requirements in an identical manner to its own business operations today and consequently to demand rapid implementation from all providers of cash and valuables transport.

All players operating in such an important part of our economic life must keep their eyes on the future and never cling to the status quo. Today, topics such as digitalisation and environmental protection naturally belong in the programmes of sustainably oriented companies. Every organisation needs courage, creativity and a willingness to invest in finding a digital language for analogue solutions. This fact is of particular importance in the Corona pandemic, because it acts as an accelerator for the global digital transformation.

Politicians underlined that they have recognised this on 9 December 2020 with the BMI’s draft bill for a second law to increase the security of information technology systems. But even before the draft becomes law, the following applies to Prosegur: the further development of current standards, investment in sustainable technologies and personnel as well as in the certification of processes and models must absolutely be in the interest of every serious money and value service provider already today.

Resilience through standards and digitalisation

It is essential to arm oneself against all kinds of threat scenarios – known and new, present and future – and to become resilient against external shocks. To be resilient so that, as a critical infrastructure, citizens can access money even in crises or exceptional situations. And to offer support to other critical infrastructures to also become resilient in order to avert supply bottlenecks for the population in cooperation. Prosegur consistently pursues this maxim, among other things with the smart cash procedure, in which cash receipts, for example in the supermarket or pharmacy, are deposited in a smart safe, where they can be credited to the business account via Early Value. Independent of the physical collection of the money, the company can use it to do business. A lack of liquidity does not become a showstopper for supermarkets and pharmacies in times of crisis. They remain open and the supply of goods and medicines is maintained. In the impulse paper “Resilient pioneers from business and society” of the German Academy of Science and Engineering (acatech), Prosegur Smart Cash was presented in December 2020 as a resilient concept for success.

Standards create resilience. So what standards should the cash and cash-in-transit industry additionally orient itself to? In Prosegur’s opinion, the standards of the credit institutions with which the cash and valuables transport industry cooperates on a daily basis. Not only in terms of their own resilience, but also in order to be a true partner for customers with their very own challenges in the low and negative interest rate environment, in the digital transformation and in the climate crisis. Then the players in this industry not only transport, process and store values, they also embody them and prepare to take on even greater responsibility in the “cash cycle” value chain.

Competence NOW: The DATA LITERACY CHARTA

It is an honour to be able to support this forward-looking Data Literacy Charter, initiated by the Stifterverband, as a first signatory together with the most competent representatives from politics, education, business and science.

Jochen Werne

DATA LITERACY CHARTA

Find all original information in German > HERE / please find below a translation for English speaking audience – created with DeepL.com

The Data Literacy Charter, initiated by the Stifterverband in January 2021 and supported by numerous professional societies, formulates a common understanding of data literacy and its importance for educational processes. The charter is in line with the Federal Government’s data strategy and with the Berlin Declaration on the Digital Society.

Author and authors:
Katharina Schüller, Henning Koch, Florian Rampelt


SUMMARY
Data literacy encompasses the data skills that are important for all people in a world shaped by digitalisation. It is an indispensable part of general education.

With the Data Literacy Charter, the signatories express the common understanding of data literacy in the sense of comprehensive data literacy and its importance in educational processes. This understanding is in line with the Federal Government’s data strategy and with the Berlin Declaration on the Digital Society.

Data literacy includes the skills to collect, manage, evaluate and apply data in a critical way. If data is to support decision-making processes, it needs competent answers to four fundamental questions:

What do I want to do with data? Data and data analysis are not an end in themselves, but serve a concrete application in the real world.
What can I do with data? Data sources and their quality as well as the state of technical and methodological developments open up possibilities and set limits.
What am I allowed to do with data? All legal rules of data use (e.g. data protection, copyrights and licensing issues) must always be considered.
What should I do with data? Because data is a valuable resource, a normative claim derives from it to use it for the benefit of individuals and society.
The supporters of the Charter see data literacy as a central competence of all people in the 21st century. It is the key to systematically transforming data into knowledge.

Data literacy enables people, businesses and scientific institutions, as well as governmental or civil society organisations,

to actively participate in the opportunities offered by data use;
deal confidently and responsibly with their own and other people’s data;
to use new drivers and technologies such as Big Data, Artificial Intelligence or Internet of Things to meet individual needs, address societal challenges and solve global problems.
Data literacy strengthens judgement, self-determination and a sense of responsibility and promotes the social and economic participation of all of us in a world shaped by digitalisation.

GUIDING PRINCIPLES
Five principles characterise the importance and role of data literacy as a key competence of the 21st century.

Data literacy must be accessible to all.
Data literacy serves to promote maturity in a modern digitalised world and is therefore important for all people – not only for specialists. The aim of teaching data literacy is to ensure that each individual and our society as a whole deal with data in a conscious and ethically sound manner. Data literacy enables successful and sustainable action that is based on evidence and that takes appropriate account of uncertainty and change in our living environment. We are therefore committed to ensuring that data literacy is taught broadly and can be acquired by all people.

Data literacy must be taught throughout life in all areas of education.
Data literacy must be anchored in all formal and non-formal education sectors and thus established as part of general education. To do this, we must continuously teach learners how data relates to their respective lifeworlds: Data are digital images of real phenomena, objects and processes – this applies to all fields of application. How to collect or procure, evaluate, apply and interpret data appropriately for the respective application must be systematically learned and practised. The basic concept of data literacy and its sub-areas therefore applies across the board, even if the level of competence imparted varies depending on the educational sector and level.
In concrete terms, this requires the inclusion of data literacy in the curricula and educational standards of schools, in the curricula of degree programmes and in teacher training programmes. Learners should not only be addressed as passive consumers of data. Rather, we want to enable them to actively shape data-related knowledge and decision-making. In order to make lifelong learning of data literacy possible, data literacy programmes for extracurricular and vocational training are also needed. We advocate developing and promoting these, for example, together with adult education centres or public libraries.

Data literacy must be taught as a transdisciplinary competence from three perspectives.
Data literacy involves three perspectives: the application-related (“What is to be done?”), the technical-methodical (“How is it to be done?”) and the social-cultural (“What is it to be done for?”). We therefore want to ensure that data literacy is taught from a trans- and interdisciplinary approach. This includes
● the application-oriented perspective (for example, applications from the natural and engineering sciences, economics, medicine, psychology, sociology, linguistics, media studies and many more),
the technical-methodological perspective (for example, from the perspective of statistics, mathematics, computer science and information science),
the socio-cultural perspective (for example, reflection on legal, ethnological, ethical, philosophical as well as inequality aspects)
● as well as the perspective of teaching (for example on the part of subject didactics and educational science).

Data literacy must systematically cover the entire process of knowledge and decision-making with data.
Data literacy ensures that answers to real problems are found with the help of data in a structured and qualitative way. Data literacy therefore includes the following areas of competence:
● Using and protecting data (ability and motivation to responsibly acquire, analyse, share and obtain appropriate data and information in the context of the task at hand).
Classify data and information derived from it (ability and motivation to contextualise and interpret data and information and to critically question learning systems, such as AI applications).
● Act in a data-supported manner (open-minded attitude towards data in the sense of a data culture including insight into the role of data for evidence-based action, ability to handle data with confidence including effective communication of data-based decisions).

Data literacy must comprise knowledge, skills and values for a conscious and ethically sound handling of data.
Data literacy comprises three competence dimensions that must be mapped in all three competence areas. Each competence area is characterised by
● specific knowledge (dimension “Knowledge”),
● the skills and abilities to apply this knowledge (dimension “Skills”) and
● by the willingness to do so, i.e. the corresponding value attitude (dimension “Values”).
Data ethics is a central component of a key competence and is reflected in all sub-areas of data literacy. This means that when data is collected, managed, evaluated and used in a critical way, ethical aspects play an important role throughout. Data ethics and values contribute significantly to ensuring that not only the right means are used to solve problems with the help of data, but above all that the right goals are pursued: Data should make a sustainable positive contribution to society and therefore be used responsibly, context-sensitively and with a view to possible future consequences.

The signatories of the Data Literacy Charter will take measures to disseminate this understanding of data literacy and to further strengthen the associated competences. They call on other actors to do the same in their sphere of influence.

The initial signatories
Institutions & Initiatives (in alphabetical order)

  • Bund Katholischer Unternehmer e.V. (BKU)
  • Deutsche Arbeitsgemeinschaft Statistik (DAGStat) mit ihren 14 Mitgliedsgesellschaften und dem Statistischen Bundesamt Destatis
  • Deutscher Volkshochschul-Verband (DVV)
  • Deutsche Statistische Gesellschaft (DStatG)
  • Digitalrat der Bundesregierung
  • Europäisches Wirtschaftsforum e.V. – EWiF Deutschland
  • Federation of European National Statistical Societies (FENStatS) mit ihren 27 Mitgliedsgesellschaften und der Europäischen Zentralbank
  • FernUniversität in Hagen
  • FOM Hochschule für Oekonomie & Management
  • Hochschulforum Digitalisierung
  • Initiative for Applied Artificial Intelligence by UnternehmerTUM
  • Institute of Electrical and Electronics Engineers (IEEE), European Office
  • International Association for Statistical Education (IASE)
  • KI Bundesverband e.V.
  • KI-Campus – Die Lernplattform für Künstliche Intelligenz
  • Partnership in Statistics for the Development in the 21st Century (PARIS21) / OECD
  • RWI – Leibniz-Institut für Wirtschaftsforschung
  • Stifterverband
  • Technische Universität Dortmund
  • Weltethos-Institut | An-Institut der Universität Tübingen
     

Individuals (in alphabetical order)

Regina Ammicht Quinn, Dorothee Bär, Thomas K. Bauer, Manfred Bayer, Jörg Bienert, Felicitas Birkner, Vanessa Cann, Thomas M. Deserno, Roman Dumitrescu, Johanna Ebeling, Florian Ertz, Andrea Frank, Gerd Gigerenzer, Jessica Heesen, Ulrich Hemel, Norbert Henze, Burghard Hermeier, Wolfgang Heubisch, Oliver Janoschka, Johannes Jütting, Claudia Kirch, Volker Knittel, Henning Koch, Ralf Klinkenberg, Annegret Kramp-Karrenbauer, Alexander Knoth, Beate M. Kreiner, Sebastian Kuhn, Monique Lehky Hagen, Andreas Lenz, Andreas Liebl, Anna Masser, Volker Meyer-Guckel, Antje Michel, Ralf Münnich, Dominic Orr, Ada Pellert, Martin Rabanus, Walter J. Radermacher, Philipp Ramin, Florian Rampelt, Richard K. Frhr. v. Rheinbaben, Peter Rost, Philipp Schlunder, Harald Schöning, Katharina Schüller, Rainer Schwabe, Andrea Stich, Sascha Stowasser, Renata Suter, Georges-Simon Ulrich, Daniel Vorgrimler, Jochen Werne, Johannes Winter

The hallmark of an open society is that it promotes the unleashing of people’s critical faculties, and the Data Literacy Charter, in this best sense, promotes the much-needed creation of data literacy for all areas of our digital society

Jochen Werne

Whitepaper: Introduction of AI systems in companies

Design approaches for change management

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.

Digital Summit 2019

It’s a great pleasure supporting on October 28, this year’s DIGITAL SUMMIT together with other experts from the “Platform Learning Systems, the Platform for Artificial Intelligence” #DigitalGipfel19 #platformeconomy

The Digital Summit (previously the National IT Summit) and the work that takes place between the summit meetings form the central platform for cooperation between government, business, academia and society as we shape the digital transformation. We can make best use of the opportunities of digitisation for business and society if all the stakeholders work together on this.

The National IT Summit was renamed the Digital Summit in 2017. This was to take account of the fact that digitalisation comprises not only telecommunications technology, but the process of digital change in its entirety – from the cultural and creative industries to Industrie 4.0.

The Digital Summit aims to help Germany to take advantage of the great opportunities offered by artificial intelligence whilst correctly assessing the risks and helping to ensure that human beings stay at the heart of a technically and legally secure and ethically responsible use of AI

The Digital Summit looks at the key fields of action within the digital transformation across ten topic-based platforms. The platforms and their focus groups are made up of representatives from business, academia and society who, between summit meetings, work together to develop projects, events and initiatives designed to drive digitalisation in business and society forward. The Summit will serve to present the results of the work that has been done in the past, to highlight new trends and discuss digital challenges and policy approaches.

Looking forward moderating the Panel Discussion on “Digital Platforms for new AI-based Services”

International Understanding – Keynote: Technologies and humanity in the context of modern Vietnam

Video Stream of Jochen Werne’s keynote at the launch ceremony of the Vietnam Germany Innovation Network (VGI Network).

“It was a great inspiration to meet so many committed people in just one day, ambitious and authentically personally committed, striving for strong intercultural relations between Vietnam and Germany, with the aim of bringing visible benefits to the people of both nations”.

Jochen Werne

Experience more about the VGI Network at https://www.facebook.com/VGInetwork2019/

Panel discussion at Handelsblatt Bankengipfel 2019 – “AI in Banking”

Inspiring discussions with Michael Kaiser, Head of Department for Financial Institutions at the Office for Data Protection of the German State of Hesse & Ralf Heim, Co-Founder of Fincite.

Handelsblatt panel from left: Katharina Schneider, Ralf Heim, Michael Kaiser, Jochen Werne

Finance Journalist at Handelsblatt Katharina Schneider greatly moderated the panel: “Chances & Risks of #Technology – Can data protection and artificial intelligence be reconciled?”

Details HERE

New ways – Artificial Intelligence in Cyber Security

Defense against cyber attacks through new technologies

Author: Jochen Werne – published by Der Bank-Blog – 15 February 2019

Cyber crime has become a serious threat to business, politics and private individuals since a long time. New technologies based on the use of artificial intelligence might offer more security.

The fight against cyber threats has become significantly more complex for global government organisations, businesses, and individuals in recent years. Technical protection of IT systems and infrastructures and thus data security in the narrower sense are no longer the only issues. Companies, for example, need to address the much broader concept of information security.

Solutions based on artificial intelligence could prove helpful in the fight against cybercrime. According to a study by the IBM Institute for Business Value, the spread of intelligent, AI-based security solutions will increase significantly in the coming years.

Technical protective measures have long since been based on machine learning, for example, to identify spam or phishing e-mails or to record trends and anomalies in large amounts of data – both in data traffic within the corporate network and in its external connections.

Jochen Werne
Jochen Werne

AI systems for the identification of cyber attacks

In future, for example, systems might also be able to identify hidden channels in the corporate network through which cyber criminals attempt to acquire data. AI’s greatest strength, pattern recognition, enables automated detection of a wide range of anomalies and security incidents. For this purpose, however, AI-based systems must also learn to distinguish between common IT failures and cyber attacks. In addition, self-learning algorithms need to take internal corporate processes into account to come up with precise results.

In the near future, according to a forecast by Christian Nern, former Head of Security Software DACH at IBM Germany and today Partner at the Consulting firm KPMG, AI-based security analysis systems will be able to detect and fend off attacks proactively. Then, according to the former IBM security software chief, the confrontation between cyber criminals and security officers could possibly take place directly between the AI systems they use.

Germany as a pioneer country

Germany, which considers itself a pioneer country in the fields of learning systems and artificial intelligence, has already launched a platform for artificial intelligence on this topic initiated by the Federal Ministry of Education and Research (BMBF): “Learning Systems”. The platform with its 200 members brings together leading experts from science, business and society and deals with technological, economic and social issues relating to the development and introduction of learning systems on an interdisciplinary and cross-sector basis.

One of the seven working groups deals in particular with IT security, privacy, law and ethics. The composition of the topics in this group shows the interwoven culture-specific discussions that will later lead to scenarios, recommendations, guidelines and roadmaps.

Intelligent combination of available modules

As often in cyber security topics, there is no patent solution for the numerous questions and challenges. A company-wide risk management system, which establishes appropriate technical and organisational measures and also takes into account findings from psychology and cultural studies, seems to be a sensible way forward.

The right balance between security awareness and security, individual freedom paired with increased personal responsibility as well as support through technology and organisational structure is probably the most promising approach in the current state of research and technology to effectively meet the challenges for information and IT security.

You’re the captain, but with what ship and crew?

MANAGEMENT IN DISRUPTIVE TIMES

Author: Jochen Werne . Firstly published in the Academy for Leadership column in German. Translation supported by DeepL

“An analogy for business leaders in the financial industry that compares the challenging times of today’s technological enterprise transformation with the changes during the time of the industrial revolution when steam ships ended the centuries-long era of sailing ships.”

In 1971, the BBC began broadcasting a series on the history of James Onedin, who, as captain and later as shipowner, lived through the stormy times of industrialisation and the conversion of the entire industry from sailing to steam navigation. The series, which takes place in Victorian England in the second half of the 19th century, describes in a special way the subtleties of the interplay of a changing market. New technologies, new skills of market participants, increased conflict potential between entrepreneurs and managers and reorientation in an environment of shrinking margins – special challenges for those who tried to continue their business as before: with sailing ships.

The documentation shows impressively how highly hierarchical organisations like the Royal Navy react and often struggle in times of major technological changes

The captain is responsible for bringing his ship, crew and cargo safely and within a specified time and financial framework to the port of destination. But what if the ship is no longer able to do this and the competition suddenly moves across the blue oceans with completely different ships? What if the shipowner does not have the capacity to trust the new technologies or simply does not have the financial resources to re-equip his fleet? And what about the crew? Does the crew has the necessary skills to sail on the new ships?

Many captains of banks and financial institutions seem to have this scenario all too present. E.g. due to declining customer traffic in bank branches, the high costs for a broad branch network are hardly to be paid today. Germany as a financial centre is “overbanked”, interest rates in the basement – the conditions in Germany for successful banking have never been as challenging as they are now. To this end, customers are continuing to drive change in the industry with their changing demands on digital tools.

Outwaiting a problem or tackling it

The complexity of economic changes has been enormous in every epoch, the difference to current upheavals lies in the temporal component. If companies do not react immediate to market changes today, they might loose their customers faster than ever before. In such disruptive times, all those involved want an “efficient” change process. The only problem is that the term “change” is so omnipresent that it is often perceived as stress and overload. As a result, many levels of management fall into one of the following situations: either they try to sit out the situation and leave change to their successors, or they push many, often less effective measures in an attack of blind actionism. Active, thoughtful and vital change management is often neglected.

More entrepreneurial thinking

Processes of change require both superiors and employees. If the existing situation cannot be improved or adapted at any vertical level, it must be questioned. Concluding, this means for all those involved that situations must always be reflected and corrective measures initiated at an early stage.

Understanding the corporate culture is vital for a successful transformation

In many companies, however, this need for action, which has a high potential for conflict, is often insufficiently communicated. In some places there is a lack of interest for employee issues, a lack of error and conflict culture and a minimal willingness to change. If banks neglect these issues, change processes threaten to fail on a broad basis. This means that managers in a disruptive environment have a natural need for action. The implementation of new strategies, systems and structures and early adaptation to changing market situations are vital factors for survival. A well-known quote by former US President Wodrow Wilson (1913-1921) is particularly valid for today’s highly competitive financial sector: “If you want to make enemies, try to change something.”

Those companies that create the change will share the large financial services market with the new market players and use instruments that did not exist in the classic banking of the past.

Just like James Onedin, who for the longest time was an advocate of classic sailing ships, finally added a modern steamship to his fleet. And to facilitate the change for himself personally, he named the ship after someone he loved.

„It’s not information overload. It’s filter failure.“

Author Jochen Werne – Original in German at Bank-Blog – Translation by DeepL

Banks have to become guides for investors

Financial blogs, online communities & Co.: The ubiquitous flood of information can be both a curse and a blessing for bank customers and investors. Today more than ever, banks and savings banks must be “guides” for their customers.

Anyone who wants to invest money today gets a flood of information about the net. Dedicated private investors worldwide can be almost as well informed as professionals, in case of interest and sufficient know-how and time. Never before in the history of mankind have so many people worldwide had so much information at their disposal. Whether prices in real time, the latest assessments by analysts or experts, key figures on a security in an industry comparison, the diversity of opinion in a community – all this is available around the clock.

How intensively and purposefully this offer is used is another question. It can be assumed that only a minority is so urgently concerned with their investment or can be so concerned at all. In addition, the situation of the decision-maker is adversely affected by two factors: the excessive amount of unfiltered information and the classic behavioral finance problem.

Coping with the abundance of data and big data

Alvin Toffler, who brought the term “information overload” to prominence in his bestseller “Future Shock” in 1970, described the phenomenon and its consequences as follows:

“Information overload occurs when the input quantity of a system exceeds its processing capacity. Decision makers have a fairly limited cognitive processing capacity. Therefore, if information overload occurs, it is likely that a decrease in decision quality will occur.”

Consequently, it can be concluded that the wealth of information that accumulates every day can hardly be processed by a classic investor alone, let alone placed in the right context. In addition, there is an almost unmanageable and constantly growing mass of financial products for private customers. In short, a large proportion of investment decisions are therefore not made analytically correct, but spontaneously subjectively and emotionally, as the studies by Nobel Prize winners Kahneman and Tversky show.

Banks as a guide only for wealthy clients?

Clay Shirky, writer and consultant for Social and Economic Effects of Internet technologies and well-known in New Media circles, presented an interesting reflection on the problem of information overload:

„It’s not information overload. It’s filter failure.“

This provides a great opportunity for traditional banks to position themselves as problem solvers for the investor. The alternative – at least for wealthy private clients – apart from filtering their own information mass, is dialogue with a competent expert. A person they trust – and trust to not only filter out from the wealth of data what is relevant to their needs, but also to protect them from the classic emotional mistakes of financial decisions in volatile markets.

Development of a new, adequate support concept for all bank customers

All those who do not belong to this clientele, and this is mostly the classic retail customer, have little more than to accept the zero interest rate on their accounts and short-term securities. According to Bundesbank statistics, the majority of Germans have invested their assets in these forms of investment. This makes the Federal Republic a leading nation in financial matters when it comes to missed opportunities, as can be read again and again in the Sunday editions of the major national daily newspapers.

Today more than ever, the function of bank and financial advisors must be to act as filters and guides for customers in the jungle, providing them with a flood of information. Because no algorithm, no digital advisory service can protect the investor from an ill-considered, intuitive and possibly wrong decision. For modern bank management, this means setting up a completely different support concept with cost-efficient consulting structures, a powerful and highly flexible team and the appropriate digital and mobile equipment.