Artificial intelligence in the financial sector

It has been pleasure being guest author for the DIGIPRAKTIKER, Finanz Colloquium Heidelberg.

What role does the human factor play in times of exponential technological progress?

Author: Jochen Werne, Director Business Development, Product Management, Treasury and Payment Services at Bankhaus August Lenz & Co. AG

I. Introduction

The only constant in history was, is and remains change. Gutenberg’s invention of the printing press in 1450 was a milestone on the timeline of human development. Today we still take note of this invention, which was considered an innovation at that time, but we have long lived surrounded by smartphones and cloud applications, in which we can store the most private information and retrieve it from anywhere in the world. Today’s change is being driven by a veritable digital revolution.

Digital change already has fundamental consequences for individuals and their lifestyles, but it is developing its full potential when it comes to interacting with our social environment. In times of smart robotics and maturing systems in relation to artificial intelligence, the question arises again and again what role humans play on the stage of these technologies. Is he …

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A Banker with an (AI-)Mission / Part 2: “The New Now – Everybody Can Make a Difference”

Also in the second part of our interview we do not go directly into the technical aspects of the introduction of artificial intelligence.

Based on the question “How do you get all this under one roof?” we get a look at Jochen’s personal insights and points of view and at how each individual can counter the increasing autonomisation and the change of the working world and society through algorithms with a corresponding attitude.

Jochen Werne is full-time Director & Authorized Officer for Bankhaus August Lenz & Co. AG of the Mediolanum Banking Group and is responsible for Business Development, Marketing, Product Management, Treasury & B2B Payment Services. In addition, he is involved in the development of non-profit organizations and a member of the Learning Systems Platform of the Federal Ministry of Education and Research.

The initiative www.wegofive.net addresses the question of how a unit of man and machine can be created in the working world of tomorrow and how algorithms can be seamlessly integrated into the organization in order to supplement the capabilities of employees.

As an independent interim manager, profile and team coach, Sascha Adam supports people, decision-makers and companies in actively shaping digital change.

More at www.wegofive.net/mission/about or www.sascha-adam.net.

Many thanks to the coast by east Hamburg in the Hafencity Hamburg for the permission to film here. A very recommendable location with obliging service, extraordinary menu and good drinks. Apropos, the background noises also give you the feeling of sitting directly with us 😉

Ein Banker mit einer (KI-)Mission / Teil 2: “Das neue Jetzt – Jeder kann etwas bewegen”

Auch in dem zweiten Teil unseres Interviews gehen wir nicht direkt auf die technischen Aspekte der Einführung von künstlicher Intelligenz ein. Ausgehend von der Frage “Wie bekommst Du das alles unter einen Hut?” bekommen wir einen Blick auf die persönlichen Erkenntnisse und Sichtweisen von Jochen und darauf wie jeder Einzelne mit einer entsprechenden Haltung der zunehmenden Autonomisierung und dem Wandel der Arbeitswelt und der Gesellschaft durch Algorithmen begegnen kann.

Jochen Werne ist hauptberuflich Director & Authorized Officer für das Bankhaus August Lenz & Co. AG der Mediolanum Banking Group und verantwortet dort die Bereiche Business Development, Marketing, Product Management, Treasury & B2B Payment Services. Darüberhinaus ist er am Aufbau gemeinnütziger Organisationen beteiligt und Mitglied der Plattform Lernende Systeme des Bundesministerium für Bildung und Forschung. Die Initiative www.wegofive.net geht der Frage nach wie in der Arbeitswelt von morgen eine Einheit aus Mensch & Maschine geschaffen werden kann und sich Algorithmen nahtlos in die Organisation integrieren, um die Fähigkeiten der Mitarbeiter zu ergänzen.

Sascha Adam unterstützt als selbstständiger Interimsmanager, Profile- und Team-Coach Menschen, Entscheider und Unternehmen dabei den digitalen Wandel aktiv zu gestalten.

Mehr unter www.wegofive.net/mission/about oder www.sascha-adam.net

Ganz herzlichen Dank an das coast by east Hamburg in der Hafencity Hamburg für die Genehmigung hier filmen zu dürfen. Eine sehr zu empfehlende Location mit zuvorkommender Bedienung, außergewöhnlicher Speisekarte und guten Drinks. Apropos, die Hintergrundgeräusche geben einem auch gleich das Gefühl direkt bei uns zu sitzen 😉

Keynote announcement: International Banking Innovation Forum, Vienna

Banking Professionals are faced with many new challenges as PSD2 & Instant Payments in Europe at center stage which are driving automation and Innovations. It will be a great pleasure representing Bankhaus August Lenz with a keynote on the importance of the combination of all aspects of HUMAN, DIGITAL & CULTURE to create valuable business models for future banking. Looking forward joining other Top Industry Experts to tackle these topics with them.

Small talk with Siri, Alexa & Co.

What role does humans play in times of exponential technological developments and how does this influence our society?

Author: Jochen Werne / first published May 2019 @LinkedInPulse

Siri or Alexa? Who can offer us more help in our daily life? Who provides the better answers and leads the more eloquent conversation? A legitimate question, because both Smart Devices are now so technically mature that it is difficult to make a simple distinction. Alexa was only launched in November 2014 in the USA and at the end of October 2016 in Germany.

Our world is changing from analogue to digital. While the invention of the printing press in 1450 by Gutenberg was a true milestone on the timeline of human development, we now live surrounded by smartphones and cloud applications in which we can store, share and retrieve even the most private information from anywhere in the world. Smart support is omnipresent: Siri accompanies us through everyday life in the form of Apple products and Alexa awaits us – Amazon powered – with a familiar voice when we get home. The intelligent speech assistance systems are only one of many modern applications of Machine & Deep Learning technologies and are therefore more broadly defined by artificial intelligence. With the extremely dynamic and rapid development of smart robotics and learning systems, some people are asking themselves what role humans will play on the stage of these technologies in the future.

The emerging technological possibilities, like all technological achievements in the past, have an impact on our daily personal lives, but their potential unfolds when we consider this impact in a scaled way and when it comes to our society as a whole. The Tübingen professor of media science, Bernhard Pörksen, even speaks of the fact that we have long since been able to be described as a “digital society” – this change took place in an extremely short time and without us being prepared for it. As a result, we would first have to learn competences to understand our actions in this new digital world and also to learn how to deal with the resulting effects. The learning of these skills takes place at different speeds in the case of digitisation issues, even against a demographic background. In contrast to the digital natives of the 21st century, some parts of our population with fewer points of contact with digital media find it more difficult to deal with the challenges of new technological standards and to adapt to the changed conditions in the service sector. The efficiency of the technical possibilities that permeate all areas of our lives is impressive, but it is crucial for success in the service sector not to ignore one factor: human empathy. 

An example of this is the financial sector. Your own money is an issue that most people are most personally concerned about. However, plagued by fears of loss, personal biases and an extremely complex oversupply of investment alternatives, many investors seek personal support that goes beyond enumerating facts. We are talking about human support and empathic accompaniment, which machines (so far) have not been able to provide. A service that ideally covers not only the technical aspects of financial consulting, but also the behavioural finance aspects.

Undoubtedly there are already developments like Google Assist, in which attempts are made to incorporate empathic components into the developments, but the ability of the machines to simulate emotions and accordingly cause emotional reactions in humans (still) reaches its limits.

The upcoming technological developments will help us to solve many hitherto unsolvable problems in e.g. medicine, in environments hostile to humans or in a World Food Programme in a relatively short time. But as always with new technologies, it is also important to limit the abusive possibilities of use and to educate population that have little contact with modern instruments and technologies, because otherwise there is the danger of creating a feeling of inequality, which in turn can lead in extreme cases to a division of society. The desired progress would thus be reversed into its opposite: a step backwards based on a lack of communication at the micro and macro levels. 

“It will certainly be our task in the future to ensure that developments in technological progress, artificial intelligence and the role of man go hand in hand. To advance optimizations through technology and digitization, as well as a parallel enlightenment of the individual with regard to his uniqueness in relation to technological development, as well as his social responsibility in this context.” 

Jochen Werne

The following comparison should simplify the problem between strengths and limitations of automated systems: In 2012 an autopilot would probably not have let the Costa Concordia collide with a rock – the reason was human, emotionally driven behaviour. But an autopilot could not have landed an Airbus 320 on the Hudson River in 2009 either. This required human experience and spontaneous creativity. Something that our brain can do, but that still allows the technical possibilities of AI to reach hard limits for the foreseeable future.

It remains to be said that smart devices like Alexa and Siri provide valuable support and even provide entertainment with the increasingly mature question-and-answer game. We can ask the digital companions anything. We also get – within the scope of technical possibilities – a cheeky answer. But we have to deal with the extent to which these answers provide us with what we expect, also on an emotional basis. Because our expectations often go beyond a technical answer. 

More in-depth insights on this topic can be found, for example, at the Platform for Learning Systems (https://www.plattform-lernende-systeme.de/home.html ).

German Stevies committee is awarding innovations and human creativity

The German Stevie Awards are a top-class business award for the German business world. Outstanding achievements are rewarded in over 80 different categories: from Manager of the Year in over 30 industries, to Marketing Campaign of the Year, to Product of the Year, and more.

It’s greatly inspiring seeing the different approaches companies are going to be innovative and a step ahead of their competition in a highly dynamic business environment

Jochen Werne
German Stevie Awards Jury Member
Management & Human Ressources


Jury member Jochen Werne about the importance of the human factor in a digital world

Tradition meets modernity: Why more and more banks are relying on artificial intelligence

Artificial intelligence is finding its way into the highly regulated world of banking. And not only GAFA Silicon Valley high-tech companies see it as the technology of the future, but also FinTechs and established banks. How it came to this, what possibilities and limits there are at the moment and why humans will remain irreplaceable not only when it comes to money – the commentary

by Jochen Werne, innovation and transformation expert
Munich private bank Bankhaus August Lenz

Original published in German in the IT-Finanzmagazin (31 July 2018). Translation by DeepL

After “FinTech”, “Blockchain” and “Crypto”, “AI” is the new buzzword in the banking world. Whether chatbots in the digital customer center or self-learning algorithms for highly complex investment strategies are being discussed – the omnipresence of the term suggests that the integration of artificial intelligence into one’s own business model seems to be virtually vital.

Artificial intelligence and big data are currently the strongest and most vibrant innovation trends in the financial sector …

… was also one of the guiding principles of Prof. Joachim Wuermeling, board member of the Deutsche Bundesbank, in his speech on “Artificial Intelligence” at the second annual FinTech and Digital Innovation Conference in February 2018 in Brussels.

The choice of the conference venue, which like rarely any other city combines both a belief in progress and a deeply rooted European tradition, can hardly be more symbolic of the forthcoming change. In fact, the topic is by no means new: the development towards an increased use of so-called non-human intelligence is based on approaches from the 1940s – with the invention of the first computers

Artificial intelligence: revolution as a reaction to mountains of data?

But what is now possible in times of exponential technologies is in fact nothing less than a revolution. The financial industry is sitting on a valuable mountain of data, the extent of which is currently difficult to estimate. The maturing AI systems would not only make the preparation and processing of this data easier, but also much more cost-effective, faster and more targeted. Data already collected could become the most valuable raw material and a resource due to the technological leaps in the field of AI, which, in combination with the enrichment of external, non-structured data, must be “usable” in a meaningful way.

The industry is asked to use private data in a sensitive way for the benefit of the customer, – a goal that should certainly apply to all AI-based approaches.

To find meaningful regulations for the handling and the effects of the use of AI on society, economy and thus on our life and the work of tomorrow is the task of politics. The fact that this topic is taken very seriously is evident not only in national initiatives such as the German Platform for Artificial Intelligence “Learning Systems”, but also in the European Artifical Intelligence shoulder-to-shoulder approach, which is being pushed forward by France and Germany.

“Digital hand holding” in the event of a financial crash is not enough

At present, it is still too early to say which operational areas of the financial world will sooner or later be supported – in part or even entirely – by the use of AI systems. However, the financial crises of the past have shown this time and again:

Trust is crucial when it comes to money. Trust in the markets, the banking system and the human contact as an intermediary in a complex issue”.

However, the banking industry knows very well from its own experience how easy it is to loose customer’s trust. An experience that Mark Zuckerberg and Facebook recently also had to make in connection with the Cambridge-Analytica scandal. As with every new technology and every new approach, the same applies to the topic of “intelligent” systems: a lot of trust, coupled with half-knowledge and a big dash of emotionality results in a popular trend cocktail, which, however, bears a certain risk of headaches on the following day.

Jochen Werne

Jochen Werne is the authorized signatory responsible for Marketing, Business Development, Product Management, Treasury and Payment Services at Bankhaus August Lenz & Co. After two years as navigator of the sailing training ship ‘Gorch Fock’, the international marketing and banking specialist completed his studies as client coverage analyst at Bankers Trust Alex. Brown International and in Global Investment Banking at Deutsche Bank AG, he has worked on numerous projects in other European and American countries. In 2001, he joined Accenture as a Customer Relationship Management Expert in the Financial Services Division before joining Bankhaus August Lenz & Co. AG in Munich, where he has since been responsible for various areas of the institute. As part of the Innovation Leadership Team of the Mediolanum Banking Group, a member of the expert council of Management Circle and the IBM Banking Innovation Council, Jochen Werne is a keynote speaker at numerous banking and innovation conferences.