It was a great pleasure discussing with Dr. Robin Kiera about human behaviour and technological progress in the insurance industry during a perfectly organised EUROFORUM Deutschland GmbH conference in beautiful #Hamburg. Thanks Karin Hanten and the #EUROFORUM Team for the kind invitation.
…and thanks to Robin for keeping the fun alive which good interviews always bring
1st published in the German newspaper Handelsblatt on January 8, 2020 – translated by DeepL.com. Photos: Pixabay
Looking at the world sometimes gives the impression that things seem to be much better outside Europe. Examples? The world’s largest airport, Beijing-Daxing, goes into operation after four years of construction, while at BER, construction continues after 13 years. The coffee house chain Luckin Coffee, valued at $4.5 billion, will replace Starbucks as No. 1 in the Chinese market by the end of the year, two years after its foundation. Digital platform companies such as Apple, Amazon, Alphabet, Tencent & Co. have left the traditional commodity and industrial groups behind in terms of value.
What made these American and Asian companies so big? Absolute willingness to implement at high speed, massive state and private investments, sometimes industrial policy intervention, huge, scalable domestic markets and a just-do-it mentality favour economic and technological development alongside a number of other factors.
Is Europe, on the other hand, in a downward spiral? Is the continent now losing the much-discussed second half of digitisation, which is mainly about the digitisation of industry, now that the B2C race seems to be lost?
The recent history can also be told in a different way. The financial crisis of 2008/2009 has shown how valuable Europe’s and especially Germany’s strong industrial core is. A highly specialised, excellent SME sector and the leading groups from mechanical, plant and vehicle engineering to the pharmaceutical and chemical industries are anchors of stability. With Industry 4.0, the vision for the future of value creation comes from Germany, and there is a worldwide competition for its widespread introduction.
The strength lies in product innovation, especially in complex products such as machine tools, medical devices, vehicles or building services engineering. Germany also has world market leaders in engineering and in production and automation technology. Despite all the negative predictions, Germany has further expanded its strength in networked physical platforms with the integration of IoT, data and services in industrial environments and has secured a very good starting position. The German research landscape also holds an internationally good position in areas critical to success such as semantic technologies, machine learning and the digital modelling of products and users. And let’s not forget that the companies in the country have produced outstanding software products for the fast, reliable and scalable processing of big data and the integration of business processes.
While Germany wants to consolidate its pioneering position as the world’s supplier, the USA is relying on its expertise as a global networker and China is relying on short decision-making paths, capital intensity and a large domestic market in which it can scale quickly. In this situation, it is important that we concentrate on our strengths and resolutely tackle the digitization of industry and SMEs. However, this requires a much faster entry into the emerging B2B platform markets.
In Europe, we stand for a liberal value system, both economically and politically, which, as in the past, has proven to be the decisive differentiating factor in the medium and long term. The debate on the use of data is conducted in Europe in good tradition at an extremely high level and this in the good understanding that digitisation is not coming over us, but is made by people and is intended to serve them.
It is therefore the right moment to take a decisive step towards the future and to open up Europe’s path. To do this, we need a large, homogeneous domestic market that will make us almost competitive with the USA and China. We also need substantial investment in digital infrastructure and cybersecurity, as well as training and further education. Both competitive regions currently have the power to set standards in digitization as well. The goal of the European Union to create a single digital internal market is laudable, but final implementation is still pending. This implementation, however, is the important and very concrete next step in order to be able to achieve the competition-relevant scaling effects and to be able to play a competitive role in data-based business model innovations.
The second half is running and nothing is lost.
About the authors
Jochen Werne (48) is a member of the Executive Board and Chief Development Officer of Prosegur Cash Services GmbH, as well as a member of the Artificial Intelligence Learning Systems Platform and the Royal Institute of International Affairs, Chatham House.
Dr. Johannes Winter (42) heads the office of the Learning Systems Platform and the technology department at the German Academy of Science and Engineering (acatech).
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”
First published in German at LinkedIn Pulse on July 20, 2019. Please find article and sources in this link. Publication in English language pleas find below
On the role of cash in a modern society between technological progress and freedom
Fyodor Mikhailovich Dostoyevsky, one of the most important writers of the 19th century, impressively describes in his works the great existential and spiritual conflicts in which mankind was caught at the dawn of modernity. Not only his observations during the turbulent times of the upheaval of the Russian Empire in the 19th century, but also his personal experiences are an essential part of his work.
At the age of 28 and at the beginning of a promising career as a writer, Dostoevsky was sentenced to four years in a Siberian prison camp. The reason for this was his participation in meetings of the Petraschwezen, an intellectual circle that spoke out against tsarist despotism and serfdom. In his novel, “The House of the Dead”, which also describes Dostoyevsky’s own experiences in Siberian captivity, he formulates the sentence that was later much quoted: “Money is coined liberty”. The sentence describes the vital relevance of the possibility of a free exchange of goods in an unfree environment – and this through coined cash money.
More than 150 years have passed since the first publication of the work. Europe needed to go through the age of Enlightenment, the experiences of two world wars and a long cold war to become a peaceful and very liberal place for its citizens. A place which is putting the dignity and freedom of the individual first.
The freedom in our payment options has also multiplied thanks to technological progress. It is part of our everydays life to pay the morning croissant at the bakery, the new monthly ticket for the subway or even the use of public toilets – even without cash. Technological progress, the smartphone revolution and also our user behaviour made this evolution in payments possible. “Digital payments” have become part of our progressive society. However, the aspect of not having money physically tangible sometimes entails interesting and also unwanted aspects.
Society in upheaval
Like Dostoevsky, we also live in a time of extreme social, economic and political upheaval. An age in which exponential technology developments, industries and business models are changing radically and countries competing for dominance in areas such as artificial intelligence. It is a time when transformation is the new normality and an agile corporate culture is the key to success. In these times, for many it became clear that, “Everything that can be digitized will be digitized.” And thus the question inevitably arises whether this also applies to the first “Instant Payment” solution humans invented, one of the earliest and most sustainable achievements of civilization – cash.
Germans love affair with cash
If we look at Germany, cash is still one of the most popular payment methods and – culturally speaking – will probably remain for quite some time to come. According to a survey by the Bundesbank, 88 percent of German citizens continue to regard cash as their preferred means of payment. This cultural imprint can certainly also be traced back to modern history and the personal experiences of the Germans with their money. Beginning with the traumatic experience of hyperinflation during the Great Depression of 1923 and the resulting deep-rooted German understanding of the importance of a central bank independent from politics.
A painful experience, which states even today – like Venezuela – live through again and again and whose causes are often identical. In Reinhard and Rogoff’s bestseller book “This time is different”, this phenomenon is brilliantly explained using an analysis of 800 years of international economic history.
The positive image of (cash) money in Germany was impressively advanced after the end of the 2nd World War. From the currency reform of 1948 and the beginning of the economic miracle with 40 D-Mark, which every German was allowed to hold physically in his hands, to the 100 D-Mark welcome money at the reunification in 1989. These personal experiences paired with a consistently brillant independent work by the German Bundesbank – which always gave the population the feeling of having a strong, stable and secure own currency – are all German experiences, which were literally “obvious” and shaped the cultural reference of the country and its citizens.
The current freedom of our payment options is certainly good, as long as we consumers are free to decide which means of payment we pay with. Discussions about a possible restriction of citizens’ freedom of choice, for example through the abolition of cash, regularly call on intellectuals to take a warning position. The poet Hans Magnus Enzensberger, for example, has the following opinion on the subject of “restriction”: “Those who abolish cash abolish freedom”. Also former Deutsche Bundesbank board member Carl-Ludwig Thiele said at a conference in 2015: “Abolishing cash would hurt consumer sovereignty — the free choice of citizens about their payment instruments“ and “Government agencies do not have the right to tell citizens how they should pay.”
Having “physical power of disposal” over money, i.e. holding the banknote in one’s hands, immediately establishes a much stronger relationship for the value of something than a number on a display. More than ten years ago, the US scientists Raghubir and Srivastava in their essay for the “Journal if Experimental Psychology: Applied” described that the degree of abstraction often poses a problem when it comes to means of payment. They found a correlation between the indebtedness of individuals and the use of credit cards.
In Germany, the trend towards digital payment became apparent for the first time last year. In this period consumers in the stationary retail sector spent more money on checking and credit cards than in cash, as the trade research institute EHI recently announced.
However, this does not mean that customers will soon only pay by card or smartphone, the experts emphasized at the same time. Three-quarters of all retail purchases continue to be settled in cash. When it comes to the highly sensitive issue of “money”, many consumers continue to find it difficult to trust the comprehensive healing promises of an omnipresent digital world.
In order to ensure that cash and book money continue to be equally available, the players involved in the cash cycle, such as CIT companies like Prosegur, ATM operators like IC-Cash, banks like Bankhaus August Lenz et al., are working concentrated to make the provision of cash at all locations even more efficient and cost-effective. Both the providers of cash solutions and those of digital solutions experiment therefore with the latest blockchain and AI technologies to reach the before mentioned goals.
Technological vulnerability and fall-back option
Especially in extreme scenarios, such as catastrophes or other failures of a digital infrastructure due to cyberattacks, natural events or simply technical failure, it becomes clear how cash – by its very nature – proves to be actually the most robust payment method. Ultimately, it is not tied to electricity, digital infrastructures, passwords or other technical features – it is simply available. An interesting recent anecdote occurred in Sweden, which is one of the most advanced countries in cashless payment. A country where even the traditional church collection is now equipped with a card reader. At the Bråvalla music festival 2014, for example, the memory chips on the admission tickets went on strike. Thousands of thirsty fans sat on dry land and had to write out promissory notes for their drinks by hand. An experience that can be observed again and again when paying at the checkout, when the magnetic stripe of a card or simply the card reader does not work and the views of the people standing around in the queue are impatiently looking at the payer and trying to catch a glimpse of the name on the card of the supposedly non-solvent unlucky fellow.
Data Protection Best Practice
In an interview with Rheinische Post in February 2017, Klaus Müller, head of the Federal Association of Consumer Groups (Bundesverband der Verbraucherzentralen), said “Cash is data protection in practice”. He added: “Unbarred figures leave traces of data that can be used commercially to create a consumer profile. This data may be illegally “fished” by third parties.” Now Müller points to nothing new here and opponents of cash, use the argumentation to underline that the supposed anonymity of cash can be used for illegal business and transactions and that the suppression of cash stands above the protection of privacy. But since the first publication of the interview, the introduction of the EU General Data Protection Regulation (GDPR), the recently imposed $5 billion fine against Facebook for the Cambridge Analytica scandal and similar events, the sensitivity of the European population with regard to data protection and privacy has grown substantially.
In the closing sentence of his speech at the Cash Symposium 2018 of the Deutsche Bundesbank, the former judge of the German Federal Constitutional Court, Prof. Dr. Udo Di Fabio, underlined the probably most important point in the current discussion about cash. He said that in principle it is “not to be underestimated” that every citizen has the souvereignity of the free disposal of his money – of his personal “exchangeable assets”. He further added that this is particularly true when “financial privacy” is considered legally imperative. In other words, a society whose entire assets would be managed in digital form only, could also exercise only limited individual control over its money and would have to ask itself, “whether the state would be entitled via its central bank to carry out a controlled devaluation through negative interest rates, accounting discounts or fees on credit balances”. Prof. Di Fabio further points out that this would then not only be a property encroachment, but as a result possibly also the imposition of a special levy, which is permitted in the German legal system only under narrow conditions.
For young Fjodor Mikhailovich Dostoyevsky the conversion to book money in the Siberian prison would have meant the withdrawal of his individual sovereignity over money, so that he would not have had any more the fortune of using cash for the exchange of goods and other things. He describes the quintessence of this situation as follows: The suffering of prisoners who don’t have money is 10 times greater.
Thus, it is reasonable to assume that the intellectual serious discussions about cash and civil liberty rights would delight Dostoyevsky, with his experiences in an unfree society.
Our open and liberal society is characterised by the fact that we have and continue the discussion about “Coined Liberty 2.0” at this level.
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.”
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.
German Naval officers reflect about Antarctica and its importance for our society.
“It has been an honour to give a speech for the “Marine-Offiziers-Messe München”, highlighting the importance of Antarctica for us and our planet and to report about the Global Offshore Sailing Team’s Expedition Antarctic Blanc.”
Jochen Werne Antarctic Blanc Expedition Leader
Having experienced the sea by themselves the retired German Naval Officers enriched the discussion greatly with their own fascinating experiences and personal stories about life on sea and the challenges with the elements.
I’m grateful to Commander ret. Bernd Lehmann and Commander ret. Bernd Chittka for the invitation and the members and guests of the “Marine-Offiziers-Messe München for an outstanding evening and their engagement for our society.
The Global Offshore Sailing Team sailed to the most Southerly partially ice-free place of this planet – the ANTARCTIC continent. The international team remembered all sailors who bravely explored this fragile and dangerous environment.
With this Expedition a platform of intercultural and interdisciplinary exchange for ANTARCTIC enthusiasts such as Historians, Environmental Scientists, Sailors, NGO’s, Navies, Associations or just out of personal interest has been created.
It has been a great pleasure not only to give a speech at the plenary meeting for the Wirtschaftsjunioren Hamburg, but also to discuss in-depth the impact of AI on our society with a highly engaged auditorium.
After the meeting the Wirtschaftsjunioren summarised the evening on Facebook as follows:
“At yesterday’s plenary meeting of the Education Committee, we combined the exciting topic of artificial intelligence with the beautiful (junior) life. Our keynote speaker Jochen Werne, Director Business Development & Marketing at Bankhaus Lenz, lecturer and author, gave a vivid presentation on the opportunities, dangers and challenges of AI for companies and society. How does it feel to pass on your activated smartphone to the person sitting next to you? What does a folded leaf have to do with the moon and AI?
We had SALT AND PEPPER as a guest for the further practical testing of AI. In a VR environment, we were able to build future production facilities using the BoxPlan product. The innovative Startup Smunch, the online canteen for happy teams, provided us with very real, delicious food. In the lounge-like atmosphere of the Ruby Hans Workspaces we found a great setting for stimulating conversations and networking.
We would like to thank all guests and cooperation partners for a successful junior evening: Private Family Banker, Exclusive Agent Bankhaus August Lenz & Co. PUBLIC LIMITED COMPANY, SALT AND PEPPER technology and management consulting, software development, Smunch.co And remember, on 26.05.2019 is the European election, Step Up For Europe (see group photo 😉 )”
Thank you very much to the Wirtschaftsjunioren Hamburg and Alexander Köhne for the highly appreciated invitation.