Information dissemination ethics

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Digital technology encourages the dissemination of knowledge and know-how. Its ability to influence socio-economic structures also means it confers power and a competitive edge on those who design its applications over those who merely use them. Ethics, a form of critical thinking on social structures and traditions shaping the lives of societies. Aim at questioning moral biases and opening new choices. Digital libraries belong to an emerging digital culture. New questions concerning production, collection, classification, and dissemination of knowledge arise. How is the integrity, validity, and sustainability of these digital collections guaranteed?
Information technology is now ubiquitous (Ubiquitous Computing) in the lives of people across the globe. These technologies take many forms such as personal computers, smart phones, the internet, web and mobile phone applications, digital assistants, and cloud computing. In fact the list is growing constantly and new forms of these technologies are working their way into every aspect of daily life.  Have we allowed the digital medium to grow chaotically and carelessly, lowering our guard against the deterioration and pollution of our infosphere.  Is it due to the desire and reflection of only what we wanted – entertainment, cheaper goods, free news and gossip – and not the deeper understanding, dialogue or education that would have served us better.
During prior mediums of disseminating information (e.g. newspaper, physical mediums) there was concerned with maintaining standards, adherence to accuracy and an informed public debate. We now have the same problem with online misinformation. These kinds of digital, ethical problems represent a defining challenge of the 21st century. They include breaches of privacy, of security and safety, of ownership and intellectual property rights, of trust, of fundamental human rights, as well as the possibility of exploitation, discrimination, inequality, manipulation, propaganda, populism, racism, violence and hate speech. A lack of proactive ethics foresight thwarts decision-making, undermines management practices and damages strategies for digital innovation. The near instantaneous spread of digital information means that some of the costs of misinformation may be hard to reverse, especially when confidence and trust are undermined (Emotional Trust in an Hyperconnected world). 
How do we  establishtrust through credibility, transparency and accountability – and a high degree of patience, coordination and determination. Will this be fulfilled with an ethical infosphere to save the world and ourselves from ourselves? 

“Crypto Franc” – key ingredient for a Swiss national blockchain

In various countries there are discussions about a crypto version of the national fiat currency, which in the case for Switzerland this could be the “Crypto Franc”. We joined the Fintech Rockers writing the exposé Swiss national blockchain and cryptocurrency.


The exposé proposes the “Crypto Franc” in the context of a national blockchain which would serve as the digital backbone in the shaping mesh economy. We expect with a stable currency available on the blockchain that it will provide a catalyst effect of the economy. Such stable currency could be the “Crypto Franc” issues by the SNB directly pegged to the Swiss Franc.

“Such blockchain infrastructure, carried jointly by all Swiss cantons, will have an equivalent catalyst effect as the initial introduction of the railway system or the creation of the Gotthard tunnel during the age of industrialization. The Swiss national blockchain will enable local as well as foreign entities and all people with an interest and/or business relation with Switzerland to hold genuine Swiss cryptocurrency and/or execute transactions via legal compliant smart contracts.”

For Switzerland (and other countries) it is imperative to think about its future in a digital mesh economy. Such an envisioned blockchain would be an excellent foundation. There are ongoing debates about such a strategy but prompt and immediate decision and actions on this topic are required in order to stay a leading country in the global financial system.

“The introduction of Swiss cryptocurrency “Crypto Franc”, bound to the issued fiat Swiss Franc by the Swiss National Bank (SNB), revolutionizing digital payment capabilities. The national blockchain will enable and bring the Swiss industry(s) to the international forefront of the digital age.”

The exposé was mentioned under the title “E-franc pipe dream fails to arouse Switzerland” on recently.

The PSD2 and GDPR gym

There is an intense ongoing debate about the pros and cons of PSD2 in media. On one side some feel that the financial sector is already heavily regulated and with any additional regulation,like PSD2, it will hinder the free evolution of markets. Others on the other hand think that PSD2 is good, as it allows fintechs and bigtech to access client account and transaction data as the catalyst ti add-on services and provide superior user experience. The client owns the decison power and the incumbents are mandated to collaborate. The incumbents may actually get the biggest value from PSD2. Sounds counterintuitive so lets explore a few thoughts.

There is a general set of ongoing trends – the age of industrialization has been superseeded by the age of information. Thus the pipeline businesses which domintated during industralization are being superseded by the platform business models. The platform models are superior as they take advantage of the benefits of network effects. They leverage ideally through similar advantages of the internet. Platform business models are typically composed of many smaller organizations grouped together via the platform into a structure  much more powerful than the sum of their parts. Successful platforms create a pull effect as each participant increases the value of the platform for all.

Banking is not yet a platform business – many talk about the uberization of banking and I am convinced it will happen. Typically a very small number of big players will dominate a specific sector in a platform economy  These are companies that successfully establish the pull effect described above. When banking moves into such a model, the only players are ones which can integrate seamlessly, offer highly competive services or the one which owns the platform and masters the integration and collaboration. All successfull entities must be well connected and are experts in the interaction and integration through API’s.

Todays incumbents today are often the opposite – they operate in a closed and private environment and try to create captive businesses individually. They interact with very selective partner(s) and does not empower their clients to make their own choices l. They also typically create specific standards and make it very difficult for others to interact with the large number of incumbents.

This is where PSD2 changes the game – it forces the incumbents to think about interfaces and forces them to open up. This is a threat as business(s) may be lost but it brings to the attention of incumbents wanting to change, a survival training in the world of VUCA (Dance on the VUCAno). This forces companies to participate in the mesh economy and its dynamics. It increases the chance to become robust enough to delay the time when the tech giants might take over (Next stop fintech giants). It may well be that a fair amount of revenues of incumbents get eroded during this process and that more client touch points are lost to competitors who just create better client outcomes and experience. But it also strengthens the companies in the upcoming big tech challenge.

This leads to a key question: Should other regulators follow the EU and mandate a regulation like PSD2 and GDPR in order to strengthen the financial system by exposing the incumbents to a shock to increase anti-fragility (In a world of VUCA seek anti fragility) or should it leave the choice to the incumbents which may prefer to protect what they once had and then experience at one point their Kodak moment with potential disastrous impact on the sector and economy?

Rightsizing organizational governance

Lars Vollmer made me think with his latest book about self organization. There is some sort of a chicken and egg problem – as soon as there is a rule or policy there needs to be some governance to verify its adherence.

“Governance is the way the rules, norms and actions are structured, sustained, regulated and held accountable.”

Many organizations have developed tons of rules and policies. I don’t think that this was planned upfront – it happened over time. Let’s rock an idea and think about what would happen if those rules and policies would be deleted? Would this lead to chaos?

This depends I guess on the organization. If the organization is driven by an external purpose and a mission, then the members of the organizations would continue to do the best to move the organization towards the vision. In a healthy organizations mistakes made by individuals would be corrected by the others on the base of common sense and shared principles. The organization learns by example how to act. It walks the talk.

In some organizations the members must sign that they have read and understood all rules and policies. In a healthy organization this is no issue – there are a few rules only and it is not a problem to keep them consistent and contradiction free. In large bureaucratic organizations such behavior can only have the purpose of ‘backside covering’. Somebody needs arguments he can use in case something goes wrong – look, it was clearly stated in the policy.

An organization which has many rules needs a lot of governance. Somebody needs to train the people on the rules, and track that all the rules have been followed. For the members of the organizations this reduces the amount of personal responsibility – it’s not intended to do what’s outside of policy even if it would make a lot of sense and it is fine to do things which don’t make sense as long as they comply to the rules.

Complexity is one of the key aspects in a world of VUCA (see Dance on the VUCAno) – it is not so difficult for a common sense based organization with a clear purpose and healthy structures to adapt to the increasingly fast changes. But it is impossible for a governance dominated organizations to do so for at least the following reasons.

  • Policies cannot be changed and adapted fast enough and keeping them free of conflict is impossible.
  • Members as a consequence have to react according to policy and will miss important developments and client needs.
  • The ones who define the policies will try to embed all eventualities to be on the safe side – the amount of rules grows.
  • Every mistake tends to result in new or changed rules.

It would be much better to have a small set of principles. Please note that a principle is not a rule – it is a meta rule which helps to identify the right decision. Many organizations have such principles in addition to the rules and policies. Just be careful to really stick to principles and avoid to state the obvious.

So what would be a good approach.

  • Clear vision and external purpose everybody in the organization shares (see Giving Direction)
  • A few guiding principles which help to channel the activities
  • The minimal set of rules and policies required to allow the organization to operate safely

Then let the people create the social structures and norms based on this.

Emotional trust in an hyperconnected world

Trust is an often used term in financial services.  What is trust, how is it built, gained or lost? Has trust building changed in the last few years of emerging digital hyper connectivity and will this have an impact on banking? (see “Banking evolution: Service Innovation,” “No Off Switch“)  Let’s together explore this a little bit …
There are at least four dimensions of trust:
  • predictability – ability to predict actions of others and situations which might occur
  • vulnerability – giving others the chance to take advantage of vulnerabilities
  • value exchange – exchange of values even though there is no full knowledge about the peer
  • delayed reciprocity – giving something now with the expectations to be compensated at some future point
The trustor has logical and emotional expectations against the trustee. The logical expectations are often contract related. In case of a loan a payback including interests is a logical expectation. The emotional expectations include the level of comfort and the experiences made during the time where the loan is granted and beyond.
The following little example explores these dimensions. Let’s assume you want to make a ride home and you call a cab.
  • An ordinary cab arrives with a smiling driver.  Before you enter the cab you need to trust the driver that he knows the place, has serviced the car properly and will not crash the car while you are in. This quick assessment is nothing simple but humans have developed senses during the evolution which support this interpersonal check.
  • The cab arrives – but nobody is in. There is a screen showing a friendly face in an office telling you that he is your driver. The cab is remote controlled in a way that it feels for the driver like being in the car. You can again perform the quick assessment described above based on the reduced amount of information and available senses.
  • A self driving car arrives with a smiling man in it. He has been mandated by law to sit in the car to intervene in critical situations. You may be tempted to make the quick assessment as in the first scenario but then you notice that this person has limited chance to intervene and influence the sequence of events in an emergency situation as the available time to react would be to short. In essence you notice that you need to trust the system, its sensors and the algorithms.
  • A self driving car arrives – completly empty. That’s a different story – the interpersonal element and the usual base for quick asseementis is completly missing. Maybe you should do a short ride first to see if this is safe and then, once you gain confidence into the car, its sensors and algorithms go for longer trip. With good experience, trust is built.
There are futher factors influencing your final emotional assessment  – the taxi could be dirty, the driver may have an unpleasant driving style or the climate control may be broken. Even when the target is reached on time, the experience may not great and you may decide not to rely on the services of this company again.
I guess it is rather clear what follows now. All these situations also occur in financial services today. The chance that you meet a banker which is an entrepreneur and personally engages in the trust relationship with you are rare. Such a banker would stand up with his name for the agreement made and would do the best to meet the logical and emotional expectations.
So let’s explore the other three scenarios in a little bit more detail.
  • The secenarios have all one thing in common – the ‘driver’ has limited skin in the game.
  • Remote meetings with specialists who can come up with creative solutions for complex problems are quite the norm in business and personal live today.  Finding the right specialist may already be a challenge and arranging a physical meeting may be close to impossible.
  • You may have an assigned  employee representing the bank as a sales clerk or relationship manager. The relationship manager will talk with you and then key in the data into some engine which finally processes the agreed business. You may build up a personal relationship to your relationship manager. If this is strong, then you will be tempted to follow him if he moves to another bank. If you trust more the brand, its system and processes, then you will stay and engage with a new relationship manager.
  • You may also be routed to a customer services desk which is used to deal with requests like the one you have. With each call you get to know another person – building an interpersonal relation is not intended. 
  • You may also interact through an electronic channel with the system. A hopefully cool user interface guides you through the necessary steps to get things done.
The objective of most companies is to operate with standard processes leaving the relationship manager very limited flexibility. Hyper connectivity leads to more transparency, the logical element of the trust relationship is performed by an engine and the emotional one is more and more an outcome of the digital experience.
Trust is still a key element in many things. In banking the logical element of trust is more defined by processes, algorithms and infrastructure while the emotional aspect becomes more and more a result of a great digital engagement.
Trust is shifting from personal relationships to systems and experience.

The challenge of (financial) mobility of the future

I had the great pleasure to join the “Impulse Apero” on Feb 6th organized by Kellerhals Carrard and Implement Consulting Group featuring the head of the SBB’s board of directors Monika Ribar. Monika walked the audience in her inspiring presentation through the challenges and opportunities of mobility of the future.
  • Transparency is the new currency – people estimate transparency. Its about enabling people to reach their goals independent of the provider and about being informed in good and in bad times.
  • Openness is the new norm – we are living in a network economy. Openness is the key to unleash the combined potential of all services in the network. Closed and monolithic systems are relicts of the past.
  • Holistic services – users want to have an end to end service and an broad overview. There is just the choice of providing it or let somebody else do it.
  • Simplicity  – the different pricing schemes used by the various service providers are hard to understand for the consumer. But all this complexity can be hidden using smart technology – either by offering a flat rate scheme which enables general usage or by simply billing the actual consumption with the optimal price for the consumer.
These points are very true for a mobility provider and also for financial services and other industries as the relate to big shifts in society. There is one huge difference – the SBB has a huge logistic challenge with a lot of infrastructure which is required to realize the desired degree of mobility. Financial services companies in essence just deal with information and have a simpler problem to solve.
I also would like to highlight a few other aspects which I found very interesting:
  • Empowerment – the people who are in contact with the users must be empowered to solve problems in creative ways.  They see the problem and they can directly engage and solve them with  their creativity. The SBB has allocated a budget at discretion for the ‘railway companions’ – this are the people in the train who make sure that the travelers have a smooth journey. This empowerment of employees at the point where the company engages with the clients is just cool.
  • Team – the rail clean organization is now a part of SBB again and wears he SBB logo. In more an more automated railway stations they are often the only people. Now the wear an SBB logo again and can help support travelers in case of problems. This is a win-win situation as the job has become more interesting and as clients have a further human touchpoint with the brannd.
  • Development –  all roles are changing due to the evolution of the environment and the technology. It is of strategic importance to think about the roles and their evolution paths. SBB grows and moves together with its employees into the future of mobility.
  • Data – SBB as a provider collects a lot of data about its users. Monika stressed that the data belongs to the client and not SBB. So the client decides when and how this information is used.
Again four aspects which can be translated very well into financial services. The empowerment of the staff is key, every employee is a part of the brand management and client data belongs to the client and not the service providers.

Be Aware of your Digital Self

The ongoing digitization of our environment makes us loosing our direct contact to it. We cannot digest the wealth of information anymore because our capabilities are restricted, to slow, or the relevant ones are even not available at all.

Life, the environment we are living in, is being transformed, is being enhanced into a digital dimension. And we are already part of it. The information about us and thus our personality and how others perceive it is also enhanced and accessible in this new digital space.

Are we aware of these facts? Do we still have the overview of what others can and do see from us? Are we still in control, can we still intervene and action as effective as we could in the physical world?

In the same way as our world is being enhanced it is necessary for us to also enhance our capabilities and learn new tricks so we can persist in this changing environment with its new opportunities and requirements and regain control. For this we need help. We cannot access the digital world directly, we need new senses, the mass of information extends our processing capabilities, we need helpers. And these helpers are already underway. They help us organize our emails, capture appointments, translate web sites, remind us to leave on time in order to catch the train, tag our pictures, and so on. This is only the beginning. They learn about our taste and preferences while they are watching us and currently only carefully and subtle provide their advice and proposals. While interacting with them and being surprised by the accuracy and convenience of their services we are building up the trust that is necessary to also consciously delegate tasks to them. First small distinctive tasks then more and more complex and entangled issues to solve that require to ‘know’ us and our behaviors.

There are (at least) two perspectives regarding the ‘digital self’ to consider: We sense our amplified capabilities to act in the digital space and cope with the demand and rules valid there. We experience the ‘amplified me’, our extended powers. That’s one side. On the other side, there are the other actors on that stage who interact with us – be it other people, their digital selves, companies, robots, devices in the IoT, whoever and whatever is connected – and their perception of us. Like in real life there is sense of self and awareness of others and both of them comprise the digital world.

The digital self is much more than just an avatar that we can shape and present to others. It is the result of all our actions, the product of our history in the digital world. Our traces are like footprints in the sand but they get never washed away. The net cannot forget.

It is more than just a funny game. Digital is part of the real life. Be aware: The digital self is precious, it must be developed and needs protection. You have to care for it as if it was really a part of you. Because it is really part of you!

Banks used to be the place where you could store your valuables, the things that need protection beyond your own abilities. Few things are more precious than your reputation emanating from your digital self. It will soon be part of the master key to unlock the services you want and need. How to protect it? A vault will not do, that’s for sure! Do you have a solution?