Digital to replace the human touch?

Can technology/ intelligent machine replace the human touch? While a machine can perform a given task, often more efficiently than we can, what it lacks is the creativity in the activity, a uniquely human ability to cater to the needs of the individual. What is creativity? What are the needs of the individual? Even if a machine could determine an appropriate plan humans will still want to interact with another who has the creative expertise/ experiences to talk us through, one who understands that creativity in that context.
How much of this effect is real, how much of it is specific to our generation? Will the next generation or future generations after have the same distrust and longing for such “human” touch? Especially digital natives who grew up with the internet and social media as part of their everyday world.
Technologies of the industrial revolution (steam power and machinery) – largely complemented human capabilities. The great question of our current time is whether digital technology will complement or instead replace human capabilities…can digital technology replace human capabilities especially the understanding and judgement – let alone the empathy – requires to successfuly deliver services such as social care; or that lead us to enjoy and value interacting with each other rather than with machines.
Faster isn’t wiser: Intelligence is defined in terms of the ability to acquire and apply knowledge and skills, but what is often missing is the act of taking decisions base on the ability to choose objectives or hold values that shape it.
Values are experience, not data: As we use increasingly powerful computers to create more and more sophisticated logical systems, we may succeed in making systems resemble human thinking, but there will always be situations that can only be resolved by humans employing judgement based on values that we can empathise with, based in turn on experiences that we can relate to.
Artificial life, experience, values:
Intelligent machines can make choices based on data available to them but this is very different than a judgement based on values that emerge from our experience of life.

Information dissemination ethics

Image 20180211 172710
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? 

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.

Multipurpose Traverse


As today’s business challenges span across boundaries within and external so too must leadership. The ever-increasing complexity of today’s world calls for a critical transformation in leadership from managing and protecting boundaries to boundary spanning ( see Never fail to fail, Giving Direction, Dance on the VUCAno) With that it’s business model reflects towards a multipurpose traverse offerings supporting the client’s dynamic behaviors and journeys ( Banking evolution: Service Innovation, Banking Today)

Under the context of digital offering(s) is its simplicity of a single-purpose business model/ offering/ app the wave of the future?

WeChat, or Weixin in Mandarin, is quickly becoming one of the most popular multi-purpose platforms, not just in China, but the world. Released in 2011 by Chinese internet giant Tencent, With nearly 800 million active monthly users, its user base has grown consistently in every single quarter to date. More importantly the point that I would like to focus is it’s actual embodiment of the app.

It’s safe to say that the most ardent of technophiles have at least 100 apps on their smartphone e.g. Facebook Messenger, WhatsApp, Telegram, Skype, Google Hangouts and Duo for instant messaging. Uber, Lyft, Citymapper, Waze, Tripadvisor, AirBnB and Skyscanner for directions/maps. In addition for gastronomy related: Deliveroo, Just Eat, OpenTable, Zomato, Yelp or Urbanspoon. That’s 19 apps to cover three essential functions. WeChat includes capabilities above and more.

WeChat lets users do everything you’d expect it to – instant messaging, sharing life events and chatting to family members. But its feature list extends far beyond custom emojis and profile pictures. WeChat allows you to arrange a catch-up with a friend, pre-order food from a restaurant, book a taxi to the restaurant, get directions on foot, pay for the meal (or split amongst your friends at the time of payment), check movie times and book tickets, and also purchase other items. All without hitting the home button.

The possibilities for brand-to-consumer engagement on WeChat are almost unparalleled anywhere else in the world, and this is almost entirely due to the way the app manifests itself in as many aspects of daily life as possible. By knowing a person’s current location and when they usually have dinner, all in one app, fast-food brands can hyper-accurately target consumers when they’re most inclined to purchase. And by tapping into the app’s data on payments and money transfers, marketers can get a good idea of when, where, how and why users spend their money, before using this to hyper-accurately target their audience when they’re most likely to buy. With such understanding of a client’s behaviour enables to proactively provide financial wealth services be it from suggesting dynamic relevant payment methods to making recommended investments, wealth management and advisory, etc…

The need for banks to traverse beyond its current boundary is imperative to regain expediency with the new paradigms ( see Digital Tur Tur).

Banking evolution: Service Innovation


Not so long ago we introduced banking capabilities (see “Towards a digital barter economy?”). Then came the pursuit of product offerings from basic to highly exotic types. With globalisation and increasing market competitiveness banking institutions must now drive innovativeness in their operation to gain sustainable competitive advantage. We are now in an era of competing, not only with incumbents but new challengers outside the financial sector, on the basis of services rather than on the basis of physical products as it is hard to distinguish between products of competing brands in a given product category. It is the services offered by the banks that manifest true value. Differentiation in services must be based on the need to have a vision (see “Giving Direction“) … and not ‘just’ innovation but with the sense of purpose.

Service innovation involves intangible resources for a more innovative service(s) that challenges the conventional attribute-based view of services delivery designs. This requires going beyond current restrictions of product innovativeness that involves assimilation of improved service processes by means of designing and redesigning service delivery capabilities. The pervasive influence of information and communication technology has revolutionised the means of social interaction which will impact how banks will integrate in the client’s ecosystem.

As services become more important for society and customer’s demand more complex and personalized solutions the need to understand and build up innovative processes is vital. Globalisation, information on demand, and ubiquitous communications are pushing innovative services to become more open, flexible, integrated, complex, multi-actor, and networked-oriented).

There are various models of service innovation:

  • “4Ps model by Bessant and Todd (2011)” – 4Ps represents product innovation, process innovation, position innovation, and paradigm innovation. All four aspects formulated for “innovation space.”
  • “Six Dimensional Service Innovation Model by den Hertog, van der Aa and de Jing (2010)” – this defines services innovation as a new service experience or service solution that consist of one of the following six dimensions: new service concept, new customer interaction, new value system, new revenue model, new delivery system and technological.

Can banks use these models as a baseline to evolve future service innovation models?

Nevertheless we need to work towards sustainability competitive advantage and embracing service innovation as an integral part of the bank’s strategy in order to move continuously towards being customer-centric and services-centric. Although there will still be a wave of financial product innovation based on programmable money we should not be limited to product and/or related process innovations but we must emphasise on business model innovation, market innovation, and most importantly paradigmatic innovations.

How to explain ‘new’ things like bitcoin …

Let’s assume for a moment around year 1860 you are horse rider working for the Pony Express. You and your colleagues are doing, on a daily basis, a fantastic job delivering messages between the Atlantic and Pacific coasts ( it takes approximately 10 days). During a ride you start to see placement of wires on poles. You try to understand and to explain to your partner of this. What would you say? “ they are building a continental fence high up in the air” or at some point you understand some aspects of what this new thing does. At the moment of realisation would you still be convinced that only people on horses working for solid companies can reliably deliver messages over such a long distance. Eventually working in this paradigm will no longer be valid as you notice the decrease in demand for horses and riders.

Now let’s switch back to crypto currencies with Bitcoin as the prominent example and have a look at some of the arguments discussed on various media these days. It is very difficult to explain cryptocurrencies, such as Bitcoin, with a simple comparison to something else.

“Bitcoin has no value” – this is somehow the wrong discussion. Most currencies don’t have one – fiat currencies have declared value by authorities and maintain it as long as people trust the system. The latin word ‘fiat’ simply means “it shall be’ – an authority declares something to be a currency. Bitcoin was created in the last financial crisis. The genesis block contains the message “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. It is an attempt to create a decentral form of money where no central authorities have an influence. So the key question is not the ‘value’ – it is about how trust is built. What’s better – the declaration of an authority or the community?

“Bitcoin is a currency” – sounds reasonable as we all deal with one or more currencies each day and as Bitcoin started to become an aspect in our daily life. But what is a currency? It turns out that currency definitions like the one on Investopedia are not so helpful.

“Currency is a generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy. Used as a medium of exchange for goods and services, currency is the basis for trade. ”

If this definition is true, then Bitcoin is not a currency as it is not issued by a governmental authority. Also, the definition of money is linked to a government. Hence Bitcoin is also not money, if the definitions are considered to be valid.

“Bitcoin is not a medium of exchange” – as transaction costs and volatility are high and making small transactions unattractive to mine. Although Bitcoin is currently not an option for small amounts but could well be used for large ones.

“Bitcoin is made of thin air” – on the basis that there is no underlying physical resource. But what does this mean? Bitcoin is itself a resource on a strict mathematical base. It is not created out of thin air – its creation is the result of a well-defined and completely transparent algorithm which we all can verify and decide to trust or not to trust. Comparing this to ‘fiat currencies’  do you know how ‘fiat currencies’ are created? Do you know who decides to increase the amount of currency or to adjust the value of one against another currency? Is this done in a transparent way?

“Bitcoin is fraud” – what is the basis and evidence of such statement?. Looking at the original whitepaper of Satoshi Nakamoto this is simply wrong. Sure, there are fraudulent use cases, but this is also the case with all other currencies or assets. It turns out that Bitcoin is not really a good medium to be used e.g. in ransomware. All transactions in Bitcoin are publicly observable – we do not know the individual owning an address but that does not hinder to monitor target addresses and intervene at exchanges when they are used. In other words – using Bitcoin always leaves traces while using e.g. cash does not.

“Bitcoin needs regulation” – sounds also great as rules are essential to create trust. A system which is weak needs a lot of surrounding rules and interventions while there are systems which contain the rules transparently in their core. Bitcoin itself is regulated by the maths embedded in the system itself but not by the traditional financial services regulators or national banks. What authorities can and should do, is to think about the exchange of Bitcoin against the fiat currency they oversee and the implications.

“Bitcoin is the mother of pyramids” – sounds also somehow true as the ones who bought Bitcoins early now profit from those who come late. But what is a Pyramid Scheme?

“A pyramid scheme (commonly known as pyramid scams) is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.”

At least I’m not aware somebody recruits members in a multiplier scheme. And anybody can decide at any time to get buy or sell Bitcoins. Hence the comparison seems also to be misleading.

“Bitcoin is a bubble” – looking at the price evolution is 2017 suggests that this could be a bubble. But what is a bubble?

“A bubble is an economic cycle characterized by rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior. When no more investors are willing to buy at the elevated price, a massive selloff occurs, causing the bubble to deflate.”

Well, it is most likely some sort of a bubble – there will be price corrections and at some point in time Bitcoins will be super-seeded by a technology eliminating its constraints in terms of fairness, transaction rate and energy consumption.

“Bitcoin uses enormous amounts of energy” – this seems to be one of the concerns people love to make comparisons and also promote the idea that more transactions results in more energy consumption. Yes, it uses a lot of energy but this energy is what makes the network safe in the current proof of work- mining. An attacker would need to invest a substantial amount of these resources to destabilize the bitcoin network. The amount of energy used does however not correlate with the number transactions processed.

“Bitcoin is the new gold” – this seems to sound right when thinking about mining Bitcoins. There are the miners who produce gold and the limited supply makes gold valuable. The amount of natural gold on the planet is limited like the total amount of Bitcoins. But astro mining will change this for gold not too far in the future – experts talk about 20 years from now. Bitcoin’s mathematical foundation stays.

These points are properly summed up in Steve Wozniak’s statement “Bitcoin is mathematical. I am a mathematician. There are only 21 million. It is more legitimate than other systems”.

The following is a pretty good description:

  • It says that it is a limited resource currently slowly increasing day by day peaking at 21 million. So far, all resources which are limited and of interest, increased in value. While Bitcoin was rather unknown even 2 years ago it is now a hot topic in all media with people making harsh statements primarily defending their own interests.
  • Steve also calls it a system – there is neither a government nor a company with management nor an individual running Bitcoin. The system is very cleverly built – it is an amalgamation of many disciplines and was so far self-balancing gravitating towards a stable state where all the participants jointly benefit.

Maybe we add the following characteristics

  • The system is transparent – everybody can observe all transactions.
  • The system is democratic – everybody can use it or become a miner.
  • The system is self-balancing – no government or company decides its direction
  • The system is energy inefficient – a result of the proof of work mining approach
  • The system is not completely fair –  miners can prefer juicy transactions
  • The system is open – all technology is freely available

A hyperconnected digital economy needs inherently digital media of exchange. Bitcoin is most likely the first step into such a direction. It’s ten years history demonstrates that such a system is possible and triggered a whole new set of echnology innovations. Crypto currencies represent a fundamental upgrade to the economic systems of the world. Once they have matured and are integrated into the mesh economy, the world will look very, very different.


Ubiquitous Computing


The term is not at all a new trend or technology. Previously known as pervasive computing where due to technological advancement and cost feasibility the trend of embedding computational capabilities into everyday objects. This makes them effective in communication as they are network interconnected and performing activities of the end users without a centralised system.

Ubiquitous computing integrates via different devices, industries, environments, applications (e.g. wearable devices, appliances, fleet management, sensors). The goal of it is to make devices “smart” in the form of creating a sensor network capable of collecting, processing and sending data via the context and activity that it is under.

We had seen first phases of such capability involving wireless communication and networking technologies, mobile devices, and RFID tags. With the exponential advancement in internet capabilities, usage of voice recognition and artificial intelligence, the growth and adoption of embedding ubiquitous computing significantly increases now often associated and known to be the internet of things (IOT)

Gartner predicts approximately 8 billion connected objects to be use by the end of 2017 and it appears to be growing. In order to cope with the growth of IOT a heavy incorporation of artificial intelligence (AI) fueled autonomy will be required. An AI-driven era of IOT becomes the key building block to herald an increasingly seamless experience and hyperconnectivity as users and their digital counterparts concurrently transpose from one medium/device to another, between multiple environments, the physical and digital ecosystem.