Fourth Industrial Revolution – Page 2

Dance on the VUCAno

The notion of VUCA was introduced by the U.S. Army War College to describe a volatile, uncertain, complex and ambiguous multilateral world which resulted after the end of the Cold War. This applies well to the world we see today where a lot of things evolve in parallel influencing each other. VUCA stands for:

Volatility – fast rate of change
Uncertainty – as things change fast we seem to live in a world of uncertainty
Complexity – small things can develop huge effects, nothing seems linear anymore
Ambiguity – things can be interpreted differently, context matters, answers depend

People like stability and simple situations – but in reality is different. The elements of VUCA can be seen as a threat or an opportunity. I prefer the opportunistic view with observable developments within each elements of VUCA

Volatility – opportunity for those who can adapt, are agile and have access to resources
Uncertainty – opportunity for those who look at the bigger picture
Complexity – opportunity for those who can adapt and influence
Ambiguity – opportunity for those who live and breath diversity

Here are some thoughts triggered by VUCA

Having a vision or a longer term purpose is key to channeling activities towards a common goal. It enables all to make the right decisions at any time (giving direction)
Projects or initiatives must be structured as small steps each leading to a stable and beneficial state.
Approaches may look promising upfront but may become unattractive or even unpractical when being implemented. It s key to acknowledge, learn and move on (never fail to fail).
Try to travel light – adjusting direction and acting quickly does not work when we have lots of baggage.
Avoiding technical and business debt becomes instrumental in enabling the ability to renew systems and organizations.
Old patterns and theories become stumbling blocks. Be creative and innovative to develop patterns and tools which match the new reality.
Best practices are good to learn. They are for a specific situation – yours is different.
We live in a world of networks and network effects matter. Its about connections and influence not about hierarchy.
If one acts to isolated he loses influence which lacks the stimuli and interactions in order to drive innovation and creativity.
Try new things if you expect something new. Be curious and open for surprises – there is always something positive in it which can be used to build on.

In the world of ambiguity it may sound promising to try to keep and defend one’s current strong position. Why try to be creative and innovate? Why not just wait, optimize the current state and buy what turns out to be a success. This does not work well in a networked world. Such strategy typically leads to a limited time success followed by a serious threat.

Banking Today

The word bank immediately depicts the picture of queuing in branches, limited quality products, and legacy processes ( e.g. time to process transfer or payments, etc…). The list goes on and on whether it is overdraft charges, processing/ service fees, overseas call centre. Although in the past, prior to the digital revolution, communication and processing were performed physically and was an important valued service appreciated by its consumers (Change is inevitable, Importance of a brand’s digital behaviour). However in the digital age, this will change with the introduction of financial capabilities not through new capabilities from existing incumbent banks but by new players outside the financial sector.

What will these players offer? Will they offer radically different products, new approach(s) to customer service and radically different ways of integrating to the customer’s ecosystem offering customers genuine and value added financial services? Or will these new ventures, like many of our existing banks, simply pay lip-service to such ideas?

What would we expect these new ventures to provide? To say the least the following:

Fewer but relevant and value-based products base on the customer’s preferences. Keep it simple, make it fun, empower the customer.
Financial services anywhere anytime (Omni-digital). Ubiquitous and available when we need any forms of financial services through the customer’s ecosystem. Services that interstate with their connected life.
Personalized services and recognition. Knowing the customer personally. Listening to the customer
QR code a standard for payments where payments happens instantly with limited to no infrastructure required
Work the way customers work. Be where they are, be there all hours, respond now.
Be the kind of financial services that I want to work with: be involved.
Rate and fee sensitive/ free
Be the overall financial caretaker. True advisory relationship.

What are your expected capabilities?

FINthinker’s Predictions for 2018

2018 will bring …

2017 was an interesting year where many developments started to get real traction. Just think about blockchain, bitcoin and artificial intellgence.

2018 will be even more interesting and substantially more challenging. A few predictions for 2018 are as follows:

There will be three core changes for financial services:

Tokens (see Towards a digital barter economy?)
Blockchain
Self Sovereign Identity (see Self Sovereign Digital Identity)

All three aspects levitates a shift towards a distributed decentralized financial system. This affects the core and challenges legacy status quo and its existence in the future.

In addition fueled by the increasing tokenization and availability of blockchain based systems there will be a shift towards

Mobile Payments
Holistic mobile wallets
Global Solutions

There will be no other options for incumbents to integrate into the evolving mesh than to provide API’s to access information and services and to start to rely on others to provide crucial information. Self contained and closed financial services companies as well as local solutions will increasingly face headwinds.

Open Banking / API’s
Global solutions

Last but not least – user interfaces will become much more natural and transparent. The users will be amplified with new sense and access to information supported by intelligent agents.

Natural interfaces, Voice (see Noisy Channel(s) to Channel-less )
Artificial intelligence, Smart Assistants

Regulators will start to come up to speed with the changes. They will find ways to agree with business changes but also ethical standards across borders acknowledging the global nature of digital eco systems. A big challenge will be on the very old tax systems which are not ready yet for the shaping economy.

Tax System

These changes are fundamental – there is a ongoing paradigm change where inherent distributed digital approaches start to outperform the automated legacy processes. There are two big dangers out there

Underestimating the ongoing change (see Noisy Channel(s) to Channel-less)
Overestimating the achievements made (see Digital Tur Tur)

Many of the current developments seem to turn time back and bring up systems again which were used in the past but difficult to apply as physical distance was a limiting factor. Digital changes this – the world becomes some sort of a global village. Have a look at Yap, The Island Of Stone Money – the first productive blockchain system.

Our 2018 predictions by 11FS

What I read got me thinking

“Making me think” is one of the biggest compliments you can obtain from me. We are used to continue our habits and patterns and it takes great effort to escape from them.

As a child I was always inquisitive and full of questions – although some are not so challenging but when in doubt we try to understand and learn by asking lots of questions. Over time we perceived to think that we have asked all important ones with all the answers ready. Thus the creation of “our box.”

Asking questions is a way of getting in and out of your box at will and to develop new concepts, thoughts and ideas. Asking yourself (and others) many questions every time is a form of gym to workout your brain. Martin Gaedt explores this in “Rock your ideas” (available in German only). Look around and start to challenge yourself and others – rock your ideas!

How will Artificial Intelligence affect crime, war, justice, jobs, society and our very sense of being human? Max Tegmark provides a fascinating perspective into different forms of life, its evolution and physical limits in Life 3.0. The book defines basic terms like intelligence and busts common myths. Max raises many questions, provides answers and stresses the importance of having accepted ethical standards in the rise of AI.

What is happiness? Is there a formula to become happier? What are the parameters and how can the outcome be optimized? Solve for Happy by Mo Gawdat takes an engineers perspective.

Can humans overcome death? Should they? Homo Deus by Yuval Noah Harari looks into a world where more people die from eating too much then from having nothing to eat and where more people commit suicide then there are victims of soldiers, terrorists and criminals together.

Do you believe what you can see? Can you only see what you believe? The Internet of Us: Knowing More and Understanding Less in the Age of Big Data by Michael P. Lynch explores this paradox.

What is money? What is currency? What if companies issue their own money? Before Babylon, Beyond Bitcoin: From Money that We Understand to Money that Understands Us by David Birch s a fascinating book exploring how technology is changing money.

Do you know what work is? Do you work in the office or are you just busy playing roles without producing value? Lars Vollmer provides answers in his book Zurück an die Arbeit: Wie aus Business-Theatern wieder echte Unternehmen werden. The book is available in German only.

What is important? What is true? Is it important, that it is true? Gunter Dueck explores these questions in his book Flachsinn: Ich habe Hirn, ich will hier raus. The book is available in German only. How can one escape from the growing shallowness? Maybe by listening to these books and by challenging yourself …

The publications above made me think … What books made you think? How have they influence “your box”?

A good time to “workout” our brain and reflect on “our box” during the holiday season.

November on FINthinkers

November 2017 was the first month for the FINthinkers blog. Below is a short summary of what covered so far

Change

Our blog started with Change is inevitable looking at diverse types of change ranging from evolution to revolution. We also touched on Conway’s Law which states that organizations designing systems are constrained to produce designs which are copies of the communication structures of these organizations. Following Conway’s law companies need to change the organization to create the systems required to stay relevant in the new normal. In Next stop – FinTechGiants ? we look at the available dimensions to outperform others and at the relevant structures which each company has. Many companies seem to apply a Tur Tur strategy to change looking giant from far away but very small if one gets closely.

Client Experience and Brand

Noisy Channel(s) to Channel-less highlights the need to think from the client’s perspective. No client talks about channels but we all like to have seamless and ubiquitous experience to reach the desired outcomes. So brand’s digital behaviour becomes vital when services are transparent in a digitally augmented world.

Security

Homomorphic Encryption started a series of posts on security and related topics.

We hope that the posts inspired you to think about the topics. The nest posts will follow soon … thanks for reading.

Noisy Channel(s) to Channel-less

From single channel to omni channel the intent was to enable enterprises to seamlessly engage with their clients across them, improve client experience by ensuring context and history are in all channels seamlessly. To date there are 3000 apps available for download from the Apple App Store. Do we really need an exuberance of micro capabilities of each app across different channels in order to interact/ fulfill our daily lives? And if so how many are truly interconnected and contextualised? Or should the importance be of maintaining the social-connectedness from the events happening around the client’s ecosystem in order to ubiquitously interact and communicate? Channel-less is simply a window into the core client experiences.

With the exponential increase in the sophistication and proliferation of technology current communication are just not adapted to the client’s needs. Some require an intensive publishing cycle and don’t provide the necessary features as offered by other platforms. At the same time multitude of information sources makes it difficult to fill them all. Rather than adding more channels creating subsets of it, enterprises should think about orchestrating the experience base on the client’s interaction.

Defining personalized touchpoints for the client represents the journey a client engross in association to the brand which reflects precious insightful moments of truth. Regardless of channel(s), the interaction(s) be it via a channel or an IOT appliance or VR or AR, the interaction(s) should continuously be able to recognise and support the concurrency in which a client can be interacting through multiple mediums at the same time or span across but it is as if he/she is interacting as one.

In the forseable future digital assistant(s), which are permeable and omnipresent, will share and perform the responsibilities of the physical client. Acitivities will be perform by many digital assistants representing the client taking place concurrently in the various interaction mediums. E.g. a client maybe in front of a digital device performing a transaction while at the same time his/her digital assistant discusses wealth planning with a financial advisor while another is engaged with other administrative activity. Or be be it starting an activity through one interaction and finishing the same activity in another.

Simplicity is the key to remain flexible and able to rapidly change as the next wave of digital disruption takes hold. What the client wants is to connect/interact seamlessly in their ecosystem. It is not about a channel(s) it is is about providing and making the connection seamless and ubiquitous.