Technology, Innovation, Education
Advances in technology and innovation are the driving forces behind the growth and sustainability of prosperity in our increasingly knowledge-based society. In this context, the ongoing digitisation of the economy and the related change in economic and societal processes are particularly important. The Sectors, Technology, Resources Team analyses these structural relationships.
Blockchain
Are you already experimenting with blockchain? (Fintech #6)
No? Then it may be worth taking a look at this digital technology and its potential areas of application. Alongside unsupervised learning algorithms and early cognitive systems, blockchain is an example of a digital technology that not only calls tried-and-tested business models into question, but is already turning them on their head. It may have its origins in the financial sector, but a universal spectrum of applications is beginning to open up both within and outside the fintech world. Those who have tried experimenting with digital technologies have quickly found that in many cases they make existing business models, processes and infrastructures noticeably more efficient and thus increase productivity. This has certainly been the case with blockchain, which is why it is a good idea for many decision makers (not only) in the financial sector to keep a close eye on developments and, above all, the various experiments with blockchain that are currently ongoing. Ideally they would experiment with various projects and pilot studies themselves in order to come up with their own ideas and try putting these into practice. [more]
Digital technologies
Allow me to present the employee of the month: our esteemed colleague algorithm (Fintech #5)
The digital revolution is having a beneficial economic effect: new technologies are appearing at a faster rate. Of course, many of these technologies are still in their infancy and in some cases are still in the visionary stage, but they nevertheless hold unforeseen and lucrative potential. The race for digital technologies and appropriate monetisation strategies has been on for some time, especially among the large internet platforms. In the future, however, digital technologies will also find their way into traditional companies where they will gradually evolve into a comparative competitive advantage. This poses a number of advantages and disadvantages, which we urgently need to discuss. [more]
Data protection & security
The digital credo of traditional banks: Data protection & data security (Fintech #4)
Contrary to what some critics say, traditional banks would be well advised to start using digital and algorithm-based data analysis instruments now. In future, this will be the only way they can offer their customers personalised financial services and recommendations and continually optimise their internal processes. Should they hesitate, however, the technology-driven, non-bank market newcomers will continue to extend their information lead and in time begin to offer more financial services (also outside the retail banking segment) that are easy to standardise and automate. The latter would further intensify cut-throat competition in the financial industry and could reduce traditional banks in the case of some financial services to pure-play infrastructure providers with declining customer contact. The introduction of so-called recommendation algorithms should be accompanied by the mandatory consent of the customer and transparent communication on how they function. [more]
Big Data
Operation Big Data: Challenge accepted (Fintech #3)
Big data is a hot topic. The large digital platform operators in particular have long recognised the economic potential of algorithm-based data analysis. They demonstrate this to billions of customers professionally every day. With their analytical technologies they generate high revenues and tie us loyal customers ever more firmly to their platforms via convenient and, above all, individualised services. A steadily growing number of companies want to imitate this lucrative lock-in effect so they can also capitalise on the benefits of big data. Nonetheless, in many sectors the implementation of modern data analysis tools is proceeding only sluggishly. Contrary to the expectations of some market participants, big data is not a simple add-on. [more]
Blockchain
Blockchain – attack is probably the best form of defence (Fintech #2)
Debate over blockchain technology is raging in many online and offline media at present. In principle, the technology constitutes a decentralised ledger system that can be coordinated via peer-to-peer (P2P) networks. Any ownership or security issues arising in connection with the decentralised transactions conducted across the ledger system are handled by P2P mechanisms as well, i.e. also without a central node. Ownership status is established via the digital exchange of cryptographic keys (public vs private), while fraudulent transactions can largely be ruled out with the help of the cryptographic 'proof of work' system. Using a proof of work, blockchain technology enables the rapid, inexpensive transfer of assets and financial products between individuals who neither know nor trust one another, without a compelling need for an intermediary to reduce existing information asymmetries. [more]
Internet expertise
On the record...
Interview with Peter Schaar on the topic future challenges of the digital age
„... The question as to who has access to our data is becoming ever more important in light of current data collection and processing practices. Contrary to expectations, today's information society is primarily transparent in only one direction like a one-way mirror, with transparent users on one side and largely non-transparent, digital power centres on the other. No society in which ever more data is available at the global level is immune to cultural impoverishment and oppression....” [more]
Digital ecosystem
Fintech reloaded – Traditional banks as digital ecosystems: With proven walled garden strategies into the future
The time is ripe for established banks to transform themselves into digital platform-based ecosystems. With their current digital strategies the banks will not achieve the resounding success that will enable them to hold their own in the medium to long term. Not only certain business models, distribution and communication channels, products, services and processes, but especially the ways data are handled need to be rethought and redesigned. Implementing a fundamental reform attuned to the digital age will provide the opportunity for traditional banks to learn and adopt the strengths and particularly the monetarisation strategies (walled gardens) of the successful digital ecosystems. [more]
Data industry
In our data industry we are not the miner but rather part of the mine!
As one possible way of reacting to the loss of our data sovereignty, efforts should be taken to launch education campaigns without delay (ideally on an international basis). This can help to establish greater internet and media expertise among the population at large in the medium to long run. Furthermore, an international legal framework would be desirable in order to regulate the use of data and algorithm-based technologies as well as limiting lax data-collection practices. [more]
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