Our highlights of the second part of the Transactions
Frankfurt, the financial centre of Germany, became the venue for the second part of Transactions 20½ – and “live again, digital again”, because unfortunately there was still no real meeting possible three months after part 1 . And even if online formats naturally offer numerous new opportunities, the last year with its COVID challenges has taken its toll on everyone, especially with the many parallel tasks such as homeschooling and home office or the eternal uncertainty of video calls, which sometimes remind one of séances: “Some things are annoying. This is not how we imagined digitalisation”.
But digitization in one fell swoop is no wishful thinking and no pony farm, and at least it brings one good thing, namely versatile online events like the Transactions in their two parts.
And even though you’re looking forward to hopefully seeing each other again soon at face-to-face events, patting each other on the back and giving each other a hug, there was a lot to experience in our self-made “green hell” of the studio in Frankfurt: including the legendary Edward Snowden, ideas around new political models for the future and discussions on cryptocurrencies, sustainable investing and much more.
Of course, all this is only possible thanks to a great team, the best sponsors – and of course an amazing community!
Aya Jaff: Get Green or die tryin’
“Our everyday lives are about to undergo a huge transformation – and we need to set the course and find the right guardrails now.”
A touch of green – unfortunately that is not enough. Because there is an elephant in the room, a huge elephant even, and it stands for climate change, environmental destruction and co. but nobody wants to talk about this elephant. The programmer, author and founder Aya Jaff, however, is very willing to talk about it, which is why she is tackling the topic of more sustainable business in her talk.
What can the financial industry do here? Especially in the financial sector, there are many old structures that can be changed by young people and new ways of thinking. Jaff suggested in her keynote that the financial industry should first explain in more detail how it works and functions so that individuals also understand what, for example, the banks are doing with their money.
Because individuals can use it to exert power – also on politics, which is looking for the majority and, with changing opinions, is also orienting itself in a different and more future-oriented way. What is important to her above all: “We are not just consumers, we are much more – we can shape the future. If we don’t save the planet, no one will. So, it’s now or never!”
Panel: preach water, drink wine. How much responsibility does our industry bear?
“Just switching your own account has a huge impact.” Aysel Osmanoglu (GLS Bank)
Responsibility, that is an important topic, and it includes so many other important topics: Sustainability, racism, diversity. How can the financial industry in particular deal with this in order to use its piece of the responsibility properly? Sophia Fisher (DKB), Dr. Sven Deglow (Consorbank) and Aysel Osmanoglu (GLS Bank) discussed this in this panel, which was moderated by Julia Tschawadarow (Payment & Banking).
The responsibility of the industry is indeed great, because the banks can decide with their money which investments they will make and thus, of course, which projects they will support – and which ones they will not. For Fisher, then, it’s the impact that’s the really important thing here, because if, for example, the money is invested in nuclear power plants instead of sustainable energy, that means a big impact on the environment.
However, sustainability is only one of many topics, as diversity, for example, also plays a major role here. Osmanoglu stressed that it is not enough for a woman to be on the board if then her opinion does not count. And, of course, the issue is not exhausted with women:
“Diversity is about more,” Osmanoglu said, “about people with certain limitations, with immigrant backgrounds, with different skin colors – it’s a treasure of diversity.” It is precisely this treasure trove of diversity that can help to implement issues such as sustainability more effectively. Here, Fisher highlighted internal and external networks (such as for LGBTQ) that can not only connect people, but also make them visible.
And Deglow, effectively the quota man of the round, has joined in his bank’s initiative to only attend conferences where, among other things, there are enough women speakers. In the end, though, you have to live these ideas just as much in your everyday life, and you have to do it consistently, vibrantly, and for the long term, Deglow says: “We have to change, too, and we have to do it as a whole.”
Panel: Bad Banks, New Kids & Big Techs
“Those who implement technology consistently, not just individual products, can make a profit from this crisis.” Peter Bakenecker (Mastercard)
For over a decade now, this epic battle has been going on: the small fintechs versus the big, bad banks – but is it really (still) the case? Are the sides still so clearly divided, and most importantly, how do GAFAs get involved? Are they partners or do they actually want dominance too? Kristina Walcker-Mayer (Bitwala), Gerrit Dietz (Facebook), Tobias Kugler (Google), Peter Bakenecker (Mastercard) and Alex Flade (Microsoft) discussed this at #TRX20, with Christina Cassala and Sebastian Zelada Ocampo (Payment & Banking) taking over the discussion.
What changed about this situation – and how did Corona in particular influence everything here? Flade pointed out that fintechs and tech companies in particular had (and still have) an advantage during the Corona crisis because everything shifted to online. However, it is precisely this that has made many companies understand that they too will have to offer more digital options in the future. But the winner has not yet been found here, Bakenecker explained: “Those who implement technology consistently and not just individual products can make a profit from this crisis.” Traditional banks in particular are finding it difficult to actually implement these changes, says Kugler.
And Walcker-Meyer sees modern fintechs ahead of traditional banks here: “How to appeal to the broad masses, that’s a key question – and here the small, young players are often better because they’re more flexible.” Above all, the trend towards investing in digital currencies is clearly visible. And also in the digital advisory process, as Flade pointed out, the neo-banks are ahead: If, as is currently the case in the Corona crisis, the traditional bank advisor is missing on site, customers prefer to use the digital offers even more.
For the representatives of Facebook, Google and Microsoft, one thing was clear at the panel: they do not want to become a bank themselves. Dietz emphasized that they see themselves as partners with the banks, with a strong relationship. Making the payment process easier is what drives their work as partners. Kugler also sees itself more as a partner and is more interested in this partnership than in serving the end customer itself. And in the future?
Walcker-Meyer is thinking of completely innovative, as yet unknown ideas: “We want to think of financial products in a completely new way.” Every business model needs different solutions and models that are made possible by new technologies – and thus also offer completely new opportunities for the industry.
Panel: Data Driven Banking – Data Treasure or Pandora’s Box?
“Data warehousing is a term here – or rather the warehouses. We’re facing a pile of data right now, so we have to build something now so that this can be used elegantly and used and managed at all.” Tobias Jünemann (Senacor)
My darling – or yours? Who benefits from the alleged treasure trove of data, or is it something more like Pandora’s box that must be kept tightly closed? In this panel, Dr. Verena Thaler (Raisin), Sascha Dewald (DKB), Dr. Imke Jacob (McKinsey) and Tobias Jünemann (Senacor) ventured into this treasure, the panel was moderated by Jochen Siegert.
At the beginning there is the definition: What does Data Driven Banking actually mean? Thaler explained it this way, “It means proactively using data to structure the business.” Jacob further added that it’s all about relevance, how to become truly relevant to the customer. In this way, new services can be offered far from the usual ones, Dewald emphasized: “This allows you to create concrete measures for the customer.” This requires continuous work for the partner banks, says Thaler, so that you can see how the market is moving and where it is going – and above all, this has to happen on a long-term basis.
Jacob emphasized above all that it is often not about new products, but about sharpening a product. Data enrichment is the keyword here, because new sector knowledge can make you more relevant. For Jünemann, however, it is also central that the new ideas are then transformed into suitable technologies: “Data warehouse is a term here – or rather the warehouses. We’re looking at a pile of data right now, we need to build something now so that that can be used elegantly and used and managed at all.”
In addition to the right tools and deployment, however, the right mindset is also needed here, Dewald emphasized. Above all, it must be clear at the beginning which data you want to manage, only then will you find the right technology for it. One more thing is crucial: that all employees really know how to handle the data. “To do that, you need a culture of your own within the company,” Thaler said. “Data analytics and data engineering are important topics here, but so is just democratizing data so that no one is dependent on one department.” Still, true data experts are in short supply, so the war of talent is very active. Everyone is competing for the same talent, whether it’s a startup, a fintech or a bank, every sector needs them – though banks are often not seen as really attractive employers here, the cooler fintechs are. For Dewald, it is therefore important to inspire young talent to work for them: “But we have already succeeded a lot here, and so far we have been able to inspire all the talent to stay with us.”
But the focus is still on the customer: what do they love, what do they hate? Data analytics are decisive here, but the German market is not yet as far advanced as other international markets. “Analytics drives disruption,” Jacob said, “and disruption drives the market. Here, in turn, we need analytics so we don’t fall behind.” For this, everything has to come together, market research, customer surveys and so on, in order to develop the right products from the data. Thaler still emphasized that data driven banking will soon be nothing out of the ordinary – in five years at most, it will be a commodity everywhere.
Data protection does not have to block the whole thing at all, it is only important that the artificial intelligence is trained correctly and does not draw false conclusions from the existing data. In many areas, the theoretical construct is in place, Jünemann stressed, but more needs to be done to implement it. “We need a culture change here,” Jacob said. “Often some in the bank don’t understand what the data is for, they lack confidence there – and that’s what needs to change.”
Panel: Libra, Bitcoin, Ripple & Co.: Digital currencies on their (pre)asses
“Cryptocurrencies are at the beginning, just like the internet was in 1999.” Marc P. Bernegger
Is cash still laughing – or is Bitcoin laughing now? Digital currencies are slowly gaining new ground, but can they hold it? Prof. Dr. Philipp Sandner (Frankfurt School Blockchain Center), Tom Dapp (KfW), Marc P. Bernegger (Crypto Finance Group) and Alex Bechtel(Bitcoin, Fiat & Rock’n’Roll) spoke about this, moderated by Kilian Thalhammer (Payment & Banking).
Interest in Bitcoin and Co. is growing, but most are still rather tech-savvy customers – about one million Germans, the tech-savvy and interested minority, already own Bitcoin. But interest is growing, Sandner pointed out, “To me, that means cryptocurrencies are on the rise – even though there are ups and downs, there’s a definite uptick.”
For the future, it was clear to the panel participants that this means that the financial and crypto sectors will become increasingly blurred. Dapp sees more convenience coming, for example with banks offering services around digital currencies. This would mean exciting solutions for customers and a strengthened role for banks. “The economy has not yet gone into attack mode,” Sandner said, ‘there is a threat that Europe and Germany will miss the boat here.’ Switzerland was faster here, Bernegger pointed out, its technology-friendly understanding helping. According to Dapp, it would be important for Germany to have room for experimentation: “In Germany, things are only released onto the market after they have been designed on the drawing board for a long time. At the same time, you should simply try something out.” New ideas are still needed for this ecosystem – then it will also offer many opportunities for business models.
Mark Krymalowski: Embracing the future with human answers
“The opportunities multiplied. But many executives resisted, and when the lockdown ended, they wanted to go back to the way it was before. The empire struck back.” Mark Krymalowski (Egon Zehnder)
Digital leadership is critical to the modern executive world, both during the COVID pandemic and beyond. Because new digital challenges are coming our way, and for that we need the right leaders. Mark Krymalowski (Egon Zehnder) is always on the lookout for the best digital solutions and leaders, and in his keynote he explained what to look out for.
Corona has changed a lot in the world and especially in the world of work, and for this, among others, leaders had to develop answers. “Each of us is challenged, even repeatedly overwhelmed – and we just have to work together to find answers,” Krymalowski said. Good digital leadership also helped me make the switch to a home office, which of course has its advantages and disadvantages. But when the change slowly became possible back to the “old normal”, many executives did not go along. ” said Krymalowski. “But many executives resisted, and when the lockdown ended, they wanted to go back to the way it was before. The empire struck back.”
But what to do when the empire suddenly insists so stubbornly on old conditions? For Krymalowski, it is first of all important to take a look at the personality structure, both that of the managers and that of the employees. For we all have, according to Erica Ariel Fox’s model, four types united within us, all in varying degrees:
- Dreamer: Focus on creativity and vision
- Warrior: dedicated to targeted actions
- Thinker: focus on analysis and objective argumentation
- Lover: strong with emotions and relationships
It is not only important to know which of one’s characteristics is the strongest, but also to know one’s different characteristics and to use them correctly in every situation. “You can do a lot with this in society,” Krymalowski explained – but it’s just as important to use this typology in companies, because every good company needs all four types.
With them, change is easier and does not always have to happen in extremes, as is often the case in Germany: first almost nothing happens, then suddenly everything happens at once in a panic. Krymalowski knows this well from his work and also the problem that what is announced in great detail is often not lived. “Many executives found it difficult to operate in the new world,” Krymalowski said. “Actually, they should have been happy that a new muscle was being trained, but instead many wanted to go back to primal.” Even though much has remained the same, especially at the highest levels, things are moving and will lead to changes, especially in the next few years. “This is where we’re going to see more diversity, in many ways.” Some resistance to this will always remain, and you will never be heard in every place, but Krymalowski also stressed that you must always remember that you are very much heard and noticed across the board – change happens no matter what!
Thomas Keller: SAMSUNG Pay – BizDev Insights
“In Germany, people prefer cash and the debit card.” Thomas Keller (Samsung Pay)
Thomas Keller (Samsung) was jointly responsible for the concept and launch of SAMSUNG Pay in Germany – how exactly did that work out and what is it anyway? SAMSUNG Pay offers the possibility to pay with your Samsung mobile phone, but in doing so, you have to find your own way for each country by carefully studying the market situation and choosing the right approach. In Sweden, for example, the launch was very simple: the banking situation is straightforward, paying by credit card is quite normal – so the launch was easy. In Germany, however, the situation was quite different: Here, customers prefer cash, and when they do pay by card, it is usually with a debit card. At the same time, there was a large amount of banking and about 20 million Samsung users – but also a desire for new ways of making payments. Keller reported that when considering how the launch in Germany could succeed, they were quite open about the fact that they had not yet found an ultimate solution. It was precisely this that ultimately led to success, because people were so open to all kinds of solutions.
The approach for Germany was to include the maps pre-installed on all new mobile phones. If you then register for a current account via it, you can pay via the digital debit card at the end. Of course, strong partners were important for this: on the one hand Solarisbank, with whom a special splitpay procedure was developed, and on the other hand VISA, which came on board as a further partner.
In the end, however, not only were several partners working on the project, but also different nations were working together, which sometimes led to cultural misunderstandings. A simple statement such as “cannot guarantee”, which in Germany is more of a factual safeguard, can quickly be understood as a clear “no” in Korea. In addition, Corona made it difficult to conduct the usual field tests with which any new technology is practically tried out in real life, but other solutions were found for this as well. Last but not least, security was an important issue, for which Solarisbank introduced special identity checks to eliminate money laundering and other risks.
With success: SAMSUNG Pay is well accepted, is already pre-installed on the new phones and offers the familiar debit card experience, meanwhile it is also possible on the smartwatches. Keller is betting that the success will continue, “We hope we get the market moving again in a good way!”
Ulrich Coenen: Does that come in cool? Customer enthusiasm instead of cultivated boredom in banking
“Regional in the heart often means in the end that you don’t buy regionally after all – you first have to overcome the inverse blood-brain barrier.” Ulrich Coenen (Fiducia & GAD IT)
Is banking, especially regional banking, sexy? Perhaps not quite – unless you listened to the keynote speech by Ulrich Coenen (Fiducia & GAD IT), who showed how regional standards and digital innovations can indeed be combined. This really applies to any industry, because a business can only be relevant to the future if it is cool and interesting. At Coenen, the first issue was how to lead regional banks into the big wide digital world. Do you really still need the local branch? In fact, local banks still play a very important role in many communities today, supporting charitable projects, for example. This also has an impact on the people, who can then feel the bank locally.
And so it is important to many that the regional is taken care of – but the practical implementation is often still lacking. Coenen explained, “Regional at heart often means you end up not buying regional after all – you have to cross the inverse blood-brain barrier first.” Convenience is an important issue here, as is being able to hold your own alongside big players. That’s why customer wishes are an important topic, because they can provide the added value demanded: “Here, we simply need even more capabilities to really fulfill these customer wishes,” says Coenen, “and even more: many customers want, quasi similar to Asia, that banks can also bring more and above all more linked services across regions.”
But it’s also about authentic dialogue with customers, “meaningful dialogue” as one Australian bank calls it: “You have to transform that into dialogue – but to do that you need good understanding of technology, optimal use of data and the right tools to let real communication emerge.” Only by staging the right customer journey can cool banking emerge in the end. Is that enough for real goosebumps then? Coenen stressed: “That doesn’t have to result in the goose bumps themselves – but that has to be the claim and the orientation, where it should go. And cool banking? “Cool, after all, is anything that exceeds expectations,” Coenen said.
In the search for it, you can discover new things that can always surprise you, so you always discover new definitions of cool. Above all, the customer must always be the focus here. He needs a successful customer journey, which will then enable cool banking to succeed: “With the right model, any regional bank can also transform itself into a model for the future.”
Edward Snowden: Digital Banking: Security Risks, and Pros and Cons
“The security of the society is distinct from the security of the state.” Edward Snowden
Edward Snowden, the former CIA employee turned whistleblower, is already one of the icons of our time who hardly needs an introduction – for TRX he was joined live from Moscow, interviewed by Dr. Vincent Haupert. For Snowden, one thesis is central to his remarks: “The security of the society is distinct from the security of the state.” Because at the moment, society can no longer strongly influence many areas – especially, of course, the area of security. The law no longer protects everyone, and especially not everyone equally. This has a particular impact on the handling of data: “We don’t have a data protection problem – we have a data collection problem. Not only is data collection happening on a massive scale, but it’s happening in many more places, like Google or Facebook. Thus, vast amounts of private moment, data and information accumulate, revealing everything about the private lives of many people.
This always raises the question of consent – and whether this can still really be given. Because a lot of things can be given without specific consent, otherwise most of it just reduces to “yes or no?” questions. This becomes the only decision in the field of privacy and in the end it is only the illusion of consent. Just a little click and you give your consent.
“But at what point does your click offer no point of return?” This question is crucial for Snowden – is there even an alternative to this yes or no? After the question of whether you want to continue the purchase process, yes or no, then comes the question of whether you want food, yes or no – or whether you want to stay alive, yes or no. “In the end you have no way of choosing an alternative, to shape your life in a different way.”
To this end, technologies are increasingly taking over our lives, Snowden stressed, because whether the light goes on or the door to the apartment opens may soon be based on a technology – but this must also always be trusted, and it can always be faulty. Since there are often many different service providers behind a technology, the trust issue multiplies: “You need to trust every single provider.” And that’s what makes everything so opaque and complicated.
One’s own smartphone is always with them, always in one’s pocket, and can find out so much about the user. One thing in particular bothers Snowden about these smartphones: “You paid for the phone, but someone else owns it. Because that’s exactly where the problem lies: that we use things and pay for them, but they don’t actually belong to us. What’s more, we often don’t even know or understand the technology behind the devices, even though this very technology is all around us. The search for new secrets continues, and every device that is connected to the Internet can simultaneously provide new information – how can we prevent this?
Snowden emphasized here that it is precisely the aforementioned trust issue that is the problem. Because really, companies shouldn’t ask if they’re trusted, they should give the reason that this exact question doesn’t need to be asked.
But the upside is that discontent is growing here, just as it is with currency, as digital currencies like Bitcoin offer a first alternative. And they show how change happens here: “If you do not provide a better alternative for your model or platform, someone else will do it for you!” This change can revolutionize all areas, as long as the motto “trust less” is taken to heart. “We need to create systems that are direct and don’t need trust,” says Snowden. Because the more clearly people see that there can be workable alternatives that offer more freedom and more privacy, the more they will end up turning to those alternatives.
“The beautiful thing of technology is, it can improve over time,” Snowden said. “I think we will move away from this pervasive surveillance system.” At some point, there will come a point when we are so shocked by the way things have been done so far that we will want to move away from it – the only question is when that point will come. And the responsibility of the financial industry?
This is where companies come in, because they are often networked with the government and its surveillance – sometimes voluntarily, sometimes rather not. For him, especially the storage of data over a long period of time is a big problem – and that’s why you have to fight against it. “Someone has to do something which is different – and probably wrong. That would change a lot!”
“We are approaching a breaking point,” Snowden explained, looking to the future, because everything can look very different here. The more society’s opinion changes, the more politicians will have to adapt, because they depend on the majority. Even if this change happens slowly, it still happens. “The security of the society is distinct from the security of the state,” Snowden concluded his talk, “but it does not have to be this way – and we can change it!”
Special thanks to our sponsors
Make two out of one, that’s the motto of this #TRX20 – sounds easier than done, and especially with a pandemic behind us. The Payment & Banking team had a lot of work to do – but fortunately also many good sponsors as supporters:
Thanks to you! There is so much more to sponsorship than financial support: thanks to sponsors, you can bring people together in real or digital spaces, you can discover great venues or technologies, listen to great speakers, listen to panels full of innovative ideas and be part of something big. And through all of these opportunities, sponsors, like TRX, often become true friends and inspiring partners.
Thank you, dear sponsors, for making this possible!
IN THIS SENSE, WE HOPE TO SEE YOU ALL AGAIN AT TRANSCATIONS 21 IN NOVEMBER…CIAO!