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My iPhone is, literally, my baby. With every step that I take, it is with me. I never realized how much data I was sharing, until I looked through all my apps today. In Google Maps and in the Maps of iPhone, you can look through all your recently visited places. With timestamps and all. And another app that was smiling at me like a doting parent was FaceBook (okay, it was more creeping at me like a helicopter mom.) And I am pretty sure that FaceBook also knows my location about me. But how much do they know about me? Like really know?

Well… Quite a lot actually. You can actually see your own ad preferences / ad profile on Facebook based on what you liked and didn’t like, what you have hidden etc, with what kind of ads you have interacted and which of the companies might already know about you because you are one of their customers. It is kind of scary to see how much they got right, e.g. they were spot on about my love for food, and my love for cats. (Click here, if you want to check your own Ad profile on Facebook).

Every act that you do on Facebook, that helps them build a better profile for you. However, what can you conduct from all these interactions on Facebook? And what does it say about you? Well… there is Apply the magic sauce. This is an internet engine that use all these little actions what you are doing on the internet to sketch a personalized profile about you. It is a personalization engine that predicts your personality from whatever you do online. I do recommend you to check it out (and to be creeped out about it). I used the Apply the magic sauce on my Facebook profile and they were also very spot on about who I was psychologically. It also set me thinking and made me realized some things about myself that I wasn’t even aware of…

So, Facebook (and all these other apps) know so much about you, you can almost say that they know you better than yourself. However, the power that they have over you, how are they going to use it? This is such an open space with no boundaries (yet). There is almost no legislation about it, and the ease of how to abuse these information is high, also the risks.

What do you guys think? Did you try the websites out? Were you surprised about the findings? Share your thoughts with me 🙂

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Artificial intelligence (AI) has become a long way. Using AI, computers can already beat human chess players. Autonomous driving cars are becoming more and more a reality right now. AI is being implemented in chatbots for a better customer experience. Some even state that chatbots may provide a better and more humane experience, as chatbots don’t know what bad days are or annoying customers. All in all, AI is becoming more and more human. However, what kind of “humans” are they becoming? AI is learning based on the input that we give it, and it processes this data using machine learning and the output that we prioritize, e.g. this is how Google search know that you mean “Google” instead of your typo “Goolge”. What does this mean for the AI? What kind of AI are we creating? Let’s delve into this topic using the example of autonomous driving.

Autonomous cars can do a lot right now. We can implement it with many camera’s, so they can “see” better than any human driver can possibly see. With the intelligence that they already possess, they can drive even better. Accidents will also be lowered dramatically. However, accidents can always happen. This probability is something that we cannot eliminate. Not even with the amount of camera’s on a driverless car. However, if an accident will occur, what should the driverless car do? Using only programming, we can create an algorithm that the car will choose for the minimum damage. However, what do we define as the minimum damage? And is it also the most humane way?

The arising problem has a great similarity with the Trolley problem:

 

You can imagine that it is very difficult to “teach” the car what it should do, as people have different levels of morality and what they see as morally correct or wrong. Some may preach that killing 5 adults is better than killing 1 child; and others will preach that killing 1 murderer is better than killing 1 doctor. Thus, teaching AI, what they should prioritize, will create a dilemma. Autonomous driving, or other AI that will cross with human lives, will definitely come. However, the question that arises is how are we going to teach them who to prioritize? The ones who program the machines, will they also be the teachers? Maybe, or maybe not. Are we going to crowdsource a public opinion for morality and implement it in machines? However, is the public opinion also the correct one, or just the opinion of who screams the loudest?

At the moment, we are on a crossroad. Technology has come a long way, and right now we need to decide which way to go. Our next step will set the tone for the next generation, so what will it be?

What are your opinions on this dilemma? And how would you solve it? Join the discussion by posting your comment below.  

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The payment industry includes any organization and individual who takes part in a transaction, as sender, receiver or intermediar. It represents organisations like MasterCard and UnionPay – who partner with banks like ING in order to earn fees from the processing of payments. For this blogpost, we will zoom in on the payment gateway, which is being disrupted due to technological innovations.

How we are paying is changing dramatically. Some societies still prefer cash (Ellore, 2017), while others have transitioned to digital solutions. Digital transaction is becoming easier, cheaper and more secure than ever. In the past 50 years, the industry invented the credit, debit, and prepaid cards, which dominated the industry. In 1998, cards outnumbered cheque usage worldwide; in 2004, card transactions have totalled worldwide more than $12 trillion. However, the continued success of cards has led to innovative stagnation, which made banks vulnerable to other gateway providers.

 

The first contactless card was introduced in 2007, the same year Apple debuted the “iPhone”. Unlike the banks, the tech industry continued redefining itself over time and eventually expanded to multiple industries – including the payment industry with Apple Pay and Alipay. In the present, the banks have made little progress towards embracing technology or transitioning to mobile, while fintech organisations like Alipay and Apple have entered the bank’s original business model of earning fees through the processing of transactions.

 

The Dutch banks have developed their own applications, but they are limited to balance overview, money transferring, and some online payments. In most scenarios, verification readers, e.g. RaboScanner, are still required to process an online transaction.

 

Although card transactions have dominated for decades, their inefficiencies have remained to the very present:

 

• Non-instantaneous transactions
• Expensive and intransparent cross-border transactions
• Inconvenient and outdated verification process

 

Using Porter’s five forces, insights to the industries vulnerabilities are identified. Threat of new entrants is high as industrial boundaries keep blurring with that of other industries and technological costs continue to decrease over time – diminishing overall barriers to entry. Bargaining power of buyers is high as dependency on banks decreases and switching costs are reduced as alternatives increases. Bargaining power of suppliers is medium as deregulation empowers entrants to enter the market – thereby reducing supplier concentration and power (sepaforcorporates, 2015). Threat of substitutes is high as new entrants enter the market with lower prices and easier-to-use-services. Industry rivalry is high as banks will not only compete among each other but also with fast growing fintech startups.

 

Porter’s model presents a dangerous scenario for the incumbents’ short-term and long-term, with emerging organisations making the payment processes more convenient and faster. Hereby, we introduce an organisation that has disrupted the payment industry in China and is currently the largest and most technologically advanced player in the global payment industry: Alipay.

Alipay’s unified payment business model represents the future of mobile payments, and it will therefore likely be the foundation for something similar in the West.

Alipay is an international payment platform, founded in 2004 as a payment platform for Alibaba, out of the need to foster trust between sellers and buyers. Alipay became a success because of the escrow services it offered, where the consumer first needs to confirm that they received their money and are satisfied with the product, before the money is transferred to the merchandiser. With more than 520 million users, Alipay has managed to integrate into the daily lives of the Chinese consumers through the provision of convenient and real-time money transfer between two parties, the offer of payment protection for the users and providing free payment services for their consumers and users with low value of money transaction.

 

Alipay offers several sustainable competitive advantages compared to current banks:

• Real-time transactions
• Transparent and lower fees
• Easy-to-use verification process

 

According to Business Insider (2014), Alipay became the largest mobile payment platform in the world in 2014. Alipay announced that they processed nearly $150 billion in mobile transactions the year before, which meant that its mobile payment amount was greater than both PayPal and Square combined.

Moreover, Chinese fintech organisations like Tencent and Alipay managed to disrupt the payment industry in 2015, causing China’s banks and UnionPay to lose $22 billion in transaction fees (Kapron, 2016). Since then more and more consumers continue to shift their payment method from traditional card payments to mobile payments, the segment where banks lack.

As entrants continue to advance their technology, the gap between incumbents and entrants seem to widen further and further, leading to a long-term scenario where the incumbents cannot even compete with the entrants.

The future of the payment industry is therefore uncertain, incumbents will face a period of extreme disruption as new entrants continue to challenge traditional players. Entrants will likely even attain sustainable dominance as platforms like Alipay enable network effects for users and merchants. Simultaneously, the future is inevitably digital and mobile first as consumers will demand transparency, accessibility and real-time processing. Also more ways to authenticate yourself and to verify payments will arise to protect and to utilize  user information, e.g. using biometric data, GPS.   

– Group 8

Link to video: https://drive.google.com/open?id=0B9lcK_0Kp70VZHNWTDA4YVBOQ28

 

Bibliography

 

China Banks lost 22B to Alibaba and Tencent in 2015, but that’s not their biggest problem. (2017). Forbes.com. Retrieved 22 September 2017, from https://www.forbes.com/sites/zennonkapron/2016/03/06/china-banks-lost-22b-to-alibaba-and-tencent-in-2015-but-thats-not-their-biggest-problem/#200247706094

 

Ellore | Tech Trends: The Future of European Payments: What to expect from banks in the next few years. (2017). Ellore.eu. Retrieved 22 September 2017, from http://www.ellore.eu/2017/08/28/tech-trends-the-future-of-european-payments-what-to-expect-from-banks-in-the-next-few-years/

 

Heggestuen, J. (2014). Alipay Overtakes PayPal As The Largest Mobile Payments Platform In The World. Business Insider. Retrieved 22 September 2017, from http://www.businessinsider.com/alipay-overtakes-paypal-as-the-largest-mobile-payments-platform-in-the-world-2014-2?international=true&r=US&IR=T
7 Insights Into The Causes of Payments Disruption. (2017). SEPA for Corporates. Retrieved 22 September 2017, from http://www.sepaforcorporates.com/payments-news-2/7-payments-disruption-insights-deloitte/