Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019.
The interaction of Humans and Machines is becoming more core to my focus. Finance is an integral part of our socio-economic fabric and Artificial intelligence (in a very broad sense) is shaping an increasing part of Fintech innovation.
In this post I am inspired from some of the points we raised in the great conversation in June which was part of the Thinkathon of Fintech.TV spearheaded by Dr. Jane Thomason. (Watch Future Economic System and the Role of the Democratic State) with Emily Landis-Walker, Lord (Chris) Holmes MBE, Lawrence Wintermeyer, Loretta Joseph and myself.
Jane`s activities weave in a unique way her passion for the SDGs, for health and fintech. She has been recognized as one of the SDG Impact heroes, has worked with the WHO and took over the Fintech worldwide week which is now part of Fintech.TV.
Social & Technology innovation gap
I see a huge widening of the gap between technology innovation and social innovation.
Social innovation has been lagging. We continue to organize and collaborate in the same ways. At all levels, our ways have not changed – in business, in communities, in cities, in countries – despite the connectedness and the digitalization.
It is remarkable how unnoticed this has been. Many will claim that when something works don’t try and fix it. And every time we have a crisis (whether financial, political, or health induced like the recent one) we treat it as if it is the last one.
We fix it with the same band-aids, antiseptics, and regimes. We refuse to transform governance mechanisms at any level. This would require core shifts in our society and disruption of powers, values and collaboration models.
Examples of the same band-aids, antiseptics, and regimes from past crises, are the creation of new institutions to deal with the consequences of a crisis and its ripple effects or the creation of new controls through regulations and other agencies. Same old, same old.
The classic example is the 1913 creation of the Federal Reserve enacted by the US Congress with the mandate to create a lender of last resort for the troubled banking sector. The failure of this `fix` is monumental but getting rid of an institution at this level is unprecedented.
Over the past century, we have several such `band-aids, antiseptics, and regimes` with new organizations with a variety of mandates, missions, and coalitions (e.g. UN after WorldWarII) in addition to major regulatory controls with substantial ripple effects (e.g. The Dodd–Frank Wall Street Reform and Consumer Protection Act enacted in 2010 to prevent another financial crisis).
The Gold Standard Didn’t Create the Great Depression, the Federal Reserve Did
Does anyone believe that the existing institutions or a new generation of institutions can deal with the complexity of our frequent crises that come in bundles (in case you haven’t noticed)? If you look at the WEF annual risk lists below, we are currently being faced with half a dozen of those at a time (not one).
Does anyone believe that a series of new controls can solve the current problems and prevent us from the next wave?
Our ways are not human or people-centric
We have been operating in a world that is profit-focused and task-focused. Businesses and countries compete on strict financial KPIs. These are not economic KPIs that would include the well-being of the communities (e.g. health, education) and the well-being of the ecology.
Technology has been used to improve tasks, commoditize products and services at an accelerating rate that people cannot adjust to. Stress and fear of unemployment and unequal wealth distribution has gone unmanaged. Upskilling people is another task, without anyone taking clear responsibility for it. Artificial intelligence is being deployed Top down NOT Bottom up. In plain words, AI is being adopted and trained at the Bigtech level and not for individual empowerment first.
We need SOCIAL-FIRST innovation.
An example of this would be to open source real-time economic data so that individuals, communities, businesses of any size can use the real-time data at the granular level they need in order to make better decisions. Open source does not mean that there is no compensation for access at all. It could be `pay as go` for analytics and visuals, for example.
Another example would be to give individuals AI tools that advise them on managing their finances, uncertainty, and stakeholders in the economy. This goes beyond commoditizing transaction costs to accomplish some savings. It is focused on a human-centric approach first. We are still in the era in which we keep the same intermediaries, give them some technology and tools, and add on Top Down regulations and controls to keep the intermediaries honest. Same old, same old ways of organizing and controlling (just not using grandpas tools). We need a Social-First approach which empowers individuals to check the intermediaries and the institutions, Bottom UP. Flip the model over with a completely new design.
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