Why should Google, Instagram and photographers worry about business? Exploring current and future digital trends

Hi Jan, speaking of banks, you were involved in their digital transformation in the Czech Republic twenty years ago. How did the launch of the first digital products actually go back then?

People often think of a digital product as a form that I transfer from paper to computer and upload online. But the digital world works differently. I'll give you an example. When we created the first online loan application for Česká spořitelna that could be completed from the couch at home, it didn't sell very well.

We had to revisit the issue and take a step back. You don't lie on the couch and say, ‘Now I want a loan’. Instead, you want it when you don't have the money for something. And that's why we've moved the loans to payment gateways.

Did this change help in the end?

No, time again played a role. People didn't want to spend several minutes filling out and submitting a credit application when paying, and sometimes they didn't have their personal documents or other things at hand. We saw from the data that they were abandoning their shopping carts. That's why we ended up with deferred payments.

I come, I buy the goods using deferred payment, and promise to pay for them in a fortnight. This is a considerably easier process than arranging a loan. All I need is an assessment from the bank to determine whether I can be trusted. I then have two weeks to arrange the credit or return the goods. Now this is the ideal digital version of a consumer loan.

How do banks stand in terms of credibility, can we trust them in the process of digitalization?

In the Czech Republic, they are extremely trustworthy. For example, I am absolutely confident that if I deposit my money with them, I will not lose it. Likewise, I trust the bank not to misuse and resell my personal data. However, trust in banks is declining as concerns consultancy; most people will rather go to a financial adviser if they want to obtain a mortgage. That's where the banks have a big weakness.

What about bank identity, which is used by every third citizen in our country?

This is interconnected. People believe that their money and data are safe with the bank, and they also believe that the banks can correctly and properly identify their clients. Banks also have fewer technological problems and digital service outages. I have a different issue with BankID. It's sad that it was the banks that had to do it. instead of the state.

Trask recently held a conference called Trask Future Insight, where one of the topics was artificial intelligence. What stage of working with AI are we at now? In the Czech Republic, the Prague University of Economics and Business is abolishing undergraduate theses because of ChatGPT. What other changes can we expect?

I studied a subject called artificial intelligence in college way back in 1999. AI has been around for a long time, it's been used for years, for example in image recognition or camera focusing, we just haven't paid much attention to it. The huge boom only came with generative AI that can create text or images - I would compare it to riding a roller coaster. Now we're at the top and we're starting to think that we won't have to work or think. But a rough descent will follow.

What do you mean by that?

It's an interesting technology, everyone is experimenting with it now, but it won't solve everything. We will be able to apply it to certain things where it will be irreplaceable, but it is certainly not the salvation of the mankind. We're more likely to have to sober up.

So the complete disappearance of certain professions is not imminent in your opinion?

The idea that the “glassmakers will starve” has appeared a million times in history. But the result has always been that even more people were needed, just with different qualifications. Yes, some specific professions will probably disappear, but more will be created. It is difficult to predict what the impact will be. It's easy to guess where technology will go, but harder to guess what mankind will do with it.

For example, we can see that theoretical researches like bachelor's theses are no longer meaningful - generative AI does them faster - meaning alternative solutions have to be found, for example in the form of student projects. Google should also start worrying about their business model.

Why Google?

Among other things, AI has changed the way people look for information. Speaking again about the banks I have experience with. We have already implemented artificial intelligence at banks to answer employees’ (e.g. branch bankers’) queries (about procedures, instructions, product rules, etc.).

In the past, a branch worker had either to laboriously search for information on the intranet or call an internal call center. Today, AI finds the required information and presents it in a comprehensive way within seconds. Photographers who sell illustrative images might also be worried about their jobs, as many companies have already switched to generating illustrative images.

Can you think of another example of a service that no longer makes sense because of AI?

Instagram comes to mind. It's based on showing yourself in a better light, slightly better colors. Some influencers have been able to monetize it very well, they really worked on each post and spent hours on it. With AI, you can have perfect photos and videos in seconds, like the famous profile of a 20-year-old Finnish girl with hundreds of thousands of followers. That Finnish girl doesn't exist, she was created by two developers. If this becomes more frequent, the whole point of Instagram will be lost.

What do you think about the cyber threats that AI poses? The Czech Republic has seen an avalanche of deepfake videos, including those of politicians.

Societies have to get used to them, just like other misinformation. People simply have to learn that not everything they see and hear is necessarily true. It will take time and it will get more and more complicated.

The Nigerian prince scam still works on some people. How are they supposed to react to an almost authentic video of a politician?

Indeed, banks still have to handle problems with clients who, for example, have fallen for a foreigner who “fell in love” with a Czech woman and needs thousands of crowns for airline tickets. Banks are even able to detect this. If they see a large payment to Tunisia by a person who has never left the Czech Republic, they try to call the client and convince them that it is probably a scam. But some insist anyway, the bank cannot forbid them from acting. This is still happening, and as technology advances, it will be even harder for people to spot fraud.

What other technological trends do you think are ahead of us?

I find the idea of miniaturization, so-called “Tiny IT”, interesting. We already have sensors that you can mount on a butterfly, sensors without a battery, sensors that take energy from the surrounding Wi-Fi background. Soon we'll have a giant sensor network around us. It will be cheap and easy to read - the sensors can be printed on paper or fabric. They will provide us with a much better overview of our surroundings and environment. We're going to collect vast amounts of data.

What will we do with such data?

This is where we get into George Orwell's novels, depending on whether the companies will be good or evil. Shopping, for example, could become much easier. Companies already know exactly what I buy as a customer, where and what I ponder for a long time and so on, they can theoretically offer me a purchase themselves. It may sound scary, but I'm an optimist.

So you think good will prevail?

Good always prevails in history, I am convinced of that. But what we won't be able to avoid is the creation of some sort of digital twin of the customer. Businesses really need to have as much data as possible about the customer. In the future, they could share these data and create a digital copy for each of us. Banks already do this. A typical bank has hundreds of IT systems that allow a bank advisor to work with you and understand you, even if it's the first time they've seen you in their life.

How will the GDPR respond to this?

It may seem like a nonsense, but look at the ads on websites. You go online to buy something and similar products come back to haunt you on other sites. The web browser has actually created your online profile and the individual sites share it. Unfortunately, they don't have enough data, they don't know that you have already bought the goods and don't need more. If they knew about your purchase, the advertising would be less annoying. I think some online ecosystems will join forces in the future and share more data about us.

In general, the digital world is still shifting, from computers to smartphones, and now we even have chips or smart rings. What do you see as the next gamechanger? Will it be Apple's Vision Pro?

I don't think so, this technology is not far enough along and there are a lot of unresolved issues. But plenty of technology is evolving at an extreme speed, and at some point it will cross the threshold where it's suddenly available to everyone and has a major impact because it costs a few cents.

[.infobox]Something that is rarely talked about, but can have a huge impact, is DNA sequencing (sometimes referred to as reading, an umbrella term for methods that can describe the order of nucleotides in a particular string of DNA). It used to take years and cost millions of dollars to sequence my genome, but now you can get it done for a hundred dollars. I've heard the opinion that if things keep going this way, in a few years, sequencing will be cheaper than flushing a toilet. It could bring new possibilities in medicine.

But in terms of more accessible technology, I think the gamechanger will be when the power of AI chips gets to the point where I'll be able to run generative AI (Large Language Models) locally on my phone or PC. This will take the capabilities of devices (phones, tablets, cars, etc.) to a whole new level. Their natural ability to understand what I want them to do will increase tremendously and they will become significantly more intuitive, interactive and usable. The performance of the chips is not yet sufficient, but I think that will change soon.[.infobox]

Author:

Jan Antos
CTO at Trask
Contact: jantos@thetrask.com‍