Is cash really incomprehensible

"War on Cash": Does cash have a future?

From 2021, China wants to go one step further in this direction at the state level, the aim is to connect the payment solution Alipay and all private and state databases, including those in which cashless payment transactions are stored. The aim is to record and evaluate consumer behavior. Then there will either be rewards or sanctions. Anyone who accumulates too many debts or does not repay them is no longer allowed to use an express train or plane in China. Such a development in European democracies is completely out of the question for the foreseeable future, but do you also assume that consumer behavior will play a much more important role in credit checks in the future?

Jochen Werne: Harvard history professor Niall Ferguson coined the term “new Cold War” over a year ago. This “cold war” is primarily about technology leadership in artificial intelligence and is taking place between the United States and China. Technologies are not good or bad, but how and for what purpose we humans use them determines. Just because something is now technically possible doesn't have to make sense for a society. It is a great value of free democracies that these issues are discussed, privacy is protected and the state cannot act on its own authority.

Regarding the credit check, the following can be said: the better a credit institution knows the borrower, the better a risk assessment can be made to quantify credit default risks. During the credit check, the institute is required to use all relevant and available data for the decision. It is technically possible today to enrich the data made by the future borrower with information about him from the Internet and social media and to round it off with the help of AI algorithms and peer group comparisons. However, there is a high risk that private personal data will also be processed if carelessly and privacy protection is violated. This must be prevented. How this will be dealt with in the future remains to be seen.

Leif Wienecke: First and foremost, it is about the various possibilities to use generated data sensibly in order to create added value. Companies such as banks primarily face the challenge of preparing their customers' data in a meaningful way and integrating it for new use cases. The ecosystems of the "GAFAs" or Alipay are "data first" companies that are integrated into the everyday lives of their users. In principle, you only make decisions based on data and empirical knowledge. The above description from China, however, does not go hand in hand with our understanding of data or consumer protection, so we do not see this coming either.

On the other hand, it is of course essential to operate data-driven innovation. The credit check that exists today can certainly be expanded to include relevant, contextual data points in the interests of consumers and credit institutions. The topic of “social scoring”, ie the use of customer data from social networks, is controversial in Germany and is discussed above all in the context of consumer protection. That is correct, because consumers should not only have to give their consent for such a scoring, but should also understand the algorithm and be able to complain if they are discriminated against.