Category Archives: Information Technology

“The Digital Director”

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Last year, the Australian Institute of Company Directors (AICD) ran a series of 10 webinars under the umbrella of “The Digital Director”. Despite the title, there was very little exploration of “digital” technology itself, but a great deal of discussion on how to manage IT within the traditional corporate structure – as between the board of directors, the management, and the workforce.

There was a great deal of debate on things like “digital mindset”, “digital adaption and adoption”, and “digital innovation and evolution”. During one webinar, the audience were encouraged to avoid using the term “digital transformation” (instead, think “digital economy”) – yet 2 of the 10 sessions had “digital transformation” in the title.

Specific technical topics were mainly confined to AI, data privacy, data governance and cyber security. It was acknowledged that while corporate Australia has widely adopted SaaS solutions, it lacks depth in digital skills; and the percentage of the ASX market capitalisation attributable to IP assets shows we are “30 years behind the USA”. There was specific mention of blockchain technology, but the two examples given are already obsolete (the ASX’s abandoned project to replace the CHESS system, and CBA’s indefinitely deferred roll-out of crypto assets on their mobile banking app).

Often, the discussion was more about change management, and dealing with the demands of “modern work” from a workforce whose expectations have changed greatly in recent years, thanks to the pandemic, remote working, and access to new technology. Yet, these are themes that have been with us ever since the first office productivity tools, the arrival of the internet, and the proliferation of mobile devices that blur the boundary between “work” and “personal”.

The series missed an opportunity to explore the impact of new technology on boards themselves, especially their decision-making processes. We have seen how the ICO (initial coin offering) phase of cryptocurrency markets in 2017-19 presented a wholly new dimension to the funding of start-up ventures; and how blockchain technology and smart contracts heralded a new form of corporate entity, the DAO (decentralised autonomous organisation).

Together, these innovations mean the formation and governance of companies will no longer rely on the traditional structure of shareholders, directors and executives – and as a consequence, board decision-making will also take a different format. Imagine being able to use AI tools to support strategic planning, or proof-of-stake to vote on board resolutions, and consensus mechanisms to determine AGMs.

As of now, “Digital Directors” need to understand how these emerging technologies will disrupt the boardroom itself, as well as the very corporate structures and governance frameworks that have been in place for over 400 years.

Next week: Back in the USA

 

 

 

BYOB (Bring Your Own Brain)

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My Twitter and LinkedIn feeds are full of posts about artificial intelligence, machine learning, large language models, robotics and automation – and how these technologies will impact our jobs and our employment prospects, often in very dystopian tones. It can be quite depressing to trawl through this material, to the point of being overwhelmed by the imminent prospect of human obsolescence.

No doubt, getting to grips with these tools will be important if we are to navigate the future of work, understand the relationship between labour, capital and technology, and maintain economic relevance in a world of changing employment models.

But we have been here before, many times (remember the Luddites?), and so far, the human condition means we learn to adapt in order to survive. These transitions will be painful, and there will be casualties along the way, but there is cause for optimism if we remember our post-industrial history.

First, among recent Twitter posts there was a timely reminder that automation does not need to equal despair in the face of displaced jobs.

Second, the technology at our disposal will inevitably make us more productive as well as enabling us to reduce mundane or repetitive tasks, even freeing up more time for other (more creative) pursuits. The challenge will be in learning how to use these tools, and in efficient and effective ways so that we don’t swap one type of routine for another.

Third, there is still a need to consider the human factor when it comes to the work environment, business structures and organisational behaviour – not least personal interaction, communication skills and stakeholder management. After all, you still need someone to switch on the machines, and tell them what to do!

Fourth, the evolution of “bring your own device” (and remote working) means that many of us have grown accustomed to having a degree of autonomy in the ways in which we organise our time and schedule our tasks – giving us the potential for more flexible working conditions. Plus, we have seen how many apps we use at home are interchangeable with the tools we use for work – and although the risk is that we are “always on”, equally, we can get smarter at using these same technologies to establish boundaries between our work/life environments.

Fifth, all the technology in the world is not going to absolve us of the need to think for ourselves. We still need to bring our own cognitive faculties and critical thinking to an increasingly automated, AI-intermediated and virtual world. If anything, we have to ramp up our cerebral powers so that we don’t become subservient to the tech, to make sure the tech works for us (and not the other way around).

Adopting a new approach means:

  • not taking the tech for granted
  • being prepared to challenge the tech assumptions (and not be complicit in its in-built biases)
  • question the motives and intentions of the tech developers, managers and owners (especially those of known or suspected bad actors)
  • validate all the newly-available data to gain new insights (not repeat past mistakes)
  • evaluate the evidence based on actual events and outcomes
  • and not fall prey to hyperbolic and cataclysmic conjectures

Finally, it is interesting to note the recent debates on regulating this new tech – curtailing malign forces, maintaining protections on personal privacy, increasing data security, and ensuring greater access for those currently excluded. This is all part of a conscious narrative (that human component!) to limit the extent to which AI will be allowed to run rampant, and to hold tech (in all its forms) more accountable for the consequences of its actions.

Next week: “The Digital Director”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust in Digital IDs

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Or: “Whose identity is it anyway?”

Over the past few years, there have been a significant number of serious data breaches among among banks, utilities, telcos, insurers and public bodies. As a result, hackers are able to access the confidential data and financial records of millions of customers, leading to ransomware demands, wide dissemination of private information, identity theft, and multiple phishing attempts and similar scams.

What most of these hacks reveal is the vulnerability of centralised systems as well as the unnecessary storage of personal data – making these single points of failure a target for such exploits. Worse, the banks and others seem to think they “own” this personal data once they have obtained it, as evidenced by the way they (mis)manage it.

I fully understand the need for KYC/AML, and the requirement to verify customers under the 100 Points of Identification system. However, once I have been verified, why does each bank, telco and utility company need to keep copies or records of my personal data on their systems? Under a common 100 Points verification process, shouldn’t we have a more efficient and less vulnerable system? If I have been verified by one bank in Australia, why can’t I be automatically verified by every other bank in Australia (e.g., if I wanted to open an account with them), or indeed any other company using the same 100 Points system?

Which is where the concept of Self-Sovereign Identity comes into play. This approach should mean that with the 100 Points system, even if initially I need to submit evidence of my driver’s license, passport or birth certificate, once I have been verified by the network I can “retrieve” my personal data (revoke the access permission), or specify with each party on the network how long they can hold my personal data, and for what specific purpose.

This way, each party on the network does not need to retain a copy of the original documents. Instead, my profile is captured as a digital ID that confirms who I am, and confirms that I have been verified by the network; it does not require me to keep disclosing my personal data to each party on the network. (There are providers of Digital ID solutions, but because they are centralised, and unilateral, we end up with multiple and inconsistent Digital ID systems, which are just as vulnerable to the risk of a single point of failure…)

But of course, banks etc. insist that not only do they have to ask for 100 Points of ID each and every time I open an account, they are required to retain copies or digital versions of my personal data. Hence, we should not be surprised by the number of data hacks we keep experiencing.

The current approach to identity in banking, telcos and utilities is baffling. Just a few examples I can think of:

1. In trying to upgrade my current mobile phone plan with my existing provider, I had to re-submit personal information via a mobile app (and this is a telco that experienced a major hack last year, resulting in me having to apply for a new driver’s license). If I have already been verified, why the need to ask for my personal data again, and via a mobile app?

2. I’ve lived at my current address for more than 5 years. I still receive bank statements intended for the previous occupant. I have tried on numerous occasions to inform the bank that this person is no longer living here. I’ve used the standard “Return to Sender” method, and tried to contact the bank direct, but because I am not the named account addressee or authorised representative, they won’t talk to me. Fair enough. But, the addressee is actually a self-managed superannuation fund. Given the fallout from the Banking Royal Commission, and the additional layers of verification, supervision and audit that apply to such funds, I’m surprised that this issue has not been picked up the bank concerned. It’s very easy to look up the current registered address of an SMSF via the APRA website, if only the bank could be bothered to investigate why the statements keep getting returned.

3. I have been trying to remove the name of a former director as a signatory to a company bank account. The bank kept asking for various forms and “proof” that this signatory was no longer a director and no longer authorised to access the account. Even though I have done this (and had to pay for an accountant to sign a letter confirming the director has resigned their position), if the bank had bothered to look up the ASIC company register, they would see that this person was no longer a company officer. Meanwhile, the bank statements keep arriving addressed to the ex-director. Apparently, the bank’s own “systems” don’t talk to one another (a common refrain when trying to navigate legacy corporate behemoths).

In each of the above, the use of a Digital ID system would streamline the process for updating customer records, and reduce the risk of data vulnerabilities. But that requires effort on the part of the entities concerned – clearly, the current fines for data breaches and for misconduct in financial services are not enough.

Next week: AI vs IP  

 

An AI Origin Story

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Nowadays, no TV or movie franchise worth its salt is deemed complete unless it has some sort of origin story – from “Buzz Lightyear” to “Alien”, from “Mystery Road” to “Inspector Morse”. And as for “Star Wars”, I’ve lost count as to which prequel/sequel/chapter/postscript/spin-off we are up to. Origin stories can be helpful in explaining “what came before”, providing background and context, and describing how we got to where we are in a particular narrative. Reading Jeanette Winterson’s recent collection of essays, “12 Bytes”, it soon becomes apparent that what she has achieved is a tangible origin story for Artificial Intelligence.

Still from “Frankenstein” (1931) – Image sourced from IMDb

By Winterson’s own admission, this is not a science text book, nor a reference work on AI. It’s a lot more human than that, and all the more readable and enjoyable as a result. In any case, technology is moving so quickly these days, that some of her references (even those from barely a year ago) are either out of date, or have been superceded by subsequent events. For example, she makes a contemporaneous reference to a Financial Times article from May 2021, on Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs). She mentions a digital race horse that sold for $125,000. Fast-forward 12 months, and we have seen parts of the nascent DeFi industry blow-up, and an NFT of Jack Dorsey’s first Tweet (Twitter’s own origin story?) failing to achieve even $290 when it went up for auction, having initially been sold for $2.9m. Then there is the Google engineer who claimed that the Lamda AI program is sentient, and the chess robot which broke its opponent’s finger.

Across these stand-alone but interlinked essays, Winterson builds a consistent narrative arc across the historical development, current status and future implications of AI. In particular, she looks ahead to a time when we achieve Artificial General Intelligence, the Singularity, and the complete embodiment of AI, and not necessarily in a biological form that we would recognise today. Despite the dystopian tones, the author appears to be generally positive and optimistic about these developments, and welcomes the prospect of transhumanism, in large part because it is inevitable, and we should embrace it, and ultimately because it might the only way to save our planet and civilisation, just not in the form we expect.

The book’s themes range from: the first human origin stories (sky-gods and sacred texts) to ancient philosophy; from the Industrial Revolution to Frankenstein’s monster; from Lovelace and Babbage to Dracula; from Turing and transistors to the tech giants of today. There are sections on quantum physics, the nature of “binary” (in computing and in transgenderism), biases in algorithms and search engines, the erosion of privacy via data mining, the emergence of surveillance capitalism, and the pros and cons of cryogenics and sexbots.

We can observe that traditional attempts to imagine or create human-made intelligence were based on biology, religion, spirituality and the supernatural – and many of these concepts were designed to explain our own origins, to enforce societal norms, to exert control, and to sustain existing and inequitable power structures. Some of these efforts might have been designed to explain our purpose as humans, but in reality they simply raised more questions than they resolved. Why are we here? Why this planet? What is our destiny? Is death and extinction (the final “End-Time”) the only outcome for the human race? Winterson rigorously rejects this finality as either desirable or inevitable.

Her conclusion is that the human race is worth saving (from itself?), but we have to face up to the need to adapt and continue evolving (homo sapiens was never the end game). Consequently, embracing AI/AGI is going to be key to our survival. Of course, like any (flawed) technology, AI is just another tool, and it is what we do with it that matters. Winterson is rightly suspicious of the male-dominated tech industry, some of whose leaders see themselves as guardians of civil liberties and the saviours of humankind, yet fail to acknowledge that “hate speech is not free speech”. She acknowledges the benefits of an interconnected world, advanced prosthetics, open access to information, medical breakthroughs, industrial automation, and knowledge that can help anticipate danger and avert disaster. But AI and transhumanism won’t solve all our existential problems, and if we don’t have the capacity for empathy, compassion, love, humour, self-reflection, art, satire, creativity, imagination, music or critical thinking, then we will definitely cease to be “human” at all.

The Bibliography to this book is an invaluable resource in itself – and provides for a wealth of additional reading. One book that is not listed, but which might be of interest to her readers, is “Chimera”, a novel by Simon Gallagher, published in 1981 and subsequently adapted for radio and TV. Although this story is about genetic engineering (rather than AI), nevertheless it echoes some of Winterson’s themes and concerns around the morals and ethics of technology (e.g., eugenics, organ harvesting, private investment vs public control, playing god, and the over-emphasis on the preservation and prolongation of human lifeforms as they are currently constituted). Happy reading!

Next week: Digital Perfectionism?