Thursday, January 12, 2017

Change Management: Norway's switch to Digital Radio

Norway is making the switch: moving from FM Radio to digital audio broadcasting (DAB).

As reported in the Local, an English Norwegian news site, Ole Jørgen Torvmark, the head of Digitalradio Norge, (jointly owned by the private and public radio stations):

"The big difference and the main reason behind this big technological shift is that we want to offer a better radio service to the whole population."

The article also notes that FM can only support 5 national stations, whereas DAB can support 22 national stations and 20 smaller ones. Furthermore, they make the case it is:
  • Cheaper: Will cost an eighth of FM.
  • Better: Better coverage, ability to catch up on programs.
  • Faster: Easier to get Emergency messages out.
However, not all are happy. According to the WSJ, 2/3rds of people are actually against the move. The Local noted that people are not pleased about paying the extra money for getting the new radio to receive the signals - despite the advertised benefits.

For those interested in the technology behind AM and FM radio check out this:

But for more on the challenges of abandoning this decades old technology check the following BBC report:

As any technology professional knows, one of the most difficult aspects of making change is the people aspect of the technology. For example, Norwegians would be collectively better off if the switched to DAB as the overall cost of operating radio would be much cheaper.

But is that good enough for people to pay the costs for getting a new radio?

It's important to recognize that people need more than cold facts to be positive towards change. Organizations that need to make such changes - technology or otherwise - need to also address the emotional nature of people by addressing the fear, uncertainty and doubt that comes along with such change. 

Monday, January 9, 2017

SEC and Whistleblowers: Can robots come to the rescue?

Saw this following news alert from AccountingToday:

"The Securities and Exchange Commission announced that it had awarded more than $5.5 million to a whistleblower. According to the SEC, the whistleblower directly reported critical information to the commission about an ongoing scheme at their workplace, and that led to a successful enforcement action..."

The article also gives some useful stats on the number of whistle-blowers coming out and the total number of payouts, so check it out.

This is good news in terms of promoting the idea of speaking truth to power. Without such assistance it can be quite difficult to encourage whisteblowing.

We often have a romantic notion of what it is like to tell the truth when there is a drive by all of those around us to commit fraud. Too many Hollywood blockbusters make us believe, falsely, that there is always a happy ending where the good guys win.

For a reality check, we should take a look at Alayne Fleischmann's ordeal in attempting to blow the whistle on the mortgage fraud at Jamie Dimon's JP Morgan Chase. As Rolling Stone's Matt Taibbi notes:

"Fleischmann...had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower...Thanks to a confidentiality agreement, she's kept her mouth shut since then. "My closest family and friends don't know what I've been living with," she says. "Even my brother will only find out for the first time when he sees this interview."

As she notes in the video below, the reality of such environments is that there is subordination of the "compliance" functionsto enable the fraud to go through (e.g. the Due Diligence manager got angry when people thought that the loans were bad), lack of effective segregation of duties (e.g. sales people were involved in the due diligence review), and other issues:

Can robots come to the rescue?

When looking at process automation more broadly, we see that one of the "side benefits" is compliance. For example, when library loans out e-books they are never returned late as the patron's access to the digital copy on the reading device is removed right on the due date. Similarly, with autonomous vehicles they never speed, fail to complete to a full stop and the like.

Insurance companies have attempted to use what we can call "compliance tech" by offering drivers a discount for good driving if they are willing to install a monitoring device in their car. As noted in the CBC article, Desjardin Insurance has noted that 7000 people have for this offer which they call Ajusto. As can be seen in the video, Ajusto also leverages gamification and social to promote this program.

Although they have promised that such technology can't be used to penalize the driver, many skeptics are not sure that it will turn out that. For example,  Leonard Kunka, a motor vehicle litigation lawyer, notes:

"It's an invasive technology. It provides a lot more information than insurers currently have to set premiums, and I question whether it's any better than what the insurers use today to set premiums, which is a person's driving record and their history of collisions and accidents."

In other words, can we expect the insurance companies to maintain rates when they can "see" the driver constantly breaking speed limits? Conversely, can we expect them to lower rates when they see that people can drive safely above the speed limits?

Although I doubt it, the reality of such compliance-tech is that it is only used by people who are already compliant: the others who are not compliant would not sign-up for such technology and even if they did would somehow subvert it - as we saw with the whole Volkswagen emission debacle:

"In the test mode, the cars are fully compliant with all federal emissions levels. But when driving normally, the computer switches to a separate mode—significantly changing the fuel pressure, injection timing, exhaust-gas recirculation, and, in models with AdBlue, the amount of urea fluid sprayed into the exhaust. While this mode likely delivers higher mileage and power, it also permits heavier nitrogen-oxide emissions (NOx)—a smog-forming pollutant linked to lung cancer—up to 40 times higher than the federal limit. That doesn’t mean every TDI is pumping 40 times as much NOx as it should. Some cars may emit just a few times over the limit, depending on driving style and load."
Ultimately, technology is only good as the people that support it and so we can't abdicate such responsibility to technology. Instead, we need to continue to encourage people morally and financially to speak the truth when the see things go awry.

Monday, January 2, 2017

Millennials: Are we influencing them or are they influencing us?

Millennials. Most of have heard something about them by now. A friend of mine, who is a millennial, shared this video with me via Facebook:

Given that it's been a few years since I uncovered this generation, I thought it was a good refresher on the topic. However, I think a couple of caveats are important to the phenomenon:

  • Millennials are middle class: As Sinek notes that millennials have the entitlement notion. However, that can only develop if they've been insulated from reality of life. That is, they've always had a "safe zone" to fall back on: namely the bank and couch of mom and dad. This is not a reality of people who live in poverty inside or outside of Canada/US/Europe/Australia. 
  • Boys adrift phenomenon may be a confounding factor: Dr Leonard Sax wrote, Boys Adrift, a phenomenal book that explores why boys - specifically - have "failed to launch". This includes video games, pornography, misguided education approaches education and other factors. Definitely important to look at Sax's work when the individual in you are trying to help or advise is male. 
That being said, what I thought was interesting is: who is influencing who? Specifically, when Sinek spoke about smartphone addiction I thought "uh oh is he talking about me?" 

I recently commented to a colleague about how I have a propensity to ensure that I clear all my notifications and maybe that's a good thing because that way I am up to date on all my emails, slacks, and texts. However, after watching this I realize that in my desire to remain constantly productive, I am favouring the virtual world or the physical world. 

Although these devices are amazing in terms of helping us doing more with our dead time (e.g. driving ). That's how I "read" Dr. Sax's book - by listening to it on Audible while on the go. However, am I now at the point where I tend to prefer the screen of the smartphone? It is truly a strange thing for me. Early on in my career as a junior auditor I found the most effective way to deal with clients and colleagues was not by phone but actually going and discussing with the person live. In fact, when I returned to Deloitte in 2012 the new virtual mode of connection took a while for me to adjust as we used Lync (now Skype for Business) to conduct meetings - no more physical presence. 

So how can it be that I've been accustomed to the "millennial approach" to interaction?

Nicholas Carr, who wrote an article for the Atlantic "Is Google Making Us Stupid?", which he later followed up with "The Shallows" actually talks about a similar phenomenon that he went through. He noticed how it was hard for him to get through books. What he discusses in his book is how by being immersed in the era of tweets, blogposts, and YouTube clips is that our brains are actually been reshaped by neuroplasiticity to favour this type of engagement over reading. 

Combine that with the dopamine bursts that Sinek talks about, it's no surprise that I have suddenly become millenialized. 

However, there is hope. 

Carr discusses how by disconnecting and forcing himself to read he is able to restore his brain and once again consume long-form material. The key is to purposely retrain our habits  to return to world of physical interaction and put away the smartphones as Sinek suggests. 

For more on the positive side of neuroplasticity see the work of Barbara Arrowsmith-Young who was able to rewire her brain. It's a truly inspirational story about how a woman was able to overcome her learning disabilities and help others as well.

Friday, December 30, 2016

RPA and the Accountant: A path out of the mundane?

One of the latest hype technologies is Robot Process Automation (RPA).

My first question when coming across this, is what is the difference between this and cognitive computing? 

As can be seen by these videos, it's more about "dumb" automation instead of "smart" innovation: where routine tasks are handled by the system instead of a person. This is in contrast to something like IBM's Watson, which attempts to understand language and offer probabilistic judgments as to what is the right answer to a question like it did on Jeopardy!

The first video (produced by Deloitte UK) does a great job of actually showing us how RPA can automate the process of extracting information/documents from email and the generating invoices through the company's ERP:

The strength of this video (produced by EY) is showing us the business case for RPA:

The idea is that RPA can automate routine tasks, instead of offshoring. In other words, it brings the world of automation onced reserved for the assembly line to the back office.

As described in this Deloitte publication, it puts RPA as the first step towards a cognitive enterprise - automate the task and then bring cognitive, AI, machine learning, etc., into the process to make it smarter.

To use a maturity model approach, RPA is the first level in bringing together the necessary data and processes to actually train the algorithm to make it smarter.

What does this mean for auditors and accountants?

For accountants, the back office is going to require less people in terms of executing these mundane tasks.

However, this doesn't necessarily mean that jobs will be lost.

As with the advent of cloud computing, the enterprises will have to determine whether such talent can be used more effectively to improve the quality of financial reporting and work on the back log of finance projects that haven't been attended due to staff working on these low-value tasks. That being said, the problem of meeting quarterly targets to feed investors insatiable desire for profits is something that can't be ignored when discussing whether management will choose profits over better processes.

For auditors the story is a little different.

The reality of the profession is that it can't retain talent because people find the work unsustainable: it's hard to shutdown your personal life for a third of the year or more to meet the needs of clients during busy season.

RPA and automation could make the profession more sustainable, as these mundane tasks could be handed to a system instead of a junior. This is similar to the "race with the machine" concept I mentioned in this post, when referring how Watson is helping doctors treat cancer.  Auditor could then focus on more value added tasks, such as assessing aggregate risks, industry trends, etc. Such insights will improve audit quality and give clients better understanding of business and audit risks, making the work more interesting for both auditors and auditees alike. 

Thursday, December 29, 2016

Blogging for bitcoins? A look at the crypto-change alternative to paywalls

Another interesting talk at the American Banker conference discussed how cryptocurrency more broadly could address the issue of advertising, ad blockers and paywalls.

One of the presenters, Victoria Van Eyk, wrote a post on medium that essentially summarizes the issues as follows:
  • Advertisers loses one to many medium to the Internet: Although not explicitly mentioned in her post, our journey begins with the Internet displacing the incumbents - TV, print and radio - as the advertisers destination of choice. It was the Internet that enabled the "attention merchants" (as Tim Wu puts in his latest book) to better target us in terms of ads.
  • Targeted Ads, Privacy and the Invasion of our minds: The post does a good job in terms of summarizing the creep factor of the ads - in terms of how technology has been developed to actually follow you around on the web to get you buy something based on your habits. The other aspect is the whole idea of advertising itself or as Tim Wu puts the "sale of attention". In his talk at Google, which summarizes the history of how both public and private enterprises used the media and "sticky eyeballs" to attract attention; see this video below for a quick snippit of the type of things he discusses.

  • Ad Blockers - the remote control of the Internet: Of course technology is a double-edged sword. So like the remote control that enabled people to skip commercials (which Tim Wu explains was invented by the eccentric owner of Zenith, Eugene F. McDonald, as an electronic device that would literally zap the commercial), ad-blockers came to be our best friend in terms of protecting us from these unwanted ads.
  • Media companies strike back: Just when you think the consumer rebellion would succeed against the corporate empires, they strike back. Companies make you turn off the ad blocker to use their website. As the hold access to the material, they ultimately have the power to withhold the content unless we comply with their demands. 
  • Enter crypto-currency based micro-payments: The solution to this tug-of-war? Micropayments. When I heard the panelist discuss this, I thought this made a lot of sense. Being someone who has given into paywalls, I would most likely have a media budget set aside that would allow me to pay for articles - 10 cents here or 25 cents there - to consume content. This is much better than being on the hook for hundreds of dollars a month for subscriptions you may or may not use. In Victoria's post, she mentions a number of services that are working on this model, including Brave (which uses cryptocurrency) as well as Patreon (see video below). 

As I mentioned in my last post, the bitcoin represents the world of open and this is one of the use cases that illustrates its potential. With bitcoins micro-payments can be potentially cheaper, friction-less way of making these types of payments that were prohibitive in the credit card centric world that we currently inhabit. For example, Brave notes that they charge 5% in their FAQ. However, without bitcoin they would have to charge a 2.5% credit card fee on top of that for their business to be viable.

Although it would be nice for us to see this hit a critical mass, I think one of the challenges beyond the cost is the underlying psychology that prevents people from paying out: I think many would rather sell access to their mind to the attention merchants instead of paying out digital cash. 

Wednesday, December 28, 2016

Public versus Permissioned Blockchain: All of the above?

Earlier this year, I attended the American Banker's conference on Blockchain.

One of the sessions that attracted me to the conference was the session, "The Debate: Permissioned vs. Permissionless Blockchains".

This is one of those good old tech "religious" debates on whether the future is open or closed - similar to open source versus proprietary software debates of old.

As for public blockchain this is referring to Bitcoin or Ethereum.

As for permissioned or closed blockchains, I had written an earlier post where I explored Goldman's take on the "permissioned blockchain" where the participants are known to each other.  I had noted in the post that the "consensus mechanism in the permissioned blockchain is quite different than it's public counterpart, which relies on the proof of work (POW)... This is not the case for permissioned system which require the consortium who set-up the blockchain to determine how they will work with each other". Some main examples of permissioned are R3Hyperledger, and NASDAQ's Linq. The following video gives a quick breakdown of Hyperledger and the key features of a permissioned ledger:

Before seeing the debate (more of a spirited discussion), was that permissioned was going to win out.

To be honest, what I see as the main obstacle of the public blockchain is the amount of energy it needs to sustain itself.  Linked to that is how much more energy it would require to hit the level of Visa or other credit card transaction processing to become mainstream.

It's not to say there aren't other issues, such as confidentiality and regulatory opposition to the technology, but I see this as one of the key challenges. So I thought we would at least see permissioned ledgers dominate at the outset.

However, what I realized after seeing the debate was that I wasn't approaching this from the right perspective.

What Siddharth Kalla (Chief Technology Officer, Acupay) noted in the debate was that you need to think what's the equivalent of Google and the blockchain. What he was saying was to think of blockchain as the equivalent of the Internet: how could we have predicted that TCP/IP would have ushered in the technology-giant we now know as Google? 

That concept hit my mind like a bolt of lightning: think about all the things that Google has brought about, search, gmail, Android, and cloud-based office productivity

That's the power of open.

And that's what I realized is that I needed to think of bitcoin or Ethereum as the Internet of Value's first proof-of-concept (POC). There will be someway to overcome the limitations I noted above and make it viable. It's only matter of time before the equivalent of Sergey Brin and Larry Page will unleash the power of open on the public blockchain. 

So what about the permissioned blockchain? Will it die out?

Where I am is that this not about one or the other. Rather, each solves for different problems. The public blockchain is about exchanging value with strangers. The permissioned blockchain is about exchanging value with private parties that an entity regularly deals with. In a gross oversimplification of the latter, it is a "secured-shared-spreadsheet" that replaces the routine exchange of spreadsheets by email. I like the term distributed ledger ledger technology, as used by the World Economic Forum, to describe the latter. 

Although the two are closely linked now in terms of community and development, eventually the two communities will separate based on what societal or business challenge they address. 

Monday, December 26, 2016

Virtual Personal Assistants: How far will they go? Part 2

In the last post, I spoke about the advent of the Virtual Personal Assistants (VPAs) in terms of Gartners predictions as to where they will go and how popular culture sees them coming to enable our lives.

For the second part of this post, I wanted to talk about my first work experience - ever - with a fully virtual assistant.

Let me set the context.

In the course of my work, I was dealing with a vendor who was trying to arrange a meeting with us through his personal assistant, Amy Ingram.

So we were going back and forth to fix a date and time for the conference call.

I responded to the initial request as follows:

"Hi Amy,

Actually out of town on Tuesday; Thursday is open though. Does that work with you?"

"Her" response was (using Billy as a pseudonym):

"Hi Malik,

I'm sorry, but that time doesn't work for "Billy".

How about Wednesday, Jun 22 at 11:30 AM EDT? "Billy" is also available Wednesday, Jun 22 at 3:00 PM EDT or Thursday, Jun 23 at 9:00 AM.


When I read Amy's response, I thought to myself something like: "I told her that Thursday is open, so why did she say that doesn't work for the "Billy"?"  But I thought something like "whatever" and just responded with:

"Thursday at 9 am works, thanks"

To which Amy responded:

"Hi Malik,

Thanks for letting me know.

I'll send out an invite once I've confirmed a time with "Jim".


[Jim is my colleague; true name hidden for confidentiality purposes]

Eventually, it dawned on me: I wasn't dealing with a person, but a robot!

And then it hit me: the future is here.

The one thing that I realized through my interaction is how forgiving I was about the error because I thought the thing on the other side was human: everyone makes mistakes and so it's no big deal that "she" didn't get that I was open on Thursday.

This has a deeper implication on how "knowledge work" gets automated.

When we gauge machines for the ability to perform cognitive tasks, such as booking meetings, we should be careful as to how good is good enough for us to work with machines instead of humans. As we can see based on my interaction, they don't need to be perfect - they just need to get the job done.

In my interaction above, we were able to schedule a meeting and the fact "she" didn't understand that I had told her Thursday was open had no real consequence on the overall role "she" was playing. The meeting eventually got booked and that was that.

Ironically, I realized that I had already come across Amy at the DLD Conference in NY that had attend a few weeks earlier.

Dennis Mortensen (Founder of, describes the challenge of setting up meeting and how this technology can solve the problem (profanity alert!):

His talk starts 5m47s:

As Dennis mentions, it's a very basic problem but at the same time it's so complicated. Specifically, the challenge with dealing with politeness: it's hard for AI to parse through this and understand the substantive facts that pertain to setting up the meeting. If we take a look at my response, we can see the challenges first hand:

  • When I said I was out of town that the AI had to understand that meant I am not available. 
  • I did not include Wednesday as a date that was possible so that implies that I'm also not available that day.
  • When I stated I was open on Thursday, I meant I was available all day. 
So what does this mean for jobs? Are accountants going to be replaced by Amy one day?

It's actually shows the level of complexity involved in the most basic of human interactions and how much more complex it would be to train AI in terms of doing even the most basic of auditing procedures - at least for now. 

Dennis actually made a good point about this in the Q&A portion of the discussion as it relates to jobs. The other presenter noted how he sees massive displacement as a result of AI; specifically in the truck driving industry. Dennis, on the other hand, was a bit more optimistic. He noted that what tools like his will do is essentially give assistants to people who don't have assistants. For example, the vendor we were dealing likely wouldn't have hired an assistant to help book appointments. 

And I think that's where auditors and accountants need to actually see how AI assistants, like Amy Ingram, can help with automating those mundane tasks that none of likes us to do.