Author: Oliver Pickup

Award-winning future-of-work Writer | Speaker | Moderator | Editor-in-Chief | Podcaster | Strategist | Collaborator | #technology #business #futureofwork #sport

Box cleverer: how to cut waste in ecommerce packaging

The pandemic-driven boom in online shopping has highlighted the challenge facing etailers and brands in finding packaging solutions that are sustainable and accessible, yet also cost-effective and secure

A meme on social media showing a tearful woman with a caption that reads “I get more Amazon boxes in a week than I can fit in my recycle bin” sums up the problem with packaging in 2021. 

The growth of ecommerce since the start of the Covid crisis – online sales in the UK during the first quarter of this year were 54% higher than the total for Q1 2020, according to research by Adobe – has heightened concerns about packaging waste. 

On the one hand, online shoppers complain about excessive packaging. On the other, a purchase that arrives damaged, needing to be returned and replaced, will have a far bigger environmental impact. 

While consumers are becoming increasingly eco-conscious and mindful of waste in packaging, etailers must consider several other factors, including cost, security and accessibility (23% of online shoppers in the US have damaged at least one purchase during the unboxing process, according to packaging firm DS Smith).

In December 2020, the Chartered Institute of Marketing (CIM) warned that the growth in ecommerce was the main reason why 85% of the UK consumers it polled thought that etailers were using too much packaging. Amazon was singled out as the worst offender by far, but other big companies attracting criticism included Asos and supermarkets Tesco, Sainsbury’s and Asda.

“We know the lockdowns have changed buying behaviour and there has been a considerable increase in online purchasing, which means more home deliveries,” says the CIM’s marketing director, Gemma Butler. “Even where companies have improved their packaging, the increased volume of purchases will naturally push up the amount of packaging in circulation.”

Innovation needed: recycling is not enough

Stressing the need for innovative packaging solutions, Butler calls for an update of the popular ‘reduce, reuse, recycle’ maxim. 

“Recycling cannot be seen as the answer,” she argues. “It should be considered only after reducing and reusing. Our recycling infrastructure cannot support the volume and variety of packaging in circulation, so most of the material still ends up in landfills. Organisations must rethink not only the materials they use in their packaging, but also the lifecycle of that packaging.”

A pan-European survey conducted by DS Smith in March supports her view. Nearly half (46%) of the consumers it polled said they wanted to see more cardboard or paper-based packaging, rather than plastic, while 58% wanted an overall reduction in the volume of packaging. Most notably, almost a third reported that they had stopped buying certain brands because they considered that their packaging was not sufficiently sustainable.

Organisations must rethink not only the materials they use in their packaging, but also the lifecycle of that packaging

Another finding – that 22% of UK respondents don’t always have room in their recycling bins for all the packaging they receive – is one that’s “disturbing” to DS Smith’s sales, marketing and innovation director, Marc Chiron. “Some boxes are being put to good use – people are reusing them for storage, for instance – but many aren’t finding their way back into recycling streams,” he reports.

Awareness about packaging that’s “fit for the circular economy and ecommerce age” is growing steadily, according to Chiron. “Companies can contribute by choosing solutions that eliminate waste and keep materials in use. But this goes beyond material choices, as supply chains need to be optimised to avoid the unnecessary use of transport too. That would be the win-win outcome for business and environment.”

Win-win: sustainable and branded packaging

Chiron adds that high-quality branding that explains an etailer’s approach to sustainability in packaging has become a key marketing tool. 

“Storytelling is a growing trend in the retail sector. It can elevate on-package branding to the next level,” he says. “Innovative businesses are using packaging that conveys their craftsmanship and passion. This enables a company to connect with customers in new ways, eliciting emotional responses and making it easier for them to identify with the business and its products.”

Jonathan Dixon, senior vice-president of sales at Arla Foods UK, agrees that it is crucial for “brands to get their packaging right”. He notes that ecommerce sales in the grocery sector are 70% higher than they were at the start of the pandemic – and that consumers spend only 15 minutes doing their weekly grocery shop online on average, compared with 43 minutes in a supermarket. 

“For new brands, packaging is their main marketing tool when selling online,” Dixon says. “It must therefore stand out to prevent shoppers from scrolling past.”

Companies that have created sustainable packaging solutions in recent times include Italian pasta brand Barilla. It adopted 100% paper-based containers in May 2020, taking out the plastic front windows that had made the packs less easy for consumers to recycle. Its move followed that of rival brand Napolina, which in September 2019 had switched the packaging of some lines from plastic to cardboard. Napolina estimates that this change has taken 16 tonnes of plastic out of the waste stream each year in the UK alone. The company is has started to extend plastic-free packaging to its core range in a bid to push the total up to 200 tonnes.

Wilkinson Sword recently switched to plastic-free packaging when it relaunched its Hydro shaving razor range. The change has removed 88 tonnes of PET and 35 tonnes of virgin paper from its supply chain every year, achieving a significant cost reduction in the process.

Wayne Snyder is vice-president of retail industry strategy for EMEA at Blue Yonder, a US specialist in supply management software. He believes that technology can help businesses struggling to strike a balance between packaging cost, security, accessibility and sustainability. 

“Retailers cannot look at any of these factors in isolation,” Snyder argues. “Each requires a different weight based on its characteristics as well as the business strategy. While this task may seem daunting, new AI technologies will enable an optimised method that factors in these questions to find the right balance.”

It’s clear that consumer brands looking to thrive in the ecommerce age must make sustainability a priority and think both inside and outside the box when it comes to packaging.

This article first appeared in Raconteur’s Future of Packaging report, published in July 2021

How National Lottery players helped prepare Hege Riise’s football team for Tokyo

GB women’s football team leader David Faulkner explains how funds from The National Lottery paid for acclimatisation equipment to help Team GB cope with Japan’s 35° heat

Team GB women’s football team will make history on Wednesday July 21 by playing its first competitive overseas match, against Chile in Sapporo. The only other occasion a British women’s team has played at the Games was at London 2012, when Hope Powell’s side suffered a 2-0 defeat to Canada at the quarter-final stage. 

David Faulkner, Team Leader of GB women’s football, says that Hege Riise’s squad is primed and feeling optimistic about a medal-winning run. But he stresses that adequate preparation would have been impossible without National Lottery support. 

“Bringing together a GB women’s football team for the first time has been a long time in the making,” says Faulkner from the Yokohama camp. He was awarded an MBE for services to sport in the Queen’s Birthday Honours earlier this year, and says National Lottery support means “the team is in the best place possible to compete against the world’s best as Great Britain, which is in itself unique”.

“The team arrived in Japan with a high level of confidence after completing a demanding schedule at Loughborough University, while evolving the team culture as part of ‘One Team GB’ – much like the British and Irish Lions.”

Before flying to the Japanese capital on July 7, the women underwent a gruelling three-week training camp. With temperatures in Japan expected to reach 35°C and humidity hitting 95%, the team used an acclimatisation chamber at Loughborough University, thanks to Lottery funding.

The chamber is a cross between a sauna and steam room, and the players were forced to exercise daily on Wattbikes with the temperature turned up, replicating the hot and humid environment expected. The physical and mental demands of the acclimatisation sessions should pay off when the competition kicks off, says Faulkner.

“There is no question that without The National Lottery’s support we would not be in a position to have the dedicated accommodation, food, gym, and an acclimation area and training pitch,” Faulkner says. “We cannot thank those that play The National Lottery enough for the funds that have provided the team with the best preparation possible for the Tokyo Games.

“Not only did it provide a high-performance environment for such intense preparation, we were also able to make it Covid-safe with our protocols and testing. We are extremely grateful for the support that has enabled us to set up such a unique performance environment where every additional percentage gained will have such an impact with delivery in Japan.”

On the extra costs required due to coronavirus precautions, the 58-year old continues: “Covid places many more demands on players and staff, such as testing every day in game time, wearing masks and social distancing at all times. However, the funding has ensured there remains a performance focus across the elements of technical, tactical, physical and psychologically.”

Nigel Railton, Chief Executive of The National Lottery operator, acknowledges the role of those who play The National Lottery in helping Team GB’s Olympians and Paralympians this summer. “Every day, National Lottery players make a huge difference to communities across the UK. Their support has a real impact on a sport and in boosting the chances in Tokyo.”

Former hockey full-back Faulkner, who earned 225 international caps, captaining both England and Great Britain, knows what it takes to achieve, having won at Seoul 1988. “To win a medal you must ensure you reach the semi-finals,” he says. 

Following the first Group E match against Chile, Riise’s side takes on hosts Japan on Saturday July 24 and Canada next Tuesday July 27.

“The players and staff are highly motivated, relishing the challenge ahead and ensuring every element of performance that can make a difference to delivery on match day is covered,” says Faulkner. “A podium finish would be a fantastic achievement for this group – but they have the energy, depth and talent to finish at the peak.”

Whatever happens, Faulkner is thankful for The National Lottery funding, which has been supporting Team GB since 1998 – two years after the Atlanta Games when Great Britain won only one big prize.

“Quite simply, the funding has provided the opportunity for more athletes across more sports to be the best they possibly can be at the pinnacle level of sport,” adds Faulkner. “At the same time, the investment has helped develop a performance system that is the envy of other sporting nations, which has resulted in consistent medal-winning performances at every Games since 1996. This, in turn, continues to inspire the next generation of Olympians, which is the true legacy of the funding.”

This article, sponsored by Camelot, first appeared in The Telegraph in July 2021

Sport’s biggest cheats: 10 instances of notorious unsporting behaviour

When 9.79*, a film about the ill-fated men’s 100-metre final at the 1988 Olympics, sprinted into cinemas, Oliver Pickup selected his 10 most dastardly cheats

Ben Johnson 

In August 2013, the British Board of Film Classification certified that the film 9.79* – a 83-minute documentary about the infamous men’s 100-metres final at the Seoul Olympics in 1988, featuring interviews with all eight runners – would be classified as PG, meaning it would require parental guidance, as it “contains mild language and references to performance-enhancing drugs”. 

Ironically, the BBFC added that “this work was passed uncut”, which is more than can be said for the chief protagonist, a Jamaican-born sprinter who moved to Ontario as a teenager, and his colleagues when they took to the starting blocks in South Korea in what would be dubbed “the dirtiest race in history”.

With his yellow, bulging eyes and increasingly bizarre behaviour leading up to the showdown it was – in hindsight – no surprise that the adopted Canadian was wired and, three days after breaking his own world record (reaching a peak speed of 27mph), was disqualified after his urine samples contained stanozolol, an anabolic steroid. Canada were forced to hand back their first-ever gold medal.

But it seems that Johnson was not alone, and Carl Lewis – the 26-year-old’s biggest rival then, and the man named ‘Olympian of the Century’ by Sports Illustrated – was later found to be one of 10 men in the 20-strong list of quickest-ever 100-metre runners to be scratched off through gobbling performance enhancers. Some 25 years ago the outing of Johnson’s betrayal shook the sporting world – it would be the equivalent of Usain Bolt being busted now – and subsequently the event has been tainted with suspicion ever since.

Fred Lorz 

The marathon at the 1904 St Louis Olympic Games was held on a sweltering afternoon – the mercury on thermometers rose to 90 degrees Fahrenheit – and followed a challenging, mountainous course; the combination meant that just 14 of the 32 starters completed the race. 

First back was New Yorker Lorz, who staggered home in three hours and 13 minutes. Having been congratulated by – and photographed with – Alice Roosevelt, the President’s daughter, Lorz was just about to receive the gold medal when it became apparent that he had covered 11 of the 26.2 miles as a car passenger. The crowd’s acclaim immediately turned to anger and abuse, and Lorz was handed a lifetime ban which was later lifted. 

The controversy was not to stop there, however. British-born Thomas Hicks, the American who was subsequently handed the gold medal, was aided by a heady mix of strychnine sulfate (a common rat poison) and brandy – a fusion which would not have been allowed in later years. Even though he was supported by his trainers, who had administered the potion to help him complete the course, when he crossed the finish, he was still considered the victor. Rather ingloriously Hicks needed to be carried off the track, and might have died there in the St Louis stadium, had he not been immediately treated by several doctors.

Andy Haden 

On Nov 11, 1978, the mighty New Zealand All Black rugby team faced Wales at Cardiff Arms Park and, trailing 12-10 with seconds ticking down on what would have been their first defeat of the tour, resorted to dirty tactics. 

The All Blacks won a lineout deep in the opposition half and as the ball was thrown in, lock Haden – hardly the most flimsy character at at 6ft 6in and 250lbs – fell away from the set-piece as though illegally shoved. The conned referee awarded a penalty to the visitors, which full-back Brian McKechnie duly converted (although the dual international would get his comeuppance – see below). 

Although the All Blacks went on to win the game and the grand slam that year, the incident became known as “the great dive to victory”, and followed Haden, winner of 117 international caps, throughout his career. 

Neil Back 

In the closing minutes of the 2002 Heineken Cup final at the Millennium Stadium, Leicester Tigers, up 15-9, were looking to hold on to their slender lead against a powerful Munster team. Facing an opposition scrum on their own five-metre line and under tumultuous pressure, the England back-row forward, on the blindside of the referee, illegally nudged the ball out of Munster scrum-half, Peter Stringer’s hands, and back into the scrum on Leicester’s side. 

The official missed the incident and Leicester gleefully punted the ball clear and won the game, leaving the Irish club fuming. In ironic reference to Diego Maradona’s own misdeeds against England’s football team in 1986 the moment became known as ‘Hand of Back’.

Michel Pollentier 

Forget the recent revelations about Lance Armstrong and his rivals, when it came to cheating in the Tour de France this Belgian rider literally took the piss. After scaling Alpe d’Huez and gaining the famous yellow jersey in the 1978 Tour, the race leader failed his post-stage drug test – not because anything illegal had been found in his urine sample, but because the urine sample wasn’t his. 

Officials organising the post-stage test became suspicious when he “began pumping his elbow in and out as if playing a set of bagpipes”, conjuring up a scene from Withnail and I which remained on the cutting floor. 

When ordered to lift his top, Pollentier did so to uncover a complex plumbing system running from a rubber, urine-filled bulb under his arm to the test tube. 

David Robertson 

In the 1985 qualifying round for the Open at Deal, Kent, the former Scottish boys champion took advantage of golf’s culture of honesty and self-regulation. After 14 holes Robertson’s playing companions called an official who disqualified him for repeatedly replacing his ball incorrectly on the greens. 

By arriving on the green first Robertson would appear to mark his ball before surreptitiously moving it closer to the hole. The shamed golfer was fined £20,000 and banned from the PGA European Tour for 20 years. 

Sylvester Carmouche 

On a very foggy day in January 1990, at Louisiana’s Delta Downs track, Carmouche aroused the suspicions of the stewards by riding home 23-1 outsider Landing Officer by 24 lengths in just a second over the course record. 

It transpired that Carmouche, who initially protested his innocence, had dropped out of the one-mile race as soon as he was out of view, only to rejoin it just before the rest of the field came round on the second lap. He finally admitted what he had done and served a ban for eight years. 

Michelle Smith de Bruin 

She was the darling of Ireland after winning three swimming gold medals at Atlanta 1996 – the only gold medals Ireland had ever been awarded* – and one bronze. Suspicions of foul play were voiced by rivals, however, and the fact that her husband and coach – the former Dutch discus-thrower Erik de Bruin – had served a four-year ban for testing positive for illegal levels of testosterone, only elevated those rumours. 

Two years after the success at Atlanta the swimmer was banned for four years, not for testing positive, but for switching her urine sample. After laboratory analysis the sample, which had “a very strong whiskey odour” was found to contain traces of the golden nectar. 

Although Smith de Bruin was not stripped of her medals – as only samples subsequent to her Olympic involvement tested positive – she became a hate figure among Irish people and, at 28, realised that her time in the pool was over, so now practices law as a barrister.

*Ireland did also win a gold medal at Athens 2004 in show jumping, only for the horse to fail a drugs test, therefore the medal was lost. 

Boris Onischenko 

Representing Ukraine in the 1976 Montreal Olympics, the respected pentathlete was looking to improve on the silver medal he had been awarded four years previously in Munich. 

In his desire to win, Onischenko bent the rules by using a crooked sword. Having wired a switch into the handle of his épée he was able him to claim an electronic ‘hit’ even when he missed. When Great Britain’s Adrian Parker and then countryman Jim Fox reported their doubts over the authenticity of Onischenko’s victories, his weapon was replaced, and he was eventually disqualified. Fencing rules were subsequently changed so that grips that could hide wires or switches were banned. 

Trevor Chappell 

The Australian did not cheat as such, but his actions simply weren’t cricket, in gentlemanly terms; his unsporting behaviour caused the rules of the game to change.

On Feb 1, 1981, New Zealand were chasing Australia’s 235 in the third final of the 1980-81 Benson & Hedges World Cup Series. With one over left to bowl New Zealand required 15 runs to seal an unlikely victory. Aussie captain Greg Chappell called his youngest brother, Trevor, on to bowl. 

Off the first five balls nine runs were scored and two wickets fell, leaving the new batsman Brian McKechnie (see above) with one ball to score a six to win the game. Chappell senior ordered his brother to bowl the remaining ball underarm, crown green bowling style. 

Trevor executed his captain and brother’s plan, to the disgust of McKechnie, who threw his bat to the ground after defending the ball, and the dismay of his Australian team-mates. 

Due to the ensuing uproar, which almost caused an international incident, underarm bowling was promptly banned and Chappell has never been forgiven by New Zealand or Australian cricket fans alike.

This article first appeared in The Telegraph in August 2013

‘Just do it’: digital transformation lessons from Estonia

The Baltic state is a digital trailblazer, having made 99% of its public services available online. The government’s CIO, Siim Sikkut, offers his advice for businesses contemplating their own transformations

The smallest of the Baltic states by both area and population, Estonia has served as a political pawn in the hands of several neighbouring powers over the centuries. Since regaining its independence after the collapse of the Soviet Union 30 years ago, this republic has been punching massively above its weight in one respect: technological innovation.

In 2005, for instance, it was the first country to enable online voting. In 2012, it was the first to use blockchain technology for governance. By the time that Wired magazine named Estonia the “most advanced digital society in the world” in 2016, almost all public spaces in the country had been served by free Wi-Fi for a decade. Today, under the government’s so-called e-Estonia programme, 99% of government services are accessible online, while 70% of the country’s 1.3 million citizens regularly use digital ID cards. 

“We joke that our e-services are impossible only for marriages and divorces – you still have to leave the house for those,” says the man in charge of e-Estonia, Siim Sikkut, who has been the government’s CIO since 2017. 

He explains that the country desperately needed a technological “reboot” after gaining its freedom from the debilitating grip of Russian rule in 1991. With this in mind, the state committed itself to electronic governance – a decision that established a digital-first approach on which the country’s pioneering innovations have been based ever since. 

Sikkut, who also chairs the national task force on artificial intelligence, graduated from Princeton University with a degree in public and international affairs in the same year that online voting started. He initially joined the Ministry of Finance before becoming a digital policy adviser at the Ministry of Economic Affairs and Communications, when he co-founded Estonia’s ground-breaking e-residency scheme. Among other things, this offers entrepreneurs based anywhere in the world a digital ID granting them and their businesses remote access to markets in the EU.

Spearheading the world’s digital revolution

Sikkut, 38, is modest about the role he has played in creating what the e-Estonia website calls “an efficient, secure and transparent ecosystem”.

“I stand on many shoulders,” he says. “When I moved to my current role, it wasn’t a question of what to digitise next. All the low-hanging fruit had been picked. It has been about how to keep going to the next level of digitisation. We need to keep everything running while innovating and iterating.”

I hope that our experience in Estonia shows that it’s not rocket science. With commitment, anyone can achieve a digital transformation 

What might have been classed as a risky commitment to technology three decades ago has fostered a more progressive and open society, both online and offline, according to Sikkut. A Eurobarometer survey in 2018 found that 49% of Estonians trusted their government, compared with the EU-wide average of 34%, for instance. 

Indeed, it is said that in Estonia you are only two calls away from the prime minister – the implication being that people in this small country are community spirited and willing to help each other out.

Size matters: but trust trumps all

“It does help that there are few degrees of separation here,” Sikkut says. “With our small population, we get things done – both the connection and decision cycles are much shorter here than in other countries. But our talent pool is much smaller too, so our size is both a constraint and an opportunity.”

It’s no coincidence that the capital, Tallinn – where Sikkut lives with his wife and their three young children – is often referred to as Europe’s Silicon Valley. Estonia is estimated to have produced more start-ups per capita than any other European country in recent years. According to Startup Estonia’s online database, 1,104 enterprises have been established in the country since 2013 – including Uber rival Bolt and payment company Wise (TransferWise until it was renamed at the start of this year).

Any entrepreneur seeking to up the pace of their business’s digital transformation has much to learn from Estonia’s experience. Sikkut believes that strategic partnerships are key in this respect. He points to e-Estonia’s soon-to-be-launched digital testbed framework, a collaboration model that will offer free access to the government’s tech stack, on which any business worldwide can build new products or services and gain proofs of concept.

“I’d say to business leaders: ‘You have to be open for innovation and open to partnership,’ like we’re trying to be with our testbed framework. If someone comes to you with a good idea, take it on board, try it out and then perhaps you can move more quickly,” he says. “We’re looking to increase the speed of innovation in Estonia again by being open and encouraging experimentation with new ideas. The emergence of AI has been a game-changer, for instance, as we embark on this new stage of digitisation.”

Taking people with you

What other advice would Sikkut offer business leaders looking to introduce new digital tools and services? 

“If you build something that saves people time, money or effort and offers them value, they are likely to use it and refer it to others,” he says, adding that “you still might want to throw in incentives for people to start using them. For example, we offer much quicker tax reimbursements to those who complete their forms online rather than on paper.”

Sikkut stresses that it’s essential to spend an adequate amount on training people in how to use new digital tools. “We’ve invested in infrastructure and worked on skills to ensure that people can use our online services. You have to take care of your users so that you can bring them along with you,” he says.

His advice for any entrepreneur who may be approaching digital transformation with trepidation is to learn from his country’s success and stop dithering. 

“Just do it,” Sikkut says. “You’ll never have a perfect plan. Take an engineer’s attitude: try things out, fix them if they fail and try them again before scaling up your operations. I hope that our experience in Estonia shows that it’s not rocket science. With commitment, anyone can achieve a digital transformation. You don’t have to build everything from scratch. There are solutions that you can reuse and you can partner with people who’ve gone through it already – including us here in Estonia.” 

He continues: “The latest technology will probably not solve all your problems. What matters most is being open to possibilities and open to partnerships. If you give bright people a conducive environment, magic will happen.”

This article was first published in Raconteur’s Business Transformation report, published in June 2021

Will Bitcoin’s energy issues turn off investors?

Crypto’s energy use might worry eco-conscious investors, but there are reasons to hope for a greener future

Cryptocurrency has long had a dirty secret: the energy needed for bitcoin mining. 

Crypto evangelists – who believe a decentralised financial system is for the greater good – tend to ignore this inconvenient truth. In May, however, when Tesla boss Elon Musk decried the environmental effects of the mining that goes into validating bitcoin transactions, the energy issue became a burning topic. 

It’s a big problem for cryptocurrencies because the majority of investors (77%) are aged under 45, according to a study published earlier this year by Gemini Exchange. These consumers are also more eco-conscious than older generations. Indeed, Musk’s damning assessment arrived at the same time that a Pew Research Center study found that 37% of Gen Z and 33% of millennials in the US cite climate change as their top personal concern.

Unsurprisingly, some worry that these investors could sour on bitcoin and other energy-draining cryptocurrencies. Bitcoin in particular is a victim of its own success, at least when it comes to environmental concerns. This is due to its ‘proof-of-work’ protocol: a decentralised consensus mechanism that requires members of the network to expend effort solving an arbitrary mathematical puzzle so that no one can hijack the system. 

It’s a vicious correlation, because the higher bitcoin’s market value – in February it easily became the quickest asset in history to reach $1tn, after only 12 years – the more energy is consumed.

The latest bitcoin bull run, which began at the end of 2020, has sparked a surge in mining, bringing with it increased energy consumption. It’s no coincidence that China’s government has cracked down on crypto: the vast majority of bitcoin is mined there, driving up energy demand and making it harder for the country to achieve its target of net-zero emissions by 2060.

Solving the proof of work energy issue

Currently, bitcoin would rank as the 32nd-highest nation in the world by energy consumption, ahead of the Netherlands. Bitcoin and ethereum between them consume more than three quarters of the electricity used by all cryptocurrencies. Notably, the other three on the list of the five worst offenders – dogecoin, bitcoin cash and litecoin – all use the ‘proof-of-work’ protocol.

Bitcoin’s energy consumption has more than quadrupled since the beginning of its last peak in 2017, says Charles Hoskinson, co-founder of ethereum – the second largest crypto by market capitalisation. “It’s set to get worse because energy inefficiency is built into its DNA,” Hoskinson argues. As chief executive of global blockchain engineering firm IOHK, he’s also the driving force behind third-generation cryptocurrency cardano.

According to Hoskinson, bitcoin’s carbon footprint will “become exponentially worse because the more its price rises, the more competition there is for the currency” and thus the more energy it consumes. 

Other, greener consensus mechanisms are gaining in popularity, such as the ‘proof-of-stake’ blockchains that underpin cryptocurrencies like cardano, polkadot and algorand, and don’t require mining. Proof-of-stake uses considerably less energy than proof-of-work chains, because “network participants are chosen to validate ‘blocks’ of transactions based on how many coins they hold rather than the computational processing power they have”, Hoskinson explains. He estimates that cardano is “four million times” more energy efficient than bitcoin.

Going green, one block at a time

Monica Long, general manager of RippleX, which provides open-source code and developer tools to accelerate interoperable blockchain technology, agrees that proof of work is “very energy intensive”. However, she says things are changing rapidly, noting that ethereum will shortly be switching to a proof-of-stake protocol that is expected to reduce electricity consumption by 99%.

She welcomes both the Bitcoin Mining Council, unveiled by Musk in May to monitor and improve the industry’s sustainability, and the Crypto Climate Accord, which is a private sector collaboration focused on making all blockchains carbon neutral by 2030.

Ultimately, not only does digital money offer many great advantages, but it’s a step towards a greener future overall

Rhian Lewis, author of The Cryptocurrency Revolution: Finance in the Age of Bitcoin, Blockchains and Tokens, says it’s vital to keep things in perspective. “Modern life is by its very nature energy intensive. In the US alone, the energy consumed by inactive household devices left on standby every year would power the entire bitcoin network for 1.9 years.”

And when people compare the energy consumed by a transaction on the Visa network, for instance, with a transaction on the bitcoin network, it is a “false equivalent”, she says. “A transaction on Visa needs the entire world banking system to be in place before its transaction can be processed, with all the physical infrastructure of banks, their buildings, people travelling between them, physical money being minted and transported, and so on. In contrast, bitcoin does all that inherently.”

An eco-friendly future? 

Pavel Matveev, founder and chief executive of Wirex, a crypto payment card, believes bitcoin’s energy consumption is the exception in the industry. “With more than 4,000 cryptocurrencies in existence, there are plenty of environmentally friendly options available, and many more on the way,” he says. 

For example, he points to nano, a eco-friendly cryptocurrency that doesn’t rely on mining, printing or minting and aims to address the current inabilities in today’s existing financial systems and limits fees while providing quick transaction speeds.

Given the introduction of less energy-intensive coins and a move towards renewable energy for mining, crypto could well become a more eco-friendly payment system in coming years, he suggests.

“Even the less eco-friendly cryptos can still be better for the environment than traditional currency,” says Matveev. “Imagine: goodbye plastic cards, paper receipts and pennies.

“Ultimately, not only does digital money offer many great advantages, but it’s a step towards a greener future overall.”

Perhaps Musk’s energy truth bomb was just what the industry needed to hear to clean up its act, even if, in the long term, the appeal of the original crypto is overtaken by more environmentally conscious alternatives. 

This article was first published in Raconteur’s Cryptocurrencies report in June 2021

Absolute beginners: startup tips for first-time founders

Starting a business is challenging enough even in normal times, but at least there is plenty of expert advice on offer for the UK’s new wave of novice entrepreneurs

Ironically, no one knows who invented the adage “necessity is the mother of invention”. This ancient proverb has rarely been more relevant in the business world, given the pandemic’s seismic impact on enterprises of all sizes.

The coronavirus crisis has caused widespread job losses and limited the career prospects of millions of people. This has led many to start their own enterprises. In the 12 months to March 2021, more than 810,000 businesses were incorporated in the UK, 22% up on the preceding year’s total, according to Companies House. In Q4 2020 alone, 221,000 companies were established – the highest quarterly figure in a decade. 

Britons have been running an entrepreneurial, startup culture for centuries – it’s what we do very well

Starting a business from scratch is no mean feat even when there isn’t a pandemic. Fortunately, several successful entrepreneurs, acknowledging the help they received when they started, are willing to share their insights with first-time founders. One such high-flyer is Markus Villig. 

As a secondary-school student in 2013, the Estonian had used a £4,300 loan from his parents and brother to start the business that would become pioneering transport company Bolt. Five years later, he became the youngest CEO of a European ‘unicorn’, a privately owned startup valued at $1bn. 

Give people what they need – even if they don’t know it yet

Villig’s original plan had been to provide a digital platform for cab users in his home city of Tallinn. The teenager hadn’t passed his driving test (he still doesn’t have a licence) and was frustrated by the capital’s disorganised taxi facilities. 

Today, Bolt is worth over £2bn and has 1.5 million drivers in 40 countries. But it wasn’t an immediate success, partly because Villig had trouble persuading people to adopt his pioneering technology. 

“There was a resistance from drivers to joining, as they didn’t understand how easy it was,” he recalls. “To combat this, I took to the streets myself, approaching drivers at taxi stands to pitch the idea and show them the simplicity of the technology and how it could benefit them.”

Villig stresses the importance of clear, concise communication in marketing, adding: “Don’t expect people to love your idea as much as you do from the get-go. I was faced with a tough market when I started Bolt, so I had to go out of my way to show that our common enemy was the private car. Once I began using this as my key message, we began getting taxi drivers on board.”

He continues: “It’s easy to overthink things. What I have found is that we humans like things to be simple. The simpler your business targets are, the better. At Bolt, we do our best to boil ours down to a few sentences.”

Start with a business plan to evaluate strengths and weaknesses

Erica Wolfe-Murray, the author of a guide for new entrepreneurs called Simple Tips, Smart Ideas, echoes Villig’s advice. 

“If you have a new idea for a product or service, don’t expect everyone to understand it automatically. They won’t,” she says. “If you’re thinking about launching a business, ask yourself: ‘Why now?’ If you can’t answer that, or your response is just flannel, rethink everything. I’ve seen so many startups that were little or no different from other companies. It saddens me, because they can take a huge amount of effort to launch yet will often fail quite quickly.”

Another common – and often fatal – error that new entrepreneurs commit is to make the pursuit of financial success their main reason for starting a business, Wolfe-Murray suggests. 

Don’t expect people to love your idea as much as you do from the get-go

“So many companies focus on their offering and the money before they focus on their unique experience, possible trends and different ways of approaching markets,” she says. “To start with, I always look at devising a business plan without involving money. The internal aspects of the company inform its strengths and weaknesses, while the external factors present opportunities and threats. This simple divide can often be overlooked, yet it is crucial to any business plan.”

Wolfe-Murray adds that the process of evaluating weaknesses and what outside help might be needed to address the latter requires a key entrepreneurial skill: resourcefulness. 

“Don’t underestimate the value of what and whom you know,” she explains. “You can analyse and harness these elements to launch an original, smart business in ways you may not have originally thought. Why copy others when your own assets give rise to a much richer offering?”

The financial hard yards – external help needed?

Wolfe-Murray warns that poor financial management is the “biggest pitfall” for new entrepreneurs. “It can take most companies up to three years before they get going, but that relies on regular customers and decent cash flow,” she says. “Yet founders take their eyes off the ball because there is so much else to do apart from looking after cash flow. I often ask founders who manages the money in their households. If it’s not them, they may not be used to doing the financial hard yards.”

Hannah Bernard, head of Barclays Business Banking, agrees. She would encourage any new entrepreneur to keep money from their business separate from the funds in their personal account. This will make it more straightforward to track the company’s cash flow and keep on top of supplier payments.

Ask yourself: ‘Why now?’ If you can’t answer this, or your response is just flannel, rethink everything

“This will help you to build up a business credit history, which could make it easier to access a loan – should you need it – as your venture starts growing,” she says, stressing the need to keep a scrupulous record of all revenues and expenses.

Bernard believes that most entrepreneurs will never be able to master every aspect of running a business, so they “should not be afraid to seek external help. A good place to start is online, where there are lots of free resources. The Barclays business hub, for instance, has tips on aspects ranging from writing a business plan to building a team.”

Wolfe-Murray offers a final word of encouragement to those pondering whether or not to start a new venture. “Britons have been running an entrepreneurial, startup culture for centuries – it’s what we do very well. Small companies are the bedrock of our economy. They enable inventive people to do things that intrigue and fulfil them,” she says. “If you have a hankering to start your own business, just do it.”

This article first appeared in Raconteur’s Supporting SMEs report, published in June 2021

Introducing Rufus the hawk: the official bird scarer of the Wimbledon Championships

There was a time when ‘birds stopped play’ was a legitimate reason for downing rackets at Wimbledon. That was before Rufus the hawk, official bird scarer, was drafted in to ensure avian invasions are kept to a minimum.

The sky’s the limit for young players at Wimbledon, where a good performance can see their careers take off. But one star of the show will be flying higher than most at the prestigious venue with a vital job to do: Rufus the Harris Hawk.

Rufus is the tournament’s official bird scarer, tasked with frightening pigeons away from the courts. ‘‘Bird stops play’’ used to be a regular problem at Wimbledon, but since 2000 Avian Environmental Consultants Ltd, based in Northamptonshire, has provided hawks to eliminate the problem.

Rufus, who has been working at Wimbledon since 2007, is a celebrity in the tennis world. He regularly poses for pictures during the tournament, has earned a Blue Peter badge and has more than 9,000 followers on Twitter.

Imogen Davis, his handler (and social media manager) since 2012 and director of Avian Environmental Consultants, says: “Pigeons don’t know the difference between eating grass seed when the tennis is on and when there is no play, and that can cause big interruptions. As a player concentration is crucial, so we do our bit to limit that disruption.

“There is an intensive training process, and it is all food-motivated. Harris hawks are not quite like a pet – they don’t just follow you around because they love you – and are one of the few birds in the world that hunt socially; they associate the handlers with food and consider us part of their pack.

“When a pigeon or another bird spots Rufus it’s all about fight or flight, and when a huge Harris hawk with sizeable talons is flying at them they would be daft to choose the first option. The most important part of my job is to monitor his weight.

“His optimum flying weight is 1lb 6oz, so if he is at that weight I know that he is going to be keen enough to chase any birds away but not so keen that he is going to grab it and fill himself up on a pigeon.”

In preparation for The Championships, Rufus, whose kidnapping in June 2012 triggered global interest (he was found three days after being stolen from the back of Ms Davis’s car), visits the venue most weeks of the year to encourage local birds to roost away from the grounds.

During the competition he is flown from 5am, before the gates open. Ms Davis says that the Wimbledon fortnight is “incredibly tiring” and adds: “I am up from 4am and we are working at The Championships until about 10am every morning. There are some benefits – we get to see some incredible sunrises and meet celebrities, including Andy Murray and Camilla, Duchess of Cornwall – but by the time most of the public have entered we have gone, because it’s our job to make sure all the birds are out of the way before the matches start.

“Rufus will not be flying that whole time; he knows all of the pigeons’ favourite spots to hang out, and he checks them to see there is nothing that might cause any trouble. As we bought Rufus when he was 16 weeks he trained at Wimbledon – it’s basically his playground, and he loves it here.”

This article, sponsored by Jaguar, was first published by The Telegraph in July 2017

Colin Jackson: ‘When things open up again, I’ll be in the front row’

Athlete Colin Jackson is desperate to attend live sporting events, hear the roar of the crowd, and also get his skates back on following his star turn on Dancing on Ice

As someone whose life has centred around sport – and athletics in particular – for more than half a century, I am utterly desperate to attend live sporting events again, once lockdown restrictions finally ease.

The pandemic has tested everyone, but has been especially tough on elite sportspeople, who have had to perform in empty stadia, if at all. Perhaps I am biased, given my passion, but I believe athletes have suffered more than most. Top-tier athletics is truly global, and without being able to travel, meaningful competition is pretty much impossible.

That’s why I’m looking forward to heading to Switzerland in September and watching Weltklasse Zürich – as a fan rather than a commentator, crucially. The annual invitation-only world-class track-and-field meeting was established in 1928, and in 2021 it will serve as the sole final of the Diamond League competition. The audience members are always so knowledgeable, and it will be a joy to mingle and learn without work pressures.

It’s hard to put into words the critical role spectators play for top sportspeople, as is also the case with actors, musicians and dancers. If you’re underperforming, a roar from the home crowd has the magical ability to lift your game by an extra percentage point, and gives you the oomph needed to push you across the line. Without a live, in-person audience, I can imagine it just feels like glorified practice.

I want the real deal, the whole package of live, atmospheric sport. I crave the moments of silence – before the starting pistol is fired, for example, or the hushed seconds ahead of a vital penalty kick in rugby union – and the spine-tingling bellows as glory is secured.

Cheering on the Six Nations champions from the sofa

I’ve watched plenty of sport from my sofa throughout lockdown, including tennis, golf, cricket, and – being a proud Welshman – rugby union. I always tune in for the Six Nations, and I was delighted when the unfancied Wales team was crowned champion this spring. I loved that most people wrote the Welsh off, but the players stayed cool and took the title again.

While the Six Nations was on, I performed in Dancing on Ice, and would dash back from training to catch the games, wearing the red of my country – and I’m glad I did. Before the coronavirus crisis, I would never have predicted in a million years that I would learn how to ice skate.

It was one of the most unique and enjoyable experiences of my life, genuinely. Finishing third in the competition was beyond my wildest dreams. I had so much fun, and when the ice rinks open again, I’ll be getting my skates on once more.

I’ve also tried to keep abreast of all the athletics news during lockdown, and tuned into events all over the world. Thanks to technology, I’ve been able to catch most meetings of interest, no matter how small. On one occasion, I contacted some Italian athletes on social media to ask them about an event, and they live-streamed it, basically just for me. I don’t know how we would have coped without the advanced tech we take for granted.

Sport has been forced to innovate – and that’s good for the future

In a way, the situation caused by the pandemic has been good because it has forced all elite sports to reflect on what benefits they provide for spectators. It has sparked innovations – though not always successfully, as the many people who rallied angrily against football’s proposed European Super League can testify.

However, having to think outside the box has been a useful exercise for all sports. For instance, I was proud of athletics when, last July, the Weltklasse Zürich was transformed into the inaugural Inspiration Games: a live, 90-minute virtual competition. Thirty top track-and-field athletes started their races simultaneously, from their tracks all over the world, and fans enjoyed the live event despite the coronavirus restrictions.

Ultimately, every single sport has had to look at reinventing itself, to an extent. It has been essential to sustaining interest in sport as a vehicle for entertainment, and I firmly believe that most sports will come out of the pandemic stronger. One thing is for sure: when things do open up again, I’ll be in the front row, roaring on the action.

This article, sponsored by American Express, was first published by The Telegraph in June 2021

Mastercard cyber chief on using AI in the fight against fraud

Ajay Bhalla, Mastercard’s president of cyber and intelligence solutions, thinks innovations like AI can tackle cybercrime – and help save the planet

The fight against fraud has always been a messy business, but it’s especially grisly in the digital age. To keep ahead of the cybercriminals, investment in technology – particularly artificial intelligence – is paramount, says Ajay Bhalla, president of cyber and intelligence solutions at Mastercard. 

Since the opening salvo of the coronavirus crisis, cybercriminals have launched increasingly sophisticated attacks across a multitude of channels, taking advantage of heightened emotions and poor online security.

Some £1.26 billion was lost to financial fraud in the UK in 2020, according to UK Finance, a trade association, while there was a 43% year-on-year explosion in internet banking fraud losses. The banking industry managed to stop some £1.6 billion of fraud over the course of the year, equivalent to £6.73 in every £10 of attempted fraud.

If you don’t test things to break them, you can be sure their vulnerabilities will be discovered down the line

The landscape has rapidly evolved over the past year, says Bhalla, due to factors like the rapid growth of online shopping and the emergence of digital solutions in the banking sector and beyond. These changes have broken down the barriers to innovation, driving an unprecedented pace of change in the way we pay, bank and shop, says the executive, who’s responsible for deploying innovative technology to ensure the safety and security of 90 billion transactions every year. 

“Against that backdrop, cybercrime is a $5.2 trillion annual problem that must be met head-on. Standing still will mean effectively going backwards, as fraudsters are increasingly persistent, agile and well-funded.”

AI: the new electricity

It isn’t just the growing number of transactions that attracts criminal attention, but the diversity of opportunity, according to London-based Bhalla, who has held various roles at Mastercard around the world since 1993. 

“As the Internet of Things becomes ever more pervasive, so the size of the attack surface grows,” he says, noting that there will be 50 billion connected devices by 2025. 

Against this backdrop, AI will be essential to tackle cyber threats. 

“AI is fundamental to our work in areas such as identity and ecommerce, and we think of it as the new electricity, powering our society and driving forward progress,” says the 55-year-old.

Mastercard has pioneered the use of AI in banking through its worldwide network of R&D labs and AI innovation centres, and its AI-powered solutions have saved more than $30bn being lost to fraud over the past two years. 

In 2020, it opened an Intelligence and Cyber Centre in Vancouver, aimed at accelerating innovation in AI and IoT. The company filed at least 40 AI-related patent applications last year; it has developed the biggest cyber risk assessment capability on the planet, according to Bhalla. 

“We are constantly testing, adapting and improving algorithms to solve real-world challenges.”

Turning to examples of the company’s work, Bhalla says Mastercard has built an ability to trace and alert on financial crime across its network, a world first. He also points to the recently launched Enhanced Contactless, or ECOS, which leverages state-of-the-art security and privacy technology to make contactless payments resistant to attacks from quantum computers, using next-generation algorithms and cryptography. 

“With ECOS, contactless payments still happen in less than half a second, but they are three million times harder to break.”

Building security through biometrics


Such innovations are transforming customers’ interactions with financial services providers. For example, Mastercard has combined AI-powered technologies with physical biometrics – like face, fingerprint and palm – to identify legitimate account holders. These technologies recognise behavioural traits, like the way in which customers hold their phone or how fast they type, actions that can’t be replicated by fraudsters. 

“We see a future where biometrics don’t just authenticate a payment; they are the payment, with consumers simply waving to pay.”

Excited by developments in this area, Bhalla says Mastercard recently detected an attack that involved hundreds of devices attempting to log in from a phone that had reported itself as lying flat on its back. “Given the speed at which the credentials were typed, we knew it was unlikely it could be done with the phone flat on a surface,” Bhalla says. “In this way, a sophisticated attack that looked otherwise legitimate was detected before any fraud losses could occur.”

Cybercrime is a $5.2 trillion annual problem that must be met head-on. Standing still will mean effectively going backwards, as fraudsters are increasingly persistent, agile and well-funded

Mastercard might boast an impressive list of successful fraud-fighting solutions, but wrong turns are vital for the journey, Bhalla admits. “If you don’t test things to break them, you can be sure their vulnerabilities will be discovered down the line,” he says. “At Mastercard, trust in and reliance on our services is far too important to take that risk, so rigorously testing solutions before they get anywhere near the end user is our standard operating procedure.”

Trust is a must

A keen rower and golfer, Bhalla volunteers as an executive-in-residence at the University of Oxford’s Saïd Business School. He has a bachelor’s degree in commerce from Delhi University and a master’s degree in management from the University of Mumbai. 

Even with his experience and tech knowledge, Bhalla insists that Mastercard and others within the industry must go back to basics and focus on customer experience. The company’s leadership in standards has been core to earning and retaining the trust of its customers, he notes. 

The technology may be evolving quickly, but one core principle remains, says Bhalla. “Our business is based on trust, which is hard-won and easily lost.”

The correct operating processes and standards must be in place from the outset so that both customers and businesses can have confidence in the technology and trust that it will be useful, safe and secure. 

“What has changed is the sharp focus now placed on developing leading-edge solutions that prevent fraud and manage its impact, which is not surprising given that the average cost of a single data breach has now grown to $3.86 million,” Bhalla says.

Providing a blueprint for business leaders, Bhalla strongly believes that “innovation must be good for people … and address their needs at the fundamental design stage of the systems and solutions we create.”

“We see a future where biometrics don’t just authenticate a payment; they are the payment, with consumers simply waving to pay

Bhalla is using tech to fight fraud and drive financial inclusion, with Mastercard aiming  to connect 1 billion people globally to the digital economy by 2025. His ambitions are wider still, with much of his work focused on “protecting the world we have”. 

Mindful that climate change is high on the agenda, especially for younger generations, Mastercard has launched a raft of programmes in the area, including this year’s Sustainable Card Badge, which looks to identify cards made more sustainably from recyclable, recycled, bio-sourced, chlorine-free, degradable or ocean plastics.

Much like fighting fraud, global warming is reaching a crucial stage. Thanks to the efforts of industry leaders like Bhalla, the world stands a better chance of ultimate triumph on both fronts.

This article was originally written for Raconteur’s Fighting Fraud report, published in June 2021

Can crypto’s energy problem be solved?

Bitcoin, Ethereum and other proof-of-work cryptocurrencies might have enjoyed a bull run since the end of last year, but if they are not good for the planet, eco-conscious millennial and gen-z investors could be turned off

Even in the notoriously volatile world of cryptocurrencies, it has been an incredibly turbulent few weeks for Bitcoin, the founding crypto. In mid-June, El Salvador became the world’s first nation to approve Bitcoin as legal tender.

A month earlier, Elon Musk first backed away from accepting Bitcoin payments at Tesla, citing the environmental effects of the energy-intensive mining that goes into validating transactions. Then, a week later, he introduced the idea of the Bitcoin Mining Council to monitor and improve the industry’s sustainability.

Understandably, these positive and negative developments impacted the stock market price of Bitcoin, as well as the values of a cluster of other cryptos that typically take their lead from Satoshi Nakamoto’s pioneering digital currency. In February, following a months-long bull run, Bitcoin – whose genesis block was mined in January 2009 – hit a market capitalisation of $1 trillion for the first time. The asset’s acceleration of nought to one trillion in just 12 years was easily the quickest in history. (The “big four” – Apple, Google, Amazon and Microsoft – took 33 years on average to reach $1tr.)

However, while crypto investors are used to the ups and downs, could growing worries around energy consumption derail the rollercoaster? Given the popularity of cryptos among younger people, in particular – 77% of investors are under 45, according to a study published earlier this year by Gemini Exchange – and their supposed eco-conscious sensibilities, do Bitcoin and other energy-draining cryptocurrencies need to change direction, and clean up their acts?

Investors aside, environmental concerns are understood to be behind China’s recent crypto crackdown. The vast majority of crypto is mined in China, driving up energy demand and making it hard for the country to achieve its net-zero emissions by the 2060 target.

Solving the proof of work energy issue

The recent skyrocketing of Bitcoin’s value has triggered new interest, which has led to a surge in mining and energy consumption, as individuals and mining farms alike have invested in hardware to dig for digital gold.

“Bitcoin’s energy consumption has more than quadrupled since the beginning of its last peak in 2017, and it’s set to get worse because energy-inefficiency is built into its DNA,” posits Charles Hoskinson, co-founder of Ethereum – the second-largest crypto by market capitalisation – and, as chief executive of global blockchain engineering firm IOHK, the driving force behind Cardano.

The Hawaii-born entrepreneur points out Bitcoin’s carbon footprint will “become exponentially worse because the more its price rises, the more competition there is for the currency” and thus the more energy it consumes.

As a leading “green crypto”, Cardano stands to benefit from the furore around Bitcoin’s energy problem. It uses a proof-of-stake protocol that requires considerably less energy than proof-of-work chains used by Bitcoin and Ethereum. Hoskinson reckons the Cardano network uses 6 GWh annually – less than 0.01% of the 110.53 TWh needed by the Bitcoin network, as estimated by the University of Cambridge. 

Currently, Bitcoin would rank as the 32nd highest energy-consuming nation in the world, ahead of the Netherlands. Next is Ethereum, and the pair consumes over three-quarters of the electricity used by all cryptocurrencies. Notably, the other three on the list of the five worst offenders – Dogecoin, Bitcoin Cash, and Litecoin – all use proof-of-work protocol.

However, things are changing rapidly. Notably, Ethereum will shortly be switching to a proof-of-stake protocol that, its creators claim, will reduce electricity consumption by 99%.

And most people inside and outside the crypto space welcome both the Bitcoin Mining Council and the Crypto Climate Accord, which is a private-sector collaboration focussed on making all blockchains carbon neutral by 2030.

Ultimately, perhaps this energy issue is the shake up Bitcoin needs to pave the way for a more sustainable future for the whole digital asset class, even if the founding crypto becomes less attractive to eco-conscious investors.

The worrying rise of ransomware as a service

The Colonial cyberattack that cost a US fuel pipeline $4.4m in May highlights why businesses need to treat the fast-emerging threat of ‘ransomware as a service’ more seriously

A wry observation doing the rounds among cybersecurity experts is that the hackers who’ve transformed ransomware attacks into a multibillion-dollar industry are more professional than their high-profile corporate victims. 

It was certainly no laughing matter for the CEO of the Colonial Pipeline, one of the largest fuel-distribution networks in the US, when an attack in early May disabled the 5,500-mile system, triggering fuel shortages and panic-buying at filling stations. Within hours of the breach, Joseph Blount controversially paid a $4.4m (£3.1m) ransom to DarkSide, the Russian hacking group that mounted the attack, on the basis that it was “for the good of the country”. Despite this, the network was still out of action for a week.

The Colonial Pipeline case is one of many similar incidents, which have increased sharply in number since the pandemic started but have tended to go under the radar, as the victims are understandably reluctant to publicise their security failings. This high-profile example has exposed the rise of so-called ransomware as a service (RaaS), which DarkSide and various other professional hackers are now offering. 

Ethically speaking, you have to consider that you are enabling cybercrime by paying a ransom

The number of cybercrimes committed worldwide in 2020 was 69% higher than the previous year’s total. Ransomware was involved in 27% of these and a total of $1.4bn was demanded, according to a report published in May by US data security company Zscaler. In the UK, cybersecurity specialist Mimecast believes that as many as 60% of companies suffered a ransomware attack during the year. 

Ransomware is on the rise (Soumil Kumar from Pexels)

“Covid-19 has driven a huge ransomware surge,” reports Deepen Desai, Zscaler’s chief information security officer. “Our researchers witnessed a fivefold increase in such attacks starting in March 2020, when the World Health Organization declared the pandemic.”

Criminals seeking to exploit the network vulnerabilities created by the general shift to remote working during the Covid crisis either developed more sophisticated hacking methods or, seeking a shortcut, paid for RaaS. 

RaaS business model rings alarm bells

“RaaS has enabled even the least technically advanced criminals to launch attacks,” says George Papamargaritis, director of managed security services operations at Obrela Security Industries. “Gangs are advertising their services on the dark web, collaborating to share code, infrastructure, techniques and profits.” 

The RaaS model means that the spoils are split among three partners in crime: the programmer, the service provider and the attacker. “This is a highly structured and organised machine that operates much like many other legitimate organisations,” he adds.

The earliest reference to RaaS can be traced back to 2016. But, as Jen Ellis, vice-president of community and public affairs at Rapid7 and co-chair of the Ransomware Task Force, notes: “There are indications that it’s on the rise as more criminals take the chance to make a quick, easy and relatively risk-free profit by entering the ransomware market.”

This collaborative approach to ransomware attacks is terrible news for businesses, warns Ian Pratt, global head of security for personal systems at Hewlett-Packard. “Once, it was the preserve of opportunistic individuals who targeted consumers with demands of a few hundred pounds. Today, criminal gangs operating ransomware make millions from corporate victims in so-called big-game hunts,” he says. “This should have the alarm bells ringing in boardrooms.”

By educating themselves and their employees, business leaders can improve company-wide security protocols and so minimise the risk of ransomware attacks. Pratt explains that “users are the point of entry for most attacks”, accounting for 70% of successful network breaches. Malware is “almost always delivered via email attachments, web links and downloadable files”.

Prevention better than cure

Michiel Prins, co-founder of HackerOne, a vulnerability-disclosure platform connecting businesses with penetration testers, agrees. “Difficult as it may seem to prevent these attacks, prevention is always better than cure when it comes to ransomware,” he says. “This means maintaining a nimble and adversarial approach to cybersecurity that takes into account the perspective of an attacker, getting beyond traditional solutions that miss more elusive vulnerabilities.”

Prins argues that working with ethical hackers will “strengthen an organisation’s overall security posture”, as potential weak spots are reported and fixed “before serious damage is done”. Additionally, establishing a so-called bug-bounty programme, which rewards people for highlighting faults in the coding, “signals a high level of security maturity,” meaning that the criminals might look for easier prey.

If they do fall victim to an attack, should organisations accede to ransomware demands? CrowdStrike estimates that just over a quarter of victims end up paying the hackers to unlock their systems. Nearly 60% of UK businesses would enter negotiations, according to Sam Curry, chief security officer at Cybereason. 

Gangs are advertising their services on the dark web, collaborating to share code, infrastructure, techniques and profits

“We’d advise against paying ransoms. But in extreme situations, where lives are at risk or a national emergency is likely, it could be better to pay,” he says. “Before making that decision, it’s essential to notify your legal counsel, your insurer and the relevant law-enforcement agencies.”

Even when a business does cough up, there’s no guarantee that this will put an end to its problems. Peter Yapp, former deputy director at the UK’s National Cyber Security Centre and now a partner at law firm Schillings, cites the Travelex attack in December 2019 as an example. Many of the company’s web pages were still out of action two months later and a $2.3m ransom was eventually paid to the hackers. Later in 2020, Travelex sank into administration, “partly due to the losses and reputational damage caused by the attack”, he says.

Charles Brook, threat intelligence specialist at cybersecurity company Tessian, acknowledges that it’s a tough decision. “Ethically speaking, you have to consider that you are enabling cybercrime by paying a ransom,” he says. “But I can sympathise with organisations that may have no other option.”

There are other considerations, Brook adds. “If you pay, you could put a target on your back for further attacks. And, even after your files are decrypted, there may still be something malicious left behind.”

With the hackers in the ascendancy, Yapp believes that the government needs to step up its efforts to combat ransomware. “This has become such a serious problem that perhaps it’s time to lobby for the UK’s new National Cyber Force to fight back against these criminals in a different, military, way,” he suggests.

Perhaps the hackers won’t have the last laugh, after all.

This article was originally written for Raconteur’s Connected Business report, published as a supplement in The Times in June 2021

Is your business harnessing the power of conversational search?

The proliferation of smart devices and the improving capabilities of AI-powered voice assistants mean that voice search-ability is no longer a mere ‘nice to have’

Hey, Siri. Are marketers and their businesses investing enough time, money and effort in improving their conversational search rankings? 

Given that Juniper Research forecasts that consumers will be using voice assistants on more than 8.4 billion devices by 2024, while MarketsandMarkets predicts that the global conversational AI market will grow from £3.4bn in 2020 to £9.8bn in 2025, there’s a strong case that they should be doing more.

Consumers embrace new technology if it makes life simpler and more effortless for them. Otherwise, what’s the point?

Firms that have already invested in achieving higher voice search rankings are benefiting from it. For instance, translation service Lionbridge started optimising for voice search in July 2019. Twelve months later, it had almost 47 times more ‘featured snippets’ – the short text at the top of a page of Google search results. This improvement aided a 127% year-on-year increase in traffic to the firm’s website.

“Businesses should view optimising for conversational search as mandatory,” argues Olga Andrienko, head of global marketing at Semrush, which manages Lionbridge’s marketing analytics. “We have already seen the dramatic effect it can have on businesses’ search results. As voice assistants are further integrated into people’s everyday lives, this influence will grow.”

Nick McQuire, chief of enterprise research at tech consultancy CCS Insight, agrees. “As one of AI’s most important areas of development, conversational search is progressing rapidly,” he says.

Bringing AI to the masses

Conversational search development has accelerated “because it sits at the centre of two important trends”, McQuire suggests. First is the improvement in AI speech technology. Second is the need to improve information search in businesses. “This area”, he says, “is often listed as ‘broken’ by customers owing to information silos, especially across several data stores, documents and applications.”

McQuire continues: “The fact that all the big tech firms have started to tackle this area with products and tools demonstrates the scale of the customer need.”

Conversational search is a more complex matter than people simply using their voices instead of keyboards, though. For instance, on what smart device is the search being conducted – a screen-less Apple HomePod, a Google Nest Hub Max or an in-car Amazon Alexa?

While companies can pay to appear on the first page of a conventional typed search on a computer screen, mastering conversational search is not so straightforward. For one thing, marketers don’t always have the same real estate for advertising. 

If a device being used for voice search has no screen, how likely is it that a business will pull traffic to its website if it ranks outside the top three search results? Equally, if the device has a screen, a more visual response is presumably better. Notably, the average answer length for the three most popular voice assistants – Siri, Alexa and Google Assistant – is 23 words, according to Semrush.

Convenient and contextualised answers

Semantics aside, the crucial point for marketers is that consumers want their problems solved quickly. So says Kashif Naqshbandi, CMO at IT recruiter Tenth Revolution Group, who adds: “Most of the time they are not just looking for a ‘what’, but also a ‘how’ and ‘why’. This is why question-driven conversational search has spiked.”

Naqshbandi explains that few people are now searching online for, say, a “mountain bike” and then clicking through web pages of information. Instead, they are asking specific questions – for instance, “what sort of mountain bike should I buy?” – to seek a contextualised answer.

“Consumers are more accustomed to these fast, personalised interactions that help them cut through the digital noise and find a solution,” he says. “Marketers have to evolve to deliver interactive, dialogue-based experiences to stay competitive.”

Euan Matthews, director of AI and innovation at ContactEngine, a developer of conversational AI systems, agrees that people ultimately want to save time wherever possible and are happy to pay for convenience. 

“Consumers embrace new technology if it makes life simpler for them. Otherwise, what’s the point?” he says, attributing Amazon’s continuing ascendancy to the time it saves customers. But he adds that a “big pitfall” for marketers is to focus only on the search element.

To illustrate his point, Matthews says that some devices, when asked about the best local Indian restaurant, say, will now offer a follow-up option of booking a table through Google, and – if the user accepts – they will add this booking to the digital calendar. 

“This time saving is not because of the conversational search,” he says. “It’s more because that search has been seamlessly married with the ability to execute a transaction on your behalf. Marketers must consider how to marry conversational search and the transactional capability of the voice assistant, because this is what saves consumers time and makes it more likely that they’ll progress down the sales funnel.”

The direction of travel is clear, so marketers must alter their course accordingly. “We will see more advances in the ability for conversational search to end in a transaction – and this will drive uptake,” Matthews predicts. 

Will it ever replace keyed search? “I doubt it,” he says. “Some searches are best not voiced aloud.”

This article was originally published in Raconteur’s Future of Marketing and CX report in June 2021

How the past 12 months have changed the face of fatherhood

Homeworking and homeschooling enforced by coronavirus restrictions gave dads more time with their offspring, and both parties, as well as mothers, are enjoying the benefits

The coronavirus crisis has been a spur for transformation, with several aspects of our lives changing at a gallop, and that includes the typical role of a father. During the epochal events of 2020 and into 2021, the meaning of fatherhood has been profoundly altered, and for the better.

Most dads have welcomed with open arms the opportunity to spend more time with their offspring through lockdown – even if it meant them attempting to get their heads around quadratic equations and decimal fractions again while homeschooling. 

Statistically, mothers bore the brunt of the increased parenting duties, but dads played a more significant part, on average, than they did before the pandemic. The Office for National Statistics data supports this: during the UK’s first lockdown, which began in late March 2020, the amount of childcare provided by fathers jumped 58 per cent, while their working hours were reduced by almost 100 minutes per day.

“There is no doubt that the events of 2020 have changed the face of fatherhood,” says Dr Amanda Gummer, a child psychologist, parenting expert and author of Dr Gummer’s Good Play Guide. “I believe many dads have seen the benefits of this way of life now, and therefore will be unwilling to go fully back to how it was before.”

Dr Gummer points to a recent study in the US by Making Caring Common that revealed almost 70 per cent of fathers felt closer to their children during the coronavirus crisis. Thanks to the move to hybrid working, with people performing their jobs at home and at the office, she is confident fathers will continue to relish a more active role in parenting in the coming weeks, months and years. 

“Homeworking and homeschooling have significantly altered what it means to be a man,” she continues. “Since some normality has returned, with the children returning to school, I have seen more dads performing school drop-offs and pick-ups than ever before. Being a father now means being more involved in the day-to-day activities of your child’s life – pre-pandemic, not many dads got to experience this to the extent that is possible now.”

Bilkis Miah, director and co-founder of You Be You, a not-for-profit organisation that aims to inspire primary school children and break gender stereotypes, is similarly optimistic that the more engaged father is here to stay – and this extends to other areas that traditionally have been the women’s domain. 

“Men have had to step up and fill in gaps, particularly for those who have key workers as partners,” she says. “The result: more time spent with children and sharing the ‘load’ of parenthood. 

“Men are now doing more housework and childcare than ever before. A recent report highlighted how the number of parents saying they shared housework relatively equally jumped from 26 per cent before Covid-19 to 41 per cent during the pandemic.”

Miah is hopeful that the increased role played by fathers since early 2020 will create a virtuous circle that will inform and empower future generations. “Being more present at home enables men to flourish as fathers, but it also generates a deeper bond with their children,” she adds. “Moreover, this evolution of fatherhood helps lay the foundation of the ‘new normal’. With luck, young boys can take these lessons forward and be inspired to be better fathers themselves.”

This article was originally published by the Telegraph in May 2021, and sponsored by Armani

What does it mean to be a man in 2021?

Modern men appear more willing to show their vulnerabilities – and we should celebrate that this is progress being made

As a 30-something father of two, with a marriage, mortgage and all the accompanying mayhem, I have often reflected this past year, while locked down, what it means to be a modern man. 

Having moved house, welcomed our youngest child, bought a puppy, and worked from home since the start of the pandemic, I’ve embraced the opportunity to be more available to and active with my lovely, growing family, and learnt new skills as a husband and dad.

Certainly, there has been a dramatic evolution in masculinity in the last few years, with male role models queuing up to urge others to eschew supposedly typical characteristics of bottling-up emotions and not asking for help or guidance. 

The coronavirus crisis has catalysed the trend towards a softer, more-rounded man, as we have been forced to be more, well, human, display our vulnerabilities, and communicate more kindness and calmness. 

Admittedly, the pandemic has had a polarising effect, and some men have reverted to stale stereotypes – unfortunately for those people and especially those around them. The majority, though, have embraced change and welcomed the chance to reimagine what it means to be a man in 2021.

Child psychologist and parenting expert Dr Amanda Gummer warns that “outdated concepts of masculinity are dangerous for many reasons” – not least because they can stop men who are struggling to reach out for help. 

“In years gone by, young men have been taught that ‘boys do not cry’ and that they have to be tough and strong,” she says. “Showing emotions or verbalising these feelings have often been viewed as a sign of weakness in a man.”

Dr Gummer continues: “Although there has been a shift in this viewpoint, suicide is still the single biggest killer of men aged under 45 in the UK. It is these outdated concepts that act as undertone within our society, stop men from speaking out and keep these statistics high.”

Thankfully, things are changing for the better – and rapidly. “Masculinity is in a state of flux,” suggests Neil Wilkie, a psychotherapist and author of Reset: The Relationship Paradigm. “In the olden days, the men would go to work. Women would be ready for when the men returned, with a tidy house, groomed children and dinner on the table.”

In 2021, there is greater gender equality, Wilkie says – and while most celebrate this parity and progress, some men have struggled to come to terms with the new reality.

“Now their earnings and employment prospects have declined, and they are in competition with women for most jobs,” he continues. “The change in societal norms and roles is eroding their self-esteem and a sense of purpose.

“Traditional masculinity is about strength, courage, assertiveness and independence. The new masculinity needs to be about self-awareness, expressing vulnerability and emotions, communicating by listening, helping others and connecting rather than controlling.”

Dr Ashley Morgan, a Masculinities Scholar at Cardiff Metropolitan University, agrees. “There is currently a great deal of conflict between ‘traditional’ values of masculinity – dominance, control, not demonstrating emotions, other than anger – and what might be termed ‘softer’ masculinity, which is the opposite of those things,” she adds.

So here’s to all the other men and fathers who are starting to show their softer side and being comfortable taking on more “traditionally female” duties. The direction of travel is clear: the modern man is calm, kind and vocal – in a good way.

This article was originally published by the Telegraph in May 2021, and sponsored by Armani

Generation game: how to sell to all ages

While consumers in different demographics have varying priorities when it comes to online shopping, they’re all losing tolerance for substandard etail experiences

Gertrude Stein, the avant-garde novelist and poet, declared that “whoever said money can’t buy happiness simply didn’t know where to go shopping”. The meteoric rise of ecommerce has, 75 years after her death, given this aphorism added meaning.

Thanks to the power of the internet and the ubiquity of smart devices and applications, today’s consumers have never had more places to go shopping and be happy, without even having to leave their homes. With such a wealth of choice at their fingertips, they’re unlikely to be patient when a retailer fails to hit the standard of ecommerce experience to which they’ve become accustomed.

Any brand that fails to engage with its target customers in their preferred place to shop will pay a heavy price. The lack of an effective ecommerce strategy has proved damaging for Topshop, Debenhams and Primark, to name but three laggards.

Research shows that 51% of consumers now want a mix of both bricks and clicks for the best experience

It’s clear that retailers need to keep pace with consumers’ changing requirements to survive. The digitalisation of the shopping experience, accelerated by the Covid-19 lockdowns, has transformed how customer loyalty is gained and lost. New statistics indicate what shoppers want from etailers varies depending on their age. 

A survey published by Sitecore, a company focused on improving consumers’ online experiences, suggests that 61% of 18- to 24-year olds are less loyal to brands than they were before the pandemic, compared with 33% of baby-boomers, while 69% of these post-millennials have become less patient with poorly functioning websites. 

Meanwhile, research from customer-service software firm Zendesk has indicated that 80% of UK consumers will switch retailers after only one bad experience. 

A great opportunity to innovate and expand the customer base

“The pandemic has undoubtedly changed the way we shop,” says Jeni Mundy, Visa’s MD in the UK and Ireland. “Our research shows that 51% of consumers now want a mix of both bricks and clicks for the best experience.”

She continues: “As the lines between offline and online continue to blur, there is great opportunity for businesses to keep innovating to reach new shoppers, expand their customer base and build their brands. But different generations and age groups have varying priorities, so it’s more important than ever for retailers to tailor their websites and social media offerings to meet their target audiences’ needs.”

Visa’s research suggests that 18- to 34-year-olds shop mainly online for a wide variety of goods and services. “Updating your website to showcase the full range of products is a good way to attract this audience,” Mundy recommends. “Many in this age group are also likely to shop on social media, so having a presence here and switching on the ‘swipe up to shop’ functionality is a great way to meet them.”

Social media campaigns and digital events encourage micro-influencers

Studies show that consumers aged between 35 and 54 most want an efficient online shopping experience. A well-signposted website is therefore vital. For people aged 55 and above, simplicity is the key, so maintaining an uncluttered, straightforward page design should help to attract and retain them as customers. 

Francesca Grillini, an ecommerce manager at Reckitt, points out that social media platforms ranging from TikTok and Clubhouse to Instagram and Facebook are especially popular among both millennial and gen-Z audiences. 

“Members of generation Z are digital natives who have attention spans of eight seconds, compared with millennials’ 12 seconds. Yet they are notoriously loyal,” she says. “They can quickly become brand ambassadors, acting as micro-influencers on social channels.”

Ecommerce is “more about necessity” for baby boomers, she says, suggesting that people in this generation have changed their shopping behaviour the most during the pandemic. Ecommerce has “opened previously closed doors” for boomers, many of whom have been forced to shop online more often because of lockdowns and health concerns. 

The Covid crisis obliged most high-street businesses to close their doors at various points over the past 18 months. North London restaurant Top Cuvée was among them, but it took a glass-half-full approach to the problem and has successfully turned to ecommerce, becoming an online wine supplier. It has fostered customer loyalty by adopting a multichannel marketing strategy, including email newsletters, social media campaigns (the firm’s Instagram following has grown tenfold to 35,000 in a year) and interactive online events. 

Brodie Meah, co-founder and chef at Top Cuvée, says: “Our mailing list is a great way of keeping people informed and engaged, but we generate a lot of sales from social media too. We recently held a digital Easter egg hunt, which drove mass engagement online as well as attracting over 1,000 customers to our physical store.”

Tom Pugh is director of client services at Revive Management, a software company specialising in payment systems. He salutes any retail business that’s willing to embrace a multichannel approach. 

“There is a huge demand for them to accelerate, improve and enhance their digital capabilities and to blend these with in-store experiences to add value,” he says. “Omnichannel strategies allow businesses to create breadth and increased accessibility to their customers.”

Connecting with consumers across various channels enables a deeper understanding of their generational habits, which is why investment in ecommerce is worthwhile, Pugh adds. “Providing customers with a variety of channels of engagement is key, as it empowers them to interact via their preferred channel.” 

After all, shopping instils happiness – as Gertrude Stein would concur.

This article originally featured in Raconteur’s Future of Ecommerce report, published in June 2021

Hyperautomation will revolutionise work – but what exactly is it?

Experts agree that the growing maturity of a cluster of technologies has transformative potential, but businesses must act fast if they’re to gain a competitive edge

Hyperautomation has been thrust into the spotlight for the second time in six months by Gartner. In October 2020, the research giant named it as one of its top strategic technology trends for 2021. Its latest report on the subject, published at the end of April, forecasts that the global market that enables hyperautomation will be worth almost £430bn in 2022 – a 24% increase on the previous year’s figure. 

“Hyperautomation has shifted from an option to a condition of survival,” says Fabrizio Biscotti, research vice-president at Gartner. 

But what is hyperautomation, why is it generating such interest now, and – most crucially – how can businesses best harness its potential? 

In essence, hyperautomation is a strategy that enterprises adopt to quickly identify, vet and automate as many processes as possible, applying a disciplined, holistic approach and mix of technologies. It spans the whole spectrum of operations, using digital tools to simplify many time-consuming tasks. These tools include AI systems, robotic process automation (RPA), low-code application platforms and virtual assistants. 

The concept is becoming increasingly relevant, Biscotti says, because organisations will “require more IT and business process automation as they are forced to accelerate their digital transformation plans in a post-Covid, digital-first world”. 

Gartner’s October 2020 report had noted: “Many organisations are supported by a patchwork of technologies that are not lean, optimised, connected, clean or explicit. At the same time, the acceleration of digital business requires efficiency, speed and democratization. Organisations that don’t focus on efficiency, efficacy and business agility will be left behind.”

Tackling low-hanging fruit

Peter van der Putten is director of AI solutions at cloud software firm Pegasystems and an assistant professor of AI at Leiden University in the Netherlands. He suggests that the drive towards hyperautomation has been “gathering pace for a while as the technologies have matured”. 

Their simultaneous emergence has created far-reaching possibilities. There is low-hanging fruit to be gobbled by business leaders, he says, although those who invest heavily in hyperautomation stand to gain the most from it.

“There is more to hyperautomation than streamlining workflows to save time and reduce cost,” van der Putten stresses. “There are strategies that businesses can use to link automation with business outcomes more directly. Realising the potential of hyperautomation hinges on robust governance and the quality of executive-level support – how it is implemented across an organisation and not in narrow niches.”

Hyperautomation will do to the knowledge worker what the industrial revolution did to the manual worker

For instance, the ability to manage exceptions through AI enables finance, IT and governance experts to deliver value for industries that already use new networks or decentralised cloud services. A recent global survey of 1,300 business leaders by Pegasystems identified key areas where hyperautomation has already been benefiting financial services providers. Respondents reported achieving quick wins in a number of functions, including finance, data management and production. They expect to see significant advances in areas such as supply chains and “partner ecosystems” over the next five years.

As an example of what’s possible with hyperautomation, take credit broker Loan.co.uk. The business, which has been building intelligent systems since 2014, has transformed mortgage lending from a process that’s traditionally been opaque, complex and painfully slow. The total automation improvements to date have “saved our 40 advisers and processors on average three hours and 45 minutes a day”, reports CEO Paul McGerrigan.

The company’s AI helper, Albot, can search thousands of lenders’ offers in less than a second while matching more than 10,000 criteria, delivering the lowest rate appropriate for the applicant’s circumstances. 

“Our smart AI underwriter can fully underwrite about 100 cases in 30 seconds, including credit searches,” McGerrigan says. “Previously, it would have taken an adviser 20 minutes to underwrite one complex case.” 

A workplace revolution

The company’s new approach has significantly increased transparency and, in turn, engendered greater trust among its customers. McGerrigan urges other companies to embrace hyperautomation, which, he says, “will do to the knowledge worker what the industrial revolution did to the manual worker. We are seeing the largest shift in how we work in 100 years. Most firms have been taken by surprise at the speed of change, while some are still asleep.”

Guy Kirkwood, chief evangelist at UiPath, an RPA software provider, agrees that the potential for hyperautomation is huge. “In the US alone, 2.6 trillion hours of work a year are automatable,” he says, noting that the pandemic-induced lockdowns have added impetus to the trend. 

“Work will be revolutionised,” Kirkwood predicts. “Almost over night, employees were expected to work from home, deal with unfavourable economic conditions and handle a huge rise in their workloads in areas such as customer service and data entry. Many turned to automation to adapt.”

He points to a firm providing smart infrastructure that used to print, sign, scan and upload 400,000 invoices a year manually. The business “now has a robot that performs these tasks digitally. This means that no employee needs to physically be in the office to process an invoice.”

Now that businesses have been catapulted into the digital age, regardless of their industry, we are on the verge of a new era of work in which hyperautomation will play a much greater role. Companies that make the leap today and go big on automation will be winners tomorrow. 

This article was originally published in Raconteur’s AI for Business report in May 2021

Trust is a must: why business leaders should embrace explainable AI

The EU’s proposed regulation on artificial intelligence has earned widespread praise. The prospect of harmonised rules presents an ideal opportunity for firms to improve transparency and reduce bias in their processes by investing in AI that’s easier for humans to understand 

The European Commission vice-president responsible for media and information matters, Margrethe Vestager, neatly summarised the founding philosophy of the EU draft legal framework on AI at the time of its publication in April. 

“Trust is a must,” she said. “The EU is spearheading the development of new global norms to make sure AI can be trusted. By setting the standards, we can pave the way to ethical technology worldwide.” 

Trust is a must (Anna Shvets from Pexels)

Any fast-moving technology is likely to create mistrust, but Vestager and her colleagues decreed that those in power should do more to tame AI, partly by using such systems more responsibly and being clearer about how these work. 

The landmark legislation – designed to “guarantee the safety and fundamental rights of people and businesses, while strengthening AI uptake, investment and innovation” – encourages firms to embrace so-called explainable AI.

If we want AI to play a role in decision-making, then we have a right to understand how the AI came to a decision, regardless of its complexity

Most business leaders have welcomed the initiative, understanding that the goal is to increase public trust in AI by promoting the use of more transparent systems. 

Peter van der Putten is director of AI solutions at cloud software firm Pegasystems and an assistant professor of AI at Leiden University in the Netherlands. He believes that the EU has produced a “sensible, risk-based framework” that distinguishes “prohibited, high-risk and low-risk” AI applications from each other.

“This is a significant step forward for both EU consumers and companies that want to reap the benefits of AI but in a truly responsible manner,” he says.

The end of ‘computer says no’ 

Given that many organisations are using opaque algorithms to make significant decisions – sometimes with disastrous results – the creation of a legal framework that would encourage them to adopt explainable AI is welcome. So says Matt Armstrong-Barnes, chief technologist at Hewlett Packard Enterprise. 

“If we want AI – constructed using complex mathematics – to play a role in decision-making, then we, as citizens, have a right to understand how the AI came to a decision, regardless of its complexity,” he argues. “Explainable AI can answer the fundamental question: why? Once we know this, the decision can be evaluated to ensure that it’s made without bias. ‘Computer says no’ is no longer acceptable or desirable.”

Pip White, MD of Google Cloud in the UK and Ireland, agrees. “Your ability to understand your AI and machine-learning models entirely is key to your ability to roll out the technology confidently, particularly in regulated industries where trust is critical,” she says. “It’s also paramount in helping to unpick bias and other gaps in data or models. Ultimately, the more informed you are about the ‘why’ of AI-driven decisions, the more useful and responsible your AI deployments will be.”

But not all experts believe that that the draft law, which proposes fines of up to 6% of a company’s global revenue for the most severe breaches, will have a sufficiently positive effect if enacted in its current form. 

By setting the standards, we can pave the way to ethical technology worldwide

“You have to admire the EU for arriving late to the party and telling everyone to turn the music down,” says Mark K Smith, founder and CEO of ContactEngine, a conversational AI company. “I agree that AI needs regulation, but a regulation that stifles innovation would be unhelpful and lead only to developments being encouraged elsewhere.”

A well-timed reset

Van der Putten, who stresses that AI was never intended to replace human intelligence, believes that the proposed law will serve as a “reset moment” for the technology and its proponents, because it will help to improve trust. 

The EU’s intervention is timely, concurs Joe Baguley, EMEA vice-president and chief technology officer at enterprise software firm VMware. A survey by his company at the start of this year found that only 43% of Britons trust AI.

“This absence of trust can be attributed to AI’s perceived lack of transparency, which must be a key consideration for business leaders,” Baguley says. “There is no doubt that AI has the potential to revolutionise the workplace and society, but the need for explainable AI will become more pressing, as fears about the technology remain high.”

He continues: “If developers themselves don’t know why and how AI is thinking, this creates a slippery slope, as algorithms keep becoming more complex. Offering the public more insight into how AI makes decisions will give them more confidence and, in turn, help them feel more secure about the organisations that use the technology.”

The legal implications for AI in other jurisdictions

Kasia Borowska, managing director of AI consultancy Brainpool, believes that the rest of the world needs to catch up with the EU in regulating the technology. 

“The next step needs to involve making these regulations international, because uneven laws between different blocs could have catastrophic consequences in the long term,” she warns. “International leaders should look at this urgently. We know that AI will give unparalleled advantages to those in less controlled countries.”

How should businesses in the UK respond to the lead that Brussels is taking? “Be more guide dog than guard dog,” advises Caroline Gorski, group director of R² Data Labs at Rolls-Royce. “Create your own simple framework that meets the EU requirements. Focus on defining what can be done rather than what can’t, then break it down into steps, with auditable standards for each step. Join them all up and create a procedure.”

Simon Bullmore, co-founder and CEO of data-literacy consultancy Mission Drive, suggests that firms seeking guidance on explainable AI should engage the Open Data Institute, the Alan Turing Institute and the Office for Artificial Intelligence.

He urges business leaders to treat the EU’s initiative as a chance to invest in explainable AI – and to educate both themselves and their employees in the technology. 

“Regulators step in when they lose trust in the market’s competence and desire to self-regulate,” Bullmore says. “Part of the challenge of using AI is the disconnect between what leaders know about AI and what their organisations are doing with it.” 

Now that the rules of the game are changing, it will be the proactive leaders that gain the competitive edge by going back to basics with AI. 

This article first appeared in Raconteur’s AI for Business report in May 2021

Creating a crisis management plan

An unexpected crisis of some sort is almost an inevitability when you’re running a business – but you can avoid being severely affected by having a solid crisis management plan. Here’s how to put one in place …

What we’re talking about

One inarguable fact of running a business: there are countless things that could – and probably at some point will – go wrong. A delivery might go missing, you could inadvertently wade into controversial territory with a social media post, or a global pandemic could hit and reduce your revenues to zero overnight.

While you can’t avoid the crisis, you might be able to avoid some of the fallout by thinking ahead and putting plans in place for things that could go wrong, however unlikely they might seem. That’s what crisis management is all about: it’s the process of preparing to deal with a disruptive – and usually unexpected – situation or emergency. It involves work across all the functions of the business, from financial modelling to PR. How you respond publicly to an unplanned event can be critical when your community closely follows how you handle things.

Why it’s important

A crisis can happen to a business of any size – not just big multinational ones. And if recent events have taught us anything, it’s the disproportionate impact of a crisis on small businesses. 

The thing to remember is that although crises are unpredictable and you can’t directly control them, you can manage how you respond to them to lessen their impact. And the key to your response lies in having a well-laid-out plan and a robust strategy ready to go when one hits. Creating plans for hypothetical events might not be top of your priority list, especially when there are plenty of present issues to keep you occupied. But when you take the time to think about everything that could go wrong, you’ll soon realise the value of some prep. By being proactive and using good management, you can even turn a crisis into an opportunity – enriching relationships with your existing customers, and even gaining new ones.

Things to note

Crisis management is possible on a budget. Though you can spend a lot of time, money and effort on crafting a crisis management plan, there are plenty of free or inexpensive tools and templates to take advantage of as a small business.

A bad response to a crisis can have a longer-lasting impact than the event itself. For example, dealing with a crisis badly might sink staff morale and lead to customer loyalty, and consequently sales, taking a hit. That’s why it’s important to take all aspects of your response into account when you’re planning.

The scale of the crisis can affect your response. That’s why it’s useful to have several contingencies for the same crisis at different scales. For example, your plan might include instructions on what to do if your revenue falls moderately, and different instructions if your revenue drops to zero.

Managing a crisis might take up your time. Make sure your crisis plan includes ideas about how to keep the rest of your business running as smoothly as possible while you’re dealing with the unexpected. For example, by reassigning some of your team members to take over certain responsibilities while you manage the crisis itself.

How to create a crisis management plan

(1) Identify the crises your business could face. First, brainstorm all the possible problems that could pop up – and leave nothing off the table. To get you thinking, here are some common risks businesses face: a financial crisis such as a fall in revenue; a personnel crisis like unethical or illegal activities among your employees; an event that impacts your reputation; a technological crisis like a downed server or a cyberattack; or a natural crisis such as a flood or a storm.

(2) Examine the potential impact of each one. After listing all the possible internal and external issues that could come your way, start to explore how they might impact the various parts of your business, including your operations, finances, staff and reputation. Ask yourself what the knock-on effects of any event might be. For example, a supplier going bust might cause delivery delays that drive customers away – which in turn could lead to a temporary drop in sales, and leave you with less money to cover your overheads. Don’t forget to consider how much it’s likely to cost you to deal with each crisis as well. 

(3) Come up with potential solutions. Consider the crises and impacts you’ve listed and decide what actions you need to take to: reduce the likelihood that they’ll happen; resolve them in real-time; or reduce the impact they have on your business. Treating this as a collaborative exercise and gathering your team to get your collective ideas on a whiteboard is a great way to do this. Make sure you go into granular detail about how long it’ll take you to resolve the crisis, what tools and resources you’ll need, who’ll be involved and whether you’ll need to address your staff and customers – or even make a public statement. 

(4) Delegate responsibilities. Allocate specific duties to your team members – even if there are only a handful of you – and bring them up to speed with your plan. For example, you may want someone to handle some of your responsibilities, like ordering stock and managing customer orders, while you’re dealing with the crisis itself. Depending on the type of crisis, you’ll also need to identify who to get involved externally, such as solicitors, consultants or first responders.

(5) Update your plan regularly. As your business grows and circumstances change, you’ll need to revisit your plan and regularly update it. Aim to review your crisis plans at least every six months to make sure they still apply to your current team, business activities and facilities.

(6) Review your response. Finally, if you do experience a crisis, take the time to evaluate how you handled it and incorporate any learnings into the other plans you have in place or develop in the future.

Key takeaways

• Crisis management is all about advance planning for potentially disruptive situations for your business.

• This type of planning is essential for small businesses – which are likely to be disproportionately affected by major crises.

• Unexpected crises can lead to unexpected opportunities if your business survives them.

Learn more

Perspective. The leaders of international crisis and reputation management firm Bernstein Crisis Management have a blog that explores crisis management issues that appear in the news.

Example. Prohibition’s list of PR crises that various recognisable companies experienced in 2020 illustrates the breadth of issues that can affect a business.

Tool. Smartsheet offers a variety of templates for crisis management plans.

This article was originally published by Courier in May 2021

Banking in the near future: optimising risk management and resilience in the digital age

Roundtable highlights: Technology may be the great enabler for banks and their customers, but to achieve holistic risk management, culture change and education are equally important

Speakers

Charlotte Branfield, Head of operational resilience, Citi

Andrea Brody, Chief marketing officer, Riskonnect

Marc Leaver, European chief operating officer, Standard Chartered Bank

Jason Maude, Chief technology advocate, Starling Bank

Ralph Nash, Chief compliance officer, HSBC UK

Suresh Viswanathan, Chief operating officer, TSB

Future of banking (Expect Best from Pexels)

Q What is the current state of personalisation in banking in the UK and around the world?

Ralph Nash Last year’s events have accelerated some of the trends already emerging in banking. These include the increased use of automation and digitalisation and the concept of “the bank in your pocket”. Branch networks will remain important, but increasingly we see demand-led interaction around digital and that’s something we need to satisfy. A greater digital focus creates both risk and opportunity from a stability and resilience perspective. There are some risks, both technical and ethical, but if we get it right, it could be a win-win scenario for the bank and the customer. We are at an exciting juncture.

“Driven by demand for seamless customer experience and fintech partnerships, banks will become hubs where products can be plugged in and out. That’s pretty revolutionary”
Charlotte Branfield

Jason Maude In the next decade, affording customers immediate and secure access to their data in the same way they have access to their money will become a requirement, rather than a “nice to have”. If you, as a bank, cannot offer that connectivity or application programming interface (API) capability, you will be like a town the railroad missed out, and you will weaken and die. Customers, including small and medium-sized enterprises, are not going to do business with a bank that relies on paper processes.

Charlotte Branfield What makes a good bank is how fast they reach the customer, to solve their problems and provide financial services conveniently, efficiently and responsively. Therefore, the concept of a bank is evolving from the traditional bricks-and-mortar bank to an “embedded finance” model. Driven by the demand for high-quality seamless customer experience and fintech partnerships, banks will become hubs where products can be plugged in and out. When you think about banks’ business models, that’s pretty revolutionary. The whole system is changing and it’s an exciting time to be involved in operational resilience.

Marc Leaver I agree that we are at an inflexion point in banking: if we don’t change the traditional way of delivering products and services to clients, we will be redundant in the digital age. We see ourselves as a bank that connects clients, products and markets. To do this we utilise digital offerings to tap into the digital needs of our clients. Three pillars to build this: innovative partnerships exploring disruptive business models; investment in fintechs; and, arguably the most challenging element, greater internal innovation.

Suresh Viswanathan The definition of where a bank starts and finishes is transforming. Previously we have been constrained by physical infrastructure and analogue systems. As we emerge from a post-pandemic world, the march to digital is inevitable. However, as we move towards a world driven by open banking and APIs, you lose control of when demand hits. People trust banks and I think now it is obligatory to ensure we deliver more value to customers than just a current account, a loan, a mortgage and a card. It’s a unique position to be custodians of customer data and leverage that trust, and it means we, as banks, can offer them more connectivity.

Andrea Brody We talk with our financial services customers all the time. The same topics are discussed; the drive for greater automation and data analytics is taking centre stage because of the need for connectivity. It’s imperative to leverage technology, but improved risk management in corporate strategy is required and the pandemic has exacerbated the need for better reporting.

Q What are banks’ biggest operational challenges in 2021 and what problems are on the horizon?
RN The last year emphasised the importance of banks as a transmission mechanism of government policy to support individuals and businesses through the coronavirus crisis. We have effectively done years of lending in a few months, at an unprecedented level. Managing the exit from government support schemes will be a significant operational challenge for HSBC and the industry, this year and next, particularly in the UK. Customers’ payment holidays will end, but some will be unable to resume repayment on their debt. Historically banks have been worried about cash and keys, and now they should treat data and systems as crown jewels and focus on building resilience for the latter. The operating model and technologies need to support that, as well as meeting regulatory and societal expectations.

JM To keep pace with those expectations, it’s essential to have the architecture to operate faster. It’s often thought that for banks there is a seesaw-like balance between security and reliability on the one side and speed of delivery on the other. At Starling Bank, we have constructed a system that makes these two things mutually reinforcing. We rapidly deploy feature changes, new products and services, and seek bugs daily to increase resilience. This system will be vital as we look to enter new markets globally in 2021.

“We are marching to the cloud. As networks become smarter and 5G is more widespread, we can push more content into the hands of devices customers hold”
Suresh Viswanathan

ML Standard Chartered Bank has moved to a cloud-first strategy and we are looking to shift our core banking platform into the cloud by 2025, subject to regulatory approvals. Regulators are beginning to become more comfortable with banks’ evolution to digital and familiar with safe data storage. Certainly, the strides made by Starling Bank and others are fabulous for the industry and the customers we serve. Partnerships with technology specialists are critical to our strategy because we know clunky platforms and traditional banking methods are not sustainable, frankly.

SV Today, 90 per cent of TSB’s customer services are digital, as is 70 per cent of our sales. In terms of operational resilience, it is very important to have a multichannel approach because you want to comfort and support customers and be readily available. We are marching to the cloud and, as networks become much smarter and 5G is more widespread, we can push more content through the pipes into the hands of devices customers hold. That capability gives us the ability to educate customers and improve financial literacy. A key imperative, though, is to become more holistic in our management of risk.

CB I agree that banks need to embrace holistic risk management and think about processes differently. At Citi, our priorities lie in better understanding our clients’ experience of using our services and improving upon it. As an industry, we have to move away from the mindset that cybersecurity, for example, is only a tech expert’s responsibility. That approach causes a disconnect concerning operational risk because, in today’s digital economy, the fundamental commodities at risk are trust, data and connectivity, not just money. If we want to manage cyber risk properly, we are going to have to have far greater engagement from the client relationship managers, the user experience designers, and the product sales and development teams, and not just within banking, but in the public sector as well.

AB Considering the customer’s viewpoint is a perfect way to look at risk holistically. Every department in a bank is responsible for risk. Thus, silos need to be broken and communication between the different functions improved, and this can now be enabled by technology.

Q How can technology help optimise risk management?
RN Increasingly, we feel there are some challenges in using data from an ethical perspective. How do we ensure we don’t end up with unintended consequences due to modelling our customers’ data? For instance, if we become more sophisticated at modelling the propensity of a customer to commit financial crime, or pose a compliance risk, do we end up inadvertently becoming less inclusive and less able to target the unbanked at a time when probably we should be trying to do the complete opposite? There is also the question of staff surveillance; what is legal but fails on the “creepiness” test?

ML The debate about vaccine passports has dominated the news recently, showing that the ethics of handling customer data is no longer a horizon risk. As banks, we are grappling with the same challenges: we know if we use data-driven insights, we can make better business decisions and we can improve the way we serve our clients. But what is the tipping point? While customer data protection has long been part of the design of a bank’s processes and systems, with increasing digitalisation, data management best practice needs to be embedded into its DNA. Ultimately, the customer’s data is a gift and we must keep it secure.

JM We think of cybercriminals as competitors who are trying to steal our business, so we combat them by making it too expensive for them to spend time trying to hack our systems. A security bug is a big draw because it allows you to hit multiple people all at once and in banks no one has coded everything from scratch. Chaos engineering is going to become more prevalent in our industry. We deliberately attack our systems in a controlled manner to test and prove we are resilient.

SV There is a lot of artificial intelligence (AI) and machine learning in the banking industry, though some applications are more mature than others. Smart partnerships that drive innovation will be vital to delivering super specialisation, for example if you want to optimise the noise-to-signal ratio in ATM fraud. It’s about adding value to the customer, but not at the cost of impacting operational resilience. For this reason, we need to be bold, be innovative, fail fast and move on.

CB There are so many shiny new tech toys and it’s easy to think a bank has to have the latest gadgets and be deploying the latest piece of AI, but without actually understanding why. It’s critical to go back to basics and back to your first principles. Ask yourself, “What benefit is this bringing to either the business or my customers?” It’s an exciting time to be involved in resilience and risk management because it means looking carefully at your organisational structure and culture.

AB It is indeed an exciting time and there is clearly a real focus on operational resilience in the digital age from those in the financial services space. There are many challenges, but a bank’s technology stack must support the desired outcomes. It will be fascinating to see how the ethics and compliance concerns evolve in the coming years.

This article was originally published in The Times, as part of Raconteur’s Future of Banking report, in April 2021. The videos for the roundtable session, which I moderated, can be accessed here

From lean to agile: Harrods’ supply chain director on how the pandemic sparked a revolution

Simon Finch says the coronavirus outbreak left retailers grappling for new supply chain models and now organisations must scale new heights to put people and the planet before profit

The iconic doors of Harrods’ Knightsbridge store closed for the first time in its 172-year history in March 2020, when prime minister Boris Johnson enforced an initial lockdown to stem the spread of coronavirus. But what did this mean for the supply chain of arguably the world’s leading luxury department store?

Incredibly, the London stalwart remained open throughout the Blitz and only shut for half a day following a 1983 terrorist attack. Consider the joy, for staff and customers alike, when the doors were unlocked on April 12. 

Speaking on the eve of the reopening, Harrods’ supply chain director Simon Finch reveals a “back-to-school feeling” and is optimistic that footfall will be impressive, despite the lack, for the moment, of wealthy tourists. “People are very keen to come back in and Harrods has the benefit of being 1.1 million square feet, so there’s plenty of space for social distancing,” he says.

From now on, the supply chain must be more about agility, to cope with volatility and uncertainty, and less about being lean

Finch began his career at Harrods 25 years ago as a graduate trainee. The amateur high-altitude mountaineer, who has scaled Himalayan peaks as well as the highest reaches of Africa and Europe, has climbed the corporate ranks and was appointed to his current role in October 2019, less than six months before the first lockdown.

While both his employer’s online operations and warehouse remained open for the duration of the pandemic, the 46-year-old concedes, with admirable honesty, that like so many other supply chain professionals, he was forced to grapple with unforeseen operational challenges and struggled initially. 

“We were probably all a bit too overconfident in the system, a bit like those in financial services when the economic crash happened in 2008, and when something unexpected hit, there was a lot of scrambling around to make things work,” he says.

Championing the technology-driven supply chain revolution

Like other UK retailers, Harrods has been buffeted by the coronavirus crisis and, more recently, Brexit fallout. It is the pandemic, though, that exposed operational weaknesses. 

“The pandemic has triggered a supply chain revolution,” says Finch. He argues, convincingly, that businesses were “obsessed with making supply chains as lean as possible” before COVID, moving items around quickly, with minimal stock and expense.

“Coronavirus completely screwed up that approach,” Finch continues, “as the organisations holding themselves up as having the leanest supply chains were the ones that had the most significant challenges as soon as there were global disruptions.

“From now on, the supply chain must be more about agility, to cope with volatility and uncertainty, and less about being lean. However, that agility has to be fully supported by technology and data insights. Whereas previously we have used technology to create a leaner supply chain, now the tech needs to provide the knowledge to make better decisions to drive agility and visibility.”

Data can’t get stuck in the Suez Canal, nor does it get held up at the borders with Europe

Given that Harrods was established in 1849 with the rather ambitious motto of omnia omnibus ubique (all things for all people, everywhere), the consumer behaviour trends accelerated by the pandemic forced the business to keep pace with change and embrace the digital age. Little surprise, then, that Harrods has recently employed more data scientists. 

“Understanding our customers, and how we can serve them better, and starting to use artificial intelligence, whether for our replenishment operations, to make sure we have the right amount of stock, or to manage outbound fulfilment volumes, is paramount,” says Finch. “Data can’t get stuck in the Suez Canal, nor does it get held up at the borders with Europe. And the sharing of data with our partners delivers a better operating model for the end-to-end supply chain.”

Data insights and deeper relationships driving sustainability

Technology alone, though, is not enough to drive the supply chain revolution, according to Finch. He contends that it is critical for those operating in the industry to “go retro” and forge or nurture deeper relationships with suppliers, service providers and brand partners. 

“Because the pandemic messed everything up, and we didn’t know what was happening, we picked up the phone and spoke to trusted partners and suppliers to all pull things together,” he says. “It was a return to the supply chain of the 1900s.”

Moreover, the combination of emboldened trusted relationships and data insights, plus greater diversity in terms of distribution nodes, inside and outside the UK, enables Harrods to develop a more sustainable supply chain. 

The sustainability agenda is critical to the luxury industry and we will lose sales if we don’t do this right

“As a father to two eco-conscious girls, I’m incredibly passionate about sustainability and building a brighter future,” says Finch. “I believe it’s the responsibility of all supply chain professionals and businesses to ensure we are doing the right thing for our customers. Therefore, putting the product closer to the consumer, through a decentralised supply chain and more localised distribution, is a win-win scenario. 

“Also, from a purely commercial perspective, this is the direction in which our customers want us to go; the sustainability agenda is critical to the luxury industry and we will lose sales if we don’t do this right.”

To illustrate his vision, Finch uses an example of how inefficient and harmful to the planet the supply chain and fulfilment processes can be from an ecommerce perspective. Goods might be manufactured and shipped from the United States to the UK only to be then sold online and shipped back to an American-based customer. 

“We are doing everything wrong if we create that unnecessary movement from a sustainability perspective, and also it increases costs and length of delivery time,” he says.

The COVID crisis may have sparked a supply chain revolution, but it is a work in progress for many retailers, including Harrods. Stressing the importance of diversity, data insights and developing trusted relationships for supply chains of the near future, Finch adds: “By having products that are local to customers, we can serve them more quickly, more cost effectively and more sustainably, while reducing risk, because the goods aren’t moving as far.” 

Through shifting its business model and with this smarter, tech-powered approach to the supply chain, Harrods will stand a good chance of keeping its doors, both physical and virtual, open for many years to come.

This article was originally published in Raconteur’s Procurement and Supply Chain Innovation report in April 2021