Cyber & Crypto: Promising approaches   

Last year, ERGO and Munich Re's "Tech Trend Radar" covered 44 trends in five topic areas, which we will take a closer look at here on //next in a series before the "Tech Trend Radar 2023" appears in the spring. We started with our detailed analyses of "Wellbeing", "Hyperconnectivity" and "Data & AI", and now we turn to "Cyber & Crypto": What is this trend field all about - and which individual trends are hidden behind it?

The "Tech Trends Radar 2022" ("TTR2022") defines the trend field "Cyber & Crypto" as "the home base for technologies around secure transactions and secure ways of data transfer". Key applications in this area include the broad topic of "cyber security," to which we devote a separate channel here on //next anyway, or "digital currencies" such as bitcoin. By the way, you can find a background interview with the creators of "TTR2022" here.

Which trend has which maturity level?

Details on the ten trends in this trend field can be found below, but first let's remember: The study divides all trends into the four different maturity levels:

• hold (“Put on the watch list”)
• assess (“think about what this could mean for your company”)
• trial (“first initiatives should be launched in the most affected business areas”)
• adopt (“take full advantage of this technology!”)

But which recommendation applies to what?

Four times “adopt”…

According to the “Tech Trend Radar 2022”, insurers should implement the following four trends:

1. Digital Identity: This trend includes not only the digital profiles we create ourselves - or the traces and footprints we more or less consciously leave behind through our online behavior: It also refers to the large-scale ID programs that states and communities of states are pushing, and which have picked up additional momentum as a result of the Corona pandemic. By 2025, the business with digital IDs is expected to have a sales potential of more than eight billion dollars in the mobile market alone; after all, they are regarded as an important key for any kind of verification procedure, for example on the smartphone. And in the insurance industry, where personal and sensitive data is processed and shared, this future trend is also likely to make processes more efficient and secure: "adopt!"

2. Human Recognition: How can people be reliably and uniquely identified? On the one hand, through biometric recognition features (face, fingerprints, iris, DNA, and much more), and on the other hand, through behavior-based patterns (typing speed, computer mouse paths, signature, voice changes). This is a valuable and security-enhancing trend for insurers who need to be sure they are communicating with the right person.

3. Trusted AI: The more widespread AI applications become and the more decisions they are trusted with, the more important it becomes that we can be sure of their reliability, precision, fairness and loyalty - as human as these terms may sound. On //next, we have therefore already dealt with "trustworthy AI". And for the creators of "TTR2022", the "trust" aspect is also indispensable for AI to be used safely in the insurance industry.
4. Cyber Security: This megatrend is so fundamental to the digital transformation of our society that we are dedicating one of the regular channels here on //next to it. Unfortunately, as digitization advances, the associated potential for abuse and the vulnerability of all participants also increases, so insurers are also assigning this topic top priority as they digitize their business and tap into new opportunities: "adopt!"

... four times „trial“…

1. Deepfake Defense: This trend includes all approaches that help detect and brand manipulated photos, videos, texts, and other misappropriated files. How are such fakes created? For a deepfake video, for example, a program uses AI to learn what a person looks like and what facial expressions they have. With a click of the mouse, the face can then be transferred to any person. "This makes it possible to create videos in which people appear to say or do things they have never said or done," explains physicist Harald Lesch in our article here on //next. This trend is also a major threat to the insurance industry, so it should urgently experiment with protective mechanisms and defensive technologies, according to "TTR2022: trial!"
2. Privacy-enhancing Tech (PET): Behind this trend are solutions that protect data not only when it is stored somewhere - but also when it is being processed or used for analysis. As vividly explained here in a scientific paper, this allows the "potential of sharing data while maintaining privacy to be exploited." Most importantly, methods from PET allow sensitive data to be used for analysis and calculations without having to disclose it to third parties. This can also help insurers meet their growing data protection challenges.
3. Digital Currencies: Regardless of whether they were created in a decentralized manner like Bitcoin or will be issued by a central bank in the future, for example: These innovative currencies are managed using blockchain technology and are therefore difficult - if not impossible - to manipulate. However, they are also - except for the so-called "stable coins" - currently still very volatile, meaning: Their value in established currencies such as the euro or dollar fluctuates greatly. Nevertheless, the more purchasing power these new currencies represent, the more important they will become for the insurance industry. "There are promising approaches, among others by central banks, which are intended to combine the advantages of a digital currency with the stability and reliability of a real currency," says Munich Re's Martin Thormählen, one of the two project leaders of "TTR2022." Overall, he continues, the Munich Re Group is cautious in its assessment of the insurability of these new technologies. You can read the interview with Martin and his counterpart at ERGO, Daniel Grothues, here on //next.

4. 1    Smart Contracts: They record tamper-proof agreements via blockchain and are considered the basis not only for DeFi applications, but generally for all kinds of tokens - such as NFTs - that embody digital and increasingly also real values: Smart contracts can also be of great benefit in the insurance industry, for example, if they reduce transaction costs and execute agreements automatically, unambiguously and legally securely. They also offer new business opportunities when it comes to insuring the assets held on the tokens.

... and twice „assess“

1. Automated Compliance: The Big Data revolution presents many new opportunities, but the escalating volumes of data are pushing compliance officers to their limits. Regulatory technologies (RegTech) and other automated compliance solutions offer a remedy by keeping up with the constantly changing regulatory requirements better than humans, saving time and money, and detecting violations more reliably in an automated manner - also in the insurance industry, which thrives on trust and compliant processes like no other.
2. Decentralized Data Economy: Worried about misuse and theft, many companies use their data assets less extensively than they could. With the help of tamper-proof blockchain technology, that could change: Decentralized data marketplaces would allow organizations and individuals to mutually pool and benefit from each other's data, insights and AI applications. It's a trend that certainly still has a long way to go, but one that holds great opportunities - not just for insurers, but for the entire economy.
   

 In the last article in this series ...

... let's take a look at the trend field “Emerging Industries”: Which ten trends are hidden behind it – and which applications are already in use?