AI / Robotization

With the arrival of ChatGPT, Artificial Intelligence (AI) is suddenly finding its way into the living rooms of “ordinary” citizens. AI has become mainstream. And the whole world is rushing into it. What does this mean for financial services? Will it change the way we invest? What impact will it have on client contact? And: is our society ethically and legally ready for artificial intelligence? In this series, we explore the answers with experts from inside and outside APG.

In Part 1: Pieter Custers, Director Business Development & Community Development at Brightlands Smart Service Campus.

An absolute gamechanger. You can safely call ChatGPT that, says Pieter Custers. He has been involved with the potential of AI for some time at the Smart Service Campus (BSSC) in Heerlen and within the Brightlands AI hub. But also with its ethical and legal implications. In recent weeks, Custers also delved into the much-discussed tool of company OpenAI. Just like the rest of the world, for that matter. The chatbot with generative artificial intelligence - which enables it to create something new based on existing data - is being tried out and used in practice by entire populations. Competitors, in the form of Google, for example, are also stirring. And all the while, developments in the AI field have been in flux for years. “But in the case of ChatGPT, there is a breakthrough. You see that the models are now ready, so they can actually be implemented. When you start working with it, you also do notice that this is different from previous AI software. I liken it somewhat to the step Google Translate took, when it really took translation to the next level with deep learning.”

Custers would know. He explores the possibilities of artificial intelligence on a daily basis. He has been closely involved in the creation of the Brightlands AI hub, founded in 2021 by 20 major employers from Limburg, with APG and BSSC as co-initiators. The goal: To connect companies, knowledge institutions and other organizations in the region working on artificial intelligence and data science. Because AI offers many possibilities and opportunities, he argues, but in order to use them optimally and safely, collaborations like the Brightlands AI Hub are badly needed.

Why that need for collaboration?

“Developments in the field of artificial intelligence are moving very fast. Much faster, for example, than the laws and regulations governing it. And yet there are numerous legal, social and ethical components to the use of AI. You can compare it to the developments of smartphones: they are still moving at breakneck speed. So fast that we don’t really know how to deal with them. We know that smartphones are disastrous for our attention span, but strangely enough, it remains a debate whether or not they should be allowed in the classroom. To cite just one example.

With AI, we need to get ahead of that as much as possible. Through cooperation between governments, companies, knowledge institutions and citizens, we are able to use AI in a way that, as a society, we consider to be responsible and useful. And where privacy is protected and discrimination is prevented.”

If laws and regulations lag behind global usage, aren’t tools like ChatGPT really coming too soon?

“No, because the time is right for this technology. And the possibilities it offers are huge. We’re going to benefit a lot from that, too. Think about administratively heavy work, like that of lawyers and jurists. Much of their work consists of searching for precedents. Intensive work, which AI is currently capable of doing very well. Or consider programming: ChatGPT is able to help write code. And it seems to do that well. AI can and will also be a gamechanger in client contact, for example in pension administration. For example, APG is already deploying AI at the Client Contact Center [read more about this in the next installment of this series, ed.] In all these areas and more, AI can provide valuable support.”

Supporting work or replacing work? AI is also seen by many as a threat to their work.

“We need to start seeing AI much more as an additional tool we can use. An enrichment, rather than a replacement. Of course, it can take over certain tasks, including those done by humans. But that also frees up time and space for other things. It is now more about: who is most creative with input.

Think of it this way: at the end of the 1990s, it took you a day to create one Web page; now, thanks to handy tools, you can do it in five minutes. You’d be crazy if you still did it the old way. AI does the same thing in that respect: you greatly increase the opportunities for many people. That also offers serious prospects for less developed countries. If it’s marketed properly, of course. The need for democratizing - making and keeping the technology freely available - is therefore great. With this, AI has the potential to distribute power more fairly.”

Back to regulation and policy vs. lightning-fast developments. What can “we” do to make the use of AI to go as smoothly as possible?

“Create awareness around the use of AI. I believe very strongly in that. Education and retraining are essential for that. So, I would really argue for an education program in primary and secondary schools. There is a lot to gain there, we have to prepare this generation for the new future.”

Because the older generations are lost?

“No, not at all. But we didn’t grow up with it and we are not the ones who are studying on the daily basis anymore. Our generations have to get awareness around AI from SIRE ads. And that’s not enough.”

You praise the potential of AI, but stress with equal emphasis the importance of proper education. There seems to be a concern there.

“You should not be blind to the risks. ChatGPT operates on data. If that data is flawed or too one-sided, it affects the results. It can cause a chatbot to be biased and thus discriminate. Or consider algorithms on social media - also a form of artificial intelligence - and their impact on polarizing society. And sometimes even the disruption of society.

Another risk is the issue of responsibility: who is legally liable if a self-driving car causes personal injury? These are crucial issues that go hand in hand with technical developments in AI. There are still steps to be taken there. Because it turns out to be quite difficult to innovate ethically. In the Netherlands, incidentally, we are leading the way, but there is always room for improvement.”

Because ... those issues must first be “tackled” before we can use AI optimally?

“That is a tough one. You don’t want to slow down development, but because of the risks mentioned, you’re also seeing that parties are deterred from developing data innovations. Afraid of making legal or ethical mistakes. However, having the opportunity to address social problems such as poverty and climate change and not seizing those opportunities is also unethical. The question then becomes: which ethic wins over the other?”

Within the AI Hub, you are responsible for the ELSA Lab Poverty and Debt, which works on improving the ethical aspects of artificial intelligence, among other things. Can you give an example of how that works in practice?

“At the ELSA Poverty and Debt lab, we are working with universities, colleges, governments, companies (including APG) and citizens to use AI in an ethical way to combat poverty and debt.

Together we are conducting research and developing applications to share data between citizens, government and companies in a safe, privacy and ethically friendly way. We want to ensure, for example, that a mother on welfare no longer has to identify herself and declare herself many times when applying for support, with all the embarrassment that this entails. But that this process becomes much more citizen-friendly.”  

What trends will we see this year? And what characterized last year? APG experts shed their light on this. Today Anne-Marie Le Doux (head of the Growth Factory) talks about important developments in the field of innovation. "Innovation should no longer just be about new, but also about sustainable."

The Growth Factory is part of APG and focuses on innovations around the needs of participants, employers and pension funds. In short: APG's clients. In doing so, the Growth Factory uses technologies and methods that have proven their worth in other sectors. Looking at her field, Le Doux sees a number of trends that may play an important role this year. These developments do not come out of the blue, but were often already present last year. Covid, for example, often appears to have a reinforcing influence on innovation trends.

Merging

Digital applications quickly come into the picture when it comes to innovation, and that also applies to the Growth Factory. Le Doux expects metaverse to continue as a trend for this year and beyond. "That is a kind of fusion of the physical and digital worlds. People who play Minecraft or Fortnite will be familiar with it. With the help of virtual reality (the user is completely in a digital 3D world, ed.) and augmented reality (a digital addition to the user's physical world; for example, the ability to see on your phone whether a TV or a piece of furniture fits in your living room, ed.) we can increasingly move into the digital world. Metaverse is still a concept, but one that can completely revolutionize our interaction with our fund clients' participants. After all, if a participant or company wants to approach us through Metaverse, we must adapt our services accordingly so that we can also serve them in that world. It is therefore definitely something we are keeping an eye on."

"A development that already played out last year and will continue this year is the need to separate innovation from growth," Le Doux says. "When people buy a new phone, it is good for economic growth, but it also has negative consequences for the environment and climate. In addition, over the past two years we have seen that there is a limit to the abundance we are used to. We've all seen the empty supermarket shelves, soaring energy prices and stores suddenly having to close at 8 p.m. Covid made us realize that scarcity can strike at any moment. Innovation should therefore not only be about new, but also about sustainable. You can buy a new phone, but there has to be a way of breaking down the old one in a circular way so that the raw materials can be reused. And that's really different from how it was."

Trust

Covid has severely tested people's trust in the past two years. "This has been going on for some time, but I don't expect trust in institutions to improve this year," Le Doux says. "We need to respond to this even more. We do this by responding to the call for more transparency and honest answers. That means that, as a company, you want to get the right and relevant information to the customer at the right time, in a way that suits them. At APG we are now working on a Digital Experience Platform, where members can find the answers to their pension questions. That pension information is the foundation, but I expect that there will also be increasing requests for information about how we invest or how we deal with personal data. The better you can answer these kinds of questions as a company, the greater the chance that you will strengthen the bond of trust with the customer. And preserving and strengthening that trust, looking ahead to the transition to the new pension system, is also very important for APG."

Technology trends

Le Doux: "Technology always plays a big role in innovation, like data fabric, cybersecurity mesh and hyperautomation. What you see is that by combining a number of these techniques, our processes are becoming more error-free, data-driven and more controlled. At the Growth Factory, we are now figuring out whether we can use these techniques to take some of the processes in our pension administration a big step further. For example, we are looking into whether RegTech - a combination of technologies including artificial intelligence, big data, cloud computing and machine learning - can help us meet compliance requirements in a fully automated way. All that technology reduces the chance of human error. Growth Factory has a stake in this by creating prototypes that we then assess with participants, funds and APG staff for added value."

Emerging opportunities

What is a trend now, will very soon be business as usual, Le Doux argues. "It is therefore important for APG to constantly look around us for emerging opportunities. What do we see happening in other sectors? What do our participants and employers expect from our services in a few years' time? How can we help funds to implement their strategy through the use of new technologies? It's up to us as Growth Factory to come up with solutions to these kinds of questions and test whether they work."

Climate change and digitalization leave no sector untouched. Anna Pot, Manager Global Responsible Investment & Governance Netherlands at APG, conducted a study into the consequences for employees. "Employees are especially important for companies to survive these changes. Committed, trained and flexible employees help a company to adapt and innovate."

For twelve years now, Anna Pot has been studying how companies treat their employees, something that is also referred to as human capital management. She spoke to companies about issues such as child labor in the cocoa industry, workers' right to join unions and working safely during the coronavirus pandemic. Her most recent study highlights three major trends - transitions - that have a major impact on employees, namely automation, digitalization and climate change. She makes suggestions for critical questions that investors can present to companies in this respect.

How does climate change affect employees?

"Fossil fuels are slowly but surely making way for renewable energy. Coal mines are closing. Climate change threatens industries that employ huge numbers of people, while it is still unclear exactly how many and where new jobs will be created. According to estimates of the International Labor Organization, there are 24 million, in industries such as clean energy generation, electric vehicle manufacturing and energy efficiency. But it's not just about jobs. The requirements attached to the knowledge and skills of employees are also changing. Under pressure from society and green regulations, companies have to switch to a climate-neutral business model, encouraged by investors such as APG. Innovation is becoming increasingly important. We already see this trend at car manufacturers, who are now switching from combustion engines to green engine technology en-masse."

What's new about the conclusion that automation is costing jobs?

“The conclusions from studies into this issue are not unequivocal. One study predicts a loss of two billion jobs, the other predicts millions of new jobs will be created. Automation is more than replacing people with machines. Automation also creates a need for other skills, for example, because people and machines work together. Toyota has a nice term for this: jidoka, i.e. automation with a human touch. If they want to remain competitive, companies must constantly improve their digital systems. The economy is therefore becoming increasingly knowledge-intensive. Machines are taking over routine tasks and people are being required to innovate and be more creative."

How do companies benefit from treating their employees well?

"Companies going through major changes need the support and knowledge of their employees to make them successful. They recognize that qualified, flexible and committed people are indispensable to be able to continue to innovate and adapt. Companies have identified human capital and innovation as their top priorities for the coming years. They have to think about how they can stimulate the creativity and innovative capacity of employees. In the battle for top talent, companies want to be known as a good employer. This is a crucial condition for wanting to work for a company, especially for the young generation. To be innovative, companies must create the right conditions in which employees can be creative, dare to experiment and make mistakes. Employee engagement is needed to keep them on board and make the transition effective."

Can you name a company that does this well?

"You wouldn't expect it after Dieselgate, but Volkswagen is a front-runner in this area. They have committed to allowing the transition to take place entirely on the basis of natural attrition, i.e. without laying off people. They have extensive programs in which they train employees to make the change. And it's not just about mechanics who have to switch from combustion to electric engines, but also about office workers who learn new things, such as programming or analyzing data. With digital skills, they can make the transition to other departments within the company or even join a different company. Incidentally, we are still in talks with Volkswagen about the aftermath of Dieselgate. We're asking the company to create a more open corporate culture and establish a truly independent supervisory board."

And what if companies don't do this?

"Companies that don't treat their employees well miss out on bringing in top talent, they run the risk of jeopardizing operations, or sustain reputational damage due to abusive labor practices. And it goes beyond that. If we as a society do not deal well with these major shifts, it can cost many people their jobs or significantly affect the quality of their work. This will mainly affect the less educated, poor and vulnerable groups, resulting in an increase in social discontent."

What does APG ask of companies? What does 'treating employees well' mean in specific terms?

"Our minimum requirement is that companies guarantee safe working conditions for their employees. We use the standards of the International Labor Organization. Safe work and healthy labor relations are also taken into account in our sustainability criteria. If necessary, we engage with companies to improve their working conditions. We want to know about the strategies of companies that are in transition. We ask them for a skill gap analysis: what skills do your employees have now and which ones are still lacking? And how do you get from A to B? Are you going to fire people and hire new ones? Are you solving it through natural attrition, or are you training your current employees? A year and a half ago, we asked the automotive industry to conduct such an analysis. At that time, hardly anyone did it and now, almost all car manufacturers are working on it. Ford has already included the analysis in its annual report."

In addition, APG sets requirements for company training programs, says Pot. "We want companies to report on those programs and show their impact. Employees must be included in the transition of the company. Clear communication, training and the adoption of new expertise are key elements in that respect."

You have years of experience in the field of employment rights. What was the biggest eye-opener for you during this study?

"We've always paid attention to the social component of sustainability, but this aspect has really taken off since the corona pandemic and the emergence of transitions. Especially the companies themselves now see the importance of it."

What will you do with the results of the study?

"Companies with good human capital management are attractive to us as an investor. Studies show that investors who invest in these types of companies perform better on average. We therefore discuss our findings with our portfolio managers and how they can use them in their investments. Our paper contains specific suggestions for questions they can ask companies in transition. It's a pretty long list. If you only have five minutes, I'd ask three. First: what is your strategy for human capital management? Second, how does it fit into the company's long-term strategy? For example, is it a driver of innovation, or customer satisfaction? And third: how do you measure progress as a board? These three questions give a pretty good idea of how seriously a company takes human capital management."

613 Billion euros. That is to APG’s total invested assets worldwide (position at the end of July 2021). The goal: a good pension in a livable world for the pension fund participants. The portfolio is obviously diversified. From investments in wind farms in Zeeland to Australian listed shares in stores. And from safe bonds to the somewhat more fluctuating trade in gold or soy. Who are the people behind these investments? What choices do they make? And why?

In this episode of the series The Investors: Frank Dekker, responsible for investments in the telecom and media sector at APG.

Telecom companies are installing fiber optic networks at lightning speed. This means more speed and more options when it comes to, for example, 5G, artificial intelligence and the Internet of Things. At the same time, the dynamics in the sector are increasing and telecom companies are attractive acquisition targets. Will KPN be taken over by foreign investors? Who will buy T-Mobile, which is currently in the shop window? What is the impact of such market movements on APG’s telecom investments?

Senior portfolio manager Frank Dekker has been following the sector for fifteen years and is responsible for the investments in telecom at APG. This includes KPN, which APG recently entered into a joint venture with. “Very promising,” is what Dekker says about this partnership, which will make it possible to accelerate the rollout of KPN’s fiber optic network. But perhaps Dekker is not entirely objective?

Dekker: “Good question. But not correct. As portfolio manager in telecom shares, I am completely shielded from the activities of the people that were involved in this deal. During the period of the deal and its preparation, I was not allowed to trade in KPN shares. Nor was I allowed to communicate with anyone internally about this. We are very strict about this. And we have to be. Anyway, I think the joint venture between KPN and APG is very promising. Because APG’s investment will enable KPN to complete the construction of the fiber optic network sooner. This will allow them to phase out their copper network faster, leading to significant cost savings. Moreover, this accelerated construction cuts potential competitors off from KPN.”

What does that competitive field look like in the Netherlands?

“Ziggo merged with UPC a few years ago and then merged with Vodafone. T-Mobile bought two price fighters, Tele2 and Simpel. And then we have market leader KPN. The Dutch telecom market is now very clear, with these three parties. The Netherlands has good networks for mobile phones and landlines. The prices for mobile services have dropped considerably in recent years.”

T-Mobile will be sold as soon as possible if it’s up to owner Deutsche Telekom. What does that mean for the Dutch telecom market?

“T-Mobile has a small, fixed network in the Netherlands. Deutsche Telekom would like to be number one or two in every market. In the Netherlands that is probably not going to happen, so that is why the company is going to be sold. KPN or Vodafone Ziggo are probably not allowed to take over this number three because of European competition rules. Whether competition in the Dutch telecom market will increase or decrease as a result of the sale of T-Mobile depends on the new owner. It's hard to say who that will be. Delta is known to invest heavily in fiber optic networks. In a partnership with T-Mobile, that company could provide additional competition on the Dutch telecom market. Right now, T-Mobile largely rents the fixed line from KPN for their customers who still use a landline phone.”

APG invests more than average in KPN. How much longer can that go on? 

“Unfortunately, my role does not allow me to go into detail on that. We are looking at a period of three to five years. It is difficult to predict which sector will do better than others. That is why we mainly try to achieve an above-average return within a sector; for example, by choosing the companies that perform best in class and that show the best return-risk ratio. If we look at the Dutch market, Vodafone Ziggo is KPN’s main competitor. That company does not yet have fiber, and has yet to invest heavily in the necessary upgrade of their current cable network.”

In general, are telecom companies in the Netherlands really a good investment?

“Investors usually look at the dividend yield. But what you often see is that telecom companies with a high dividend yield are a bad investment. They are paying a relatively high dividend at the moment, but the question is whether that is sustainable. After all, they will have to invest heavily in their networks in the coming years. To us, the underlying cash flows for the coming years, where we try to estimate what the sales and margins will do, is much more important than dividends. We also look at the structure of the telecom market, how the competition will develop. And what the relationship is with the regulator and politics. The corona epidemic has once again shown how important good connectivity is; policymakers will therefore want to stimulate investments in this, for example through regulation. In conclusion, we are seeing a relatively healthy market structure in the Netherlands. The downside for telecom companies is that politicians want low prices for consumers. At the same time, I consider the chance of a price war to be fairly small.”

What would be the impact of such a price war?

“Price wars occur when there are changes in local competition. More competition often means that companies start to stunt and rates drop. That’s nice for the consumer, but not beneficial for the shareholder. With less competition, the chance of price increases is higher and the cost of customer acquisition can be reduced. Our investment philosophy is therefore aimed at staying ahead of price wars. India, for example, is now a more interesting market, since they have gone from fourteen to three telecom providers. But Brazil, Canada and Finland are also interesting. In the US, on the other hand, the likelihood of a price war is rising. There has been a big takeover there, with the result that other players are trying to gain market share in a more aggressive way.”

For telecom companies, isn’t the real competition more likely to come from giants like Amazon, Facebook, Apple, Google and Microsoft in the long run?

“Certainly. A lot of value is being created with the digitalization of society. This value creation no longer goes to the KPNs of this world, but to those giants. So that’s what we invest in as well. These American and Chinese companies are increasingly investing in digital infrastructure such as data centers and the submarine cables that carry most intercontinental Internet traffic. These used to be owned by telecom operators, but those days are over. Most of the digital infrastructure that European telecoms companies still own is the last mile, the last piece of the connection to the customer.”

5G is central to that digital infrastructure. What will that network do for us in concrete terms?

“Looking back, we can attribute the arrival of Uber to the breakthrough at the time of 4G, the smartphone and data centers. I expect that 5G, along with applications of artificial intelligence, is going to bring a lot of innovations in areas such as self-driving cars, virtual reality, remote-controlled robots that perform operations, drones, you name it. All of which require a tremendous amount of computing power and as little delay as possible. For example, an ambulance transporting a victim with third-degree burns to the hospital, where a doctor can make a diagnosis and prepare the required equipment remotely via a video link. Or artificial intelligence that allows you to perform real-time simulations: for example, what is the probability of an accident occurring with a self-driving car. For this kind of innovation, you really need 5G.”  

There is increasing political pressure to ban Chinese equipment from, for example, Huawei, which telecom providers in the Netherlands also use. Does this present a big risk for the Dutch telecom sector?

“Yes, it definitely does. The U.S. is concerned about China’s technological lead in 5G. We’ve seen more initiatives by politicians and security agencies to warn of cybersecurity risks due to ownership of Huawei equipment, for example. Increased scrutiny of Chinese equipment suppliers forced KPN to remove Huawei from its core mobile network. KPN also selected Huawei for other 5G components, such as antennas. Now KPN is in danger of having to remove Huawei from its mobile radio network as well. But not KPN alone: T-Mobile has mostly Huawei equipment in its network. A ban on Huawei will cost telecom providers money, but they can partly compensate for that by charging consumers higher prices in the wireless market.”

Finally, even as a large investor, you face competition. How do you differentiate yourself from it?

“The nice thing about working for APG is that we are large scale. As a result, we have above-average access to research, management and alternative data, but are able to keep costs down. That data, especially sector-specific data, is expensive and not every investor can afford it. Anyway, it’s also about what you do with that data. My team and I look at developments within sectors and not between sectors. This is called relative investing. In that sense, we can make full use of our time to investigate the differences between players in the telecom market and to make them work to our advantage.” 

And is that working?

“We have outperformed the competition (benchmark) by about 30 percent over the last 11 years, with an absolute return of 12.6 percent per year. So: yes, it’s working well.”

Facts & Figures 

What does APG invest in in terms of telecom and media?

Interactive media: Google, Facebook, Snap, Twitter

Broadcasting: Fox, Prosieben, Discovery, Viacomcbs

Interactive home entertainment (gaming companies) Activation Blizzard, EA

Cable & satellite: Comcast, SES

Advertising: (Advertising agencies) Publicis, WPP

Movies & entertainment: Netflix, Disney

How much?

The satellite portfolio 1218 invests just over 1.5 billion euros.

Group IT Officer Frans van Kessel and ethical hacker Stan Hegt about cyber security at APG

Cybercrime: in 2021, you cannot get around it, especially as an organization with a lot of loot. And that applies to a pension administrator like APG too, of course. How do we protect 568 billion Euros worth of assets? How do we protect desirable and sensitive information? One way is to have the systems attacked by hackers on a regular basis. Ethical hackers, that is. A conversation with Group IT Officer Frans van Kessel and ethical hacker Stan Hegt about honey pots, the kill chain and simulating hacks. “We get to prepare for a real-life hack for months. For us, these kinds of assignment are the cherry on the cake.”

When APG systems are visited by hackers, no one in the organization knows if it is being done by malicious intruders or if it is a simulation – except for a handful of people, including Frans van Kessel, who is responsible for APG’s cyber security. Everything is done to make an exercise like that seem as real as possible. And in a sense, it is a real hack, which has been extensively prepared for a long time and executed by a team of ethical hackers, also called white hat hackers. Whizz kids who have made it their profession to try to infiltrate into the systems of companies and governments. Their goal is to help these organizations to keep their IT security intact or bring it up to snuff.

Stan Hegt from the IT security company Outflank is such an ethical hacker. Van Kessel hired him specifically to put APG’s IT security to the test. “Our people look at the cyber security primarily from a defensive perspective at APG. But hackers use an offensive perspective. They are always thinking along the lines of: what is the easiest way for me to get to the most interesting parts of the system? Someone from outside sees very different openings than we do. People like Stan and his team bring that perspective to the table. Stan sees all kinds of little windows while we are watching all the doors.”

Information services

In collaboration with the team from Outflank, Van Kessel and Hegt prepare a hack like that meticulously. It starts with mapping out the parties to whom APG could be an attractive target. Van Kessel: “We don’t just let a team of ethical hackers fire a load of buckshot into our systems. We try to get them to work in as focused a way as possible. First, we look at what kind of actors we might have to deal with. Then we map out which ‘crown jewels’ those parties might be interested in and what tactics, techniques and procedures they would use to get in. For foreign military information services, the participants’ files for defense could be very useful, for example. Information that shows certain investment flows could also be an interesting target for a foreign power.

With other actors, you expect more interest in access to the part of the system used to make payments. APG invests hundreds of billions for its clients. There are always parties that are interested in a big financial like that, including geopolitical interest.  Certain kinds of intellectual property – for example about the organization of the Dutch pension system – and models could be very valuable for a country like China. All in all, we are therefore dealing with a very diverse threat assessment. Based on that assessment, we map out the most likely targets. We then ask Stan and his team to focus on attacking there.”   

Once everything is prepared and the attack is ready to take place, Van Kessel takes a step back and Hegt goes to work. With a group, very consciously. Hegt: “The most dangerous hackers are always part of a team. They are strongest when they work together. The hacker sitting alone in a room in the attic is more of a TV cliché.”

What kind of hackers present the biggest threat? Hegt: “The last few years, the groups that have been the most dangerous are the ones that are active with ransomware. The best known of these is TA505, a hacker group from Russian-speaking countries. This group was also behind the attack on the Maastricht University.”

Kill chain
When it comes to the modus operandi of a hacker, you can distinguish several standard phases, Hegt explains. “A hacker works with the so-called cyber kill chain: reconnaissance, weaponization, delivery, exploitation, installation, command and control, and actions on objective. So, the first step is exploration: what are the possibilities for entering a system? Who works at the organization, who could be interesting to use for access? Then, a hacker will try to enter in one spot. For example, through a recruiter’s workplace, or through a server that is not well-protected. This is usually done with the help of malware. The third step is then to find a way to the crown jewels, for example, access to the system for making payments. That path is kind of a maze for the hacker. There are many ways to find a path. You could look for weak password of employees, for example. The last step is to carry out the actions on the crown jewels: a malicious payment by the system, or sending certain information in a way that leave those actions unnoticed.”

Honeypots

If a relatively large organization like APG only protects itself from cyber attacks from the outside, that is not enough, Van Kessel says. “It is no longer possible to prevent everything; there are always some employees that could be causing weak spot in your defense. Your inner world is a continuous point of attention. You must always assume that a hacker can get in. That is why we also focus a lot on detection and response. For us, the trick is to detect an attack as soon as possible. We do this by placing honeypots in certain places in the system – these are a kind of boobytrap the hacker steps in the moment he enters our network. That work is at least as creative as the hacker’s work. When we get undesired company, we investigate the threat and then move into containment and eradication: preventing the threat from spreading and completely removing the threat.”    

Hackers: what types of people should we imagine these are?  Hegt: “You have to be a real “professional idiot” and continually keep up to date. They are mostly relatively young men; you don’t see a lot of them that are over 50. The average is below 35, I think. And you can’t say that there are no successful hackers that are not educated, but many of them are highly educated. There is a lot of demand for them.” Van Kessel: “Even on the dark web you will run into these types of hackers; they present themselves with all kinds of certifications.”

Hegt himself, who studied math and computer science at the Eindhoven University of Technology is a “professional idiot” like that himself. “I’ve been hacking since I was ten years old and when I was fifteen, I started to hack by request of companies. Then I worked for KPMG for ten years. I did not expect this from a company like that, but it turned out that a very cool hackers’ club was working there. Five years ago, I got the opportunity to found Outflank with a few Dutch top hackers.”

Money laundering

Even though they may often be relatively young men, hackers are certainly not a homogenous group. Hegt: “There are a lot of cyber attack specialists. Invading a system is very different than finding a way to the crown jewels, once you’re in. And there are also hackers that are dedicated to laundering money. That is its own specialty.”

By having systems attacked on a regular basis in a way that, for most people involved, is not distinguishable from a real malicious cyber attack, APG is increasing its immunity. Hegt: “We also call that the vaccine effect. A test is like giving an injection, after which the body has an immune response. That is why it is so important that people don’t know that it is a test. They need to get defensive. We therefore only inform parties that could sound the alarm in advance, such as Microsoft. We get to prepare for a real-life test for months. That is great for us, but also for the APG employees that work on detection and monitoring. For us, these kinds of assignments are the cherry on the cake.”

Digitization can contribute to a sustainable world. Examples include working online, with less commuting and decreasing CO2 emissions as a result. But the use of robots, artificial intelligence and online services also has its drawbacks, such as job losses or energy-guzzling data centers. Sustainable digitization is possible, but only if government, businesses and (pension) investors work together.

This was the conclusion of an online event organized by ABP and APG, entitled 'Making investments in SDGs work: sustainable digitization'. Digital technology is claiming an increasingly important place in the investments that APG makes for its pension fund clients. Not least because digital solutions can help with the major challenges faced by people and the environment, such as climate change or the COVID-19 pandemic.

For example, on behalf of its pension fund clients, APG invests in Moderna, a producer of a vaccine against COVID-19. "This biotechnology company had a vaccine design ready within a few days using digital design methods," says Ronald Wuijster, board member of APG and CEO of APG Asset Management. "Another example of an investment in digital solutions is Remote, in which we invest through private equity firm Inkef. This platform makes it possible for employees all over the world to work together and it handles the associated administrative matters for the company."

Downsides

But there is another side of the coin. Robotization is accompanied by job losses and the need for retraining. Data centers gulp energy - they are expected to account for 80% of the global energy demand within 20 years. The raw materials for computers, chips and other hardware are often extracted under difficult circumstances. Half of all cobalt, an indispensable raw material for batteries and accumulators for electric cars, comes from the Democratic Republic of the Congo. There are many instances of human rights violations and child labor in that country. Closer to home, the position of power of major platforms such as Facebook, Twitter and Google raises questions about data privacy.

In 1986, the Dutch government set up an institute to investigate the impact of technology on our lives: the Rathenau Institute. Among other things, this institute conducts research into how you can match the supply of and demand for energy with the help of digital technology. Melanie Peters, director of the Rathenau Institute: "Energy from sources such as wind, water and combined heat and power is generated locally. We want to find out how to match this supply as closely as possible to the demand of people and businesses, with as little waste as possible."

Control over your own energy

Major platform companies in the United States and China are already measuring people's energy needs through their thermostats. This way, they can predict when energy demand will peak and respond to this. "Convenient," says Peters, "but you don't want large businesses or other countries to determine when the energy supply in the Netherlands is switched on or off. This means you shouldn't only invest in the large technology companies, but also in smaller, innovative companies in the Netherlands or Europe. And talk to them about control."
Maurice van Tilburg is familiar with these kinds of start-ups. He is a director at Techleap.nl, an interest group for Dutch start-ups. "One of those start-ups, for example, has designed a smart tool that can save a lot of energy," says Van Tilburg. "With the help of their software, which uses artificial intelligence, among other things, you can plan better and therefore energy consumption in logistics can be drastically reduced."

All hands on deck

Digitizing in a way that contributes to sustainability is a complex issue for which there is no single solution. "Collaboration is crucial," says Van Tilburg. "For example, it is still often cheapest for businesses to throw away goods that they no longer use. Circular entrepreneurship must pay off and digitization can play a role in this. For example, the government can factor in the costs of waste processing. But there is also an important role for pension investors such as APG and its pension fund clients. Investors who are able to hold out for a long time, who think along with a business. International cooperation is essential in this respect, so that we do not all invent the wheel individually."

"ABP is already taking steps with investments in start-ups via the ABP Netherlands Energy Transition Fund (ANET) and Inkef," says ABP CEO Corien Wortmann. "But we want to do more. I call on the government to create more opportunities for public-private partnerships, so that government and (pension) investors can pool their money and expertise to make sustainable digitization possible."

The Dutch middle class has been under pressure in recent years. People with a middle income, job or education find it more difficult to find a home and experience more insecurity on the labor market. Moreover, they often have limited financial knowledge and scope. To change this, in recent months, 20 participants in the National Think Tank focused on the question: how do we improve the perspective of this middle group? The result: eight specific solutions. And APG contributes to the elaboration of four of these ideas.

How do we strengthen well-being, prosperity and control for middle groups in the city and region, now and later? That question is central to the fifteenth 'edition' of the National Think Tank. Because although the Dutch economy (until the corona crisis) has grown in recent years, the position of people with a middle income, job or education has deteriorated. This group increasingly struggles with insecure employment relationships, few housing prospects and a limited financial buffer.

In discussion

Every year, the National Think Tank Foundation chooses a social topic and sets to work with specific solutions and ideas. Last week, the 'Think Tankers' presented eight specific proposals to Minister Koolmees of Social Affairs & Employment. APG has been closely involved in this edition as a theme partner and will soon enter into discussions with the initiators of four of the solutions presented.

Tools and documentaries

The initiatives involved? The first is the MomentCheck, a digital tool that supports people in making financially conscious choices at important moments in life. Nick: "This is very closely related to the activities of APG's GroeiFrabriek and Kandoor divisions. Here, we can be of value." The second solution is ZelfstandigBerekend, also a financial tool, but aimed at starting freelancers. Zie je mij?, an idea for, among other things, a documentary and a national campaign to raise the profile of essential professions, and MBO Talent Track, a talent development trajectory for MBO students, round off the list.

Financial fitness

"At first I thought APG would continue with two of the eight ideas," says Nick van de Sande-Korpershoek, a strategic policy officer at APG and in his capacity of point of contact for the Think Tank 2020, part of the process. "But internal enthusiasm was much greater than expected. Which, of course, isn't surprising. The middle group is the largest group of participants in the funds served by APG. All those teachers, police officers, construction workers and cleaners, for instance. In addition, financial fitness is an important theme at APG. That makes the issue surrounding middle groups extremely relevant to us."

Infectious enthusiasm

APG, together with Rabobank and three ministries, among others, is involved in the process in various ways. Nick: "As a financial partner, of course. But even more so as a sparring partner for the 20 Think Tankers. Some still wanted to learn more about pensions, for instance. Alwin Oerlemans, Raoul Wilmms and I, among others, intensively helped them with that in recent months." In the coming weeks, the Think Tankers will be talking with colleagues from GroeiFrabriek, HR and Asset Management, to find out how APG can help elaborate the four ideas. But also to explore what these initiatives can yield for APG.

Nick: "They are really good ideas that can actually take the middle group further. Conceived by people who take it seriously from the start, by involving the target group themselves. And, not unimportantly, they do so with particularly infectious enthusiasm."

APG will position a team of platform developers independently. The team, with ten employees, will continue under the name Hyfen. Hyfen is a spin-off from APG in wich the Belgian IT provider The Glue has acquired a majority share. APG remains involved as a shareholder and client.

In recent years, Hyfen has built a platform to connect administrations of parties in the pension sector. Previously complex and cross-business processes can be organized more efficiently and more customer-friendly with the help of the platform.

Hidde Terpoorten, director of Hyfen: “The first product we’re launching is Mijnwaardeoverdracht.nl. Currently, the platform is being connected and taken into use with the first customers. Later this year the public go-live will follow in cooperation with the Dutch pension sector. Arranging a pension value transfer is a complicated and time-consuming affair for participants. This will change with the solution developed by Hyfen. By cooperating with four large pension providers, it will soon be possible to arrange a value transfer for members online simply and quickly.”

Gerard van Olphen, Chairman of the Executive Board of the APG Group: “By positioning Hyfen remotely, our pension fund clients and their participants continue to benefit from the knowledge and skills of these professionals - while at the same time giving other pension funds and participants access to their innovative services. I am convinced that Hidde and his team will be successful and look forward to further cooperation with pleasure and confidence.”

In addition to APG as shareholder and customer, the Belgian full-service IT provider The Glue joined the spin-off as a majority shareholder. The Glue is part of a big FinTech ecosystem and has extensive project and IT experience in the financial sector.

The Glue CEO Paul Grimbers: “Much remains to be done on the European playing field of pension service providers. By joining forces and focusing on the creation of platforms with innovative data exchange, we want to deliver added value in this domain.”

With the new set-up, Hyfen will be given the space to provide independent services to the pension sector and its participants and to use the accumulated knowledge for other processes within and outside the pension sector. Future possibilities are explored together with the consortium.

Voice machines, facial recognition and predicting questions

Times are changing and pensions change along with it. While the pension system is radically revolutionized, the developments in service provision are also moving on. What is the role of innovation in this process?

Chris Veerkamp of the GroeiFabriek, the ‘breeding ground’ of APG, elaborates on the way in which they help pension participants move forward by using advanced technologies.

Pension participants living abroad, every year have to prove they are still alive. These days, they sometimes have to go to the embassy in order to fulfil that process where they have to identify themselves and are given a signed form that has to be sent to the pension fund. Time-consuming and cumbersome. There had to be an easier way to accomplish this, APG suspected, and the GroeiFabriek and a team from the organization came up with a solution. That solution was an app pension participants are able to use to identify themselves by means of facial recognition. An experiment with this solution turned out to be a success and is now being implemented within APG.

Solve

“A small solution with a major effect for that target group”, says Chris Veerkamp, one of the three Business Innovation Managers within the GroeiFabriek. In that position, Veerkamp is responsible for inventing several solutions for both pension participants and employers. “We always start with a problem experienced by the target group. What is the best solution for that problem? We explore new and innovative ways to, for example, improve the service provision and customer satisfaction. It all starts with an idea, after which we investigate during a period of experiment whether it is feasible and what we need to execute that idea in concrete terms.”

Improve

The GroeiFabriek tries to improve the service provision in smart ways. Of an entirely different nature is the deployment of a voice machine the GroeiFabriek is working on right now. That voice machine has to enable APG to develop new solutions with voice control. An example could be for pension participants to be able to ask questions to their smart speaker (like a Google Home) instead of to an agent of the customer service. Such device can also be implemented at employers, if they want to know for instance how many of their employees will retire in the next five years. Instead of wrestling through all kinds of reports, an employer only has to ask the question to the device after which a response is given immediately.

Experiment

“We make ideas concrete, one step at a time,” Veerkamp says. “We continuously ask: Is this possible, does that fit, is that working? We constantly check whether we are still on the right track and always with the target group: Is this what we want to solve, is this the way we want to do it, do you think that’s fitting? Would that help you? And are we able, as APG, to execute this? If the answer to one of those questions is No, we stop.” As with all experiments, not all of them are successful. There once was an idea for a dating app to combat loneliness amongst the elderly, but that idea never took root. The idea to let people get used to pension savings by saving small amounts at daily purchases, was also parked after an initial phase. “If you are dealing with innovation, you must experiment as much as possible and also hear from our target group as soon as possible that you are doing the wrong thing. That may sound strange, but that is how you learn. If a solution appears not to be fitting or feasible, you just have to stop.”

Predict

Once a project is completed - whether or not successful - the GroeiFabriek proceeds to yet another possible solution. Another experiment that is now conducted involves the call center. “Based on all data gathered from the conversations held, there is a smart way to make connections with algorithms”, Veerkamp explains. “This results in us being able to predict what someone’s next question will be. Call center agents are now shown a tool stating what a customer is likely to ask. Then they are prepared for it and provide better assistance to the customer.”

Collaborate

The GroeiFabriek also collaborates quite often with third parties, such as universities and colleges, says Veerkamp. “By doing things together with others, you gain new insights and obtain different knowledge. That sometimes works better than doing it yourself and on your own.”

The new pension system also brings new challenges. Take the lumpsum, for instance, included in the agreement. People who retire are allowed in the future to withdraw 10 percent of their pension payment at once as a lumpsum. “That is a new choice people will be facing, in addition to matters such as the high/low construction or early retirement. The choice process is already difficult at the moment and the level of difficulty will only increase. That is an issue we will dedicate our attention to. When that time comes, what new problems will arise or what problems become bigger? And what kind of solutions could and should we develop to address these issues? We want to respond to those problems proactively.”

Look ahead

It is simply not an option not to innovate, according to Veerkamp. “APG is the largest pension service provider in the Netherlands. The world is changing rapidly and the standard for customer experiences is developing along with it. The new laws and regulations also entail many changes in the pension industry. We must look ahead to be able to move along with the developments in order to offer customers at least the same level of service compared to the service providers people know from products and services other than pension. It is better to anticipate than to respond. Innovation enables us to see on time what is needed tomorrow and translate that to the present.”

Employees of the KlantContactCenter (KCC) for bpfBOUW are able to predict the questions of participants since a few weeks ago. And no, they do not use a crystal ball to do so. The questions are handed to them by Next Best Question (NBQ), an experiment of the GroeiFabriek that became a working reality.

The GroeiFabriek

The GroeiFabriek, the innovation lab of APG, conducts experiments with concepts helping us to serve the participant the best way we can. Using the word “experiment” already indicates that an idea sometimes is not good enough to take into production. But the ideas also include some gems that truly help us progress. NBQ is one of those ideas.

Next Best Question

The same as Netflix is able to predict our viewing behavior, NBQ predicts the reason why a participant is contacting us. Following an analysis of data, such as personal information, previous conversations, mail, e-mail messages and life events, an algorithm shows a top 5 of most probable questions when an employee of the KCC assists a customer by telephone, chat or email. This means the employee concerned is able to help the participant faster and better by proactively asking and responding to questions. This way, the participant gets a more comprehensive answer and it is less likely for him or her to call us back with a follow-up question. And for the employees it is very convenient to have the information handy as early as possible.

Edo Westerveen, employee of the KCC, definitely sees the advantages. “This is a great start, an additional service to help the participants even better. This instrument is especially beneficial for the customer contact specialists who are just starting. And once the algorithm becomes even better, it can really be an important resource for outstanding service provision.”

Only bpfBOUW?

The experiment was developed by the GroeiFabriek for bpfBOUW. That is why Next Best Question initially went live for this fund. But other funds are showing interest as well. The first test results are very promising.

Founder Tom Romanowski about financial platform Kandoor

Entis and APG reach one-year mark

A good pension in a sustainable world. To achieve that goal for ABP and the other pension fund clients and their participants, APG uses both traditional investment methods and innovative technologies like artificial intelligence. These smart algorithms can identify sustainable companies as well as pick up on hidden clues to help investors assess opportunities for return and risks earlier and more accurately. To speed up the pace of innovation, APG acquired Deloitte’s data analysis team last year: thirteen women and men who apply artificial intelligence and big data to sustainable investment. The team continued as a separate APG business unit known as Entis. ‘This is the Ferrari of investment innovations,’ says Gerben de Zwart, whose quantitative investment team works closely with Entis. He tells us just how quickly things have accelerated in a single year.

What has been achieved in the past year? 
‘In just one year, Entis categorized 10,000 listed companies around the world in an SDI classification system: how sustainable are their products, and can they be considered a Sustainable Development Investment (SDI) on this basis? We used the United Nation’s seventeen sustainable development goals as a starting point for this evaluation. As a responsible long-term investor, we want to know whether companies are working on SDGs and if so, how seriously they take them. To find out, Entis scanned all annual reports, websites, and Chamber of Commerce registration details of these 10,000 companies using artificial intelligence and machine learning.’

Was it a lot of work? 
‘It was an enormous job. But if we had had to do this manually, this task would have taken much longer or been impossible altogether. Take the theme ‘affordable and sustainable energy:’ smart algorithms were able to analyze all sources for key words like ‘solar panels,’ ‘carbon emissions,’ and ‘climate change’ at lightning speed. This information was then compared to sales and revenue figures. This allows you to determine the extent to which the revenue from a company’s products and services contributes to the SDGs, to a better and more sustainable world. A business may claim that its activities are green, but sometimes their actions do not back this up. A combination of these algorithms and human supervision can see through such so-called greenwashing. Entis’ SDI classification system helps us as investors to identify front runners when it comes to sustainability. We were looking for a new Tesla, and we ended up finding no less than 1320 of them! This information is unique and cannot be found anywhere else in the world.  This is confirmed by conversations we have had with fellow pension funds: not just in the Netherlands, but also in Japan, Scandinavia, and Australia.’

Any other highlights?
‘Artificial intelligence can also be used to get a more accurate estimate of risk and return. Entis built an infrastructure to scan text and language use in annual reports and other mandatory business reporting. We processed over 400,000 documents in all. For example: by looking for similar products you can cluster companies in a different way, across traditional sector lines. This helps you map out companies’ real competitors. A company like Facebook, for example, competes with both IT companies and media companies, and car manufacturers are facing competition from unexpected places too, like Google’s self-driving car. This insight helps investors assess the performance of companies in this new competitive field as well as the risks more accurately.’

What other applications are there? 
‘Another example is scanning annual reports for textual changes compared to the previous year, for example in the risk paragraph. This typically indicates issues and future share price drops, according to Lazy Prices, a report by Harvard researchers analyzing the annual reports of American listed companies. However, most investors only respond to this type of hidden signs months after the fact. So investors who do keep an eye out for these negative - and sometimes positive - clues can gain an advantage. In the past year, Entis used intelligent algorithms and machine learning to scan the annual reports of over a thousand American companies for textual changes. A third project focused on mapping the diversity of company boards. A study from Tilburg University showed that companies with a high level of diversity on the board achieve a 0.4 percent higher return per month than companies whose board is virtually homogenous. Entis reproduced this study, but did not consider the results sufficiently convincing to include diversity as a criterium in our investment strategy as yet.’

What else has the Entis team worked on in the past year?
‘Aside from generating insights for APG’s investors, the Entis team transferred its proprietary technology platform from Deloitte to an autonomous environment in the Cloud, including the accompanying innovative technology. The technology platform offers important added value. For example, the platform has significantly sped up document scanning: processing time was reduced from weeks to days. The next step is to expand the existing platform to the production environment. In future, this will allow the investment policy for our pension clients and their participants to benefit from Entis’ innovative insights on a daily basis.’

What challenges have you faced in the past year?
‘Using artificial intelligence for successful and responsible investment on the long-term is a new idea. As a result, we constantly have to forge our own path. Moreover, there are enormous amounts of data involved: analyzing this takes a lot of time. Staying focused is another challenge. We selected just a few projects to start off with, but we have thirty innovative ideas on our shelf.’

What tangible results have been achieved so far?
'Knowledge is power in investment. And Entis has been very busy gathering knowledge this past year. Assigning an SDI classification to those 10,000 businesses was an important milestone. Aside from that, we are currently investigating how the patterns identified by the algorithms could improve the return of our investment strategy. This analysis should determine whether we want to use this information in our investments. We want to consider this carefully: after all, we are now talking about a quantitative equities portfolio of around fifty billion euro under management on behalf of our pension clients.’

What can these innovative investment methods offer our pension fund clients and participants?
‘In the near future, we expect artificial intelligence and Big Data to facilitate better investment decision-making, helping us deliver more pension value to the funds. For example, it allows us to identify SDI companies and help achieve our clients’ sustainability ambitions: the 1320 Teslas offer us the opportunity to invest in this type of high-potential business early on. That way, innovations in quantitative investment can help contribute to higher returns and thereby better pensions for the participants: our predictions of when to invest in which companies are getting increasingly accurate, and so is our assessment of risk.’

So Entis was worth the investment?
‘Absolutely. The role of unstructured data in investment is increasing. Our acquisition of Entis has allowed us to skip ahead three years compared to where we would be if we had had to do this alone. With the SDI classification system we now have in place, we can take a leading role in sustainable investment for our pension fund clients across the globe. We are now exploring the possibility of granting other pension funds access to the classifications.’

How will investing look in the future - will humans still be involved, or will all investment decisions be made by algorithms and robots?
‘We are firm believers in the combination of people and computers. Computers can increasingly take over search and analysis tasks. This allows portfolio managers to work more efficiently and frees them up to make investment decisions. They will continue to perform manual checks, and their expertise and experience will be a key factor in the process. So even in a future with artificial intelligence, humans will remain a constant.’

Unfortunately, this article is not available in Dutch.

APG is taking over the data analytics activities for sustainable investing from Deloitte Nederland. This business unit is well known for its great expertise and knowledge at the cutting edge of artificial intelligence, big data, and sustainable investing. The thirteen employees will be working for APG in an independent business unit. The takeover will significantly accelerate APG’s use of artificial intelligence and big data for sustainable and responsible investing.

The new APG team will be tasked with identifying listed companies that make an important contribution to solutions for climate change, or for problems in the areas of health care and education. The team will complement the expertise already available at APG in the areas of artificial intelligence and big data. The technical infrastructure and the team’s smart algorithms are fully operational and are a very good fit with APG’s current investing activities.

The new business unit is also an excellent supplement to other innovative initiatives at APG, such as Kandoor, a smart digital platform where people can go to with all their financial questions. This helps APG further strengthen its innovative power and as such ensures optimal cross-pollination of high-tech knowledge, from which pension funds and their participants can profit as much as possible.

Ronald Wuijster, Interim member of the Executive Board of APG Group, responsible for asset management said: “We are constantly seeking out innovative and sustainable investment opportunities to achieve the highest possible return at the lowest possible costs. Using the unique knowledge this team has in relation to big data and artificial intelligence will make us even better at that.”

Gerard van Olphen, Chairman of APG’s Executive Board said: “By making smart and good investments, we contribute to the maximum possible pension value for the participants in the pension funds for which we work. This is another way in which we give pension funds and their participants more control over their financial future.”

Innovative pension administration

The takeover of the data analytics activities for sustainable investing is just one of APG’s many initiatives in the area of innovation. APG invests fully in new technology, both in relation to investments and pension administration.

Artificial intelligence is also being used to improve the service to pension fund participants. Algorithms are developed by a special team using, among other things, contact history, personal data, pension details, and the online browsing behavior of large groups of participants. By combining this information for different target groups, it can be predicted with high reliability when they will contact the pension fund in relation to which topic. These insights are used to proactively approach the pension fund participants, but also to communicate more efficiently and effectively with the participants.

APG announced earlier this year that together with PGGM, it had successfully completed the first phase of an experiment with a blockchain application for pension administration. In the long term this technology promises more flexibility and lower costs for pension funds and their participants. Most of the work will take place at the Smart Services Campus in Heerlen.

APG will use data science to further improve services to members of pension funds. Based on available data, such as age and marital status, it is possible to ask participants to "predict" and anticipate. APG wait no longer for a phone call, email or tweet, but participants will approach proactive and activate.

For example, with specific information about the effects of a new job for the accrual of pension are. APG expects this development over time, fewer emails and phone calls leads to the customer contact center. Furthermore, effective and efficient and euml, communicate more effectively with participants. This potentially results in a substantial saving for the affiliated pension funds. First, long-term pilot studies show that participants value the new service.

Context increasingly important

Participants increasingly expect better communication and service of their pension fund. Not least because as consumers of other service providers, such as banks, insurers and retailers also have extensive online service. In the improvement of the service to understand the context of the participant is becoming increasingly important. Every life stage and personal situation of the participant knows after all other needs for information about retirement.

Data science contributes to proactive service

To receive this context sharper focus puts APG data in science, including artificial intelligence. For this, built by a special team algorithms which will include use of contact history, personal pension information and online click behavior of large groups of participants. By combining this information for different audiences, to predict with great certainty when on any topic, contact the pension fund. For a participant can be determined by life event how likely it is that he is contacting or visiting the My Digital Fund environment. Furthermore, it is clear what kind of communication works best for an individual participant. These insights are used to access the participant proactive, but also efficient and euml,. Communicate more transparent and more effective with the participant

Raoul Willms, Director of Marketing  Distribution APG Many people are still not aware of their retirement. While income for the future is something very important. We invest then still in full knowledge and modern technology and euml; n order to make consumers more involved and to take action when it comes to their retirement 

A year ago presented APG, Province of Limburg and Maastricht University, the arrival of the Bright Lands Smart Services Campus in Heerlen. On September 12, 2016 Campus opens its doors officially in Heerlen.

Programs

In an era of ever delivering ongoing digitalization smart services based on data analysis important contributions to solving economic and social issues. This includes topics such as financial services, data security, health, climate change, and civic education. The Bright Lands Smart Services Campus is an initiative to tie in light of this knowledge, talent and entrepreneurship in the region and connect: Data for services to improve the quality of life.

Large and small companies, research institutes together with startups and other organizations, the start of an open smart services community. A community that communicates with knowledge from other fields such as new materials, sustainable technologies, nutrition and health. Therein also lies the strength of Bright Lands.

APG is to work alongside other companies and knowledge institutions on practical applications of blockchain, artificial intelligence, and technology which contributes to reducing carbon emissions. APG will be earmarking a significant part of its innovation budget for this in the coming years. Developments in these fields are advancing at lightning speeds, and hold great promise for society. The insights and experiences acquired along the way will contribute to further improvements in APG’s operational management. The projects will be conducted on the Brightlands Smart Services Campus in Heerlen.

Gerard van Olphen, APG CEO: “Blockchain’s inherent promise, artificial intelligence and the effects of climate change will all exercise significant influence on the future of APG, the commercial world and society. By investing substantially now in such technical innovations, entering into partnerships with companies, start-ups and knowledge institutions, APG is contributing to the strength, synergy and speed needed for the Netherlands soon to be a leading player. Participants in affiliated pension funds will also benefit from this. So I am extremely proud that we are taking a first step in this direction here today.”

APG has put together a special team for the execution and supervision, led by Joep Beukers, Director of Innovation at APG. This team will ensure that smart applications will be developed on the campus for a range of sectors, in line with the chosen spearheads. For blockchain, this will include applications for the financial sector, logistics, the property sector and the medical field. The aspiration is to evolve into the European breeding ground for blockchain applications. A variety of companies will collaborate, making a contribution to the center. Research and study programs of several scientific institutions will also be used, including Dutch knowledge institution TNO and BISS (the Business Intelligence & Smart Services Institute). Finally, start-ups and scale-ups will be recruited, with a range of facilities being made available to them on-campus. This aspiration and working method also applies to applications involving artificial intelligence and climate solutions.

Consultations have taken place on the spearheads, among others with the Fintech representative in the Dutch cabinet, Willem Vermeend, who believes these innovations are vitally important for the Netherlands’ smart industry and the country’s financial sector. From his position as Endowed Professor of Smart Industry at the Open University in Heerlen, he will take on chairmanship of the project’s advisory and program board.