 You're listening to the ECB podcast, bringing you insights into the world of economics and central banking. My name is Katie Ranger. Today we're talking about a topic that's a little outside of what we usually discuss, and that's digitalisation. It affects every aspect of our lives, it's constantly evolving, and the pandemic has only accelerated that. I'm joined today by Claudia Platner, head of IT here at the ECB. Claudia, welcome to the podcast. Thank you so much for having me, it's a pleasure to be here. Now, Claudia, you joined the ECB as head of information systems back in July 2021. And today we're going to be talking about, first of all, how you ended up at the ECB, and also then about a couple of areas in which your digital strategy is really driving change forward here at the bank. I really think it's a fascinating time to talk about the topic of digitalisation because since the pandemic, we've become more and more reliant on it in our everyday lives. Online meetings with friends and family are now very much routine and, well, also for many of us, showing our digital vaccination passports in shops and restaurants is very much a second nature. Now, let's start with a bit about you, Claudia. Before you joined the bank, you were chief information officer at the IT provider of Deutsche Bahn, Germany's national railway company that we know very well here in Frankfurt. That's quite a jump from trains to central banking. What was behind the move? Well, first of all, the job is not that big at all, really, because I've been doing IT there, I'm doing IT here now. And this is actually the first reason IT is my passion. So I'm really I'm a digital person. I really like technology. I like IT and I like getting things done. So this is very similar. And at the end of the day, quite a few of the problems we're facing here at the ECB, quite a few of the challenges we tackle on an everyday basis are not so different from what we did in the transport logistics business. So a very, very simple example before we go a little bit deeper is in my former job, we tried to predict, for example, when a locomotive would break down, we would collect sensor data, the motor temperature or something like this, we would try to find out when it could potentially be breaking down in order to make sure that we bring it to maintenance before that happens on the tracks, for example, where it's really, really expensive to handle that. I didn't even know that was possible. Yes, it is. It is quite possible, actually. And it's being done because that's a huge financial impact that actually affects the business. And to be perfectly honest, what we do here is not so different. We look at banks, for example, what state they're in. Is there something happening to them? And if so, how would others be affected? So in a way, we're doing kind of like the same thing. The challenges we have are not so different. They're IT related, they're data related. And this is what I'm good at and this is where I want to try to help. And this is indeed also the reason why I'm here at the ECB now. It's very, very much about the public sector. For me, at least it is. It's for giving back to society. It's about contributing because I like to think that I have some talents that I can bring to the table. And therefore, it's important for me to make sure that they're being put to good use. So this is why I'm here. OK, so it sounds like perfect combination for you. Claudia, you're also a woman in IT and women are largely underrepresented in the field. You're also a vocal advocate of change here, I'd say. I mean, I follow you and LinkedIn and you have this really, really nice series of posts that you started on International Women's Day this year where you spotlight female colleagues in IT here at the bank. And it's really popular and I really, I enjoy it. I enjoy reading the posts every week. What has been your personal experience as a woman in IT? How have you found it? A lot of people still assume that women in IT are underrepresented because they don't want to work there. That's simply not true. Women do want to work in IT. They do. But that also means we need to be able to present them an environment in which they can be valued and in which they can thrive. We still have this whole stigma about IT not being the perfect environment for a woman, which is just not true. We need to think in broader terms, we need to think in terms of diversity of thought, really. We need to make sure that everyone feels invited to work here. The excuse that there are no candidates. I don't accept that. There are candidates. And we just need to reach out to them very clearly. And the initiative that you mentioned, thanks for mentioning that, by the way. I love the fact that you love it, so that's wonderful. That idea came up and we said, you know what? When we look at the women in our directorate, they are amazing. So we want to make sure that they are seen and that everyone out there understands that this is a good place to work for women. But it's not the only thing we're doing. We're doing plenty of other things. For example, catch them early is one of those phrases, really. We're trying to have an event once a year that's called Girls That Code. So I was fantastic. It's wonderful. So I had the pleasure of being there and getting to know them. There was a group of very, very young girls and they were introduced to some coding technologies and they could actually experiment a little bit. So there was really, there was an awesome event. And I think the atmosphere was quite good. They seemed to have a lot of fun, at least. So that's one thing. The other thing that we just recently did is a scholarship for women. And we extended that from just economy and economists to indeed also engineering sciences, computational science, statistics. And I again had the pleasure to participate there. And I was a panel member and the talent we saw there truly amazing. And it's indeed a privilege and a pleasure to be able to support that in the form of the scholarship. So that's another thing. And last but not least, and I think that's the most important one, but whenever we recruit someone, whenever we have a job opening, we need to walk around with the open eyes and see if there are eligible women or encourage eligible women to apply for it. And there are plenty. Okay, so it's a little bit of a cultural change, a mindset change, but also doing things to bring women to the profession and get them on it early. Absolutely, you have to start there. I think one of the most important parts is really changing the culture. You just mentioned it. So let me get back to you on this one. I remember a time when I was in a management board. That was plenty of years ago. I was in a management board and I was the only woman there. Officially, there was another one, but she was never there for various reasons. But I was the only woman in that group, in a group of more than 10, I think it was 13, 14, something like that, man. Which is kind of typical, right? It's the typical image that we all have in our minds of the IT companies. Absolutely, that was an IT company. There were plenty of men around, only men. And I cannot say a single bad word about them. They were awesome colleagues. I really, I liked them a lot. They were extremely supportive. I liked working with them. They were great colleagues. But nonetheless, they were all men. And with my being the only woman in that group, there's a certain culture in the room. And I never realized that, even though everyone was really supportive, but I felt the change when all of a sudden, there were some activities, basically after a while, had like about a third of us were women at some point. And the way we interacted, the way we discussed things fundamentally changed. The way we discussed things, the way we looked at things, the perspectives from which we tackle challenges changed. And for the better, because it was more diverse. It was more angles that we took into consideration. And that was important in better problem solving. And also it made me feel a lot more comfortable, even though I had not felt uncomfortable before that. Sometimes you don't realize it indeed until it actually happens. What fascinating insights there. Thank you, Claudia. Let's move to IT itself, right? IT is everywhere. I mean, we need it in everything we do. And the same applies obviously for our work here at the EC. Now I want to zoom in on two areas and discuss how your work, Claudia, comes in there. The first one is now casting and measuring prices. And the second one is climate change and banks. Let's start with the very core of what we do. Our mandate of keeping prices stable. One thing we do for that is monitoring how the economy is doing, how different events affect prices. But typically such an analysis for that comes with a considerable lag, often even of a few months. But there is a way to get a snapshot of the economy basically in real time. And that's called now casting. It's a pretty cool word, or at least I think it's a pretty cool word. And it comes from the idea of forecasting, but it looks at a much, much shorter timeframe. It's really real time analysis, hence the now. And I have to say when I was researching for this podcast, I did find that the term actually comes from meteorology. So it's not something that's just restricted to central banking. Claudia, why is now casting so important for us? Well, first of all, the time dimension is the most important part, because indeed, if you want to know what the weather is going to be like tomorrow, it would be good to know what it's like today. So there is a relationship, even though the weather is more of a chaotic system, at least I hope so, than the financial world. What is really, really important for us is to be able to act and take decisions as policymakers. Think back to, for example, 9-11. It took weeks, months to understand the real impact it would have on the different parts of our economy in order to understand how this would also affect policymaking and how to respond to it. So now think back just recently when Russia attacked Ukraine. We're talking about something that's just happened a few months ago, and within days, our people here were on it, and they were trying to establish proper data, get everything in, and make assumptions, and thus take decisions on what we need to do now. And I was there for those sessions. It was quite intense. But also, the information we had was pretty good. So it was there days, hours after that, not weeks, months, even years. So the time dimension is a really important one. Another example just of our recent history is the pandemic, of course. Same thing, we need to know what kind of impact it will have. And you can get the numbers basically on a daily basis in the news. And I always say, we put a thermometer into the economy. That's the term I usually use for that. And so what we do is basically, we scrape websites. So we go to the web pages of supermarkets and we get the pricing information out. So it's not like every day you send out all these bots or something while these robots go in across the supermarket floors. That's an interesting idea to have the robots go there. But you know what? It's a lot easier. You can just call up the website because the price information is right there. And what we do, we basically do send robots, if you will, but virtual ones to this website, read all the information and get it back to us. So that's the basic idea. We call them spiders, by the way. Nice. So crawling the web, that's where the term comes from actually. And what they do is they get the price information out. They classify it, they categorize it, they clean it up. So there's a lot of background work going on in order to make sure that we have the information here. But it's a lot of things that's happening and it's a lot of data sets, actually. We're talking nine to 10 million data sets, right? That's huge. That's huge. That's amazing. And all of this gets cleaned up in an automatic fashion. And at the end of the day, it took a couple of IT people. It took a couple of statisticians. And it took also some partners who helped us settle this up. But this group of people made this happen. And it made possible for us here at the ECB to have actually on a daily basis, on an almost real-time basis, the price information of what's going on all over Europe in the supermarkets. And that is a really important piece of information when it comes to price stability, as we all know, and that's on everyone's mind these days. From what I understand, it's also a little bit more flexible. So for example, when the pandemic first started, the official statistics wouldn't have had masks, which basically became an essential good overnight. But you in now casting can add masks to the baskets. So you can make these little changes where things change in a very short space of time. That is exactly the case. I want to just go back to something that you mentioned a little bit earlier. And that's that you have a couple of IT people working on it, but you also have people from the business area. So that means that it's not just an IT thing anymore. I mean, I guess there's programming involved here. Reminds me of term digital dexterity and this idea that IT is actually in program is going to be a much bigger part of our jobs these days, right? Absolutely. Absolutely. And I couldn't have said it any better. So this is very, very much about how do IT and the business work in a partnership? That means we do need the insight of what actually needs to be done on the business side. And we do need the IT people to add the technology knowledge to it in order to get this done. And IT is used everywhere, not just in banking, also in industry, in manufacturing, in all kinds of service landscape. IT is in the heart of our production process and that means we have to get along and get this done together. None of us can win without the other. IT doesn't have a meaning without a business to work with and business cannot perform without IT in this century really. Well, I'm sure this is going to be the case in the other topic that we're now going to move on to and that is climate change. Now, we've just recently announced how we want to contribute to a greener future in our monetary policy operations. And in that same week that we announced that, we also published the results of our climate stress test, which is where our banking supervision colleagues basically looked at how prepared banks are to tackle climate risks. One word that has come up time and time again here on the podcast in my conversations with guests about climate change is data. One big aspect of what we can do in the world of finance has to do with shedding light on the financial risks stemming from climate change. And for that, we need data. Now, data is clearly at the heart of what you do, Claudia. So how exactly does climate change figure in your work here at the bank? That's an excellent question. And I think its role is already pretty big and it'll become even bigger, that much is for sure. But first of all, let's differentiate between two different things. When people think about green and IT, they usually think about green IT. So it's about how do we make our own IT operations more sustainable or greener? That is part of the journey, no doubt about it. But more importantly, it's not about green IT, it's about green with IT. So the question is how can we use IT in order to make sure that we indeed have a sustainable finance landscape out there? What can we do as the ECB to make sure that this can happen, that we have everything we need for that? So let's be very concrete because this is very, very abstract, right? Climate change has a financial dimension. And we're currently looking at the first examples. And this is why I said, in my opinion, it's going to become bigger and bigger. The first examples already show us that there's a huge dimension out there. So for example, let's say we looked at locations, really we're talking their addresses, like longitude, latitude, home address, whatever you want to call it, someplace on this planet. Because now you have an area that's affected a lot by flooding or drought or something, that can put stress on these banks. And that stress can, as we all know, propagate. So therefore, the whole topic of having an increased risk of floods or droughts, you can see that on a map, will indeed have an impact on the banking sector. And that's part of what we do, right? We're looking at banks and their health, if you will. That's one part of the story. So that would be one example. So you took the addresses and plotted them essentially on a map. Indeed, that's what we did. And the results are quite impressive. You can actually visualize what you always had a gut feeling. And all of a sudden it's there in black and white or actually in yellow and red and green. So indeed, but that's exactly the case. And there's another example. We just recently carried out a climate stress test. So there are plenty of banks involved here, IT. You need a lot of systems for that. You need to clean up the data. You need to standardize it. And then you need to draw insights from that, right? You already kind of touched upon it, climate change here at the ECB. And IT is just going to have to do more and more. And you will be more and more part of this process because the data is just needed. We won't be able to monitor these risks otherwise. Yes, I'm afraid so. It's not a journey I really want to embark on because I really wish we wouldn't have to. But it's a reality. We got to face it and we all got to stand together to solve it. IT has to play its role here. That much is for sure. We have a task in this which is bringing all the information together and making sure that others can take good decisions. So that's our job. When I look towards the future, I'm neither a politician nor a visionary nor a future researcher or anything like that. I'm an IT person. I, for myself, see an exponential rate of data come in our way in order to be able to steer that. And that means we have to be prepared for this. We have to look towards what could be needed. We have to make sure that we have the technology in place to work with that, with cloud technologies, with AI, with maybe even high performance computing in the terms of quantum. If we're talking huge simulations, those could be options that we need to look into now in order to be prepared once we need them. And unfortunately, chances are we will need them. That's at least my opinion. Okay, we're looking already to the future and it would be strange to have a podcast on digitalization and not mention something that may come in the future, the digital euro. Now, just to give our listeners a bit of background on what it is and where we stand with it, the digital euro would be an electronic form of money issued by the central bank, so by the ECB. People and firms would be able to access it, like banknotes, but in digital form. Now, at the moment we're talking about what this digital euro might look like and this is what we call the investigation phase. That started in October, 2021, so last year. And it will last for about two years, concluding in October, 2023. I'm really curious to hear what your thoughts are on it from the perspective as an IT professional. Happy to say a few words about that as well. I think we have to look a little bit first to the why. Why are we doing this? Well, our world is becoming increasingly digital, right? So with more and more services actually being offered in the digital world and us spending more and more time in the digital world, the question immediately arises, how do we use money in that world? How do we make sure that we're not only reliant on PayPal on credit cards? Because that's what we use, because it's really, really convenient. That's what we use today. If more and more of our life actually takes place in a digital world, professionally as well as privately, then we as the ECB need to have an offer for the people and the businesses of Europe to actually use money in the digital world. We need to move with that change essentially. We need to move with that change. And one example not everyone likes, but I really like it. So I'm going to bring it again. Curious now. Yeah, yeah, so. Is why does my electric car need me in order to settle the bill with the electric charging station? So why doesn't it do it automatically? Yes, why doesn't it do it automatically? You don't even have to get out the car. No, I don't even have to get out of the car. Let them deal with it, right? Or let them do this while I'm going shopping and the bills should be settled when I get back. So of course I know this is not right now not possible from a legal perspective, but the point is we're moving into a digital world. We're moving into a digital era. And that means we have to be prepared and we have to have the means to make sure that the euro as one of the signs of the unity of Europe is actually prepared for that time. And from a technical perspective, that also means you need to anticipate the unknown, the uncertainty. What I've just given you as an example that's very tangible, right? And from a technical perspective, that means we need to make sure that we build a digital euro that actually is from an architecture point of view flexible enough to serve the people in the digital world now, the businesses in the digital world now, but also offers possibilities for the future to be adapted, to be extended, to be done whatever needs to be done in that future with it. And this is really, really important because we need to have this offer for the European people and businesses. Otherwise we will missing out on a huge part of our future world, which is going to be digital. Well, thank you so much, Claudia. This has really been fascinating. I have to say that your passion on the topic is truly infectious. Now, before we wrap up, we always have a question that we ask all our guests on the podcast. And that's for a hot tip linked to the topic that we're discussing today. So broadly speaking, IT and digitalization. Claudia, have you thought of something to inspire our listeners? Well, yes, I have. So this has been kind of like my homework and I tried to do it properly. And I was thinking, what really had an influence on me? What affected me from a digital point of view? What had an influence on my thinking about the digital world? And I always came back to one book I read in 2012, 2013. It actually came out in 2010. I researched that, which is by Ernest Klein. And it's called Ready Player One. Yes, I've heard of it. I've heard of the film. Of the film, indeed. So I think in 2018 or something, Steven Spielberg made it into a movie. So now everyone knows about it. But actually, I read the book long before that. It's set in 2045 and it's about a worldwide virtual reality game in which pretty much everyone on the planet is engaged. Day long, as in they log on in the morning and they basically log off at night or something like that. So back in 2010, you said, kind of like something that we couldn't really imagine, but now very much something that we could imagine. Indeed, that's the funny thing about it. It's dystopian in a way. And of course, there's also an adventure story behind it. So it's an easy reader, all of that. But now when I first came across the news about the metaverse that was announced by Meta, formerly known as Facebook. And when I hear the term digital first, I think back to that book because it kind of formed that picture in my head of what this would be like. And I have to admit, it scares me. It even scares me because I don't really understand it so unfamiliar to just spend your whole day in this virtual world. But on the other hand, kids these days are online all around the clock. So in a way, we're moving in that direction. And metaverse is just another big step in that direction. And just because of an understanding, just because it scares me, being scared is no excuse for not acting. So for me, it's really, it's very, very important that we understand what's currently happening. We understand this world because we need to help ensure that it's actually a positive reality this is coming to. This is why this book is something that affected me and I can recommend reading it. Maybe it will cause something in the listener's hats too. Well, ready player one. You've got the novel listeners if you're looking for some summer reading, but there's also the movie by Steven Spielberg. A fantastic hot tip. I would also have another hot tip if you're interested. We'll allow it just this once. Okay, thanks. And that's very, very useful, Ron. It's just about two weeks ago. I actually attended a presentation by Google and they presented the Google Earth Engine. Google Earth Engine. I know what Google Earth is. The Google Earth Engine, no. It's not exactly the same thing, but along the same lines. So basically it's a platform which contains a huge amount of satellite and geospatial data over the last 30, 35 years and a wide tool set to actually use it. And the target audience is researchers really. What you can see for example is how the temperature on this planet has changed in different regions of the world over the last 37 years and you can actually visualize that in a globe. Oh, wow. So that's very impressive. You can also see from the satellite pictures how a landscape has changed over the last, I don't know, 30 something years. Like sea levels, things like that. Exactly, or like river deltas or something, what's happened to them. So it's very, very visual. You can actually see the effects and you get to use the data yourself. And for example, one thing that they demonstrated was really amazing. For the example that I just gave you, you could also zoom in on a single house and actually calculate with that engine what effect a solar panel on this house would have in terms of electricity. And now think about this not in terms of a house but think about it in terms of a city for example or a region. So you can actually play around with the data and see what effect, what hopefully positive effect it would have if you took certain measures. That sounds super powerful. It is very, very powerful. And if I have 10 more seconds I would like to share a small anecdote. There was a room full of CIOs listening to their presentation. And the very first question that came from the audience was so what does Google get out of this? This is a very understandable and valid question but it's also a very cynical one. And I really loved the answer from the scientists. I really want to share that one, which was we live on this planet too. And I think that's the perfect sentence to finish that one. We're in this together and we need to find 21st century solutions for 21st century problems. And they are digital and that means we have to join forces here and get it done. Fantastic way to end, Claudia. Thank you so much for all your insights today and for taking the time to be on the podcast. What a pleasure being here. Thank you. Well, that brings us to the end of this episode. Thanks again so much to Claudia Platner, our head of IT here at the ECB, for taking us on a fascinating journey through what is quite different from what we're usually covering here on the podcast. Check out the show notes for further reading on this topic. You've been listening to the ECB podcast with Katie Ranger. If you like what you've heard, please subscribe and leave us a review. Until next time, thanks for listening.