Sunday, May 29, 2016

Commencement 2016: A Brief Survey

  • Barack Obama (U.S. President) at Rutgers University: “Gear yourself for the long haul. Whatever path you choose—business, nonprofits, government, education, health care, the arts—whatever it is, you're going to have some setbacks. You will deal occasionally with foolish people. You will be frustrated. You’ll have a boss that's not great. You won’t always get everything you want—at least not as fast as you want it.  So you have to stick with it. You have to be persistent. And success, however small, however incomplete, success is still success.  I always tell my daughters, you know, better is good.  It may not be perfect, it may not be great, but it's good. That's how progress happens—in societies and in our own lives."
  • Steven Spielberg (Filmmaker) at Harvard University: “Your intuition is different from your conscience. They work in tandem, but here’s the distinction: Your conscience shouts, ‘here’s what you should do,’ while your intuition whispers, ‘here’s what you could do.’ Listen to that voice that tells you what you could do. Nothing will define your character more than that.” 
  • Sheryl Sandberg (Chief Operating Officer - Facebook) at University of California – Berkeley: “Build resilience in yourselves. When tragedy or disappointment strike, know that you have the ability to get through absolutely anything. I promise you do. As the saying goes, we are more vulnerable than we ever thought, but we are stronger than we ever imagined.”
  • Jeff Immelt (CEO General Electric) at NYU Stern Business School: “You are entering a volatile global economy, the most uncertain I have ever seen. This is a world that needs better leaders, with new skill sets. The playbook from the past won’t cut it today. My advice for you as you enter this world is to be flexible, be bold, and don’t fear criticism."
  • Spike Lee (Filmmaker) at Johns Hopkins University: “After you leave here today, it’s gonna be real life, and real life is no joke. It’s real out here for the other 99 percent, for sure. Now it’s up to you, this new generation, to make it fairer, a just world. And it’s up to the graduating classes of 2016 to make it a better world for the 99 percent, who are daily being hornswoggled, hoodwinked, duped, rebuked, and scorned, double-crossed, incarcerated, profiled, starved, mis-educated, used and abused, and even shot down on our streets.”

Sunday, May 22, 2016

Uber's Self-Driving Car and Policy View on Technology Innovation

  • Last week Uber Technologies Inc. announced on its website: “If you’re driving around Pittsburgh in the coming weeks you might see a strange sight: a car that looks like it should be driven by a superhero. But this is no movie prop — it’s a test car from Uber’s Advanced Technologies Center (ATC) in Pittsburgh.
  • The car, a hybrid Ford Fusion, will be collecting mapping data as well as testing its self-driving capabilities. When it’s in self-driving mode, a trained driver will be in the driver’s seat monitoring operations. The Uber ATC car comes outfitted with a variety of sensors including radars, laser scanners, and high resolution cameras to map details of the environment.” 
  • Separately, U.S. Senator Elizabeth Warren, in a presentation at the New America Annual Conference, said “Across the country, new companies are using the Internet to transform the way Americans work, shop, socialize, vacation, look for love, talk to the doctor, get around, and track down a 10-foot feather boa—which was my latest Amazon search … 
  • The most famous example is the rise of ride-sharing platforms in our cities … The ridesharing story illustrates the promise of these new businesses—and the dangers. Uber and Lyft fought against local taxicab rules that kept prices high and limited access to services ... While their businesses provide workers with great flexibility, companies like Lyft and Uber have often resisted the efforts of those same workers to access a greater share of the wealth generated from their work. Their business model is, in part, dependent on extremely low wages for drivers ... 
  • For centuries, technological advances have helped create new wealth and have increased GDP. But it is policy – rules and regulations – that will determine whether workers have a meaningful opportunity to share in that new wealth.”

  • Regarding driverless cars -  Broad adoption will require understanding how to navigate the less predictable moves of pedestrians and bicyclists.
  • Regarding Warren’s comments – While she seeks to protect worker rights in the “gig” economy, the larger challenge is how to address the impact of displacing workers by advances in technology and automation. 

Sunday, May 15, 2016

On U.S. Commerce, Disappearing Cash and Cyber-Crime

  • Last week, the U.S. Department of Commerce said “analysis of recent data [July 2015] shows that Americans are increasingly concerned about online security and privacy at a time when data breaches, cybersecurity incidents, and controversies over the privacy of online services have become more prominent. These concerns are prompting some Americans to limit their online activity … it is clear that policymakers need to develop a better understanding of mistrust in the privacy and security of the Internet and the resulting chilling effects. In addition to being a problem of great concern to many Americans, privacy and security issues may reduce economic activity and hamper the free exchange of ideas online.”
  • Separately, SWIFT CEO Gottfried Leibbrandt, commenting on an $81 million theft from a Bangladesh central bank account at the New York Federal Reserve, said “At the end of the day we weren’t breached, it was from our perspective a customer fraud … I don’t think it was the first, I don’t think it will be the last."
  • SWIFT also reported “a newly identified malware found in a customer’s environment” and in both cases “the attackers clearly exhibit a deep and sophisticated knowledge of specific operational controls within the targeted banks – knowledge that may have been gained from malicious insiders or cyber-attacks, or a combination of both … in this new case we have now learnt that a piece of malware was used to target the PDF reader application used by the customer.
  • Note: SWIFT provides a financial messaging service to organizations around the world.

  • Regarding the Department of Commerce study -  It is likely that policymakers will continue to have diverse views data security issue, both how to address them and their economic and social impact. 
  • Regarding SWIFT – Because its system supports diverse organizations and technologies, it will only be as strong as its weakest link; which includes the people with access to its system.  
  • Bottom line: Network/data security is critically important to governments, businesses and consumers. Improving the current environment will require better software design (including using encryption) and better oversight of user access.

Sunday, May 8, 2016

How Will Artificial Intelligence Impact the Finance Industry?

  • Last week, at the Milken Global Conference in Beverly Hills,  Daniel Nadler, chief executive of finance analytics firm Kensho Technologies, Inc.  said “Analysts, young associates, vice presidents — anyone whose job is moving a column of data from one spreadsheet to another is going to get automated  … Those people are not going to have jobs.”
  • Also,  David Siegel, co-founder of quantitative hedge fund Two Sigma said “Most people in the bulk of the job market are not involved in super-high-value jobs … They are doing routine work and tasks and it’s precisely these tasks that computers are going to be better at doing,” 
  • Separately, a Financial Times article said that “Sentient Technologies, an artificial intelligence company, plans to open its experimental hedge fund using “evolutionary” algorithmic trading to outside investors as early as this year.” Antoine Blondeau, the firm’s chief executive officer said the asset management industry’s “transition will be slow. But at some point it will become a situation where the question will be whether one machine can outdo another machine, not whether the machine can outdo a human.”
  • Finally, in “Ghosts in the machine: Artificial intelligence, risks and regulation in financial markets”, a survey of 424 executives from financial institutions and fintech companies by Euromoney and Baker & McKenzie, it stated that finance was  “an industry rapidly seeing the potential benefits of AI, while being increasingly concerned about risk and the ability of regulators to keep pace … The most dramatic changes brought about by AI and machine learning within three years are expected to be in the areas of provision of creditasset managementtrading and hedge funds.” 
  • Artificial intelligence/machine learning will automate and disrupt many aspects of the financial industry, as well as other professional services – including accountinglaw and education.
  • Because information technology systems are susceptible to “garbage in - garbage out”, safeguarding against poorly designed algorithms will be important.
  • While many technology businesses should benefit from the AI trend, the accelerating pace of

Sunday, May 1, 2016

Encryption, the Blockchain and the U.S. Department of Defense

  • Last week, the U.S. Department of Defense posted a request for proposal for a Secure Messaging System which said: “There is a critical [Department of Defense] need to develop a secure messaging and transaction platform accessible via web browser or standalone native application … Legacy messaging and backoffice infrastructures, traditionally based on centralized, unencrypted hub-and spoke database architecture, are expensive, inefficient, brittle and subject to cyber attack. The overhead costs of maintaining such architectures is rising rapidly.”
  • The messaging platform would act as the transport for a cyptographically sound record of all transactions whether they be [military procurement requests], contracts, troop movements or intelligence … The benefits are broad and could even be applied to domains such as space.”
  • “With this messaging platform the business logic of the DoD ecosystem would be mapped onto a network of known entities using distributed ledgers. By doing this significant portions of the DoD backoffice infrastructure can be decentralized, ‘smart documents and contracts’ can be instantly and securely sent and received thereby reducing exposure to hackers and reducing needless delays in DoD backoffice correspondance.”
  • Regarding encryption -  While some government policymakers are concerned about encryption technology, which is increasingly used by AppleGoogleWhatsAppTelegram and others, this DoD request for proposal validates the view that encrypted data use will continue to expand.
  • Regarding the blockchain – The blockchain is a type of database popularized by Bitcoin.  The DoD’s focus on a “customized blockchain implementation” will likely address latency and scalability issues that have plagued some implementations.
  • Regarding commercial use – Given the DoD ‘s broad communciation reach in the public and private sectors, a successful development could reshape the markets for encrypted messaging and “smart contract” solutions