When I look back on the year, I’d never anticipate how eye-opening 2019 was. For me, January was about deciphering all the questions about artificial intelligence (AI). Most notably, the fear of robots taking over our jobs and machines becoming super intelligent.
Nearly a year later, the debate continues about the negative impact on jobs, lack of talent, data quality, cybersecurity threats, algorithmic bias, accountability, transparency, the absence of regulatory and legal frameworks, protecting people’s rights, workforce training and competition.
January 2019: Big Data, ML and AI Fears
Like other technologies I’ll discuss below, one of largest barriers to adoption and innovation is understanding what AI is, how it works, and why it matters for you.
A simple way to explain the benefits of AI is to understand where we are in terms of big data. We’ve reached human capacity or information overload. It’s impossible to read all the structured and unstructured data that exists in the world.
Structured data consists of information already managed by the organization in databases and spreadsheets; it is frequently numeric in nature. Unstructured data is information that is unorganized and does not fall into a pre-determined model or format. It includes data gathered from social media sources, which help institutions gather information on customer needs. (Investopedia, 2019).
AI is based on algorithms or a set of steps for computers to complete a task. Take a digital assistant like Alexa. When you ask it a question, it changes into a digital sound which is translated into English phonemes. Then, the phonemes are broken down into words that are processed by a search engine and formulated into sentences that we can understand in a non-robotic way.
An algorithm in AI provides probabilities based on how it’s programmed or trained to find patterns in data.
By now, you should be aware of the huge amount of data that big tech firms and others have on us. Google, Apple, Facebook, Yahoo, Amazon, Netflix, Telsa and others collect email and IP addresses, phone numbers, locations, search queries, browsers, third-party information, ad targeting data and much more.
February 2019: Data Privacy — Whose Responsibility is It?
Earlier in the year, there had already been 1 billion data breaches. But it wasn’t until the the General Data Protection Regulation (GDPR) was implemented along with the California Consumer Privacy Act that consumers really began to take notice of how their personal data was being collected, used and sold to thousands of institutions, organizations and data brokers.
After a new Vermont law required companies that buy and sell third-party personal data to register with the Secretary of State, Fast Company assembled a list of 121 data brokers operating in the U.S. It’s a rare, rough glimpse into a bustling economy that operates largely in the shadows, and often with few rules.
“The registry is an expansive, alphabet soup of companies, from lesser-known organizations that help landlords research potential tenants or deliver marketing leads to insurance companies, to the quiet giants of data. Those include big names in people search, like Spokeo, ZoomInfo, White Pages, PeopleSmart, Intelius, PeopleFinders, and the numerous other websites they operate; credit reporting, like Equifax, Experian, and TransUnion; and advertising and marketing, like Acxiom, Oracle, Innovis, and KBM. Some companies also specialize in ‘risk mitigation,’ which can include credit reporting but also background checks and other identity verification services.”
Beyond data mining is social media mining by Facebook, Instagram, Twitter, LinkedIn and other companies that collect demographic data like age, sex, race, location, profession, schools, friends, connections, networks and more to inform strategic business decisions.
We leave a digital footprint everywhere as we go through the day. Whether we’re speaking on our cell phones, shopping on Amazon, watching movies on Netflix or videos on YouTube, using messaging apps to communicate and more, our every movement is being tracked.
Recently, I asked my digital assistant, Alexa, “Are Amazon and Google listening to my conversations?”
Her response was, “Here’s something I found on the web. According to CNBC.com, Google, Amazon and Apple have used humans to listen to conversations.”
Then, I asked the same question again. She answered, “Sorry, I’m not sure about that.” And again, “Sorry, I don’t know that.” I guess someone at Amazon who was listening asked his or her IT department for help to change the algorithmic response.
Yet there is no consensus about who should be responsible for data privacy. While some believe it’s consumers’ responsibility, others think that governments and businesses should do more. What’s needed is a federal law with consistent standards rather than the states implementing makeshift laws that are inconsistent and confusing for consumers traveling and businesses engaging in commerce across state lines.
March 2019: South by Southwest (SXSW), Cambridge Analytica and #OwnYourData
During SXSW, I learned even more about data privacy, GDPR, AI, digital money, sovereign identity, fake news and blockchain during #CryptoVixens panel discussions.
Another thought-provoking discussion was with John H. Meyer, Fox Business technology analyst, global technology speaker and consultant; Rachel Sibley, futurist and immersive technologist; and Brittany Kaiser, Cambridge Analytica (CA) whistleblower, Co-Founder of the Digital Asset Trade Association and creator of the #OwnYourData campaign. I was fascinated by what Brittany shared about CA.
Brittany explained that the company collected between 2,000 and 5,000 offline data points and built a database, i.e., ground truth raw data, that is real and predictive about what you’re going to do in the future. CA didn’t just do market research and political polling but did psychographic polling on individuals.
For example, CA would ask your opinion on certain brands or politicians with psychographic political polling. Instead of asking questions like, “Do you like Donald Trump?” where they couldn’t change your mind if you answer, CA would ask, “Do you believe in the importance of art? Do you see yourself as a leader in your community? Do you get along well with children?” These are the types of questions that psychographic models use.
If users like a particular brand, then ads can be targeted to people who have specific traits aligned with what they like. For example, people who are interested in adopting pets can be persuaded with ads from the ASPCA, Petco and others.
CA adopted this model through mimicking Facebook to acquire data on millions of people to target users who were more prone to impulsive actions and conspiracy theorists with Facebook groups, articles and ads. The company even analyzed political topics before the 2016 election and used other social media platforms like Twitter.
April 2019: Blockchain, Bitcoin and Cryptocurrency
Bitcoin is a cryptocurrency, and the blockchain is the technology that supports it. The blockchain is a digital and decentralized ledger that records transactions. When people purchase digital coins, or buy products and services, every transaction is recorded on an immutable public ledger which maintains a complete historic record.
Rather than having a central hub like a bank, the bitcoin blockchain is supported by a global network of developers, called miners that solve complex mathematical problems in exchange for rewards, such as bitcoins or tokens. Cryptography ensures users’ identity and security with private and public keys that create a digital signature that enables people to sign and authorize transactions.
Many experts say that data is the most valuable asset. Every day, consumers and businesses transact tangible assets like houses, cars, land, cash, stocks, bonds, equipment, vehicles and inventory, and intangible assets like patents, trademarks, copyrights, licenses, customer data, internet domain names, goodwill and more.
Less known are intangible assets like your personal or your business brand which leave a digital footprint for companies to access and harvest our personal data.
Blockchain promises a new ecosystem that’s centered on consumers controlling and owning their personal data. If you need it, please read my primer on blockchain, “How Blockchain Can Rebuild Digital Trust.”
Interestingly, the state of Wyoming is leading the charge with its first-ever U.S. blockchain law spearheaded by Wall Street veteran Caitlin Long. A bitcoin enthusiast since 2012, Long attended the University of Wyoming and wanted to donate to her alma mater in bitcoin. The laws in the state of Wyoming didn’t allow her to do that because of the Money Transmitter Act. Long drafted a legal exemption and organized the Wyoming Blockchain Coalition.
In the 1980s, South Dakota wanted to find a loophole around credit card companies’ interstate banking prohibitions which Long compared to Wyoming’s efforts to avoid financial regulatory obstacles. “South Dakota and Delaware grabbed that industry away from New York,” said Long, who estimates “as much as $20 billion is lined up to come into Wyoming by the end of 2020,” now that regulations were rolled out by the state in November.
State officials say that Wyoming’s bank model enables businesses to legally hold digital assets. Other states are following suit including Arizona, Delaware, Illinois, Vermont and Nevada, which is trying to rival Wyoming to be the #1 cryptocurrency haven in the U.S.
Wyoming may have an edge as it has enacted a series of laws that exempt blockchain startups from state taxes, allows cryptocurrency trading, permits corporations to use blockchain technology to store company records and exempts virtual currencies from property taxes. Legislation is also being considered to create one or more cryptocurrency banks which would provide financial services with blockchain-based assets.
Ryan Alfred, president of Digital Assets Data, a financial technology and data company focused on digital currencies, said, “They’re cheerleading, but they’re cautious. Startups are attracted by the potential that Wyoming-chartered banks could avoid arduous New York state regulations while accessing investors inside the nation’s financial capital, by opening a branch in the state. State banks prefer uniformity with national banks for interstate business under federal law.
The SEC declined to comment on the Wyoming bank and whether it holds any risk.
Long said both Colorado and Missouri have taken initial steps to create similar institutions.
May 2019: Blockchain, Distributed Ledger Technology and Digital Trust
From blockchain summits to conferences, events and parties, blockchain was the key topic along with digital assets, the Internet of Value, digital securities, decentralized finance, regulations, data privacy and digital trust.
After Consensus 2019 in New York City, Gartner reported:
- Blockchain is still in its early phases and isn’t enterprise ready.
- Organizations need to determine its suitability.
- U.S. regulators are cracking down on anti-money laundering cryptocurrency-related entities.
- Security tokens may hold promise.
However, Gartner named blockchain as one of the top technology trends for 2020. As the underlying mechanism for the crypto market, it’s being used across a wide variety of industry sectors, including but not limited to banking, messaging apps, voting, internet identity, ride sharing, education, cloud storage, music and entertainment, real estate, insurance, supply-chain, sports, retail, charity, cannabis and government.
Distributed ledger technology has the potential to revamp existing trust systems by providing new business and economic models, improving efficiencies, generating revenue gains, enabling users to control their information through a digital identity with cryptography and public keys, creating the mechanism of smart contracts, auditing and reducing fraud.
A major development for the industry was Facebook’s digital currency, Libra, which was registered in Geneva, Switzerland with “Facebook Global Holdings” as stakeholder.
Dubbed a Global Coin by Facebook, its launch was set to be in Q1 2020 across 12 different countries. Throughout June we learned more about the 28 founding members of the Libra Association, each of which are required to pay $1 million dollars for a vote and dividends.
The companies included Mastercard, PayPal, Naspers, Stripe, Visa, Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, Mercado Pago, Spotify AB, Uber Technologies, Inc. Iliad, Vodafone Group, Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited, Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures, Creative Destruction Lab, Kiva, Mercy Corps and Women’s World Banking.
After Facebook released its Libra white paper, top-tier publications highlighted major issues, including regulatory, privacy, ownership by for-profit companies, the potential misuse of economic and political power, doubts about permissioned cryptocurrencies, the lack of vetting app developers and more.
“Can’t wait for a cryptocurrency with the ethics of Uber, the censorship resistance of PayPal, and the centralization of Visa, all tied together under the proven privacy of Facebook,” tweeted Executive Director of Open Privacy Sarah Jamie Lewis.
Others hype Libra as having the ability to scale with Facebook’s 2.5 billion monthly users to provide financial access to billions of underbanked people worldwide with low-fee payments across borders, and to raise awareness of cryptocurrency worldwide. E-commerce would be extended by providing products to buy on Instagram and WhatsApp.
While Facebook claims that its wallet, Calibra, will not be connected to user data from Facebook and Instagram without permission, the company’s history with user privacy calls for more than a measure of skepticism.
Other important advancements for the industry were The Securities and Exchange Commission’s public forum focusing on distributed ledger technology and digital assets on May 31, 2019. Organized by the agency’s Strategic Hub for Innovation and Financial Technology (FinHub), market participants from industry and academia discussed initial coin offerings, digital asset platforms, innovations and the impact to investors and the markets.
June 2019: Bitcoin , J.P. Morgan and Cryptocurrencies
Bitcoin needs the hype to attract mass appeal to be considered a viable electronic alternative to money. It is too volatile, difficult to hedge and limited in transactional utility to be thought of as a real currency today. J.P Morgan’s Jamie Dimon called bitcoin a fraud but later changed his public statement and said that blockchain and regulated digital currencies are promising.
Subsequently, J.P. Morgan issued its own cryptocurrency coin called JPM Coin which is only offered to its institutional clients that have been vetted like corporations, banks and broker-dealers.
Anthony Pompliano, Co-founder and Partner at Morgan Creek Capital, tweeted, “One should be wary of what banks say about cryptocurrencies in general. JP Morgan is now putting out reports about Bitcoin’s intrinsic value. Thought it was worthless and had no value according to Jamie Dimon? Never listen to what a bank says. Watch what they do.” Users responded to the tweet by calling out JPMorgan for trying to devalue Bitcoin in order to hoard the coins.
J.P. Morgan has stated that it doesn’t endorse the use of an cryptocurrency, and its coin is based on the value of the bank’s reserves and may eventually replace wire transfers, and mobile payments. JPM Coins are redeemable for U.S. dollars or stable coins, making it a bank coin rather than a cryptocurrency.
S&P Global Ratings stated that cryptocurrency is a speculative instrument which is dependent on global regulators and policymakers. In its view, if cryptocurrencies become an asset class, the impact will be more gradual and blockchain technology could be a disruptor. Cryptocurrencies do not benefit from the backing of cash flows or a credible central issuer, which would give it an intrinsic value. Instead, market perception drives its valuation.
Goldman Sachs was rumored to create its own bitcoin trading desk but retracted due to regulatory hurdles.
In other news, Facebook released its whitepaper which explains Libra. Its wallet, Calibra, will be built into WhatsApp, Messenger and its own app.
July 2019: Is Facebook’s Libra a Cryptocurrency?
The news of Facebook’s Libra was met with “serious concerns for regulators.” Jerome Powell, chairman of the US Federal Reserve at a House Financial Services Committee Hearing in Washington, D.C. said, “I don’t think the project can go forward without having broad satisfaction with the way the company has addressed money laundering, all of those things.”
As compared to Bitcoin, which is open source meaning anyone can participate, Libra isn’t and can only be used by pre-approved members of the Libra Association, based in Switzerland.
Since its 28 members are mostly for-profit companies, Libra is neither decentralized nor resistant to censorship. It’s a coin that’s pegged to fiat currencies and securities and is a stablecoin, which have legal, regulatory and oversight challenges. Risks include governance, money laundering, cybersecurity, operational problems, data privacy, monetary policy, illicit financing, tax compliance and more.
Earlier this month, Rep. Maxine Waters (D-CA), chair of the House Financial Services Committee, and other congressional leaders, sent a letter to Facebook founder and chief executive Mark Zuckerberg, asking that the social media giant delay Libra until lawmakers have had time to interrogate it.
“Because Facebook is already in the hands of over a quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action,” lawmakers wrote.
Globally, countries are against Libra’s adoption, including French Finance Minister Bruno Le Maire, Benoit Coure, an executive with the European Central Bank and Britain’s Financial Conduct Authority, India.
David Marcus, head of Facebook’s Libra project, testified before the House Financial Services Committee on Banking, Housing and Urban Affairs which was met with rebuff.
U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell both said they have ‘serious concerns’ about the potential for the digital currency to be misused by terrorists, in addition to money laundering and privacy risks.
Meltem Demirors, Chief Strategy Officer of CoinShares, which launched the world’s first regulated bitcoin investment fund, testified to the significant differences between Libra and decentralized cryptocurrencies.
In October, Visa, MasterCard and other companies distanced themselves from Libra because of the regulatory environment and the concerns of centralization and ownership by private organizations. Consumers need to be protected because of Libra’s volatility, the possible use of it to undermine laws and the very real potential for Facebook to collect even more data than it already does from people.
August 2019: Data Privacy and The Great Hack
Brittany Kaiser’s new Netflix documentary, The Great Hack, begins with Parsons School of Design Professor David Carroll asking his students, “Have you seen an ad that makes you think your microphone is listening to your conversation?” He goes on to say, all of your credit card transactions, swipes, searches, locations, and likes are all collected in real-time into a trillion dollar a year industry.
Carroll was the central figure in the film who traveled to the UK after launching a lawsuit against Cambridge Analytica (CA) to provide him with his personal data. Whistleblowers Chris Wylie and Brittany Kaiser provide all the behind the scenes innerworkings of CA, Facebook’s role in the 2016 presidential election and how our data is being tracked, harvested, sold and weaponized.
The data CA harvested was from 87 million people on a Facebook app which included a personality quiz, that users took through an external app called, ThisisYourDigitalLife. Like with so many other social media tools and apps, people innocently participated without knowing the consequences.
Beyond CA, Facebook has faced numerous scandals, including its news feed, its Beacon program, third-party apps accessing and exposing users’ personal data, its mood-manipulation experiment, GDPR, massive data thefts, violations of Germany’s hate speech laws, its facial recognition software and more.
In the pursuit of personalization, we’re now facing the consequences, lack of privacy, security, how to regain control of our data, fears of identity fraud, security breaches and more.
Whenever I suggest that people watch “The Great Hack,” responses include it’s too scary, I don’t want to know, there’s nothing we can do, and our data privacy is dead.
September 2019: The U.S. Data Privacy Law
With consumers becoming increasingly disillusioned that companies are taking adequate measures, many states are considering creating privacy laws.
In 2019, there were more that 3,800 breaches, a 50 percent increase over the last four years, according to a report published by Risk Based Security.
The California Consumer Protection Act (CCPA), passed into law in June 2018, has been described as “almost GDPR in the U.S.” While big tech firms and others lobbied against the bill’s passing, high-profile cases of data breaches, hacks, ransomware, and cyberattacks persisted. The CCPA will take effect on January 1, 2020, and be enforced in July 2020.
The CCPA has a non-exhaustive list of “personal data” that a company must disclose—and delete upon request. The list includes: biometrics, internet browsing information, products purchased or considered for purchase, geolocation data, academic and employment information and inferences drawn to create a profile about the individual to reflect preferences.
Meanwhile, institutions, policymakers, attorneys, activists, legislators, CEOs, and House and Senate leaders, among others, debated the compliance costs, restriction of digital innovation and the compliance costs, legal risks, and more.
A number of bills have been introduced throughout 2019, including:
- The Social Media Privacy Protection and Consumer Rights Act of 2019,
- The Do Not Track Act,
- The Protecting Personal Health Data Act,
- The Balancing the Rights of Web Surfers Equally and Responsibly Act,
- The Designing Accounting Safeguards to Help Broaden Oversight and Regulations on Data Act,
- The Filter Bubble Transparency Act,
- The Commercial Facial Recognition Privacy Act
- The Facial Recognition Technology Warrant Act
Democrats and Republicans have continued to debate whether federal law should supersede state laws. Debates have continued into December with new federal data privacy bills, The Consumer Online Privacy Rights Act (COPRA) and the Consumer Data Privacy Act (CDPA).
Both bills propose consumer privacy laws at the federal level, requiring companies to obtain “affirmative express consent” from individuals before data is processed or transferred, maintain “reasonable data security practices,” designate privacy officers and data security officers, conduct annual privacy impact/risk assessments, and not deny goods or services to individuals who seek to exercise a privacy right.
However, CDPA would block state laws related to data privacy except for data breaches and COPRA would protect state laws with greater protections. For more in-depth information, I recommend the International Association of Privacy Professionals’ detailed white paper on the two laws.
October 2019: Consumer Datasets and Data Tracking
By now, we know that everything we do is being tracked both online and offline. Companies have huge data vaults with extraordinary amounts of information on people which includes the data we choose to share and, more critically, data that you did not choose to share.
The most obvious examples are when you send emails, post on social media, use a smart device, visit websites, make purchases and use your mobile phones. Lesser known are how mobile apps track location and harvest data on visits to the doctor, drop-offs at school and other, more intimate, personal details even while we’re sleeping. The online dating industry is unsettling because it’s difficult to know if you’re interacting with a real person versus a scammer, ghost or predator..
Businesses argue that their interests lie in finding patterns to create more personalized experiences for their customers. But many have access to raw data which identifies people without their consent.
The online data-broker industry mines addresses, phone numbers and other personal information, and legally sells that information to anyone who pays. When I did a search of consumer data sets, I was shocked. The list is endless.
On Data.Gov anyone can get hundreds of free data sets and resources to build apps that help consumers make smarter choices. Under its Finance category, we can explore hundreds of free data sets on financial services, including banking, lending, retirement, investments, and insurance. Anyone can use these data sets to build new products and services,
Under Health, there are datasets, tools, and applications related to health and health care across the Federal Government. Others include data.world, the modern catalog for data and analysis, Kaggle has “all the code & data you need to do your data science work. Use over 19,000 public datasets and 200,000 public notebooks to conquer any analysis in no time” FiveThirtyEight offers data sets from articles available online at GitHub and on its own data portal. The data ranges from information about which states have the worst drivers to the economic worth of different college majors.
One glaring use case is Amazon. High-quality data about consumers, products and other retailers has helped Amazon garner an outsized share of the retail industry. It collects and leverages huge amounts of data from its website, app, its Prime loyalty program, its Alexa smart device, home automation services and its Ring internet-connected security devices.
When Amazon integrated Alexa into its AmazonBasics Microwave and offered consumers a 10 percent discount on microwave popcorn, it helped the company gather valuable data on consumers’ consumption patterns while also helping it capture sales that might otherwise take place elsewhere, according to Digital Commerce 360.
Data aggregators are nothing new. Nowadays, a simple Google search will provide hundreds of data aggregators with thousands of data points on hundreds of millions of people.
November 2019: How to Take Charge of Our Digital Lives
Continuing the inside story of Big Data, CA, Facebook and Democracy, I spent more time delving into the world of Brittany Kaiser, author of Targeted, founder of the #OwnYourData campaign, cofounder of the Digital Asset Trade Association (DATA), cofounder of the Own Your Data Foundation and the primary subject of the Netflix documentary, The Great Hack.
Typically, people don’t want to understand what’s happening because they’re scared, feel powerless, are resigned or think it’s not their responsibility. Having met and spoken with Brittany during SXSW and listening to her speak worldwide, I know no better person to provide recommendations on how we can implement change. Brittany inspired me to become an advocate. Here’s how you can too (adopted from Targeted):
- Become digitally literate: Find tools and learn more by searching the DQ Institute
- Engage with legislators: Call and write to your legislators. All contact information is readily available at https://www.usa.gov/elected-officials
- Read about Ed Markey’s Consent Bill: The Privacy Bill of Rights Act
- Learn more about Elizabeth Warren’s Corporate Executive Accountability Act
- Since children are vulnerable, learn more from Jim Steyer, CEO of Common Sense, who testified before the United States Senate Committee on Commerce, Science, and Transportation
- Review all the legislation named in the section in this article on The U.S. Data Privacy Law
- Implement ethical technology solutions by visiting Designgood.tech
- Contact the Federal Election Commission and the Federal Trade Commission and speak up about the immediate need for solutions
- Make ethical choices by continuing to question fake news. Don’t engage in negativity, don’t participate in quizzes or give away your photos for facial recognition software to determine how you’ll look in ten years which benefits insurance companies, understand that technology and humans have biases. Be diligent when using AI solutions and don’t fall into the habit of mindless convenience.
- If you own a company, be transparent about the data you use and allow employees and customers to opt-out.
We can take the steps needed to own our data and value, and help to make the world a place that is based on trust and transparency with online and offline security protocols.
December 2019: Making Sense of It All
For me, a 30-year marketing communications veteran, this year was about delving into AI, machine learning, financial technology, blockchain, distributed ledger technology, cryptocurrency, the cloud, data privacy, personalization, innovation and technology’s entry into different industry sectors.
Whether or not you’re involved or interested in any of these areas, the lesson I want to impart is that you can learn anything if you’re curious and determined. Even if technology is not your thing, there are exhaustive resources to access news and information about any business-to-business (B2B) or business-to-consumer (B2C) product, service and trends.
Often, people ask how I became a published writer and columnist for Equities. Like anything else, it takes practice. The more you do something you’re interested in, the easier it will be. [Editor’s note: It also helps to be courteous and professional with editors!]
Another takeaway is to be authentic. This year, I decided to say the amount of years I’ve spent working. Some warned me that people will know that I’m old. My response: it’s a competitive advantage because if you’re honest people will trust you.
I understand that in this year in particular, people feel afraid to speak up and speak out because of the divisive climate we’re living in. But another lesson I learned was during South by Southwest (SXSW). There, it was a debate of ideas rather than discussing titles, backgrounds, job roles, age, gender and other stereotypes to try and place people into categories.
As we move into 2020, let’s be more inquisitive, empathetic, helpful, purpose-driven, agile and committed to being #ForeverStudents.
Wendy Glavin is founder and CEO of Wendy Glavin Agency. Find out more at www.wendyglavin.com.
Equities Contributor: Wendy Glavin
Source: Equities News