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https://www.forbes.com/sites/tomangell/2019/02/05/nebraska-could-vote-on-this-medical-marijuana-ballot-measure-in-2020/
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Nebraska Could Vote On This Medical Marijuana Ballot Measure In 2020
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Nebraska Could Vote On This Medical Marijuana Ballot Measure In 2020
Voters in Nebraska could get the chance to make their state the next to legalize medical marijuana through a campaign that activists and lawmakers launched on Tuesday.
The move to put a cannabis question on the state's November 2020 ballot comes about two weeks after a state Senate committee held a lengthy hearing on a bill to allow medical marijuana at which several people testified about the therapeutic benefits of the drug for a wide range of conditions.
Lawmakers in Lincoln for several years have introduced medical cannabis bills that have not advanced to passage, which is why advocates are now pursuing the ballot measure, the text of which they are formally filing with the state on Tuesday.
"Our legislature has been given multiple opportunities to legalize medical marijuana over the past five years and help relieve suffering for Nebraskans with serious medical conditions," Sen. Anna Wishart (D), who is co-chairing the ballot campaign in addition to sponsoring legislation, said in an email.
If her colleagues decline to pass this year's version of the bill, she said, "it is essential that Nebraskans have an opportunity to vote on this issue on the 2020 ballot, which is why we have formed a ballot campaign committee and are filing ballot language today."
Sen. Adam Morfelt (D), who is also supporting the push, added that the ballot measure "will protect patients and establish the foundation upon which a medical marijuana program will be built."
The two lawmakers joined with national advocacy group the Marijuana Policy Project (MPP) in December to form Nebraskans for Sensible Marijuana Laws, a campaign committee that will steer the ballot effort.
The measure unveiled on Tuesday is a constitutional amendment that generally lays out protections for patients and caregivers, which would later be fleshed out by implementing legislation and regulations if voters approve the proposal next November.
Under the amendment's language, physicians or nurse practitioners would be able to issue recommendations to patients, who would then be allowed to "use, possess, access, and safely and discreetly produce an adequate supply of cannabis, cannabis preparations, products and materials, and cannabis-related equipment to alleviate diagnosed serious medical conditions without facing arrest, prosecution, or civil or criminal penalties."
"State-legal private entities" would also be allowed to provide cannabis, meaning that the law would provide for a system of legal and regulated distribution through dispensaries.
In order for the amendment to appear on the ballot, advocates must first collect valid signatures from ten percent of the state's voters, which amounts to roughly 122,00o signatures.
If the measure qualifies and is approved, Nebraska would become the latest in a string of conservative states to recently allow medical marijuana. Last year, voters in Missouri, Oklahoma and Utah all passed ballot measures letting patients use cannabis.
In addition to Nebraska's effort, advocates are also working to qualify a medical marijuana measure for Mississippi's 2020 general election ballot.
"Medical marijuana ballot initiatives are now politically viable in every state in the country," Matthew Schweich, deputy director for MPP, said in an email, adding that he expects the list of states looking at cannabis measures for next year to grow. "Legislators in states that allow ballot initiatives should now understand that if they drag their feet, deny access, and maintain unjust policies that treat patients as criminals, then advocates will take the issue directly to voters."
Read the full text of the proposed Nebraska medical marijuana ballot measure below:
Section 1. At the general election in November 2020, the following proposed amendment to the Constitution of Nebraska shall be submitted to the electors of the State of Nebraska for approval or rejection:
To add a new section xx to Article xx:
xx-xx The people of Nebraska, if recommended by a physician or nurse practitioner, have the right to use, possess, access, and safely and discreetly produce an adequate supply of cannabis, cannabis preparations, products and materials, and cannabis-related equipment to alleviate diagnosed serious medical conditions without facing arrest, prosecution, or civil or criminal penalties. A minor with a serious medical condition only has the right to use cannabis if recommended by a physician or nurse practitioner and with the consent of a custodial parent or legal guardian.
These rights include accessing cannabis, cannabis preparations, products and materials, and cannabis-related equipment from state-legal private entities in Nebraska, subject only to reasonable laws, rules, and regulations that promote the health and safety of patients, ensure continued access by patients to the type and quantity of cannabis they need, and prevent diversion without imposing an undue burden on patients or providers or compromising patients’ confidentiality. A person who has been recommended medical cannabis may be assisted by a caregiver in exercising these rights.
This section shall not be construed to allow the smoking of cannabis in public or possession of cannabis in detention facilities, nor shall it allow driving while impaired by cannabis or otherwise engaging in conduct that would be negligent to undertake while impaired by cannabis. This section does not require an employer to allow an employee to work while impaired by cannabis, nor does it require any insurance provider to cover medical cannabis.
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5d26657b514e6e4a05ff967f635fe795
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https://www.forbes.com/sites/tomangell/2019/02/06/the-first-marijuana-hearing-of-the-new-congress-has-been-scheduled/?fbclid=IwAR1HI5HSWC_KFG6SayXilsQpWBJYvAuZOlU69Jjn3V4zjQ3FPMMmTnvMmS4
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The First Marijuana Hearing Of The New Congress Has Been Scheduled
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The First Marijuana Hearing Of The New Congress Has Been Scheduled
Congressional Democrats are already moving ahead with plans to consider broad changes to federal marijuana laws in 2019.
Tom Sydow Tom Sydow
Whereas the Republican-controlled House for the past several years had blocked votes on most cannabis-related measures, the chamber's new Democratic majority on Wednesday announced it has scheduled a hearing for next week to examine the difficulties that marijuana businesses face in opening and maintaining bank accounts.
Titled, “Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses,” the hearing will take place on February 13 before a subcommittee of the House Financial Services Committee.
Although a growing number of states are moving to legalize marijuana for medical or recreational use, cannabis remains federally prohibited. As a result, and despite a 2014 guidance memo released on the topic by the Obama administration aimed at clearing up the issue, many financial services providers remain reluctant to work with the industry out of fear of violating money laundering or drug laws.
"When we introduced this bill six years ago, we warned that forcing these businesses to deal in cash was threatening public safety. No hearing was given," Rep. Denny Heck (D-WA) said in an email, referring to marijuana banking legislation he and Rep. Ed Perlmutter (D-CO) have filed for the past several Congresses.
He lamented that Republican leadership didn't schedule a hearing on the proposal even after a security guard at a Colorado dispensary was killed during a robbery.
"Chairwoman Waters has made it one of her first priorities to address this urgent and overdue issue, demonstrating that she understands the threat to public safety and the need for Congress to act," Heck said of the committee's new leader. "We have a bipartisan proposal to allow well-regulated marijuana businesses to handle their money in a way that is safe and effective for law enforcement to track. I am eager to get to the work of refining it and passing it into law."
That a hearing on the issue was in the works was first noted earlier this week by Politico, and Marijuana Moment reported that the full committee is also actively planning to vote on a marijuana banking bill in the coming months.
The newly scheduled marijuana hearing is a signal that Democrats intend to move cannabis legislation this year, and is likely to be the first in a series of committee-level actions across the House on the issue.
"The upcoming hearing presents a real opportunity for the Democratic Party to assert their leadership by finally beginning the conversation on how we end the failed policy of marijuana criminalization," Justin Strekal, political director for NORML, said.
While two limited medical cannabis research bills were able to advance out of House committees last year, they never made it to the floor for votes. Meanwhile, Republican leaders consistently prevented members from offering marijuana-related amendments—including ones on banking issues—to larger legislation.
In contrast, Rep. Earl Blumenauer (D-OR) suggested in a memo to party leaders late last year that they pursue a step-by-step approach to legalize marijuana in 2019. His plan recommends that Financial Services and other committees first begin holding hearings on incremental reforms like banking access, research expansion and medical cannabis for military veterans before passing bills on those issues as part of a lead up to ultimately approving broader legislation to formally end federal marijuana prohibition by the end of the year.
A House bill to protect banks from being punished for working with state-legal marijuana businesses that Heck and Perlmutter introduced garnered 95 cosponsors in the last Congress, and 20 senators signed onto a companion bill, but neither were given hearings or brought up for votes.
"Depriving state-legal cannabis businesses of basic banking services and forcing them to operate entirely in cash presents a significant safety risk, not just to those businesses and their employees, but to the public," Don Murphy, director of federal policies for the Marijuana Policy Project, said in an email. "Support for addressing the cannabis banking problem is strong and bipartisan, and it appears Congress may be ready to adopt a real, commonsense solution. Members concerned about public safety should be jumping at the chance to express their support for this legislation."
Congress has held only a handful of hearings on marijuana reform issues in recent years, and never before has any come at a time when broad cannabis reform legislation seemed to be conceivably on its way to passage.
"This hearing is historic for cannabis policy reform advocates, business owners and the banking sector, and could directly lead to the first in what is hopefully a series of positive changes in the 2019 legislative cycle," Morgan Fox, media relations director for the National Cannabis Industry Association, said in an email. "Allowing banks to work with cannabis businesses more easily will benefit public safety, increase transparency, provide more financing options for small businesses and communities that have been targeted by prohibition, and help companies thrive so they can further displace the illicit market."
Outside of the two committee markups of cannabis research legislation last year, which were not preceded by formal hearings on the relevant issues, Senate panels have on a few occasions held lengthy discussions on marijuana.
In 2013, for example, the Senate Judiciary Committee convened a hearing to dig into the fact that a growing number of states were legalizing marijuana in contrast with federal law.
The Senate Caucus on International Narcotics Control, which is not a formal standing committee of the body, hosted a discussion on federal marijuana enforcement in 2016. Its two cochairs, Sens. Charles Grassley (R-IA) and Dianne Feinstein (D-CA), have long been among Congress's most vocal opponents of cannabis reform, though Feinstein began to shift her position last year.
Also in 2016, the Senate Judiciary Committee's Subcommittee on Crime and Terrorism held a hearing on the risks and potential benefits of medical cannabis, but it did not lead to votes on any marijuana legislation.
Meanwhile, pressure to address cannabis banking has been growing. Several top Trump administration officials have indicated they support clarifying the issue.
Treasury Secretary Steven Mnuchin, for example, suggested in testimony before a House committee early last year that he supports letting marijuana businesses store their profits in banks.
“I assure you that we don’t want bags of cash,” he said. “We do want to find a solution to make sure that businesses that have large access to cash have a way to get them into a depository institution for it to be safe.”
In a separate hearing Mnuchin revealed that addressing the issue is at the “top of the list” of his concerns.
Federal Reserve Chairman Jerome Powell said that the growing gap between state and federal marijuana laws “puts federally chartered banks in a very difficult situation... It would great if that could be clarified."
And last month, Comptroller of the Currency Joseph Otting called on Congress to "act at the national level to legalize marijuana if they want those entities involved in that business to utilize the U.S. banking system."
Meanwhile, although many major financial institutions are staying away from the cannabis industry, federal data does show that an inceasing number of banks are beginning to work with marijuana growers, sellers, processors and related businesses.
It hasn't yet been announced who will be testifying at next week's cannabis banking hearing before the Consumer Protection and Financial Institutions Subcommittee.
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ef2b2bc34256a84c0aa34554b1d8ffac
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https://www.forbes.com/sites/tomangell/2019/03/07/for-tulsi-gabbard-marijuana-sits-at-nexus-of-good-policy-and-smart-politics/
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For Tulsi Gabbard, Marijuana Sits At Nexus Of Good Policy And Smart Politics
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For Tulsi Gabbard, Marijuana Sits At Nexus Of Good Policy And Smart Politics
Rep. Tulsi Gabbard (D-HI) says that ending the federal prohibition of marijuana is smart policy and, on Thursday, she is introducing legislation in Congress to do just that.
The 2020 presidential candidate also appears to know that endorsing cannabis legalization is smart politics.
Photo element courtesy of Lorie Shaull. Photo element courtesy of Lorie Shaull.
"The fact that marijuana's still a Schedule I drug is unacceptable in the harm that it is causing to the people of our country and to taxpayers as well," Gabbard said in a phone interview this week.
Gabbard and Rep. Don Young (R-AK) are teaming up to file two new cannabis bills. One would remove marijuana from the Controlled Substances Act—a process known as descheduling—so that states can set their own laws without interference.
"The impact this has on individuals, potentially leading to criminal records that impact them, their families, their ability to get a job, housing, financial aid for college—the impacts of this are great," she said of the hundreds of thousands of arrests for cannabis offenses that take place every year in the U.S. "That's not to speak of the impact on states, small businesses and banks in those states that have legalized some level of marijuana."
# of people arrested for marijuana law violation in 2017: 659,700 # of those charged with marijuana law violations arrested for possession only: 599,282 (90.8 percent) I intro'd bipartisan bill today to END THE FEDERAL MARIJUANA PROHIBITION. Congress must act now #EndTheDrugWar pic.twitter.com/vbMV01nSRv — Tulsi Gabbard (@TulsiGabbard) March 7, 2019
The other new House proposal from the bipartisan duo would require the federal government to study the impact of state marijuana legalization policies.
"There are still a lot of myths and outdated information and stigma that are being used as excuses to not push forward these very impactful policy changes," Gabbard said.
The legislation, under which several federal agencies would be tasked with compiling information on the economic, health, criminal justice and employment effects of state cannabis laws, would generate "one central study providing facts on what the impacts have already proven to be in states that have legalized marijuana at one level or another," the congresswoman said.
Gabbard, who during her presidential campaign launch speech last month criticized a system that “puts people in prison for smoking marijuana while allowing corporations like Purdue Pharma, who are responsible for the opioid-related deaths of thousands of people, to walk away scot-free with their coffers full,” shared her thoughts on the likelihood that someone who doesn't support legalization could with the Democratic nomination.
"I think it would be very difficult, but obviously this is something that voters will have to contend with and a question I'm sure they'll be asking in states across the country of those who are seeking that office," she said.
"Regardless of who it is, this is a major issue I'm putting at the forefront of my campaign and continuing the work that I've been doing in Congress to bring about this change," Gabbard said. "It's something I've continued to bring up in bigger cities as well as small towns in New Hampshire and Iowa and other states, and it's an issue that is very exciting to voters who believe, as I do, that we've got to make this happen."
She said that "freedom of choice" is a key reason she has focused so much on cannabis during her time on Capitol Hill.
"I don't smoke marijuana. I never have," she said. "But I believe firmly in every person's freedom to make their own choices, and that people should not be thrown in jail and incarcerated or made into criminals for choosing to smoke marijuana whether it be for medicinal and non-medicinal purposes."
Today @repdonyoung and I introduced the only bipartisan legislation in Congress that reschedules marijuana thereby ending the federal prohibition. This is long overdue. We must end the failed War on Drugs before we lose another generation to this war. https://t.co/wgaFKGqYeX — Rep. Tulsi Gabbard (@TulsiPress) March 7, 2019
In the interview, the congresswoman also addressed her views on the broader war on drugs, saying that many of the arguments reform advocates make about marijuana can be applied to other substances as well.
"I think that there's no question that this overall war on drugs has not only been a failure, it has created and exacerbated a number of other problems that continue to afflict people in this country," she said, adding a teaser that "this is something that I'm working on on my presidential campaign that we will be rolling out a detailed policy position statement on."
When it comes to marijuana, Gabbard believes that Congress is well-positioned to advance far-reaching reform bills this year, at least through one chamber.
In 2017 alone, our country arrested 600,000 people just for possession of marijuana. Our bipartisan legislation takes a step toward ending the failed War on Drugs, ending the federal prohibition on marijuana, and ensuring that our policies are guided by facts and the truth. — Rep. Tulsi Gabbard (@TulsiPress) March 7, 2019
"We are hopeful that there will be a great opportunity to pass pieces of legislation in the House of Representatives given that we have the majority," she said, referring to Democrats. "We will have some more work to do to get these bill through the Senate. But if members of Congress, and leaders in Washington listen to the voices of the vast majority of Americans in this country, they will hear the calls for action that go beyond partisanship. We are long past time to bring about this kind of change."
And she believes her home state of Hawaii—where a bill to legalize marijuana was approved by a legislative committee last month—is on track to end cannabis prohibition sooner rather than later.
"Momentum is moving in the right direction," she said, but added that she's "disappointed" the bill wasn't approved by a second committee in time to advance further in the process this year.
"I think that we're only going to continue to see more progress being made," she said.
Gabbard also referenced incremental cannabis reform moves in the state, such as a bill that lawmakers approved last year to add opioid addiction as a medical marijuana qualifying condition. The measure was ultimately vetoed by Gov. David Ige (D), which she said left her and other supporters "not only disappointed but pretty pissed off."
That setback is another reason to push her new congressional bill requiring the federal government to compile information on the impact of cannabis policies, she argued.
"Even in a state like Hawaii, if you look back to the governor's statements about why he vetoed that bill, there are still a lot of myths and outdated information and stigma that are being used as excuses to not push forward these very impactful policy changes," the congresswoman said. "So that is one of the main reasons that is spurring my bill, to be able to provide this from the National Academy of Sciences as an undisputed collection of data and studies saying you can't dispute this. You can't just pick and choose anecdotes that you want to talk about".
Gabbard and Young, her Republican cosponsor for the two new cannabis bills, are actively seeking support from other lawmakers for the proposals.
"The Ending Federal Marijuana Prohibition Act of 2019 is our opportunity to remove marijuana from the federal Controlled Substances list and to allow our states the freedom to regulate marijuana as they choose, without federal inference," they wrote in a letter asking colleagues to cosponsor the descheduling legislation.
Our archaic marijuana policies– based on stigma and outdated myths–have been used to wage a failed War on Drugs. Families have been torn apart, communities left fractured, and over-criminalization and mass incarceration have become the norm. https://t.co/KuG384QhnJ — Rep. Tulsi Gabbard (@TulsiPress) March 7, 2019
"The purpose of this legislation is to collect and synthesize relevant data and to generate a federally recognized, neutral report regarding the impact of statewide marijuana legalization schemes," they wrote in a separate letter about the second bill, which is called the Marijuana Data Collection Act. "Such a report will assure that federal discussions and policies specific to this issue are based upon the best and most reliable evidence available at this time."
Prior versions of both bills filed during the last Congress did not receive hearings or votes.
But Gabbard said now is the time for action.
"We can't afford to kick this can down the road given the devastating negative impact it is having on the people of this country," she said, referring to marijuana prohibition.
Meanwhile, several senators who are also seeking the 2020 Democratic presidential nomination joined together last week to file far-reaching legislation that would deschedule marijuana. That bill also contains provisions aimed at expungements and investment in communities previously harmed by the war on drugs.
A national poll released on Wednesday found that 60 percent of voters support legalizing marijuana.
Photo element courtesy of Lorie Shaull.
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bd626a6c539cd14f0565bbdec60bfd90
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https://www.forbes.com/sites/tomangell/2019/04/29/texas-lawmakers-approve-marijuana-decriminalization-bill/
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Texas Lawmakers Approve Marijuana Decriminalization Bill
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Texas Lawmakers Approve Marijuana Decriminalization Bill
Texas would become the 25th state in the U.S. to remove the threat of being jailed as a punishment for possessing small amounts of marijuana under a bill approved by the state House of Representatives on Monday.
The legislation, which would punish people caught with an ounce or less of cannabis with a $500 fine instead of arrest and incarceration, passed by a vote of 98 to 43.
Rep. Joseph Moody (D), the chief sponsor, amended the bill on the floor in order to win more support from colleagues. An earlier version included a lower fine—$250—and would have treated low-level possession as a civil infraction instead of a class C misdemeanor as is the case under the revised proposal.
But its broad effects remain the same: No arrest or incarceration for people caught with small amounts of marijuana.
They will also avoid long-term criminal records as long as they follow terms of deferral assigned by judges, such as doing community service or completing drug education classes. The provisions, which individuals can take advantage of as much as once a year, also apply to possession of paraphernalia.
"Texans have suffered under failing marijuana policies for far too long," Heather Fazio, director of Texans for Responsible Marijuana Policy, said. "Rep. Moody's bill will help preserve valuable public safety resources and keep a marijuana charge from derailing someone's life."
The proposal also sets out a procedure for people to have marijuana offenses expunged—meaning that they would not have criminal records, which can have long-lasting consequences on employment, housing, educational opportunities and the ability to maintain a driver's license.
While Gov. Greg Abbott (R) opposes broader cannabis legalization, he said during a reelection debate last year that he is open to more limited reforms such as those that would be accomplished under the decriminalization bill.
“One thing I don’t want to see is jails stockpiled with people who have possession of a small amount of marijuana,” he said. "I would be open to talking to the legislature about reducing the penalty for possession of two ounces or less from a Class B misdemeanor to a Class C misdemeanor."
"Although this compromise isn't as far as I'd like to go, I'm not going to sacrifice the good for the perfect," Moody said of the amendment prior to the vote, noting that he spoke with the governor's office on Monday about the changes. "If this is what we can do, then this is what we must do."
It's been 45 years since the #txlege passed marijuana reform. Today, we took a huge step forward when the House supported HB63. The bill would stop 75K Texans from being arrested annually & would save ~$735 million in local tax dollars. #CJReform https://t.co/1KzZGF79Is — Joe Moody (@moodyforelpaso) April 30, 2019
The Republican Party of Texas endorsed decriminalizing cannabis last year.
“We support a change in the law to make it a civil, and not a criminal, offense for legal adults only to possess one ounce or less of marijuana for personal use, punishable by a fine of up to $100, but without jail time,” reads a platform plank approved at the 2018 party convention.
In neighboring New Mexico, Gov. Michelle Lujan Grisham (D) signed a marijuana decriminalization bill into law earlier this month.
The Texas legislation was approved by the House Criminal Jurisprudence Committee last month. After an additional House vote for third reading approval, expected as soon as this week, it will head to the Senate for consideration.
"This is a historic step forward in changing Texas's current draconian marijuana laws," Jax Finkel, executive director of Texas NORML, said. "Now, we turn our sights to the Senate so that this important policy can make its way through the legislative gauntlet and start helping Texans."
Last week, the House voted to unanimously approve a bill to legalize industrial hemp and its derivatives, including CBD.
Meanwhile, legislation to expand Texas's limited medical cannabis program has cleared a key House committee and could reach the floor soon.
While there is no strict legal definition of "decriminalization," advocacy groups including the Marijuana Policy Project (MPP) use the term to describe laws that avoid incarceration for low-level cannabis crimes, with most decriminalized states issuing fines to people caught possessing the drug.
"HB 63 would save thousands of Texans from life-altering and traumatic arrests and incarceration, while freeing up police resources to focus on crimes that have victims," Karen O'Keefe, MPP's state policies director, said.
Twenty-four other states—including 10 that have legalized marijuana outright—already have policies on the books that do not send first-time low-level cannabis possessors to jail.
Besides Texas, a number of other states may soon enact such laws.
Alabama's Senate Judiciary Committee approved a marijuana decriminalization bill this month. It has not yet been scheduled for floor action.
Lawmakers in Hawaii are working to reconcile the differences between versions of marijuana decriminalization legislation that have passed the House and Senate there.
A Missouri House committee also approved a bill to decriminalize cannabis this month.
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a8a8bbb07056ff16e5749334f49ed154
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https://www.forbes.com/sites/tomangell/2019/05/08/majority-of-state-attorneys-general-tell-congress-to-pass-marijuana-banking-bill/
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Majority Of State Attorneys General Tell Congress To Pass Marijuana Banking Bill
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Majority Of State Attorneys General Tell Congress To Pass Marijuana Banking Bill
The top law enforcement officials from 38 U.S. states and territories are calling on Congress to pass legislation to increase marijuana businesses' access to banks. The move comes just days after the treasurers of 17 states issued a separate call in support of the pending cannabis financial services bill.
TOM SYDOW PHOTO: TOM SYDOW
Even as a growing number of states adopt laws to legalize marijuana for medical or recreational use, federal prohibition remains intact—for now—and that makes many banks wary of maintaining accounts for cannabis growing, processing or retail operations. They could, they fear, be prosecuted under federal money laundering laws.
Legislation to shield financial services providers from being punished by regulators for working with the cannabis industry has been gaining momentum in Congress, and now the effort is getting a boost from the National Association of Attorneys General, which is officially endorsing the bill.
"Businesses are forced to operate on a cash basis. The resulting grey market makes it more difficult to track revenues for taxation and regulatory compliance purposes, contributes to a public safety threat as cash-intensive businesses are often targets for criminal activity, and prevents proper tracking of billions in finances across the nation," the attorneys general wrote in a letter to congressional leaders on Wednesday.
@COAttnyGeneral leads coalition of 38 state/territory AGs calling on #Congress to pass @RepPerlmutter's bill allowing #cannabis companies to access banks w/o fear of federal repercussions. @NatlAssnAttysGn has adopted this position as official policy.https://t.co/6kr60PamhQ — CO Attorney General (@COAttnyGeneral) May 8, 2019
"[R]regardless of how individual policymakers feel about states permitting the use of medical or recreational marijuana, the reality of the situation requires federal rules that permit a sensible banking regime for legal businesses," the officials wrote.
In March, the House Financial Services Committee approved the marijuana banking bill in a bipartisan vote of 45 to 15. The legislation, sponsored by Rep. Ed Perlmutter (D-CO), now has 173 cosponsors—substantially more than a third of the entire chamber's membership. It is expected to be considered on the House floor within the next several weeks.
“The SAFE Banking Act is about public safety, accountability and respecting states’ rights. I appreciate the overwhelming support of the attorneys general and treasurers," Perlmutter said in a statement. "Their endorsement of the SAFE Banking Act underscores the need to respect states’ rights on this issue and make our communities safer by allowing the marijuana industry and related businesses access to the banking system.”
The support of our nation's attorneys general and state treasurers underscores the need to respect states’ rights on this issue and make our communities safer by allowing the marijuana industry and related businesses access to the banking system. #SAFEBanking https://t.co/B1GpOUIoNK — Rep. Ed Perlmutter (@RepPerlmutter) May 8, 2019
An identical companion bill on financial services for cannabis businesses in the Senate has 25 lawmakers signed on—fully a quarter of the body.
The new letter, led by Colorado Attorney General Phil Weiser, was joined by attorneys general from Alaska, Arizona, Arkansas, California, Connecticut, Delaware, the District of Columbia, Guam, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, New York, North Dakota, the Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Utah, the U.S. Virgin Islands, Vermont, Virginia, Washington, West Virginia and Wisconsin.
It just makes sense: Majority Of State Attorneys General Tell Congress To Pass Marijuana Banking Bill via @forbes https://t.co/fmOn6JYRXn — Rob McKenna (@robmckenna) May 8, 2019
Late last month, Oregon Treasurer Tobias Read led a group of fellow state fiscal officials in sending a separate letter to congressional leaders in support of the marijuana banking legislation.
"Businesses operating in cash pose a significant public safety risk. Absent access to banking services, cannabis-related businesses are unable to write checks, make and receive electronic payments, utilize a payroll provider, or accept credit and debit cards," they wrote. "Processing, storing, and moving large amounts of cash puts business owners, their employees, and their customers at risk of violent crime. The cash-only environment means state and local government agencies must collect tax and fee payments in person and in cash, incurring added expenses and employee safety risks."
Despite the advancement of the cannabis banking bill in the House, Senate Banking Committee Chairman Mike Crapo (R-ID)refused to commit to hold a hearing or vote on the bill in his panel when asked last month.
The proposals have already been endorsed by the American Bankers Association and a number of other organizations representing financial services industry interests, as well as by drug policy reform groups.
The backing by the state attorneys general, which was first reported by the Denver Post, could go a long way toward earning support from law-and-order conservatives who might otherwise scoff at the notion of supporting legislation to assist marijuana businesses.
Today I’m leading 38 AGs in urging Congress to pass the #SAFEBankingAct, to allow legal marijuana businesses to access the US banking system. Forcing these businesses to operate only in cash leaves communities vulnerable to violence and crime: https://t.co/xgYurGRxui pic.twitter.com/bMrUoLIoAc — AG Karl A. Racine (@AGKarlRacine) May 8, 2019
"Compliance with tax laws and requirements would be simpler and easier to enforce with the regulated tracking of funds in the banking system, resulting in higher tax revenues," the attorneys general wrote. "Our banking system must be flexible enough to address the needs of businesses in the various states and territories, with state and territorial input, while protecting the interests of the federal government. This includes a banking system for marijuana-related businesses that is both responsive and effective in meeting the demands of our economy."
This is simple: not incorporating an $8.3 billion industry into our banking system is hurting our public safety and economy. #SAFEBanking #Cannabis https://t.co/La9kBIAhEG — Xavier Becerra (@AGBecerra) May 8, 2019
AG Yost has joined a coalition of 38 states urging Congress to allow marijuana-related businesses to access the banking system. Read more here: https://t.co/MBL3ZNr7n7 pic.twitter.com/d5e7n9HCLP — Ohio Attorney General Dave Yost (@OhioAG) May 8, 2019
The treasurers, in their letter, offered further encouragement to skittish lawmakers by saying that allowing the banking fix would not be "a tacit endorsement of descheduling or rescheduling cannabis from the Controlled Substances Act."
"Without banking services, cannabis businesses are less able to obey the law, pay taxes, and follow state regulations of the industry," they wrote. "The public safety risks posed by these businesses are easily mitigated through access to banking service providers and keeping the cash off the streets. Nearly every U.S. state has a stake in this issue."
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103668553ada53a876be2f83fc25c726
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https://www.forbes.com/sites/tomangell/2019/06/02/congressional-funding-bill-protects-cannabis-banking-and-lets-dc-legalize-marijuana-sales/
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Congressional Funding Bill Protects Cannabis Banking And Lets DC Legalize Marijuana Sales
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Congressional Funding Bill Protects Cannabis Banking And Lets DC Legalize Marijuana Sales
Federal officials would be blocked from punishing banks for working with marijuana businesses under an annual spending bill released by congressional Democratic leaders on Sunday.
The legislation, which is set to be considered by a House subcommittee on Monday, would also remove a longstanding rider that prevents the city of Washington, D.C. from spending its own money to legalize and regulate recreational cannabis sales.
Bill Protects Banks That Work With Marijuana Businesses
Although a growing numbers of states are moving to legalize and regulate marijuana—with Illinois lawmakers becoming the latest to pass a bill ending cannabis prohibition on Friday—many banks remain reluctant to work with licensed businesses in the industry out of fear of being subject to ongoing federal penalties.
Those hesitations could be at least partially allayed by the new House bill, which includes language barring federal regulators from punishing financial services providers for maintaining accounts for state-legal cannabis businesses:
SEC. 633. None of the funds made available in this Act may be used to penalize a financial institution solely because the institution provides financial services to an entity that is a manufacturer, a producer, or a person that participates in any business or organized activity that involves handling marijuana, marijuana products, or marijuana proceeds, and engages in such activity pursuant to a law established by a State, political subdivision of a State, or Indian Tribe: Provided, That the term ‘‘State’’ means each of the several States, the District of Columbia, and any territory or possession of the United States.
The provision only applies to spending legislation covering the Treasury Department, however, and thus would not shield banks from any enforcement activities carried out by the Justice Department, which is funded under a separate bill. It is also attached to the annual appropriations process, meaning it would have to be proactively renewed year after year if it is enacted.
Meanwhile, though, a more comprehensive and permanent proposal to shield banks from being punished for serving cannabis businesses is advancing in Congress.
In March, the House Financial Services Committee approved the bill, known as the Secure And Fair Enforcement (SAFE) Banking Act, in a bipartisan vote of 45 to 15. Advocates expect that House Democratic leadership will bring the legislation, which currently has 191 cosponsors—nearly half of the chamber's membership—to the floor within the next several weeks.
An identical proposal in the Senate has 30 lawmakers—almost a third of the body's members—signed on. While Banking Committee Chairman Mike Crapo (R) has so far refused to commit to bring the bill up for a hearing in his panel, pressure is mounting.
Organizations representing state National Association of State Treasurers, the National Association of Attorneys General and all 50 state banking associations have endorsed the proposal.
Last month, the Congressional Budget Office issued a report projecting that the bill would generate an increase in deposits in banks and credit unions, and would ultimately lead to savings for the federal government after initial implementation expenses are accounted for.
And a handful of other Republican senators, including at least one who is a member of Crapo's committee, have lobbied him to give the cannabis banking bill due consideration.
In 2014, the House of Representatives approved a floor amendment similar to the provision currently included in the new spending bill, but it was not enacted into law. The full House Appropriations Committee defeated a cannabis banking rider last year under Republican control, so its inclusion in the base subcommittee legislation as introduced by Democrats marks a significant shift.
“The provision takes another step to protect financial institutions who are providing services to cannabis-related legitimate businesses," Rep. Ed Perlmutter (D-CO), chief sponsor of the standalone cannabis banking bill, said of the new appropriations rider. "I look forward to the House passing the SAFE Banking Act soon so we can fully address the issue and get this cash off the streets.”
This provision takes another step to protect financial institutions who are providing services to legitimate marijuana businesses. I look forward to the House passing the #SAFEBankingAct soon so we can fully address the issue & get cash off the streets.https://t.co/HDp9DQoaol — Rep. Ed Perlmutter (@RepPerlmutter) June 3, 2019
Legalization advocates agreed that the spending bill language was a good sign but that the broader bill's passage is still needed.
"The inclusion of cannabis banking reform language in the Appropriations bill is indicative of the level of support this issue has in Congress," Morgan Fox, medial relations director for the National Cannabis Industry Association, said, "If passed, this would only be a temporary fix and should not be viewed as a substitute for the SAFE Banking Act, but could provide the cannabis and banking industries with a much-needed reprieve while stand-alone legislation gains more support in the Senate."
D.C. Could Finally Spend Its Own Money To Legalize Cannabis Sales
The draft House appropriations bill also removes a provision that for years has blocked the city government in the nation's capital from spending its own locally raised tax dollars to legalize and regulate the production and sales of marijuana.
Washington, D.C. voters approved a ballot measure in 2014 that allows low-level possession and home cultivation of cannabis, but consumers who are not medical marijuana patients have no legal way to purchase the drug. That's because Congress has repeatedly enacted an appropriations rider pushed by Rep. Andy Harris (R-MD) that stands in the way.
Here's how the anti-marijuana rider appeared in last year's version of the spending legislation:
Sec. 809. (a) None of the Federal funds contained in this Act may be used to enact or carry out any law, rule, or regulation to legalize or otherwise reduce penalties associated with the possession, use, or distribution of any schedule I substance under the Controlled Substances Act (21 U.S.C. 801 et seq.) or any tetrahydrocannabinols derivative. (b) No funds available for obligation or expenditure by the District of Columbia government under any authority may be used to enact any law, rule, or regulation to legalize or otherwise reduce penalties associated with the possession, use, or distribution of any schedule I substance under the Controlled Substances Act (21 U.S.C. 801 et seq.) or any tetrahydrocannabinols derivative for recreational purposes.
In addition to completely deleting the language standing in the way of D.C. using local money to pay for marijuana legalization, the legislation as introduced also cuts out the provision blocking the use of federal funds to lower cannabis penalties.
Last month, District of Columbia Mayor Muriel Bowser (D) referred a marijuana legalization bill to councilmembers in anticipation of Congress removing the ban under the newly Democratic-controlled House of Representatives. She cheered the new congressional legislation in a tweet on Sunday.
Illinois just approved legal sales of #marijuana for adults Now, the @AppropsDems have a bill to remove the reprehensible rider so that we will be able to legalize/regulate its sale It is time for the @councilofdc to act on our #SafeCannabis legislationhttps://t.co/M8ActAtXoc — Muriel Bowser (@MurielBowser) June 3, 2019
The spending proposal, as introduced by the House Appropriations Subcommittee on Financial Services and General Government, if approved by that panel, would next head to the full Appropriations Committee and then to the House floor. It could be amended at either stage and will later be merged with parallel legislation in the Republican-controlled Senate, meaning that it is far from certain that the marijuana policy implications in the initial House draft will be enacted into law as currently drafted.
Still, their inclusion in the base bill on the House side bodes well for legalization advocates, as the Senate Appropriations Committee has historically been more favorable to cannabis amendments—even under GOP control—than its House counterpart has, although it did block consideration of a banking-related provision last year.
And while the Senate panel issued initial versions of the spending legislation free of D.C.-related marijuana riders in years past, in 2018 it included the ban under new subcommittee chairman Sen. James Lankford (R-OK), who opposes cannabis reform.
The pending appropriations bill covers Fiscal Year 2020, which begins on October 1.
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363aedbf91b0acf574671c6e431a275d
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https://www.forbes.com/sites/tomangell/2019/06/08/aoc-pushes-to-make-it-easier-to-study-shrooms-and-other-psychedelic-drugs/?sh=611a2fac1002
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AOC Pushes To Make It Easier To Study Shrooms And Other Psychedelic Drugs
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AOC Pushes To Make It Easier To Study Shrooms And Other Psychedelic Drugs
Rep. Alexandria Ocasio-Cortez (D-NY) filed legislation on Friday to remove a legal barrier that scientists say makes it unnecessarily difficult for them to study the medical benefits of psychedelic drugs like psilocybin and MDMA.
Psilocybin, the active component of so-called "magic mushrooms," and MDMA, commonly referred to as "ecstasy," have "shown promise in end of life therapy and treating PTSD," a summary of Ocasio-Cortez's proposal says.
ASSOCIATED PRESS
The measure, which is an amendment to a large-scale appropriations bill funding parts of the government for Fiscal Year 2020, would delete a longstanding rider that prohibits spending federal money for "any activity that promotes the legalization of any drug or other substance in Schedule I" of the Controlled Substances Act.
"Academics and scientists report that provisions like this create [stigma] and insurmountable logistical hurdles to researching schedule I drugs," the summary states.
Cannabis is classified under Schedule I as well, and researchers wishing to study it also have to overcome procedural hurdles that don't exist for other less-restricted substances.
The existing policy in question that Ocasio-Cortez is seeking to overturn has been attached to legislation funding the U.S. Departments of Labor, Health and Human Services and Education since at least 1996.
“This language has served as a gag rule on government employees discussing the benefits of legalization," Michael Collins, director of national affairs for the Drug Policy Alliance, said. "We are moving away from the war on drugs—slowly but surely—and language like this belongs in Nancy Reagan’s journal, not in a Democrat bill.”
From the opioid crisis to psilocybin’s potential w/ PTSD, it’s well past time we take drug use out of criminal consideration + into medical consideration. That begins with research. I’m proud to introduce an amendment that helps scientists do their jobs. https://t.co/V1BziVeNtr — Alexandria Ocasio-Cortez (@AOC) June 8, 2019
Rep. Lou Correa (D-CA) filed a separate amendment to the new spending bill that would block the Department of Education from moving "to deny or limit any funding or assistance to institutions of higher education" that allow the use or possession of medical marijuana in states where it has been legalized.
The potential loss of federal funds has been held up by many colleges and universities as the reason they won't allow students to bring medical cannabis onto campus even though they are legal patients under state law.
Ocasio-Cortez's psychedelics amendment is especially timely.
Voters in Denver, Colorado approved a ballot measure last month making their city the first in the nation to decriminalize psilocybin mushrooms. Earlier this week, the Oakland, California City Council unanimously passed a resolution decriminalizing not only shrooms but also ayahuasca, mescaline and ibogaine.
On Monday, the House Rules Committee, which prepares bills for action on the floor, will decide whether either or both of the drug policy reform amendments will be allowed for votes when the full body considers the funding legislation later in the week.
While it remains to be seen if the chamber's new Democratic leadership will clear the amendments' advancement, Rules Committee Chairman James McGovern (D-MA) has repeatedly criticized his Republican predecessor for blocking cannabis-related amendments and pledged that he would take a different approach.
“I’m not going to block marijuana amendments like my predecessor has done," he said shortly after last year's midterm elections in which his party won back control of the House. "As chairman of the Rules Committee, I’m not going to block marijuana amendments. People ought to bring them to the floor, they should be debated and people ought to vote the way they feel appropriate.”
More than 500 amendments altogether have been submitted to the spending bill so far.
Meanwhile, a separate bill funding other parts of the federal government for the next fiscal year, as approved by a House appropriations subcommittee, already contains a provision to protect banks that serve marijuana businesses from being punished by financial regulators. That legislation also deletes a longstanding rider preventing Washington, D.C. from spending its own local tax dollars to legalize and regulate cannabis sales.
And the House Appropriations Committee has included language in reports attached to several funding bills that address issues such as protection of benefits for military veterans who use cannabis, roadblocks to research created by marijuana's Schedule I status, CBD regulation, hemp legalization implementation and the issuance of licenses to additional growers of cannabis to be used in scientific studies.
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c489ceb58263604c0b0d06fa29155d7d
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https://www.forbes.com/sites/tomangell/2019/08/01/naacp-aclu-and-allies-demand-congress-pass-marijuana-bill-with-justice-focus/
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NAACP, ACLU And Allies Demand Congress Pass Marijuana Bill With Justice Focus
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NAACP, ACLU And Allies Demand Congress Pass Marijuana Bill With Justice Focus
A coalition of more than 100 organizations—including NAACP, ACLU and Human Rights Watch—is coming together to call on congressional leadership to pass far-reaching legislation that would not only federally legalize marijuana but take additional steps to repair the damage of the war on drugs, which has been waged in a racially discriminatory manner.
"We are encouraged by the progress around marijuana reform at the state and federal level," the groups wrote, pointing to rapidly changing local cannabis laws and a growing number of pending proposals on Capitol Hill. "While this progress is promising, we insist that any marijuana reform or legalization bill considered by Congress include robust provisions addressing social justice and criminal justice reform."
The organizations are specifically backing the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, a bill filed last month by House Judiciary Committee Chairman Jerrold Nadler (D-NY).
Among other things, the legislation would remove cannabis from the Controlled Substances Act, create processes for expungement and resentencing of prior convictions and block agencies from denying access to federal benefits or citizenship status for immigrants on the basis of marijuana use.
It would also set a new a five percent federal tax on marijuana sales, with some directed toward job training and legal aid for people impacted by prohibition enforcement as well as loans for small marijuana cannabis owned and operated by socially and economically disadvantaged individuals.
Sen. Kamala Harris (D-CA), a 2020 presidential candidate, is sponsoring companion legislation in the Senate.
Calling the bill an important step "to bolster communities ravaged by the war on drugs," the letter pushes congressional leadership to ensure that it is "swiftly marked up and immediately scheduled for floor consideration."
It was delivered on Thursday to the offices of House Speaker Nancy Pelosi (D-CA), Minority Leader Kevin McCarthy (R-CA), Majority Leader Steny Hoyer (D-MD) and Minority Whip Steve Scalise (R-LA).
Also included are Nadler and Judiciary Committee Ranking Member Doug Collins (R-GA), who is cosponsoring separate cannabis reform legislation that would allow states to implement their own legalization policies but does not contain restorative justice provisions.
"The war on drugs, which includes the war on marijuana, devastated the lives of generations of African American and Latinx Americans from low-income communities," the groups, led by the Center for American Progress (CAP), wrote. "These individuals were disproportionately targeted and brought into the criminal justice system for engaging in marijuana activity that is increasingly lawful."
Maritza Perez, senior policy analyst for Criminal Justice Reform at CAP, said in a press release that the bill is "the most far-ranging marijuana reform bill introduced in Congress to date."
“Communities of color have been on the frontlines of this country’s drug war and should not have to continue waiting for a measure of justice, especially while others are generating extraordinary wealth for marijuana activity that sent Black and Latinx individuals to prison," she added in an email.
Hilary O. Shelton, director of the NAACP Washington Bureau said that "many of the communities served and represented by the NAACP have been among the hardest hit by our nation’s outdated and misguided marijuana laws."
"From robbing us of the talent and promise of our young people, to the breaking-up of families, to reabsorbing returning citizens who cannot take full advantage of many of the federal services offered to other Americans, our communities feel the urgency of enacting this legislation," he said. "Thus, we have urged the Congress to act as quickly as possible to correct the flaws in the current law and move towards beginning to rectify decades of unnecessary harshness."
Also signing on to the letter are Leadership Conference on Civil and Human Rights, Legal Aid Society, National Action Network, National Association of Criminal Defense Lawyers, National Association of Social Workers, National Immigrant Justice Center, National Immigration Law Center and United Food and Commercial Workers International Union.
"Criminal justice involvement deprives individuals from low-income communities of color equal access to economic opportunity," the groups wrote. "Incarceration robs families and communities of breadwinners and workers. Thus, any marijuana reform bill that moves forward in Congress must first address criminal justice reform and repair the damage caused by the war on drugs in low-income communities of color."
Cannabis industry and drug reform groups such as 4Front Ventures, Drug Policy Alliance (DPA), Harm Reduction Coalition, Law Enforcement Action Partnership, NORML and Students for Sensible Drug Policy are also signatories of the letter.
"This diverse assortment of organizations coming together to support Chairman Nadler's bill to legalize marijuana underscores the strength of the reform movement," said NORML Political Director Justin Strekal. "With the continued growth of support from nearly every corner of the political spectrum, comprehensive reform is closer than ever."
Queen Adesuiyi, policy coordinator for DPA, said that “for advocates and communities most devastated by the war on marijuana, the current opportunity that Democratic leadership has to end prohibition with a racial and economic justice lens could not have come sooner."
“From historic rates of public support for legalization to House Judiciary Chairman Nadler’s recent introduction of the most comprehensive marijuana reform bill strongly backed by civil rights and criminal justice groups – Democratic leadership have what they need to swiftly move on ending prohibition and repairing its damage,” she said.
The groups' collective endorsement of the MORE Act comes at a time when the conversation around marijuana on Capitol Hill is increasingly shifting from whether to legalize it to how to do so.
Nadler filed the MORE Act shortly after the Judiciary Committee's Crime, Terrorism and Homeland Security Subcommittee held a hearing focused on ending prohibition, which surfaced support for cannabis reform from both sides of the aisle while revealing disagreements on whether racial justice and equity measures need to be included in marijuana legislation.
"The MORE Act’s targeted programs will serve to empower historically underserved communities that bore this nation’s drug war," the new letter says. "It will also reduce racial disparities in the criminal justice system and protect people from unequal marijuana enforcement. Justice requires that marijuana reform policy in Congress first de-schedule and repair past harms."
Several of the signatory groups joined together last month to form the Marijuana Justice Coalition, which issued a statement of principles arguing that "any legislation that moves forward in Congress should be comprehensive" and "frame legalization as an issue of criminal justice reform, equity, racial justice, economic justice, and empowerment, particularly for communities most targeted by over-enforcement of marijuana laws."
This story has been updated to reflect the fact that the Minority Cannabis Business Association removed itself as a signatory of the letter because it "does not want our support of the social equity provisions of the MORE Act to be conflated with opposition to the SAFE Banking Act or any other narrowly-tailored financial services legislation which would provide relief for minority cannabis businesses that are disproportionately impacted by the lack of access to capital."
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6f55e83cfe2543e74862e9a7c18988da
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https://www.forbes.com/sites/tomangell/2019/08/24/andrew-yang-peddles-marijuana-themed-presidential-campaign-merchandise/
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Andrew Yang Peddles Marijuana-Themed Presidential Campaign Merchandise
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Andrew Yang Peddles Marijuana-Themed Presidential Campaign Merchandise
2020 candidate Andrew Yang announced on Saturday that his campaign for the Democratic Party's presidential nomination is rolling out a line of marijuana-themed merch.
AFP/Getty Images Getty
The limited edition products blend Yang's love of mathematics with his support for cannabis reform. A t-shirt being offered for $30 simply says, "Math. Money. Marijuana." And a now-sold-out baseball cap says "Math" on the front and displays a cannabis leaf on back. There's also a bumper sticker that says, "Legalize Marijuana."
Our limited edition marijuana merch is now in stock! Check it out: https://t.co/7N4g1yQb9k pic.twitter.com/cHwlfMlHeQ — Andrew Yang (@AndrewYang) August 24, 2019
Yang, who has never before held public office, has often discussed his support for cannabis legalization and broader drug policy reform on the campaign trail.
In April he said he would pardon all non-violent drug offenders on 4/20, the unofficial marijuana holiday.
“I would legalize marijuana and I would pardon everyone who’s in jail for a non-violent, drug-related offense,” he said at the time. “I would pardon them all on April 20, 2021 and I would high five them on their way out of jail.”
But he later walked back those remarks, clarifying that he would only grant mass clemency to people convicted of cannabis crimes rather than anyone incarcerated for a non-violent drug offense.
That said, his campaign website does say that he backs decriminalizing opioids.
On Friday, the candidate sent a fundraising email to his list pledging, "On my first day as President, I will pardon every person imprisoned for a low-level, non-violent marijuana offense and I would high five them on their way out of jail."
Marijuana convictions make up a very small percentage of the federal prison population, but that’s still ~ a few thousand high fives Hopefully there won’t be any signing ceremonies on day two. Raw palms! pic.twitter.com/FUNSobJYa1 — Daniel Newhauser (@dnewhauser) August 23, 2019
Yang, who says he has never personally consumed cannabis, autographed a bong at a campaign event in Oregon last month.
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0c6a108f77036439d5465b9ed27eaef1
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https://www.forbes.com/sites/tomangell/2019/10/01/marijuana-arrests-increased-again-last-year-despite-more-states-legalizing-fbi-data-shows/?sh=4235243a7e21
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Marijuana Arrests Increased Again Last Year Despite More States Legalizing, FBI Data Shows
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Marijuana Arrests Increased Again Last Year Despite More States Legalizing, FBI Data Shows
Marijuana arrests keep going up in the U.S. even though more states are enacting cannabis legalization laws.
According to new data released by the FBI on Monday, there were 663,367 marijuana arrests in the country in 2018.
That's one every 48 seconds, and represents an uptick from the 659,700 cannabis busts American police made in 2017, and from 2016's total of 653,249.
The jump comes despite the fact that there are now 11 states where marijuana is legal for adults over 21.
The 2018 arrest numbers were compiled too late to have reflected much of the impact of Michigan’s November vote to legalize, and certainly don’t take into account Illinois’s subsequent move to end prohibition this year. But the data, along with those from past years, show that U.S. police are making an increasing number of annual cannabis arrests even as public attitudes and state laws move rapidly in the other direction.
Prior to 2016, the country had seen a steady decline in cannabis arrests for roughly a decade, according to the annual FBI reports.
“Americans should be outraged that police departments across the country continue to waste tax dollars and limited law enforcement resources on arresting otherwise law-abiding citizens for simple marijuana possession,” NORML Executive Director Erik Altieri said.
The new numbers are part of FBI's Uniform Crime Report system, and come with the caveat that they only represent arrests from those local police agencies who participate by sending in data to the federal government.
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Of last year's marijuana arrests, 608,775, or almost 92 percent, were for possession alone.
U.S. police made 1,654,282 total drug arrests in 2018, or about one every 19 seconds.
FBI. FBI.
There were more busts for marijuana last year than arrests for aggravated assault, burglary, arson, fraud, disorderly conduct or sex offenses, among other crime categories.
Meanwhile, police only cleared 33 percent of rapes, 30 percent of robberies and 14 percent of burglaries by making an arrest.
“Prohibition is a failed and racist policy that should be relegated to the dust bin of history,” Altieri, of NORML, said. “An overwhelming majority of Americans from all political persuasions want to see it brought to an end. Instead of continuing the disastrous practices of the past, it is time lawmakers at all levels begin to honor the will of their constituents and support a sensible marijuana policy focused on legalization and regulation.”
Drug busts made up more than 16 percent of all arrests in the U.S. in 2018, the FBI reported.
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bbf8ed97838e3655407c8c50784cf3c3
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https://www.forbes.com/sites/tomangell/2020/01/09/virginia-governor-pushes-marijuana-decrim-in-state-of-the-commonwealth-speech/
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Virginia Governor Pushes Marijuana Decrim In State Of The Commonwealth Speech
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Virginia Governor Pushes Marijuana Decrim In State Of The Commonwealth Speech
Virginia’s governor used his annual State of the Commonwealth speech on Wednesday night to call on lawmakers to enact marijuana reform.
“We need to take an honest look at our criminal justice system to make sure we’re treating people fairly and using taxpayer dollars wisely,” Gov. Ralph Northam (D) said. “This means decriminalizing marijuana possession—and clearing the records of people who’ve gotten in trouble for it.”
Northam, who ran on support for removing criminal penalties for possession during his 2017 election campaign, announced last week in a separate policy speech that cannabis decriminalization is at the top of his criminal justice reform agenda for 2020.
“Studies show marijuana arrests have disproportionately impacted people of color—this legislation clears the records of individuals who have been previously convicted of simple possession,” Northam’s administration said in a document outlining his legislative goals.
In addition to treating cannabis possession with $50 fine, the agenda also calls for removing driver’s license suspensions as a punishment for drug offenses.
Watch Northam’s State of the Commonwealth marijuana comments below:
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Northam also touted his support for cannabis decriminalization during his 2019 State of the Commonwealth address, but the idea languished in the Republican-controlled legislature.
But the new comments come as momentum for cannabis reform is building in the commonwealth.
Democrats took control of the the state Senate and House of Delegates in November’s elections, raising the prospects for the issue considerably.
Attorney General Mark Herring (D), hosted a cannabis summit last month aimed at building support for decriminalization. The top cop, who is running to succeed the term-limited Northam in 2021, has already announced he wants to take steps toward broader marijuana legalization once the more modest step of decriminalization is enacted.
Last week, two newly sworn in prosecutors announced they would no longer pursue marijuana possession cases.
Several marijuana decriminalization and legalization bills have already been filed for the new legislative session.
Elsewhere, New York Gov. Andrew Cuomo (D) used his State of the State speech on Wednesday to push for marijuana legalization.
Meanwhile, a growing number of marijuana measures are qualifying for November ballots in other states.
On Wednesday, Mississippi’s secretary of state verified that activists collected enough signatures to place a medical cannabis legalization question before voters.
South Dakota will see both a full marijuana legalization measure and a medical cannabis-focused initiative on its ballot.
And in New Jersey, lawmakers adopted a resolution last month that will put the question of marijuana legalization to voters.
Several other states—including Arizona, Florida, Nebraska and South Dakota—are positioned to potentially qualify marijuana ballot measures for November, as well.
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a0c38196b595a0be242a00df10877259
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https://www.forbes.com/sites/tomangell/2020/01/19/tulsi-gabbard-endorses-legalizing-drugs/
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Tulsi Gabbard Endorses Legalizing Drugs
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Tulsi Gabbard Endorses Legalizing Drugs
Rep. Tulsi Gabbard (D-HI) is calling for the U.S. to legalize currently illicit drugs.
“If we take that step to legalize and regulate, then we're no longer treating people who are struggling with substance addiction and abuse as criminals and instead getting them the help that they need,” the 2020 presidential candidate said at a campaign stop in Merrimack, New Hampshire on Friday.
SOPA Images/LightRocket via Getty Images
She was responding to a voter who asked whether her plan to end the war on drugs centered on more harm reduction and treatment or if it involved moving to “legalize and regulate narcotics so that you're no longer seeing tainted drugs on the street...and involvement in the black market.”
The congresswoman replied that her answer was “all of the above.”
“The costs and the consequence to this failed war on drugs is so vast and far reaching, socially and fiscally, that if we take these necessary steps, we'll be able to solve a lot of other problems that we're dealing with in this country,” she said.
Listen to Gabbard discuss drug policy in the audio clip below:
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Audio via Michael Tracey.
Gabbard, who has sponsored several marijuana legalization bills during her time in Congress, had previously said in an interview last year that she supported “decriminalizing an individual’s choice to use whatever substances that are there while still criminalizing those who are traffickers and dealers of these drugs.”
Gabbard’s latest comments, which were first noted and recorded by journalist Michael Tracey, go beyond that by indicating she backs a legally regulated method of producing and distributing drugs.
The stance also puts her a step further than former South Bend, Indiana Mayor Pete Buttigieg, a rival Democratic presidential candidate, who has endorsed simply decriminalizing possession of all drugs.
Entrepreneur Andrew Yang, another contender, supports decriminalizing opioids and funding safe consumption sites for illegal drugs. He also wants to make psychedelic mushrooms “more freely available.”
Those candidates and most other Democrats running for president in 2020 also support legalizing marijuana—with the exceptions of former Vice President Joe Biden and former New York City Mayor Michael Bloomberg, who back more modest steps such as removing criminal penalties for possession and expunging past records.
During the New Hampshire campaign stop, Gabbard also spoke about her support for ending cannabis prohibition, calling it “easiest and most critical first step towards” ending the drug war.
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f338d011c315e9eb988fa7d16727e155
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https://www.forbes.com/sites/tomangell/2020/02/03/mike-bloomberg-says-locking-people-up-for-marijuana-is-dumb/
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Mike Bloomberg Says Locking People Up For Marijuana Is ‘Dumb’
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Mike Bloomberg Says Locking People Up For Marijuana Is ‘Dumb’
Democratic presidential candidate Michael Bloomberg said last year that legalizing marijuana is “perhaps the stupidest thing anybody has ever done.” But now that he’s on the 2020 campaign trail vying for the nomination of a party whose voters overwhelmingly back ending prohibition, the former New York City mayor says that it’s the incarceration of people for cannabis that is truly “dumb.”
The latest comment came in response to Denver reporter who asked: “Are the people of Colorado stupid for legalizing it?”
Bloomberg, who continues to oppose broad marijuana legalization but now backs simple decriminalization of cannabis possession, replied that “we shouldn’t put anybody in jail over it.”
“Colorado has a right to do what they want to do,” he told local NBC affiliate KUSA on Saturday. “I would advise going slowly to any other state because it’s not clear, doctors aren’t sure whether or not it’s doing damage. But if a state wants to do it, and Colorado and Washington were the first two that did it, that’s up to the state.
“But what I really object to is putting people in jail for marijuana,” Bloomberg added. “That’s really dumb.”
Watch Bloomberg’s latest marijuana comments:
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In addition to previously calling the policy change “stupid,” Bloomberg also claimed that legalizing cannabis is “nonsensical” during separate remarks last year.
But his position has shifted since joining the race for the Democratic nomination at a time when the party’s voters overwhelmingly support legalizing marijuana. A Gallup poll released in October showed that 76 percent of Democrats want to end cannabis prohibition.
In December, aides to Bloomberg told The Wall Street Journal that the candidate now “believes in decriminalization and doesn’t believe the federal government should interfere with states that have already legalized.”
During Bloomberg’s time as New York City mayor, he vigorously defended the police department’s controversial stop-and-frisk program through which officers frequently detained and searched people—the majority of them people of color. The policy helped to sharply drive up the city’s cannabis arrest rate.
Aside from Bloomberg and former Vice President Joe Biden, all other 2020 Democratic presidential candidates supporting legalizing marijuana.
Sen. Bernie Sanders (I-VT), for example, pledged at a rally in Iowa on Saturday that he would "legalize marijuana in every state in this country” on his "first day in office, through executive order."
Former South Bend, Indiana Mayor Pete Buttigieg, another contender for the party’s nomination, said that if Congress refuses to legalize marijuana when he is president he will board Air Force One and "fly it directly into the home district of a member who is standing in the way” to gin up pressure from constituents.
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ed5b3a97fdc3022d3a0fd242e7053f0f
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https://www.forbes.com/sites/tomangell/2020/02/19/top-trump-campaign-spokesman-marijuana-must-be-kept-illegal/?fbclid=IwAR1lQE9pBg_Zv-JtewdIGfDe4-CEJ3EhoOojGi6xGRrVVPZUQ4D46VL-ftw
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Top Trump Campaign Spokesman: Marijuana Must Be ‘Kept Illegal’
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Top Trump Campaign Spokesman: Marijuana Must Be ‘Kept Illegal’
Asked in a new interview about President Trump’s position on changing federal marijuana laws, a top reelection campaign aide said the administration’s policy is that cannabis and other currently illegal drugs should remain illegal.
“I think what the president is looking at is looking at this from a standpoint of a parent of a young person to make sure that we keep our kids away from drugs,” Marc Lotter, director of strategic communications for the Trump 2020 effort, said in an interview with Las Vegas CBS affiliate KLAS-TV.
“They need to be kept illegal,” he said. “That is the federal policy.”
Lotter acknowledged that a growing number of states are moving to legalize cannabis.
“I think the president has been pretty clear on his views on marijuana at the federal level,” Lotter said. “I know many states have taken a different path.”
During his first campaign and throughout his time in the White House, Trump has consistently voiced support for states’ rights to set their own marijuana laws when asked about the issue.
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“We’re going to see what’s going on. It’s a very big subject and right now we are allowing states to make that decision,” he said last year. “A lot of states are making that decision, but we’re allowing states to make that decision.”
However, his first attorney general revoked Obama-era guidance directing federal prosecutors to generally respect local cannabis policies.
Trump has also issued signing statements reserving his right to ignore a congressionally approved protection for state medical marijuana laws, and his budget requests have included a provision that blocks Washington, D.C. from spending its own local tax dollars to legalize cannabis sales.
“If he changes that, obviously that would be something I wouldn't want to get out in front of him on that,” Lotter, who previously severed as a special assistant to the president in the White House and worked for Vice President Mike Pence when he was Indiana governor, said of the Trump’s position in the new interview published on Wednesday.
Later in the discussion with the Las Vegas station, Lotter talked about acts of clemency Trump issued to a handful of people with drug convictions earlier this week, a move he made while also commuting the corruption sentence of a former Illinois governor and pardoning a former New York City policy commissioner convicted of tax fraud.
“This president championed criminal justice reform,” he said, referring to modest sentencing reform legislation he signed into law.
Among 2020 Democratic presidential candidates, Sens. Amy Klobuchar (D-MN), Bernie Sanders (I-VT) and Elizabeth Warren (D-MA), along with former South Bend, Indiana Mayor Pete Buttigieg, Rep. Tulsi Gabbard (D-HI) and businessman Tom Steyer support federally legalizing marijuana.
Former Vice President Joe Biden and former New York City Mayor Michael Bloomberg both oppose legalizing cannabis but have backed modest reforms such as decriminalizing possession and expunging past records.
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c02d823b7fa908f05f7f1d2a35724707
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https://www.forbes.com/sites/tomangell/2020/03/23/coronavirus-crisis-shows-marijuana-is-essential-and-mainstream/?sh=316746e64db2
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Coronavirus Crisis Shows Marijuana Is ‘Essential’ And Mainstream
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Coronavirus Crisis Shows Marijuana Is ‘Essential’ And Mainstream
Never has it been more clear than during the current COVID-19 pandemic that marijuana has arrived at the forefront of mainstream American society.
In state after state, governors and public health officials are deeming cannabis businesses “essential” operations that can stay open amid coronavirus-related forced closures and stay-at-home mandates. People might not be able to go bowling or see a movie in theaters, but they can still stock up on marijuana.
It wasn’t long ago that anyone growing and selling marijuana faced the risk of being arrested, prosecuted and jailed. But now, in the era of expanding legalization, cannabis providers in many states are held up as vital members of the community who are providing a valuable service on par with picking up prescription drugs at a pharmacy or filling up your car at a gas station.
Advocacy groups have pushed governors and state officials to ensure that medical marijuana patients in particular can maintain access to the cannabis they need. But because many people who use marijuana for therapeutic purposes don’t necessarily jump through the hoops needed in order to become officially certified as patients, recreational businesses are also seen as crucial access points that need to stay open.
“Most of the American public and an increasing number of government leaders stopped buying into the demonization of cannabis years ago,” Karen O’Keefe, state policies director for the Marijuana Policy Project, said. “Now, not only have two-thirds of states recognized that medical cannabis should be legal—with 11 legalizing adult-use—many are recognizing that safe access to cannabis is essential.”
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NORML Executive Director Erik Altieri said it is “encouraging to see our nation's public policy in practice is finally catching up to where the vast majority of Americans have been for years.”
“The recognition by our government officials that cannabis is indeed not just here to stay, but an essential part of life for millions of Americans—particularly in the patient community—is a welcome move in the right direction,” he said. “It is also a move that could not have come at a better moment for those who still require access to maintain quality of life during these trying and troubled times."
In some states, officials have enacted new temporary policies such as expanded delivery services or curbside pickup that make it easier for consumers to get their hands on marijuana while respecting social distancing measures. Others are allowing doctors to issue medical cannabis recommendations via telemedicine instead of requiring that they conduct in-person examinations.
Here’s a look at how states that are taking steps to maintain legal marijuana access during the COVID-19 outbreak:
California
Regulators deemed cannabis retail outlets to be essential businesses that can stay open amid a broader stay-at-home order. Localities, including Los Angeles County and San Francisco, have also said that certain cannabis businesses are essential providers that can continue operations.
Colorado
Gov. Jared Polis (D) issued an executive order allowing marijuana businesses to provide curbside pickup services and letting doctors issue medical cannabis recommendations via telemedicine without in-person examinations. A subsequent order from the governor says that marijuana businesses are critical retail operations, but only for the sale of medical cannabis or curbside delivery. Regulators also issued emergency rules temporarily loosening requirements for fingerprinting of marijuana business owners, modification of premises and transfer of cannabis product samples for testing.
Connecticut
Regulators deemed medical cannabis businesses to be essential and thus exempt from a general mandate to suspend in-person operations.
Florida
The state surgeon general issued an order allowing physicians to issue medical cannabis recertifications to existing patients—but not new ones—via telemedicine.
Illinois
Gov. J.B. Pritzker’s (D) stay-at-home order declares marijuana dispensaries and cultivation facilities to be essential businesses that can stay open. Dispensaries are also being allowed to do curbside sales of medical cannabis—but not recreational marijuana—products.
Maryland
Medical cannabis growers, processors and dispensaries. are exempt from an order Gov. Larry Hogan (R) issued to close non-essential businesses. Regulators are also allowing dispensaries to deliver medical marijuana to patients in parking lots.
Massachusetts
Gov. Charlie Baker (R) issued a stay-at-home order deeming medical cannabis businesses—but not recreational marijuana ones—to be essential and exempt from a general shutdown. Regulators also encouraged medical cannabis delivery services to promote and expand their offerings, and are allowing doctors to remotely recommend marijuana to patients through the use of telehealth waivers.
Michigan
Marijuana businesses will be able to continue curbside sales and home deliveries but cannot perform in-person transactions in stores under a stay-at-home order issued by Gov. Gretchen Whitmer (D). Regulators previously sent a bulletin allowing curbside pickup and encouraging delivery services, and another bulletin extending the period of prequalification status for marijuana business license applicants that may experience building delays.
New Hampshire
Regulators are allowing medical cannabis patients to do curbside pickup at dispensaries and are letting doctors issue recommendations via telemedicine.
New Jersey
Gov. Phil Murphy (D) exempted medical cannabis dispensaries from a stay-at-home order. Regulators moved to allow patients pick up medical marijuana at dispensaries' curbsides and to reduce caregiver registration fees.
New Mexico
Regulators ruled that medical cannabis businesses are essential and can stay open. They also allowed curbside pickup services, extended expiring patient and caregiver cards for 90 days and suspended background checks for new industry employees.
New York
The state Department of Health deemed that medical cannabis providers are essential businesses not subject to a general closure order. Those that are authorized to carry out home delivery are temporarily allowed to expand those services without written approval.
Ohio
Gov. Mike DeWine’s (R) stay-at-home order exempts medical cannabis businesses from a broader business shutdown. The State Medical Board also moved to allow doctors to issue medical cannabis recommendations via telemedicine without meeting patients in person. Additionally, regulators are letting patients phone in orders ahead of their arrival at dispensaries to reduce time spent inside.
Oregon
Regulators approved rules to allow curbside delivery of marijuana at licensed retail locations and to increase medical cannabis sales limits. They also moved to make it easier to obtain cannabis worker permits.
Pennsylvania
Regulators deemed medical cannabis providers as “life-sustaining” operations that are exempt from Gov. Tom Wolf’s (D) order to close businesses in general. They also took other steps, including allowing patients to have marijuana brought to their cars outside of dispensaries and letting caregivers make deliveries to an unlimited number of patients.
Washington State
Gov. Jay Inslee's (D) stay-at-home order exempts marijuana businesses as essential, allowing them to stay open. And regulators are allowing marijuana dispensaries to carry out curbside service for medical cannabis patients.
Despite the significant number of states deeming cannabis businesses to be essential and issuing rulings temporarily expanding their services, that is not the case in every legal marijuana market.
In Nevada, for example, Gov. Steve Sisolak (D) and regulators are mandating that all sales be done via delivery, effectively shuttering businesses that only have storefront operations.
And despite the accommodations, many regulators are also directing businesses to implement social distancing measures such as limits on the number of customers who can enter a retail operation at a given time or guidance on physical space between those who are standing in line—changes that can slow down operations and reduce revenue.
Still, many industry leaders seems to understand the public health necessity of such moves, and cannabis law firm Vicente Sederberg LLP, for example, issued a set of suggested voluntary guidelines for marijuana businesses to consider.
For now, industry trackers have indicated that sales are strong as consumers stock up in preparation to hunker down at home for several weeks.
Nonetheless, the industry has called on Congress to give it equal access to disaster relief funds—a request necessitated by the fact that ongoing federal prohibition means that their operations are still illegal and not generally eligible for such aid.
Legalization opponents, meanwhile, are not pleased with moves by a growing number of states to keep cannabis stores in business despite the steps intended to foster social distancing at such locations.
“We have seen numerous reports of marijuana stores with long lines of people stocking up on the drug and have additionally seen states move to keep these stores open,” Kevin Sabet, president of prohibitionist organization Smart Approaches to Marijuana, said. “Quite frankly, this presents a unique harm to public health and safety. Across the country, states are doing everything in their power to limit the gathering of people in one location. Long lines outside of establishments engaged in the distribution of marijuana should be a tremendous cause for concern.”
When it comes to consumers, while advocates have cautioned them to consider refraining from smoking or vaping for the time being due to the risk of agitating lungs amid the respiratory effects of the novel coronavirus, they have also pointed out that there are other ways to use cannabis, such as edibles.
For now, the coronavirus pandemic has further highlighted the disconnect between federal and state policies: Under one set of laws cannabis is a banned drug, and under the other it’s a medicine deemed just as essential as any other.
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f90c53a2e96f4d3a69882e28097d3ee0
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https://www.forbes.com/sites/tomasphilipson/2016/04/05/value-in-health-care-time-to-stop-scratching-the-surface/
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Value In Healthcare -- Time To Stop Scratching The Surface
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Value In Healthcare -- Time To Stop Scratching The Surface
By Anupam B. Jena and Tomas J. Philipson
“Paying for value” has become a ubiquitous saying in health care. The federal government now financially incentivizes hospitals to deliver ‘high-value’ care through a series of programs including the hospital value-based purchasing program. By the end of 2018, half of all Medicare fee-for-service payments to physicians will be tied to quality or value. But perhaps no other sector than pharmaceuticals has had as much scrutiny in trying to quantify value. We argue that our current notions of how drugs should be valued fall woefully short.
(DISCLOSURE: Manufacturers of PCSK-9 inhibitors and novel treatments for hepatitis C, such as Amgen, Gilead, and Abbvie, are clients of Mr. Philipson's consulting firm, Precision Health Economics, for which Dr. Jena also works. In general, the pharmaceutical and biotechnology companies which retain Precision Health Economics benefit from higher drug prices.)
The rising costs of specialty drugs – which accounted for 4% of all health care spending in 2014 – have led many observers of the pharmaceutical industry to question the value that new drugs provide and their impact on health care budgets (or ‘budget impact,’ as the terminology goes). With these drugs affecting potentially large markets – e.g., PCSK-9 inhibitors for high cholesterol and new medications for hepatitis C – their costs have unsurprisingly become the top health issue in the 2016 election and politicians on both sides of the aisle have advocated for government interventions to help reduce drug prices, including allowing Medicare to negotiate drug prices.
Amidst these concerns, a number of organizations have advocated for incorporating the benefits of drugs into pricing and coverage decisions by payers and have developed frameworks for how value should be determined. Within the last year, two major organizations, Memorial Sloan Kettering and the American Society of Clinical Oncology, offered recommendations for determining the value of new cancer drugs. Both value frameworks compare the prices of new drugs with the estimated benefits these drugs provide using newly developed, but somewhat arbitrary methods to estimate the improved length and quality of life from clinical trials. The Memorial Sloan Kettering framework goes one step further and assesses value based on additional metrics, including drug efficacy and toxicity, disease burden and drug novelty. Another organization, the Institute for Clinical and Economic Review (ICER), has developed metrics to value new health care technologies across all diseases, in part based on the short term budget impacts of these technologies. A recently released report asserted that the current annual $14,000 sticker price on PCSK-9 inhibitors should be reduced by more than 80% to minimize its budget impact and be considered cost-effective at a population level. It should come as no surprise that buyers want lower prices; all buyers do. However, the value frameworks proposed in order to negotiate lower prices are based on both pseudo-science and voodoo economics.
Economists generally define the value of any product as how much larger its benefits are than its costs. For example, if you are willing to pay at most $2000 for an iPhone that costs $500, the value to the consumer is $1500. These so called private benefits of a product accrue to buyers only, such as the patient taking the treatment. The social benefits accrue to others. For example, benefits to patients who no longer run the risk of acquiring hepatitis C once the virus is largely eradicated, or the reductions in caregiver burden to loved ones caring for someone with Alzheimer’s. Few would disagree that rewarding the full social value of a drug is a good idea, but the failure of current frameworks to accurately and transparently assess value poses a threat to the future pipeline of new drugs. Put simply, our current measures of value are not only too narrow but are shortsighted. Pricing and coverage decisions made on the basis of incomplete value frameworks run the risk of reducing future innovation by penalizing drugs that actually offer value to society.
Here’s why.
First, what’s important is the price of health and not the price of health care. The key issue is that innovation lowers the price of health regardless of how expensive the innovations are. To illustrate, consider the price of a longer life of an HIV positive individual in the early 1990s before the new breakthrough therapies emerged in the mid-1990s that dramatically improved longevity. The price of a longer life was then infinite because a longer life could not be bought anywhere on the planet. Regardless of the price of the new innovations, they thus lowered the price of a longer life. Today, someone with HIV can “buy” a longer life in most countries. What innovations do is to lower the price of health in this manner, bringing it down to patent-protected levels for about a decade, but to competitive cost-based levels after that.
Second, when comparing the benefits of drugs to their prices, these frameworks frequently and wrongly assume that drug prices are static. Drugs that are viewed as “expensive” today inevitably decline in price either after other competing drugs to treat the disease enter the market or after losing patent exclusivity, which means that at the value provided rises over time. It need not take long for these gains to materialize either. For example, the Congressional Budget Office has estimated that therapeutic competition from biosimilar drugs will lower biologic drug prices by as much as a third. In addition, 90% of all prescriptions are filled with a generic medication conferring enormous value attributable to the past innovations they piggy-back on.
Third, certain value frameworks emphasize the short-term budget impact of new drugs as an important component of a drug’s value. Drugs that are expensive and treat large populations have large impacts on health care budgets today, a fact that is used as an economic justification for why prices should be lowered. This logic is flawed for three reasons. First, it ignores the fact that health is an investment. Like other investments, the up front costs are often high, but the returns accrue over a lifetime (think houses, cars, etc.). Second, drugs that are hugely effective and that treat broad swaths of the population would by any other metric be considered socially valuable. However, the value frameworks that rely on assessing overall budget impacts as a determining factor of value would paradoxically favor drugs that have limited scope or are or less frequently prescribed, possibly due to lower quality. Finally, certain frameworks require that future spending on medical innovations be capped at the historical share that medical innovations have comprised in overall health care spending, which is wholly inconsistent with rewarding value. If technologies become more effective over time, their share of overall health care spending should increase. Had this logic been applied to the explosive growth in computing and telecommunications, we would not have had the innovations witnessed in these sectors which allowed better technologies to displace obsolete investments.
Fourth, health benefit per dollar spent (or cost-effectiveness) is a typical measure of drug valuation employed. In addition to measuring health per dollar spent, these measures convert health into dollars by arbitrary amounts used mainly to control budgets rather than measure the benefits of health in dollars. Certain frameworks, for example, use a dollar value of a QALY (quality-adjusted life year) of $100,000-$150,000 and some frameworks value additional life at far lower. In contrast, a number of economic analyses place the value of an additional QALY at closer to $150,000-$300,000. As one can see, an arbitrary choice of the dollar value of a QALY can make a drug look cost-effective or highly non-cost effective. This disparity in the choice of willingness-to-pay limits should be first addressed and agreed upon in society before arbitrarily categorizing drugs as being cost-effective or not.
Fifth, aside from specific value frameworks, there is contentious debate, particularly in oncology, about the value provided by drugs that fail to demonstrate overall survival benefits but “only” cause delayed disease progression such as tumor growth (reflected in progression free survival, or PFS). The failure to identify overall survival effects in relatively short clinical trials by no means implies that these effects will not materialize in the real-world. For many tumor types, overall survival has improved considerably in the past two decades while the trials underpinning the new regimens were not long enough to capture the complete benefit of treatment. Moreover, concerns are frequently raised that because PFS and overall survival are imperfectly positively correlated, drugs should not be covered on the basis of PFS evidence alone. However, this same evidence means that on average drugs that improve PFS in clinical trials also improve overall survival in the real-world. This will not always hold, of course, but failure of payers to cover drugs that were approved by the FDA on the basis of PFS will on balance harm patients more than it helps them. To be clear, drugs that ultimately demonstrate no health in the real-world are of questionable value. However, current value frameworks would severely undervalue a hypothetical drug that has reached significant PFS. These issues are only compounded by the fact that improvements in cancer care will only make it harder to detect overall survival improvements in cancer trials in the first place, as patients live longer. Surrogate endpoints, therefore, are meaningfully and clinically valuable and what is most needed are comprehensive assessments of how surrogate endpoints can be used to better predict real-world outcomes and be utilized in value frameworks.
Sixth, current value frameworks neglect to incorporate the social value of treatments, that is, the fact that improvements in health are not only valued by those who receive treatment but by others as well, as in the case of infectious disease or when caregiver burden is reduced among loved ones caring for someone who is ill. In addition, much of health care financing comes from those other than the patient, e.g. in Medicaid, likely because others value the care of those who are sick. Our own work has demonstrated that the ‘value of altruism’ could be as high as 20% of what individuals are themselves willing to pay for improvements in their own health. In fact, a primary reason that cures for diseases of the developing world are under-researched is because this value is rarely quantified, much less used to reward innovators to incentivize drug development. In the US, diseases such as Alzheimer’s and multiple sclerosis, which impose significant quality-of-life losses to caregivers, are an excellent illustration. Current value frameworks do not incorporate how better treatments for these diseases improve the lives of caregivers and confer broad benefits to society; such frameworks therefore could result in similar underinvestment in these types of diseases or health care more generally.
Seventh, the components of value in existing value frameworks also rely on somewhat archaic norms of value that ignore other important sources of value to patients. Consider, for example, how existing frameworks would have valued the first treatment for HIV/AIDS, AZT, which was modestly valuable in improving survival. For some patients treated with AZT in the early 1990s, the drug prolonged survival just long enough to receive highly active anti-retroviral therapy (HAART) in the mid-1990s. In effect, AZT created “option value”—it created the option of future treatment with more effective drugs for those who lived long enough to receive them. Among patients with chronic myeloid leukemia, the option value from future innovative therapies has been estimated to be as large as 10% of the overall value of survival gains from existing treatments. Existing value frameworks also neglect to capture the “value of hope” that some treatments provide. Patients frequently hope for cure when considering treatments as opposed to the average or median survival gains on which most value assessments focus. Differences in the “spread” of outcomes between two treatments may matter to patients even if there are no differences in average survival. In fact, one survey of cancer patients found that 77% of those surveyed preferred a therapy with a chance of cure to another therapy with similar average survival but no chance of cure. Value frameworks should be refined to incorporate the actual preferences of patients, which may not conveniently boil down to choosing treatments on the basis of median or average survival alone.
Finally, one obvious way to increase “value” as calculated in existing frameworks is to pay less for drugs, which is an argument at the core of proposals for Medicare to negotiate drug prices. Drugs that are not cost-effective or that have large budget impact at high prices obviously become more appealing at lower prices. This is a misguided argument. For starters, lower prices are not always better as everyone agrees we should not abolish the patent system even though it would lower prices. More importantly, this shortsighted view of value neglects that high prices support not only the costs of developing marketed drugs, but the >90% of drugs that do not make it to market. The inherent risk in drug R&D means that winners must pay for losers. If it costs, say, $100 million for each of 10 R&D programs of which 9 fail, then the successful drug has to make a $1 billion to make the portfolio break-even. This point is overlooked again and again by the policy community that screams at the billion dollar blockbuster but ignores the silent $900 million spent on drugs they never see. Efforts to improve value by driving down prices also ignore what we currently know about how the social value drugs create is divided between innovators and patients. In our own work quantifying the aggregate value to patients and innovators of the war on cancer, we have found that patients – not innovators – have benefited the most, capturing between 80-95% of the value these drugs created for society. Moreover, other work that moves beyond single-drug assessments towards more comprehensive assessments of the value of cancer care find large returns to investments in cancer R&D, on the order of $30 million dollar of social value for each $1 million invest in cancer R&D.
To sum up, the first step in “paying for value” is to define and measure benefits of therapies correctly. Value should be defined with a long-term view in how to lower the price of health and should incorporate the full social value of treatments. Although it is of great interest to any buyer to lower prices, the value frameworks currently proposed to better negotiate such prices will clearly hurt future patients.
Anupam B. Jena, MD, PhD is an associate professor of health care policy at Harvard Medical School, physician at Massachusetts General Hospital, and Faculty Research Fellow at the National Bureau of Economic Research.
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24b2118730a0736f24cd7184cbb2d04a
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https://www.forbes.com/sites/tomasphilipson/2016/09/06/eu-vs-us-cancer-care-you-get-what-you-pay-for/
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EU vs US Cancer Care: You Get What You Pay For
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EU vs US Cancer Care: You Get What You Pay For
A recent report suggests that cancer patients in England are suffering from serious lack of access to vital treatments due, in part, to problems with the drug assessment and approval process. The UK and other European health systems use central health technology assessment (HTA) to decide whether to cover a given treatment, but these processes are ultimately designed to help manage healthcare budgets – not get the best outcomes for patients. In cancer care, however, you get what you pay for.
Countries with single payer systems in health care – like the National Health Service in England, for example – must balance limited resources against the healthcare needs of their populations. To more efficiently allocate healthcare dollars, many countries use health technology assessment (HTA) to evaluate the cost effectiveness of new treatments in order to guide approvals and price negotiations. In England, this process is conducted by the National Institute for Clinical and Health Excellence (NICE). A recent report published by two cancer charities in the UK, however, suggests that the HTA process – especially the process in the UK – may be hurting rather than helping patients.
In the US, access to cancer drugs in the private market is different. Government assesses the clinical effectiveness and safety of drugs through the FDA, but it is then up to innovators, payers, and patients to work out the appropriate prices of these therapies and the overall amount spent on them. There are no artificial price ceilings or budget caps set by the government on private markets, although the government may use market information to decide on how much it pays for its services (using private market rebates to set rebates for Medicaid, for example). Private spending is allocated based on the supply and demand for therapies and their resulting value in the marketplace. This has led to higher spending on cancer care than in other countries, but also much faster access to cutting-edge therapies.
Are Americans getting what they are paying for? Our research suggests that countries that invest more in cancer care have better outcomes. One analysis we did in 2012, which was featured in the 2013 Economic Report of the President, compared the value of cancer survival gains in the US vs the EU from 1983 to 1999. We found that cancer patients in the US lived longer than in the EU, and these survival gains were not due to more aggressive screening of US patients. Most importantly, these additional US survival gains were worth the higher spending – to the tune of almost $600 billion over the period, or $43 billion per year. In other words, the US was spending more but getting around $61,000 in additional value per cancer patient. These findings were borne out by another study, which shows that cancer mortality rates fell faster in the highest-spending countries than in medium- and low-spending countries.
In countries other than the US, healthcare spending is determined through budgetary processes rather than private markets. It is reasonable to have concerns about bureaucrats placing (even well-intended) limitations on physicians’ and patients’ health care choices in general. There is particular cause for concern in the context of cancer care, however, where there is clear evidence that patients value such care enormously. In one study, cancer patients were willing to pay almost $300,000 per year of life gained – far above the threshold used by NICE to judge cost-effectiveness. This willingness to pay for care is not theoretical, either. Many US families are willing to go bankrupt for cancer care. This is unfortunately a side effect of the poor insurance generally offered for cancer care, but at the same time, this fact provides evidence of the tremendous value that cancer care offers to patients and their families. What other products would you be willing to go into bankruptcy for? Patients are telling us with their pocket books that they want these therapies, while bureaucrats and policy experts are often claiming they are of low value. Clearly, the patients are right.
In the UK, concerns about limitations on access to cancer drugs due to lack of NICE approval are not new. In 2010, the Cancer Drugs Fund (CDF) was set up to provide funding for some new drugs not approved by NICE bureaucrats, in order to increase access to potentially life-saving interventions. The CDF was renewed in 2014 and played an important role in increasing access for patients. Some, however, opposed this fund, arguing that it allocated precious healthcare resources to treatments not found to be cost-effective, for patients at the end of their lives. This opposition prompted recent reforms that bring CDF coverage much more in line with NICE’s assessments, but the original role of the CDF – to extend access to drugs not seen as traditionally cost-effective – was testament to the fact that patients value access to these drugs more highly than NICE’s measures would suggest.
There are several issues with the traditional cost-effectiveness approach used by NICE. One issue is that cost effectiveness is lowest at a drug’s introduction, when prices are highest and evidence of clinical benefits the lowest. Over time, competition drives down prices, and clinical experience leads to more effective use of the drug and expansion into additional indications (for more, see here). As a result, HTA bodies like NICE may not recommend approval of drugs that later prove to be cost-effective according to its own standards. This is especially true in cancer.
Another issue is that most cost-effectiveness analysis examines the experience of the treatment for an average or median patient. However, many cancer therapies are very effective for small portions of the population – for example, the new generation of therapies that trigger the immune system to fight cancer cells. In other words, the overall average survival gain may be modest for the entire population, but for the 20% who respond, it may offer years of benefit. Because traditional cost-effectiveness looks at the benefits to the average patient, these therapies are not likely to be approved by bodies such as NICE. Nevertheless, the possibility of being in that 20% is an important source of hope and a key reason for patients putting down their own money.
The CDF was designed to increase access to drugs not approved through the traditional NHS approval process. This expanded funding has not been enough, and changes to the fund are moving in the wrong direction for patients. Under recent reforms, NICE will re-assess and re-approve all drugs covered by the CDF (more here). Given that 23 of the CDF’s 47 covered drugs were previously found to be not cost-effective by NICE, this move may significantly undermine much of the benefit that the CDF provides for patients. For the time being, UK cancer patients’ prospects will continue to be limited to what their government decides is in the budget. In cancer care, as in many other sectors, you get what you pay for.
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96030a3e617bb4b4996ccea060c5c00b
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https://www.forbes.com/sites/tomaspray/2013/03/01/the-week-ahead-should-you-be-buying-or-selling-2/
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The Week Ahead: Should You Be Buying or Selling?
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The Week Ahead: Should You Be Buying or Selling?
Bulls and bears could both be right this coming week, but you can count on continued high volatility, and for well-selected stocks to look more attractive than ETFs. MoneyShow’s Tom Aspray highlights a few of the stock gems he’s found at this crucial point of the year.
It was a rollercoaster ride in many of the markets last week, especially stocks. However, after a very negative close Monday in reaction to the turmoil in Italy, stocks did manage to rebound and close the week a bit higher.
This volatile movement did little to resolve what seems to a debate between the bulls and bears on Wall Street that has been going on the for the past few weeks leading up to Friday’s sequestration deadline. The question most investors are asking is, how will stocks do in March? Also, should they be buying or selling?
As discussed in late January, the seasonal pattern is for stocks to correct for most of January before starting to turn higher in the first week of March. Since 1950, the S&P 500 has closed higher in March 40 times and lower 23 times. In 2009, the S&P was up over 9%, which is the best year, while 1980 was the worst with a decline of over 10%.
Click to Enlarge
One of the key concerns from the bearish camp is that we have already had a great year in the stock market, so what more can one expect? The comparison chart shows that the Spyder Trust (SPY) is currently up around 6.8% in 2013, which is not bad for two months.
Many may be surprised at what has transpired in many of the other world markets. As I discussed last week, many overseas markets topped out at the end of January.
The iShares MSCI Germany Index (EWG) is now down 1.2% for the year, for instance, after being up 6% just over a month ago. The Vanguard MSCI Europe (VGK) is up just 0.5% for the year. The Vanguard FTSE Emerging Markets ETF (VWO) is now down 2% in 2013.
Many of the world markets do show typical corrective patterns. When they are completed, it is likely to be a positive sign for the US markets.
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In looking at many of the individual stocks, similar divergences are evident. The Dow Industrials did the best in February, and the technical evidence confirms last week’s view that it was taking over a leadership role.
The chart of Exxon Mobil (XOM) shows that it peaked at $91.93, with a recent low of $87.70, which was a 4.6% decline from the high. Then you have stocks like Verizon Communications (VZ), which broke through resistance on February 20 and has rallied over 4%.
This type of divergence makes stock selection critical. It especially makes investing in ETFs geared to a particular market segment or average less rewarding.
The Eurozone is likely to have a further impact on the day-to-day gyrations in the global equity markets. Data out of the Eurozone Friday indicated that inflation had dropped while unemployment had risen; 19 million are now unemployed. This will put further pressure on the ECB to lower rates, maybe as soon as this week.
The concern over the value of Italian bonds has many Eurozone bankers on edge, as they have large holdings in these bonds. The chart shows that Italian bond yields appear to have bottomed at 4%, and are now edging higher as their prices have declined.
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Of course, lowering rates would also weaken the euro, and could eventually push it back to last summer’s lows in the $1.20 area.
There are also some positive signs, though. Sentiment toward the economy has improved, and some of the Eurozone stock markets still have positive weekly technical patterns. Most of the news on the US economy was quite good last week. Consumer confidence saw a sharp ten-point improvement from last month, and the ISM Manufacturing Index was strong on Friday. Manufacturing also picked up in both the Chicago and Richmond areas. It was a bit weaker in Dallas.
The housing data was also strong as the S&P Case-Shillar Housing Price index showed a nice increase as both New home Sales and Pending home sales beat economist’s estimates. The GDP and Durable Goods data were both disappointing. On Tuesday, we get the ISM Non-Manufacturing Index, followed on Wednesday by the ADP Employment Report and factory orders. In addition to the weekly jobless claims, we also get the latest report on international trade on Thursday, along with productivity and costs. Then on Friday, we get the monthly employment report, which bond traders will be watching closely.
What to Watch
Discerning the short-term direction of stocks has been tough over the past week or so.
Last Monday’s drop took the major A/D lines below their prior lows, which generally means a deeper correction. However, Tuesday’s sharp rally brought the A/D lines back above their previous highs, which flipped the short-term outlook back to positive. This week, I would look for more choppy action, with the potential for one more good downdraft before the correction is over. It is also possible that the major averages will see little upward progress in March, but I expect quite a few stocks to do much better. The traders that are interviewed regularly on the financial networks remain skeptical, if not downright bearish on the market.
It would likely take a move to new highs in the S&P 500 before they changed their tunes. The sentiment numbers improved last week. Only 28.3% of those surveyed by the AAII are now bullish. This number stood at 52.3% in January. The failure to resolve the sequestration could turn them even more negative this week. The financial newsletter writers also have turned more cautious: 46.3% are bullish, down from 54.7% a month ago.
The technical evidence now favors buying stocks that are outperforming the major averages. To find these, I typically look at the weekly and daily relative performance analysis, as well as the volume and chart patterns.
Last week, I pointed out two Dow stocks that I thought had turned the corner, International Business Machines (IBM) and McDonald's Corporation (MCD). So far, only IBM has reached my initial buy level. I will likely favor large caps given the recent leadership of the Dow Industrials, but I will also look for mid- and small-cap stocks if the risk can be controlled. The long-term weekly chart of the NYSE Composite shows the recent high of 9,004. Up to Tuesday’s early low, it had dropped 3.3%. It has held well above the 20-week EMA at 8,596, as well as the stronger support from last September at 8,515.
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There is initial resistance now at 8,947, which was last Monday’s high. The next major resistance from 2008 is in the 9,400 area, followed by 9,724. The all-time high from October 2007 stands at 10,311<
The weekly NYSE Advance/Declineline broke out to the upside in January as the resistance (line c) was overcome. It has continued to make new highs, and shows no signs yet of a top. On the chart, you will notice that in the past, similar breakouts corresponded with rallies that lasted more than just a month or two, and the A/D line typically warns in advance of a deeper correction.
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S&P 500
The Spyder Trust (SPY) has traded between $153.28 and $148.73 over the past two weeks. So far, the correction has held above the stronger support at $148.15, but did come close to the daily Starc- band early last week.
The daily on-balance volume(OBV) broke its uptrend on February 21, and is now very close to moving back above its WMA. The weekly OBV (not shown) is acting much stronger, having held well above its rising WMA. The S&P 500 A/D line has crossed its WMA four times in the past week or so, but is now very close to making new highs. The decline held above the stronger support (line c). A daily close above $152.87 to $153.28 should be enough to confirm the correction is over. The all-time highs are not far away at $157.42.
Dow Industrials
The SPDR Diamond Trust (DIA) has been holding up well after its one sharp down day, as it is still bumping into the resistance (line d) that goes back to the 2012 highs. It made a new weekly closing high this week, even though it has not surpassed the all-time high of $141.95 . The highest daily close was at $141.57, which occurred on October 9, 2007.
The Dow Industrials A/D line closed the week at new rally highs last week after testing tis uptrend (line f) last week. The weekly relative performance (not shown) with this week’s strong close now appears to have completed its bottom formation.
Nasdaq-100
The PowerShares QQQ Trust (QQQ) reached a low last week of $65.96, which was just below the quarterly pivot support at $66.10. It held above the 38.2% Fibonacci support at $65.63.
The uptrend (line b) appears to be holding, but a close above $68.35 is needed to signal that the Nasdaq-100 is finally ready to catch up with the rest of the market. The Nasdaq-100 A/D line has moved back above its WMA, but is still below its previous high. It has also not surpassed the high from last summer.
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Russell 2000
The iShares Russell 2000 Index (IWM) may have completed its correction last Friday, as it dropped down to test the week’s lows and support (line d) before closing higher. The decline has held above the monthly pivot support at $87.
There is initial resistance now at $91.57, followed by $92.68, which was the February 20 high. For this week, the Starc+ band is at $95.49, with the quarterly R2 resistance at $97.69.v The daily OBV tested its rising WMA last week, but made new highs on Friday. The Russell 2000 A/D line dropped below its WMA and its uptrend (line f) on the correction. It now appears to have resumed its uptrend, but is still below its February highs.
Sector Focus
It is not a surprise that the iShares Dow Jones Transportation (IYT) made another new high in the past week, after correcting as low as $103.03. That was a correction of over 3.8%, but most of the damage occurred in just two days. Following a new high on Thursday and IYT closed the week with a 0.7% gain.
The Select Sector SPDR Financials (XLF) and the Select Sector SPDR Energy (XLE)were the weakest sectors last week, down 0.5% and 0.7%. XLE may have already completed its correction, and if it retests the lows it will look attractive.
NEXT: Commodities and Tom’s Outlook
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7aa3ed98f2e6acd2978e3476bed2d7ad
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https://www.forbes.com/sites/tomaspray/2013/03/12/a-global-hunt-for-yield/
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A Global Hunt for Yield
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A Global Hunt for Yield
As central banks around the world have driven interest rates down to record levels, income investors have gotten squeezed but MoneyShow’s Tom Aspray has found a stock and two ETFS with attractive yields that have corrected from their recent highs.
As stocks continue to edge higher, those on the sidelines are trying to decide whether they should be buying, and if so what? Overnight news dampened some of the enthusiasm for the Chinese economy, but most realize their data is quite volatile.
Yields have picked up recently as the yield on the 10-Year T-Note closed last week at its highest level since April of 2012. Those who are very bullish on stocks at current levels think that a rotation from bonds to stocks could cause stocks to melt up.
In January’s articles When Will the Fat Lady Sing? and Don’t Buy the Junk, I discussed the uptick in rates and the key levels to watch, as well as recommending that investors not buy the popular junk bond ETFs. The bond ETFs peaked a week later and are trading well below their highs.
So what is an income investor to do? There is one US stock and two global ETFs that have pulled back from their highs and have attractive yields in today’s environment.
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Chart Analysis: The daily chart of the 10-Year T-Note yield shows that the downtrend from the early 2011 highs, line a, was broken decisively last fall.
The pullback in yields during November and December established a clear uptrend, line c. The current yield of 2.056% is in the next resistance zone at 2.06 -2.11%. The key trend line resistance, line b, is now at 2.28%. A weekly close above the 2012 highs at 2.363% and 2.407% would be a much stronger sign that rates had bottomed. A close in yields below 1.85% would be the first sign that the rally had lost upside momentum. There is more important yield support now at 1.715%.
PetroLogistics LP (PDH) is a $2.0 billion dollar diversified chemical company that has a yield of 7.7%.
When PDH made its February high at $16.90, the yield was 6.60%. The low three weeks ago at $14.09 was between the 38.2% Fibonacci support at $14.47 and the 50% level at $13.70. In a last week’s trading lesson, I noted that retracements often drop to the midpoint between the 38.2% and 50% support levels. The August and October 2012 highs, line d, are at $13.94. The 61.8% level and the quarterly pivot are in the $12.94 to $12.91 area. The relative performance did confirm the recent highs but has dropped back below its WMA and is now close to support at line e. The weekly OBV was very strong on the early January breakout, line f, as the volume was quite high. Volume has been low on the recent correction, which is a positive sign. There is initial resistance at $15-$15.50.
Click to Enlarge SPDR Euro STOXX 50 (FEZ) is a blue chip Eurozone ETF that has over 30% in Germany and France. It currently yields 3.07% with an expense ratio of 0.29%. The two largest holdings are Sanofi (SNY) and Total SA (TOT), each of which make up over 5% of the ETF. FEZ had a weekly doji high of $36.52 at the start of February. The low two weeks ago was $32.82, which was a drop of 10% from the highs. The quarterly pivot is at $33.48 with the minor 61.8% support from the November low at $32.71. The weekly relative performance did confirm the highs in 2013, line b, before dropping below its WMA. The weekly on-balance volume (OBV) after testing its uptrend, line c, has moved back above its WMA. There is initial resistance now at $35.24 with the 127.2% Fibonacci target at $37.61. The WisdomTree Emerging Markets Equity (DEM) has 200 stocks and yields 3.38% with an expense charge of 0.63%. DEM peaked at $58.09 in the first week of the year with a recent low of $54.80. This was a correction of 5.6%. The decline fell below the 38.2% Fibonacci support at $55.38 but held above the 50% support at $54.54, which is typical of retracements. The relative performance broke its downtrend, line f, but is now below its WMA and close to making new lows. The OBV completed its bottom in December when resistance at line g was overcome. The OBV has turned higher after testing its rising WMA. There is next resistance at $57.21. What it Means: The corrections in both the SPDR Euro STOXX 50 (FEZ) and WisdomTree Emerging Markets Equity (DEM) do not appear to over. Therefore, I would look for a pullback into last week’s range to buy. PetroLogistics LP (PDH) still could correct a bit more as the weekly momentum has not yet turned higher. All three look like good picks for the income part of your portfolio with PDH having the highest yield and the highest risk. How to Profit: For PetroLogistics LP (PDH), go 50% long at $14.14 and 50% at $13.47, with a stop at 12.83 (risk of approx. 7%). For SPSR Euro STOXX 50 (FEZ), go 50% long at $34.32 and 50% at $33.61, with a stop at $32.53 (risk of approx. 4%). For WisdomTree Emerging Markets Equity (DEM), go 50% long at $56.46 and 50% at $56.02, with a stop at $53.96 (risk of approx. 4%).
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ec49fa9a5d62f5c81e56ae7e08fea912
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https://www.forbes.com/sites/tomaspray/2013/12/28/one-indicator-stock-traders-must-follow-2/
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One Indicator Stock Traders Must Follow
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One Indicator Stock Traders Must Follow
Most stock investors spend a lot of time using technical or fundamental analysis to pick the best stock, ETF, or fund to buy. Less time is spent on doing equally rigorous analysis of the market’s trend, and too often their conclusions are based on a fundamental opinion of the economy. The majority of technical analysts, of course, will tell you that the fundamental data badly lags the price action.
In March 2009, it was almost impossible to have a positive fundamental view of the economy. As I will show you later, there were clear technical signs at the time that the stock market was indeed bottoming. In this article, I will focus on the one indicator that is often ignored by many, but that should be followed closely by all stock investors.
While there are always some stocks that will rise when the major averages are declining, going against the major trend is generally never a good idea. By determining the market’s internal strength or weakness, you will be able to make a more reasoned decision to buy or sell, and this should make your investing more successful.
The best way to measure the market’s health is through the Advance/Decline line, or A/D line. The most important A/D line is based on the NYSE Composite. It is calculated daily by determining the number of stocks that are up (advancing) and the number of stocks that are down (declining). The A/D line is a then-cumulative total of the number of advancing minus the number of declining stocks.
In many years of study, I have found that the A/D line is the most effective tool for identifying market bottoms. In this article, I will show you how I use support, resistance, trend line analysis, and moving averages to determine the market’s trend using the A/D line. Of course, these patterns are rarely exactly the same, but through these examples, you should be well-prepared for most future scenarios.
Figure 1
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This chart, courtesy of Tradestation.com, covers the period from November 2004 through November 2005 and is a ideal example of how the A/D line can identify a market low. On the bottom of the chart in blue is the A/D line with a 34-period exponential moving average (EMA) of the A/D line in pink.
From the NYSE Composite’s March high of 7453, the market retreated sharply and violated four-month support, line a, in April. This created significant overhead resistance, as anyone who bought since November was now at a loss.
The NYSE made lower lows in April and May (line b), consistent with a weak market. The NYSE A/D line was giving a different picture, as it formed higher lows, line c. A bullish or positive divergence is not always seen at market lows, but when it is, that signal is highly reliable.
As I have mentioned previously, once a divergence is spotted, I wait for confirmation before I am confident that a turning point has been identified.
On May 15, 2005 (line 1), the A/D line moved above the key resistance at line d, which confirmed the positive divergence.
It is important to note that the A/D line was acting stronger than prices, and while the NYSE was at 7124 and still well below the April high at 7222 (line e), the A/D line was higher.
The NYSE Composite did not overcome its resistance until 17 trading days after the A/D line. Though this may seem rather surprising, this is a rather common occurrence with the A/D line.
Over the next three months, the A/D line was rising steadily, but on August 12, it failed to make a new high with prices (point 2). This was the first warning signal.
The NYSE Composite made further new highs on September 9 at 7665 (point 3), but the A/D line failed to make new highs, forming a negative divergence, line f. This divergence was completed on September 20 when support at line g was broken. This was 11 days before the important chart support at line h was broken.
Figure 2
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With the popularity and liquidity of ETFs like the Spyder Trust (SPY), I started to combine it with the NYSE A/D line and found the signals to be quite reliable. SPY peaked in May 2006, which made the followers of the “Sell in May…” philosophy happy for a while.
The ensuing decline in SPY took it 7.5% lower, as it bottomed at $122.34 on June 14, but the NYSE A/D line only declined by 2.4%. This was a sign that the market was showing internal strength. The A/D line tested long-term support at line a, but no divergences were formed. On July 26, SPY closed at $126.83 and the downtrend in the A/D line was broken (line 1).
By early August, the A/D line was well above its rising weighted moving average (WMA) and on August 29 (line 2), the A/D line moved above the May highs with SPY closing at $130.58. It was almost a month later before the SPY surpassed its May highs.
The A/D line remained very positive until February 2007, when negative news on the Chinese market caused a sharp selloff in the US. This took the A/D line below its weighted moving average for the first time since July. The A/D line did hold up better than prices and formed a slight positive divergence before turning higher.
The market high in 2007 was a textbook example of A/D line analysis. After the February drop (see Figure 2), the A/D line rebounded sharply, and by March 20 (line 1), it had already moved above the previous high, line a.
The A/D line was again leading prices higher, as the sharp rally continued into early June when the A/D line made its bull market high at point 2.
The A/D line developed support in June and July, line c, but when SPY made a new high on July 17, the A/D line failed to make a new high (point 3). This bearish divergence is illustrated by line b.
Figure 3
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The A/D line dropped sharply into the August lows and moved well below its weighted moving average. (The wide gap between the A/D line and its WMA was indicative of an oversold market.)
By early September, the A/D line was again in an uptrend (higher highs and higher lows), and on October 11, 2007, SPY hit a high of $157.52, but the A/D line was much lower (point 4). The A/D line had just rallied back to its downtrend, line b, and the former support (now resistance) at line c.
Just to illustrate that this type of A/D line analysis has worked for many years, this chart covers the NYSE Composite from May 1972 through April 1973. This is the market top that was followed by the massive bear market of 1973-1974.
Prior to our recent financial crisis, this was the worst bear market since the Depression. (Though I was not trading the market at the time, by the late 1970s, I had studied this period in detail using historical charts!)
Figure 4
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The NYSE A/D line peaked on May 26, 1972 with the close in the NYSE Composite at 648.66. The market stayed in a broad range until the latter part of October, as the A/D line was forming lower lows. The A/D line moved above its weighted moving average on October 26 and the NYSE Composite rallied over 11% by early December, point 2. On this high, the A/D line was much lower, line b.
The NYSE Composite made another new high on January 11, but the A/D line was not able to move above its declining weighted moving average and formed a much lower high, point 3.
This second bearish divergence signaled that the market was internally weak. The drop below the A/D line support just two weeks later (line c) completed the top. By the final low in October 1974, the NYSE Composite had lost over half its value.
As for more recent history, the market bottom in March 2009 came at a time when many investors had already given up on the stock market. The selling into the November 2008 lows took the stock market, as well as the A/D line, to dramatic new lows. Stocks finally rebounded into early 2009 and stabilized before another wave of selling hit in February 2009.
As the major averages headed back to test their lows, the market internals had improved and the A/D line started to act stronger. This was evident in a chart that was posted on February 25, 2009.
If the market was actually bottoming, then finding the strongest sector was obviously quite important. After running my relative performance, or RS analysis, on the key sectors, there was one sector that stood out, which I noted on March 4 (see “Tech Sector Breaks Out.”)
The positive view of the RS analysis was consistent with the analysis of Tradestation’s Advance/Decline data on different market averages which includes the S&P 500, Dow Industrials, Amex Index, Russell 2000, and Nasdaq 100.
In the above chart, I have plotted the PowerShares QQQ Trust (QQQ), the ETF that tracks the Nasdaq 100, versus the Nasdaq 100 A/D line. The A/D line made sharp new lows in November, as did QQQ before it rebounded back to the $31.63 level in both December and January (line d). The March 9 lows in QQQ at $25.63 were just above the November 2008 lows at $25.06.
Figure 5
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Though it is tough to tell on the chart, the Nasdaq 100 A/D line did make slightly lower lows in March. It had tested its downtrend from the June 2008 highs in February (see circle) but failed to move through it. The A/D line rose sharply from the lows and broke its downtrend on March 23.
By early April (line 1), the A/D line was in a new uptrend, as tests of its weighted moving average were well supported. Further resistance for QQQ at $33.85 was overcome by the end of April, which was confirmed by the A/D line.
Both QQQ and the A/D line formed corrective flag patterns in July before both again moved sharply higher. The A/D line stayed positive and held support (line e) and by April 2010, QQQ had moved above the $50 level.
NEXT: S&P 500 Advance/Decline Line
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a64bcaa492dfcca63e8fd393df6fcc98
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https://www.forbes.com/sites/tomaspray/2014/05/30/the-week-ahead-a-portfolio-that-wont-ruin-your-summer/
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The Week Ahead: A Portfolio That Won't Ruin Your Summer
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The Week Ahead: A Portfolio That Won't Ruin Your Summer
Investors came back from the long weekend ready to buy as the S&P 500 closed above the 1900 level in impressive fashion. Nevertheless, many analysts and TV pundits still point to the number of reasons why stocks should not be this high and can’t go higher.
The environment has also been difficult for individual investors as the choppy action in the S&P 500 and the wide swings in the Nasdaq 100 have made them difficult to trade. Clearly, the broad market has been in a non-trending mode, but it is still possible to find and buy stocks that are trending.
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Last Thursday’s preliminary reading on 1st quarter GDP was worse than expected at -1.0% but stocks still closed the day higher, further confounding the market bears The final reading for the 1st quarter will be released on June 25, and I would not be surprised to see it revised upward.
Certainly, buying the averages at current levels has too high a risk, in my opinion, as one needs to use a very wide stop. However, there are quite a few stocks that appear to have just bottomed and look attractive on a slight pullback. Three such consumer stocks were discussed last week in Betting on the Consumer.
Still, there are many investors who are uncomfortable with individual stocks especially after the recent wild earnings seasons, which has driven both fundamental and technical analysts nuts. For example, Abercrombie & Fitch Co. (ANF) reported that it lost less than expected and its stock finished the day up 5.75%.
The summer months are typically even choppier but after the last five months this may not be the case this year. Still, summer is a time for many to focus on their families and not worry about their investments. Those who decided to sell at the start of May may be wondering if they should get back in as the S&P 500 has gained almost 2%.
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In this week’s column, I will be focusing on using a dollar cost averaging approach to establish positions in three very diverse ETFs. This is a good approach for those who are not invested in the stock market, as well as those who would like a lower stress investment strategy during the summer months.
In August’s A Contrary Bet for 2014?, I recommended this approach for the Vanguard FTSE Emerging Markets ETF (VWO) starting on September 3. Six equal investments were made every three weeks (see arrows on the chart) with the final investment made on December 17.
Of course, the advantage of this approach is it makes it less likely that one will buy at the market high, which often happens to individual investors. With the reinvestment of dividends, the position is now up almost 18%. The chart is now looking quite bullish, so it may indeed turn out to have been a good contrary play for 2014.
A similar strategy was recommended on January 10 in either a S&P 500-tracking ETF or fund. The amount invested will depend on how much exposure you want to have in the equity markets and also how you personally react when the Dow Industrials has a daily drop of 100 or 200 points. We are likely to have several such days before the end of the year, and if such a drop is going to ruin your summer vacation, invest less.
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For those who are not invested in stocks at all, a 30% commitment to these three ETFs does not seem unreasonable. That would be 10% in each fund that would be made up of five separate investments every three weeks. Starting on June 2, subsequent investments would be made on 6/23, 7/7, 7/28, and 8/18.
All of these three ETFs have been recommended previously and the top choice is the Vanguard FTSE Europe (VGK). As indicated on the chart, it has a current yield of 3.75%, which is better than a 30-year US T-Bond and has a low expense ratio of 0.18%.
This data is courtesy of Morningstar, which has a wealth of information on VGK, as well as the other ETFs. For example, it has a total of 505 stocks with the largest position a 2.65% stake in Nestle SA ADR (NSRGY). The chart shows a well-defined bullish trading channel (lines a and b) and the OBV broke out to the upside in February. The quarterly pivot resistance is at $63.16.
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Another favorite is the Vanguard FTSE Pacific (VPL), which also has a nice yield of 2.56%. It has 818 stocks with the largest holding (2.57%) in Toyota Motor Corp. (TM). Like all Vanguard ETFs, the expense ratio is quite low at 0.12%. In addition to 56.4% of its holdings in Japan, it has 19.3% in Australia, 11.3% in Korea, 8.9% in Hong Kong, and 3.7% in Singapore.
The weekly downtrend was broken two weeks ago (see arrow) but the broader trading range is still intact (lines a and b). The OBV has already broken through its corresponding resistance at line c, suggesting that the OBV is leading prices higher.
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The final recommended ETF is the Vanguard Large Cap ETF (VV), which has a yield of 1.79% and an expense ratio of 0.09%. It has over 80% in mega- and large-cap US stocks and 669 stocks in total. The largest holdings are a 2.9% stake in Apple Inc. (AAPL) and 2.4% in Exxon-Mobil (XOM).
The chart has been in a solid uptrend since late 2012 and VV was up 32.7% in 2013. The OBV staged a strong breakout in early 2013 and has made a series of higher highs with the weekly starc+ band now at $90.20.
The other major market news last week was the further rally in the bond market and the sharp drop in gold prices, which I warned about several weeks ago. For more details, see page 4 of this article.
In contrast to the GDP report, most of the other economic news was better than expected including the Durable Goods, PMI Flash Services Index, and the S&P Case-Shiller Housing Price Index.
At the end of the week, the Chicago PMI reflected strong growth in the region while the month ending reading on Consumer Sentiment fell slightly to 81.9 from April’s 84.1 reading.
We have a full calendar this week especially when it comes to the manufacturing sector. On Monday, we get the PMI Manufacturing Index, the ISM Manufacturing Index, and Construction Spending. This is followed on Tuesday by Factory Orders.
This is another jobs week so we get the ADP Employment Report on Wednesday, along with Productivity and Costs, followed by the ISM Non-Manufacturing Index. The monthly jobs report will be out Friday morning.
What to Watch
The outlook for the market has certainly changed in the past two weeks. In hindsight, it seems as though my more cautious approach in the last Week Ahead column just meant that the trading range was going to be resolved sooner rather than later.
On May 21, two of the technical studies suggested the market rebound had failed but it was not confirmed by the price action, as the major averages closed above their key levels. Nevertheless, stops were raised in the Spyder Trust (SPY) and the PowerShares QQQ Trust (QQQ).
The confirmed upside breakouts suggest the surprises may be on the upside, though there should continue to be pullbacks along the way. The minor support for the S&P 500 is now in the 1900 area, with the monthly projected pivot support for June at 1880.
Once again, the oversold reading from the Arms Index helped us identify the market lows.
The continued low readings of the VIX are being used by many as a warning sign, but one of the foremost experts on the VIX, Larry McMillan, interprets its action as bullish.
The individual investor turned a bit more bullish recently, as the bullish percentage is up to 36.4%, but a higher percentage is now neutral at 40.3%. With the market at new highs, having only 36.4% bullish, I think, is positive sign.
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The five-day MA of the % of S&P 500 stocks above their 50-day MAs finally has completed a bottom formation, as indicated by line a. Only a drop back below 48% would negate this and the percentage could rise as high as 79-82%.
For the Nasdaq 100, the drop below 5% (see arrow) was pretty amazing, as I thought we might get a short-term pullback, but instead, it has risen sharply. It is now just below the mean of 60% and could move back to the 78% level before the market reaches a high risk zone.
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The daily chart of the NYSE Composite (NYA) shows the impressive rally of the past week or so. The NYSE held May’s monthly pivot at 10,522 before exploding to the upside. The upper trend line (line a) is now at 10,850 with June's projected resistance at 10,907. The quarterly pivot resistance is at 11,087.
The rising 20-day EMA is at 10,637, with the June monthly projected pivot support (courtesy of John Person’s software) at 10,590. This also corresponds to the short-term uptrend, line a.
The NYSE Advance/Decline made an impressive move to new highs last week, as it is well above its previous peaks and its rising WMA. The weekly A/D line (not shown) has also made a new high.
The McClellan oscillator broke through its longer-term downtrend, line c, last week. It pulled back Friday as the A/D ratios were flat. It has major support now at line d.
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S&P 500
On the daily chart of the Spyder Trust (SPY) you can see that the resistance, at line a, has been decisively overcome. There is additional resistance in the $194 area with June’s projected pivot resistance and the weeklystarc+ band in the $196.30 to $196.77 area.
t was a positive sign that the SPY never closed below the May 7 low of 186.01 and this set the stage for the recent rally. The monthly pivot and first support is now at $190.25 with the 20-day EMA at $189.56.
The daily on-balance volume (OBV) has broken through its resistance from last fall, line c, and made another new high last week. As I tweeted last Tuesday, the weekly OBV had broken out to the upside before the long weekend.
The daily S&P 500 A/D, like the NYSE A/D line, made a convincing new high last week and is acting stronger than prices. It is well above its rising WMA.
Dow Industrials
The SPDR Dow Industrials (DIA) is now testing the May 13 high at $166.86 with the daily starc- band at $168.21. The monthly projected pivot resistance is at $169.36 with the weekly starc+ band at $171.26.
Though the daily OBV has broken its downtrend, it is still well below the late 2013 high and therefore diverging from prices. The weekly OBV (not shown) has confirmed the price action.
Both the weekly and daily relative performance have dropped sharply in the past two weeks, aborting the bottom formation. This suggests that they are no longer market leaders but I still like the majority of large-cap, high yielding stocks in the Charts in Play portfolio.
The daily Dow Industrials A/D line did make a new high and has confirmed the price action.
The 20-day EMA is at $165.43, which is quite close to the monthly pivot at $165.48. The monthly projected pivot support is at $164.09.
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Nasdaq-100
The PowerShares QQQ Trust (QQQ) did exceed the March 7 high at $91.15 (line a). It has rallied very sharply in the past eight days and is well above its rising 20-day EMA at $88.99. The monthly pivot is at $89.38 with more important support at $86.58.
The weekly starc+ band is at $92.89 with the monthly projected pivot resistance at $95.16.
The daily OBV has surpassed its downtrend, line c, but is still below the highs from earlier in the year. The weekly OBV is above its WMA but is also below its all-time highs.
The Nasdaq 100 A/D is acting much stronger as it has moved well above its previous highs and has been acting stronger than prices. The uptrend, line d, was tested and held before the recent sharp rally.
Russell 2000
The iShares Russell 2000 Index (IWM) has had a more anemic rally as it has still not been able to move above the quarterly pivot at $114.53. The rising 20-day EMA is at $111.66 with the monthly pivot now at $111.26.
The daily OBV was just barely able to break its downtrend, line f, while the weekly has been able to move above its WMA. It is still below its previous peak.
The Russell 2000 A/D has just rallied back to its downtrend, line g, but it is encouraging that its WMA is now rising.
NEXT PAGE: Sector Focus, Commodities, and Tom's Outlook
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2e7c74caf31fca3a4f3b80e052e2f155
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https://www.forbes.com/sites/tomaspray/2014/09/11/is-the-junk-dump-a-warning/
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Is the Junk Dump a Warning?
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Is the Junk Dump a Warning?
The stock market rebounded nicely Wednesday but concerns over next week’s FOMC meeting may cut short the rebound. The major averages had tested short-term support before turning higher. The market internals were slightly positive as the McClellan oscillator has turned up to -79. A close back above the zero line would be a short-term positive.
The futures are lower in early trading and the selling in the Eurozone markets has increased since they opened. The focus has turned to the bond market as the yield on the 10-Year T-Note has risen from 2.32% at the end of August to 2.53% Wednesday.
Last week’s fund flow data showed that money moved out of high yield funds for the first time in four weeks. I would expect this week’s data to show even more dramatic outflows as the selling in some of the high yield ETFs has been heavy.
Is the bond market in the process of turning? A look at the weekly and daily technical studies will help you be prepared for the remaining months of the year.
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Chart Analysis: The weekly chart of the 10-Year T-Note Yields shows that the recent drop in yields just took them back to important support.
A major reverse head and shoulders bottom formation was completed in May, point 1, as the neckline (line b) was overcome. Yields then surged to above the 3.00% level forming the second point for the weekly downtrend, line a. The weekly starc+ band is now at 2.672%. The quarterly projected pivot resistance is at 2.749% while the downtrend is at 2.853%. In classic chart terms, the recent retest of the neckline is quite normal. The weekly MACD-His turned negative last fall and the uptrend, line c, was broken in early 2014. The MACD analysis shows signs of bottoming but no new buy signals have been triggered yet. The daily MACD analysis did turn positive last week. There is now short-term support in the 2.439% area.
The Vanguard Total Bond Market Index (VBMFX) was discussed in early August as it is one of the largest bond funds with total assets of $121 billion. It has a current yield of 1.94%.
It is up 3.86% YTD and the weekly chart shows a classic flag formation, lines d and e. This is consistent with a rebound that is normal after a sharp decline. A weekly close under $10.71 will complete the formation. The 127.2% Fibonacci target from the formation is at $10.39%. This would be a decline of 3.6% from current levels, almost double the current yield. The MACD line formed lower highs last month and this negative divergence, line f, is consistent with formation of a top. There is resistance now in the $10.82-$10.85 area. The daily starc- band is now being tested, which increases the odds of some stabilization or a rebound over the short-term.
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The SPDR Barclays High Yield ETF (JNK) has assets of $9.17 billion with a current yield of 5.76%.
JNK is up 3.70% YTD but down 1.22% in the past three months. At the early August low of $40.06, the weekly uptrend was tested. The rally from these lows just tested former support now resistance (line a) in the $41.50 area. JNK has been testing its daily starc- band for the past five days as the quarterly projected pivot support at $40.35 has been reached. There is resistance now at $41.04 and the declining 20-day EMA. The volume was very heavy at the August lows but quite light as JNK peaked at the end of the month. The selling has been heavy over the past week. Both the weekly and daily OBV are now below their WMAs.
The iShares 20+ Year Treasury (TLT) has assets of $4.61 billion with current yield of 2.91%.
It has gained an impressive 15.15% YTD compared to 9.33% for the Spyder Trust (SPY). TLT is down 3.7% from its August high of $119.43. The resistance at line c, was just slightly overcome on the rally. The monthly projected pivot support at $114.92 is now being tested. The weekly uptrend (line d) and the 20-week EMA are now in the $113.76 area. A weekly close below the June low of $110.34 would complete the top. The weekly on-balance volume (OBV) did make a new high in August and is now testing its rising WMA. There is more important support at the uptrend, line e. The monthly pivot and strong resistance is now at $117.18.
What it Means: The short-term oversold status of the bond market does favor a rebound in the near term. If the SPDR Barclays High Yield ETF (JNK) does rally back to its 20-day EMA ahead of the FOMC announcement, it will set up an interesting situation.
If there is no significant change in the FOMC policy, it will be interesting to see if the bonds can rally substantially. The market is likely to react negatively to any signs that they are now ready to raise rates earlier than the market expects.
The daily technical studies on the ProShares UltraShort 20+ Year Treasury (TBT) are positive but the weekly analysis has not yet confirmed that a bottom is in place. Having taken two small losses in TBT this year, I will wait for weekly confirmation before buying again.
How to Profit: No new recommendation.
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4d7f15e394ba34719dfabce2dea6b0cd
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https://www.forbes.com/sites/tomaspray/2014/11/07/the-week-ahead-three-reasons-not-to-jump-into-stocks-now/
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The Week Ahead: Three Reasons Not to Jump into Stocks Now
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The Week Ahead: Three Reasons Not to Jump into Stocks Now
The stock market’s powerful rally from the October lows has definitely impressed most professional analysts and the financial media. Some commentators that were recommending the short side of the market in October, are now back in the bullish camp.
Others, when asked if they have changed their view, point to their macro view of why the liquidity-driven economy and the stock market can’t continue to stay strong for much longer. Of course, these macro views may be right at some point but those hedge funds that follow a macro strategy have had a dismal year. One $15 billion fund was down 11% by the middle of October and many have lost money so far in 2014.
As I mentioned in July’s One Bubble Starting to Burst, I felt that decision by Calpers (California Public Employees' Retirement System) to change its hedge fund strategy was the start of the hedge fund bubble bursting. Their announcement—on September 15—that they were terminating their $4.5 billion hedge portfolio provided confirmation. Don’t get me wrong, as many are run by very smart guys and some are doing quite well, but still, their exponential growth couldn’t last.
The exit polls after the big Republican win suggested that the general public was pretty pessimistic on the economy and the surging stock market was not helping them become more hopeful or optimistic about the future.
The public participation in the stock market is still at very low levels as the crash of 2008 and the financial scandals have kept them away. Even the strong jobs report last Friday is unlikely to encourage new investments by those who are worried about their jobs and haven’t gotten a raise.
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The recent volatility also has probably discouraged other new investors. Meanwhile, those that are investing have become much more bullish. Last Thursday’s poll of individual investors from AAII revealed that only 15.05% are now bearish. Looking back, I believe that is the lowest reading since July 2005. The bullish percentage rose further to 52.69%, which is the highest reading since December 26, 2013.
Though this is far from a perfect indicator, the very low bullish readings in 2010 and 2011 helped confirm good buying opportunities. Even though the extremes in sentiment often lead prices by several weeks, this is the first reason why I think a new investor should not jump into the market right now. In contrast, at the February 2014 panic lows, over 36% were bearish.
The second reason that I feel now is not a good time to be an aggressive new buyer is because of the market’s seasonal tendency over the next month. There have been many articles about how November-May is the best time to be in stocks and the third year of a president’s term is the best for the stock market. That may indeed be the case by May, or at the end of 2015, but that does not mean that, in the interim, the market can’t have more severe gyrations.
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The seasonal analysis of the S&P 500—that uses data going back to 1930—reveals that the stock market typically tops on out November 7 (line 1). It then declines for two weeks before a brief rebound. On a seasonal basis, it finally bottoms on December 13 (line 2) and rises until the spring.
In my analysis, I found the seasonal analysis to be the most effective when it is in agreement with the charts and technical studies. There are many instances where a market is entering a seasonally strong period but it looks very weak technically.
For example, we are getting close to the strongest seasonal period for crude oil, yet the technical outlook across many time frames looks negative as I discussed in last week’s Two Worst Markets in Any Time Frame. So, for crude oil, I will be waiting for some positive signals before I pay attention to the positive seasonal bias.
There are some worrisome signs for the stock market now on a technical basis and the view from last week’s column was that an even stronger rally was needed to overcome some of the divergences.
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In Friday’s review of the Dow Jones Averages, I pointed out that both the Transports and Utilities had reached or exceeded their weekly starc+ bands. This does not mean they cannot continue to move higher but does indicate that they are now both in high risk buy areas.
The weekly chart of the Spyder Trust (SPY) shows that it is currently just about 1.5% below its weekly starc+ band as it had dropped well below the starc- band in October. The volume on the October decline was quite heavy, line a, and reached climax levels the week of October 17.
The volume on the rally has been quite disappointing as the histogram shows a series of lower highs, line b. The on-balance volume (OBV) generally does a much better job of identifying whether the buyers or sellers are in charge.
The fact that the weekly OBV dropped below its WMA and support (line c) on the correction was a sign of weakness. Now it has just rallied back to its WMA, which is a reason for caution. This could be resolved positively by another higher close on good volume this week that could move the OBV back above its WMA. However, a lower close could turn the pattern more negative.
The market leading PowerShares QQQ Trust (QQQ) shows a similar pattern, though it lagged some last week and may form a doji. This would make last week’s low at $102.03 more important. The volume and OBV patterns for the QQQ are very similar to that of the SPY, with important OBV support now at line d.
In last week’s full economic calendar, the outlook on manufacturing was mixed, with the PMI Manufacturing Index weaker than expected while the ISM Manufacturing Index was quite strong as new orders were up nicely. Factory orders were pretty much flat.
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The economic calendar is light this week with Veteran’s Day on Tuesday when the stock and futures markets are open but the bond market is closed. After Thursday’s jobless claims, we have Retail Sales and the mid-month reading on Consumer Sentiment from the University of Michigan.
At the end of October, Consumer Sentiment rose to a new bull market high of 86.9. On the great chart from Doug Short, I have drawn the downtrend, line a. In 2013, I noted that it was broken, which I felt at the time was a positive sign for the economy. A drop below the key support at line b, would be quite negative, but given the many positive signs for the economy, that does not look likely.
What to Watch
It was another strong week for the stock market in spite of a few earning’s misses that dropped some stocks very sharply. Still, there were plenty of winners as the technology, health care, industrials, and consumer staples all made new highs last week.
The sharpness of the rally makes identifying short-term support difficult as the first levels to watch are at the November 4 low. A break below these levels should signal a decline at least to the 20-day EMAs, if not the quarterly pivots.
Though buying a market-tracking ETF like the SPY or QQQ is high risk at current levels, there are some stocks that are just coming off support and look good technically. At the end of October, I ran a scan of the small-cap S&P 600 for those stocks that had positive monthly and weekly volume. Some were recommended last week in 4 Small-Caps with Bullish Monthly Volume.
Some measures of the market are already reaching overbought levels, which also makes the risk high at current levels. The 5-day MA of the number of Nasdaq 100 stocks above their 50-day MAs has now risen to 80.79% after dropping to 9.70% on October 17.
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It is now over one standard deviation above the mean at 63.30%. It peaked above 80% several times in 2013 (see arrows) and is now in a high risk area. The divergences in the weekly OBV for all the major market index ETFs is still the primary concern as is the lagging action of the NYSE Composite.
The daily chart of the NYSE Composite (NYA) is still below the short-term downtrend, line b, which is now at 10,900. There is further resistance at the July highs, line a. The NYSE dropped below its quarterly quarter pivot at 10,789 last week but bounced back above it by the end of the week.
The daily starc+ band is at 11,045 with the weekly starc+ band just a bit higher at 11,108. The quarterly projected pivot resistance is at 11,340.
The rising 20-day EMA is now at 10,666 with the quarterly projected pivot support at 10,470.
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The daily NYSE Advance/Decline line has moved back to the late June highs, but is still well below the August highs as is the NYSE Composite.
The McClellan oscillator peaked at +269 on October 31 and has since declined. It is now just above the +100 level. There is further support at the zero line.
S&P 500
The Spyder Trust (SPY) dropped to a low of $200.06 last Tuesday, but then made higher highs the next three days to close near the best levels of the week. The weekly and daily starc+ bands are now in the $206-$206.50 area with the quarterly projected pivot resistance at $208.43.
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The daily S&P 500 A/D line has continued to make higher highs and shows a bullish pattern. It is well above its rising WMA and has been very strong since it broke through its downtrend, line b.
The daily on-balance volume (OBV) moved a bit higher last week, but is still well below the resistance from August and September, line c.
Once below the $200 level there is further support at $198.50 with the 20-day EMA at $198.65. The quarterly pivot is at $196.19 with the monthly pivot at $195.13.
Dow Industrials
The SPDR Dow Industrials (DIA) just reached the trendline resistance, line d, in the $175.50 area. The daily starc+ band is at $177.54 with the weekly at $177.32. The quarterly pivot resistance is at $179.48.
The daily Dow Industrials A/D line made further new highs last week and has moved well above the September highs (line e).
The daily OBV has finally broken its downtrend, but is still well below the September highs.
There is initial chart support now at $172.46 with the rising 20-day EMA at $170.50. The quarterly pivot and more important support is at $168.61.
Nasdaq 100
The daily chart of the PowerShares QQQ Trust (QQQ) was pretty much unchanged last week as it did form a doji. On a weekly closing basis, last week’s low at $100.67 now becomes more important. A close this week below it will trigger a low close doji sell signal.
The daily starc+ band is at $103.99 with the quarterly projected pivot resistance at $104.74.
The daily starc- band is at $98 with the 20-day EMA at $99.25. The quarterly pivot is at $97.59 with the 20-week EMA at $96.69.
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The daily Nasdaq 100 A/D line continued to make new highs last week and is acting stronger than prices. It is well above its strongly rising WMA and a pullback to this support should be a buying opportunity.
The daily OBV is also well above its rising WMA and made a new high last week. It is still well below the all time highs at line b.
Russell 2000
The iShares Russell 2000 Index (IWM) gapped above its daily downtrend, line c, last week, which is a bullish sign. The quarterly projected pivot resistance at $116.58 was exceeded last week. The daily starc+ band is at $119.73 with the monthly pivot resistance at $121.27.
The daily Russell 2000 A/D has continued to move higher last week and has now exceeded the early September high. It is well above its rising WMA.
The daily OBV has just moved barely above the September highs, line e. It is getting closer to the July highs and a move above this resistance would be a very positive sign.
There is minor support now at $115.28 and then further in the $114 area. The 20-day EMA is now rising more sharply and is now at $113.18.
NEXT PAGE: Sector Focus, Commodities, and Tom's Outlook
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7b6cffa42f5d8e06a8894528f122d5c1
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https://www.forbes.com/sites/tomaspray/2016/03/16/can-these-ibd-stocks-push-the-spy-even-higher/
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Can These IBD Stocks Push The SPY Even Higher?
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Can These IBD Stocks Push The SPY Even Higher?
Now that the Spyder Trust has surpassed the $202 level with a Monday high of $203.04 investors seem to have lost much of their investing fear that they had in January. Still the severity of the drop will likely keep many out of stock market until much later in year.
The major swing in sentiment from a month ago along with the recent narrowing of the price ranges means it is not a time to be complacent. In "Three Sentiment Indicators Investors Should Follow" I suggested that there were three measures of investor sentiment that should be followed for signs that investors may have become complacent.
One was the Rydex Cash Flow Ratio which has dropped from a peak of 1.38 on February 1st to a current reading of 1.05 which was a decline of 24%. Rydex Inverse S&P 500 2x Strategy Fund (RSTPX) has dropped over 18% from its February 11th high. The bullish% of individual investors according to AAII has risen from a January low of 17.9% to 37.4% last week. We get a new reading on Thursday and it could move to the 43%-45% area. The CNN's Fear & Greed Index has risen from a reading of 21 (Fear) to 73 which is now in Greed territory.
Though the A/D lines have continued to make new highs the NYSE McClellan oscillator peaked at +328 on March 1st but has been diverging from prices since then as it is now at +55. Additionally the NYSE Composite, June S&P futures and iShares Russell 2000 (IWM) formed dojis on Monday so a close below Monday's lows will be a sign of weakness.
These factors heading into the widely watched FOMC announcement and press conference are likely to cause an increase in volatility. Recently the initial reaction to the FOMC language has been reversed on the following day as rallies on the announcement have been met with selling the next day. In last week's "Bear Market Rally or More? I suggested that those who had some nice profits from the rally should consider taking some of those profits.
Spyder Trust (SPY) is now down just under 1% for year but there are a number of stocks that are doing considerably better. Four stocks that are outperforming the SPY are also on the IDB Top 50 list but can they continue to lead the SPY higher?
Ross Stores (ROST) is up 8.3% YTD as it broke through weekly resistance, line a, three weeks ago. The stock has been churning recently in the $57.50-$59.30 area and this makes a near term pullback more likely .
Though a pullback to $55-$56 area is possible over the near term the upper trading channel and starc+ bands are in $62-$64 area. The relative performance broke through resistance (line d) in early December signaled that it was becoming a market leader. The RS line still looks strong and a drop to its WMA could present another buying opportunity. The OBV broke its downtrend, line e, in January and dropped back to its WMA (highlighted ) which created a good buying opportunity. Viper Hot Stock traders went long on this pullback and took profits on strength over the past week. The OBV could pull back to its WMA on a correction.
AT&T Inc. (T) is up 13.3% YTD and has a current yield of 4.9%. It closed above weekly resistance, line f, in the latter part of January and quickly rallied to its weekly starc+ bands. After two weeks of consolidation it accelerated to upside.
It has now reached the monthly pivot resistance at $38.52 with the weekly starc+ band at $39.67. There is minor support now at $37-$37.60 with the 20 week EMA at $35.60. The weekly relative performance broke though strong resistance, line g, in December as it began to lead S&P 500 higher. The RS line still looks strong and is well above its rising WMA. The on-balance-volume (OBV) broke its downtrend, line h, on January 15th and has since surged to upside. The OBV is well above its WMA so a pullback cannot be ruled out.
Edward Lifesciences (EW) surged to the upside five weeks ago as it reached the trend line resistance at line a. It is up 11.3% YTD but has made little upside progress over the past two weeks. There is monthly pivot resistance at $92.85 with the weekly starc+ band at $95.68.
There is initial weekly support in the $83-$84 area with the 20 week EMA at $81.35. The relative performance has been in a strong uptrend, line c, since last September. The RS line is now pulling back to its WMA. The OBV has been lagging prices as it dropped below support, line d, in early January. The OBV is now just barely above its WMA. The daily studies (not shown) are now slightly negative.
Reynolds American (RAI) formed a doji last week so a weekly close below $50.80 will generate a short term sell signal. It is up 11.3% YTD and hit monthly pivot resistance at $52.26 last week.
On a drop below the $49 level it could decline back to the 20 week EMA at $47.47 with the long term uptrend, line e , a bit lower. The relative performance had started a clear uptrend in July and has stayed above weekly support at line f. The RS line did make new highs with prices a few weeks ago. The weekly OBV moved out of its trading range, line g, a few weeks ago which was a sign of strength. The OBV now has major support at line h. On the daily chart there was a doji sell signal with last Friday's close so a further pullback is likely.
What to do? Given the strong YTD gains these four stocks are likely to correct over the next few weeks as EW and RAI do look the most vulnerable. Though ROST and AT&T may also correct the weekly analysis makes them the most attractive for new purchase on a drop back to support. I will be watching both for clients of my Viper Hot Stocks service
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3e43acbc6cb344f5398e05de5b989d97
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https://www.forbes.com/sites/tomaspray/2019/02/13/one-chart-formation-you-shouldnt-ignore/
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One Chart Formation You Shouldn't Ignore
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One Chart Formation You Shouldn't Ignore
Having analyzed the market for many years I have developed a systematic approach that I follow each weekend. It was likely an offshoot of my earlier days in biochemistry research. I have found that the consistent routine makes me well-prepared for the week ahead and is helpful in developing a disciplined approach to the markets.
In my review of all the key market averages and the most active ETFs and stocks, I look carefully for one particular candle chart formation. That formation is a doji. A doji is formed when the open and closing price are about the same, but with a wide trading range. On a chart, the formation looks like a cross.
A doji formation creates the opportunity for the generation of buy or sell signals over the next few periods. A doji buy signal is generated when that market closes above the doji's high, while a doji sell signal is generated when that market closes below the doji's low. The most powerful buy signals occur after a protracted decline while the most valuable sell signals come after a good rally. As is the case for most technical methods, monthly signals are more valuable that weekly signals which are more valuable that daily signals.
Therefore, every weekend and at the end of each month, I look to see if any of the key markets have formed dojis. In October, I commented that the SPDR had formed a doji in September. This made the October close more important.
In September, GLD had a high of $114.78, a low of $111.85 and a close of $112.75. Therefore GLD needed to close October above $114.78 to trigger a monthly doji buy signal. As it turned out, GLD had a high of $117.65 and closed the month at $115.15. The ensuing rally brought GLD to a high in January of $125.23.
The best doji signals, whether monthly, weekly, or daily, are supported by corresponding or confirming signals from the technical studies. Amazon.com (AMZN) formed a doji on September 28, 2018 (point 1) with a low of $1996.46. Two days later, on Tuesday, October 2, it closed at $1971.31 (point 2) therefore triggering a daily doji sell signal.
The relative performance (RS), which measures the performance of AMZN against the S&P 500 had formed a lower high as the doji was being formed. On October 2, the RS dropped below its Weighted Moving Average, confirming the doji sell signal. Weakness was also observed in the On-Balance Volume, which dropped below its WMA the next day on October 3 (line 3).
AMZN eventually had a low of $1307 on December 24 (not pictured) where it again formed a doji. A daily doji buy signal was triggered the next day with a close at $1470.
As I informed my subscribers before the open on Monday, February 11, there were three major averages and one key ETF that formed dojis the week ending February 8. They were the Dow Industrials, Russell 2000, S&P 500 and the Consumer Discretionary Select (XLY).
On the chart I have added the doji high, low and close. On Friday, watch for a close below the key levels: Dow Industrials below 24,883, Russell 2000 below 1494.4, S&P 500 below 2681.8, and XLY below 106.36. If any close on Friday below their doji lows, weekly sell signals would be triggered.
In my weekend article, “Should You Join The Wall Street Bears”, my analysis favored a resumption of the market rally after last week’s minor correction. This was because the strength of the other technical studies was more impressive than the potential for doji sell signals this week.
The week is not over, but the 1.5% gain in the Dow Industrials and Nasdaq 100 on Tuesday along with the 1.3% gain in the S&P 500 have put the averages well above their doji lows. This makes weekly doji sell signals less likely and supports my bullish outlook, even though the week is not over yet.
In my Viper ETF Report and the Viper Hot Stocks Report, I update my stock market outlook twice each week with specific buy and sell advice. New subscribers receive six trading lessons for just $34.95 each per month.
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25478e67baf64eacc8e2b24cc3636627
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https://www.forbes.com/sites/tomaspray/2019/05/15/a-technical-look-at-two-key-commodities/
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A Technical Look At Two Key Commodities
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A Technical Look At Two Key Commodities
The July Crude oil contract made its high of $66.44 on April 23, before it started just over a two-week slide in prices. Last Monday, the July crude contract had a low of $60.10. This amounted to a decline of 9.5%, which has really surprised those crude oil traders who follow fundamental data.
(Photo by PATRICK HERTZOG / AFP) (Photo credit should read PATRICK HERTZOG/AFP/Getty Images) Getty
The weekly chart shows that one week before the price high crude oil formed a doji (One Chart Formation You Shouldn’t Ignore). This was a sign that the market was indecisive, and it peaked the next week. The 20 week EMA at $60.66 was violated last week, but crude closed above it at $61.80. Once below last week’s low of $60.10, the next support is in the $58-$59 area.
The Herrick Payoff Index (HPI) measures money flow through the price volume and open interest data. It peaked with prices, and has since pulled back to just below its WMA. Last October the HPI dropped below its WMA three weeks after the high. The weekly On Balance Volume (OBV) looks stronger, as it is still well above its rising WMA.
The daily chart shows that the starc- band was tested last Monday. Crude seems to have some short covering on Monday as stocks were plunging. Crude had a high of $63.48 before closing lower at $61.21. Crude acted better on Tuesday up 0.64 or just over 1%.
The daily HPI formed a lower high on April 23, creating a negative or bearish divergence (line b) with prices. Two days later the daily HPI dropped below its WMA and it is still negative. The daily OBV is below its WMA and shows no signs yet of bottoming. This is not an encouraging sign for crude oil prices over the near term.
The Comex continuous gold contract peaked the week of February 22 at $1349.80. A week ago, gold had a low of $1267.40 but moved higher last week. From the February high to the recent low, gold declined $82.40 per ounce or 6.1%. If the recent lows do not hold then the next good support is in the $1250 area. The weekly downtrend (line a) is now in the $1300-area and a close above it should signal a move to the $1325 area.
The weekly HPI peaked with prices in February, and two weeks later dropped below its WMA, It is still holding above the zero line, so the money flow is therefore still positive. The weekly OBV is also below its WMA, but not by much, and will move well above it with a strong close this week.
The daily chart of gold also shows a well-established downtrend (line c) that was overcome in decisive fashion on Monday when gold closed just barely above $1300. The daily starc+ band is at $1311.70 with additional resistance at $1314 and then $1325. Gold is well above the 20-day EMA which has turned up and is now at $1287.20.
The daily HPI formed a negative divergence at the February high (line d) before it dropped sharply with prices. The downtrend in the HPI (line e) was broken in late April. This was after the HPI had formed higher lows (line f) and therefore a bullish divergences. The HPI is now rising strongly as it is well above the zero line..
In other words, the money flow was improving even though gold prices were declining. The HPI is now in a clear short term uptrend and well above the zero line. The OBV has moved back above its WMA and needs to overcome the March high to complete its bottom formation.
For traders, the evidence suggests that gold prices have bottomed. It appears that the down-gap open on May 2 was a good entry point for traders in the Spyder Gold Trust (GLD). A stronger rally would confirm the improving technical studies. There are no signs of a completed bottom in crude oil but one more decline might be enough. I would not advise being an aggressive seller of crude oil at these levels. For updates on the markets follow me on Twitter.
For twice a week analysis of the commodity ETFs you might consider the Viper ETF Report which is only $34.95 per month.
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e8ad3f4daba1e1402370128753abc98f
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https://www.forbes.com/sites/tomaspray/2020/10/11/watch-what-the-market-is-telling-you-not-the-news/
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Watch What The Market Is Telling You, Not The News
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Watch What The Market Is Telling You, Not The News
Data driven analysis getty
The stock market has had a crazy past two weeks after a very weak performance in September, where the Nasdaq Composite was down 5.2% and the S&P 500 lost 3.9% for the month. The stock market opened rough on Friday, October 2, with panicked overnight selling in the futures and stocks as traders reacted to President Trump’s COVID-19 diagnosis.
However, despite the frantic end to the week, the overall market remained strong, as there were three times more advancing issues on the NYSE and than there were declining ones. That is why I concluded last weekend that “as long as the market turns higher by the end of the week [of October 5], the intermediate trend will stay bullish.”
However, there was another news-related market decline last week, as President Trump ordered an end to negotiations over a new economic relief package. From a high of 3431.56, the S&P 500 dropped to a low of 3354.54 in the last 90 minutes of trading on Tuesday. The market commentary after the close was not optimistic, as this was the S&P 500's largest daily drop in almost two weeks.
SPY Tom Aspray -ViperReport.com
However, a longer view is necessary to diagnose the current market's trend. The above chart of the Spyder Trust (SPY) has data up through the close on Tuesday, October 6. As you can see, the SPY low from late September corresponded to SPY's high from June high (line a), which shows that resistance level became support.
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The advance/decline numbers help to give an even better picture. On Wednesday, September 30, the S&P 500 Advance/Decline closed above its downtrend (line b), which was a sign that the correction from early September was over. Then on Monday, October 5, the S&P 500 A/D line made a new high which signaled that the S&P 500 will also make a new high.
The NYSE Stocks Only A/D Line peaked even earlier, on August 12, and made a significantly lower high in early September (line c) forming a downtrend as the SPY was making a new high. This downtrend was broken on October 2, as more stocks were advancing then declining, even while the market averages were lower. The NYSE Stocks Only A/D line is also now positive as it is well above its weighted moving average (WMA). However, it is still below the August high.
Markets Tom Aspray -ViperReport.com
Given the positive readings from the advance/decline analysis, it is not surprising that the major averages finished higher last week, led by the 6.4% gain in the iShares Russell 2000 (IWM). Both the Dow Jones Utility Average and Dow Jones Transportation Average were up at least 5%. The Nasdaq 100, S&P 500, and Dow Jones Industrial Average all saw gains in the 3.0-4.5% range.
QQQ Tom Aspray -ViperReport.com
The Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, fell very close to its rising 20-week exponential moving average (EMA) three weeks ago, having declined 14.2% from the September high of $303.26. It then closed the week high.
It was also a positive sign that the Nasdaq 100 A/D line turned higher that same week, and has now made a convincing new high. This is an indication that the QQQ will also make a new high even though as of Friday’s close it was 5.6% below the September high.
The two top sector ETFs last week were the Materials Sector (XLB) and Energy Select (XLE), which were both up 5%. More impressive was the over 7% gain in the SPDR S&P Bank ETF (KBE) and SPDR S&P Regional Bank ETFs.
Growth VS Value Tom Aspray -ViperReport.com
This help stimulate a number of discussions in the financial media as to whether it was finally time for value stocks to lead growth stocks. This monthly chart is of the spread between the S&P Growth Index ($IGX) and the S&P Value Index ($IVX), going back to 1999. When the ratio is rising, growth stocks are outperforming value-based ones, and when it is falling, value stocks are stronger.
The spread peaked in June 2000 at 1.564, and bottomed in May 2007 at 0.844, as value stocks led growth stocks over that period. Growth bottomed before the bear market ended in 2009. Since late 2019, the spread has accelerated to the upside as growth has outperformed value in a spectacular fashion. This long term chart shows no signs yet of a change in trend, even though it appears quite extended.
IWF vs IWD Tom Aspray -ViperReport.com
Another way to look at this relationship is by comparing the iShares Russell 1000 Growth (IWF) to the iShares Russell 1000 Value (IWD). This spread peaked on September 1 and declined 7.9% to a low of 1.750 on September 18.
A move above the October 1 close of 1.8548 and the downtrend (line a) should be a signal that growth is again leading value. If instead the spread drops below the support (line b) and the July low of 1.6995, that will be a positive sign for value stocks.
The daily Moving Average Convergence-Divergence (MACD) lines are negative and formed lower highs in August (line c). That was also the case in May, when value had a nice rally versus growth, before growth resumed its upward trend. A move in the MACD lines above the October 1 peak will favor growth over value.
Yields last week were higher, as the 10 Year T-Note exceeded the highs of the past sixteen weeks, closing at 0.775%. The June high was 0.957% which is now the level to watch. Early this coming week, we get the CPI and PPI, while later in the week including the Philly Fed, Empire State Manufacturing, Retail Sales, Industrial Production and Consumer Sentiment
Going off of the A/D line analysis, the outlook is still bullish, as the correction from early September appears to be over. The news-related market declines of the past two weeks have created some good buying opportunities. As the market moves higher and the election nears, I think more such declines are likely, allowing for a few more good opportunities to buy at support.
In my Viper ETF Report and the Viper Hot Stocks Report, I update subscribers with market analysis twice per week, along with specific buy and sell advice. Each report is just $34.95 per month. New subscribers also receive six free trading lessons, a $49 value.
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74cff3f6cc5ede38ba864fb19879ebf4
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https://www.forbes.com/sites/tomaspray/2020/11/12/has-gold-topped-out/
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Has Gold Topped Out?
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Has Gold Topped Out?
Gold bullions on the background of the growth chart. getty
With last week’s action, the Comex gold futures were up 3.8%, finishing the week above the highs of the prior five weeks. For the past few months, Gold prices had been correcting from the early August high at 2089. The volume last week was higher than it had been over the prior four weeks, which was also an encouraging sign.
Gold Futures Tom Aspray - ViperReport.com
That changed with the positive news from Pfizer early Monday, as the gold futures collapsed, closing down 5% on Monday. Volume was the highest since late August. As of the close at 1861.6 yesterday, gold is down 4.3% for the month—but of course, the month is not over yet.
The November close will be important for the monthly technical studies, as the low for the month so far of 1848 is just slightly below the September low of 1851. The long term monthly chart shows that the 38.2% retracement support from the September 2018 doji low of 1259.80 is at 1738.80, with the 50% support at 1629.90. The still-rising 20-month exponential moving average (EMA) is at 1746.2. These are all support levels to bear in mind.
The monthly on-balance volume (OBV) moved above multi-year resistance (line a) at the end of 2019. It has now dropped slightly below its weighted moving average (WMA) and will look negative if gold closes November below the September close at 1880.
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The Herrick Payoff Index (HPI) uses volume, open interest, and prices to determine whether money is flowing in or out of a commodity. The HPI is currently above its WMA, and more importantly, is above converging support (lines b and c) as well as the zero line. When the HPI is above zero, it is a sign of positive money flow; a negative reading would be an indication that money is flowing out of gold.
Gold futures Tom Aspray - ViperReport.com
The daily chart of December Comex gold shows the sharp drop Monday, testing the support going back to early July (line b). The Monday low of 1848 was just above the monthly pivot support at 1846.3. A move above the resistance at 1969.9 (line a), is needed for an upside completion of the trading range. There is additional resistance on the daily chart at 2025.
Even though the volume during Monday's selling was higher than the 30-day average, the daily OBV has held above its WMA, and turned up on Tuesday. There is stronger OBV support going back to early September (line c). The daily HPI dropped from 988 to -1374 on Monday. The HPI is above the support from August and September (line e).
GLD Tom Aspray - ViperReport.com
The SPDR Gold Trust (GLD) has had a low so far this week of $173.64, which is just above the monthly pivot support at $173.58. GLD is trading below its 20-week EMA at $176.36 with the weekly downtrend (line a) at $182.83. The OBV is holding above its WMA with more important support going back to August (line b). The price's declining 20-day EMA at $178.13 (not shown) is also meaningful resistance.
GDX Weekly Tom Aspray - ViperReport.com
The VanEck Vectors Gold Miners (GDX) has been weaker than GLD over the past three months, down 11.4% compared to a 7.6% decline in the GLD. GDX is down 10.4% so far this week, but is, as of Wednesday's close at $37.15, is still above the October low at $36.01. The monthly pivot support is at $35.22. If that support level is broken, the next support is at $34.49, which is 38.2% Fibonacci retracement support from the March low.
The 20-week EMA is at $38.61 with the weekly downtrend (line a) at $41.58. The OBV is slightly below its WMA, and if it breaks below the prior low it could decline to the stronger support at the May high (line b). The daily OBV (not shown) is well above the late October lows, which could set up a potential bottom formation.
Combining the monthly and weekly technical analysis on the gold futures, as well as GLD and GDX, indicates the close in November may be significant for the intermediate-term trend. A close at current levels will cause some continued deterioration, while a strong close is needed to indicate that decline from the August lows is over. For updates on my gold analysis, follow me on Twitter.
In my Viper ETF Report and the Viper Hot Stocks Report, I update subscribers with market analysis twice per week, along with specific buy and sell advice. Each service is just $34.95 per month. New subscribers also receive six free trading lessons, a $49 value.
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fe0741b51a4efd4de4bdc7262939b6c8
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https://www.forbes.com/sites/tomaspray/2021/02/21/most-overweight-global-equities-since-/
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The Most Overweight Global Equities Since …
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The Most Overweight Global Equities Since …
World map getty
The market dip-buyers were active for much of last week as the economic data was much stronger than anyone expected. The Retail Sales, in particular, was surprising, reporting 5.3% instead of the expected 1.2%. The Empire State Manufacturing Index came in at 12.1, (expectations were at 5.9) and the Philadelphia Fed Manufacturing Index came in at 23.1 (against the expected 19.2).
SPX Tom Aspray - ViperReport.com
The hourly close-only chart of the S&P 500 reveals that it was a pretty wild ride. The S&P 500 had a high of 3950.43 in the first hour of trading Monday but then closed the day a bit lower at 3932.59. The pattern was reversed on Wednesday, as the S&P 500 opened lower and then closed near the highs. This was also the pattern on Thursday, and the prior weekly low was violated before stocks turned higher.
However, the spike in yields on Friday made the dip-buyers a bit more cautious, as the yield on the 10 Year T-Note closed at the highest level since February 24, 2020. Since the start of the year, yields have risen 0.91% to a close last week of 1.34%. The rapid increase in yields may create worry among investors, despite seeing similar levels in February 2020.
Markets Tom Aspray - ViperReport.com
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Most of the markets closed lower for the week, though the Dow Jones Transportation Average did manage to gain 0.8% while the Dow Jones Industrials were up 0.1%. The big losers were the tech stocks, as the Nasdaq 100 NDAQ was down 1.6%, and the SPDR Gold Trust lost 2.2%. Both were hurt by higher yields.
For the week the iShares Russell 1000 Value ETF (IWD) IWD was up .20% while the iShares Russell 1000 (IWF) IWF was down 1.7%. The higher rates gave the financial stocks another boost to the upside as the Financial Select Sector (XLF) XLF was up 2.8% for the week.
In January, I reviewed the data from the monthly Bank of America global fund manager survey, which indicated fund managers were taking a record-high level of risk and their cash levels were quite low.
In the latest survey, which was conducted from February 5-11, they are even more bullish. The financial press has gone wild over the quote from BofA's BAC Michael Hartnett that “[The] only reason to be bearish is…there is no reason to be bearish.” The allocation to stocks is the highest since February 2011.
SPY 2011 Tom Aspray - ViperReport.com
The daily chart of the Spyder Trust (SPY) SPY shows that it rallied in the first part of February 2011 and reached a high of $111.39 on February 18, 2011. By the March 16 low (point c), the SPY had dropped 6.9% in seventeen days. According to the data from the American Association of Individual Investors (AAII) the Bullish % went from 51.5% on February 3, 2011, to 28.5% on March 27.
On the chart, it is interesting to note that on the second and third days of the decline in February the SPY dropped below its starc- band (point a). As is often the case using starc bands, the SPY then rebounded for several days (point b) before the selling resumed. This bounce provided a good opportunity to sell longs or to establish short positions. By early May of 2011, the SPY was making new highs.
QQQ Tom Aspray - ViperReport.com
Returning to the present, the Invesco QQQ Trust (QQQ) QQQ made a new high of $338.19 on Tuesday, but then dropped to a low of $328.36 on Thursday, as the 20-day exponential moving average (EMA) at $328.83 was reached. The daily support (line a) was briefly broken in late January, and is now at $325.55. The late January low was $312.76, which is now the support level to watch. There is also longer-term support at $303.07 (line b).
The Nasdaq 100 Advance/Decline made a new high on Friday, February 12. It has now pulled back, but is still above its weighted moving average (WMA). The A/D line has initial support at the late January lows with more important at its uptrend (line c). The daily On Balance Volume (OBV) did not make a new high with the A/D line, and has dropped below its WMA. This reflects that volume increased on the decline late in the week. There is next support at the October 2020 high (line d).
Crude oil closed a bit lower last week after making a new rebound high. As I mentioned last week, this market is quite extended on the upside. Gold, on the other hand, has continued to decline, as noted by the drop last week of 2.2% in the Spyder Gold Trust (GLD) GLD .
Comex Gold Tom Aspray - ViperReport.com
The Comex Gold futures contract was down 2.5% last week, dropping below the December lows. The 38.2% Fibonacci support from the August 2018 low is at 1728.4, which is 2.8% below Friday’s close. The 50% support is at 1620.4, and corrections often terminate between the 38.2% and the 50% support levels. The declining 20-week EMA is now at 1841.8, which represents strong resistance.
Comex Gold's weekly OBV decisively broke its uptrend (line a) at the end of January and is now in a clear downtrend. It is also below its declining WMA. The Herrick Payoff Index (HPI) is a key indicator in determining the direction of commodity prices. Comex Gold's HPI dropped below the zero-line on January 15 and then violated its support from the 2020 low (line b). The daily OBV and HPI (both not shown) have not yet made new lows with gold prices, so I am watching the action in Comex Gold and GLD closely.
It is still my view that a deeper decline is needed to reduce the high level of bullishness and complacency in the market. Therefore, I would be raising cash ahead of a correction. The market can still move higher before a correction, but one is likely in the next month. Such a decline should present a good buying opportunity for selected ETFs and stocks.
In my Viper ETF Report and Viper Hot Stocks Report, I update subscribers with market analysis twice per week, along with specific buy and sell advice. Each report is just $34.95 per month. New subscribers also receive six free trading lessons, a $49 value.
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f550bd8ecc86d2fce7a2a67f0a00c8d1
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https://www.forbes.com/sites/tomaspremuzic/2014/03/21/the-uberisation-of-talent-can-the-job-market-really-be-optimised/
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The Uberisation of Talent: Can the Job Market Really Be Optimised?
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The Uberisation of Talent: Can the Job Market Really Be Optimised?
The talent market is far from efficient. On the one hand, all organisations have talent problems and lament their inability to attract and retain top employees. On the other hand, and in stark contrast with this war for talent, most people are not happy about their work situation - either because they haven't found the right job, or because they have found one that isn’t right. There is therefore a clear gap between talent supply and demand, and this gap is making people miserable and organisations anxious and ineffective.
So what's causing the problem?
Three things:
First, there is a big difference between what employers want and what they need. And, to make matters worse, employers are generally unaware of this. Indeed, most organisations operate under the misconception that they have a smart talent identification strategy, which prescribes precisely what they need and how to find it. However, even the most admired companies in the world are unable to staff key positions with the right players and, when they do manage, they are sufficiently honest to admit that this has happened more or less by accident, luck, or at the expense of many other less impressive hires.
Second, in the minority of cases where organisations do know what they need, it is quite hard for them to find it. Big companies devote considerable resources on recruiters and LinkedIn , which is used even more compulsively by recruiters. Yet despite the millions of highly visible active and passive job seekers online, the proliferation of HR technologies, social recruitment, big data, and the abundance of talent finders, we have yet to witness any real progress in staffing. Technology has simplified our ability to shop, travel, and date, but things are yet to improve for job seekers. To be sure, there is no shortage of apps offering B2C and C2C job-matching services (e.g., Fiverr, Mechanical Turk, oDesk, and Gild). However, these efforts to crowdsource work are still limited to mundane tasks, temporary jobs, or specific professions. It’s as if we had to shop for different brands of jeans on different sites, as opposed to just using Amazon or eBay.
Third, there is an important mismatch of expectations and standards. The majority of job seekers are either too desperate or not desperate enough to end up in the right job, which results in a Pareto distribution of talent that mirrors employee productivity. In most organisations 20% of the workforce accounts for 80% of the productivity, while 80% of the workforce accounts for 20% of productivity. Along the same lines, 80% of employers compete for 20% of the job seekers, while 80% of job seekers compete for just 20% of jobs. In the realm of love and relationships, this would equate to most people staying single because they are only interested in marrying Angelina Jolie or Brad Pitt, who are unhappily married to each other but uninterested in breaking-up.
The key question, then, is when – not whether – the talent industry will be uberised [Note: in case you are wondering, Uber is the car service that bridges demand and supply of taxis via a location-based app that monitors the movement of its taxi fleet and implements a dynamic pricing algorithm to balance supply with demand. To uberise something is to optimise it via similar methods in order to create an "on demand" market].
Quite clearly, bridging the gap between the talent supply and demand would have immense socio-economic advantages: a more engaged and productive workforce, less unemployment and underemployment, and strong economic growth. As you will probably appreciate, these benefits are almost as important as the ability to stream movies and music whenever we want, wait less for taxis, and hook-up with someone without relying on refined seduction strategies, right?
Perhaps the main problem is not our inability to direct employers to the right candidates, but a shortage of suitable candidates. If this is true, it would suggest that the last decades have produced a futile inflation of qualifications and titles while simultaneously creating an unhealthy deficit in some core dimensions of talent: e.g., EQ, good judgment, and leadership potential. The result is a fairly incongruent scenario whereby most employees are hired on the basis of their occupational expertise, but promoted (or fired) on the basis of their attitudes, motivation, or political skills. Why not evaluate these traits in the first place?
Another possibility would be a lack of desirable jobs. In a way, this is the simplest alternative explanation to the shortage of relevant skills. If most people aspire, and even feel entitled, to fulfilling careers, and expect to have jobs that are fun, creative, and highly paid, then most people will be disappointed with their jobs… perhaps to the point of avoiding employment. This may be a better explanation for the recent rise in self-employment rates than the economy.
In any event, one would predict that the uberisation of talent is more likely to happen in the self-employed population. Indeed, sole traders and freelance agents entering a short-term commercial relationship with each other would no doubt benefit from a matching algorithm that evaluates both degree of competence for the project and psychological compatibility for working together. Such a platform would be to traditional employment what YouTube is to TV.
Headshift global recruitment drive (Photo credit: Lars Plougmann)
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05348992df0baea7d318c0d6a1731f37
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https://www.forbes.com/sites/tomaspremuzic/2014/06/11/the-business-of-lying-or-fooling-others-to-remain-honest-to-yourself/?_suid=1415294642049048724186909385026
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The Business Of Lying (Or Fooling Others To Remain Honest To Yourself)
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The Business Of Lying (Or Fooling Others To Remain Honest To Yourself)
Despite the fact that society preaches honesty, we are trained to lie, already as kids. Dr. Kang Lee, the director of the Institute of Child Study at the University of Toronto, classifies children’s lies into three main categories:
lies that enable them to get along with others, by being kind (e.g., “You are very pretty,” “Your cake was delicious”) lies that protect them from potential punishment (e.g., “It wasn’t me,” “I didn’t do it”, “I didn’t mean it”) self-deceiving lies (e.g., “I am a good person,” “I tried my best”, and “I never lie”)
As adults, we continue to rely on these three types of lies. The first two are indicative of social adjustment and indispensable to get by in society – although it is taboo to admit this, and despite the fact that others will punish you when they think you are being fake. On the other hand, self-deceiving lies are problematic because they distort reality at the expense of maintaining a positive self-view, which will sooner or later clash with how other people see you. Competent people are able to lie when needed, and being aware of their lies helps them remain truthful to themselves. Accordingly, the more honest you think you are, the more delusional you are likely to be. Conversely, when you are consciously trying to fake it, you are probably aware of what you really think, and who you really are.
Contrary to popular belief, it is more advantageous to fake modesty than confidence. Americans are more accepting of self-promotion than any other nation, and they also tolerate self-deception more than other societies do. This explains the compelling nature (in the US) of messages such as “just be yourself,” “don’t worry about what others think of you,” and “whatever others say, if you think you are great, you are great”. Although displaying high levels of self-confidence is a common presentational strategy in America – unlike, for instance, in Sweden, Finland, Korea and Japan – scientific evidence clearly suggests that whatever confidence surplus people perceive (surpassing your actual competence) is a toxic asset. In other words, the minute people perceive that you have more confidence than competence, your assertiveness will work against you.
The simple fact is that self-promoters tend to be perceived as arrogant, and that people are much more likely to be admired, respected, and loved when they avoid self-claims of competence. Truly talented individuals let their qualities speak for themselves, but since talent is rare, we are not used to dealing with such people. Although high self-confidence can be used to mask one’s limitations and weaknesses, it is easier to do so by being modest and displaying low confidence. In fact, higher social confidence is mistaken for competence only by those who are unable to accurately judge competence, and even then it would be easier to get others to like you by avoiding blatant self-promotion and arrogance.
Thus, if you are competent, there’s no need to enhance your talents with extra displays of hubris; if you are not, faking confidence will only help you disguise your weaknesses for a limited time and with a limited number of people (who don’t know better anyway). By the same token, when competence is coupled with modesty and a splash of insecurity, you will be able to not just impress others but also gain their sympathy.
A final point of consideration concerns the personal, short-term, advantages of fooling others, which do come at a price: namely the long-term disadvantages for others. Consider the case of incompetent experts who often flourish because of their clients’ inability to discern between confidence and competence. The better these self-proclaimed (ignorant) experts do, the more society suffers. Such charlatan self-promoters tend to fall into two categories. The first is people who believe their own hype – the self-deluded ones. The second is people who are consciously making stuff up, in a deliberate attempt to deceive others – the bull*****rs. It is tempting to see the former as more moral and ethical, but their irrationality and persuasiveness is more likely to harm others.
Piers Morgan (Photo credit: Digitas Photos)
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1c5d321dc389472b97f6e885d1ccc166
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https://www.forbes.com/sites/tomaspremuzic/2018/08/12/five-hiring-problems-ai-could-solve-but-probably-wont/
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Five Hiring Problems AI Could Solve But Probably Won't
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Five Hiring Problems AI Could Solve But Probably Won't
(AP Photo/David Zalubowski)
If you make a living identifying human potential, recruiting talent, or are interested in hiring the right people for the right role, there are good reasons to be enthusiastic about the rise of artificial intelligence (AI) as a recruitment tool.
Anywhere in the world - and at any given point in time - labor markets are inefficient, with disengaged and underperforming employees in jobs that are a poor fit for their abilities, interests and personalities; critical roles that remain vacant for a long time despite no lack of investment to attract and find suitable candidates; and people with real talent and potential who struggle to find work. Although such inefficiencies are partly structural, they are also the product of organizations' limited understanding of human potential, or at least their inability to translate their understanding into effective hiring practices.
Here's where AI could help: by looking at a wider range of signals - including deeper signals, which escape even trained human observers and traditional talent tools - it may reveal the hidden connections between a person's background and their career potential, identify the fundamental "grammar" of talent, and ultimately upgrade the quality of our hiring decisions, making the job market less inefficient (and people less miserable about their careers). However, a prerequisite to enable this would be to first address five big hiring problems that we shouldn't really expect AI to solve:
Predicting performance: You can predict only what you measure. Since most organizations have limited data on employees' actual job performance, there is not much AI can do to improve the accuracy of their predictions. This is really a shame, since as Ajay Agrawal argued in a brilliant recent book, the essence of AI is cheaper - more scalable and efficient - prediction. As a result, organizations' application of AI is limited to predicting human judgments: "what would a human do in this situation?" While the data required to answer this question is easy to get, this is how AI can end up emulating or even augmenting human biases. For example, it is far easier to predict the degree to which candidates will be liked during a job interview than how well candidates will actually perform on an interview: the former simply requires interviewer ratings; the latter actually requires connecting candidates' behaviors to their future performance on the job. By the same token, training AI to predict whether an employee will be rated positively by their boss once on the job, or whether they will get promoted, is rather different from predicting a candidate's actual performance or contribution to a team, unit, or organization. To be sure, this problem is not new to AI, but unless we resolve it AI will inherit it. In fact, AI's ability to enhance the efficiency and scale of prediction may exacerbate the old hiring problem of lacking objective indicators of job performance to validate our selection methods. Under such circumstances, our hiring protocols may convey the illusion of accuracy even in the presence of bias. For instance, a person may be hired based on job-irrelevant attributes (e.g., gender, age, attractiveness, and ethnicity) but such discrimination will be masked if the interviewer and subsequent manager share the same biases, or when they are the same person. To make matters worse, these unfair selection criteria may actually influence clients' perceptions of the candidates - i.e., attractiveness increases not only candidates' ratings on job interviews, but also managers' ratings of their job performance, and clients' perceptions of their competence and trustworthiness. All this means that AI can legitimately predict candidates' success while also perpetuating bias and unfairness: neglecting the variables that should matter but don't, focusing on the variables that matter but shouldn't. Assessing potential: Even if AI improved our ability to predict performance, this would generally be limited to situations where the future is fairly consistent with the past. The old precept in industrial-organizational psychology is that "past behavior is a good predictor of future behavior", so long as the context doesn't change. That is, people are fairly consistent and predictable, but in order to predict something a person has never done before, past behavior alone is of limited value. As Ajay Agrawal and colleagues note in Prediction Machines: "AI cannot predict what a human would do if that human has never faced a similar situation." For instance, organizations interested in promoting people from individual contributor to manager roles - or manager to leaders - will inevitably focus on candidates' past performance to decide on their promotability. However, there is a big difference between being a good performer when you are an individual contributor - and your task is to follow orders, solve relatively well-defined problems, and manage mostly yourself - and being a manager or leader of others. This is why so many employees don't perform well when promoted to the next level (into roles they are neither able nor willing to do). Training AI models with past performance data - even if, contrary to what I indicated in point 1, that data were actually available - will not solve this issue. What will, then? Accepting that some of the best potential managers or leaders in the organization may have been average, or even poor, performers as individual contributors. That is, not making past performance a prerequisite for being selected into a different type of role. Instead, organizations should focus on the known ingredients of managerial or leadership potential, such as expertise, people-skills, integrity, and self-awareness (with or without AI). Understanding potential: Predicting performance is critical for assessing potential. Because potential is a person's probability to perform well in the future. And if you can't predict something, you shouldn't really attempt to explain it -unless you are a sports pundit or political analyst, which apparently gives you the authority to provide a perfectly rational explanation for something you just failed to predict. However, just because we can assess potential doesn't mean we understand it. Without a verifiable and refutable theory, data alone has fairly limited value. A blackbox AI model may effectively predict future behaviors without necessarily providing much insight into the "why" of the relationship. For instance, there is a difference between linking certain physical properties of candidates' speech or nonverbal communication during an interview to their future job performance, and also having a plausible and defensible explanation for such linkages (e.g., they are signals of EQ, self-presentation, or curiosity). The digital age has enabled us to collect a much wider range of signals, and AI has advanced our ability to translate that data into prediction, but ideally, we also want to explain the nature of any prediction underlying a hiring decision. This is where science is critical, for science is data + theory. It is only when we truly understand the causes of future performance that we will be able to improve our hiring practices - prediction alone is not enough. Breaking our love affair with intuition: Even if the three previous problems are solved, that doesn't mean that AI will fix our hiring mistakes. Why? Because there will always be other data points and decision making criteria that are unaffected by, and independent from, AI. This is particularly relevant if AI is used in conjunction with human judgment, rather than as a substitute to it. The biggest proof of this is that we have seen 100 years of solid science overruled by intuition during common hiring practices and decisions. There is a gap between the methods that work and the ones hiring managers love to rely on. The problem is not lack of evidence on what works and what doesn't, or a shortage of predictive tools or methods, but that people prefer to play it by ear, assuming they are a great judge of character when in fact they are not. "I know talent when I see it," "this person is a great culture fit," or "what a charismatic guy," are all everyday illustrations of instinctive judgments that will likely eclipse any data and hard facts. In a data-driven world, the MBTI would not be the number one assessment tool, the unstructured interview would not be the preferred selection method, and the main criterion for deciding whether something worked or not would not be face validity or gut feeling, but hard facts, including data that can expose our the errors of our intuitive decisions as a big mistake, and make us (and our methods) accountable. Paradoxically, the biggest utility of AI will come from making predictions that are discrepant with human predictions, calling into question our intuition (and biases). But it is in those exact situations that we will probably ignore AI and go with our instincts instead. By the same token, when AI and our instincts align, we will probably use AI to justify a decision we were going to make anyway. Killing the politics of selection: As if our love affair with our intuition weren't enough, our subjective and data-free decisions are not entirely random - they are influenced, if not co-opted, by our personal agendas and the wider politics that contaminate the vast majority of hiring decisions. Just imagine a world in which AI has substantially enhanced our ability to predict performance, assess and explain potential, to the point that we are willing to ignore our intuition and trust the machines. That would still leave us with one big hurdle, which is the political implications of making a choice that is somehow disadvantageous to our own career (or the temptation to make a choice that is better for us rather than the organization). For instance, what if hiring a superstar exposes our own limitations? What if hiring candidate X puts our own job at risk (because they are clearly willing and able to get it in a few years)? What if hiring candidate Y will annoy my manager? At times the politics may have less to do with our own individual interests than the wider political context of the organization: for instance, you may follow a decidedly strategic and data-driven approach to hiring a disruptive leader to bring much needed change to the organization, and - for the same reasons that make that candidate perfect in theory - the organization will react adversely to that appointment and hinder their chances of success. However, the alternative - hiring someone who is a good fit and perpetuates the status quo - would surely not be the solution. The bigger point here is that even the best tools can be deployed detrimentally in the absence of strong ethics or the presence of harmful interests.
To conclude, there's no doubt that AI could vastly elevate our ability to fix our hiring problems, so long as we can first acknowledge and address some of the main historical limitations to our staffing processes, which are still very much alive today. Failure to do so will result not only in limiting the potential contribution of AI, but also exacerbating existing problems.
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d263ac8f7a187fcb3535f7cff88f56a5
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https://www.forbes.com/sites/tomaspremuzic/2018/08/20/should-you-care-about-your-unconscious-biases/
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Should You Care About Your Unconscious Biases?
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Should You Care About Your Unconscious Biases?
(Photo by Chip Somodevilla/Getty Images)
In recent years, a growing number of businesses – and particularly HR leaders – have devoted a considerable amount of attention to the concept of “unconscious bias.” This includes some of the most successful organizations in the world. For example, Google has put 60,000 “Googlers” through a 90-minute training program on the topic. The U.S. Department of Justice has offered a range of techniques to combat unconscious biases to 28,000 employees. Most famous of all, Starbucks enrolled 175,000 employees in a program designed to enhance conscious inclusion and prevent discrimination. There are also Facebook pages dedicated to hosting unconscious bias videos and learning resources, and academic institutions, such as the University of California at San Francisco, and the Association of American Medical College, have developed comprehensive programs and resources to highlight the importance of unconscious biases at work, and how to address them.
So, what does “unconscious bias” actually mean? Although there are no well-established definitions for the term, in business circles it is generally used to denote stereotypical biases, such as sexism or racism, that contribute to the unfair treatment of minority groups in the workplace, mostly because individuals are unaware of them. Thus, a great deal of unconscious bias training – for example, vis-à-vis gender diversity and inclusion – operates under the assumption that if we make people aware of their biases they will behave better (e.g., identifying and preventing bad behaviors and acting in fairer and more pro-social ways).
Within academic psychology, where the concept originated, there are two different “layers” of unconsciousness we need to examine in order to properly understand the meaning of the term.
The first and most famous is of course the Freudian notion of unconscious, where thoughts and feelings that were repressed in the past – mostly as the result of conforming to social pressures and inhibiting morally inappropriate desires and impulses – adopt a life of their own, often emerging to the surface of consciousness, albeit disguised in dreams, symptoms (like the famous Freudian slip), and even artistic creations (according to Freud, Leonardo da Vinci’s prolific inventions were a substitute for his repressed sexuality). Thus, Freud noted: “Properly speaking, the unconscious is the real psychic; its inner nature is just as unknown to us as the reality of the external world, and it is just as imperfectly reported to us through the data of consciousness as is the external world through the indications of our sensory organs.”
This structural version of the unconscious represented the very focus of Freud’s early psychoanalytic intervention: if we can help patients make their unconscious thoughts conscious, they will function more effectively, and even be happier (or at least less miserable). Freud’s ideas were based more on intuition than solid data, which is why they were largely discredited by modern science (though not always). However, two aspects of Freud’s notion of the unconscious are clearly still alive in the modern, business notion of unconscious bias: first, the fact that we are at least in part governed by our inner dark side; second, that we need to make people aware of this dark side if we want them to control it, as opposed to being controlled by it.
The other academic use of the term “unconscious” is more superficial, focusing less on the hidden inner forces that are responsible for our toxic tendencies, and more on implicit attitudes or beliefs. Importantly, this approach provides a reliable methodology for testing such beliefs via reaction time based experiments (for a famous free example see Harvard’s racism test). The basis of these experiments is straightforward: if people show faster reaction time associating two different words to each other (e.g., “women” and “stupid” is faster than “women” and “smart”), we can assume that such associations are indicative of stronger beliefs, so they are expressed more spontaneously or automatically. Although this inventive methodology has been deployed quite extensively in academic research, there is still a great deal of debate as to what implicit attitudes actually predict – and even, what they ought to predict.
Some researchers have tried to validate implicit attitude tests against self-report, but by definition the relationship between the two should be weak. Others have looked at the degree to which implicit attitudes predict actual behavior, but there is an extensive scientific literature showing that the relationship between attitudes and behaviors is rather complex, and often weak, even when attitudes are explicit: for instance, most people are in favor of organ donation but very few decide to donate their organs; lots of people express preference for a political candidate without voting for them in the end; and even people who overtly report sexist or racist attitudes often behave nicely and politely to the very people they allegedly detest. Same goes for “spotting biases” in the brain: while neuropsychological processes, through EMG and fMRI signals, may reveal thoughts or preferences that are in conflict with conscious beliefs, there’s no clear formula for turning such finding into an actionable intervention that reduces the amount of bias in people’s reasoning or behavior.
We should also remember that humans are inherently biased, in the sense that we are permanently taking mental shortcuts to translate the ambiguous information of our environment into (seemingly) meaningful thoughts and ideas. We crave constant meaning, so we can't stop fabricating it, even where there is none: we are meaning making machines, with minimal need for actual facts or objective data. Quite clearly, our interest in reality is not as strong as our desire to maintain a positive view of ourselves. Fake news and the filter bubble may be a social media thing, but they fulfill our own universal preference for hearing what we want to hear, and seeing what we want to see. Self-deception, the unconscious attempt to distort reality in our favor in order to protect our self-concept, is the mother of all biases, because most biases are self-serving and self-enhancing.
This is not to say that we shouldn’t strive for rationality and a better understanding of the world. But we must be realistic about our ability to achieve this, and understand the downsides of doing so: we would not be able to function very well in everyday life if we had to stop to “think slow” about our preferences, decisions, and other people. We tend to focus on the “ugly” type of biases – social biases like stereotypes and prejudice that nurture interpersonal conflict and inequality – but most of the decisions we make on a regular basis are made in default or autopilot mode, and our capacity (and willingness) to become aware of these biases is indeed very limited. As the Nobel prize laureate Daniel Kahneman noted: “We're blind to our blindness. We have very little idea of how little we know. We're not designed to know how little we know.” And the problem starts very early in life: even at the age of 1, infants show an unconscious preference for more attractive people, fixating their eyes for longer on people who are deemed more beautiful by other adults, and trusting those people more.
So, while we should care about our unconscious biases, there is little scientific evidence in support of the idea that making people aware of their biases will eliminate problematic behaviors against the object of such biases, or reduce bias in general. In fact, there are reasons to remain skeptical of these ideas:
First, a recent meta-analysis of 426 independent scientific studies with over 72,000 participants showed that interventions produce relatively small changes in implicit attitudes, and that such changes rarely transfer onto changes in explicit beliefs or actual behaviors. As the authors concluded: “Together, these findings suggest that implicit bias is malleable, but that changing implicit bias does not necessarily lead to changes in explicit bias or behavior.”
Second, when it comes to prejudiced and stereotypical biases, we should remember that they are mostly explicit rather than implicit, and conscious rather than unconscious. Indeed, people are not just aware of their prejudiced biases, they are also proud of them: this is how they retrieve the main benefits from such biases, which is to feel better about themselves (by belittling other people). It is also questionable whether depriving people from that benefit will make them less angry, let alone more rational.
Third, it is not easy to consciously control unconscious thoughts, which is why the process often backfires. Imagine we are training an interviewer - let's call him Donald - to overcome their unconscious biases against certain group of people, such as women. Donald may undergo a great deal of training to identify his unconscious biases and finally accept the fact that he is a misogynist, but even if he had the best intention to keep such toxic attitudes in check when he is interviewing job candidates, that is a near impossible task: it would require him to ignore the gender of the person he is facing. In fact, the louder his inner voice may tell him that he “should not pay attention to the candidate’s gender”, the more he will focus on the candidate’s gender, at the expense of everything else. This is an area where AI and machine-learning algorithms promise to both outperform and help humans, by injecting more objectivity to the screening process. AI has two big advantages over human beings: first, unlike humans, AI can learn to ignore certain things, such as gender (which, in effect, means unlearning certain categories); second, unlike humans, AI doesn’t care about maintaining a positive self-view (and failing to maintain a positive self-view will not make it depressed, for AI has no self-esteem to protect).
Last, but not least, it is generally easier to identify our own rather than other people’s biases, and that includes stereotypes and prejudice. Indeed, you are more aware of your own than of other people’s prejudices, even when theirs' seem more obvious than yours' (an illusion that is itself a form of bias). That said, what matters most is not how you feel about your biases, but what other people think of them. You may be the least biased person in the world, but have a reputation for being biased, if your behaviors suggest that. By the same token, you may have horrible internal biases and behave in the most least biased of ways vis-a-vis the objects – subjects – of such biases. And of course, sometimes there will be alignment between your internal beliefs and your external behaviors, which is something most people praise under the label of “authenticity” (though being authentically racist or sexist is hardly a virtue). The key point here is that what matters most is what other people think of you: whether or not you have a reputation for being biased is the critical issue at stake. This may sound superficial, even Machiavellian: but imagine a society – or organization – in which the majority of people don’t have a reputation for being biased: that is surely as good as it gets, regardless of what they actually think.
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6661ff5ae3a1f566020d4fd0cbe9ccf8
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https://www.forbes.com/sites/tomaspremuzic/2019/03/04/why-asking-women-to-lean-in-wont-solve-our-leadership-problems/
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Why Asking Women To Lean In Won't Solve Our Leadership Problems
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Why Asking Women To Lean In Won't Solve Our Leadership Problems
Although women are awarded 57% of bachelor’s, 60% of master’s, 51% of doctor’s degrees, and they occupy over half of all managerial and professional roles in the U.S., as well as most middle management roles, they make up fewer than 5% of Fortune 500 CEOs and just 14% of Fortune 500 Executive committee members.
A common misconception is that the major reason for this obvious underrepresentation is women's inability (or unwillingness) to lean in, defined broadly as the tendency to showcase assertiveness and ambition. If only women had the same desire to lead as men, the argument goes, we would have more female leaders!
Not quite.
For starters, academic studies show that, at least in the industrialized world, there are no significant gender differences in motivation to lead, which means that both men and women are equally interested in becoming leaders. In fact, a recent study of 1,000 employees in U.S. public and private organizations reported that women's ambition to get to the top of their organization is now higher than men's, with other studies suggesting that female career aspirations now surpass male's. Furthermore, as I highlight in my latest book, academic studies also report differences favoring women when it comes to leadership effectiveness.
To be sure, men do rate their own leadership talent more highly than women do theirs', just like they tend to have more positive (and distorted) self-views than women on pretty much any dimension of talent. But when leadership talent is evaluated through peer — rather than self — ratings women tend to outperform men. At the same time, when women perceive fewer opportunities to succeed as leaders, their motivation to lead decreases, but that is just a reflection of real constrains, rather than a self-fulfilling prophecy or self-defeating self-view. It denotes their ability to accurately interpret reality, and to give up on unfeasible goals.
Perhaps more importantly, even if there were significant gender differences in expressed ambition, such that men showcased their drive and leadership motivations more emphatically than women did, that would still not justify the under-representation of women in leadership. Because putting yourself forward as a leader has never really been a reliable indicator of your actually having talent for leadership. In fact, the number of people who are interested in advancing their careers by becoming leaders far exceeds the number of people who have talent for leadership, and many of the most talented leaders will be less pushy and abrasive in their self-nomination, preferring to let their achievements speak for themselves. They will also be more self-critical and aware of their limitations, which ironically may end up working against them: because we tend to assume that people are more talented when they are unaware of their limitations, as there is no better way to fool others than to fool yourself first.
So, instead of blaming women for not leaning in enough, we only have ourselves to blame for not realizing that just because men tend to lean in so much it does not mean that they are truly leadership material. This is why most leaders are not just male, but also incompetent, having rather negative effects on their teams and followers: causing low levels of engagement, trust, and productivity, and high levels of burnout and stress. If organizations were better at identifying actual leadership potential, they would neither fall for overconfident men who lean in when they don’t have the talents to back it up, nor overlook talented women (and men) just because they don’t self-promote or lean in as much as others.
It is therefore somewhat odd that so much of the recent debate over getting more women into leadership positions has focused on encouraging them to lean in more, which is exactly what men do in excess and how men arrive to leadership positions, especially when they shouldn’t. Do we really want to ask women to replicate a fairly deficient model? Sure, these are the qualities that we look for in leaders, but they are not precisely raising the quality of our leaders. Yes, these are the people we tend to pick as our leaders — alas, with pretty bleak and dismal consequences. Perhaps more progress would be achieved if we found a way to persuade the average men to behave more like women: lean in less, unless they are as talented as they think they are.
By the same token, lowering our standards when we select female leaders would create an awkward form of fairness: we would simply make it as easy for incompetent women to succeed as it always has been for men. To some degree, this is what happens when women manage to succeed by mastering the current rules of the game, which promote a range of toxic behaviors, such as narcissistic self-absorption and entitlement, faking it until you make it, and focusing much more on managing up and playing politics than on actually driving high performance in their teams.
The result is that so many of the powerful female leaders who end up achieving exceptional levels of success are bad role models. They perpetuate the flawed leadership archetypes we have, "out-maling" males on masculinity, and mimicking the worse male leaders. For the many people (both male and female) who wrongly question the data-driven fact that women are not just as capable of leading as men, but generally better at it than men, every bad female leader is a great excuse for reaffirming their sexist prejudices.
What does all this imply for gender diversity? While it is certainly a sign of progress that a growing number of organizations are putting in place deliberate interventions to increase the proportion of women in leadership, a more reasonable goal would be to focus instead on selecting better leaders, not least because that would also take care of the gender issues. Getting more women into leadership does not necessarily increase the quality of leaders, whereas getting more talented people into leadership would increase the representation of female leaders, to the point that they outnumber men.
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a2174ec673bd259c7baa46782839f50f
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https://www.forbes.com/sites/tomaspremuzic/2020/03/20/even-in-physical-isolation-we-will-remain-socially-and-emotionally-connected/?sh=2238fe70458a
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Humans Have The Power To Remain Socially And Emotionally Connected Even In Extreme Physical Isolation
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Humans Have The Power To Remain Socially And Emotionally Connected Even In Extreme Physical Isolation
PARIS, FRANCE - MARCH 17: General view of the empty Alma bridge, in front of the Eiffel tower, ... [+] while the city imposes emergency measures to combat the Coronavirus COVID-19 outbreak, on March 17, 2020 in Paris, France. The Coronavirus Covid-19 epidemic has exceeded 6,500 dead for more than 169,000 infections across the world. During a televised speech dedicated to the coronavirus crisis on March 16, French President, Emmanuel Macron announced that France starts a nationwide lockdown on March 17 at noon. (Photo by Edward Berthelot/Getty Images) Getty Images
Social distancing is nothing new, and a great deal of research has highlighted the benefits of social distancing for highly transmissible diseases in the absence of vaccines, but never before has the term occupied the central place it has in our mind’s today, with governments around the world anxious to reduce or even stop all interpersonal contact in order to control the covid-19 pandemic. While the precise medical, economic, and social consequences of this unprecedented measure remain uncertain, we should be clear about one thing: we have never been as prepared to minimize the psychological cost of social distancing as we are today, thanks to the digital age.
Since most of us have already migrated a great deal of our lives (and identities) to the digital world, creating virtual equivalents for virtually any human activity, physical isolation is far less likely to feel like loneliness, equate to boredom, or truly represent social isolation. In fact, it is conceivable that for a large number of people isolation from the digital rather than analogue world – in other words, switching to a purely offline life – would be more traumatic. Perhaps this is why we have recently devoted more time to worrying about computer viruses and cybersecurity attacks than biological viruses and pandemics.
This is not to say that we will find it easy to adjust to a life less rich in face-to-face contact, and the prospect of being removed from our families, friends, and work colleagues for an indefinite amount of time is for sure daunting. It is also obvious that in certain cultures, age groups, and less technological societies, it is far harder to reduce physical interactions or simply replace them with digital alternatives (the same goes for certain jobs, industries, and organizations). At the same time, there has never been a better time in history to cope with a radical reduction in physical contact, not least because technology has been downgrading the value of physical human exchanges for a few decades now, and dramatically so during the past 10-years. We would not have seen this drastic approach to social re-engineering imposed so systematically if so many of our key activities couldn’t be substituted (at least in part) with virtual alternatives.
Ironically, we have devoted (myself included) much of the past two decades to being shocked and scandalized by the psychological harms caused by our smartphone addiction (NoMoPhobia), lamenting the rise of digital narcissism fueled by Facebook and Instagram, the threat to truth and harvesting of fake news caused by Twitter and our digital filter bubbles, and the dystopian fears that the very algorithms designed to simplify our lives would end up controlling and manipulating us, amplifying human prejudice and bias, and downgrading us to mindless advertising products or data producing machines. Although these fears are arguably still warranted, we should also acknowledge that the very technology accused of making us stupid, lazy, or antisocial has just turned into an indispensable tool for minimizing the social and emotional costs of physical isolation.
It is important to note that there has always been a salient interaction between social behaviors and environmental constraints, including the threat of viruses and pathogens. Culture itself is the product or result of this interaction. For instance, cultural differences in curiosity, social exploration, and extraversion can be explained by environmental (climatic and geographical) influences on parasitic and pathogenic risks to human health – with cultures developing more openness, extraversion, and curiosity in places where the risk of physical interpersonal contact, particularly outside one’s in-group, was lower. In other words, our evolutionary ancestors have previously encountered many instances in which there was a strong wellbeing cost linked to socializing and hanging out with others. Historically, social distancing, in the sense that it is currently understood, has been the norm rather than the exception, with clear health risk associated with physical interactions outside our in-group. Modern medicine and globalization have done a great deal to mitigate these risks in recent centuries, but it’s thanks to the digital age that we are now able to maintain meaningful emotional and social connections with others even in the absence of physical proximity.
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In this context, it seems logical to at least acknowledge some of the reverse arguments to the alarmist discussions on the adverse psychological effects of digital media on social and work behaviors. For example, it seems feasible that our concerns for the potential increases in loneliness, depression, and social anxiety caused by excessive social media usage must coexist with an acceptance that those same digital addictions have helped us cultivate deep virtual connections with others, which have become very real. By the same token, our tendency to condemn digital distractions, whether it’s binge watching YouTube, getting hooked on the Netflix series, or falling for clickbaity headlines, may feel less problematic when we find ourselves with more time and boredom to kill, and distractions are rather welcome. And of course if it weren’t for e-commerce, virtual meetings, and remote working, we would be facing a bigger shock to the economy, as well as an even more pronounced tension between our wellbeing and productivity.
But it’s not technology that we should celebrate, but the human capacity to create it, and adapt to it. Even in those who are suddenly forced to adopt a more virtual way of life, replacing precious in-person contact with seemingly cold and clunky digital substitutes, we can expect quick adaptation and the creation of new long-term habits. Any technology involves doing more with less, and there is no true technological adoption without an underlying need or necessity. Just as our desire to know, learn, produce, bond, and improve our mental and physical wellbeing has fueled recent technological innovations, any threat to such desires will only exacerbate the value of these inventions. Our individual and collective imaginations have enabled us to evolve into the most collaborative species on earth, and the digital age represents the latest phase in our quest to push the boundaries of cooperation. As tragic as global pandemics can be, we should regard them as a test for our capabilities. We are better equipped for dealing with them than we ever have been, largely because we have been able to create an entirely new system for coordinated human action – now we must make proper use of it.
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9c8004dd13ae67fd6dd19b29746a3d9c
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https://www.forbes.com/sites/tomaspremuzic/2020/07/18/how-much-should-your-boss-know-about-your-personal-life/?sh=62a3745269fc
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How Much Should Your Boss Know About Your Personal Life?
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How Much Should Your Boss Know About Your Personal Life?
We used to look forward to bringing our whole self to work. Now we can’t keep our boss out of our home.
null Getty
In a matter of months, the jobs that haven’t gone have gone fully virtual, the physical office has been evacuated or extinguished, and the already elusive boundaries between our work and personal space have all but disintegrated. More than ever before, managers and bosses are popping into our homes and invading our private habitat, fairly uninvited at times (like when we they expect us to turn on our camera, because they have), creating significant changes to the dynamics between you and your manager.
On the one hand, competent managers will know that in a crisis, and when assiduous contact with people has been lost, it is critical to establish frequent communication, ramp up the cadence of meetings, and check in with people as often as needed, and ideally more. On the other hand, we musn’t forget that work is generally just a fraction of people’s lives, and that there are limits to what managers should know about their employees, even if they care deeply about their wellbeing.
So, how much should your boss know about you, including your personal life and circumstances? And, if you happen to be a boss, what should you refrain from asking your employees, even if you have good intentions, such as caring about their physical and mental wellbeing? These questions are hardly new, but they have acquired a whole new meaning with the pandemic, eroding the space between our professional and private selves.
Although there are no definitive answers, here are a few points to consider if you are interested in thinking about some of the implications of managing in a purely virtual world:
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One size does not fit all: Any generic advice aimed at helping managers deal with their employees is of limited utility because one size never fits all. By and large, good management is about personalizing the relationship bosses have with each employee, not treating everyone the same, but like they deserve and prefer, and in ways that enhance their performance, motivation, and wellbeing. There are not just personal, but also cultural differences pertaining the distance between work and personal spaces. Some national and organizational cultures are more formal and hierarchical than others, so they will have clearly defined boundaries – and more distance – between work and personal activities. Others will be less formal, more intimate, and interpersonal, so you can expect bosses to know more about their employees’ personal lives, and vice-versa. Regardless of the type of culture a company, industry, or country may have, there is still plenty of room for diversity and individual variability within that culture. Culture is often defined as “how we do things around here”, but a more precise definition would be “how we generally do things around here”, because culture is an aggregate measure of individual variability. A strong culture, such as a cult, is defined by less individual variability, which is why to anyone outside that cult it is shocking to see how homogeneous, predictable, and systematic, their members’ behavior is.
Disruption is a given: Although one size does not fit all, there are still some general assumptions you can make. For example, that most employees will be facing challenging changes and disruptions to their habitual work routine, and be looking for effective ways to adapt and manage their version of the new not-normal, navigating the muddy boundaries between their physical home and virtual work, as well as struggling to differentiate them. You can also assume that when employees are under higher levels of stress, pressure, and burnout risk, you may be less aware of it in an office-less world because you cannot see them. We therefore know that frequent communication, check-ins, and empathy will be appreciated, but managers need to learn how to do this remotely, in a cold, virtual, and sterile environment, and understand the rules and norms that work best for each employee. While employees want “one life”, even before the current crisis there was a risk that work-life fusion caused problematic imbalances, and few people imagined that some of the benefits of separating work and life would be erased by our obsessive dependence on technology.
What happens at home should stay at home: For the biggest part of human history, employees have enjoyed the mantra “what happens at home stays at home”, and for a lot of people there is a strong psychological distance between their work and private personas. To be sure, the job of managers is to evaluate and manage employees’ job performance, so what happens in their employees’ personal lives is none of their business. Even when managers step into the role of a mentor, coach, or support agent their remit should purely be limited to professional activities and they must respect people’s privacy, even if those limits are harder to see. We have all been complicit in partaking in gossip activity and speculating about people’s personal life, but it is safe to say that most people would not want their bosses to comment on their private lives: “she is a neat freak”, “his wall art is very strange”, or “wow , their kids are uncontrollable”. Although it is nearly impossible to ignore the deep psychological signals people convey on themselves when you look at their physical or virtual habitats, managers must try hard to ignore them or at least pretend to, unless employees explicitly bring it up. Indeed, there is a big difference between having them say “sorry, my wife just walked by in the background” and your asking “who is that woman that just walked by behind you?”
Don’t force employees to be under constant scrutiny: Employees were already judged and evaluated enough before the pandemic, now managers and teammates enter their homes on a daily basis. Forcing employees to be under constant scrutiny is no fun. The general rule that applied before (and is still a good rule for physical work environments) should be maintained as overarching principle for the new etiquette of virtual management: that is, wherever possible, bosses should refrain from micromanagement and focus on measuring output and results, rather than obsessing over input. If you treat people like adults, they will generally behave like them. If you give them clearly defined objectives, and the resources to accomplish them (including high-quality feedback), then you shouldn’t care about how many times they went for a walk, or if they are daydreaming. Managers must adhere to the laws and ethical guidelines that apply in their countries, and these are mostly the same rules that were in place prior to the pandemic. While many government authorities, including the EEOC here in the US, have provided some latitude given COVID-19, privacy requirements under HIPAA, CCPA, GDPR and the like, are still applicable. So, managers be careful.
Going more personal without being unprofessional: Some employees might share more information than normal, and some might be even more protective. Warning to managers: if it doesn’t impact their performance or doesn’t violate the employee handbook, it should not be considered for employment purposes. So, if an employee says they are drinking more since lockdown and social distancing started – as indeed some report – a manager cannot presume there is problem or that the employee’s performance will suffer. And, with many employees working longer hours, does this mean some are also drinking on the job? To be sure, any changes to employees’ levels of performance pre-pandemic may be affected by a wide range of factors, including WiFi speed, office space, home distraction, childcare challenges, and mere domino effects coming from other employees or team members being impacted: every employee is a small piece of a bigger system so even if they are not affected you can expect their performance to change because of major changes to the system. Inevitably, managers will find out things about their employees’ personal lives they didn’t know, ask, or intended to find out. This is understandable and necessary since those personal factors are now more intertwined with work and impact employees’ morale and performance, so managers need to be aware of them. Also, not asking may be perceived as not caring or lacking empathy. After this crisis is over and employees look back to it, they will remember how their bosses dealt with the crisis, whether they stepped up or not, and whether they managed to elevate the relationship with their teams by both gaining a deeper understanding of their employees’ morale and wellbeing during such difficult times, and keeping things professional. There is a real chance for managers to step up and improve their reputation with their team, and yet they also face an increased risk to ruining their reputation if they cannot help employees through these difficult circumstances.
What next? One big question right now is what the next phase of this looks like, and nobody knows or has data on the future. When employees return to the office, it will likely be a progression or incremental transition where the past two months blend into the next phase, which will not look like the past. They will surely want to maintain some aspects of that one life, while drawing lines between personal and professional where it suits them. So, as organizations become more proactive at monitoring employees’ behaviors, with the goal of reducing health risks and improving wellbeing, they must also equip managers with legal and cultural guidelines to ensure lines are not crossed. Without proper precautions and training, such new measures, especially when they involve tech and data, may backfire or be perceived as overly intrusive. Employees will be wary. Overuse of surveillance technologies, AI, and data with the pretext of keeping people safe, at the risk of creating a creepy Orwellian culture where every move is tracked and monitored, and cyber-snooping is the norm will quickly be exposed. Ultimately, the key question is one of trust. If employees trust their bosses and the leaders of their organizations, they will understand that even seemingly invasive and creepy technologies may be deployed for their own benefit, to increase their health, morale, and productivity. But if they don’t, then they will not want to work there or at least, not work for that boss. It is not the technology or AI we must learn to trust, but the humans who deploy it. Bad bosses were bad prior to the pandemic and if unchecked, armed with technology and data, will only get worse. Good managers, will lead with a peoplefirst approach, regardless of the technology or data; and while they may make some missteps given the blurring of lines between work and home during this COVID-19 era, if their employees trust them, their employees will likely forgive them.
I am grateful to my ManpowerGroup colleague Michelle Nettles for her input on this article.
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a723b4b66498a3ca3f434d575bf25079
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https://www.forbes.com/sites/tomaspremuzic/2021/01/19/in-defense-of-unmotivated-workers/
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In Defense Of Unmotivated Workers
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In Defense Of Unmotivated Workers
Concerns about employees’ lack of enthusiasm have been vastly exaggerated.
(Photo by Al Bello/Getty Images) Getty Images
Motivation, like talent, fluctuates from person to person, and according to the challenges and demands of the situation. Despite a booming employee engagement industry that tracks and monitors employee motivation and satisfaction across all jobs, major companies, and industries, the best scientific study in this area suggests that the overlap between employee engagement and business unit performance is less than 10%. In other words, many factors other than employees’ motivation, engagement, or satisfaction, determine how they perform at work.
One of such factors is talent, which in any area of performance has the ability to compensate for lower levels of effort, drive, and motivation. For example, if you are a skilled public speaker, a gifted musician, or an empathetic salesperson, you will probably outperform many of your less talented counterparts even if they prepare more than you, and they are much more passionate or mandate-driven than you are. Consider that among professional athletes deliberate practice, effort, and training accounts for just 1% of the variability in final results or performance. Motivation matters more in other areas of performance, but it’s still far less influential than we think.
In what is probably the most authoritative academic review of this subject, researchers analyzed hundreds of scientific studies to estimate that the effect of training and deliberate practice are just “21% for music, 18% for sports, 4% for education, and less than 1% for [typical] professions.” So, motivation is far less important than talent, and it matters a great deal less than popular writers suggest.
Furthermore, it is not that easy to alter one’s natural level of motivation. So, even if Malcolm Gladwell’s 10,000 hour rule (adapted from Anders Ericsson) were true, one does not just serendipitously wake up one day to decide to practice 10,000 hours, even if that guaranteed us to become experts, which is alas not true. In reality, the probability of throwing ourselves into intense training and preparation is an actual reflection of our personality: you have to be inherently driven, conscientious, and ambitious, to be likely to do this in the first place. In line, scientific studies show that 50% of the variability in employee engagement is a reflection of people’s personality. What this means in non-academic terminology is that some people are a lot more driven and passionate about work than others. By the same token, some people are not really that interested in work: they don’t live to work but prefer instead to work to live.
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Most companies would love to only hire spiritual workaholics - people who are simply obsessed with work and who see work as a source of meaning and purpose. Unfortunately, this is not possible. These possessed individuals who have managed to achieve a psychotic level of identification with their work persona are not the norm. Furthermore, even if you hired them there is no indication that they will be talented, or that they will manage to avoid burning out, or falling out of love with your business as soon as they realize they are not fully fulfilled or spiritually actualized.
This strategy would not just be unrealistic, it would also backfire. It is just not feasible for the vast majority of employees in the world to find meaningful world, and for every in-demand employer who persuades employees that if they join them they will change the world, there are 10 others who are offering jobs, in many instances sustainable employment and interesting experiences, sure, but it is called “work” for a reason, and your goal is to have 100% of your workforce finding a higher sense of meaning and purpose in their jobs, then you better be running a cult rather than a business.
Importantly, just like you wouldn’t - or at least shouldn’t - get rid of people who are less talented (this is what happens when you have a normal distribution, which is what you get when you plot any physical or psychological trait, including motivation and talent), you should not discard or ostracize people who are demotivated. It is not even your fault if they are, because motivation - even work and pay motivation - depends on many factors you can’t and shouldn’t want to control.
And despite the rise of Chief Happiness Officers and the hijacking of HR by the feel-good/self-help airport literature, people are not paid to be happy, but productive, at work. Equally, companies and organizations only care about employee happiness and motivation if it raises their performance, which is why few will reward or promote useless employees who are happy and engaged, while sanctioning or demoting useful employees who are grumpy or miserable. Note I said “few” rather than none because this does indeed happen, more often than it should. But when organizations go that way, they are likely to suffer.
Too much getting along can get in the way of getting ahead, and the most valuable and innovation employees are often hard to please and hard to manage, but their inherent dissatisfaction (you could call it fire in their belly) is a major agent of progress and innovation. Evolution, and anything that has ever been created that is of any value in human civilization, is the result of talented but dissatisfied and unhappy individuals. They were motivated yet, but mostly to change and improve the status quo. You can imagine they would have scored pretty low on most employee engagement surveys, which is why in many instances they decided to quit their jobs and traditional employment altogether to start their own ventures.
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91aa1b02605cbf5fea6f3589cb825c62
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https://www.forbes.com/sites/tomaspremuzic/2021/01/25/humanizing-work-in-the-age-of-creepy-ai/
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Humanizing Work In The Age Of Creepy AI
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Humanizing Work In The Age Of Creepy AI
Horror tales of an Orwellian future of work have haunted humans for decades, but they seem uncomfortably real today.
Man with big Eyeball pulling red sweater over face against blue background getty
We have spent much of the past decade obsessing about the future of work, and the current pandemic has prompted many to assert that the “future is finally here”. Chronologically, this is factually correct: the present was once the future. Philosophically, we can debate whether the changes we are seeing now are indeed the crystallization of accurate predictions, let alone real changes. The clichéd assertion that the pandemic has accelerated everything that was already there to begin with seems suspiciously self-serving. A sort of “I told you so” that exhibits all the characteristics of confirmation bias. We seem to look for trends like the drunkard who searches for his keys under the lamppost: not because that’s where he lost them, but because that’s the only place where he can see.
To be sure, one of the problems with predicting the future is that nobody has any data on it, so the best we can do is guess, make stuff up, and hope that people will pay some attention, remember our guesses, and forget our misses. More often than not, future predictions are an attempt to make sense of the present, but they can also distract us from solving the real problems we face today. In that sense, the best prediction is one which results in some form of action. An action that helps us create a better future by addressing the big problems of the present.
One of the big problems we face today is the potential dehumanization of work, a trend that may actually suppress (rather than accelerate) recent efforts to improve the employee experience and enable workers to construct a more meaningful relationship with their work, including purposeful careers rich in learning opportunities, and the potential to develop their human and humane qualities, such as creativity, curiosity, empathy, and integrity. Cynics may argue that this quest for the spiritual workaholic was perhaps just PR... a recruitment strategy designed to seduce the narcissistic aspirations of an otherwise disenchanted workforce. Even if this is true, we can now see the emergence of a much darker reality casting Orwellian shadows over our work and careers. This dystopian reality has revitalized fears of alienated workers oppressed by technocratic surveillance and algorithmic capitalism.
Clearly, there is no stopping technology from playing a bigger and bigger role in our lives and careers, but this doesn’t mean undermining the human aspect of work, or making work less humane. The big impact of the pandemic is not so much the advancement of technology, but the removal of human-to-human interaction, which no Zoom or Virtual Reality can fully replicate. Not so long ago our main concern was whether AI would automate humans; our main concern today should be to stop humans from behaving like AI. When you sterilize the personal touch from work, our natural proclivity is to turn into productive machines. We can, thanks to technology, self-optimize our working lives so as to minimize time wasting, boost efficiencies and productivity, which would turn us into a more predictable and soulless species. This is the way AI would want it. We already spend much of our working lives training algorithms, but there should be more to our selves than that which can be automated.
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Fortunately, there is no need to wait for any technological developments to make work better, as the solution to the problem is human rather than artificial intelligence. Empathy, honesty, trust, and compassion are the key ingredients for a better tomorrow, and a better today. They are the only attributes capable of turning artificial intelligence into a genuine human ally, capable of augmenting rather than downgrading our humanity, and we surely have every incentive to avoid any of he far bleaker alternatives.
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9859e5c2a559b8eb7630a7afb2706d67
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https://www.forbes.com/sites/tombarlow/2011/06/15/how-to-buy-happiness-with-money/
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How to Buy Happiness with Money
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How to Buy Happiness with Money
"Image via Wikipedia"
In their fascinating paper, "If money doesn't make you happy, then you probably aren't spending it right", researchers Elizabeth W. Dunn, Daniel T. Gilbert and Timothy D. Wilson culled current research to investigate the relationship between how we spend and our happiness. They distilled their findings into eight suggestions about how to spend in ways that actually increase our happiness.
1. "Buy experiences instead of things"
According to the authors, research has shown that people derive more pleasure from spending on experiences that they do on objects. The reasons for this are several.
First, we adapt quickly to possessions, and consequently the pleasure of acquisition is short-lived.
Second, studies show that we are most happy when focused on what we are doing at the moment, and experiences provide just that focus. Think, for example, about riding a roller coaster; your mind is locked into the thrill (and perhaps terror).
Third, the memory of the experience allows you to derive additional pleasure. Think back on the greatest joys in your life to date; were they objects or experiences?
In fact, the authors explain that experiences help us define who we are, and wouldn't you rather define yourself as the person who climbed Everest than the person who owns a riding mower?
2. "Help others instead of yourself"
The authors point out that research has shown that, as social animals, our happiness is closely tied to the amount of our social interactions. Spending on others, whether as gifts or charity, tends to strengthen social ties, and well as enhancing our self-image.
3. "Buy many small pleasures instead of few big ones"
Again, our ability to adapt even to the greatest possessions means that the pleasure we derive from that new Corvette or front-loading washer diminishes quickly. Given this, one might find a great deal more pleasure in buying new outfits frequently that splurging the same amount of money on a one-time purchase of a Mercedes.
Also, pleasure doesn't necessarily increase in lockstep with the amount spent. While a Mercedes may cost 500 times more than a new pair of Manolo Blahniks, it probably doesn't provide 500 times the pleasure.
4. "Buy less insurance"
Why do we buy extended warranties and other types of insurance? Because we anticipate that a loss is going to make us quite unhappy. However, according to the authors, humans have a great wellspring of emotional protection; that is, we have the capacity to handle loss much better than we anticipate we will. One way we commonly do this is by transferring blame.
Warranties and generous return policies can actually serve to increase our discontent, the authors state, because if we know we're stuck with an item we find a way to appreciate it; if we know we can take it back, this appreciation never takes place.
5. "Pay now and consume later"
Anticipation of a purchase is often better than owning the purchase. Most of us have experienced this phenomena when dating, when the promise of the evening was much better than the reality of that evening. The authors put it this way; "anticipation is the Batman to the Robin of reminiscence."
Buying on credit, buying on impulse, robs us of this delicious anticipation.
There is another effect at work here, too. When we buy on impulse, the authors state, we tend to buy to suit our vices, while when we plan and anticipate a purchase, we tend to buy for our virtues, which are more likely to be more long-term satisfying.
6. "Think about what you're not thinking about"
When we envision something that will make our lives better, a new house perhaps, we think about the big picture, perhaps the family gathered around the fireplace at Christmas. However, as the authors point out, our happiness is likely to be more determined by the many small things that happen to us day to day; work troubles, car problems, teenager problems, our weight, the weather, our backswing. Money spent to improve those small things could have a greater impact on our happiness.
7. "Beware of comparison shopping"
When you go car shopping, perhaps you're one of those that compares potential purchases detail by detail, or only buys items at the top of the Consumer Reports ratings. This could be a threat to your happiness. Why?
Because the attributes that will affect your happiness may not be included in those numbers. Perhaps the esthetics of the car mean more to you that its horsepower or number of cup holders. Perhaps Consumer Reports doesn't rate an Apple MacBook Air as a best buy, but if it's what you really want, buying something else just won't bring you as much pleasure.
8. "Follow the herd instead of your head"
Most of us like to feel that we are independent enough to make our own best decisions about what to buy based on our own tastes. Wrong. According to the authors, "Research suggests that the best way to predict how much we will enjoy an experience is to see how much someone else enjoyed it."
This is a good defense for sites such as Yelp and Amazon, that allow you to use the experience of others as a barometer for how much you might enjoy a restaurant, a nightclub, a movie or a book.
Despite the bromide to the contrary, many of us still believe that money can bring happiness. The authors of this study show that how and what we purchase can have a large impact on our happiness. This blueprint helps show us the way to get the most out of our money.
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e163b2102f0e8651e44e2c2e1f33e07a
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https://www.forbes.com/sites/tomcoughlin/2012/02/21/hdd-capital-spending-in-2012-and-beyond/?feed=rss_home
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HDD Capital Spending in 2012 and Beyond
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HDD Capital Spending in 2012 and Beyond
In order to repair the damage to the HDD supply chain from the 2011 Thailand floods as well as meet the increasing need for digital storage the hard disk drive industry must continue to make investments in capital equipment and production facilities. Future increases in HDD areal density as well as increasing unit sales will drive significant capital spending investments that will impact the revenues of companies such as Anelva, Hitachi High Technologies, Innovative Instruments, Intevac, KLA Tencor, Teradyne, Xyratex, Veeco, and many others in the next few years.
The 2012 Hard Disk Drive Capital Equipment and Technology Report provides 207 pages of in-depth analysis of technology developments and capital equipment spending to sustain the growth and development of the hard disk drive industry. Some highlights from the 2012 report include:
169% growth in HDD capital spending is expected from 2011 to 2016, driven by three factors: unit shipment increases of 167%, the introduction of new HDD technologies such as HAMR and the replacement and repair of equipment damaged in the 2011 Thailand floods. Between CQ4 2011 and CQ4 2012 over $1 B in capital spending is expected to repair or replace equipment and facilities damaged in the Thailand floods. HDD and component companies have more cash to invest in equipment and technology development in 2012 and 2013, due to higher drive demand, limited drive supply and higher HDD prices. Total industry spending on capital equipment in 2012 is expected to be about $2.4 B with 72% of this spent on process equipment, 21% on production test and 7% on metrology. Average HDD capital equipment spending per year between 2008 and 2016 is estimated at about 7.2% of HDD industry revenue, with this percentage increasing in the last years of this period due to new technology introductions. HDD areal density has slowed to 20-25% annually but 3.5-inch HDDs with storage capacities of 12 TB and 2.5-inch HDDs with 6 TB are expected by 2016. Lower AD growth will drive more components per drive and thus more capital spending on head and media production equipment in coming years. Industry consolidation and recovery from the Thailand shortages will result in higher HDD prices than 2011 at least until 2014 and likely HDD prices will flatten out about 10-15% higher than in 2011—this will help fund expensive new technology transitions by 2015-2016 and increase areal density growth rates to 40+% CAGR. The normal capital equipment cycle will likely be re-established by 2014. Capital purchases in 2014 and later will be driven by increasing unit demand (assumed 14% annual growth) as well as the introduction of heat assisted magnetic recording in 2015 and 2016.
The 2012 Hard Disk Drive Capital Equipment and Technology Report is now available from Coughlin Associates. To find out more about this report please see the brochure at http://www.tomcoughlin.com/techpapers.htm
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132c57bfd4af11b83a70e85687abe4c4
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https://www.forbes.com/sites/tomcoughlin/2014/12/17/making-computers-that-dont-forget/
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Making Computers That Don't Forget
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Making Computers That Don't Forget
The 2015 IEEE IEDM Conference (celebrating its 60th anniversary in 2014) as well as a Canon USA MRAM Forum this week gave interesting insights into the latest developments and expectations for solid state memory and storage technologies. Tom Coughlin is president of Coughlin Associates.
MRAM technology appears to be poised for adoption in discrete and embedded electronic products for many applications. According to a report this year by Coughlin Associates, the total available market for MRAM devices is projected to reach over $2 B by 2019. MRAM technology would provide a non-volatile memory replacement for fast but volatile static and dynamic RAM (SRAM and DRAM). These products are geared for important discrete as well as embedded memory applications. There are several companies working on these MRAM products including Avalanche, Crocus, EverSpin, Samsung and Toshiba . See below for a picture of a STT MRAM memory cell.
According to EverSpin Technologies, who presented at the Canon event and said that they had shipped over 40 M MRAM devices, MRAM applications include energy and metering, PLC automation, industrial control systems, RAID controllers, professional audio and automotive. MRAM technologies appears poised to show up in FPGAs from Altera and in HDD and flash memory based storage devices introduced by companies such as Smart Modular Technologies, Buffalo and in products using the NVMe and PCIe interfaces.
While challenges remain for ramping spin tunnel torque (STT) and related advanced MRAM technologies it is clear from the discussions at the IEDM as well as at the Canon Forum that many companies are involved in development of devices with low power capability and demonstrated endurance and speed. At the IEDM IMEC spoke about sub-20 nm MRAM for embedded memory applications and Samsung discussed challenges for creating Tera-bit-level STT MRAM.
This product development activity is driving the creation of manufacturing and testing tools and processes that will allow ramping MRAM production. Canon reveiled a roadmap at their Forum showing equipment and processes for volume production ramp of MRAM by 2016.
Resistive random access memory (RRAM) is another promising solid-state storage technology with the potential for displacing NAND flash memory sometime in the future. IEDM papers by Micron Technologies and Adesto Technologies looked at factors important in designing low noise and high endurance RRAM devices. Stanford announced a 3D chip architecture that combined logic layers on top of memory layers allowing very fast transport of information between the processing elements and the memory, see below.
Tohoku University was showing a similar 3D processor architecture where MRAM layers were combined with logic layers. Other development at the IEDM conference were a 16 GB RRAM paper from Micron, a flexible SONOS non-volatile memory from KAIST, a new version of phase change memory called Topologically Switching RAM (TRAM) and the use of porous silicon in a chip as a super capacitor to provide power to finish writing to non-volatile memories. Not all of these interesting technologies will make it to market, but they show important developments in non-volatile memory.
It is our expectation that todays volatile memories will be replaced by non-volatile memories in most applications within 10 years, resulting in major power savings, faster boot ups and new capabilities. With MRAM there is a possibility that with a move away from current to spin based circuits that processing and memory can be combined in the same device, creating even greater capabilities.
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9e9c8ea3d5fa108bcbecc2753900758b
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https://www.forbes.com/sites/tomcoughlin/2016/09/20/cloud-storage-pricing-mindset/
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Cloud Storage Pricing Mindset
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Cloud Storage Pricing Mindset
Mark Hurd, in his keynote at the 2016 Oracle Open World Conference, made a very cogent explanation of the factors that are driving the movement of enterprise applications and resources to the cloud. He said that IT spending today is basically flat at most companies and that the age of current IT enterprise IT equipment and applications is old at least in the Fortune 500 companies. The average age of Fortune 500 applications is 21 years old!
Furthermore corporate IT spending is primarily focused on keeping these older systems operating, with only about 15% earmarked for innovation. The funds for enterprise innovation are an easy target for emergency funding to keep the current infrastructure running. As a consequence, the incremental pressure on innovation budgets prevents effective innovation of in-house IT. The move to cloud-based services provides an affordable way to upgrade this aging IT and free up funds and resources for innovation. As a consequence, the largest cloud providers are growing 44% annually while overall IT spending is experiencing no growth.
Tom Coughlin Photo at 2016 Oracle Open World
Hurd projects that by 2025 80% of IT budgets will be spent on cloud rather than traditional IT. He thinks that by that date CIOs will spend 80% of their IT budgets on innovation rather than maintenance. Nearly all enterprise data will be stored in the cloud and enterprise clouds will be the most secure IT. The number of corporate owned data centers will drop by 80%. Increases in available bandwidth will reduce cloud latencies driving cloud services, including storage into more applications.
Cloud services, including storage, are priced by use rather than as a fixed asset. This moves cloud spending to an operating budget (Opex) rather than a capital budget (Capex). Several companies have even started to price local storage like cloud storage—by use rather than as a capital purchase. This pricing often is part of an overall cloud plan with local storage for low latency applications and cloud storage for higher latency and perhaps archive.
Oracle has taken this approach but so have companies such as Zadara (who combine public cloud services with local storage with charges based upon use of the storage) and Nimble Storage, who recently announced App-based pricing for storage on demand for their all flash and hybrid flash and HDD storage appliances.
Oracle also announced a major new Infrastructure as a Service (IaaS) offering that includes bare metal cloud servers that are charged per use and are dedicated to the customer. This means these servers can be quickly allocated and de-allocated to customers. They claim that their bare metal cloud servers are 11.5X faster and 20 percent cheaper than the fastest solution offered by the competition. Oracle Bare Metal Cloud Services are a high-scale public cloud offering and include bare metal cloud servers in a fully virtualized network environment. The innovative new services deliver high performance database-as-service, network block storage, object storage and VPN connectivity.
Tom Coughlin Photo at 2016 Oracle Open World
The bare metal servers offered are all Intel X5 with 36 core per server processor-based. Standard has no local disk and 256 GB of RAM. The High I/O version has 12.8 TB NVMe SSD and 512 GB of RAM. The Dense I/O version has 28.8 TB NVMe SSD and 512 GB of RAM. Oracle’s first Bare Metal Cloud IaaS center will open in Phoenix in the next few weeks. They plan another North American center by the end of the year and look to move into international markets in 2017.
The Oracle bare metal cloud servers offer access to different types of storage. These include local NVMe Storage with 4.2 M random 4K read IOPS and 2.6 M random 4K write IOPS at a lower cost than AWS pricing. They also offer block storage over iSCSI protocol with 256 GB and 2 TB volume sizes and 1,500 IOPS per volume. This can back up to high durability object storage and easily restored to a new volume. The object storage is located at the same high performance network as compute with superior latency and throughput. This object storage is best for big data workloads.
Tom Coughlin Photo at 2016 Oracle Open World
Cloud based services and infrastructure are poised to transform the IT requirements of organizations over the next 10 years. There is a major push to create cloud-based services, even offering the performance of bare metal servers. Storage will play a major role in the growth of cloud services including NVMe SSDs, block storage and object storage.
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6d9f8a69f9eef0bd186ce44d0e7da5b5
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https://www.forbes.com/sites/tomcoughlin/2017/08/03/metadata-is-a-communications-channel-to-the-future/?sh=17f8898e68f2
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Metadata Is A Communication Channel To The Future
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Metadata Is A Communication Channel To The Future
Finding something you have stored, even if what you have stored is bits of information, is a challenge. If the content is text, you can do a text search, but if it is sound or video, that can be more difficult. You can create metadata (information about information that remains associated with the original data) that can be used to find content later, but unless the metadata is organized according to some sort of standard format, even knowing the right metadata to find stored content later can be a challenge.
Fortunately, metadata standards for professional content seem to be converging, making the use of metadata a more critical element in a modern media repository. By adding metadata to data, the data becomes easier to find and use. Metadata is a communications channel to the future, perhaps even more...
Metadata Is a Love Note to the Future https://www.flickr.com/photos/sarahseverson/6245395188/in/photostream/ based upon a Jason Scott talk in Sept 2011
In many modern professional video cameras GPS location detection, as well as time information, can be added as part of the content metadata. This is important metadata, but historically much metadata on what happens in a piece of content or who is involved is entered manually. This can take time and can be subject to error.
There are software tools available to convert speech to text and for image recognition, which can create metadata about the content that it describes. These tools use various types of artificial intelligence technologies such as neural networks that can make probable guesses at words and people from audio and video content. As these technologies are exposed to more and more content and as they learn what is right and wrong, they become increasingly accurate.
Recognizing speed and people in images is just the start of what AI can do to help people manage large amounts of rich content. As processing power available in the cloud and locally increase automated metadata generation from the raw content can become more sophisticated. In addition to creating metadata on what was said, machine learning programs can analyze the frequency components in speech to recognize who is speaking. This can be used in combination with image recognition to improve the accuracy of participant metadata in a video scene that includes audio.
Video image recognition can also include recognition of backgrounds, this can be aided by GPS data captured with the original content. It can also be used to recognize the types of action going on in a set of images. For instance, AI can determine if there is motion in the video (perhaps determining if a scene is being made in a car or are the participants all sitting in a single room). All of this information can become part of the metadata that can be used for finding and managing content.
In the future, AI can determine the emotions and activities of the different participants in a scene, making that information available for accessing and managing the content. AI could even help with content editing that matches actions, participants, dialogs and other important characteristics to get the best version of a scene for every participant with the help of automatic tools that eliminate any discrepancies in the various shots.
Ultimately AI could even put together participants in a production who never met or worked together, modeling the historical content to power a realistic avatar actor. At the very least AI will enable faster editing tools and offers the possibility of new special effects created at low cost. AI will be particularly useful for 360-degree virtual reality video work, where the total metadata describing everything going on in the shots can be daunting.
Jaunt One 360-Degree Video Camera for VR Video From Jaunt One Marketing Materials
More down to earth, AI improves finding and organizing unstructured digital content, whether that is professional video, digital surveillance video, health and genomic data or engineering and scientific content. AI can be used for intelligent allocation of content into a storage hierarchy depending upon the probability of need. It can also be used for making sure that content is protected according to an organization’s policies. AI will make Media Asset Management (MAM) more useful, and a key to extracting and creating value from a library of media assets.
If you are interested in finding out more about the future of metadata creation and management using artificial intelligence, please come to a Webinar that I will be giving on August 24 at 11:00 AM PT with Quantum. You can find out more here.
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9af62ccf96af5861b852b9620bc8ea29
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https://www.forbes.com/sites/tomcoughlin/2018/02/27/distributed-ledgers-could-revolutionize-content-storage/
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Distributed Ledgers Could Revolutionize Content Storage
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Distributed Ledgers Could Revolutionize Content Storage
At the 2018 HPA Retreat in Palm Desert, CA Michelle Munson and Serban Simu, founders of Aspera, an internet content transfer acceleration company (bought by IBM in 2014) revealed some details and a demonstration of what their new startup company, eluv.io, plans to bring to the media and entertainment, and other industries, that need to move massive amounts of data. What they showed was stunning and could change the nature of how we use and move content, perhaps changing the current conception of cloud storage and other services.
Michelle and Serban see building a new security and trust framework that is decentralized and programmable, using distributed ledger (blockchain) technology. This allows reliable intelligent routing of content similar to the way the internet protocols (TCP/IP) works, allowing an enormous reduction of network edge caching requirements, intelligent routing using machine learning and just in time rendering of content requiring no duplication.
Advantages of the Content Fabric Photo by Tom Coughlin
The use of AI, ML, blockchain ledgers, processing power and GPUs, cryptographic theoretical frameworks and the internet video explosion enable an entirely new way to look at content storage and delivery models. These technologies are far beyond those described by Van Jacobson in his 2006 presentation, "A new way to look at Networking."
Michelle and Serban have created the beginning of a software content fabric, consisting of a single software stack on hosts (content nodes) for content and metadata where content and metadata is distributed and decentralized and nothing is shared (copied). There is one instance of the bytes for all formats and end-products are dynamically rendered from the original source, on demand. The content nodes are not trusted but they are measured and publically rated for behavior and performance. The content itself is always encrypted for protection and access to content is mediated through blockchain transactions, that obey programmable contracts-enabling business use cases.
eluv.io Software Content Fabric Photo by Tom Coughlin
No single entity controls or decides anything (there is no "master"). The control is in the protocol and the data, rather than in a "master." Decisions are made using a decentralized consensus and the system is open to new entities and has no point of failure to bring down the system. The "Nothing shared" architecture allows capacity to grow with the size of the network, like the Internet. No file copies and JIT rendering from native sources makes the system inexpensive and efficient. The use of distributed ledgers allows for native commerce that can handle all kinds of content-related transactions and allows a public audit trail as well as privacy (using secret certificates).
The result of such a networked storage architecture could fundamentally change the concept of centralized cloud storage and Content Delivery Networks (CDNs) and simplify asset management systems and lead to new powerful workflow tools. Michelle and Serban demonstrated content fabric using a single IMF master (IMF is a SMPTE standard) with English, Japanese and Italian language tracks for delivery to different markets. A content playlist (XML) describes geo and language-specific renderings. The content is distributed to end users using the content fabric (e.g. as multi-bitrate DASH/HLS). Users would get the quality of delivery that they pay for and are charged according to bandwidth delivered per a Service Level Agreement (SLA).
Dynamic Content Rendering with IMF Photo by Tom Coughlin
The eluv.io content fabric technology could revolutionize the way that content is stored and distributed on the Internet. Use of this technology would revolutionize our concept of cloud storage, making content storage single instance and distributed, significantly lowering the cost of content storage, securing the content and allowing automated business transactions using distributed ledgers. This may be the future of content storage and delivery.
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bd6bae97e0b83a4e5b4239c6f5be057c
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https://www.forbes.com/sites/tomcoughlin/2018/07/21/how-much-data-in-the-world-cup/
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How Much Data In The World Cup
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How Much Data In The World Cup
I recently worked with Matt Starr, Spectra Logic’s CTO and his staff to explore how much data is stored in the FIFA World Cup Matches. The digital storage requirements of live sports events are a big driver of media technology. These events use many cameras per game and eventually you may be able to enjoy your favorite live sports event in virtual reality—looking at the amount of digital storage required for today’s games can give us a taste of how much this could grow in the future.
Soccer Virtual Reality From Spectra Logic
Here are some details. There were 64 total matches with 300 broadcasters showcasing live matches to 210 countries. In the months leading up to the World Cup, FIFA announced that this would be the first one to have all 64 matches shot in Ultra HD, with HDR to boot. 37 cameras covered every single match. From these 37, eight were shooting in UHD/4K format. Eight cameras were there to purely capture footage to be shown in super slow motion and two other cameras are ultra-motion cameras.
Managing all these cameras requires an advanced networking setup. According to the SVG blog: The UHD/HDR efforts at the FIFA World Cup have two layers of production formats in use: a core layer comprises cameras operating in 1080p/50 SDR mode (REC.709) with HD graphics; an enhanced UHD layer operates at 2160p/50 HDR (BT2020) without graphics. The HDR production format is OETF Slog3/Live, and the UHD feed (available only at the International Broadcast Center) relies on quad 1080p/50 at 3 Gbps to create the 4K-resolution image.
Spectra Logic calculated that the entire 2018 FIFA World Cup generated, at a minimum, 5.36 PB of raw video footage alone. This number considers only a single copy of the raw footage from each camera in each stadium, during the average 60 minutes of gameplay. Other footage generated from the games not included in Spectra’s calculation includes additional coverage from news agencies, footage which includes overlays such as scores and times, or the multiple copies of the footage which will be created for archive purposes, not to mention all pre- and post-game footage and players or team feature footage. Below are details on this calculation.
World Cup Broadcast Storage Calculation Coughlin Associates and Spectra Logic
The total storage requirements are probably significantly higher. All game broadcasts need to be redubbed in their native language (32 countries and 15 different languages). Using SMPTE’s IMF standard for these dubs would save on digital storage requirements.
Many fans will have captured photos and videos of the game, that will be stored in portals throughout the world, including in the cloud. Storage in the cloud will probably result in multiple copies of each video due to their data protection policies. If we assume that 80% of the stadium (45,000 seating capacity on average) are taking photos and videos and that each photo uses 20 MB and each video is 100 MB and that these active viewers take 1-20 photos and 1-5 videos, then each game could generate something like 14.6 TB. With 64 matches, that would generate about 934 TB (close to 1 PB) of consumer generated content for the tournament.
Big sports events are attracting the latest technologies to give fans the ultimate sports experience, particularly for home viewers. Sophisticated viewing and ultimately VR viewing requires multiple high-resolution cameras. The 2018 World Cup may have generated over 6 PB of total content. Future sports events will require even more.
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62d13a7d5a5b5ec35585497d9c7a01b7
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https://www.forbes.com/sites/tomcoughlin/2018/11/06/20-tb-hamr-hdds-by-2020-more-later/
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20 TB HAMR HDDs By 2020, More Later
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20 TB HAMR HDDs By 2020, More Later
Western Digital (WD) announced a 15 TB shingled magnetic recording (SMR) HDD that increases tracks per inch (TPI) to achieve higher areal density. The 15 TB Ultrastar DC HC620 host-managed SMR HDDs are targeted at hyperscale and cloud storage customers as well as video surveillance applications where vast amounts of cooler data are stored, where an SMR drive will mostly be used for write once, read occasionally applications.
In 2017 both Western Digital and Seagate Technology announced that they will be introducing higher capacity HDDs using energy assisted magnetic recording technology that goes beyond the areal density limits of conventional perpendicular recording (CMR). WD was going to use microwave assisted magnetic recording (MAMR) and Seagate was going to use heat assisted magnetic recording (HAMR).
Neither company had indicated that they had shipped any of these products. A recent report from The Register with slides from an A3 Tech Live event in London projecting a 20+ TB HDD in 2020 using HAMR along with a 16 TB CMR HDD in 2019/2020. The forecast slide shows areal density doubling every 2.5 years with a 36 TB drive in 2021/2022 and 48 TB in 2023/2024. Higher capacities, perhaps 100 TB, are implied after 2025.
Seagate HAMR HDD Plans Seagate London Presentation
Seagate also said that it will introduce its first Mach.2 multi-actuator HDDs in 2019 as well as capacity-optimized, and lower performance, SMR drives. These products will both use HAMR technology to follow the areal density growth projected above. According to the Register, Seagate said that it would be 13 to 25 months before the first HAMR drives are available in volume.
Seagate Multi-actuator versus SMR Drive Roadmap Seagate London Presentation
Hard disk drives are ready for an areal density boost in order to remain competitive versus other storage technologies, such as SSDs. According to our latest HDD shipping product areal density graph, shown below (https://tomcoughlin.com/product/digital-storage-technology-newsletter/), HDD shipping areal density growth has been pretty static since the end of 2015. This current low AD growth period is almost as long as the period from mid-2011 through early 2015. The straight lines in the figure indicate various continuous AD annual growth rates starting in Q1 2000.
Shipping HDD Areal Density Trends Coughlin Associates
The capacity growth in HDDs has been mainly through adding more disks and heads. The actual growth in shipping product areal density has remained essentially static since late 2015. Energy assisted magnetic recording is the industry’s path to future AD growth. However we don’t expect to see HDDs with this technology in production volume until 2020 according to the latest announcements.
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632127cf33a962a3f2cf73b248c4fcd2
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https://www.forbes.com/sites/tomcoughlin/2019/07/24/where-do-you-backup-data/?sh=4a76481242f0
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Where Do You Backup Data?
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Where Do You Backup Data?
Many people are backing up their personal or business content to the cloud but there are still many folks who are uncomfortable with having the only copy of their data on someone else’s storage system. According to a long-running survey published by BackBlaze (an online backup service), 4 out of 5 computer owners have backed up all the data on their computers in 2019, up 4% from 2018 and up 15% from 2008 (the first year of the survey).
In 2008 35% of computer owners never backed up their computers and in 2019 that was down to 20%. In addition, of those who backup, more people back up more often than they did in the past surveys. The table below compares the original 2008 survey backup frequency data (for those do did backup their computers) compared to 2019.
Backblaze Backup Frequency Survey History Image from Backblaze Blog
According to the survey, among those who have ever backed up all data on their computer, about 42% use an external hard drive or NAS device for their primary backup, with the balance using the cloud as their primary backup method. Although not mentioned in the survey, many folks may backup to local storage as well as the cloud. I know that I use both types of backup to try and make sure that my data is safe.
For those who use local storage for backing up their data, either as the primary of secondary backup, there are many choices in the market. In this blog we look at three recently announced products. One of these is the USB attached Secure Drive that offers hardware encrypted access to data for privacy and security. Another is the Kwilt 3 personal cloud hub. The third is the Amber personal hybrid cloud platform. The Kwilt 3 and Amber products offer remote access to data and thus serve as NAS devices.
The USB Secure Drive BT offers up to 5 TB HDD or up to 8 TB SSD storage with AES256-bit XTS hardware encryption. It is FIPS 140-2 level 3 validated, which means it meets the Federal Information Processing Standard Publication 140-2 US government computer security standard for cryptographic storage modules. The product ties to an application on your smartphone that can turn access to the device on or off through wireless one or two factor authentication. The device can also perform a remote wipe when the device next connects to an Internet accessible network. Remote management is allowed through a separate subscription.
Secure Drive BT Secure Drive Product Image
The Kwilt 3 advances the original Kwilt personal cloud hub. The product is particularly focused on automatic backup and storage of photographs allowing local and remote access. The Kwilt 3 offers three USB ports to connect hard drives and USB memory sticks for storage expansion as needed. It also has a USB 3.0 input port and an SD card reader to import photos, videos and other files into one of the connected storage drives. The Kwilt 3 automatically sorts a photo collection and makes it easy to find photos of your choice using smart filters such as recently taken, timeline, location and photo source.
Kwilt 3 Personal Cloud Hub Kwilt 3 Product Image
The Amber Personal Hybrid Cloud Storage from Latticework has HDD storage capacities of 1-2 TB and includes a local wireless and wired Ethernet router. The device allows end-to-end encrypted remote access to material stored in the device using an Android or iOS application and can backup data from other devices to share and access on through wireless or Internet connection. Data at rest is encrypted. There is a focus on photos and videos and the device allows wireless streaming and casting your data or can be connected to a display using an HDMI cable. Built in AI capability processes and organizes stored data in real-time. The device has dual HDDs for mirrored storage to prevent data loss if one of the drives fails. Intelligent software provides early fault detection and alerts if problems develop.
Latticework Amber Personal Hybrid Cloud Latticework Product Image
An increasing number of people backup their personal and business data. Many use the cloud and many backup locally, and some use both types of backup for additional security. Products from Secure Drive, Kwilt and Latticework can give you greater security and features that help you find and use your backup content.
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b57fa9da3e2c121e71ab855c031f7be0
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https://www.forbes.com/sites/tomcoughlin/2020/06/04/advances-enable-36b-emerging-memory-market-by-2030/
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Advances Enable $36B Emerging Memory Market By 2030
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Advances Enable $36B Emerging Memory Market By 2030
This article presents some information from a recent report on emerging nonvolatile memories projected growth as well as projections for the corresponding growth in capital equipment to manufacture these memories. We also include some insights from the 2020 IEEE International Memory Workshop (IMW) on various emerging memories and especially magnetic random access memory (MRAM).
Emerging memories are well on their way to reach $36 billion of combined revenues by 2030. That’s the finding of a newly-released report by Objective Analysis and Coughlin Associates: Emerging Memories Find Their Direction. The emerging memory market will grow to this $36 billion level largely by displacing current technologies including NOR flash, SRAM, and DRAM. New memories will replace both standalone memory chips and embedded memories within microcontrollers, ASICs, and even compute processors.
3D XPoint memory’s sub-DRAM prices are expected to drive revenues to over $25 billion by 2030, while stand-alone MRAM and STT-RAM revenues will grow to over $10 billion, or over two-hundred eighty-five times 2019’s MRAM revenues. In addition, ReRAM and MRAM will compete to replace the bulk of embedded NOR and SRAM in SoCs, fueling even greater revenue growth. The chart below shows projected baseline petabyte memory shipments from 2018-2030.
Memory Petabyte Shipments History and Projections to 2030 Image from Coughlin Associates
The industry’s migration to emerging memory technologies will require a significant increase in capital equipment spending. Total MRAM manufacturing equipment revenue will grow to about sixteen times its 2019 total of about $44 million to reach $696 million in 2030. The chart below shows low, baseline and high MRAM manufacturing equipment spending estimates from 2019-2030.
Capital Equipment Spending Projections, 2019-2030 Image from Coughlin Associates
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This report examines PCM, ReRAM, FRAM and MRAM as well as a variety of less mainstream technologies, explaining each one’s competitive strengths and weaknesses. These emerging nonvolatile memories are poised to enable a world of pervasive high-performance networks, internet of things (IoT) and artificial intelligence (AI) applications.
The IEEE International Memory Workshop has been going on for many years. This year it was supposed to take place in Dresden, Germany but because of COVID-19 it was a well-run virtual event. Tutorial, keynotes and regular technical sessions covered topics including the evolution of dynamic random access memory (DRAM), 3D NAND, high performance flash memory, resistive RAM (RRAM), ferroelectric RAM (FRAM), magnetic RAM (MRAM), phase change memory (PCM) as well as sessions on embedded memories and computing in memory. Presentations on MRAM and other emerging memory technologies show why the projections for the emerging memory and manufacturing capital equipment market will grow.
Creating a memory where the data doesn’t dissipate during a reasonable time takes careful tuning. Thibaut Devolder, from Centre de Nanosciences et Nanotechnologiers in France, in association with imec gave a tutorial on spin tunnel torque (STT) MRAM operation including information on ways to tune for optimal minimum energy performance and persistence. Note that the amount of persistence required (how long the data should remain in the memory without refreshing), depends upon the application.
For some applications hours or days are fine, for other uses the data should remain and be readable on the device for many years. The figure below from Thibaut’s talk shows some of the major developments and requirements to make a large sandwich of thin layers of magnetic and non-magnetic materials work as an STT MRAM memory.
Developments of STT MRAM Image from 2020 IMW
In order to make an STT MRAM work for a particular application the mechanism for reversing the magnetization of the free layer and thus changing the resistance of the memory cell (to store new information) must be understood and controlled. The tutorial covered the way that magnetic reversals start by procession of the magnetic spins of electrons in the materials, initially started by thermal energy fluctuations and often completed by domain wall movement, if the memory cell is large enough.
Another important consideration for an STT MRAM for many applications is being able to withstand temperatures used in complementary metal oxide semiconductors (CMOS) annealing as well as soldering components to breadboards. Materials and process technologies using significant amounts of the element, Boron, have enabled MRAM thin film stacks that can withstand 400 degree-C temperatures, enabling them to be used in many more applications.
Looking at the bigger picture of memory development, Arnaud Furnemont from imec in Belgium, discussed the role of MRAM, various technologies being pursued as well as the development of other nonvolatile memories that are being produced or developed to enable higher density memories that displace current memory and storage products. The figure below shows a storage/memory hierarchy and how various memory and storage technologies (including various MRAM, RRAM, FRAM, PCM, carbon nanotube as well as DNA storage) are attempting to find a role in that hierarchy. It is a rather busy chart!
Emerging Memories and their Use in the Storage/Memory Hierarchy Image from 2020 IMW
Arnaud then focused on developments in spin orbit torque (SOT) MRAM and voltage-controlled MRAM (VCMA), which could rival the performance of high speed static RAM (SRAM), used in many embedded applications. He spoke on three approaches for the use of various MRAM memories, including embedded as well as stand-alone applications, as shown below. Note that a two-terminal selector MRAM could enable crosspoint MRAM memory, increasing the memory density by stacking cells in the third dimension.
Three applications for MRAM Image from 2020 IMW
The imec speaker said that emerging memory, combined with new software and new architectures, can move embedded system design to the next level by minimizing power use and optimizing the energy to function ratio of the device.
In the 2020 IMW sessions there was additional discussion of MRAM developments. Zihui Wang from Avalanche Technology spoke about their MRAM developments. He said that the company is making stand-alone MRAM with a foundry partner (UMC) and that in 2020 they would have 1-16 Mb persistent higher-level SRAM replacement 108 MHz maximum, QSPI 1-16 Mb, 35ns parallel 1-32 Mb and 35ns parallel 256 Mb-1Gb products. The company has also licensed 22nm 8-64 Mb micros to a foundry for early evaluation production in 2020. A transmission tunneling microscope (TEM) image of an Avalanche MRAM device and some key parameters is shown below for Avalanche eFlash and SRAM replacement products.
Avalanche MRAM Parameters Image from 2020 IMW
Zihui also said that their MRAM devices can be used in applications (such as automotive) where several solder-reflow operations are required.
Along with other emerging nonvolatile memories, MRAM is also being considered for analog applications as memory elements in artificial neural networks. A talk by M. Mansueto, et. Al from SPINTEC, CEA, CNRS and the Univ. of Grenoble Alpes in France talked about how resistive elements made with tunneling magneto resistive (TMR) devices could be used for this type of AI processing.
MTJs in Neural Networks Image from 2020 IMW
Emerging memory developments enable nonvolatile memory devices that will replace current volatile memory, as shown at the 2020 IEEE IMW. These developments will result in growth of emerging memory for standalone and embedded applications that will create $36B in revenue by 2030.
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2b6029f292e2dbdcd8216a992eca6cd8
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https://www.forbes.com/sites/tomcoughlin/2020/10/08/nvidia-introduces-high-performance-networking-and-storage-bluefield-dpus-for-data-centers/
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NVIDIA Introduces High Performance Networking And Storage BlueField DPUs For Data Centers
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NVIDIA Introduces High Performance Networking And Storage BlueField DPUs For Data Centers
3d Rendering with server room programming data design element., Concept of big data running with ... [+] computing technology. getty
During the NVIDIA Global Technology Conference the company announced its Bluefield-2 Data Processor Units (DPUs) based upon its Mellanox acquisition’s Bluefield networking and NVMe storage technology, see below. The company’s new DPU represents a new domain specific computing technology that the company hopes will be as much or more successful than its GPU business.
NVIDIA BlueField-2 Data Processing Unit NVIDIA DPU Product Announcement
The NVDIA BlueField-2 DPU is enabled by the company’s Data-Center-Infrastructure-on-a-Chip Software (DOCA SDK). The company also announced a partnership with VMware to power vmware’s Project Monterey. VMware’s Project Monterey was announced in late September at its VMworld 2020 conference as a re-architecture of VMware Cloud Foundation (VCF). It is a continuation of an effort started in 2019 to integrate Kubernetes containers into the fabric of vSphere that resulted in a single platform for running VMs and containers, with a common operating model.
Because of the slowing in microprocessor scaling, specialized domain specific processors (often called accelerators) have proliferated to relieve workloads on generalized CPUs. Project Monterey leverages a new hardware technology called SmartNIC, (NIC stands for network interface card) designed to deliver maximum performance, zero-trust security and simplified operations to VCF deployments. Implementing Project Monterey moves functionality that used to run on the core CPU to run on the SmartNIC. These SmartNICs enable bare metal operations systems and applications. The image below shows a block diagram of a Project Monterey SmartNIC. The NVDIA BlueField-2 DPU modules are one of the Project Monterey SmartNIC partnerships.
VMware's SmartNIC Block Diagram VMware SmartNIC Blog
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NVIDIA’s CEO and founder, Jensen Huang, during his introductory keynote, spoke about the company’s DPU and its supporting Data Center on a Chip Software (DOCA SDK) that enables developers to create DPU-based applications. The company said that “DOCA provides developers a comprehensive, open platform for building software-defined, hardware-accelerated networking, storage, security and management applications running on the BlueField family of DPUs.”
Jensen revealed the company’s three-year DPU roadmap (out to 2023, as shown below). Off-loading processing to a DPU can result in overall cost savings and improved performance for data centers. Jensen said that “A single BlueField-2 DPU can deliver the same data center services that could consume up to 125 CPU cores. This frees up valuable CPU cores to run a wide range of other enterprise applications.”
NVIDIA's BlueField DPU Roadmap to 2023 NVIDIA's GTC Keynote Presentation
In addition to VMware, NVIDIA said that it also has DPU partnerships with Red Hat, Canonical and Check Point Software Technologies. NVIDIA’s current DPU lineup includes two PCIe products, that the company described below.
The NVIDIA BlueField-2 DPU, which features all of the capabilities of the NVIDIA Mellanox® ConnectX®-6 Dx SmartNIC combined with powerful Arm cores. Fully programmable, it delivers data transfer rates of 200 gigabits per second and accelerates key data center security, networking and storage tasks, including isolation, root trust, key management, RDMA/RoCE, GPUDirect, elastic block storage, data compression and more. The NVIDIA BlueField-2X DPU, which includes all the key features of a BlueField-2 DPU enhanced with an NVIDIA Ampere GPU’s AI capabilities that can be applied to data center security, networking and storage tasks. Drawing from NVIDIA’s third-generation Tensor Cores, it is able to use AI for real-time security analytics, including identifying abnormal traffic, which could indicate theft of confidential data, encrypted traffic analytics at line rate, host introspection to identify malicious activity, and dynamic security orchestration and automated response.
BlueField-2 DPUs are sampling now and expected to be featured in new systems from leading server manufacturers in 2021. The higher performance BlueField-2X DPUs are under development and are also expected to become available in 2021. DOCA is now available on GitHub for early access.
Domain specific processors (accelerators) are playing greater roles in off-loading CPUs and improving performance of computing systems. In data centers, NVIDIA’s DPU with its DOCA software, could be an important element in recreating tomorrow’s data centers running at higher performance and with greater efficiency.
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5a673e5c5de64838ec04c992bfeb53c3
|
https://www.forbes.com/sites/tomcoughlin/2021/01/09/digital-storage-projections-for-2021-part-3/?sh=46b327392abc
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Digital Storage Projections For 2021, Part 3
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Digital Storage Projections For 2021, Part 3
Hand touching pass thru infographic to 2021 year with blue bokeh and dark background. New year ... [+] change concept. getty
The great pandemic of 2020 taught us about the importance of digital connections and compute, memory and networking in data centers that enabled us to work from home. The trends toward remote work created during the pandemic will continue (to some extent) even after the pandemic has ended. According to a recent survey report from INAP, “54% say… the pandemic has motivated their organization to move applications and workloads off-premise. IT pros also shared the biggest challenges they expect to face in 2021: adapting infrastructure and networking strategies for long-term remote work or a return to the office.”
Some industries were particularly impacted by the pandemic and had to scramble to find ways to stay in business, aided by storage technology. For instance, live video projection was shut down or significantly constrained throughout much of 2020. According to David Feller, VP or product management and solutions engineering at Spectra Logic, “The pandemic has resulted in media and entertainment (one of the industries hardest hit by COVID-19), becoming almost completely dependent on reusing pre-existing content, making access to archive absolutely critical.”
This move to supporting new working models, provide ready access to archives plus the growth of machine to machine data generation and data movement (with the growth of IoT, AI and other big data applications) will drive many trends in the development of digital storage and memory systems. This third and last part of my Digital Storage Projections for 2021 blog will explore trends in storage/memory systems in 2021 and beyond.
We will explore developments in general storage architectures (NAS, SAN and object storage), NVMe and NVMe-oF (over fabric), as well as CXL and GenZ and talk about how these technologies will enable disaggregated and composable data centers. We will also discuss computational storage and in-memory processing and the general growth of distributed processing using special and general-purpose accelerators. Finally, we will look at developments and needs for storage security to address ransomware and other cybersecurity attacks. We will include some quotes from industry players as well.
NAS (where data is accessed as files) is generally associated with unstructured data such as video and medical images, while SAN is generally associated with defined (structured) workloads such as databases. High performance scalable NAS also has an important role in storage for AI and big data analytic applications. However, object storage, the most common storage in large data centers is also used for unstructured data. Scale out NAS is sometimes able to compete with object storage scalability. In addition, many software platforms, designed for file level access, give some advantage to NAS or file-access to data through gateways or other approaches for accessing object storage. We expect growth in both object storage and scale out NAS in 2021.
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Object storage in data center applications is often used in containerized workflows that can be spun up or spun down as needed. Creating and managing persistent storage of containerized applications is becoming popular with many different tools. Some of these tools are also part of storage solutions that can span multiple hybrid data centers or cloud storage. According to Zedara, “The need to move data from on-premises to cloud or between clouds is a challenge that can be overcome with containers – and having a common platform will enable containerization to go to new levels in 2021”. 2021 will see growth in storage and memory developments for containerized applications as well as multi-cloud environments.
At the same time that cloud storage is growing, it is not entirely displacing on-premises storage. According to Jon Toor, CMO for Cloudian, “All public cloud providers now offer on-prem solutions, which positions public cloud and on-prem as environments that should work in combination, rather than being viewed as an either/or decision. In addition, enterprise storage providers have upped their cloud game, building new solutions that work with the public cloud rather than competing with it. As both sides move towards the center, the inevitable result is that organizations will come to view public cloud and on-prem as two sides of the enterprise storage coin.” In addition to traditional on-prem and cloud, with the rise of IoT and higher speed wireless networks more storage and processing at the network edge and endpoints is becoming common in 2021 and beyond.
Storage tiering that optimizes storage cost and performance puts only the most accessed data on the fastest (usually SSD) storage devices. As the amount of data grows, the amount of data in accessible or active archives will increase. According to Shawn O. Brume, Global Hypergrowth Storage OM at IBM, “Only 33% of IT budgets shrunk as a result of the 2020 challenges, most budgets aligned spending to mobile access and security enhancements. While some infrastructure changes are on hold, storage requirements continue to grow. Active Archives are the most efficient method of reducing cost of infrastructure without recognizing penalties. The growth created in cloud storage during the pandemic will lead to an increased spend on active archives by Hyperscale and Hyperscale-lite storage providers.”
NVMe is now the dominant storage interface for new SSD storage systems. NVMe works on the PCIe physical bus and thus its performance will continue to advance with future PCIe bus advances. NVMe over fabrics, such as Fibre Channel and Ethernet, are allowing wider use of remote direct memory access (RDMA) of various sorts as well as helping to enable storage pooling and server disaggregation (including distributed computing approaches, often called computational storage, discussed below). NVMe based storage solutions will continue to dominate in 2021 with faster connectivity as PCIe Gen4 and early Gen5 buses become available. The figure below shows how disaggregated and composable infrastructure differs from traditional converged infrastructure.
Comparison of converged versus composable infrastructure Intel Presentation, August 2020
The CXL interface also runs on the PCIe bus and unlike the traditional memory channel on computers, supports memories with differing characteristics (heterogenous memories), for instance Intel’s Optane as well as DRAM, but possibly other memories as well. CXL is being touted as providing the means to disaggregate and pool memory and will also lead to distributed processing close to memory, often called in-memory compute.
The CXL initiative has also joined with the GenZ initiative, with a general consensus of using CXL inside a box and GenZ for box to box and rack to rack connectivity. CXL and GenZ will likely continue in the early development and demonstration phase through 2021 with early products available in 2022 or later. The figure below from a VMWare presentation at the 2020 Persistent Memory Summit shows CXL or GenZ for persistent memory pooling serving a couple of servers.
Showing use of CXL and GenZ to pool heterogeous memory Image from VMware Presentation at the 2020 PM Summit
Computational storage drives (CSDs) brings processing closer to where the data is stored, either in the storage media itself or in the media controllers. In addition, adding additional intelligence in a storage network, e.g. with Mellanox’s latest generation of Smart NICs provides new distributed processing options. Moving processing closer to the storage reduces the time to process data and also reduces energy consumption from moving data between processors and storage. All these computational storage approaches are using NVMe and NVMe over fabrics. The image below from SNIA shows various approaches to bringing processing closer to the stored data.
Examples of computational storage Image from SNIA
Computational storage was originally developed to off-load storage-centric functions from a computer system CPU. These initial uses include data compression, data encryption and RAID control. However computational storage with more sophisticated processors can perform more advanced data analysis functions closer to the data and thus faster than if a CPU was used for this data analysis.
Computational storage can use ASICs or FPGA domain specific processors (or accelerators). SNIA defines fixed computational storage services and programmable computational storage services. The fixed services perform dedicated services such as data compression, data encryption or simple RAID management. The programable version can run a host operating system, usually Linux and is more flexible in the local processing that it can provide. In 2021 we expect to see the greater use of storage systems with programmable computational storage services and continued use of fixed services both in hyperscale and enterprise applications.
In addition to changes in basic storage hardware, storage software will increasingly use AI tools for storage management. According to Shridar Subramanian, CMO of StorageCraft, “Cutting-edge storage tools increasingly rely on AI and machine learning to automate the data backup process. Given the exploding size of enterprise data, these intelligent tools will become vital for maintaining an efficient backup process that can quickly and effortlessly react to changing requirements while saving untold hours on manual backups.”
With many employees working at home, organizations with large amounts of valuable data have been more vulnerable to various hacking and malware attacks. Among these are ransomware attacks, where the user’s data is encrypted and the data is only released (if at all) after a ransom is paid. Storage companies have responded by pointing out that having an air gap between some storage and the networked storage, such as with magnetic tape backup, can save the loss of lots of data during an attack.
Not having sensitive data on accessible hardware is an important way to protect that data. Drew Daniels, CISO and CIO of Druva said, “A strong data protection architecture will be key to ensure endpoints aren’t cluttered unnecessarily with sensitive or confidential data like PII. Instead, the focus should be on backing up such data, and then restoring it temporarily at a future time, if and when required.”
Other solutions are WORM and immutable data backups where encryption and other changes in data is prevented. According to Cathleen Southwick CIO for Pure Storage, “In 2021, regulatory bodies will enact stricter data privacy laws for consumer protection, and CIOs will make security their topmost priority and invest in confidential computing, the virtual private cloud, and other secure infrastructure.”
Also, in general, since data is kept on digital storage, improving the security of data movement is an important area of development as well as ways to assure that some sort of backdoor is not built into the hardware. Control of the component supply chain and ensuring the provenance of components using technologies such as distributed legers will be an important element in storage system security. In addition, there is much work going on to establish roots of trust in storage components and storage systems. We think that, after the security breaches and malware attacks in 2020, that 2021 will see a major emphasis in developing more comprehensive storage system security.
2021 will see continued growth of storage in data center to on-premises, the edge and end points to support remote work and the growth of IoT and AI workloads. NVMe and NVMe-oF will be commonly used in storage system with continuing development of CXL, GenZ and other memory fabrics. Computational storage will demonstrate useful applications and storage security will be a big focus to secure valuable institutional data.
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https://www.forbes.com/sites/tomcoughlin/2021/01/20/2021-ces-consumer-storage/
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2021 CES Consumer Storage
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2021 CES Consumer Storage
Consumer Electronics getty
The 2021 Consumer Electronics Show (CES) was a virtual event and very different from past physical events. The show had a focus on ADAS and autonomous vehicles, IoT and especially technologies for enhancing health and safety, brought front and center due to the COVID-19 pandemic. The exhibits were virtual and many companies, normally exhibiting or at least having meetings in hotel suites in Los Vegas were not participating in the 2021 show.
In particular, storage companies such as Seagate and Western Digital were mostly absent from the 2021 show, but others were at the show, including companies like Kioxia, Kingston, OWC, Biwin, Quantum and NetApp. Let’s look at some of the storage and memory products shown at the 2021 CES as well as some technological developments, particularly on immersive video, that will drive future storage growth from the CES as well as the 2021 IEEE International Conference on Consumer Electronics (ICCE).
We shall do so in two parts, with this blog looking at consumer-oriented solutions and the second blog focusing on immersive video developments as well as enterprise and data center storage.
The USB Implementers Forum was at the 2021 Pepcom event, talking about USB Gen 4 (USB4). This was based on the Thunderbolt 4 protocol from Intel. USB4 includes two-lane operation using existing USB Type-C cables and up to 40Gbps operation over 40Gbps certified cables. It also supports multiple data and display protocols that effectively share the maximum aggregate bandwidth and backward compatibility with USB 3.2, 2.0 and Thunderbolt 3. USB4 also offers up to 100 W power via USB power delivery (PD) 3.0. The Samsung Galaxy S20 series were reported to be the first smartphones to receive certification based on the USB PD 3.0 specification. The roadmap supports USB performance up to 80Gbps in the future.
Kioxia was showing their consumer and enterprise-oriented products at the 2021 CES, based upon the companies BICS Flash technology. We will cover Kioxia enterprise products in our second 2021 CES blog. Consumer oriented products included the company’s first PCIe 4.0 client SSD for notebooks, desktops and workstations. The XG7/XG7-P series of consumer SSDs (shown below) was originally announced in November 2020.
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Kioxia SG7 M.2 PCIe 4.0 Consumer SSD Kioxia Product Image
Built for demanding PC environments, the XG7/XG7-P Series with storage capacities of up to about 4 TB offers 2x the sequential read speed and approximately 1.6x the sequential write speed of the PCIe Gen3 based XG6 Series. The product uses an in-house controller vertically integrated with the flash memory and incorporating advanced NVMe feature support.
Kioxia was also showing their XFMXPRESS PCIe/NVMe-based small form factor SSD designed for compact embedded and removable storage. This is a PCIe Gen 3X2 and NVMe 1.3b device with capacities up to a bit over 1 TB. The company said that JEDEC standardization is underway on this device, shown with important physical dimensions in the figure below.
Kioxia XFMEXPRESS PCIe/NVMe small form factor SSD Kioxia Product Presentation
In addition to these products, Kioxia supplies Managed UFS and e-MMC flash, SLC NAND and scalable 3D QLC and TLC flash memory to many companies for their consumer products. The company had an infographic about the role of flash memory in connected IoT devices for consumer, industrial, agricultural and civic applications.
Kingston Digital was showing some new products at the Pepcom event as well as in a virtual CES exhibit associated with the 2021 CES. The company also discussed its upcoming NVMe SSD roadmap. Kingston introduced its Workflow Station products, shown below. The Workflow Station and readers (which plug into the workflow station dock) is meant to serve customers such as content creators who need to transfer video, photos and audio from multiple sources at once with USB 3.2 performance.
The workflow readers, like the one shown below, can be used standalone, connecting to a laptop via a USB-C cable, or plug into the dock. These readers provide USB miniHub, SD or microSD reading (UHS-II and UHS-I card) capability. The Workflow station works with Windows and Mac OS’s.
Kingstron Workflow Station Kingston Product Image
Kingston also introduced new client and data center U.2 NVMe SSDs. These included its first PCIe NVMe Gen 4.0 SSD as well as an external USB 3.2 SSD. Following are a list of these Kingston SSDs and the image below shows the NVMe SSDs and the XS2000 USB 3.2 external SSD.
· Ghost Tree: The upcoming High-Performance Gen 4.0, 8-channel SSD codenamed “Ghost Tree” is targeting speeds of 7.0GB/s read and write, with capacities ranging from 1TB-4TB.
· NV Series: The latest Gen 3.0 x4 SSD offers capacities up to 2TB.
· XS2000: This is Kingston’s all-new USB 3.2 Gen 2 x2 external drive with 500GB - 2TB capacities The USB Type-C interface allows for data transfers up to 2.0GB/s.
· DC1500M: The Data Center 1500M is an update to the DC1000M, adding support for multi-namespaces. The U.2 NVMe SSD is designed to support a wide range of data- intensive workloads including cloud computing, web hosting and virtual infrastructures.
Kingston M.2 and External SSDs Kingston Product Images
OWC was also at Pepcom as well as having a CES exhibit. The company announced four new products. These were the OWC Envoy Pro FX, Thunderbolt Dock, the USB-C Travel Dock E and the U2 Shuttle. The Thunderbolt Dock and the Travel Dock provide multiple interface connectivity, including wired Ethernet as well as memory card access for Thunderbolt enabled computers. The Thunderbolt Dock enables Thunderbolt 4.0 connectivity, while the Travel Dock now includes a wired Gigabit Ethernet port with Thunderbolt 3.0 connectivity.
The OWC Envoy Pro FX portable SSD (see image below) supports up to 2.8GB/s data rates and is dust/drop and waterproof. The cool-running aluminum cased drive’s Thunderbolt/USB cable works with all Macs and PCs made since 2010 as well as iPad Pro, Chromebook and Surface devices.
OWC Envoy Pro FX SSD OWC Product Image
The OWC U2 Shuttle for a 3.5” drive bay (see image below) combines four NVMe M.2 SSDs into a swappable massive capacity flexible RAID ready storage product, supporting RAID 0, 1, 4, 5 or 6 via various RAID utilities. As for many OWC products, this one is targeted at video editors, audio producers, photographers and graphic designers.
OWC U2 Shuttle OWC Product Image
At the 2021 CES and at the accompanying Showstoppers, 25-year old China-based Biwin Storage Technology Co., Ltd. talked about the launch of the company’s own brand of Biwintech memory and storage products (see image below) as well as its HP brand consumer storage products, produced and marketed by Biwin, under license. The company also announced its new BIWIN Huizhou Science and Technology Campus with more than 110,000 square meter of production lines for chip manufacturing and the production of memory modules, memory cards and SSDs. The company said that it would be expanding further into Europe in 2021 and that it provides memory/storage for wearable products for an established wearable product company.
BIWIN Memory and Storage Products BIWIN Presentation at CES
Samsung had a big presence at the 2021 CES with a lot of focus on its C-Labs internal and external product collaborations. There was one storage product featured in the Samsung exhibit. It was the 870 EVO/QVO SATA consumer 2.5-inch form factor SSDs. An image of the Samsung 870 QVO SSD is shown below. The EVO drives use three level cell (TLC) 3D NAND flash, while the QVO SSDs use four (quad) level cell (QLC) 3D NAND flash. The EVO is available with up to 4TB capacity, while the QVO has up to 8TB capacity. The company says the 870 series has up to 30% higher sustained write performance, compared to its predecessors. The EVO version has a 5-year limited warranty while the QVO has a 3-year limited warranty.
Samsung 870 QVO SSD Samsung Product Image
Although not officially at the 2021 CES, Western Digital announced a line of four 4TB portable consumer SSDs during the CES, under the SanDisk brand. The SanDisk Extreme Pro Portable SSD offers up to 2 GB/s read and write speeds with a forged aluminum chassis to act as a heatsink to enable higher sustained data rates. The SanDisk Extreme Portable SSD offers up to 1.05GB/s read and 1.00GB/s write speeds and features up to two-meter drop protection and IP55 water and dust resistance. The WD_Black P50 Game SSD offers read speeds up to 2.0 GB/s and is provides storage expansion for PCs, PS4 and Xbox One game libraries. The My Passport SSD is shock and vibration resistant and drop resistant up to 6.5 feed and comes in a range of colors with read speeds up to 1.05GB/s and write speeds up to 1.00GB/s.
Western Digital Portable SSDs WDC Product Images
Verbatim (a brand of CMC Magnetics out of Taiwan) had a 2021 CES exhibit showing their array of flash, HDD and optical storage products. H-L Data Storage from Korea also was showing optical storage components as well as drives.
There were also new non-volatile memory enabled products on display at the 2021 CES including STMicro’s Steller 32-bit automotive microcontroller (MCUs) using phase change memory (PCM). Using PCM allows going to smaller feature size than NOR flash, allowing larger memories for various automotive applications including advanced driver assistance systems (ADAS) and enhanced vehicle stability control as indicated in the figure below.
Use of Phase Change Memory in STMicro Automotive MCU STMicro Product Presentation
Although the 2021 CES show was virtual and some companies that usually show up, at least at hotel suites in Las Vegas, were not at the show, there were several companies showing storage and memory products to support the next generation of consumer technology.
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https://www.forbes.com/sites/tomcoughlin/2021/01/20/2021-ces-storage-for-volumetric-video-automobiles-enterprise-and-data-centers/
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2021 CES Storage For Volumetric Video, Automobiles, Enterprise And Data Centers
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2021 CES Storage For Volumetric Video, Automobiles, Enterprise And Data Centers
Interior of autonomous car. Driverless vehicle. Self driving. UGV. getty
In a prior blog I talked about products and trends in digital storage and memory for consumer applications from the 2021 CES and related events. In this blog I will focus on material related to digital storage and memory to support advanced imaging such as volumetric video, automotive automation and to support processing at the edge and in big data centers. With so much remote entertainment and work during the pandemic, the cloud (big data centers) and content stored in the cloud has played an enormous role during in supporting consumer applications of all sorts.
Let’s first look at digital storage and memory to support the capture and display of more immersive video content. In particular, high resolution video images, captured with multiple cameras can be stitched together to provide a realistic 3D representation of object in the video stream. This volumetric video can then provide content for more immersive video experiences (think of, for instance, the holodeck in Star Trek).
Creating ever more realistic volumetric video will drive consumer (and other) applications for decades to come. At the 2021 IEEE ICCE conference there was an interesting series of talks from Intel on Next Generation Video Applications on Consumer Integrated and Discrete Client GPUs. The Intel graphics architecture used is called Xe and was introduced by Intel in 2020. The figure below shows the high-level architecture of a Xe GPU including cache shared via a memory fabric and a division of video processing via 3D/Compute slices and media slices.
High Level Architecture of Intel GPU Image from Intel Presentation at 2021 IEEE ICCE
This GPU is used across Intel’s end to end media processing offerings and uses its oneAPI software architecture as a common development interface for accelerators including the use of its oneVPL (video processing library) in media hardware. Both HEVC and the more recent AVI encoding formats are supported. 8K content can be played back on Tiger Lake (mobile processor launched in September 2020 with Iris Xe graphics) clients.
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An Xe MAX discrete GPU (DG1) was announced in October 2020. Intel’s DeepLink technology aggregates multiple processing engines through a common software framework to maximize CPU performance, boost AI creation performance and to provide next generation media experiences. Intel discussed “ludicrous speed” encoding with its DeepLink technology that can speed up video editing and transcoding applications.
In the last presentation by Intel at the 2021 IEEE ICCE session demonstrated using a DG1 GPU to create a more immersive video experience. MPEG Immersive Video (MIV) uses Visual Volumetric Video-based Coding (V3C), as does Video-based Point Cloud Compression (V-PC). An encoder takes input from any number of camera views with a capturing configuration and can render output views, again from any perspective. The demonstration was said to work with any video codec.
In the demonstration the viewer was able to see different content on a screen by moving his head (using face tracking) to render an image reflecting the change in apparent viewpoint of the viewed video objects. A Freeport Player (open-source VLC player) was used to view the demonstration. This demonstration gave an idea of what may be possible with volumetric video content viewed in future consumer devices.
At the 2021 CES Canon was showing its 100-camera 4K volumetric video system. At Canon’s 690 square foot Volumetric Video Studio in Kawasaki, Japan the company used 100 cameras to film, scan and create virtual representations of Japanese skateboarders doing their routines at the Love Park skateboarding field in Philadelphia (which was demolished in 2016).
The 100 4K cameras simultaneously shot videos at up to 60fps and was able to record up to 10 people simultaneously. The videos from the cameras were then processed and combined together to create a 3D representation of the skateboarders. The enabled video playback from any possible (and even very incredible) camera angle and any path, with a latency of only three seconds. Using a green-screen backdrop, that footage can be rendered with any backdrop of location, such as Love Park.
Several companies at the 2021 CES were showing products for advanced driver assist development, including autonomous driving. Let’s look at some of these. The block diagram below, from an NXP fact sheet shows storage and memory used in their BlueBox 3.0 automotive high-performance compute (AHPC) development platform. This platform allows prototyping automated driving workloads, including highway autopilot and automated parking.
NXP BlueBox 3.0 automotive high performance compute development platform Image from NSP Data Sheet from the 2021 CES
Quantum was showing products primarily supporting the development of autonomous vehicles (AV). Their exhibit featured a interesting white paper by Jason Coari and Mark Pastor from Quantum that talked about what the AV industry can learn from the media and entertainment industry. They also had material on the Quantum R-Series in-vehicle storage solution (shown below) for storing automotive sensor, GPU, cameras and processed data for autonomous vehicle development.
This rugged compact storage unit running on 12V DC power allows room for other electronic equipment in a development vehicle. The removable magazine includes either 2.5 or 3.5-inch SSDs or HDDs and allows RAID 5 or 6 for data protection. Data stored on an R-Series magazine can be uploaded into a StorNext environment using dual 10 GbE ports using the StorNext FlexSync feature to quickly upload content to a shared storage environment.
Quantum R-Series in-vehicle storage solution Image from Quantum CES 2021 Presentation
Quantum also recently acquired Square Box Systems maker of CatDV to increase its capabilities with unstructured data in data cataloging, user collaboration and digital asset management software. It also unveiled its new data and storage management platform, Quantum ATFS. ATFS integrates real-time data classification and insights with the needs of applications to determine how storage resources are allocated and consumed.
Quantum was also showing their ActiveScale object storage solution. ActiveScale places stored objects across storage units for high resiliency and ongoing monitoring and repair of errors. The system can start small and scale up as storage needs increase. Geo-spread system design disperses object chunks across 3 locations and ensures accessibility in case of a disaster. Object lock delivers immutability, providing legal compliance and protecting data from a ransomware attack. Advanced erasure coding, versioning and dynamic monitoring and repair ensure long term data retention. Quantum targets this product for cloud services, media and entertainment, life sciences and health care, backup and archive and as a data lake repository for data analysis.
NetApp was also showing storage products geared for AI in automotive applications. According to a NetApp solution brief, “Data silos and technological complexity are the two biggest impediments to moving AI projects into production. Automotive companies need an end-to-end data fabric to unlock insights and turbocharge innovation.” The figure below shows NetApp’s view of a data pipeline for autonomous driving.
NetApp view of a data pipeline for autonomous driving NetApp Material from 2021 CES
NetApp offers various storage hardware and software tools as well as cloud-based data services with various public cloud providers (Azure, AWS or Google) for an AI workflow. In addition to these public offerings these data services include the company’s ONTAP, ONTAP AI (with NVIDIA’s DGX supercomputers) and ONTAP Select software, its AFF A8000 all flash storage, FlexPod AI converged infrastructure. In addition to applications for autonomous driving, NetApp’s AI solutions can be used for connected vehicles, mobility as a service and smart manufacturing.
NetApp also had information about the company’s Astra application and data management for Kubernetes (containers). Astra brings NetApp on-premises and cloud storage to bear on managing data for stateful Kubernetes applications. Astra manages, protects and migrates Kubernetes applications within and across multi-hybrid clouds, providing data protection, disaster recovery, audit as well as migration for business-critical applications.
Kioxia was showing enterprise-oriented products as well as consumer products at the 2021 CES. These included a PCIe 4.0 Open Compute Platform (OCP) NVMe cloud specification-enabled SSD (the E1.S) and fast PCIe Gen 5 SSDs (E3.S). These two enterprise/data center SSDs are shown below.
Kioxia enterprise and data center SSDs Image from Kioxia 2021 CES Materials
Kioxia’s E1.S form factor XD6 SSDs are Enterprise and Datacenter SSD Form Factor (EDSFF) E1.S SSDs addressing specific requirements of hyperscale applications, including the performance, power and thermal requirements of the Open Compute Platform (OCP) NVMe® Cloud SSD Specification. The XD6 Series is PCIe® 4.0 and NVMe 1.3c specification compliant, and is available in E1.S 9.5 millimeter (mm), 15mm, and 25mm form factors.
E3.S is a new form factor standard for NVMe™ SSDs in cloud and enterprise data centers, especially targeting PCIe® 5.0 and beyond. The E3.S will contribute to the design and development of next-generation systems, such as cloud, hyper-converged and general-purpose servers and all-Flash Array (AFA) systems in cloud and enterprise data centers.
Kioxia was also promoting its XL-Flash low-latency, high-performance flash memory that it hopes will offset some use of Intel’s Optane memory. Kioxia announced new additions to its KumoScale software to bring faster NVMe-oF storage to containers.
The company also talked about advances in their software enabled flash (SEF) initiative. Kioxia’s SEF requires special HW, available in 2nd half of 2021 as well as open-source SW, see figure below. It incorporates the zoned name spaces (ZNS) capabilities that the company has been promoting. SEF offers data placement and workload isolation at the flash-die level, multiprotocol capabilities and latency control and optimization through advanced queuing.
Kioxia's software enabled flash Image from Kioxia 2021 CES Material
A European company, called SwissVault was showing its Space Odysee 25TB NVMe SSD storage network server for small or medium sized businesses at a virtual exhibit.
The 2021 CES featured storage and memory technologies to support volumetric video, autonomous vehicle development and more efficient and effective cloud services to serve myriad consumer applications.
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https://www.forbes.com/sites/tomcoughlin/2021/02/09/storage-made-simple/?sh=7c9d4ab46328
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Storage Made Simple: Breaking Down IBM’s New Flash Storage Offerings
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Storage Made Simple: Breaking Down IBM’s New Flash Storage Offerings
Concept of Well Being. Keep It Simple on a light box. getty
IBM announced new high-performance entry-level flash storage systems, as well as hybrid cloud and container-centric updates, in order to broaden its offerings of enterprise-class storage for businesses of all sizes. The figure below shows the announcements made by IBM.
IBM 1Q21 Storage Announcements Image from IBM Announcement
According to IBM, the new FlashSystem 5200 has greater performance and capacity than its predecessor, the FlashSystem 5100. The 5200 also has a base price that is on average 20% less expensive (based on configuration). Other key attributes include:
· Hybrid Cloud & Containers: The IBM FlashSystem 5200, like the entire IBM flash storage portfolio, supports Red Hat OpenShift, Container Storage Interface (CSI) for Kubernetes, Ansible automation, and Kubernetes, as well as VMWare and bare metal environments.
· Enterprise Capabilities: The system also comes with IBM Storage Insights, which can give users visibility across complex storage environments to help them make informed decisions, and IBM Spectrum Virtualize, which enables users to consolidate and manage storage as if it were one pool, designed to improve performance and lowering operating expenses. Also included are such data resiliency functions as IBM HyperSwap which supports automatic failover in case of a site incident.
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· Capacity: FlashSystem 5200 starts with 38TB of data capacity and can grow to deliver 1.7PB[1] in a compact 1U form factor for space-constrained environments.
· Speed: Although FlashSystem 5200 is half the size of traditional storage systems, it offers 66% greater maximum I/Os than its predecessor and 40%1 more data throughput at 21GB/s, and is designed to help clients save on both capital and operating expenses.
In addition to the FlashSystem 5200, IBM also announced two additional models to the series that are designed to deliver improved performance: the FlashSystem 5015 and 5035, both of which are 2U systems, designed for organizations with less demanding performance and growth requirements but with the same rich IBM Spectrum Virtualize and IBM Storage Insights functions.
In addition to the new FlashSystem models, IBM announced plans to continue advancing hybrid cloud capabilities across its storage portfolio.
When made generally available in March, the company will add support for IBM Cloud Satellite to the FlashSystem portfolio, IBM SAN Volume Controller, IBM Elastic Storage System and IBM Spectrum Scale. The company says that IBM Cloud Satellite is being designed to enable companies to build, deploy and manage cloud services anywhere – in any public cloud, on premises and at the edge – with speed and simplicity. IBM Cloud Satellite will be delivered as-a-service from a single pane of glass and managed through the IBM public cloud and is currently in beta.
In addition, IBM announced plans to update IBM Spectrum Virtualize for Public Cloud, software that enables clients to replicate or migrate data from heterogeneous storage systems between on-premises environments and IBM Cloud or Amazon Web Services. IBM plans to extend the same capabilities to Microsoft Azure starting with a beta program in the third quarter of 2021.
EditShare, a well know storage hardware and software provider for the media and entertainment industry recently announced that it has joined forces with HPE to deliver media management and storage solutions using HPE ProLiant servers. The company said that “With its world class platform technology, support, and international logistics capabilities underpinning the solution, HPE provides the perfect foundation by extending industry-leading security, performance and versatility for EditShare’s current hardware needs and future product roadmap, achieving economies of scale.”
Commvault recently announced that it is adding new data protection solutions, features, and enterprise workload support including: enhanced SaaS application protection with the introduction of Metallic Salesforce Backup and Microsoft Teams recovery enhancements; the addition of Oracle and Active Directory to Metallic Database Backup; and the expansion of its hybrid cloud capabilities with the addition of HyperScale X as a fully integrated appliance and edge offering for Metallic.
IBM made announcements of new all flash storage products for all sizes of enterprise customers as well as new hybrid/public cloud and service offerings, to make storage simple for all. Editshare is using HPE ProLiant servers and Commvault adds new data protection solutions to Metallic.
[1] With deduplication and compression applied, according to internal IBM testing.
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https://www.forbes.com/sites/tomcoughlin/2021/02/17/storing-data-loops-in-space-purity-and-lucidlink/?sh=7be612be1c83
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Storing Data Loops In Space, Purity And LucidLink
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Storing Data Loops In Space, Purity And LucidLink
Planet Earth ans Sunrise. Earth View from Space in a star field showing the terrain and clouds. ... [+] Elements of this image are furnished by NASA. getty
Some interesting storage developments in this piece, including using light to store data in space, Pure Storage software enhancements and a partnership between LucidLind and IBM. First let’s look at a new concept for digital storage in space.
I had an interesting conversation with a company, called LyteLoop that wants to install a unique approach to digital storage in outer space, which just raised $40M in a private financing round. In some prior blogs I wrote about Cloud Constellation, another company that wants to set up secure data centers in space, using conventional storage and processing technology in low earth orbit. LyteLoop wants to put its light-based digital storage technology in space for another reason, in addition to storage security, to enable low loss optical paths in near vacuum.
In LyteLoop’s storage technology, which the company calls “Storage in Motion” uses high bandwidth lasers and extremely long light paths created with light reflected back and forth between mirrors. At any point in time the data can be accessed from one of these mirrors. Working in near vacuum, the degradation of the light beams can be minimized, allowing very low energy requirements for storage. According to the company they could store an exabyte (EB) of data for 10’s of kilowatts instead of megawatts, like a hard disk drive storage would require. The light path data storage in these satellites will be supplied by solar panels. The image below is of a LyteLoop cell that contains the optical path used for storing data.
LyteLoops cell containing optical path used for storing data Image with permission from LyteLoops
The concept of an active storage device versus physically stored data, such as in HDDs and SSDs, dates back to the early days of radar and computing. During WW II delay lines were used to reduce clutter from ground reflections and reflections from other stationary objects. The delay line provided a prior data point to compare with a current radar signal and allow removing detected objects that hadn’t moved.
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Delay lines were used in some early computers for temporary data storage. These delay lines storage capabilities were generally only possible for short times, unlike the LyteLoop technology. Delay lines were made using acoustical (sound) as well as magnetostriction (where magnetic fields caused expansion or contraction of metal wires) and piezoelectric means.
Pure Storage announced updates to its Purity software for FlashBlade and FlashArray. According to the company the new versions of Purity for the company’s FlashBlade and FlashArray products deliver exceptional application performance, continuous data availability, and enhanced protection. The image below shows Pure’s view of how its storage products can serve multiple workloads.
Pure's view of how its storage products serve multiple workflows Image courtesy of Pure Storage
Pure says that their portfolio updates include data security for enhanced confidence and uptime and a comprehensive portfolio of file services for greater value and more use cases.
LucidLink recently announced that it was collaborating with IBM to bundle IBM Cloud open hybrid cloud storage offerings with LucidLink Filespaces. This offers a cloud-native file system that enables users to access data in the cloud, like a local drive. The announcement says that, “With IBM Cloud and LucidLink, users will have access to massive amounts of data from anywhere in the world.” The IBM/LucidLink partnership allows LucidLink customers cloud-based egress pricing 60% below LucidLink’s previous fees and often below organization’s current negotiated rates with public cloud vendors.
LyteLoop wants to storage data on light in space. Pure Storage announces updates to its Purity Software and LucidLink announced a collaboration with IBM Cloud.
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04d2f6097ba463ea1276c658dd3f9e14
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https://www.forbes.com/sites/tomdavenport/2019/07/24/how-conversica-uses-ai-to-move-customers-along-the-marketing-funnel/
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How Conversica Uses AI To Move Customers Along The Marketing Funnel
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How Conversica Uses AI To Move Customers Along The Marketing Funnel
Since artificial intelligence (AI) is not a general-purpose technology but one that automates and makes more intelligent individual tasks, successful AI companies need to pick what task they are going to address, and make sure they handle it well. That’s the approach taken by Conversica, which has focused on conversational AI for advancing marketing and sales discussions among companies and their customers.
Conversica has been at this for a while, having been founded by Ben Brigham as AutoFerret.com in 2007. Brigham, who is still head of innovation and a board member for Conversica, claims that it was the world’s first AI-based sales assistant, which seems plausible given the founding date. AutoFerret ferreted out sales leads for car dealers, but now Conversica works with 1500 different companies across a wide variety of industries.
Alex Terry, Conversica’s CEO since 2015, told me that the primary idea behind the company’s offerings is to move customers along the marketing, sales, or retention funnel using natural language processing (NLP)-based conversations. The technology also incorporates a robotic process automation (RPA) capability.
How Conversica Helps
Converting leads into sales, Brigham’s original idea, is still Conversica’s primary focus. The company’s AI assistant automatically contacts, engages, qualifies, and verifies the lead’s contact information, and then usually hands off qualified leads to a human salesperson. The conversations are all done over email or SMS in a human-like way.
Conversica now has three different types of AI assistants:
Sales and marketing—for lead engagement, either tailored for specific industries (e.g., car dealers, university admissions) or generic; Memberships—to convert and retain members of nonprofits or health and wellness organizations; Customer success—to monitor and ensure product/service usage among companies that are already customers.
Each assistant has its own knowledge graph (taxonomy of terms used in the conversations) and classification of customer intents. Conversica has identified about a thousand different customer intents thus far; some are commonly used, and some are pretty rare.
If a company “hires” one of Conversica’s assistants—which, according to Terry, requires very little customization--it comes with a variety of “skills.” The most commonly-used skills are “engage demand,” “activate unresponsive demand,” or “reactivate dormant demand.” Some companies also want skills related to event reach-out or winning back former customers. The company bringing on the assistant gives it a name (a human one—customers may not realize that they are conversing with a machine), a title, an email address, a password, and connections to the company’s CRM and marketing automation systems.
Alex Terry told me that it is common for Conversica’s customers to assign lower-quality leads to the AI assistant. They feel that humans are often good at following up on the highest quality leads, but it’s not cost effective to pursue lower-quality ones. Many of the company’s customers, he says, ignored B or C leads before Conversica. In general, he says, the sales and marketing assistant can increase the percentage of leads leading to sales meetings by 5%. Conversica says its AI assistants have reached out to 100 million people, engaged 24 million people and identified 10 million leads for its customers.
I wondered whether Conversica is leading to reductions in human marketing or sales personnel, but Terry said that doesn’t happen. Salespeople—particularly entry-level ones—are often concerned about that, but Terry notes that 80% of his customers say they have increased the size of their sales teams after implementing Conversica. More qualified leads require more salespeople to close them.
Conversica at Snowflake Computing
One customer that has successfully implemented Conversica’s offerings is Snowflake Computing, a fast-growing provider of data warehouse capabilities in the cloud. The company has raised almost a billion dollars in venture financing, and it has more than doubled its valuation (to $3.5 billion) in nine months.
A company like Snowflake has no shortage of sales leads. Denise Persson, the Chief Marketing Officer, said there are roughly 100,000 new leads per quarter. Leads that come in are automatically scored by the Sales Development organization, and leads that are considered relatively unlikely to convert to sales are given to the Conversica AI assistant. Named account or higher-quality leads go to the field sales force or to the Inside Sales organization, respectively.
Snowflake has a philosophy of “no lead left behind,” and Conversica helps make it possible, Persson said. The goal is to get potential customers to do a live demo, and then to set up a phone call with an inside sales person. Persson says that no salespeople should be forced to prospect for leads; they should be highly focused on the right opportunities.
Persson confirmed Terry’s statement that Snowflake could use Conversica “pretty much out of the box,” with only some minor customization of messages to fit the industry and product being sold. There have been no negative reports about Conversica from either customers (who generally think they are being contacted by a person, not a machine) or employees. Given Snowflake’s very rapid growth, there have clearly been no complaints about Conversica replacing employees. Persson commented, “We are hiring at a very rapid rate. The most important thing we can do is to keep their productivity high, and Conversica helps us do that in sales and marketing.”
Snowflake classifies different types of leads according to their level of interest, the source, and whether or not there has been previous contact with the company. Conversica-handled leads cross all types. Only one type of leads (a small category with only 25 leads) led to no sales opportunities created; among the other types, between 9% and 71% of leads across different types led to sales opportunities with inside or field salespeople.
Sales/Marketing Funnel Getty
The type of AI that Conversica represents doesn’t claim to be smart about everything, or to work with every organizational process. Rather, it’s smart about moving customer leads down the marketing funnel and converting them into sales. It doesn’t claim to replace humans, but rather to do tasks like prospecting lower-quality leads that humans don’t want to do. It doesn’t claim to transform the organizations or strategies of its customers—only to make them more money.
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9038b68f7257e87d1454e2298c5956f6
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https://www.forbes.com/sites/tomdavenport/2019/09/23/information-technology-powers-almost-all-innovation/
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Information Technology Powers (Almost) All Innovation
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Information Technology Powers (Almost) All Innovation
The 2019 35 Under 35 Innovators at Emtech MIT MIT Technology Review
In the early 1990s I was living in Boston and reflecting on the relative progress of information technology and the life sciences. It appeared to me then that IT was sputtering a bit; the Internet hadn’t yet transformed commerce, and AI was in one of its winters. Life sciences, on the other hand, seemed to be at the beginning of a boom—at least in Boston and Cambridge. Genomics, personalized medicine, gene editing, and so forth hadn’t fully appeared in life sciences yet, but they were on the horizon. So I toyed with the idea that I should abandon my research, teaching, and consulting on IT to focus on life sciences. Not that I have the biochemical expertise to make fundamental contributions to that field, but I could at least focus on the business strategy and organizational effectiveness issues in the life sciences industry.
That would have been a big mistake on my part. To be sure, the life sciences have taken off in a big way. If you’ve visited Kendall Square in Cambridge recently you will know what a biotech boomtown it has become. But almost every person I meet in the biotech companies in the region have the term “informatics” in their title. IT has become a dominant force in almost every type of innovation. In fact, during a recent visit to Kendall Square for the 2019 Emtech MIT conference, I was confirmed in my belief that information technology, big data, and AI are powering developments in almost every area of science and technology.
The specific provocation for this observation was the “2019 35 Innovators Under 35” awards, which are announced annually by MIT Technology Review (which puts on the Emtech conferences). 31 of the 35 young innovators were present at the conference, and each one gave a short talk. The particular science or technology domains of the young innovators were quite varied, ranging from measuring moisture levels in harvested grain to mapping the human brain. Some, of course, worked in information technology fields like artificial intelligence. But I was struck that almost every one of these innovators used information technology to help achieve their goals.
Take, for example, the mapping of the human brain for the purpose of better understanding neurological disorders. That’s the focus of Archana Venkataraman, a professor at Johns Hopkins University. She’s using AI—deep learning models in particular—to analyze EEG data and to pinpoint the time and location of epileptic seizure onset in the brain. She hopes that will help to diagnose and treat epilepsy, as well as other neurological disorders like schizophrenia, brain tumors, spinal cord injury, and autism.
Similarly, measuring moisture levels in harvested grain in Africa wouldn’t seem to be an IT innovation. But Isaac Sesi from Ghana has a product called GrainMate that helps farmers and grain purchasers to measure moisture in their grains, which helps keep them from spoiling after harvesting. It uses an electronic grain-moisture meter and a mobile app.
There were many other examples of IT-enabled innovation. Riana Lynn uses nutrient data and AI to make more nutritious snacks. Tim Ellis employs machine learning and automation to power a 3D metal printer to make rocket components. Silvia Caballero applies bioinformatics to identify gut bacteria that can control antibiotic-resistant infections. Himabindu Lakkaraju develops AI models to check for bias in important decisions. Between the innovators who develop IT itself—AI models, robots, user interfaces, quantum computing, cybersecurity, etc.—and those who use IT to help with something else—the great majority of these innovators are using information technology to solve important problems.
Of course, there were some exceptions to the prominence of IT. At least in the short talks I heard, there wasn’t much IT in materials science for textile-based building blocks, or a new approach to filtering dirty water. However, I’m guessing that those innovators used IT in some important way. And while I was at MIT on this visit I noticed there was a big effort in the Materials Science and Engineering Department to use machine learning to identify new materials.
Virtually every technological or scientific investigation today involves the generation, collection, and analysis of data. That data is too big and complex to be analyzed solely by the human brain—we need computers to chew through it and make sense of it. To research and develop new technologies in cognitive science, genetics, or medicine is also to research how information and computers can shed new light on those areas.
This is why many organizations seek data scientists who have PhDs in scientific fields. A few years ago, when researching the backgrounds of early data scientists, I counted more PhDs in experimental physics than any other background. This was not because experimental physicists were trying to create better information technologies, but because they had to use IT in novel ways to understand the fundamental forces of the universe. IT isn’t entirely omnipotent—there are some things it can’t do. But it can provide greater understanding of even the things it can’t accomplish on its own.
If you’re running a university or a research institute, that means that you should build IT capabilities that are just as advanced as those for the domains you plan to teach or research. If you’re someone who wants to be an innovator in any field, it means that you can’t ignore new developments in IT as a means to accomplish your objective. If you’re training young minds to become innovators, you need to equip them with the IT expertise that will enable them to achieve great things.
It’s difficult to think of any area of human endeavor that doesn’t already depend on information technology in some fashion—sports, the arts, politics, and certainly business and science. This dependence is only going to become stronger. Seeing and hearing these young innovators make heavy use of IT at the Emtech conference made me realize how IT has become the most powerful technology of our age. I’m certainly glad I didn’t give up on it in my own career.
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5bf82ac716b7cd8615030c5c9abd4f26
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https://www.forbes.com/sites/tomdavenport/2019/11/12/ai-at-jpmorgan-chasebreadth-depth-and-change/
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AI At JPMorgan Chase—Breadth, Depth And Change
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AI At JPMorgan Chase—Breadth, Depth And Change
By Thomas H. Davenport and Randy Bean
Most large banks in the US are pursuing AI fairly assiduously, but JPMorgan Chase stands out for the depth of its commitment to the technology, the breadth of projects it has adopted, and the focus on driving actual business change from its AI initiatives. The Bank, the largest in the US and 6th largest in the world in terms of total assets, has AI projects or production applications in all the usual areas of banking: risk, fraud prevention, marketing, investment banking, wealth management advice, trading, back office automation, and customer engagement (particularly in the corporate banking area thus far). But JPMorgan Chase distinguishes itself from other banking firms in its level of investment, its hiring of AI academic stars, and its coordinated approach to the management of AI and analytics.
Large-Scale Investment and Depth—AI and Analytics in Chase Bank
JPMorgan Chase spends $11 billion a year on technology, and about half of that amount is devoted to research on new and emerging technologies. Its research investments cover a wide variety of domains, including investments in AI startups and AI-based hedge funds.
To understand how AI is being applied within Chase, the consumer banking arm of JPMorgan Chase, we spoke with Sandra Nudelman, Chief Data and Analytics Officer of Chase. Nudelman has both data and analytics responsibilities, creating a comprehensive view of the data lifecycle. Much of her focus now is on an innovation agenda and, in the context of AI, how Chase can create AI models to improve various aspects of Chase’s performance and its relationships with customers.
Nudelman’s group cultivates a continuous improvement culture, seeking to enhance its productivity and performance consistently over time. They already have considerable impact on the business, but are always looking for where they can have more. “We run a predictive modeling engine,” Nudelman says, “and we’re always trying to make it run better.” One way to improve the engine is to reuse the analytical and AI models that it creates. So model reuse is being promoted across the group, which creates greater efficiencies and cost effectiveness. The Chase Data & Analytics charter covers the broad variety of analytics and AI, from conventional reporting to complex AI models. Regardless of the type of model, it’s clear that the demand for them will outpace the ability to hire analysts and data scientists, so Chase is always on the hunt for strong talent.
As an example of more sophisticated models, Nudelman described a machine learning application for Chase’s Digital organization, which determines what information a particular user sees on Chase’s digital platforms. Machine learning models typically change only episodically at best with new training data, but this model needs to change rapidly to respond to real-time customer inputs and behaviors in order to make a customer’s experience more customized and relevant. Therefore, machine learning developers came up with a sustainable model that updates itself several hundred times a day. It’s a bellwether of what machine learning-based systems with large amounts of fast-changing data will do commonly in the future.
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Of course, accommodating to these capabilities means that the business needs to be ready for this type of change—processes, tasks, monitoring, and so forth. Nudelman says that all of the people who work with clients have to be closely aligned with business leaders – they must be the owners of both the process and the change. In the case of the Digital application, the business partner was the head of Digital marketing channels who, along with other business leaders, governs the business side of the application. The Marketing Analytics team monitors how well the models are working over time. Analytics and AI providers need to think about and enable change management, but it requires adequate oversight and governance—they can’t own it.
Most of Chase’s models are relatively easily interpreted, but some complex machine learning models are more challenging to interpret than others. As a result, Chase’s analytics and AI teams also have to work closely with regulators to ensure an understanding of how machine learning and AI is being employed responsibly. They also discuss how the Bank is keeping customers’ financial situations and their data privacy safe and protected, and how their efforts ultimately benefit customers.
AI Governance and Collaboration
Nudelman’s organization at Chase is only one of many groups in JPMorgan Chase that is aggressively pursuing AI. 53,000 employees of JPMorgan Chase work in technology-related areas of the bank, and several of them are among the brightest minds in AI. In 2018 the bank brought in Manuela Veloso, then head of machine learning at Carnegie Mellon, to head the JP Morgan AI Research organization. Veloso brought Prashant Reddy, one of her former CMU Ph.D. students, in from Google, and Tucker Balch, a Georgia tech professor, to be Directors of AI Research. External high-level hires also address the development of production AI capabilities for the bank. Also in 2018, Apoorv Saxena was recruited to lead a Silicon Valley-based “AI and Machine Learning Services” organization. He had previously led product management for cloud-based AI services at Google. The Bank has also hired a large number of leading researchers with Ph.D.s in the areas of risk, trading, and even machine learning on quantum computers.
There are a variety of centers of excellence (CoE) for various technologies, including one for machine learning and another for automation. Analytics and AI groups within particular businesses sometimes work on projects with a particular CoE or research organization; Nudelman’s group in Chase, for example, is working on a project with Manuela Veloso’s AI Research group to predict customer experience across the Bank, and to determine whether customer journey data can effectively predict the Net Promoter Score a customer would give.
In general, however, research groups like Veloso’s tend to research problems with a longer time horizon. Groups like Nudelman’s tend to work in the much shorter term with objectives of driving change through the application of analytics and AI directly to Chase’s businesses.
The presence of so many AI-focused organizations with diverse objectives creates a need for coordination, governance and sharing across all of JPMorgan Chase. Within Chase, there is an AI/ML Council that meets monthly to discuss projects and assess emerging challenges. There are similar councils elsewhere in JPMorgan Chase; for example, the Global Research organization has a Quantitative Council that addresses analytics, big data, and AI topics.
One area on which there is broad agreement within JPMorgan Chase is that there is not expected to be large-scale job losses from the introduction of AI and automation. Instead, the focus is on reskilling front-line employees to adapt to the jobs and tasks involved in working with AI on a daily basis. The company has made a commitment to spend $350 million on reskilling its employees, and is working with the MIT Initiative on the Digital Economy to classify the automatable skills in jobs across the bank.
What’s Next?
Many of the AI-driven banking processes at JPMorgan Chase are already in production; they include fraud detection, trade execution, customized credit card offers, and many others. Others are likely to appear in the near future.
We don’t yet know to what degree AI will be a transformational technology for the bank and for the banking industry in general, but the level of commitment that JPMorgan Chase is exhibiting is likely to yield considerable change in business processes, products and services, and deeper customer relationships.
Randy Bean is an industry thought-leader and author, and CEO of NewVantage Partners, a strategic advisory and management consulting firm which he founded in 2001. He is a contributor to Forbes, Harvard Business Review, MIT Sloan Management Review, and The Wall Street Journal. You can follow him at @RandyBeanNVP.
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7c83b7da51d1923da6f426e9d9c7a968
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https://www.forbes.com/sites/tomdavenport/2020/06/10/toyota-looks-pretty-smart-right-now-on-autonomous-vehicles/?sh=5552a3747123
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Toyota Looks Pretty Smart Right Now On Autonomous Vehicles
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Toyota Looks Pretty Smart Right Now On Autonomous Vehicles
Gill Pratt, CEO Toyota Research Institute, speaks at the Toyota press conference during CES 2019 in ... [+] Las Vegas, Nevada on January 7, 2019. (Photo by Robyn Beck / AFP) AFP via Getty Images
The automobile world is in quiet retreat on the topic of fully autonomous vehicles (AVs). As an excellent article by Steve LeVine in Marker described, vehicle autonomy is closely linked with ride-sharing, and in the pandemic era we’re going through, nobody wants to share cars much anymore. The ever-optimistic Elon Musk, who claimed that a fleet of robotaxi Teslas would be on the road by 2020, still says the technology is ready (though none of us has seen it), but he at least admits that regulatory approval might be a problem. Ford postponed and GM discontinued (Maven—its AV subsidiary Cruise continues, albeit with cutbacks) their shared vehicle robotaxis, and Uber says it’s dismantling its AI Lab. Starsky Robotics, an autonomous truck firm, went out of business. As my favorite car magazine Car & Driver put it in the title of a recent article, “Self-Driving Cars Are Taking Longer to Build Than Everyone Thought.”
Some AV firms are keeping a stiff upper lip, but almost everyone except Musk admits that it’s going to take a good while before we can binge watch “Better Call Saul” while our car handles the driving. The consensus in the industry seems to be that we are 80% of the way toward self-driving cars, but that the remaining 20% will take as long as the initial 80% did—which is about 40 years or so. There will, of course, be some highly constrained environments in which self-driving cars can thrive—geofenced, pedestrian free zones in cities, for example—but they aren’t likely to sell a lot of cars or trucks.
All of which makes Toyota’s strategy on smart cars the smartest one around. For years it’s been pursuing Guardian—a project at the Toyota Research Institute (TRI) focused on making human driving smarter and safer. Gill Pratt, the CEO of TRI (and a former professor at Babson’s sister school, Olin College of Engineering), has emphasized the safety theme for several years now. After an MIT conference on autonomous vehicles where Pratt spoke in 2017 I wrote:
He [Pratt] pointed out, for example, that although less than 1 percent of adult deaths in the US are from auto accidents, 35 percent of teenage deaths are. So Toyota is trying to develop a vehicle with a “guardian” mode to protect teens (and other bad drivers, presumably) from making lethal driving mistakes. The company is also working on a “chauffeur” mode for older drivers who need continuous help—particularly important in Japan, with its rapidly aging population.
Pratt and TRI are still working on both Guardian and Chauffeur—they are project names now and not just adjectives. Toyota came out of the closet a bit on Guardian at the 2019 CES, where a press release described a “blended envelope control” approach to improving safety. The details remain to be revealed, but it sounds like a “drive by wire” situation where you provide inputs to the car’s computers. Say, for example, a driver intends a left turn against traffic that’s initiated by a turn signal and a leftward move of the steering wheel, and the car replies, “I don’t think so.” It sees an oncoming vehicle at high speed, and cancels the left turn or slows the car down until the oncoming car has passed by. According to Toyota, the approach is similar to how a modern fighter jet works.
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It’s too early to say how drivers will react to something like this; to have your car veto your intentions may be a bit more intelligence and control than some drivers want. However, most drivers don’t seem to have reacted too negatively to lane change warnings that vibrate your steering wheel, or autonomous braking systems that take over when they sense an object in the way at close range. The more aggressive Guardian system may simply be viewed as an extension of those driver augmentations.
Of course, this is all just a strategy. The implementation will make all the difference to the eventual success of the Guardian approach. And just to cover its bets, Toyota and TRI and also working on Chauffeur—the full autonomy approach—although the company suggests that it has recently focused primarily on Guardian. Pratt suggests that the safety features will be available “in the 2020s,” which seems far more realistic than Musk’s predictions about full autonomy.
I see many reasons why this strategy is a good one for Toyota. The company is known, of course, for incremental improvement—the Toyota Production System and all that—and this approach to vehicle intelligence fits well into that company culture. The safety focus is also more likely to provide some economic returns well before full autonomy does. Steve LeVine points out that the automakers and VC firms have invested more than $16B in full autonomy projects, but I don’t see any short-term returns on all that money. But it’s easy to see that a safety-oriented parent or older driver might purchase a Toyota just because of its Guardian features.
We will learn over time how this all turns out—it’s a long-term play to be sure. But at the moment Toyota’s Guardian approach seems a lot better bet than the full autonomy ones. I guess I will just have to watch “Better Call Saul” from the passenger seat while my wife drives.
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cb2d3f29209c6f9ec570b1fda8b5130d
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https://www.forbes.com/sites/tomdavenport/2020/08/03/bots-for-the-people-by-the-people-at-bank-of-montreal/?sh=2eb278161065
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Bots For The People, By The People At Bank Of Montreal
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Bots For The People, By The People At Bank Of Montreal
TORONTO, ONTARIO, CANADA - 2015/03/29: The Bank of Montreal, or BMO Financial Group, is one of the ... [+] Big Five banks in Canada. (Photo by Roberto Machado Noa/LightRocket via Getty Images) LightRocket via Getty Images
BMO Financial Group, the over 200 year old banking group also known as Bank of Montreal, is the 8th largest bank, by assets, in North America and one of the ‘Big Five’ Canadian banks. After exploring intelligent automation for several years now, BMO is accelerating its robotic process automation (RPA) strategy. It is building on the strong foundation of RPA, machine learning, and AI to enable a future of digital and human workforce collaboration.
These capabilities been evolving rapidly since 2017, when Randy Bean and I first wrote about BMO’s work in the automation space. Since then BMO has employed automation for hundreds of processes and in doing so, created millions of dollars in value for the bank. This new ‘digital workforce’ performs repetitive, manual tasks and ultimately frees much needed capacity for BMO’s employees, allowing them to tackle more judgment-based, creative and complex work.
Bots are helping their BMO colleagues by performing testing and monitoring functions, tightening controls, fighting crime and speeding up client onboarding processes. Upskilling the human workforce allows teams to leverage their increased capacity to drive big impacts in the bank. A BMO executives feel that their secret sauce is the people behind the bots and how they leverage the automated solutions to maximize their own productivity. There is a strong focus on training the ‘bot managers’ as automated solutions are implemented.
The CoE develops and maintains a strong risk and control framework that synergizes with existing business controls, to ensure that the bots are integrated seamlessly into day-to-day operations. Two core factors contribute to a successful automation implementation in any enterprise. First, investments are required in areas such as technology and talent to maximize the usage and efficacy of these automation applications. Secondly, companies must place a strong focus on appropriate risk and control frameworks to support these solutions as they provide benefits in production. Together, robotics and AI provides increased enterprise capacity at scale, reducing overhead costs and enabling the workforce to upskill talent to tackle more strategic objectives.
Whether it’s hosting a hackathon that empowers employees to think outside the box with automation or hosting team competitions to decide a bot’s new name, the AI CoE partners with technology and lines of businesses across the BMO enterprise to generate excitement and awareness about the problems a digital workforce can help solve.
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The Role of Automation at BMO
Currently robotics works well as a short term efficiency enabler to compliment longer term system digitalization. As time goes on, this space will evolve such that Robotics and Digitization work together to transform process in an optimal way and to minimize the manual work, as per the RPA capability.
That being said, RPA has the potential to tackle increasingly complex processes and tasks. WorkFusion, BMO’s primary RPA vendor, enables the use of machine learning in combination with RPA to allow for creative technical solutions. An example is the automation of a process that requires data extraction from scanned documents; ML-based optical character recognition in conjunction with automation allows this complex task to be streamlined by a bot. RPA is truly considered to be just one tool in a large toolkit that the AI CoE enables. The focus is on picking the right tool for the job. This flexibility and collaboration allows the bank to leverage several different tools to create unique and effective solutions to the bank’s challenges.
Managing the digital workforce
BMO takes a unique approach with regards to bot management and HR. Every single bot follows a well-established governance process throughout its lifecycle in the company. To ensure the effectiveness of this governance model, bots even report to specific employees, recognized as a ‘bot manager,’ who effectively oversees the day-to-day output of the bot.
Establishing well documented procedures for bots similar to people is a good way to ensure accountability and ownership. BMO has well-established processes to make sure that its bots get the appropriate system access when ‘onboarded,’ and similarly accesses are decommissioned at the termination of the automated process. Feeding into existing control frameworks is a key success factor.
A Process for Automating Processes
BMO has a well-defined process for the development and delivery of an automation solution. The owner of the process (be it the business unit or function) ultimately owns the solution and is a key stakeholder throughout the development process.
If the business decides to move forward with RPA, the project goes into the ‘intake’ phase. At this point, the technical feasibility and the financial benefits are reviewed. The Intelligent Process Automation team has created a set of tools to streamline this assessment – including determining the cost, time, and return of investment on a potential solution.
Once validated, the solution goes through the solution design, development, and deployment stages. One key aspect is the level of post-implementation support and ‘guardrails’ that are put into place for any solution, ensuring that the bot operates as planned once in production. BMO has a dedicated RPA technology team for both development and post implementation support. Having dedicated resources also allows for best practice sharing and a well established set of standards making solutions very resilient once deployed in production.
The RAMBO Bot for Enabling Remote Access
Many organizations use RPA bots only for back-office tasks, but BMO has a use case that is oriented to preventing financial crimes. The bank launched the Financial Crimes Unit (FCU) in January 2019, bringing together information security, fraud management, physical security and crisis management into one cohesive team. Its mission is to ensure that BMO can best prevent, detect, analyze, and respond to all threats aimed at the bank, its clients and partners.
One innovation from the FCU has been RAMBO, or Remote Access Management Bot, to deal with requests for remote access token provisioning. FCU typically would receive around 400 requests a week for remote access, but there was a surge in the volume in early March to 1700+ requests per week due to COVID-19. The FCU team had a massive backlog and placed a high priority on completing the provisioning.
Launched on March 13, RAMBO was integral during the first stages of the COVID19 response, enabling BMO to quickly and effectively transition its workforce to remote network access. More than 11,000 requests were reviewed and triaged by RAMBO, providing an additional 1,300 hours of team capacity to address this critical activity. The rapid uptake allowed employees to safely work from home right at the start of the COVID-19 lockdown. It also enabled BMO to meet its commitments to customers, by ensuring minimal or no impact to bank operations.
Larry Zelvin, head of the FCU at BMO, commented:
“The development and deployment of RAMBO during this heightened, ever-changing threat environment is a testament to our purposely designed collaborative approach of combining world-class technology and human capital. This highly effective model ensures that we can continue to effectively prevent, detect, analyze, respond to and recover from any and all threats aimed at our bank, clients and partners.”
All in all, BMO has been achieving significant impacts through RPA. Steve Tennyson, Chief Technology and Operating Officer of BMO Financial Group, commented,
“Technology is evolving at a great speed, as are the needs of our customers, and so must we. BMO has been achieving significant impacts through robotic process automation in terms of efficiencies, cost savings, and increased employee experience,” says Steve Tennyson, Chief Technology and Operating Officer BMO Financial Group. “Across the organization, we’re looking at ways to leverage new technology – more so now than ever before given our new environment, to enable our business and better serve our customers.”
Looking into the future, with technology leadership’s support BMO plans to further leverage machine learning and other modern toolkits in conjunction with RPA to allow automation with higher levels of intelligence and capability.
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265078fc687f7125e924a1e71e146fb7
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https://www.forbes.com/sites/tomdavenport/2021/01/13/data-exhaust-turbocharges-mastercard/?sh=6eb545ad87df
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Data Exhaust Turbocharges Mastercard
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Data Exhaust Turbocharges Mastercard
Mastercard contactless payment card Mastercard
Thirty years ago, consultants Stan Davis and Bill Davidson wrote a book called 2020 Vision in which, not surprisingly, they laid out their vision what would happen by 2020. I am not quite ambitious enough to review all their predictions, but one is of particular interest to me. In fact, in a Wall Street Journal column 7 years ago, I wrote this about one prescient Davis and Davidson prediction:
a company's "information exhaust" (information byproducts gathered in the course of its normal business) could be used to "informationalize" a business (develop products and services based on information).
I wrote then that big data companies were beginning to make use of data (fewer syllables than information, roughly the same thing) exhaust, but it’s been a slow trend to go mainstream. Many companies lacked the rich data, the technical skills, and the business insight to create new products from data exhaust. Just as we didn’t figure out how to use engine exhaust to power cars until turbochargers became widely adopted, most companies haven’t had the turbocharging mechanism in place to make data-driven products and services feasible.
Data & Services at Mastercard
One company that clearly does have turbocharging capabilities for data exhaust is Mastercard. Specifically, its “Data & Services” business unit, led by Raj Seshadri, seems to have all the necessary components. I knew that this organization existed, having co-authored an article recently about Mastercard’s Chief Data Officer, JoAnn Stonier. But I didn’t realize what a great example it is of developing an organization that can turbocharge performance with data exhaust.
It may be possible to find someone better than Seshadri to play the role of President, Data & Services, but it’s difficult to imagine. Initially trained as a Ph.D. in Physics, I told her—and she agreed—that she might have become a data scientist if she’d gotten that degree (from Harvard) a few years later. After a short postdoc at Bell Labs, she got an MBA from Stanford, ventured into consulting at McKinsey for a decade, and became a partner there. She then worked at several large financial institutions, including US Trust/Bank of America, Citi, and BlackRock in roles ranging from sales to marketing to strategy. Then she came to Mastercard to lead its work with banks and credit unions in the U.S., before taking on her current role in early 2020. A leader of Data & Services would need to know something about data as well as the business contexts in which it is used, and both are undeniably present in her background.
Mastercard doesn’t report financial results separately for the Data & Services unit, so it’s difficult to assess its size and performance. But then-CEO Ajay Banga said at an investor conference in 2019 that the company’s services lines (which include data & services, as well as cyber & intelligence solutions and processing) represented about a quarter of its roughly $15 billion in 2018 revenue. In a more recent Fortune interview, he implied that those businesses comprised a third of the company’s revenues. In short, Data & Services is a significant business in itself.
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There are multiple components to the Data & Services business, including:
Consulting Analytical services Marketing services Innovation services Software platforms such as Test & Learn Loyalty services
Seshadri notes that for any given client project, “All the ingredients are already in the pantry—it’s just a question of how to cook up the right meals.” The overarching principle of the business, she said, is simply to use data and analysis to make smarter decisions with better outcomes for customers.
But how does Mastercard Data & Services do that? There seem to be several different components that make the business work. I’ll describe four here: the data, the software, the methods employed, and the people.
The Data and the Ethics Behind It
Mastercard’s payments data is clearly the core asset of the Data & Services business. As the unit’s website notes upfront, “Mastercard’s real-time, anonymized and aggregated transaction data is the world’s best resource for consumer-facing businesses to develop a holistic view of the behavior of different consumer segments.” Mastercard now has about 3 billion cardholders who make about 90 billion transactions at about 70 million merchants through about 40,000 banks and financial institutions in about 210 countries and territories. That adds up, of course, to a massive amount of information on the purchasing trends of humans. Seshadri confirmed that most of Data & Services’ engagements with clients make use of the insights.
Data & Services has a variety of “data products” based on this data asset. SpendingPulse, for example, which measures overall retail spending including estimates of check and cash spending (extrapolated to the government definition of Total Retail Sales) and issues monthly reports across various countries, industry sectors and channels, began in 2002. Its clients include governments, merchants, banks, and many other types of businesses. Business Locator is another data product that is particularly valuable in this pandemic, as it provides information on what businesses are open based on whether they are doing Mastercard transactions.
I learned when interviewing JoAnn Stonier, Mastercard’s Chief Data Officer, that the company has a strong focus on data privacy and ethics. It makes perfect sense that the company wouldn’t destroy the value of its data assets by not safeguarding the data or abusing consumer privacy. It has a well-articulated set of “Principles of Data Responsibility” that it released in 2019.
The Software Tools
The data turbocharger at Mastercard wouldn’t be complete without a set of software tools to analyze the data. Mastercard has made a number of acquisitions in recent years of technology firms. Some are fintechs that enable new or more efficient financial transactions, but several are primarily oriented to data analysis and are part of the Data & Services portfolio. I’m most familiar with an offering called Test and Learn, which is based on an acquisition of Applied Predictive Technologies (APT) in 2015. I wrote in a 2009 article before APT was acquired that its software “leads users through the test-and-learn process, keeps track of test and control groups, and provides a repository for findings to be usefully accessed in the future.” Presumably it still does that, but now it has plenty of purchasing data to use as a dependent variable in a wide range of business experiments.
Some of the other analytics-oriented software businesses within Data & Services include Cytegic, a cutting-edge cyber risk assessment and management platform; and Session M, a customer data and loyalty platform based in Boston.
The Methodology
Seshadri said that although there are a diverse set of services and offerings within the business unit, there is a common methodology that is used on client engagements. It is centered on the key opportunity or challenge a customer is facing, and has the following steps:
Discover—Look at all available data that’s relevant to the client and business issue, and responsible to use Recommend—Apply analytics and consulting to tease out meaningful insights Act—Executing the proposed solution—at this step Data & Services typically gives the customer a choice about whether Mastercard will implement the solution, help with implementation, or make recommendations for it; Improve—Measure the impact, and determine how to make the results better over time.
This is a straightforward set of activities that might be found in any data-oriented services business, but it’s probably useful to have a common framework for working with clients and attempting to improve their businesses.
The People
In any services business, a key success factor is having great people. Data & Services doesn’t reveal how many people work in the unit, but there are clearly a good number of them. One account of SpendingPulse said that the company overall has 2000 data scientists, many of whom probably work in Data & Services. There are also a number of economists, at least some of whom work in the Mastercard Economics Institute, a part of Data & Services. The Institute was launched in 2020, and provides both customized insights for clients and a series of public reports. One series is called Recovery Insights, and was intended to help businesses and governments recover economically from Covid-19. Its reports address topics like “The Shift to Digital,” “Travel Check-In,” and “2020 Holiday Shopper.”
Data & Services also has a large number of consultants, and they are located around the world. This isn’t new; the Mastercard Advisors consulting business was created in 2001. It has a focus at the intersection of payments and management consulting; a job description for a “Senior Managing Consultant—Advisors” in San Francisco describes the role:
“We combine traditional management consulting with our rich data assets and in-house technology to provide our clients with powerful strategic insights and recommendations.”
Lessons for Other Data-Rich Firms
So if your company has a lot of data and you think it may be valuable as the basis for products and services, the Mastercard Data & Services business unit will certainly be instructive. The key lesson is that you need a variety of capabilities to surround the data with value. You need to be fully committed to the data-driven business idea in order to assemble these resources, and you need to be sure that your data is sufficiently valuable to be worth the trouble. Mastercard’s clearly is, and it has been proving that assertion for at least twenty years by now.
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d50d5f45353b3fc478954a5c30de9129
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https://www.forbes.com/sites/tomdavenport/2021/01/18/the-future-of-work-now-pharmacists-and-the-robotic-pharmacy-at-stanford-health-care/?sh=46d641d23937
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The Future Of Work Now: Pharmacists And The Robotic Pharmacy At Stanford Health Care
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The Future Of Work Now: Pharmacists And The Robotic Pharmacy At Stanford Health Care
New Stanford Healthcare hospital building. Stanford Healthcare
In November 2019, Stanford Health Care, an academic medical center consistently ranked among the best in the U.S., moved into a new hospital building. With seven stories and 824,000 square feet, the hospital required over a decade and two billion dollars to plan and construct. Most descriptions of the hospital focus on the airy private patient rooms or the state-of-the-art operating rooms, but one of the most technologically sophisticated aspects of the building is found in the basement. That’s where the hospital’s pharmacy lies, and it has some of the most advanced robotic equipment for storing, dispensing, and distributing medications found anywhere.
How a Robotic Pharmacy Works
A substantial amount of the pharmacy space in the new building is taken up by three robotic devices, all from the same manufacturer (Swisslog, which is, contrary to expectations, an Italian company). Two are for bulk storage and retrieval of medications. Called BoxPicker, these huge rectangular boxes have stacks of drawers containing boxes of medications. A mechanical picker moves up and down the aisles and removes the boxes that are needed. Many of the medications in these boxes are destined for dispensing cabinets on patient floors. They’re commonly-prescribed drugs that many patients might take. Less frequently-prescribed and bulky medications remain in the BoxPicker. It’s like a pharmacy shelf that brings medications to the technician and records inventory information in real time.
The other machine is a PillPick robot, also made by Swisslog, which packages up a day’s worth of medications for a particular patient into a small bag. There is one pill in each vacuum-sealed bag; it’s extracted from a bulk bottle by suction. if the patient requires multiple pills, the bags are connected with a plastic ring that connects all medications for a patient for a day. The PillPick can package up 1000 doses per hour, which used to require a pharmacy technician 4-5 hours a day to pack manually.
All three robotic machines automatically keep track of their inventory, and automatically generate orders for the hospital’s drug wholesaler each day. They are also all connected to EPIC, the hospital’s electronic medical record (EMR) system. Stanford is the first hospital to integrate the EPIC and Swisslog systems for full management of the medication supply chain. EPIC manages the medication inventory and is the source for all medication orders for patients. If a physician enters a medication order for a patient into EPIC, it’s automatically sent to the Swisslog system and the orders are automatically sent to BoxPicker or PillPick, and then packaged by a technician or automatically. If there’s a need for quick delivery, the pharmacy technicians put them into the hospital’s pneumatic tube delivery system for rapid arrival at the patient floor.
New Roles for Human Pharmacists and Technicians
There are 70 pharmacists and over 100 pharmacy technicians working in the hospital. Their jobs have changed substantially with the new building and systems. Deepak Sisodiya, the Director of Pharmacy at Stanford Health Care, explained:
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In the old building and before the new pharmacy management system was installed, pharmacists and techs spent much of their time picking up drugs for patients and delivering them to the bedside. That gave them less time for focusing on quality control and—particularly for the pharmacists—consulting with physicians and patients about their medications.
And time spent on quality control was more necessary under the old process. There was a bar code system to ensure that the patients got the intended medications, but human involvement in picking and packing drugs led to more errors. Pharmacists reviewed every order—and they still do—but there were many more errors found, and more time consumed finding them.
Joanie Wen, a pharmacist at the hospital, describes the quality role:
We no longer have issues with whether the right medication is in the PillPacks. It’s correct all the time; we haven’t seen any pill selection errors at all. The only issue is when there are pills stuck together in the pack, or when some pills are broken. We still check every order, but it’s a much faster process.
Technicians still have to prepare, compound and label the medications assembled in a “clean room” with negative air pressure. They include drugs administered intravenously, cancer chemotherapy drugs, and nutrition not taken by mouth. All of these medications require sterile environments, and they were prepared in a similar fashion in the old hospital.
Inventory management has changed dramatically with the new devices and systems. It was previously all manual and “guesstimate-based;” a buyer would walk the shelves for 4-5 hours a day and reorder based on experience. Now unless there is some type of malfunction, all inventory management and reordering is handled by automated systems, and is much more accurate. Vladimir Hernandez, a Supervising Technician in the pharmacy, said that his job has changed:
We used to know our inventory count only once a year when we did inventory yearly, but now this data is available live, with some monthly tasks. Some medication boxes are too big to fit into Swisslog, so we have to check their levels manually. But for the most part inventory time now just means printing out some reports.
Both Wen and Hernandez have time for new tasks in their jobs. For Wen, the focus is on consulting now rather than on filling and checking prescriptions. She spends most of her time in what is jokingly referred to as the “call center”—a set of cubicles in the basement where pharmacists take calls from physicians. Stanford is a highly research-oriented hospital, so physicians are always wanting to enter innovative doses or medication orders into EPIC. But the possible orders might not reflect what they want, so she must have a conversation with the physician to optimize the formulation for the patient. Wen is also notified if a physician has put in an order that EPIC deems to be incorrect, or if the formulation ordered isn’t in the system.
Now that distribution is largely handled automatically, Wen has much more time to work in the “call center” to answer questions from patients or nurses. A new task is to reconcile narcotic transactions on a daily basis to prevent diversion. She also has time to participate in various investigational trials, assisting the team by enrolling patients in trials, preparing their medication, and coordinating delivery. The hospital has at least ten trials underway and is enrolling patients daily.
For “coded” patients in urgent situations, Wen sometimes takes a variety of medications in a backpack to the patient’s room to administer or compound immediately. That is now her only exposure to the clinical floors of the hospital. She does miss some of the face-to-face interaction that she had when she was regularly distributing medications to the clinical floors. Most of that interaction is now done by specialist pharmacists in various hospital departments.
Both Wen and Hernandez are more focused on technology than they were previously. Hernandez’s job has evolved into a technology specialist, so he was assigned, for example, to build all the Omnicell dispensing units on patient floors, and to interface them with the EPIC and Swisslog systems. He has also had to learn the inventory management application.
Joanie Wen also finds that she needs to have knowledge of the EPIC, Omnicell, and Swisslog systems. If she gets a call from a physician or nurse about a problem with the system related to medications, she tries to help them resolve it. She wasn’t trained on this as a pharmacist, but doesn’t find it too difficult now. In the beginning, however, she said it was all a bit overwhelming.
Moving Toward a Fully Autonomous Pharmacy
Deepak Sisodiya, the head of the Stanford pharmacy services, is on the advisory board of Autonomous Pharmacy, an industry group attempting to move hospital pharmacies toward error-free autonomous operations. He feels that Stanford has taken a major step toward that goal with the new systems and processes in the new hospital building. Stanford has arguably achieved Level 3 (Sisodiya describes it as “halfway there”) in the five-level Autonomous Pharmacy framework, which is characterized by the following attributes:
Majority of processes automated, with barcode tracking applied widely Data integrated across enterprise and mostly visible Pharmacists somewhat focused on medication distribution, with some direct patient care. Technicians focus on manual procurement and controlled substances, and nurses rely on automated dispensing
Sisodiya feels that the roles of Joanie Wen and Vlad Hernandez already come close to the ideal for this level, and that they and their colleagues will evolve more in that direction over time as Stanford moves toward full autonomy. The Covid-19 pandemic arose shortly after the new hospital opened, so pharmacy staff have been somewhat constrained in how they practice their clinical roles. He’s confident, however, that Stanford will remain at the forefront of changing and improving how pharmacists and technicians add quality and value to patient care.
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76e6ac2b26d8c52b1aa16a614baac48e
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https://www.forbes.com/sites/tomdavenport/2021/01/21/an-rpa-robot-for-every-employee-at-dentsu/?sh=4717464c51c8
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An RPA Robot For Every Employee At Dentsu?
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An RPA Robot For Every Employee At Dentsu?
A StudioX screen from UiPath UiPath
If you follow the robotic process automation industry, you may have heard the idea that eventually every person within a company will have a software robot to perform all their previously-tedious tasks. This marketing concept, primarily promulgated by UiPath, a leading RPA vendor, is—I think—meant to be aspirational. The idea is that there will eventually be huge armies of citizen automators, each assiduously improving their own productivity by spawning bots to do the boring, repetitive tasks we all suffer through.
There are, to my knowledge, no large organizations that yet have one robot per person. However, there are some that are moving in that direction. One of those is dentsu international, a global ad agency and PR firm headquartered in Tokyo. It’s the 5th largest ad agency network in the world, with over 60,000 employees in 145 countries. That term “network” is an important one, because dentsu, like most of its competitors, is a holding company containing many holdings. Most were obtained by acquisition, and historically were left pretty much alone if they performed well.
A Chief Automation Officer
Max Cheprasov, however, would like dentsu’s diverse holdings and business processes to have a bit more in common. He’s the firm’s Chief Automation Officer, a title held only by a few in the world, at least according to my LinkedIn search. He has both an operations and a technology background, and he combines those capabilities to produce operational improvements in dentsu’s processes. He started getting excited about RPA and automation more broadly in about 2017, in part because he felt that traditional process improvement approaches fell short. He now works with several automation partners, including UiPath, to standardize, improve, and automate information-intensive processes and tasks using RPA.
Some of those processes are enterprise-wide—tasks that are, or could be, performed similarly throughout the entire firm or at least large business units. With the idea of focusing on those, Cheprasov created an Automation Center of Excellence (CoE) at dentsu in 2018. Its mission was to find enterprise-level automation opportunities and develop bot solutions for them. CoE staff fanned out across dentsu, doing workshops and surveys to identify high frequency, labor-intensive tasks that were highly structured and amenable to large-scale RPA projects.
The CoE team, however, found only a relatively small number of large-scale opportunities. They began work on those, which each required several months to develop. However, in its search across the company the team became aware of a much larger number of potential projects—"a long tail of microtasks”—done by individuals that would never be able to be addressed by the CoE. As Cheprasov put it, “We needed to figure out how do we bridge top down and bottom up automation opportunities.”
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The Automation CoE then adopted a second mission: to recruit and enable a set of “citizen developers” of smaller-scale automation solutions. The goal was to put tools in the hands of employees, take out the bureaucracy and accelerate innovation at the local level. This initiative coincided in time with UiPath’s announcement of StudioX, an RPA product designed for citizen developers to create automated small processes.
In 2020, the Automation CoE began to identify citizen developers across service lines and trained them to use StudioX. During that year fifty were trained, primarily in dentsu’s US media buying agency, Carat. Compared to some of dentsu’s other business units, the media business has somewhat more structured and repetitive tasks that are amenable to automation. Each citizen developer received twelve hours of self-guided training, then participated in a two-day hackathon with a StudioX engineer. The developers created sixty solutions during the hackathon that automated about 3500 hours of work. Many citizen developers then took other self-paced instruction modules. Each automation solution that was developed was added to the UiPath Automation Hub, which was available to all dentsu employees.
Two Citizen Developers
Jessica Berresse and Erica Shand were two of the Carat employees who went through the first round of citizen developer training. Kate Hall, an Automation Solutions Architect who leads the Citizen Automation Program within the Automation COE, had come to them suggesting that StudioX might help them improve the productivity of the specialized task teams (such as search, planning) and account teams they support. Both felt that the teams they worked with “performed brainless tasks taking hours of time” and involved “really smart people wasting their time doing things a robot could do.” Now both say they spend over half of their time on automation projects. Neither had much experience with robotics or programming beyond Excel macros.
One of Shand’s first projects involved a search team. She asked the team to describe a menial and time-consuming task. They mentioned one that involved finding specific ad campaign executions on Google Ads, then downloading, renaming, and saving them. The task took five people a total of about 70 hours each month. After the team described the specific steps they took when they did the task, Shand was able to design the same actions in StudioX within a few hours. Now the solution takes one bot about 35 minutes to perform one day per month.
Berresse, who has been at Carat for about seven years, was originally in a strategy and planning client-facing role. Now she is in Account Operations, with a focus on looking for and building cross-functional efficiencies that save the teams time. Before the RPA citizen developer role, she focused on finding efficiencies through advanced Excel formulas. When she saw what StudioX could do, she “jumped for joy.”
One of her favorite examples of tasks she’s automated was one of her own. When she started in the operations role, one of her assigned jobs was “timesheet police officer.” The finance team owned time reporting, but they were complaining that too many people weren’t filling out their timesheets on a timely basis. They asked the operations team to address the issue, and Berresse found herself reviewing the reports of late timesheets and sending the same emails each month to habitual timesheet offenders found in the report. She was able to quickly build a StudioX bot to go through the report, find the offenders, and fill in the details of email templates. She was very happy never to have to be timesheet policewoman again.
Both Berresse and Shand said that they play a process improvement role as well as an automation one; they are not trying to automate bad processes. The goal is to optimize what the humans do, and then automate that with a bot. Berresse commented, “Nobody wants to automate for the sake of automating; in some cases we might identify enough improvements that the team might not need a bot after all.” Shand agreed: “We almost always do some process improvement before automating the process. A team might be downloading things one by one instead of in bulk, and it’s part of our job to encourage them to do it in a better way.”
Moving Forward with Citizen Development
Dentsu, Max Cheprasov, and the Automation CoE have ambitious plans for citizen development going forward. Cheprasov said that the CoE hopes to triple the number of citizen developers in the first quarter of 2021. They also plan to extend the program into Canada and into dentsu international businesses beyond Media, including Creative and CXM (Customer Experience Management) units. The CoE has also done automation work in the IT and Finance functions for dentsu, and they hope to expand into other functions as well.
In addition to collecting automation programs in the Automation Hub, in 2021 the CoE will also collect ideas and documented requirements for them. Kate Hall said, “When a task isn’t something you personally do, figuring out the steps involved can be difficult. Once we get similar process documentations in the automation hub, the citizen developers will have to spend less time asking people what they do.” She said that the CoE also has quarterly meetings with the citizen development community, at which tips and tricks, new software features, and new published bots in the automation hub are publicized.
Cheprasov is focused on the big picture, and how automation might change the industry. “We plan to reward people who automate aspects of their work with incentives—not everybody has to be a developer, but we want to reward those who make themselves and their groups more productive. No other company in our industry has done this nearly as aggressively as we have, although some have tried automation within particular business functions—and I know they’re watching us.” He sees citizen-based automation as the quickest way for any organization to get started with RPA.
RPA and UiPath are also at the heart of a collaboration that dentsu has developed with AutonomyWorks, a company that specializes in creating job opportunities for its employees on the autism spectrum. The Automation CoE has upskilled AutonomyWorks employees and used them on its own projects. As a dentsu press release on the partnership notes, “Many people on the autism spectrum excel at tasks that require a higher aptitude for repetitiveness, pattern recognition, and attention to detail. With the advent of robotic process automation (RPA) and continuing maturity of AI services, an organization can strike a perfect collaboration balance between the humans and robots by using cutting-edge technology to augment human work in the most effective and efficient way.”
Cheprasov often says that the mission for automation at Dentsu is to “elevate human potential through automation.” That’s true, he said, for the AutonomyWorks employees as well as the over 60,000 Dentsu workers. Perhaps, he mused, there will be 60,000 bots within the company at some point.
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85211350af285a4b46c08266627279f8
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https://www.forbes.com/sites/tomfgoodwin/2016/07/14/4-ways-smartwatches-can-win-your-wrist/
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4 Ways Smartwatches Can Win Your Wrist
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4 Ways Smartwatches Can Win Your Wrist
Smartwatches have been an underwhelming product category thus far. Born of a need to shout out the features, smartwatches are now massively over-engineered, all so they can replicate the functions now being done by smartphones. Do I really want to make calls or see images from my wrist? Should I really use my watch to order a burrito, when nature has already given me a mouth?
And yet, with few exceptions these watches have large, bright, colored screens that require large batteries, forcing large form-factors and frequent recharging. They use relatively heavy operating systems, requiring yet more power, and are armed with a powerful foundation that offers an array of complex and impressive uses, that few people want – something needs to change. I’d suggest that electronics companies start by thinking around the needs of people today and in the future, thinking about ways to make life easier and reduce cognitive burden, not merely push out what’s made possible by clever engineers. Make things people want, don’t make people want things.
And people already want smartphones. Actually, it’s more like they need them, but every time you pull your smartphone out from a pocket or purse, you run the risk of a pricy investment being dropped, stolen, scratched, or otherwise damaged. And once you’ve activated the screen, the battery expenditure brings you one-step closer to a vital personal asset being rendered useless. Smartwatches should minimize both, by carrying out functions that don’t require you to stop what you’re doing (in the way that a smartphone does), but instead complement what you’re doing, in the way that a smart wearable should. Here are four examples.
Glanceable contextual nudges
As I’ve noted before, the internet is becoming thinner, it’s becoming less about search and more about key contextual nudges. This is where the smartwatch can win. A smartwatch screen should be optimized for “glanceablility” and not protracted reading. It
should be designed to only show simple messages – a nudge to tell you to turn right, a buzz to
tell to you to change direction, the first few words of a text message, your next appointment, and, of course, the time.
Apps on the smartwatch should be designed around this lighter footprint, but also around the idea of context-awareness. They should be based on your movements, intentions, locations and other situational information like weather and traffic conditions. If you regularly use a citibike at 8:30am from your home address, but the next morning at 8:20am there are no bikes, your smartwatch should simply alert you to this and offer the next best location on your route. If you have a meeting a long walk away and it starts to rain, your watch should suggest calling Uber. When you enter your home, your watch should suggest mood or bright lighting. Everything it offers you should be in the form of contextual smart nudges and an internet that anticipating decisions you may want to make.
A voice UI hub
Increasingly our transactions are not just thin and glanceable, they’ve actually vanished altogether. From Google now to Amazon Alexa, we’re slowly finding voice UI to be fast, accurate, conversational and instinctive. The smartwatch of the future needs to place less emphasis on the device and more as an access point to smartness in the cloud. I see smartwatches becoming ambient audio assistants, prompting us to open the curtains after turning on the alarm, being the gateway to playing our favorite music, or even playing queued TV shows.
Intimate data capture
Like any Fitbit, or Microsoft band, or Huawei watch, the device should record heartrate, steps taken, and the usual array of health data, and other habitual data you might want to track for the purposes of self-improvement. From receipts for the things I buy, to recording my payment behaviors, to my sleep, I want it all recorded and stored in one place where I can control access. I’m fine with my credit card company knowing my location so long as I don’t get payments blocked, I’m fine with my airline chasing me as I’m far from the gate – transparency and value exchange are key in this new world of privacy.
ID & transaction
The final and as-yet rarely mentioned aspect would be as our personal electronic ID and touchpoint interface – replacing much of the bric-a-brac we keep in our pockets and purses now, such as keys, security passes, and cash and credit cards. As we increasingly use digital tools for everyday transactions, we’re going to increasingly want that tool to have a battery life equal to that of the average business trip, not just the average business day. Thus, I see the smartwatch as our way to handle everything when we’re out and about. I want to jump on a train and be billed by a swipe, to access a plane and a country with a passing of the wrist. And of course there are many other potential transactional uses. Perhaps we’ll one day exchange contact information by pressing our watch-faces together (“watch-kissing” folks, you heard it here first).
The future of devices is in entry to systems and partnerships
All this means that smartatches of the future are less about in the incredible engineering of hardware minimization, but in the maximization of the services, platforms and partnerships of the future. From working with retailers on payment and receipts to smart home makers on protocols and platforms for the home, to security systems for buildings or payments for transportation companies to locks on hotel chain doors. The company that thrives in the future won’t be closed, tight, and control-obsessed; it will be open, transparent and progressive. The future looks bright, so long as we can build these open platforms for the benefit of all.
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0890fc341cdc95ada27d863a910e6b6d
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https://www.forbes.com/sites/tomflynn/2019/04/24/carolina-panthers-nfl-draft-preview/
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Panthers NFL Draft Preview: An Edge Rusher Like Brian Burns Leads Carolina's List Of Needs
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Panthers NFL Draft Preview: An Edge Rusher Like Brian Burns Leads Carolina's List Of Needs
The Florida State Seminoles' Brian Burns looms large among the Panthers' first-round options. (Photo... [+] by Don Juan Moore/Getty Images) Getty
The Carolina Panthers' foray into the free-agent market was more of a maintenance effort than an attempt to fill their considerable needs heading into the 2019 season. With the Nos. 16 and 47 overall picks, they'll seek an immediate impact player defensively or cast an eye toward a top available offensive lineman, and in subsequent rounds, they'll look for a defensive back or quarterback.
Curious what the NFC South rival Falcons, Saints and Buccaneers will be up to in the draft? Check out Forbes' complete NFL draft coverage.
Team Needs
Offensively, Carolina will seek to fill holes in its line, where it lost center Ryan Kalil to retirement and released a still-under-contract Matt Kalil at tackle. Cam Newton should return under center for the Panthers, but questions about his long-term durability persist – he turns a prematurely-worn 30 on May 11. Newton is currently progressing through an offseason shoulder surgery recovery and per the Panthers is on schedule to be available for Week 1 of the season. It would be a surprise to see the team pick a quarterback at #47 (with a possible caveat noted below), but with the #77 overall pick (one of two picks in the third round), they could also look to bolster their emergency scenario options behind Newton if a quality choice is on the board.
On the far side of the ball, the Panthers draft decisions should work in push-pull tandem. If they land a much-needed edge rusher early, that diminishes the urgency for upgrade work in the secondary. They re-signed Eric Reid in the offseason at safety, a critical move in solidifying a unit that yielded 32 aerial touchdowns (tied for fifth-worst in the NFL, and just four scores from a league-worst) last year.
Failure to land an early-round rusher will then bump up the remaining defensive secondary options on the Panthers' draft radar.
Mock draft: Forbes.com's contributors project all 32 picks of the first round
First-Round Targets
The Florida State Seminoles' Brian Burns projects on many draft boards right in the neighborhood of where the Panthers will be picking in the #16 spot. In December, Burns declared his intention to enter the draft after three seasons in Tallahassee. Last year, he played in 12 games and registered 52 total tackles, including 15.5 for a loss. He also had 10 sacks. All three numbers were improvements over 2017, despite playing one less game. Burns impressed scouts at the NFL Combine, and showed soft hands in underneath coverage that would lend flexibility to the Panthers' down-and-distance units if he takes on a linebacker role.
Montez Sweat is another edge rusher who ranks lower than Burns here only because he will probably be drafted before the Panthers’ number is called. He ran a 4.41 in the 40-yard dash at the NFL Combine, the best-ever for a defensive lineman should he play that role at the next level. Sweat struggled with off-field issues early in his college career, but appears to have matured. He moved from Michigan State to Copiah-Lincoln Community College (Miss.) and then to Mississippi State. His availability in the first round is a wildcard, but if he is around when the Panthers' turn is up, he would be a hard option for any team to resist at #16.
Alabama's Jonah Williams would bolster a depleted Panthers offensive line. (Photo by Robin Alam/Icon... [+] Sportswire via Getty Images) Getty
Jonah Williams, an offensive tackle from Alabama, would help fill the void created when the team parted ways with Matt Kalil at left tackle. Williams, like Sweat, could be off the board before the Panthers' number is called.
Later-Round Targets
Burns, Sweat, and Williams should leave the table in the first round, and the Panthers then step up in the second-round with the #47 overall selection.
Notre Dame's Julian Love is a cornerback who projects into the second or third round. With a 4.54 40-yard dash his speed is questionable for an NFL-level corner, but technically he's one of the best available at the spot and has big-game and limelight experience coming from South Bend. He turns pro after his junior season, more of a liability for a defensive back in learning NFL schemes than for an edge rusher like Burns.
North Carolina State’s Ryan Finley doesn't line up well in terms of availability with the Panthers' selections, but if he is available to Carolina at some juncture outside of the first round, he becomes an intriguing and well-known option, especially with two picks (#77 and #100) available to the team in the third round.
The Panthers underneath pass receiving game is in solid shape with Christian McCaffrey and the recent addition of Chris Hogan in free agency. Stanford's Kaden Smith, a 6'5" junior tight end who declared late for the draft, could be a quality sixth or seventh round pick if available and would be a reliable part of an eventual replacement package for Greg Olsen at the position.
Best-Case Scenario
In a best-case scenario, the Panthers land Burns or Sweat and help take the pressure off their secondary this fall. If they do, the team will eye a reversal of a 7-9 2018 mark and vie to become a perimeter player in this fall's playoff picture.
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eabb7e3860da3af6bf1ebc7ee29c10c4
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https://www.forbes.com/sites/tomflynn/2019/08/10/nc-state-football-2019/
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N.C. State Football Retools In 2019
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N.C. State Football Retools In 2019
JACKSONVILLE, FL - Matthew McKay #7 of the North Carolina State Wolfpack runs with the ball against ... [+] the Texas A&M Aggies during the 2018 TaxSlayer Gator Bowl. (Photo by Joe Robbins/Getty Images) Getty Images
On Sunday, N.C. State will hold its annual "Meet the Pack Day" as it heads into the heart of its 2019 training camp. This year the name is especially fitting as of the four Tobacco Road football teams, the Wolfpack will have the most new faces in key roles when it opens its 2019 schedule later this month at Carter-Finley Stadium.
N.C. State comes into the season on the heels of consecutive 9-4 campaigns. Over the broader span of the last half-decade, the Wolfpack has appeared in five consecutive bowl games, winning three of them, and within the conference N.C. State has now posted back-to-back winning ACC records for the first time since 1991-1992.
RALEIGH, NC - SEPTEMBER 29: Head coach Dave Doeren of the North Carolina State Wolfpack directs his ... [+] team against the Virginia Cavaliers at Carter-Finley Stadium on September 29, 2018 in Raleigh, North Carolina. NC State won 35-21. (Photo by Lance King/Getty Images) Getty Images
Head coach Dave Doeren enters his seventh year with a record of 43-34 in Raleigh and an overall career mark of 66-38. Doeren signed a new five-year deal earlier this spring, and the consistency of his tenure has raised the level of what Wolfpack fans will expect to see at Carter-Finley Stadium this fall, even after having 13 players drafted by the NFL in the past two years.
One of the biggest offseason losses on offense was under center, as last season's starter Ryan Finley was drafted in the fourth round by the Bengals. Finley spent three years in Raleigh after transferring from Boise State and threw for 60 touchdowns and over 10,000 yards, while emerging as one of the top quarterbacks in the ACC. Reggie Gallaspy finished his college career in the backfield for the Wolfpack last fall with 18 touchdowns and 1,091 yards. He was the third different N.C. State runner in as many years to eclipse the 1,000-yard mark.
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CINCINNATI, OHIO - AUGUST 6: Last year's N.C. State starter, Ryan Finley, is now in training camp ... [+] with the Cincinnati Bengals. (Photo by Justin Casterline/Getty Images) Getty Images
The Wolfpack also lost three offensive linemen to graduation including Rimington Trophy winner, center Garrett Bradbury (Bradbury was drafted in the first round by Minnesota). Wide receiver Kelvin Harmon was drafted by the Redskins in the sixth round and fellow wideout Jakobi Meyers was signed as an undrafted free agent by New England and has been getting first-team reps with the Patriots this summer.
N.C. State even lost its offensive coordinator when Eliah Drinkwitz took the head coaching job at Appalachian State. Staff members Des Kitchings and George McDonald will serve as co-offensive coordinators following the departure, and the Wolfpack should retain their familiar spread offense look with stretch zone runs that will pressure defenses on the ground.
A host of candidates will vie to replace Finley with Matthew McKay, a redshirt sophomore, out in front of the class. McKay is an unproven quantity as he attempted just eight passes last year, but showed more mobility than Finley. Also in the mix are junior college transfer Bailey Hockman (a one-time Florida State Seminole), redshirt freshman Devin Leary, and freshman Ty Evans.
In the backfield, sophomore Ricky Person Jr. had 471 yards as a freshman despite persistent injuries and will be the next N.C. State runner to push for 1,000 yards. In the spring game, freshman Bam Knight also made a good impression and will complement Person on the ground.
Replacing Meyers and Harmon out wide are junior Emeka Emezie (53 catches, 616 yards, and 5 TDs in 2018) and sophomore Thayer Thomas, who caught 34 passes last fall as a freshman.
Across from scrimmage, the defense will have a more experienced core, with eight starters returning to Raleigh. Former Wolfpack linebacker Germaine Pratt is now in Cincinnati along with Finley, and was drafted in the third round by the Bengals just ahead his teammate. Pratt was a significant loss for a defense that struggled to bring pressure last year. They'll return senior safety Jarius Morehead who was the team's second-leading tackler last season with 81 stops and also added three interceptions. Joining him as a returner in the secondary is safety Stephen Griffin, who started six games last year but saw limited time due to injuries.
JACKSONVILLE, FL - DECEMBER 31: James Smith-Williams #39 of the North Carolina State Wolfpack in ... [+] action against the Texas A&M Aggies during the TaxSlayer Gator Bowl at TIAA Bank Field on December 31, 2018 in Jacksonville, Florida. Texas A&M won 52-13. (Photo by Joe Robbins/Getty Images) Getty Images
Up front, defensive end James Smith-Williams will return to his spot at defensive end and registered six sacks in 2018. The team also has four quality in-state recruits coming in on the defensive line in Joshua Harris, Terrell Dawkins, C.J. Clark, and Savion Jackson.
The Wolfpack opens the 2019 season at home against two in-state opponents, East Carolina (Aug. 31) and Western Carolina (Sep. 7), before traveling to face the Big-XII's West Virginia on September 14.
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2e0fe58099cc672f85ad1a6e0e596208
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https://www.forbes.com/sites/tomflynn/2019/10/19/carolinas-kyle-allen-quickly-gaining-poise-at-23/
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Carolina Panthers’ Kyle Allen Is Quickly Gaining Poise At 23
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Carolina Panthers’ Kyle Allen Is Quickly Gaining Poise At 23
LONDON, ENGLAND - OCTOBER 13: Kyle Allen of Carolina Panthers looks on during the NFL game between ... [+] Carolina Panthers and Tampa Bay Buccaneers at Tottenham Hotspur Stadium on October 13, 2019 in London, England. (Photo by Naomi Baker/Getty Images) Getty Images
At 23, the Carolina Panthers’ Kyle Allen is one of the NFL’s youngest starting quarterbacks and – six games into the season and heading into a bye week – has helped right a season that had all the earmarks of a lost campaign after just two weeks.
The year headed onto the shoals almost immediately as the Panthers opened up 0-2. They scored a promising 27 in a losing week 1 effort against the defending NFC-champion Rams, but the next week against the Bucs Cam Newton was noticeably ineffective as he labored through the hobbling effects of a foot injury. That injury, sustained in week 3 of the preseason against New England, came as the larger question of his pace of recovery from an offseason shoulder surgery was still being answered.
In week 3 of the regular season, Allen started in place of the injured Newton against the Cardinals in his home state of Arizona. He responded to the promotion by throwing for four touchdowns to lead the team to its first win of the year and just the second in its last 11 dating back to last season. Allen and the Panthers followed up that victory with three more, culminating with a convincing 37-26 win over the Buccaneers last week in London.
Allen played as an undergraduate for two seasons at Texas A&M before transferring to Houston, taking a requisite redshirt year, and then starting three games for the Cougars before being benched by then-head coach Major Applewhite in the fall of 2017.
The transfer and redshirt year, followed by the benching in Houston, didn’t dissuade him from entering the spring 2018 NFL draft as a junior. It appears to have dissuaded NFL teams from pursuing him, however, despite solid statistics over parts of three college seasons. That is increasingly looking like a mistake.
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Allen went undrafted, was signed as a free agent with the Panthers in April of that year, and was later released before returning to Carolina’s practice squad in the fall. He garnered a week 17 start following injuries to Newton and backup Taylor Heinicke and delivered a win, the first in eight games for the Panthers.
The 6’3” Allen is quick to note that the Panthers’ success in the last four weeks has been the result of the efforts of many contributors, and the stats through week 6 back up his assertion. Christian McCaffrey could challenge the league’s all-time season scrimmage yardage record and currently leads the NFL with 618 rushing yards. He also has 305 receiving yards and two touchdowns through the air.
Carolina Panthers linebacker Brian Burns (53) tackles Jacksonville Jaguars quarterback Gardner ... [+] Minshew (15) forcing a fumble during the second half of an NFL football game in Charlotte, N.C., Sunday, Oct. 6, 2019. (AP Photo/Mike McCarn) ASSOCIATED PRESS
The Panthers’ defense leads the league with 27 sacks, the most in the team’s history through six games. As a whole, the Panthers have now won four straight games on the road dating back to 2018, the longest such streak in the NFL and the franchise’s longest road winning streak since 2015.
“We’re a really complete team. We’re playing complementary football right now,” said Allen, following last week’s win in London. He added a refreshingly succinct explanation as to why he’s improving – experience. “I think that it’s just that you experience a lot of things out on the field through different games,” said Allen.
“You’ve seen different defenses, different schemes. Different stuff that happens in the games…you’re just trying to absorb everything from an experience perspective and trying not to make the same mistakes twice.”
On one account – holding onto the ball while being tackled – Allen has looked like the newcomer to the starting ranks that he is. He’s fumbled a total of six times in his four starts, but in his last start held fast against the Bucs and didn’t fumble once.
Offsetting that propensity is an unmatched stat: Allen set an NFL record by going 5-0 in his first five career starts without throwing a single interception. He’s effectively compensated for an at-times loose grip when scrambling with the ball to a tight one when delivering it to his intended target.
The Panthers will return from their bye week to face a likely undefeated 49ers team on October 27 in San Francisco. The 5-0 49ers face the 1-5 Redskins this Sunday in Washington.
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90f79d3a8b7f646a394e4c02452c4cad
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https://www.forbes.com/sites/tomgillis/2011/05/05/the-best-thing-to-offer-a-technology-customer-choice/
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The Best Thing to Offer a Technology Customer: Choice
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The Best Thing to Offer a Technology Customer: Choice
I hit the carriage return a little casually. The rectangular green cursor just sat there blinking. Had my job been submitted? Should I submit it again? How long has it been running—is it seconds or minutes? Ugh…it feels like hours. What is happening down in the “glass room” of computing? Are there giant wheels turning together to solve my problem? Maybe I should go and get a drink. No, I’ll just wait. It must be almost done. Hold on a minute…did I load all the parameters for this job? What if I forgot “on”? I’ll have to run it again! Oh, how my head hurts. How long has this thing been running? OK, I am going to cancel the job and resubmit. No, wait, something is happening! Oh my gosh, here it is!
Wait…“Error 732, invalid parameters”? Huh? What the…?! #$@%&*^%#!
For those of us who have actually worked on a mainframe, the scenario above (with all of its implied colorful language) is probably familiar—staring at the blinky green cursor and wondering what, if anything, was happening.
The day I got my personal computer, my life as a design engineer was forever changed. Seriously. The transition from centralized computing resources to personal computing unleashed a multi-decade wave of productivity.
So now we want to time warp back 30 years to a system where all our data resides on a giant lump of iron in some distant data center? Well, maybe.
With the rapid rise of the consumerized endpoint, many enterprise customers are looking at Virtual Desktop Infrastructure (VDI) as a security solution that can deal with an unmanaged, heterogeneous set of endpoint devices. And for some applications, the VDI approach makes good sense. It has the advantage of anytime, anywhere access from any device. Data is always contained, so security policy can be tightly enforced.
But I see two major drawbacks to this approach. First is performance. There is no doubt that my concerns are shaped by my formative years working in a mainframe pit of despair, watching that good ol’ blinky cursor blink and blink and blink. Now, as a guy who works for the world’s biggest networking company, I fully realize that the Internet is getting faster and smarter, so a VDI session is not exactly equivalent to the VAX mainframe sessions I suffered through in the 1980s. Heck…maybe we can solve the latency problem—and maybe connectivity will get good enough so we can solve the offline problem, too?
But the other big drawback I see with VDI is the “iPad factor.” What is interesting about the iPad (and its many and growing number of cousins like the Cisco Cius) is that the innovation is a combination of the hardware device and the applications themselves. Tens of thousands of apps are being reinvented for these new mobile devices. The most obvious is the email client. When I buy my iPad/Android/Palm, a big part of what I am investing in is my choice of mobile apps. But the VDI model breaks this mold. In VDI, I’m running a standard app on whatever device is underneath. If I’m just trying to check my corporate email from my iPhone, does VDI really make sense? It certainly seems clunky.
I think the clear answer for large enterprises is that there’s a role for both. VDI provides very good security for the most valuable data. But there’s also a need for a native security architecture that will give end users an excellent seamless experience that is native to their device. So the iPad user gets the iPad mail client, and the Android user gets the Android client. When security policy is enforced in the network, both models can work.
The best scenario is to have the choice of using VDI where VDI makes sense—and still have a native solution for more ubiquitous access. Does this mean the pendulum will swing back to the days of the glassed-in mainframe computing center? I believe we’ll see 20 percent of the world moving to the “tower of computing power” and setting up large-scale VDI. For the other 80 percent, computing will stay personal. But with choices available that recognize the shifts underway, 100 percent will have a solution that works in today’s fast-changing environment.
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4f74700507bfebcfa95e996ec10c5a12
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https://www.forbes.com/sites/tomgillis/2011/05/19/solving-for-security-in-a-virtualized-world-do-we-repackage-or-reimagine/
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Repackage or Reimagine? Virtualization and the Potential for a New Security Regime
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Repackage or Reimagine? Virtualization and the Potential for a New Security Regime
I started my professional life using a mainframe. Back then the people running the mainframe world were known as the “data center guys.” These guys had a certain DNA combination that created an expanding waistline, a retreating hairline, a belt buckle the size (and shape) of Texas, and a penchant for big iron. This crowd ruled the data center for a long time, but virtualization in the data center is now driving a radical shift that seems to be changing everything.
Instead of having an application running on a dedicated tower of hardware power, apps are now free from the limitations of the infrastructure underneath. Hardware is evolving rapidly into dynamic blocks of utility computing (and storage and networking) that can be standardized, widely deployed, and efficiently utilized. This change is good news, as it can cut data center costs by 50 percent or more. If the big iron crowd from the mainframe days doesn’t adopt this fundamental shift, they’ll be hanging up their Texas belt buckles in the computer museum next to the punch card, the VAX, and a replica of the ILLIAC.
The same shift is also happening with security. Since most security products are primarily software based, it is not much of an effort to repackage these products as “virtual security.” But merely repackaging security products misses the point. Today’s security architecture was built at a time when the workplace was very different than it is today. End users would come into the office and work on a PC, which sat on a desk and was connected by a wire to a port on the wall. At this time, the IP address was a pretty good proxy for the user’s identity. And applications would each run on their own tower of power—hardware that was often running in a unique data center rack or racks. Therefore segmenting the data center in this era was relatively easy; it was based on IP address ranges and, later, on virtual LANs (or VLANs).
But the workplace of today (and tomorrow) looks very different. We’re no longer tied to a specific lump of hardware. We expect to access our apps in the cloud from any device, at any time, from anywhere. Therefore the IP address is a less useful means of defining data center boundaries.
We need a new capability that allows the security team to maintain its meaningful policy enforcement capability, while enabling that policy to be relevant across all infrastructure—physical and virtual. An important nuance here is that the policy should be consistently enforced across physical infrastructure as well as across virtual infrastructure from any virtualization vendor. This level of enforcement requires special access to the hypervisor. Without this access, a virtual security solution can’t see traffic between two virtual machines (VMs).
How the various security vendors plan to address hypervisor access is still an open question. And how that question gets answered is significant—and is likely to reshape the security vendor landscape.
So as we consider various virtual security solutions, simply repackaging today’s security software as a VM running in a cluster of other VMs is extremely uninteresting. Instead we must reimagine the way that we build and deploy security solutions. How do we bridge the policy model from today’s hardware-based firewalls to the virtual firewalls of tomorrow? How can we maintain a separation of duties, so that security policy definition is separate from traditional network operations? And how will we orchestrate all of these components in the dynamic, nimble data center of tomorrow? These are not small issues. But of course, that’s what makes my job fun.
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9a66f9665490fe747efd2154007957b3
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https://www.forbes.com/sites/tomgroenfeldt/2012/09/24/data-centers-as-power-hogs-will-green-issues-impact-high-frequency-trading/
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Data Centers As Power Hogs -- Will Green Issues Impact High Frequency Trading?
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Data Centers As Power Hogs -- Will Green Issues Impact High Frequency Trading?
James Glanz has an excellent piece in the Sunday New York Times and continuing today on how much power is consumed by data centers in the U.S. To provide fast response time, they operate near full capacity much of the time, and waste up to 90 percent of their energy consumption.
Several data centers, including several operated by Amazon in northern Virginia, have faced large fines because their emergency generators were installed without permits, and others because the diesel generators have contributed significant air pollution during testing.
One of these days opponents of high frequency trading (HFT) are going to ask how much power is consumed by financial firms’ data centers and exchange colocation facilities. Could green issues be the undoing of HFT?
Glanz reports that Viridity, which tests data center server utilization found “in one sample of 333 servers monitored in 2010, more than half were found to be comatose. All told, nearly three-quarters of the servers in the sample were using less than 10 percent of their computational brainpower, on average, to process data.”
“The data center’s operator was not some seat-of-the-pants app developer or online gambling company, but LexisNexis, the database giant.” The company was able to shrink its data center from 25,000 square feet to 10,000 but unfortunately Glanz doesn’t go into detail on server consolidation and virtualization. He did report that surveys by McKinsey and Gartner have found utilization at data centers runs in the 6 to 12 percent range.
IBM PureSystems, which I wrote about last week streamlines operations and reduces system waste by placing both Power and x86 chips on a single chassis; the company said that two or three PureSystem racks could replace 100 to 200 Sun servers.
The problem, and the solution, are not exactly new. Four years ago I wrote about Tideway Systems in London. It was offered tools to track utilization in servers, and typically found that several were no longer doing anything, but nobody knew for sure so they were left to run, with all the attendant power, cooling, real estate and software licensing costs. Tideway provided tools to find them, turn them off and consolidate servers. The company was acquired by BMC in 2009.
Glanz reports that “In a typical data center...the energy wasted is as much as 30 times the amount of electricity used to carry out the basic purpose of the data center.”
Technology and operational management can improve this picture. Glanz said that The National Energy Research Scientific Computing Center, which consists of clusters of servers and mainframe computers at the Lawrence Berkeley National Laboratory in California, ran at 96.4 percent utilization in July...the efficiency is achieved by queuing up large jobs and scheduling them so that the machines are running nearly full-out, 24 hours a day.” Of course, for a data supporting unpredictable traffic on Facebook, or video downloads on YouTube, lining up jobs hours in advance of runtime isn’t much of an option.
“A company called Power Assure, based in Santa Clara, markets a technology that enables commercial data centers to safely power down servers when they are not needed — overnight, for example.
“But even with aggressive programs to entice its major customers to save energy, Silicon Valley Power has not been able to persuade a single data center to use the technique in Santa Clara, said Mary Medeiros McEnroe, manager of energy efficiency programs at the utility.”
He concludes with a quote from Gartner VP David Cappuccio that contradicts much of the story:
“That’s what’s driving that massive growth — the end-user expectation of anything, anytime, anywhere. We’re what’s causing the problem.”
Not really. Poor data center management is causing lots of it, and the story says so.
(More today on how Microsoft played hardball over diesel emissions (3,615 hours in 2010) and electricity rates at its data center in Quincy, Washington. Is Microsoft Bing a cancer threat? School officials worry.)
“The State Ecology Department says enough permits for generating power have been issued in Quincy to eventually pump out 337 million watts — roughly a third of the output of a major nuclear power plant.”
In another post on Forbes, Dan Wood offers a far different assessment of the Glanz reporting. He also includes links to several sites that offer more information on the way that technology and internet companies are working to increase data center efficiency.
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944a8b84478cfe8bfd70f8b430ed3cc5
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https://www.forbes.com/sites/tomgroenfeldt/2013/04/08/financial-advisors-are-adopting-social-media-fitfully/
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Financial Advisors Are Adopting Social Media, Fitfully
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Financial Advisors Are Adopting Social Media, Fitfully
Almost half of U.S. financial advisors are interacting with their clients through social media.
And the clients they chat with on Facebook aren’t just ‘tweens and millennials -- about 60 percent of advisors surveyed who were active on social media had client portfolios over $20 million, Accenture found in a survey of 400 financial advisors.
“The majority (60 percent) has daily contact with clients through social media, some likely flouting their firms’ current policies against this type of activity,” the study said.
Alex Pigliucci, global managing director of Accenture wealth management services, said social media creates a huge opportunity for firms that get it right and a real risk for firms that regard it mostly as a threat. Firms will have to recruit and train advisors on the basis of their ability with social media if they are going to survive the generational change when millennials will become increasingly important as both advisors and investors.
The survey showed that millennials are conservative and mistrustful when it comes to finance. It uncovered two big perception gaps between advisors and investors in knowledge of investing where advisors are three times as likely to describe clients as very knowledgable as the clients themselves -- 42 percent to 12 percent of clients. Advisors are also twice as likely as clients to describe the client investment preferences as aggressive.
The danger for advisors is that in overestimating investor knowledge, they will fall short of full explanations of an investment recommendation. For millennials in particular, this can lead to the perception the financial advisor is primarily interested in transactions.
Accenture suggested that advisors use online seminars, virtual meetings and online communities to educate investors.
“If an advisor makes a recommendation but doesn’t take time to explain it, that will erode trust,” said Pigliucci. A better way would be to make a recommendation is to push some information about the recommendation and links to outside sources to the client’s computer or tablet, and give her time to think about it.
“That changes the whole interaction, makes the process transparent.” Clients can look up information and not have to worry about looking stupid for asking questions.
Many tech-savvy clients are going to research recommendations anyway, he added.
“We found that after an advisor makes a recommendation, the next gen investors will check online and do some research before they will commit.”
Financial services firms that rely on brokers and advisors face a threat from online channels which are accumulating assets faster than full service firms, partly because of the growing popularity of passive investments such as index funds and ETFs, he added.
He thinks that financial advisors still have an important role because a lot of investors don’t feel equipped to make investment decisions.
“They don’t understand the markets well and if you can fill that void you will be successful in accumulating assets.”
Wealth management and private banking still lag in digital developments, he added, behind retail banking and well behind digital commerce leaders like Amazon. Financial firms can’t just compare themselves to their industry peers, because investors’ expectations are cross-industry -- how well does the financial advisor’s firm compare to Amazon or Nordstrom , for example.
“Customers have a high expectation of how to deal with social media and they expect realtime updates and alerts. Pop me an alert and have my advisor call me; I don’t care to come into your mahogany office.”
Social media users aren’t just young people, although a firm should assume that millennials, both financial advisor recruits and investors, are digital natives. Skill and comfort levels vary across ages and individuals, but for many clients in their 60s and 70s, social media is the way they communicate with children and grandchildren around the world. They too have high expectations of social media service quality from their investment advisors.
Coming out of the financial crisis, many investment firms have been slow to realize what a reputational blow has hit them.
“A lot of firms are only just now really getting to the maturity of monitoring consumer sentiment in social media,” said Pigliucci. Software tools are available to monitor what employees are saying on social media to avoid compliance issues, but few firms have moved beyond defensive measures to adopting social media strategies which make it easy for advisors to proactively interact with social media, he added. That creates opportunity for the leaders and a danger to those firms which lag in social media adoption.
Social media has been useful for advisors to recruit new clients. Forty percent said they had gotten new clients through Facebook, 25 percent through LinkedIn, and 21 percent through Twitter.
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ea047848eae35d4ccd4fa0b0a2eb5263
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https://www.forbes.com/sites/tomgroenfeldt/2013/06/03/keybank-moves-to-data-driven-decision-making/
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KeyBank Moves To Data Driven Decision Making
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KeyBank Moves To Data Driven Decision Making
When Cleveland-based KeyBank reaches a decision about its optimal branch footprint, the decision is based on analytics, said David Bonalle, executive vice president and director of client insights and marketing.
The bank used to have a committee that looked at branches and all the decisions had to be unanimous.
“Now all decisions have to be Net Present Value positive; someone would have to make the case in data terms. We use analytics to force discipline in how to think about the right answers for our customers and for the bank.”
Bonalle joined KeyBank about a year ago to lead an analytics center of excellence which centralizes all the analytics across the bank. He reports directly to the president of Key Community Bank which covers consumer, small business, private banking and middle market.
“I am on the president’s leadership team and we have this analytics function which cuts across all the businesses,” Bonalle explained. The commitment to analytics from the president and from Beth Mooney, the bank’s CEO, makes it very difficult for someone in the bank to disregard the analytics and rely on gut feel to go in a different direction.
“I present the finding that we have and they have made a really significant commitment that this is the way we will do things. We spend a lot of time on market research understanding the attitudes and needs of our customers.”
William Koehler, Key Community Bank president, explained the role of the analytics group:
"We are a relationship bank focused on understanding clients' needs, while providing targeted advice and differentiated solutions that address those needs,” he said. “We expect our centralized analytics team, focused on developing insights about client behaviors, critical strategic questions, and sales performance, to help our sales teams become more productive and impactful as they engage clients about their transacting, financing and investing objectives."
In many banks the analytics function is buried in marketing, said Bonalle. As an independent center at KeyBank, it has the chance to influence decision-making. The bank tests and controls for everything from new campaigns to new policies and incorporates the learning back in.
“The advantage [of this structure] is we are optimizing across all of our products.”
The analysts monitor campaigns and can adjust them, especially online.
“For example,” said Bonalle, “we had a marketing campaign that reflected our product managers’ view of our best assets. We ran analytics showing it wasn’t working, which ran completely against their business intuition. We spent a lot of time going through the analytics and why we had reached that conclusion.”
They agreed to change their approach, he said.
“The analytics weren’t complicated but the commitment to live by them is hard. A lot of companies are not structured the way Key is to benefit.”
The bank combines quantitative and qualitative research online, asking participants to answer standard surveys with scores of 1 to 10 but then also inviting them to write comments.
“We get a wonderful combination of how they are feeling and a quant measure which you couldn’t get in a focus group because it is too small.”
When the analytics group looked at branches, it identified changing behaviors, such as the move to online services and more use of mobile devices for banking. The bank was able to change staffing to meet needs that changed by the hour and close some branches, saving $35 million annually.
“We track all activities across all channels -- how do people use channels, segments per channel and future expectation. We have found it very important to get behind the numbers to understand why the trends are occurring, to marry usage data with attitudinal data.”
Just about every bank runs analytics on its customers; one thing that sets KeyBank apart is that it has centralized the analytics and the support from top management overcomes the interests of fiefdoms within the organization.
“KeyBank’s secret sauce is that it has made a commitment to make a decision based on what the analytics say is right for the customer regardless of the fiefdom. In the past it wouldn’t be unusual for a product manager to offer his product to more customers to hit his goals. We don’t do that any more. If our data tells us these customers would be better served by these products, that is how we do it. We conquer fiefdoms through the centralized analytics group.”
KeyBank has the standard tools like relational databases and transactional data, he said. It’s difference is how coordinated and sophisticated it is in analyzing data and how disciplined the entire bank is in using data rather than over-riding it with business judgements.
“A lot of banks do a lot of analysis,” said Bonalle, “and they have teams across the bank. That can create problems because it is hard then to create a best practice. At KeyBank we have a way to do analytics, we have a way to develop models and that’s how we go about solving problems. There are many ways to do analysis and you can get conflicting answers that are confusing and inefficient. We solved that by bringing the analytics all together. It is more sophisticated than if we were decentralized.”
KeyBank worked with Booz & Company in the initiative's early stages to assess the strategic importance of building a centralized capability as well as identifying critical organizational capabilities
The bank tested different ways of communicating with new customers, Bonalle added.
“By changing our approach we were able to reduce attrition by 25.1 percent versus the new-client communication approach used previously. The new communication was a more consistent approach of welcoming new clients to Key, and better delivered on our relationship strategy.”
The bank uses Mu Sigma, a high-end analytics and big data consultancy.
Before the center of excellence, Mu Sigma has been used by just one group. Now the firm’s expertise, especially in modeling and best practices, is used across the bank.
“Mu Sigma bring expertise from beyond financial services. Finance is very good at analytics but they look across all industries.”
The bank’s analytics center of excellence has about 40 people focused on analytics and another 40 on more general work such as reports and running campaigns to leverage the analytics.
Bonalle said that the analytics group works closely with the product groups, exchanging ideas about customer needs and what the data is saying about product strategy.
The bank sees strong migration to online and mobile, no big surprise there.
“People think it is just the young,” added Bonalle, “but we see adoption across demographics.”
To be effective and competitive as a relationship bank you need the best data and analytics about your customers.
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f757adcbc2e09789e9f5fff2290151a3
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https://www.forbes.com/sites/tomgroenfeldt/2013/09/05/lots-of-data-one-analyst-many-reports-narrative-science/
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Lots Of Data, One Analyst, Many Reports -- Narrative Science
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Lots Of Data, One Analyst, Many Reports -- Narrative Science
Narrative Science can make an equity research analyst 20 to 100 times more productive by using computers to turn data into narrative that sounds like a person wrote it, according to the company CEO. The Chicago-based company, which grew out of some journalism research at Northwestern, has developed software called Quill, that can create news stories, operational reports, customer statements and investment research.
“We can do it at incredible speed and scale and sounds like a human wrote it,” said Stuart Frankel, the CEO. “It is a horizontal platform, it can take just about any data from any industry and create any kind of narrative content.”
With a number of industries to choose from, the company decided to work on financial services as one of its core verticals with an initial focus on a few areas. Investment research is one -- helping companies expand the universe of companies, stocks and publicly traded debt issues that they can cover.
“A traditional research analyst has only so many hours in a day and can cover only so many stocks,” Frankel explained, “but if we can take what the analyst does, codify it, map it to our system and use it to leverage the analyst’s knowledge, we can increase his productivity 20-100x.”
Another area for Narrative Science in financial services is in customer communications where wealth management firms tend to inundate customers with a clunky amount of data oddly presented in lists and pie charts without much useful insight on how a customer’s portfolio is performing.
“We can take the data and deliver a personalized statement showing a customer’s portfolio, how it is doing in absolute and relative terms and against benchmarks and show the advice or moves a financial advisor has made. We are also doing things to help financial advisors prepare for meetings with clients,” Frankel added. “Now they will probably pull your account and try to refresh their memory and look at their notes. We we can assemble a document that prepares that financial advisor for that meeting, giving them talking points and topics they should focus on.”
The narratives are individually tailored, he added.
“One of the powerful aspects of our technology is that it is not template-driven. Each report is built from the ground up. It starts with the data and whatever the system gleans from the data it will generate in a document for the audience, even an audience of one.”
The company was selected for the 2013 FinTech Innovation Lab in New York, providing exposure to the leading money center banks in the city.
“It was great; it is great,” said Frankel of the intensive 12-week program whose impact tends to continue for months of interactions with banks after the formal program ends.
“The Lab gave us new ideas around product development. It gave us a lab to stress test a number of ideas very quickly in front of decision-makers and people who knew what they were talking about.”
Like other fairly new companies, he said, Narrative Science can face difficulty in finding the right people in a large distributed organization like a global investment bank.
“The Lab helped us identify the right people to give us feedback and potentially work with us. It opened relationships for us and accelerated discussions which put us in position to do pilots.” He hopes some large commercial deals will come out of it, he added.
Mutual fund companies could use Narrative Science for their reports and marketing materials that summarize the latest performance information. Insurance companies that want to improve their reporting around agent sales performance might also find it useful.
Frankel sees great opportunity beyond financial services as well, because every industry is faced with exponentially growing amounts of data.
“Imagine the amount of time and money companies are spending taking data, trying to get a couple of interesting things out of that data, and then putting it into PowerPoint or Word. It takes an extraordinary amount of effort.
“The demand and breadth of the opportunity is bigger than we had anticipated,” Frankel added. “We knew we were onto something, knew people people were struggling with the amount of data that they had, but as we talked to these firms, especially large organizations, we realized there is an unbelievable amount of opportunity, even with functional solutions like helping them report on HR activities or customer activity, or creating marketing communications and compliance documents.”
The company’s technology has been around for three years and was incubated at Northwestern’s schools of engineering computer science and Medill School of Journalism, he said.
“The idea was to automate the creation of long-tail content such as coverage of high school sports or Little League. You have millions of these events with tiny rabid audiences who are interested in the stories but the economics don’t work.”
Much the same applies to small companies in earnings season, he added.
“We do earnings previews for Forbes. A few days before a public company is going to announce, we generate a story. We have taken concepts from journalism, such as the concept of angles, to find out what the story is. If it is a financial news story on a publicly traded firm, we might say it is going to beat earnings or fall short of expectations.” The company has two patents -- issued in just two years-- and another 10 patents pending on the way it uses data to create a news story, he added.
For financial services, Narrative Science worked with content architects including writers, editors and financial analysts to configure the system.
“As we get into new domains and new reporting types, there is configuration work up front, but once we have done that, it is a relatively painless process to launch a new customer or new report.”
Narrative Science can tune its text to fit particular domain, type of report, type of content and it can even be customized to fit an individual’s voice and style.
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ce16ff216f97865942a9241e6c7b2de5
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https://www.forbes.com/sites/tomgroenfeldt/2014/02/11/billguard-offers-free-card-fraud-app-for-mobile-phones/
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BillGuard Offers Free Card Fraud App For Mobile Phones
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BillGuard Offers Free Card Fraud App For Mobile Phones
Mobile phone users can check credit, debit and bank account charges quickly and painlessly with an app from BillGuard which uses crowd-sourcing to detect fraud. Much like email programs have a button to mark a message as spam, the sleek BillGuard interface has a button to let a user select a charge and ask the system if it is fraud. The query goes to a database where other BillGuard users have identified transactions or merchants as fraudulent. BillGuard had offered its service free for two cards and $10 for more; today it announced that it is free for an unlimited number of cards.
“We have built a crowd-source system of identifying fraud on debit or credit cards,” said Yaron Samid, BillGuard’s CEO. “The system will ask others if this charge is OK or not OK, and if system see a few people saying this is not an unauthorized charge, we alert others that it is potentially fraudulent. The more people that join the network, the more effective it gets. We saw how many people were using the app and felt a responsibility to open it up.”
BillGuard for iPhone launched about 5 months ago, shortly before the Target card data breach, said Samid. BillGuard users would have seen immediately if their cards were being used to buy merchandise, or were being tested. BillGuard was the first firm to alert consumers of the Target breach, he added.
Samid said that after a data theft like Target, thieves put the card details up for sale. If they aren’t validated, cards might sell for $5, but if they are validated — by running a small transaction which a user might not notice — the card could sell for $100.
“Attackers who want to sell the cards will run micro charges, definitely less than $10, on tens of thousands of cards.” Most cardholders don’t check their charges regularly, or closely. If they do see a charge of $3.84 from an unknown merchant, they are more likely to let the charge slide than to complain. BillGuard software can identify fraud very effectively without burdening cardholders, Samid said. Users swipe to indicate a charge is OK or if it is suspect, and BillGuard can contact the merchant or the bank.
“In the last four months we have found more than $600,000 in fraud just by checking card activity with iPhone BillGuard.” The app, which is one of the highest ranked financial apps on the Apple store, has been acquiring 2,500 new users daily; it will be available for Android phones beginning next month. Users link the BillGuard app to their accounts in a read-only mode and it can check transactions as often as the user wants.
A graduate of the FinTech Innovation Lab in New York two years ago (see stories on left), BillGuard planned to sell its app to banks, which would offer the service to customers. Samid said the company is in pilot with one of the nation’s top ten banks, but he has found banks move even more slowly than the Lab had cautioned.
“I am disappointed the banks haven’t moved. We innovate in real-time and these banks are not structured to do that. They are bound by regulations and they are slow moving organizations. When, they do come around, however, we can distribute the technology to tens of millions of consumers. But I have learned our experience is not unusual; the typical sales cycle with a bank is two to three years.” Only available in the U.S. for now, BillGuard will launch in Canada, the UK and Australia, he added.
His plan is to also offer BillGuard as a service to good merchants who will be able to post a BillGuard certification on their site, providing the sort of of consumer ratings that eBay and Amazon offer. The service already helps differentiate good and bad merchants, Samid said. Algorithms help identify fraudulent merchants quickly. In addition, a button on the app lets a consumer dispute a charge.
“We give the merchant two days to resolve it before escalating the dispute to the bank, where the merchant might run into all sorts of chargeback fees. We do merchant reviews for the real world, from super-centers to a taxi driver taking a Square payment.”
Target has offered its customers credit monitoring, which will let them know if their scores have changed, but BillGuard offers transaction monitoring which sees what is happening on a card now, he added.
The solution requires consumer vigilance; Samid recommends checking cards at least weekly.
“There’s no technological substitute for personal vigilance. The card numbers are out there, and the effect on your card could kick in this week or a year from now. Check your card activity, report it to your bank, and you can get your money back.”
BillGuard users are highly engaged, the company says, opening the app four times a week on average.
“They verified over 1.5 million transactions last month, protecting themselves and everyone else in our national transaction monitoring network.”
With its analytics and data, BillGuard’s is expanding into personal budgeting and coupon delivery. Without holding users to a rigid and often unrealistic budget, it can provide a picture of total spending and spending by categories, presented in clear charts with comparison to previous periods, similar to what Moven offers its users. The company is also collecting coupon information from the Internet and using its views of a user’s spending to present relevant coupons.
“What if you could be alerted the moment there’s a money-saving coupon for one of your favorite places or a store you're about to enter - without having to actively search for it?” a company press release asks. “BillGuard’s new Smart Savings feature does exactly that. It’s a shopping protection service, preventing you from paying more when you can pay less. BillGuard searches the web 24/7 for coupons that will lower your bills - based on your personal spending patterns, and soon your geo-location as well. And our technology improves with use: as you cash in on particular savings, BillGuard adapts and begins tailoring your alerts accordingly.”
Once you have a consumer’s spending data, you can do all sorts of interesting things with it.
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a4ec64dcbf60b88429a06b42789a09a5
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https://www.forbes.com/sites/tomgroenfeldt/2014/02/28/financial-advisors-build-business-with-linkedin/
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Financial Advisors Build Business With LinkedIn
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Financial Advisors Build Business With LinkedIn
It’s been a couple of years since social media made a splash at the securities industry’s SIFMA tech conference in New York. At that time it seemed an alien intruder subject, suspect in an industry that worried about compliance, especially over communications that left a full trail in the hands of customers.
Acceptance of social media in banking and wealth management hasn’t been fast, but with several companies offering software to monitor and control posts on LinkedIn, Facebook and Twitter, it is slowly gaining acceptance.
For a time many firms decided they couldn’t stay compliant if their advisors were on social media, so they avoided it entirely. Then in 2012 and 2013, several firms conducted small pilots to try it out and see if they could conduct business safely.
“The pilots are now converting to large enterprise deployments,” said Bruce Milne, chief marketing officer at Socialware, one of the companies offering social media compliance software.
Recently, ING announced that it will use Socialware to support its more than 2,400 advisors’ use of LinkedIn to build professional networks.
Milne said financial advisors using social media fall roughly into two groups.
“The average successful advisor has been in business for 10-13 years, and is in his or her late 40s to 60s,” and may not be particularly adept at social media. “Then there is a whole cohort who grew up with social, are Foursquare users and understand how to take advantage of it.”
Brian McGrath, a 25-year old financial advisor at the Wellesley Financial Group, an agency working with the Guardian Life Insurance Company outside Boston, has been using Socialware and LinkedIn to develop his business.
“Prior to joining the Guardian Office in Wellesley, I had never lived, worked or built any relationships in Massachusetts,” McGrath said. He joined the company in June 2012 as a pre-contract employee and then became a full-time financial representative in September. He soon started using social media — LinkedIn only — because he thinks it makes him look serious and professional in a way that other social media don’t.
“People coming to LinkedIn aren’t coming to look at pictures; they are coming to gather content about something professional. I wanted to use that and leverage it as a young person and ask how can I have people looking at me in a professional light.”
McGrath grew up in New Hampshire and then studied biology and chemistry at Roger Williams University in Rhode Island. His first idea was to use LinkedIn to find other graduates, but that led him to 20,000 Roger Williams alumni in the Boston area. So he filtered for architecture because it’s a profession that fascinates him.
“I ended up with 500 to 600 people who went to Roger Williams and somehow were associated with architecture.” In a year he acquired 33 clients using LinkedIn, 24 of them are associated with life insurance totaling more than $15 million in coverage protecting their families, he added.
When he meets with clients, he shares with them their LinkedIn connections, filtered for geography, and asks them for introductions to five or 10 of their friends who might also find value in his advice. Fortunately for him, his contacts don’t share the feelings Bill Murray displayed about insurance in Groundhog Day.
“I have gotten as many as 25 names from one list. It’s hard to think of people sometimes. I truly believe people want to help each other, but it is sometimes hard to think of names in a meeting. This allows me to share professional names and gives them the opportunity to help others if they found value in my advice.”
McGrath is using the basic free version of LinkedIn, he added, and has recently realized he has only uncovered the tip of the iceberg.
“The greatest thing about LinkedIn is that you can connect with someone and see their world. If you can share with them their world, and then ask whom do you care about most on the list and who would find value, it makes the world a lot smaller. If we go back to the architecture example, generally you will find in someone’s LinkedIn connections there will be a lot of architecture. But some will be outside and that allows you to break into other industries. One architect connected me to her dentist which allowed me to break into the dental world where I had no presence before.”
Whether advisors understand social media or not, they aren’t allowed on without some controls like Socialware provides, such as archiving of messages and blocking of some functions that aren’t permitted. Socialware works in the background and simply hides features that would cause compliance problems.
“We are invisible to the advisors; the features they are’t allowed to use don’t show up,” said Milne. The software also supports financial advisors with a selection of applets and applications they can use to publish content from a pre-approved library. If they want to publish something original, they usually need to get approval from compliance and their manager.
That’s easy enough to do personally in a wealth management business with five or 10 people, Milne added. “But when you get to 2,400 at ING or 8,500 at Morgan Stanley, at that scale you need Socialware. Firms find that they can handle social media with two or three compliance people monitoring LinkedIn or Facebook; Twitter is more challenging because it is so active.
Most advisors start off with the pre-approved library of content, but they rapidly transition to wanting to create their own material and develop an authentic personality, he said.
Dashboards can prompt an advisor to make contact with a client. If LinkedIn shows someone has changed jobs, that means a 401(k) could be in motion, and that’s something a financial advisor wants to know.
The “Congratulations” function on LinkedIn is valuable because an advisor can reach out to someone who has been promoted or achieved a work anniversary and offer a compliment.
“There’s a reaction when you spend five minutes in the morning reaching out to people who have been promoted or are moving. The fact you took the time makes a lot of trust.”
Advisors who post good content find that their clients pass it along to friends, creating an opportunity to expand the advisor’s reach to win new business.
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64a345011f5961d74469bdbb1bb055b6
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https://www.forbes.com/sites/tomgroenfeldt/2014/09/17/banking-vs-google-apple-and-amazon/
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Banking Vs. Google, Apple and Amazon
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Banking Vs. Google, Apple and Amazon
When it comes to banking, loyalty is down, regulation is up, threats loom from tech firms, innovation is important, and so, sort of, is digital.
The annual Temenos survey checked with 198 senior bankers, so it measures their perceptions of the marketplace. And as my story about Harvard Business Review and Verizon’s study of going digital found, line managers don’t always think senior executives have a good grasp of what is going on.
It uncovered a few interesting asides — bankers don’t think banks will upgrade until regulators force them to, and no doubt they will then complain about intrusive regulators. They talk innovation but most don’t plan to spend a lot on it.
That said, the banking software company’s study found that 30 percent said customer loyalty is their biggest challenge.
“Even more so than in 2013, bankers are concerned about the triumvirate of regulation, new competition and changing customer behaviour. While in 2013, fewer bankers than the year before had cited regulation as the industry’s biggest challenge, in the 2014 survey the figure was back up, suggesting that, while the pace of regulatory change may have slowed, compliance with new regulation remains a major operational challenge.
“Bankers perceive the competitive pressures from outside the industry to be at least as great as from within and they see their biggest threat as being technology vendors, such as Apple and Google (cited by 23 percent of respondents).”
The study’s view of banking innovation seems rather optimistic.
“Banks are responding to their structural challenges by investing chiefly in product innovation.” But that proved to be a big priority for only 16 percent of the banks. No wonder they are worried about Apple, Google and Amazon.
It doesn’t look like bankers are taking a lot of initiative in innovating.
“A large number of senior bankers believe that, ultimately, it will be regulators and not management who will force the issue of IT renewal… more than half of respondents (53 percent) believe that regulators will ultimately force banks to update their mission-critical systems.”
A big majority, 86 percent, are taking a big step toward innovation, or innovation support — that’s the percentage running at least one application in the cloud, although it may be something fairly simple like email or development. Only one percent are running any mission-critical app in the cloud.
While large incumbent banks are still viewed as formidable competitors (cited by 20 percent), banks are noticeably less concerned about small banks, start-up banks and supermarket entrants than in previous years.
Twenty-nine percent of bankers in the microfinance sector are concerned about competition from technology vendors. That makes sense as various banking services offered through debit card/mobile phone companies — Moven, Simple, GoBank, T-Mobile, not to mention American Express Bluebird, are targeting people who are on the fringes of banking services. That theme was strong at Money2020 last year and it will be interesting to see what has happened since.
Product innovation is a goal for about a quarter of the bank respondents, most of it going into traditional product innovation but some aimed at open banking — especially app stores to make APIs available to developers.
“Partners can develop banking apps and ancillary services to extend the bank’s innovation capabilities at the same time as potentially creating new revenue opportunities.”
Although the importance of branches dropped five points this year, they are still important, although their role is changing.
“Investment was being directed less towards extending the branch footprint, but rather in updating the branch formats, remodeling them as centres for sales and advice rather than making standard transactions.” (See my story on Bank of America’s drive to make its branch network more cost-effective.)
Bankers plan to spend more on IT with the 2014 responses the must bullish (at least for a technology vendor) ever.
“In 2014, we had the most positive reading ever, with 67 percent of respondents expecting higher budgets and just 11 percent anticipating their IT budget to shrink, giving a positive delta of 56 percent, higher than in 2013 (53 percent) and in 2008 (46 percent).”
Temenos started asking bankers about cloud in 2009.
“Since we initiated the survey, we have observed two clear trends: 1) a perception that the regulatory hurdles to cloud adoption are diminishing over time and 2) a perception that data security in the cloud is improving. In the 2014 survey, respondents indicated once again they believed that regulators were becoming more amenable to cloud adoption…”
The survey concludes that banks are making a number of the right bets: investing strongly in core banking replacement to lower costs and improve agility…” for one. That’s been a slow, hit or miss process. As I have reported, BBVA Compass replaced their core with Accenture’s Alnova, but that’s the only core replacement that has been completed in the U.S. in 10 or 15 years. I am talking tomorrow with an IBM financial services expert who thinks that just in the last year some new technologies, presumably middleware of some sort, will make core replacements less necessary. Zafin Labs is an IBM partner in wrapping core to provide real-time response to digital channels, and Simple recently launched its own transaction processing engine which does the same thing.
The survey also thinks banks will invest in digital channels “to give customers a rich experience access to a broad range of services wherever they are…” and cite’s Accenture’s Everyday Bank strategy which suggests banks can help not only provide a mortgage but find a house and manage the move. I’ve seen the Accenture presentation and I am doubtful a bank can provide the expertise better than specialists (see how banks have done on keeping their own customers’ investments to a Fidelity, Schwab or Vanguard), and do it without immense, costly, slow-moving overhead. I’d put my money on digital providers and guides keeping banks out of any larger role in “Everyday.”
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426ad35d1a8c1087bff3e68571354dd2
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https://www.forbes.com/sites/tomgroenfeldt/2015/03/03/samsung-pay-launches-at-gsma-mobile-world-congress-in-barcelona/
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Samsung Pay Launches At GSMA Mobile World Congress in Barcelona
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Samsung Pay Launches At GSMA Mobile World Congress in Barcelona
Samsung led the mobile payments announcements at the GSMA with its announcement of Samsung Pay, a contender with Apple Pay in the competition for retailers and consumers. Like Apple, it launched with major bank and credit card partners — Bank of America, Citigroup, JP Morgan Chase, and US Bancorp., but not Wells Fargo, which is an Apple Pay participant. Samsung Pay also has partnered with MasterCard and Visa.
Samsung Pay, available on the new Galaxy S6 and S6 edge, will work with the plain old credit card magnetic stripe readers like those in almost every store in America. It relies on neat technology that Samsung acquired by buying LoopPay in February — the patented Magnetic Secure Transmission technology. With it, a user chooses the card she wants to use and then holds her phone with the LoopPay device next to the reader, where she would normally swipe her card. LoopPay’s Web site said it can hold thousands of credit and debit cards from all banks along with gift and loyalty cards, and it protects the information with both encryption and with PIN and password. Before being acquired by Samsung, the LoopPay suggested storing the card in a custom mobile phone carrying case, but Samsung will have it built into the phone itself.
Meanwhile, Reuters published news of a Gartner report saying that Apple outsold Samsung in the fourth quarter — based on the strength of its iPhone 6 and 6 Plus, Apple sales were up 49 percent while Samsung smartphone sales dropped 12 percent.
PayPal announced that it would acquire Paydiant, which has “helped companies like Subway, Harris Teeter, Capital One build mobile payments, offers and loyalty into their own mobile applications,” Dan Schulman, PayPal President and soon to be CEO, wrote in a blog post. “They also provide the mobile wallet platform for MCX whose members include many of the world's largest retailers including Walmart, Target, Sears, Wendy's, Exxon, CVS.”
PayPal has also announced a new NFC-enabled PayPal Here Chip and PIN card reader, which will start rolling out in the UK and Australia this summer, and in the U.S. later this year. It will enable both Chip and PIN and contactless payments from debit and credit cards, and mobile devices.
Chip technology in cards may disappoint
Reuters had some bad news for the American card industry. In a long and comprehensive piece, Nandita Bose reported that the estimated $8.65 billion shift to EMV chip cards will affect only 37 percent of fraud, the kind that occurs at a point of sale. It won’t affect hacking or cyber attacks, not to mention card not present fraud such as phone orders or internet purchases with stolen card numbers. American card companies have resisted including PINs, widely adopted with chip technology in the rest of the world, because they are more expensive to administer and card companies fear consumers will relegate the most complicated card, one requiring them to remember a PIN, to the back of their wallet.
Mobile encourages financial inclusion
The GSMA’s annual report on Mobile Money for the Unbanked found that “the mobile financial services sector continued to expand in 2014, boosted by the creation of more enabling regulatory frameworks in several markets. With 255 mobile money services in operation across 89 countries, mobile money services are now available in over 60 percent of developing markets.” Its 2014 State of the Industry Report found that regulators are increasingly modifying financial rules to permit more services from non-bank providers of mobile money services.
The number of registered mobile money accounts globally grew to reach just under 300 million last year, but that accounts for just 8 percent of mobile connections in the markets where mobile money services are available, the GSMA said.
Interestingly, the fastest growth in 2014 occurred in bulk disbursements, bill and merchant payments rather than in person to person payments.
Mobile is also becoming the preferred way to send money across borders. “Survey respondents reported that the median cost of sending USD 100 via mobile money is USD 4.0, less than half the average cost to send money globally via traditional money transfer channels.”
Ismail Ahmed, CEO and founder of mobile money transfer service, WorldRemit, said of the report: “The rapid growth of mobile money services represents one of the biggest enlargements of participation in the global financial system, ever.”
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88daf14cd4b66ce29ede3f1b79b7cb3d
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https://www.forbes.com/sites/tomgroenfeldt/2015/05/13/moven-takes-its-mobile-banking-global-with-accenture/
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Moven Takes Its Mobile Banking Global With Accenture
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Moven Takes Its Mobile Banking Global With Accenture
Moven, which pioneered a smart phone banking app that helps users track their money and improve their savings, is expanding internationally with bank alliances and a partnership with Accenture.
A U.S. Moven account consists of a MasterCard debit card and an account at CBW Bank, a technologically aggressive bank based in Weir, Kansas. Moven has a licensing agreement with Westpac in New Zealand and has partnered with TD — Toronto-Dominion Bank — in Toronto.
In a December story about TD and Moven, Mary Wieniewski at the American Banker wrote:
“The agreement comes at a time when banks are struggling to reimagine personal financial management for mobile and determine whether consumers want to do anything that complicated on small screens. Moreover, TD's move is the latest example of how traditional players are turning to fintech companies to help solve their problems.”
Founded by Brett King, Moven is similar to Simple, the Portland, Oregon company that tracks spending and tells customers how much they can safely spent without running out of money at the end of the month. Simple was acquired last year by BBVA Compass, an arm of the global bank based in Spain. Both companies have made a hit with customers by helping them avoid overdraft fees and improve their savings.
At Finovate in San Jose today, Moven announced new features to help customers save through gamification and behavioral design which it calls “Impulse Savings”. These include “Lock Away Savings” prompts to encourage users to save extra money when they are below their usual spending patterns. A new feature lets users set up a visual wish list of items to save for, a list a customer can link to her Pinterest board. When a user wants to spend from their savings account they tap the app interface three times to simulate breaking the glass.
Moven, which already links to the Android Moto360 and Samsung Gear smartwatches, has expanded to include the Apple Watch. Users on all these devices will be able to receive instant receipts, see insights on their spending habits via Moven’s spending meter and be gently nudged to save their spare cash. Moven has also launched an emergency cash feature that combines GPS technology and understanding of a user’s spending to alert them when they are entering a restaurant or grocery store where their average spend exceeds the money they have on hand. It offers a cash advance with clearly defined fees.
The Accenture alliance will help Moven go global by providing the savings solutions and new features through banks around the world.
Accenture and Moven will also collaborate on design and implementation services for developing new digital banking capabilities — such as next-generation account opening, biometric authentication, real-time marketing — and help improve the overall service experience for Moven’s end-users.
Accenture said the alliance leverages Moven’s leading mobile-centric banking app and financial wellness solutions and Accenture’s banking industry experience, system integration knowledge, as well as its digital capabilities and digital customer focus provided through Accenture Interactive and Fjord.
“The alliance with Accenture will be invaluable in helping us mobilize our services globally as we grow to tens of millions of users in a dozen countries.
Banks pressured and partnering with startups
BBVA has been a leader, not only buying Simple but also signing a deal with Dwolla for real-time, low-cost payments. In a recent feature on fintech startups around the world, The May 9 Economist in a feature on fintech said AngelList has about 4,000 fintech firms and they attracted $12 billion in investment last year, up from $4 billion in 2013.
The article quoted Tonny Thierry Andersen, head of retail at Danske Bank, on one reason they are having such an impact:
“If you want to come up with a new product in a bank, any one of 50 people internally can shoot it down. If you’re a startup, you can go visit 50 venture capitalists and you only need one to give it a green light.”
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3749c8d18a6c48e68df21388eedd5221
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https://www.forbes.com/sites/tomgroenfeldt/2015/08/05/delivering-big-data-insights-to-small-businesses-through-banks/
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Delivering Big Data Insights To Small Businesses Through Banks
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Delivering Big Data Insights To Small Businesses Through Banks
Anatalio Ubalde, founder and CEO of SizeUp, used to work in economic development in cities around the San Franciso Bay area. His experience shows in the way he understands what small businesses need in sophisticated big data applications presented, but in a way that a busy small business owner can understand quickly. He partners with banks, such as Wells Fargo , which uses SizeUp to provide a strategic service to small business clients.
SizeUp won the 2015 NYC Innotribe Startup Challenge Showcase in New York in June as one of the world's top early-stage startups serving the financial industry. As a winner, it will present at Sibos, the largest financial industry conference in the world, in Singapore this October.
"The Innotribe Startup Challenge finale gives us a superb platform to show financial companies how we can help them create value and engagement with their small business customers," said Ubalde.
SizeUp's primary audience is the small and medium size business market — businesses with revenues of less than $250 million per year, which make up 99.99 percent of all businesses in the USA.
“This is a highly underserved segment of the business market because many cannot afford business consulting or assistance,” said Ubalde. “We serve them by replacing their unreliable gut decisions with powerful, quantitative business intelligence at no cost,” he added.
Banks often find it very hard to work with small businesses because there are so many of them and they are so different that it’s hard to work with them on a one-to-one basis, he explained.
Some banks respond by choosing to work with five to 10 verticals.
“SizeUp takes a different approach. The product we have for financial institutions is designed to help them empower their small business customer to make smarter decisions with data. Through the use of massive data, big data, we can provide a completely customized analysis for that small business so they can better understand themselves and their competitive landscape.”
SizeUp uses data from hundreds of public and private data sources including industry, demographics, wages, labor costs plus consumer and transportation data plus census data which it updates twice a year with forward projections.
The company offers small business three primary tools, Ubalde said.
“It answers the question of how does my unique business size up to my competition. We look at variables in the US — how does my revenue compare, the year that I started, am I in a growing or declining industry, and am I paying my employees too much or too little.”
Second it offers ways to find customers, suppliers and competitors and to identify market opportunities, including new ways to grow and where to position a company geographically.
“Third is offers the ability to optimize advertising by showing ideal locations to target their ad spend. That will be based on what is important, such as targeting the places that are best in their industry or the most underserved markets. It can also help businesses target specific populations like higher income, or younger people.”
The information is delivered in an easily understood design that doesn’t require an MBA to understand, he added. You can see it in action at Wells Fargo.
“They can enter information like how much they make each year and SizeUp crunches millions of data points and comes back to show your business is doing compared to others in your city, county, state. We show maps of where markets are strongest, where competitors are and where to find more customers and suppliers.”
It could tell a chiropractor in San Francisco where the most underserved areas are by zip code and then she could decide whether to put up a billboard, take out a newspaper ad or use Facebook or Google advertising.
“SizeUp expands the possibility of what bank services are,” Ubalde added. “If banking is just about depositing checks and money sitting somewhere, then banks are at risk of being disrupted because those things are becoming easier to do. This allows a bank to become a business’s partner for success. The bank can help a business owner better run, grow and understand her business and, not incidentally, become a larger account for the bank.”
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41fc87fbece0c3e417fcc8e6b9d6c9cb
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https://www.forbes.com/sites/tomgroenfeldt/2016/03/08/zopa-uk-p2p-lender-partners-with-metro-bank/
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Zopa, UK P2P Lender, Partners With Metro Bank
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Zopa, UK P2P Lender, Partners With Metro Bank
Zopa, the world’s first person to person (P2P) lender, recently signed a deal with Metro bank, a challenger bank in London started by Vernon Hill, who created Commerce Bank in the U.S. Metro.
The Metro partnership will provide Zopa with additional funds to lend, said Giles Andrews, Zopa’s co-founder and CEO.
"This will allow the bank to lend its funds on our platform, a first of its kind in the UK," wrote Zopa's Mat Gazeley "This exciting development in the UK's financial services industry is the first partnership between a UK P2P platform and a retail bank. The move will see Metro Bank receive a return by lending millions of pounds each month directly to UK consumers through Zopa." Zopa had previously announced a deal with Uber to help drivers buy their own cars.
From 2008 until relatively recently, Zopa could support its growth of 80 to 100 percent a year with retail funds, but more recently it has pursued institutional funds to meet lending demands.
“We have a blend of both; I want to maintain retail flavor to our brand,” explained Andrews. “Metro is very good at getting deposits but it is very focused on the asset side.”
Metro runs more like a customer-friendly retailer than a traditional bank. It is open 7 days a week, 362 days of the year. Each branch has a free coin counting machine and welcomes dogs with bowls of water and dog treats. Bikers can ride directly up to the tellers -- no need to lock the bike outside. (Hill explains his almost obsessive customer focus in a fascinating short book, “Fans, Not Customers: How to Create Growth Companies in a No Growth World”.)
The alliance between Zopa and Metro will provide the lender with the funds it needs and attractive returns for Metro.
Zopa, got started in 2004 as an investment vehicle, added Andrews.
“We launched the business to solve a problem for retail consumers — they don’t have much to do with their money. In the UK, people don’t like stocks and shares.”
Although the lender started with a retail focus, it has shifted to a blend of individual and institutional money, but its focus on individual savers/investors is clear on its Web site.
“ A person who started investing £50 a month at the age of 25, would have built up capital of over £75,000 by the time he came to retire at age 65,” the company explains.
It cites the example of Alan Brusby from East Yorkshire who has invested in loans through Zopa for years.
“He understands that there is more risk attached to P2P lending than putting money in a savings account, he has not been badly affected by bad debt. ‘I have made hundreds of loans, and there are maybe three or four people who haven’t paid me back,’ he says. Zopa makes a lot of financial sense because the returns on bank deposit accounts have been so low since the credit crunch, Alan adds. “Most accounts are just paying 1 percent or 1.5 percent, which is incredibly low.”
Zopa, has made $1 billion in loans with a default rate of less than .5 percent, the company says.
Unlike some of the American online lenders, Zopa has never let institutions perform their own credit analysis on lender, Andrews added.
“When we started engaging with institutions we didn’t let them pick loans — we think that is what you pay us for. We think we are brilliant at managing the credit list. If you were capable of adding value, if you take away the good stuff, what you leave behind is worse and that hurts the retail guys. I think cherry picking has been reduced in the U.S. because the regulators don’t like actions which hurt the little guy.”
At a P2P meeting in February Andrews predicted that 2016 will see the first UK securitization of P2P loans.
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812d0f8f3c9ed4eaeeb1425957081e1e
|
https://www.forbes.com/sites/tomgroenfeldt/2016/06/27/citi-uses-voice-prints-to-authenticate-customers-quickly-and-effortlessly/
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Citi Uses Voice Prints To Authenticate Customers Quickly And Effortlessly
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Citi Uses Voice Prints To Authenticate Customers Quickly And Effortlessly
In all the discussion of online and mobile banking, the role of voice in banking is often obscured, but call centers are still a popular way for bank customers to interact with their financial institution. Now banks are looking for ways to make voice transactions faster and more secure.
Photo by Tom Groenfeldt
Citi has deployed voice biometrics authentication from NICE to recognize customers from their voice in the first few seconds of conversation. Citi launched the project this year to automatically verify a customer's identity while the customer is explaining the reason for calling, allowing customer service reps (CSR) to skip tedious questions about the customer’s first pet’s name, place of birth, last four of the social, favorite sports team and nearest sibling’s place of residence.
NICE says its software securely authenticates customers in real-time with no customer effort and reduces time to service, to free up time for CSRs while improving fraud protection. Citi Voice Biometrics uses sophisticated technology to identify roughly 130 different physical and behavioral characteristics within a person's vocal pattern and match those with a prerecorded voice print to verify the caller's identity. Setting up the voice print takes less than a minute; roughly 250,000 of Citi's U.S. credit card customers have already opted in, according to the bank. Its deployment of this type of voice biometric is the largest in the U.S.
Customers are usually routed to the appropriate agent to address the reason for their call, but if they are calling about something else, they can be routed to the right person with their identity already authenticated, so the don’t have to answer more questions or wait for the systems to identify their voice patterns.
"Voice biometrics allows us to fundamentally change the customer experience – from ‘Who are you?' to ‘How can I help?'" said Andrew S. Keen, Citi's chief administrative officer for global consumer operating functions. "This is one of several new capabilities we're introducing to increase protection while decreasing friction for Citi clients. We take a multi-pronged approach to security, and voice biometrics is an additional layer of defense. Our ultimate goal is to provide protection, peace of mind and convenience for our customers.”
The bank has rolled out the voice identification for customers of U.S.-branded credit cards and for all of its Asian consumer banking businesses that work through call centers, Keen said. It is looking at business applications but for now has used the voice software in consumer lines only.
Citi began the research phase in 2013 of voice biometrics and conducted a non-customer-facing pilot in the summer of 2014 and began a customer-facing pilot began in the spring of 2015.
The voice biometrics has reduced the time customers have to spend on the phone with CSRs, Keen said.
“It has cut verification times from approximately 30 seconds to less than 15 seconds and thus could potentially free up over 300 million seconds at our U.S. call centers every year.”
The biometric solution has also reduced the number of customers hanging up because they grow impatient.
“Given that our deployment is focused on agent-based servicing, we don’t see significant ‘hang ups’ once a customer has connected to the agent. As you would expect, anytime we can remove points of customer friction and enable seamless interactions we add value for all parties involved.”
The NICE software also works to prevent fraud by identifying fraudsters within the first seconds of a call by matching the caller’s voice print to an existing fraudster black list. When a caller’s voice print is identified as belonging to a fraudster, the call is classified as high risk and can be immediately transferred to a fraud specialist to prevent an unlawful transaction from taking place.
Citi’s surveys have shown that customers who have been authenticated through biometrics had higher satisfaction scores than those who were not. The bank’s foray into biometrics earned it two 2015 Gartner Financial Services Cool Business Awards at the Gartner Symposium/ITexpo for "Most Promising Digital Business Transformation Initiative" and "Digital Champion for the Americas."
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65f58d4dfa3dcb3c080dec48e600e79b
|
https://www.forbes.com/sites/tomgroenfeldt/2016/09/19/data-like-oil-is-pretty-useless-in-its-raw-state/
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Data, Like Oil, Is Pretty Useless In Its Raw State
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Data, Like Oil, Is Pretty Useless In Its Raw State
(Credit: Shutterstock)
Data is the new oil, is a popular cliché among big data enthusiasts. The comparison is true on a deeper level than they usually discuss.
Oil sitting thousands of feet below the surface of the Gulf of Mexico has no value until it is pumped out and refined. Similarly, data is everywhere in a large organization, but it has to be stored and analyzed before it generates any value.
And that’s a challenge for CIOs.
“CIOs are in trouble right now, and it is getting worse,” said Stephen Brobst, the chief technology officer at Teradata , a leader in data storage and analysis. “We’ve seen exponential growth in data. If I drop data on the floor and lose it, I am a bad CIO but if my budget grows exponentially to handle it, I am also a bad CIO.”
"The business comes to the CIO and says it wants to do this or that with the company’s data and the CIO says 'Sorry, we aren’t keeping that data,' he added.
“But the business is becoming savvy about data as the oil of the 21st century. The business figures the data has value and they want to extract that value. Budgets are flat and data growth is exponential, which is why you see emergence of alt approaches in how to capture, store and exploit data.”
Large organizations like tier-one banks have too much data, and too many diverse types of data, to store on one system, but managing multiple systems is hard, Brobst explained. So Teradata is working with Facebook on an open source platform called Presto, a distributed SQL query engine optimized for ad-hoc analysis at interactive speed and at petabyte scale.
Teradata is developing tools and features that help make Presto valuable to large enterprises in areas such as security, documentation, and ODBC and JDBC connectors to link it to commercial software. All the Teradata tools for Presto are entirely open source and can be downloaded from Teradata or GitHub.
“Ten years ago if you had asked if I believed we would be working with Facebook to create open source software that we would give away free, but that is happening,” Brobst said. “We are in joint development with Facebook Apache Open Source.”
Brobst said that Presto is being used by the smart kids in Silicon Valley including Airbnb, Dropbox, Gree, Groupon , and Netflix . For Teradata, Presto is a a good fit with some of its own big data analytics technology.
Dropbox uses it to analyze how people are using the freemium site and determine when their use is become sophisticated enough to offer them to a paid subscription.
The company said Presto complements Teradata QueryGrid software and fits within the Teradata Unified Data Architecture vision.
“Presto provides users the ability to originate queries directly from their Hadoop platform, while Teradata QueryGrid allows queries to be initiated from the Teradata Database and the Teradata Aster Database all through a common SQL protocol.”
CIOs can choose the tools that fit a task. Voice recordings from a call center wouldn’t fit the Teradata database, which is SQL oriented, he explained.
“I would put the recordings into a Hadoop cluster and transform them to text, then put that into a Hadoop Distributed File System and apply natural language processing to do fact extraction and sentiment scoring. Those are very structured and can be loaded into Teradata and accessed through Presto.
Because Presto operates in memory it doesn’t require the I/O processing of Hive," he added.
“Presto is Hive 2.0.”
Banks are looking for these capabilities, said Byron Vielehr, group president of depository business at Fiserv. Fresh from a user conference, he said bankers he talked to are trying to figure out how to take all this data that they have and make it into something worthwhile and important.
He asked a EVP from a large retail bank what happens to direct deposit when someone leaves her job.
It goes away, the banker responded.
Yes, said Vielehr, but first the direct deposit jumps as back pay, vacation pay and severance are deposited. That may lead to an opportunity to restructure a loan or create a wealth management opportunity, but only if the bank is capturing and analyzing that data and acting on it.
“With Amazon, every time you log in they put something in front of you,” Vielehr said. “Bankers haven’t been at the leading edge of thinking about data analytics and merging that into a real-time world. People in banks have a lot of data that would let them see what are the next most likely products for a customer.”
As banking becomes increasingly digital, banks will have to use data and digital channels to connect with customers who are no longer walking into a bank lobby where they can interact with tellers and loan officers in person. Banks need to adapt to new cars that can provide real-time stock quotes.
“Five years ago no one thought about automobiles with voice and touchscreen interfaces as a distribution point.”
Fiserv is developing a new platform called Notifi that will embed eventing engines in many of Fiserv’s solutions to provider fraud alerts and generate marketing offers. If a customer carrying a mobile phone walks into an auto dealer on a Saturday morning, the system could push out an auto loan offer, already approved.
Vielehr thinks a customer will be attracted to a loan from the bank where she already has a relationship.
“You just have to get the offer in front of them.”
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3589b1449838eac3c32a1514e588201d
|
https://www.forbes.com/sites/tomgroenfeldt/2016/11/03/ibm-trials-blockchain-for-supply-chain-dispute-resolution/
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IBM Trials Blockchain For Supply Chain Dispute Resolution
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IBM Trials Blockchain For Supply Chain Dispute Resolution
Bitcoin showed IBM’s Jerry Cuomo what blockchain could do, but anonymous ledgers didn’t meet the needs of the company’s largest enterprise customers, especially those which are heavily regulated.
Now the vice president of blockchain technologies for IBM, Cuomo had been working in the company’s middleware products. Blockchain brought together some familiar technologies — distributed ledgers, encryption and data synchronization, he said during an interview at Money2020.
“I saw value in supply chains, health care, health record maintenance and in financial services, security and settlement.” Except for supply chains, all those uses operate under regulations that govern data accountability and consistency, he added.
The direction IBM and many other in finance are going is to look at permissioned ledgers connecting companies that know and (within limits) trust each other. The blockchain could allow companies to transact, resolve disputes and settle more efficiently than current practices.
IBM’s corporate treasury and another company which uses IBM Global Finance, the company’s arm that finance purchases of IBM products, suggested using blockchain to resolve disputes, which were delaying $100 million in payments for up to 40 days.
IBM ran two years of transactions to test the concept. By using a distributed ledger which shows the entire life of a transaction from purchase order through remittance, they could reduce the backlog to less than 10 days, freeing up significant capital. IBM has launched a a proof of concept distributed ledger with half a dozen members of IBM Global Finance.
In addition to reducing resolution time, it had also markedly improved customer satisfaction.
In a three-party transaction — IBM, the buyer and the shipping company — the blockchain allows participants to go back to the last point at which they were all in agreement, and then figure out what went wrong. It could be as simple as seeing that a part shipped but never arrived because the address was wrong. Using blockchain simplifies a process that previously involved multiple phone calls, emails and even the occasional fax.
IBM is also working with SBI Securities in Tokyo to test blockchain technology for a new type of bond trading system, from registering the bond until its reimbursement, IBM said in a release.
Cuomo said customer interest in blockchain has developed rapidly this year. It started with blockchain tourism — customers coming in to look around and attend a lecture or two. By mid-year they were getting more prescriptive. Some companies are already using blockchain technology, he said. Walmart is using it in China to track the provenance of food, so if there is a case of mango poisoning stores can see exactly which farm or processing plant was responsible rather than shutting down all mango sales. Everledger, which traces diamonds to digitally certify that they comply with the Kimberly Process, uses IBM’s cloud-based blockchain solution.
Using blockchain effectively in banking may require sociological changes, said Cuomo, such as banks agreeing to cooperate with competitors to fend off potential disruption from companies such as Apple and Google. Using blockchain to power applications such as P2P payments may keep them ahead of disrupters.
“Reducing friction eliminates the middleman, and in a lot of cases that is a bank,” he said.
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d17c7d4c720d711a9d3730fe4a20f8b3
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https://www.forbes.com/sites/tomgroenfeldt/2017/02/23/celent-expects-more-apps-to-incorporate-payments-like-uber-does/
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Celent Expects More Apps To Incorporate Payments Like Uber Does
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Celent Expects More Apps To Incorporate Payments Like Uber Does
Celent, the financial services research and consulting firm, sees modest changes ahead in retail banking payments with more banks offering mobile person-to-person (P2P) payments.
(LIONEL BONAVENTURE/AFP/Getty Images)
When he looks at trends ahead for retail banking in 2017, Celent’s senior analyst Zilvinas Bareisis expects more contextual commerce — making payments easier for customers by taking the transaction to wherever the customer happens to be, whether that is on a social media site where they want to make a purchase, buying clothing from inside the changing room at a retail store or checking into a hotel from an Uber car as it approaches the entrance.
He has hope for mobile wallets, although he concedes he may be a minority voice here. It’s too soon to write mobile wallets off, but they need to combine payments with loyalty points and be consistent across applications and merchants. If the wallets are too cumbersome, consumers will stick with plastic. Two advantages of mobile payments — a user can see the transaction immediately, whether on a card or from a bank account, and it’s faster than EMV cards have been.
Slow checkout is just one reason Bareisis concluded that EMV adoption has attracted negative press reports that also included customer complaints about "inconsistent customer experiences, and slow merchant adoption. And yet, while the end customer experience clearly must improve, real progress has been made." Card companies were slow to issue chip-enabled cards and merchants were slow to get chip-enabled terminals deployed. Both Visa and Mastercard have moved to speed up terminal certification, which was a source of long delays, and both have moved to reduce time to checkout with their EMV cards.
Person-to-person payments have been doing well — PayPal reported that it did $64 billion in P2P payments in 2016 across PayPal, Venmo and Xoom. Bareisis suggests 2017 could be the year banks get into P2P, especially with the autumn announcement of Zelle from Early Warning, a bank network operator. Good point -- Bank of America this week announced it was offering P2P payments through Zelle.
The banks may have some catching up to do. Venmo offers a distinctly cheeky customer experience, letting users split bills and add social commentary at the same time, a feature that appeals to youthful users as much as it horrifies their older acquaintances…see the Quartz story about the Venmo line for an amusing description of the difference in visions.
Celent notes that the definition of merchant continues to expand. “Aren’t we all merchants now?” Bareisis asked. With APIs, services such as PayPal’s Braintree, Stripe and Marqeta allow startup sellers and individuals to accept payments.
The concept of Open Banking — using APIs to allow third parties to access an individual’s bank account, with her permission, is different in the U.S. and the UK. Regulators in the UK have pushed banks to allow third party service providers to access accounts for services such as personal financial management or even to initiate payments.
Alasdair Smith, who chairs the retail banking market investigation for the Competition and Markets Authority, wrote in the Financial Times that new rules for banks will provide customers with better information and “will open up the current account market to new products and services that will make all banks work harder for their customers and will create opportunities for innovation challengers to the incumbents.”
Regulators in the U.S. are not active advocates of APIs, but some banks are acting on their own. Citi has announced an API hub that will give developers access to APIs “across eight usage categories, including account management, peer to peer payments, money transfer to institutions, Citi rewards, investment purchases and account authorization,” according to the bank’s announcement.
Bareisis has limited enthusiasm for blockchain in retail payments, although he thinks it has potential for cross-border payments, corporate banking and capital markets. He did note that Metro Bank in London and Deloitte had demonstrated a contactless card payment with processing and settlement done on a blockchain through SETL, which claims it can process billions of transactions a day.
“We believe in the power of distributed ledgers for cross-border payments, corporate banking and capital markets, and even outside of financial services, in identity management, trade logistics, healthcare and many other sectors,” Bareisis wrote. “We do question blockchain’s ability to challenge the established order in retail payments, but we will continue to monitor any developments in the space.”
Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies
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80da51739a477dfda7a5d884f0c0d44f
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https://www.forbes.com/sites/tomgroenfeldt/2017/03/14/omni-channel-extends-across-retail-and-banking/
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Omni Channel Extends Across Retail And Banking
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Omni Channel Extends Across Retail And Banking
Radial, which was formed out of eBay Enterprise and Innotrac, a global e-commerce fulfillment firm, provides retailers with e-commerce tools including ordering, payment guarantees and shipping. And not just shipping from a single warehouse, but the ability to ship from the best source of supply, whether a warehouse or a brick and mortar retail store.
Algorithms help Choose the best source and best shippers at Radial. Photo by Tom Groenfeldt
GameStop, a Radial client, has 3,800 stores. Radial can take an online order to GameStop and fulfill it by shipping from warehouses, from one store to another, or to the buyer’s home, said Stefan Weitz, chief product and strategy officer at Radial.
“You give us the order and we do all the algorithms to figure out the best place to ship from and the best shipper.” The algorithm that determines this is one of the most complex Weitz has ever seen, and he was a director at Microsoft’s Bing before moving to Radial, so he’s familiar with complexity.
“Retail will be unrecognizable in five years,” Weitz said. “It faces a combination of consumer demand shifting, along with Amazon. The changes are taking out what were profitable businesses and segments over the years. We will see a shift to aggressive recruiting of customers, aggressive loyalty programs and super aggressive investment in e-commerce.”
Some leading retailers have shifted 30 percent of their sales online, but their margins are getting killed, he said.
“The margins on e-commerce are way less than in stores. People competing with Amazon on share are getting killed. For a small retailer in the Midwest it gets gut-wrenching.”
Retailers have to figure the balance between high quality customer experience and expense.
“The difficulty is getting that dial turned to where you are balancing the customer experience and expense where e-commerce is today and almost no one has it right.”
Omni channel is cool, but it requires change inside the retailer, and many don’t know how to do it, Weitz said. Customers can order online and pick it up in stores or get the goods delivered to home or office, buy in store and return online, or buy online and return to a store. The complexity grows.
“Our value prop at Radial is we are not just one thing — not just payment, fulfillment or customer care. We have integrated the supply chain end to end, from order management to the label printer which spits off a label just in time for the box to hit the station.”
On the payments front, Radial offers fraud prevention, guarantees of card payments and managed fraud and tax services. Citing a report from Forrester, Weitz said that as e-commerce sales are expected to grow to $480 billion by 209, online fraud is projected too increase from $3.1 billion in 2015 to $6.4 billion in 2018.
Radial offers full service fraud management and guarantees outsourced or on premise and it claims a 99.7% approval rate, above the industry average of 97.7%. The company says its approvals of online orders requiresonly 1.5% manual review compared to an industry average of 7%.
That’s partly because it has been in business longer than competitors. Its database contains billions of customer profile data gathered from processing orders during its time as GSI Commerce, eBay Enterprise and now as Radial.
Radial recently signed an agreement with Klarna, the Swedish company which allows online customers 14 days to pay. Buyers will often increase their order size if they aren’t confronted with the need to fill out payment information at the time they buy, and retailers can take advantage of this by making a flash offer. For example, Weitz said, a merchant could pop up an offer and suggest that a customer could pay for at just $10 or $20 a month.
Radial is entering new markets with new payments methods — Alipay in China and cash on delivery in Germany. Customers can also pay directly from their bank accounts, use Apple Pay, stored value and gift cards, Open Invoice, PayPal and PayPal Credit.
“We’d love them to do direct transfer — they provide better margins,” said Weitz. “The mix of payment methods is shockingly static. We are not seeing a huge shift in major tenders — Amex, Mastercard, Visa. Amazon payments is getting some traction, which is interesting to watch.”
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af1d9b5a072a3d2cab5ada9565091630
|
https://www.forbes.com/sites/tomgroenfeldt/2017/04/07/citi-wins-open-banking-award-for-bringing-consumer-convenience-to-corporate-treasury/
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Citi Wins Open Banking Award For Bringing Consumer Convenience To Corporate Treasury
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Citi Wins Open Banking Award For Bringing Consumer Convenience To Corporate Treasury
Corporate treasurers aren’t asking for much — they just want the convenience at work that they have at home.
Digital has come to corporate banking, said Susan Feinberg, senior analyst for corporate banking at Celent, the global financial technology research and advisory firm which is a subsidiary of Oliver Wyman.
The number one driver is improving customer experience, she said.
Customer experience has become something of a cliché in banking, and Feinberg knows it.
Citibank Photo by Tom Groenfeldt
“This is consistent with what we hear from the consumer side,” she said. “That would never have been the answer before in corporate banking — the goal was always about growing revenue and keeping up with the competition in terms of functionality.”
Celent named Citi its winner in Open Banking for CitiConnect API which allows clients and partners to integrate directly with Citi’s applications for real-time access to their data and banking services.
“The solution allows Citi’s treasury services clients to directly connect with Citi to access payment initiation, payment status, and account balance inquiries services using their own Treasury Workstations or Enterprise Resource Platform (ERP) resulting in convenience, as well as potential cost savings and reduced risk,” the bank said in its release.
Feinberg said that the top priority for corporate banking is integrated portal rather than separate sign-on for lending, trade, finance, commercial cards and other services.
“That’s frustrating for corporate clients. It is inefficient and creates security issues.”
CitiConnect supports API based integration across 96 countries, the bank said in its release. It is part of the bank’s omni-channel digital banking product suite that also includes CitiDirect BE, CitiDirect BE Mobile and CitiDirect BE Tablet.
“The financial industry has been taken by storm with API based integrations,” said Naveed Sultan, Citi's global head of treasury and trade solutions. “We believe that through our CitiConnect API, Citi has the leading solution delivering the right services on a global scale. This award from Celent recognizes the work and solutions we are offering our clients.”
Patricia Hines, senior analyst for banking at Celent, said CitiConnect uses APIs as a channel to provide connectivity between the corporation and the bank.
“What Citi did was extend their consumer banking APIs to the corporate space.”
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a3cda20a4a5a31c012be13acffdb0767
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https://www.forbes.com/sites/tomgroenfeldt/2017/05/02/card-testing-by-fraudsters-is-up-200-percent-this-year/
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Card Testing By Fraudsters Is Up 200 Percent This Year
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Card Testing By Fraudsters Is Up 200 Percent This Year
Credit card testing, a tactic used by fraudsters to test stolen credit card numbers with small incremental purchases before making large-dollar purchases on the card, is up 200 percent in the first four months of 2017 compared to the same period last year, according to a report from Radial’s eCommerce Fraud Technology Lab. Fraud also is up 30 percent year over year, the e-commerce company said.
"Our data adds another alarming statistic for retailers who may be unprepared to manage fraud activity in e-commerce,” said Stefan Weitz, chief product and strategy officer at Radial.
E-commerce fraud has spiked since EMV launched. Photo by Frank Polich/Getty Images)
“We know fraudsters won’t stop looking for opportunities to monetize their stolen data and will even automate this process once they have a card that appears to be working. This results in quick, large-volume purchases that leave retailers vulnerable. When retailers miss card testing, they’re contributing to future card attacks. Fighting card testing is complicated but can stop millions of unanticipated fraud attacks if tracked and managed efficiently.”
Fraudsters are after anything that can be sold easily, from electronics to higher-end clothing, he said.
Weitz said he talked to one retailer in the third quarter last year and the merchant had been ignored by fraudsters. That changed in the fourth quarter when he was targeted repeatedly.
“He said he didn’t know what happened, but he went from not being bothered to being a pretty easy target. Some retailers and brands likely took a nontrivial hit on chargebacks and lost merchandise. We saw tens of thousands of dollars a day some of our merchants could have lost if we hadn’t caught the fraud.”
Radial had seen testing drop off somewhat since mid-March, which he thinks is because their systems have caused fraudsters to take their attacks elsewhere.
E-commerce fraud-prevention specialists such as Radial, Forter, Klarna and Signifyd have developed sophisticated tools to identify and stop fraud; they offer guarantees of online sales in return for a fee of around 50 basis points, depending on volumes. They invest heavily in technology and benefit from a view across a broad range of transactions, so they can see trends in fraud that many retailers don’t have access to.
The fraud landscape is rapidly changing and presents pervasive and growing threats for eCommerce merchants. Radial’s Fraud Technology Lab and a team of data scientists use their robust fraud platform to uncover how trends in fraud can drive down retailers’ bottom lines and increase their risk.
E-commerce retailers face two threats in fraud. The first is sending out valuable merchandise to a fake account. The second is turning down good business because they can’t be sure the customer is legit, missing a sale and antagonizing a customer.
Weitz said their systems had stopped a $9,000 order from overseas where the billing address didn’t match the shipping address. It was directed to manual review and the Radial team saw it was a repeat customer with two homes who had submitted good orders in the past. They approved it.
“Merchants who use simple tools or have in-house fraud teams will decline more of those,” he said. “That customer, who was spending $9,000 in a single day, would have been very dissatisfied. If you ratchet back and decline good orders, your top-line revenue will decline."
A giant like Amazon can manage fraud in-house; smaller retailers may struggle to avoid the traps of actual fraud or turning down good sales, because they don’t trust the payment information. Third-party fraud-prevention companies also benefit from seeing fraud patterns as they develop across a range of businesses, and they can build up data resources that a single retailer can’t match.
For example, according to Radial’s analyses, since August 2016, the market segments of electronics, entertainment, jewelry, and sporting goods experienced the highest increases in online fraud during the 2016 peak season.
“More retailers claim they are combatting fraud, but underestimate the other areas they’re endangering – like revenue and customer loyalty,” said Radial’s Weitz.
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bd1485e94ca8dce0781765a6aa1ddb18
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https://www.forbes.com/sites/tomgroenfeldt/2017/06/12/what-are-our-customers-doing-londons-metro-bank-asks-its-data/
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What Are Our Customers Doing, London's Metro Bank Asks Its Data
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What Are Our Customers Doing, London's Metro Bank Asks Its Data
London’s Metro Bank, which opened its first branch in 2010, wants to know its customers better. With contemporary architecture, lots of glass and facilities that are open seven days a week, it is already very accessible. And with its standing invitation for bike riders to ride right up to counters, water bowls for dogs and free coin counters, it’s a pretty friendly bank.
London's Metro Bank Photo by Tom Groenfeldt
But now that it has grown to 48 branches and, just recently, one million customers, it wanted to know more about how customers visited physical locations, how they used mobile, online and call centers, and how to allocate resources to provide great service.
That means data and the promotion of Bruce Rioch, the bank’s business leader on its Microsoft Dynamics CRM and Power BI platform to the broader role of chief data officer, which he assumed last August.
“We had started to build a big data infrastructure to maintain a single view of the customer,” Rioch said. “As we have grown as an organization and built more IT inside, the risk is you start to lose your single view of the customer. We built operational data store for a single view so we can understand how customers transact with us whether by phone, mobile, online or in a store."
As chief data officer he is also responsible for data governance, not only for understanding customer, but to meet regulatory reporting requirements.
Finally, as that bank has recruited more people who want insight into the business and the customers, the demands on Power BI have increased. The bank runs on Temenos in a data center, but for some of the other Microsoft applications, including Office 365 and Dynamics CRM, Power BI uses the Microsoft Azure cloud. The banks now has 80 dashboards for its users.
“We have grown that number significantly in part, because we integrated well with our data center.” Users can connect to Dynamics CRM, and Power BI to directly get the insights they want.
Metro recently used PowerApps to build an app to let customers pre-book appointments, or show up at a store to register for an appointment and get a text message 10 minutes before the appointment opens, so they can go shopping or take care of other business in the meantime.
“That’s all done in a table in Dynamics. A dashboard shows how much traffic comes through a store, how many customers book appointments and what they are for," Rioch explained. "That helps us understand our flow around how many customers come into a store, helps us with resourcing and lets us understand how long customers might be waiting. The bit I really like is that the function which calculates wait time is within one minute of the actual wait time. I has really changed the way we can serve customers on a day-to-day basis, and we built it quickly in PowerApps with Microsoft and our CRM team.
“We use Dynamics CRM for all of our customer interactions and case management. We use all of the Office 365 suite, Power BI, PowerApps, Azure functions, Azure Database and Dynamics Voice of the Customer module for our customer surveys and Dynamics Marketing for our email campaigns. ”
The idea that branches are dead is a bit of a myth. He has found through data, 55% of Metro Bank customers use its stores, and they also use its other channels including mobile, online and telephone. For data analytics, the bank relies on Azure.
“Cloud is especially useful for machine learning and internet of things, which our data center can’t do. If we had legacy systems this would be a huge challenge, but the fact we are relatively new and chose our technology gives us a good platform to build on.
“Keeping the hybrid model and open architectures gives us the ability to spin things up quickly in the cloud, which really helps us. We definitely trust Microsoft and enjoy their partnership to help us when we need help and point us in the right direction.”
Metro Bank's net promoter scores are in the 90s and are getting better, we added.
Looking ahead, Rioch wants to see the bank become a real insight-driven organization.
“How do we use the data and transactional history we have to basically understand our customers better, when, where and how often they contact us so we understand out busy times?"
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6df1a055256048dc1e246bf7b53e0534
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https://www.forbes.com/sites/tomgroenfeldt/2017/07/12/kpmg-and-microsoft-boost-their-global-alliance/
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KPMG and Microsoft Boost Their Global Alliance
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KPMG and Microsoft Boost Their Global Alliance
KPMG and Microsoft have announced a global alliance that encompasses both KPMG’s and audit practices running on Microsoft’s Azure cloud platform.
The two organizations are establishing a global Digital Solution Hub, which will leverage Microsoft Azure intelligent cloud services and artificial intelligence (AI) technology with KPMG business experience to help companies transform all areas of their businesses -- including finance, operations and the customer experience.
Mark Goodburn, KPMG's global head of advisory, said the two organizations had enjoyed a good relationship since the 1990s, but it hadn’t changed very much.
“The intersection between technology and business has been getting stronger. We re-evaluated it, saw some of their new technologies that looked good to us and our business acumen looked good to them.”
KPMG Global Chairman John Veihmeyer said CEOs are looking for new types of digital solutions that combine the best technology with deep sector and business expertise. KPMG’s Digital Solution Hub will support technology solutions the consultancy develops to help clients optimize their operations, to build more efficient and sustainable digitally driven business to compete in an ever-changing world.
As the pace of change increases, KPMG needed to be able to act faster, said Goodburn.
“Many of the clients know they have to do something but they are not exactly sure what they need to do. We want to start a conversation in a challenge or opportunity. To do that with a business consultant like us is often valuable; to do it with a technology-driven company like Microsoft is valuable. When a potential client along with KPMG and someone from Microsoft get together in a room, you get to a different discussion and you can innovate and move quicker, he said.
“We used to be able to see a problem, develop a solution, test the heck out of it and go back and put it into the marketplace. Now clients want more agility. If they bring us in with Microsoft to co-create we can move quicker.”
The Hub will be staffed by data scientists, developers, analysts, designers and other specialists from both organizations. KPMG and Microsoft plan to begin operations by the fourth quarter of 2017.
KPMG has also said it will offer some of its Clara smart audit tools though Azure.
“If you has asked 10 years ago about the potential to move audit to cloud I could have put up a bunch of reasons not to,” said Goodburn. But Clara smart audit tools on Azure let auditors tackle tasks differently, he said. The company is working with a global insurer and using Azure helps break through silos, improve digital relationships with clients and reduce costs.
KPMG wants to develop solutions that have repeatable components and then put bespoke solutions for individual clients on top, he added. The digital solutions hub it announced with Microsoft will not be implemented 100% pre-configured; consultants will add custom solutions on top.
“On digital solutions, we started with customers and employees and are moving into middle and back office.”
The customer and employee solutions will continue to grow in size and scope while the speed at which the operational side grows will be faster, he added.
Financial services will continue to be a strong focus for the consulting firm, along with strategic procurement, health care, life sciences and public sector, he said. He sees the industry on a journey from searching for more data to using analytics to gain insights from that data. Now firms are looking at collaboration — how do they collaborate with people who can capitalize on their insights.
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4b8cfadc7f5dbab8729247982cba0aa8
|
https://www.forbes.com/sites/tomgroenfeldt/2017/09/20/trillion-dollar-a-day-cls-group-launches-new-products-around-core-fx-settlement/
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Trillion-Dollar-A-Day CLS Group Launches New Products Around Core FX Settlement
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Trillion-Dollar-A-Day CLS Group Launches New Products Around Core FX Settlement
CLS Group, which was formed in 2002 to reduce foreign exchange settlement risk, has launched three new products, a move it calls the next step in its evolution. They are:
CLSNow, a same-day FX settlement service, allowing counterparties to access intraday liquidity more easily and efficiently
CLSTradeMonitor, a real-time consolidated view of the match and confirmation status of trade instructions submitted to CLS
CLSData, an expansion of CLS’s data offering to include FX order flow reports, intraday FX spot volume reports and FX pricing reports
In 1974 Bankhaus Herstatt in Germany failed, leaving American banks which had completed FX transactions with it the previous day unable to collect their side of the trades. International banks and regulators recognized the need for a way to reduce the settlement risk across time zones and developed the CLS bank to conduct payment vs. payment across currencies in real-time. It started with 39 members and seven currencies and since has expanded to 66 members and currencies from Asia, South Africa, Scandinavia, Israel and Mexico. Its average daily volume in August was $1.39 trillion across swap, spot and forward trades.
To date, most of the changes to CLS were enhancements of existing services, including aggregation, netting and compression to make its service more capital-efficient.
David Puth, CEO of CLS, said “regulatory reform, new technology and structural change mean market dynamics and client requirements are continuously changing. Given CLS’s role at the center of the FX market, its global connectivity to banks and other non-bank institutions, as well as close working relationships with central banks and regulators, we believe we have a unique opportunity to leverage our experience and market insight to create standardized solutions to address common market challenges.”
CLSNow, its same-day settlement service expected to launch in the second half of 2018, will be available for CAD, CHF, EUR, GBP and USD to start. This expands on a small offering in same-day USD-CAD settlement.
Alan Marquard, chief strategy and development officer at CLS,, said the company was taking a holistic view of the marketplace to identify areas where it could help participants reduce costs and risk.
“Introducing a same-day settlement service creates a huge amount of flexibility for the market, rather than settling T+2 during that settlement window, participants can exchange currencies at any time the central banks for those currencies are open.”
CLSTradeMonitor enhances CLSNet with a real-time consolidated view of the match and confirmation status for all trade instructions submitted to CLSSettlement and CLSNet, built on a distributed ledger technology (DLT), aka blockchain, platform. CLS said this will help participating institutions to drive process efficiencies such as optimizing intraday liquidity, enabling real-time awareness of currency and counterparty exposures, and reducing operational and credit risk. The services should be available in the first half of 2018.
The company has always valued its own data but mostly used it for internal purposes, said Marquard. Now it is starting to provide data in a more useful way to the market, hourly at first but moving closer to real-time. Since its first trade in 2002, it has captured the details of every trade, providing an unparalleled view of FX market activity.
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1d05c1fd51e316452aba659b6c55e2ff
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https://www.forbes.com/sites/tomgroenfeldt/2017/11/16/volante-partners-with-open-vector-to-meet-open-banking-demand/
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Volante Partners With Open Vector To Meet Open Banking Demand
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Volante Partners With Open Vector To Meet Open Banking Demand
Volante Technologies, a global provider of software for payments, has announced a partnership with Open Vector, an consultancy specializing in the design of open banking to create a comprehensive service for global banks looking to adopt open banking capabilities, the companies said in their announcement.
“We are the orchestration layer between the API world and the bank’s platforms,” said Nadish Lad, global head of payment product at Volante.
Nadish Lad Courtesy Volante Technologies
Within a bank the information an API needs to interact with will be held in individual systems — balances will be held in the core banking, FX rates in the FX engine and payments in one or more the payments engines.
“We are able to orchestrate the APIs.” So an API looking for FX rates would go through the Volante orchestration layer to reach the FX system, get the rate information and deliver it back to the API, he said. Volante’s VolPay enables banks to rapidly integrate their back office servicing applications, including payment engines and core banking applications, with the front-end API management layer that provides the secure managed access to the bank’s environment via defined APIs.
If an online merchant is accepting a direct payment from a customer account, the API validates that the customer does indeed have an account at the bank. Volante customers said they didn’t just want to validate the account’s existence, they also wanted the API to be able to see if the customer had sufficient funds for the purchase.
Merchants avoid card fees by using APIs to direct debit consumer accounts AP Photo/Elise Amendola
Making direct payments from consumer bank accounts to merchants is probably the number one use case for open banking, said Peter McKenna, global marketing director at Volante. When consumers use credit cards, merchants receive only 92% to 94% of the purchase price — the rest is lost to card and processor fees.
“The online merchant would rather take it from your account, and with real-time payments it could have those funds directly. We think this will be a big trend.” Merchants will probably have to offer consumers incentives such as loyalty points or free shipping, to move them off cards to direct payments, he added.
“You are going to need some kind of orchestration to fulfill these APIs,” added Lad. “We have been working closely with our clients on the open banking front.” Some have new systems in place, some are working with legacy technology, he said, but they will continue to operate multiple systems and they will continue to need an orchestration layer.
“It is highly unlikely that banks will expose individual core systems to APIs. They will use orchestration to a single gateway for data transformation and access to the systems.”
Banks right now are largely focused on the regulatory requirements for open banking, but once that is in place they will look for revenue growth.
Banks do realize they need to look for new models in the future to generate more, said McKenna.
“API means they can have operational relationships with third party providers and grow revenues, but they won’t allow the API management layer to have direct access to their core modules.”
Walter Wriston, who invested billions to make Citi en electronic banking leader, famously said "Information about money has become almost as important as money itself.”
(In a 1996 interview with Wired Magazine he also said: “In the real world, over time, proprietary systems won't work. "Open" has become the pretty girl at the party. Nobody quite knows what open means, but the world is demanding that systems talk to each other.”)
Now the emphasis on finance is information with money. ISO 20022 lets information, such as invoices, travel with payments to reduce the amount of time spent on reconciliation.
For international payments with SWIFT gpi, Volante’s VolPay Suite enables banks to track payments. In talking to customers, said Lad, Volante realized that tracking payments provides value to both the sending bank and the payment recipient. In a B2B or B2C payment, the sender knows the payment status — their account had been debited, explained Lad.
“The key party for whom this information is most relevant is the beneficiary. If they can track the payment, it will make their life easier, and will also make life as remitter easier because they won’t get calls from the beneficiary asking where the payment is.” Volante enables SWIFT gpi data to be shared with beneficiaries by email or other communications. That’s a useful service banks can offer customers at a fee.
Lad said that by partnering with Open Vector, Volante will be able to offer a full-service approach to clients looking to quickly adopt open banking, from strategy through to rapid technology implementation.
“Open Vector is one of the very few commercially-oriented consulting firms that to date has included working with a major global financial centre to interpret policy mandates, and then in the successful creation, design and implementation of its open banking ecosystem,” said Carlos Figueredo, the company’s CEO. “Through partnering with Volante, we can enable clients to become compliant with regulation, and also help them realize new commercial business opportunities and revenue streams.”
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31978bf2287ac95dd32b0d4afe25afdc
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https://www.forbes.com/sites/tomgroenfeldt/2018/04/19/latin-american-banks-were-slow-to-go-digital-but-now-theyre-moving-fast/
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Latin American Banks Were Slow To Go Digital But Now They're Moving Fast
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Latin American Banks Were Slow To Go Digital But Now They're Moving Fast
Banks in Latin America are picking up the pace in moving to digital, according to the third annual digital banking report from Technisys, a digital banking technology company.
“The most important thing that is changing is the way the market is evolving in digital banking,” said German Pugliese-Bassi, cofounder and CMO at Technisys.
Customers and visitors using the cash machine ATM dispensers inside the secure lobby of Itau, one of... [+] Brazil's major banks. Photo by Viviane Moos/Corbis via Getty Images
From the first appearance of the internet back in 1995, banks led the way in choosing the online services they would offer.
“Now the big change is that the customers are the ones who lead the disruption,” Pugliese-Bassi said. “They are forcing banks to create services that they want. They want the same experiences in banks as they have in many other services like Netflix, Uber, Amazon and Google.”
In the three years since Technisys started the report he has seen significant change in the banking industry, Pugliese-Bassi added.
“When we started the research banking executives were telling us not everyone at the bank was aware of the digitalization of the industry. Some they were not even looking at this. In three years that situation has changed dramatically -- every board and every CEO of a bank is aware. They are the biggest sponsors of this digital transformation. Now the big challenge could be the culture, getting everyone at the bank onboard this disrupting change.”
The study found that 31% of banks mentioned that the digital team is still struggling to convince non-digital mindsets, while another 26% believe their digital culture is only strong in some silos and is not integrated throughout the entire company. An overwhelming majority of banks (85%) consider fintech's potential partners, and another 6% expressed interest in acquiring fintech competitors.
Some banks are buying fintech companies not so much for their technology as for their culture, Pugliese-Bassi said.
The Uala app offers tech-savvy Argentines a low-cost banking alternative via their smartphones.... [+] Photographer: Erica Canepa/Bloomberg
Core banking systems in Latin America are not as old as those in North American banks, but the difficulties they present to digital operations are similar.
“Many of the big core banking transformation projects in the past 10 years have failed dramatically. Banks and CIOs are resistant to go through big core banking transformation because it is too risky and it takes a lot of time.”
Instead, they are placing digital banking technology in front of the legacy core to reduce the workload going to the old system. Some are creating new digital banks and plan to eventually move customer off the old platform.
“They can start offering digital banking services without risking the whole operation they have in place right now, which is very profitable. It’s a way of moving into this new digital space without risking the current business, without doing investments that take a lot of money and a lot of time with results that are not clear.”
Technisys is a strong player in the digital banking technology marketplace, he added. Vendors from abroad who are entering the market "are those who can offer something similar to what we offer in terms of digital vision, and a real digital banking platform. Many vendors may advertise digital banking while they are not."
Mobile is playing a growing role in banking he added, in part because it offers banks a way to provide customers with access to their accounts without issuing a debit card, which can be an expensive process.
“Banks are going to be different from how we know them now. You always see a bank as a big place with a lot of people and very good reputation.”
He thinks banks, or banking business, are going to become part of daily life, regardless of where the bank buildings are located.
“In the future, you will do your shopping in Amazon and the financial service will come along. It will not necessarily be a place, a building or a service you have to pick separately from what you are doing.”
Digital transformation may by-pass credit cards, which don’t have the wide adoption in Latin America that they have in the U.S.
Digital will also reduce costs and enable banks to go after unbanked or underbanked people who are not profitable with the high costs of traditional banking. By some estimates, the unbanked and underbanked represent a trillion dollar opportunity.
One in three banks surveyed has a special program to reach the unbanked, the survey found.
“One of the banks we interviewed attributes their advanced digital initiatives to a desire to cater for the low-income population in their local market, which forced the bank to be lean and come up with scrappy ways to streamline and simplify the user experience in order to serve this traditionally less profitable target segment more efficiently,” the report said.
“Integration of the different new digital features into an old banking core is difficult to achieve, and it currently still takes time to transfer information between different silos inside the bank if it employs an old core. However, without overall integration, a truly unified customer experience is unattainable,” the report concluded.
"We also see challenger banks," said Pugliese-Bassi, "some coming from the banking industry and some from other economic groups that wanted to jump into the financial sector with a digital strategy."
The report found a contradiction between what banks think they offer and the technology behind it.
It found that over 60% of banks are implementing or testing cloud computing, chatbots, and big data while a minority (less than 22%) mentions Blockchain, IoT and virtual reality. While 72% believe in the value of a consistent customer experience, only a third think seamlessness between channels is important.
“Executives from fintech companies consider banks natural strategic partners. However, difficulties integrating systems, long execution times, and lack of digital mindsets are among the challenges listed by entrepreneurs regarding partnership with banks."
Digital players have ample opportunity — the study found that only 22% of the banks qualify as digital leaders , fully prepared with a complete digital offer in Latin America.
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4f0edf36dd66b6df53ac1b31bafaaac4
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https://www.forbes.com/sites/tomgroenfeldt/2018/06/07/finastra-develops-an-open-platform-for-banking-apps/
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Finastra Develops An Open Platform For Banking Apps
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Finastra Develops An Open Platform For Banking Apps
Finastra, the global fintech company, has launched a cloud-based platform that will allow financial firms to develop apps with minimum coding and offer a marketplace for them to collaborate with banks.
Called FusionFabric.cloud, it is a Platform as a Service (PaaS), an open innovative platform that will change the way banks develop and deploy software, said Natalie Gammon, chief cloud officer at Finastra.
“One big challenge banks face is to remain competitive and relevant,” she said. “They are under pressure to reduce costs, manage risk, boost revenues and meet customer expectations.”
Finastra's open banking platform will help small banks compete. Photo by Tom Groenfeldt
Ninety percent of bank innovations come from outside the organization, she added, and they face competition for customer loyalty from companies like Mint and Monzo which aggregate financial information and offer it to customers in one place.
The risk for banks is that their customers will establish their primary financial relationship with the aggregators rather than with brick and mortar banks.
“On the other side we deal with a lot of fintechs which have the innovation, but similar problems — they are struggling to find a way to connect with financial institutions. Some are startups and don’t have the capital or sales presence required to deal globally, or even to get through the long arduous procurement process needed for a large bank.”
Banks and consultancies have launched incubators and partnership programs to bring together technology firms and banks, helping tech firms meet the appropriate decision makers while learning what banks need in terms of financial stability and security from suppliers. Accenture, which is a partner with Finastra in the open banking platform, has sponsored fintech innovation labs in New York, London and Hong Kong.
For a fintech firm, just finding the right person to talk to in a money center bank can take 12 to 18 months; the innovation labs and bank incubators seek to match technologists with the right department in a bank to reduce the lag time.
Gammon said that on the bank side, it can take 10 months to two years to bring an innovation to market.
To speed development, Finastra also provides FusionCreator, a low-code environment where 60 early adopters were able to create innovative apps in just a few days, a 10x improvement over traditional development, Gammon said.
Although Finastra offers its software for installation on-premise, it is increasingly using the Microsoft Azure cloud for its software and for its open banking program, including FusionOperate and FusionStore, an online marketplace where banks can search for apps and fintechs can market their software.
Other banking technology firms have developed similar programs. Temenos, for example, has its app MarketPlace which “provides Temenos customers with access to Temenos certified business apps that are fully integrated with the latest release of the Temenos platform,” according to its web site.
The Temenos MarketPlace includes products for security, anti-fraud, user experience and analytics.
Finastra’s marketplace is much broader than what other tech vendors offer, Gammon said.
“What’s different about our offering is that while competitors have talked about APIs, they have opened very narrow APIs for specific business lines. What we are doing is opening up our entire core architecture on the platform across our entire product suite, and we will release APIs across all our portfolio. We focus on retail and corporate banking where the demand comes from.”
Finastra’s initial API focus is on payments and retail banking to serve the immediate demand of PSD2 and open banking coming into force. Other APIs will be added in due course to cover the whole Finastra line of products and solutions.
Finastra has partnered with big names including Thomson Reuters, Accenture and fintechs like Conversation.one which develops build-once deploy-everywhere conversational apps for Alex and Google Home.
“They have dozens of pre-built conversation flows to check balances and to make transfers and authorize payments.”
The advantage for banks is that it allows them to accelerate their innovation cycle and optimize costs while improving customer experience.
On both the banking and technology sides of the market, Finastra's platform helps small and mid-size firms compete with the giants. The open banking platform helps smaller banks and credit unions to be unlock innovation cost-effectively while also helping smaller startups that don’t have have the capital to compete with big technology players.
“We’ve seen a lot of excitement in the fintech space,” Gammon added. “Smaller startups that don’t have the capital to compete can develop much more quickly at much lower expense and have greater sales reach. People have talked about platformification but no one has really owned the standard before. We want to be the number one provider of a platform for open innovation.”
Finastra is riding currents of changed thinking about cloud computing within financial services.
Gammon said financial firms have had a wake-up call over costs and time to deploy.
“A few years ago were having very different chats. People were afraid of cloud, they thought they could do it on their own, they saw no need to collaborate. They had big buy or build budgets, and they could justify multi-year multi-million projects. Now they are under so much pressure —to retain those end customer relationships.”
She still has conversations over issues of cloud, especially compliance and security, she said.
“One reason we have partnered so strongly with Microsoft is because they have the strongest compliance in the industry., and Microsoft understands the importance of security.” Already Finastra has 4,000 customers on Azure, she said, and "the majority of our go-forward platforms are on Azure.
“We chose to partner with Microsoft because of their global footprint, and they truly understood financial services and they have global reach,” she said. “I don’t think anyone is not having conversations about cloud, although they may be having conversations saying they are not quite ready.”
Banks in the U.S. as well are starting to understand if they are not innovative and can’t compete they are going to lose out.
Beyond FIs and fintechs, Finastra has been getting interest from a third group — academics who want to teach their students the development skills to to build apps for the financial industry. They see that partnering with Finastra will be good for their curriculum.
“University College London has students building out apps for pricing and capital markets,” she said.
Finastra was formed by Vista Equity Partners, a private equity firm, through the merger of Misys and D+H. Both of them had in turn had acquired several other fintech companies over the years, including Opics, Loan-IQ and Sophis on the Misys side and Harland Financial Solutions and Fundtech at D+H.
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89236d474728f290c59d188061c2dfcd
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https://www.forbes.com/sites/tomgroenfeldt/2018/07/30/cls-and-ibm-launch-blockchain-app-store-with-banks-and-fintechs/
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CLS And IBM Launch Blockchain App Store With Banks And Fintechs
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CLS And IBM Launch Blockchain App Store With Banks And Fintechs
IBM building on Madison Avenue in New York City. (Photo by Michael Brochstein/SOPA... [+] Images/LightRocket via Getty Images)
CLS, the global foreign exchange settlement bank founded to eliminate Herstatt risk — the risk of one side in an FX trade will fail before paying its leg of a transaction — is now partnering with IBM to offer a blockchain app store called CLS LedgerConnect.
As a well established and trusted bank utility, CLS provides a safe place for permissioned blockchains based on the Hyperledger Fabric.
LedgerConnect is designed to enable banks, buy and sell side firms, FinTechs and software vendors to deploy, share and consume services hosted on a shared distributed ledger network, CLS said in its announcement. It will let financial institutions access services such as know your customer (KYC) processes, sanctions screening, collateral management, derivatives post-trade processing and reconciliation and market data.
“By hosting these services on a single, enterprise-grade network, organizations can focus on business objectives rather than application development, enabling them to realize operational efficiencies and cost savings across asset classes.”
Nine financial institutions, including Barclays and Citi (the only two which permitted their names to be used in the announcement), are participating in the Proof of Concept (PoC). They have selected services from a number of vendors including Baton Systems, Calypso, Copp Clark, IBM, MPhasis, OpenRisk, SynSwap and Persistent Systems to participate in the PoC.
Although the blockchain concept has aroused a lot of interest among financial institutions, few have gone beyond proof of concept into production. Industry experts think the savings from blockchain could be $7-12 billion in post-trade and $5 billion in KYC, but those savings require standardized processes and a secure network to connect them, said Keith Bear, vice president, Global Financial Markets, IBM.
“We are taking the experience we have with blockchain over the past few years and creating this network.” He expects that fintechs, software companies and banks that have developed apps for the buyside and sellside will want to use the network. It will facilitate the identification of available apps and support deployment at the push of a button to connect with other banks.
LedgerConnect will combine an app store with managed network services and secure infrastructure to provide connectivity between providers and consumers of apps, he added.
The blockchain operations will be segregated from the CLS FX transactions, Bear added. The Federal Reserve, which regulates CLS, wanted to ensure the blockchain apps would have no impact on FX settlement.
“This is nothing to do with FX but is an example of CLS moving outside immediate FX settlement while leveraging its position as a bank-owned utility linked to fund managers. It is an interesting extension away from the core franchise to leverage its market position and market ownership.”
"LedgerConnect is part of CLS's strategy to explore how we can provide safe and robust solutions that create efficiencies and reduce risk for a diverse range of firms operating in the financial markets,” said Alan Marquard, Chief Strategy and Development Officer, CLS. “We expect LedgerConnect to deliver enhanced efficiencies and economies of scale over single-purpose distributed ledger networks."
It is still in early stages of development and test environments, he added.
“The initial version of the app store is being built. We are working with fintechs and software OpenRisk and SynSwap and the banks that have elected to start testing for reconciliation, margin management, etc.”
Although the focus is on wholesale banking and capital markets, LedgerConnect could have value in insurance and retail banking areas such as regulatory reporting, mortgage and digital identification, an area where IBM is working with SecureKey on a blockchain environment. IBM will have more announcements by the SWIFT Sibos, show, Bear added.
“We do think this is largely about accelerating the benefits of blockchain. There has been a lot of cynicism and inertia.” The success of LedgerConnect will depend in part on banks’ willingness to get over their PoC fatigue, he added.
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a8440041586b45f6b5eaa9b0b6a242e9
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https://www.forbes.com/sites/tomgroenfeldt/2018/09/12/using-blockchain-to-record-asset-backed-securities/
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Using Blockchain To Record Asset-Backed Securities
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Using Blockchain To Record Asset-Backed Securities
A Fintech startup working with IBM is using blockchain technology to prevent double counting of collateral assets in forming asset-backed securities (ABS) portfolios.
Global Debt Registry has developed a private blockchain built to ensure the integrity of loan assets and protect pledged assets on the network from errors or misrepresentation in the future. The company worked last year in IBM’s Digital Mentorship Program and then became a member of IBM’s Entrepreneur Program to help scale the company.
Residential solar is one of the hottest categories in asset-backed securities. Photographer: David... [+] Paul Morris/Bloomberg
In its announcement the company said that “In 2008, double-pledged loans, or loan assets that had already been pledged but due to inadequate tracking and verification methods, contributed to the collapse of some of the United States’ largest and most iconic financial institutions…”
The company’s CEO, Charlie Moore, kind of walked back the press announcement’s suggestion that double-pledged loans were behind the collapse of major banks. Instead he pointed out the inefficiency and inadequacy of technology in dealing with an ABS market of $300 to $400 billion, not counting mortgage-backed securities, with paper and Excel spreadsheets.
Indeed, later Moore suggested that perhaps more important than the risk of double-counting collateral, as the firm initially suggested, the greater danger may be in tying up capital by over-collateralizing loans.
Firms will often have more loans pledged that the actual credit facility, Moore said.
The company says blockchain technology will provide clear persistent records.
“Blockchain is faster, cheaper, and more efficient,” Moore said. This asset class “hasn’t seen a lot of process innovation,” he added. “It’s the same as 20 to 30 years ago when it comes to the funding of deals and the way deals are put together for securitization. It is a slow, manual process with a batch of siloed entities managing a view of loan information with no [central] system of record.”
The fewer than 10 Wall Street investment banks which handled almost all ABS deals spend a lot of time, and money, with custodians, verification agents and attorneys to manage those loans. The blockchain has come a long ways in recent years, providing a solution around data integrity, integrity of records and the digital asset challenges the industry has, he added.
“We have been working with the big investment banks who are providers of the underlying capital. They provide warehouse facilities into the market space or auto lending space and they participate in the underwriting stage. Then they syndicate these bonds out to the market; they have a lot of control over core data around collateral positions.”
Typically loan information is sent around to the various parties in spreadsheets or CSV files without confidence that everyone is looking at the same data at the same point in time, he added. Records often are not as up to date as they should be. Many banks are still getting fined around issues such as misrepresentation of borrower and loan information, he said.
“Part of the problem is that they wouldn’t necessarily have that transparency into the data from origination…having increased certainty around borrower and loan data reduces many of the risks.”
“Ratings agencies assume the data they are provided is accurate, there is no guarantee that the loan information they are getting around the base and the servicer performance is accurate, because there is a lack of a single system of record.”
Blockchain performance is not an issue with loans, Moore said.
Asset-backed securities are not a very data-intensive market, Moore said. A lot of early Proofs of Concept (POCs) in capital markets have been around clearing and settlement, which is data intensive and aimed at high frequency, high performance markets.
ABS markets are not.
“MBS and ABS do updating on a monthly basis in spreadsheets, “ Moores said. “They are very, very data-light with transactions that are measured in weeks or months rather than seconds. The end state is the loan is native on the blockchain and transaction-able in near real-time.”
Global Debt Registry is developing a set of protocols for how the industry can work with this infrastructure, how participants should record their data around a data standard for interoperability.
The company is now live with the first phase around collateral pledged —750,0000 loans and whom the loans are pledged to, Moore said.
“The banks can start to use that as system of record when they record liens with the DTCC. That is where we are starting and we will focus on that for the next year or so and extend to serving data which is more complex in terms of data fields.”
ABS is growing at double digit rates, said Moore. Residential solar is the most active.
“The market has moved away from leasing solar panels to the homeowner’s actually taking out a loan to provide that equipment, and that equipment is part of the collateral that is pledged. The solar provider will have a warehouse line from a big bank, and once sufficient volume is accumulated, they will package it and sell it on to investors.”
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fbe96140d468b8d7f8893d1ac58bdd28
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https://www.forbes.com/sites/tomgroenfeldt/2018/10/04/thomson-reuters-and-squirro-offer-powerful-crm-for-wealth-managers-and-commercial-bankers/
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Thomson Reuters And Squirro Offer Powerful CRM For Wealth Managers and Commercial Bankers
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Thomson Reuters And Squirro Offer Powerful CRM For Wealth Managers and Commercial Bankers
The purpose of customer relationship management (CRM) systems in finance is pretty simple — provide users at a bank or brokerage with a comprehensive view of a customer’s finances, 360-degrees in the popular parlance.
If one CRM systems is useful, are two better? Probably not for users who would prefer a single version of the truth. And while a CRM system in retail banking can handle a static savings account and a current account, as it is hit by checks, electronic debits and credits, what happens with a wealth management account, holding securities in multiple countries, time zones and currencies? The challenge is even greater for commercial bankers who may need to aggregate customer information and market information for advising on M&A transactions.
To provide the information they need, Thomson Reuters has partnered with Squirro, which describes its technology as AI, for augmented intelligence, to provide a complete current overview of each client. It is aimed at relationship managers who need to understand complex in wealth management and commercial banking.
(As of 1 October, The Thomson Reuters Financial & Risk business will be known as Refinitiv, following the closing of the strategic partnership transaction between Thomson Reuters and private equity funds managed by Blackstone. The Blackstone-led consortium now owns 55 percent of the equity in a new corporation created to hold the F&R business, and Thomson Reuters retains a 45 percent equity stake, at an overall valuation of US $20 billion.)
Thomson Reuters news ticker (AP Photo/Mark Lennihan)
The combination will provide a single view of the customer including internal information such as meeting notes, deal history, pipeline and products — especially helpful for commercial banking — along with third party market data in a single application. It will also support talking points for customer interactions and use AI-driven tools to facilitate cross-selling.
“ Banks are operating multiple platforms containing customer information, with significant time being spent searching for and compiling relevant information , and not making the most of unstructured data sources” said Leon Saunders-Calvert, global head of capital markets & advisory at the Financial & Risk division of Thomson Reuters.
Until now, proprietary data about customers sat in one or more CRM systems while market data was separate, he added.
“Getting one view of the customer is very, very difficult. The partnership with Squirro is very exciting because we can bring our data natively into CRM systems.” Squirro can look across multiple CRM systems, he added, while also controlling access to maintain Chinese walls where required within the bank or brokerage.
Investment bankers who can offer services such as M&A advisory, capital raising and cash management, want a comprehensive view of the customer, and the firm’s previous interactions and information about that customer including points of contact and meeting notes.
The Thomson Reuters partnership with Squirro lets a firm combine data they may have in multiple places and allows users to view it all in one place, Sanders-Calvert added.
"Finance professionals are demanding more from their data and financial institutions are driving digitization strategies to spot new opportunities faster.
The new Refinitiv business expects to invest in a number of key areas to serve its customer base, which currently includes 40,000 institutions in over 190 countries, Blackstone said in its announcement. “This includes further investing in content coverage, AI and analytics across its open data platforms Elektron and Eikon for buy-side, trading, wealth and banking customers. It also plans to invest in enhanced capabilities for its leading platforms for trading, as well as in indices, risk management, and fighting financial crime.”
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dc97cdb42c24fe575bbca2a960d82ee3
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https://www.forbes.com/sites/tomgroenfeldt/2018/11/06/citizens-bank-will-launch-real-time-payments-for-commercial-accounts-in-2019/
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Citizens Bank Will Launch Real-Time Payments For Commercial Accounts in 2019
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Citizens Bank Will Launch Real-Time Payments For Commercial Accounts in 2019
Citizens Bank plans to phase in real-time payments for its commercial banking business starting in 2019. The bank, which is an owner bank of The Clearing House (TCH) has been a backer of real-time payments for three to four years, said Matt Richardson, head of product solutions in treasury management at the bank.
Citizens Bank Photo by Tom Groenfeldt
Bank executives thought the U.S. needed a better payments system, he said.
“This is following the global trend to get to faster payments; that trend is moving throughout the world and we felt the U.S. had to get up to speed in terms of faster payments,” he explained. “We still have wire and ACH, but neither is really fit for purpose in a digital economy where the consumer expectation is that things happen immediately. It’s hard to support that with legacy platforms.”
The bank will launch with the ability to receive real-time payments and then follow up later in the year with the capability to send by file transmission, API or via a commercial online banking platform.
Real-time is definitely not just for the TCH owner banks, he added.
“The only way for a payment system to really take hold is for it to be ubiquitous.”
One of the attractions for real-time payments will be that companies like utilities can do requests for payment. That requires ubiquity.
“A utility needs to be confident that all five million clients can accept the request for payment regardless of where they bank. TCH has done a ton of work in that regard, reaching out to smaller banks and their trade associations and working with processors like FIS, Fiserv and Jack Henry. The hope is that the processors will make it available to the banks they process for.”
In October The Federal Reserve Board “invited public comment on actions the Federal Reserve could take to support faster payments in the United States. The potential actions, which would facilitate real-time interbank settlement of faster payments, build on collaborative work with the payment industry through the Federal Reserve System's Strategies for Improving the U.S. Payment System (SIPS) initiative.” Comments are due by December 14, 2018.
Peter Gordon, co-founder of Payment Relationship Management and an active participant in the Fed’s Faster Payments conferences, said that the current Fed Chair Jerome (Jay) Powell has been active in faster payments. A lawyer and investment banker, including an eight-year stint as a partner at the Carlyle Group, his background differs from the usual suspects at the Fed who are largely economists, said Gordon.
“He’s a business person who understands the need to drive down costs at businesses of all sizes. Now he is looking at growth and productivity tools, and electronic payments could be another tool the Fed uses to improve productivity and support GDP growth in this digital era.”
Big banks in the U.S. for years showed little enthusiasm for faster payments because there was no obvious business case for them. It’s an expensive proposition with no apparent ROI. The Fed has patiently educated, prodded and encouraged banks to plan for real-time payments. After one of the Chicago Fed's two-day programs on real-time, one banker, displaying a significant lack of urgency, said it would be interesting to see what would be discussed at next year’s session. (That may be the reason the Federal Reserve Board included the year in its deadline for a request for comment, just to ensure banks didn't think the deadline was 2020 or beyond.)
The Fed has basically asked if it should become an operator of the system, said Richardson, who is wary of this direction.
“I think the Fed has done good work. They set an objective, set some standards that a faster payment system would have to meet, and they created a dialogue around it. That part is good. But there is definitely some concern that if the Fed does decide to become an operator, or if they suggest they might become an operator of a competing scheme, it could fragment the market and make it hard to get to faster payments.”
Somewhere between 20 and 30 countries around the world have, or are building, real-time payment systems; the UK is celebrating the 10th anniversary of its faster payments.
“ The U.S. is the only jurisdiction that is trying to launch a new payment platform without a government mandate ,” said Richardson. “Everywhere else has been government sponsored or mandated. That is not the case here, at least not so far."
Corporations are interested in real-time payments, he added and have told TCH to hurry up and build it so they could take advantage of it.
“People will ask why a corporation would want to pay faster? From a cash flow perspective the idea is not to get the money out of a corporate account and to payee faster, not to hurt their working capital, but to give them certainty. With real-time you will know almost the second that the payment has settled.” Richardson said.
"The other huge thing for corporations is what it means for collections, being able to leverage request for payment to re-engineer how they collect from customers. That could be very, very powerful. Corporations want to manage risk and have cost effectiveness, but they also really wanted operational efficiency. The ideal system is being built where payment information accompanies the payment. What could that mean for corporations in an era when lock boxes are still prevalent? It’s a huge opportunity for corporations.”
That probably will require corporations to upgrade, or take the next release, of their ERP systems, he added. The good news is that major ERP vendors have already worked with faster payments in other countries, so they are prepared.
Richardson said that Citizens’ chairman and CEO, Bruce Van Saun, took a long view of moving to real-time.
“The payment landscape was changing and we can either be a part of it or not. We weren't going to bury our head in the sand to preserve the status quo. I do think real-time payments is a legit value-added improvement over the payment systems we have today, and I do think we will be able to monetize that, especially if we can help our customers re-engineer their collection process.”
Citizens has partnered with Fiserv, which had acquired Dovetail, a payment hub company, to develop real-time capabilities. He won’t be surprised if he is surprised along the rollout.
“You can whiteboard it all you want and have brain-storming sessions, but you don't necessarily know how the corporations are going to use it and what use cases are going to take off. It would surprise me a little if there is a use case no one has thought of, but which will be popular and take off, that could be surprising,”
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e20eb68489d89fd731bb184c14c7de0b
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https://www.forbes.com/sites/tomgroenfeldt/2019/01/07/sigfig-robo-advisor-works-with-individuals-banks-and-advisors/
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SigFig Robo Advisor Works With Individuals, Banks And Advisors
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SigFig Robo Advisor Works With Individuals, Banks And Advisors
SigFig is a robo advisor that comes in a couple of flavors. For investors who meet the $2,000 account minimum, it is free for the first $10,000. After that it charges .25% for direct investors and offers them access to a personal advisor. It also provides its platforms to banks which charge .50% or more and also offer in-house advisors. So an investor with a $20,000 portfolio would pay $21.67 to a traditional advisor chargings the usual 1% of assets under management but would pay SigFig just $2.08 and somewhere in between by using SigFig throuh a bank.
Mike Sha, co-founder and CEO, said working directly with consumers gives the firm insight into how people are using the tools so it can modify them to improve the customer experience. Working with large banks gives SigFig access to far more investors, and helps the banks provide innovation at a speed that might be difficult for them alone.
Mike Sha, CEO of SigFig Courtesy SigFig
Prior to SigFig, Sha held senior roles at Amazon where he launched and built the Amazon Visa Card into one of the fastest growing consumer loyalty cards in history, and he was one of the original inventors of Amazon's Prime program,
“We have a big focus on serving financial institutions and a big part of that is to drive impact at scale so we can touch lots of peoples’ lives,” Sha said.
“Banks have a deep desire to be innovative and rethink how their products work, but a challenge they have is cultural — they don't iterate very quickly. By contrast, at Amazon, teams would build something and figure out what works and what doesn’t work.
“The advantage of digital products is you can change them all the time and show customers different versions to see what was most effective. That learning cycle was orders of magnitude faster than a traditional business. The direct to consumer operation is a good lab, not so much for the scale and revenue but for the speed of learning.”
SigFig has benefited from a change in bankers’ thinking, he said.
“Even the biggest banks in the world have stepped away from being purists on wanting to build everything themselves. Some firms want to build rather than license; Wells is one of the banks that likes to build more than partner.” But Wells Fargo, like UBS and Citizens, has chosen to use the SigFig platform.
“The reasons to partner are quite compelling,” Sha said.
SigFig has invested years of skilled developer time in its platform, and banks that have licensed it realized that they would have to climb a large mountain to replicate the solution, he said.
“The second reason is speed to market. We could get them to market 3-4x as fast and in the time they would be building their own system, our product would be getting better.”
“The fourth, and under-appreciated but significant factor, is that while banks have a lot of tech resources, they are in short supply, so the IT operations at a bank always juggle more products than they have time for. So the tech teams jump from project to project, and when one project is done they get assigned to another. If you are the P&L owner at the bank, that kind of funding structure is infinitely debilitating. You build and it is over budget, late and not all you had hoped, and then the team that built it goes on to the next project and you are stuck with the thing five to 10 years later.”
By contrast, SigFig has a dedicated team constantly updating the software.
“If you are the P&L owner, our solution continues to stay best in class and that leads to a different trajectory for the business.”
The combination of a modern robo advisor and a trusted bank, attracts customers to the wealth management division, he said.
“The existing industry has ignored the usual consumers; the minimum investment [often $100,000 to $150,000] required ignores 90-plus percent of the population. That is why this product is unique. Hundreds of millions of people need help with investments and we have a better opportunity working with big banks because they touch hundreds of millions of consumers.”
The advice platform combining technology and access to a human advisor, is attractive to people who might be wary of an entirely algorithmic platform, he added.
“The average consumer, say 20 to 50 years old, is saving a few thousand at a time and they are looking for something to help them get to where they are trying to go.”
Most consumers don’t want details about algorithms, auto rebalancing and tax harvesting, he added. For SigFig to attract mainstream customers, it has to be easy to use and show value.
SigFig makes it easy to enroll, he added.
“Our onboarding and funding have improved. A lot of people expect investing will be difficult and that leads to procrastination. We are trying to make good investing cheaper and simpler — let’s get you into a well diversified portfolio at a low fee with the right level of service. We are not trying to build a platform that is exotic or doing crazy hedge fundy-type stuff. We have tried to stick to simpler products and create a simpler experience.”
He has been surprised at how many advisors have taken to using the platform.
“We have seen a real demand for adapting the platform we have already built for use by those employees. When you look at advisors and branch managers and bankers, they are often using technology that is 20-30 years old with green screens. They require a lot of training and lead to errors because the systems are hard to use. There is a business transformation opportunity for us to provide those people with better tools so they can serve the clients better. Who doesn’t win there? The banker and advisor are more productive and the customer gets better service.”
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2cae5224f30132c966a25eabb1187e0e
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https://www.forbes.com/sites/tomgroenfeldt/2019/01/10/student-loan-servicers-get-a-report-card-from-lendedu/
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Student Loan Servicers Get A Report Card From LendEDU
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Student Loan Servicers Get A Report Card From LendEDU
Drawing on extensive data from the Consumer Financial Protection Bureau (CFPB) LendEDU has developed reports on the level of student lending complaints against loan servicers as recorded by the Consumer Finance Protection Bureau. The CFPB hasn’t released a report this year, so LendEDU, which runs a web site providing guidance for refinancing student loans, used CFPB numbers reports to develop one by itself.
Students walk on the campus of Miami Dade College, in Miami. (AP Photo/Lynne Sladky) ASSOCIATED PRESS
“The most complained about student loan company was Navient, which has had its fair share of problems in the last few years,” the report said.
“Not surprisingly, Navient once again led the way this year when it came to the most complained about federal student loan companies; 42 percent, or 2,239 complaints, of the 5,362 federal student loan complaints were lodged against Navient which has 6,660,000 loan recipients. AES/PHEAA which services 8,210,000 clients was the closest pursuer, representing 26 percent, or 1,399 complaints, of all federal student loan complaints.”
Mike Brown, a research analyst at LendEDU, ran the numbers which showed that Navient had nearly twice the level of complaints, 336 per million loan recipients as AES/PHEAA which was running 170 per million. Nelnet with 6,410,000 clients had 79 per million and Great Lakes with 8,250,000 loan recipients had just 27 per million.
Private student loan complaints were similar…Navient was 53% by volume, AES/PHEAA 8% and SLM Corporation 6%. Discover Bank was 5%, Nelnet and Wells Fargo each 4%, Transworld Systems 3% and Great Lakes, ACS Education Services and SoFi each 1%,
In previous years the CFPB developed this sort of report on its own, as directed by the Dodd-Frank act: The student loan Ombudsman “shall compile and analyze data on student loan complaints and make appropriate recommendations to the Secretary of the Treasury, the Director of the Consumer Financial Protection Bureau, the Secretary of Education, and Congress.”
But that ended this year.
Brown said the Trump administration is reducing the operations of the CFPB. The LA Times reported
in May that Mike Mulvaney was closing the bureau’s student lending office which had returned $750 million to student borrowers and had sued Navient. The CFPB estimated one in four student loan borrowers, or 10.5 million people - were delinquent on student loans or in default, according to the Pew Charitable Trusts.
One of the charges against Navient is that it pushes borrowers into forbearance, a suspension of payments while interest continues to build up, rather than enroll in an income-driven repayment plan.
In addition to the CFPB, Pennsylvania, California, Washington and Illinois have sued Navient.
“Just a few days ago, a U.S. district court judge shot down a request by Navient to have a lawsuit dismissed,” LendEDU said. “The suit, filed by Pennsylvania Attorney General Josh Shapiro, alleges Navient violated state law by pushing borrowers towards costly repayment programs.”
A web site for student loans lays out some of the issues:
When one 2018 graduate called to find out what their repayment options were, the representative gave her only one and refused to talk about alternatives. What’s more, the representative wouldn’t say how much the monthly payments would be on the plan they recommended.
“I ended up just working with the website and figured out what I needed to do by myself,” the reader wrote, “which was not the recommended plan that the servicer stated.”
Navient has a section on its web site discussing the legal actions against it.
“As the nation's leading student loan servicer, Navient helps more than 12 million borrowers navigate loan repayment through proven solutions that fit their individual circumstances. And it's working: borrowers we service are 37 percent less likely to default and 53 percent of student loan balances we service for the government are enrolled in income-driven repayment.”
LendEDU has been designed to help people who want to refinance student loans; On its web site the company says:
“Our services are free for consumers and do not hurt consumer credit. In addition, we've created hundreds of original guides, tools, and resources designed to help students and graduates make tough financial decisions and ensure that they are making, saving, and growing their money to the best of their abilities.”
Mike Brown at LendEDU, said some of the lenders it lists on its site are using sophisticated new tools to qualify borrowers.
“A lot of lenders and banks are moving away from traditional tools like FICO, which they may still use, but we now see a lot of lenders using a big data to determine if applicant is qualified.”
Funding University, one of LendEDU’s partners, uses information like GPA, college major, test scores and career paths to evaluate borrowers.
NerdWallet, the consumer financial web site, also posts alternatives to traditional student loans and explains what borrowers need to qualify such as credit scores at least in the high 600s, a steady income or a co-signer.
Check the NerdWallet blog which has a number of entries regarding student loans.
The Nation magazine looked at how other countries do it. In Australia tuition is based on the potential earnings for the corresponding degree or area of study. It gets better. Australian students only have to repay their loans after they start earning a sizable income (over $39,000). After that, borrowers pay a mere 4 percent of their yearly income. Payments for student loans are automatically collected through income taxes, making it easier to avoid loan default.
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a0c81f1fafd599e6b9b3222b170c89eb
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https://www.forbes.com/sites/tomgroenfeldt/2019/01/29/community-banks-want-the-federal-reserve-to-create-real-time-payments-system-fast/
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Community Banks Want The Federal Reserve To Create Real-Time Payments System -- Fast
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Community Banks Want The Federal Reserve To Create Real-Time Payments System -- Fast
Community bankers want the Fed to provide a real-time payments network so they don’t have to rely on the private real-time payments system that is being developed by The Clearing House (TCH).
The Independent Community Bankers of America (ICBA) has come out strongly in favor of a big role for the Federal Reserve in real-time payments. including developing and operating a real-time gross settlement (RTGS) system to provide access and foster ubiquity for all financial institutions regardless of size or charter. And it urged the Fed to act as soon as possible and reminded the Fed of its goal of having a real-time payments system in place by 2020.
Will community banks get left behind by a real-time payments network run by big banks? Photo by Tom Groenfeldt
It responded to complaints the Fed might slow widespread adoption of the TCH system. While it may slow adoption of the private system it will hasten the development of end-to-end-user interfaces by providing the access and ubiquity to needed to enable them.
David G. Schroeder, senior vice president for federal governmental relations, writing on behalf of the Community Bankers Association of Illinois (“CBAI”), which represents 320 Illinois community banks, urged the Federal Reserve to implement fast and secure payments.
“An essential feature of these Improvements, and which we believe only the Federal Reserve is uniquely positioned to provide, is open and fair access to the Payments System for all community banks regardless of size, charter type or location, to meet the existing and evolving payment needs of their customers and communities.”
Community banks play a vital role across the country, the association’s statement said.
“While community banks account for only approximately 20% of banking assets, they extend almost 50% of the loans to small businesses and an ever higher percentage of agricultural loans; and approximately one in five counties in the nation are only served by the physical presence of a community bank. A Payments System that does not serve all banks equally or which disadvantages community banks will have a devastating impact on the nation’s consumers, small business and agriculture.”
The association said it is concerned by a private-sector payments solution owned by the largest banks.
“The recent and ongoing misdeeds of many of the largest financial institutions have greatly harmed consumers, endangered the entire financial system and resulted in the worst recession since the Great Depression.”
The Illinois association, which created a 12-member task force to study the Faster Payments initiative, said the Federal Reserve System should maintain its dual role as the Payments System’s regulator AND as an operator and service provider.
The Illinois bankers also pointed to the importance of an active Fed role in event of a financial disruption.
“As these disruptions occur, with little or no warning, the Federal Reserve’s Proposed Improvements must already be fully operating so that it can immediately provide payment services for everyone.”
On the ideal time to market, the association was clear.
“CBAI believes the ideal time for the Federal Reserve to deliver the Proposed Improvements to market is as soon as is practically possible…While CBAI appreciates the thoughtful and inclusive approach the Federal Reserve has taken in the exploration of faster and more secure payments, NOW is the time for the Federal Reserve to move forward with implementing the Proposed Improvements.”
William Rosacker, president of United Bankers Bank in Bloomington, MN said that on the Fed faster payments task force “the large banks stymied or watered down nearly all the industry task forces’ recommendations.”
Greg Rayon form First State Bank Southwest in Worthington, MN said “It is critical for the safety and soundness and independence of our payment system to be controlled by the Federal Reserve System. We should not allow the private sector to control our payment systems.”
Krista Fischer from APP FreedomBank, had a complaint; “The proposed 3-5 year plan is much too slow.”
In South Bend, IN CEO Chris Murphy at 1st Source Bank displayed skepticism.
“While there is a faster payment system being developed in the private sector it is not available and may never be available to all banks. It has been very slow to develop and many of us are subject to our system and the core providers timing and pricing. Also the interests of the largest banks are now and may be even more so in the future at odds with the continued success of Community Banks across the United States.”
He too complained the Fed has been moving too slowly.
"The Federal Reserve System participation has now been considered for many years with no real action being taken. The private sector solutions, in spite of being given the time to establish themselves, have been very slow to roll out and then almost not available to smaller institutions.”
Mark Field at Liberty Bank in Liberty, IL criticized both the large banks and the tech companies that provide the systems smaller banks can’t afford to develop.
“As a rural, community bank, I cannot depend on the benevolence of the largest 25 banks in the country to control such a system while they have the absolute power to raise fees or refuse access to my bank or my customers at any point in time. Neither can I depend on the largess of a handful of core software companies who routinely extract exorbitant fees from banks for every little thing a bank needs to take care of its customers.”
Aaron A. Kness, president/CEO of Iowa State Bank & Trust Co. in Fairfield, IA raised the issue of customer privacy in personal payments.
“A provider such as Zelle is owned and controlled by the largest banks in the U.S. When customers of a community bank utilize Zelle they provide these larger banks with their private financial information, creating substantial risk to the community bank. There currently exists no alternative for the community bank to offer its customers, which is why the Federal Reserve’s involvement is so critical.”
Whatever the Fed decides, it should decide soon said, among others, Jeff Plagge president & CEO of Northwest Financial Corp. in Arnols Park, IA.
“Delaying key decisions will only delay the progress of moving forward with faster and real time payments. Many community banks will just stand on the sidelines until the Fed announces their intentions. And if the Fed decides to push forward with both proposals, they need to do it with urgency and work with the industry…”
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9ad9dd816c2bc3720b7194d874c3e2fa
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https://www.forbes.com/sites/tomgroenfeldt/2019/02/05/n26-will-bring-successful-european-digital-banking-platform-to-the-u-s/
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N26 Will Bring Successful European Digital Banking Platform To The U.S.
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N26 Will Bring Successful European Digital Banking Platform To The U.S.
A checking account linked to a smartphone and a card. Hmm, sounds like Simple or Moven.
But Berlin-based N26 is no underfunded startup — it is coming to the U.S. from Europe and recently announced a $300 million Series D funding led by Insight Venture Partners of New York with participation by GIC, Singapore’s sovereign wealth fund and several existing investors. The new round values the banking company at $2.7 billion.
The company said it now has more than 2.3 million customers, has doubled its customer base over the last nine months and is adding 2,500 per day while monthly transaction volume is more than €1.5 billion.
Its new round of funding represents the largest equity financing round (non-IPO) in the fintech industry in Germany to date and is one of the largest in Europe. It will be used to accelerate N26’s global growth strategy including plans to enter the UK and U.S.
“N26 is a European mobile first bank,” said Nicolas Kopp, US CEO of N26.
“We are a technology company with a bank license. We are bringing the product we built, which is a checking account with a card and services around that, into the U.S. market later this year.”
N26 screen showing savings accounts for Thailand and Retirement Courtesy N26
He thinks the U.S. market is attractive because it has a high degree of smartphone concentration and it is the largest retail banking market. Although the U.S. is a highly competitive market, he thinks there is a real space for N26 because it is “beautifully designed and managed and offers real monetary value.”
Kopp contrasts its technology with legacy systems in the U.S. Most American banks have diverse technology stacks, with different technologies for different lines of business, he said.
“We have built N26 from scratch, using the newest technologies. A big thing for us is AI (artificial intelligence). How do you make your banking product or retail finance product very customized to the end user, so you can give personalized advice on a mass scale?”
In Europe N26 is one of the fastest growing banks with a goal to reach 5 million customers by end of 2020, Kopp added.
N26 screen showing spending Courtesy N26
“In the U.S. we have a wait list that is growing quite well. At N26 we are different — we really use technology to serve customers’ needs. It sounds very simple but the way we go about it is very rigorous. We take customer research very seriously. We speak to customers and then go back to the technology team. We put out a lot of features and move quickly. Evolving our base product at the speed we operate on, and with the customer in mind — that is the secret sauce.”
While large, the U.S. market is also highly fragmented, he added. People are likely to have three or more credit cards from different providers, plus an app like RobinHood for investing and perhaps a savings account at the bank their mother used.
“We think we have an opportunity to come in and consolidate that into one platform, which is our long-term vision.”
Companies like Simple, Moven or Chime get a few things right, he added.
“At N26 we think what is missing in their service is this mobile holistic view of your mobile finance life. We want to build a service around N26. We have a very customer-centric approach. We built in Europe over time and can learn from that, but in the U.S., once we have our first basic product out we will be working with customers and seeing what features they want most.”
Its basic account is free and then it offers by subscription two other categories — Black and Metal which provide features like travel insurance — less common in the U.S. than it is in Europe, and multiple sub accounts for savings like a vacation or new car. Metal, the first stainless steel contactless payment card also offers access to WeWork co-working spaces.
The company operates in 24 markets in Europe. The UK will be its first non-euro market and the U.S. its first non-European. It will not get a U.S. banking license, at least initially. Instead it will work through a bankers bank, as Moven does and Simple did until it was acquired by BBVA. This provides provides account processing and access to the banking system without requiring N26 to go through licensing in all 50 states, a process that can take a year or more. N26 will develop and run all the customer-facing technology.
He expects it will eventually offer loans, savings and investment products, but he plans to work with customers to see what they need most.
The company was founded in 2013 and initially aimed at teens and a younger adult population with mobile checking account and a card for teens to let parents manage their money.
“We realized over time that the company had an amazing product that is suitable for a lot of people, not just teens. In early 2015 we came out with an account for adults — we are fully focused on mobile.”
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