Gemalto, the world-leading provider of digital security solutions has won the 2016 IoT Evolution Connected Home & Building Award for its Cinterion LTE Cat. 1 wireless module. The award from IoT Evolution honors organizations delivering the most innovative solutions that are advancing the smart home and building industry. The first-of-its kind Cinterion module was selected for delivering highly efficient Cat. 1 LTE connectivity with seamless fallback to 2G and 3G networks, which is ideal for smart home and building applications such as metering, alarm systems and remote building maintenance. 

The Cinterion ELS61 LTE Cat. 1 module is part of a family of Low Power Wide Area M2M connectivity solutions designed for IoT applications t hat require the future proofing offered by LTE networks but don't need the higher speeds they offer. The module provides advantages in power efficiency and size while delivering M2M-optimized speeds of 10 Mbit/s download and 5Mbit/s uplink. 

Connected Home IoT device makers can also benefit greatly from Gemalto´s On-Demand Connectivity (ODC) offering, in conjunction with the easy implementation of an eSIM (embedded SIM) in their initial designs. ODC enables remote activation of network connectivity when the device is powered on for the first time. This helps to reduce the number of manufacturing variants required, and simplify network subscription management for devices with particularly long lifecycles.

"The award from IoT Evolution highlights Gemalto's commitment to innovating leading edge solutions that connect, secure and monetize the expanding Internet of Things," said Andreas Haegele, Senior Vice President IoT Products Business Line at Gemalto. "The Cinterion LTE Cat. 1 solution provides both network and power efficiency, and shares the same footprint as all modules in our Industrial Family to provide a clear migration path to LTE Cat. M1, LTE NB and forthcoming MTC technologies."

I am glad to be with you today to hear firsthand about the latest innovations in consumer financial services. These innovations seem to be generating considerable interest and optimism about the future. They are driving new services for consumers and transforming how they conduct their finances. At the Consumer Financial Protection Bureau, we want to help channel these cutting-edge approaches in positive directions. Our goal is to put consumers first and provide them with more tools to take control of their financial lives. And we want you to share this vision as well. 

As many of you know, the Consumer Bureau is the single federal agency with the sole mission of protecting consumers in the financial marketplace. This includes monitoring the rapid changes that new technologies are spurring in transactions, lending, underwriting, and money management, among other things. As we track how these changes evolve, we will be keeping consumers top of mind as this all plays out. 

My remarks will focus on three broad areas of special interest to the Bureau. First, our Project Catalyst initiative is familiar to many of you, yet I will begin by describing the approach we take to encouraging consumer-friendly innovations in consumer finance. Second, we are carefully considering the issue of consumer control over their personal financial data. Third, we are looking into the benefits and risks of using unconventional sources of data to underwrite loans as a way to open access to credit for more consumers. 

In general, however, I will note two overarching principles that the Bureau seeks to uphold in all these areas. First, we believe in a level playing field for all providers of consumer financial products and services. Evenhanded oversight of all providers – whether they are large banks or fintech startups – is a basic rule of the road for effective regulation of the financial marketplace. Nobody gets a free pass to exploit regulatory arbitrage; everyone must be held to the same standards of compliance with the law. Second, we strongly urge all providers to make sure that consumer protections are built into emerging products and services, right from the start.  Consumer protections and compliance should not be mere add-ons or afterthoughts; they must be essential elements of the business model, from beginning to end. 

We all have a vested interest in fostering a marketplace where consumers can understand and access the kinds of responsible products they can rely on throughout their financial lives. And the information consumers need to make decisions about their economic opportunities must be accessible, accurate, and reliable. You are in position to play a large role in helping all American consumers achieve key components of this overarching vision. 

Let me offer an overview of efforts we are making to encourage innovations in the financial marketplace that will lead to products and services that are more accessible, more affordable, and more convenient for consumers. Our major initiative here is our Project Catalyst, which brings us face to face with many of you. It operates on the principle that markets work best when they are wide open to competition from new ideas. As Linus Pauling, who won two Nobel prizes, once said, “The best way to come up with a good idea is to come up with a lot of ideas.” 

From early on, we have made it a priority to engage with financial innovators. We are regularly gleaning insights from industry pilot programs, devising policies to promote consumer-friendly innovation, and listening to the hopes and fears of the innovators themselves. Project Catalyst hosts an “Office Hours” program where we engage with startups, nonprofits, banks, and other financial companies. We are learning about what does and does not work for consumers and the potential challenges facing entrepreneurs and investors. If you want to learn more about our programs supporting financial innovation, please join us at a future Office Hours event. 

Project Catalyst also conducts research pilot programs with companies both large and small to inform our understanding of emerging issues. To date, these include a pilot to encourage savings and a pilot to improve the effectiveness of early-intervention credit counseling, among others. We continue to receive and review new pilot ideas for consumer-friendly innovations or research questions, and we urge you to consider working with us in this way. 

Project Catalyst is also devising new policies to foster innovations. Our Trial Disclosure Waiver Policy allows financial providers to develop new technologies and innovative approaches for designing and testing alternative consumer disclosures. We encourage you to consider working with us to test new disclosures that could promote greater transparency, improve consumer understanding, or reduce costs. Project Catalyst also administers our “no-action letter” policy, which is intended to help promote novel products that may not fit neatly within the existing regulatory structure, yet may yield significant consumer benefits. A no-action letter would state that Bureau staff does not intend to recommend any supervisory or enforcement action based on these particular innovations for a defined period. The purpose of the policy is to mitigate regulatory risk for products that promise substantial consumer benefit, where there is substantial uncertainty about how they may be viewed under existing law. 

Utilization of data in the financial marketplace is rapidly evolving. Many of these developments are changing and improving the way consumers manage money and direct their financial affairs, but they have not been without risk to consumers. So we want to understand how consumers and third parties are accessing and using that data, and how it fuels new innovations. We also are deeply interested in how consumers are exercising control over their personal financial data, including the data that is maintained by their financial institutions. 

Many of these innovations rely on access to current information drawn from the assets, balances, and transactions in people’s financial accounts. These include savings and checking accounts and, for those who have them, investment, mortgage, credit card, auto loan, or student loan accounts. In each case, by helping them budget or obtain credit, the information recorded about them can be a valuable asset. Indeed, it may matter as much or more to their financial situations than the dollars they actually have in their accounts at any given time. 

In November, we issued a Request for Information to inquire about the challenges consumers face in accessing, using, and securely sharing their financial records. We seek to identify whether barriers exist between consumers and the personal data that their financial providers maintain about them. And we want to hear solutions from stakeholders that can help address the risks and technological challenges posed by consumers who want to have ready access to this data and to share it electronically with third parties. We are keenly aware of the serious issues around privacy and security, for consumers and providers alike. One pressing issue is how to satisfy the demands of consumers without exposing the providers that maintain this data to undue costs and risks. Another pressing issue is how to prevent consumers from subjecting themselves to undue risks, including the possibility that their data could be misused. 

Over the past few months, we have received about 70 comments from financial institutions, data aggregators, companies that use aggregated data, trade associations, consumer groups, and individuals. We are sifting through the comments, which are extensive and thoughtful. They present a wide range of ideas about how best to achieve the broad goals we have in mind. 

Certain perspectives presented in the comments are not surprising. Banks and other financial companies raise concerns about consumer data security and offer solutions that may address those concerns. Aggregators and users of the data, by contrast, are recommending less fettered access and greater freedom to store and use the data that consumers permit them to collect. This would give them more flexibility to enhance their services and their business models. Almost everyone is offering justifications that their approach will better protect the interests of consumers. At stake is how consumers can control what data is shared, and whether security or other concerns should restrict how it is shared, with whom, how often, and for what purposes. 

So there is much to digest, and we see the market moving quickly, with high stakes for all involved. Even as we speak, vigorous and spirited negotiations are underway throughout the industry that could shape the future of information access. We expect the interests of consumers to be at the forefront of these discussions. Yet we remain concerned about reports of some institutions that may be limiting or restricting access unduly. 

For our part, the Consumer Bureau will continue to analyze these issues and closely follow developments. We will take action as needed to make sure that consumers can safely access and share information about their financial lives, that providers and aggregators act in accordance with their instructions, and that financial institutions have their legitimate interests appropriately protected. We recognize that data access makes it possible to realize the many benefits of competition and innovation. We will be drawing heavily on the technological expertise and insight of the various stakeholders, and we will test their arguments and explanations directly against one another. Above all, we will insist that the consumer is the focus, not the football, as this process unfolds. So we look forward to further productive engagement with all parties to find solutions that will put consumer interests first. 

I also want to update you on our latest actions to encourage the use of new types of data that can open up credit opportunities for more consumers. Computer-enabled data analysis, for example, has the potential to provide greater insights into the financial patterns of the underserved – their inflows and outflows, and the ways they manage the gaps. Thoughtful and responsible use of financial data about individuals could expand the credit available to underserved consumers. If it is possible to expand opportunity in this manner, it would benefit not only these consumers, but perhaps would buoy the economy in ways that benefit us all. 

So last month we launched an initiative to learn more about issues raised by new technologies and new uses of data. In particular, we issued a Request for Information about the potential benefits and risks of using, applying, and analyzing unconventional sources of information to predict people’s creditworthiness. We want to know whether various types of this so-called “alternative data” can help more consumers build their credit histories and gain more access to credit. 

Just what consumers are we talking about here?  As a self-described “data-driven agency,” naturally the Consumer Bureau has dug into the data to gain a deeper understanding. After crunching the numbers, we estimate that 26 million Americans are “credit invisible,” meaning they have no credit history at all. Another 19 million people have credit histories that, under most models, are too limited or have been inactive for too long to generate a reliable credit score. 

That means about 45 million adults nationwide fall into these two categories. For every one of them, managing the ways and means of their lives usually costs more, risks more, takes longer, and does less to build their financial futures than is true for most consumers. That is simply a tragedy in a modern economy and a modern financial system like ours, and we all need to think harder about what we can do to address it. Certain longstanding products, such as secured credit cards, can provide part of the answer and should be actively offered to these consumers. 

As many of you are well aware, alternative data may draw from sources such as rent or utility payments, which in general have not been traditionally defined as “credit.”  It may draw from electronic or other records of transactions, such as deposits, withdrawals, or account transfers. And it might include other personal information, such as the consumer’s occupation or educational attainment. Other forms of alternative data may spring from new sources that never existed before, such as the use of mobile phones or the Internet. By filling in more details of people’s financial lives, this information may paint a fuller and more accurate picture of their creditworthiness. So adding alternative data into the mix may make it possible to open up more affordable credit for millions of additional consumers. 

Through a Request for Information issued last month, we are looking at the pros and cons of using the types of alternative data available today, and what the future may hold as technologies continue to evolve. We are looking at how this information is gathered and analyzed in the underwriting models now used by banks and other financial companies, including the fintech companies. And we are seeking to better understand how all of this is beginning to unfold. 

Some of the main inquiries we posed are these. First, can the use of alternative data to create or augment individual credit scores increase access to credit for consumers by helping lenders better assess their creditworthiness? Second, will this lead to more complex lending decisions for both industry and consumers, and what risks would that pose? Third, how might the use of alternative data, new modes of analysis, and new technologies affect costs and services in making credit decisions? Certainly it could mean a faster application process, lower operating costs for lenders, and lower loan costs for borrowers, all of which could benefit consumers. Fourth, what forms of alternative data might be prone to errors, and how hard will it be for consumers to identify such errors and get them corrected? Finally, and quite significantly, how may the use of alternative data affect certain groups or behaviors in ways that might run afoul of the fair lending laws or create other risks for vulnerable consumers? 

We are hearing from innovators who want to expand access to credit or offer credit at lower interest rates to borrowers whose credit scores may understate their ability and willingness to repay. And we see promise in some consumer-friendly innovations that bring new products to those who had been locked out or underserved by the banking system and existing credit models. These approaches also pose risks, and we want to know more about these risks and how they can be mitigated or minimized. On the whole, we are encouraged by the potential for alternative data underwriting to benefit the very consumers that the fair lending laws are designed to protect. So we welcome you all to the frank and wide-ranging discussion we have begun on this subject. We are eager to hear your experiences and perspectives, and we encourage you to reach out to us. 

We will continue to engage with you and others to work through these issues. As we want to make clear, everyone who provides consumers with financial products and services must adhere to the same standards and be held accountable under the law. So as we move forward, we will have one eye on protecting consumers and the other on encouraging innovations to improve their lives. As is always the case, the long-term interests of your businesses depend on delivering great value and customer service. In these ways, our goals intersect. So let us travel this course together, and consider how we can direct our paths toward a better world for many millions of American consumers. Thank you.

IBM and Maersk have announced a new partnership to use blockchain technology to transform the global, cross-border supply chain. 

The blockchain solution based on the Hyperledger Fabric and built by IBM and Maersk, the global leader in transport and logistics, will be made available to the shipping and logistics industry. The solution will help manage and track the paper trail of tens of millions of shipping containers across the world by digitizing the supply chain process from end-to-end to enhance transparency and the highly secure sharing of information among trading partners. When adopted at scale, the solution has the potential to save the industry billions of dollars.

The ocean shipping industry each year carries Ninety percent of goods in global trade. IBM and Maersk intend to work with a network of shippers, freight forwarders, ocean carriers, ports and customs authorities to build the new global trade digitization solution, which is expected to go into production later this year. It has the potential to vastly reduce the cost and complexity of trading by using blockchain technology to establish transparency among parties. The solution is designed to help reduce fraud and errors, reduce the time products spend in the transit and shipping process, improve inventory management and ultimately reduce waste and cost. Maersk found in 2014 that just a simple shipment of refrigerated goods from East Africa to Europe could go through nearly 30 people and organizations, including more than 200 different interactions and communications among them.

In order to prove the potential value of a commercial trade digitization solution, IBM and Maersk have worked with a number of trading partners, government authorities, and logistics companies. For example, goods from Schneider Electric were transported on a Maersk Line container vessel from the Port of Rotterdam to the Port of Newark in a pilot with the Customs Administration of the Netherlands under an EU research project. The U.S. Department of Homeland Security Science and Technology Directorate, and U.S. Customs and Border Protection are also participating in this pilot. Damco, Maersk’s supply chain solutions company, supported origin management activities of the shipment while utilizing the solution. The international shipment of flowers to Royal Flora Holland from Kenya, Mandarin oranges from California, and pineapples from Colombia were also used to validate the solution for shipments coming into the Port of Rotterdam. 

Mobilink Microfinance Bank (“MMBL”), the 10^th licensed microfinance bank in Pakistan, has chosen Path Solutions’ iMAL for its financial inclusion solution project for Loan Originating System (LOS). The iMAL solution will help MMBL extend its microfinance lending products in unbanked areas of Pakistan and adapt to changing customer needs for digital financial services.

The comprehensive capabilities of the iMAL solution, which will be integrated with the bank’s existing core banking system T24 from Temenos, will enable MMBL to grow its lending portfolio, to capture complete information covering both approved and non-approved cases, and to generate variety of reports for management / regulators. The new solution will also enable MMBL to offer finely-tailored short-term credit products to its existing and potential customers.

MMBL aims to reach out to the vast majority of people in Pakistan who remain financially excluded by leveraging latest technologies. The bank owns 51 business units at present and supports around 100,000 micro entrepreneurs and small farmers in improving their incomes. It conducts over 3 million transactions a month (covering both Branch and Branchless Banking) through a network of around 71,000 agents. MMBL also serves over 8 million mobile wallet holders and provides life and health insurance products to low-income customers.

“MMBL has been one of the early adopters of financial inclusion in Pakistan, and we are committed to ensure inclusive growth and sustainable development of our country”, commented Ghazanfar Siddique, Group Head IT & Operations at MMBL. “We have evaluated different local and international system vendors and selected iMAL solution which was meeting our requirements. This strategic decision was necessitated in order to enhance MMBL’s market position, strengthen its delivery channels and partner with a vendor capable of adequately supporting our operations. iMAL perfectly fits into the strategic requirements of MMBL, and Path has a very suitable framework for providing direct and adequate local support to our 51 branches throughout Pakistan”, he said.

Mohammed Kateeb, Group Chairman & CEO, Path Solutions commented, “Microfinance banks need a robust platform that will enable them to offer branchless banking to support their financial inclusion strategy and the fight against poverty. As part of this mission, the efficiency of operations and cost reduction for low-income customers requires the implementation of an adaptive solution. We are delighted to partner with MMBL to propel its growth in Pakistan. We are confident that iMAL is the solution that will enable them to achieve their objectives”.

TA Associates, a world leading growth private equity firm, today reported it has acquired a minority equity interest in Interswitch. Interswitch is an Africa-focused integrated digital payments and commerce company. Financial terms of the transaction were not disclosed. Helios Investment Partners will remain the majority shareholder of Interswitch.  

Founded in 2002, Interswitch is active across the entire payments value chain. A recognized leader in the payments space in Nigeria, the company owns and operates the country’s principal domestic debit card scheme, Verve, as well as serves as a third-party transaction processor for many of Nigeria’s largest banks. In addition, the company offers a number of B2B electronic payment services to public and private sector organizations and businesses, including government entities, hospitals, telecommunications companies and utilities, and also operates Quickteller, the leading B2C bill payments and digital commerce platform in Nigeria. Through add-on acquisitions, Interswitch also operates in Kenya and Uganda.

“By strategically partnering and aligning its interests with key banks, merchants and other institutions, Interswitch has become a leading provider for payments solutions in an emerging and rapidly growing market in Nigeria,” said Naveen Wadhera, a Managing Director at TA Associates who will join the Interswitch Board of Directors. “Interswitch is a unique, high quality and strategic asset located in one of Africa’s leading economies. We are delighted to expand upon our longstanding presence within the global payments industry through our partnership with the management team and Helios, and look forward to helping Interswitch continue to expand its business.”

“Since our founding, we have been committed to creating social, environmental and economic value by facilitating trade through forms of exchange that are secure, convenient and consistent,” said Mitchell Elegbe, Founder, and Managing Director at Interswitch Limited. “Keeping that in mind, we believe a partnership with a growth private equity firm such as TA Associates will prove highly beneficial to our ongoing efforts of consolidating the impact of our services and increasing financial inclusion for all. We welcome TA as our newest investor and look forward to benefitting from their experience in the payments space and their valuable insight and support.”

“With our investment in Interswitch in 2011, we backed a talented founder and management team, and have worked hand-in-hand with them to institutionalize the business and build the platform, spearheading growth not only in their core processing and card scheme businesses but also into mobile payments, expansion into East Africa and the launching of products and services to address the unbanked – driving financial inclusion. As the majority investor in Interswitch, we look forward to working with the company’s first-rate management team and TA Associates to drive the next phase of the company’s growth,” said Alykhan Nathoo, Partner at Helios Investment Partners.

The digital payments evolution is in the early stages of development in Nigeria, with cash used for 99% of transactions according to McKinsey & Company, versus approximately 50% for developed markets in North America and Europe. Despite the young market, its continent-leading population and sizeable economy underpin the size of the Nigerian payments opportunity. Based on estimates from McKinsey & Company, Interswitch occupies a leading position in the emerging marketplace, especially in debit cards, which comprise 99% of all cards in Nigeria.

Bittium has received a purchase order from the Finnish Defence Forces for further development of the software package (waveform) for the Bittium Tactical Wireless IP Network™ (TAC WIN) system that is used as the wireless broadband network by the Finnish Defence Forces in their M18 command, control and communications system. The work package that was ordered now will be delivered to the Finnish Defence Forces during the years 2017 and 2018. 

The product development of the software package is part of the renewal of the Finnish Army’s command, control and communications system, where the Software-Defined Radio based Bittium TAC WIN system forms the core of the Army’s tactical wireless IP network. Bittium TAC WIN provides a mobile broadband IP network connection for the combat troops. This supports the Finnish Army’s reformed combat doctrine, where mobility, leading the troops on the move and effective communications are playing a key role. The main objective for the development work of the software package is to continue enhancing the performance, data transfer capacity and survivability of the software and the related radio platform. The development work is done based on the observations made during field-testing and waveform research done by Bittium.  

Today Cisco and IBM have revealed new solutions for VersaStack™, converged infrastructure jointly developed by the two companies. VersaStack assists organizations to reduce complexity and automate processes to facilitate the delivery of applications. The additional technologies incorporated in the announcement today extend VersaStack to include hybrid cloud capabilities and also take advantage of the latest software defined storage technologies to address cloud-scale applications.

This broad set of solutions allows IT organizations to:

• Simplify and standardize service delivery through infrastructure automation: with Cisco ONE Enterprise Cloud Suite and VersaStack; improving efficiency while reducing complexity and cost; and delivering a rich set of storage capabilities.
• Deploy premier solutions for hybrid IT: utilizing Cisco CloudCenter and IBM Spectrum Copy Data Management to deploy, provision, and manage applications and data in hybrid cloud environments, with 20+ cloud types and regions, including IBM Bluemix Infrastructure (formerly IBM Softlayer).
• Improve the manageability, recovery and storage of data:  Spectrum Software Defined Storage with VersaStack and Cisco UCS® help improve efficiency and leverage existing server and storage resources while delivering a rich set of storage capabilities.
• Easy scaling to multi-petabyte storage for fast growing cloud-scale applications: The combination of the Cisco® UCS S-Series Storage Servers with IBM Cloud Object Storage delivers an on-premises storage solution for data intensive workloads by supporting IT organizations to help prepare for business requirements with an easily scalable solution.

"Our GIS, engineering, and other applications were slow and underperforming," said Bill Reed, Chief Technology Officer, Arizona State Land Department. "With our VersaStack solution, we've been able to boost system and staff performance and enable mobile access to business-critical data and tools via a hybrid cloud. VersaStack gives us faster, smarter systems that enable us to make better-informed decisions about the State Land Trust much more efficiently for the benefit of all students in the Arizona Public Schools education system, the primary beneficiary of the trust."

"These additions to VersaStack create an environment well suited for both traditional and emerging scale-out applications, addressing our customer needs in a simplified way," said Liz Centoni, Senior Vice President and General Manager, Cisco Computing Systems Product Group. "By bringing together Cisco and IBM technologies for hybrid IT we help customers diversify their consumption models and achieve the agility and efficiency digital transformation demands."