Source Code: Your daily look at what matters in tech.
To give you the best possible experience, this site uses cookies. If you continue browsing. you accept our use of cookies. You can review our privacy policy to find out more about the cookies we use.
indexindexauthorShakeel HashimNoneNeed to dive deep into the financial movements that matter to tech? Get Shakeel Hashim's newsletter every Friday.f11fbe35a3
January 28, 2021
On Thursday morning, Robinhood started blocking users from buying stock in GameStop, AMC, BlackBerry, Nokia and other stocks at the epicenter of wild market volatility. "In light of recent volatility, we are restricting transactions for certain securities to position closing only," the company said. Other trading apps were soon forced to follow suit, when clearing house Apex said it would no longer accept buy orders of some of the volatile stocks.
On its face, Robinhood's decision doesn't quite make sense. Robinhood has seemingly benefited from the retail investor-fueled boom: The long-time favorite of Reddit's WallStreetBets community has rapidly gained traction in the wider world, surging to the top of the U.S. App Store charts on Wednesday.
By blocking the most popular stocks from being traded, Robinhood instantly ignited fury from some of its users. "This is market manipulation" was the headline of one top Reddit post this morning, while another proposed a class action lawsuit against the company. These people know how to hold a grudge, remember: They've spent the past week boosting GameStop stock partly because they're mad at a hedge fund.
Robinhood's not the only brokerage to take action. Others, including Interactive Brokers, TD Ameritrade and Charles Schwab have introduced certain restrictions, such as raising margin requirements. But Robinhood appears to be the only U.S. brokerage to have voluntarily banned purchases — and as the poster child of democratized retail investing, the decision feels both more important and unexpected than the others'.
This is beyond absurd. @FSCDems need to have a hearing on Robinhood's market manipulation. They're blocking the ability to trade to protect Wall St. hedge funds, stealing millions of dollars from their users to protect people who've used the stock market as a casino for decades. https://t.co/CGkJxVfzkv
— Rashida Tlaib (@RashidaTlaib) January 28, 2021
So why did Robinhood do it? It seems to be betting that it's the least bad of the available options. While Redditors might know what they're doing with these stocks, the bulk of the people downloading the app on Thursday morning probably couldn't explain how the GameStop short squeeze works. If the stock crashes — which many think is inevitable — those new, inexperienced users will likely be very, very mad. Looking for someone to blame, they might pick Robinhood for failing to protect them.
It's not just users Robinhood has to worry about, either. Last month, regulators in Massachusetts filed a complaint against the company for exposing investors to "unnecessary trading risks." They accused it of "falling far short of its fiduciary standard" to investors, arguing that the company has gamified stock trading to an unhealthy degree. Stepping in today is one way for the company to show that it is willing to protect investors when they're at risk, potentially keeping regulators at bay.
Earlier in the day, Robinhood users appeared to be abandoning ship in favor of other apps, including Webull and Public. But the party ended for both of them, too, when Apex said it would no longer accept buy orders for the stocks. Still, by pulling the plug later than Robinhood, and by blaming a third party for the decision, Webull and Public might be able to save face.In the same way that Twitter and Facebook's Trump ban boosted moderation-light apps like Parler, Telegram and Gab, Robinhood's difficult decision could light a fuse under its competition.
This story is developing and has been continually updated.
From Your Site Articles
- The tech IPOs to watch in 2021 - Protocol — The people, power and ... ›
- Reddit's new content moderation problem: GameStop - Protocol ... ›
- Why is GameStop stock going up? Thank Reddit - Protocol — The ... ›
- Robinhood charged with misleading customers about commission ... ›
- Robinhood fumbled GameStop, and Betterment was mostly spared - Protocol — The people, power and politics of tech ›
- Fintech's moment of reckoning: Robinhood and Reddit - Protocol — The people, power and politics of tech ›
- Robinhood fumbled GameStop, and Betterment was mostly spared - Protocol — The people, power and politics of tech ›
- Robinhood's handing of GameStop shows fintech's PR problem - Protocol — The people, power and politics of tech ›
Shakeel Hashim
Shakeel Hashim ( @shakeelhashim) is a growth manager at Protocol, based in London. He was previously an analyst at Finimize covering business and economics, and a digital journalist at News UK. His writing has appeared in The Economist and its book, Uncommon Knowledge.
Power
Google wants to help you get a life
Digital car windows, curved AR glasses, automatic presentations and other patents from Big Tech.
A new patent from Google offers a few suggestions.
Image: USPTO
February 28, 2021
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
February 28, 2021
Another week has come to pass, meaning it's time again for Big Tech patents! You've hopefully been busy reading all the new Manual Series stories that have come out this week and are now looking forward to hearing what comes after what comes next. Google wants to get rid of your double-chin selfie videos and find things for you as you sit bored at home; Apple wants to bring translucent displays to car windows; and Microsoft is exploring how much you can stress out a virtual assistant.
And remember: The big tech companies file all kinds of crazy patents for things, and though most never amount to anything, some end up defining the future.
<h3>Alphabet</h3><p><a href="https://pdfpiw.uspto.gov/.piw?PageNum=0&docid=10929982&IDKey=D2992D61B62A%0D%0A&HomeUrl=http%3A%2F%2Fpatft.uspto.gov%2Fnetacgi%2Fnph-Parser%3FSect1%3DPTO2%2526Sect2%3DHITOFF%2526p%3D1%2526u%3D%25252Fnetahtml%25252FPTO%25252Fsearch-bool.html%2526r%3D13%2526f%3DG%2526l%3D50%2526co1%3DAND%2526d%3DPTXT%2526s1%3Dgoogle.ASNM.%2526OS%3DAN%2Fgoogle%2526RS%3DAN%2Fgoogle" rel="noopener noreferrer" target="_blank"><strong>Making selfies look better</strong></a></p><p>Perhaps even before our lives were dominated by video calls, you might've noticed when someone just couldn't figure out where to place their camera. Generally, anything below eye height is going to lead to some unflattering angles, but if you're also on a phone, holding your device up that long can get tiring. Google is apparently trying to solve this with AR: According to this patent, it's looking into using the depth sensors found on the front of many smartphones to re-create your face in video calls at a more flattering angle, to reduce what the pattern calls "the big nose effect." I'm here for this concept, but also Google's depiction of what it's trying to eliminate:</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
</div>
</div></p><p><img src="https://lh5.googleusercontent.com/lYYEYZ52NjuL8M2BnrKVI80huN6UBNYEl1sFEScg5s5MdKrv8n2pBlI3tqXw3ooNJh8h2fWLTeTQaI4TrETMRu-E8ld49QGy3U783TOD8k8WMIR0lPZBAlCih9p3NU4U2sOEqtuI"></p><p><a href="https://pdfpiw.uspto.gov/.piw?PageNum=0&docid=10929885&IDKey=AFA7541891BF%0D%0A&HomeUrl=http%3A%2F%2Fpatft.uspto.gov%2Fnetacgi%2Fnph-Parser%3FSect1%3DPTO2%2526Sect2%3DHITOFF%2526p%3D1%2526u%3D%25252Fnetahtml%25252FPTO%25252Fsearch-bool.html%2526r%3D16%2526f%3DG%2526l%3D50%2526co1%3DAND%2526d%3DPTXT%2526s1%3Dgoogle.ASNM.%2526OS%3DAN%2Fgoogle%2526RS%3DAN%2Fgoogle" target="_blank"><strong>Jamming more ads into Maps</strong></a></p><p>Google Maps has become increasingly beset with ads in recent years, with promoted pins and locations on various instances of Maps. But this patent, which determines how Google goes about valuing ads in Google Maps — it, shockingly, has a lot to do with location — shows that the company might be looking at turning every part of the world into a digital version of Times Square, by displaying ads in-between the streets on a map. Hopefully it doesn't feel the need to run ads in <em>all</em> these potential slots at once, as that might make it rather difficult to navigate: </p><p><img src="https://lh6.googleusercontent.com/JcWTDCLxLAIEnhwl__JCNqeGm5ivedVoZVx_t83zGUntlZdU2H3CeQm9L3RC7QEZ_Cbb1n8B-bq_B-UJoATR2JiehxRwlA_O9GgO2BcEsph9C2cMPihvsdIWJlG9iJfvo4hTmLG9"></p><p><a href="https://pdfpiw.uspto.gov/.piw?PageNum=0&docid=10929486&IDKey=8946337F7961%0D%0A&HomeUrl=http%3A%2F%2Fpatft.uspto.gov%2Fnetacgi%2Fnph-Parser%3FSect1%3DPTO2%2526Sect2%3DHITOFF%2526p%3D1%2526u%3D%25252Fnetahtml%25252FPTO%25252Fsearch-bool.html%2526r%3D23%2526f%3DG%2526l%3D50%2526co1%3DAND%2526d%3DPTXT%2526s1%3Dgoogle.ASNM.%2526OS%3DAN%2Fgoogle%2526RS%3DAN%2Fgoogle" target="_blank"><strong>Outsourcing having a life to AI</strong></a></p><p>It's tough to do things, I know. Many days, even before the pandemic, I was content to just sit on the couch all day watching TV and ordering takeout. But Google is apparently looking into outsourcing to a virtual assistant the task of making sure you actually get your butt off the sofa. The patent outlines an assistant that could suggest things to do, as well as where and when to do them, based on the user's preferences. It could also suggest things to do that your friends or other users have enjoyed doing. Some of the suggestions aren't exactly things I'd consider a hobby, though: choosing "fight off a cold" as an activity is a really odd way to want to pass the time. <img src="https://lh4.googleusercontent.com/uHktu_DhtqRY9P68bJLJeoFceXUWTrtEeTN7xB6hiBFWxiCY5FDqrZW0zGkqlssZ481nmrNba9nGYXrsdfEk0eTsG64QXV37qaAfQ51BYGhs5DlwKuNJiA2WI5uGtQaLcOS_INsS"></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
</div>
</div></p><h3>Amazon</h3><p><a href="http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=27&f=G&l=50&co1=AND&d=PTXT&s1=amazon.ASNM.&OS=AN/amazon&RS=AN/amazon" target="_blank"><strong>Searching using loyalty programs</strong></a></p><p>When you search for things online, you're generally only shown the prices for things that everyone sees. But if you're a member of a loyalty program, you might often get discounts or other benefits that could make some products cheaper or more attractive. Amazon's patent outlines a search engine that can store which loyalty programs you're a part of, and show any deals associated with that membership that businesses might be running. This could be useful for finding deals at partners of loyalty programs that you might not be aware of, but if you're already loyal to one hotel or airline brand, you're probably going to search them first before doing a general search. </p><p><img src="https://lh3.googleusercontent.com/XSeV507IoB60vuP-AKADzUQH3OCfoDarf4Ahdgo0kNH-YxVe6qj-MRv9dfGECwElzPftQ3dJfMBeJq5fEEaqcAR6cyprVeBF99cienf2ipJGV35gR5LrTL8RVSOqAHqtqKrMX6Et"></p><p><a href="https://pdfpiw.uspto.gov/.piw?PageNum=0&docid=10929810&IDKey=0F7C251F2619%0D%0A&HomeUrl=http%3A%2F%2Fpatft.uspto.gov%2Fnetacgi%2Fnph-Parser%3FSect1%3DPTO2%2526Sect2%3DHITOFF%2526p%3D1%2526u%3D%25252Fnetahtml%25252FPTO%25252Fsearch-bool.html%2526r%3D23%2526f%3DG%2526l%3D50%2526co1%3DAND%2526d%3DPTXT%2526s1%3Damazon.ASNM.%2526OS%3DAN%2Famazon%2526RS%3DAN%2Famazon" target="_blank"><strong>Indoor drones</strong></a></p><p>Amazon has been making waves for years about using autonomous drones for delivering orders, but to date, it hasn't gotten much traction. It seems, according to this patent, to be turning its attention at least partly to a less-regulated bit of airspace: indoors. The patent explains how autonomous drones, fitted with cameras and sensors, could be used to inspect inventory stored in the bins in the company's massive, high-ceilinged warehouses. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
</div>
</div></p><h3>Apple</h3><p><a href="https://pdfpiw.uspto.gov/.piw?PageNum=0&docid=10928697&IDKey=B939F26801A6%0D%0A&HomeUrl=http%3A%2F%2Fpatft.uspto.gov%2Fnetacgi%2Fnph-Parser%3FSect1%3DPTO2%2526Sect2%3DHITOFF%2526u%3D%25252Fnetahtml%25252FPTO%25252Fsearch-adv.htm%2526r%3D51%2526f%3DG%2526l%3D50%2526d%3DPTXT%2526s1%3D%252522apple%252Binc%252522.ASNM.%2526p%3D2%2526OS%3DAN%2F%252522apple%252Binc%252522%2526RS%3DAN%2F%252522apple%252Binc%252522" target="_blank"><strong>Smart tinted windows</strong></a></p><p>This feels like a concept you'd see in sci-fi films set in a future where people have time to kill in the back of a self-driving car. Instead of staring at their phones, the sunroof and windows tint black, and news programs or views of scenic landscapes would replace whatever dystopian cityscape the car is driving through. It seems that Apple is looking into turning this into a reality, by creating see-through glass panes embedded with LEDs and other light sources that could change the color of the glass and allow information to be displayed on it. Pair that with the AR maps it was working on from <a href="https://www.protocol.com/alphabet-eat-balloons" target="_self">last week</a>, and you could have a whole new way of looking at driving on your hands. </p><h3>Facebook</h3><p><a href="http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=29&f=G&l=50&co1=AND&d=PTXT&s1=facebook.ASNM.&OS=AN/facebook&RS=AN/facebook" rel="noopener noreferrer" target="_blank"><strong>Curved-lens AR glasses</strong></a></p><p>This feels a little bit like the walking-around version to Apple's patent above. Most AR headsets use cameras to portray information on flat surfaces in front of your eyes. If you're like me and wear giant glasses that make you look like an owl, that might be fine, as your entire field of view is covered by lenses, but this patent explores adding AR to the periphery as well. The glasses in the patent have lenses that curve around the side of the frames so that they can overlay information on your peripheral view, which could make the experience of augmenting reality feel a little less jarring. That said, you would have to go out in public wearing something that looks like this: </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
</div>
</div></p><p><img src="https://lh6.googleusercontent.com/YQudRSE9rpgmW6sFYiOU7-fK_tijuGQMxUhPKBq9cQWjmapgqPuV-K2FKAb-C_mlGqBmzOeFisYN3K2JLXqjzmvJzsHuEwfPo-_-CiIodnZg-alfFF1wsw74xVkb5nNaTx-pU71_"></p><h3>Microsoft</h3><p><a href="http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=36&f=G&l=50&co1=AND&d=PTXT&s1=microsoft.ASNM.&OS=AN/microsoft&RS=AN/microsoft" target="_blank"><strong>Automatic presentation controls</strong></a></p><p>If you've ever watched a presentation from a major tech company and wondered how they nailed the timing on slide changes so well … it's probably because they've rehearsed it a thousand times and have someone whose job it is just to press forward on the slide at the right time. But if you don't have that luxury at your disposal, you might find the ideas in this patent helpful. Microsoft is exploring presentation software that would be able to listen for cues in your speech to detect that you've gotten to the end of one slide, and move you automatically on to the next. It also suggests doing a training run, where the user runs through their presentation, manually clicking where they want to change slides, and the system would record that and do it automatically when they go to present. I'm not sure about having to have something listen to me at all times to get this to work, but it'd make presentations a lot less awkward than the "please can you click to the next slide, no, not the last slide, the next one" that often happens. </p><p><a href="https://pdfpiw.uspto.gov/.piw?PageNum=0&docid=10931607&IDKey=7B2CDAAF4E95%0D%0A&HomeUrl=http%3A%2F%2Fpatft.uspto.gov%2Fnetacgi%2Fnph-Parser%3FSect1%3DPTO2%2526Sect2%3DHITOFF%2526p%3D1%2526u%3D%25252Fnetahtml%25252FPTO%25252Fsearch-bool.html%2526r%3D19%2526f%3DG%2526l%3D50%2526co1%3DAND%2526d%3DPTXT%2526s1%3Dmicrosoft.ASNM.%2526OS%3DAN%2Fmicrosoft%2526RS%3DAN%2Fmicrosoft" rel="noopener noreferrer" target="_blank"><strong>Getting angry at virtual assistants to get results</strong></a></p><p>Stressing other people out when you're in charge is a very easy, albeit not very amenable, way to get stuff done. If you're having a conversation with someone and they stress to you, "I <em>need</em> you to get this back to me by end of day," and you know that they are ultimately the person who could end your employment, you're very likely going to get it back to them soon, unless you don't want to work there anymore. It's a lot harder to convey emotion and stress like that to a digital assistant, but this patent is exploring being able to understand human intonation and emotion in requests, such as a user stressing that they need to get a meeting scheduled with someone by the end of the week, which the AI would interpret as it being an urgent meeting when looking for time to schedule. Hopefully when the robot uprising comes, they'll not be too annoyed at us taking them for granted as digital PAs. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
</div>
</div></p><p><img src="https://lh6.googleusercontent.com/CHYmBNr1k8asJ9p8zi43L-PaaZ5dYVTxgP5mblcY4OmjXw5YoLRZQxZCLBJPDurDGO1QQyCe4_A__MUCFgfubokFtskr7qHjgZOHlsv76dvmVtv7P6iWpys6pqmMrroiPNrIkPi0"></p>
From Your Site Articles
Keep Reading
Show less
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
Sponsored Content
The future of computing at the edge: an interview with Intel’s Tom Lantzsch
An interview with Tom Lantzsch, SVP and GM, Internet of Things Group at Intel
February 28, 2021
Saul Hudson has a deep knowledge of creating brand voice identity, especially in understanding and targeting messages in cutting-edge technologies. He enjoys commissioning, editing, writing, and business development, in helping companies to build passionate audiences and accelerate their growth. Hudson has reported from more than 30 countries, from war zones to boardrooms to presidential palaces. He has led multinational, multi-lingual teams and managed operations for hundreds of journalists. Hudson is a Managing Partner at Angle42, a strategic communications consultancy.
February 27, 2021
An interview with Tom Lantzsch
Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corporation
Edge computing had been on the rise in the last 18 months – and accelerated amid the need for new applications to solve challenges created by the Covid-19 pandemic. Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., thinks there are more innovations to come – and wants technology leaders to think equally about data and the algorithms as critical differentiators.
In his role at Intel, Lantzsch leads the worldwide group of solutions architects across IoT market segments, including retail, banking, hospitality, education, industrial, transportation, smart cities and healthcare. And he's seen first-hand how artificial intelligence run at the edge can have a big impact on customers' success.
Protocol sat down with Lantzsch to talk about the challenges faced by companies seeking to move from the cloud to the edge; some of the surprising ways that Intel has found to help customers and the next big breakthrough in this space.
What are the biggest trends you are seeing with edge computing and IoT?
A few years ago, there was a notion that the edge was going to be a simplistic model, where we were going to have everything connected up into the cloud and all the compute was going to happen in the cloud. At Intel, we had a bit of a contrarian view. We thought much of the interesting compute was going to happen closer to where data was created. And we believed, at that time, that camera technology was going to be the driving force – that just the sheer amount of content that was created would be overwhelming to ship to the cloud – so we'd have to do compute at the edge. A few years later – that hypothesis is in action and we're seeing edge compute happen in a big way.
<p>The last 18 months have been a wild time to be in technology. We've seen edge compute come to life to help businesses adapt during the pandemic. At the same time, we are also seeing how 5G is going to drive up interest, especially from a networking perspective, rather than a use-case perspective. We also see lot of people that are focused on their data, but the <em>algorithms</em> that companies train with the data are going to be their critical assets. It doesn't matter what company or what industry; <em>this</em> will really become the differentiator for many companies.</p><p>And particularly amid the backdrop of the pandemic, we've seen how companies are using technology to either bring workers back in safely or <a href="https://www.intel.com/content/www/us/en/corporate-responsibility/covid-19-response-sensormatic-article.html" target="_blank">serve their customers in new ways</a>, <a href="https://www.intel.com/content/www/us/en/customer-spotlight/stories/brentwood-academy-customer-spotlight.html" rel="noopener noreferrer" target="_blank">educate children in new ways</a> -- all things that have accelerated the digital transformation that had been underway. I recently read a <a href="https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever" rel="noopener noreferrer" target="_blank">McKinsey survey</a> that reported on the "speedup in creating digital or digitally enhanced offerings. Across regions, the results suggest a seven-year increase, on average, in the rate at which companies are developing these products and services."</p><p>And based on what we're seeing at Intel, those are lifesaving and industry saving investments happening today – completely re-designing the way that <a href="https://www.intel.com/content/www/us/en/corporate-responsibility/covid-19-response-mic-article.html" rel="noopener noreferrer" target="_blank">patients are treated</a>, and businesses operate.</p><h4>What are you particularly expecting to see this year?</h4><p>What I find most interesting is the work that combines IoT with networking capabilities – and I think this is going to be a year of expansive exploration and working with our customers to put these two things together to solve real business challenges.</p><p>When we first started the integration of networking technology and operational technology capabilities and layered that across the industry verticals, we could count the amount of interested customers and opportunities on one hand. Last year, it was five times that many and this year we see that number increasing significantly already. So, we're excited to see the industry continue to build excitement to scale those types of deployments.</p><h4>What role does AI play at the edge and in what way is Intel involved?</h4><p>An AI use case recently grabbed my attention: employees in a restaurant being screened by a device that checks temperature while the employees are washing their hands – and provides a determination on whether they'd done it adequately before they report to work. I have seen other applications using similar technology in the <a href="https://marketplace.intel.com/s/offering/a5b3b000000TiMSAA0/using-ai-to-make-construction-site-safer?language=en_US" rel="noopener noreferrer" target="_blank">construction industry</a>, where an AI algorithm scans to see if employees have their helmet, goggles, vest and other safety equipment on properly to determine if they are ready to work. And the best part is – that the employer can see aggregate data on these interactions to determine if more training on handwashing or helmet wearing is needed.</p><p>At Intel, in addition to providing the fundamental base technology to enable these applications, we work with a lot of third-party developers to create these applications. And we help the developers scale them across multiple industries with our salesforce. So, we may not make the scan technology that determines if you have the right gear on, but we orchestrate that coordination across our ecosystem with all of our partners to effectively put it into a <a href="https://marketplace.intel.com/s/?language=en_US" rel="noopener noreferrer" target="_blank">catalog</a> so that if customers are interested in that sort of application, we can provide them with different parties to make that happen.</p><h4>Is there a problem with fragmentation in the market and how can that be solved?</h4><p>It's very fragmented. I gave just two examples of totally different workers coming to work in different industries and I can give you five more that are different again. Although the base technology that Intel creates to enable this type of innovation is very horizontal in nature, the reality is that bringing those to life must be very "vertically-centered" and very "use-case centered" – and must take into account, geography. The two employee use cases I cited look very different if you are talking about employees in North America, India or Germany. So, all in all, this is a holistic ecosystem challenge – and an ecosystem solution.</p><p>At Intel, we're in a unique situation to orchestrate these solutions. </p><p><cite class="pull-quote">People tend to think of Intel as providing the technical footprint that enables edge computing – but we also have the developer reach – and we can use our ecosystem and scale to help our end customers get access to the best solutions.</cite></p><h4>What sort of challenges do customers face when they're attempting to adopt edge computing?</h4><p>There are two common challenges. One is the technical question of 'Who can I work with?' A customer may have a chip focus but actually, it's a more complex question than a chip. We like that complexity, because we can be an adviser to them and <a href="https://marketplace.intel.com/s/partners-by-industry?language=en_US" rel="noopener noreferrer" target="_blank">bring to the table partners</a> that they can work with to solve that complexity leveraging our technical knowledge and ecosystem network. </p><p>The second thing that companies struggle with is the challenge of how to fund getting into this space – even if the business case warrants the investment. The world has changed. Companies don't want to write a big capital check for these types of investments – they want a pay-as-you-go model, like you see with the cloud. We've been working with customers to find a way to make that happen – and I think that is going to be a bigger part of the conversation moving forward.</p><p>You can see it across almost every aspect of technology now. We rent compute more than we buy compute. Evidenced by the success of AWS, companies can rent compute from Amazon instead of building their own data center – and there are many benefits to that approach. In the old world, even for this video conference that we're having today we would have installed capital to do this. Now it's just a service. And I think that edge as a service is right around the corner.</p><h4>Do you have an example of that?</h4><p>A customer in Mexico wanted to deploy outdoor WiFi and add security features into it. So, it was an edge-based computing issue that was part connectivity. But there was actually way more to it than just installing it. We not only helped to solved the technological challenge creatively and coordinated the <a href="https://marketplace.intel.com/s/partners-by-industry?language=en_US" rel="noopener noreferrer" target="_blank">ecosystem of providers</a> to solve this, but we also found a way so that the customer could get into this market with a service-based model without needing to outlay a lot of capital.</p><p>Other semiconductor companies would have a difficult time partnering on both sides of that challenge, but Intel can do it because we have the scale.</p><h4>How do businesses identify which functions they do want to perform at the edge versus in the cloud?</h4><p>It really comes down to a question of what you're trying to do and how you do it at the lowest cost, highest quality and standard in computability.</p><p>If you have an application and it can perform what you need it to do in the cloud, you'll probably run it there. The cloud is a great thing - there's infinite compute and lots of choice in a well-understood developer environment.</p><p>But there are many things you can't or shouldn't do in the cloud for certain reasons. Take the camera example from earlier. Say you have eight high-density cameras, and you want an action on them immediately. You may not be able to afford the latency that comes with going up into the cloud. Or it may be a financial challenge – that its actually more expensive to send that data to the cloud over and over again, and it makes sense to invest in compute at the edge. There are nuances in the decision-making. It really comes down to what you want the application to do, how quickly and how much it should cost.</p><h4>How does Intel help developers to learn, to build and then test their solutions at the edge?</h4><p>To enable what we know to be interesting and challenging use cases at the edge, required us to change our focus on who these developers are and what they care about. We learned that they <em>really</em> don't care about what hardware they're running on. The modern developers are fairly well extracted from the hardware – they just assume the compute is going to be available for them to do their work.</p><p>To make sure we can deliver on that, we typically target developers by specific capability. The most advanced case that we've been studying on the edge recently is focused video and specifically, video inferencing and AI inferencing. We created a tool called <a href="https://software.intel.com/content/www/us/en/develop/tools/openvino-toolkit.html" rel="noopener noreferrer" target="_blank">OpenVINO</a>, which was developed in a way that developers didn't have to care about the hardware it runs on. It's a model optimization technology that enables them to easily scale out to different hardware platforms. That's proven to be an interesting value proposition to these developers.</p><p>Our goal with <a href="https://software.intel.com/content/www/us/en/develop/tools/openvino-toolkit.html" rel="noopener noreferrer" target="_blank">OpenVINO</a> is democratize AI activity and inference at the edge. We want to make it simple -- to put these tools in the hands of non-data scientists and make it work. As a part of that process, we're also creating an environment where they can develop anyplace, anytime, anywhere they want to be. We're so proud of our <a href="https://software.intel.com/content/www/us/en/develop/tools/openvino-toolkit.html" rel="noopener noreferrer" target="_blank">OpenVINO</a> community and are constantly working to grow the community and release new features and capabilities to edge developers.</p><h4>What's the possible next breakthrough that you see for Intel in edge computing and the IoT space?</h4><p>I'm looking forward to the big breakthrough when we show integrated 5G, Virtual Private Network and the edge workloads all in one unit. More to come.</p>
Keep Reading
Show less
Saul Hudson has a deep knowledge of creating brand voice identity, especially in understanding and targeting messages in cutting-edge technologies. He enjoys commissioning, editing, writing, and business development, in helping companies to build passionate audiences and accelerate their growth. Hudson has reported from more than 30 countries, from war zones to boardrooms to presidential palaces. He has led multinational, multi-lingual teams and managed operations for hundreds of journalists. Hudson is a Managing Partner at Angle42, a strategic communications consultancy.
People
Making the economy work for Black entrepreneurs
Funding for Black-owned startups needs to grow. That's just the start.
"There is no quick fix to close the racial wealth and opportunity gaps, but there are many ways companies can help," said Mastercard's Michael Froman.
Photo: DigitalVision/Getty Images
February 26, 2021
Michael Froman serves as vice chairman and president, Strategic Growth for Mastercard. He and his team drive inclusive growth efforts and partner across public and private sectors to address major societal and economic issues. From 2013 to 2017, Mike served as the U.S. trade representative, President Barack Obama’s principal adviser and negotiator on international trade and investment issues. He is a distinguished fellow of the Council on Foreign Relations and a member of the board of directors of The Walt Disney Company.
February 26, 2021
Michael Froman is the vice chairman and president of Strategic Growth for Mastercard.
When Tanya Van Court's daughter shared her 9th birthday wish list — a bike and an investment account — Tanya had a moment of inspiration. She wondered whether helping more kids get excited about saving for goals and learning simple financial principles could help them build a pathway to financial security. With a goal of reaching every kid in America, she founded Goalsetter, a savings and financial literacy app for kids. Last month, Tanya brought in backers including NBA stars Kevin Durant and Chris Paul, raising $3.9 million in seed funding.
<p>
Reaching this milestone is a testament to Tanya's perseverance and resilience as she, like many other Black women founders, struggle to find institutional investors. Our financial system is simply not set up to help Black entrepreneurs launch a business. Most new businesses are initially funded from savings and home equity, but the persistent racial wealth gap in our country places Black would-be entrepreneurs at a dramatic disadvantage since many don't have those assets available. On top of that, of the approximately $625 billion in venture capital invested since 2015, only around $15 billion went to Black and Latinx founders; that's just 2.4% of funding. For Black women founders specifically, the numbers plunge to 0.27% of funding over the past <a href="https://www.projectdiane.com/" rel="noopener noreferrer" target="_blank">two years</a>.
</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
</div>
</div></p><p>
This is not an issue that will resolve itself; we need to be deliberate about opening doors and bringing down barriers, not just to solve for one Black or minority-owned business at a time, but to rebuild a system that gives everyone a chance. Capitalism has lifted millions of people out of poverty and improved their quality of life, but it has also left many behind. As we now rebuild our national economy, we need to ensure future growth is inclusive, and that small businesses — the backbone of our economy — recover in a way that lifts up promising Black-owned startups at every point in their journey.
</p><p>
There is no quick fix to close the racial wealth and opportunity gaps, but there are many ways companies can help. Here are four insights we've learned from years of working with startups and community organizations.
</p><p>
<strong>Invest in the network.</strong> Startups like Oakland-based <a href="https://www.mycnote.com/" rel="noopener noreferrer" target="_blank">CNote</a> are working to channel capital to underserved micro and small businesses through a vast network of Black-owned banks, minority credit unions and community development financial institutions that have direct access to many local communities. However, these market innovators are hampered by complex governance requirements that Fortune 200 companies have to put in place before they will do business. We need to make it easier for new players like CNote to pass procurement hurdles and get into the pipeline so they can grow. By helping them on the back end, it opens them up to partnering with large corporates from all across the country.
</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
</div>
</div></p><p>
<strong>Open up access to markets.</strong> For those Black-owned businesses that do secure a first round of funding, their growth trajectory often slows when it comes to entering new markets. A startup's ability to scale increases exponentially when larger companies with trusted relationships not only make introductions to its partners but also offer the startup's services as part of a proposed solution to customers. This is an approach that has helped <a href="https://mocafi.com/about/" rel="noopener noreferrer" target="_blank">MoCaFi</a>, a New York-based, Black-owned startup that offers banking services to lower- and moderate-income communities, to start working with local city leaders in new markets. This work can be mutually beneficial for corporations: The ability to deliver effective support to underserved communities increases when the right partners with the right solutions are brought to the table.
</p><p>
<strong>Digitizing access to capital.</strong> Black entrepreneurs are being denied or given smaller bank loans nearly <a href="https://www.federalreserve.gov/publications/2017-september-availability-of-credit-to-small-businesses.htm" rel="noopener noreferrer" target="_blank">twice the rate of</a> their white peers — 54% compared to 30%, respectively. Microfinance institutions and CDFIs have stepped in to fill this void, supporting applications for those previously denied loans. However, the demand exceeds the resources and tools available, and getting funds to those who need it urgently can be challenging. New digital tools can be transformative in this situation if we could accelerate access for these organizations. Many rely on slow paper-based processes, but through the digitization of both applications and distribution of loans, CDFIs like the <a href="https://crfusa.com/" rel="noopener noreferrer" target="_blank">Community Reinvestment Fund</a> and micro-finance institutions like <a href="https://www.grameenamerica.org/" rel="noopener noreferrer" target="_blank">Grameen America</a> have been able to process requests faster, more securely and for more businesses, throughout the pandemic.
</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
</div>
</div></p><p>
<strong>Going all in. </strong>Finally, one of the most important lessons we've learned is that the programs and partnerships used to tackle these issues can't be just for a moment in time or a single intervention. For maximum impact, companies need to be all in with the full breadth of their assets — funding, product pilots, supplier practices, consulting services, data insights — as this is how to drive a catalytic impact and create a more sustainable, inclusive digital economy.
</p><p>
As more businesses, CEOs, corporate treasurers and venture capitalists join in this effort, we can collectively help bridge that wealth and opportunity gap. Startups can't scale up if they aren't given that first chance.
</p><p>
As we are reminded during this Black History Month, the problems of racial economic disparity have existed for too long, and although the challenge seems daunting, we are confident that with perseverance we can successfully build a more just and equitable economy. Our early progress matters, and we should make every effort to build on the first steps by coming together across sectors and organizations so that amazing ideas like Tanya's are embraced from the outset.
</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
</div>
</div></p>
Keep Reading
Show less
Michael Froman serves as vice chairman and president, Strategic Growth for Mastercard. He and his team drive inclusive growth efforts and partner across public and private sectors to address major societal and economic issues. From 2013 to 2017, Mike served as the U.S. trade representative, President Barack Obama’s principal adviser and negotiator on international trade and investment issues. He is a distinguished fellow of the Council on Foreign Relations and a member of the board of directors of The Walt Disney Company.
Transforming 2021
Blockchain, QR codes and your phone: the race to build vaccine passports
Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.
One day, you might not need to carry that physical passport around, either.
Photo: CommonPass
February 23, 2021
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
February 23, 2021
There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.
Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.
<p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
</div>
</div></p><p>But building a system that everyone agrees with — and can access — is no small task. There are several companies working on competing projects to verify vaccinations. But beyond that, there are more than a few hurdles that could prevent vaccine passports from succeeding, from antiquated medical records systems to interoperability issues and privacy concerns. Here's how they could actually succeed. </p><h3>Competing projects, similar standards</h3><p>Pretty much since the first blockchain white paper, people have been looking for perfect examples of where a distributed, immutable ledger could be valuable. There's obviously the push to use it for currencies, and companies have tried to use it for things like tracking <a href="https://www.protocol.com/ibm-blockchain-supply-produce-coffee" target="_self">food production</a> and <a href="https://www.govtech.com/products/Blockchain-Voting-Debate-Heats-Up-After-Historic-Election.html" rel="noopener noreferrer" target="_blank">voting</a>, but there are few use cases that have truly taken off, at least so far. "We've been working on this since 2014; we never thought that health care would be the kind of the use case that we take this mainstream," Jamie Smith, the senior director of business development at Evernym, a company focused on using the blockchain as a basis for verifying identities, told Protocol. </p><p>Smith said Evernym had been discussing its concepts with automakers, retailers, telcos, governments, loyalty companies and banks prior to the pandemic. One of those companies was IAG, the airline group that owns British Airways, which had been interested in the idea of contactless travel based on a single identity credential that follows you from the airport check-in to your gate. With the pandemic, that morphed into thinking about ways to verify that passengers have had negative COVID tests, and eventually, that they've received a vaccine. "From our perspective, it was a really easy lift to see," Smith said. "We're doing contactless travel, and we just added verifiable credentials for test results."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
</div>
</div></p><p>It's a similar genesis for IBM's Digital Health Pass initiative, which leader Eric Piscini said started about two years ago as a way to store people's entire health records in a safe, accessible platform. It also relies on the blockchain for its immutable record of proof, and both Evernym and IBM are part of an open-standards group called the Good Health Pass Collaborative, which aims to bring private credentialed vaccine records to business and people around the world. Companies are working on their own implementations of the standards, but Evernym's Smith said the data is meant to be portable from one passport to another. </p><p>Most of the companies working on passports say their systems are private by design, especially given that they're mainly working off the same open standards. In most cases, the health information only ever remains on a user's phone, but where it asks to verify that the user's information meets a system's standards — such as whether this person has had two COVID vaccines and should be allowed into an office — that information is recorded on a blockchain. "You can, using blockchain technologies, verify that someone has been tested recently, without having access to the underlying data," Piscini said. "I don't know any other technology where you can do that."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
</div>
</div></p><p>Similarly, the nonprofit Commons Project's CommonPass, backed by the likes of Oracle, Microsoft and Salesforce, started out as a project to bring an analog to Apple Health for Android. JP Pollak, a senior researcher at Cornell and founder of the Commons Project, first launched CommonHealth to bring the sort of data and insights that Apple Health offers to iPhone owners to Android users. Last summer, the group started building an app that could take health data and privately share it with others — in that case, it was to help truckers stuck at the borders in <a href="https://www.newtimes.co.rw/opinions/digital-technology-re-opening-africa" rel="noopener noreferrer" target="_blank">East African countries</a> who couldn't easily prove they'd taken COVID tests. This morphed into vaccine credentialing, with the group now working to pull together the various data streams needed to get a project like this off the ground. </p><p>"Health care institutions, EMR vendors, retail pharmacies, state vaccine registries, all issuing people a digital verifiable credential of their vaccination record that they could then use in the app of their choice, to be able to get access to various kinds of services," Pollak said. CommonPass is also working with the Mayo Clinic, as well as Epic Systems and Cerner, two of the largest EMR vendors. </p><h3>Something for everyone </h3><p>With so many competing efforts to become the world's digital vaccine passport, it might seem that the country is heading for some sort of VHS versus Betamax format war for proving everyone has had COVID vaccines. But given that so many of the efforts are using the same standards, and in many cases, looking to embed their tech in someone else's app rather than their own, the race might be less about the best tech winning, and more about various approaches working in different situations. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
</div>
</div></p><p>"The intent is not to be the only company; we don't want to be the proprietary platform that everybody has to use because they have no choice," IBM's Piscini said. "That's not who we are right now: That's the IBM from 30 years ago, not the IBM of today."</p><p>For IBM, though, the selling point is that the company already works with so many other massive companies. Why look elsewhere for a vaccine passport solution if your airline booking system is already powered by IBM? "We believe our network is going to be more valuable than any other because of our scale and our ability to integrate the platform with CRM systems, building systems or stadium systems — we can do that every day," Piscini said.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY2NTc3NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyMTM1MjYyM30._ykxxCyx3_wDbZrYgCcmK0QT2Ue1tZFdP5pf60kOmPU/img.jpg?width=980" id="c81c9" class="rm-shortcode" data-rm-shortcode-id="3967636652192acfdaad341861263bc8" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">IATA's digital passport app.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Photo: IATA</small></p><p>For other companies, it's about securing new partnerships with major players in the hopes of finding that scale. Evernym, for example, is working with International Air Transport Association, the airline industry's trade association, on an air travel-specific app called Travel Pass. IATA is working with airlines and local governments to ensure it has the latest requirements to feed the app's rules engine. "It will say, 'Hey, you're flying JFK to Heathrow, you need a PCR test 48 hours in advance before you can land,'" Evernym's Smith said. "And of course, those policy changes are changing every day." Qatar, Emirates and Etihad Airways are all <a href="https://simpleflying.com/qatar-iata-travel-pass-launch/" rel="noopener noreferrer" target="_blank">expected</a> to start trialing the app in the next few weeks.<br></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
</div>
</div></p><p>In other instances, the technology will live inside other companies' existing apps; why make someone download yet another app and add another hurdle to compliance? Instead, the experience will be rather like adding a loyalty account or TSA PreCheck number when booking a flight. Airlines and other venues restricting access will require uploading negative test results or vaccine records using one of these services. "You're going to be using the United or the Delta app, and they'll be using our solution or somebody else's, but you will do it via their app," IATA's Travel Pass lead, Alan Murray Hayden, told Protocol.</p><p>The World Health Organization is also working on its own offering, and recently convened the <a href="https://www.who.int/groups/smart-vaccination-certificate-working-group" rel="noopener noreferrer" target="_blank">Smart Vaccination Certificate Working Group</a>. It's built upon the WHO's nearly century-old notion of the "yellow card" vaccination record, which first was used to document that travelers had been inoculated against diseases such as cholera and yellow fever. Evernym Chief Trust Officer Drummond Reed is part of the working group; he said there should be more to share in the coming months. </p><h3>What could go wrong?</h3><p>It's entirely possible that as more people start to get vaccinated, vaccine passports start to become the norm. You walk to work — still masked, of course — scan a QR code reader in the lobby, and are let in. You go out for lunch, and your loyalty card app has a discount for in-store shoppers verifying they're vaccinated. Your concert ticket is also tied to health pass information that you shared earlier in the day with Ticketmaster. But there are more than a few hurdles ahead of the companies rushing to turn these concepts into realities. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
</div>
</div></p><p>First off, there's the … reality … of the real world that any digital system has to contend with. For anyone without access to the internet, digital vaccine credentials will prove difficult to acquire, though all the companies Protocol spoke with said they would offer a paper-based QR code for people who don't have smartphones. But there's also the issue of having to corral so many different stakeholders into one system, especially when some health care providers are still reliant on antiquated database systems or <a href="https://www.protocol.com/manuals/health-care-revolution/electronic-health-records-after-coronavirus" target="_self">even paper records</a>. "The amount of inefficiency in the system is tremendous," IBM's Piscini said. </p><p>But in the U.S. at least, all vaccinators are required to report COVID-19 vaccines to their state. Piscini said that even for people who just received a paper copy of their vaccine records, systems like IBM's can likely link up to the state's immunization registry and allow people to import records to a vaccine passport.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY2NTc4My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzNzg3MTM2M30.RZtqR7F_FuXK1S24V6jVaqUZ0xOSG-gCwj00xU3fxcM/img.png?width=980" id="b0bd3" class="rm-shortcode" data-rm-shortcode-id="11d8002d92c0cd6ef39b12fc7b8dccf8" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">How CommonPass's app shows your records. </small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Image: CommonPass</small></p><p>And states are willing to help out, Pollak said, adding that CommonPass has started working with Hawaii to roll out its offering for would-be tourists. "We're seeing a lot of state governments stepping up and doing a really good job with this," Pollak said. "It would be surprising if there wasn't a coordinated federal effort very soon." That being said, while <a href="https://www.cbc.ca/news/canada/north/iceland-covid-passports-canada-1.5904828" rel="noopener noreferrer" target="_blank">many countries around</a> the world are committing to working on vaccine passports, getting a straight answer out of the U.S. government on what it's doing has proven difficult. The State Department, which maintains America's traditional, analogue passports, referred me to Homeland Security, which referred me to the White House. The acting director and chief of staff of the White House's Office of Science and Technology Policy, Kei Koizumi, told Protocol that "OSTP can't discuss projects we are working on before they are publicly announced."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
</div>
</div></p><p>But even with systems in place at a federal level, there's still a fair amount of education that needs to happen before people will trust systems like these. "There's a substantial gap in understanding and knowledge of how these systems work, and people's views, in terms of who should get access to which data," Pollak said. </p><p>"We assume there's a Facebook Borg in the sky, monitoring every interaction," Smith said. "The emergence of verifiable credentials breaks down that mental model, where actually it becomes more like decentralized bits of paper that I can carry around, and no one's to know that I've been sharing this information."</p><p>"Our belief is that if you do the right thing, from a platform point of view, protecting your privacy, and giving you control and access to the platform to everybody who wants to use it," Piscini said. "I think those are very basic things that allow the core of the platform that we build to generate adoption by the individuals."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="8">
</div>
</div></p><p>Even with a system that works, there may still be holdouts to this potential new normal. "Some people are saying, 'I will never get vaccinated,'" Piscini said, "and I don't know if the airlines are going to say, 'Well, maybe you will never fly again.'"</p>
Keep Reading
Show less
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
Protocol | Fintech
These digital banks try to stand out by focusing on niche communities
Banks like Daylight and Purple are serving communities that have been overlooked by big banks.
Upstarts like Purple and Daylight are trying to meet the specific needs of their customers.
Photo: Stephen Phillips/Unsplash
February 24, 2021
Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.
February 24, 2021
When Billie Simmons and Rob Curtis started the LGBTQ-focused digital bank Daylight last year, they didn't seek to just "stick rainbows" on the product to market to the group. Instead, they decided to focus on building a product that met the specific needs of the population.
<p>
Fueled by the growth of plug-and-play banking infrastructure, startup niche banks have cropped up that cater to specific demographic or interest groups, such as people in the LGBTQ community, African Americans, Latinx consumers, immigrants, students, people who are disabled and those interested in climate change. There are even digital banks for gamers.
</p><p>
These startups — which typically have a licensed sponsor bank such as MetaBank or Bancorp as well as banking infrastructure from Galileo, Unit or Marqeta — say they aren't just a marketing front-end but are offering specific products that consumers can't get elsewhere. But many have similar basic features such as mobile-first, free checking and no fees, so they face challenges to stand out in a crowded field of neobanks.<br>
</p>
<p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
</div>
</div></p><p>
Traditional banks have not met the specific needs of these groups, these upstarts say. Meanwhile, the bigger digital banks such as <a href="https://www.cnbc.com/2020/09/18/chime-is-now-worth-14point5-billion-surging-past-robinhood-as-the-most-valuable-us-consumer-fintech-.html" target="_blank">Chime</a> have grown so large that they are targeting much broader swaths of consumers.
</p>
<p>
"For LGBT people, money matters are different and left behind by wider incumbent banks," Curtis said.
</p>
<p>
For example, Daylight has a feature for its debit card and mobile banking app where customers can sign up with their preferred name, regardless of the name on their legal identification. "That's really important for trans and nonbinary folks," Curtis said. "It's a cumbersome process to get legal documentation changed."
</p>
<p>
Ando, which appeals to those concerned with climate change, shows what percentage of your checking account dollars are being invested in areas such as wind energy, electric batteries or green buildings. "We're improving banking by moving from no transparency or accountability and no direction to better direction" of your money, said Ando CEO JP McNeill.
</p>
<p>
Others such as Greenwood, co-founded by rapper Killer Mike, focus on Black and Latinx consumers.
</p>
<p>
Spinning up a bank can take about a month and a half, said Itai Damti, CEO of banking-as-a-service startup Unit, which handles things like account origination, reconciliation, know-your-customer checks and settlement.
</p>
<p>
"In each case what we're looking for are use case [innovations] more than just the [demographics]," said Ryan Falvey, co-founder and managing partner at Financial Venture Studio, who has invested in startups in this area such as Dave, Propel and Point.
</p>
<p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
</div>
</div></p><p>
Daylight also has two community features for consumers: peer-to-peer advice from others on the platform as well as advice from financial experts. People in the LGBTQ community often have specific financial questions or concerns that others may not have, from adopting a child to gender confirmation surgeries to just saving for retirement, Simmons said. "It's a community of like-minded individuals to support individuals through what's often a confusing and lonely process," he said.
</p>
<p>
Community is one way niche banks can differentiate themselves, said Sean Park, founder at venture firm Anthemis. "It's more about the community because the infrastructure and even the products are becoming commoditized," Park said.
</p>
<p>
Because the banking technology and infrastructure has gotten relatively easier to set up, there's been a flood of competitors. "Usually even if you have something interesting and unique, it's not really defensible. If it catches on, everybody copies it," Park said.
</p>
<p>
John Ciocca started Purple, which uses Bancorp and Galileo, for people with disabilities. Purple is helping as many as 60 million people in that demographic maintain their disability benefits, because in certain states, if a person's assets exceed $2,000, they can lose those benefits, he said.
</p>
<p>
"What we consider differentiates us from Chime and others is we tailor the experience and features to the unique needs of people signing up for disability benefits," he said. "We make people feel at home, because we're taking care of your needs like a community bank."
</p>
<p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
</div>
</div></p><p>
While many of these banks are quick to point out that they aren't just about marketing, many neobanks do have particular expertise in data and user acquisition, and they outsource core banking, said Joe Floyd, a general partner at Emergence Capital. "They have two core competencies: data and user acquisition. Neobanks are here to stay — especially if they focus on niches. They can acquire customers more cheaply and strategically and get top-tier customers for the right products because they have better data."
</p>
<p>
Distribution, quickly acquiring customers and product differentiation give these banks an advantage over incumbents, Damti said. "The more distinct and tight-knit the population is, the more you can take advantage of this dynamic," he said.
</p>
<p>
Some believe that challenger banks are unsustainable businesses because they focus on marketing to certain groups and are just a "debit card for X." But Falvey says that's not the case, and many of these startups offer a "fundamentally different user experience."
</p>
<p>
"What's happening is deep innovation on what the product looks like," Falvey said. "The products are quite different than what incumbents are offering. They're acquiring users at a fraction of the cost that incumbents are."
</p>
<p>
Still, customer acquisition costs have risen, which makes unit economics challenging unless a bank reaches large scale, Park said. "Unit economics for a lot of these businesses aren't fantastic," he said. "If you can get to 14 million customers like Chime, then yeah, you can figure it out."
</p>
<p>
Because there are so many competitors now, it's hard to stand out, so not many will make it, Floyd said. "The challenge is not all of them will fulfill their potential," he said. "You'll have a few big horizontal banking platforms. A few will find big enough niches. Most are great seed investments and terrible growth investments."
</p>
<p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
</div>
</div></p><p>
But some interest groups may not be tight enough or have a "unique financial need" for a business to be built on, Damti said.
</p>
<p>
The community should have clearly unmet product and emotional needs, and should be self-organizing and viable long term, Curtis said. "Certain groups — freelancers, students, etc. — may be bonded by common functional needs, but it will be tricky to convert that into a community over the long term," he said.
</p>
<p>
One challenge is turning all those customers into revenue. Many start with checking accounts for their customers, which don't generate much revenue, or credit cards, which generate interchange fees. But the overall goal is to gather customers and eventually sell a range of products, from loans to mortgages to specialized services.
</p>
<p>
"It's the exact same strategy as Wells Fargo or Citibank in the 1960s: Get the top of the wallet, then grow wallet share," Falvey said. "They're employing a strategy we know is a recipe for success."
</p>
Keep Reading
Show less
Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.
Latest Stories
See more
Most Popular
Bulletins
February 26, 2021 16:23 EST
February 26, 2021 13:45 EST
February 25, 2021 17:33 EST
Get Source Code in your inbox
David Pierce's daily analysis of the tech news that matters.