Global fintech and funding innovation ecosystem

Category Archives: Tech, Tools, Productivity

The Global Effort to Level the Playing Field with Tech Giants

Competition | Feb 12, 2024

Unsplash hisuccc Google - The Global Effort to Level the Playing Field with Tech Giants

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The global community has begun to question whether big tech corporations are being held suitably accountable for their actions.

Today technology companies have grown to unprecedented sizes, their influence permeates every facet of our daily lives. From how we communicate and consume media to the way we shop and interact with the world around us, tech giants like Google, Meta (formerly Facebook), Amazon, and others have become central to our digital existence.

The Rise of Regulatory Interventions

Recently, there's been a shift in how governments approach the regulation of tech giants:

  • The European Union's Digital Markets Act (DMA) is a prime example, identifying 22 "gatekeeper" services that will face stringent new rules aimed at ensuring fair competition and innovation.
  • Meta complied with the UK Competition and Markets Authority (CMA) to sell the animated images platform Giphy, signaling a growing willingness among tech companies to adapt to regulatory demands. These actions represent significant steps toward curbing the unchecked power of Big Tech, setting a precedent for other nations to follow.

See:  DoF Consultation: Financial Competition in Canada

  • Also, the Canadian government took decisive action against Facebook (now Meta Platforms Inc.) over privacy violations. Stemming from the global Cambridge Analytica scandal, the Privacy Commissioner of Canada found in 2019 that Facebook had contravened Canadian privacy laws by inadequately protecting Canadians' personal information. This failure allowed third-party applications to access users' data without obtaining explicit consent, spotlighting serious flaws in Facebook's approach to privacy and its compliance with national regulations. Despite the investigation's findings, Facebook contested the Privacy Commissioner's authority and recommendations, leading to a legal standoff that highlighted the challenges faced by national regulators in enforcing compliance among global tech behemoths.
  • The approach to tech regulation varies significantly across jurisdictions. Japan, for instance, has recently begun to implement new legislation focused on data protection and social media platforms.
  • Australia's News Media Bargaining Code forced major tech companies to negotiate payment with Australian media companies for their content. These examples illustrate the diverse strategies employed worldwide to manage the impact of Big Tech, reflecting different national priorities and regulatory philosophies.

The Role of Competition Law and Litigation

Competition law has emerged as a key tool in establishing checks and balances against the monopolistic tendencies of Big Tech. The landmark judgment in Meta Platforms and Others v Bundeskartellamt by the Court of Justice of the European Union (CJEU) underscored this point, linking breaches of the EU General Data Protection Regulation (GDPR) to abuses of dominant market positions. This case, among others, highlights a growing recognition of the need to adapt legal frameworks to address the unique challenges posed by the digital economy.

See:  CFPB (Office of Competition and Innovation) is Shifting Policies that Provide Special Regulatory Treatment for Individual Firms

In 2021, the Canadian Competition Bureau launched an investigation into Google's alleged anti-competitive practices, focusing on the tech giant's dominance in the online advertising market. This investigation is a critical example of how competition law is applied to ensure that the digital economy remains competitive and innovative.

Beyond governmental action, private litigation has proven to be a potent tool in holding tech companies to account. High-profile cases, such as Google's settlement over privacy allegations in its "incognito" mode, have brought significant public attention to the practices of these corporations. These legal battles, while challenging, play a crucial role in ensuring that tech giants cannot operate above the law.

Ben Lasserson, Partner, Mishcon de Reya:

Each of the Big Tech giants is essentially a monopolist in their own ecosystem

Unsplash Matthew Henry privacy - The Global Effort to Level the Playing Field with Tech Giants

Image: Unsplash/Matthew Henry

Best Practices for Regulating Tech Giants

The goal is to create a digital ecosystem where tech companies can thrive and innovate while ensuring they do not abuse their market power to the detriment of consumers and smaller competitors. Here are some key best practices:

1. Clear and Adaptable Regulatory Frameworks

  • Regulations should be clearly defined to avoid ambiguity that tech giants could exploit. Laws need to precisely target anti-competitive behaviors without stifling innovation. Given the rapid pace of technological change, regulatory frameworks must be adaptable. This could involve sunset clauses for regulations to be reviewed and updated regularly based on the evolving digital landscape.

See:  Is productivity, wealth creation and competition at the forefront of Canada’s growth agenda?

2. Promoting Fair Competition

  • Implementing strict anti-monopoly measures to prevent market dominance that stifles competition. This includes scrutinizing mergers and acquisitions that could lead to unfair market consolidation.
  • Ensuring that smaller players have fair access to markets dominated by tech giants. This could involve mandating interoperability standards or opening up platforms to third-party developers under fair, reasonable, and non-discriminatory (FRAND) terms.

3. Consumer Protection

  • Strengthening privacy and data protection laws to ensure that consumers' personal information is not exploited for profit without explicit consent. This includes enforcing transparent data practices and giving consumers control over their data.  (See:  67 of top 1000 US websites violate EUs GDPR law)
  • Requiring tech companies to be transparent about algorithms, data collection practices, and the use of personal data. This transparency can empower consumers to make informed decisions about their digital interactions.

4. Encouraging Innovation

  • Creating a supportive environment for startups and smaller tech companies through grants, tax incentives, and access to resources. This can help foster innovation and provide viable alternatives to services offered by tech giants.
  • Promoting the use of open standards to encourage interoperability and compatibility across different platforms and services, facilitating innovation and competition.

5. International Cooperation

  • Working towards global regulatory standards for digital markets can help prevent tech giants from exploiting regulatory gaps between countries. International cooperation can lead to a more consistent approach to antitrust enforcement, data protection, and cyber security.

See:  BoE Report: Open Banking Boosts Productivity, Competition

  • Establishing agreements on cross-border data flows that protect consumer privacy while not impeding global digital commerce.

6. Effective Enforcement

  • Ensuring that regulatory bodies have robust enforcement mechanisms, the authority and resources to enforce regulations effectively. This includes the ability to impose significant penalties for non-compliance that are substantial enough to deter anti-competitive behavior.
  • Establishing mechanisms for consumers to report grievances and seek redress for harms caused by the actions of tech giants. This can include simplified legal processes or dedicated consumer protection agencies.

7. Stakeholder Engagement

  • Engaging a broad range of stakeholders, including tech companies, consumer groups, academics, and policymakers, in the regulatory process. This inclusive approach can help ensure that regulations are balanced, effective, and reflective of diverse perspectives.

8. Monitoring and Research

  • Continuous regularly monitoring the tech sector for emerging trends and potential anti-competitive behaviors. This can help regulators stay ahead of the curve and address issues proactively.  Investing in research to understand the impacts of digital technologies on society, competition, and the economy. This knowledge can inform evidence-based policymaking.

Conclusion

the path to regulating tech giants will undoubtedly require a concerted effort from all stakeholders. The outlined best practices offer a roadmap for creating a digital environment that prioritizes consumer welfare, fosters healthy competition, and encourages innovation.

See:  FCA’s Emerging Regulatory Strategy for Big Tech and Artificial Intelligence

By embracing these principles, regulators can ensure that the benefits of the digital age are widely shared, preventing monopolization by a few dominant players. The journey is complex, but through vigilance, adaptability, and collaboration, we can shape a digital ecosystem that benefits all, characterized by innovation, fairness, and respect for individual rights.


NCFA Jan 2018 resize - The Global Effort to Level the Playing Field with Tech GiantsThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Open Banking Regulation in the U.S. Strikes a Chord

Open Banking | Feb 12, 2024

Freepik Open Banking platform - Open Banking Regulation in the U.S. Strikes a Chord

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Impending Open Banking Regulation Is Set to Transform Finance in the U.S.

In a recent Forbes article, Alexandre Gonthier, CEO of Trustly, Inc., digs into the transformative potential of open banking regulation in the U.S.  This forthcoming regulation, championed by the Consumer Financial Protection Bureau (CFPB), aims to formalize consumers' rights to share their banking data, ensuring the continued availability of innovative financial services that have become integral to modern financial management.

Threat or Financial Innovation and Security Catalyst?

  • Open banking levels the playing field by enabling consumers to share their banking data with third-party services, potentially bypassing traditional card-based transactions.  Some large banks view open banking as a competitive threat, particularly concerning the revenue generated from credit card interchange fees, which amounted to $100 billion in 2022.
  • The promotion of Tokenized Account Numbers (TANs) by big banks as a security measure. However, Gonthier points out that TANs, especially when tied to revocable data sharing, can be exploited by fraudsters, complicating fraud prevention efforts within the banking payments context.
  • The CFPB's proposal mandates that consumers renew their data-sharing consent every 12 months. While intended to protect consumer data, this requirement could introduce friction into recurring payment processes, inadvertently boosting card transaction volumes.

See:  BoE Report: Open Banking Boosts Productivity, Competition

  • Gonthier applauds the CFPB's push for an API-based connection standard but warns of potential consumer harm if a proper transition period is not allowed for fallback to legacy connection methods during API outages.
  • Monetization of Data Access: The lobbying efforts by banking associations to impose fees on consumer data access, a move that could adversely affect open banking business models reliant on high volume and low margin economics.

Gonthier believes that while the CFPB's proposal is a positive step towards fostering competition in the payments sector, the final rule must go further to ensure that alternative payment methods, such as ACH, RTP, or FedNow, can compete on equal footing with traditional card-based payments. This competition could lead to lower payment processing costs and, consequently, lower prices for consumers.

FIS's Open Access Platform

FIS recently announced its Open Access platform is set to revolutionize how consumers interact with their financial data. By integrating with leading data networks such as Akoya, Envestnet | Yodlee, MX, and Plaid, the platform offers consumers unparalleled access to and control over their financial information. This initiative not only accelerates the shift towards open banking but also aligns with the Consumer Financial Protection Bureau's (CFPB) proposed Personal Financial Data Rights rule, establishing industry-wide standards for data access and protection.

The Open Access platform empowers consumers to securely share their financial data with a broader array of financial institutions and third-party apps, enhancing their ability to manage finances through their preferred services. This approach not only fosters a more inclusive financial ecosystem but also ensures that consumers can exercise control over their data, with the flexibility to revoke access at any time.

Conclusion

By formalizing the right to data sharing, impending open banking regulation, led by the CFPB, challenges traditional banking paradigms, promising enhanced financial innovation and competition.

See:  Feds Promise Open Banking Laws in 2024 and to Broaden Access to Payments Canada

As the industry adapts, initiatives like FIS's Open Access platform exemplify the potential for greater consumer empowerment and control over financial data paving the way for a future where financial services are more accessible, efficient, and aligned with consumer needs.


NCFA Jan 2018 resize - Open Banking Regulation in the U.S. Strikes a ChordThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Meta Seeks New Standards in Labeling AI-generated Content

AI | Feb 7, 2024

Meta Expands AI-generated Image Labeling To Enhance Transparency and Accountability Across All Platforms

According to TechCrunch, Meta is broadening the scope of its AI-generated imagery labeling posted by users to enhance transparency and user awareness  The strategic move is expected to increase the volume of labeled AI-generated synthetic versus authentic content distribution on Meta's platforms.  The rollout of expanded labeling will occur in the coming months, covering all languages supported by each app.  Nick Clegg, Meta's president of global affairs, emphasized the company's collaboration with industry partners to establish common technical standards signaling AI-generated content.

Challenges and Standards

The task of labeling AI-generated content extends beyond images to the more complex realms of video and audio. Current technology faces challenges in detecting AI-generated videos and audio due to the nascent adoption of marking and watermarking necessary for effective detection. Meta is exploring various strategies to overcome these obstacles, including the development of classifiers to detect AI-generated content lacking invisible markers and efforts to make it more difficult to remove or alter invisible watermarks.

See:  The Frontline of AI’s Copyright Law Battle in 2024

Meta's policy now requires users to disclose when posting "photorealistic" AI-generated video or "realistic-sounding" audio, reserving the right to label content deemed to pose a high risk of deceiving the public on matters of importance. Failure to comply with this disclosure requirement could result in penalties under Meta's Community Standards.

Meta's proactive measures reflect a commitment to safeguarding the integrity of digital content, particularly in the context of significant global events such as elections.  By working with other leading companies and forums like the Partnership on AI, Meta aims to develop common standards for identifying AI-generated content. This collaborative approach seeks to mitigate the potential harms associated with generative AI, including the proliferation of fake but realistic-seeming content.

The potential for deepfakes and other forms of misleading content also looms large, necessitating advanced detection technologies and ethical guidelines to safeguard against misuse.

Impact on Creators

On one hand, generative AI technologies offer artists, photographers, videographers, and other content creators unprecedented tools for creativity and innovation. These tools can generate new forms of art, enhance productivity, and open up new avenues for artistic expression that were previously unimaginable.

However, the labeling of AI-generated content introduces a layer of complexity regarding authenticity and originality. For creators who pride themselves on producing original content, the rise of AI-generated imagery could dilute the perceived value of human creativity.

See:  Canada New AI Copyright Policy Consultation

One huge area to watch is the is how creators' work is received and monetized if their content is labeled AI-generated / augmented versus holistically authentic.  If AI-generated content is labeled as such, it might be treated differently by algorithms, affecting visibility, engagement, and revenue opportunities. Creators may need to adapt by clearly distinguishing between AI-assisted and purely human-made creations, potentially affecting their creative process and how they market their work.

Future of AI in Digital Media

As we look ahead, the integration of AI in digital media promises to reshape the landscape of content creation, offering both challenges and opportunities. The ongoing dialogue between technology, creativity, and ethics will be pivotal in forging a future where AI-generated and human-created content not only coexist but also enhance our digital experiences in meaningful ways.

See:  Australia to Regulate High-Risk Artificial Intelligence

Meta's initiative to label AI-generated content on platforms like Facebook, Instagram, and Threads is a signal and big step towards ensuring transparency and trust online. This strategic move, aimed at distinguishing between synthetic and authentic content, if successful, will help establish sets a new standard for accountability and ethical practices in the tech industry.


NCFA Jan 2018 resize - Meta Seeks New Standards in Labeling AI-generated ContentThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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UK Digital Securities Sandbox: A Guide and Implications

UK Digital Sandbox | Feb 6, 2024

The UK's Digital Securities Sandbox Regulations Are A Catalyst for Global Fintech Innovation

The Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023, which came into effect on January 8, 2024 and introduces the UK's first digital securities sandbox, allowing firms to explore new technologies within a flexible legislative framework. The move is a clear signal of the UK's ambition to modernize its financial market infrastructure through digital asset technology, with a particular emphasis on distributed ledger technology (DLT).

The Role of DLT in Financial Market Infrastructure

DLT is at the heart of this legislative innovation. Its decentralized nature offers a transformative potential for the operation of central securities depositories and trading venues. By enabling direct ownership of investments and bypassing intermediaries, DLT could significantly enhance transparency and efficiency in the financial markets.

See:  UK Releases Digital Asset Consultation Results

The technology promises round-the-clock operations, near-instantaneous settlement, and the potential for new models of shareholding, trading, and settlement services.

Legal and Regulatory Adjustments

The implementation of the digital securities sandbox necessitates a series of legal and regulatory adjustments to ensure that digital transactions are recognized and facilitated within the UK's legal framework, addressing potential issues such as the registration of transfers and the maintenance of company records on a distributed ledger. Key areas of focus include amendments to:

Who Can Use the Sandbox and How Does It Work?

The sandbox is open to UK-established entities that meet specific eligibility criteria set out in the Financial Services and Markets Act 2023 (Digital Securities Sandbox) Regulations 2023. These entities include, but are not limited to, financial services firms, technology companies, and other organizations that are exploring innovative financial products, services, or business models that utilize digital securities and DLT.

  • Firms interested in participating in the digital securities sandbox must apply to enter the program. The application process involves submitting a detailed proposal of the technology or innovation to be tested, including how it intends to use DLT or other digital asset technologies within the financial market infrastructure. The proposal must also outline the objectives of the test, the expected outcomes, and how it aligns with the sandbox's goals.

See:  European Blockchain and DLT for SMEs Guide

  • To be accepted into the sandbox, applicants must demonstrate that they are UK-established entities and meet the eligibility criteria specified in the regulations. This includes the ability to show that the proposed innovation requires testing within the sandbox environment due to its novel or unique nature and that the firm has the necessary resources and plans in place to manage the test effectively.
  • Participants in the sandbox are allowed to test their innovations under a modified legislative framework. This means certain regulations may be applied, disapplied, or modified to facilitate the testing of new technologies. Firms must clearly understand which regulatory modifications apply to their test and ensure compliance with the sandbox's conditions.
  • Sandbox participants are required to provide regular updates (reporting) and feedback to the regulators, including the Financial Conduct Authority (FCA) and the Bank of England, if applicable. This includes reporting on the progress of the test, any challenges encountered, and the outcomes achieved. The regulators may also set specific evaluation criteria to assess the test's success and its potential impact on the market and consumers.
  • Firms must have a clear exit strategy for concluding their test within the sandbox. This includes plans for winding down the test in a way that minimizes any adverse effects on consumers and the market. Upon exiting the sandbox, firms may be required to submit a final report summarizing the test's findings and any next steps for implementing the innovation outside the sandbox environment.

See:  Bank of Canada, TMX say blockchain feasible for securities settlement

The sandbox offers a unique opportunity for firms to explore and develop innovative digital securities solutions within a supportive regulatory environment. By participating in the program, firms can contribute to the evolution of the UK's financial market infrastructure and potentially set precedents for future regulatory frameworks in the fintech sector.

Implications for Canadian and Global Fintech

The UK's digital securities sandbox offers valuable insights for Canada and the global fintech community. For Canadian fintech, this initiative serves as a model for how regulatory frameworks can evolve to support technological advancements while ensuring market stability.  While there are a number of sandbox programs across Canada, in the past industry experts have lamented that regulators are simply pushing interested parties to existing registration categories without being a full service digital sandbox that allows companies to 'test novel innovations' wholeheartedly with the support of regulators.  Perhaps the closest sandbox to the above definition is Alberta's Bill 13.  The Canadian Securities Administrators host the Financial Innovation Hub where you can learn more and reach out directly.  All of this highlights the importance of creating a conducive environment for testing and integrating new technologies like DLT.

Globally, the UK's approach underscores the need for international cooperation and the harmonization of legal and regulatory frameworks to facilitate the adoption of DLT and other fintech innovations. As financial markets become increasingly interconnected, establishing common standards and practices will be crucial for the seamless integration of new technologies across jurisdictions.

Next Steps and Future Innovations

The sandbox is set to operate for five years, until January 8, 2029, managed by the Financial Conduct Authority and the Bank of England.

See:  UK launches pioneering digital securities sandbox

This period will allow firms and regulators to collaboratively explore the capabilities and implications of DLT and other digital asset technologies within a controlled environment. The flexibility of the sandbox framework, coupled with the potential for HM Treasury to create further sandboxes with different configurations, opens the door to continuous innovation and adaptation in the UK's legal framework to accommodate emerging technologies.


NCFA Jan 2018 resize - UK Digital Securities Sandbox: A Guide and ImplicationsThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Circuit Breakers and Switches: Safeguarding Energy Flow

Feb 2, 2024

Unsplash Markus Spiske electrical switch box - Circuit Breakers and Switches: Safeguarding Energy Flow

Image: Unsplash/Markus Spiske

In the intricate web of electrical systems, the unsung heroes ensuring smooth operations are none other than circuit breakers and switches. These essential components stand as sentinels, guarding against overloads and regulating the flow of energy. This article delves into the pivotal roles of circuit breakers and switches, examining their functions, types, and the benefits of aligning with reputable energy brands.

The Role of Circuit Breakers

Circuit breakers protect electrical circuits from overloads, short circuits, and potential fire hazards. They act as a crucial barrier, automatically interrupting the flow of current when abnormal conditions are detected.

The Function of Switches

Switches, on the other hand, are devices used to open or close electrical circuits. They are the control points that allow us to turn on or off lights, appliances, and various electrical devices.

Types of Circuit Breakers and Switches

  1. Miniature Circuit Breakers (MCBs): Commonly used in residential and commercial settings, MCBs protect lower current circuits.
  2. Molded Case Circuit Breakers (MCCBs): Suitable for higher current applications, MCCBs offer adjustable trip settings for added versatility.
  3. Ground Fault Circuit Interrupters (GFCIs): Designed to protect against electric shock, GFCIs are essential in areas where water is present.
  4. Arc Fault Circuit Interrupters (AFCIs): AFCIs detect dangerous arcing conditions that can lead to fires, providing an extra layer of protection in homes.
  5. Residual Current Circuit Breakers (RCCBs): Specialized in detecting leakage current, RCCBs offer protection against electric shock.

Types of Switches

  1. Single-Pole Switches: These control one light or electrical device from a single location.
  2. Double-Pole Switches: They are used to control one light or device from two locations.
  3. Three-Way Switches: Typically used in hallways or large rooms, they allow control from three or more locations.
  4. Four-Way Switches: Used in conjunction with three-way switches, they allow control from four or more locations.

Safeguarding Energy Flow

The harmonious operation of electrical systems relies on the precise coordination of circuit breakers and switches. Circuit breakers act as sentries standing guard to prevent overloads and potential electrical hazards. Switches, meanwhile, grant us the power to control the flow of electricity, providing convenience and safety in our daily lives.

The Benefits of Partnering with Reputable Energy Brands

While the significance of circuit breakers and switches in electrical systems cannot be overstated, it's equally crucial to consider the broader impact on energy efficiency and sustainability. This is where partnering with reputable energy brands comes into play.

Reputable energy brands are pioneers in developing energy-efficient solutions for residential and commercial applications. They invest in research and innovation to create technologies that not only enhance the performance of circuit breakers and switches but also contribute to reducing overall energy consumption. By aligning with these brands, you gain access to cutting-edge solutions that drive efficiency and sustainability in your electrical systems.

Embracing a Safer, More Efficient Future

In embracing the significance of circuit breakers and switches, we not only optimize our electrical systems but also contribute to a safer, more sustainable future. By leveraging advanced technologies and partnering with reputable energy brands, we ensure that our electrical systems are not only efficient but also environmentally responsible. This commitment positions us as stewards of a safer, technologically advanced electrical landscape.

See:  Bitcoin’s Energy Blueprint for the AI Revolution

With circuit breakers and switches as our steadfast allies, we navigate the complex currents of electrical energy with confidence and precision. By recognizing and harnessing the power of these essential components, we ensure the safety and efficiency of our electrical systems for generations to come. Partnering with reputable energy brands elevates this commitment, propelling us towards a future where energy is not only abundant but also used with unparalleled efficiency and responsibility.


NCFA Jan 2018 resize - Circuit Breakers and Switches: Safeguarding Energy FlowThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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DoF Consultation: Help Modernize Canada’s SR&ED Program

Consultation | Feb 1, 2024

Canada's Department of Finance Seeks Input on Modernizing SR&ED Program and Introducing Patent Box Regime

The Scientific Research and Experimental Development (SR&ED) program in Canada is undergoing significant changes and consultations in 2024, with a focus on modernizing the program to better support research and development activities in Canada. The program has been a cornerstone of federal funding for innovation in the country, providing support to firms engaged in R&D activities and in the development of valuable intellectual property.

About SR&ED

The SR&ED program is a key part of Canada's innovation strategy, offering tax incentives to a wide range of businesses for their R&D activities. In 2021, it provided $3.9 billion to over 22,000 Canadian businesses.

See:  IP Box: Would a special IP income tax rate boost Canada’s flagging innovation?

  • A notable aspect of the SR&ED program is its comprehensive coverage of various eligible expenditures. These include labor costs, contractor fees, materials, and overhead expenses that directly relate to R&D activities aimed at resolving technological uncertainties or challenges.
  • The program offers different levels of funding for these expenses, such as up to 69% for eligible labour costs and up to 45% for materials consumed in R&D activities.
  • In terms of the application process, the reporting deadline for the SR&ED program is set at 18 months from the end of the tax year in which the qualifying expenses were incurred.
  • Additionally, there are also provincial and territorial variants, offering additional support with their own criteria and funding amounts. For instance, Canadian-Controlled Private Corporations (CCPC) may earn a refundable Investment Tax Credit (ITC) at the enhanced rate of 35% on qualified SR&ED expenditures up to $3 million.

Consultation

The review process for SR&ED involves gathering insights on how the program can better align with Canada's broader R&D goals. This includes exploring ways to enhance the retention of intellectual property within Canada, potentially through a patent box regime.

See:  CIC Launch Delayed Impacting Innovation Funding Landscape

Stakeholders from various sectors, including technology and research, are contributing perspectives, emphasizing the need for reforms to further incentivize innovation while ensuring the program's benefits extend across the Canadian economy.

1. Patent Box Regime

The Canadian government is consulting on the creation of a patent box regime to enhance research and development (R&D) and intellectual property (IP) retention in Canada. This consultation focuses on how such a regime might best support innovation, the specific design features of a patent box, and its integration with the broader tax system. The goal is to create a policy that incentivizes R&D and the commercialization of resulting IP in Canada.  For a detailed understanding of these consultation questions, you can visit the page here.

2. Cost Effective Ways to Modernize the SR&ED Program

The Canadian government is soliciting feedback on how to modernize and improve the program, focusing on its effectiveness in supporting R&D investments, refining eligibility criteria, enhancing the complementarity with other R&D support programs, targeting overall assistance more effectively, ensuring IP retention within Canada, simplifying access for entrepreneurs, and determining the best use of existing support. Stakeholders are invited to contribute their insights. For more information, you can visit the consultation page here.

See:  Canada’s Ranks 15th on WIPO 2023 Innovation Index

The government's ongoing review and consultation process for SR&ED is expected to further refine and enhance the program, ensuring that it effectively supports Canada's R&D landscape and positions the country as a leader in innovation.

Reaction

The Council of Canadian Innovators (CCI) issued a statement regarding the Department of Finance's announcement about reviewing the Scientific Research and Experimental Development (SR&ED) Tax Credit and exploring a patent box regime.

Nicholas Schiavo, CCI's Director of Federal Affairs, emphasized the critical role of the SR&ED tax credit in driving innovation and economic activity in Canada. CCI advocates for reforms to prioritize Canadian firms and expand eligibility criteria to cover intellectual property costs related to R&D. The potential patent box policy, aimed at boosting IP generation and commercialization in Canada, is also seen as a positive development. CCI remains optimistic about the consultation process and its implications for Canada's innovation economy.

Share Your Feedback By April 15, 2024

All Canadians and stakeholders are invited to share feedback by emailing SRED-PB-RSDE-RPB@fin.gc.ca by April 15, 2024, with either “SR&ED Review” or “Patent Box” as the subject line.


NCFA Jan 2018 resize - DoF Consultation: Help Modernize Canada's SR&ED ProgramThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Exploring ARK’s 2024 Big Ideas: AI & Fintech Future

Report | Feb 1, 2024

Ark Invest Big Ideas 2024 - Exploring ARK's 2024 Big Ideas: AI & Fintech Future

ARK Invest's "Big Ideas 2024" report outlines ambitious expectations for the evolution of key technologies by 2030 and their potential impacts by 2040.

While the 163 page PDF report covers a plethora of innovations and emerging and converging technologies, this article will look at specific projections providing a roadmap for how innovations in public blockchains, digital wallets, smart contracts, and artificial intelligence (AI) could transform industries and economies over the next decades.

Public Blockchains and Cryptocurrencies Are The Foundation of a New Financial Ecosystem

Public blockchains are set to redefine financial ecosystems by facilitating the migration of all money and contracts onto platforms that ensure digital scarcity and proof of ownership. This shift anticipates a significant reconfiguration of financial systems to accommodate cryptocurrencies and smart contracts, marking a transition towards a digital-first economy.

By 2030: Cryptocurrencies are anticipated to account for about 10% of the global money supply, driven by institutional and high net worth individual investments, nation-state treasuries, and adoption in emerging markets for remittances and global settlements. Cryptocurrencies, particularly Bitcoin, are expected to continue displacing gold as a store of value, capturing 40% of the market​​.  With a projected market value scaling to $5.2 trillion by 2030 for decentralized applications, the economic impact and investment opportunities within this domain are vast and ripe for exploration by fintech innovators and investors alike​​​​.

See:  Blockchain Private Credit Grew 55% in 2023

By 2040: Cryptocurrencies could largely replace permission-based, centrally controlled monetary systems, reformulating financial ecosystems around digital assets that facilitate transaction flows without counterparty risk. This transformation could begin at the fringes of the financial system, particularly in geographies with inefficient banking systems, and gradually extend to developed markets​​.

Digital Wallets Are Revolutionizing Payment Ecosystems

By 2030: Digital wallets are likely to become primary financial interfaces for the majority of smartphone users, facilitating more than half of all meaningful financial functions. These platforms are projected to disrupt traditional banking relationships by offering wholesale pricing of financial services and becoming pivotal in e-commerce and other digital services​​​​.

By 2040:  Digital wallets are projected to close the loop with two-sided networks, offering a suite of financial services tailored to the needs of specific industries. They could enable fully closed payment ecosystems, with platforms like Block, Shopify, and Toast potentially leveraging digital wallets to facilitate transactions and monetize deposits​​. Vertical software platforms serving merchants with financial services through digital wallets are expected to disintermediate merchant banking, significantly enhancing convenience and reducing the number of steps from payment authorization to merchant settlement​​.

Smart Contracts Will Automate the Future of Finance

Smart contracts present an automated, global, and auditable alternative to traditional financial intermediaries, offering a transparent and efficient way to manage contracts and transactions on the blockchain.

See:  Blockchain Smart Bonds

By 2030:  Smart contracts are projected to secure less than 5% of global financial assets by GDP through decentralized protocols, a rate consistent with the early adoption curve of the internet. These protocols, along with application protocols, are expected to significantly reduce the fees extracted by traditional financial institutions, fostering a more efficient and transparent financial ecosystem​​​​.

By 2040:  Most contracts might migrate to open-source protocols that enable and verify digital scarcity and proof of ownership, diminishing the role of traditional financial intermediaries. This shift could lead to more transparent risk-sharing arrangements, easier asset securitization, and a substantial decrease in counterparty risks​​​​.

AI Innovation Is Surging (Today)

AI technology has rapidly evolved, transitioning from simple machine learning algorithms to complex neural networks capable of deep learning and reasoning. This evolution is marked by the development of models like GPT-3 and GPT-4, which have demonstrated capabilities close to human-level language understanding and generation. GPT-3, released by OpenAI, contains 175 billion parameters, making it one of the largest and most sophisticated language models ever created.

AI is already enhancing productivity across various sectors. Tools like GitHub Copilot and AI-driven analytics platforms are automating routine tasks, allowing humans to focus on more complex and creative endeavors. GitHub Copilot has been shown to improve programmer productivity by assisting in code generation and debugging, significantly reducing development time.

Achieving New Heights (2024-2030)

By 2030, AI is expected to dramatically increase the productivity of knowledge workers. As AI becomes more integrated into business processes, tasks that currently take hours will be accomplished in minutes.  ARK Invest predicts that knowledge worker productivity will quadruple leading to unprecedented growth in GDP and innovation, fostering new industries and reshaping existing ones.

See:  Australia to Regulate High-Risk Artificial Intelligence

AI in healthcare is set to revolutionize diagnosis, treatment, and patient care by enabling precision medicine and reducing human error. Multiomic data analysis and AI-driven diagnostic tools will offer personalized treatment plans with higher efficacy. AI algorithms are already outperforming human radiologists in detecting certain types of cancer in imaging scans, promising more accurate and earlier diagnoses.

The World Will Be Transformed by AI (2030-2040)

By 2040, AI could become a universal personal assistant, deeply integrated into daily life. From managing schedules to making informed decisions on behalf of users, AI assistants will offer a level of personalization and efficiency previously unimaginable. The integration of AI in smart devices and home systems will make smart homes truly autonomous, adjusting to individual preferences for comfort, security, and energy efficiency without human input.

Future AI systems will not only optimize tasks but also engage in creative processes, contributing to art, literature, and science. AI-driven creativity tools could collaborate with humans to produce novel works and solve complex scientific problems.  AI-generated art and music are already blurring the lines between human and machine creativity, suggesting a future where AI partnerships could lead to new artistic movements and scientific breakthroughs.

See:  Metacrime in the Metaverse

As AI becomes more pervasive, ethical considerations and governance will take center stage. The development of transparent, fair, and accountable AI systems will be critical to addressing concerns around privacy, bias, and autonomy. Ensuring AI systems make decisions in a way that aligns with human values and ethics requires ongoing research, regulation, and dialogue between technologists, policymakers, and the public.

Beyond 2040 AI Horizon

The concept of the singularity—where AI surpasses human intelligence in all aspects—remains a potent idea for the future. The path toward such an event will be marked by incremental advances, each expanding the boundary of what's possible with AI.  The journey toward superintelligent AI poses profound questions about identity, consciousness, and the future of humanity itself, inviting us to reimagine our place in a world where intelligence is no longer uniquely human.

Conclusion

By 2040, these technologies are expected to reshape not just industries and economies, but also the very fabric of daily life, presenting both unparalleled opportunities and challenges.


NCFA Jan 2018 resize - Exploring ARK's 2024 Big Ideas: AI & Fintech FutureThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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