With majority control of the Senate at stake, it’s no surprise that the recent Georgia runoff elections were the most expensive political race in American history. Wherever campaign dollars flow freely, as they did in Georgia, accountability questions proliferate. Where did that money come from, where did it go, and what influence (if any) did those spending choices have on results?
Election law requires that campaign expenditures be made public. Even so, it often takes weeks or even months for analysts to sift through a dense forest of information and build usable datasets. Important decisions have to wait; only after a dataset has been given the green light can anyone even begin to search for associated outcomes and trends.
Many have wondered whether there is a legitimate place for artificial intelligence in harvesting public data repositories. Can machine-generated data really be trusted? And even if it can be, can it replace human analysts?
When Data is Public but Nearly Useless
Each TV and radio station is required to carbon-copy invoices for political advertisements to the Federal Communications Commission, which makes them public record. This sounds great on paper, but the FCC mandate is to merely publish the invoice documents — and each election comes with tens of thousands of invoices.
The invoices are important because of the dates, callsigns, and amounts listed on them page by page. The data allows analysts to build spending maps and scrutinize campaign behaviors, but the data needs to be aggregated in a spreadsheet first. A spreadsheet analysis would ordinarily mean going through this massive amount of invoices by hand.
A Better Use of Data
Of course, it’s not just the FCC receiving invoices — all businesses receive invoices when they trade with each other. Any company of size faces the same problem as the data analysts who would like to use the FCC data.
One automation software company that solves the problem of translating business documents to data for enterprises decided to unleash its automatic data capture on the FCC invoices for the Georgia runoff elections. The vendor Rossum, in partnership with analysts from the e.ventures fund, just published the resulting data set.
AI-Powered Reporting Follows the Money
Ever since the 1976 film “All the President’s Men,” many of us have internalized the admonition to “follow the money.” The practice remains a tried-and-true method for discovering unseen relationships and shedding light on patterns of activity and motivations that we might otherwise miss.
Data capture technology cannot read the minds of campaign managers — something for which we can all be thankful. But the new breed of automation based on artificial intelligence might at least enhance our ability to better see the tracks they’ve left.
Accelerating Data Collection
In addition to eliminating the time-consuming tedium of keystrokes and accelerating data collection, policy analyst Jordan Shapiro found that Rossum’s processing of the Georgia spending data produced a greater degree of granularity. This granularity, in turn, enabled her to better grasp the thinking that lay behind decisions made by the various campaigns.
Following the Spend
“As a political analyst, Rossum’s data about 2020 Georgia runoff election spending gave me the opportunity to get inside the heads of the campaigns to see which areas they thought were more or less competitive based on how much each candidate spent in that region,” says Shapiro. “Particularly helpful for my work was the ability to compare county-level spending patterns with a shift in vote share between November and January.”
Data Suggests a Shift from Red to Blue
Southern states have historically been fertile territory for Republicans seeking election, but that appears to be changing.
An NPR report from January 2020 found more Black Americans are moving south, and as they relocate, they are contributing to a shake-up in election results. In 2000, Rockdale County (southeast of Atlanta), for example, was a predominantly white area with a Black population of approximately 18%. Today, that same area has a 55% Black occupancy.
Shapiro notes that Georgia’s changing demography, heavy campaign spending by Democrats, increased voter mobilization at the grassroots level, and a tumultuous national political stage all played a hand in what many saw as upset victories. Political turmoil and civic unrest on the national scene rocked Republicans and set the stage for Democratic wins. Both races were reasonably close, with Ossoff winning his race by about 55,000 votes and Warnock winning his with around 93,000 votes.
Regardless, Rossum’s analysis found something even more important than spending-outcome correlations: reasons to default to AI-driven analysis.
Why AI-Enhanced Reporting Will Be Big
The mandatory availability of campaign spending records affords skeptics and naysayers an opportunity to fact-check any reporting that emerges after an election. Reports that have been compiled using AI-powered scanning techniques can be fact-checked just as easily as traditional reports constructed by workers furiously pounding away on keyboards.
As AI-powered processes continue to improve, confidence in this newer methodology is certain to grow as well. As that happens, voters can expect to see more accurate, useful information in the run-up to Election Day.
AI-driven reporting benefits democracy in at least four ways:
1. Enhanced Transparency of Public Data
Much data is the subject of public record, but too often, it is not readily available for analysis and therefore carries only a fraction of its potential. The problem with campaign spending records is that key dates and amounts are scattered through scanned documents instead of being aggregated in a spreadsheet that can be readily analyzed for new insights. This problem is common for many registries, FoIA data releases, and internal government operations.
2. Rapid Data Analysis
The speed advantage of AI-enabled reporting systems over traditional methods of computation will make relevant data available much earlier than in past election cycles. Earlier delivery of results could, in turn, open up new options for campaign managers to consider as constituents respond favorably or negatively to various messages.
3. Added Depth and Surfacing of Less-Obvious Correlations
As noted above, Shapiro was able to take Rossum reporting on election data and cross-reference it with migration data. In doing so, she discovered a trend in specific Georgia counties shifting from presumed Republican strongholds to surprise Democratic wins.
4. More Informed Policymaking and Decisions
Tightening the link between election results and policymaking can serve as a check on any politician’s temptation to drift away from the will of the people they serve. A democratically elected official can only disregard his or her mandate for so long. Faster access to accurate information allows voters more time to assess a politician’s voting record.
What’s Coming in 2022
With another election cycle coming entirely too soon, keep an eye out for new applications of AI. Both parties will use the technology to unearth patterns, analyze results, and suggest new political strategies. Policymakers will check proposals against their constituents’ latest voting trends.
Will 2022’s political environment be any less fraught than the 2020s? Maybe not — but it will be more data-driven.
Image credit: edgar colomba; pexels
Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!