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New business models, big opportunity: Financial services

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New business models, big opportunity: Financial services


More motivated than ever, organizations in all industries are ready to cut expenses that lack a clear return on investment. So it’s no surprise that survey respondents highlight computing projects—all highly measurable— as priorities in their 2021 plans. Among financial services institutions, 62% are looking to ramp up tech investments, and another 62% expect to move IT and business functions to the cloud, compared with 46% across industries. In a recent report, Nucleus Research found that cloud deployments deliver four times the return on investment as on-premises deployments do.

Planning beyond the pandemic

The Guardian Life Insurance Company of America is an exemplar of a progressive cloud adopter—it’s now moving many of its core financial systems to the cloud. The insurer was motivated to do so—an internal study had found several opportunities, including insufficient data management, a need for lower-level data for better analytics, a lack of system integration, and manual reconciliation issues. “These pain points helped create the need for a new system,” says Marcel Esqueu, assistant vice president for financial systems transformation at Guardian. “We looked at moving to the cloud about five years ago, but we didn’t think it was ready.” Now the company deems cloud services mature enough to support the advanced functionality it requires.

Financial institutions are also looking at mergers and acquisitions as a path beyond pandemic survival. In fact, according to a Reuters report, such deals were up 80% in July, August, and September 2020 from the previous fiscal quarter to hit a whopping $1 trillion in transactions. In the MIT Technology Review Insights survey, 41% of financial services execs report that their organizations acted on a business merger or acquisition or will do so over the coming year.

“People have realized they need to consolidate to create stronger and better-equipped businesses to deal with what the world looks like going forward,” says Alison Harding-Jones, managing director at Citigroup, in the Reuters report.

Mergers and acquisitions have long been a way for an organization to expand its core business—or even gain expertise in emerging technologies. For example, while many financial institutions buy business software with built-in artificial intelligence (AI) capabilities, Mastercard acquired a Canadian AI platform company called Brighterion in 2017 to provide “mission-critical intelligence from any data source,” says Gautam Aggarwal, regional chief technology officer (CTO) at Mastercard Asia-Pacific. The company first used Brighterion’s technology for fraud detection but now puts it to work in credit scoring, anti-money laundering, and the company’s marketing efforts. “We’ve really taken Brighterion and applied it not just for the payment use case but beyond,” says Aggarwal.

Business change, outside and in

Indeed, organizations have had to innovate and respond fast to survive in the covid economy. In the survey, 81% of organizations across industries have evaluated new business models in 2020 or are planning to launch them over the next year. Among financial services institutions, improving the customer experience is paramount, with 55% reporting that they’re improving the experience they offer their customers, compared with 35% across industries.

That’s true for Jimmy Ng, group chief information officer (CIO) at Singapore-based DBS Bank. When physical branches closed during lockdowns, DBS customers— like other bank patrons the world over—did their banking online. But some of them did so only because they had to. “The question is whether this group of people will continue staying on the digital channel.” So DBS is exploring ways to keep customers who prefer in-person service engaged, exploring technologies such as augmented and virtual reality and the 5G mobile network, which enables superfast connections. “How do we enable a joyful customer journey in this remote way of engagement?”

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This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by MIT Technology Review’s editorial staff.

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The hunter-gatherer groups at the heart of a microbiome gold rush

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The hunter-gatherer groups at the heart of a microbiome gold rush


The first step to finding out is to catalogue what microbes we might have lost. To get as close to ancient microbiomes as possible, microbiologists have begun studying multiple Indigenous groups. Two have received the most attention: the Yanomami of the Amazon rainforest and the Hadza, in northern Tanzania. 

Researchers have made some startling discoveries already. A study by Sonnenburg and his colleagues, published in July, found that the gut microbiomes of the Hadza appear to include bugs that aren’t seen elsewhere—around 20% of the microbe genomes identified had not been recorded in a global catalogue of over 200,000 such genomes. The researchers found 8.4 million protein families in the guts of the 167 Hadza people they studied. Over half of them had not previously been identified in the human gut.

Plenty of other studies published in the last decade or so have helped build a picture of how the diets and lifestyles of hunter-gatherer societies influence the microbiome, and scientists have speculated on what this means for those living in more industrialized societies. But these revelations have come at a price.

A changing way of life

The Hadza people hunt wild animals and forage for fruit and honey. “We still live the ancient way of life, with arrows and old knives,” says Mangola, who works with the Olanakwe Community Fund to support education and economic projects for the Hadza. Hunters seek out food in the bush, which might include baboons, vervet monkeys, guinea fowl, kudu, porcupines, or dik-dik. Gatherers collect fruits, vegetables, and honey.

Mangola, who has met with multiple scientists over the years and participated in many research projects, has witnessed firsthand the impact of such research on his community. Much of it has been positive. But not all researchers act thoughtfully and ethically, he says, and some have exploited or harmed the community.

One enduring problem, says Mangola, is that scientists have tended to come and study the Hadza without properly explaining their research or their results. They arrive from Europe or the US, accompanied by guides, and collect feces, blood, hair, and other biological samples. Often, the people giving up these samples don’t know what they will be used for, says Mangola. Scientists get their results and publish them without returning to share them. “You tell the world [what you’ve discovered]—why can’t you come back to Tanzania to tell the Hadza?” asks Mangola. “It would bring meaning and excitement to the community,” he says.

Some scientists have talked about the Hadza as if they were living fossils, says Alyssa Crittenden, a nutritional anthropologist and biologist at the University of Nevada in Las Vegas, who has been studying and working with the Hadza for the last two decades.

The Hadza have been described as being “locked in time,” she adds, but characterizations like that don’t reflect reality. She has made many trips to Tanzania and seen for herself how life has changed. Tourists flock to the region. Roads have been built. Charities have helped the Hadza secure land rights. Mangola went abroad for his education: he has a law degree and a master’s from the Indigenous Peoples Law and Policy program at the University of Arizona.

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The Download: a microbiome gold rush, and Eric Schmidt’s election misinformation plan

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The Download: a microbiome gold rush, and Eric Schmidt’s election misinformation plan


Over the last couple of decades, scientists have come to realize just how important the microbes that crawl all over us are to our health. But some believe our microbiomes are in crisis—casualties of an increasingly sanitized way of life. Disturbances in the collections of microbes we host have been associated with a whole host of diseases, ranging from arthritis to Alzheimer’s.

Some might not be completely gone, though. Scientists believe many might still be hiding inside the intestines of people who don’t live in the polluted, processed environment that most of the rest of us share. They’ve been studying the feces of people like the Yanomami, an Indigenous group in the Amazon, who appear to still have some of the microbes that other people have lost. 

But there is a major catch: we don’t know whether those in hunter-gatherer societies really do have “healthier” microbiomes—and if they do, whether the benefits could be shared with others. At the same time, members of the communities being studied are concerned about the risk of what’s called biopiracy—taking natural resources from poorer countries for the benefit of wealthier ones. Read the full story.

—Jessica Hamzelou

Eric Schmidt has a 6-point plan for fighting election misinformation

—by Eric Schmidt, formerly the CEO of Google, and current cofounder of philanthropic initiative Schmidt Futures

The coming year will be one of seismic political shifts. Over 4 billion people will head to the polls in countries including the United States, Taiwan, India, and Indonesia, making 2024 the biggest election year in history.

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Navigating a shifting customer-engagement landscape with generative AI

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Navigating a shifting customer-engagement landscape with generative AI


A strategic imperative

Generative AI’s ability to harness customer data in a highly sophisticated manner means enterprises are accelerating plans to invest in and leverage the technology’s capabilities. In a study titled “The Future of Enterprise Data & AI,” Corinium Intelligence and WNS Triange surveyed 100 global C-suite leaders and decision-makers specializing in AI, analytics, and data. Seventy-six percent of the respondents said that their organizations are already using or planning to use generative AI.

According to McKinsey, while generative AI will affect most business functions, “four of them will likely account for 75% of the total annual value it can deliver.” Among these are marketing and sales and customer operations. Yet, despite the technology’s benefits, many leaders are unsure about the right approach to take and mindful of the risks associated with large investments.

Mapping out a generative AI pathway

One of the first challenges organizations need to overcome is senior leadership alignment. “You need the necessary strategy; you need the ability to have the necessary buy-in of people,” says Ayer. “You need to make sure that you’ve got the right use case and business case for each one of them.” In other words, a clearly defined roadmap and precise business objectives are as crucial as understanding whether a process is amenable to the use of generative AI.

The implementation of a generative AI strategy can take time. According to Ayer, business leaders should maintain a realistic perspective on the duration required for formulating a strategy, conduct necessary training across various teams and functions, and identify the areas of value addition. And for any generative AI deployment to work seamlessly, the right data ecosystems must be in place.

Ayer cites WNS Triange’s collaboration with an insurer to create a claims process by leveraging generative AI. Thanks to the new technology, the insurer can immediately assess the severity of a vehicle’s damage from an accident and make a claims recommendation based on the unstructured data provided by the client. “Because this can be immediately assessed by a surveyor and they can reach a recommendation quickly, this instantly improves the insurer’s ability to satisfy their policyholders and reduce the claims processing time,” Ayer explains.

All that, however, would not be possible without data on past claims history, repair costs, transaction data, and other necessary data sets to extract clear value from generative AI analysis. “Be very clear about data sufficiency. Don’t jump into a program where eventually you realize you don’t have the necessary data,” Ayer says.

The benefits of third-party experience

Enterprises are increasingly aware that they must embrace generative AI, but knowing where to begin is another thing. “You start off wanting to make sure you don’t repeat mistakes other people have made,” says Ayer. An external provider can help organizations avoid those mistakes and leverage best practices and frameworks for testing and defining explainability and benchmarks for return on investment (ROI).

Using pre-built solutions by external partners can expedite time to market and increase a generative AI program’s value. These solutions can harness pre-built industry-specific generative AI platforms to accelerate deployment. “Generative AI programs can be extremely complicated,” Ayer points out. “There are a lot of infrastructure requirements, touch points with customers, and internal regulations. Organizations will also have to consider using pre-built solutions to accelerate speed to value. Third-party service providers bring the expertise of having an integrated approach to all these elements.”

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