The federal government is working with a Canberra-based company to trial machine learning technology that aims to detect pests at Australian shipping ports.

The trial is being implemented in partnership with the Department of Industry, Science, Energy and Resources, the Department of Agriculture, Water and the Environment, Australian company Trellis Data, and global logistics company DP World, in Brisbane.

The technology will stop pests from breaching biosecurity processes at Australia’s container ports by detecting invasive species that are less than 10 millimetres in size, according to Trellis.

“The technology allows pests to be detected on the outside of every container that is transported from ship to shore in Australia. It also has the same detection capability for any internal container inspections required by biosecurity authorities,” the company told The Mandarin.

“The software works in all environments 24/7, identifying pests in real-time. Not only does it identify pests, it explains its reason for the identification and ensures all detections are correctly associated with the individual container ID.”

A recent CSIRO report found the amount of biosecurity risk materials intercepted in Australia increased by almost 50% in the five years to 2017. It warned that outbreaks across biosecurity sectors “are continuing to rise in volume and complexity”, and called for transformational changes to Australia’s biosecurity system.

The CSIRO noted that greater levels and speed of global trade would create new opportunities for pests and diseases to enter and spread across Australia.

Trellis said that initial progress has shown “very promising” results. The first official trial figures are expected to be released in May, with final evaluation to be completed by the end of the year.

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Why has data analytics become so critical in the current times, particularly for the payments industry?

Data analytics help tapping the power of data by using tools and technologies to find patterns that yield insights. It’s these insights that businesses and governments find truly actionable, especially in uncharted times when there is no rear view or past trends. Its problem-solving prowess becomes an essential navigational tool.

The payments industry generates lots of data that is helpful and important for governments and businesses to make informed decisions for fraud prevention, risk exposure assessment, improved customer service, better customer targeting and top channel performance. In the current data-driven era, analytics can support businesses optimise, streamline and grow, as well as deliver value to consumers during and post-Covid.

How is Mastercard all set to leverage big data analytics for business in a post-Covid world?

At Mastercard, our analytics platforms enable organisations globally to make faster and better business decisions based on real-time, anonymised and aggregated transaction data and proprietary analysis.

We generate insights through a comprehensive array of software platforms and services that provide solutions to the core challenges faced by the businesses today. We enable customers to innovate strategically and distil insights from this data through software platforms and industry expertise, driving strong consumer connections.

Today, we are working closely with various banks, governments and businesses by making insight-driven tools available to them to give a timely snapshot of economic performance and help them make informed decisions critical to the long-term success of companies and communities around the world.

To cite an example, when a quick-service restaurant chain in Asia Pacific was at a financial loss, data based insights allowed the restaurant chain to focus resources on those outlets that had a better chance of rebounding with aligned timings and menu options of work-from-home habits and tailored promotions for larger transaction volumes.

In another instance, we leveraged our data driven proprietary platforms to help an international airline that saw bookings drop 60 percent and continued to fall precipitously toward an overall drop of 90 percent across the entire travel and hospitality sector in the airline’s country of origin. With relevant insights on price reduction, trip duration, the immediacy of departure and fare type, the airline saw a potential 30 percent increase in international bookings resulting in a 25 percent increase in revenue on economy routes over control routes. With a better understanding of how fare conditions influence uptake, the airline is now manoeuvring further as more travel routes open.

What are your key implementations and how is it contributing in providing seamless services to your customers?

As I mentioned above, our analytics platforms enable organisations globally to make faster and better business decisions based on real-time, anonymised and aggregated transaction data and proprietary analysis by:
• Providing customers across industries and geographies with a tailored portfolio of solutions to address pain points across their businesses
• Harnessing the power of anonymized and aggregated transaction data, analytics and expertise to create global, actionable insights, enable more intelligent decisions and drive predictive capabilities
• Prioritising customer-centricity and the user experience by delivering convenience: speed, ease of use and personalisation

To cite an example; our application Intelligent Targeting helps boost efficiency, effectiveness and ease of acquisition by leveraging insights and expertise to design, execute and optimise acquisition campaigns for high-value customers and Business Locator provides the most accurate, up-to-date view of Mastercard-accepting merchants open for business on any given day.

Similarly, Acquirer Intelligence Center enables pre-defined analytics on portfolio performance across volume, fraud, and authorisation, compared to custom benchmarks for a full view of business performance and actionable insights.

In the last few months, we have been committed to leverage this expertise and help retailers, restaurants, consumer brands and many others navigate the challenges of the pandemic. Our customers need our services more than they ever needed as they need to act fast while they are taking multiple recovery actions across the globe. Since cross border travel has been hit the hardest in this pandemic, we are trying to help the customers on gradually building up domestic solutions as alternatives before the international travel across the world resumes.

For instance, we used data analytics on transactional data to help a financial institution count and counter the Covid-19 impact with a report outlining year-over-year shifts in spending broken down by day relevant subcategories was provided along with a quantitative financial assessment on clients’ businesses. This was followed by drawing up likely scenarios in terms of mitigating actions and growth opportunities.

We recently introduced a portal, www.shopopenings.com in UK to help people and businesses manage the transition from the lockdown by providing searchable information about merchant establishments that have re-opened. This is based on successful Mastercard card transactions at the relevant stores within the last 48 hours and up to the previous seven days.

Another instance, when an Asian country wanted to understand the impact of the lockdown on its economy it chose to analyse transaction data. Changing consumption patterns indicated the sectors that had been most affected.

Please share how you are setting high benchmarks in terms of data security and safety ? If you can give some examples.

We live in an increasingly interconnected world. On an average, a household has around 8 connected devices and an organisation has 100s. The attack surface that a cybercriminal can exploit grows with every device and so does the complexity of managing cyber security.

Mastercard strives to deliver best in class user experience that is safe, secure and fits well with customer’s needs. We have been leveraging latest mobile and AI tools to build an environment with highest levels of security. Our latest acquisition, RiskRecon, can monitor the cybersecurity performance of organisations using open-source intelligence by deploying passive, non-interfering techniques to discover organisation’s public systems and to analyse the cybersecurity risk posture of those systems. These scans can be completed easily without any technical help without any access to data or integration with existing systems. This helps in increasing the frequency of the scans without any disruption to business. We believe that these capabilities will help organisation identify gaps before the criminals and also address risks with the (aforementioned) expanding scope of cyber security.

Your views / any other significant factor.

We established ‘Data & Services Centre of Excellence’ in India, in 2013, to support Mastercard foreign group entities. The aforesaid support includes providing of data insights and strategic payment solutions by identifying spending trends derived from the billions of anonymous transactions processed by Mastercard every year.

Our Centre has recruited qualified analytics talent with payments industry, retail, technology and media experience to provide hands-on support to Mastercard foreign group entities on custom analytics.

The COE provides data insights by analysing spending trends derived from the 73 billion anonymous transactions processed by Mastercard and specific customer shared data elements, every year. Along with insights and analytics, this group also supports in data driven consulting.

New-age technology is witnessing a steady growth in India. Keeping that in mind, we (under the guidance and instructions of the Mastercard foreign group entities) established Artificial Intelligence Garage at the start of last year with an aim to enhance existing solutions as well as create new ones. With this, we embarked on an expansion and reskilling programme focused on AI where we are hiring experienced AI professionals as well as fresh computer science graduates and training them in this new-age technology.

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WEST LAFAYETTE, Ind. — Purdue University will host the Big Data, Safe Food Conference online on Oc. 12-15. The conference will explore the intersection of big data and food safety through conversations with experts from industry, government and academia.

Ariana Torres, assistant professor of horticulture and landscape architecture and agricultural economics, who is one of the conference organizers, said the event will explore how stakeholders can collaborate to make food safer.

“The main question the conference will focus on is how can as academia, industry and government entities collaborate to address and prevent foodborne diseases using data collected from farm to fork. Food has a long and complex supply chain, and we need to discuss how big data can influence food safety, along with who manages and shares these data points,” Torres said.

Sessions will focus on foodborne pathogen contamination, data science applications specific to the food industry, traceability of food products and translation of big data to consumer impacts. Andrew Kennedy, Office of Food Policy and Response at the U.S. Food and Drug Administration, will deliver the conference’s keynote speech.

Dennis Buckmaster, professor of agricultural and biological engineering and Dean’s Fellow for Digital Agriculture, said he looks forward to a meeting of the minds from many different sectors.

“Improved data flow, coupled with data analytics and artificial intelligence, has tremendous potential to improve food safety,” Buckmaster added. “We hope this conference helps attendees identify technologies and approaches in sensing and control that could nicely complement blockchain and traceability for both marketing and safety.”

Attendees at the Big Data, Safe Food conference will contribute to drafting a plan of action that combines scholarship, research and possible industry opportunities. A session at the end of each day will facilitate this.

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Undercover operatives and agents play a crucial role in preventing and safeguarding victims from the most serious crimes, including terrorism. In order to gain the trust of those under investigation, there are occasions where they need to participate in criminality themselves. This is a long-standing capability which remains critical for national security.

The Covert Human Intelligence Sources Bill provides certainty to public authorities already using this critical capability and confirms a common set of safeguards by which they are bound, including compliance with Human Rights.

Debt of gratitude

Security Minister James Brokenshire said: “We owe a huge debt of gratitude to the men and women who put themselves in often dangerous situations in order to protect our national security and keep the public safe. In the course of this vital work, it may be necessary for agents to participate in criminal activity in order to gain the trust of those under investigation. This is a critical capability and subject to robust and independent oversight. It’s important that those with a responsibility to protect the public can continue this work, knowing that they’re on a sound legal footing to do so.”

Ken McCallum, director general of MI5, stated: “Throughout MI5’s history, human agents have played a critical role in helping to protect the UK from terrorist threats and hostile activity by states. Since March 2017, MI5 and Counter-Terrorism Policing have together thwarted 27 terror attacks. Without the contribution of human agents, be in no doubt that many of these attacks would not have been prevented. In some situations, it’s both necessary and proportionate to authorise agents to be involved in some managed level of criminal activity in order to win or maintain the trust of those intent on harming the UK and gain the critical information needed to save lives.

This power, carefully used and independently overseen, is vital such that we can continue to meet our duty to keep the public safe.”

Express power

DAC Graham McNulty, Covert Human Intelligence Sources lead at the National Police Chiefs’ Council, explained: “We welcome the creation of an express power which will ensure policing can continue to deploy this vital tactic against the most harmful offenders. From terrorists to violent gangs and organised criminals who seek to harm the most vulnerable in society, this Government Bill will help us to disrupt their activities and keep our communities safe.”

Lynne Owens, director general of the National Crime Agency, commented: “We lead the UK’s fight to cut serious and organised crime, focusing on the most determined criminals who dominate communities through violence linked to drugs and firearms supply, who abuse the vulnerable and who threaten the UK’s economic security and institutions. Law enforcement has long used Covert Human Intelligence Sources to help thwart the most serious criminal threats to our nation and its partners.”

Owens went on to state: “Only when it’s absolutely necessary and proportionate will we authorise our Covert Human Intelligence Sources to be involved in a limited form of criminal activity. This is done with great care and scrutiny. Without this capability we would not be able to bring to justice criminals and their groups who conspire to harm the UK and its citizens. We welcome this new legislation which puts this crucial capability on a firm foundation.”

Robust oversight

Robust independent oversight is provided by the Investigatory Powers Commissioner, namely Sir Brian Leveson, who carries out regular inspections and publishes an Annual Report on the findings for public consumption.

This capability is supported by the courts, with the Investigatory Powers Tribunal (in its recent supportive judgment on the use of Covert Human Intelligence Sources participation in criminal conduct) noting that: “The policy… has been exercised with scrupulous care by the Security Service so as to discharge its essential functions in protecting national security, while also giving proper regard to the Human Rights of persons who may be affected by the activities of agents.”

The Investigatory Powers Commissioner has also commented that, with regards to MI5, “in every case that we examined… the activity authorised was proportionate to the anticipated operational benefits”.

The public authorities that will be authorised under the Bill are the UKIC, the police service, the National Crime Agency, the Home Office (immigration and borders functions), Her Majesty’s Revenue and Customs, HM Forces and their police, the Ministry of Justice (HMPPS), the Competition and Markets Authority, the Environment Agency, the Financial Conduct Authority, the Food Standards Agency, the Gambling Commission, the Medicines and Healthcare Regulation Authority and, last but not least, the Serious Fraud Office.

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The Morrison Government has today released a voluntary Code of Practice to improve the security of the Internet of Things (IoT) in Australia – including everyday devices such as smart fridges, smart televisions, baby monitors and security cameras.

Minister for Home Affairs Peter Dutton said cyber security has never been more important to Australia’s economic prosperity.

“Internet-connected devices are increasingly part of Australian homes and businesses and many of these devices have poor security features that expose owners to compromise,” Mr Dutton said.

“Manufacturers should be developing these devices with security built in by design.

“Australians should be considering security features when purchasing these devices to protect themselves against unsolicited access by cybercriminals.”

Minister for Defence Senator the Hon Linda Reynolds CSC said the Australian Signals Directorate’s Australian Cyber Security Centre (ACSC) has today also released quick and easy tips to help Australian consumers protect themselves against cyber threats when buying and using internet-connected devices.

“Boosting the security and integrity of internet connected devices is critical to ensuring that the benefits and conveniences they provide can be enjoyed without falling victim to cybercriminals,” Minister Reynolds said.

When purchasing and setting up an IoT device, some of the questions families and businesses should ask are:

1. Is the device made by a well-known reputable company and sold by a well-known reputable company?
2. Is it possible to change the password?
3. Does the manufacturer provide updates?
4. What data will the device collect and who will the data be shared with?

The ACSC has also produced guidance for manufacturers on how to implement the loT Code of Practice.

The Code of Practice is a key deliverable as part of the 2020 Cyber Security Strategy and has been developed in close partnership with industry following nation-wide consultation earlier this year. It outlines the cyber security features the Government expects of internet-connected devices available in Australia.

The Code of Practice also aligns and builds upon guidance provided by the United Kingdom, and is consistent with other international standards.

The Australian Government will continue to explore further initiatives for lifting the security of the Internet of Things and making Australia the safest place to connect online.

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Before moving forward, with the advancements of AI, it has become imperative to acknowledge the biases ingrained in the AI models.

The death of George Floyd, Breonna Taylor, and Ahmaud Arbery in the USA has raised many brows towards existing biases in society. The unfortunate events have not only made authorities and government to reckon about their systemic strategy towards this loophole of the society but has also made many organizations to take cognizance that AI might have similar biases.

With the recent announcement of Amazon’s halt of providing Facial Recognition kits to the US police department for a year, it is apparent that despite its advantageous use, biases in AI are perilous. IBM trailed the same like Amazon, by abandoning the study about Facial recognition.

Understanding the AI Biases

Any technology that helps in human advancements has some flaws. While it profits society, its defects can be precarious to the improvement of the society. And AI is not foreign to these flaws. It has, what many activists, organizations, and studies imply, a system that has put the society on a pedestal. That’s why it becomes imperative to acknowledge and understand these biases.

Facial Recognition is used in day to day life. Be it as a mobile phone application, or used by organizations to identify their employees, its use is vast, useful, and dangerous.

An MIT study on Gender Shades revealed that the AI-based facial recognition system developed by companies such as IBM, Microsoft, and Face plus are more inclined towards recognizing lighter-skinned individuals as compared to darker skin. It further revealed that all companies performed better on lighter skins as compared to dark-skinned individuals, having a difference of 19.2%. Also, the study suggests an error difference of 34.4% for lighter males and darker females.

The example of this type of facial recognition bias can be confirmed by citing the incident when a facial recognition system failed to recognize Oprah Winfrey and when a Brown student was misidentified as a suspect in Srilankan Blasts.

In another study, it is found that gender-based bias is another concern about using AI. The study states that the representation of males is more as compared to females in any AI-organization. Facebook has only 15% of female AI-staffer and Google employees less than 10% of female staff.

This comes at a point when organizations like the IMF and Pepsico are already headed by female representatives.

Reasons for Biases

Any AI-based program is based on a set of solutions that are referred to as algorithm. Data engineers, Data Scientists, and Data analysts are responsible for using this algorithm to plan out sensible strategies to use Artificial Intelligence.

However, most of the time the biases embedded in AI are unintentional and unconscious. Any AI-based model is governed by deep learning. When the said algorithm of deep learning is fed with recurrent entities, which are bias-inclusive, the system fails to recognize any new or under-represented structure.

For example, when a facial recognition model is tested by exhibiting the white-skinned male repetitively, it will fail to recognize the darker-skinned female. Such practices can lead to offensive classification based on gender, race, and minority.

Another bias that can be concerning for any AI-based model is tweaking of the data, according to the intentions of data scientists and data analysts. Such type of bias is known as Selection bias. This can lead to the presentation of untrue or biased results.

Lack of data within an algorithm can also generate biases within a system.

Solutions for AI-based biases

Just like any software disparities, the AI-based biases can be corrected by a strategical approach. By implementing a gender-neutral perspective, these biases can be meted out. This can be achieved by:

• Applying Intellectual Diversity– All data-driven algorithms are governed by human intelligence. Thus implementing an intellectual diversity in the staff, will enable the system to pertain to academic discipline, higher risk tolerance, accept diversified political perspective, and will enhance the creativity and productivity of the organization. Intellectual Diversity would also help in recognizing and improving existing AI-based biases.

• Developing an inclusive Software-  Developing an AI- model with the inclusiveness of gender and race, will ensure equal representation of individuals in the model. It will also ensure data collection by teams with diversified experience, backgrounds, ethnicity, and viewpoints.

• Cross-checking the Algorithm-  Cross-checking an algorithm would help in identifying the pattern that is irrelevant, repetitive, and are unnecessarily intended. This will curb down the possibilities of the biases due to a lack of data.

• Workspace Inclusiveness-  Organizations must ensure that all the employees are equally represented. It will help in uplifting of the under-represented group and evoke a sense of responsibility towards the organization. The Workspace inclusiveness must also include the presentation of discrimination feedback to plan out a strategical approach for solving the problem.

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Prime Minister Narendra Modi on Saturday reiterated that the government will soon unveil a new cybersecurity policy.

During his speech from the Red Fort on the 74th Independence Day, Modi said that India is alert, cautious and is taking decisions to counter cyber threats and is constantly developing new systems.

The draft of National Cyber Security Strategy 2020, that envisages creating a secure cyberspace in India, is ready and is likely to be finalised this year.

“The threats from cyberspace can endanger all these aspects of Indian life. The government is alert to this threat and is taking all the necessary action,” Modi said.

The government recently banned several Chinese apps to protect the personal data of the Indian users.

As nation-state bad actors from countries like China, Russia and Pakistan amid the demand to keep the data of Indians to remain within the boundaries of the country, the government has envisioned the “National Cyber Security Strategy 2020”.

“Cyber intrusions and attacks have increased in scope and sophistication targeting sensitive personal and business data, and critical information infrastructure, with impact on national economy and security. The present cyber threat landscape poses significant challenges due to rapid technological developments such as Cloud Computing, Artificial Intelligence, lnternet of Things, 5G, etc,” according to the draft.

“New challenges include data protection/privacy, law enforcement in evolving cyberspace, access to data stored overseas, misuse of social media platforms, international cooperation on cybercrime & cyber terrorism, and so on”.

Digitisation in India will dramatically rise in a post COVID-19 scenario which in turn will increase demand for greater cybersecurity and privacy, according to experts.

Amid the COVID-19 crisis, as businesses are still coping up, cybersecurity is being seen as a core technology to keep companies secure as they go online and virtual, and as emerging deep tech such as Artificial Intelligence, Machine Learning, Blockchain evolves, investment in cybersecurity will be a key differentiator for companies offering such services.

“We have joined hands with DSCI (the Data Security Council of India) in establishing a National Centre of Excellence to accelerate innovation and make India an attractive cybersecurity market,” Ajay Sawhney, Secretary, Ministry of Electronics and Information Technology (MeitY), said recently.

Ransomware-related cyber attacks on the Indian enterprises saw a significant rise in the first three months of the year, and the increase has been enabled by operators offering ransomware as a service (RaaS) to cyber attackers.

The report from Global cyber security major K7 Computing also found that Chennai, Pune, Ahmedabad and Hyderabad recorded the highest rate of infections amongst Tier-I cities.

Guwahati, Jaipur and Jammu had the highest infection rate of 38 per cent each, followed by Patna at 35 per cent among Tier-II cities.

One in two Indian companies have experienced a data breach involving the loss or theft of more than 1,000 records containing sensitive or confidential customer or business information in the past two years and the Covid-19 has only accelerated the cyber attacks, according to Sandip Patel, General Manager, IBM India/South Asia.

For 46 per cent of Indian firms, data breaches led to significant disruption to their IT and business processes, according to a recent global survey conducted by Ponemon Institute and sponsored by IBM Security.

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Other research has painted a similarly dire picture for regional and local public services. However, the Government has chosen this moment to make a statement about its vision and intent for public services moving forward. Perhaps aimed first at central Government, Michael Gove used the Ditchley Annual Lecture to state ‘public service is a privilege’ and it is incumbent on everyone in the sector to prove what they are doing is ‘genuinely transformative.’

Whatever your views are on how achievable it is to realise this philosophy, it is clear there will be growing scrutiny on how spending is allocated and on the return it delivers. Some commentators feel this shift has been a long time coming, but if public sector bodies are to fulfil a “genuinely transformative” agenda, a much greater synergy between the leadership team of the chief executive, CFO, COO and CIO will be necessary.

The harsh reality is that where these roles are better aligned, organisations will likely emerge healthier from this crisis. For the local government CIO, the Government’s apparent intentions present a unique opportunity not just to enable this alignment, but to drive the strategic change demanded. The obstacle for every council CIO can be the board’s instinctive response to crisis, which is to prioritise cost savings. To counteract this reflex the CIO must build a close relationship with the chief executive – and equally the chief executive must understand that the traditional hierarchy of relationships must be broken down. Get it right and the CIO could become tomorrow’s hero. Get it wrong and it will lead to intense public scrutiny that could be very career limiting.

So how does the CIO achieve alignment and drive the agenda?

It is not an ‘either or’ decision between cuts and investment

There was much talk of Roosevelt’s ‘New Deal’ in Michael Gove’s speech, and subsequently when the prime minister made his ‘Build, build, build’ announcement. It appears the Government’s intention is to be radical to improve service delivery, so local government CIOs – along with their peers – will be challenged to demonstrate the same level of ambition at a time of such constrained budgets.

To deliver ‘genuinely transformative’ change CIOs must avoid getting stuck in ‘business-as-usual’ mindsets and allow IT planning to be dominated by traditional budget cycles. It is understandable that the initial reaction is to prioritise cost savings ahead of investment to protect essential services, but emerging from this crisis should not mean strategic IT projects are sacrificed to deliver efficiencies.

Cuts and investment should go together. Indeed, properly planned and costed strategic projects should deliver transformation and cost reductions. So why put them on hold?

For CIOs reaching for success, it will be critical that they reflect the objectives of the board and demonstrate that IT investment is being effectively targeted. This will help enable the organisation to be faster to agree and implement change. It requires the leadership team to operate with an integrated mindset, where all the business functions are prepared to work together. If this does not happen the organisation will likely be too slow to respond to citizen demands and it could lead to poorly implemented IT projects, cost overruns and project failures. It falls to the CIO to demonstrate the communications and negotiation skills necessary to convince the Chief Executive and the rest of the board that this more collaborative model of planning and executing IT strategies will also deliver greater efficiencies.

But we can’t afford it

It is perhaps tough to say, but if a CIO doesn’t have the money to invest in transformational IT initiatives, then surely the question has to be: “Why not?”

It is incumbent on the CIO to constantly review vendor costs to identify the ‘best value’ for the organisation. For example, why pay the vendor 22% of net license fees to support enterprise applications, when organisations could be paying half of that figure by using third party support? Kent and Essex Police and Nottingham County Council have used third party support in conjunction with a shared services model. Kent and Essex Police split finance, payroll and HR processes between them, while Nottingham County Council runs SAP Payroll on behalf of other organisations including the Nottinghamshire Local Government Pension Fund. This model enables them to maximise efficiencies, so resources can be re-directed to invest in essential services and innovation.

When considering genuinely transformative projects, public sector CIOs must also assess the potential risks. Implementing a SaaS ERP application may fulfil the ‘cloud first’ mantra but will it lead to the change the Government is apparently pushing for? Ultimately, it is questionable as to whether moving a stable, existing ERP application to a SaaS environment will be seen as driving a public sector body’s innovation strategy especially in the current climate.

Genuinely transformative initiatives are more likely to come about through the adoption of microservices and agile development techniques, as well as cutting edge technologies such as artificial intelligence. Such dynamic methodologies will enable local government bodies to get closer to citizens and build more responsive applications. They will also help fulfil the cost saving demand. If a CIO carefully plans the long-term strategy through alignment with the chief executive, it will be possible to create a virtuous cycle driving transformation through such initiatives, while delivering savings that can in turn be reinvested in future projects.

We are digital

Beginning now, local government must find a way to plot its path forward. Looking at Michael Gove’s speech, it appears the Government wants to encourage a very different mindset, which could be perceived as permission to do things differently. Gove said: ‘We need to move to a system where those who propose the innovative, the different, the challenging, are given room to progress and, if necessary, fail.’

Local authorities and public service organisations might be able to see this as the ‘green light’ to create the right operational structure to support an agile IT strategy. It will demand a closely aligned leadership team, which will be vital to ensure the organisation fails fast and learns quickly from its experiences.

The CIO must seize this opportunity to lead the change needed, in conjunction with the chief executive. Ultimately, together they should encourage the organisation to adopt the mindset: “we are digital”

A brief review of recent examples in the public or private sector underlines that the successful organisations will ‘just be digital’.

This means across every aspect of planning, implementation and interaction with the public the organisation has a multi-channel strategy, which seamlessly combines on- and offline experiences. It requires a deep understanding of technologies, such as open source, and development approaches, like microservices, and how they will empower an organisation’s future IT roadmap.

Certainly, this is a bigger challenge in the public sector but adopting the right transformative mindset will lead to greater success and alignment with the Government’s apparent vision.

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In response to a legal challenge brought by the Joint Council for the Welfare of Immigrants (JCWI), the Home Office has scrapped an algorithm used for sorting visa applications. Represented by Foxglove, a legal non-profit specialising in data privacy law, JCWI launched judicial review proceedings,, arguing that the algorithmic tool was unlawful on the grounds that it was discriminatory under the Equality Act 2010 and irrational under common law. 

In a letter to Foxglove from 3rd August on behalf of the Secretary of State for the Home Department (SSHD), the Government Legal Department stated that it would stop using the algorithm, known as the “streaming tool”, “pending a redesign of the process and way in which visa applications are allocated for decision making”. The Department denied that the tool was discriminatory. During the redesign, visa application decisions would be made “by reference to person-centric attributes… and nationality will not be taken into account”. 

The “streaming tool” was an algorithmic system designed to categorise visa applications with reference to how much scrutiny each application needed. It would assign an application a red, amber, or green rating: red indicated that the application’s case worker ought to spend more time applying scrutiny, and would have to justify approving the application to a more senior officer. Applications with a red rating were much less likely to be successful than those rated green, with around 99.5% of green being successful but only 48.59% of red. 

The exact weighting of the numerous factors that contributed to the streaming tool’s decision making are not known, as the architecture of the algorithm was not revealed. However, in a letter to Foxglove, the SSHD revealed that “nationality is one of the relevant factors used by the streaming tool”. Certain nationalities are identified in the Equality Act Nationality Risk Assessment (EANRA) as “suspect”. A visa application coming from someone whose nationality was identified in the EANRA would be automatically given a red rating. An applicant’s nationality, even if not on the EANRA “suspect” list, could still, in conjunction with other factors, contribute to the awarding of a red or amber rating.

Nationality is protected from discrimination under Section 4 of the Equality Act. However, the Equality Act does allow for enhanced scrutiny of visa applications on the basis of nationality if prescribed by a Ministerial Authorisation issued under section Schedule 3 of the EA. The use of the streaming tool was justified with reference to the Ministerial Authorisation, as its only authorised use was to signify the need for a “more rigorous examination” of the application.

The Ministerial Authority which legitimised the streaming tool’s categorisation by nationality sets out various routes by which a specific nationality can be placed on the EANRA “suspect” list, most notably a nationality being associated with a high number of “adverse events”. These can include unauthorised behaviours (over-staying, working, etc.). Adverse events also include having a visa application refused. Given that red ratings were typically refused at a higher rate than other ratings, this risked creating a vicious cycle where certain nationalities would be locked onto the EANRA “suspect” list.

Foxglove argued that the use of the streaming tool was discriminatory and irrational. The streaming tool’s only authorised function was to classify applications in relation to required caseworker scrutiny, and not to contribute to decision making. Foxglove held that the ratings materially contributed to the decision making process. They suggested that rating an application red would create confirmation bias, leading case workers to rate evidence contributing negatively to the application more highly than positive evidence. This, they suggested, is evidenced in the difference in success rates between red rated and green rated applications. Furthermore, Foxglove cites a report from the Independent Chief Inspector of Borders and Immigration from 2017 which states that the streaming tool had become a “de facto decision-making tool”. 

Both the confirmation bias and the report make clear how the streaming tool was used beyond its authorised bounds. As nationality was a significant factor in the streaming tool’s weighting (in many cases, thesignificant factor), its use was argued to be illegal under section 4 of the Equality Act. 

The vicious circle present in the streaming tool “produce[d] substantive results which [were] irrational”. Because visa application refusals were considered to be adverse events, and those same adverse events fed into the algorithm’s decision making, certain nationalities were locked onto the EANRA “suspect” list. This further increased the number of adverse events associated with that nationality, in turn contributing to its position on the EANRA list. As such, the algorithm would class applications as high risk merely because it had done so in the past. Foxglove argued that this constituted irrationality. 

The function of the streaming tool highlights a wider debate surrounding the use of reinforcement learning algorithms and AI in government. Algorithms that feed their own results back into their learning processes, like the streaming tool and other algorithms relying on reinforcement learning, often end up shaping their own learning environments and entrenching biases. This risks manifesting in discriminatory ways. 

While the streaming tool was shelved before a judicial review could be conducted, the Foxglove/JCWI case could prove to be an important referent as more public services use algorithms in their functioning. Foxglove also argued that the government had failed to undertake the Data Protection Impact Assessment required for the use of the streaming tool. The Home Office has committed to a fast redesign, intending to complete it by the latest 30th October 2020.

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Several factors have converged to force companies to make vital decisions about the future of their operations departments.

The most pressing issue is the ongoing Covid-19 pandemic. Government-enforced shelter-at-home orders worldwide have compelled financial institutions to set up their employees for success in remote environments. The situation no doubt will have long-lasting effects on the industry.

But before the pandemic reached a crescendo in the US, financial institutions faced several key issues with their operations teams.

The emergence of zero-fee equity trading caused teams handling treasury operations to become more cash management-oriented due to the need to be more value-driven than ever. At the same time, aging technology stacks forced companies into deciding whether to invest in current systems, or undertake a complete overhaul. Financial institutions were also faced with outsourcing capabilities outside of their core operations.

These issues today still hold true, and will continue to exist even in a post-Covid world.

As financial institutions build their operations with an eye toward the future, it spurs conversations about how best to handle these challenges, and technology will be at the forefront of this change. Emerging technology will transform how operations departments work. For example, DocuSign has begun to replace “wet signatures” on documents; videoconferencing services like Zoom have made remote work environments more feasible; and blockchain might have the ability to eliminate many reconciliation and P&S teams. Additionally, technologies such as artificial intelligence (AI) and machine learning eliminate and streamline reconciliations, doing away with entire departments.

It’s imperative for financial institutions to take advantage of the changes while future-proofing their teams. They can do this by moving to a cloud-based platform. First of all, the cloud allows for a more distributed workforce, which in this environment has become vitally important. Also, cloud allows firms to embrace microservices, as opposed to being locked into full front-to-back solutions. And perhaps most importantly, cloud allows users to be nimble when it comes to picking the tools they want to deploy, thus allowing them to focus their internal teams on building true value-add systems and solutions.

Future Proofing Ops

Changes in technology, particularly as they relate to data, are impacting today’s operations teams. For example, data is essential to the way companies will set up AI and machine learning going forward. In the past, companies might have gotten away with having an offshore ops team reviewing reference security data and enriching it post-trade. With AI and machine learning, that process can start up front so companies can focus on extracting real-time trade data.

And it’s the distributed nature of this data that is causing changes to how those employees work.

Data now is filtering in from multiple sources as opposed to a centralized location companies dealt with a decade ago. This development has been the proverbial “game-changer” as financial institutions seek how best to organize such vital information. At the same time, firms now view their own data as a commodity, which prompts a couple of questions: Should it be monetized? If yes, then how?

That said, the technology to ingest and leverage datasets has dramatically changed as well in the past three years, which has changed the role of operations teams.

Teams must now identify, fix, and prevent problems, and have a deep understanding of the technology being used. The path to future-proof operations teams will rely on hiring personnel familiar with the latest technology along with traditional skills such as market awareness. No longer will the prerequisite for jobs be simply knowing how databases are built and how to read them.

Financial institutions also will need to answer questions about how best to deal with technology shortfalls, either internally or via outsourcing.

Those firms should seek to outsource capabilities that are not unique to a company. More and more, financial institutions are moving toward a model of “keep your bread and butter internal, and outsource functions that don’t add differentiating value.”

While outsourcing has become more bespoke and modular than in the past, a company’s strategy will vary according to its size. For example, a large financial firm might want to leverage a third-party user interface to take advantage of industry scale and various resources, so there may no longer be a need to build internally. 

The end goal for these technology changes is to help ensure efficiency within the operations team, which extends to the entire organization. That will help organizations improve their response to customer inquiries and issues.

Come Together

Since every company is unique in its processes, and approaches operational challenges in its own way, the need for communication and collaboration with industry peers is important. In order to communicate harmoniously as an industry, we need to agree that the future of operations cannot rely on a system that only works for one bank.

Organizations like ISITC, Sifma, Isda, and the EDM Council exist to assist companies in accomplishing their end goals when it comes to modernizing the operations team with uniformity across financial institutions’ systems. Our organizations can help lead the way as part of the ecosystem by establishing standards that make sense for all companies.

Companies today need to have conversations about vital topics with the goal of identifying common understandings of various processes. The industry needs to collaborate and align on such aspects of the business. If not, we will repeat the mistakes of the past without transforming the operations teams of the future.

Lisa Iagatta is chair of ISITC, where she is responsible for the strategic direction and growth of the independent non-profit financial services organization. She is also director of account management at Tegra118. 

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