Recommendations for fintech startups navigating the procurement process

The expanding scope of fintech has been well documented in these digital pages. Payments, investing, financial planning and lending often spring to mind as “classic” fintech startups, but other business models like regtech, compliance, human resources and marketing are on the ascent.

For passionate and talented founders, the tireless pursuit of building innovative technology is critical and fundamental. That said, to be successful in financial services, significant time and effort needs to be dedicated to other business fundamentals: corporate setup, privacy and security. The financial services customer base presents unique challenges for fintech startups as the regulatory and operational requirements for third-party vendor assessment and management are, in comparison to most other industries, brutal. Issues that might go overlooked during the early stages of product design and team-building could turn into obstacles during the sales process.

Understanding the dynamics of the financial services procurement process is essential if you want to negotiate it as quickly and seamlessly as possible. And before diving head-first into the development of your killer fintech app, consider the following questions:

  • Is my technical architecture secure?
  • Who is responsible for cybersecurity in the organization?


    Source: Tech Crunch

ACLU says it’ll fight DHS efforts to use app locations for deportations

The American Civil Liberties Union plans to fight newly revealed practices by the Department of Homeland Security which used commercially available cell phone location data to track suspected illegal immigrants.

“DHS should not be accessing our location information without a warrant, regardless whether they obtain it by paying or for free. The failure to get a warrant undermines Supreme Court precedent establishing that the government must demonstrate probable cause to a judge before getting some of our most sensitive information, especially our cell phone location history,” said Nathan Freed Wessler, a staff attorney with the ACLU’s Speech, Privacy, and Technology Project.

Earlier today, The Wall Street Journal reported that the Homeland Security through its Immigration and Customs Enforcement (ICE) and Customs & Border Protection (CBP) agencies were buying geolocation data from commercial entities to investigate suspects of alleged immigration violations.

The location data, which aggregators acquire from cellphone apps including games, weather, shopping, and search services, is being used by Homeland Security to detect undocumented immigrants and others entering the U.S. unlawfully, the Journal reported.

According to privacy experts interviewed by the Journal, since the data is publicly available for purchase, the government practices don’t appear to violate the law — despite being what may be the largest dragnet ever conducted by the U.S. government using the aggregated data of its citizens.

It’s also an example of how the commercial surveillance apparatus put in place by private corporations in Democratic societies can be legally accessed by state agencies to create the same kind of surveillance networks used in more authoritarian countries like China, India, and Russia.

“This is a classic situation where creeping commercial surveillance in the private sector is now bleeding directly over into government,” said Alan Butler, general counsel of the Electronic Privacy Information Center, a think tank that pushes for stronger privacy laws, told the newspaper.

Behind the government’s use of commercial data is a company called Venntel. Based in Herndon, Va., the company acts as a government contractor and shares a number of its executive staff with Gravy Analytics, a mobile-advertising marketing analytics company. In all, ICE and the CBP have spent nearly $1.3 million on licenses for software that can provide location data for cell phones. Homeland Security says that the data from these commercially available records is used to generate leads about border crossing and detecting human traffickers.

The ACLU’s Wessler has won these kinds of cases in the past. He successfully argued before the Supreme Court in the case of Carpenter v. United States that geographic location data from cellphones was a protected class of information and couldn’t be obtained by law enforcement without a warrant.

CBP explicitly excludes cell tower data from the information it collects from Venntel, according to a spokesperson for the agency told the Journal — in part because it has to under the law. The agency also said that it only access limited location data and that data is anonymized.

However, anonymized data can be linked to specific individuals by correlating that anonymous cell phone information with the real world movements of specific individuals which can be either easily deduced or tracked through other types of public records and publicly available social media.

ICE is already being sued by the ACLU for another potential privacy violation. Late last year the ACLU said that it was taking the government to court over the DHS service’s use of so-called “stingray” technology that spoofs a cell phone tower to determine someone’s location.

At the time, the ACLU cited a government oversight report in 2016 which indicated that both CBP and ICE collectively spent $13 million on buying dozens of stingrays, which the agencies used to “locate people for arrest and prosecution.”


Source: Tech Crunch

Unpacking Uber’s new profitability promise

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Yesterday Uber reported its Q4 2019 financial performance. Today, following the news, shares of the ride-hailing giant are up over 9%, pushing Uber’s stock above $40 per share. While Uber’s shares are still under its $45-per-share IPO price, the company’s earnings report appears to indicate that there may be an end in sight for Uber’s infamous losses.

After promising to reach adjusted profitability in 2021, Uber made a better pledge yesterday to generate a loose form of profit in Q4 2020, earlier than it or investors previously anticipated.

This morning, we’re going to quickly skim Uber’s results, unpack the profitability promise to understand if what the company promised today is impressive or not and wrap with a note on cash burn and more traditional profit definitions to frame the news.

If Uber has turned the corner on profitability, the halo effect from the good news could prove a boon to other on-demand companies, especially the private cohort who are struggling to combat a narrative that when it comes to making money, they are all forecast and no follow-through.

Results


Source: Tech Crunch

Daily Crunch: Netflix makes autoplay previews optional

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Netflix’s horrible autoplay previews can be turned off

Netflix’s autoplay trailers are now optional. That’s it. That’s the news.

And here’s how to turn them off now: Click “Manage Profiles,” choose your profile, then untick “Autoplay previews while browsing on all devices.”

2. Instagram prototypes letting IGTV creators monetize with ads

Instagram confirmed to TechCrunch that it has internally prototyped an Instagram Partner Program that would let creators earn money by showing advertisements along with their videos. By giving creators a sustainable and hands-off way to generate earnings from IGTV, those creators might be inspired to bring more and higher-quality content to the service.

3. Carta debuts fund to invest in startups that tap into its platform

Carta has created an investing vehicle called Carta Ventures. The well-funded unicorn hopes to foster an ecosystem around its core products and services.

4. SoftBank-backed Fair puts the brakes on weekly car rentals for Uber drivers

When Fair laid off 40% of its staff in October, CEO Scott Painter promised it wasn’t shuttering its leasing services to on-demand fleets. But just one week later, Painter was removed as CEO and replaced in the interim by Adam Hieber, a CFA from Fair investor SoftBank.

5. Is your startup using AI responsibly?

Since they started leveraging the technology, tech companies have received numerous accusations regarding the unethical use of artificial intelligence. Gramener’s Ganes Kesari says that to address the issue, fixing the model is not enough. (Extra Crunch membership required.)

6. NASA panel recommends Boeing software process reviews after revealing second Starliner issue

NASA’s Aerospace Safety Advisory Panel is recommending that Boeing’s software testing processes undergo a review, following the discovery of another problem with the on-board system that was in operation during the CST-100 Starliner uncrewed Space Station docking test launch in December.

7. Motorola embraces the stylus life on its budget G series

This morning, at an event in Chicago, Motorola introduced two new entries into the G line: the Moto G Power and Moto G Stylus, which will run $300 and $250, respectively.


Source: Tech Crunch

Netflix begins streaming in AV1 on Android

Netflix announced this week that it has started to stream titles in AV1 on Android in what could significantly help the two-year-old media codec gain wider adoption.

The world’s biggest streaming giant said on Wednesday that by switching from Google’s VP9 — which it previously used on Android — to AV1, its compression efficiency has gone up by 20%.

At the moment, only “select titles” are available to stream in AV1 for subscribers “who wish to reduce their cellular data usage by enabling the ‘Save Data’ feature,” the American firm said.

Netflix hasn’t shared much about the benefit AV1 will provide to customers, but the new media codec’s acceptance nonetheless sends a message by itself.

Tech giants, including Google, have spent years developing and improving media codecs as consumption of data skyrocketed and low-cost devices began to sell like hotcakes. But they just can’t seem to settle on one media codec and universally support it.

Think of Safari and YouTube, for instance. You can’t stream YouTube videos in 4K resolution on Safari, because Apple’s browser does not support Google’s VP9. And Google does not support HEVC for 4K videos on YouTube.

AV1 is supposed to be the savior media codec that gets universal support. It’s royalty-free and it works atop of open-source dav1d decoder that has been built by VideoLAN, best known for its widely popular media player VLC and FFmpeg communities. It is sponsored by the Alliance for Open Media.

Who are the members of Alliance for Open Media? Nearly all the big guys: Apple, Google, Amazon, Netflix, Nvidia, ARM, Facebook, Microsoft, Mozilla, Samsung and Tencent, among others.

But that’s not to say there aren’t roadblocks in the adoption of AV1. Compared to HEVC — the format that AV1 is supposed to replace in popularity — encoding in AV1 was noticeably slower a year ago, as per some benchmark tests.

Adoption of AV1 by various browsers, according to analytics firm StatCounter. Safari is yet to support it.

Netflix’s announcement suggests that things have improved. The streaming giant said its goal is to support AV1 on all of its platforms. “In the spirit of making AV1 widely available, we are sponsoring an open-source effort to optimize 10-bit performance further and make these gains available to all,” it said in a blog post.


Source: Tech Crunch

After Iowa caucus flub, can tech be trusted in elections?

An app intended to speed up reporting of election results for the Iowa caucuses has failed spectacularly, not only confusing the electorate but perhaps poisoning their feelings toward making any technological “improvements” to the voting process whatsoever.

TechCrunch staff reporters Brian Heater, Jonathan Shieber, Zack Whittaker, Devin Coldewey and Ingrid Lunden discussed the issue informally.

Brian Heater: We all agree that this is a good sign of a healthy democracy, right?

Jonathan Shieber: Totally agree with Brian here.

Brian Heater: I’m legitimately finding it difficult to discuss these sorts of things without delving into the conspiratorial. That said, I think it’s far more likely that this was just a massive fuck-up on the part of the Iowa Dems. Chalking it up to a conspiracy is honestly giving them entirely too much credit.

Devin Coldewey: But what’s the nature of the fuck-up? Fundamentally?

Brian Heater: An app that wasn’t tested at the scale of a statewide election. The more we move away from more traditional means of accounting, the more of these we’re going to see.


Source: Tech Crunch

AllVoices raises $3 million to build a platform for anonymous harassment and bias reporting

As the national conversation pushes companies to reexamine the HR processes suppressing sexual harassment and bias reporting, tech startups are looking to find a way to smooth out the process and encourage communication.

LA-based AllVoices is building an encrypted communications platform for offices that allows employees to anonymously send complaints to their human resources department that can then follow-up and track the cases in an easy-to-use dashboard. CEO Claire Schmidt tells TechCrunch that her company has just closed a $3 million seed round with funding from Crosscut, Greycroft, Halogen Ventures, Vitalize VC and others.

CEO Claire Schmidt

Schmidt, most recently a VP at 20th Century Fox, started AllVoices after finding inspiration in Susan Fowler’s Uber blog post to create a platform that allowed employees at companies to anonymously offer feedback and file reports about internal toxicity. Schmidt says existing processes used for reporting can leave victims of harassment hesitant to come forward and risk damaging their career paths.

“We’re using this really outdated process, we’re basically telling people, ‘Okay, just come in and tell someone in HR, and hope for the best.’,” Schmidt told TechCrunch in an interview. “And to me that seemed especially unfair to the most vulnerable people in any given work environment because they’re junior they don’t have as much job security — they’re viewed as more expendable.”

Employees at companies that use AllVoices can log into a mobile app and anonymously submit reports and receive text notifications when they’ve gotten a response from the company, a streamlined process that Schmidt hopes can encourage people to “report in real-time.” HR people don’t see names or any other identifying information and AllVoices doesn’t know the name of the employee either with all communications being encrypted.

“We do encrypt all of our data in storage, in backup, in transit, at rest — at every level,” Schmidt says.

Sixty days after a complaint is made, AllVoices sends a notification to the employee asking whether they were aware of any action being taken by the company and how satisfied they were with it. The startup then aggregates that data and provides it back to the company so they can get a clearer sense of their own responsiveness.

AllVoices isn’t the only startup tackling this issue, in 2018 we profiled Spot which is also building an anonymous reporting platform. AllVoices’ platform goes beyond streamlining processes for sexual harassment, the startup has modules for general feedback, ethics and compliance issues, culture problems, diversity and inclusion concerns and harassment and bias complaints.

The startup has also aimed to make a free version of its product so that employees at companies that haven’t integrated AllVoices can still make anonymous complaints by entering in an email for someone in their HR department. Schmidt hopes that the free service will serve their broader mission and help them onboard new customers.

AllVoices says they now have nearly 50 companies using the platform, including Instacart, GoPro, Wieden+Kennedy, The Wing, and FabFitFun.


Source: Tech Crunch

Google and Facebook turn their backs on undersea cable to China

Google and Facebook seem to have resigned themselves to losing part of the longest and highest profile internet cable they have invested in to date. In a filing with the Federal Communications Commission last week, the two companies requested permission to activate the Pacific Light Cable Network (PLCN) between the US and the Philippines and Taiwan, leaving its controversial Hong Kong and Chinese sections dormant.

Globally, around 380 submarine cables carry over 99.5 percent of all transoceanic data traffic. Every time you visit a foreign website or send an email abroad, you are using a fiber-optic cable on the seabed. Satellites, even large planned networks like SpaceX’s Starlink system, cannot move data as quickly and cheaply as underwater cables.

When it was announced in 2017, the 13,000-kilometer PLCN was touted as the first subsea cable directly connecting Hong Kong and the United States, allowing Google and Facebook to connect speedily and securely with data centers in Asia and unlock new markets. The 120 terabit-per-second cable was due to begin commercial operation in the summer of 2018. 

“PLCN will help connect US businesses and internet users with a strong and growing internet community in Asia,” they wrote. “PLCN will interconnect … with many of the existing and planned regional and international cables, thus providing additional transmission options in the event of disruptions to other systems, whether natural or manmade.”

Instead, it has been PLCN itself that has been disrupted, by an ongoing regulatory battle in the US that has become politicized by trade and technology spats with China.

Team Telecom, a shadowy US national security unit comprised of representatives from the departments of Defense, Homeland Security, and Justice (including the FBI), is tasked with protecting America’s telecommunications systems, including international fiber optic cables. Its regulatory processes can be tortuously slow. Team Telecom took nearly seven years to decide whether to allow China Mobile, a state-owned company, access to the US telecoms market, before coming down against it in 2018 on the grounds of “substantial and serious national security and law enforcement risks.”

Although subsidiaries of Google and Facebook have been the public face of PLCN in filings to the FCC, four of the six fiber-optic pairs in the cable actually belong to a company called Pacific Light Data Communication (PLDC). When the project was first planned, PLDC was controlled by Wei Junkang, a Hong Kong businessman who had made his fortune in steel and real estate.

“It is just one of those moments where it is more difficult to land a cable, no matter who the Chinese partner is, because of the political situation.” – NYU professor Nicole Starosielski

In December 2017, Wei sold most of his stake in PLDC to Dr Peng Telecom & Media Group, a private broadband provider based in Beijing. That sent alarm bells ringing in Washington, according to a report in the Wall Street Journal last year. While Dr Peng is not itself state-owned or controlled, it works closely with Huawei, a telecoms company the Trump administration has accused of espionage and trade secret theft. Dr Peng has also worked on Chinese government projects, including a surveillance network for the Beijing police.  

PLCN has been legal limbo ever since, with Google complaining bitterly to the FCC about the expense of the ongoing uncertainty. In 2018, it wrote, “[any further holdup] would impose significant economic costs. Depending on the length of the delay, the financial viability of the project could be at risk.”

Google and Facebook finally secured special permission to lay the cable in US waters last year, and to construct, connect and temporarily test a cable landing station in Los Angeles. But while the network itself is now essentially complete, Team Telecom has yet to make a decision on whether data can start to flow through it. 

In the past, Team Telecom has permitted submarine cables, even from China, to land in the US, as long as the companies operating them signed what are called network security agreements. These agreements typically require network operations to be based in the US, using an approved list of equipment and staffed by security-screened personnel. Operators are obliged to block security threats from foreign powers, while complying with lawful surveillance requests from the US government.

In 2017, for example, Team Telecom gave the green light to the New Cross Pacific (NCP) cable directly connecting China and the US, despite it being part-owned by China Mobile, the state-owned company it later denied US access to on national security grounds.

“Normally there wouldn’t be so much fuss over a cable to China,” says Nicole Starosielski, a professor at New York University and author of The Undersea Network. “We’ve had cables to China for a long time and all of these networks interconnect, so even if they don’t land directly in China, they’re only a hop away. It is just one of those moments where it is more difficult to land a cable, no matter who the Chinese partner is, because of the political situation.”

In September, Senator Rick Scott (R-FL), who sits on Senate committees for technology, communications and homeland security, sent a letter to FCC Chairman Ajit Pai urging him to block PLCN. “[PLCN] threatens the freedom of Hong Kong and our national security,” wrote Scott. “This project is backed by a Chinese partner, Dr Peng Telecom & Media Group Co., and would ultimately provide a direct link from China into Hong Kong … China has repeatedly shown it cannot be trusted … We cannot allow China expanded access to critical American information, even if funded by US companies.”

Google and Facebook saw the writing on the wall. On January 29 last week, representatives from the two companies – but not PLDC – met with FCC officials to propose a new approach. A filing, made the same day, requests permission to operate just the two PLCN fiber pairs owned by the American companies: Google’s link to Taiwan, and Facebook’s to the Philippines. 

“[Google] and [Facebook] are not aware of any national security issues associated with operation of US-Taiwan and US-Philippine segments,” reads the application. “For clarity, the [request] would not authorize any commercial traffic on the PLCN system to or from Hong Kong, nor any operation of the PLCN system by PLDC.”

The filling goes on to describe how each fiber pair has its own terminating equipment, with Google’s and Facebook’s connections arriving at Los Angeles in cages that are inaccessible to the other companies. “PLDC is contractually prohibited from using its participation interest in the system to interfere with the ownership or rights of use of the other parties,” it notes.

Neither company would comment directly on the new filing. A Google spokesperson told TechCrunch, “We have been working through established channels in order to obtain cable landing licenses for various undersea cables, and we will continue to abide by the decisions made by designated agencies in the locations where we operate.” 

A Facebook spokesperson said, “We are continuing to navigate through all the appropriate channels on licensing and permitting for a jointly-owned subsea cable between the US and Asia to provide fast and secure internet access to more people on both continents.”

“I think stripping out the controversial [Hong Kong] link will work,” says Starosielski. “But whenever one of these projects either gets thwarted, it sends a very strong message. If even Google and Facebook can’t get a cable through, there aren’t going to be a ton of other companies advancing new cable systems between the US and China now.”

Ironically, that means that US data to and from China will continue to flow over the NCP cable controlled by China Mobile – the only company that Team Telecom and the FCC have ever turned down on national security grounds.


Source: Tech Crunch

Scaleway launches block storage

Cloud hosting company Scaleway is adding a new service today — block storage. Consumers will be able to purchase additional storage, attach that volume to a cloud instance and use it for a database, for instance.

Block storage works pretty much like plugging an external hard drive to your laptop. You get a ton of free space that you can use with your apps on your server. Compared to object storage, it is particularly useful if you need to constantly read and write data to a database, for instance.

Cloud servers usually come with local storage, but you might reach the limit even though you still have a lot of headroom when it comes to CPU and RAM. Additionally, if you delete your cloud instance, your block storage is still available, and you can attach it to another server. You can manage your volumes in the admin interface, using the Scaleway API or standard DevOps tools, such as Terraform.

Scaleway is also working on a managed Kubernetes service to deploy containerized applications directly. That service is also going to take advantage of block storage.

As for specifications, you can create a volume on any size between 1GB and 1TB. Starting in April, you’ll also be able to scale up your volume without having to detach your volume from your instance. You also can create as many as 15 different volumes for one instance.

Every volume is replicated three times and you can create snapshots. Scaleway uses SSDs and can handle 5,000 input/output operations per second.

The company charges €0.08 per GB per month. For instance, a 50GB volume will cost you €4 per month. In the future, there will be a more expensive tier at €0.12 per GB per month with performance of 10,000 input/output operations per second.

Scaleway says that its solution is both cheaper and more efficient than what Google and Amazon offer:


Source: Tech Crunch

Apple unifies its app stores by extending the universal purchase option to Mac apps

Apple surprised its app developer community today with the official announcement that they’ll soon be able to sell their cross-platform apps as one universal purchase including, for the time, apps that run on macOS. For consumers, a universal purchase option allows them to just pay once for an app that works across devices, including iPhone, iPad, Apple TV, and/or Mac. Developers, meanwhile, will be able to entice customers to buy their Mac and iOS app together, or other combinations of apps. They’ll also be able to more easily sync customers’ in-app purchases and subscriptions across platforms.

Apple says support for universal purchase will roll out in March 2020.

In preparation for the changes, the App Store categories will be unified across the iOS App Store and Mac App Store, to make apps more “discoverable,” Apple says.

Apple’s App Store categories are rarely updated, so this too is a notable change that will impact all developers — including those without a universal app bundle to sell. By listing their app in a new category, developers may have a better shot at ranking higher on the list of Top apps, compared with competing in an existing category alongside far more apps.

On iOS, developers will be able to list their app in two new categories: “Developer Tools” and “Graphics & Design.”

The Mac App Store is gaining several other categories coming from iOS, including “Books,” “Food & Drink,” “Magazines & Newspapers,” “Navigation,” and “Shopping.”

In addition, the “Photography” and “Video” categories on the Mac App Store will be combined into “Photo & Video,” to better sync up with iOS. And “Kids” will no longer be a subcategory within “Games” on the Mac App Store.

Apple says developers can choose to either create a new app for these platforms using a single app record in App Store Connect, or they can add platforms to an existing app record to take advantage of the new universal purchase option. The feature will be enabled by default for Mac Catalyst apps and made available to non-Catalyst apps, too.

Developers can download the Xcode 11.4 beta update released today to get started, but the option doesn’t go live for the public until the March launch date.

This isn’t the first time that developers have been able to distribute their apps together as one purchase, to be clear. If you’ve ever bought an iPhone app and gained the iPad or Apple Watch app alongside it, for example, you are already familiar with this universal purchase option. What’s new is that Apple is now bringing this same functionality to Mac apps for the first time.

Of course, a universal purchase doesn’t make sense for all apps, so developers will need to weigh the pros and cons for themselves, based on how they want to do business. But the option does represent a significant step in unifying the separate app ecosystems Apple offers, which could spur more Mac app development in years to come.

 

 

 


Source: Tech Crunch