Safe and secure technologies that support the innovation of financial services
March 30, 2018
FIN/SUM WEEK 2017, a global start-up summit, was held in September this year. Many representatives of start-up companies and students from abroad participated in the Pitch Run, Idea Camp, and other events during the Summit.
Mycash Online presented an online store for migrant workers and immigrants. Most of the migrant workers in Malaysia do not have access to banks, making it difficult for them to save or send money. The online store offers migrant workers access to these services. PolicyPal presented a smartphone app that makes use of the OCR function. The platform enables, for example, processing the confirmation of visa applications in Singapore within five minutes, a process for which insurance registration took five weeks due to manual input of information. These and other start-ups have focused on the issues faced by their society and are trying to use technology to solve those issues.
Major enterprises also presented solutions to social issues using technology. NEC is conducting business based on the seven themes for social value creation it has formulated in relation to the Sustainable Development Goals established at the United Nations Summit. SDGs are targets set forth for solving poverty, energy, and other issues by 2030 covering all countries.
In the lecture by NEC President and CEO Takashii Niino, he said that, ”SDGs cannot be achieved without the participation of various stakeholders, including companies like us, other than the UN or NPOs. We also need to contribute to the realization of social values through our business.” In this era, major corporations as well as startups must contribute to the solution of social issues through their business, the key to which are innovative technologies.
Safety and security are imperative particularly in areas involving money, such as in savings and remittances. In finance, improving convenience through new services can only be possible with an assurance of safety and security, a role that will be played by companies possessing highly reliable technologies that prioritize safety and security over costs.
President Niino introduced three technologies; namely, AI, blockchain, and security, and gave examples of how they protect safety and security.
The first is about the enhancement of the monitoring of illegal transactions using AI.
Last year, NEC and the Japan Exchange Group tested the effectiveness of AI in trade screening operations for detecting market price manipulations and other unfair transactions. The trials showed that NEC’s deep learning technology, RAPID machine learning, was able to detect such transactions with high accuracy. Starting September, SBI Securities, Rakuten Securities, and other security companies have been conducting trials on the adaptability of AI-based detection of illegal transactions in stock orders and plan to implement the system within the next fiscal year.(1)
The next is blockchain technology. President Niino introduced NEC’s joint demonstration trial with SBI Holdings and SBI BITS aimed at the enhancement and streamlining of personal identification operations (Know Your Customer, KYC) during the opening of accounts using blockchain technology.(2)
This trial is based on the ”Proof of Concept Testing for Utilization of Blockchain in Capital Market Infrastructure”(3) project of the Japan Exchange Group, wherein 33 financial institutions, IT vendors, and the Financial Services Agency come together with their knowhow and technologies to investigate and verify various financial infrastructure use cases, to resolve issues, and, eventually, to create new business.
Although blockchain has gained attention as the core technology for the virtual currency bitcoin and is often associated with the financial industry, its characteristic resistance to data manipulation and loss makes it applicable to fields outside of finance.
NEC has focused on this characteristic even before blockchain became popular. Germany-based NEC Laboratories Europe has been conducting joint research and development with the Swiss Federal Institute of Technology in Zurich and the Aalto University in Finland.
NEC is also a member of Hyperledger, a project promoting blockchain technologies led by the Linux Foundation, a nonprofit organization promoting innovation and evolution of technology through open source collaboration. On the merits of the technologies it has accumulated thus far, NEC has become a premier member, the highest position for members, of the project, and is also conducting joint research with more then 140 companies from various industries.(4)
Last is cyber security. It is said that the number of malware produced every month exceeds 10 million. NEC has established the Cyber Security Factory as a center for operations against cyber crimes, and has deployed a security surveillance support system (threat analysis system) based on AI.
NEC is the top provider of cognitive/AI systems according to the ”Japan Cognitive/Artificial Intelligence Platforms Market Vendor Trends Survey” conducted by investigation firm IDC Japan. NEC therefore supports safety and security of financial services through its reliable technologies.
The Banking Act of Japan has been recently amended to implement a new regime of open banking application programming interfaces (APIs). In response, NEC has started the provision of platforms that enable secure API collaborations. President Niino concluded his lecture by saying, ”Supporting and promoting cross-industry and cross-sectoral collaborations through technology will also help realize Connected Industries, which will bring about the Society 5.0 concept advocated by the Japanese government. I believe that these collaboration initiatives are important in creating value for Connected Industries.”
Solving social issues required the use of safe and secure technologies and the formation of ecosystems for creating business beyond existing industry frameworks. As equal partners in forming these ecosystems, major enterprises and start-ups have a crucial role in generating further innovations in financial services.
(Written by: Yukiomi Kawasaki)