1-888-643-2217 Email ABEX
Keeping you updated

Category Archives: Business

Future Trends Shaping AI Regulation

As artificial intelligence (AI) continues to transform industries far and wide, it’s time for regulation to catch up. Here’s how the landscape will change.

When you consider the impact of AI on our lives as consumers, it’s really no surprise that the industry worldwide is also being transformed.

Just as predictive text on smartphones uses language models to suggest words far faster than fingers can type, AI is making all kinds of business processes more accurate and efficient. But is AI developing too fast?

We’re not suggesting that AI will become uncontrollable and set out on world domination. But it does have key industry figures worried, such as the ‘godfather of AI’ Geoffrey Hinton, who resigned from Google over his prognosis of the direction of AI.

This is why we’re talking about an expanding regulatory gap. As AI continues to develop and improve ways of working, does the regulation currently exist to safeguard those involved in case of a mistake or fault?

Yes or no, as we increasingly use AI, what’s certain is that new exposures will emerge. This will cause big changes in how we approach the technology, as the global community looks to strike a balance between innovation and ethical considerations. Still, the best way of minimizing risk is to keep two eyes fixed on today’s rapidly changing regulatory landscape – and forecast where it’ll turn next.

The current state

Today, the global regulatory landscape is seeing different countries adopting different strategies.

Some nations have taken a proactive approach, implementing comprehensive frameworks which govern AI development and deployment. Look no further than the European Union’s (EU) General Data Protection Regulation (GDPR), crucial in setting standards for transparency, data protection and the right to explanation in AI systems.

Presently, the EU is looking to classify AI systems on the risk they may pose to users, with a sliding scale of penalties and enforcement actions. While China, with a fear that AI could undermine national unity, is racing to regulate. The country is drafting regulations that require companies to register generative AI products with their cyberspace agency and submit them to a security assessment before release.

Future trends

Globally, we are likely to see a greater focus on AI regulation centered around five key trends.

With the same AI products being used in multiple countries, it stands to reason that these countries will ramp up their collaboration efforts. As different regions work together to establish common standards and best practices for AI, this should also ease global cooperation and streamline AI development.

Ethical frameworks
Much of AI is unchartered territory, so the coming years will see more comprehensive ethical guidelines that address bias, fairness and accountability. It will become standard for organizations to implement measures that ensure responsible AI development and usage across their entire operations.

To most of us, AI operates in a shroud of secrecy. But going forward, demand for transparency in AI algorithms and decision making will grow. Regulators will likely require organizations to provide clearer explanations for AI-driven outcomes. Particularly in industries like healthcare and finance, this will strengthen trust and mitigate the risk that comes with black-box AI systems. Already technology is emerging to assess the reliability of AI models.

Risk-based approaches
Focus is set to intensify on the potential harm AI can cause. Regulators will seek to identify and assess risks associated with AI systems, leading to targeted regulatory interventions – an approach that will foster innovation while safeguarding users against risk.

Constant adaptation
AI development shows no signs of slowing, and regulation will have to constantly evolve to keep up. As we look to build an agile regulatory framework, expect to see AI developers, industry experts and society at large collaborate closer than ever to deliver the flexibility that’s required.

Staying onside

Even as the regulatory landscape matures, AI will still introduce new exposures. Taking out the right insurance policy can protect organizations against their unique risks, and empower them to use and benefit from AI with confidence.

Traditionally, technology companies don’t consider their regulatory exposure as they’re not usually governed by bodies in the same way more typical professions are. But as technology pervades daily life, regulatory risk will undoubtedly grow into a much bigger exposure for emerging technology companies.

Source: www.cfcunderwriting.com

What the Future Holds for Open Banking

Open banking is still in its infancy, yet it has the potential to reshape the banking industry on a global scale. To take full advantage, it’s important for financial institutions to understand the risks involved – as highlighted in new recommendations from the Joint Regulatory Oversight Committee.

As the world turns towards open banking – a term used to describe the use of open standards, technology and APIs that allow financial institutions to securely share customer data with third-party providers – consumers are set to benefit from a host of new product and service innovations.

But for institutions far and wide, open banking isn’t so much tearing up the rulebook as it is writing a second volume, with just chapter one complete.

The current state of play

As things stand, open banking is mostly unchartered territory. The US open banking ecosystem lacks the privacy rules afforded to consumers in the traditional banking industry, introducing a series of technical and privacy challenges which may be enough to dissuade firms from entering the market.

Meanwhile, the UK market is more structured. Open banking was initiated in 2017, following an investigation conducted by the Competition and Markets Authority into retail banking. This was followed by the Second Payment Services Directive passed in 2018, which made it mandatory for banks to share their database with third-party providers via APIs.

With tensions around privacy, competition and data portability still taking center stage, the UK’s Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) acted as co-chairs of the Joint Regulatory Oversight Committee (JROC), to publish recommendations on its vision for the expansion of open banking in the UK. These recommendations not only shed light on the future of open banking in the UK, but they also show how other nations can enable open banking safely and successfully.­

Laying the groundwork for success

With demand skyrocketing, open banking systems need to scale quickly if they’re to keep up. More than that, they need to become economically sustainable while remaining resilient, reliable and efficient. That’s no small task, so it’s no surprise the JROC recommendations state that strong regulatory direction is required to build an environment where a wealth of new products and services can emerge.

An open banking ecosystem depends on enhanced data sharing and collection. This encourages innovation and competition, but the ecosystem should also put protections in place if things go wrong. To mitigate the risks that come with open banking, financial institutions must understand the level of financial crime, their unique exposures and how to address them.

On top of the ecosystem and data sharing practices, the JROC is also set to prioritize payments. Creating a greater choice of payment methods would offer flexibility and more cost-effective alternatives to direct debits and card payments. The payments space needs a commercially sustainable model in place, along with the right dispute resolution processes.

Taking a proactive approach to risk

As new measures and infrastructure improvements are rolled out, we’ll see a fresh surge of product innovation in the FinTech market. This will lead to an increased use and reliance on open banking by consumers and businesses, resulting in a growth of total investment in open banking.

Open banking works as it empowers users to make better decisions about their finances through increased visibility of spending and financial health, while also making financial services more accessible. The JROC recommendations will lay the foundation for institutions to create new products and services. Both consumers and SMEs stand to gain from additional functionalities and the benefits of competition, including lower fees for payments and product innovation.

Source: www.cfcunderwriting.com

Top 3 Tech Exposures in Design and Construction

The construction industry is in the midst of a technological boom. It doesn’t matter whether you’re a large design build firm or a small artisan contractor, technology exposures – like software and cyber related errors, are becoming inescapable.

As the construction insurance industry continues to grasp this boom in tech, many insurers are neglecting the traditional construction errors and omissions (E&O) exposures in favour of technology E&O, and vice versa. CFC has looked into some top tech tools in the design and construction industry that may be more exposed than you think.

Software platforms

Construction software platforms, such as Procure or Autodesk are growing in popularity because they can solve a wide array of challenges like improving connectivity, project management, data collection and key processes all in one centralized place.

With this heavy reliance on technology, it’s important to also consider what happens if the platform fails. What happens if there’s an error in the platform software itself resulting in incorrect construction drawings being sent, or even a cyber breach resulting in loss of sensitive data?

Even a contractor using the software is not immune to these exposures. Disclaimers used by several major platforms deny liability for E&O as a result of their software. Providers are not often likely to leap to a construction manager’s defense if the platform fails, or if it is disrupted by a cyber-attack on your business.

Contractors can take some refuge by their insurance provider trying to rectify any damage caused to their project and reputation, or respond to an ongoing cyber breach in order to minimize further losses.

Generative design

Generative design utilizes artificial intelligence (AI) technologies to generate and explore multiple design options and to optimize project solutions. The AI learns what design elements work and what doesn’t using pre-set rules, parameters, and design preferences.

Generative design software is being used increasingly as part of the design build process. While human beings may still be involved in the sign-off processes for these AI-generated designs, the exposure to a business using a technology platform to create drawings in the first place will mean that anyone working with this software should have construction E&O in place. Broad coverage for technology errors should be included, otherwise they could risk technology claims falling through the gaps.

Modelling and virtual reality

While use of computer-aided design (CAD) and building information modelling (BIM) for construction dates back to the pre-2000s, digital visualization in construction is heading to new, complex heights. There are an increasing number of tools for contractors, construction engineers, planners, or safety personnel to plan and visualize construction activities. Some platforms enable project stakeholders to visually explore assets in full virtual reality (VR), even when still under construction.

The reality is though, whether it be CAD, BIM, or even VR, errors and costs can always occur, from an incorrect rendering of plans, to broken contractual clauses as a result of a data breach. A huge variety of construction personnel utilize 2D or 3D electronic renderings in some form or other and therefore, technology errors coverage is essential to take into consideration.

There are many more technological advances and investments being made in the construction industry today. 3D printing of building materials or even programmed robot constructors could be a common practice in the future. As well as the multitude of construction E&O exposures faced by the construction industry, they are also faced with growing technological and cyber event exposures too.

Source: www.cfcunderwriting.com

5 Things you Need to Know about NFTs

Non-fungible tokens (NFT) have taken the digital world by storm in recent years. From Snoop Dogg to high school students, people and their NFTs are making waves.

But what are they? And are they a fad or here to stay? CFC has answered the top 5 questions about NFTs.

What are NFTs?
An NFT is a blockchain held token that at its most simplistic is a certificate of ownership over an original item, typically (but not always) a digital asset, such as artwork, audio, videos or even memes. As digital assets are so easily shared, downloaded or copied this provides ownership to one person for the original. In real art terms think of it like the fact that anyone can own a print of Van Gogh’s, The Starry Night, but there is only one original. The NFT is akin to owning an original digital asset.

By definition, fungible means replaceable or interchangeable, so a non-fungible item is the opposite, meaning it is unique and cannot be replaced by something else. For example, currency (including cryptocurrency) is fungible as you can exchange £1 coin for another and you’ll have the same thing, but an NFT is one of a kind.

Are NFTs and cryptocurrency the same?
No. The confusion usually stems from them both being stored on a blockchain. Cryptocurrency is essentially a coin and operates more like traditional money and is native to a blockchain. NFTs are more like digital deeds and are created on a blockchain. The biggest differentiation between the cryptocurrency or coins is that cryptocurrencies have their own blockchains, whereas NFTs are built on an existing blockchain. So for example on the Ethereum blockchain, the cryptocurrency native to the chain is Ether but the Ethereum blockchain is the most commonly used blockchain for the creation of NFTs.

What is an NFT marketplace?
An NFT marketplace is a platform that allows the buying and selling of NFTs. It’s like any large ecommerce site, but just for NFTs. There are many marketplaces which provide the minting process, which is how an NFT is created and becomes live on a marketplace for sale. Compared to traditional online marketplaces, purchasing fungible assets can be more time consuming and costly. To be a part of the NFT marketplace users are required to have a crypto wallet to store their cryptocurrency after selling an NFT.

Can NFTs be copied?
It’s the token that is the valuable part of the NFT which cannot be copied. However, this does not mean the asset itself cannot. Think of the token as an artist’s signature on a famous painting, while the painting can be copied, it’s the artist’s signature (or token) which makes it authentic.

When did NFTs become so popular?
In 2014 a digital artist minted the first NFT, Quantum. Following this, various other games, and platforms started utilizing NFTs and popularity started to build. But it was 2021 which saw the biggest boom, with the likes of Bored Ape Yacht Club attracting the attention of Eminem, Paris Hilton, and Snoop Dogg. McDonalds created the McRibNFT for a Twitter campaign, and the Kings of Leon’s NFT provided fans with a limited-edition vinyl and front row seats to future concerts. And little old Quantum was sold for over $1.4 million in a Sotheby auction.

The digital transformation of collectibles through NFTs enabled brands to engage with customers in new ways. Companies across the tech and media sectors are finding unique ways to implement NFTs into their products and services – whether this be in their games to add player engagement, or as part of a marketing strategy on behalf of their customers. The virtual platform Decentral held its first fashion show including famous designer brands such as Dolce & Gabbana and Paco Rabanne.

From a brand perspective investing into NFTs may be an inventive way to engage with their users and to build a sense of community. NFTs can be used to raise funds for charitable causes and to deliver unique experiences to their customers.

Source: www.cfcunderwriting.com

Technology for Isolation Alleviation

The corona outbreak has illustrated just how important technology is in our lives. Whether it’s allowing you to work from home, stay in touch with loved ones that you can’t be with, or keeping you fit when you can’t make it to a gym – technology is so essential to the human experience – now more than ever.

CFC receives a variety of tech risks from start-ups to SMEs, but there’s certainly been an influx as we all grapple with life in lock-down.

Here are some of the tech risks CFS is seeing which seem to have particular relevance in a COVID era:

Checkout-less shopping

Maintaining social distancing while in your local supermarket is a tough call at the moment, but some retailers are using artificial intelligence to operate stores without checkouts, so there’s no more queuing and no unnecessary groups of people! With onsite cameras, cloud services and sensor technology, all you need to do is download the app, scan in, grab those essentials and walk out!

Digital events for seniors

Borne out of the awareness that isolation can be especially tough for seniors who may already live a relatively solitary life, this app hosts digital events for elderly people. The app is helping to combat the loneliness epidemic with book clubs, regular religious and worship events and yoga – the perfect way for the elderly to stay connected during social distancing.

Social gaming

What better time to become a gamer?! eSports is becoming the fastest growing form of entertainment in the world, with over 550M viewers expected industry-wide by 2021!  This games developer is creating titles across a multitude of platforms including augmented reality, virtual reality, consoles, mobile, PCs, and interactive television.

Internet discovery platform

A new way to share content with friends and strangers – this platform finds the internet’s hidden gems using in-depth machine learning. Move over annoying algorithms that forever show you dog photos after that one accidental click! The platform recommends content (for example recipes, decorating, astrology, fitness) that the user may like due to their chosen interests, it also allows the user to save and share their favourite finds for others to discover. Browse corners of the internet the usual social platforms skip over – or let other users do the work for you!

Treasure hunt

This business is diversifying its proposition for 2020’s stay home world. Usually this tech company offers an augmented reality application that enables the user to go on treasure hunts around public spaces. With public engagement on hold, they’re providing fun adventures to play among family and friends in the form of escape rooms. Users are tasked with finding hidden codes, perform fun tasks and solve riddles. This should keep the kids busy for a little while!

Fitness from home

The gym may be closed, but no one wants to walk out of lock-down twice the human they walked in!  Now is the perfect time to try some new fitness regimes.  This app is packed full of instructional videos for yoga, HIIT, barre and quick 7-minute fitness work outs. Let’s get physical!

Sports engagement for kids

Using the app, kids can learn, practice and develop new sports skills. The app is designed to inspire youth with a virtual coaching and engagement platform. App users can also upload videos of themselves performing the skills for other children to learn from.

We will see some amazing new technology emerge as a consequence of the coronavirus era, as technology continues to respond to our changing lives.

Source: www.cfcunderwriting.com



Receive notifications of new posts automatically.


Like us on Facebook

Connect with us on LinkedIn