Horizons is a bi-monthly Dasym Research initiative to show you how the Dasym themes have been in the news. We publish the Horizons on our website and as an email newsletter. If you wish to receive the email, please contact Investor Relations.
Do you have a question about the digitization of consumer’s daily lives? As a research-driven investment company, we want to be relevant to you, so please provide us with your questions and remarks. Your feedback will help us to drive our research agenda.
Protection against privacy fines
About a year ago GDPR came into force and regulators have now started to ramp up fines for companies violating Europe’s privacy rules. It started in January with French regulator CNIL fining Google for €50m, citing a lack of transparency and consent in advertising personalization. Several European regulators have Google and Facebook in their sights, but other companies are also at risk. In July, U.K. data protection authority ICO fined British Airways with $228m and hotel chain Marriott with $124m for leaking personal data of their customers. In both cases, the breaches occurred because of poor security arrangements. Had BA maintained its technical solutions, it would have spent a few million dollar, much less than the record fine it received. The heights of the recent fines show that regulators intent to use the full breadth of enforcement powers granted by the GDPR: the worst offenders may have to pay €20m or 4% of their annual global turnover. At these price points, cybersecurity becomes a top priority to prevent cyberattacks and privacy fines.
Future leaders get a taste of new economics
A new introductory course at Harvard University, called “Using Big Data to Solve Economic and Social Problems”, has proven very popular among students. Taught by Professor Raj Chetty, a prominent frontrunner of the empirical turn in economics, the course focuses strongly on real-life problems and solutions by using (big) data. Chetty’s work has gained prominence in political debates as it shows – by means of empirics instead of theory – how markets are failing to address societal problems and how state intervention is warranted in ways that traditional economics would disapprove of. These ideas tie in with the broader trend of favoring a larger role for government that is reflected in ambitious Democratic plans in relation to sustainability (e.g. the Green New Deal) and inequality (e.g. Medicare-for-all). With decision-making in societies and economies becoming increasingly data-driven, this is now also being reflected at universities and in (socio-)economic research. As such, the new mindset that Harvard graduates will bring to board rooms and political debates is likely to impact American society in the coming decades.
BigTech are attacking financial services
Over the years, the finance sector has seen a wave of startups that want to disrupt the sector with their technology-enabled innovations. Recently, however, it was Facebook, one of the BigTech firms, that shook up the financial world with the announcement of global digital currency Libra. With Libra, Facebook aims to build a “financial infrastructure that can foster innovation, lower barriers to entry, and improve access to financial services.” Facebook is not the only BigTech attacking financial services, especially payments; Amazon, Apple and Google have also entered into the space. Although they come from various backgrounds, expanding into finance is a logical step for all of them. Apple, for instance, is rolling out its mobile payment system across Europe, while Amazon is moving into the continent by offering retailers the use of its Pay network. With their scale, data and technology, BigTech can reduce friction, undercut incumbents on fees and harvest the financial data. As such, they can become huge competitors to incumbent financial institutions.