Banks AI Push Pulls Lending Discrimination Into Question

Banks AI Push Pulls Lending Discrimination Into Question
  • AI already has a history of bias against minorities

  • In 2016 20.9% of black borrowers were rejected for mortgage loans

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Banks that want to use artificial intelligence (AI) still have to adhere to several industry specific rules primarily around transparency. Most of the rules were put in place to protect poor and minority consumers, including laws which are supposed to ensure the equal treatment of customers. Are black people going to fall further behind in getting approved for loans and credit cards if banks start using AI for lending decisions?

Why This Matters: AI and deep learning technology already have a history of bias against minorities. There are laws in place like the Equal Credit Opportunity Act, which state banks have to prove they’re not discriminating based on traits like gender or race. “We want to understand how the decision is made, so that we can stand behind it and say that we’re not disfavoring someone,” said Hari Gopalkrishnan, client-facing platforms technology executive at Bank of America (BAC +0.96%) during its tech summit.

AI platforms taking over bank lending decisions could put black family wealth further behind. In 2016 20.9% of black borrowers and 15.5% of Hispanic borrowers were rejected for a loan, along with 8.1% of white applicants and 10.4% of Asian applicants, according to a Zillow report. The gap is significant because owning a home can help most people regardless of race, accumulate assets to boost their net worth.

What is deep learning technology? Let’s start with the tools used for deep learning, which include neural software networks whose structure roughly tries to simulate the human brain’s operations. These systems create outcomes with unprecedented accuracy and speed. However, the main issue here is not always clear on how the dense web of computations reaches a specific decision.

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Breast Cancer Breakthrough Could Save Black Women Money

Breast Cancer Breakthrough Could Save Black Women Money
  • The 5 year survival rate was 83% for black women between 2011 - 2015

  • In 2017 Roche made $7 billion from Herceptin in global sales

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Treating breast-cancer patients may become a little cheaper and more efficient. A study by the U.K. National Institute for Health Research has found a six month treatment of Roche’s (RHHBY +1.83%) Herceptin drug is just as effective as the longer 12 month cycle. Just how much can black women benefit from shorter treatment cycles?

Why This Matters: African Americans have the highest death rate and shortest survival of any racial and ethnic group in the U.S. for most cancers. Black women are more often diagnosed with a very aggressive form of breast cancer called triple-negative. It’s a subtype that does not rely on hormones to fuel its growth. Between 2011 and 2015 the five year relative survival rate was 83% for black women, according to the American Cancer Society.

The study by the U.K. National Institute for Health Research has found Herceptin can be just as effective in half the amount of time. This is a potential game changing discovery for black women because the drug has improved treatment for an aggressive type of breast cancer known as HER2-positive.

In the study researchers found 89.4% of the women who took Herceptin for six months were free of disease four years after the start of treatment, versus 89.8% for women who received 12 months of treatment. Roche’s Genentech unit noted the new study should be viewed in the context of prior studies that didn’t show that shorter treatment was better.

While this is great news for cancer patients, the same cannot be said for the company which generated about $7 billion from Herceptin in global sales for Roche last year. In the U.S., the drug costs $76,700 for 12 months of treatment and is particularly effective when used to prevent disease recurrence after breast surgery.

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New Wave of Accusations Flood Tidal

New Wave of Accusations Flood Tidal
  • Tidal reduced royalty payout from 62.5% share of its revenue to 55%

  • Sprint owns a 33% stake in Tidal, which it bought for $200 million

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Tidal’s back in the hot seat as the streaming company is reportedly not paying artist royalties on time. Will Tidal survive these cataclysmic events?

Why This Matters: Just last week, news broke that Tidal inflated streaming numbers for artist-owners Beyoncé and Kanye West. Though it shrugged off the accusations as a “smear campaign,” Norwegian publication Dagens Næringsliv is back with a new development.

Based on translations from Music Business World, the report highlights Tidal is “behind with payments directly to three major international record companies,” and several execs went on the record to corroborate the story. The most concerning account noted “people are talking about withdrawing [their music from TIDAL].” The comment came from Sveinung Rindal, country manager at Sony (SNE -0.43%)owned The Orchard, who based on his Linkedin also worked at Tidal until November 2016.

More over, Dagens Næringsliv alleged Tidal reduced royalty payout from 62.5% to 55% last April, “without consulting rights-holders or PROs.” The recent reports by DN follow a December story where it said Tidal had about 6 working-months left, despite a $200 million cash injection from Sprint (S +0.98%) in mid 2017.

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The Prison Phone Industry Faces a New Video Challenge

The Prison Phone Industry Faces a New Video Challenge
  • The U.S. prison phone system industry totals $1.2B

  • In 2014 500 million phone calls took place to and from prison facilities

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Prison phone system companies Securus and GTL are making a push for video calls to replace in-person visits in correctional facilities across the U.S. These two companies dominate the prison phone industry, yet there are competitors who provide low-cost alternatives vying for a larger market share. What needs to happen to create more opportunities for these companies to level the playing field in the industry?

Why This Matters: Securus and GTL are the two dominant players in the $1.2 billion prison phone industry. The question is whether Pigeonly and Flikshop will be able to scale enough to take significant market share away from Securus and GTL. Video calls are the latest service they are rolling out in the correctional facilities they contract with. The revenue opportunity here is large because an off-site 20-minute video call can cost $14 or more in some prison systems, not including additional fees. To get a better sense of the revenue opportunity for video calls, consider there were 500 million similarly expensive phone calls that took place to and from prisons in 2014.

Two startups run by formerly incarcerated individuals are trying to create more competition in this industry. Pigeonly, which is run by Frederick Hutson, offers services ranging from sending photos to providing low phone call rates through its VoIP technology. The company currently averages more than $175,000 in monthly revenue and has raised more than $5 million in venture funding. The company plans to expand to more incarceration facilities and add a payments platform.

Flikshop, founded by Marcus Bullock, is focused on using postcards to ease the ability families have in communicating with loved ones. Families can use the Flikshop app to upload photos that Flikshop sends to their incarcerated loved ones for $0.99.

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Will Apple Think Different at Research Triangle Park?

Will Apple Think Different at Research Triangle Park?
  • $130,000 average salary for new Apple campus

  • Up to 10,000 new jobs in North Carolina Research Triangle Park

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Apple (AAPL +0.71%) is said to be finalizing a new campus deal in North Carolina’s Research Triangle Park area. Will the tech behemoth be able to recruit more diverse talent?

Why This Matters: The Research Triangle Park location gives Apple access to talent at HBCUs Shaw University and North Carolina Central University. The opportunity would align with Apple’s active efforts to attract black tech talent through its Apple HBCU Scholars Program.

This move can potentially up its black employee representation which currently falls at 9%. Similarly, the Research Triangle Park neighborhood is part of the Raleigh-Durham-Chapel Hill vicinity, where 22% of the population is black. Those numbers nearly double the nations 12% black population, and are slightly higher than North Carolina’s overall 21%. Local companies such as IBM (IBM +0.98%), Cisco (CSCO +1.25%), and Lenovo (LNVGY +2.58%), usually rake in talent from three neighboring universities: North Carolina State University, Duke University, and University of North Carolina at Chapel Hill.

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Living Black Artists Create Bidding Frenzy Frontier

Living Black Artists Create Bidding Frenzy Frontier
  • Jean-Michel Basquiat’s “Flesh and Spirit” sold for more than 2,000 times its purchase price

  • Diddy purchased Kerry James Marshall’s “Past Times” for $21 million

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The contemporary art sale at Sotheby’s auction house turned up the heat surrounding black art. Three living black artists set auction records including Kerry James Marshall’s “Past Times” painting which sold for $21.1 million. How important are these milestones to help move black artists into the mainstream art spotlight?

Why This Matters: Pieces by black artists drew dozens of bidders and even celebrities like Swizz Beatz and Diddy got in on the action. One of the highest selling black art pieces was Jean-Michel Basquiat’s “Flesh and Spirit” which sold for $30.7 million, more than 2,000 times its purchase price from 35 years ago.

Swizz Beatz won a portrait by Lynette Yiadom-Boakye for $555,000, which was part of the Studio Museum group. Leave it to Diddy to go all out with a $21 million purchase of Marshall’s “Past Times” painting. This piece of art was acquired in 1997 for $25,000 by the Metropolitan Pier and Exposition Authority (MPEA) in Illinois for the South Building of its McCormick Square campus. Originally the painting was purchased with public money raised through project-expansion bonds. The sales price should make a small dent in the state’s debt problem, even as S&P projects the state’s budget deficit will likely eclipse $7bn in its fiscal 2018 year.

Also, The Studio Museum of Harlem raised a hearty $16.4 million from the auction. “It’s a testament to the importance and centrality of these artists within the narrative of contemporary art,” said Thelma Golden the Studio Museum’s director to Bloomberg.  It will use its proceeds from the auction to help renovate and expand the museum’s 125th Street home.

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Marshall Makes Auction History, Sherald Makes it to Museum Board Room

Marshall Makes Auction History, Sherald Makes it to Museum Board Room

We are at such an important moment in contemporary art history. Kerry James Marshall has fetched 20 odd million at auction. There are increasingly more solo and group exhibitions mounted for Black artists. What I find fascinating is that among Black artists, women artists are as respected and revered as their male counterpart. This is not true in any other area of contemporary art. Black artists are not only finally given a seat at the exhibition table, they are being invited to positions of power within the hallowed halls of museum board rooms. Amy Sherald, who famously painted The First Lady, Michelle Obama, has officially become a trustee on the board of the Baltimore Museum of Art. Sherald used Black cultural references from the community of Gees Bend, Alabama. The women of Gees Bend quilted with rags from slavery to the Civil War, a failed reconstruction, Jim Crow to Dr. King and onward. These quilts are the roots upon which so many African American artists are reclaiming history. Both Black men and women united together creating a new language of contemporary art.

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Zimbabwe’s Central Bank Puts Cryptocurrencies in the Morgue

Zimbabwe’s Central Bank Puts Cryptocurrencies in the Morgue
  • The Reserve Bank of Zimbabwe bans all financial institutions from recognizing cryptocurrencies

  • Cryptocurrency exchange Golix cancelled a $32M initial coin offering

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The Reserve Bank of Zimbabwe dealt a major blow to the country’s cryptocurrency industry by banning their recognition at all financial institutions. Cryptocurrencies have been a popular form of bridging gaps in the availability of cash in the country. What impact will this policy move have on cryptocurrencies in Zimbabwe?

Why This Matters: For decades Zimbabwe has buckled under the weight of astronomical levels of inflation. At its peak in 2008 inflation reached 79.8 billion percent, the second highest level ever recorded behind Hungary. Inflation has subsided significantly since then, but the country still uses multiple currencies as opposed to one. Following a coup in 2017 Zimbabweans turned to cryptocurrencies in effort to preserve the value of their cash out of fear that hyperinflation would re-emerge.

This ban does not come out of the blue for Zimbabweans. In December the Reserve Bank issued a circular memo, warning financial institutions on the risks associated with cryptocurrencies. Golix, the largest cryptocurrency exchange in Zimbabwe had planned a $32 million initial coin offering to fund expansion to other African markets. The exchange released a statement on Twitter stating it understood what the Reserve Bank was trying to accomplish. It also noted they would work with banking partners and the Reserve Bank to address concerns with cryptocurrencies.

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Cellulant Secures $47.5M to Take Africa FinTech to the Next Level

Cellulant Secures $47.5M to Take Africa FinTech to the Next Level
  • Cellulant’s co-founders made 400 pitches before securing $47.5M investment

  • In 2017 financial technology startups in Africa secured $119M in venture funding

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Mobile payments startup Cellulant secured a $47.5 million investment from a group of firms led by The Rise Fund. Cellulant has been recognized as one of the top providers of mobile financial services across Africa. How will the funds Cellulant raised impact the millions of people who still lack access to financial services across Africa?

Why This Matters: Mobile banking continues to be the most popular venture capital investment opportunity across Africa. In 2017 African startups secured $590 million in venture funding. Financial technology startups made up $119 million of that amount. The Rise Fund’s investment in Cellulant continues that trend. Right now the startup provides a series of products that reach 40 million users in 11 countries. These products include apps like Moola for bill pay transactions, the e-commerce-focused Tingg and its agriculture-focused blockchain technology Afrikore.

Cellulant has plans to expand to more African countries and roll out consumer-facing applications. “We are scaling up our existing payments products in the agriculture sector, digital banking and internet payments; as well as introducing consumer-focused products to complement the enterprise products we already have,” said Cellulant Co-Founder Bolaji Akinboro. The startup’s expansion to consumer-facing products will be welcomed as only 17% of the continent has access to banking services.

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