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‘GLOBAL TRADE IN 2008 VS 2021: GLOBAL IMPACT, DIFFERENT CHALLENGES’

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A Q&A with Nawaz Ali Head of Insights at Western Union Business Solutions who draws comparisons between the financial crisis of 2008 and the coronavirus pandemic and provides some insight into how businesses can better plan for the year ahead.

 

2020 has been a tumultuous year for global trade with many drawing comparisons to the financial crash of 2008, how do you think the two crises compare?

Though both crises were global in nature and had far reaching impacts worldwide, it is important to note that the dynamics of today’s global trade have shifted in the past 12 years. Today, faster digital transformation can help enable the global services trade to counterbalance some of the impact of the protectionist policies, which we typically witness in times of crisis, on the global goods trade.

Even so, the recovery of global trade could still be very gradual as these more protectionist behaviours could also keep trade activity near to its lowest level over the past 10 years.

Unlike in 2008, this time both global supply and demand factors are at play, so the effects could last longer. Furthermore, this time around the crisis is broad and impacting all sectors whereas in 2008, the crisis was more concentrated in the banking sector.

The recent vaccine developments have been an important turning point, and we’ve seen an immediate positive impact if, for example, you look towards the recent spike in commodity prices. However,  global demand could still remain distressed  in 2021 due to  corporate insolvency risks and weaker purchasing power of consumers.

Similar to 2008, global interest rates have been cut to new historic lows by central banks which should underpin investment and support the recovery. However, the key factor for any recovery actually lies more in the mass development and distribution of the COVID-19 vaccine, and it is that uncertainty which spurred governments into also launching record amounts of fiscal stimulus.

Nevertheless, by putting the right plans in place for 2021 businesses will be able to better equip themselves to recover from the pandemic.

 

When a crisis hits, typically investors rush to safe-haven currencies to minimise their losses. Could this have a different impact today when compared to 2008?

Yes, the geopolitical differences between now and 2008 are stark. Today, the first signs of a capital rotation into risk-prone assets are emerging. With the US-Sino trade war, domestic mismanagement of COVID-19 in the US, and rising global geopolitical tensions, now could be the beginning of a major multi‑year global FX regime change as investors start to look for alternatives for the greenback.

Despite the fact investors have failed to find a credible substitute for the dollar since 2010, in this volatile environment it is critical that businesses ensure they understand their FX exposure and have plans in place for every potential scenario.

There is a disconnect between stock markets and the economy. Investors remain optimistic about the economic turnaround on the horizon, but the reality is far from certain. If the risk of long‑term economic damage rises, this optimism will likely fade and weigh on risk‑friendly currencies, including Sterling, and boost safe-havens like the Japanese Yen and Swiss Franc.

In short, with global interest rates converging, proper crisis management and economic growth differentials could overhaul the balance of power on the world stage after the recession.

 

Aside from the coronavirus pandemic, what other marquee events should businesses be planning around in 2021?

Of course, there are many other seismic geopolitical issues that should be taken into account when planning for 2021, which will have significant impacts on currency markets, such as Brexit, US-UK trade negotiations and regime change following the US election result – a Joe Biden presidency could have a material impact on the global trade environment.

Analysing the Brexit example alone, in a world gripped by virus-related supply chain disruption and growth concerns, a no-trade deal Brexit could exacerbate the economic shock. There are currently no tariffs on trade between the UK and EU and if a  trade deal or an extension of talks is not in place by Dec. 31, 2020, resulting barriers to trade could significantly harm export and import business and further damage any economic recovery.

Herein, the importance of a business evaluating the risks and opportunities related to the ongoing disruption in global trade on a more regular basis cannot be understated.

 

How can companies be better prepared for these challenges going into 2021?

The rise of geopolitical themes such as trade wars, and the growing influence of political figures on financial markets, has significantly increased the complexity around judging future market trends and their implications for international business. We discuss how businesses can better prepare for some of the most topical challenges  in our Are you Ready for 2021? guide.

 In summary, regardless of a businesses’ goals, understanding their FX risk and exposure should be part of every businesses strategy so that they can better pivot at speed and at scale in times of crises and minimise potential damage to their business.

 

Business

Web Scraping in 2022 & Beyond

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Web scraping has been coming into the limelight in recent years due to the rising interest in data. Businesses across the globe have been eyeing automated data collection as a way to enhance their profitability and overall decision making.

We’ve sat down with the Lead of Commercial Product Owners at Oxylabs.io, Nedas Višniauskas, to talk about the future of web scraping. Few people have been as deeply involved with the industry as Nedas, which has allowed him to gain a unique perspective on how it has developed and how it will continue to do so.

What do you think has been the biggest change in web scraping over the last decade? How has Oxylabs participated in these changes?

There have been some interesting changes during the past few years. One of them, I think, has been the proliferation of increasingly sophisticated anti-bot systems. Scraping such websites at scale, in turn, becomes more difficult.

Scraping enthusiasts, of course, have their own answer to these issues, which is to develop dedicated data collection tools. These, while limiting the field of use, can bypass the anti-bot systems and they are constantly being updated for that purpose.

Another important change has been the rising popularity of JavaScript. More and more websites are using it to load critically important data dynamically, which means it’s essentially unreachable without browsers.

Headless ones, therefore, are a necessity. At the same time, that means infrastructure costs are rising as headless browsers take up much more computing power and traffic than simple HTTP requests.

Finally, ethics have been in the limelight. For example, residential proxy providers are looking for ways to inform and reward participants of the network. We ourselves took charge of building the framework for ethical acquisition, which, I believe, has played a part in the fact that there are less shady practices and more clarity among all industry participants.

To answer the second question, Oxylabs have reacted to these changes with the development of Scraper APIs. We created both dedicated and universal scrapers that can acquire publicly available data from nearly any website without issue. Additionally, all of our proxies are ethically sourced, giving our partners the much needed peace of mind when engaging in scraping.

Have you seen or noticed any particular trends in data acquisition or web scraping? Are specific data types becoming popular?

Off the cuff I’d say that the use of ecommerce and delivery data has been booming since the pandemic hit. Businesses want to (legally) spy on competitors and gain access to as much data as possible. Data types like pricing, products or delivery times are important to any competitor.

But these have always been important. Maybe I would say that external data in general has risen in importance. Outside of that, I don’t think there have been any particular trends in data types. There have been, however, changes in the entire supply chain. As I’ve mentioned, businesses only really need the data. Even then, the data is not the key – insights are.

As such, businesses at the tail-end of the chain have proliferated in recent years. Data-as-a-service aggregators, ones that collect information and sell sets of it, have been rising in popularity.

There are also some businesses that provide insights directly. While these are still few and far between, some of them have unique value propositions that I could see as worthwhile. Jungle Scout, for example, is a service that both scrapes external data and has large datasets from internal sources. As such, they can provide insights other businesses can’t.

What do you think are the biggest challenges the industry is facing currently? Are there any innovative solutions to these or other challenges on the horizon?

Bot protection has always been the greatest challenge. Scraping, you see, is a cat-and-mouse game. Websites attempt to implement anti-bot measures, such as the well-known CAPTCHA, while scraping companies attempt to continue evading them to retain access to data.

There have been great strides made in bot protection. TLS (Transport Layer Security) fingerprinting has been one such improvement. Sophisticated websites can use initial network handshakes to match them with headers. As many scraping tools manually modify the headers sent, TLS can often be mismatched, which would be a dead giveaway.

On the other hand, the deck is always slightly stacked in the favor of scraping. Most anti-bot protection features put a dent in the overall user experience. Filling in a CAPTCHA is something that detracts from that frictionless experience of the modern web we’re used to.

Some businesses use these techniques and see no issue. Others, ones highly concerned with delivering the best user experience possible, avoid using CAPTCHAs unless absolutely necessary. It’s always a tradeoff. More bot protection equals, almost always, worse UX, which leads to less revenue. But then less people are scraping your website.

Additionally, new pages with interesting data and content appear all the time. And you don’t start building a website from bot protection. It has to be functional first. So, the process of scraping is a lot easier than it could be for a long time.

Would you say that there are potential benefits in web scraping for academic research or policy-making? If so, why hasn’t the scientific or political community adopted the practice?

Academic research, quantitative in particular, is in large part based on data that doesn’t exist on the internet, yet. There could be studies, however, on internet behavior or something of the like where scraping could be immensely useful. Additionally, I think we’re not seeing such widespread adoption due to the previously mentioned barrier to entry.

Let’s imagine that there’s no previous scraping experience in some particular university. The researcher would have to build everything from the ground up, get all the deep knowledge, and the funding required just to start acquiring the data.

It doesn’t help that the research areas that benefit the most from scraping (like sociology, economics, psychology, etc.) are far removed from the coding, development, and IT in general. I think it’s more of an unfortunate, but temporary, circumstance, because web scraping providers will be able to reduce the barrier by a significant margin in the future.

When it comes to policy-making, I’m not so sure. I think that rather than making, it should be about enforcing. Governments are definitely knee-deep in web scraping for all kinds of security purposes. Businesses, on the other hand, have been using the same processes to protect themselves from counterfeits and copyright infringement. There’s an entire business vertical dedicated explicitly to brand protection.

 

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Q&A: THE IMPACT OF ENVIRONMENTAL CONDITIONS ON BIOMETRIC AUTHENTICATION.

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Joël Di Manno, Authentication & Biometrics Laboratory Service Line Manager and Abdarahmane Wone, Biometrics & AI Researcher at Fime.

 

User adoption of biometric authentication has accelerated in recent years, yet some users are still cautious. Fime is exploring ways to innovate on biometric evaluation to help solution providers to launch reliable and high-performance products. In this interview, Stéphanie Pietri, Communications Director at Fime, speaks to Joël and Abdarahmane about their scientific paper to learn more on the impact of environmental conditions on fingerprint systems performance.

 

Stéphanie Pietri: What is biometric authentication?

Joël Di Manno: Biometric authentication solutions utilize a person’s physical or behavioural characteristics, such as their fingerprint, face, or keystroke dynamics to verify their identity. Using biometric characteristics to authenticate someone provides a high level of security because these traits are unique to that person. It also provides a good user experience, as there is no need to remember long passwords. This can provide consumers with easier routes to make a payment or access a service.

However, the adaptability of biometric solutions can present challenges, as different conditions have the potential to increase false acceptance or rejection rates. This means that there is the potential for security to be compromised if non-genuine users can be verified, or the user experience will be impacted if genuine users cannot.

 

SP: What type of environmental conditions can influence biometric authentication?

Abdarahmane Wone: One of the challenges of biometric solutions is that environmental conditions can alter their performance. For example, if someone is using a facial recognition solution, changes in lighting or the background can influence its performance. Similarly, fingerprint systems can be affected when environmental conditions like temperature and humidity change, because the texture of fingerprints alter accordingly. This change can mean that the fingerprint does not match the reference fingerprint that was recorded during enrolment and therefore is not verified.

These environmental changes impact the performance, security, user experience and the trust of biometric systems. It is also important to note that not all biometric systems are impacted in a similar way. However, while we know that there is an impact, very little research has been done to assess the performance of biometric systems in different climatic environments.

 

SP: What did Fime do?

AW: To find out more about these impacts, Fime undertook some research to understand how humidity and temperature changes affect the performance of fingerprint systems. We tested the performance of three different third-party fingerprint authentication matchers in different climatic conditions. The aim was to see how accurate the algorithms were at matching the fingerprint samples taken during enrolment. The performance of the biometric systems was evaluated in six different conditions made up of a combination of two different temperatures and three different humidity environments. The different humidity and temperature environments were created using climatic chambers. After signing consent forms regarding European GDPR regulation, more than one thousand fingerprint images were collected from 17 volunteers.

 

SP: And what was the impact of these environmental factors on biometric authentication?

AW: We observed that all of the algorithms performed better when the environment was less humid. Importantly, we saw that the three algorithms were all impacted differently by temperature and humidity changes, demonstrating that the impact of environmental factors is not consistent across biometric solutions.

Also, the environmental conditions of the enrolment of the fingerprint samples made a difference. The algorithms all performed better when the environmental conditions were the same as those during enrolment of the fingerprint samples. Again, we saw that the three products were all impacted differently when the verification was done in an environment different to the enrolment environment. While two of the products differed less than 1%, the third product differed by 24%. This shows that the product could present high security risks and/or a bad user experience for consumers. This study highlights the importance of a comprehensive enrolment guide for vendors and users, to decrease the impact of environmental conditions as much as possible.

 

SP: What can be done to mitigate the impact of these conditions on biometric authentication systems?

JDM: Fime has now developed a process and identified parameters to evaluate environmental impact, thanks to the research project. The results of this research demonstrate that environmental conditions can have differing degrees of impact on biometric authentication systems. Therefore, testing the performance of biometric solutions in different environments, including different conditions between enrolment and verification, could prevent real-life issues. Certification schemes could introduce this aspect into their evaluation programs to ensure security in various conditions and decrease variance between different biometric solutions.

Biometric solution vendors can use this evaluation during their own quality assurance processes. By performing testing in this area, they can fine-tune solutions to mitigate the impact of environmental conditions. This will verify that their products can be deployed globally and will perform well in different climates. By taking these factors into consideration, they can enhance the trust, security, performance and user experience of their solutions. This may give them the ability to outperform competitors who are not considering the impact of environmental factors when developing their solutions.

 

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