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Three Trends Currently Shaping GovTech Landscape

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Here are Three Trends Presently Shaping GovTech Landscape

The COVID-19 pandemic has challenged the majority of countries around the world. While some of the solutions proposed by governments have varied, when it comes to providing social, economic, and medical assistance, those with developed GovTech—a whole-of-government approach to public sector digitization—have generally been more efficient.

The pandemic has highlighted the importance of such systems, but as with any crisis, it has also left many pondering: how will GovTech evolve in the future?

Experts at NRD Companies, a global IT and consulting group of companies specializing in governance and economic digital infrastructure, have elaborated on how the landscape of GovTech might look like going forward.

Remote collaboration

The importance of developing e-government systems has not been overshadowed by the pandemic. In fact, the adverse conditions have only reinforced the need for GovTech solutions as countries seek to deliver their citizens an efficient way of accessing public services. With a deadly virus raging and travel restrictions in place, the crisis has opened up new opportunities for remote collaboration, which is no longer seen as an option, but rather as a necessary component for successful GovTech project implementation.

“As tools, processes, and software constantly improve, it has become possible to implement large-scale GovTech projects entirely remotely, regardless of location and time zones,” said Mindaugas Glodas, CEO at NRD Companies. “Of course, consulting and implementing projects remotely is significantly more complex than doing it the usual way, thus when choosing partners, countries should consider their experience in working with such projects. In any case, moving forward, remote work will stay with us even after the pandemic, as countries are becoming more aware of the benefits such methodology brings to the table.”

One such project involves Barbados, an island country in the Caribbean which has recently agreed, even amidst the pandemic, to take the first step toward digitizing the public sector. Working together with NRD Companies, the nation will implement a progressive e-services delivery platform entirely remotely, encouraging cooperation and data exchange between the public sector and the government by providing a Directory of Services and designated online spaces for citizens, businesses, and the government.

Shift to cloud

Multiple governments around the world still rely on physical, premise-based data centers. Such centers require careful management and are vulnerable to fire, smoke, moisture, flood, pollution, and data leakages. As governments receive more and more sensitive data, storing it in bare metal servers is becoming too risky to continue.

“The limitations of legacy systems are going to encourage a shift to cloud,” said Mr Glodas. “It is no longer safe and practical to store data on physical servers, especially when an increasing number of governments are choosing the digitization path. Going cloud is the next logical step as it provides more resilience, saves money and stimulates innovation.This has been happening for quite some time in the private sector, but the transition in the public sector is only accelerating.”

In particular, private clouds are now on the rise. In 2018, a study predicted that governments will shift to private cloud at twice the rate of public cloud through 2021. Since then, the German federal government, the French Ministry of the Interior and a few Swedish government agencies, among others, have transitioned to private cloud to ensure control and security.

Other countries choose similar cloud solutions. Partnering with NRD Companies, Anguilla, a British overseas territory in the Caribbean, will have its electronic system for the Commercial Registry implemented on a hybrid cloud—a combination of on-premises infrastructure, private and public clouds—to ensure availability in a cost-effective way.

Positive influence of electronic business registries

The private sector is crucial in the country’s fight against poverty through investment and job creation. Where an effective private sector is lacking, business registration reform has been shown to be one of the essential first steps toward improving the business environment and fostering private sector growth. The easier, faster, and cheaper the business registration process becomes, the higher number of businesses are in an economy.

“When local businesses flourish, they create jobs and generate income that can be spent and invested domestically,” said Ieva Tarailienė, Head of Registry Practice at NRD Companies. “And for the businesses to flourish, favorable conditions must be ensured by the government. This is where digitization can help tremendously—online business registries streamline the whole process of formally registering one’s business and at the same time level the playing ground. As long as governments continue developing online business registration registries, it is a no brainer that their economic segments will only improve.”

The benefits of electronic business registries are reflected in the World Bank’s Ease of Doing Business ranking, which often acts as a guiding light for foreign investors. For example, Mauritius, an island nation in the Indian Ocean, has moved up 36 places during the last three years and is now ranked first in the Sub-Saharan region and 13th overall in the latest Doing Business ranking. This is mostly thanks to its paperless e-registry system, recently developed by NRD Companies, which allows businesses and citizens to use over 30 registries completely remotely.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Visa and Mastercard Face Setback as Judge Indicates Likely Rejection of $30 Billion Deal

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Visa Inc. and Mastercard Inc. are facing a potential setback as a federal judge in Brooklyn indicated she is likely to reject their $30 billion settlement with retailers.

The deal, aimed at capping credit-card swipe fees, has been a focal point of contention between the card giants and merchants for years.

Judge Margo Brodie of the U.S. District Court for the Eastern District of New York expressed skepticism about the settlement during a hearing on Thursday.

According to court records, Judge Brodie suggested she might not approve the agreement, stating she would issue a written decision in the coming days.

Retailers have long campaigned to reduce their share of the costs associated with accepting card payments, known as interchange fees.

These fees, which are partially passed on to banks that issue the cards, including major institutions like JPMorgan Chase & Co. and Citigroup Inc., have been a burden for many merchants.

Announced in March and pending court approval, the settlement was designed to allow merchants to charge consumers extra for transactions involving Visa or Mastercard credit cards.

The agreement also aimed to introduce pricing tactics to steer consumers towards lower-cost cards.

“The court’s comments strongly suggest that she won’t accept the settlement,” noted Justin Teresi, an analyst with Bloomberg Intelligence. “While Judge Brodie doesn’t seem convinced that larger retailers should be allowed to opt out from the settlement, provisions like changes to digital wallet acceptance rules and some state bans on surcharges likely present real adequacy issues.”

Both Visa and Mastercard expressed disappointment over the developments. A Mastercard representative stated, “We believe the settlement presented a fair resolution of this long-standing dispute, most notably by giving business owners more flexibility in how they manage their card acceptance activities. We will pursue our options to ensure a proper resolution of this matter.”

Visa’s spokesperson echoed this sentiment, emphasizing that “continued engagement between industry and the merchants is the best way forward.”

Swipe fees have become a substantial financial issue for retailers, totaling more than $160 billion last year, according to the Merchants Payments Coalition. Reactions to the settlement were mixed when it was announced, with some retail coalitions pledging a thorough review and others quickly opposing it.

The Retail Industry Leaders Association, representing large merchants such as Target Corp. and Home Depot Inc., described the settlement as a “mere drop in the bucket” and urged careful review to assess if it adequately addresses the harm inflicted on retailers.

Doug Kantor, general counsel for the National Association of Convenience Stores, praised the judge’s remarks, stating, “We’re gratified to see that the court recognized how bad this settlement was.”

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Norwegian Watchdog Slams Meta for Cumbersome Opt-Out Process in AI Training Plans

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Meta Platforms Inc., the parent company of Facebook and Instagram, is facing a new legal challenge in Norway over its plans to utilize user images and posts to train artificial intelligence (AI) models.

The Norwegian Consumer Council has lodged a complaint, criticizing Meta’s cumbersome and deceptive opt-out process, which it argues breaches stringent EU data protection regulations.

The Council’s statement on Thursday highlighted that Meta’s method for allowing users to opt out of data collection for AI training is overly complicated and intentionally confusing.

“The process to opt-out breaches strict EU data protection rules and has been made deliberately cumbersome by using deceptive design patterns and vague wording,” the Council said.

This isn’t Meta’s first run-in with European regulators regarding data privacy. The tech giant has previously faced multiple complaints for allegedly failing to obtain proper consent from users before collecting their data to target advertisements.

Also, the European Union’s top court has warned Meta about safeguarding public information on users’ sexual orientation from being used for personalized advertising.

“We are urging the Data Protection Authority to assess the legality of Meta’s practices and to ensure that the company is operating in compliance with the law,” stated Inger Lise Blyverket, head of the Norwegian Consumer Council.

The complaint was prepared by the European Center for Digital Rights and will be submitted to the Norwegian Data Protection Authority, as well as other European data protection authorities.

Due to Meta’s EU base in Dublin, the Irish Data Protection Commission will serve as the lead authority in this matter.

The outcome of this complaint could have significant implications for how Meta, and other tech companies, handle user data within the EU.

Meta’s use of user data for training AI has raised significant privacy concerns. Critics argue that without clear and straightforward consent mechanisms, users are often unaware of how their data is being used.

This latest complaint underscores the ongoing tension between big tech companies and European regulators striving to enforce robust privacy standards.

The Norwegian Consumer Council’s action reflects a growing impatience with tech giants’ data practices, emphasizing the need for transparency and user control.

As AI technologies continue to advance, ensuring ethical and lawful data usage remains a critical challenge for both companies and regulators.

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Ethio Telecom Sale to Foreign Bidders Halted; Local Investors to Get Priority

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Ethiopia has decided to halt the sale of its state-owned telecommunications operator, Ethio Telecom, to foreign investors.

Instead, the government will prioritize domestic retail investors before listing the company on the nation’s upcoming securities exchange.

Originally, the Ethiopian government planned to sell 45% of Ethio Telecom to foreign investors. This approach was abandoned in November after Orange SA, a major contender, withdrew from the bidding process.

Emirates Telecommunications Group Co. was also rumored to have considered a bid but did not proceed.

“There were bidders, but each one of them has left the process at one point,” said Abdurehman Eid, CEO of Ethiopian Investment Holdings, which is overseeing the sale along with the finance ministry. “At the end, we felt it’s probably better to halt the process.”

Eid explained that foreign interest did not meet Ethiopia’s expectations. “The priority now is to expedite the sale of 10% to retail investors, who are showing a huge appetite,” he noted during an interview at a sovereign wealth fund conference in Mauritius.

The focus on foreign investors will resume after Ethio Telecom is listed on the Ethiopian Securities Exchange (ESX), set to commence operations in October.

Ethio Telecom, the largest telecommunications operator in Africa’s second most-populous country, had a monopoly for decades. By January, the company boasted 74.6 million subscribers and recorded a profit of 11 billion birr ($191.6 million) for the first half of the fiscal year.

The shift in strategy underscores Ethiopia’s intention to leverage domestic investment capacity. The decision to prioritize local investors aligns with broader economic goals, aiming to stimulate local participation in major economic sectors.

This move is part of a larger plan to list five other state-owned companies on the ESX. According to Eid, proceeds from these divestitures will be utilized to reduce public debt.

Over the years, enterprises controlled by the government have accumulated substantial debt, leading to financial struggles.

The Liability Asset Management Corp., established three years ago, currently manages close to 780 billion birr in debt.

By redirecting the sale of Ethio Telecom shares to local investors, Ethiopia is fostering a more inclusive investment environment and setting a precedent for future listings.

The new strategy is expected to enhance domestic capital markets and provide more opportunities for Ethiopian citizens to invest in the country’s economic future.

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