Leveraging alternative data to provide loans to the unbanked

Curated on Posted on by Stefaan Verhulst

Article by Keely Khoury: “Financial inclusion is integral to the achievement of seven of the 17 global SDGs, and the World Bank says in its 2021 report that between 2011 and 2021, “Great strides have been made toward financial inclusion.” However, despite a significant increase in the number of people accessing bank accounts, around 24 per cent of the global population remain unbanked.  

Particularly for minority groups such as immigrants, the ability to access formal financial services is made exponentially more difficult by their lack of permanent address, loss of employment, and gaps in tax records. For small business owners – many of whom provide an essential community service – a lack of formal accounting records, along with any previous time spent unbanked as individuals, contributes to a dearth of information traditionally used to evaluate risk for loans.  

To tackle this issue, US startup Uplinq provides lenders with a ‘credit-assessment-as-a-service’ solution that takes into account the entire business ecosystem, and therefore billions of data points that would not traditionally be examined by underwriters considering a traditional loan application. From supplier references and store traffic to community involvement and property improvements, Uplinq provides a holistic and accurate assessment of the “opportunities, challenges, and interests of each prospect” within “known confidence ranges.” By working with independently audited and fully regulatory-compliant data sets, Uplinq’s services are available worldwide.  

Other innovations that Springwise has spotted that are helping unbanked communities include a Spanish language-first bank, and a free digital learning platform to help underserved communities understand how to better manage their finances…(More)”.

To harness telecom data for good, there are six challenges to overcome

Curated on Posted on by Stefaan Verhulst

Blog by Anat Lewin and Sveta Milusheva: “The global use of mobile phones generates a vast amount of data. What good can be done with these data? During the COVID-19 pandemic, we saw that aggregated data from mobile phones can tell us where groups of humans are going, how many of them are there, and how they are behaving as a cluster. When used effectively and responsibly, mobile phone data can be immensely helpful for development work and emergency response — particularly in resource-constrained countries.  For example, an African country that had, in recent years, experienced a cholera outbreak was ahead of the game. Since the legal and practical agreements were already in place to safely share aggregated mobile data, accessing newer information to support epidemiological modeling for COVID-19 was a straightforward exercise. The resulting datasets were used to produce insightful analyses that could better inform health, lockdown, and preventive policy measures in the country.

To better understand such challenges and opportunities, we led an effort to access and use anonymized, aggregated mobile phone data across 41 countries. During this process, we identified several recurring roadblocks and replicable successes, which we summarized in a paper along with our lessons learned. …(More)”.

Lisbon’s Citizens’ Council: Embedding Deliberation into Local Governance

Curated on Posted on by Stefaan Verhulst

Article by Mauricio Mejia: “Lisbon is joining cities like Paris, Bogota, and Milan in establishing new democratic institutions by convening Portugal’s first permanent Citizen Council. In April 2023, a new group of randomly selected citizens will deliberate on how to create a 15-minute city — one where citizens can easily access essential services such as education, health, commerce, culture, or green and leisure spaces.

Lisbon has taken the objective of reinforcing democracy seriously. Citizen participation is the first pillar of its Municipal Plan, intending to build “alternative mechanisms for democratic participation, capable of mobilising people’s knowledge.” To translate this into action, the City established its first Citizens’ Council, a decision-making body that is “representative of Lisbon’s population, while being impartial and independent from political parties.”

Lisbon’s Citizens’ Council is a microcosm of the city’s population

Anyone over 16 years of age who lives, studies, or works in Lisbon is eligible to become a member of the Citizens’ Council. For the first edition, the recruitment process consisted of two stages:

1. Voluntary enrolment to participate in the lottery. This process could be done online or at an in-person kiosk (Lojas Lisboa).

2. Random selection and stratification, using the following criteria: gender, age, academic qualifications, profession, area of residence, work or study, and level of political engagement.

Among the 2351 citizens enrolled, 50 citizens were randomly selected to form a microcosm of Lisbon’s population[i]:

Visual representation of the Council’s members by the gender, age and activity status criteria

Members were accompanied by an ecosystem of public servants, civil society stakeholders, academics, scientists, and experts to ensure deliberation was informed, facilitated, and objective. Participation in the Citizens’ Council was not remunerated, nor involved any financial incentives. However, members could request support to cover meals and transportation. The OECD suggests in its good practice principles for deliberative processes that participation should be encouraged through remuneration, coverage of expenses, and provision of childcare and eldercare…(More)”.

Models and experts: urgent questions about how we inform decisions and public policy

Curated on Posted on by Stefaan Verhulst

Blog and book by Erica Thompson: “Mathematical models are here to stay. Whether they are determining supply chain vulnerabilities, demonstrating regulatory compliance, or informing policies for a zero-carbon future, quantitative models are at the heart of modern societies. And as computers become more powerful and more readily accessible, artificial intelligence and machine learning models are also being applied in many new areas.

Given that, we urgently need to understand how best to use and work with models to make good and responsible decisions. Statistician George Box was quite right to point out that “all models are wrong”. They are necessarily simplifications of the messy reality we want to get to grips with. But many quantitative methods for working with models basically assume that the model is right, or at least that it can accurately estimate the range of plausible outcomes.

If the model is not quite perfect, we can expect some of its outputs to be wrong (not just inaccurate). In that case, the information that is offered as decision support could be misleading. We have two options here. We could remain in what I call model land and just expect to have to say “what a shame, we made the wrong decision” occasionally. In some circumstances that might be a reasonable answer, but if we are making decisions about critical infrastructure or selling a product that might be unsafe to millions of people, then we have both a legal and ethical responsibility to do better, to get out of model land and understand how relevant our model results are for the real world.

So what’s the second option? You won’t be surprised to know that it isn’t easy. In my new book, I consider some of the implications of working with imperfect models and the kinds of strategies that we need to adopt to make best use of the information they contain. One theme that I explore is the need to understand the role of expert judgement in constructing, calibrating, evaluating, and using models, and the way that that expert judgement might be shaped by our social context.

Experts make models – and that’s a very good thing, because who would want to rely on a model created by a non-expert? But their expertise is often limited, and it comes from a particular background and set of experiences. Indeed, you can often find equally qualified experts who will disagree about the right assumptions to make when constructing a model and who give different advice about how to achieve the stated aims. Then the decision-maker – probably a non-expert – will be in the difficult position of trying to adjudicate between different models from different experts, weighing up their relative credibility…(More)”.

Wanted: Data Stewards — Drafting the Job Specs for A Re-imagined Data Stewardship Role

Curated on Posted on by Stefaan Verhulst

Blog by Stefaan Verhulst: “With the rapid datafication of our world and the ever-growing need to access data for re-use in the public interest, it’s no surprise that the need for data stewards is becoming increasingly more important every day. Organizations across sectors and geographies, from the United Nations Statistics Division to the Government of New Zealand, are all moving towards defining the roles and responsibilities of a data steward within their own unique contexts and use cases.

At The GovLab, we have long advocated for the professionalization of data stewardship through our research into the role of data stewards in fostering data collaboration, as well as our executive education courses at the Data Stewards Academy. The recent launch of The Data Tank, a non-profit dedicated to addressing the challenges and opportunities of datafication, which I co-founded, is another step in the right direction, creating a platform to explore data stewardship in practice and providing additional educational resources.

While these resources are no doubt valuable, we are still often faced with the question: What are the required competencies of a data steward? If I want to hire or train a data steward, what should the job specifications be?

With that in mind, we are initiating a process of crafting a job description for data stewards, outlining the responsibilities, skills, and behaviors of a data steward below. Such a job description may not only help organizations create formal data steward roles internally and recruit externally, but it will also help aspiring data stewards seek out the relevant training and opportunities for them to strengthen their skillset.

The job description below captures our initial thoughts on the role of a data steward, and we would welcome your insights on the roles and skills required to be an effective data steward. It is based on previous presentations shared publicly….(More)”.

Decidim: why digital tools for democracy need to be developed democratically

Curated on Posted on by Stefaan Verhulst

Blog by Adrian Smith and Pedro Prieto Martín: “On Wednesday 18 January 2023, a pan-European citizen jury voted Barcelona the first European Capital of Democracy. Barcelona has a rich history of official and citizen initiatives in political and economic democracy. One received a special mention from the jurors. That initiative is Decidim.

Decidim is a digital platform for citizen participation. Through it, citizens can propose, comment, debate, and vote on urban developments, decide how to spend city budgets, and design and contribute to local strategies and plans.

Launched in 2016, more than 400 organisations around the world have since used the platform. What makes Decidim stand out, according to our research, is developer commitment to democratising technology development itself and embedding it within struggles for democracy offline and online. Decidim holds important lessons at a time when the monopolisation of social media by corporate power presents democrats with so many challenges…(More)”.

Citizen Z: Strengthening the participation of young citizens in democratic and civic life

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Blog of the European Commission: “Contemporary political attitudes are characterized by significant political indifference, disengagement from public life, and a decline in political participation, especially among young people, whose level of interest in politics is steadily declining in almost all EU countries. The ‘Citizen Z’ project, which started in November 2022, applies deliberative methods, to both stimulate interest in civic and political life among young people aged 15 to 25 and to involve them in the decision-making process. Special attention is devoted to the intersectionality principle and those groups that are often affected by low levels of participation: migrants, disadvantaged communities, girls and women.

The ‘Citizen Z’ project aims to respond to the European Commission priorities outlined in the European Democracy Action Plan and the EU Citizenship Report 2020 by enhancing civic engagement and democratic participation of EU citizens, particularly youth aged 15 to 25.

The project is also in line with the position supported by the European Committee of the Regions, which in 2019 encouraged a ‘cultural change’ towards experimenting with deliberative democracy tools as developed at the local level (European Committee of the Regions, Putting citizens at the Centre of the EU agenda), as the most authentic democratic participation originates in the context closest to the citizen…(More)”.

Foresight is a messy methodology but a marvellous mindset

Curated on Posted on by Stefaan Verhulst

Blog by Berta Mizsei: “…From my first few forays into foresight, it seemed that it employed desk research and expert workshops, but refrained from the use of data and from testing the solidity of assumptions. This can make scenarios weak and anecdotal, something experts justify by stating that scenarios are meant to be a ‘first step to start a discussion’.

The deficiencies of foresight became more evident when I took part in the process – so much of what ends up in imagined narratives depends on whether an expert was chatty during a workshop, or on the background of the expert writing the scenario.

As a young researcher coming from a quantitative background, this felt alien and alarming.

However, as it turns out, my issue was not with foresight per se, but rather with a certain way of doing it, one that is insufficiently grounded in sound research methods. In short, I am disturbed by ‘bad’ foresight. Foresight’s newly-found popularity means that there is more demand than supply for foresight experts, thus the prevalence of questionable foresight methodology has increased – something that was discussed during a dedicated session at this year’s Ideas Lab (CEPS’ flagship annual event).

One culprit is the Commission. Its foresight relies heavily on ‘backcasting’, a planning method that starts with a desirable future and works backwards to identify ways to achieve that outcome. One example is the 2022 Strategic Foresight Report ‘Twinning the green and digital transitions in the new geopolitical context’ that mapped out ways to get to the ideal future the Commission cabinet had imagined.

Is this useful? Undoubtedly.

However, it is also single-mindedly deterministic about the future of environmental policy, which is both notoriously complex and of critical importance to the current Commission. Similar hubris (or malpractice) is evident across various EU apparatuses – policymakers have a clear vision of what they want to happen and they invest into figuring out how to make that a reality without admitting how turbulent and unpredictable the future is. This is commendable and politically advantageous… but it is not foresight.

It misses one of foresight’s main virtues: forcing us to consider alternative futures…(More)”.

‘Neurorights’ and the next flashpoint of medical privacy

Curated on Posted on by Stefaan Verhulst

Article by Alex LaCasse: “Around the world, leading neuroscientists, neuroethicists, privacy advocates and legal minds are taking greater interest in brain data and its potential.

Opinions vary widely on the long-term advancements in technology designed to measure brain activity and their impacts on society, as new products trickle out of clinical settings and gain traction for commercial applications.

Some say alarm bells should already be sounding and argue the technology could have corrosive effects on democratic society. Others counter such claims are hyperbolic, given the uncertainty that technology can even measure certain brain activities in the purported way.

Today, neurotechnology is primarily confined to medical and research settings, with the use of various clinical-grade devices to monitor the brain activity of patients who may suffer from mental illnesses or paralysis to gauge muscle movement and record electroencephalography (the measurement of electrical activity and motor function in the brain)….

“I intentionally don’t call this neurorights or brain rights. I call it cognitive liberty,” Duke University Law and Philosophy Professor Nita Farahany said during a LinkedIn Live session. “There is promise of this technology, not only for people who are struggling with a loss of speech and loss of motor activity, but for everyday people.”

The jumping-off point of the panel centered around Farahany’s new book, “The Battle for Your Brain: The Ability to Think Freely in the Age of Neurotechnology,” which examines the neurotechnology landscape and potential negative outcomes without regulatory oversight.

Farahany was motivated to write the book because she saw a “chasm” between what she thought neurotechnology was capable of and the reality of some companies working to one day decode people’s inner thoughts on some level…(More)” (Book)”.

What is the role of public servants and policymakers in the battle against mis- and disinformation in our democratic systems?

Curated on Posted on by Stefaan Verhulst

Article by Elsa Pilichowski: “Recent health, economic and geopolitical crises have highlighted the urgency for governments to strengthen their capacity to respond to the spread of false and misleading information, while simultaneously building more resilient societies better prepared to handle crises. The challenges faced demand a whole-of-society-approach. 

First, governments should help citizens become more digitally literate so that they can identify false information before they spread it, intentionally or not. Increasing societal resilience also means supporting a diverse and independent media sector which can give voice to all viewpoints. Finally, new partnerships between civil society, the media, social media platforms and governments need to be built to help pre-bunk and de-bunk mis- and disinformation.

While not the ultimate actor in information provision, governments themselves will have to step up their capacities in the information space by strengthening inter-agency coordination mechanisms, developing innovative strategies and tools, and working with international partners to build knowledge of the origins and pathways of mis- and disinformation. Another specific avenue is to help ensure the role of public communication in reinforcing an information space conducive to democracy. Breaking down internal silos to facilitate collaboration; building partnerships with external stakeholders like fact-checkers; and focusing on efforts to reach all segments of society with accurate information will all be important.

Regulatory responses that help establish effective transparency frameworks around content moderation processes and decisions, build understanding of the role of algorithms in the spread of mis- and disinformation and promote a fairer and more responsible business environment are all key priorities. Such constructive and process-based regulation is all the more critical to safeguard against government interference in the free flow of information and impingement upon one of the foundational values of democracy—the right to free and open speech…(More)”