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May 23, 2019
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Trump’s Huawei ban ‘wins’ one trade battle, but the US may lose the networking war

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While U.S. government officials celebrate what they must consider to be a win in their battle against the low-cost, high-performance networking vendor Huawei and other Chinese hardware manufacturers, the country is at risk of falling seriously behind in the broader, global competition for telecom tech and customers.

It may be a race that the U.S. is willing to concede, but it should be noted that Huawei’s sphere of influence on other shores continues to expand, even as the company’s ability to operate in the U.S. is completely proscribed.

Indeed, Huawei’s executive director and chairman of its investment review board, David Wang, told Bloomberg that, “Our U.S. business is not that big. We have global operations. We still will have stable operations.”

Wang is right… to a point. Huawei derives most of its sales from international markets, according to a 2018 financial report released earlier this year, but it depends heavily on technology from U.S. chip manufacturers for its equipment. Without those supplies, Huawei could find itself in a very difficult spot, indeed.

Huawei’s end of year financials showed its consumer devices business is now its main money-maker, while the majority of its revenue is not derived from the U.S. market

And the U.S. has its reasons for working to stymie Huawei’s efforts to expand the reach of its networking technologies as this excellent Twitter thread from Adam Townsend persuasively argues.

Essentially, China has invested its basically limitless capital into subsidizing next-gen wireless technology and buying up next-generation startups and innovators, all while the U.S. has borne early stage risk. Meanwhile, it is also using unlimited money to poach regulators and industry experts who might advocate against it.

Huawei continues to make inroads in nations across the emerging markets of Latin America, Eastern Europe, Southeast Asia and Africa where demand for connectivity is on the rise. Those are regions where the U.S. has plenty of strategic interests, but America’s ability to sway public opinion or entice governments to act against Chinese networking companies could be severely limited by its inability to offer meaningful incentives or alternatives to them.

Even with the passage of the BUILD Act in October 2018, which was meant to revitalize U.S. foreign aid and investment with a $60 billion package, it’s worth noting that China spent nearly $47 billion in foreign investment in Europe alone in 2018. Chinese direct investments totaled another $49.45 billion into Africa and the Middle East and $18 billion into South America, according to data from the American Enterprise Institute, compiled by Foreign Policy.

Map courtesy of the American Enterprise Institute.

Those investments have turned nations that should be staunch political allies into reluctant or simply rhetorical backers of the U.S. position. Take the relationship between the U.S. and Brazil, for example — a historically strong partnership going back years and one that seemingly only strengthened given the similarities between the two ultraconservative leaders in power in both nations.

However, as Foreign Affairs reports, Brazil is unlikely to accede to President Trump’s demands that Brazil aids in steps to block China’s economic expansion.

“Brazilian business groups have already begun to defend the country’s deep trade ties to China, rightly pointing out that any hope of containing China and once more turning the United States into Brazil’s most important trading partner is little more than unrealistic nostalgia,” writes Foreign Affairs correspondent, Oliver Stuenkel. “Working alongside powerful military generals, these business associations are mobilizing to avoid any delays that sidelining Huawei in the region could cause in getting 5G up and running.”

The whole article is worth reading, but its refrain is that the attempts by U.S. government officials to paint Huawei and Chinese economic inroads as a national security threat in developing economies are largely falling on deaf ears.

It’s not just networking technologies either. As one venture capitalist who invests in Latin America and the U.S. told TechCrunch anonymously: “It’s interesting how the U.S.-China relationships are going to affect what is happening in Latin America. The Chinese are already being more aggressive on the banking side.”

China’s big technology companies are also taking an interest in South America, both as vendors and as investors on the continent.

In an article in Crunchbase, the South American and Chinese-focused venture capitalist, Nathan Lustig underscored the trend. Lustig wrote:

In both the private and the public sectors, China is swiftly increasing its support for Latin America. Chinese expertise in financial technology, as well as its influence in developing markets around the world, is turning China into a strategic partner for startups and entrepreneurs in Latin America. Most of the Chinese investment in Latin America so far is going to Brazil, although this is likely to spread across the region as Chinese investors become better-acquainted with the local tech ecosystems, most likely to Mexico.

Beyond the Didi Chuxing acquisition of Brazil’s 99 in January, Chinese companies began investing heavily in Brazilian fintech startups, specifically Nubank and StoneCo, this year.

Indeed, China has an entire catalog of low-cost technologies and economic packages from state-owned and privately held investors to support their adoption, backing up its position as the leader for tech across a range of applications in emerging markets.

For the U.S. to compete, it will have to look beyond protectionism at its shores to actual commitments to greater economic development abroad. With lower tax revenues coming in and the prospect of giant deficits building up as far as the eye can see, there’s not much room to promote an alternative to Huawei internationally. That could leave the country increasingly isolated and create far more problems as it gets left behind.

News Source = techcrunch.com

OpenFin raises $17 million for its OS for finance

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OpenFin, the company looking to provide the operating system for the financial services industry, has raised $17 million in funding through a Series C round led by Wells Fargo, with participation from Barclays and existing investors including Bain Capital Ventures, J.P. Morgan and Pivot Investment Partners. Previous investors in OpenFin also include DRW Venture Capital, Euclid Opportunities and NYCA Partners.

Likening itself to “the OS of finance”, OpenFin seeks to be the operating layer on which applications used by financial services companies are built and launched, akin to iOS or Android for your smartphone.

OpenFin’s operating system provides three key solutions which, while present on your mobile phone, has previously been absent in the financial services industry: easier deployment of apps to end users, fast security assurances for applications, and interoperability.

Traders, analysts and other financial service employees often find themselves using several separate platforms simultaneously, as they try to source information and quickly execute multiple transactions. Yet historically, the desktop applications used by financial services firms — like trading platforms, data solutions, or risk analytics — haven’t communicated with one another, with functions performed in one application not recognized or reflected in external applications.

“On my phone, I can be in my calendar app and tap an address, which opens up Google Maps. From Google Maps, maybe I book an Uber . From Uber, I’ll share my real-time location on messages with my friends. That’s four different apps working together on my phone,” OpenFin CEO and co-founder Mazy Dar explained to TechCrunch. That cross-functionality has long been missing in financial services.

As a result, employees can find themselves losing precious time — which in the world of financial services can often mean losing money — as they juggle multiple screens and perform repetitive processes across different applications.

Additionally, major banks, institutional investors and other financial firms have traditionally deployed natively installed applications in lengthy processes that can often take months, going through long vendor packaging and security reviews that ultimately don’t prevent the software from actually accessing the local system.

OpenFin CEO and co-founder Mazy Dar. Image via OpenFin

As former analysts and traders at major financial institutions, Dar and his co-founder Chuck Doerr (now President & COO of OpenFin) recognized these major pain points and decided to build a common platform that would enable cross-functionality and instant deployment. And since apps on OpenFin are unable to access local file systems, banks can better ensure security and avoid prolonged yet ineffective security review processes.

And the value proposition offered by OpenFin seems to be quite compelling. Openfin boasts an impressive roster of customers using its platform, including over 1,500 major financial firms, almost 40 leading vendors, and 15 out of the world’s 20 largest banks.

Over 1,000 applications have been built on the OS, with OpenFin now deployed on more than 200,000 desktops — a noteworthy milestone given that the ever popular Bloomberg Terminal, which is ubiquitously used across financial institutions and investment firms, is deployed on roughly 300,000 desktops.

Since raising their Series B in February 2017, OpenFin’s deployments have more than doubled. The company’s headcount has also doubled and its European presence has tripled. Earlier this year, OpenFin also launched it’s OpenFin Cloud Services platform, which allows financial firms to launch their own private local app stores for employees and customers without writing a single line of code.

To date, OpenFin has raised a total of $40 million in venture funding and plans to use the capital from its latest round for additional hiring and to expand its footprint onto more desktops around the world. In the long run, OpenFin hopes to become the vital operating infrastructure upon which all developers of financial applications are innovating.

Apple and Google’s mobile operating systems and app stores have enabled more than a million apps that have fundamentally changed how we live,” said Dar. “OpenFin OS and our new app store services enable the next generation of desktop apps that are transforming how we work in financial services.”

News Source = techcrunch.com

Europol, DOJ announce the takedown of the GozNym banking malware

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Europol and the U.S. Justice Department, with help from six other countries, have disrupted and dismantled the GozNym malware, which they say stole more than $100 million from bank accounts since it first emerged.

In a press conference in The Hague, prosecutors said 10 defendants in five countries are accused of using the malware to steal money from more than 41,000 victims, mostly businesses and financial institutions.

Five defendants were arrested in Moldova, Bulgaria, Ukraine and Russia. The leader of the criminal network and his technical assistant are being prosecuted in Georgia.

The remaining five defendants, all Russian nationals, remain on the run and are wanted by the FBI, said prosecutors.

All were charged with conspiracy to commit computer fraud, conspiracy to commit wire and bank fraud, and conspiracy to commit money laundering. An eleventh member of the conspiracy, Krasimir Nikolov, was previously charged and extradited to the U.S. in 2016 and pleaded guilty in April in his role in the GozNym malware network.

The names, roles and locations of the indicted suspects. (Image: Justice Department/supplied)

The takedown was described as an “unprecedented international effort” by Scott Brady, U.S. attorney for Western Philadelphia — where a grand jury indicted the defendants — at the press conference announcing the charges.

GozNym is a powerful banking malware that spread across the U.S., Canada, Germany and Poland. The malware was developed from two existing malware families, both of which had their source code leaked years earlier: Nymaim, a two-stage malware dropper that infects computers through exploit kits from malicious links or emails; and Gozi, a web injection module used to hook into the web browser, allowing the attacker to steal login credentials and passwords.

The banking malware hit dozens of banks and credit unions since it first emerged in 2016.

Described as malware “as a service,” the leader of the network allegedly obtained the code for the two malware families and built GozNym, then recruited accomplices and advertised the new malware on Russian speaking forums. The malware used encryption and other obfuscation techniques to avoid detection by antivirus tools. Then, spammers are said to have sent hundreds of thousands of phishing emails to infect staff at businesses and banks. After the malware infected its victim computers, the malware would steal the passwords control of bank accounts, which the criminals would later log in and cash out.

Prosecutors said the malware network was hosted and operated through a bulletproof service, a domain and web hosting known for lax attitudes towards cybercrime and favored by criminals. Europol said the 2016 takedown of Avalanche, an infrastructure platform used by hundreds of criminals to host and run their malware campaigns.

Although the victims were not named, the Justice Department said at least 11 U.S. businesses — including a church, two law firms, and a casino — fell victim to the GozNym criminals.

Read more:
The hacker group behind the Triton malware strikes again
A new cryptocurrency mining malware uses leaked NSA exploits to spread across enterprise networks
Researchers find a new malware-friendly hosting site after a spike in attacks
Shellbot malware evolves to spread and shuts down other cryptominers
TrickBot malware attacks are ramping up ahead of Tax Day
New malware pulls its instructions from code hidden in memes posted to Twitter

News Source = techcrunch.com

YouTrip, a challenger bank in Southeast Asia, raises $25M for expansion

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Singapore-based startup YouTrip thinks consumers of Southeast Asia deserve a taste of the challenger bank revolution happening in the U.S. and Europe, and it has raised $25 million in new funding to bring its app-and-debit-card service to more parts in the region.

Challenger banks have sprung up in Europe in recent years. Unicorns Monzo, Revolut and N26 are among those that offer their customers a debit card linked to an app and various levels of banking services, including savings and overdrafts. Brex — another billion-dollar-valued startup — is bringing that approach across the pond to the U.S. market.

But what about Southeast Asia?

All the signs indicate this is a region where digital services can thrive. The number of internet users across its six main countries is larger the entire U.S. population, and online spending is tipped to triple to $240 billion by 2025. Already, the region has mega startups including Grab ($14 billion valuation), Tokopedia ($7 billion) and Go-Jek ($9.5 billion) whose investors are betting that these growth signals will translate into reality.

At the more modest end, YouTrip has pulled in this new money to take its model beyond Singapore and into larger countries in Southeast Asia.

YouTrip CEO Caecilia Chu counts Citibank, McKinsey and Chinese fintech giant Lufax among her past employers

Since its commercial launch in August 2018, YouTrip has clocked over 200,000 app downloads and completed over one million transactions for its customers, according to CEO and co-founder Caecilia Chu.

It covers 150 currencies in the app, but the card itself is limited to 10 currencies (including Singapore dollars) with plans to add local options for Southeast Asia.

Chu — who went to Havard with Grab founders Anthony Tan and Hooi Ling Tan, as well as Go-Jek CEO Nadiem Makarim — started the business with co-founder Arthur Mak in 2016 for frequent travelers who are sick of being short-changed when exchanging money for trips, or using overseas ATMs. Over the longer term, she wants to turn the product into a more modern take on banking for Southeast Asian consumers in the style of the aforementioned European flagbearers.

“The objective is to build a trustworthy financial product for the mass consumer with exchange rates that are competitive,” Chu explained in an interview with TechCrunch. “Right now, we’re incredibly focused on travelers.”

“The success [of European challenger banks] has certainly helped in this part of the world where we are the first mover,” she added.

Like Monzo and its ilk, YouTrip offers zero percent transaction fees and no cross-border fees, but there are “competitive” exchange rates and a “small” fee to cover up to SG$2,000 ($1,460) in ATM withdraws per day. (Because, in much of Southeast Asia, cash remains king.)

The plan, further down the line, is to introduce financial products in the future to draw revenue and provide access to services for users, Chu explained. That’s, again, straight out of the European playbook… but there’s nothing wrong with that.

In Singapore, the card — and app — is backed by Mastercard and it includes integration with EZ-Link, the contactless payment option that covers public transport and more in Singapore. Those are the kind of local integrations that the company is eying with its market expansions.

The YouTrip service in Singapore is integrated with Singapore’s EZ-Tap payment system

On that note, Chu, a former banker, is keeping coy on which countries the service will expand to, but she does anticipate that YouTrip will reach one or two new markets over the next six to twelve months. It already has a regional footprint, though. Its team of 70 is located across HQ in Singapore and an engineering office in Hong Kong.

“We’re certainly looking to expand regionally,” she said. “We will hire a local team for each country because the future of fintech is regional and we believe in a localized strategy.”

That’s where this new money will come into play for YouTrip. The $25 million round included Insignia Ventures Partners — the Singapore firm from Yinglan Tan, formerly with Sequoia India and Southeast Asia — with undisclosed family offices and angels providing the remainder.

That’s somewhat unconventional, but Chu said the family offices “have deep roots in Asia, are really motivated and want to invest in our kind of business.” Likely, they understand the frustration of moving money between borders, or for travel purposes, in Southeast Asia and beyond.

With Revolut continuing to stall on its planned entry to Singapore — which was first announced last November — YouTrip will want to seize the initiative on establishing challenger banking in Southeast Asia.

News Source = techcrunch.com

Google launches new Assistant developer tools

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At its I/O conference, Google today announced a slew of new tools for developers who want to build experiences for the company’s Assistant platform. These range from the ability to build games for smart displays like the Google Home Hub and the launch of App Actions for taking users from an Assistant answer to their native apps, to a new Local Home SDK that allows developers to run their smart home code locally on Google Home Speakers and Nest Displays.

This Local Home SDK, may actually be the most important announcement in this list, given that it turns these devices into a real hardware hub for these smart home devices and provides local compute capacity without the round-trip to the cloud. The first set of partners include Philips, Wemo, TP-Link and LIFX, but the SDK will become available to all developers next month.

In addition, this SDK will make it easier for new users to set up their smart devices in the Google Home app. Google tested this feature with GE last October and is now ready to roll it out to additional partners.

Developers who want to take people from the Assistant to the right spot inside of their native apps, Google announced a preview of App Actions last year. Health and fitness, finance, banking, ridesharing and food ordering apps can now make use of these built-in intents. “If I wanted to track my run with Nike Run Club, I could just say ‘Hey Google, start my run in Nike Run Club’ and the app will automatically start tracking my run,” Google explains in today’s announcement.

For how-to sites, Google also announced extended markup support that allows them to prepare their content for inclusion in Google Assistant answers on smart displays and in Google Search using standard schema.org markup.

You can read more about the new ability to write games for smart displays here, but this is clearly just a first step and Google plans to open up the platform to more third-party experiences over time.

News Source = techcrunch.com

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