SMALL SHOULD MEAN AGILE
With a population below 5 million, New Zealand has the ability to be agile, adapting to new technologies and being innovative in a way that means consumers can get the most out of new products and services.
In the past, we’ve been used as an international testing ground for new technology, such as Eftpos in the 1980s.
More recently, other companies to user-test here include Facebook, which trialled a Snapchat competitor and its new Marketplace function; Microsoft, which tested website-creator app Sway; and Domino’s Pizza, which teamed up with drone business Flirty to bring Kiwis the first aerial-delivered pizza. New Zealand was also among the first nation to receive the game Pokemon Go.
While we might get new technologies early, that doesn’t mean we’re good at spotting potential risks and opportunities.
Throughout the Superfad series, it became apparent that those in charge of policy and regulation have been falling behind. And, with the increasing rate of advancements, they have little hope of catching up.
DROPPING THE BALL
In the case of cryptocurrency, most major banks, the country’s central bank and the Department of Internal Affairs have been slow to react. The Reserve Bank of New Zealand’s first significant paper on the topic was released last week. (The concept of bitcoin was introduced in 2008.)
Kiwibank, Westpac, ANZ and BNZ all declined to be interviewed as part of Superfad, saying they didn’t have an employee assigned to this area.
They did say they assessed customers’ use of virtual currencies on a case-by-case basis but some trading – especially for those acting on behalf of others – breached current moneylaundering legislation.
Dawie Oliver, Westpac’s chief information officer, last month took the stage at AI-DAY, the country’s premier artificial intelligence event, to talk about automation in banking services. Following his presentation, host Dr Michelle Dickinson thanked Oliver and asked, jokingly, when Westpac would allow her to buy and trade bitcoin. Oliver laughed but did not respond.
Stuff technology columnist Richard MacManus has written about how it feels like ordinary Kiwis are missing out on a revolution: ‘‘Instead of supporting bitcoin, our banks are closing down accounts that trade in it.’’
Auckland University business school associate professor Alex Sims agrees, saying that New Zealand has ‘‘dropped the ball’’.
‘‘We’re slow, really slow. I’ve had people contact me from overseas, saying ‘New Zealand prides itself on being nimble and agile, what’s going on?’ ’’
While other countries have been leveraging the potential of the blockchain technology behind cryptocurrency, New Zealand – again – seems to be twiddling its thumbs.
Estonia, the tiny post-Soviet nation, has used blockchain to build the most digitally advanced society in the world. Its government is virtual, borderless, and secure. Its citizens even have state-issued digital identities, which let them provide digital signatures when using e-services.
Late last year, the Edmund Hillary Fellowship wrote a paper, co-authored by a number of blockchain experts, including Coinbase co-founder Fred Ehrsam and Mark Pascall of blockchainlabs.nz, offering recommendations for regulators.
That paper said regulators should move quickly to create a legal framework for cryptocurrency and blockchain so New Zealand could attract overseas entrepreneurs and investors. However, Pascall says it was met with little interest from politicians.
UNDERSTANDING NEW TECHNOLOGY
This issue isn’t specific to cryptocurrency. It was again highlighted in the Superfad episode on direct-to-consumer DNA test kits. Today, thanks to these genetic tests, we can have parts of our DNA analysed for about $100.
One in 25 American adults now have access to personal genetic data, according to MIT Technology Review. Genealogy company Ancestry.com is the largest player — it says it has 7 million DNA samples in its database, with ‘‘tens of thousands’’ of those from New Zealand — followed by 23andMe, which has more than 3 million.
But Wellington-based Dr Katherine Neas, clinical leader of the Genetic Health Service’s central hub, says such technology isn’t just outpacing the knowledge of consumers but also many health professionals.
‘‘It’s quite complex information and the way it comes back to the consumer doesn’t necessarily give them the idea it’s so complex.
‘‘Sometimes you can read the information and become quite concerned about your risk of a certain health problem and actually the scientific information wouldn’t back up that degree of concern.’’
Rather than telling people to avoid the tests, which she describes as ‘‘a part of modern life’’, she is calling for better education around genetics and genomics, so people can ‘‘engage with the technology safely’’.
GLOBAL PRIVACY WOES
As well as a lack of education and understanding about this technology, there are questions around how companies could go on to use the personal information gathered. For example, could they sell consumers’ health information to insurance companies, affecting premiums?
Massey University marketing expert Valentyna Melynk says, increasingly, consumers are drawn to products and services that have the ‘‘five Ps’’: purpose, pride, partnership, protection and personalisation.
The most recently added P, personalisation, is what gives a product or service the edge. Personal behavioural and demographic data is used to tailor the product or service to the consumer’s unique needs and wants.
But there’s a flip-side. The evergrowing ‘‘internet of things’’ raises similar issues around privacy protection, Melynk says. This issue is under the spotlight in the wake of a privacy scandal surrounding Facebook.
Lawmakers and regulators have been questioning the social media giant after it was revealed it improperly shared personal data of tens of millions of users with a political consultancy. Even after founder Mark Zuckerberg was hauled in front of Congress to testify, Facebook has continued to flout international privacy laws.
A Privacy Bill introduced this year promises to modernise New Zealand’s legislation, repealing and replacing the Privacy Act of 1993. However, it’s fair to say it hasn’t been a priority for the new Government. (In response to questions on the issue, the MP in charge of the bill, Justice Minister Andrew Little, says: ‘‘It’s been a while since I’ve seen the content of the Privacy Bill, I need to have another a look at it.’’) And the power of the privacy commissioner will always be