Meta has launched its first AI-driven ad targeting program for businesses on WhatsApp, aiming to generate revenue from the popular chat service. CEO Mark Zuckerberg announced the new tools at a conference in Brazil, marking a significant shift for WhatsApp, which has traditionally avoided targeted advertising.
The new AI tools will use behaviour data from Facebook and Instagram to target messages more effectively to users who are likely to engage, provided they use the same phone number across accounts. The new feature is crucial for businesses as it allows for optimised ad delivery, making their marketing efforts more cost-effective.
Meta is also testing a new AI chatbot for business inquiries on WhatsApp. Namely, the chatbot will handle common requests like finding catalogues or consulting business hours, pushing towards automated customer service solutions. Additionally, Meta is integrating Brazil’s popular digital payment method, PIX, into WhatsApp’s payment tool, enhancing its functionality in the country.
These developments come as part of Meta’s broader strategy to monetise WhatsApp, which, despite its massive user base, has yet to contribute significantly to Meta’s overall revenue. The new initiatives are seen as steps to leverage WhatsApp’s extensive reach and user engagement for greater financial returns.
The European Securities and Markets Authority (ESMA) has issued its first statement on AI, emphasising that banks and investment firms in the EU must uphold boardroom responsibility and legal obligations to safeguard customers when using AI. ESMA’s guidance, aimed at entities regulated across the EU, outlines how these firms can integrate AI into their daily operations while complying with the EU’s MiFID securities law.
While AI offers opportunities to enhance investment strategies and client services, ESMA underscores its inherent risks, particularly concerning protecting retail investors. The authority stresses that management bodies are ultimately responsible for decisions, regardless of whether humans or AI-based tools make them. ESMA emphasises the importance of acting in clients’ best interests, irrespective of the tools firms choose to employ.
ESMA’s statement extends beyond the direct development or adoption of AI tools by financial institutions, also addressing the use of third-party AI technologies. Whether firms utilise platforms like ChatGPT or Google Bard with or without senior management’s direct knowledge, ESMA emphasises the need for management bodies to understand and oversee the application of AI technologies within their organisations.
Their guidance aligns with the forthcoming EU rules on AI, set to take effect next month, establishing a potential global standard for AI governance across various sectors. Additionally, efforts are underway at the global level, led by the Group of Seven economies (G7), to establish safeguards for AI technology’s safe and responsible development.
Fintech company Klarna has revealed that substantial cost savings have been achieved through the use of generative AI (GenAI) technology. Klarna, an early adopter of GenAI, employs AI for various purposes, including running marketing campaigns and generating images. The company reports saving approximately $10 million annually through AI implementation.
In the first quarter, Klarna reduced its sales and marketing budget by 11%, with AI accounting for 37% of these cost savings. Utilising GenAI tools such as Midjourney, DALL-E, and Firefly for image generation, Klarna has notably reduced image production costs by $6 million. By leveraging AI, Klarna updates images on its app and website weekly, aligning with key retail events like Valentine’s Day and summer sales.
According to Klarna’s Chief Marketing Officer David Sandström, the company has eliminated the need for costly bespoke imagery traditionally associated with seasonal events. With GenAI, Klarna has streamlined its image development cycle, generating over 1,000 images in the first three months of 2024 and reducing the cycle time from six weeks to seven days.
Additionally, Klarna has realised further savings of $4 million by reducing spending on external marketing suppliers for translation, production, and social agencies. Furthermore, Klarna’s partnership with OpenAI has resulted in an AI assistant for customer service, performing tasks equivalent to 700 full-time agents, showcasing the company’s commitment to leveraging AI technology across various aspects of its operations.
The US House of Representatives passed a bill to establish a new legal framework for digital currencies. The Republican-sponsored Financial Innovation and Technology for the 21st Century Act was approved with a bipartisan vote of 279-136. Proponents argue that the bill will offer regulatory clarity and promote the growth of the digital currency industry. However, whether the Senate will take up the measure remains to be seen.
The US Securities and Exchange Commission (SEC) has raised significant concerns despite the House’s approval. SEC Chair Gary Gensler warned that the bill could create regulatory gaps and undermine long-standing oversight practices, posing risks to investors and capital markets in the US. Gensler pointed out that under the bill, investment contracts recorded on a blockchain would no longer be considered securities, stripping investors of protections under existing securities laws.
Why does it matter?
Supporters from the crypto industry, who view Gensler’s SEC as a barrier to broader adoption of digital assets, welcomed the bill. They argue it addresses necessary regulatory updates for the evolving industry. Nonetheless, Gensler highlighted the bill’s provision allowing crypto issuers to self-certify their products as digital commodities, which could limit SEC oversight and complicate regulatory enforcement.
The SEC’s recent indication that it may approve applications for spot ether exchange-traded funds has boosted the industry. Still, the debate over the appropriate regulatory approach for digital currencies continues, with significant implications for the future of financial innovation and investor protection.
Crypto startup funding surged to $2.4 billion in the first quarter of 2024, marking a second consecutive quarter of growth, according to data from PitchBook. Expectations of lower interest rates and the launch of the first US bitcoin spot ETF fueled this 40.3% increase from the previous quarter. Despite the global venture capital investments hitting a near five-year low, the crypto sector saw substantial investor interest spread across 518 deals.
Why does it matter?
The rise in funding comes after a significant downturn from the peak of over $10 billion in early 2022, driven by economic uncertainties and the collapse of major market players. However, the approval of spot bitcoin ETFs by US regulators, with offerings from financial giants like BlackRock and Fidelity, has bolstered the credibility of digital assets, pushing bitcoin to an all-time high of $73,803 in March. This renewed confidence is expected to continue driving venture capital into the sector, as PitchBook analyst Robert Le noted.
Infrastructure-focused crypto and blockchain startups attracted the most funding during this period, with the largest deal being decentralised cloud platform Together AI’s $106 million early-stage round led by Salesforce Ventures, valuing the company at $1.1 billion. According to Le, early-stage deals are becoming increasingly competitive and often receive higher valuations than their late-stage counterparts. While exits remain low, mergers, particularly among exchanges, custodians, and infrastructure providers, are anticipated to increase as the market evolves.
Coins.ph will back the stablecoin with its own cash and cash equivalents held in Philippine bank accounts, ensuring a one-to-one peg with the Philippine Peso. The pilot program aims to assess the benefits of the PHPC and its impact on the existing financial ecosystem. Coins.ph plans to make the PHPC stablecoin available on its platform by early June. The company’s CEO, Wei Zhou, previously served as CFO at Binance. Coins.ph received approval to publicly test the stablecoin in April and hopes to obtain full approval if certain metrics are met, allowing the PHPC to operate outside of the pilot phase.
Coins.ph’s approval to conduct the pilot program demonstrates the BSP’s openness to exploring digital and cryptocurrencies. Operating within the Regulatory Sandbox Framework allows the central bank to observe the real-world applications while ensuring consumer protection and financial system stability.
The Philippine government recently blocked Binance from operating in the country, indicating regulatory concerns and a cautious approach towards digital currency exchanges. Additionally, the Philippines plans to issue a wholesale central bank digital currency (CBDC) within two years.
The Central bank of Rwanda call the public consultation on the future Central Bank Digital Currency (CBDC) pilot. The Central Bank call for the inputs of all stakeholders via online questionnaire available on their official website.
The launch of the Rwanda’s CBDC might get fast trajectory after the government commitment to improve financial system in the country. In particular in relation to e-commerce, online payments systems, and related features.
Global tendencies towards implementation of the Central Bank Digital Currency is highlighted in the latest BIS report on the CBDC implementation, released earlier this year. The BIS innovation center follow closely developments around CBDC implementation and the coordination work needed,
The EU Council has signed a new protocol aimed at facilitating cross-border data flows with Japan, a deal that was concluded in principle on the margins of the G7 Trade Ministerial in Osaka at the EU-Japan High-Level Economic Dialogue (HLED). This protocol, which is a key component of the broader EU-Japan Economic Partnership Agreement (EPA), marks a crucial development in the global digital economy, emphasizing the importance of streamlined digital trade and data management.
Approved by the EU Council, the protocol focuses on providing legal certainty for businesses by eliminating data localization requirements that often complicate digital operations. By allowing companies to handle data more efficiently without the need to establish multiple local data storage sites, the agreement aims to reduce costs and complexities, thereby boosting competitiveness and operational efficiency for businesses across sectors, including financial services, transport, machinery, and e-commerce.
A fundamental benefit of the protocol is the alignment with both regions’ existing digital privacy laws and regulatory frameworks. This guarantees that unwarranted limitations won’t obstruct data flows between the EU and Japan, promoting a safe and predictable legal environment for cross-border data processing. This alignment is particularly significant given the strict data protection standards upheld by both regions, which are integral to their digital trade strategies.
The EU has designated Shein, a fast-fashion company founded by China, as a very large online platform (VLOP) due to its extensive user base, surpassing 45 million users. The categorisation under the EU’s Digital Services Act (DSA) imposes stricter regulations on platforms regarding online content, mandating them to take more robust measures against illegal and harmful content as well as counterfeit products.
Shein, responding to the designation, expressed its commitment to complying with the rules outlined by the EU. Leonard Lin, Shein’s global head of public affairs, emphasised the company’s dedication to ensuring consumers in the EU can confidently shop online. Shein, known for its rapid expansion and popularity, launched its marketplace in the EU in August last year and is considering a US initial public offering.
Italy’s antitrust authority has fined two Amazon subsidiaries 10 million euros for alleged unfair commercial practices, a decision that Amazon plans to challenge through an appeal. The regulator accused Amazon of limiting consumers’ freedom of choice by automatically pre-setting a ‘Subscribe and Save’ option on its website for a wide range of products. This practice encouraged consumers to opt for recurring deliveries rather than one-off purchases, potentially restricting their ability to choose freely.
According to the authority, pre-ticking recurring purchases could lead consumers to buy products periodically, even without a genuine need, thus curtailing their freedom to choose. Amazon responded by contesting the decision and stating its intention to appeal. The company defended its ‘Subscribe and Save’ program, highlighting its benefits to customers regarding cost savings and convenience for routine purchases.
Amazon emphasised that the ‘Subscribe and Save’ option, which allows customers to schedule regular deliveries of essential items with a discount, has resulted in significant savings exceeding 40 million euros since its introduction in Italy. Despite the fine and regulatory scrutiny, Amazon maintains that its program continues to provide value to customers by simplifying their shopping experience and offering discounts on recurring purchases of everyday products.
