The idea behind tapping into collective intelligence is simple: There’s bits of useful information distributed among the members of diverse crowds, so aggregating their judgments should yield a better answer — better even than experts’ — to a particular question.
But ARA is looking to do something just a little different from other crowdsourcing efforts. While many similar tools assign equal weight to participants’ inputs, ACES will be looking for the most accurate predictors over time and weighting their judgments more heavily than other users.
Tools that tap into the smarts of the crowd have shown promise on a host of challenges over the years. Researchers have used Twitter buzz about upcoming movies to make pretty accurate predictions about box office sales on opening weekends. Tools like Ushaidi, nonprofit software that lets users map incidents, resources or people in the midst of crises, has helped rescuers find and save victims of disasters like Haiti’s earthquake.
ACES is a crowdsourcing tool somewhat similar to an online poll. People who sign up for the website will be asked whether an event in the fields of politics, economics, science, society or security will take place and what probability they assign to it. Their answers are then aggregated to see if the group produces an accurate prediction. It’s not a prediction market like the famous InTrade, which lets users bet on just about anything you can think of. No money changes hands on ACES — only opinions.
For ACES to be successful, it needs to attract a diverse pool of users and keep them engaged. But the online world is home to a lot of crowdsourcing tools and prediction markets, posing stiff competition for the marginal predictor’s attention. In addition to sites like InTrade, there’s a slew of other options available. The University of Iowa’s Iowa Electronic Market has been around since 1988 letting users bet on presidential elections or Federal Reserve Policy. Cinephiles use the Hollywood Stock Exchange website to bet on opening weekend box office hauls and other movie-related events.
Warnaar says he’s hoping some of ACES’s features designed to research analytical skills for the intelligence community will also prove interesting to the average user. “We’re thinking that people will be interested in competing with others and maybe learning how to become better forecasters.”
To accomplish that, ARA is working on a tool intended to help forecasters better calibrate their estimates of a prediction’s probability. For example, let’s say ACES finds out that when you say there’s a 60 percent chance an event will happen, it turns out that over time your “60 percent” guesses actually end up having a probability of closer to 40 percent. The site will then clue you in to your serial over or under-confidence, giving you feedback on your forecasting ability and allowing you to adjust accordingly.
Other features planned for the site would allow a social dimension to the prediction process. There’s some evidence that indicates information sharing among participants may undermine the accuracy of the crowd, turning a wise crowd into a dull mob. Warnaar says the jury is still out on the effect of social influence. “It’s not clear, for example, whether or not collaboration between participants helps or hurts.” Either way, he plans to find out, as ACES will experiment with features that lets users work together on prediction challenges.
Just like with math problems, ACE wants you to show your work after making a prediction. ARA has yet to determine how exactly participants can elaborate and collaborate on predictions. But some approaches could involve having users write about their rank their reasons behind it and let others vote on them.
“We think there’s a way of doing it this way that would basically give us the arguments for [a particular event] and split the problem apart in such a way that people start thinking about this problem a little deeper than they otherwise would,” says Warnaar.
Turning to the crowd has proven pretty popular with security types. In-Q-Tel, the CIA’s venture capital arm, recently began work on a prediction market aimed at forecasting computer security events. Darpa, the nerd cousin of Iarpa over at the Defense Department, tucked away some cash in its budget last year to farm intelligence, surveillance and reconnaissance data out to the crowd in search of better analysis. The Navy has even turned to crowdsourcing via online multiplayer games in order to hunt for better ideas against piracy.
So how would ACES be applied in the intelligence community? ARA’s press literature mentions National Intelligence Estimates (NIEs) as an area of potential application. NIEs represent the top-level assessment of America’s various spook agencies and senior-most analysts on a particular topic. Right now, ACES is still in the research phase and any firm ideas on how or would just be speculative, but it’s not hard to imagine potential uses. A validated ACES tool that polls intelligence analysts could complement an NIE, letting intelligence consumers gain a more complete picture of the intelligence community’s views on an issue.
But that’s only possible if ACES turns out to be accurate, something that’s yet to be proven. It’ll be a long while before answers are forthcoming — the project won’t be completed for another four years.
Photo: Focus Features
See Also:
- Challenge! Darpa Crowdsources New Military Vehicles
- Jihad Forums Crowdsource Fantasy Assassination List
- Military May Crowdsource Haiti Relief
- NATO’s Newest Bombing Tool: Twitter
- Paging Chris Anderson: Darpa Wants DIY Drones
- Physicist: I Can Predict Insurgent Attacks, Thanks to The ‘Red …
Holding on to unclaimed property could soon begin hurting corporate bottom lines as cash-strapped states adjust their escheatment policies in an effort to raise revenues. States are changing the rules regarding the seizure of lost property, changing the reporting requirements for corporations that must report unclaimed property, and increasing audit activity and the size of fines, all in an effort to speed up the process that awards unclaimed funds to their rightful owners or to the state.
An area of compliance that hasn’t generated a lot of concern from corporate secretaries may soon command their attention – but not in a good way. Fines for non-compliance can be in the millions.
‘We’re seeing states increase the number of audits that they conduct in an effort to induce penalties, fines and interest fees,’ says Karen Anderson, vice president of compliance at Unclaimed Property Recovery and Reporting, which provides pre-escheatment owner location services to corporations.
‘States are also changing the extent of what needs to be reported – for example, making it clear that they want the social security numbers and even email addresses of the owners of lost property,’ Anderson says. Such changes have financial implications for companies because internal systems and controls may need to be adjusted in order to meet the new standards of compliance.
John Buonomo, senior vice president of regulatory services for AST, says the dormancy periods for unclaimed property continue to shrink, which means companies have to be more diligent about alerting the state that the time owners have to collect their property has expired. He says most states used to have five-year dormancy periods, with some at seven years, but now ‘there are no sevens and very few fives; almost everyone is at three years, with a few states pushing to move to two years on certain assets.’
Time is short
Unclaimed property laws in 48 states and Washington, DC have dormancy periods that are triggered by inactivity, so companies need to be aware of the length of time that each state believes constitutes ‘inactivity’. The faster the dormancy period is reached, the faster the states can start assessing fines or collecting lost assets for their coffers.
Increasing the number of audits also increases the opportunities to collect fines. Buonomo says California was one of the first states to begin aggressively fining companies, but Michigan is implementing fines this year and other states are following. Experts estimate that in most states, only 15 percent to 35 percent of all companies are in full compliance with escheatment laws, so enforcement could yield a pretty penny.
The cost to some companies could be huge. On unclaimed property consulting firm Keane’s website, a blog post written by chief compliance officer Debbie Zumoff and Valerie Jundt, the managing director of Keane National Consulting and Advisory Services, warns that ‘because there’s virtually no statute of limitations for unclaimed property in most states, the time frame for compliance may be expanded, creating the need to estimate liability for historical years. This can result in an increase in the known liability by three to eight times, translating into millions of dollars potentially owed to states in fines and penalties.’
And states are ramping up efforts to collect, with the backing of the courts. Insurer John Hancock has been involved in three collection actions already this year – a $20 million unclaimed property settlement in California, an agreement to establish a $10 million fund to repay beneficiaries and supply an additional payment of $3 million to three regulatory agencies in Florida, and a settlement with Louisiana, 35 states and the District of Columbia to recover unclaimed insurance proceeds.
Financial institutions such as John Hancock have become prime targets for states that have stepped up enforcement of escheatment laws. Jundt identified several areas where financial institutions were particularly vulnerable to liability in a recent article she penned for Bankers Digest. During an audit, states may find that financial institutions have not properly identified potential unclaimed property that should be included in their annual reports, have forgotten to return small loan credit balances to customers, have not followed up proactively to reactivate customers’ dormant accounts, or have simply made filings to the wrong state. Because financial institutions deal with massive amounts of money and potentially millions of customers, mistakes are often duplicated many times over, and this can lead to multiple fines that can add up to millions of dollars.
Staying in compliance
To avoid state actions, Anderson suggests companies reassess their policies and procedures on unclaimed property to make sure that they are in line with state regulations. Some states have changed their rules concerning the types of assets that are considered unclaimed property, so being proactive about compliance before being audited will help companies to avoid fines.
‘With so many states cash-strapped and extending their reach, being proactive has never been more important than now,’ says Anderson.
Companies should also review the effectiveness of their unclaimed property efforts more regularly, looking for ways to improve efficiency. A quarterly review of company procedures involving reaching out to unclaimed property owners or exploring new options for locating beneficiaries is a positive step.
Buonomo, whose company helps stock issuers locate the owners of lost shares, says stock issuers, who often find themselves in the position of locating beneficiaries of shareholders who have died or forgotten about shares, should consider implementing escheatment programs that can handle unclaimed property issues in the future. He says such programs, which actively seek out the owners of unclaimed property and return it to them, can have a positive effect on the reputation of a company. Stock issuers usually don’t pay for programs that return shares to shareholders – instead, companies charge the shareholders a fee for alerting them to their lost asset. Even thought they have to pay a little to get hold of their assets, customers will generally think highly of a company that is honest enough to return money to them that they didn’t know they had coming.
Such programs can also protect corporate secretaries and investor relations executives from the wrath of their boards. ‘If you get hit with a $500,000 fine from California for being late on escheatment of property, no exec is going to be able to explain that away to the board,’ Buonomo says.
[Article by Matthew Scott, Corporate Secretary]
what is online reputation management
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