Mastercard is investing heavily in the notion that IoT cybersecurity and intelligence will be an incredibly important touchpoint in the future with a new hub based in Vancouver.
The massive payments company has announced a new Intelligence and Cyber Centre based out of Vancouver. The announcement is anchored by a $510 million investment from Mastercard Canada as well as a $49 million investment from the Canadian Government’s Strategic Innovation Fund. The new investments will create 380 full-time jobs and 100 co-op roles by 2029, with most of the hiring being done by 2024.
This new investment builds on an acquisition Mastercard made in 2017. Two years ago, Mastercard purchased NuData, a company headquartered in Vancouver that prevented fraud by using session and biometric indicators. According to Johan Gerber, EVP of Security and Cyber Innovation at Mastercard, the company liked NuData and saw so much value in the business that building a new global hub was an easy decision.
“That leadership NuData brings is what we really want to grow on, because it’s a really important space for us right now and we want to build on top of that and expand the scope of that whole operation,” says Gerber.
Other factors also influenced the decision, such as access to Canada’s deepening cybersecurity and AI talent pool, as well as synergy with other recent acquisitions Mastercard has made. Mastercard bought the San Francisco-based Brighterion in 2017, and several AI engineers from that company will now move to and work out of the Vancouver Centre. The Toronto-based Ethoca was also recently acquired, and there will be significant knowledge transfer between those companies and the new hub.
The new centre will mostly focus on consumer-facing products and features, though Gerber explains there will always be a small adherence to working on frameworks and guidelines that other businesses and partners of Mastercard would be able to utilize.
In fact, the Vancouver hub will focus largely on the idea of building new frameworks, regulations, and best practices for an increasingly connected world. By 2025, there will be 50-75 billion connected devices, and Mastercard has continually been working towards increasing security when it comes to enabling payments in all kinds of devices. This will be a major pain point the new centre will focus on.
“When we think about IoT, there’s a lot of challenges around it. It comes down to creating an environment where you can really trust every device,” says Christopher Bailey, CEO of NuData and EVP of EMV/Digital Devices, at Mastercard.
“There’s AI, digital assistants, and other things making payments on behalf of humans when they’re not there to secure it themselves. How do you always trust those devices? How do you institute standards, how do you get people to comply to security practices, how do you make that easy to execute, and how do you actually think about humans not being present for transactions?”
These are the problems (among others) Bailey, the NuData team, and the 380 new hires will be tasked with solving. The answer, according to Bailey, comes down to one thing.
“Privacy by design,” he says. “We’re working on trying to collect as little as data as possible, and guarantee that data is only being used for fraud and security purposes.”
One area of research NuData and Mastercard have been exploring relates to building AI into a device that can analyze data and then provide a logical response—that means detecting that data is present and only accessing the needed information without ever sending it to another party away from the device.
“It’s protecting data in the ultimate way by asking security questions on the device and trusting the answer without pulling it from the consumer,” says Bailey. “It is a mix of AI plus the standards we’re creating, and we’re trying to enable those types of technologies right now.”
Mastercard will begin to form partnerships with post-secondary institutions in the area such as the University of British Columbia and Simon Fraser University, as well as continue to work with the federal government and other technology partners in the country.
The Canadian government is making a major investment into the project via its Strategic Innovation Fund, an investment fund that is dedicated to growing both smaller and larger companies and further the technology prowess inside Canada. Canada’s Innovation Minister Navdeep Bains said in a statement, “Our government is investing in a new cybersecurity centre in Canada to develop the technology solutions Canadians and people all over the world need to protect their personal and financial information when they use their devices.”
“This is not something a company should do on their own,” added Gerber. “This is something we need partnerships with universities, governments, private sector, and anyone in the ecosystem. And Vancouver is the perfect location for that.”
The centre will be located in Vancouver’s Old Stock Exchange building, where NuData currently works out of. The centre is Mastercard’s sixth in total: there are others in New York City, Dublin, Sydney, St. Louis, and Pune-Vadodara in India.