NEC is one the oldest, largest, and most successful companies in Japan. It has thrived as an electronics and computer producer while laying down critical network infrastructure and expanding into a semiconductor manufacturing giant.
Now, as the world market continues to evolve, so too is NEC. It is increasingly moving into services, with the Internet of Things and biometric technology taking on a central role in the company’s strategy.
Photo: Loren Moss of Finance Colombia (L) sits down to talk about NEC’s operations in Colombia and abroad with Kukita Shinya (R), the Japanese company’s chief engineer.
The Tokyo-based technology firm also has a large presence in Colombia. One of its biggest success stories is outfitting a football stadium in Medellín with face-recognition technology that has helped increase security during events.
To discuss this innovation and NEC’s other pioneering advancements, Loren Moss of Finance Colombia recently sat down with Kukita Shinya, the firm’s chief engineer. He explains NEC’s shifting business strategy, its work in the Internet of Things, and how biometrics is becoming an ever-larger factor in the financial services industry.
Finance Colombia: NEC now has less of a presence in consumer electronics and much more of a presence in industry and business. That probably was a strategic decision that the company took some time ago. But tell me, where does NEC fit in that whole universe?
Kukita Shinya: As a company, as you correctly mentioned, we are not doing home appliances anymore, and actually we are not doing the mobile handset anymore. We have started to focus on what we call the social solutions: at this moment, consumer products, industrial, and social.
In industrial and social, the boundary is a little ambiguous. For the international market, our strength at this moment is still on the telecom carrier market, including microwave transmissions, Netcracker OSS/BSS, submarine systems, and all the other components of infrastructure. But we say we focus on social solutions starting from our biometrics identification technologies, like fingerprints and facial recognition. The solutions applied to the stadium in Medellín are one example. That’s our story.
Finance Colombia: I know the Internet of Things is a big area now as well. What is NEC focusing on in terms of IoT?
Kukita Shinya: I categorize the IoT into three different parts: personal IoT, industrial IoT, and social IoT. Personal IoT is like wearables, wristbands, glass-wear, or home appliances. And then for industrial IoT — actually there are different types of industrial IoT — with the most famous one being the jet engine of General Electric. They monitor the status of their own products.
Finance Colombia: Right. The engines themselves are feeding back to the provider, to General Electric.
Kukita Shinya: Exactly. So that means the motivation is the manufacturer maintaining the relationship with customers for an extended period of time.
In the past, every manufacturer tried to do that, either with loyalty programs or membership or those kinds of things. But those are very weak. People can easily stop using those programs. But with IoT it’s wired — it’s connected — so it’s very strong.
Finance Colombia: There’s less “churn” in the relationship. It’s stickier. You’re buying a relationship with General Electric — not just a jet engine — and General Electric is going to make money over the lifetime of the service of the product versus just from having a one-time hardware sale. It’s brilliant.
Kukita Shinya: Exactly. And another type is very similar, where the monitor is attached to a moving object. It’s similar to the jet-engine case, but this one used by operators, for example, in a bus. They want to monitor the exact location of the bus to give better information to the passengers, and they can be used to monitor driving behavior, too.
Finance Colombia: So you know when the next one is coming? You see that on the trains in the subways. It says, “three minutes until the next one.”
Kukita Shinya: Yes. Another industrial IoT focus is the manufacturing process. “Industry 4.0.” Sometimes IoT means Industry 4.0, some people say, but Industry 4.0 is, more specifically, for manufacturers and, even more specifically, driven by the German government. So you know, we are participating in this industrial part as well.
They are using our unique technology, like the fingerprint of things or coordination programs among factories — not only within the factories but also across the factories, including raw material suppliers and distribution channels. End-to-end manufacturing.
But for us, the most significant IoT is social IoT. And this social IoT is almost a synonym for “Smart City,” with various sensors, networks, data analysis, and body codes on top. So this is very much a résumé of our recent focus on social solutions.
Finance Colombia: As an example, can you talk about what NEC has done, or what Medellín has done here in Colombia, using NEC technology? It’s all very innovative, especially what you all have been able to accomplish in the football, or soccer, stadium.
Kukita Shinya: With the face-recognition technologies, we have been working on this from scratch — from the research level, for over 20 years — and the speed and accuracy of our face recognition has been recognized as number-one technology by NIST, the National Institute of Standards and Technology.
Using this world-number-one technology, we can pick out the hooligans — or the bad actors — in the stadium through video imaging instead of needing the person stop at the still cameras. We can capture the face as the people are moving.
And similar technology can be applied to the “passway” between the plane and the airport building. In “the skybridge.” We can deploy the camera with the recognition systems so that we can capture the image crossing over the bridge before they reach the immigration office so that the officials can be well prepared.
Actually, that’s the technology we deployed in the press room at the Olympics in Rio just months ago. So they could go through security just with facial recognition.
Finance Colombia: Something that’s interesting is that the use of biometrics is different in different parts of the world. Different cultures have different expectations of privacy. In the U.S., we tend to be rebels and not like anything the government wants to do — just because the government said it. Here in Colombia, on the other hand, it’s very common to use biometrics. You go into a bank, you make a transaction with cash, and the bank takes your fingerprint. If somebody sends you money with a money transfer service, they take your fingerprint.
What do you see in the future regarding the use of biometric technology? What are some of the innovations that will not just improve security but improve the customer experience when it comes to the banking and the financial sector?
Kukita Shinya: Absolutely. There are ongoing trials for proof-of-concept things that use only biometric information for retail shopping. Obviously that’s for convenience. People don’t have to carry their credit card or even their wallet. They can purchase things with their fingerprint.
Finance Colombia: I’m told that in Brazil you can go to an ATM and take out money just with your fingerprint.
Kukita Shinya: Yes. The different applications are under study right now. And a lot of it is about privacy and security versus convenience and the quality of experience. They are a trade-off in many cases. If you try to improve the convenience, you need to sacrifice some privacy or security. That’s the common saying. But we don’t want to compromise either one.
So privacy is an issue and — as you just rightly mentioned — that is quite different from country to country. Expectations exist, so we cannot apply a single global rule for these things. But our aim is to overcome these trade-offs. We’d like to achieve both, and we have to choose the correct method for each country.