MONEY ISSUE 63 by BE.COMMUNICATIONS

B US IN E SS

L IFESTY L E

D ESIGN

TH E FI N A N CE EDI T I ON I SS U E 6 3

COVER STO RY

Christian Sammut & Gege Gatt

NOW WE'RE TALKING

16 Tony Zahra & Philip Fenech .

10 Rober ta Metsola

BREAKING THOSE GLASS CEILINGS

ARE YOU BEING SERVED? .

28 Manuel Delia .

AT YOUR FINANCIAL SERVICE .

4 · MONEY

Editor's note — The time that everyone has been waiting for is finally here—the end of 2020! But what does that mean? We've been through a year that nobody could have predicted... and not only because of the pandemic, although that is undoubtedly what 2020 will be remembered for in the history books; but, on a local level, it's also the year that the Daphne Inquiry was supposed to end—but won't just yet. It's the year that the financial services regulator found itself without a captain as Manuel Delia explores the journey of the financial services industry in Malta from an offshore option to a wellrespected onshore jurisdiction to a country on the brink of a potential MONEYVAL greylisting... and the reputation of a country and a whole industry on tenterhooks about their livelihood. It's also the year that ministers blacklisted journalists, and allegedly offered bribes by lawyers, as they saw their profession being lambasted and scrutinised. But it's not all doom and gloom. This year also saw MEP Roberta Metsola chosen as First Vice President of the European Parliament, a proud moment for both herself and her country. Giselle Borg Olivier spoke to her about the new role and all that comes with it. The pandemic also allowed entrepreneurs and business people to explore new possibilities and be part of the movement that could potentially lead to a new Industrial Revolution. We've been working on a 9-5 schedule for over a century now, indeed a vast improvement over how our predecessors worked (and were overworked), but also a system that is now antiquated given the technological advances available to us. When many people were forced to work from home, there was the realisation that brick and mortar offices where all workers would go to daily to spend eight hours together in the same building is no longer necessary. As long as people had a laptop, an internet connection, and possibly a VPN connection, then it didn't matter where they worked from—remote working became a viable solution and option. Of course, this wasn't easy for everyone to comprehend, but it certainly provided a valuable lesson in good management and trust; you can't have one without the other if you intend for your team to thrive. On a European level, the European Commission needed to act fast in delivering a recovery plan

ISSUE 63

WELCOME

COVER Christian Sammut & Gege Gatt Now We're Talking! Read the full story on page 14

for all member states as each country battled Covid-19, with some states faring worse than others. As this magazine goes to print, the Netherlands has 'cancelled' Christmas and gone into a 5-week lockdown with Germany following suit. Economist Jordan Portelli takes a closer look at what the EC is doing for Malta in this regard. Theo Dix also surveys the impact of the pandemic, noting how the world was forced to change its approach and way of doing things, and it's the change makers who will be the ones to thrive.

CREDITS EDITOR

Anthony P. Bernard anthony@moneymag.me DESIGN

The news of the vaccine being rolled out across the EU on the 27th December has been announced, bringing with it a collective sigh of relief and a glimmer of hope that life will "go back to normal"—whatever that means. If it means that we can meet family and friends and hug them; if it means that children can play with all their friends in the playground and not just their 'bubble'; if it means that we can stop using the word bubble except when referring to soap suds, then that's all well and good, and bring it on! So, for this last issue of this unpredictable and crazy year, allow me to wish you and your loved ones a very Merry Christmas in the safest way possible. The year has certainly driven home the unequivocal message that it's the people in our lives that make it worth living, and not the material things that we slave for, so let's take care of each other by wearing our masks, maintaining our distance, and always maintaining the necessary hygienic standards. Here's to a 2021 of renewed hope and vision for the world!

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6 · MONEY

ISSUE 63

CONTENTS

EUROPE

BREAKING THOSE GLASS CEILINGS

MEP Roberta Metsola was recently appointed First Vice President of the European Parliament: the first Maltese to ever hold this post. Giselle Borg Olivier asks her about her new responsibilities and what it means to her, her family and her country—and why breakfast is her favourite time of the day.

32 14

COVER STORY

NOW WE'RE TALKING!

Technology solutions provider BMIT Technologies acquires stake in EBO: a company using AI to develop process automation revolving around customer conversations. MONEY speaks to BMIT Technologies CEO Christian Sammut and EBO CEO Gege Gatt about this acquisition.

BUSINESS

ARE YOU BEING SERVED?

The hospitality industry has been dealt a particularly heavy blow due to the pandemic. MHRA President Tony Zahra and Deputy President of the Chamber of SMEs Philip Fenech explain to Veronica Stivala how their respective organisations are supporting their members and that there is a light at the end of the tunnel.

ECONOMY

THE GREAT RESET

RECOVERY

THE CAVALRY HAS ARRIVED

CLOSING FOR SUCCESS

What is success? If you ask this question to a hundred different people, you will probably receive a hundred different replies. For many, success must do with physical wealth and financial freedom while others have different ideas of it, which could revolve around building solid character or achieving strong family ties, friends, relationships or achieving a level of stature and reputation.

TRENDS

TRENDS IN BROAD STROKES

S T R AT E G Y

REWIRING STRATEGY TO THRIVE AMID CHANGE

Theo Dix emphasises the need to drive change amid and beyond the pandemic.

BR ANDING

LIDL WIZARDRY

Elise Dalli reveals why Lidl's clothing brand sells out when fast-fashion brands don't.

There is no doubt that 2020 can be described by mostas annus horribilis. As we are in the final weeks of the year, the positive news surrounding the vaccine and the anticipated commencement of vaccination programmes in the coming months signals a semblance to a return of normality. Most economic projections and sentiment indices hinge on the success of vaccination. JP Fabri explains.

COACHING

OPINION

AT YOUR FINANCIAL SERVICE

Political analyst Manuel Delia examines how the financial services thrived since 2004 and how it was dealt a blow with all the unfolding political scandals, including the recent allegations on the self-suspended chief of the financial services regulator, Joe Cuschieri.

FA S H I O N

TIS THE SEASON

Winter is the season to be generous with yourself.

GIFTS

A STOCKING FULL OF STARS

Start the new year in style with MONEY’s gift list.

BOV INVESTMENTS

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10 · MONE Y

EUROPE

ISSUE 63

Giselle is a marketing professional, and independent writer and proofreader. She runs Content for Success.

BREAKING THOSE GLASS CEILINGS MEP Roberta Metsola was recently appointed First Vice President of the European Parliament: the first Maltese to ever hold this post. Giselle Borg Olivier asks her about her new responsibilities and what it means to her, her family and her country—and why breakfast is her favourite time of the day.

G You are the First Vice President of the European Parliament. What are your duties, and how do you intend to succeed in this role? R The role of First Vice President is enshrined in EU law. It is an institutional one, and the First Vice President holds several high-level responsibilities related to the external representation of the European Parliament, and the negotiation of legislation with the European Commission and the European Council. I am also the Parliament official responsible for Article 17 Dialogue with religious and non-confessional organisations, and I am also entrusted with relations with national parliaments in the Member States. This is on top of my responsibilities as a member of the Committee on Civil Liberties, Justice and Home Affairs, where I have served

as the Coordinator for my political group for nearly four years and in the Committee on Environment, Public Health and Food Safety, and naturally my responsibilities to my constituency of Malta and Gozo. It is a tremendous honour for me to fill this role. Through it, I hope to bring the European Parliament a bit closer to people in Malta and Gozo and work to bridge the gap between citizens and European decision making. G There's been the usual mention of women achieving high ranking positions. How do you feel about the attention that is given to your gender alongside your qualifications? R What is important is that every girl in Malta and Gozo realises that our geographic realities do not limit their potential. We are not as small as some people think. The truth

is that I would not be here if it wasn't for the trail-blazing ceiling smashers who came before me and I will do everything I can to make the path easier for all those who come after me. G What does your new role within the EU mean for the local community in Malta?

THE FINANCE EDITION

EUROPE

I hope to bring the European Parliament a bit closer to people in Malta and Gozo, and to work to bridge the gap between citizens and European decision-making.

MONEY · 11

R It is my new role as much as it is Malta and Gozo's new role. Being entrusted with the parliament's relations with national parliaments in the Member States and with relations with religious organisations, I hope to bring other communities closer to Malta and Gozo. To build and strengthen bridges with other parts of the Union, and in turn, →

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ISSUE 63

I am grateful to all those Ministers, MEPs and people who militate within the Labour Party who took the time to get in touch. We are better and bigger when we can look past our partisan interests.

to take a piece of Malta and Gozo with me across the Union. I also hope to reinforce how the Parliament of Malta and the European Parliament interact and underline the idea that the parliament is the House of everyone in Malta and Gozo. There are channels envisaged within EU law to provide national parliaments with the opportunity to weigh in on legislation that is before the European Parliament with opinions, that are crucial to empower the national parliament to participate in the legislative process and fulfil its duties in providing checks and balances on other branches of government. With greater participation by the Parliament of Malta in the EU decision-making process, as it has a right to do, legislation adopted at the EU level will be closer to the needs and priorities of local communities in Malta and Gozo, reducing unnecessary bureaucracy and ensuring that laws agreed at the EU level are mindful and adaptable to smaller Member States. On a more practicable level, it will be the first time that Maltese will be used to preside over a European Parliament plenary session—so that is something to look out for too. G You've received many accolades from various well-known and highly respected people in the political world. Yet, the

Prime Minister of Malta didn't extend his congratulations (to date). What does this say to you? R I have never asked for, nor expected anything different from the Prime Minister. I think it is a little sad for the casual observer to witness. In my view, it exposes an insecurity that should be above someone occupying the role of Prime Minister of the country. We should not see ourselves as a small country. More importantly, I think it sends the wrong message to young people, girls in particular, that our Prime Minister is only able to see the nation in shades of blue or of red. This tribalism holds us back, and we need to rise above it. I am grateful to all those Ministers, MEPs and people who militate within the Labour Party who took the time to get in touch. We are better and bigger when we can look past our partisan interests. G Do you have the next steps of your career all planned? What's in the pipeline? R I've always taken my career on day-by-day basis. I have only just been elected First Vice President, and the range of responsibilities I am entrusted with is considerable. Beyond being responsible for Maltese and Gozitans in the European Parliament, a responsibility

I have always shouldered with honour, I am now also responsible for the whole European Parliament with various duties including replacing the President in North America. It means that I do not have the luxury of planning my career—politics is about serving the people and not the other way around. But I can safely say that I plan to continue to be active in politics for the foreseeable future. G You're a very busy woman—what is the favourite part of your day, and why? R It's hard to pin down my favourite part of the day, but mostly it is the mad rush in the morning when my husband and I make sure my boys have breakfast and get to school on time—there is something grounding about finding a way through the chaos every morning. G You've got four young sons—what do they think about mummy's job? R They are generally unimpressed. My eldest did have a flurry of questions about this election, how it is done, what it will mean, and so much more. He's very internet savvy, so I know he worries a little when people write things about me online, and that is something we have had to address as a family.

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14 · M O N E Y

COVER STORY

ISSUE 63

NOW WE'RE TALKING!

M What does this investment mean for EBO and BMIT Technologies? CS Our commitment to our customers and shareholders is to evolve further and harness technology to power businesses. And this investment is part of this journey to further diversify and strengthen our offering to local and international customers, in the areas of AI and associated services. BMIT Technologies and EBO already have an established collaboration, which allows us to offer an intelligent Virtual Agent to our customers in the online gaming sphere. This investment, though, brings us closer, as we seek to diversify our offering, and reach out to

new sectors and markets. It will also allow BMIT Technologies to participate in this innovation and automation space actively. GG As a pioneer in the local AI industry and a fast-growing player in the UK, EBO brings together some of the brightest minds in the digital fields of healthcare, iGaming and financial services. BMIT Technologies' investment of a stake in EBO helps us accomplish a bigger vision: to bring the power of Artificial Intelligence to more companies around the world. EBO will now accelerate its growth path and remain as passionate as ever about helping shape the future of AI.

M How is the market/your users reacting to this news? CS Very positively. Since our announcement on the Malta Stock Exchange and in the media, we have received excellent feedback, both from customers and investors. It has been interpreted as a sign of long-term commitment from our end to AI technology and applications, at a time when transformation and innovation are vital to the success or failure of most organisations. GG This investment deepens EBO's commitment to delivering enterprise solutions based on robust infrastructure and excellent

THE FINANCE EDITION

service models. AI technology is evolving rapidly, and our customers are accelerating their adoption to digitally transform into more nimble companies. With BMIT acquiring a stake in EBO, the industry is exploring the powerful capabilities of our solutions and the talent which we bring to the table.

businesses through technology. AI plays a vital role in this transformation journey, and a postCOVID world will certainly see the increased emphasis on automation as a method of streamlining services, reducing costs and optimising processes. CS I second what Gege said.

M How much of a challenge is it for BMIT Technologies and EBO to ensure that their new technologies are compliant with Maltese gaming laws? CS BMIT Technologies has been offering services to highly regulated industries such as online gaming and financial services for a long time. Therefore, by design, all our solutions and products are fully compliant with any applicable legislation in that segment. We even have specific offerings to enable operators to be fully compliant with the technology aspect of their licensing obligations. So, to answer your question, we embrace compliance in product design, delivery and support, and see it as an opportunity to differentiate ourselves, rather than a challenge. GG Regulatory compliance is an opportunity. We believe that the successful companies of tomorrow will be those that are most capable of building products which serve regulatory needs and create trustworthy solutions for end-users. AI technology, like any branch of science, is a human endeavour that is guided by values. Subsequently, EBO develops AI solutions to fulfil specific objectives which are aligned to the requirements of the law, societal norms and customer expectations. It makes us accountable and responsible to our customers to deliver solutions that are not merely compliant, but also transparent, accountable and worthy of trust. M Why is there a need for this tech now more than ever? GG BMIT Technologies and EBO share a fundamental mission: that of enabling the sustainable digital transformation of

AI will augment (not replace) human capability.

MONEY · 15

COVER STORY

M What would you say to the people who think AI is putting people out of work? CS The argument technology vs work is as old as technology itself. But history shows us that the net result is that technology creates new employment opportunities, makes life easier for workers, and allows for an improved standard of living in general. AI will not replace humans, but help them to do things better, more efficiently and will enable them to focus on new opportunities. GG Although global employment will be invariably affected, most of the current AI deployments will rely on human judgement when complex cognitive tasks are at play. Therefore, AI will augment (not replace) human capability. More so, several studies reveal that AI will roughly create the same number of jobs that it will eventually displace.

should have around the business benefits or the tough questions we need to discuss regarding AI bias, ethics and human agency. AI must engender trust, and to do so; it must have wide societal acceptance. For this to occur, we take time to explain key AI concepts, like classification and confidence levels, ethics and fairness in machine learning, for non-technical audiences. And we do this in simple terms to allow anyone to follow.

QUICK-FIRE QUESTIONS M Which book is by your bedside right now? CS ‘Done: The Secret Deals that are Changing our World’ by Jacques Peretti. GG I generally read three simultaneously, which allows me to jump from one to the other based on my reading appetite on the day. My three presently are: Nick Bostrom's ‘SuperIntelligence’, Daniel Kahneman's ‘Thinking fast and slow’, and Arora's ‘The Next Billion Users’. M Which podcast are you listening to?

M Are you working on changing misconceptions of AI?

CS TED Talks Daily. GG Roman Mars' excellent ‘99% Invisible’.

CS AI is a popular pet-subject for conspiracy theories, hype and fantasy. Yet, it is increasingly part of our day-to-day life, and the sooner we focus on the benefits and reality, the quicker we will start reaping benefits. One way to change misconceptions is to show what AI means in practice. Taking the BMIT Technologies—EBO collaboration as an example, what we are doing is tapping into EBO's AI expertise to offer help to customer experience and customer support teams in organisations. Through our approach, customer support teams are supported by intelligent AI agents to answer repetitive questions from customers, to enhance the level of engagement and to have around the clock support, even in multiple languages. Now, how is that for a straightforward way to remove misconception about AI?

M What album do you listen to, to unwind?

GG There's a lot of AI hype which unfortunately 'hides' the real discussions we

CS Nothing specific but love listening to classical music when driving. GG Any piano solo by the jazz pianist Keith Jarret, or when I need a proper break: Bach's Cello Suite No.1 in G Major. M What is the best advice you ever got? CS Not to be scared to teach others what you know—only in this manner can you learn something new and move on to bigger and grander things. GG Know what significant goals you want to work towards every day and get the most challenging things done first.

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Veronica is a freelance writer and editor. She won the IGM Award for her work on Ethical and Positive Disability in 2016.

ARE YOU BEING SERVED? The hospitality industry has been dealt a particularly heavy blow due to the pandemic. MHRA President Tony Zahra and Deputy President of the Chamber of SMEs Philip Fenech explain to Veronica Stivala how their respective organisations are supporting their members and that there is a light at the end of the tunnel.

THE FINANCE EDITION

BUSINESS

M O N E Y · 17

The hospitality industry has, and continues to be, badly hit by the pandemic: with reduced flights to the country's only corridor for tourists and with severe restrictions in eating and entertainment establishments many in the business have taken a considerable blow. MHRA President Tony Zahra and Deputy President of the Chamber of SMEs Philip Fenech explains how their organisations have done their utmost to see how to go about the situation in the best way. The Chamber plays an important role in being the communication channel between all strata of the hospitality industry: “We are the transmission from the shop floor, to the top floor, that is the administration,” explains Mr Fenech. He goes on to explicate how people who are self-employed, particularly those in the hospitality industry, which is probably one of the most demanding industries, often find themselves significantly cut off, because they are so concentrated on their business. Thus, the Chamber serves to be the voice of such people, passing on what they are feeling to the top. The same applies vice versa, and the Chamber often helps explain things on “micro-level” to the politicians, who, as Mr Fenech puts it, “tend to look at things at macro-level”. Speaking about the role of the Chamber of SMEs in the pandemic, Mr Fenech notes how

they wanted “to find a balance between controlling the pandemic and at the same time keeping the economy going as best [they] can”. He is adamant to clarify the misconception that the hospitality industry could re-open its doors—albeit with restrictions—not because the pandemic was over, far from it, but for economic reasons, that is, to try to keep the industry going. “We are explaining to our members that we all have to carry the weight collectively,” he points out, adding how “the complacency of one person means damaging the collective understanding”. After a long time now, this is starting to sink in and those in the business are beginning to understand better, as it was previously perceived that things had gone back to normal, notes Mr Fenech. Mr Zahra comments how the MHRA has from the start been working to get the best support packages for those in the industry, noting, “We were immediately in contact with the government to get support for the industry because it fell off a mountain, not a cliff,”. He stresses how hardly hit the industry was, going from one which “generates €2.1 billion annually, into generating zero”. The MHRA, he notes, agreed that if there was going to be mass unemployment, the industry

needed support with the employees. He recalls how initial decisions were not enough: the first-time government confirmed it would give support was when it was announced that €320 a month was going to be made available to employees in the hospitality industry. This, he says, “would not help much and would still result in mass unemployment”. After a few weeks’ government listened and offered €800 a month. Proudly he comments: “we were very much instrumental in getting this.” →

...TO A CERTAIN EXTENT WHEN YOU'RE IN BUSINESS, IT DOESN'T MATTER IF YOU INCUR SOME DEBTS AND YOU KNOW THAT YOU'RE GOING TO RECOVER THEM. THE WORST IS WHEN YOU DON'T KNOW WHERE YOU'RE GOING.

18 · MONEY

The MHRA also agreed with government on several other helpful decisions: a delay in payment of taxes, like VAT. They also got the MTA to postpone the licences and eventually they said they will not collect licence fees for 2020. Furthermore, they talked to the banks and agreed on moratoriums and finally they also discussed a cash flow emergency support arrangement for those in need of it. In his words, “If it hadn't been for the MHRA the industry would have been in trouble.” Mr Fenech goes on to note how the biggest challenge, however, is that “we are still in unprecedented waters”. And the issue is not just local: the leisure industry depends a lot on what is happening overseas. Tourism is a huge part of trade that leisure lives on. And because the figures are going up abroad too, it is naturally not only a question of getting Malta's figures down by controlling the situation both at the airport and on a

IT WOULD BE POLITICALLY ECCENTRIC FOR ANYONE TO SAY LET'S CANCEL CHRISTMAS.

BUSINESS

domestic level, but it also depends on abroad on how figures will go down for people to travel. Mr Fenech discusses how Malta as an island economy has been particularly badly hit. The 53 airlines supplying Malta are all in retrenchment, he notes, stressing how by cutting down access to a destination you completely lose your accessibility. This, he notes, will take time to get back to normal, mainly because other countries that receive more significant numbers of tourists, will probably be given preference, as opposed to Malta, whose figures are always lower. That said, Mr Fenech is hopeful that Malta has a very good standing with airline companies, and this will hopefully bode well for the near future.

ISSUE 63

restrictions must be abided by, a full stop on Christmas-related celebrations cannot be stopped. “This is not a normal Christmas, and it is up to all of us to make it work without further increasing burdens on the health and the economy. It would be politically eccentric for anyone to say let's cancel Christmas.” He goes on to note that “if we all have good self-management; this can work out”. The reason it has not worked out, he says, is “because as individuals we are not abiding to protocol”. He concedes that of course if the hospitality industry were to be open then the figures would be worse, but that now that so many establishments are closed and that figures continue to rise, then the spread of the virus cannot only be attributed to this industry.

Mr Fenech stresses how certain divisions in the industry were hit even harder than others, such as bars and entertainment venues, which have been closed since August, and on the day of our interview, were announced to have to keep closed “for the coming weeks”.

Looking ahead, Mr Fenech is keen to stress that there is a light ahead of the tunnel with a vaccine nearer in sight than predicted. “We can feel a bit more secure,” he comments, adding that “it seems that recovery will start coming in slowly”.

This had particularly strong implications seeing as, during the typically lucrative weeks coming up to and during the festive seasons, such establishments would be taking an even harder blow. Mr Fenech notes that while

Mr Zahra looks to the vaccine, now imminently on the horizon as the solution to bringing back tourists. Thanking the MTA for the cooperation they extend he hopes to be able to work to bring back tourists in conjunction with the association and to be able to “recover ahead of the curve”. How fast the vaccine can be rolled out will play a big part in this, both in Malta and internationally. Mr Fenech explains how having an end in sight is what is essential: “to a certain extent when you're in business it doesn't matter if you incur some debts and you know that you're going to recover them. The worst is when you don't know where you're going. No business and no government can go on supporting without a limit. Governments,” he notes, “have also lost their revenues but thankfully that seems to be something of the past.” Both feel confident to be able to say that a vision is in sight come March when we can slowly start our path to recovery. The interviews were carried out on November 25 and December 4, 2020 and the information provided was correct at the time of going to print.

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ECONOMY

JP is a founding partner at Seed, a boutique advisory practise. An economist by profession, he is also a visiting assistant lecturer at the University of Malta.

THE GREAT RESET There is no doubt that 2020 can be described by mostas annus horribilis. As we are in the final weeks of the year, the positive news surrounding the vaccine and the anticipated commencement of vaccination programmes in the coming months signals a semblance to a return of normality. Most economic projections and sentiment indices hinge on the success of vaccination. JP Fabri explains.

Economic recovery will not be automatic, and although most projections are talking of a rebound, I believe that this will be gradual as there are many factors at play. However, one thing is sure in terms of national economic performance; the pause in economic activity has scarred economic conditions and resources. Economic weaknesses that were already beginning to evidence themselves pre-COVID-19 will manifest themselves even more once activity recommences. Also, on an international level, countries had the opportunity to implement reforms and adjust their economic offering to make their country more productive, competitive and attractive for the new world order. These are three important economic concepts that not only shed light on the current state of the economy

The country needs to come together to transform its sectors through technology, upskilling and productivity.

but even more essential yardsticks for the future of the economy, its prospects for growth and wealth creation. Productivity is commonly defined as a ratio between the output volume and the volume of inputs. In other words, it measures how efficiently production inputs, such as labour

and capital, are being used in an economy to produce a given level of output. Productivity is considered a key source of economic growth and competitiveness and, as such, is necessary statistical information for many international comparisons and country performance assessments. Nobel laureate Paul Krugman states that “productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.” If one had to analyse Malta’s productivity over the past decade has improved, though less than European averages, over most sectors, however, some sectors warrant some attention. These include the remote gaming, real estate and financial services which have declined in terms of productivity because of faster employment growth. The public sector too faced worsening productivity. Going forward, productivity-enhancing issues must be a focus of any recovery programme. These include a focus of training, reskilling, upskilling as well as investments in technology and innovation. Unfortunately, productivity developments are seldom mentioned in economic and policy discourse.

THE FINANCE EDITION

Too much focus is given on the headline figures of GDP and employment; however, it is the dynamics between these two values that can shed more light on the actual developments of an economy. The results in productivity are also positively linked to a country’s competitiveness. The World Economic Forum, which has been measuring competitiveness among countries since 1979, defines it as “the set of institutions, policies and factors that determine the level of productivity of a country.” In measuring competitiveness, the World Economic Forum breaks down countries’ competitiveness into 12 distinct areas, or pillars, which are grouped into three sub-indexes. These are “basic requirements” which comprise institutions, infrastructure, macroeconomic environment and health and primary education. Next are the “efficiency enhancers” sub-index. Essentially, it’s focusing on markets—whether it is the functioning of goods, labour or financial markets—but also considers higher education and training, and technological readiness, which measures how good economies are prepared for the transition into more advanced, knowledge-based economies. The last pillar, innovation and sophistication, consists of two pillars: business sophistication and innovation. These are more complex areas of competitiveness that require an economy to be able to draw on world-class businesses and research

ECONOMY

establishments, as well as an innovative, supportive government. Over the last edition of the Index, Malta placed 38th out of 141 countries but has seen a decline in its scoring across most of the pillars. The institutional and innovation ecosystem pillars are the ones which Malta needs to focus on. The latter requires a complete rethink and focus on how we can increase our innovation capability. We need to prepare Malta for a research-driven economy, and this requires an investment in our educational system to ensure that there is a stream of STEM students, lower early school leavers, higher percentages of students graduating from tertiary education as well as sustained investment in research facilities and the enabling environment. Competitiveness is also a vital determinant of a country’s attractiveness. For a small island state like Malta, investment attractiveness is critical for us as we remain mostly dependent on the flow of foreign investment to use Malta as a hub for their activities. Investment attractiveness is usually measured by looking at various elements of the enabling environment that attracts investment to a country and therefore looks at the infrastructure, the reputation, the institutional environment, the tax and non-tax incentives and the regulatory environment. The EY Attractiveness Index has become the leading benchmark to assess Malta’s investment attractiveness by foreign investors. The downward trend has continued this year with several challenges being highlighted. The priorities for Malta that were identified are reputation & brand, education & skills and the institutional set-up, including enforcement. Corporate tax remains a crucial

More changes need to be implemented to improve Malta’s governance, and institutional set-up whilst a reputation-building exercise and remediation plan needs to be implemented.

MONEY · 21

element in attracting business together with Malta’s robust telecommunications infrastructure. 2021 is a year of great expectations. It is the year that hopefully, the world and the global economy starts its recovery from the aftermath of COVID. From an economic point of view, the international competition between countries will intensify to ensure that their economies can rebound quickly and support enterprises and employment. The world is going to be different and economic dynamics will change too. This great reset is going to be critical for countries to prosper in the longer term and it is precisely for this reason that economic concepts such as productivity, competitiveness and attractiveness are going to be critical for countries. Malta has indeed displayed a strong economic performance over the past few years; however, we must now ensure that the fundamentals are in place to sustain a strong rebound and sustainable performance. The challenges are known. Various reforms have already been implemented, and several investment programmes have been launched. There is no doubt that this is a good start; however, more ambition is needed to build Malta’s research and innovation ecosystem. To this end, the setting up of a dedicated ministry to research and innovation signals the political commitment to this vital ecosystem. More changes need to be implemented to improve Malta’s governance, and institutional set-up whilst a reputationbuilding exercise and remediation plan needs to be implemented. On the productivity side, one hopes that all social partners can come together to focus on improving Malta’s productivity through a revised social pact. The country needs to come together to transform its sectors through technology, upskilling and productivity. This will ensure that Malta remains competitive and attractive and will continue future-proofing the economy and its prosperity.

22 · MONEY

ISSUE 63

RECOVERY

Jordan is an economist and a portfolio manager for a local asset management company.

CAVALRY HAS ARRIVED the

To combat the unprecedented scenario brought about by COVID-19, the European Commission (EC) had to act fast to alleviate the tremendous strains being experienced by European members’ states. Undoubtedly, the magnitude of the shocks pinched member states differently with selective members such as Italy and Spain, on the brink of an economic and health system collapse as COVID-19 cases soared. Jordan Portelli reviews the EC's recovery firepower for Malta. On the 27th May, the EC put forward a proposal for an effective recovery plan which harness the recovery proposition and more importantly, its sustainability. Labelled as the 'Next Generation EU' with a proposed €750 billion allocation, in addition to additional reinforcements to the long-term EU budget for 2021-2027, the total financial firepower of the EU budget increased to a record of €1.85 trillion.

aim to activate private resources to support countries and critical sectors which were severely impacted by the viral crisis. Clearly through the planned recovery plan, in addition to other indirect mechanisms, such as the loosening in budget deficits for member states, the EC is emerging as a vital source of support to mitigate the severe impact on both the economy and the health system.

The recovery plan under the Next Generation EU focuses on three main pillars; investment and reforms, incentivising private investments and addressing the lessons of the crisis. The recovery plan has a welldefined long-term sustainable view, rather than solely addressing the current COVID-19 problem. Indeed, investments in green energy and digitalisation emerge amongst the top priorities for more sustainable economies through the recovery plan.

The EC's assistance and Malta Malta, as a European member, in the wake of the pandemic, will be receiving around one billion euro to combat its economic and social pitfalls. The allocations will consist of circa €350 million in direct cash grants. At the same time, the remainder will be through loans at very favourable conditions through which the EC will finance through financial markets given its strong triple-A rating.

More defensively is the allocated budget to prepare for a future health crisis while at the same time re-enforcing the health system. While more decisively is the newly established solvency support instrument with its main

Inevitably, Malta has been hit harshly economically, namely on the premise of its reliance on the tourism industry. Indeed, the tourism industry contributes to circa 11% of Malta's gross domestic product,

and the expected economic contraction for Malta in 2020 will be highly conditioned by the restrictive travel bans which pushed the tourism industry into dire straits. The hotel and leisure sectors were amongst the harshly hit with Government support being imperative. Wisely the Government intervened by launching the wage subsidy scheme to mitigate the closure of businesses and

The recovery plan under the Next Generation EU focuses on three main pillars; investment and reforms, incentivising private investments and addressing the lessons of the crisis.

THE FINANCE EDITION

MONEY · 23

RECOVERY

Source: EBA supervisory reporting

job losses. The EC's assistance will also finance such a scheme under the short-term European Unemployment Reinsurance Scheme (SURE) which will provide €100 billion to support workers and businesses. Malta's allocation is a total of €244 million with the initial tranche of €120 million being accessible for Malta last month, while the remaining €124 million being available in the coming months.

80% 70% 60% 50% 40% 30% 20%

Moreover, the Government going forward can continue to support the economy through the said favourable loans made available under the EC's recovery plan. Undoubtedly, over the past months, the Government swift action in tackling the economic stress was crucial in mitigating a more severe impact. Indeed, one of the most effective measures were the distributions of vouchers which a higher percentage skewed towards their utilisation in sectors that were the most impacted, such as hotels and restaurants. Thus, the recent benevolent announcement by the Government of a second round of vouchers early next year continues to augur well towards Malta's economic recovery.

10% 0%

As expected, small to medium enterprises (SME) in Malta, which are circa 99% of total enterprises, mostly utilised the moratoria scheme offered by banks. In fact, as a percentage of total loans just below 30% were SMEs, while only about 10% where mortgages. The above data continues to prove that the protection of jobs through economic policies, namely targeting SMEs given their contribution towards the domestic economy, should command the Government's COVID-19 recovery plan. The lack of liquidity possibly will pose the risk of debt servicing, which can eventually translate into business closure and job losses. This, in turn, will ultimately trigger an increase in non-performing loans which Source: EBA supervisory reporting

100% 90% 80% 70% 60% 50% 40% 30% 20% 10%

≤ 3 months

> 3 months / ≤ 6 months

> 6 months / ≤ 9 months

Households

That said, more easing measures might be required to continue to mitigate job losses which ultimately could trigger a more problematic scenario. An interesting report published by the European Banking Authority showed that the moratoria provided by banks to support the economy due to the pandemic crisis diverged amongst countries.

> 9 months / ≤ 12 months

> 12 months / ≤ 18 months

> 18 months

Mortgages

EE NFCs

SMEs

DE CREs

...its (vaccine) rollingout hopefully in the first quarter of 2021, will condition the pace and velocity of the economic recovery. will derail the bank's sanity and ultimately economic stability. The graphical illustration above shows that the maturity ladder of moratoria in Malta is much better positioned than other EU members with over 62% of loans have a moratoria maturity greater than six months. Thus, despite this augurs well for business in terms of breathing space, possibly more easing from banks in this regard might be required if the economy fails to kick-off in the first quarter of 2021. The recent positive news coming from the vaccine front and more importantly, its rolling-out hopefully in the first quarter of 2021, will condition the pace and velocity of the economic recovery. Immunisation is a necessity and not an option. Thus, the health authorities will have an essential role in convincing societal sceptics on the importance of getting vaccinated, not solely for their wellbeing but also for the broader society. It will also be beneficial in terms of a speedy economic recovery.

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26 · MONEY

ISSUE 63

S T R AT E G Y

Theo is a senior manager at EYParthenon, the strategy consulting business of EY, that helps clients design and deliver grounded strategies, and to support them reframe their future.

REWIRING STRATEGY TO THRIVE AMID CHANGE Theo Dix emphasises the need to drive change amid and beyond the pandemic.

With today’s pressure to make significant changes rapidly, many organisations are scratching their heads on what to do. They are wondering when the world will return to normal, how far their funding can stretch, how quickly and robustly will their business recover and what shape their competitors will be in. They are also trying to understand how profound and long-lasting changes to consumer behaviour will be. If COVID19-driven changes to their operating and business models should be something, they maintain going forward. The impact of COVID-19 has pushed the need to reimagine, reshape and reinvent—and to do so fast. All sectors are affected, but the effect varies considerably by industry. Across the more robust sectors, we see an investment push to expand, while in the weakest sectors, capacity will be taken out and, in some industries, only the strongest

The ability to generate capital for reinvestment in the next generation of products and services is a critical component of success.

players may survive. In some cases, the crisis has accelerated current megatrends, and companies across all sectors will need to embrace digital transformation further as they future-proof their business models and look ahead. Sitting tight in the eye of the COVID-19 economic storm may not be the best route ahead. Amidst an ever-changing landscape, businesses need ambitious corporate strategies that they can action fast—and the optimal strategy will vary per the sectors and the companies' position within the industry. At the same time, the strategy should focus on a broader group of stakeholders—customers, employees, suppliers and society—to truly maximise the value that can be created for shareholders. Ecosystems have become increasingly essential, and competitors also need to be considered as potential partners to thrive in an uncertain future. These forces are changing the way companies formulate and execute strategy. The new EY Realising Strategy survey of 1,000 CEOs, CFOs and other C-suite executives on the future of strategy formulation shows how. Among the key findings: −

76% indicate that COVID-19 will impact, or even cause them to pivot, their organisations’ medium- to long-term strategy, and 12% say it will cause them to look to new sectors to succeed.

−

82% indicate that customers are as important as, or more critical than, shareholders when formulating strategy, and 69% say the same for employees relative to shareholders. 67% believe that the most significant competitive threat in the next three years will come from a company outside their current sector. 97% indicate that they are likely to partner with competitors: 56% of them suggest that they would be most likely to do so to overcome traditional barriers, such as capital requirements, regulatory requirements and supply chain optimisation. Meanwhile, 43% indicate that they would do so to enter new markets.

From sector to sector, leaders should ask how they will better position their companies to emerge stronger beyond the crisis. Would an acquisition future-proof growth or an asset-light model, migrating non-core assets and operations to an ecosystem of strategic partners, make the business nimbler and more resilient? Would the allocation of investment capital to certain areas create long-term value or just quick wins? While everything seems different now, companies should distinguish between enduring changes versus temporary shifts

THE FINANCE EDITION

in behaviour. These deeper fundamental drivers of change will remain long after the pandemic passes us by and planning around those needs to be at the heart of a company’s long-term strategy regardless of how fierce the urgent pressures are. Understanding who your real competitors are and taking a systematic look at your industry position and at which industry boundaries are under attack can be critical ways to identify areas for growth and potential partners

S T R AT E G Y

or acquisition targets. After this analysis, it may become apparent how—a spirit of “competition”—working with traditional competitors in some cases to fill in market, product and technology gaps or fend off threats from global competitors can benefit both organisations. The ability to generate capital for reinvestment in the next generation of products and services is a critical component of success in the near-to-mid-term. Although

MONEY · 27

it may seem counter-intuitive, as achievable valuations are likely to be lower, divesting non-core assets now could end up boosting returns in the future if that capital can be redeployed in the right area. As executives look towards what comes next, they may need to make hard choices about which businesses, and type of business model, they need to capture new potential growth. The stakes and the rewards are high for those who win the battle for the beyond.

28 · MONEY

OPINION

Manuel is a political blogger who writes for The Sunday Times and manueldelia.com.

AT YOUR FINANCIAL SERVICE Political analyst Manuel Delia examines how the financial services thrived since 2004 and how it was dealt a blow with all the unfolding political scandals, including the recent allegations on the selfsuspended chief of the financial services regulator, Joe Cuschieri.

ISSUE 63

THE FINANCE EDITION

OPINION

The world is changing. Do not expect the clock to turn back. The global village has come to pass. We will not go back from that. The far-left first rallied against the injustices of the new times as industry was spirited to where exploitation was cheaper. Then the far-right took up that mantle saying they could reverse the trends. Donald Trump told the rust belt their factories and steel mills would be great again. Brexiteers told middle England, Europe would come begging for their products. Politicians like simple answers to very complex questions. What cannot be squeezed in a slogan on the side of a bus is of no use to them. It takes them too long to explain that the way the world will change will not make it completely unfamiliar. As we watch these shifts from Malta, we should be wondering how we are to re-invent ourselves to fit and prosper in this new world. In the early 1990s planners anticipated the easier flows of worldwide capital. The offer of what at first was naively branded as “offshore services” exploited the desire of the wealthy to dodge substantial tax bills. We offered to help the rich become richer. We did it smartly, discreetly and efficiently earning a good name for ourselves as a place with more than sun and sand. It was not a small miracle to rebrand “offshore” to “near shore” and allow the financial services industry to survive EU accession.

IT WAS NOT A SMALL MIRACLE TO REBRAND “OFF-SHORE” TO “NEAR SHORE” AND ALLOW THE FINANCIAL SERVICES INDUSTRY TO SURVIVE EU ACCESSION.

MONEY · 29

It did more than survive it. Malta's financial services industry positively thrived since 2004. Malta's USP was the best of both worlds: a low tax jurisdiction with the legal and political comforts of an EU member state. To coin a phrase, we cultivated a gold-egg laying goose. Which we proceeded to cook for a lavish goose dinner, served between around 2013 and 2017 when it seemed our good fortunes would have no limits. In our inebriated state of self-congratulation, we ignored the rot eating away at the industry. This period will be remembered as the phase of oblivious calm before the storm. It included the licensing of Pilatus Bank and Satabank, their shenanigans, and their eventual closure mainly after a foreign intervention. It will be remembered for the exposure of just how disproportionately weak our law enforcement agencies are in comparison with the billions of euro they are supposed to oversee. And, add this to the stains on our record, it exposed the ineffectiveness of political appointees placed in crucial positions, doing more harm than good. It would not be a proper analysis of the state of play in the sector if we didn't acknowledge the corrective measures that have been put in place since the world realised we were no longer a jurisdiction one could trust. After years of obtuse resistance to change, a host of regulatory measures and legislative changes were adopted in line with recommendations we got from the Council of Europe for our financial sector. Moneyval did not debate us on the reasons why we let ourselves go so badly. It's up to us to come to terms with the fact that we planted bent cops to run the police force to allow top politicians to commit financial crimes with impunity. It's up to us to deal with the fact that the government dismissed or transferred anyone who could stop their wrongdoing. It's up to us to stop ourselves from plucking the feathers off our gold-egg laying goose to have it for dinner. What Moneyval could do was tell us what we needed to change in the rule-books to →

30 · MONEY

OPINION

look serious about fighting financial crime. Adopting new laws is relatively easy. And we did that. We now have a legal and regulatory framework that ticks all the Financial Action Task Force (FATF) boxes. And we now also have a Proceeds of Crime Act that, though missing an effective provision to act on unexplained wealth, at least provides for asset recovery. By the end of the year, we'll have new rules on suspicious transactions that should help intelligence-gathering some more.

the truth. Our institutions are still harassing them for it.

When Moneyval and the FATF examine us on whether we've implemented their advice, they'll find we got busy changing laws.

Joe Cuschieri sits on the supervisory board of the European Central Bank. He was supposed to be the main interlocutor with Moneyval and the FATF persuading them that we haven't just improved our laws, we also have serious people intending to enforce those laws, starting with him. But now he's suspended from duty over an egregious case of collusion with a regulated licensee, who incidentally is not just any regulated licensee. He is Yorgen Fenech charged with killing Daphne Caruana Galizia of whom Maria Efimova and Jonathan Ferris were significant sources.

But that was hardly ever the problem, now was it? Keith Schembri and Konrad Mizzi are not at liberty because they committed crimes our laws had not yet discovered in 2013. No one in the management and boards of Pilatus and Sata was ever charged with any wrongdoing, even though their banks were shuttered by regulatory intervention. But that wasn't because money-laundering was not a crime in 2014 and 2016. It was. We just did not have the people to enforce the law, whether because law enforcement agencies were poorly manned, or because the people with the job to man them were too loyal to act against the partisan interests of their bosses. This, after all, is what landed us in this mess.

IT'S UP TO US TO COME TO TERMS WITH THE FACT THAT WE PLANTED BENT COPS TO RUN THE POLICE FORCE TO ALLOW TOP POLITICIANS TO COMMIT FINANCIAL CRIMES WITH IMPUNITY.

ISSUE 63

Moneyval and the FATF can take pity on us and give us another chance, keep us on their white list because of the new laws we've written in, and excuse us on the back of our relatively pristine pre-2013 record. We can only hope. But they'll need to squeeze their eyes shut to help us out. They'll need to ignore the fact, for example, that just last November Malta renewed its persecution of two whistleblowers who broke open the lid on Pilatus Bank and the Electrogas imbroglio. While Joseph Muscat and Keith Schembri drank to Ali Sadr Hashemi Nejad's health at his wedding in 2015 and Konrad Mizzi partied like he was 20, Maria Efimova from within the bank and later Jonathan Ferris from within the financial intelligence agency, risked everything and lost everything to let us know

On the other hand, the only chief justice in Malta's history to have also been a political candidate for the Labour Party has been brought in to assess whether the CEO of the financial services regulator, the MFSA, breached ethics allowing the owner of a business he regulated to fly him and two lady friends of theirs on an all-expenses-paid tour to Las Vegas.

No one looks forward to grey-listing by the FATF. We risk facing shrinking foreign investment, expensive deficits as the government struggles to borrow money. Hushed silences at the World Bank or the International Monetary Fund if we ever needed their money, a spiralling trade deficit and an accumulated boycott from the international community. The worsthit will be just the services and businesses that made this country what it has become: banking, asset management and financial services. Let's pray we sail past this Charybdis and continue to float on the white list. But it is depressing to realise that we had the far less than white Joe Cuschieri speaking for us until he had to quit halfway through this gauntlet, bashed by the exposure of the truth. It may be the most expensive lesson we've ever had to learn in our modern history, but we might find out soon, to our greatest regret, that when a bunch of politicians make a mess of things, they're the last people to be trusted with cleaning it up. Or that a nicely roasted goose cannot lay eggs, even golden ones.

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Learn More. Get in touch with us today. Drop us an email on sales@computimesoftware.com Give us a call on +356 2149 0700 or visit our website on comply-radar.com

32 · MONEY

ISSUE 63

COACHING

CLOSING for SUCCESS What is success? If you ask this question to a hundred different people, you will probably receive a hundred different replies. For many, success must do with physical wealth and financial freedom while others have different ideas of it, which could revolve around building solid character or achieving strong family ties, friends, relationships or achieving a level of stature and reputation.

Whatever the case, and whichever way one looks at it, success on any level is a result of how effective we are at selling—closing a sale more specifically. That's right! Successful people, whether in business or otherwise, are the best salespeople because they are involved in promoting and closing (or selling) something—themselves, proposals, initiatives, suggestions, ideas, thoughts, products or services. The reality is that success on any level must do, to one degree or another, with the level of one's ability to 'close the sale'. Think about it: from the moment, we wake up in the morning to the moment we go to bed at night; we are continually selling our ideas and preferences or products and services depending on who we are dealing with. Here is something to think about: some sell successfully, while others are successfully sold to. Those successful at selling are ultimately the ones that take command of their life and have a direct hand in creating their world while the rest are living in a world that is designed for them. It is a stark reality. Honest selling is not about using tactics to pressurise or bulldoze people into accepting an idea or purchasing something they don't need or is not beneficial to them; it's neither a tug of war. That's old school. Selling is about enthusiastically offering an idea, product or service that you know will benefit the other person, (your prospect), and then leading them to the desired outcome. Honest and effective selling is about having a deep and genuine belief in your idea, product or

THE FINANCE EDITION

service and are convinced beyond measure that it will be of value to your prospect. With this as the underlying motivation, not reaching an agreement means that your prospect loses out on a product or service that will bring value to him due to your inability to 'close the sale'. In addition to this, in business, no agreement (or no sale) means that you lose out on potential income. For any business, and yourself, money is a vital resource, and this resource abounds in proportion to your (or your team's) ability to 'close the sale'! In simple terms, one could state that if you have a product that is a correct fit for your prospect, you have a responsibility to lead the other person to a close otherwise you fail him by depriving him of a product or service that creates value. You will fail yourself (or your business) by depriving yourself of income—all because of an inability to 'close' effectively. Per Merriam-Webster's Dictionary, selling is 'to persuade or influence to a course of action, to induce a purchase'. There you have it: selling is about 'closing'. We all do it multiple times a day. Some close and win, while others get closed and lose. The ability to

COACHING

MONEY · 33

close (or lack of it) has everything to do about winning or losing. The question is, where do you stand? Do you more often win, or lose? What's your level of success using this as your measure? Selling makes the world go around. Nothing would get done unless we sell to each other. As stated, whether we realise it or not, it is an integral part of our daily lives. So long as our proposals offer value for the other party and

One of the keys to successful businesses and their ability to close in today's marketplace is to be motivated by an unselfish desire to help and solve the problems of others

we convincingly lead them to see our point of view, we stand to close and win. If we don't close, we lose. Successful transactions in business are owed to an important mantra which fuels us, and which we emphasise in most talks that we give. This mantra ensures that a product, service or idea is only presented when knowing beyond doubt that it will benefit the other party. It must be the underlying motivation for any business to be truly successful. Anything short of this will only mean that you are possibly setting yourself

up for short term gain but long term failure. Companies should be positioned, together with their product or service as having massive value for the prospect. People care about what value is provided for them and purchase that. They want to know that the product or service being offered will benefit them, preferably in a massive way. To do this effectively, you must be so sold on your product; believing, beyond doubt, that it will bring enormous value to those who purchase it. One of the keys to successful businesses and their ability to close in today's marketplace is to be motivated by an unselfish desire to help and solve the problems of others. The attitude should be that whatever it is that your business offers, tremendous value will be added to the life of those being served. It will help position your business, and yourself, as a top performer in your field. Having a genuine outgoing concern for your prospects, in addition to offering ideas, products and services that you deeply believe in, must be the fundamental starting point if you want to hit and exceed your 'closing' targets and overall results from a business perspective. This motivation will allow you to lead your prospects and reach a win-win situation.

Frank and Gordon have over the years built a formidable work relationship which has extended to a solid friendship. In line with their work ideals which revolve around commercial operations and human resources, they have a strong desire to reach out to the broadest audience possible by offering tools, tips and strategies to help others reach their goals as smoothly and as quickly as possible. [ frankandgordon.com]

bloom@bloomcreative.com.mt

We build remarkable brands. To view a selection of our best work, visit bloomcreative.com.mt

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PROMO

MONEY · 35

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MONEY · 37

PROMO

Duncan has over two decades of experience in feature writing and journalism. He is also a freelance writer. In 2012, he was the national winner of the EU Health Prize for Journalists.

MEET HENRY

A string of entrepreneurs have taken to social media to share their inspirational quotes. One such entrepreneur involved in the real estate business is Henry Zammit, who set up his motivational Facebook and Instagram page 'Meet Henry'. Duncan Barry speaks to the franchise owner at Ben Estates Elite, who is also fast becoming one of Malta's leading and inspiring business coaches. “My main objective is to help people daily; I believe that by coming across and reading just a few inspirational words, you can shift your day to a more productive one and I want to be there to help out,” Mr Zammit said when asked what his main objective is of setting up a Facebook page featuring daily inspirational posts of his. He adds: “I also know that many salespeople out there are left alone, and no motivation or coaching is given to them especially during times like these,” referring to the pandemic that has affected businesses in some way or other. Meet Henry was kickstarted during COVID-19 just for that reason: to help and support others. When asked what kind of feedback he is getting from the public and whether the page is part and parcel of his real estate profession at Ben Estates Elite, Mr Zammit says that the feedback has been great, adding that locals might be used to seeing similar pages on social media but not from a local, which makes it easier for them to relate to. “I have been working in the real estate industry for the past ten years; believe me, in this industry, I also need my daily dose of motivation, so basically I'm also helping myself.” This pandemic has affected businesses in some form or other, some having risen to the occasion. “The market has shifted a lot, and I had to take a few difficult decisions which weren't easy to make, but with the right frame of mind and a great team beside me, we managed to overcome most challenges. On the other hand, when the pandemic hit the island, luckily, I was in

a good frame of mind, and it helped me gain more confidence in myself. It only could have happened because I invest a considerable amount of time in personal development.” Is there any light at the end of the tunnel? “Most businesses will overcome COVID-19 only if they react with a positive and hardworking mindset. This could be an opportunity for one to grow. If you're in a job you hate and maybe working three times a week, this is the perfect time to start doing what you love, that is, turning a negative into a positive. One of my mentors had shared a very nice reply to your question which I will use here ‘if there is no light at the end of the tunnel, I will create it’.” “Nothing was meant to be easy in life: tough times don't last, but tough people do. We all started with nothing and created whatever we have. Set yourself to zero and think about how you can do things better and focus only on growth. If you're using your last bit of energy, make sure you use it sensibly.” Mr Zammit sums up his real estate job in a oneliner. “I see and help people take life-time

decisions daily, and I'm part of it.” On work ethics, Mr Zammit also had some wise words to share to the real estate industry: “Never run a short-term business: always keep work ethics at the top of your list of daily goals. This career is based on people and trust—get it wrong, and you're out.” Visit 'Meet Henry' Facebook and Instagram pages and find out more about this inspiring entrepreneur making waves on our islands. facebook @mthnry

instagram @meet.henry

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ISSUE 63

PROMO

THE GROWTH GURUS MONEY interviews Josh O'Cock and Alex Thomson, directors at Growth Gurus, about their agency, adapting to the ‘new normal’ and their vision going forward.

M Growth Gurus has made its name and is holding firm as one of the leading agencies—where did it all begin? A We started up Growth Gurus in 2015. Back then, we shared a single desk and computer screen in a coworking space. We are a digital marketing agency offering strategy, branding,

WE KNOW THAT THE HUMAN MIND CAN FOCUS ON MAXIMISING ITS OUTPUT IF IT KNOWS WHERE THE END IS...

websites, digital marketing, and training. Now in our 5th year, we have worked with over 200 clients from around the world and are passionate to continue growing. M How has your business evolved in 2020? J 2020 brought change to just about every business on this planet. We evolved a lot. Despite moving into our awesome new office in January, we embraced remote working full-heartedly in March. We've been working very closely with our consultants to help us develop our leadership qualities and to build a crisis-proof organisational structure. It has had a tremendous impact on us maturing whilst helped us gear up for a healthy 2021 and the forthcoming years. A We restructured our organisation, which, of course, came with some pain but will have

long-term gains. We ensured our vision and values are clear and that we have the right people in the right seats, all pulling the same rope in the same direction. The goal, although being a service-based company, is to develop (as-close as we can) a scalable agency that keeps the client in control. M Can you tell us a bit more about your process? A Working with Growth Gurus is a journey. We have a proven process that leads to business owners having the best opportunity of reaching their business goals through digital marketing. The journey starts with a half-day discovery workshop. It helps align our team and our client's team as well as flattening out the typical silo structure between departments when it comes to how overall company goals are

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MONEY · 39

PROMO

…WE HAVE DEVELOPED A COLLECTIVE SENSE OF PURPOSE WHERE CREATIVITY AND AMBITION ARE UNLEASHED IN EACH TEAM MEMBER M Digital marketing can be very impactful. Is there a specific project that you are incredibly proud of? perceived. It outlines the objectives for updating the client's brand to match its audience, developing the website to focus on conversions and implementing a strategy for digital marketing success. We know that the human mind can focus on maximising its output if it knows where the end is, so we plan for the year and break it down into 90-day phases that are easy for our clients to understand and implement as a team. M What drives you?

A If we can inspire change—in vision, circumstances, revenue, results, knowledge and happiness—with everybody who engages with us, team and clients alike, then that’s fuel to our fire. As our name suggests, no matter how we work together, we’re committed to inspiring growth on every plane. J Since inception, we have set ambitious goals for the business that we reached yearon-year. Our team is critical to our success, and we motivate them to do the same. At Growth Gurus, we have developed a collective sense of purpose where creativity and ambition are unleashed in each team member. Nothing drives me more than this energy and passion. M Growth Gurus has picked up several business awards over the year. How does that feel? J Awards are amazing, of course, but we’re happiest when we’re winning the hearts of our clients for a job well done. This year we won two awards, the Best Service Provider of the Year at the Malta iGaming Excellence Awards and the Best Social Media Campaign at the Tech.mt eBusiness Awards for our work with Logix Creative and Neil Agius for the Wave of Change. We're also proud to have been finalists for the EY Entrepreneur of the Year award that sadly got cancelled this year.

J Tough one to narrow down, but there is one project that is extremely close to my heart. Earlier this year, I flew out to Boracay in the Philippines with Mission of Love to help the kids of the indigenous Ati tribe. Christian Palmer, a renowned street artist from Australia, joined us on a mission to make beautiful art together with the Ati children. We used our skills and passion for making a significant positive impact. We launched a life-changing project called We Art Love (www.weartlove.com) - combining Art, eCommerce and Digital Marketing to raise awareness and financial support for children in need. All proceeds from every piece of art purchased go directly into funding their health, nutrition and education, depending on the print you choose. M Can you let us in on what comes next for Growth Gurus? A Josh and I are currently working on further developing our digital agency business model. I've said it live on Facebook and I'll repeat it: the agency model is tough, but there's lots of room for growth and change. Building a genuinely world-class digital agency is our goal, but this is not our end game. With Growth Gurus as our core, our vision for the future involves developing a portfolio of supporting businesses.

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TRENDS

TRENDS IN

BROAD STROKES

ISSUE 63

THE FINANCE EDITION

TRENDS

M O N E Y · 41

Richard is the CEO of Switch — Digital & Brand, a marketing agency that forms part of ICOM, the world's largest network of independent agencies. [richard@switch.com.mt]

It's that time of the year again—no, not the time when you should be putting cookies and cream out for Santa, but the time when everyone tries to make predictions for the most important marketing trends to look at for 2021. Richard Muscat Azzopardi outlines his predictions. Predicting the best trends for 2020 was a fun game, especially if you look at it in hindsight. No one won that game. No one expected how marketing would be turned upon its head by a global pandemic. So most of the trends we were looking at at the beginning of 2020 were based on extrapolations around behaviour that had been building slowly. We were predicting a series of evolutionary changes, not a complete revolution. We, as an agency, were incredibly optimistic, too. We were coming out of a year in which our most prominent clients had just had record years, so we were expecting bumper budgets to flow our way throughout the year. We were hoping to innovate by considering new platforms, or maybe by being proactive and getting some of our larger clients to give video the attention it deserved finally. It was not to be. Come March; all our plans were thrown out of the window. But this is not an article about 2020. I'm here to tell you about what to look out for in 2021, and it's not going to be as different to what we looked at in 2020. Behaviour has changed by quite a bit. People are reacting differently to situations, but really and truly, people are still people. What you need to do to thrive in 2021 is to look at how humans have always behaved and find the things that are more important to them now. Things that are relevant in a world that's

ravaged by a pandemic and that's on the brink of an economic depression. A world that's mostly acting as if nothing is the matter economically. More eCommerce If you look at the stock prices of Amazon, Shopify and Square, you'd immediately be able to tell that people are betting big on eCommerce. But retailers still aren't making a move quickly enough. It seems silly that it took a pandemic to force people into investing in eCommerce, but the truth of the matter is that shoppers won't look back now. In-person shopping will still be a treat, and

it will still dominate the volumes for years to come. However, this was the year in which the growth of eCommerce was unprecedented; businesses that had never sold anything online were finally pushed into not having a choice. The Drum says: “In a report by eMarketer on US e-commerce trends in 2020, online spending is projected to take up 18% of all consumer spending, compared to just 14.9% in 2019. The fastest-growing categories encompass essential needs like food and beverage, health, personal care, and beauty.” 2021 should be the year in which businesses that know what they're doing will take the stop-gap measures they put in place in 2020 and will finally build a solid eCommerce offering. If they don't, they're going to be left behind, and the results will not be pretty. →

The final prediction for 2021 is the acceleration of consumers taking a stand in the everincreasing divide between the rich and the poor.

42 · MONE Y

More Local. More Human. The very first significant impact that COVID-19 had on the social media world, and therefore marketing by association, was an outpouring of love and appreciation for our fellow humans. Brands were expected to follow, and even though the initial enthusiasm faded away as the months wore by, consumers still expected brands to maintain a basic level of decency. Brands are catching on, and in another acceleration of a trend that we've been talking about for a few years now, meaningful brands are being rewarded. It goes beyond an occasional post that says “thank our front liners”. Switched on consumers are expecting brands to change down to their core. In the process, one of the significant shifts we've seen accelerating is the embracing of local. Globalisation had its moment, but the future is local. People are appreciating that supporting local brands is more meaningful than ever for various reasons. First, it keeps money in the community. When the whole world is suffering, the least you can do is support businesses that are close to you. The other primary reason is that local businesses tend to reduce unnecessary transportation, bringing the carbon footprint of your choice

TRENDS

down without any significant change on your part. More Agility The third aspect that brands need to be prepared for next year is increased agility and willingness to pivot. As people's habits changed rapidly throughout the months, companies had to make changes that they would make over years in the space of weeks, sometimes days. The changes ranged from communications changes that meant that any prepared content had to be thrown out of the window right down to entire business models (or businesses) which became redundant overnight. The one guarantee for 2021 is that agility needs to be built into any marketing mix. The companies that will thrive will be the ones who can display skill in their communications at levels that have never been experienced before. Less (rigid) Planning This segues perfectly into this point, though, because it's going to be a very stressful year for brands that usually rely heavily on pre-planning all their content for a year in advance. This year we will need to plan for far shorter periods, but we will also,

ISSUE 63

paradoxically, need to plan for flexibility. We're working with our clients to be able to come up with structures that allow us to be on the ball without having rigid plans. It involves us creating content for multiple scenarios, with the possibility of deploying it in a way that's far more versatile. By creating this content in advance, but not planning it out to the minute details, we allow ourselves to be as agile as possible with our non-existent plans without having the stress of trying to navigate every move on an ad-hoc basis. Less Perfectionism Audiences have always been far more forgiving of honest mistakes than bosses. If a brand made a tiny mistake in one of its communications, people would either not realise or not care. The boss who commissioned it would be far less forgiving though because everything coming out on a brand level should be perfect. This all went out of the window in March 2020, and nobody has looked back since. Everyone on the internet now accepts brands that produce content in their living room, photos that show blemishes, kids bursting onto a serious zoom call with your biggest client. Audiences have always been forgiving, but now brands are allowing themselves to believe that people don't want everything to be as highly polished as a glass on the Queen's private jet because they drink their morning coffee from a slightly chipped mug. Their favourite brand can produce content with a truck hooting in the background, too, because it's just the way it is.

... the impact that COVID-19 had on the social media world, and therefore marketing by association, was an outpouring of love and appreciation for our fellow humans.

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TRENDS

MONEY · 43

Globalisation had its moment, but the future is local. It will be a trend that flows into 2021 as people expect brands to be even more approachable, even more relatable, even more human. Less Greed The final prediction for 2021 is the acceleration of consumers taking a stand in the ever-increasing divide between the rich and the poor. The erosion of the middle class is bringing corporate greed to the front pages, and top-tier politicians are highlighting the problem with this, too. As politicians like Bernie Sanders and Alexandra Ocasio-Cortez make it to mainstream media, even if they're not moving into the white house just yet, they're making the narrative of corporate greed a much more prominent one. It's not infrequent for millennial and, increasingly Gen Z, consumers to look at brands under a microscope to understand what their net-good balance is, and evil brands tend to be punished. While this is a long-term process, with big and relatively evil corporations growing their share prices exponentially over 2020, the tide is slowly turning. It might still be a little drop in the ocean; however, people are changing in their behaviour. Just like the oil companies seemed unassailable just a decade ago, greedy companies might find their match over the next decade or so, and the ones who start acting meaningfully now will reap the rewards in the long run. And in the end I haven't spoken about any specific marketing techniques, and it's not the place to do so; however, I can say that 2021 will be an exciting year for marketing. Tactics and techniques will mostly remain the same—we might see “new” platforms gain more traction, but at the end of the day it's not what medium you use, it's the story that you tell that matters. And, if in doubt, feel free to reach out to me for a conversation.

brings cool back to the kitchen with engaging content, delicious recipes and a lifestyle flair.

E AT R E L I G I O U S LY Available from all Park Towers Supermarkets’ check-out points and selected outlets.

THE FINANCE EDITION

BR ANDING

MONEY · 45

Elise is a creative writer by trade and a literature graduate by degree. She works at Switch Digital and Brand as a copywriter and trend-watcher, and keeps herself up to date with everything digital, internet and informational.

LIDL WIZARDRY Elise Dalli reveals why Lidl's clothing brand sells out when fast-fashion brands don't. Following on the heels of bootleg Ikea fashion and mass-market demand, Lidl's new sneakers created a social media storm on release, only to sell out days later and reappear for resale on sites such as Depop and eBay. Designed to appeal to bargainhunting shoppers, this isn't the first time that Lidl's stepped into the fashion circles, or created mass hysteria around a product. In 2018, their first foray into fashion culminated in Lidl-branded socks hyped up on social media by influencers. Although not featured on the Milan Fashion Week catwalk, the Lidl socks proved popular enough that Lidl superiors took note. Less than two years

MOST IMPORTANTLY, THEY'RE SCARCE: THEY'RE FAST-FASHION IN HIGH-FASHION QUANTITIES

later, Lidl brought their fashion line to the market and showed lightning does strike twice. What's extra fascinating is that they brought out the line during the height of a global pandemic and ensuing recession, and somehow managed to achieve what other fast fashion brands struggle to obtain after a decade of refinement. However, there are a few factors in play that potentially helped escalate Lidl's sneakers from a bargain hunter's dream to must-have footwear for fashionistas. Anti-fashion fashion isn't a new creation. Ikea's iconic blue bag has been turned into clothing since its launch. While Lidl does carry clothing on occasion, the juxtaposition between clothing and branding is particularly useful in attracting people who would want to stand out. Lidl-branded clothing, on paper, appeals to both people looking for a bargain and people who see themselves as individuals and trend-setters. Furthermore, there's the aesthetics chosen: most fast-fashion brands move with, not against, the fashion industry trends that trickle down from on a high, particularly for colours. It's hard to find bright, colourful clothing that stands out in a fast-fashion world, so Lidl's primary-coloured kicks appeal to people who want a little more out of their clothing than neutrals, blacks, and whites. They photograph well, and they're cheap. You can pick up a pair of sneakers while you're doing your weekly shopping. They're funny, well-made, and nostalgic: who else

remembers the candy-coloured sneakers of the 90s? Having a pair of them might not make you a fashion icon, but if you post it on social media, it's an easy way to get likes. Most importantly, they're scarce. They're fastfashion in high-fashion quantities, making you lucky if you've managed to bag a pair, and the brief envy of your peers, which is why sneakers priced below €15 at Lidl are selling for up to €1,225 and beyond. Can fast-fashion brands recreate this? Probably not. Part of the appeal is that it's a limited one-time-only run of a fashion house that isn't even a fashion house: it's a phenomenon, not an item of clothing, and impossible to recreate unless you exist in the same liminal space between fashion and functionality.

PHOTOGRAPHER Marvin Grech

STYLIST Peter Carbonaro

WINTER is COMING MODEL Andriy @ Models M

Shot on location at TheGreenSixteen

Jacket by Dan John Polo neck by Ted Baker Jeans by Charles & Ron Accessories — stylist’s own

Hoodie by Charles & Ron

Polo shirt and beanie by Charles & Ron

Trousers by Dan John

Hoodie by Benetton Jeans by Charles & Ron Trench coat by Esprit

Suit and shirt by Dan John

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ISSUE 63

FA S H I O N

TIS THE SEASON Dunhill Aerial patina mesh and leather sneakers €595

Alexander McQueen Burnished silver-tone cuff €390

Saint Laurent Logo-print glossed-nylon duffle bag €895

Winter is the season to be generous with yourself.

Gucci Horsebit cashmere-lined leather glove €390

THE FINANCE EDITION

Givenchy Spectre perforated leather sneakers €650

Séfr Harvey slim-fit tapered woven trousers €150

MONEY · 55

FA S H I O N

Breitling Aviator 8 stainless steel €7,100 / elcol.com Moncler Grenoble Hintertux slim-fit quilted shell down ski jacket €1,060

Burberry Logo-print loopback cotton-jersey hoodie €790

AldoMariaCamillo Washed-silk blazer €2,655

All items available from mrporter.com

56 · MONEY

ISSUE 63

GIFTS

A STOCKING FULL OF STARS Start the new year in style with MONEY’s gift list.

Gucci GG Marmont full-grain leather cardholder with money clip €250

TOM FORD BEAUTY Black Orchid eau de toilette: black truffle & bergamot, 50ml €79

Dr Dennis Gross Skincare DRx SpectraLite FaceWare Pro €475

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MONEY · 57

GIFTS

L'Atelier du Vin Oeno motion corkscrew €125

Kingsman Drake's silk pocket square €60

Transparent Speaker Small transparent speaker €500

Valextra Textured-leather backpack €1,990

Pineider Cherry wood and leather travel desk set €3,800

Master & Dynamic MW07 Plus true wireless in-ear earphones €320

All items available from mrporter.com

58 · MONEY

ISSUE 63

NEWS

ERP solution for a multi-brand distribution business In today’s ever-changing distribution sector, companies face many of the same challenges around marketing a portfolio of brands in a highly competitive marketplace, managing the supply chain, and maintaining tight credit control. Forward-thinking companies are turning to the state of the artfully integrated Cloud ERP software, which is specifically designed for distributors. A modern ERP system for distributors provides tools to help manage sales ordering, pricing, shipping, sourcing, and billing—enabling you to streamline your business processes so that all your information is in one secure location. With accurate, real-time information available, situations requiring attention can be identified early and addressed quickly. Our solution covers all aspects of mobile sales force automation, merchandising, logistics,

with a streamlined direct store delivery process and increased truck sales by using the latest technology. Acumatica Cloud ERP can help you reduce errors, payment disputes, and the administrative costs associated with distribution, merchandising, delivery, receiving, and payment procedures. Additionally, it empowers your field sales reps with access to the relevant information quickly and efficiently—enabling you to eliminate the errors that come with pen-and-paper order entry.

purchasing, warehouse management, and accounting. It delivers seamless integration between your field sales, distribution logistics, inventory management, invoicing, and payment functions—providing you

For more information on how Computime Software can empower your distribution business to increase customer satisfaction and unearth new sales opportunities for route staff, email info@computimesoftware. com or visit www.computimesoftware.com/ acumatica-erp.

Till debt do us part Creditinfo Malta offers several debt collection products to assist in getting paid quicker and collect any outstanding debts to complement their credit reports. Pressure Letters: Their notification letters are a very effective means of collecting money owed to you, or as a last resort before taking legal action towards late payers or defaulting debtors. Debt Collection: With over 15 years’ experience in credit management services, Creditinfo Malta has a debt collection service to complement their existing tools. The debt collection service is available both locally and overseas. Credit Control Services: Credit control functions can be time-consuming, expensive and inconsistent, with continuous pressure to be cost-conscious, businesses may not have the

required resources to chase debt. Outsourcing your credit control to a dedicated credit control specialist is more cost-effective as your resources can be better focused whilst still

improving your cash flow. Contact Creditinfo Malta on (+365) 2131 2344 or email info@creditinfo.com.mt.

We print

STATIONERY, BOOKLETS, FOLDERS, CALENDARS, ETC. Salander Group Co. Ltd. KW3, Corradino Industrial Estate, Poala, Malta +356 2189 4446/7 www.printit.com.mt

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