47_European business magazine winter 2023 by European Business Magazine

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WINTER EDITION | 2023

EUROPEAN BUSINESS

MAGAZINE Jean Pierre Overbeek Director of Gather Redefining Connection, Collaboration, and Creativity at the Intersection of Innovation and Design pages 20-23

Artificial Intelligence 29 Generative Market 42 Tesla’s Latest Cyber Truck 48 The European EV Market Automotive Economies 58 Moving Circular

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DISCOVER THE BMW iVISION CIRCULAR CONCEPT CAR.

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Table of Contents 6

Cop 28 - The Era To A New Dawn

Interest rates, market volatility and European securities

How AI-Powered Knowledge Management is Transforming Contact Centres

Training, Trust and Transparency: Compliance in the Generative AI Era

Industry Leader Oakley Walks the Talk with Sustainability Efforts

The Role of SCCE in Today’s Business Landscape

Interview: Jean-Pierre Overbeek

AI and ESG: Where do they overlap?

Embracing the SoftPoS revolution to unlock new business opportunities

‘Advanced AI will become businesses’ best friend, not foe’, says digital specialist

The Generative AI Market

Don’t get burnt by the AI hot potato

AI Predictions for 2024

How Bad Data Poses a Multimillion-Pound Risk to Your Business

Why the C-suite is critical to overcoming the challenges of digital transformation

Will your business survive the fourth industrial revolution?

The EV European Market - Charging Ahead

The Adaptation of Electrical Vehicle’s

Electric Vehicle Components Market Is Estimated To Be Valued At US$ 1001.95 Billion By 2032

Tesla’s Cybertruck: Pioneering Innovation Across European Landscapes

Three things to know about forced labour and its implications within the global supply chain

Creating Multi-organisation Collaboration

Why Robotic Process Automation (RPA) and GenAI revolutionise SME operations

Automotive Economies are Moving Circular… And it Makes Sense

How Digitalization Can Make Small Steps That Count

How do we address the global employee loyalty problem?

Is the Global Market Finally Ready for Europe’s Ambitious Circular start-ups?

Growing Role Of Climate Considerations In Supply Chain Management

The Transformative Impact of AI in Financial Services: Navigating the Landscape of Job Disruption

Klarna’s Remarkable Comeback: A Journey from Valuation Collapse to Potential 2024 IPO

Navigating Challenges and Charting a New Financial Horizon

Google’s Alphabet Eyes Monzo: A Strategic Move in the FinTech Chess Game

Paving the Way for Crypto’s Next Evolution

A Paradigm Shift in Finance

A Tale of Customer Growth and Financial Resilience

Operating Effectively when Crisis Hits

$13.5 Trillion Investment Needed to Fast-Track Decarbonization of Key Hard-to-Abate Industry Sectors

Sustainable Business Practices in Satellite Communications

Businesses must commit to better carbon measurement to ramp up net zero progress

Marketing Strategies of Web2 Giants in the Game

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EUROPEAN BUSINESS

MAGAZINE Publisher Nick Staunton Editor Patricia Cullen Deputy Editor Anthony Gill Associate Publisher Brad Adams Features Editor Katie Winearls Head of Production Paul Rogers Head of Design Vladimir Mladenovski Subscriptions Manager Rebecca Hill Head of Business Development Paul Matthews Advertising Sales Brad Adams Tara Duckworth Advertising Sales Tara Duckworth, Mike Ray, Andy Ellis, Mark Holburn Contributing writers Patricia Cullen, Richard Fitzpatrick, Bala Murali Krishna, Shilpa Meen, Argee Laraya, Aimee Ni Mhaolcraibhe, Gordana Ristic, Jonathan Hooker, Jose Ignacio Latorre Head of Digital Stephen Scott Photographer Ben Fisher NST Publishing Ltd, 19 Leamington Spa (studio 1) Leamington Spa,Cv324tf, UK The information contained has been contained from sources the proprietor believes to be wholly correct however no legal liability can be accepted for any errors. No part of this publication can be reproduced without consent of the publisher.

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Cop 28 - The Era To A New Dawn

he 28th United Nations Climate Change Conference, widely known as COP 28, is poised to make history as it converges in the vibrant city of Dubai. This seminal event, with its roots tracing back to the first COP gathering in 1995, is not just a conference; it is a beacon of hope, a platform for collaboration, and a call to action. As we stand at the crossroads of environmental challenges, COP 28 emerges as a pivotal moment, promising to propel the world toward a sustainable and resilient future.

A Journey Through COP History: The COP conferences have served as crucial milestones in the global fight against climate change. Originating 6 europeanbusinessmagazine.com

in Berlin in 1995, these conferences have played an integral role in shaping international climate policies and agreements. From the groundbreaking Kyoto Protocol to the landmark Paris Agreement, COP gatherings have witnessed the evolution of global consensus and the commitment of nations to address the climate crisis.

The Significance of COP 28: COP 28 carries the weight of unparalleled significance as the world faces an escalating climate emergency. This conference aims to build upon the foundations laid by its predecessors and translate global commitments into actionable policies and initiatives. Against the backdrop of rising temperatures, melting ice caps,

and extreme weather events, COP 28 seeks to be a catalyst for transformative change. The theme for COP 28, "Sustainable Horizons: Navigating the Climate Challenge," encapsulates the urgency and complexity of the issues at hand. The conference will delve into the practical implementation of climate goals, focusing on sustainable solutions that bridge the gap between commitment and execution. Delegates will grapple with topics such as emissions reduction, climate finance, adaptation strategies, and the role of technology in combating climate change. Dubai, known for its modern skyline, cultural diversity, and commitment to innovation, is the chosen host city for COP 28. The city's forward-thinking approach aligns seamlessly with the conference's agenda, providing an ideal backdrop for discussions on sustainable development and environmental stewardship. The state-ofthe-art facilities and infrastructure in Dubai will ensure a seamless and impactful conference experience for participants. COP 28 is scheduled to unfold over days of intensive discussions, workshops, and negotiations. The COP28 climate summit is taking place from 30 November to 12 December The format of the conference is designed to facilitate meaningful dialogue and collaboration, with plenary sessions, thematic discussions, and side events providing a comprehensive platform for addressing the multifaceted challenges posed by climate change. COP 28 is expected to draw a diverse and influential audience, including government officials, climate scientists, activists, business leaders, and representatives from non-governmental organizations. The conference serves as a melting pot of ideas, fostering dialogue and collaboration among individuals and entities committed to making a positive impact on the environment.

Corporate Engagement: One notable aspect of COP 28 is the active participation of leading corporations committed to sustainability. Companies across sectors, including energy, technology, finance, and manufacturing, will showcase their initiatives to reduce carbon footprints, adopt green technologies, and contribute to a low-carbon economy. COP 28 provides a unique opportunity for businesses to demonstrate their commitment to environmental responsibility and explore partnerships that drive meaningful change.

Global Media Spotlight: COP 28 is set to attract extensive media coverage from around the world. Journalists, broadcasters, and influencers will converge to report on the latest developments, conduct interviews with key stakeholders, and analyze the outcomes of crucial negotiations. The media plays a pivotal role in amplifying the urgency of climate

action and holding leaders accountable for their commitments.

Innovation Showcase: A highlight of COP 28 will be the Innovation Showcase, where companies and research institutions will exhibit cutting-edge solutions to address climate change. From renewable energy technologies to sustainable agriculture practices, the showcase will provide a glimpse into the future of environmentally conscious innovation. This dynamic space will encourage collaboration and the exchange of ideas that can drive real-world impact. COP 28 aims not only to yield immediate results but also to set the stage for ongoing global collaboration on climate issues. The decisions made and commitments undertaken at the conference will have a lasting impact on the trajectory of climate change mitigation and adaptation efforts. As COP 28 unfolds, it will leave an indelible mark on the collective global effort to build a sustainable and resilient future.

As COP 28 approaches, individuals, businesses, and organizations are encouraged to engage with the conference's themes and objectives. Whether through participation in side events, supporting sustainable practices, or advocating for policy changes, everyone has a role to play in the collective effort to address the climate crisis. For more information and updates on COP 28, please visit [COP 28 Official Website].

About COP 28 The United Nations Climate Change Conference, COP 28, is a pivotal gathering of global leaders, experts, and stakeholders committed to addressing the challenges of climate change. With a rich history of fostering international collaboration, COP conferences play a pivotal role in shaping the future of our planet. COP 28 aims to accelerate climate action, translating commitments into tangible solutions for a sustainable and resilient world. europeanbusinessmagazine.com 7

Interest rates, market volatility and European securities Mairos Chailis - CMO, The Libertex Group

he global experience of high inflation and economic volatility has resulted in drastic actions by central banking authorities. Following over a decade of interest rates hovering under 1% in the US, UK and the European Union (EU), investors have suddenly been confronted by successive rate hikes over a short period of time. Interest rates are one of the most important factors that affect the performance of the stock market. They influence the cost of borrowing, the profitability of businesses, the valuation of assets, and the expectations of investors. Global economists are coming to the conclusion that the global interest rate hike could be coming to an end. With the US Fed Reserve and the Bank of England deciding to put interest rates at hold at their last respective meetings, it seems as though inflationary pressures are easing. In one respect, this brings about a degree of market relief. The market has adjusted to higher interest rates and it seems to finally be having the desired impact through a drop in inflation. Does the putting of interest rates on hold signify the beginning of a reverse trend whereby rates will slowly be cut? For the immediate future, this is unlikely to be the case. While things have settled, there is no indication that inflation has been effectively quelled. There are too many uncertainties to contend with, particularly in Europe. Simply put, retail investors in Europe need to accept the realities of trading in a high interest rate environment, understanding how higher borrowing costs are likely to impact the value and trading of securities.

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The impact of interest rates on European trading Generally speaking, high interest rates tend to have a negative impact on the stock market, as they make borrowing more expensive, reduce profitability and earnings, lower valuations and future cash flows, increase opportunity cost and inflation expectations, and appreciate the exchange rate. Within this context, the European stock market has performed remarkably well when compared to other financial markets like the US. In the 24 months leading to April 2023, European stocks gained a total of 13.8%. This is in comparison to the S&P, which only managed a 2.8% gain during the same period. If we were to monitor the performance of both markets over the last decade, the US would come out on top. Nonetheless, this two year period is relevant given it takes into account the interest rate hike cycle. The reason for this stark divide can be attributed to the profile of the companies that list on the exchange. The US has successfully established itself as a leading destination for tech firms seeking to go public. The tech industry is booming, though the pace and scale of the boom has brought a new set of challenges, particularly when it comes to accurate valuations and the companies that have not yet posted consistent revenue growth. High interest rates can impact these businesses who don’t normally have significant excess capital. Profits are typically reinvested and financing may be required.

If the US is known as the beacon for growth stocks, then Europe is seen by investors as a hub for value stocks and companies that are stable and less risky. During the interest rate hike, investors have been turning to Europe to take advantage of value stocks, or company securities that are considered to be underpriced. This explains why the European stock market has outperformed the US amidst the increase in interest rates.

What does the future hold? Higher interest rates have signaled confidence in the strength of the European economy and its ability to withstand external shocks, such

as the war in Ukraine and the global slowdown. They have also supported the euro currency, which boosted the competitiveness of European exporters and their stock prices. However, there have also been other effects. The rate hike has reduced the attractiveness of stocks relative to bonds and other fixed-income assets, as they increased the opportunity cost of holding stocks and reduced their present value. To a certain extent, it has also dampened consumer spending and business investment, which has a flow on effect on corporate earnings and stock prices. The coming months will be an important time for retail investors in Europe.

Should interest rates remain on hold, it is likely that we will see a degree of stability return. Importantly, the future performance of the European stock market will be determined by events in the US. An interest rate hike in the US could enhance the attractiveness of the European stock market, whereas an interest rate hike in Europe could see more investors gravitating to the US. The European Central Bank expects the Euro area economy to grow by 1% in 2024, with inflation falling from 5.8% to 2.8%. Should this occur, it is then up to the European Central Bank to determine whether interest rates need to be cut. A final point to note is on IPOs. Part of the challenge with any stock market is ensuring that companies continue to list and trade on the exchange. This is something Europe is currently

struggling with. Only 34 companies went public in Europe during the first six months of 2023, which is the lowest number recorded since 2009. Interest rates do play a role here - the high cost of borrowing can result in companies delaying plans to go public until there is greater certainty. Should listings, and the subsequent opportunities, drop, it is likely to dampen investor sentiment towards European stocks. For now, it seems as though investors and financial institutions are treading carefully, watching how events unfold not only in Europe but the US and further abroad. There is as much of a reason to be optimistic about the future of the European stock market as there is to be cautious. For now, this will be determined by interest rates, inflation and how geopolitical events unfold. europeanbusinessmagazine.com 9

How AI-Powered Knowledge Management is Transforming Contact Centres

here’s something incredibly fascinating happening right before our eyes in the contact centre industry in the form of artificial intelligence or AI. This powerful tool has begun redefining knowledge management within contact centres. As we move into an ever more digitally focused era, embracing AI-powered knowledge management in contact centres will play a decisive part in determining competitive edge and industry success. Although deploying such technology can be complex, the overwhelming benefits make it an indispensable tool for any forward-thinking enterprise seeking to elevate their customers’ experience while maintaining exemplary operational efficiency. To understand how deeply it’s disrupting traditional norms and empowering call agents like never before, read on...

Overview of AI-Powered Knowledge Management for Contact Centres As we move further into the 21st century, artificial intelligence is at the forefront of technology that continues to shape many sectors, including retail customer service. This has led to the emergence of AI-powered knowledge management for contact centres. Predominantly a combination of AI and knowledge management, it provides a potent solution that enhances operational efficiency in contact centres. At its core lies a simple yet intelligent algorithm capable of processing enormous volumes of data instantaneously. Usually fed with vast amounts of unstructured data, from frequently asked queries to chat transcripts or agent responses, the system analyses all of this. But here’s where things get

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interesting. Upon receiving a query, it doesn’t just provide a response but offers an optimised answer based on context and prior interactions. The emergence of this tech plays a pivotal role in tackling some common challenges faced by contact centres today, both internally and externally. As it becomes more refined, it will prove indispensable to businesses that want to offer unrivalled customer experience.

Challenges Facing Agents in Contact Centres Making sense of the complexities faced by agents is vital to understanding the potential for transformation in using AI-powered knowledge management for contact centres. Navigating these challenges lie at the heart of enhancing agent performance. Below are three of the main challenges that contact centres face.

Multi-tasking One of the main challenges facing agents in contact centres is the immense pressure from high call volumes and meeting tight handle times. Agents are compelled to solve issues quickly and pleasantly, which can be stressful and strenuous.

Outdated Information Outdated information is a significant obstacle for contact centres, as seamless customer service relies on up-to-date intelligence about products, policies or procedures. Outdated knowledge repositories could yield incorrect information triggering potential inaccuracies during client interactions, leading to a poor customer experience.

Personalised CX In this day and age, customers increasingly expect bespoke services catering to their unique needs and preferences. The ability to tailor knowledge based on individual contexts requires sophisticated technologies beyond conventional CRM capabilities.

Benefits of Using an AI-Powered Knowledge Management System From workforce optimisation to streamlining systems and processes, there are many benefits that an AI-powered knowledge management system can bring to a contact centre.

Elevating Customer Experience Implementing an AI-powered CRM system can help with delivering a personalised experience to the customer,

can contact them on, which can reduce efficiency. Implementing an AI-powered omni-channel strategy is a clear way to tackle this challenge. By bringing all your channels into one user-friendly application, agents can stay on top of all customer conversations, regardless of what channel they’re coming through.

Reducing Training Time Another compelling benefit lies in reducing agent training times. With AI-powered knowledge management as a tutor, new hires can quickly learn how to handle common customer inquiries and appropriate resolutions. Swift onboarding leads to cost savings and rapid adaptability.

AI-Powered Search and Self-Service Solutions

without adding extra pressure onto the agent. The system can achieve this by providing quick and accurate responses to queries, saving customers from long wait times. This prompt response rate is made possible through machine learning algorithms within these platforms, aiming to automate solutions for frequently asked questions.

Empowering Contact Centre Agents AI-powered knowledge systems can also help empower agents in a number of ways, including offering them timely insights enabling them to handle more complex queries with confidence. AI-powered software tools work as powerful sidekicks delivering contextual information to agents, enhancing their problem-solving capabilities.

Decreasing Turnover Rates Since the COVID-19 outbreak, hybrid working has become common in many businesses. However, while there are many benefits, it also presents some challenges, often in the form of lack of inter-departmental communication about new processes and policies. With the implementation of AI-powered instant messaging services, such as Microsoft Teams software integration, agents can now collaborate with the entire organisation, and deliver even better customer experiences, while in the comfort of their preferred work environment.

Improving Operational Efficiency Contact centres are nothing without the agents who work with them, but agents can sometimes struggle to juggle the many channels that customers

AI-powered knowledge management systems are transforming contact centres, offering streamlined search experiences and superior self-service solutions that are fuelled by cutting-edge technologies like machine learning and natural language processing. Through AI-driven algorithms, these intelligent systems can swiftly navigate vast amounts of data and facilitate agents to quickly locate the most relevant information precisely when needed. As a result of these enhanced navigational abilities, the contact centre agent’s problem-solving speed significantly increases with immediate access to the right details. This capability is crucial in high-pressure situations where agents need rapid access to correct information. AI-powered knowledge management systems also augment self-service solutions for customers with several functionalities. • Interactive voice response (IVR) systems guide callers in solving issues without needing human intervention. • Natural language processing-enabled chatbots comprehend queries better and deliver more accurate responses. europeanbusinessmagazine.com 11

• Self-help portals provide an intuitive interface that facilitates users finding quick solutions. Integrating all these offerings into a seamless system ensures improved first-contact resolution rates. The innovative utility of AI assist technology not only drives efficiency but also enhances client satisfaction levels. It’s worth noting how responsive such standalone technologies can be when coupled by intersecting various datasets to generate more holistic insights about individual consumer interactions. According to Jason Roos, CEO of Cirrus: “The incorporation of AI-powered search capabilities within knowledge management systems has a multitude of benefits for both the clients and their servicing agents. By harnessing complex tech-focused models in an accessible way, we manifest optimised self-service provision contributing substantially towards delivering excellent customer service experiences.”

Personalised and Contextual Knowledge Delivery The brilliance of AI-powered knowledge management for contact centres shines brightest when delivering personalised and contextual knowledge. When a customer contacts your call centre, they want personalised attention from agents that understand their unique queries and concerns. That’s where AI makes an impact, as AI-powered technologies can provide agents with specific knowledge related to the customer’s issue instantly. Beyond just providing relevant data, these intelligent systems also understand the context of queries too. This means if a customer is inquiring about plan B, the system would intuitively know whether plan B refers to a service upgrade, billing query or technical assistance based on past interactions and intricate data linkage. Each customer interaction can also become smarter than the last as AI-assist learns as it goes along. It remembers old interactions and uses them to fine-tune responses for customers.

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With capabilities like this to augment coherent conversations, customer interactions become easier and an opportunity to build trust. An important factor that should not be overlooked is how this advanced level of service delivery dramatically reduces time spent on each customer query. This is arguably one of the most significant benefits for contact centres that are striving for efficiency amidst surging demands. Jason Roos said: “Investing in an AI-powered knowledge management system is vital if contact centres wish to master the art of personalised and contextual customer service.”

Data-Driven Knowledge Optimisation In the era of information overload, having access to data isn’t always enough. Contact centres need smart solutions that leverage AI capabilities, and this is where data-driven knowledge optimisation comes into play. Essentially, it revolves around harnessing AI to extract valuable insights from vast amounts of data, offering agents not just raw facts, but actionable information. Employing AI-powered knowledge management for contact centres means going beyond mere data collection and moving into intelligent analysis. Key benefits include enhancing customer interaction understanding, strengthening response strategies and improving overall service delivery efficiency. Here’s how using a potent blend of AI algorithms and advanced technology brings about innovative solutions.

1. Intelligent Identification: The initial step in optimising knowledge lies in identifying useful patterns and trends within the collected data. This requires highly sophisticated tech capabilities. AI assist technologies are designed specifically for this purpose. 2. Insight Generation: After filtering through potentially millions of bytes of raw information, prevailing themes or issues are revealed. These insights can then be turned into effective strategies tailored to meet customers’ specific needs. 3. Adaptive Learning: One key aspect setting AI-powered systems apart is their ability to learn over time, refining responses and adapting techniques based on new experiences. 4. Automated Content Updating: As new information accumulates daily from diverse customer interactions, maintaining a well-organised repository can present an enormous challenge for contact centres. However, with an automated system overseeing content curation, you ensure relevant information is conveniently accessible whenever needed. How is this possible? Machine learning algorithms power knowledge repositories that continue to grow. This illustrates just one facet of how intelligence augmentation can facilitate processes in complex customer engagements and lift performance standards. Getting access to an AI-powered knowledge management system is like being granted a magic wand that unlocks solutions buried within your data. Perhaps the most thrilling aspect lies in how quickly this technology is evolving, paving the way for even more transformative possibilities.

Integration with Existing Systems One of the important aspects to consider when adopting AI-powered knowledge management for contact centres is its integration capability with your current systems. Your teams may already be utilising various

software tools, CRM (customer relationship management) systems, and databases that house crucial information about your customers. The potential to integrate a new knowledge management system seamlessly is an advantage. Primarily, optimal integration allows for an uninterrupted workflow. Rather than switching between systems continuously, which is generally a time-consuming and inefficient process, agents can access all necessary customer data from a single source. This significantly improves the overall efficiency of a contact centre’s operations. The use of APIs (application programming interfaces) has made it considerably easier to achieve this kind of integration. These interfaces allow two applications to communicate effectively. This enables the existing database or CRM system to interact efficiently with an AI-powered knowledge management solution. AI-assist features can be very useful here, as they essentially provide on-demand support for agents during interactions with customers. They can suggest responses based on historical data or fetch vital client information from integrated databases instantly — increasing both speed and quality in service delivery. Successful integration hinges on thorough planning and well-defined strategies. • Perform comprehensive assessments on your existing technology infrastructure before implementing a new knowledge management system. • Ensure compatibility between systems. • Implement regular evaluations post-integration to catch any possible inconsistencies early. • Conduct sufficient training so that your team becomes adept at utilising the maximised capabilities available due to efficient integration. Effective integration yields higher productivity by minimising unnecessary redundancies, streamlining processes, and enriching customer

experiences through faster response times and resolutions. This paves the way towards improved satisfaction rates and operational excellence in contact centres driven by artificial intelligence-based solutions.

Implementation Considerations for AI-Powered Knowledge Management Systems As you embark on the journey of integrating AI-powered knowledge management into your contact centres, there are a few essential factors to consider. Paying heed to these will ensure that the implementation process runs smoothly, yielding maximum value from your investment. First, consider the importance of initial data input. An AI-based system is only as good as the information it’s provided with. Although time-consuming, diligent and accurate data entry at the very outset lays a strong foundation for robust knowledge management. Second, remember that AI technology isn’t a one-size-fits-all solution. A successful integration requires customization and shaping the system to serve your unique business processes and goals. For example, Clarks used AI technology to help increase their customer satisfaction, while Premium Credit used it to help optimise its workforce.

Third, examine changes in staff roles and processes that might arise because of this fresh addition to your toolkit. Your team members need proper training not just to utilise AI assist, but also to accept and adapt to new ways of working with it. Finally, don’t overlook user engagement considerations. How easy is it to navigate the interface? Is support readily available when there are issues? Thinking about these principles while incorporating AI-powered knowledge management into your operations enables effective optimisation of contact centre performance through proper planning and execution. By doing this, it’s possible to harness powerful benefits like the increased productivity and improved customer service that AI offers. The key is to approach it with thought and care.

Conclusion It is clear that AI-powered knowledge management systems are no longer a luxury for contact centres but a necessity. The complexities and escalating demands of today’s customer services require an innovative approach assisted by cutting-edge technologies. AI-powered solutions tackle common issues in contact centres while boosting agent performance and fostering superior customer experiences. By offering prompt answers, personalising users’ engagement, improving self-service options, these systems play a significant role in transforming contact centres’ functionality, efficiency, and service quality. A crucial takeaway from this exploration is that implementing an AI-powered knowledge management system requires careful consideration for seamless integration with existing structures. Data-driven decisions should guide this transition to optimise system selection and application. It’s also important to stay abreast of advances in AI applications such as machine learning algorithms or natural language processing technology which are fundamental to these transformative tools.

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Training, Trust and Transparency: Compliance in the Generative AI Era By Hans Petter Dalen, Sales Executive, IBM EMEA AI Governance Platform

he meteoric rise of generative artificial intelligence (AI) has been extraordinary. It is easy to see why. While traditional AI is programmed by data scientists to perform one specific task, generative AI has democratised the technology like never before. By leveraging foundation models such as large language models (LLMs), it can fulfil a far wider range of tasks across a spectrum of business and creative functions. At the same time, generative AI has prompted legitimate questions about transparency, data privacy, security, and governance. Business leaders who already are, will soon, or are considering leveraging the competitive capabilities of generative AI must now navigate the evolving regulatory landscape, the need for core guiding principles for AI usage – including the importance of human oversight – and the role data will play in a wider conversation about the technology.

The regulatory landscape The EU AI Act is currently on course to become the world’s first comprehensive AI legal framework. First proposed in February 2020, it was drafted with a ‘risk-based’ approach to balance innovation with responsibility and trust. Now in the final stages of negotiation, the EU AI Act focuses on high-risk uses of AI and the importance of high-quality data sets for training AI models, transparency of data usage, and AI having explainable outcomes for those high-risk uses. This risk-based approach is significant 14 europeanbusinessmagazine.com

because AI regulation needs to be flexible and evolve as technology does. Different industries and companies will have different AI use cases and associated risks – to avoid stifling innovation, blanket regulation should not be applied to all generative AI. As governments worldwide consider their own AI rulebooks, at IBM we believe that responsible AI regulation should be based on three core principles. The first is the need to regulate AI risk, not algorithms. This is reflective of the ‘risk-based’ approach currently being employed by the EU and recognises that not all AI carries the same level of risk. As a result, regulation should address the context that AI is being deployed, ensuring that highrisk uses are regulated more closely. The second principle is accountability. Governments have a significant role to play, but it is also vital that AI creators and deployers are held accountable for the context in which they develop and deploy the technology. This will be essential in preventing organisations claiming immunity in cases related to discrimination, bias and fraudulent activity. Third, we should not create a licensing regime for AI, which would hinder open innovation and risks creating a form of regulatory capture. We instead are advocates for a vibrant, open AI ecosystem that promotes competition, skilling and security and will help ensure that AI models are shaped by diverse and inclusive voices. Together, these principles would encourage the right balance between innovation and accountability, ensuring that AI can flourish in a transparent, open, and fair environment.

The importance of human oversight Another important consideration for business leaders will be the need to create an effective AI governance strategy based on transparency and fairness. Any responsible governance strategy will have a significant amount of human oversight. Generative AI, like traditional AI, is organic. It learns from its users and can ‘drift’ or have what are known as ‘hallucinations,’ when an LLM generates false information. Failure to correct errors results in AI learning from inaccurate data which becomes further ingrained in its model. It is therefore vital that suppliers of foundation models are transparent about their model, so companies deploying the technology can explain the outcomes – a critical step to ensure the trusted use of generative AI. IBM’s watsonx.goverance, expected to launch by the end of the year, has

this principle at its core. As an end-toend toolkit encompassing both data and AI governance to enable responsible, transparent and explainable AI workflows. It will allow organisations to direct, manage and monitor AI activities, and strengthens the ability to mitigate risk, manage regulatory requirements and address ethical concerns through software automation. As AI becomes further embedded into daily workflows, this proactive governance will be essential for driving responsible decisions across both private and public sectors. Failure to monitor incorrect outcomes is not just a matter of regulatory compliance, it has far wider financial and reputational risks for a business. There are some exciting real use cases for sectors such as insurance, banking and mortgage lenders – but inaccurate outcomes in these cases could have highly detrimental impacts on customers. Developing a governance strategy underpinned by

human oversight and transparency enables businesses to avoid these risks, and business leaders should start to train and educate their workforce in these areas now to prepare for generative AI adoption.

Data, data, data As the policy landscape evolves, business leaders are faced with the dual task of harnessing the benefits of generative AI to remain competitive whilst protecting their organisations from the financial, reputational, and regulatory risks that ungoverned use of generative AI can bring. Business leaders face several challenges on generative AI, and one of the biggest questions is about its commercial viability. Business leaders across all sectors have displayed huge enthusiasm for the technology, but actual adoption within organisations requires adequate preparation and proper investment first.

The technology community is already exploring ways to accelerate this process. We are seeing a vibrant community of developers creating foundation models, pre-training them, and open sourcing them. In time, this collaborative approach could accelerate adoption and drive-up ROI for businesses.

The next step for regulation Generative AI and the regulatory landscape surrounding it will continue to evolve in unison. Business leaders must keep pace with the developing regulatory landscape and, as the EU AI Act is on course to do, we must take a risk-based approach to AI and ensure governance at every level. Together, these steps will enable companies to deploy trusted, responsible, and accountable AI throughout the entire AI lifecycle, allowing businesses and society to reap the benefits of trustworthy AI. europeanbusinessmagazine.com 15

Industry Leader Oakley Walks the Talk with Sustainability Efforts

n recent years, there has been a significant demand for sustainability practices among brands as more environmental problems are on the rise. The call for change is especially felt within the retail and fashion industries, which are considered to be major contributors to global pollution. UK Research and Innovation (UKRI) cites that fashion is the second most polluting industry in the world, accounting for 10% of greenhouse gas emissions and 20% of global water use. Furthermore, around 85% of

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textiles go to landfills each year and remain as pollutants since they do not biodegrade. As a result, a lot of brands are taking the necessary steps to adopt greener measures by ethically sourcing their materials and ensuring eco-friendly initiatives through the production process. Sportswear brands have been notably sustainable for years and are only ramping up their efforts today. One such environmental ally is Oakley, an industry leader at the forefront of adhering to significant

sustainability efforts without compromising quality.

Quality meets sustainability Oakley are a brand committed to quality, innovation, and style. They became a pioneer in the eyewear industry with their design prowess and attention to detail, making Oakley sunglasses a leader in performance eyewear. The brand’s notable frames, including the Flak® 2.0 XL, Jawbreaker®, and Holbrook™ XL,

Future eco-initiatives

are recognised for their cutting-edge design that is non-slip and durable, making them a popular choice among people with an active lifestyle. Oakley also highlights their latest lens technology, which seamlessly incorporates comfort with protection using polarised lenses to protect from ultraviolet (UV) rays. In terms of sustainability, the brand is also recognised for its use of eco-friendly materials. Some Oakley frames, such as the Leffingwell and Frogskins XXS, are made

using BiO-Matter, one of their newest innovations. It is made of castor bean bio-resin, which is derived from biological sources such as vegetable oils instead of petrochemicals— this reduces carbon footprint and impact on the planet. The brand also emphasises its commitment to monitoring its carbon footprint, choosing to efficiently and responsibly use resources while further investing in the auto-production of renewable energy close to its manufacturing sites.

Given the dedication Oakley are investing towards sustainability, there are some interestingdevelopments in their initiatives outside of eyewear, too. The recent release of the Oakley x Satisfy line not only displayed the brand’s continuous attention to quality but also highlighted their adherence to producing sustainable apparel. The collaboration reimagines sunglasses and apparel to present a whole new approach to running equipment and features the Mothtech shirt made from organic cotton. This is aligned with the brand’s initiative with Better Cotton, cementing their commitment to sourcing at least 50% of their cotton from ethical and fair-trade suppliers. In line with this, Oakley are also working towards promoting a circular economy by having sustainable technologies. The brand seeks to introduce more bio-based materials into its range of products, which has already started with the BiO-Matter initiative. Some emerging materials being used in sustainable eyewear include vegetal resin, bio-acetate, and recycled plastic. Presently, Oakley have yet to release any further news regarding their future eco-initiatives. However, as our article on the EU’s upcoming Corporate Sustainability Reporting Directive (CSRD) states, it is expected that more companies will improve their sustainability efforts to help reach the goal of carbon neutrality by 2050. This initiative essentially requires businesses to report their green efforts and encourage one another to invest in environment-friendly business practices, which can lead to changes within the corporate atmosphere. Furthermore, Research from the University of Leeds found that there is a growing shift in consumer behaviour when it comes to sustainable fashion consumption. More people are becoming conscious of their approach to fashion and want products that feature transparency in the production process and effectively communicate a brand’s green strategies. With this, we can expect to see significant developments from Oakley and how they will seek more innovations for their products to meet the current consumer and environmental demand. europeanbusinessmagazine.com 17

NAVIGATING THE ETHICAL IMPERATIVE:

The Role of SCCE in Today’s Business Landscape

By Adam Turteltaub

ne need not look far to see how complex business has become from a legal and regulatory perspective. The number of anticorruption and privacy laws has exploded globally. At the same time, sanctions regimes have grown ever more complex. In addition, all of this comes against a background of long-standing requirements in areas such as anticompetition law, government contracting requirements and managing conflicts of interest. For the corporate marketplace, Society of Corporate Compliance and

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Ethics (SCCE) has long been a beacon of guidance and support in navigating legal, regulatory, and ethical challenges. Established in 2004, SCCE is a not-for-profit institution claiming over 7500 individual members across more than 100 countries. Its mission is to “…champion ethical practice and compliance standards and to provide the necessary resources, education and networking opportunities for ethics and compliance professionals and others who share these principles.” Serving its membership grows increasingly important as regulatory schemes develop and evolve in both number and complexity. Privacy, for

example, has grown to be an evergreater concern for individuals and governments. The European General Data Protection Regulation (GDPR) created a host of obligations for companies. It, however, is not the only regime out there. Global organizations must comply with numerous country-specific regulations as well as state by state requirements in the US. Anti-corruption laws have followed a similar trajectory. The US Foreign Corrupt Practices Act has since been joined by the UK Bribery Act, Sapin II in France, and several others with, potentially, an EU directive coming shortly. On the sanctions front, organizations must deal with a constantly changing lists of individuals and entities moving on and off sanctions lists. Together these and other legal frameworks have raised demands on business and call for stronger, up-to-date compliance programs led by individuals who understand what makes for best practice. SCCE helps meet this demand by pursuing a multi-pronged approach which is based on the expertise of experienced practitioners sharing insights with each other. One of the association’s most notable programs is its Basic Compliance & Ethics Academy. The Academy is offered in Dubai, Sao Paulo, and Singapore each year, plus twice a year in Europe and numerous times in the US. It provides three and a half days of intensive, classroom-style training in the fundamentals of managing a compliance and ethics program. With over 9,000 graduates worldwide, it is the largest provider of training for the corporate compliance community. Many organizations have come to use the Academy to ensure that its workers, no matter where they are, enjoy consistent training in how to manage a compliance and ethics program. The Academy takes compliance officers through the essential elements of a compliance program. The classes are highly interactive, with attendees broken up frequently into groups for exercises which help them apply their newly learned skill.

SCCE also offers a host of conferences each year. Its European Compliance & Ethics Institute (ECEI) is held each spring and offers compliance professionals multiple tracks of sessions to choose from. It covers the broad spectrum of compliance topics, from best practices for compliance training to managing whistleblowers to how to manage the latest legal and regulatory risks. The 2024 ECEI will be held 18-20 March in Amsterdam. In the US, the annual Compliance & Ethics Institute is offered in the fall and draws over 1,000 participants from around the globe. Both the Compliance & Ethics Institute and European Compliance & Ethics Institute are offered in a hybrid format, enabling individuals to attend either virtually or in person. The association also offers a wide range of specialty conferences, many of them in a virtual format. Among them are workshops on auditing and monitoring, creating effective compliance training, risk assessment, and conducting investigations. These programs are designed to help compliance teams both broaden and deepen their skills. The association also publishes several books, as well as a magazine to keep its members informed. Its Complete Compliance and Ethics Manual lives up to the “Complete” in its title. The publication was written by more than 95 compliance and ethics experts and provides 1276 pages of content. Included in it are a number of tools such as a sample audit review form, sample hotline information sheet and a checklist for managing third-party risk. The Manual is available as a two-volume set or, like the rest of the association’s publications, is accessible digitally via COSMOS (www.compliancecosmos.org), SCCE’s online content platform. COSMOS provides a rich resource to compliance professionals. SCCE members can also access current and former issues of the association magazine Compliance and Ethics Professional.

For those compliance and ethics professionals wanting to demonstrate their expertise, the association offers two designations: Certified Compliance & Ethics Professional (CCEP) and Certified Compliance & Ethics Professional – International (CCEP-I). The former is US-centric, with the latter focused on common direction for compliance programs across multiple jurisdictions. The CCEP and CCEP-I designations enable compliance professionals to demonstrate their knowledge of relevant regulations and their expertise in compliance processes. Earning the certification requires at least a year of work in compliance, 20 continuing education units (CEUs) in the previous year – that education need not come from SCCE – and passing a multiple-choice exam. Certifications must be renewed every two years, and doing so requires ongoing continuing education to ensure that the individual stays current on compliance challenges and practices. Ethics is also a strong component of the SCCE’s work, with a track on the

topic at the annual Compliance & Ethics Institute. The association also publishes a code of ethics for compliance and ethics professionals. As the pandemic continues to wane and the world returns to a more normal mode, the association will continue to serve the compliance community, addressing new challenges such as the impact on remote and hybrid work on corporate culture. At the same time, it will continue to address the ongoing challenges compliance teams face, such as securing management support, helping to build a culture of compliance, responding to cyber security threats, and making it safe for employees to come forward and raise concerns without fear of retaliation. The bottom line for organizations is that no matter where they operate and what business they are in, compliance and ethics challenges will always exist. SCCE will be there to help those on the front lines of managing those challenges do so successfully.

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Interview

Jean-Pierre Overbeek Gather, the latest brand from Econocom Group is spearheading the workplace revolution with their unique, human-centric approach — placing humans at the heart of technology. Can you give a summary of Econocom’s newest launch, Gather?

ts premise is to unite the futureproof competencies of audiovisual, Unified Communications, and Information Technology within the Econocom Group, providing solutions for their customers. Operating in 60-plus countries, Gather have a presence in many leading European cities, including London, Paris, Brussels, Madrid, Barcelona, and Rotterdam. Gather’s launch echoes Econocom’s commitment to re-think AV, UC, and IT solutions, positioning themselves to lead the work, retail, travel, and leisure space. Consolidating the expertise of top-tier manufacturers — Microsoft, Philips, LG, Cisco , Samsung and SONY to name a few — Gather, as a brand of the Econocom group, conceives, finances, and facilitates Audiovisual, Unified Communications &amp; IT solutions for large firms and public organisations. With a greater need for complex IT structures, whether through the public and private cloud or on-premise systems, Econocom are empowering clients in facilitating digital transformation and have pledged a commitment to achieve global impact by 2028. Along the way, Econocom pledge to refurbish 1.5 million recycled assets, which are maintained in their repair centres, plus the brand has a top 1% sustainability rating and SBTI validation. The European Business Magazine caught up with Jean-Pierre Overbeek, the current CEO of BIS|Econocom and the Director of the Gather brand.

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We are considered market leaders in our industry and in the past few years, and during the Pandemic, we have been able to grow our business. And last month, we were able to communicate our new, strategic five-year plan, from Econocom Group to the market. In which it’s stated that, for the audiovisual part, in which BIS|Econocom plays a crucial part, it is one of the strategic initiatives for the coming five years. It’s the idea that Econocom will grow it’s total business from €2.7 or €2.8 billion, to €4 billion and the ambition is to double the business for audiovisual, UC, and IT solutions. The launch of Gather plays a key role in realising this ambition. The Econocom Group already have business in Europe through different entities — different countries with different solutions. As far as Gather is concerned digital signage is an important one, where we have an excellence centre in Madrid, where we primarily focus on the hospitality and the retail markets. For all our AV, UC and IT solutions, Gather deal with business in France, with subsidiaries in Paris and we have business in the UK, Benelux countries and in Italy. So, we have coverage already, but the ambition is to grow in different countries throughout Europe. And that’s the reason we introduced the brand name, Gather, it’s not a company, it’s a brand name. And I’ve been asked to coordinate the initiative and grow the Gather business throughout Europe. Why the name Gather for the brand and what is the idea that underpins it?

We are in an IT world, [which is] very technologically driven, but we want to focus on what we are providing with our technology. And what we are providing is people can come together; and [for] centuries people have come together to share ideas and glean energies from [one another], gathering around a campfire to share anecdotes and histories. So, the gathering of people is very human-centric, and that’s the brand’s main goal to bring people together and develop relationships between them. Of course, we are facilitating that through technology, but it’s very much around the end user of that technology. So, technology is just a tool, and that’s not the goal itself. Could you talk about Econocom’s five-year plan and provide some context around the Gather initiative? Econocom has grown its business and is now 50 years old this year, growing the business in three pillars, through the financing of IT. Which means we are able to speed up the process of the adopting the latest technology for our customers and provide the product itself via our distribution entities. The goal of the five-year plan is that Econocom have two new initiatives; the first is the audiovisual and collaboration part and the other one is the refurbishment of technology. We want to be focused on the sustainability of our world and reduce e-waste. With our as-a-service concept, we are gaining control of the entire lifecycle of products, so that’s one of the key things. And on top of that, we want to make sure that we are now focusing more on the synergies we are providing to customers throughout our different silos.

We will de-invest some activities and use that money to focus on the strategic initiative, like audiovisual, UC, and IT solutions and services, [enabling us] to grow faster than the market, with both organic growth and with acquisitions. Can you talk about sustainability in the context of Gather? And did you face any challenges along the way? Econocom was founded with the idea to sell refurbished IT equipment, mainly IBM during that time. That was the start of Econocom 50 years ago. What we are doing right now is when we take the entire lifecycle of products — including our role in financing and advising the right technology, installing and maintaining the right technology, and doing the technology swap, in three to five years’ time, through updating and then upgrading the technology — the entire chain of activities is funded by ourselves, so people don’t have to pay for the ownership of the products, they only have to pay for the usage of the products.

And in that sense, it’s in our interest and the interest of the customer, to have the lifetime as long as possible. And in the interest of the market, in earlier times it has been in the interest of the manufacturer and supplier to have the lifecycle as short as possible, because they wanted to sell as much as possible. But we see a shift towards a more sustainable business model and that’s certainly what we are aiming for, we want to be very sustainable in what we advise and optimise usage with limited outfall. What we are seeing in the last six or seven years is we really are able to extend the lifecycle management through our fleet management and our approach to technology. And we use the Ellen MacArthur Foundation rules, which involves the re-use of equipment in a second-life proposition and environmentally friendly destruction of products and parts at the end-of-life stage. And it goes with several challenges because different countries have different rules on how to maintain products and solutions. So, cross-border

there are a few challenges, but we think we are the only ones uniquely positioned to take care of those challenges for our customers. AV, or audiovisual as a service, was introduced by us, and people thought it was a financing solution — it’s not, it’s completely focused on the usership of products, and not so much the ownership. What we see is even the bigger companies and bigger governmental bodies are making use of our methodology, and not just entry-level and mid-level companies, but also the bigger companies because they are getting rid of the hassle of procurement and maintenance. Why take a human-centric approach to technology? That’s one of the main reasons we are in business. We like to do business with people and provide solutions and the right ideas, together. It’s not as straightforward as we like to do business because we like to make money. The only reason we are able to make a better world is because we all europeanbusinessmagazine.com 21

come up with ideas together and that is the way we like to do business and it’s in our DNA. We only live for a very short period of time so it’s important to do the right thing and combine the right technology for people. And what we see is a lot of businesses in our industry is very much about the products itself and we need to make sure it’s for the right application. Our solution doesn’t have a one-size-fitsall approach and we are very keen on overseeing the process of all our activity, which impacts our clients, and that process is different per industry, per application, per everything. What is Econocom’s role in funding Green Assets? Econocom acquired a refurbishment company which is able to either extend the lifecycle time or make sure the parts are re-used or broken down in the right way. We are very much focused around reducing e-waste and we are in discussions with our manufacturers because the process starts with our manufacturers. And we are selecting the right manufacturers with a strong focus on 22 europeanbusinessmagazine.com

the environmental line. For the AV part we are in discussion with 10–15 strategic manufacturers and with each and every one of them we are discussing this [sustainability]. Luckily, the focus on this topic is increasing both on the system integrating side and the manufacturing side. But it’s not at the level we’d like to see. Furthermore, we see a lot of governmental bodies providing focus on this. And now, we foresee this will be a main driver for a selection of the right solutions and in that sense, we want to be the thought leader, as well. In the Netherlands, we were the first ISO 14001 certified in the AV industry, and that was already 10–15 years ago. And we want to be leading the industry in a sense, not only in sustainability, but also in recognising what the e-waste will be. Any facts or insights in relation to the brand, Gather? So far, in 2023, our revenue will be around €250 million and the five-year plan is to increase it to €400 million in the coming three to five years, and

then the next step would be €500 million, in the B2B environment. Consolidated, we are doing that with 450 people, and we deliver thousands of solutions, and on our website, it’s stated we deliver products to 60 different countries. We have a global alliance of partners who are able to service our end users on our behalf. But the main fact is that with Gather we can support our customers in realising their Audiovisual, UC, and IT needs from A to Z; including financing, interior design, installation, training, adoption, maintenance and even fleet and lifecycle management. Can you talk about the services you offer to creative sectors? Yes, we have two, one is we have interior architects in-house, that are able to complete floorplans, because it’s not only about technology but it’s also about the room itself — the acoustics, the lighting, the setup of the room. And the second one is that we are not only delivering the hardware, but we also deliver the content. So, movies, animations, and everything that is shown on

a display, both indoor and outdoor, we are able to create any content needed. Last year, we created almost 20,000 movies for our additional signage networks we have in place, mainly for our retail customers. We are facilitating brands to communicate with customers, and we are making them the content. On top of this, we have specialists for virtual reality and augmented reality, and we are able to show customers what we are able to do for them in a 2D or 3D version, without glasses and with the right tooling. And that is something we started doing approximately one and a half years ago. How popular is virtual and augmented reality and do you see this growing in business contexts? Yes, the forecasts show that the industry will explode, in the positive sense of the word, and again we want to be at the front of that industry and it’s very exciting to see what we are already able to do, both online and via tooling. For example, with iPads, so people are able to see what we do, and they have high expectations. On top of that, artificial intelligence will play a big role in our industry, and you want to combine all those technologies for our users. What will AI’s role be in the Gather business, plus finance and wider business contexts? The first steps with AI we see is mainly in the collaboration of what we are doing right now. The bigger manufacturers are investing quite a lot of money to get the right technology in place to optimise voice, for instance, via translation. You see, for instance, that you are able to walk into a room and speak to our devices, and these devices are instantly recognising you as a participant, and then providing access to the meeting. So, you don’t need to touch anything, and you can just start a meeting. We see quite a lot of artificial intelligence in digital signage solutions, to really tailor the right content to the right group or customers. And for the coming years we are expecting AI to be integrated into a lot of different technologies. So, we feel we are at the

starting point, but for the next quarter it will move very fast and that’s something we are preparing for — AI will be leading this industry, for sure.

leading the industry on the product side. So, we need to trust that this policy is in place and so far, we haven’t had any challenges in our industry, so that’s a good thing.

Do you have any concerns or reservations about AI at this first stage of evolution?

I’m quite sure there will be policies coming from local and national governments, which we need to follow because there are some people having some doubts but let us not go to deep in that sense because we are an AV and digital signage specialist, and AI is added to that.

Of course, there are concerns, the biggest one is security, of course. But the manufacturers we are doing business with have their security by design, which are incorporated, and they are

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AI and ESG: Where do they overlap? AI and ESG are two boardroom topics that have more in common than you might think. The bottom line is two undeniable certainties: AI and ESG are crucial to modern corporate governance.Both are here to stay. Just as with any other essential governance topic, it’s therefore crucial that you integrate both into a robust corporate strategy. Doing so will highlight a synergy that perhaps you didn’t realise was there all along.

AI and ESG: An interplay of forces. Both concepts are shaping the future of corporate governance. AI grants us the ability to generate content and analyse data in ways that were never previously possible. Meanwhile, ESG represents a new constitution of principles and strategy. Not only are they hot topics in offices and online meetings worldwide, but they hold the same importance in the minds of investors, consumers, and regulators - the people whose rules companies need to play by if they want to succeed long-term. But where do AI and ESG overlap? Ultimately, all three pillars of ESG (environment, social and governance) are affected by the AI revolution, but the category that matters most of all is G - governance. Let’s dive into the reasons why:

Without governance, there is no ESG Companies invest time and money into ESG to ensure that, as they conduct business, they don’t harm the planet, its people, or themselves. Paradoxically, the third of those three items that need protecting is the most important. A company can’t pursue environmental and social policies unless it is run correctly. It’s one of two reasons the “G” 24 europeanbusinessmagazine.com

in ESG should command our attention the most when it comes to AI. The other is the fact that AI has the potential to deliver huge, positive change in pursuing good governance.

Revolutionary data-driven insights Artificial intelligence means directors and executives are able to collect, analyze, and interpret ESG-related data at an unprecedented scale and speed. In some ways, it’s a miracle crossover, considering ESG data has only become more complex and cumbersome. To the ill-prepared board, the new information and requirements can easily be too much. Enter AI - the answer to the data nightmare. Through natural language processing and machine learning, AI algorithms can sift through vast amounts of textual and numerical data, including reports, news, social media, and financial disclosures. It lets governance experts identify ESG trends and critically learn how ESG factors effect their organisation. This is precisely the engagement that investors want to see.

Automating reporting Reporting is everything to ESG, and new rules from regulators and investors mean it’s only getting harder… or at least it would if AI hadn’t arrived to provide the essential boost. AI can streamline beyond belief. It can help ensure accuracy, consistency, and efficiency in ESG disclosures, reducing the risk of errors or omissions. Furthermore, AI can identify discrepancies between reported and actual ESG performance, helping organisations maintain transparency and credibility. This eases the burden and enhances the reliability and timeliness of ESG information for stakeholders.

Predictive risk assessment There’s no getting away from the primary governance responsibility of being able to manage risk. Failure to do it brings the possibility of serious reputational or financial damage. Nobody wants this, and businesses are scrambling for ways to avoid it. What AI brings is a vastly increased capacity to analyse historical data, market trends and other external factors in order to paint accurate pictures of corporate risk, both in the short and long term.

The caveat The biggest opportunity for AI and ESG (particularly governance) is the capacity and insights; the biggest pitfall is assuming that AI can just solve everything at the click of a button. Every single one of the advantages above comes with the caveat that AI is nothing more than a tool. It’s a tool unlike any other, for sure, but if it’s not used in the right way, then all of the benefits it could potentially bring to governance and ESG are lost. Realistically, you’ve probably heard this warning already as AI becomes commonplace in daily life. But hear it again from this governance perspective: directors have some of the biggest responsibilities in the business world; if they misuse AI, the fallout will be substantially greater.

In conclusion AI is a transformative force in ESG, and it all starts with governance. If AI isn’t applied to the “G” first, in order to ensure innovative, solid leadership, then the “E” and the “S” stand far smaller chances of maturing properly. AI-driven insights enhance decision-making, streamline compliance, predict and mitigate risks, and foster stakeholder engagement. Companies should recognise this connection now because it’s vital in navigating the intricate landscape of ESG principles. What’s more, this is a connection that will only become stronger as the years go on. Now is the time to get on top of it. europeanbusinessmagazine.com 25

Embracing the SoftPoS revolution to unlock new business opportunities By Brad Hyett, CEO at phos

n the ever-evolving landscape of the business world, innovation is the key to staying competitive. Today, one of the most significant innovations driving change is the Software Point of Sale (SoftPoS) revolution, which can unlock new horizons for both small and large businesses. Traditionally, merchants were required to invest in expensive hardware (chip and pin machines), creating a barrier for small businesses looking to embrace digital payments. But SoftPoS offers an ingenious method for merchants to leverage the devices already in their hands and provides an array of benefits that resonate through every aspect of their operations. Whether you operate as a retailer, run a hospitality venue, or exhibit at festivals, SoftPoS can effortlessly become a part of how you run your business. For instance, in retail, SoftPoS enables swift expansion of payment terminals to shorten wait

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times at checkout. In restaurants, waiters can offer contactless payment options using the same device used for order-taking. The potential applications are numerous.

The value of consumer behaviour To thrive in today’s market, businesses must grasp the importance of understanding consumer behaviour. This knowledge is invaluable, as it empowers businesses to make informed decisions that can be the difference between success and stagnation. By leveraging data analytics and reporting tools, SoftPoS solutions provide insights into consumer behaviour that can be a game-changer for businesses, enabling them to tailor their offerings, and create personalised experiences. SoftPoS technology enables merchants to capture a wealth of data on consumer purchasing patterns. By analysing it, companies can gain deep insights into what

drives their customers’ choices. For instance, they can identify peak purchasing times, preferred payment methods, and even specific product preferences. Armed with this knowledge, businesses can tailor their product offerings, streamline their operations, and enhance their overall customer experience.

The benefits of embracing SoftPoS And the advantages of embracing SoftPoS technology extend far beyond understanding consumer behaviour. This innovative payment solution simplifies, speeds up, and makes payments more practical via NFC-enabled smartphones or tablets, resulting in: • Increased sales and repeat business: SoftPoS technology enables seamless and efficient payments, reducing delays in the checkout process. This frictionless experience encourages consumers to complete their purchases, ultimately leading to increased sales. Moreover, a satisfied customer is more likely to return, contributing to higher customer retention rates. Consider a small café that adopts SoftPoS technology. By offering quick and convenient payment options, they could see a surge in sales during peak hours, as customers make swift transactions, resulting in shorter lines. • Cost reduction: Traditional pointof-sale systems come with significant hardware and maintenance costs. SoftPoS eliminates the need for expensive terminals, reducing upfront capital expenditure. Moreover, the streamlined payment process reduces operational costs related to payment processing and reconciliation. For example, large retail chains can significantly reduce

costs by implementing SoftPoS solutions across their numerous locations, eliminating the need for costly POS hardware at each store. • Improved customer experience: In an age where convenience reigns supreme, SoftPoS technology aligns perfectly with consumer expectations. It isn’t just small and medium merchants that can use SoftPoS to enhance their digital payment networks. SoftPoS can also be used as an accompanying solution, for example, if a standard POS terminal fails, the SoftPoS solution can be used while waiting for a replacement. It offers a more convenient and contactless payment experience, enhancing overall customer satisfaction.

The future of SoftPoS The SoftPoS revolution is not just a passing trend; it’s here to stay and poised for further growth. In 2022, Apple entered the contactless payments sector with the launch of Tap to Pay on iPhone. This advancement enables businesses to accept contactless payments through a simple tap to their iPhone — no additional hardware or payment terminal needed. Merchants can now receive payments not only from customers’ iPhones and iWatches but also from various bank cards and digital wallets, offering a seamless and secure payment experience. Apple’s well-known dedication to userfriendly design ensures that merchants

can effortlessly complete transactions with a simple tap from their customers, but its impact extends beyond the iPhone itself. Apple’s move into the payment space will significantly increase the far-reaching popularity and adoption of SoftPoS globally. Merchants which adopt SoftPoS technology are positioning themselves ahead of their competitors. As the world of payments becomes progressively more contactless, those who can provide seamless, secure, and convenient payment experiences will undoubtedly have an edge. By doing so, businesses can unlock a world of new opportunities and remain at the forefront of innovation in their respective industries. europeanbusinessmagazine.com 27

‘Advanced AI will become businesses’ best friend, not foe’, says digital specialist

HE march of AI will result in the likes of ChatGPT becoming the most powerful ally of marketing departments the world over, a leading digital specialist has predicted. As AI systems become increasingly intelligent, more businesses than ever before are enlisting the help of robots to improve their SEO status and boost their search engine rankings as a way of increasing their visibility to a wider online audience. Michael Knowles, a former Google trainer and senior lecturer, predicts that AI will continue to develop in terms of higher levels of personalisation, improved accuracy of information it provides and adopting everyday language including humour and slang, and these characteristics will increase the brain power of humans working on their next major marketing campaign. “The current AI systems utilised by a lot of businesses are incredibly intelligent and sophisticated, many of which blow your mind at how clever the automated responses are,” said Michael, who founded ROAR Digital Marketing in 2016.

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“But we haven’t seen anything yet. “The levels of personalisation will increase significantly to replicate human behaviour and attributes more accurately, and more relevant and correct information will be readily accessible at the press of a button. “The technology and algorithms used by AI will become so intelligent to the point where the systems will be able to immediately analyse search engine patterns and data, and enhance the user experience, to inform businesses what steps to take to improve their search engine rankings, tailor content and ultimately help brands adapt their approach and communicate more effectively to their users. “Businesses, however, need to be careful not to be over-reliant on AI to generate content - whether written, imagery or video - because search engine algorithms are equally as intelligent, and they analyse material and, as advised many times by Google already, prefer to rank original

human-generated content higher than artificially produced text. “The strength of AI for businesses lies in instantly coming up with new ideas and creating content to supplement parts of other texts, for example headlines, to allow marketing departments to work much more efficiently.” Reflecting on the increased popularity of AI among businesses, Michael has been buoyed by the receptiveness of companies implementing the new technology. Marketing departments have welcomed the advanced AI with open arms to help with ideas for videos, written content and social media posts. Removing the human element from marketing campaigns, however, would be disastrous for businesses, argued Michael. He said: “Humans are, and always will be in my opinion, key to understanding business’ true values and ethics, as well as being aware of the brands’ personality and messaging. Robots don’t come anywhere near when it comes to these emotive aspects. “More businesses are integrating AI into their daily operations, and most to good effect, but a whole load more is yet to come, and I predict that things will develop at a rate of knots within the next year. “What we will see is that AI will become the norm and not just be used as an add-on to most software and platforms. It will form a part of all digital marketing packages, and it will soon be unusual if the technology isn’t accessible for everybody in an instant. “There are exciting times ahead with AI and businesses can expect to benefit from implementing it, if embraced fully and not opposed. That is not to say that AI can ever truly replace people as that important human connection and emotive element is always required, plus AI content faces search engine updates and AI monitoring that can potentially hinder its performance.” ROAR Digital Marketing specialises in Search Engine Marketing, helping business get found online and turn clicks into customers.

The Generative AI Market G

enerative AI refers to unsupervised and semi-supervised machine learning algorithms that enable computers to use existing content such as text, audio and video files, images, and even code to create new, organic content, such as marketing mail, social media advertisements, legal contracts, and musical symphonies. Generative AI uses deep learning to build models from a given training data set. These models are trained to recognize patterns in the data and then generate new data based on those patterns. The growth of the market can be attributed to the innovation of cloud storage, enabling easy access to data, the evolution of AI and deep learning, and the rise in content creation and creative applications

Generative ai Market size, 2023-2030 The figure above depicts the global generative AI market between 2023 and 2028. According to MarketsandMarkets, the generative AI market is estimated to be USD 11.3 billion in 2023 and is projected to reach USD 51.8 billion by 2028, at a Compound Annual Growth Rate (CAGR) of 35.6% during the forecast period. The market is growing and possesses huge potential over the next decade. Companies heavily invest in generative AI solutions and services to support the ecosystem. The opportunities in adjacent markets, such as chatbot and conversational AI, open new revenue prospects for the generative AI market. MarketsandMarkets estimates that the revenue shall reach USD 75-85 billion by 2030.

Generative AI Market outlook in Japan Japan has witnessed a significant adoption of AI technology in the past years. Key factors driving Japan’s growth in generative AI include the evolution of AI and deep learning, and the rise in

content creation and creative applications. Japan is the third largest country in the Asia Pacific region in the generative AI market, and slated to generate USD 2.8 billion in revenue in 2028, growing at a CAGR of 41.9% during the forecast period 2023–2028. Japan has a strong base of technologically advanced industries with a first-mover advantage in innovative markets. The Innovation Hub Japan (i2.JP) is an open innovation initiative that connects healthcare professionals, local governments, academia, and private companies, designed to jointly work out collective and practical optimal answers toward the solution of issues in the healthcare field. i2.JP was established in 2018 by AstraZeneca, with the support of the Japanese government. The hub is in Tokyo and has a network of over 100 partners, including pharmaceutical companies, hospitals, research institutes, and startups. Mitsui & Co., Ltd., one of Japan’s most prominent business conglomerates, has collaborated with NVIDIA on Tokyo-1, an initiative to supercharge the nation’s pharmaceutical leaders

with technology, including high-resolution molecular dynamics simulations and generative AI models for drug discovery. Announced at the NVIDIA GTC global AI conference, the Tokyo-1 project features an NVIDIA DGX AI supercomputer that will be accessible to Japan’s pharma companies and startups. The effort is poised to accelerate Japan’s USD 100 billion pharma industry, the world’s third largest, following the US and China. The rapid progress of Japanese generative AI is a sign of the country’s commitment to the field. As generative AI continues to develop, Japan will likely play a leading role in its application to various industries In healthcare, generative AI is being used to develop new drugs and treatments for diseases. For example, the Japanese company Takeda Pharmaceutical Company is using generative AI to design new cancer drugs. Interprotein is a Japanese company that is using generative AI to design new molecules that could be used to treat cancer. The company’s AI system is trained on a massive dataset of known europeanbusinessmagazine.com 29

molecules, and it can use this data to generate new molecules that have the potential to be more effective than existing treatments. Interprotein has already used its AI system to design several new molecules that are currently in clinical trials. One of the most notable advancements is the development of the DeepMind AlphaFold protein folding model. AlphaFold is a machine learning model that can predict the 3D structure of proteins from their amino acid sequence. This breakthrough has the potential to revolutionize the field of biology, as it could be used to design new drugs and treatments for diseases. In addition to these major advancements, In finance, Mizuho Bank is a Japanese bank that is using generative AI to detect signs of fraud in credit card transactions. The bank’s AI system is trained on a massive dataset of historical credit card transactions, and it can use this data to identify patterns that are associated with fraud. Mizuho Bank has already used its AI system to successfully detect several fraudulent transactions. Within the automotive sector, Toyota is a Japanese automaker that is using generative AI to design new car parts. The company’s AI system is trained on a massive dataset of existing car parts, and it can use this data to generate new designs that are more efficient and lightweight. Toyota has already used its AI system to design several new car parts that are currently in production. Japan is also making progress in several other areas of generative AI. For example, researchers at the University of Tokyo have developed a new method for generating images from text descriptions that can be used to create realistic images for use in movies, video games, and other applications. 1. software segment to ACCOUNT for the largest market size during the forecast period Source: Press Releases, Investor Presentations, Interviews with Experts, and MarketsandMarkets Analysis Based on offering, the generative AI market is divided into two categories: software and services. The software segment is expected to garner

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a higher revenue during the forecast period and reach USD 42.5 billion by 2028 from USD 9.7 billion in 2023, at a CAGR of 34.5%. The growing importance of generative AI software among creative professionals to develop models for image and video generation, style transfer, and text-toimage synthesis to enhance customer experience is expected to drive the demand for generative AI software. The services segment is projected to witness a higher growth rate during the forecast period. The growth can be attributed to the increasing requirement for technical expertise, such as product upgradation, maintenance, training, and consulting, which plays an important role during and after the implementation of generative AI software.

Natural language generation to ACCOUNT for the largest market size during the forecast period The computer vision segment is expected to garner a higher revenue during the forecast period and is projected to reach USD 8.2 billion by

2028 from USD 1.9 billion in 2023, at a CAGR of 32.8% during the forecast period. The growth of computer vision in generative AI is driven by the increasing demand for intelligent automation and decision-making capabilities in various industries, such as healthcare, automotive, and retail.

Media and entertainment vertical to hold the LARGEst market sIZE during the forecast period The BFSI segment was an early adopter of generative AI solutions and services; this segment is expected to continue to account for a high market share. Retail & e-commerce sector enterprises principally use generative AI solutions to enhance brand awareness and global reach. Generative AI chatbots are being used by banks and other financial institutions to provide customer service, answer questions, and complete transactions. For instance, Mizuho Bank in Japan, has developed a chatbot called Mizuho Chatbot that can answer customer questions about banking products and services.

Prominent end users in generative ai market Media & Entertainment – Generative AI is enabling media & entertainment companies to create compelling and unique content faster and more efficiently than traditional methods. For instance, generative AI is being used to create virtual sets and characters for films and TV shows, which can save time and money on production costs. In the music industry, generative AI is being used to create new and innovative sounds and styles. In gaming, it is being used to generate game

worlds and characters in real-time, providing players with a more immersive experience. In advertising, generative AI is being used to create personalized and targeted content that resonates with specific audiences. BFSI: – Chatbots are one of the most popular applications of generative AI in the BFSI sector. They can be used to provide customer support, answer questions, and even sell products. For example, in Japan Mizuho Bank has developed a chatbot called Mizuho Chatbot that can answer customer questions about banking products and services. Virtual assistants are another popular application of generative AI in the BFSI sector. They can be used to help customers with tasks such as managing their finances, setting up appointments, and making payments. For example, SBI Sumitomo Mitsui Banking Corporation has developed a virtual assistant called Sumitomo Mitsui Banking Corporation Virtual Assistant that can help customers with a variety of banking tasks. Healthcare: In the drug discovery sector, generative AI is being used to accelerate the process of finding new drugs. For example, the company Insilico Medicine is using generative AI to design new molecules that could be used to treat cancer. Insilico Medicine has already identified several promising new molecules, and it is currently working to bring them to clinical trials. In the medical imaging sector, generative AI is being used to improve the accuracy of diagnoses. For example, the company Zebra Medical Vision is using generative AI to develop algorithms that can automatically detect cancer in medical

images. Zebra Medical Vision’s algorithms have been shown to be as accurate as human radiologists, and they are being used by hospitals around the world. Another Japanese company PatientsLikeMe is using generative AI to create personalized treatment plans for patients with chronic diseases. PatientsLikeMe’s platform allows patients to share their data with each other and with researchers, which helps to identify patterns that can be used to improve treatment.

Future outlook The generative AI vendors are witnessing new revenue prospects from the opportunities in adjacent markets, such as chatbot and conversational AI. The following table includes market sizes and compounds annual growth rates of such adjacent markets. The developments in these technology markets are boosting the growth of the chatbot and conversational AI market in Japan. Rakuten AI Chatbot, a chatbot that can be used for a variety of purposes, such as customer service, sales, and marketing, is powered by Rakuten’s own AI technology, and is able to learn and adapt the way that users interact with it. LINE Clova, a conversational AI platform can be used to create chatbots, virtual assistants, and other AI-powered applications. It is powered by LINE’s own AI technology, and is able to understand and respond to natural language. These are just a few examples of the many chatbot and conversational AI technologies that are available in Japan.

Market size and growth rates of adjacent markets adjacent market Conversational AI Market Chatbot Market Artificial Intelligence Market Synthetic Data Generation Market Automated Machine Learning Market Decision Intelligence Market Natural Language Processing Market MLOps Market

market size, 2023 (USD Billion) 10.7 5.4 125.1 0.2 1.0 11.5 18.8 1.5

CAGR 22.6% (2023-2028) 23.3% (2023-2028) 36.2% (2022-2027) 44.5% (2023-2028) 44.6% (2023-2028) 17.8% (2022-2027) 25.7% (2022-2027) 41.0% ((2022-2027))

Source: Secondary Research, Interviews with Experts, and MarketsandMarkets Analysis europeanbusinessmagazine.com 31

Don’t get burnt by the AI hot potato

Behrad Babaee, Technology Evangelist at Aerospike outlines the challenge and the action organisations can start to take to minimise the impact of their AI on sustainability goals and reporting.

I is going to continue impacting the working world in lots of ways. We are starting to see the first tentative steps of a concerted effort by vendors and governments to ensure we all reap the benefits. Efforts are also being made to manage the more extreme possibilities of frontier AI, as the recent UK Government AI Summit in November has shown. Issues such as bias, fraud, deep fakes and misinformation are all being tackled. Add to this the more recent advances in areas such as Explainable AI (XAI) – which seeks to ensure

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companies understand how their AI solutions reach decisions and that they are complying with relevant industry and AI regulations then it is easy to start feeling positive not only about the technical advances in AI, but how it will ultimately fit into society. Whilst this is all a great start, there is one aspect of AI that we have not seen mentioned much, yet which poses a significant threat for the organisations that are investing heavily in this technology to support their goals, customers, and to improve the efficiency of their operations.

The hot potato Sustainable data centres are nothing new to the tech world, with recycling and advances in cooling, for example, having a significant impact on reducing the effect of the industry on the world. But, in recent years, greater attention has been placed on its impact as we rely more heavily on cloud computing and the services provided by hyperscaler cloud providers, whether that be for gaming, to serve content, or provide raw storage and compute power. I am sure we can all also remember the startling facts

Although that works, it shouldn’t be forgotten that a 50% more efficient software platform can handle the doubled workload on the same amount of hardware! As the size of workloads doubles every now and then, doubling the amount of resources forever is not a sustainable solution. The new CSRD legislation will hopefully make it more apparent that the industry has to focus on efficiency once again, to reduce the hardware footprint.

Changing the mindset be required to comply with the framework too. Those criteria are revenues of over €40m, €20m in assets or 250+ employees. It has become common for many companies to to use cloud compute services for the heavy lifting of storing data and training their AI. The hot potato was with the cloud providers, making them a cheap and easy way to offload the emissions problem of their IT operations. As things stand, in 2026, the potato shifts to the end user of the services, forcing them to report the emissions.

about the environmental impact of all the energy and data centre power that was being dedicated to crypto coin mining. While the tech industry is doing a great deal, new legislation is going to force businesses to have a better understanding of the sustainability impact of their IT operations, which will include their use of high-performance computing tasks such as machine learning and AI. Starting in 2025, new EU Corporate Sustainability Reporting Directive legislation (CSRD) will require organisations to calculate and publish their emissions in a much tighter framework than has been required to date. The biggest companies - those that are exchange listed with more than 500 employees - will be required to report on their 2024 emissions from 2025. That is nearly 12,000 organisations in Europe. In 2025, companies with two or more of other criteria will

Cooling things down For much of the IT industry’s history, efficiency has been the holy grail of computing. From its earliest days and up to about 2005, every line of code would be poured over to squeeze cycles and bytes out. During this time frame, hardware was scarce and expensive, making running inefficient software uneconomical. The internet started to change that in the late 90s. Efficiency in terms of speed became less important because, on the one hand, to handle the scale of the internet, we needed scalability, not speed/efficiency, and on the other hand, many of our platforms were fast enough. Therefore, scalability over speed/efficiency became the order of the day. Many software platforms today claim to be elastic, meaning that if the workload doubles in the future, the platform will handle it, if the amount of resources dedicated to it doubles.

Companies need to start thinking about the efficiency of the software or cloud services they buy and the code they write. In the same way we consider the range of an electric car, or the emissions of a vehicle or the energy rating of a domestic appliance when we buy them, we need to do the same with software and assess its efficiency. Research has shown that moving a database from a first-generation NoSQL database to a contemporary database like Aerospike can reduce cost and emissions by 80%. While energy ratings for software do not exist in a standardised format today, some companies, like Aerospike, are producing independent reports to demonstrate the efficiency of their software. Development teams can even get energy efficiency modelling add-ons for their development platforms that will help them assess and improve their code. Shifting the mindset now will give companies a chance to start asking the right questions and make changes before the CRSD takes effect. The new reporting framework is much more stringent and designed to make it hard for companies to hide their emissions impact, as well as hold them to account. In the same way that sustainability has been a focus for areas such as the supply chain and manufacturing, the CRSD will ensure that AI’s impact is accurately accounted for. Now, while there is still time, speak with teams about the efficiency of applications wherever they sit in the infrastructure. europeanbusinessmagazine.com 33

AI Predictions for 2024 “T

he payments industry has been using ‘artificial intelligence’ and machine learning for years – every time you make a payment, anti-fraud checks are carried out by what are effectively AIs, and it’s been this way for years. The current craze for AI comes from generative AIs – systems like ChatGPT and Midijourney that allow users to prompt a system to create realistic-seeming writing or images – and there are currently limited applications for this particular technology for many businesses. Few organisations are losing money because they can’t create enough written content – their pain points come from high costs, high inflation rates and low consumption, which AI is not able to address. There is huge potential in automation, as we have seen in the payments industry, but as with many advancements they are unlikely to be flashy, and the real progress will happen through automating time-intensive

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processes rather than deploying sci-fi style artificial general intelligence. As with so many things, we need to get serious about increasing productivity through building upon the AI systems that have been producing value for years rather than chasing a moonshot.. The industry has had an interesting year, with many organisations feeling the impact of economic and political events globally, from high costs and even higher inflation rates to low consumption. AI is the one standout topic in 2023 that got everyone talking and while the basis of the technology has been around for many years, it was in 2023 that it really took off and became a household term, and that is in large part thanks to ChatGPT, which celebrates its first anniversary at the end of the year. That being said, the technology hasn’t changed the world as much as we thought it would - both the threats and benefits of AI are being somewhat oversold as

it is not able to address the key difficulties that many organisations experienced this year. Looking forward to 2024 we’ll be looking at the regulation of AI. It is not so much the technology that is regulated but the structure of it, which is indicative of the fact that regulation will never be able to keep up with technology that evolves this quickly, or foresee what it might be capable of.”

The Payments sector needs to begin 2024 as a united front to Innovate effectively, fight fraud and protect consumers “The rise of certain technologies like generative AI in 2023 has heralded a great deal of transformative change that will shape how the payments industry develops in 2024. As these changes become more apparent, it is imperative that the payments sector cooperates to enable consumers to pay and be paid securely and

conveniently. The three factors that will inform the payments sector over the next year will be the rise of innovative digital currencies, the new initiatives that will serve to combat APP fraud, and the importance of proportionate regulation. All three of these were highlighted in The Payment Association’s Payments Manifesto. It’s imperative that we foster a flourishing digital currencies ecosystem, starting with stablecoins, or S-Money, as it is now known. This requires global interoperability, ensuring seamless transactions across borders and platforms. We must also attract talent and investment from around the world to fuel innovation and growth in this burgeoning space. In short, we need to run towards innovation, not away from it. Meanwhile, we must constantly err towards the best interests of the consumer and that means combatting APP fraud, which has become a significant threat to the integrity

of our services. Cross-industry data sharing is essential to effectively identify and prevent fraudulent activities. By working together, we can safeguard consumers and businesses alike. Finally, we must strike a balance between innovation and regulation. In recent years, the regulatory pendulum has swung so far towards consumer protection that the entrepreneurial fire of innovation is being snuffed out. A proportionate regulatory framework is crucial to fostering responsible growth and protecting consumer interests. We must avoid stifling innovation with overly burdensome rules and enforcement of them while also ensuring that our systems remain sufficiently safe and secure. By embracing innovation, collaborating to combat fraud, and advocating for proportionate regulation, 2024 can be a year where payments are more secure, convenient and accessible to all. Thinking even further into the future, here are my additional predictions: Open Banking: In the face of rapidly increasing fraud and new regulations around consumer duty, Third Party Payment Providers (TPPs) will need to implement enhanced fraud prevention tools to drive confidence in open banking payments and protect consumers against losses (like card scheme-based liability protection mechanisms, including chargeback dispute resolution). As the growing need for consumer protection increases the cost of open banking payments, the business case for such payments will be diminished for merchants. Open Finance: As companies recognise the potential of data and AI, they will refocus their open banking efforts from payment initiation (Payment Initiation Service Provider - PISP) to data utilisation (Account Information Service Provider - AISP) to improve accuracy, efficiency, and customer experience. The data angle will become even more beneficial as we evolve into Open Finance with the participation of non-bank financial institutions, such as mortgage, insurance, pension, and investment companies.

Wallets: Consumers will increasingly leave the house without physical cards or cash and will demand the acceptance of digital and mobile wallets with biometric authentication to make purchases both online and in person. Merchant failure to accept popular wallets will increasingly result in shopping cart abandonment, which has already reached 70% in the case of eCommerce, due to the friction involved in needing to have the physical card available. Additionally, QR codes will increasingly be introduced across the customer journey, including information, membership, ticketing, loyalty, ordering and payments. Super Apps: Wallets and digital banks will endeavour to increase their ubiquity, usage, and customer engagement by evolving into superapps. To achieve this status, they will broaden their service offerings to customers, including investing, lending, savings, loyalty, and P2P payments, as well as embed commerce and high engagement activities through lite apps, such as shopping, ticketing, transportation, delivery, or messaging. Consumers, particularly Gen Z and Millennials, will increasingly adopt such wallets due to subscription fatigue, convenience, and slick user experience.” Digital Currency: The percentage of UK adults owning cryptocurrency was over 10% in 2022, compared with 4.5% in 2021, which shows a growing interest in crypto assets. In 2022, 28% of non-crypto asset holders said that they would be more likely to buy cryptocurrency if the market was regulated. Additionally, it is becoming much easier to obtain crypto assets through popular wallets, like PayPal and Revolut. As merchants observe this growing trend, they will explore new ways of accepting popular cryptocurrencies, such as Bitcoin and Ethereum to gain a share of spend. As acceptance increases, so will the adoption of crypto assets, creating a flywheel effect. (Note: The figures in the US are more than double that of the UK, which may propel big tech companies in the US to accept cryptocurrencies more widely than in the UK.). europeanbusinessmagazine.com 35

How Bad Data Poses a Multimillion-Pound Risk to Your Business Ed Macosky, Chief Product and Technology Officer, Boomi

very business contends with a level of 'bad data'—information marked by inconsistency, contradictions, and fragmentation across application silos. Organisations that successfully minimise the impact of 'bad data' realise substantial rewards that enhance their bottom line, while those neglecting this issue face challenges that can result in multimillion-pound losses annually. Gartner’s experts emphasise the severity of this problem, highlighting in an article on data quality that poor data quality costs organisations an average of $12.9 million each year. This not only contributes to financial losses but also amplifies the complexity of data ecosystems and leads to suboptimal decision-making. In this context, we delve into the critical impact areas that organisations may encounter when they overlook the importance of data quality, examining the costs and missed opportunities, and what can be done to help avoid this significant financial risk.

Poor Business Decisions Leaders at executive and financial levels rely heavily on data for strategic forecasting and analytics, forming the backbone of decision-making processes crucial for organisational growth. The examination of metrics such as cash flow, customer and product profitability, and sales effectiveness plays an instrumental role in shaping key business strategies. Despite the advanced capabilities of modern analytics tools, their effectiveness is inherently tied to the quality of the data they process. A significant challenge arises when data discrepancies exist across core applications, leading to the management 36 europeanbusinessmagazine.com

of multiple versions of the truth and decisions based on informed conjectures rather than concrete insights. This concern is widespread, with a survey by Experian revealing that 38% of respondents believe poor data quality damages the reliability and trustworthiness of their analytics. Supporting this perspective, Melody Chien, Senior Director Analyst at Gartner, emphasises in an article entitled “How to Improve Your Data Quality,” that “good quality data provides better leads, better understanding of customers, and better customer relationships.”

Diminished Productivity A common approach to readying data for business use involves manual reconciliation by staff. This process entails extracting data from source applications and addressing significant discrepancies through a spreadsheet or a similar tool. Alternatively, in situations where customer service agents or account managers handle inquiries related to bills or licenses, inaccuracies or incomplete information within a single application can trigger a cascade of requests to colleagues across various channels to rectify the customer's query. These labour-intensive data tasks incur a substantial cost. The hours dedicated to cumbersome data preparation accumulate into sizable monthly expenses and contribute to diminished staff morale. Furthermore, these efforts divert precious time away from more valuable tasks crucial for business growth. It's unsurprising, therefore, that the Experian survey mentioned earlier identifies "wasted resources and additional costs" as the primary concern associated with poor data quality, acknowledged by 42% of respondents.

Subpar Customer Experiences Customers today demand seamless interactions with businesses, favouring brands that not only comprehend their preferences but also anticipate their needs, delivering personalised experiences. However, this ideal is jeopardised when customer data is siloed and inconsistent, irrespective of whether a business serves B2C, B2B markets, or both. The repercussions of bad customer data are manifold, including customer disappointment arising from products shipped to outdated addresses not updated in warehouse management systems, frustration due to customer service teams offering only partial views of order histories, and resentment towards email marketing campaigns providing discounts on recently purchased products at full price. Such discontent is amplified when shared online, leading to potential reputational damage and declines in Net

Promoter Score (NPS), which could dissuade prospective investors. According to Experian's survey, 39% of respondents identify the impact of poor data quality on customer experiences as their second most significant concern, with 85% indicating that poor-quality customer contact data adversely affects operational processes and efficiency. Achieving true customer centricity necessitates a comprehensive, 360-degree view of customers across all channels, providing a competitive advantage that not only delights customers but also fosters trust and cultivates long-term brand loyalty.

falter due to inaccurate data, leaving opportunities untapped. • The risk of regulatory non-compliance, particularly when mission-critical data fails to align seamlessly within core systems. • Sluggish and labour-intensive onboarding of new employees or partners can slow time to value and leave subpar first impressions. • Acquisitions may fail to deliver quick and effective value as new data struggles to integrate seamlessly with existing information in your systems.

Sidestepping Data Land Mines

Build a Foundation For Success with Data Integration and Management

Allowing the proliferation of bad data introduces a host of additional risks, including but not limited to: • The potential loss of revenue as cross-sell and upsell initiatives

Addressing bad data is not just about avoiding financial losses; it's about fortifying the foundation upon which various business functions and strategic initiatives rely.

Effective data integration and management play a pivotal role in mitigating the financial risks associated with 'bad data' within a business. Inaccurate, inconsistent, or fragmented data can lead to costly errors in decision-making, impacting everything from financial forecasting to customer interactions. By integrating and managing data systematically, organisations ensure a unified and accurate view of their information ecosystem. This not only enhances the reliability of business insights but also safeguards against regulatory non-compliance, potential revenue loss, and operational inefficiencies. The ability to make informed, datadriven decisions hinges on the quality of integrated data. A well-structured data management strategy not only helps avoid financial pitfalls but also fosters a foundation for innovation, strategic growth, and sustained success in today's data-driven business landscape. europeanbusinessmagazine.com 37

Why the C-suite is critical to overcoming the challenges of digital transformation Integrate and include IT in leadership and across the organisation One of the most common issues when it comes to digital transformation is the lack of integration of the IT department. Digitisation is not just a concern for IT departments, it’s about your entire organisation. As the importance of digitisation has been increasingly recognised, the digital department of organisations has been given more latitude and recognition. However, they are still siloed off – and that is problematic. Technologists need to be included in the C-suite and working with other members of the ‘C-team’ to build an organisation-wide collaborative network.

Create the right culture By Richard Farrell, CIO at Netcall

he value of advanced automation technologies and artificial intelligence (AI) has become indisputable across industries, with 70% of organisations at least piloting automation technologies – up from 57% in 2018. Whilst most CEOs recognise the potential of advanced technologies like AI, many are struggling with how to get digital transformation ‘right’. Leaders need to establish a vision and get involved from the beginning. Without the CEO and the rest of the C-suite’s dedication to digital transformation, efforts will tend to fail. Only 11% of respondents in a McKinsey survey believe their current business models will remain economically viable through 2023. C-suites that fail to prioritise their involvement in digitisation efforts risk their organisation’s long-term future. However, leaders that invest time throughout the process, shaping their

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organisation’s journey, dramatically increase the likelihood of sustainable success.

It begins with vision and leadership Successful digital transformation is grounded in a practical “automation-first” strategy. According to a recent Forrester report, CEOs are the “chief champion” for digital transformation, and as such it is their responsibility to define their vision and establish C-level oversight. Organisation leaders need to uncover their “why” for automation and then develop a top-down plan that is realistic, malleable and innovation-promoting. Bottom-up initiatives fail because they lack organisation-wide implementation. Organisations reflect the messaging of their leaders, so that message needs to have intention because it is the foundation upon which a business operates.

Once the C-suite has determined a vision for digitisation, this needs to be clearly communicated across the organisation and modelled by the leadership team. Because if leaders aren’t modelling change, no one else will follow. Communication and teamwork are key to the success of any plan. Employees have valuable insights and feedback to offer – their input should be encouraged and considered. Leaders are responsible for engaging their team and, by doing so, they will encourage employee buy-in and collaboration that extends beyond traditional organisational boundaries. Whilst the right solutions are a key factor for successful digitisation, equally essential is a team able and willing to bring those tools to life. For financial services firm, Aon, “overcommunication” played a crucial role in their successful implementation of a low code platform, which they used to automate their claims management process. This was instrumental

because it built trust across the organisation and established a common goal. It was through the establishment of teamwork and a common goal that Cumbria County Council was able to transform its services in as little as 12 weeks and deliver rapid ROI. The team’s success was made possible through a pre-determined vision, which enabled the Council to seek out the right solution. They opted for a low-code platform that would pave the way for much needed financial and resource savings with a tight budget, whilst still driving home tailored digital transformation. They also facilitated a collaborative culture that now sees the Digital Team working closely and co-creating with other departments. With the right leadership, an open culture that encourages workers to engage with each other across the organisation is developed.

Procurement matters Whilst leadership’s role is key, equally critical is the solution used as the vehicle for digital transformation. Without the right transformation partner, any effort will be moot. This is why the C-suite needs to be involved from the beginning. Procurement teams should include a cross-section of the organisation since the solution will, ultimately, be integrated across the organisation. Vision is important because your organisation’s long-term future should factor into the procurement choice you make today. Taking the time to devise that vision for your organisation’s digital journey will save reworking costs and boost ROI shortand long-term. Regardless of whether you want to start small or go full-scale from the outset, you want a solution that is flexible enough to offer both, so you can build as you go. The future is unpredictable, so your automation plans need to be flexible because you don’t know how they will need to be adapted as you move through your digital transformation journey over the next few years. Vertical specialisation is another key differentiator that procurement

teams should prioritise. Your partner will be able to do so much more for your digital transformation objectives if they have sector-specific expert knowledge. Automation is not a generic solution; you need a partner that recognises that and the importance of capturing your voice in automation plans. For Dreams, the UK’s most recommended bed retailer, its focus on customer experience played a key role in its vendor selection. It needed a partner that understood its unique pain points, could help deliver the nimble digital infrastructure needed to grow and retain its customer base, and enable its CEO and board members to be involved in the journey. Their CX focus led them to adopt an omnichannel contact centre and customer engagement management solution. This allowed them to deliver exceptional CX at every customer touchpoint, consolidated interactions into a single interface and provided them with the data to see what was driving performance. They combined this with an AI-assisted conversational messaging solution, which ensured the customer journey remained intact as back-office systems were connected to front-end customer problems. Dreams’ board used their partner’s built-in reporting features to involve the executive team on a regular basis. This fostered a results-drive proactive approach by leadership, the success of which led the company to continue expanding its digital infrastructure.

Thanks to its decision to partner with a multi-solution vendor, they were able to seamlessly build on their existing digitisation efforts and adopt a low-code application platform (LCAP). This paved the way for rapid in-house development of full-stack applications to automate processes, further enhancing efficiency and customer experience. Their business-wide, leadership driven approach, has enabled the company to give time back to its employees, achieve its original CX goals and devise new digitisation plans.

Think big picture. Think long-term. The past few years has seen traditional work models completely upended. Whilst many things remain uncertain, one thing is clear – the ways in which we used to work are no longer viable. Leaders are realising that their customers and citizens interact with various parts of their organisations, and – to make those interactions worthwhile and effective – that journey needs to be seamless. That is only possible with an advanced automation plan under the stewardship of a dedicated leadership team and knowledgeable partner. With that, leaders poise their organisations to be on the receiving end of happier customers, patients or citizens; lower costs; satisfied workers; and greater shareholder return overall. Done right, it’s a collaborative effort, and it starts at the top. europeanbusinessmagazine.com 39

Will your business survive the fourth industrial revolution? By María Balbás, President, Elev8

t a time of economic uncertainty, business leaders are naturally more preoccupied than ever on how to maintain profitability. Adopting new technologies can help secure a competitive edge but for the full benefits to be felt, the workforce also needs to be equipped with the right skills to deploy these technological advances. Unfortunately, according to research published by Eurostat, the statistical office for the European Union, only 13 % of people aged between 16-29 are able to perform technical digital tasks, such as writing code. Rapid technological change has led to skills gaps that Europe’s industries are struggling to address. To turn the tide, business leaders should adopt a strategic approach to digital upskilling, pinpointing and plugging specific skills gaps to create a more resilient and adaptable organisation and – because upskilling requires a direct investment in people – a more motivated and loyal workforce. The digital upskilling challenge is one that is being faced by a wide range of industries. What they all have in common, however, is that the strongest players have placed upskilling high on their corporate agenda.

Automate, innovate, grow With McKinsey & Co reporting that more than 50 per cent of duties in the manufacturing industry can be 40 europeanbusinessmagazine.com

automated, it is no surprise that tech adoption here is high. However, the industry has not undergone a process of merely replacing manual labour with new machines, as these new technologies require a digitally skilled workforce to operate and maintain them. Industry leaders such as Jaguar Land Rover have therefore committed heavily to digital upskilling, recognizing that it is vital to develop the skilled global workforces needed to design, build and maintain the vehicles of the future. This is an industry which illustrates how investment in new technology must occur in tandem with investment in upskilling to create efficient hybrid workflows between man and machine, which can be harnessed for growth.

TMT – survival of the fittest In the telecommunications and media sector, rapid changes in the way the public consumes media have placed long-established players under threat from new challengers. A recent EY survey found that 42% of media companies are prioritising enhancing the analytics and data skills of the organization, and more than a third of senior media and entertainment executives said that their company would cease to exist in five years unless they reinvented themselves. The report placed talent management above competition, technology and changing customer expectations as one of the biggest drivers of change in their business. Some companies have risen to the challenge. In the US, for instance, when telecoms company AT&T found

that nearly half of their employees lacked key skills such as data science, cybersecurity, and computer science, the company undertook a huge reskilling project. AT&T became empowered to update its operations and product offering, evolving from a voice network to a data network and moving from the landline to the cloud. Overall, the business was able to fend off competition from newer arrivals in the market and become future proof.

Money talks As an industry driven by the ability to spot the next big opportunity and back the right horse, the financial industry has long embraced technological innovation. The potential

of blockchain, artificial intelligence and cloud computing in financial markets are attracting huge attention. For example, blockchain is entering the mainstream and giving rise to DeFi – decentralised finance – technologies. However, to leverage these technologies and provide a boost to the bottom line, it is vital that employees are not just financial experts, but digitally proficient too. Jamie Dimon, Chairman of JP Morgan Chase & Co believes, “the new world of work is about skills, not necessarily degrees” and with a $350 million training budget in play, it would seem that training has indeed been prioritised. Leaders in the financial sector must be comfortable at the forefront of technological advances, and therefore they need their teams need to have a constantly evolving skillset to keep up with complex emerging technologies.

Only those with the right digital skills will be able to capitalise on these, whilst others will be playing catch-up.

Investing in people Research suggests that workers are keen to reskill and upskill. Post-Covid, many have reassessed their employment options and are seeking out employers who value and invest in them. Far from a luxury, training and upskilling are vital ongoing investments that should form the bedrock of any successful business. When the only constant is change, the only way to succeed is to evolve. Digital upskilling is nothing short of a fourth industrial revolution – businesses slow to react risk getting left behind. europeanbusinessmagazine.com 41

The EV European Market - Charging Ahead

he automotive industry is experiencing significant changes, particularly in the realm of electrified vehicles. Over the past decade, governments and corporations have taken measures to shift away from traditional gasoline-powered cars and toward electric vehicles (EVs). The European business market is no exception to this trend, as more and more companies are recognizing the benefits of incorporating EVs into their fleets. This essay will examine the current state of the European EV market and explore the opportunities and challenges facing businesses as they transition to electrified transportation.

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Current State of the European EV Market The European EV market has been growing rapidly in recent years. According to a recent report by the European Alternative Fuels Observatory, the number of EVs on the road in the European Union (EU) has increased by approximately 70% from 2018 to 2019. This growth is expected to continue, with projections indicating that the number of EVs on the road in the EU will reach 12 million by 2025. There are several factors driving the growth of the European EV market. One of the primary drivers is

government policy, as many countries in the EU have set ambitious targets for the deployment of EVs. For example, the European Commission has set a target of reducing greenhouse gas emissions from the transport sector by 60% by 2050, compared to 1990 levels. To achieve this goal, the Commission has encouraged the deployment of EVs through a variety of measures, such as providing financial incentives for consumers to purchase EVs and supporting the development of charging infrastructure. Another factor driving the growth of the European EV market is technological advancements. In recent years, the range and performance of

EVs have improved significantly, making them more competitive with traditional gasoline-powered vehicles. Additionally, the availability of charging infrastructure has increased, making it easier for consumers and businesses to own and operate EVs.

In addition to cost savings, incorporating EVs into a fleet can also help companies achieve sustainability goals and improve their reputation. By transitioning to electrified transportation, businesses can demonstrate their commitment to reducing their carbon footprint and contributing to a more sustainable future. This can help to attract customers and employees who are concerned about the environment and promote the company’s reputation as a responsible and environmentally conscious organization.

Opportunities for Businesses

Challenges for Businesses

The growth of the European EV market presents several opportunities for businesses, particularly in the realm of fleet management. For example, many businesses are recognizing the cost savings associated with operating EVs. EVs typically have lower fuel and maintenance costs compared to traditional gasoline-powered vehicles, making them an attractive option for companies looking to reduce their transportation costs.

Despite the many benefits of incorporating EVs into a fleet, there are also several challenges that businesses must overcome. One of the primary challenges is the upfront cost of EVs, which is still higher than traditional gasoline-powered vehicles. Additionally, many businesses are concerned about the reliability and range of EVs, particularly for long-distance trips. Another challenge facing businesses is the lack of charging infrastructure,

which can make it difficult for EVs to be used for long-distance trips and can limit the practicality of using EVs for fleet management. To overcome this challenge, companies must invest in charging infrastructure or have access to public charging networks. Finally, many businesses are concerned about the availability of EVs and the time it takes to charge them. This can make it difficult for businesses to transition to electrified transportation, particularly if they have a large fleet and need to replace a significant number of vehicles. To overcome this challenge, businesses must carefully plan their transition to EVs and consider factors such as charging infrastructure and vehicle availability when making purchasing decisions.

Conclusion The European EV market is growing rapidly and presents significant opportunities for businesses looking to incorporate electrified transportation into their fleets. By transitioning to EVs, europeanbusinessmagazine.com 43

The Adaptation of Electrical Vehicle’s

he electric vehicle (EV) market is one of the fastest growing industries in the world, with a surge of interest in clean and sustainable transportation solutions. The United States and China are both major players in this market, with each country having its own unique approach to promoting and advancing the use of EVs. In the United States, the EV market has been growing steadily in recent years, driven by a combination of government incentives, advancements in technology, and increasing consumer demand. The federal government offers tax credits for the purchase of EVs, and many states have

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additional incentives for consumers and businesses to switch to EVs. Additionally, the development of charging infrastructure has been a key factor in promoting the growth of the EV market in the United States. This infrastructure provides consumers with the confidence they need to make the switch to EVs, as they know they will be able to easily recharge their vehicles when needed. Despite these efforts, the US still lags behind other countries in terms of the overall adoption of EVs. This can be attributed to a number of factors, including the relatively high cost of EVs compared to conventional vehicles, limited model options, and a lack

of consumer awareness about the benefits of EVs. Despite these challenges, the US EV market is expected to continue to grow in the coming years, with many new models from major automakers slated to hit the market in the near future. In contrast, China has been much more aggressive in promoting the use of EVs, with a focus on both consumer and commercial vehicles. The Chinese government has set ambitious targets for the adoption of EVs, with a goal of electric vehicles to make up 40 percent of new cars sold by 2030. To support this goal, the government has offered a range of incentives for consumers, including tax credits and

subsidies for the purchase of EVs, as well as investment in charging infrastructure. In addition to government support, China has also become a major player in the manufacturing of EVs. Many global automakers, including Tesla, have established production facilities in China to take advantage of the country’s growing market. This has led to a significant increase in the number of EVs available in China, with a wide range of models and price points to meet the needs of different consumers. One of the key factors that has driven the growth of the EV market in China is the country’s focus on clean energy and sustainability. The Chinese government has made it a priority to reduce its dependence on fossil fuels and shift towards clean energy, and the promotion of EVs is a key part of this effort. Additionally, the country’s large population and urbanization have created a growing demand for sustainable transportation solutions, with EVs playing a significant role in meeting this demand.

Despite these efforts, there are still significant challenges to the widespread adoption of EVs in China. One of the biggest challenges is the lack of charging infrastructure, particularly in rural areas. Additionally, the cost of EVs is still relatively high compared to conventional vehicles, and there is a lack of consumer awareness about the benefits of EVs and the charging infrastructure available. Overall, it is clear that the EV market in the United States and China are at different stages of development, with each country facing its own unique challenges and opportunities. In the United States, the focus is on improving consumer awareness and increasing access to charging infrastructure, while in China the focus is on increasing production and reducing the cost of EVs. Despite these differences, both countries have a key role to play in advancing the EV market, and their efforts will have a significant impact on the global market. The US has a strong tradition of innovation and entrepreneurship, and its leadership in technology and manufacturing will be

critical in driving the growth of them more accessible to consumers. In conclusion, advances in the consumer electric vehicle market have been significant in both the United States and China, although each country has taken a different approach to promoting and advancing the use of EVs. The United States has focused on consumer incentives and charging infrastructure, while China has emphasized the importance of clean energy and the growth of the manufacturing sector. Both countries will continue to play a critical role in advancing the EV market, and the outcome of their efforts will have a significant impact on the global market. It is important that both countries continue to work together to overcome the challenges facing the growth of the EV market, such as the lack of charging infrastructure and the high cost of EVs. By doing so, they can help to promote the widespread adoption of clean, sustainable, and efficient transportation solutions that benefit the environment and improve the quality of life for all people. europeanbusinessmagazine.com 45

Electric Vehicle Components Market Is Estimated To Be Valued At US$ 1001.95 Billion By 2032 government subsidies and large-scale domestic production hence increasing the electric vehicle component market. North America, Latin America, and Europe are also estimated to drive the global electric vehicle component market owing to a significant focus on minimizing vehicular emissions leading to the growing use of e-vehicles over the coming ten years. The governments in this region are actively taking steps to improve infrastructure and components. Countries like China and India are set to be dominant market space for EVM components owing to the rise in sales of electric cars.

Recent development

he global electric vehicle component market is valued at USD 148.32 Billion in 2022. The market is further expected to gain size of USD 1001.95 Billion by the year 2032. The market is expected to grow with a CAGR of 21.05% in the forecast period. Batteries used in electric vehicles come in three types, out of which lithium-ion batteries are quite expensive yet have good performance, lead-acid batteries are the cheapest in price, and nickel metal hydride batteries are moderately priced and have a higher output than lead-acid batteries. Motors used in electric vehicles are DC motors, AC induction motors switched reluctance motors

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and permanent magnet synchronous motors. Electric vehicles originated in the late 18th century. Since then there have been numerous developments in the electric vehicle including the evolution of batteries, no noise pollution at all, and adaption of the technology in cars after bicycles and motorcycles. The use of lightweight material in the manufacturing of e-vehicles gives a new dimension to e-motor racing.

Which region holds the major share of this market? Asia Pacific leads in the sales of e-vehicles because of countries like India and China owing to benefits such as

The market is characterized by key players which are offering a wide range of EV components that are particularly dedicatedly to the production of passenger cars and electric buses. Companies focused on innovation and technologically driven change. These companies are opting for strategic collaboration and mergers in order to increase business reach. These players are focused on the research and development into electric vehicle components that make these firms stay competitive in the market. • In 2022 March the Panasonic Corporation announced the setting up of a plant to boost the manufacturing of lithium batteries. Tesla increased their benefits due to Panasonic corporation. • In 2021 February The introduction of Hyundai in the development of electric vehicle parts enhanced cost effectivity. The collaboration of Kia and Hyundai have been working on EV components in India and are likely to get a major market share in the forecast period.

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TESLA'S CYBERTRUCK:

PIONEERING INNOVATION ACROSS EUROPEAN LANDSCAPES

n the dynamic realm of automotive innovation, the Tesla Cybertruck, a brainchild of Elon Musk, has emerged as an emblem of cutting-edge design and sustainable technology. Far beyond disrupting the traditional automotive market, this electric pickup has ignited profound discussions about the trajectory of transportation's future. In this immersive exploration, we embark on a detailed journey through the origin, development, manufacturing intricacies, associated costs, market projections, and the nuanced mechanics

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that propel Tesla's Cybertruck toward a revolutionary impact on European roads. In 2019, Elon Musk, the visionary entrepreneur behind Tesla, introduced the Cybertruck to the world. This bold venture was spurred by Musk's desire to reshape perceptions of electric vehicles and challenge the established conventions of traditional truck design. The Cybertruck stands as a tangible manifestation of Tesla's unwavering commitment to sustainable transportation without compromising on power and utility.

From Concept to Reality: Tesla's Innovation Odyssey The development journey of the Cybertruck is characterized by Tesla's distinctive blend of innovation and risk-taking. Elon Musk, known for his ambitious goals, set out to create a vehicle that not only pushed the boundaries of electric vehicle (EV) technology but also challenged the aesthetic norms of conventional trucks. The outcome was a polygonal exoskeleton crafted from cold-rolled stainless steel—a departure from the

reaching into the billions. While exact figures remain closely guarded, this significant investment encompasses research and development, materials, manufacturing infrastructure, and the integration of cutting-edge technologies. The Cybertruck's unique exoskeleton, made from cold-rolled stainless steel, contributes to its robust structure but also adds to production costs. Additionally, advanced features, including Tesla's Autopilot and Full Self-Driving capabilities, further elevate the overall cost of bringing this groundbreaking vehicle to market. As the Cybertruck gears up for production and deliveries, Tesla anticipates a surge in demand for its electric pickup. Pre-order numbers underscore robust market interest, with hundreds of thousands of reservations made within days of the vehicle's unveiling. The buzz around the Cybertruck, fueled by its distinctive design and Tesla's reputation for technological prowess, positions it as a frontrunner in the electric truck market. Tesla's revenue projections are intricately tied to the success of the Cybertruck. With its entry into the lucrative pickup truck segment, Tesla aims to diversify its product offerings and tap into a broader consumer base. The success of the Cybertruck is poised to have a significant impact on Tesla's overall financial performance.

Navigating the European Landscape

smooth curves characterizing traditional truck designs. The Cybertruck's development wasn't without its challenges. The initial design, unveiled at a dramatic launch event in California, polarized opinions with its futuristic, angular structure. Yet, the unconventional design was a deliberate choice, aligning with Musk's vision of a vehicle that stands out in a crowd of traditional trucks. Tesla's manufacturing prowess takes center stage at the Gigafactory in Texas, USA, designated as the hub for

Cybertruck production. Beyond mere assembly, Giga Texas plays a pivotal role in advancing Tesla's battery technology, underscoring the company's commitment to expanding production capacity and leaving a profound impact on the American automotive industry.

Cost of Innovation: A Billion-Dollar Endeavor The cost of developing the Cybertruck constituted a substantial investment,

While the Cybertruck has garnered global attention, identifying optimal global markets is a strategic consideration for Tesla. Europe, with its growing emphasis on sustainability and electric mobility, emerges as a lucrative market for the Cybertruck. The vehicle's unique design and ecofriendly credentials align seamlessly with the preferences of European consumers. However, entering the European market presents challenges, including adherence to regulatory standards, competition from established automakers, and navigating the diverse preferences of consumers across

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different countries. Tesla's success in penetrating and thriving in the European market will hinge on its ability to navigate these complexities effectively. Understanding the target audience for the Cybertruck is paramount for Tesla's marketing strategy. The vehicle's design and features appeal to a diverse demographic, ranging from tech enthusiasts to adventure seekers and environmentally conscious consumers. The Cybertruck's utilitarian appeal, combined with cutting-edge technology, positions it as an attractive option for those seeking a blend of performance, sustainability, and futuristic design. While the Cybertruck pioneers the electric truck arena, it faces 50 europeanbusinessmagazine.com

competition from both traditional automakers and new entrants vying for a share in the electric vehicle market. Notable contenders, such as Rivian's R1T and the electric version of the Ford F-150, intensify the competition as automakers recognize the potential of electric trucks in this burgeoning market.

Industry Response: A Paradigm Shift in Motion The introduction of the Cybertruck has prompted diverse reactions from traditional automakers, ranging from curiosity to a sense of competition. Some express skepticism about the vehicle's design, while others acknowledge the potential disruption

it could bring to the market. The automotive industry, historically resistant to rapid change, now faces the challenge of adapting to the growing influence of electric vehicles and reimagining the future of transportation. The Cybertruck's performance prowess significantly contributes to its appeal. Boasting impressive acceleration, the Tri Motor All-Wheel-Drive variant achieves a 0-60 mph time of under 2.9 seconds, made possible by Tesla's advanced electric drivetrain. The elimination of a traditional internal combustion engine results in instantaneous torque and a smooth, silent acceleration experience, complemented by the all-wheel-drive system for optimal traction across diverse terrains.

Autopilot and Full Self-Driving Capabilities: Shaping the Autonomous Horizon A hallmark of Tesla vehicles, including the Cybertruck, is the incorporation of Autopilot and Full Self-Driving (FSD) capabilities. While not fully autonomous, these features represent a significant step towards self-driving technology. Autopilot enables the vehicle to assist with driving tasks, such as steering and lane-keeping, while FSD aims to provide a comprehensive self-driving experience, pending regulatory approval. The inclusion of these advanced features aligns with Tesla's commitment to pushing the boundaries of driving technology. However, it also raises

questions about regulatory readiness and societal acceptance of self-driving capabilities.

European Odyssey: Paving the Future of Mobility As the Tesla Cybertruck prepares to make its mark on European roads, it symbolizes more than just a vehicle; it represents a paradigm shift in the automotive industry. From its inception in Elon Musk's visionary mind to the manufacturing floors of Giga Texas, the Cybertruck embodies the fusion of innovation, sustainability, and performance. Tesla's bold venture into the electric truck market challenges preconceived

notions of design and functionality. As the automotive landscape evolves, the Cybertruck is poised to redefine the driving experience, shape consumer preferences, and contribute to a more sustainable future. The journey of the Cybertruck is not merely a technological feat but a testament to the transformative power of innovation. In the coming years, as the electric pickup navigates the global market and encounters the diverse landscapes of consumer preferences, its impact will extend beyond the roads it travels. It will be a catalyst for change, inspiring a new era of electric mobility and paving the way for a future where sustainability and performance coexist harmoniously on European roads and beyond. europeanbusinessmagazine.com 51

DESCARTES THOUGHT LEADERSHIP:

Three things to know about forced labour and its implications within the global supply chain By Thomas Lobert, Solutions Consultant Global Trade Intelligence, Descartes

he battle against forced labour in global supply chains has gained momentum in recent times, not least thanks to coverage of the dramatic situation of the Uyghur population in the province of Xinjiang in China and the legislative proposals which have emerged in reaction. In the United States, the Uyghur Forced Labor Prevention Act (UFLPA) has, for example, prohibited the import of goods manufactured in whole or in part by forced labour and originating from the autonomous region of Uyghur since June 21, 2022. At the European level, a much-debated bill will be voted on by MEPs with implementation expected at the start of 2024. In Germany the law on corporate responsibility in the supply chain (Gesetz über die unternehmerischen Sorgfaltspflichten in Lieferketten) came into force on January 1, 2023. Similar laws are in force or in preparation in other countries in Europe. Meanwhile, in the UK, what are the implications of forced labour in the management of international supply chains? And what can businesses do to create more ethical and responsible supply chains in this regard?

Forced labour: reinforcement of UK regulation Forced labour is considered a serious crime in the UK. In 2009, a standalone offence of holding a person in slavery, servitude or forced labour was includ-

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ed in section 71 of the Coroners and Justice Act, while a House of Lords private members bill was proposed in July 2021, that would have seen significant amendments to the Modern Slavery Act 2015 (MSA), significantly increasing accountability for abuses occurring in the supply chain of UK multinational corporations. Unfortunately, little seems to have happened since those amendments were tabled, and meanwhile, the UK’s risk rating for critical violations has increased, according to the Supply Chain ESG Risk Ratings Report 2023. Despite this lack of regulatory enforcement, UK businesses cannot afford to maintain a ‘laissez-faire’ attitude to forced labour within their supply chains. According to research from Deloitte, amongst the changes consumers are making in their purchasing decisions, sustainable and ethical practices are becoming more important, with consumers actively

choosing brands with ethical practices / values ; ceasing to purchase certain brands or products because of ethical concerns ; and even contacting brands to raise an issue regarding sustainability or ethics.

Identifying forced labour: a complete ecosystem Forced labour refers to situations where workers are forced or threatened in any way to work against their will, often in inhumane and abusive conditions. This can happen at any time in the supply chain: from sourcing raw materials to manufacturing products, including distribution. It is a serious violation of human rights and a form of modern slavery that affects millions of people around the world. This concern is not limited to the practices of a company alone, but extends to its suppliers and external service

providers. The entire chain must be able to be audited. We must be vigilant about working conditions and the location of the company and its suppliers. For a Chinese supplier, for example, is the production plant close to a Uyghur forced labour camp? As global supply chains are infinitely complex and constantly in motion, establishing long-term, reliable risk monitoring and visibility is challenging. Additionally, government agencies do not publish lists of companies suspected of using forced labour, further complicating background checks on potential suppliers.

3. Take action NOW Despite its perceived complexity, there are actions and practices businesses can put in place to bolster the fight against the use of forced labour within their supply chains:-

• Identify risks: be alert to the circumstances that may encourage the use of forced labour • Diversify sources of information to understand working conditions within your supply chain (talk with your suppliers’ employees, examine your internal policies in detail, collaborate with NGOs, etc.) • Always be aware of the laws in force on slavery and forced labour • Review and implement internal compliance plans (ICP): the control measures required to monitor the compliance of exports and international trade are increasingly taken into account. Thorough monitoring is essential in the fight against forced labour. Analysis firms like Kharon have developed their own research methods and their network of international experts to identify companies at risk, particularly with regard to forced labour. This

information can then be implemented into a due diligence solution to continuously analyse all third parties in the supply chains.

Conclusion Today, based on a list of 50 entities sanctioned by a government, it is possible to identify more than 8,600 companies associated with these 50 entities. Every company in the world should be able to guarantee that their supply chain is free of forced labour. This includes identifying at-risk suppliers, promoting fairer supply chains and implementing solutions to ensure all suppliers meet these working standards. Not taking action is no longer no option. For more information – see Descartes’ mini guide on Forced Labour and its Implications in the Supply Chain

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Creating Multi-organisation Collaboration

upply chains cannot function without collaboration but traditional one-to-one relationships are both expensive to manage and potentially restrictive, especially at times of disruption and escalating costs. Furthermore, over the past decade, organisations have invested heavily in digitisation to achieve efficient, automated and streamlined processes – yet extending internal improvements to include partners is complex and challenging. When just a single example of inconsistency in mapping data between two organisations can lead to a mismatch in routing that adds delay, cost and conflict to the relationship, how can businesses confidently reach out beyond one-toone relationships and embrace a wider collaborative model? Yet if organisations are to drive new efficiencies, reduce costs, improve sustainability performance and transform employee well-being, it is imperative to move supply chain collaboration beyond the limitations of individual relationships. From intelligence driven route optimisation to automated execution and the use of powerful analytics to proactively respond to challenges, with the right approach, organisations can achieve so much more when working together. Christopher Keating, Senior Vice President at Transporeon and Christopher Quin, Vice President of Sales at Trimble discuss the power of consistent data combined with smart collaborative platform technology to achieve effective, multi-organisation collaboration across the supply chain.

Supply Chain Collaboration Objective Supply chain disruptions continue unabated. While the problems created by Far East disruption ease, inflationary pressures have created an unprecedented increase in transportation 54 europeanbusinessmagazine.com

costs. The Russia-Ukraine war continues to undermine confidence, especially throughout Europe. Add in staff shortages, as well as industrial action, and it has become extremely difficult for organisations to plan efficiently and forecast accurately. The reality of course, is that supply chains are constantly subject to upheaval events. From financial crises to weather, supplier failure to political change, any organisation involved in logistics requires the ability both to respond to immediate problems and create a strategy to mitigate longer term challenges. Certainly, the evolution in logistics technology has delivered huge strides over the past decade. From vehicle telematics to delivery route optimisation, automated unloading/loading to warehouse management, organisations throughout the logistics and supply chain industry have leveraged automation and visibility to drive new levels of cost effectiveness and efficiency. But with on-going geopolitical uncertainty and a slowing of global demand, the industry faces a new set of operational challenges. Add in the need to also eliminate waste and meet increasingly regulatory driven carbon targets, businesses recognise the importance of working closely with partners. An October 2022 Indago survey found that nearly all respondents either “Strongly Agreed” (71%) or “Agreed” (25%) that for organisations to address supply chain challenges more effectively, they need to collaborate more with their suppliers, customers, logistics service providers and other trading partners.

Data Inconsistency Leads to Conflict There is a huge gap, however, between the vision of supply chain collaboration and the reality on the ground – and one of the biggest problems is the lack of

trusted, consistent and precise data. Just consider, for example, what happens when a manufacturer and a carrier are using different mapping data. Both organisations will have invested heavily in digital technologies including transport management to ensure routes are optimised, based on precise time and distance calculations. Yet when the carrier’s mapping opts for a different route to the one outlined in the manufacturer’s systems, there can be a huge discrepancy in cost, delivery timing, even carbon emissions. Indeed, even the most basic inconsistencies can have serious ramifications. What happens to the delivery schedule when a consumer-grade mapping solution, for example, defaults to a retail store’s literal centre rather than the loading/ unloading bay defined by a business-grade alternative? Organisations need to consider not only the inevitable delay while the truck is rerouted but also the impact on driver morale – a key concern given the endemic shortage. Consistent, precise mapping data is a clearly vital component of successful

supply chain collaboration. Unless every organisation is working to the same, precise geo-positioning, the assumptions and calculations that underpin streamlined, automated processes will be incorrect, leading to inevitable conflict.

Platform Foundation Wider Collaboration While organisations are clearly committed to creating a far more collaborative supply chain model, it is simply not achievable when every business is reliant upon a different data set. Yet how often are the data issues only revealed after a hugely complex and time-consuming interoperability project, typically involving multiple technology providers? The concept of extending these oneto-one collaborative relationships to embrace the wider supply chain is simply too complex using traditional interoperability models. Yet organisations throughout the supply chain recognise the essential value, indeed imperative, of achieving far more

efficient, effective and flexible collaboration. This deadlock can only be overcome with a different approach. The use of platform technology not only provides every organisation with a consistent data foundation but also fast-tracks the broader collaboration model. A single connection to the platform provides organisations with an immediate connection to all their current and potential trading partners. With full and trusted visibility of every stage of the process, organisations can rapidly expand the collaborative mindset. For example, with confidence that every carrier will have access to the same, precise mapping data, an organisation can be far more flexible – even adding spot procurement deals to manage spikes in demand or a problem with an existing provider.

More than Marginal Gains Overcoming the costs and delays associated with data conflict will reap significant financial and operational

benefits. Improving the consistency of delivery operations, for example, will reduce the time spent waiting to unload, with the associated carbon savings and improvements to driver morale. Greater delivery accuracy will enable intelligent utilisation of scarce warehouse resources. With consistent routing and mapping data, organisations can confidently commit to delivery times, reinforcing customer satisfaction and loyalty and improving retention. These marginal gains, while considerable, are just the start. An effective collaborative model enables new levels of flexibility. When inevitable supply chain disruptions arise, organisations can leverage trusted information across thousands of supply chain providers to access the resources required on demand. Organisations can also become far more proactive to meet evolving business objectives. For example, different route optimisation concepts can be explored, comparing routes for sustainability, cost or timeliness. Access to a new breadth of possible supply chain collaborators introduces new ways to add efficiency and meet sustainability goals, for example by adding backhauls to reduce empty miles.

Conclusion Successful, cross supply chain collaboration is the only way to successfully mitigate the inevitable crises that occur – in whatever form. From real-time freight visibility and transportation management to automated execution and powerful analytics, organisations need to evolve beyond the limitations of one-to-one interaction and embrace a powerful community of thousands of business partners. But this collaboration must be underpinned by confidence in the shared information resource. From trusted, consistent mapping onwards, the use of a neutral technology platform is now vital to level the playing field. It is the foundation to realise the power of many, working together effectively to deliver the next level in cost savings, sustainability goals and employee well-being.

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Why Robotic Process Automation (RPA) and GenAI revolutionise SME operations By Dave Adamson, CTO, Espria

n the past year alone, industry has seen rapid and revolutionary transformations due to advancements in automation. Organisations have been able to reduce the time spent on repetitive tasks such data manipulation, migration, entry and analysis, and also those spent remediating human error, saving their resources for more critical tasks. Simply getting up to speed with automation can offer huge benefits to business functions like HR, finance, travel and marketing – all supporting business efficiency and ultimately, profitability. In previous years, the rise of Robotic Process Automation (RPA) has removed the burden that legacy technologies, cumbersome manual processes and repetitive tasks had on day-to-day business operations. By offering companies of any size the potential for low-cost, accessible ways to understand data, they can benefit from faster, more informed decision-making. With the current explosion in Generative AI solutions, we are sure to see operations bolstered once more. But how can SMEs be convinced to make another radical change to their operations without fear? Here are 4 reasons why RPA and GenAI aren’t a threat to operations, but rather have the power to completely transform SMEs for the better:

Low-cost investments for rapid results Previously, automation solutions have often required both software and hardware, as well as an investment 56 europeanbusinessmagazine.com

in training current staff members. In some cases, such as when employees are not able or willing to learn, SMEs have also had to invest in recruiting new staff with the necessary digital skills to work with the new technologies. RPA is now available as a SaaS (software-as-a-service) offering, meaning businesses of any size can access it through a simple cloud deployment. RPA SaaS is also an affordable option, particularly for smaller companies, avoiding the cost implications of investing in expensive infrastructure or re-architecting applications. Businesses also have the opportunity to remove the weight that legacy technologies, burdensome manual processes and repetitive tasks place on their everyday operations. By automating repetitive tasks with improved accuracy and efficiency, businesses are able to invest more time in retraining and reskilling workers in different, more productive areas.

AI-supported humans will become the new workforce Whenever a new, disruptive technology emerges, there is always an underlying concern that humans with be replaced. However, SMEs shouldn’t be scared: as RPA only replaces those roles that can’t be fulfilled by humans, the same is true of Generative AI tools; either because humans cannot be found to perform the roles, or the level of quality needed cannot be consistently delivered by the human hand. If anything, adopting AI tools will allow staff to spend more time being innovative and getting in touch with

their creative side, which opens the opportunity for increased personal development and the chance to be re-deployed to higher-level, managerial roles. Rather than replace the roles, the tools simply offer different avenues and the creation of new technical roles, where skilled workers are now needed to monitor and analyse the results. Tools like ChatGPT are simply that – tools. They shouldn’t be demonised, as they simply enable another interface into the digital world, aiding workers in finding answers. As it matures, it will only become riper for creativity, and therefore business opportunity.

AI and automation tools are accessible across sectors Whilst the early adopters of RPA were larger enterprises in the finance and banking sectors, automation tools have had huge success

in revolutionising sectors such as healthcare, manufacturing and logistics. RPA can be used to automate most repetitive tasks in many different organisations across an array of industries – for greater accuracy and efficiency. These necessary tasks crosscut every industry, which highlights how RPA can be of great assistance in improving how businesses run, regardless of the sector. As AI becomes more reliable as an operational enhancement mechanism, Generative AI tools will only become more accessible. Whilst some have concerns about ChatGPT and similar tools marking the end of creativity, a more realistic and grounded approach will be how generative AI will enhance information gathering and collection – medial tasks applicable across all sectors. As it matures, the level of content will improve and become more efficient for specific sector and industry needs.

Embracing new avenues for operational improvement Whilst the current focus of RPA and GenAI providers is firmly placed on bigger enterprises, particularly banks and financial services firms, engagement with SMEs could be more impactful due to their smaller size and therefore greater business agility. Yet many SMEs are not currently geared towards optimising the technology they have, let alone the adoption of automation and AI-related systems, which means they may not immediately appreciate the value it can bring to their business. Add to this the fact that many RPA providers focus most of their time and resources on the “big boys”, how can SMEs be aware of the impact that automation technologies could have on day-to-day operations and their bottom line? Business leaders in SMEs, particularly those with purchasing power, must take the lead and push for new technologies to be introduced into their company workflows. They should look

to engage with the right partners and cloud providers who have knowledge of the most cost-effective and accessible solutions, now be provided as SaaS. For businesses, finding a trusted external technology partner which can fill a company’s skills and expertise gaps is essential at a time of economic downturn. Managed Service Providers (MSPs) need to act as business partners, helping assess your risk exposure, develop security policies, choose and deploy security solutions, ensure compliance with regulatory mandates for data protection and develop skills with your teams. As in any period of economic uncertainty, businesses need to control and contain cost. MSPs in turn need to adapt and evolve with technology in order to offer clients in turn the most comprehensive solutions possible, and bring real value-add. If SMEs partner with the right MSP they can get started in a very low-cost, low risk manner, and reap the full rewards of RPA and GenAI.

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Automotive Economies are Moving Circular… And it Makes Sense

By Kieran McMullan

mproving the state of the world, according to the World Economic Forum, is a critical lever for organisations to achieve climate commitments and realise net-zero emissions. The much talked about circular economy in its essence, aims to keep resources in use for as long as possible, forming the crux of intelligent and sustainable business models of the future. It is a known fact the planet has wrestled with worsening

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environmental conditions, despite entangling and ofttimes misguided debate. However, the seismic question of economies moving away from the old linear patterns of the past, to greener, circular agendas remains of vital importance worldwide. Linear economies are a dead-end, an environmental cul-de-sac, where products are sourced, used, and ultimately disposed. The circular economy aims to cut and reduce waste, it is a rethought manufacturing process, where existing materials are reused

and recycled. Not only is the linear economy unattainable environmentally, but non-renewable renewable resources are also finite, and the disposal of products is a revolving problem for the planet. In the automotive industry, we have already seen a shift from internal combustion to electric vehicles (EV), though the production of electric cars can create more emissions than the production of petrol cars. Plus, with the increased regulatory and tax burdens on businesses causing

higher emissions and landfill waste, mixed with the implications of the Paris Climate Agreement, it increasingly makes more sense economically for the automotive industry to steer toward a circular agenda, by recycling and reusing wherever possible. The EU has announced an action plan to move towards circular economies by 2050 in many industries, as part of its action pathway to carbon neutrality and to reduce the loss of biodiversity. The automotive industry is largely seen as the ideal place to test

the notion as, under the correct conditions, for example up to 95% of the raw materials in electric car batteries can be recovered. There has been some proactiveness towards carbon neutrality in automotive, where Japan, South Korea, India, and several US states’ governments have ratified legislation around the requirements of end-to-life recycling of EV components. In harmony with the circularity pathway, the BMW Group has scrutinised the minutiae of its car manufacturing europeanbusinessmagazine.com 59

process with its RE:THINK principle, which aims to re-think and optimise all material cycles for a more circular future with less waste. The car maker’s rationale puts innovation as key to reaching a circular economy, exploring all facets of keeping disused vehicles and its components in the resource cycle. Across its entire supply chain, the BMW Group is actively minimising waste production along the volume chain, along with improving its recycling practices by using secondary materials where possible. BMW Group aims to significantly increase the percentage of secondary

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material in its vehicles going forward. Other means of sustainability include procuring raw materials in a more responsible way, says BMW Group, which are processed carbon-free, or with low carbon at the very least. “Sustainability and economic success go hand in hand at the BMW Group. As a premium manufacturer, we have the ambition to lead the way in the area of sustainability.” — Oliver Zipse, Chairman of the Board of Management of BMW AG. The BMW Group also states that it is committed to the Paris Climate Agreement and presents the aim of

40% CO2 emissions over its entire value chain. As the first German car manufacturer to join the Business Ambition for 1.5°C of the Science Based Targets Initiative, BMW Group is consciously pursuing the agenda of net zero by 2050, a serious and weighty goal that requires consistent innovation and dedication. Humans consume more than 100 billion tonnes of raw materials every year with figures rising, and one which is accelerated by the processing of primary materials. This process is extremely energy-intensive and therefore, carbon-intensive. The guiding principle of the BMW Group is ‘secondary first’ — an assured way of reducing material waste and carbon emissions. Using secondary materials will limit the economy’s dependence on critical primary raw materials, which limits our dependence on rising raw material prices. Furthermore, a vehicle’s carbon footprint can be significantly reduced by using high quality secondary materials. The BMW Group has placed the aim of a circular economy as one of its

main focus areas, in an effort to design more resource-efficient vehicles. The idea is to keep materials in the manufacturing cycle and prevent the loss of materials for products, ensuring its long use. From 2025, the Neue Klasse is set to take another step towards the approach to the concept vehicle BMW i Vision Circular. This new model generation will launch a renewed generation of e-mobility, utilising round battery cells that efficiently match the new architecture, as well as newly developed lithium-ion cells, where energy density will see an improvement of 30 per cent and enhanced charging speeds. But perhaps more positively, BMW Group state that CO2 emissions are reduced by up to 60% in the production of the battery cells. It is clear then, that BMW Group’s increased investment for e-mobility and its preparation for global production to further electrification, is at its core, a positive and impactful motif. The result will benefit the benefit with the use of recycled, secondary materials, will limit CO2 emissions, and will be circular in the long term.

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Decarbonizing Logistics:

How Digitalization Can Make Small Steps That Count

driven by trucks in 2022 even the smallest change can have a huge influence in scale. While Eco League by Girteka presents an immediate opportunity for decarbonization through easy educational initiatives with minimal investment, the current driver shortage and the influx of new drivers in the road transportation industry signal that its full potential is yet to be realized. Many truck drivers and logistics companies have not yet incorporated such awareness programs, leaving substantial room for influencing driver behavior and fuel consumption practices.

Intelligent Software to Tackle Emissions

n a world where climate change and environmental responsibility are increasingly pivotal concerns, the logistics sector is under scrutiny. The potential for decarbonization in the transportation industry is vast. One of the low-hanging fruits of decarbonizing road transportation is digitalization. An easy and simple way to implement and still with potential for emissions reduction. Recent studies and analyses initiated by Girteka Group in cooperation with

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one of the leading truck manufacturers prove that small steps in updating software for trucks can influence the level of fuel consumption and therefore the overall emission from heavy goods transportation. Besides discussing and implementing new battery-electric vehicles, hydrogen vehicles, or utilizing HVO, the behaviour of drivers, way of driving, speeding, and accelerating is crucial for overall fuel level consumption. And having more than 2.8 trillion kilometres

Girteka Group, being focused on digitalizing its operations, collects enormous amounts of data from its trucks. This data is very valuable in terms of analysing and upgrading performance. A recent project, which started with delivering data from 300 trucks, allowed to investigate and find the best suitable and tailor-made software solution to tackle the emissions. The system integrates digital technologies to read the route and map in real-time, allowing trucks to use the maximum kinetic energy the vehicle can utilize, optimizing smoother movements, acceleration, and braking, while using cruise control. The partnership includes two types of proprietary software, already being installed in more than 100 trucks. The main features of the software are: - Smoother the acceleration - Anticipate the speed limits thanks to sign recognition - Using kinetic energy during braking and accelerating - Enhance cruise control - Improved eco-driving “The results of our analysis were astonishing. With simple changing software in trucks, we were able to reduce fuel consumption and emissions by 1.2 litre per 100 km, which is approx. 4%” - says Arvydas Petrikas, Project Manager in the Transport Development Department at Girteka Group.

With the newest software installed on the part of trucks while the driver is accelerating, systems avoid speeding too much and therefore consume additional fuel. The trucks also can read and respond to speed limits and other road signs in terms of speeding and breaking as well as topography of planned routes. The digital system integrates with local data, adjusting speed automatically, thereby helping to maintain an eco-friendly operation and reducing the chances of speed-related incidents.

Data-Driven Feedback Loop The performance of each truck is continuously monitored and shared. This data is compared with baseline metrics to measure the effectiveness of the new features both in reducing

carbon emissions and improving safety. The installation of these features is not a one-off event. By the end of the year, Girteka is planning to equip another part manufacturer's trucks with this technology. The scale at which the company will implement these changes is significant; it amplifies the reduction in carbon footprint and sets a standard for the logistics industry.

Potential of scale Typical fuel usage for these trucks is approximately 28 litres per 100 km[1]. A 1.2-liter reduction, therefore, signifies a 4.3% decrease in fuel and subsequent carbon emissions. If we implement similar solutions in each of the 6.2 million trucks[2] today the effects can be enormous, allowing

us to meet the newest decarbonization targets for HGV. In the quest for decarbonization, every small step counts. By partnering between logistics companies and manufacturers and leveraging the power of digitalization, the whole sector can make strides in reducing environmental impact without sacrificing operational efficiency. It's a vivid illustration of how technology and scale can come together to forge a more sustainable future. “This is a forward-thinking, databacked approach that not only provides immediate benefits but also positions us as thought leaders in responsible logistics and transportation. It's not just about being bigger; it's about being smarter and more sustainable for the world we all share.” – summarizes Arvyda Petrikas.

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How do we address the global employee loyalty problem? By Vincent Belliveau, Chief International Officer, Cornerstone

he past few years of global instability have had a sizable impact on the collective workforce, leading to widespread employee unrest and apathy. This is perhaps why we have seen such a nosedive in employee loyalty. Research has revealed that 47% of employees are still open to other job offers even after accepting a position, and half of respondents had accepted a job offer within the last 12 months, only to back out prior to starting. High churn rates and the process of recruiting new employees is time intensive and expensive, and so many business leaders are looking for ways to turn this around. To do so, companies must evaluate the current employee experience and rethink their talent management strategies. However, knowing where to begin can be immensely challenging. It’s crucial for HR and business leaders to get clarity over the different aspects of talent management – from learning and development (L&D), to career mobility, and performance management – and to have a clear, holistic strategy to drive positive changes. Talent management challenges differ globally, and organisations cannot assume that a particular strategy is applicable in every region. So, how are different areas of the world faring? And which aspects of talent management need the greatest degree of attention?

Diversity & inclusion must be prioritised Recent research has revealed that employees in EMEA rated their companies’ success in developing and 64 europeanbusinessmagazine.com

ensuring diversity and inclusion (D&I) at just 37% – significantly lower than NAM at 72%, and APAC at 59%. However, while the EMEA region is certainly lagging behind, it’s clear that D&I needs more focus on a global level. Many employees have high expectations of their organisations when it comes to social matters, particularly the younger generations, and overlooking this could lead to alienating staff. Moreover, organisations should be striving to be welcoming to everyone. Companies can improve their D&I strategy in several ways – from rolling out learning content and initiatives, to encouraging open discourse with employees. Also key is ensuring

career paths are equally available to all – research has found that women were 50% more likely than men to say they do not have visibility into internal career opportunities. This is something which must change. Skills development will also be crucial in tackling D&I gaps – after all, nothing changes until someone learns something new. True transformation requires new skills and abilities to drive the change.

The skills confidence gap persists This brings us onto skills more broadly, another crucial area of a talent management strategy. Recent research has revealed that, globally, there is a

that interest employees on an individual level. Approaching skills development and performance management in this way will provide workers with a sense of belonging. Feeling valued by their employer could be significant in their choice to remain in their current roles.

AI remains untapped

30% skills confidence gap between employees and organisations that has persisted for the last three years. This gap illustrates that, whilst employers believe they are delivering skills to their employees effectively, employees do not share the same confidence in their employer’s ability to develop their skills. This incongruity between what employees want from their talent management, and what they feel their organisations are providing, is concerning. Why? Because if areas like learning and progression aren’t prioritised, the workforce will vote with their feet. There is an inherent link between organisational success and growth, as well as developing workforce

skillsets. As such, companies must invest in resources and provide assistance to help employees close skills gaps, improve their performance, and navigate their respective career paths. However, currently, less than half of businesses in the UK, France, and Germany view performance management as a collaborative process – which risks upholding the skills confidence gap. Skills development and performance management should not be a oneway-street. Businesses must prioritise 1-1 communication, frequent check-ins, investment into modern skills and career development tools, and an open discourse about skills development – including in areas

Technology is personalising and revolutionising talent management, and this will only continue as we move further into the age of artificial intelligence (AI). HR leaders recognise this, with 76% believing that organisational success will plateau if AI isn’t implemented in the next 12 to 24 months. Yet, in the UK, France, and Germany, less than 35% of organisations are leveraging employee-centric tools and technologies to streamline talent processes. Whilst there are concerns around AI implementation – from ethical concerns around bias, to fears that it will hamper employee productivity – taking a balanced approach can drastically improve talent management and the employee experience. AI’s timesaving benefits allows employees to focus on the parts of their roles they enjoy most, and gives HR practitioners more time to concentrate on the welfare of the wider workforce. AI can also play a key role in skills and careers, matching workers to tailored internal career pathways, and allowing businesses to spot organisational skills gaps and understand where to pull from to fill them. Embracing AI will undoubtedly reshape the future of talent management, and those that get ahead of this trend will be the ones leading the charge. A global effort leads to global success Globally, employee loyalty has slackened – but it’s never too late to turn the tide. Organisations should take a holistic approach to improving talent management and determine tangible ways to enhance the many aspects of the employee experience, one step at a time. Doing so will allow them to reap the rewards of their investment into their workforces. europeanbusinessmagazine.com 65

Is the Global Market Finally Ready for Europe’s Ambitious Circular start-ups?

urope has long been a welcoming home to sustainable minded companies. As one of the early homes of solar energy and wind power, circular economy was also an idea that found early adoption in the continent. In fact, for more than a decade, European start-ups in the circular economy have been vying for corporate and VC support at events like the Green Alley Award, which awards Europe’s most promising circular economy startups with both monetary as well as operational support. As calls for a shift to more sustainable processes grow louder, and Europe finds itself struggling to comply with the Paris climate accord, the inherent value these startups can drive is continually growing. With this in mind, it is crucial that those in the industry take a closer look at how the circular economy is changing as it scales, and takes measures to optimize the way they are building for the future.

The trend is clear – European industry is going in circles Europe has actually been trending towards a more circular economy in general, going back as far as two decades. To be precise, over the past 20 years, the total material use in the EU has decreased by 9.4%, with the share of resources derived from recycled waste material increasing by almost 50%. This shows the natural trend towards more sustainable practices when looking at the decrease in materials used, while also understanding that there was an increase in output, the significance can be clearly understood. These miniscule data points alone point towards massive potential if 66 europeanbusinessmagazine.com

the circular economy is properly supported and scaled up in Europe. The logic behind reducing the unnecessary utilization of materials is quite clear, what is important is identifying the best path forward to properly support start-ups in the space, and to achieve maximum impact. To better understand the state of the circular rollout in Europe, we can examine the types of companies that are currently vying for support from circular minded organizations. When looking at companies competing for last year’s Green Alley Award, there were three distinct types of solutions on display – 40% of start-ups focused on waste production, 33% of companies on Digital Circular Economy Solutions, and 27% on recycling. Understanding the business models of current start-ups in the space is also important – 50% of these companies offer a product, 28% a service and 22% are technology providers. It will be interesting to watch how these numbers look as they scale and the markets mature.

The workforce is already ahead of the trend While it is valuable to know the types of companies active in the space, it is also crucial that there will be a workforce in place for this emerging sector. Thankfully, in recent years we have seen a distinct increase in interest in the transition to a more sustainable economic system, in particular a circular economy, among scientists, politicians, and industry practitioners across Europe. This gives considerable weight to increasingly present calls to put even more of a regulatory focus and industry push to circular

companies. If the technical workforce in Europe has shown an interest in the sector, we can expect that innovation in the field should continue to increase in the years ahead. The idea of upskilling has been a major issue in Europe’s energy transition. Ensuring workers can seamlessly transition from industries such as coal and oil and has, to wind and solar has been no small task, and stands to remain a topic for decades ahead. Thankfully, many of the main topics in the circular economy are far less technical comparted to the highly specific specialized jobs in the wind and solar sectors. As noted above, these

companies focus on waste production, Digital Circular Economy Solutions, and recycling, meaning many of the specific tasks can be adapted from existing industries such as waste management and digital solutions.

The opportunity ahead cannot be ignored One thing that is impossible to ignore when looking at the circular rollout, is the economic potential that is possible if Europe were to make a more concerted push towards circularity. A McKinsey report which was released to coincide with the first EU Circular

Economy Action Plan outlined the potential net economic benefit of adopting circular strategies at a staggering €1.8 Trillion by 2030. This is without taking into account environmental and social benefits that could drive even more value as the broader transition is better understood. This massive potential points to considerable value that can be derived from start-ups in the circular economy, and a future where these emerging companies can play a pivotal role in re-orienting established companies in a more circular economy. As Europe’s start-up scene has developed over the past decade, it has

become increasingly clear that circularity will be a crucial part of their business models, no matter what they may be. Not only will circular-economy focused companies play a more central role in responsibly scaling up key industries in Europe, but companies in many industries will need to embed their own circular practices into their businesses. It is amazing to see the idea of Circular Economy continue to grow in importance in Europe – not only will this position Europe well for the decades ahead, but it will once again allow the continent to accelerate the sustainability movement on a global scale.

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GROWING ROLE OF CLIMATE CONSIDERATIONS IN SUPPLY CHAIN MANAGEMENT

s part of support to its over 300 member organizations (https://chwmeg.org/member-list.asp), non-profit association CHWMEG, Inc. (https://chwmeg.org) canvasses waste management and recycling vendors about their existing programs for managing greenhouse gasses as relates to their climate change efforts. CHWMEG reviews are conducted in support of member environmental/waste stewardship programs that now are emerging as required under supply chain due diligence requirements.

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CHWMEG’s pursuit of the details at these valuable suppliers focus on the vendor’s (and their owning companies) carbon reduction plans. CHWMEG seeks copies of the plans for managing greenhouse gasses, and has done so while conducting more than 4,700 facility reviews since these important factors were included in CHWMEG’s protocol in 2008. The level of detail incorporated in CHWMEG’s facility reviews will likely grow significantly with the final enactment of the Corporate Sustainability & (Supply Chain) Due

Diligence Directive in the EU in the coming months. Amendments added by the European Parliament in June 2023 go well beyond simply reporting climate impacts. They require action plans. This will ostensibly extend to activities in the supply chain outside countries that have any applicable national climate rules. Recital (50) In order to ensure that this Directive effectively contributes to combating climate change, companies should in consultation

European Scientific Advisory Board on Climate Change. See Article 15(f). This can require full carbon emissions analysis of multiple vendors, including those not in direct contractual relationships with the covered company. Since supply chains also include the company’s own production facilities, the Directive will make climate commitments subject to the same legal penalties and requirements as other obligations under the Directive (conducting due diligence, taking preventative measures, remediation of adverse impacts, etc.). This can include very large financial penalties up to 5% of a company’s global turnover. The size of financial penalties is also subject to the pending triad negotiations and may be reduced, but the Directive represents a major increase in the sanctions and enforcement policies applied in this area. Randy Mott - CHWMEG

with stakeholders adopt and implement a transition plan in line with the reporting requirements in Article 19a of Directive (EU) 2022/2464 (CSRD) to ensure that the business model and strategy of the company are aligned with the objectives of the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement, as well as the objective of achieving climate neutrality by 2050 as established in Regulation (EU) 2021/1119 (European

Climate Law), and the 2030 climate target. The Directive, unless amended in the triad negotiations now underway, will require scope 3 emissions targets “where appropriate”: The plan should take into account the value chain and include timebound targets related to their climate objectives for scope 1, 2 and, where relevant, 3 emissions, including, where appropriate, absolute emission reduction targets for greenhouse gas including, where relevant, methane emissions, for 2030 and in five-year steps up to 2050 based on conclusive scientific evidence, except where a company can demonstrate that its operations and value chain do not cause greenhouse gas emissions and that such emission reduction targets would therefore not be appropriate. The plans should develop implementing actions to achieve the company’s climate targets and be based on conclusive scientific evidence, meaning evidence with independent scientific validation that is consistent with the limiting of global warming to 1.5°C as defined by the Intergovernmental Panel on Climate Change (IPCC) and taking into account the recommendations of the

The Directive will also expand the reach of EU Climate policy by extending to supply chains outside of EU territory. The key factor here will be the interpretation of “where appropriate” in Article 125(f). Indeed, recital 8 of the Directive makes it clear: This Directive is therefore an important legislative tool to avoid any misleading climate neutrality claims and to stop greenwashing and fossil fuels expansion worldwide in order to achieve international and European climate objectives, also recommended by the latest scientific reports. The adverse impacts that the Directive seeks to address also include climate change: The obligation to identify and prevent, mitigate or bring to an end an adverse impact on one of the following environmental categories [including] climate change…. Annex 1, Part 2, section (-1). CHWMEG anticipates that climate and carbon reduction issues will play an increasing role in supply chain due diligence. The ambiguities of the Directive’s language for facilities outside the EU will obviously create some confusion and implementation issues, especially to the extent that the EU policy conflicts with local national law. europeanbusinessmagazine.com 69

The Transformative Impact of AI in Financial Services: Navigating the Landscape of Job Disruption

n the ever-evolving landscape of technology, artificial intelligence (AI) has emerged as a transformative force across various industries. The financial services sector, long considered a bastion of stability and tradition, is not immune to the profound effects of AI. A recent survey has sent shockwaves through the industry, revealing that a staggering 73% of financial services executives expect AI to take their jobs. This revelation not only underscores the seismic shift underway but also prompts a critical examination of the challenges and opportunities that lie ahead.

The Current State of AI in Financial Services: AI, encompassing machine learning, natural language processing, and other advanced technologies, has found fertile ground in the financial services sector. From algorithmic trading and fraud detection to customer service automation, AI has demonstrated its ability to streamline processes, enhance efficiency, and deliver data-driven insights. However, the widespread adoption of AI comes with a double-edged sword, as it introduces the potential for job displacement, causing a ripple of uncertainty among industry professionals.

The Survey Insights: The survey revealing that 73% of financial services executives anticipate AI taking their jobs provides a glimpse into the prevailing sentiments within the industry. The unexpected acceleration of AI integration has left many executives grappling with the implications for their roles and the broader workforce. This sentiment 70 europeanbusinessmagazine.com

reflects not only concerns about job displacement but also the need for a strategic approach to AI implementation that aligns with organizational goals and employee well-being.

The Fear of Job Displacement: The fear of job displacement due to AI is not unique to the financial services sector. Across industries, professionals are navigating the delicate balance between the benefits of AI-driven automation and the potential erosion of job security. In the financial services realm, where roles often involve complex decision-making and data analysis, the prospect of AI assuming these functions raises valid concerns among executives about the future of their careers.

The Evolution of Roles in Financial Services: While the survey highlights apprehension among financial services executives, it is essential to recognize that the integration of AI does not necessarily equate to wholesale job loss. Instead, it signals a shift in the nature of roles within the industry. Routine, repetitive tasks are more susceptible

to automation, freeing up professionals to focus on higher-order responsibilities that demand creativity, critical thinking, and emotional intelligence— qualities inherently human and challenging for AI to replicate.

Upskilling and Reskilling Initiatives: To navigate the impending changes, financial services organizations are increasingly investing in upskilling and reskilling initiatives. These programs aim to equip existing employees with the skills necessary to complement AI technologies, fostering a collaborative relationship between humans and machines. By embracing continuous learning and adapting to the evolving technological landscape, professionals can position themselves as valuable contributors to the industry's AI-driven future.

The Role of Leadership in Managing Change: Effective leadership plays a pivotal role in managing the transition brought about by AI adoption. Clear communication, transparent

discussions about the impact of AI on job roles, and a commitment to employee development are crucial components of leadership in this era of change. Leaders must foster a culture that embraces innovation while prioritizing the well-being and professional growth of their teams. While the fear of job displacement looms large, it is crucial to view AI as a catalyst for innovation within the financial services sector. The capabilities of AI extend beyond automation to include predictive analytics, personalized customer experiences, and enhanced risk management. Organizations that leverage AI strategically can unlock new opportunities, gain a competitive edge, and contribute to the advancement of the industry.

Ethical Considerations in AI Implementation: As AI continues to reshape the financial services landscape, ethical considerations come to the forefront. Transparency, fairness, and accountability must be integral to AI systems to ensure responsible and ethical use. Addressing biases in algorithms, safeguarding customer data, and establishing clear guidelines for AI deployment are essential steps in

building a trustworthy and sustainable AI-driven financial ecosystem.

Collaboration Between Humans and AI: The future of financial services lies in the collaboration between humans and AI. Rather than viewing AI as a threat, professionals can harness its capabilities to augment their decision-making processes. Human oversight remains crucial in interpreting complex data, understanding nuanced contexts, and making ethical judgments. The synergy between human intuition and AI-driven insights can lead to more informed, ethical, and innovative financial practices.

Global Perspectives on AI Adoption: The impact of AI on jobs is a global concern, with financial services professionals worldwide grappling with the implications of automation. The pace of AI adoption varies across regions, influenced by factors such as regulatory frameworks, technological infrastructure, and cultural attitudes toward innovation. While some regions may experience

more immediate changes, the global financial community is interconnected, necessitating a collaborative approach to address the challenges and opportunities presented by AI. In an era where technological advancements are rapid and constant, the imperative for continuous learning cannot be overstated. Professionals in the financial services sector must embrace a mindset of adaptability and be proactive in acquiring new skills. This commitment to lifelong learning not only enhances individual career prospects but also contributes to the resilience and dynamism of the industry as a whole. The revelation that 73% of financial services executives expect AI to take their jobs is a stark reminder of the transformative power and potential disruptions associated with AI adoption. However, it is essential to approach this paradigm shift with a nuanced perspective that recognizes the coexistence of human expertise and artificial intelligence. By embracing a collaborative approach, investing in skills development, and prioritizing ethical considerations, the financial services sector can harness the full potential of AI to drive innovation and shape a more resilient, sustainable, and inclusive future.

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Klarna's Remarkable Comeback: A Journey from Valuation Collapse to Potential 2024 IPO

n the fast-paced realm of financial technology (FinTech), success stories often come hand in hand with resilience, innovation, and strategic adaptability. Klarna, a Swedish FinTech giant, has emerged as a prime example of such resilience, having navigated through a valuation collapse to position itself on the brink of a potential initial public offering (IPO) in 2024. This tale of resurgence is a testament to Klarna's ability to learn from setbacks, iterate on its business model, and leverage market dynamics to not only recover but to thrive. Klarna was founded in 2005 by Sebastian Siemiatkowski, Victor Jacobsson, and Niklas Adalberth with a vision to simplify online transactions and revolutionize the way consumers shop. The company introduced a "buy now, pay later" model, allowing users to make online purchases without immediate payment and offering them the flexibility to pay within a specified period. This innovative approach quickly gained traction, establishing Klarna as a pioneer in the FinTech space. In its early years, Klarna experienced rapid success, resonating with both consumers and merchants. The simplicity of its payment solutions and the seamless user experience contributed to its widespread adoption. As a result, the company's valuation soared, and by 2015, Klarna had achieved unicorn status with a valuation exceeding $1 billion. The FinTech darling seemed unstoppable, attracting attention and investment from major players in the financial industry. However, the road to success in FinTech is rarely without obstacles. Klarna faced its fair share of challenges, particularly as the landscape of online payments evolved.

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As competition heightened and regulatory scrutiny increased, the company found itself grappling with issues related to risk management and regulatory compliance. Additionally, changes in consumer behavior and market dynamics posed new challenges for Klarna's business model. The tipping point came in 2017 when the company faced a significant valuation collapse. The FinTech bubble that had propelled Klarna's valuation to astronomical heights burst, leading to a reevaluation of the company's worth. Investors and industry observers began to question Klarna's long-term viability, and the once-celebrated unicorn faced a period of introspection and recalibration.

Learning from Setbacks: Rather than succumbing to the challenges and setbacks, Klarna embraced them as opportunities for growth and transformation. The leadership team, led by CEO Sebastian Siemiatkowski, initiated a comprehensive review of the company's operations, strategies, and market positioning. This period of introspection was characterized by a commitment to learning from mistakes, addressing shortcomings, and charting a course for a revamped Klarna that could withstand the evolving dynamics of the FinTech landscape.

Strategic Adaptability and Innovation: Klarna's journey from valuation collapse to potential IPO in 2024 is marked by its strategic adaptability and relentless focus on innovation. Recognizing the need to diversify its offerings and fortify its risk

management practices, Klarna expanded beyond its core "buy now, pay later" model. The company introduced a range of new services, including direct payments, installment plans, and partnerships with merchants to enhance the overall shopping experience. One of the key factors in Klarna's resurgence was its ability to leverage technological advancements. The company invested heavily in data analytics, artificial intelligence, and machine learning to enhance its fraud detection capabilities and optimize its risk assessment processes. This not only bolstered Klarna's security measures but also contributed to a more efficient and reliable payment ecosystem. Moreover, Klarna's commitment to user-centric design and innovation played a pivotal role in its revival. The company continually refined its user interface, making it more intuitive and user-friendly. By staying attuned to the evolving expectations of consumers, Klarna ensured that its platform remained a preferred choice for online shoppers, contributing to customer loyalty and trust.

collaborations amplified Klarna's market influence and solidified its role as a transformative force in the FinTech sector.

The Evolution of Klarna's Business Model:

In the aftermath of the valuation collapse, Klarna faced increased scrutiny from regulators who sought to address concerns related to consumer protection and financial stability. The company responded by actively engaging with regulatory bodies, advocating for industry best practices, and implementing robust compliance measures. Klarna's proactive approach to regulatory challenges not only demonstrated its commitment to operating within the bounds of the law but also positioned the company as a responsible and trustworthy player in the FinTech sector. The lessons learned from regulatory hurdles further fueled Klarna's commitment to transparency, ethical practices, and collaboration with relevant authorities.

The Global Expansion Strategy: As part of its revitalization efforts, Klarna adopted a bold global expansion strategy. The company recognized that diversifying its geographical footprint was essential for sustained growth and resilience against regional economic fluctuations. Klarna strategically

entered new markets, forming partnerships with international retailers and establishing a presence in key regions, including the United States, the United Kingdom, and various European countries. The global expansion not only broadened Klarna's customer base but also diversified its revenue streams. The company's agility in tailoring its services to meet the specific needs and preferences of diverse markets showcased its ability to adapt to varying regulatory landscapes and cultural nuances. Klarna's journey back to prominence was marked by strategic partnerships that served as catalysts for its growth trajectory. The company forged alliances with major retailers, e-commerce platforms, and financial institutions. These partnerships not only expanded Klarna's reach but also allowed the FinTech giant to integrate its services seamlessly into the existing ecosystems of established players. By aligning with key industry stakeholders, Klarna positioned itself as an indispensable component of the broader financial and retail landscape. The synergies created through these

In response to the challenges posed by its valuation collapse, Klarna underwent a significant evolution of its business model. While retaining its core "buy now, pay later" offering, the company diversified its suite of services to encompass a broader spectrum of financial solutions. This evolution reflected Klarna's commitment to remaining agile in a rapidly changing industry and addressing the diverse needs of both consumers and merchants. Klarna's expanded portfolio included options such as "Pay Now," allowing users to make immediate payments, and "Financing," offering longer-term installment plans. This diversified approach not only mitigated risk by reducing reliance on a single revenue stream but also positioned Klarna as a comprehensive financial services provider capable of meeting the varied preferences of its user base.

The Potential 2024 IPO: The culmination of Klarna's resurgence appears to be marked by the anticipation of a potential initial public offering (IPO) in 2024. An IPO would not only be a significant milestone for Klarna but also a testament to the company's ability to rebound from adversity and position itself as a formidable player in the FinTech market. The decision to go public reflects confidence in Klarna's financial stability, growth prospects, and market positioning. It also provides an opportunity for the company to raise additional capital for further expansion, innovation, and strategic initiatives. However, the path to an IPO involves meticulous preparation, regulatory compliance, and a transparent communication strategy, all of which Klarna is likely to approach with the same level of diligence that has characterized its resurgence.

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REVOLUT’S GLOBAL ASCENT:

Navigating Challenges and Charting a New Financial Horizon

n the dynamic realm of financial technology, few companies have captured the zeitgeist as boldly as Revolut. From its humble beginnings as a disruptor in the European financial landscape to its meteoric rise as a global FinTech giant, Revolut's journey has been nothing short of remarkable. However, as the company sets its sights on broader horizons, a challenging road lies ahead—one fraught with complexities that mirror the evolving nature of the FinTech industry. In this in-depth analysis, we unravel the narrative of Revolut's global ambitions, exploring the hurdles, strategies, and transformative potential that characterize this pivotal juncture in its trajectory. Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, Revolut emerged with a mission to redefine traditional banking norms. The company's inception was marked by a revolutionary proposition: a mobile app that transcended borders, offering users seamless access to a suite of financial services with minimal fees.

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Its 'no-nonsense' approach to currency exchange, budgeting tools, and international money transfers quickly struck a chord with users, propelling Revolut into the spotlight. From Unicorn to Global Ambitions: The Revolut Acceleration Within a remarkably short span, Revolut transitioned from a startup disruptor to a unicorn, achieving a valuation exceeding $1 billion by 2018. The company's success was underpinned by its agility in responding to user needs, a commitment to challenging conventional banking norms, and a relentless pursuit of innovation. As Revolut became synonymous with financial flexibility, it set its sights on a grander stage—the world. Revolut's aspirations for global dominance are not without challenges, and the nuances of navigating diverse markets have become increasingly apparent. The company's ambitious expansion strategy necessitates a delicate dance between adhering to regulatory landscapes, understanding local consumer behaviors, and

staying ahead in an ever-evolving FinTech arena.

Regulatory Labyrinth: Balancing Compliance and Innovation Regulatory scrutiny looms large as Revolut extends its reach across borders. Operating in multiple jurisdictions means contending with a myriad of regulatory frameworks, each with its own set of challenges. Revolut's global ambitions demand not only compliance with an array of regulations but also a proactive engagement with regulatory bodies to shape industry best practices. Expanding globally isn't just about crossing geographical boundaries; it's about resonating with diverse cultures. Revolut's challenge lies in striking the right balance between maintaining a cohesive global brand identity and adapting its services to cater to local preferences. Cultural sensitivity becomes a linchpin in fostering trust and acceptance in each new market.

Competitive Dynamics: Navigating a Crowded FinTech Landscape Entering new territories means navigating through a crowded landscape where local FinTech players and traditional financial institutions already hold sway. Revolut must continuously innovate to stand out amidst the competition, differentiating itself through unique offerings, staying attuned to emerging trends, and maintaining a nimble approach in the face of evolving competitive dynamics. Trust, the bedrock of any financial services platform, is an intricate challenge for Revolut in a global context. The company must address concerns related to security, data privacy, and the reliability of its services to maintain a positive brand perception globally. Transparent communication, robust security measures, and proactive customer support are paramount in building and sustaining user trust across diverse markets.

Operational Scalability: Meeting Global Demand Head-On Revolut's rapid user acquisition demands a scalable infrastructure that can handle increased transaction volumes, diverse user data, and the complexities of simultaneous operations in multiple markets. Operational scalability encompasses not only technological robustness but also human resources, customer support, and partnerships—all critical components for a seamless global expansion. Operating in multiple currencies exposes Revolut to the inherent risks of currency volatility and economic uncertainties. Fluctuations in exchange rates, geopolitical events, or economic downturns in specific regions can have cascading effects. Revolut's ability to implement sophisticated risk management strategies becomes crucial, involving real-time market analysis, dynamic currency hedging, and scenario planning to navigate through unpredictable economic landscapes. As Revolut embarks on its global odyssey, a strategic playbook becomes

essential to navigate the road ahead. Here are key strategies that could define Revolut's success in the face of challenges: Investing in market research and localization strategies to tailor services according to specific cultural, regulatory, and consumer nuances in each market.Proactively engaging with regulatory bodies, staying ahead of compliance requirements, and advocating for industry best practices to build a regulatory environment conducive to innovation. Continuous innovation to stay ahead of the curve, introducing new features, enhancing user experiences, and remaining agile in response to emerging trends. Building and maintaining user trust through transparent communication about security measures, data privacy practices, and a commitment to addressing user concerns promptly. Collaborating with local players, financial institutions, and merchants to facilitate smoother market entry, gain insights into local market dynamics, and enhance the platform's offerings.Investing in a robust and flexible infrastructure that can seamlessly

scale with user growth, ensuring technological resilience and operational efficiency. Implementing sophisticated risk management strategies, including dynamic currency hedging, real-time market analysis, and scenario planning to navigate through currency volatility and economic uncertainties. Revolut's journey from a European disruptor to a global financial titan is a saga of ambition, resilience, and adaptability. As the company encounters the bumps and turns on its global road, it is poised at a critical juncture where strategic decisions will shape its future narrative. The FinTech industry, known for its rapid evolution, demands not just innovation but also a keen understanding of the intricate balance between global ambitions and local intricacies. Revolut's ability to thread this needle will determine whether it emerges as a transformative force not just in the FinTech landscape but in the broader global financial narrative. The journey is intricate, the challenges are formidable, but for Revolut, the roadmap to global success is rife with transformative potential. europeanbusinessmagazine.com 75

Google's Alphabet Eyes Monzo: A Strategic Move in the FinTech Chess Game

n a move that could reshape the FinTech landscape, Google's parent company, Alphabet, is reportedly in advanced discussions to acquire a stake in the British digital bank Monzo. The negotiations, facilitated through Alphabet's investment arm, Capital G, have ignited speculation about the potential impact on both companies and the broader financial technology sector. If successful, the deal could catapult Monzo's valuation to over £4 billion, marking a significant milestone in the evolution of this digital banking disruptor. Google's entry into the realm of financial technology is not a novelty, but the potential investment in Monzo underscores the tech giant's strategic focus on diversifying its portfolio. Alphabet, known for its ventures into various industries, views the FinTech sector as a lucrative arena for growth and innovation. The move aligns with Google's broader strategy of expanding its influence across diverse domains, from search and advertising to cloud computing and now, finance. The vehicle for this potential investment is Capital G, Alphabet's independent growth fund that focuses on strategic investments in technology-driven companies. With a track record of backing successful ventures, Capital G is no stranger to identifying opportunities for disruptive growth. The reported talks with Monzo signal Alphabet's interest in leveraging its financial prowess to tap into the rapidly evolving landscape of digital banking.

Monzo's Rise: Disrupting Traditional Banking Monzo, founded in 2015, emerged as a trailblazer in the FinTech space, challenging the conventions of traditional banking with its user-centric 76 europeanbusinessmagazine.com

approach and innovative features. Positioned as a digital-only bank, Monzo quickly gained a devoted user base, drawn to its transparent fee structures, intuitive app interface, and real-time financial insights. The vibrant coral-colored debit cards became synonymous with a new era of banking that prioritized simplicity, accessibility, and customer empowerment. The potential partnership with Alphabet marks a remarkable chapter in Monzo's journey. From its inception as a startup challenging the status quo, the digital bank could now find itself in the embrace of one of the world's tech behemoths. The infusion of funds from Alphabet could provide Monzo with the financial muscle to accelerate its growth, invest in technological enhancements, and solidify its position in the highly competitive FinTech landscape.

The Nuts and Bolts of the Deal: Valuation and Funding Round At the heart of these discussions lies the question of valuation. Reports suggest that the deal could value Monzo at over £4 billion, a testament to the confidence Alphabet places in the digital bank's potential. This valuation would not only reflect Monzo's current standing but also project its future trajectory in an industry undergoing rapid transformation. The funding round associated with the potential deal is estimated to fall within the range of £300-500 million. Such a significant injection of capital could fuel Monzo's ambitious plans for expansion, innovation, and market penetration. It would provide the digital bank with the financial runway to explore new products, enhance existing features, and potentially explore entry into international markets.

For Alphabet, an investment in Monzo could yield strategic advantages on multiple fronts. Firstly, it positions Google's parent company at the forefront of the digital banking revolution, allowing Alphabet to diversify its revenue streams beyond its core businesses. The move aligns with a broader trend among tech giants, including Apple and Amazon, that are exploring opportunities within the financial services sector to deepen user engagement and loyalty. Secondly, Monzo's data-driven approach to banking aligns with Google's expertise in leveraging data for personalized services. The integration of Monzo's user data with Google's analytics capabilities could open avenues for enhanced customer experiences, targeted financial products, and the development of innovative solutions. Thirdly, the potential partnership could provide Google with a foothold in the rapidly growing FinTech market, positioning Alphabet to compete more directly with other tech-driven

The move also raises questions about potential ripple effects on other FinTech startups. Will this set a precedent for other digital banks seeking partnerships with tech giants? Will we witness a wave of collaborations between established technology companies and agile FinTech disruptors?

The Future of FinTech: A Convergence of Tech and Finance

financial services. This move comes at a time when traditional banks are grappling with digital disruption, and tech companies are increasingly encroaching on financial territory. For Monzo, the benefits of an alliance with Alphabet extend beyond the financial injection. The association could provide Monzo with access to Alphabet's technological expertise, data analytics capabilities, and global network. Alphabet's influence could catalyze Monzo's evolution from a digital bank to a comprehensive financial services platform, offering a wide array of products beyond the realm of traditional banking.

closely examine the implications of such a partnership on competition, consumer protection, and data privacy. Integration dynamics also pose challenges. Merging the operations, technologies, and cultures of a tech giant like Alphabet with a nimble FinTech player like Monzo requires meticulous planning. Ensuring a seamless integration that preserves the aspects that made Monzo a beloved digital bank while capitalizing on Alphabet's resources will be a delicate balancing act.

Challenges on the Horizon: Regulatory Scrutiny and Integration Dynamics

The potential Alphabet-Monzo deal sends ripples across the broader FinTech landscape, influencing investor sentiment, competition dynamics, and the strategic decisions of other players in the industry. As established tech giants increasingly delve into financial services, the line between traditional banking and technology-driven finance continues to blur.

However, the road ahead is not without challenges. Any significant investment or acquisition in the financial sector draws regulatory scrutiny, and the potential Alphabet-Monzo deal is no exception. Regulatory bodies will

The Broader FinTech Landscape: Ripple Effects and Industry Dynamics

In many ways, the potential Alphabet-Monzo deal epitomizes the ongoing convergence of technology and finance. As digital natives demand more seamless, intuitive, and personalized financial experiences, traditional financial institutions are compelled to adapt or risk obsolescence. Technology companies, with their deep pockets and innovative prowess, are well-positioned to play a transformative role in shaping the future of finance. The FinTech arena, once characterized by scrappy startups challenging the establishment, is now witnessing a paradigm shift. Established tech giants are increasingly becoming active players, seeking to redefine financial services through a lens of technological innovation. The Alphabet-Monzo saga represents a chapter in this broader narrative—a story of how two seemingly disparate worlds, technology and finance, are converging to create a new frontier in the financial landscape. As Alphabet engages in advanced talks to acquire a stake in Monzo, the FinTech world watches with bated breath. The potential partnership signifies more than a financial transaction; it represents a nexus of possibilities, where a digital banking disruptor and a tech behemoth join forces to shape the future of finance. The outcome of these negotiations will not only influence the trajectories of Alphabet and Monzo but may well set the tone for the evolving relationship between technology and finance in the years to come. In this juncture of uncertainty and anticipation, the Alphabet-Monzo deal stands as a testament to the ever-evolving chess game of FinTech, where each move carries the potential to reshape the industry's landscape. europeanbusinessmagazine.com 77

BLACKROCK'S ETHEREUM SPOT ETF FILING:

Paving the Way for Crypto's Next Evolution

In a significant move that could reshape the landscape of cryptocurrency investments, BlackRock, the world's largest asset manager, has filed for an Ethereum Spot ETF. This filing marks a potential game-changer for the crypto market, signaling a shift in institutional interest beyond Bitcoin and into the broader realm of decentralized finance. As the crypto community and financial markets eagerly await regulatory approval and the subsequent implications, it's essential to delve into the details of BlackRock's Ethereum Spot ETF filing and explore the broader implications for both the crypto industry and traditional finance. Exchange-Traded Funds (ETFs) have long been recognized as a bridge between traditional financial markets and the rapidly evolving world of cryptocurrencies. These investment vehicles offer a way for investors to gain exposure to digital assets without directly owning them. While Bitcoin ETFs have been in the regulatory pipeline for some time, the filing by BlackRock for an Ethereum Spot ETF introduces a new dimension to the growing intersection between traditional finance and the crypto space. BlackRock's entry into the crypto ETF arena is particularly noteworthy 78 europeanbusinessmagazine.com

given its status as the world's largest asset manager, overseeing trillions of dollars in assets. The company's influence extends across a wide spectrum of traditional investment products, including mutual funds, iShares ETFs, and actively managed portfolios. As BlackRock sets its sights on the cryptocurrency market, it underscores the industry's maturation and the growing recognition of digital assets as a legitimate asset class.

(DApps) and smart contracts. Its blockchain's versatility has positioned it as a fundamental player in the burgeoning decentralized finance (DeFi) space, making an Ethereum-focused ETF a gateway to a broader spectrum of blockchain-based assets and financial instruments. If approved, BlackRock's Ethereum Spot ETF could be a catalyst for mainstream adoption of Ethereum and other altcoins. While Bitcoin has dominated the narrative as a digital store of value, Ethereum's utility in powering smart contracts and decentralized applications adds a layer of complexity and functionality that extends beyond the scope of a mere digital currency. The approval of an Ethereum Spot ETF would likely result in increased demand for Ethereum tokens, potentially driving up prices and solidifying its position as a pivotal player in the crypto market. Furthermore, the ETF structure facilitates accessibility for a broader range of investors, including institutional players and retail participants who may find navigating crypto exchanges and wallets daunting.

Decoding the Ethereum Spot ETF Filing

The Regulatory Hurdle: A Key Determinant

The filing for an Ethereum Spot ETF, as opposed to a futures-based ETF, is a strategic choice by BlackRock. While Bitcoin futures-based ETFs have faced delays and regulatory hurdles, the move to file for an ETF tied directly to Ethereum's spot price signals a different approach. The ETF would purportedly hold physical Ethereum tokens, offering investors a more direct exposure to the second-largest cryptocurrency by market capitalization. The choice of Ethereum is strategic on multiple fronts. Ethereum, beyond being a decentralized digital currency, serves as the foundation for a multitude of decentralized applications

The crypto industry has been eagerly awaiting regulatory approval for Bitcoin ETFs for years, with multiple proposals facing rejection or delays from regulatory bodies. The Securities and Exchange Commission (SEC) in the United States, in particular, has been cautious in approving such financial instruments, citing concerns about market manipulation, investor protection, and the nascent nature of the crypto markets. The approval process for BlackRock's Ethereum Spot ETF is likely to face similar scrutiny. However, the unique characteristics of Ethereum, coupled with the growing acceptance of digital

assets, may present a compelling case for regulators to greenlight this ETF. If successful, it could set a precedent for a broader range of crypto-based ETFs, opening the door for more institutional and retail investors to participate in the crypto market. Beyond the potential implications for the broader crypto market, an Ethereum Spot ETF underscores the increasing importance of Ethereum in the decentralized finance space. DeFi has emerged as a revolutionary force, reimagining traditional financial services on blockchain networks. Ethereum's smart contract capabilities form the backbone of numerous DeFi applications, including decentralized exchanges (DEXs), lending protocols, and yield farming platforms. As institutional investors seek exposure to the transformative potential of blockchain technology and decentralized finance, Ethereum stands out as a primary beneficiary. An ETF tied to Ethereum's spot price amplifies its significance, as investors gain indirect exposure not only to the cryptocurrency itself but also to the entire ecosystem of decentralized applications and financial instruments built on the Ethereum blockchain. BlackRock's foray into Ethereum ETFs is not just a testament to the maturation of the crypto market but also a signal of the evolving dynamics within traditional finance. As institutional giants like BlackRock pivot towards digital assets, it reflects a broader recognition of the transformative potential of blockchain technology. Traditional financial institutions are grappling with the inevitability of digital currencies and the demand from their clients for exposure to this emerging asset class. The move by BlackRock could prompt other asset managers and institutional players to explore similar offerings, accelerating the integration of crypto assets into traditional investment portfolios. While the potential benefits of an Ethereum Spot ETF are evident, challenges and risks loom on the horizon. Cryptocurrency markets are notorious for their volatility, and an ETF tied to Ethereum's spot price would be susceptible to market fluctuations.

The SEC and other regulatory bodies will likely scrutinize the risk management mechanisms in place to protect investors from the inherent volatility of digital assets. Moreover, regulatory uncertainty persists, and the approval of an Ethereum Spot ETF does not guarantee a smooth ride for other crypto-based financial products. The evolving nature of the crypto market and its intersection with traditional finance necessitate a delicate balance between innovation and investor protection—a balance that regulators worldwide are actively seeking.

The Future of Crypto Investments: An Evolving Landscape As the crypto community awaits developments on BlackRock's Ethereum Spot ETF filing, the broader narrative of crypto investments is undergoing a transformative shift. The lines between traditional finance and the crypto space are blurring, with institutional giants recognizing the potential of digital assets beyond Bitcoin. The potential approval of an Ethereum Spot ETF could be a landmark moment, not just for Ethereum

but for the entire crypto market. It signals a departure from the dominance of Bitcoin in the ETF space and opens doors for a more diverse range of crypto-based financial products. BlackRock's filing for an Ethereum Spot ETF represents a watershed moment in the evolution of crypto investments. If approved, the ETF could serve as a gateway for a new wave of institutional and retail investors to participate in the crypto market. Ethereum's unique capabilities in powering decentralized applications and smart contracts position it as a strategic choice for an ETF, reflecting the broader shift towards recognizing the multifaceted nature of digital assets. While challenges and regulatory scrutiny persist, the filing underscores the increasing acceptance of cryptocurrencies in mainstream finance. The outcome of this regulatory journey will not only impact BlackRock and Ethereum but will set the tone for the next chapter in the convergence of traditional finance and the crypto revolution. As the regulatory landscape evolves, the potential approval of an Ethereum Spot ETF could be remembered as a pivotal moment that paved the way for a more inclusive and diversified era of crypto investments.

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JPMORGAN’S PROGRAMMABLE PAYMENTS:

A Paradigm Shift in Finance

PMorgan, a financial behemoth with a legacy spanning two centuries, has propelled itself into the future with the launch of Programmable Payments. This bold initiative signifies more than a mere technological advancement; it is emblematic of a profound paradigm shift in the financial sector. In this exploration, we delve into the intricacies of JPMorgan's Programmable Payments, deciphering its potential impact on the financial landscape and contemplating the broader implications for the future of finance. Programmable Payments, at its core, represents a departure from traditional banking structures. It is a platform that harnesses the power of blockchain and smart contract technology to facilitate programmable, instantaneous, and secure payments. By integrating distributed ledger technology, JPMorgan aims to streamline the entire payment process, offering a level of efficiency, transparency, and flexibility that transcends the capabilities of conventional banking systems. The genesis of this paradigm shift lies in JPMorgan's recognition of the transformative potential of blockchain technology. Blockchain, the decentralized ledger system underpinning cryptocurrencies like Bitcoin and Ethereum, becomes the cornerstone of Programmable Payments. It provides a secure and transparent way to record and verify transactions, introducing a new era of programmability and automation in financial transactions. To comprehend the magnitude of this shift, it's imperative to dissect the key components that constitute JPMorgan's Programmable Payments. Smart contracts, the building blocks of automation, play a pivotal role. These self-executing contracts, with terms written directly into code, automate the execution of predefined actions when specific conditions are met.

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They eliminate the need for intermediaries, streamlining processes and reducing the potential for errors. Instantaneous settlements represent another critical component, redefining the speed at which transactions occur. Traditional cross-border transactions often involve numerous intermediaries and can take days to settle. Programmable Payments, by minimizing the need for intermediaries, enables real-time transactions. This speed is particularly transformative in a globalized economy where businesses and individuals demand faster, more efficient financial transactions. Enhanced security is inherent in blockchain's immutable ledger. Transactions recorded on the blockchain are tamper-resistant, providing a transparent and auditable trail of financial activities. This heightened security feature reduces the risk of fraud and contributes to a more secure and trustworthy financial ecosystem. Customizable financial workflows, enabled by the programmability aspect, allow users to tailor solutions based on their specific needs. From automating recurring payments to creating complex financial agreements, the flexibility of programmable payments opens the door to a new realm of customization that aligns with the diverse requirements of users. The potential impacts of JPMorgan's Programmable Payments extend beyond the confines of the banking industry. Disintermediation, or the reduction of intermediaries in financial processes, stands out as a significant consequence. The traditional banking model heavily relies on intermediaries to facilitate and verify transactions. Programmable Payments, with its use of smart contracts and decentralized technology, has the potential to disintermediate many of these processes, leading to a more direct, cost-effective, and streamlined financial ecosystem.

Global payments, perennially plagued by delays, high fees, and a lack of transparency, are also poised for transformation. Programmable Payments could revolutionize cross-border transactions by offering instantaneous settlements, reduced costs, and increased visibility into the entire payment process. This transformation holds particular significance for businesses engaged in international trade and individuals sending remittances across borders. The programmability aspect opens avenues for unprecedented innovation in financial products and services. From decentralized lending platforms to automated investment solutions, the ability to customize financial workflows could lead to a wave of transformative

products that cater to the evolving needs of consumers and businesses. The introduction of programmable payments raises questions about the regulatory framework that will govern these innovative financial processes. Regulators will need to adapt to the changing landscape, ensuring that appropriate safeguards are in place while fostering an environment conducive to innovation. While the promise of JPMorgan's Programmable Payments is substantial, it's crucial to acknowledge the challenges and considerations inherent in such a paradigm shift. Regulatory compliance, integration with existing systems, user education, and security considerations loom large on the path to widespread adoption.

Looking ahead, the future of programmable payments holds the potential for increased collaboration within the financial industry. Banks, fintech startups, and other stakeholders may find common ground in developing interoperable solutions that leverage the benefits of blockchain and programmable technologies. The success of programmable payments could serve as a catalyst for broader blockchain adoption within the financial industry. As one of the largest and most influential banks globally, JPMorgan's endorsement of blockchain technology adds significant weight to its credibility and potential widespread acceptance. JPMorgan's launch of Programmable Payments is not just a technological

innovation; it's a declaration of intent to navigate the new frontier of finance. As the financial industry grapples with the implications of blockchain, smart contracts, and programmability, one thing is clear—change is inevitable. Whether it's disintermediation, global payment revolution, or the reimagining of financial products, the paradigm shift initiated by Programmable Payments sets the stage for a financial landscape that is more dynamic, efficient, and aligned with the evolving needs of a digital economy. The journey ahead will require a delicate balance between innovation, regulation, and user acceptance as the financial industry embraces the transformative potential of programmable technologies.

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Wise Quadruples Profits: A Tale of Customer Growth and Financial Resilience

n the ever-evolving landscape of financial technology, Wise, formerly known as TransferWise, has emerged as a beacon of success, quadrupling its profits in a testament to robust customer growth and strategic financial management. The company's stellar performance reflects not only its agility in navigating the complexities of the fintech sector but also its ability to capitalize on higher rates, showcasing a resilience that positions Wise as a significant player in the global financial services arena.

The Evolution of Wise: From Transfers to Comprehensive Financial Solutions Wise, founded in 2011 by Kristo Käärmann and Taavet Hinrikus, began its journey with a mission to simplify international money transfers. Over the years, it has evolved into a comprehensive financial platform, offering a range of services beyond currency exchange, including borderless accounts, debit cards, and business solutions. This strategic expansion has not only diversified Wise's revenue streams but also positioned it as a one-stop-shop for individuals and businesses seeking efficient and transparent financial solutions. The company's growth trajectory has been nothing short of remarkable. With a user-centric approach that prioritizes fairness and transparency, Wise has garnered a loyal customer base that spans the globe. Its commitment to providing a cost-effective alternative to traditional banking has resonated with individuals and businesses alike, contributing significantly to its exponential growth. The recent announcement of Wise quadrupling its profits is a testament 82 europeanbusinessmagazine.com

to the company's financial acumen and adaptability. While the specific financial figures are yet to be disclosed, the quadrupling of profits indicates a substantial leap in Wise's bottom line, signaling a period of financial prosperity amid a dynamic and competitive fintech landscape. One pivotal driver behind Wise's financial success is its impressive customer growth. As individuals and businesses increasingly turn to Wise for their financial needs, the company experiences an expanding user base. The platform's userfriendly interface, coupled with competitive fees and exchange rates, has fueled customer acquisition and retention. Wise's ability to attract a diverse range of users, from individuals sending remittances to businesses engaging in cross-border transactions, highlights its versatility. The company's commitment to transparency in fee structures and real exchange rates has resonated with users disillusioned by hidden fees prevalent in traditional banking. Another critical factor contributing to Wise's profit quadrupling is its adept response to changes in the financial landscape, particularly higher interest rates. The company has demonstrated financial agility by capitalizing on favorable interest rate environments, optimizing its investment strategies, and ensuring a robust revenue model. Higher rates can significantly impact financial institutions, and Wise's ability to navigate this terrain effectively showcases its financial resilience. By aligning its strategies with market dynamics, Wise has positioned itself to not only weather economic fluctuations but also leverage them to enhance its profitability.

Wise in the Context of the Fintech Revolution Wise's success story is emblematic of the broader fintech revolution that has disrupted traditional banking models. As consumers increasingly seek alternatives to traditional financial institutions, fintech companies like Wise have seized the opportunity to offer innovative, user-centric solutions. The success of Wise

underscores the shift in consumer behavior towards digital-first financial platforms that prioritize transparency, accessibility, and cost-effectiveness. Fintech companies have emerged as disruptors, challenging conventional banking norms and reshaping the financial services landscape. With nimble operations, innovative technology, and a customer-centric focus, these companies have carved

out significant market share, particularly among digitally savvy demographics. Wise's success echoes the broader trend of fintech companies gaining prominence as viable alternatives to traditional banks. The agility and responsiveness inherent in the fintech model enable companies like Wise to adapt quickly to market changes, seize opportunities, and deliver a superior user experience.

The global reach of Wise highlights the borderless nature of fintech platforms. As individuals and businesses engage in increasingly cross-border activities, the demand for financial solutions that transcend geographical limitations has surged. Wise's ability to facilitate international money transfers, offer borderless accounts, and provide multi-currency solutions positions it as a global financial partner for a diverse user base. europeanbusinessmagazine.com 83

Operating Effectively when Crisis Hits By James Wood, Regional Security Director at International SOS

n an era marked by global unrest and conflict, businesses face the considerable challenge of maintaining operations amidst uncertainty. It is not always possible to predict when or where the next security issue will come, so thorough planning is vital. Businesses should develop comprehensive risk management planning and evacuation strategies to prepare and react in a timely manner and keep any potentially affected staff safe. If evacuations do become necessary, organisations need reliable intelligence to inform timely decision making. The rapid escalation of crises seen recently in locations like Sudan, Niger, Israel, and Gaza serves as a stark reminder that security threats are deeply complicated and interconnected. Hence, it is paramount businesses are equipped with the knowledge and guidance necessary to navigate these challenges successfully.

Preparedness is the Foundation of Risk Management At the heart of effective risk management lies meticulous preparation. Businesses need to craft robust risk management planning strategies that draw insights from various parts of the organisation. These plans should encompass a thorough analysis of the geopolitical landscape, potential disruptions to business operations and supply chains, and an assessment of local market impacts. It is important that flexible strategies which allow for agile responses to evolving situations can be formulated. Third party security risk management organisations can be an invaluable resource for businesses operating in conflict-prone regions. They 84 europeanbusinessmagazine.com

can provide not only immediate security support but also a broader spectrum of assistance. International SOS actively monitors security incidents, gauging their potential to spread and impact wider regions. For example, there are ongoing concerns about the Israel-Gaza crisis spilling across borders in the region and tensions within European urban centres rising in response. If a business already has planning in place, then these secondary effects of security crises can be better mitigated. Beyond addressing physical safety concerns in Israel and Gaza, International SOS has also been providing support for mental health issues, trauma, and crisis fatigue among clients’ employees. This is due to the sensitive and emotive nature of the conflict, which has far-reaching repercussions. A comprehensive approach ensures that businesses can attend to the long-term wellbeing of their employees and the future of the company.

How and When to Get Out? In the rare situations where the security landscape deteriorates to the point where it is no longer feasible to operate safely and securely, businesses should be prepared to undertake evacuations. Evacuations can be facilitated through various means, including commercial flights, chartered flights, and local road or maritime transportation. However, executing evacuations is no simple feat; road, border or airspace closures may occur unexpectedly, or infrastructure could be compromised, demanding flexible logistics. Evacuations present multifaceted challenges, particularly as they usually occur in very dynamic environments. The current situation in Israel

and Gaza underscores the unpredictable nature of on-the-ground conditions. With a diminishing number of commercial flight options available from the country, numerous businesses made the decision to evacuate staff from Israel. International SOS has, so far, successfully transported over 100 people and organised multiple chartered flights across Israel during a period of active conflict, some of whom were as close as 6 miles from the Gaza border. Assistance as complicated as this is only possible with the ability to accurately assess the risks stemming from rocket fire or similar activity. So, crucial to successful evacuations are in-country partners, providing

on-the-ground insights, effective risk assessments and support. The International SOS Incident Management Team coordinated the movement of travellers across various locations in Israel, who had to meet at Ben Gurion International Airport. It also ensured reliable information on their status was fed back to businesses – at a time where the spread of misinformation poses a substantial challenge for businesses across the globe.

Reliable Information as a Strategic Imperative The most effective crisis management structures empower the pre-crisis phase. This focuses on identifying and

collecting information to make timely decisions and rehearsing the potential response. Information remains key in successful crisis management and can be prepared in advance by researching key players, assessing the historical context of the conflict, and predicting its trajectory. This information needs to be shared with those on the ground, but communication in conflict zones poses unique challenges, especially when infrastructure is compromised. Businesses need contingency plans to address communication blockages and disruptions, ensuring that alternative channels are available and staff know how to access them. Establishing a dedicated team and

maintaining strong links with vetted on-the-ground partners is fundamental to this. The ability of businesses to continue to operate when a security crisis hits lies in thorough preparation, empowered Crisis Management Teams, strategic partnerships, and access to reliable information. By prioritising comprehensive risk management plans and staying informed on the situation on the ground, businesses can bolster their resilience and, in turn, reduce the risks for their employees. In an era defined by uncertainty, adaptability and preparedness stand as the essentials for sustaining operations and prioritising the safety and wellbeing of employees. europeanbusinessmagazine.com 85

NET-ZERO INDUSTRY TRACKER:

$13.5 Trillion Investment Needed to Fast-Track Decarbonization of Key Hard-to-Abate Industry Sectors

ransitioning to a more sustainable and carbon-neutral future, $13.5 trillion in investments will be needed by 2050, particularly in the production, energy and transport sectors, according to a new World Economic Forum report. The Net-Zero Industry Tracker 2023, published in collaboration with Accenture, takes stock of progress towards net-zero emissions for eight industries – steel, cement, aluminum, ammonia, excluding other chemicals, oil and gas, aviation, shipping and trucking – which depend on fossil fuels for 90% of their energy demand and pose some of the most technological and capital-intensive decarbonization challenges. The report, published the same week as the United Nations called at COP28 for “dramatic climate action” to close an “emissions canyon”, outlines pathways to accelerate the decarbonization of emission-intensive production, energy and transport industries. While the pathway to net zero in these sectors will differ based on unique sectoral and regional factors, investments in clean power, clean hydrogen and infrastructure for carbon capture, utilization and storage (CCUS) will be needed to accelerate industrial decarbonization across most sectors. “Decarbonizing these industrial and transport sectors, which emit 40% of global greenhouse gas emissions today, is essential to achieving net zero, especially as demand for industrial products and transport services will continue to be strong,” said Roberto Bocca, Head of Centre for Energy and Materials, World Economic

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Forum. “Significant infrastructure investments are required, complemented by policies and stronger incentives so industries can switch to low-emission technologies while ensuring access to affordable and reliable resources critical for economic growth.” According to the report, the $13.5 trillion in investments is derived from average clean power generation costs of solar, off-shore and on-shore wind, nuclear and geothermal, electrolyzer costs for clean hydrogen and carbon transport, as well as storage costs. The Net-Zero Industry Tracker proposes a comprehensive framework

of emissions drivers and enablers to measure progress and identify gaps, scorecards for each industry, and opportunities for cross-sector collaboration. Building on the 2022 edition, the updated report includes transportation sectors and applies the framework to identify strategies for netzero industrial transformation. The report’s findings underscore the urgency for creating a robust enabling environment, including low-emissions technologies, infrastructure, demand for green products, policies and investments. In addition to increasing capital expenditures to decarbonize existing industrial and transport asset

Share of global GHG emissions for heavy industrial and transport sectors

bases, further investment is needed to build a clean-energy infrastructure. The majority of the technologies needed to deliver net-zero emissions are expected to reach commercial maturity after 2030, highlighting the need for collaborative approaches to research, develop and scale them. This includes substituting legacy technologies with low-emission alternatives, increasing efficiency of processes and machinery, electrification and driving circularity. “It is imperative that action is taken soon to both decarbonize and improve energy efficiency; otherwise, unabated fossil-fuel demand in the key industry sectors, which have grown 8% on average the past three years, will increase very significantly by 2050,” said Bocca. “But industrial leaders can respond through new collaborative ways of working and innovating, for example within industrial clusters and by fostering best practices, sharing infrastructure in important areas like clean hydrogen and CCUS and building demand for lower-emissions products.” According to the report, carbon pricing, tax subsidies, public procurement and development of strong business cases can support in mobilizing necessary investments. However, raising capital for high-risk projects with unproven technologies could be challenging in the current macroeconomic environment. Institutional investors and multilateral banks, therefore, can play an important role by

providing access to low-cost capital linked to emissions targets; equally vital is adapting financial models to the needs of various industries and regions. “Collaboration between the public and private sectors is critical to a successful energy transition, and technology can be a key enabler in both managing affordable and reliable access to clean energy and addressing the incremental cost of decarbonization,” said Muqsit Ashraf, who leads Accenture Strategy. “Widespread scaling and adoption of clean power, carbon capture and storage, and energy efficiency technologies across sectors are vital for progress. Additionally, business model innovations can also help stimulate demand and accelerate industrial decarbonization — achieving net-zero objectives and a resilient energy transition.” The report acknowledges that recent policy developments can push the industrial net-zero transformation in the right direction. While some advanced economies are enacting large-scale policy measures, emerging economies – which will account for a larger share of future demand for industrial products and transport services – will need help accessing low-emission technologies and solutions. The report also calls for industrial sectors to focus on the following five areas, and details specific actions for each of the sectors as part of its individual scorecard:

• Technology – Prioritize clean power technology across most sectors, commercially scale CCUS in cement, and improve technology to reduce costs for clean hydrogen development. • Infrastructure – Promote shared infrastructure, such as industrial hubs and clusters. • Demand – Create a standardized framework for low-emissions products, a simple emissions-intensity calculator and an auditable carbon-footprint assessment process, improving consumer transparency. • Policy – Align on emissions reduction requirements globally, with policies customized to suit individual country needs and enhance market transparency to increase emission intensity visibility. • Capital – Improve transparency for low-emissions and low-carbon alternatives, strengthen demand signals and reduce capital expenditures through shared infrastructure development. “The Net-Zero Tracker 2023 explores in detail how low-carbon solutions and infrastructure will contribute to increasing the pace of decarbonization in hard-to-abate industries,” said Stephanie Jamison, Accenture’s global Resources industry practice lead and global sustainability services lead. “This depth is essential to help companies create sustainable value and impact as they strive to achieve net-zero carbon emissions.” europeanbusinessmagazine.com 87

BRIDGING THE DIGITAL/ENVIRONMENTAL DIVIDE:

SUSTAINABLE BUSINESS PRACTICES IN SATELLITE COMMUNICATIONS By Brian Allen, Head of Product Design and Development at equipment case manufacturers CP Cases, provides his expertise.

s businesses increasingly come to rely on automated technologies in a digital landscape, the focus turns to satellite communication as the most efficient means of connectivity. While satellite internet offers a number of benefits – particularly in locations where traditional telecom infrastructure is lacking – the environmental impacts cannot be ignored. It’s up to businesses investing in and benefitting from satellite technologies to take accountability and drive for responsible and ethical usage as satellite-based connectivity systems gain popularity across the UK.

Environmental impacts of satellite communication For its numerous benefits, satellite internet comes at a price. Mass satellite groups including SpaceX’s Starlink have garnered criticism for their detrimental environmental impacts. Astronomers have panned such schemes, blaming failed observations of sensitive radio telescopes on light pollution and radiation leaks. Astronomers from the Netherlands Institute for Radio Astronomy (ASTRON) have detected radiation between 110 and 188 MHz from 47 out of the 68 satellites observed, with such levels of radiation contributing to global warming upon passing through the atmosphere. Radiation emitted from satellite internet systems has also been linked with the decline of nesting success for birds, as well as disruptions to seasonal animal behaviours. Furthermore, while the satellites themselves are solar-powered, the ground stations responsible for sending and receiving signals require 88 europeanbusinessmagazine.com

immense amounts of energy – the majority of which is sourced from fossil fuels. As a result, satellite communication systems accumulate larger carbon footprints than other forms of internet access; energy consumption by satellite internet systems is estimated to be four times higher than traditional internet services, such as cable or fibre optic. With such an environmental cost attached to the implementation and use of satellite technologies, action must be taken to mitigate and minimise impacts to the climate. While much of the onus is on the proprietors of these satellite systems, accountability also lies with the businesses that benefit from such systems. They need to initiate positive change towards a greener and more sustainable future.

Four steps towards connectivity sustainability: There are numerous ways in which a business can contribute to minimising satellite communication’s effect on the environment, with tangible change possible through small shifts in day-to-day operations. 1. Investment in energy-efficient satellite designs With satellite communication promising to surpass the efficiency and effectiveness of traditional telecom systems, satellite-based internet systems are here to stay. With that in mind, businesses must actively look to invest in the development of greener technologies and continue to reap the benefits of satellite communication while safeguarding the environment.

2. Adoption of environmentally friendly materials and production processes Businesses can look to offset carbon emissions created by satellite communication through small changes to their ground-level day-to-day operations, countering global warming’s effects through green business practices. They might shift energy solutions towards renewable energy sources, cutting down greenhouse gas emissions in the process. For example, business premises and production facilities might integrate solar power, or optimise production processes to reduce waste. 3. Environmental advocacy While individual businesses can ‘do their bit’, it‘s vital for action to be taken on a systemic level. Without the cooperation of the government, industry associations and regulatory bodies,

any change will be limited. Through lobbying, raising awareness and outspoken advocacy of sustainable connectivity systems, legislation may be introduced to enforce ethical and environmentally friendly satellite communication practices. From responsible satellite disposal to regulation of radiation exposure, systemic change must come from positions of authority, while initiated at grassroots levels. 4. Environmental consciousness With the rapid onset of a climate crisis and projections of net zero by 2050, environmental consciousness must be at the forefront of all business decision-making. It’s vital that concentrated efforts are made to curb global warming, avoid climate catastrophe and establish future-proofed connectivity solutions at the same time. This extends from offsetting satellite communication’s carbon footprint to

responsibly investing in greener satellite technologies. With sustainable methods of operation and green business practices, businesses are able to move forward with technological advances, reducing uncertainty and securing a responsible, sustainable and successful future. It’s paramount that businesses are aware of the environmental impacts of satellite communication. And with the continued uptake of satellite-based connectivity systems, environmental agencies must work alongside proprietors to find sustainable solutions as we look to the future. With satellite communication here to stay, a balance must be struck whereby technological innovation and environmental consciousness can coexist. As we service businesses and communities with improved connectivity, we must also protect the environment from potential climate disasters. europeanbusinessmagazine.com 89

BUSINESSES MUST COMMIT TO BETTER CARBON MEASUREMENT TO RAMP UP NET ZERO PROGRESS

By Hugo Kimber, CEO @Carbon Responsible

he business community globally has generally understoodthe urgency to significantly reduce carbon emissions by 2030, on route to net zero by 2050.Asconcerns grow that we are noton trackto achieve net zero by 2050, companies across all sectors are taking their responsibility seriously,often going beyond regulatory obligations to set ambitious decarbonisation goals. As of November 2023, two-thirds of the world’slargest publicly listed companies have set emissionsreductions targets, with this number increasing by 40% in the last 16 months. Setting targets is anecessary first step to developing net zero strategies and taking meaningful actionto reduce emissions. The key question now is whether these targets are achievable.Researchby Accenturesuggests that mostcorporate net zero targets will be missed without doubling the paceof decarbonisation by 2030.

So what’s going wrong? Part of the problem is in how companies are measuring and reporting their carbon emissions in thefirst place. 90 europeanbusinessmagazine.com

In order to set ambitious but realistic interim targets (for example by 2025 or 2030), companies mustaccurately measure and understandtheir emissions baseline and identify specific areas whereemissions could be reduced, in the short-termand the long-term. This goes beyond plugging numbers into an emissions calculator to arrive at whatis essentially anestimate of your company’s carbon footprint. Doing so does establish abroadroad plan foremissions reductions, but the approach is neither accurate nor detailed enough to inform sensibletargets ordrive anet zero strategy forward. Forexample, using publicly available conversion factors forscope 3emissionslike business travelwillestimate the environmentalimpact of journeys taken by employees but it won’t account for nuanceslike aspecific airline’s environmental performance or more precise rail track distances for traintravel. Not only does this run the risk of producing inaccurateemissions reportsand settinginappropriate reduction targets, but it also fails to motivate smaller, shorter term changes (likeswitching airlines while also reducing business flights)which are crucial to meeting interim goals. What’s needed is carbon accounting, as opposed to measurement. The two terms are often usedinterchangeably, but the difference is clear when carbon accounting is understood as analogous tofinancial accounting. The same principles of financial accounting apply to carbon accounting: standardised calculationsand reporting frameworks,datavalidation, and categorising emissions by sources.

Whereas carbon measurement can be done in-house by acompany using conversion factors, or aidedby tools which are able to automated the same process, carbon accounting almost always requiresfiner-grained research and data collection in order to correctly identify the nature of controland ownership over emissions sources, and ensure carbon reported across scopes 1to 3can beindependently verified and validated. There are many situations in which more simple carbon measurement does fulfil disclosurerequirements to reportemissions,but treating this as abox-ticking exercise makes it hardforcompanies to really move the needle on their decarbonisation plans, andfalls short when acompanyhas more complex regulatory obligations-whether from multiple jurisdictions, specific industryregulation or due to surpassing reporting thresholds. Currently, the range of both reporting frameworksand accompanying accounting standards varies,especially in asset impacts. An example of self-measurement and disclosure error by an international company we reviewedrecently was the inclusion of gas impactsin Scope 2and not Scope 1. Here, the measurement itselfmay well be accurate, but there is nonetheless an accounting error which could undermine net zerotargets, split by scope. Such challenges are exacerbated by the use of SaaS and other online platforms that ingest data andthen immediately provide reports.Aside from the lack of verification of these inputs,SaaSplatformscannot keep pace with the multiple demands of emergingand changing disclosure

regulations andrequirements in the delivery of audit quality reports. As with financial accounting, ensuring the base data is correct and can be verified and accounted forreduces risks of misreporting and inadequate baselines for target setting. The stakes for inaccuratemeasurement and misreporting are high. Internally, setting inappropriatetargets and missing relevant information could set back bothdecarbonisation and cost reduction,but there are also significant reputational and regulatory risks. Consumer activism around sustainability is only increasing,and missed or backtracked targets cancause huge reputational damage with real consequences. Much like the market

impactof acompanyoverestimating its financial targets, greenwashing charges have to be taken seriously, even when acompanyhasn’tmade misleading claims which warrant fines from advertising regulators, forexample.This year shoe brand Crocs pushed back its net zero targets from 2030 to 2040, in part dueto the factit hadset original targets without comprehensively calculating its baseline emissions. Perhaps even more importantly, the direction of environmental regulation shows an increasing needfor standardised and independently verified emissions reporting. In the US,the SEC’s climatedisclosure rule, and the Corporate Sustainability Reporting Directive (CSRD) in Europe both requireemissions data disclosed

alongside financialstatements, treated with the same level of rigour. Companies will soon have to ensure their sustainability reportscan passan third-party audit -usingat least limited assurance (which tests asample of the data). In both the short- and long-term, decarbonisation requires radical changes to company activities,supported by innovative solutions.These include tools to increase energy efficiency, and alternativesto traditionalenergy offering, likeNaked Energy which decarbonises heating with cleaner, solarenergy. Such solutionsand transitionshave to be driven by accurate data, emissionsbaselines,realistictargets and verifiable carbon reporting. europeanbusinessmagazine.com 91

WEB3 BATTLE HEATS UP:

MARKETING STRATEGIES OF WEB2 GIANTS IN THE GAME The ascent of Web3 as the next frontier in internet development has become a consensus, and the question now arises: how will these traditional Web2 giants play with NFTs, the cornerstone of Web3?

eb3 has seen an influx of new players, with many brands that once battled in the Web2 arena now strategically positioning themselves in Web3. These seasoned Web2 brands, with their extensive experience, bring forth innovative marketing strategies upon entering Web3.

The increasing trend of Web2 brands entering Web3 can be attributed to several factors: Rising Consumer Expectations for Personalization Modern consumers are no longer satisfied with traditional goods and services; they seek personalized and unique experiences. NFTs, as representatives of digital assets, offer brands an excellent tool to achieve this level of personalization. Building Genuine, Multidimensional Business Experiences through Ownership Web3, built on blockchain technology, provides users with true ownership. This decentralized characteristic fosters diverse and highly interactive business experiences, deeply engaging users in a multidimensional manner. Acknowledging Web3 as the upcoming trend in internet development, Web2 brands understand the necessity of seizing this opportunity. Web3 presents a unique chance for these brands to evolve and stay relevant in the ever-changing digital landscape. Entering Web3 often starts with taking the first step, and for many, the preferred choice is through NFTs. 92 europeanbusinessmagazine.com

Web3 Gateway: NFT NFT, as a crucial component of Web3 development, is considered the primary channel and vehicle for the future of the Web3 world. Several renowned brands have chosen NFT as the gateway to enter Web3, demonstrating its significance in this domain: Disney: Disney Pinnacle • In November 2023, Disney announced a collaboration with NFT IP development company Dapper Labs to launch the NFT platform "Disney Pinnacle." Iconic characters from Star Wars and Pixar studios will be presented in the form of NFTs. Starbucks: Odyssey Program • Starbucks launched the "Odyssey" initiative, utilizing NFTs to reshape its membership system and strengthen brand influence. Trip: Trekki NFT Project • Backed by Trip, the NFT project Trekki signifies not only owning a digital travel companion but also enjoying Trip coins, premium memberships, travel AI assistants, and other benefits. From the current entry of Web2 brands into the news, it is evident that companies in the fast-moving consumer goods, content culture, and service sectors are actively embracing Web3 with a rapid response. Brands with native philosophies and audience alignment with Web3 culture, particularly those using NFT as an entry point, are more readily accepted. Ownership & Membership System Establishment • Granting users true ownership of digital assets, brands leverage

NFTs to authenticate and safeguard their digital content or offer exclusive services to users. The tangible form of NFTs makes it easy for brands to construct user identity and loyalty systems. Uniqueness and Scarcity • The uniqueness and limited quantity of NFTs make users more receptive to and appreciative of these digital assets. This underscores and signifies the identity and status of each NFT holder, elevating user trust and a sense of belonging to the brand. Weak Financial Attributes of NFTs • Compared to other cryptographic assets, NFTs primarily function as digital collectibles with relatively weak financial attributes. This

characteristic avoids compliance issues, making NFTs more widely accepted by a diverse user base. Brand Innovation and Trend Embrace • Introducing NFTs is not merely a business strategy but also a way for brands to demonstrate innovation and embrace new technologies and trends, showcasing their commitment to staying at the forefront of the industry.

NFT Marketing Strategies Many industry giants have embraced Web3, starting with NFTs. How do they execute NFT marketing strategies? NFT & Philanthropy • Integrating NFTs with philanthropy not only showcases a

brand's social responsibility but also establishes a positive image, resonating with core values tied to charitable causes. Associating NFT projects with specific social issues helps attract target audiences, and philanthropic actions often gain widespread media attention. Importantly, philanthropic NFT projects tend to navigate regulatory scrutiny more compliantly, providing brands with a safer marketing space. • Luxury skincare brand La Prairie collaborates with digital artist Carla Chan for its inaugural NFT art series, "Space Beyond." The NFTs, with 365+1 versions generated in real-time based on weather and population data, will be exhibited at FRIEZE in New

York on May 18, with proceeds dedicated to glacier conservation worldwide. NFT & Metaverse • The application of NFTs in the metaverse is a common strategy in NFT marketing. The metaverse offers a virtual world that provides brands with a broader display space, making NFT presentations more vivid. Social interactivity creates additional avenues for NFT sharing and promotion among users. Furthermore, the metaverse opens up innovative possibilities for brands, allowing them to expand NFT applications through virtual events, exhibitions, and other formats, bringing more creativity and imaginative space to digital marketing. europeanbusinessmagazine.com 93

• Louis Vuitton introduces the commemorative game "Louis: The Game," featuring 30 NFT rewards, including 10 designs by digital artist Beeple. Cooperating with Native Web3 Entities From the above examples of NFT marketing, it can be observed that many major players prefer to collaborate with native Web3 entities when designing NFTs. These entities can be individual digital artists or projects. Trekki NFT, in order to expand its audience, launched a joint campaign with a Web3 growth platform. The benefits of collaborating with such platforms include: Specialized Channels: The channels are highly vertical, providing access to the Web3 market. Large User Base: Growth platforms have a substantial user base with a high level of awareness, reducing the need for extensive user education. Diverse Gameplay Across User Lifecycle: Various gameplay options cover different stages of the user lifecycle, from acquiring users during the initial phase of the NFT project to user conversion and retention, accelerating the project's operational pace. 94 europeanbusinessmagazine.com

Trekki NFT, a project supported by a leading Web2 brand, has achieved tremendous success in the Web3 space, with a total issuance of 10,000 NFTs and a community subscription rate reaching 100%. Collaborating with Web3 projects in marketing strategies facilitates convenient user participation in the NFT market, fostering broader dissemination of NFTs. Brands can leverage the technological innovations of Web3 projects to enhance NFTs with unique features and gameplay, ultimately enriching the user experience.

Challenges and Prospects While major players entering Web3 through NFTs have achieved initial success, deeper marketing efforts have exposed some issues:

Limited Sustainability The NFT market is still in its early stages, lacking mature standards and regulations. Brands issuing NFTs often fail to implement long-term maintenance and empowerment plans, leading to the difficulty of sustaining the value and significance of NFTs. User interest and demand for NFTs may fluctuate over time, posing challenges to their circulation and usage.

Reputation Challenges Brands emphasize the identity and cultural aspects of NFTs over their financial attributes, causing users to perceive NFTs as symbolic and virtual rather than practical. This perception diminishes the social value and influence of NFTs. While acknowledging the challenges in NFT marketing, it's undeniable that the strategies employed by Web2 brands entering Web3 have shown initial effectiveness. The integration of traditional brand marketing from the internet era with Web3 technology is gradually taking shape. Looking ahead, as more projects and users enter the space, the application scope of NFTs will expand, and initial marketing challenges will be addressed. In this evolving marketing battleground that combines Web3, brands, and projects deeply immersed in the field are actively exploring alternative marketing approaches to enhance market share. For projects outside this landscape, leveraging the marketing methods discussed earlier could be a strategic move, seizing opportunities before the marketing battlefield expands and securing a position. Author: Akashi04 BIO: Web3 marketing researcher.

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