Global Banking & Finance Review Issue 10 - 2017 Banking Awards - Business & Finance Magazine

Issue 10

®

Eduardo Ebensperger Orrego, C.E.O, Banco de Chile Discusses the Chilean and Global Economy

UK £50.00 USA $62.00 EUR €55.5 CAN $82.00 AED 227.50

EM E A | A sia | A mer ic as

www.globalbankingandfinance.com

Compare Prices of Hotels & Flights

OffersWorld.com

FX rates fluctuate.

Expertise stays the course.

Voted Best Forex Provider North America* for the seventh year running, our foreign exchange team has the consistency, global perspective and expertise to help you achieve your FX goals.

*Global Banking & Finance Review, 2011-2017. BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A. (member FDIC), Bank of Montreal Ireland p.l.c, and Bank of Montreal (China) Co. Ltd and the institutional broker dealer businesses of BMO Capital Markets Corp. (Member SIPC) in the U.S., BMO Nesbitt Burns Inc. (Member Investment Industry Regulatory Organization of Canada and Member Canadian Investor Protection Fund) in Canada and Asia, BMO Capital Markets Limited (authorised and regulated by the Financial Conduct Authority) in Europe and Australia. “BMO Capital Markets” is a trademark of Bank of Montreal, used under license. “BMO (M-Bar roundel symbol)” is a registered trademark of Bank of Montreal, used under license. ® Registered trademark of Bank of Montreal in the United States, Canada and elsewhere. ™ Trademark of Bank of Montreal in the United States and Canada.

CEO and Publisher Varun Sash Editor Wanda Rich email: wrich@gbafmag.com

FROM THE

editor

Editorial Coordinator Sachin MR Web Development and Maintenance Anand Giri Head of Distribution & Production Robert Matthew Head of Operations Sreejith Nair

Project Managers Megan Sash, Amanda Walker

Video Production and Journalist Phil Fothergill

I am pleased to present Issue 10 of Global Banking & Finance Review. For those of you that are reading us for the first time, welcome.

Graphic Designer Jessica Weisman-Pitts Business Consultants Anshuma Gupta, Monika Umakanth, Stefy Abraham, Sara Mathew, Rhea Paul, Steve Edwin, Anna

Research Analysts Maahi B, Sanjay, Sanjana, Vidhya Accounts Joy Cantlon, Quynh Quan Advertising Phone: +44 (0) 208 144 3511 marketing@gbafmag.com GBAF Publications Ltd Kemp House, Unit 2, 7 Tarves Way, London, SE10 9JP. United Kingdom Fax: +44 (0) 871 2664 964 Email: info@gbafmag.com Global Banking & Finance Review is the trading name of GBAF Publications LTD Company Registration Number: 7403411 VAT Number: GB 112 5966 21 ISSN 2396-717X. Printed in the UK by The Magazine Printing Company The information contained in this publication has been obtained from sources the publishers believe to be correct. The publisher wishes to stress that the information contained herein may be subject to varying international, federal, state and/or local laws or regulations.

The purchaser or reader of this publication assumes all responsibility for the use of these materials and information. However, the publisher assumes no responsibility for errors, omissions, or contrary interpretations of the subject matter contained herein no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the publisher

In this edition we are pleased to present the Global Banking & Finance Award® 2017 Award Winners. The awards were created to recognize companies of all sizes that are prominent in particular areas of expertise and excellence within the financial community. Global Banking & Finance Review would like to congratulate the award winners and look forward to their continued success.

Featured on the front cover is Eduardo Ebensperger Orrego the C.E.O of Banco de Chile who provides us with Banco de Chile’s view on the Global and Chilean economy. Inside you will also find engaging interviews with leaders from the financial community and insightful commentary from industry experts. Mr. Mel Carvill, Member of the Board of Directors of Home Credit B.V. discusses consumer finance in China. Find out more about the innovative healthcare insurance in Saudi Arabia from Tal Hisham Nazer the CEO of Bupa Arabia and how to manage business risk in the digital economy from Paul Taylor, Partner and UK Head of Cyber Security at KPMG. We strive to capture the breaking news about the world's economy, financial events, and banking game changers from prominent leaders in the industry and public viewpoints with an intention to serve a holistic outlook. We have gone that extra mile to ensure we give you the best from the world of finance.

Send us your thoughts on how we can continue to improve and what you’d like to see in the future.

Happy reading!

Image credits:

Image credits:@istock.com/Nikada(p10,11), @istock.com/ kzenon(p13), @istock.com/RyanKing999 (14,26), @istock.com/ Kittikorn(p19), @istock.com/ DragonImages(p24) ,@istock.com/ chombosan(p25), @istock.com/ lisegagne(p26),@istock.com/ JohnnyGreig(p26),@istock.com/ Rawpixel Ltd(p26), @istock. com/tifonimages(p32), @istock.com/ RomoloTavani(p36), @ istock.com/ipopba (p39,132,133), @istock.com/sitox(p40,41), @istock.com/scyther5 (p43), @istock.com/ FeelPic(p44), @istock.com/ismagilov(p45), @istock.com / Visivasnc (p46,47, @istock.com/wwwebmeister(p49),@istock.com/ gilaxia (p51), @istock.com/:kynny(p52,53), @istock.com/ SeventyFour(p54),@stock.com/ -1001-(p56-78), @istock.com/ Seqoya (p86,87), @istock.com/gorodenkoff(p90,91), @istock. com/ monkeybusinessimages (p93), @istock.com/ Rawpixel (p94,112,113), @istock.com/artJazz (p99), @istock.com/ gorodenkoff(p100), @istock.com/ spainter_vfx (p102), @istock. com/ OlgaSalt (p108,109),@istock.com/ thitivong(p110),@istock. com/ chombosan(p110), @istock.com/Sitthiphong(p114,115),@ istock.com/johnkellerman(p116,117), @istock.com/ ipopba(p118,119), @istock.com/ Moussa81 (p120,121), @istock. com/ GeorgeRudy(p123), @istock.com/ umemories(p124,125), @ istock.com/chombosan(p126), @istock.com/Jacob Ammentorp Lund(p128), @istock.com/ ukayacan (p130,131),@istock.com/ PhonlamaiPhoto(p134),@istock.com/courtneyk(p136,137),@ istock.com/Prykhodov(p138)

Wanda Rich Editor

®

Stay caught up on the latest news and trends taking place. Read us online at

http://www.globalbankingandfinance.com/ where you can also subscribe to the print magazine so you never miss an issue.

Issue 10 | 5

CONTENTS

12 96

32

BANKING

17

Can regional banks across APAC stop market data costs from spiralling out of control?

Tim Versteeg, Chief Sales Officer APAC at NeoXam

30

SCB: EMPOWERED WITH IT INNOVATION

32

Banco de Chile’s View on the Global and Chilean Economy Eduardo Ebensperger Orrego, C.E.O, Banco de Chile

96

84 30

SCB: EMPOWERED WITH IT INNOVATION Digital Banking in Chile

Banco de Chile’s View on the Global and Chilean Economy

inside...

“The Black Sea Trade and Development Bank Seeks to Play a Stabilizing Role in the Region – says President Delikanli”

6 | Issue 10

The Black Sea Trade and Development Bank Seeks to Play

BANKING

118

BUSINESS

A Strategic Response to Open Banking

26

“Your basket contains: one microwaveable lasagne, and a mortgage. Proceed to checkout?”

40

Gianluca Corradi, Director, Simon-Kucher & Partners

123

Tom Blower, Director and Executive Coach, EMEA, Black Isle Group

Paul Bowen, Banking Lead, Avanade

130

The challenges of complying with conflicting regulations: reality versus practicality Stuart McClymont, Co-Founder and Managing Director, base60 Consulting

The revolution of the banking industry Steve Lemon VP of business development & co-founder of Currencycloud

Why leadership – and leaders - will look very different in 2018

46

Rising above the competition with next generation customer experience

Tom Tseki, Vice President & General Manager, GeoFluent & Customer Care Solutions, Lionbridge

CONTENTS

47

102

Consumer Finance in China

10

Why RegTech will play its winning hand in 2018

BUSINESS

93

What Merchants Need to Know About Protecting Customers and New Regulations

104 FINANCE

10

Catherine Moore, President, J.P. Morgan Merchant Services Europe

99

THE GDPR PARADOX: More data, more agility

Felix Van de Maele, Co-Founder and CEO, Collibra

110

22

Consumer Finance in China

Global Banking & Finance Review’s Phil Fothergill met with Mr. Mel Carvill, Member of the Board of Directors of Home Credit B.V. in London to discuss consumer finance in China and Home Credit’s success.

A shifting global trade environment: How transaction bank adaptations will benefit corporates

Raphael Barisaac, Global Co-Head of Trade Finance, UniCredit Adeline de Metz, Global Co-Heads of Trade Finance, UniCredit

Managing business risk in the digital economy Paul Taylor, Partner and UK Head of Cyber Security, KPMG

38

Cryptocurrency and regulation: How the recent past offers a potential insight into how the seemingly impossible can be achieved Nir Gazit, CEO, COTI

Innovative Healthcare Insurance

FINANCE

102

Why RegTech will play its winning hand in 2018 Tom Harwood, Chief Product Officer and Co-Founder, Aeriandi

132

PSD2 - The pinnacle for a harmonised payment playing field

Bertrand Lavayssiere, Partner and Managing Director at zeb

136

Convergence is key for the future of mobile payments Shane Leahy, CEO of Tola Mobile

INSURANCE

104

Innovative Healthcare Insurance

Catherine Moore, President, Interview with Tal Hisham Nazer, CEO, Bupa Arabia

Issue 10 | 7

CONTENTS

114

What does the future of AI hold for financial services?

134

INVESTMENT

TECHNOLOGY

36

2018 outlook for private equity

44

Five Data Challenges Every Index Provider Faces

86

126

William Charlton, Managing Director at Pavilion Alternatives Group

Partha Sen, CEO and Co-Founder, Fuzzy Logix

Investing in Turkey

Rafi Azim-Khan, Head Data Privacy, Europe, Pillsbury Law Görkem Bilgin, Managing Associate, Gün + Partners Selin Başaran Savuran, Associate, Gün + Partners

Macroeconomic trends in the healthcare sector

Dr Ash Patel, Investment Manager at Mercia

51 108

51

Back to the Future of Networking

Michael Wood, Vice President of Marketing, VeloCloud

Back to the Future of Networking

TECHNOLOGY

114

134

What does the future of AI hold for financial services?

Dr. Rob Walker, Vice President, Decision Management & Analytics, Pegasystems

The construction industry needs a digital platform for guarantees and bonds Simon Streat, VP Product Strategy, Bolero International

Between the Hackers and the Regulators…

Alistair Millar Group Marketing Manager Altodigital

Laying the foundations: The road to digital transformation in 2018 Simon Richards, EMEA/APAC Managing Director, tekVizion

112

Between the Hackers and the Regulators…

TRADING

90

Why are capital markets still managing by policy?

Andrew Fawcett, Product Manager, TeleWare

8 | Issue 10

CONTENTS

19

80

RETAIL BANKING IN THAILAND

DIGITAL BANKING INNOVATION

interviews...

RETAIL BANKING IN THAILAND 19 Mr. Winyou Chaiyawan, Chief Executive Officer, The Thai Credit Retail Bank Public Company Limited

DIGITAL BANKING INNOVATION 80 As the first fully digital bank in Spain, Openbank is leading the way in banking innovation. We interviewed Patricia Benito, Chief Digital and Business Officer at Openbank to find out more.

Issue 10 | 9

Asia 10 Issue 10

ASIA FINANCE

Consumer Financing in China Home Credit’s goal is to enable people to keep up with their ambitions and needs in a fast, simple way. Working across the world in three continents, it has created 135,000 jobs, opened hundreds of thousands of points of sale and helped millions of people’s lives become better, providing more than 100 million loans. The aim is to lend without creating unnecessary obstacles. In many countries Home Credit has introduced the term consumer finance and developed revolutionary products. Home Credit has enabled people to connect with their families as well as the whole world through helping people get access to the means for transportation and commerce. Home Credit’s philosophy is to build a better life.

Global Banking & Finance Review’s Phil Fothergill met with Mr. Mel Carvill, Member of the Board of Directors of Home Credit B.V. in London to discuss consumer finance in China and Home Credit’s success.

As a leader in consumer finance, what do you attribute to your success?

including the types of products we offer and the way we offer them. And we are able to serve 70 million people globally and 37 million in China since our initiation in the country.

Consumer finance is a growing industry in China. What do you think are the driving forces behind that?

It's a new industry that has been going on a few years. China obviously is an enormous country and if we look at the penetration of debt, the household to GDP ratio in China is about 44% and that's half what it is in the United States. So, we're really at the beginning of the story, and there's a long way to go. If we think about, for example, the evolution of consumer finance in the United States.

At a time that the U.S. was becoming a more consumer-oriented economy and was urbanizing similar things that are happening in China right now, more than 50% of household goods and indeed cars were financed by consumer finance. And in China, that numbers are much less, maybe a fifth of that today, so there's an enormous scope for growth.

I think it's because we're a customer-centric organization, we organize everything we do around the needs of Chinese consumers,

Issue 10 | 11

ASIA FINANCE

So, there's development going on and as you say it's almost a new thing in some ways, what would you say the challenges are in China for consumer financing?

Well, the biggest challenge for any consumer finance company is always to be sure that we don't over debt people, and we're always on the lookout for a consumer credit boom which can lead to a bust. So, the key thing is to have a very sophisticated risk management system to make sure that we only lend to people who can comfortably afford to pay back and always be on the outlook for those macro trends which could lead to a problem. Of course, that can always happen, so another key thing is to make sure that your company is strong, you carry strong capital and strong reserves, and you pass stress tests from time to time to make sure that you will survive that downturn which inevitably comes over a long business cycle.

So, you have to be aware of the situation at all times and try and predict as far forward as you can.

That's right, and predicting the future is always very challenging.

Absolutely, well let's look at something from the present, then tell me a little bit more about the POS network, one of the innovations that your organization operates.

Yes, we have two hundred and thirtyfive thousand POS outlets. POS means points of sale, so that's where our products are available in stores and that covers a large part of China, in fact, 312 cities in 29 provinces. And it's at those

12 | Issue 10

points of sale that you can get a loan to finance something, be it a mobile phone, refrigerator, television or whatever, and those point of sale are available in stores. The POS are in big stores like Suning, but also in the mom-and-pop stores that are in the smaller parts of the cities and in the smaller towns.

How does it actually benefit consumers and indeed retailers?

From a consumer’s point of view, you can have the product sooner than you might otherwise be able to have it, and it's available almost everywhere, so it's very convenient. For the producer of a good and the retailer of a good, they are able to sell more because consumers are able to afford it sooner than they would otherwise be able to do, so it's a big plus for the retailer.

When it comes to consumers, obviously there are always those nervous moments about what decisions they should make about financing, what advice do you have for consumers over financing?

The most obvious piece of advice I would give is never take on an obligation that you can't afford, and to be able to do that you must have some basic financial education. You must understand how to do the family budget, and that's a hugely important thing and actually something that we do quite a lot with our consumers. We teach them about financial literacy and we help them when they're thinking about taking a loan, to ensure that they are able to pay it back. We also do something else which is pretty unique, and that is we have a cooling-off period in China. That's not required by law, but we offer it. And it means that the consumers, if they

change their mind within 15 days, can cancel the loan at no cost. So maybe if someone's a little bit overexcited about the latest TV and they enter into an arrangement that they really shouldn't have done, and they reflect on it with us, they can cancel out within the 15 days.

It's a nice safeguard obviously. What kind of loans do you offer consumers?

We offer a range of different loans. We offer these point-of-sale loans and those tend to be smaller loans – they're usually for something like RMB 2,700.

We also offer cash loans which are not tied to a specific good at the time, which are on average much larger about RMB 14,000 and are usually used for things like household redecoration and education. Those loans that we offer are available in stores but also online, so if you're an online consumer you can do it all through the internet. Most importantly, these loans are paperless so the whole thing is done through your mobile device or your computer.

And have consumers in China embraced that modern technology in a big way?

Oh absolutely, I would say China is by far the most advanced country in terms of e-commerce and even in terms of payments – there are 700 million Chinese consumers online. Mobile pay has become the payment method of choice, actually, sometimes it's quite difficult in China to find someone will accept cash since people are using WeChat Pay or Alipay through their mobile devices. This is really transforming the way that Chinese consumers shop, and I'm sure it's a full runner of what's going to happen in the rest of the world.

ASIA FINANCE

Issue 10 | 13

ASIA FINANCE

How do you ensure that your customers get the best possible service?

As I said at the very beginning, we are a customer-centric organization. We spend a lot of time and a lot of energy trying to make sure that the product we offer is what the customer wants, and we do that through obviously a lot of market research. We also measure the customer satisfaction on a regular basis through such things as Net Promoter Score, and we also think a lot about how we can use FinTech to make the process frictionless. As I often say our products are simple, easy and fast, it's through the use of technology that we can help the customers. We can also deal with customers who perhaps other institutions wouldn't deal with because the costs are too high, but through the use of technology, we can drive down

14 | Issue 10

costs and reach a lot more consumers than we would otherwise be able to do.

So that's a kind of financial inclusion, bringing in people who are poorly served by traditional institutions but we're able to deal with them.

I'm glad you mentioned that point because obviously as you say China has embraced modern-day electronic financing in a big way, but obviously I know as an organization, you're very committed to financial literacy.

How do you go about ensuring that operates successfully?

That's right. The whole world has become very aware of the need for financial literacy training for the population, and in fact, it's a G20 program. China has embraced that, and we've been helping the Chinese

government and doing our own activities as a good corporate citizen to spread financial education. We do that in a number of ways. We run seminars all over China, which are free seminars for anyone who'd like to come along.

We also produce some books on basic financial education, some cartoons, and we have some online tools to help people understand how to manage their financial issues. We've also partnered with the People's Bank of China to help them in some of their poverty alleviation programs sponsoring financial education in rural villages, so there are a whole range of things which are really all about helping people manage their money better.

ASIA FINANCE So, given that situation, what would you see as the future for online financing in China?

It's undoubtedly the case that people are buying more and more online, but we still see a real place for physical stores since lots of people still want to go and buy in the traditional way. But what's emerging is a kind of hybrid. Lots of people want all the benefits of online purchasing, but they'd actually like to see the good first.

You know, a simple example with the television, you probably want to look at the quality of the picture before you buy it.

So we're seeing a range of sort of hybrid stores where is perhaps just one example of the product and you can see it, but then you can buy it online. So, I think the future of financing is going to be online, offline and hybrid. And we have to make sure that we're able to provide our services through all those channels, and that we can do that right now. We're obviously going to have to keep up-to-date with the evolution of the marketplace.

Mr. Mel Carvill Member of the Board of Directors Home Credit B.V.

Issue 10 | 15

ASIA BANKING

Can regional banks across APAC stop market data costs from spiralling out of control?

For many financial institutions, in a world inundated with so many new rules fundamentally changing how the global banking system operates, it can be hard to keep up to speed with everything. Different regulations, of a course, affect different banks from all parts of the world in a variety of different ways.

And while the big multinationals in established markets such as Europe are currently fixated with the race to be ready for MiFID II, other banks scattered across other corners of the globe have other regulatory concerns. The fundamental review of the trading book (FRTB), a more prescriptive version of its BCBS 239 predecessor, is one of the biggest compliance challenges facing regional banks in APAC. This is because, unlike the U.S or Europe where it is easy to access liquidity, the market is highly fragmented with multiple smaller jurisdictions all at differing levels of maturity.

Traditionally, banks often start by building a base in Singapore, before then rolling out across the rest of the region. But as these firms start increasing their footprint, it becomes much harder to consolidate a full trail of market data which is needed

to meet strict FRTB requirements. This problem is exacerbated by the fact that a number of regional banks are trying to handle FRTB data requirements by relying on managed feeds from their trading software. This approach has led to market data costs getting completely out of hand.

Banks will have multiple different data requests going out to the likes of Bloomberg and Reuters, and due to the complex risk scenarios, which will need to be run under FRTB, certain banks could find themselves in a situation where they are repeating requests for data. All because they do not have the processes in place to reuse what they have already requested.

With all FRTB scenarios, a vast amount of market data is going to be needed on a daily basis. And if there is not an optimised process to minimise market data costs, then things can start getting out of hand pretty quickly. The risk engine providers are being told by clients that the market data problem is one of the digest challenges they face. The truth is that if they stick to the same old processes, market data costs are going to explode.

With this problem in mind, how should regional banks go about trying to better manage, control and optimise their market data costs ahead of FRTB coming into force? The answer is governance and data management tools need to be more sophisticated than ever before to meet FRTB requirements. After all, FRTB is far more prescriptive than BCBS 239 in terms of what a firm needs to do with its market data.

Tim Versteeg Chief Sales Officer APAC NeoXam

Issue 10 | 17

ASIA INTERVIEW

Providing the underlying assets for all murabaha / tawarruq transactions via our web based trading system

96 | Issue 10

ASIA INTERVIEW

Retail Banking in Thailand

The Thai Credit Retail Bank provides commercial banking products and services to retail customers and small and medium-sized enterprises. It offers products and services such as deposits, home loan, gold, micro and nano finance as well as SME. The Thai Credit Retail Bank can offer support and advice for businesses across Thailand to help support growing organizations to flourish from small beginnings. The bank has grown continually over recent years, Mr. Winyou Chaiyawan, Chief Executive Officer of The Thai Credit Retail Bank traveled to London in November of this year to discuss the bank’s growth and success.

• Received the license to operate as a commercial bank from the Ministry of Finance on Dec 22, 2006 • Started to serve small businesses on Jan 18, 2007 • Started Micro business on Nov, 2015 • 20 Full Branches • 153 Lending Branches

Issue 10 | 19

ASIA INTERVIEW

What initiatives do you feel have led to your growth and success?

•

Build our own unique business model to enter the micro segment – with personalised relationship approach, focus on customer’s needs and behavior.

•

Low cost branches located next to the target segment i.e. traditional market and local business community area.

•

Acquire the right team with passion to achieve our vision.

Customer relations are very important in retail banking, how do you ensure customers are receiving the best customer experience available?

Our success depends on our relationship with the customers. Our Relationship Managers work directly with the customer on a one to one relationship.

We have an independent team to measure our Net Promoter Score and Customer Satisfaction rating. We also have a quality control staff who talks directly to the customers after completion of loan process, not just by random, but to all customers to ensure our best service is delivered.

We also create product programme to respond to the specialist type of customers i.e. doctor’s loan, gold for cash.

What innovative products and services have been created in direct response to customers’ needs and wants?

We have been well recognised as flexible on our product and services. Our customers are well described as "informal SME" therefore they have no clean financial or business information, so they are high risk. Our business and RM are trained and experienced in understanding the customer's businesses in order to understand their credit capability. You have to understand that our customers are usually being ignored from other institution because lack of documentation and proof of their business income.

Knowledge regarding the community and the local business are also very important in making credit decision.

In summary, our product is actually a very simple loan, but we have a unique overall risk management capability to serve our target segments.

Can you tell us how The Thai Credit Retail Bank supports the growing needs of SME clients?

Thailand is a traditional SME market.

Many of the customers are good business owners but they do not have the discipline or knowledge of financial planning and reporting making them less attractive or ignored by financial institution. Our bank is providing access for these segments, whom otherwise have to borrow from loan sharks with very high interest.

We also educate our customers to build their financial discipline, and providing loan only for the purpose of productive reasons not consumptive. In return, the customers trust us and that is one of the key success to our business loan.

20 | Issue 10

Technology plays significant role in banking, how is The Thai Credit Retail Bank meeting the challenges of IT development?

Our systems are almost fully customised besides the core banking. Because our business model is different, we actually build our own acquisition and operations system, attached to our core banking system. We digitise (almost all) of our monitoring capability so that we can see our loan process in every step and directly with our portfolio quality on real time. At any point in time, we can see what happens to a customer's loan process, who is handling it at this time,

ASIA INTERVIEW

and for example, why the applications is returned, or why it is pending. You can even see the appointment of each RM with the customers and their report must be recorded.

Today we are developing this further to digitise our target segments. We are able to see where our customers are, how much penetration in each zone, number of customers, quality of customers, by branch by RM or by zoning.

We also prepare our downloadable APP which focuses on loan and e-applications process between the customers and RM.

Phil Fothergil

CSR has always been important to The Thai Credit Retail Bank. Can you tell us some of the ways you support the social economic development in Thailand?

Our bank provide them with a transparency and understanding of the loan structure, and we protect them from over burden from too much borrowing.

Key impact from our business is the financial inclusion to the micro segments, whom otherwise would borrow from the loan sharks at exorbitant interest rates. The worse we have seen are people who need to borrow in the morning and pay back at night with interest. Annual interest is usually above 100%. Some vendors have never finished paying their loan because they do not know how much principal or interest has been paid.

We are also moving towards helping our customers with saving products for the micro segments, which is currently under development.

What does the year ahead look like?

We still see a lot of growth opportunity for our bank. We plan to be the best in Micro Segment in Thailand. We will continue to expand our branches and we plan to fully digitise our business model.

Mr. Winyou Chaiyawan Chief Executive Officer The Thai Credit Retail Bank Public Company Limited

Issue 10 | 21

The most internationalized bank in Taiwan The bank you can trust Mega Bank For futher information please contact: No. 100, Chi-Lin Rd., Taipei City 10424, Taiwan, R.O.C. Tel : 886-2-25633156 Visit us at : www.megabank.com.tw

ASIA FINANCE

A shifting global trade environment: How transaction bank adaptations will benefit corporates

Transaction banks are responding to changes in the global trade environment by driving internal efficiencies, broadening their digital offerings, and reconfiguring their client service models. Amidst this change, the outlook for corporates is promising – increasingly digital and clientcentric solutions, combined with fairer and more competitive pricing, say Raphael Barisaac and Adeline de Metz, Global CoHeads of Trade Finance at UniCredit In the face of a shifting global trade environment, the onus is on transaction banks to stay ahead of the curve.

Documentary trade finance instruments such as letters of credit are diminishing in popularity in favour of open account trading, while regulatory and due diligence requirements are adding necessary, but significant, costs to banks’ books.

Indeed, the convergence of these trends has prompted many banks to rethink their operating models from the top down.

Improving internal efficiency, streamlining client service models, and collaborating with fintechs to produce new, holistic and client-focused solutions are all emerging as

ways to ensure future stability and continue to drive improved services.

For banks’ corporate clients, these are exciting changes – heralding faster, cheaper, and more tailored solutions, underpinned by improved bank-client relationships.

Regulations catalysing change Regulations, of course, are one of the key factors sparking change in the industry. Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements have been frequently cited in this capacity, but there is another set of regulations having a significant impact on trade finance – the Basel Accords’ risk-weighted-asset (RWA) requirements.

Under Basel III, banks are required to hold a minimum amount of capital in reserve to reduce risk of insolvency. This is determined by a bank’s RWAs, and – while trade finance is well known as a low risk-investment – most banks lack the historical and performance data to back this up. This has a knock-on effect on banks’ willingness to offer trade finance.

This is compounded by the fact that while capital requirements don’t factor in the low-risk nature of trade finance, market prices do. Trade finance is therefore a capital-intensive product, bearing relatively low returns. This puts it under intense pressure when assessed purely on a profitability basis – and some banks may choose to raise their prices, reallocate a part of their trade finance funds to other products or even cease trade lending altogether. Of course, not all banks view trade finance in this way – instead, some are less focused on returns and more on maintaining key client relationships, as well as forging new ones.

Either way, bank RWA modelling issues – along with other compliance costs – are acting as drivers of internal efficiency for the majority of transaction banks, with many looking to upgrade their IT and back-office systems.

Issue 10 | 23

ASIA FINANCE

A more focused approach At the same time, many banks are rethinking how they serve their corporate clients – an initiative that has largely gone under the radar thus far. Increasing client segmentation – by geography or industry, for example, or into brackets such as “platinum” or “gold” – may enable banks to significantly improve their client service.

For corporates, this could mean a greater availability of services, greater choice, and more competitive pricing – but they should consider their bank relationships carefully.

A good strategy would be to distribute trade finance requirements across a few banks, in order to hold the status of “platinum” client – securing a higherquality service than would be received if spreading business across multiple banks as a “bronze” client.

Digital as standard Many banks are achieving efficiency gains through other means, too – looking closely at new technologies, such as blockchain,

24 | Issue 10

as well as existing tools such as the Bank Payment Obligation (BPO). Corporates, again, stand to benefit – standardised, more efficient, and cheaper digital products will serve a greater variety of companies, from a wider spread of industries and geographies. In particular, offering digital services more widely will enable banks to establish a baseline service level, guaranteeing a high-quality service for all clients – and not just those in the “platinum” segment.

As part of this drive towards increasingly digital services, many banks are also looking to collaborate with fintechs. Indeed, the risk appetite and tailoring required for so many transactional products and services make it unlikely that fintechs will replace banks as trade finance providers – making collaboration the most promising avenue for all parties. Transaction banks can also draw on their extensive market knowledge to advise businesses on the most promising fintech opportunities.

Certainly, at UniCredit we have seen increasing demand for this kind of support

– with many clients keen to draw on our insight into the crowded fintech landscape.

Our view is that there is plenty of scope for profitable, mutually beneficial partnerships.

Supply chain finance – opening up the options Supply chain finance stands as a clear example of this potential. As corporates increasingly align the objectives of their procurement and treasury departments, they are becoming increasingly focused on strengthening their supply chains, in addition to habitual concerns such as DPO, DSO and other key performance indicators (KPIs). Supply chain finance is invariably part of the conversation.

Indeed, the growing use of supply chain finance runs in parallel with banks taking an increasingly holistic approach to their supply chain finance solutions. Rather than a siloed product offering within the bank, banks are adopting more open, collaborative models where fintechs can make significant contributions.

ASIA FINANCE

Through bank-fintech collaboration, comprehensive, sophisticated solutions are being developed, and this is a model that banks are increasingly looking to employ – combining bank expertise and fintech innovation to create client-centric solutions beyond what either party could deliver alone.

Developments such as this give corporates every reason to be optimistic – despite the challenges of the current environment. Banks are finding ways to adapt – tightening their service models and developing streamlined, digital products for their clients. Corporates that take a careful approach and cultivate deep relationships with a few banks will be best placed to take advantage – enjoying the fruits of more digitalized, more convenient and more comprehensive services.

Adeline de Metz

Raphael Barisaac

Global Co-Heads of Trade Finance UniCredit

Global Co-Head of Trade Finance UniCredit

Issue 10 | 25

ASIA BUSINESS

26 | Issue 10

ASIA BUSINESS

Why leadership – and leaders will look very different in 2018 Leadership in UK business is set for rapid change in 2018 as the way we choose, measure and value leaders - and even the very skills we perceive to be important for success - continue to shift faster than ever before.

As our economy continues to absorb the ambiguity of a post Brexit world and uncertainty brought by technology changes, organisations are less clear as to what success looks like.

However, much of the new thinking is also inspired by social and philosophical advances as people begin to question the very validity of what previous generations viewed as key leadership traits. Getting things done, being conscientious and focussed have always been seen as key traits. In the new world, openness is seen as more valuable as we seek to explore and find new ways of working, or solutions to novel problems.

The phrase ‘enterprise leadership’ is already a boardroom buzzword as businesses move away from a command and control structure to a more collaborative style in which common goals are chosen and staff encouraged to join together to achieve them.

There needs to be a fundamental shift in the how leaders approach the new world, moving away from the person with all the answers who provides control and certainty, to the person creating an environment for success using emotional intelligence. Research indicates that up to two-thirds of success in leadership is attributed to EQ, rather than IQ.

Certainly, there is an intense interest in the way our leaders behave and how they get the best from a team, whether that is in business, on the sporting field or in politics.

Businesses are moving away from such notions of leadership to a far more collaborative, networked and empowered model. The new world model will create an environment where anyone could step forward and lead.

The implications of this shift are profound. As EQ becomes more important, the value we place on IQ will reduce. This affects how we value the education of our young people, whether it prepares them for the workplace to get good jobs and be successful and in the roles they will need to earn the money to pay off their university debts.

The soft skills and intelligences that underpin creativity, teamwork and problem solving will be at the heart of a more entrepreneurial economy.

In reality, it is not necessarily bookish children who succeed in business or become entrepreneurs and leaders. On the contrary, those who do not perform so well academically and who develop other skills as a coping strategy often shine in that environment.

Millennials, who seem to instinctively understand emotional intelligence better than their predecessors, are currently taking their first steps on the leadership ladder - so it would be no surprise to see leadership styles develop rapidly. They don’t necessarily value the old ways of waiting for the tap on the shoulder of progression and promotion, they have grown up with instant access to answers and information and want to be given opportunities to step up immediately.

Issue 10 | 27

ASIA BUSINESS

Here are six things leaders need to be thinking about in 2018:

1. Think about how to attract young people. Historically, success has been defined as earning a lot of money, but the world is changing and a package which puts personal development at the top of the agenda is likely to win. Consider the employee value proposition for your business.

2. Analyse your working environment.

A recent report by Deloitte suggests 300,000 people a year lose or leave their job because of mental health issues. Leaders need to tackle a work environment in which all the focus is being on busy and productive and ensure employee’s work-life balance is carefully considered.

3. Place a greater emphasis on how you hire the right people – it’s about a lot more than qualifications. The use of psychometric testing, such as the Hogan Assessment which explores the science of personality, is growing. The advice for leaders is hire slow, fire fast.

4. Try to see the information age as a positive not a negative for leadership. The modern world provides greater transparency and can be a force for good - if you misuse power then your reputation is automatically on the line.

5. Plan for a future in which power is no longer held or determined by the elite and instead is more of a democracy. The world is shifting away from traditional hierarchy and organisation and so leaders who understand that shift will be able to deliver change.

6. Think about the metrics your business uses to measure productivity. In future it may be defined as much by customer satisfaction and delight as by numbers.

Tom Blower Director and Executive Coach , EMEA Black Isle Group

Black Isle Group Company Background Founded in 1990, Black Isle Group is a leadership development company which brings about business transformation by enabling a sustainable shift in the behaviour of its clients.

Black Isle Group works on getting to the root cause of what stops human beings from achieving their true potential, working with them through their day-to-day challenges. Expert coaches draw on commercial and psychology backgrounds to impart skills and techniques to help clients break through self-imposed limits and support them in bringing about lasting change.

Black Isle Group’s philosophy is to deliberately disrupt the way that leaders think and provide truly exceptional learning experiences. The Group is led on the belief that people want to achieve, driven by data and guided by the real business challenges of participants.

The company is headquartered in London, with offices in Hong Kong, Sydney and Toronto.

Issue 10 | 29

ASIA BANKING

SCB :

EMPOWERED WITH IT INNOVATION After 25 years of establishment and development, Saigon Joint Stock Commercial Bank (SCB) has become one of the biggest banks in Vietnam with strong financial capacity, nation-wide network and more than 5,000 employees.

Aiming to maximize benefits for customers, bring added values to shareholders and prosperity for all of employees, SCB has been maintaining its solid finance advantage to develop and expand its business in safer and more efficient orientations, introducing technology-integrated product portfolio to welcome the digital banking era.

In 2017, there have been positively significant improvements in the entire economy, especially in banking and finance industry. All banks have striven for asserting their positions in the domestic and international markets. In addition to network expansion, human resources and recruitment improvements, great emphasis has been put in banking infrastructure and advanced technology integration.

SCB has honorably received the award “Best Banking Technology Vietnam 2017” from Global Banking & Finance Review magazine, SCB’s representative has given some words concerning its technology infrastructure.

1. Last year Saigon Joint Stock Commercial Bank (SCB) undertook a range of IT projects. Can you tell us about some of the projects and the advanced IT platforms created to meet the needs of banking customers?

During the past few years, SCB has constantly developed many applications to improve governance competency, optimize operation, resulting to high-quality products and increase added values. For some projects to name, we upgraded the Core Banking system to the latest version of Oracle (Oracle Flexcube Core Banking), launching the Treasury system of FIS and reforming all the old-style transactions to Digital Banking platforms.

2. What advantage does the continued upgrade and invest in technology infrastructure offer to shareholders and customers?

30 | Issue 10

ASIA BANKING

SCB – the modern and multi-functional retail bank

The upgrade in IT infrastructure will certainly facilitate the transaction procedures to become more automatic and convenient. The banking system will be in continuous operation with the highest safety levels while keeping the costs low. All of those help our bank compete in the market and benefit the most to customers and shareholders.

3. With the increased use of mobile banking technology and other alternative banking methods, what initiatives have you incorporated to ensure customers continue to receive the best customer experience possible?

At this time, SCB is currently transforming all transaction procedures to Digital Banking platforms. With this move, our customers will experience all of our services with mobile devices via internet. Customers are able to perform transactions of the best quality anytime, anywhere.

4. You were one of the first banks in Vietnam to achieve the “version 3.2 of PCI DSS” from the Payment Card Industry Security Standards Council, why was this a priority and how does it benefit consumers?

This has been put in our top priorities as we determine that all customers’ transactions must be maintained at the highest safety. All the latest version 3.2 of PCI DSS will absolutely guarantee for that.

5. Can you tell us about the new data center you established?

Our new data center is qualified in Tier 3, along with the existing data center on Active-Active basis. The two data centers will ensure the continuous and safe operation of our bank and the zero data lost system also keeps all the data free from lost and risks.

6. What are SCB’s plans for continued investment in infrastructure and further strengthening the foundations of the bank?

To 2020, we plan to strengthen our Digital system, fortify the ERP system and other risk management applications, together with Digital Banking and Analytics systems.

Issue 10 | 31

Americas 32 Issue 10

AMERICAS BANKING

Banco de Chile’s View on the Global and Chilean Economy The last decade was characterized by important changes that have transformed the economic landscape drastically. Many economies went in and out of recession, important financial institutions worldwide became distressed, which also brought about political uncertainty and important changes in regulations for the banking industry. Today, after one of the worst economic crisis of the last century, the global economy has shown a very strong recovery and is probably at one of the strongest points it has been in the last decades. In fact, FMI data confirms that the number of countries in recession is at very low levels and this together with excellent expectations; markets in every continent have rallied.

This is a key advantage for Chile, as we are one of the most open economies in the region. The better global economic conditions should certainly provide good news and contribute positively in strengthening the Chilean economy. This coupled with a stronger copper price and better business and consumer confidence levels will help drive GDP growth. However, it is important to take into consideration that a recovery is not guaranteed and that there are risks that must be addressed and monitored. Chile and all of Latin America must move forward on structural reforms that favour gains in productivity and accelerate growth, which are determining elements for long-term progress. Despite the current better copper prices than prior years, the commodities super cycle, which led an important increase in

Issue 10 | 33

AMERICAS BANKING investment rate, has ended. This together with other domestic factors has reduced Chile’s potential GDP from levels above 4% earlier this decade to nearly 3.0%. This reinforces the fact that we must identify and promote sustainable sources of development. Policies promoting labour participation, infrastructure investments, financial integration and labour flexibility, among other elements, will certainly make the difference.

Chile has implemented all of the basic conditions to become a developed nation, such as a robust policy framework (independent Central Bank and counter cyclical fiscal rule), strong institutional foundation and clear rules. Thanks to this, we have grown faster than our peers in Latam and have reached the highest GDP

34 | Issue 10

per capita in the region. In order for Chile to continue growing and improving the well-being of all Chileans, it’s important to focus on more difficult tasks that enhance industry diversification, reduce red tape, stimulate SMEs, and promote improvements in productivity levels.

This is a great opportunity for the financial system in Chile, which has built a sound banking industry with attractive levels of profitability and low delinquency rates, demonstrating the soundness of this sector. This has paved the road to creating better conditions for both individuals and companies in Chile.

As Banco de Chile, a leading universal commercial bank in Chile with over 120 years of history, we provide financial products and services to a broad customer base, from consumer finance to large

multinational companies. Throughout our recent history, the bank has shown a proven track record of responsible growth, which always takes into account the longterm sustainability of its customers and society in general. This is the foundation that has guided and will continue to guide us in the long-term. We truly believe that we have built a solid institution, with strong competitive advantages based on a consistent long-term customer centric strategy that will permit us to take greater advantage of this positive cycle and its opportunities to grow responsibly. We are also very proud that we as Banco de Chile, one of the most important financial institutions in Chile, have been throughout our history an important part of providing opportunities to Chileans to accomplish their projects and to contributing continuously to the economic development of Chile.

AMERICAS BANKING

Eduardo Ebensperger Orrego C.E.O Banco de Chile

Issue 10 | 35

AMERICAS INVESTMENT

2018 outlook for private equity 36 | Issue 10

While there are some common themes in private equity across geographies as well as the various sub-sectors, there are also some major divergences within and across markets. In the U.S. buyout market, median EBITDA multiples remain high even though there has been a notable decrease in deal flow. Additionally, the exit market has been slowing even faster than the deal flow market. Despite this, institutional investors continue to be very interested in private equity and, as a result, fundraising remains strong. A major challenge for U.S. buyout fund managers in 2018 will be deploying the abundant capital that they have raised over the past several years without putting additional upward pressure on purchase multiples.

AMERICAS INVESTMENT

US

The U.S. venture capital exit market has also been slowing but, unlike the buyout market, deal flow is up for both early and late stage companies. However, venture capital fundraising has been moderating.

Perhaps the biggest challenge facing the U.S. venture capital market is the IPO environment. While the IPO market showed some signs of recovery in early 2017, several IPOs were not well received and it remains very difficult to successfully navigate the intricacies of taking a company public. On a more positive note, the anticipated repatriation of large amounts of capital currently held by public companies in off-shore accounts due to proposed changes to the U.S. corporate tax code could impact positively on an already robust acquisition market.

Europe

Both deal flow and exits have been declining in the European buyout market.

While fundraising this year is also lower relative to last year, that may be due to a high-water mark being established when many of the pan-European fund managers raised large funds last year. Although it has yet to be reflected in the statistics, fundraising activity has increased more recently. Despite the decrease in deal flow, EBITDA multiples are up significantly over recent years and are approaching the lofty levels already seen in the United States. If prices remain high and expected economic growth remains bounded, European fund managers will be challenged in 2018 to generate historically attractive private equity returns commensurate with their risk profiles. Furthermore, the uncertainty induced by Brexit adds to the complexity of accurately assessing risk-return exposures across the region.

Asia

In contrast to the mixed measures for both the U.S. and European markets, all measures are up in Asia-Pacific private equity markets including deal flow, exits, and fundraising. While these trends are positive, many of the Asia-Pacific economies are substantially dependent on

exports, which makes them very sensitive to economic performance in other regions of the world. The unresolved geopolitical situation associated with North Korea induces additional uncertainly across the region and is particularly problematic as reasonable outcomes are difficult to characterise. Investors focused on AsiaPacific will face the continued challenge of investing in companies that can be successful even in the event of a decrease in global demand.

Oil

Oil prices have enjoyed a steady recovery from their lows and are at a level where there are attractive investment opportunities in the private equity energy market. Even more promising is the evidence of increasing demand for oil. If the economic recovery continues and further increases demand, energy prices may well experience additional improvement. A challenge in 2018 for energy markets is identifying quality private equity fund managers that can consistently generate attractive returns when the underlying value of their assets are highly dependent on a decidedly volatile commodity. In the infrastructure market, record levels of dry powder have led to increased competition for projects globally.

As infrastructure tends to be at the lower end of the private equity return spectrum, significant increases in pricing could be detrimental to project yields. A challenge for infrastructure in 2018 is identifying assets that have the potential to generate attractive returns despite the higher entry prices.

the recent economic recovery does not sustain, we could be seeing the initial phases of a perfect storm in global credit markets. If so, distressed fund managers may be well-positioned to take advantage of current overly lenient terms. The challenge in credit markets for 2018 will be finding fund managers that are able to issue loans with terms that provide some protection in the event of an economic decline.

Conclusion

As briefly discussed above, 2018 is shaping up to be a year of challenges as well as opportunities. Certainly, a major positive for the upcoming year is the recent increase in global growth expectations.

Growing economies generally would be beneficial to most private equity fund managers with the possible exception of distressed managers. In any case, most institutional investors are maintaining or increasing their allocations to private equity which may aggravate the capital deployment issues discussed above. The capital deployment issue is one of the “known knowns,” but as Donald Rumsfeld has argued, the bigger risk may well be from the “unknown unknowns.”

Private credit

Private credit markets have seen rapid growth in recent years as many institutional investors seek a broader opportunity set to increase returns in their fixed income portfolios.

Consequently, private credit is enjoying a strong fundraising market. However, it appears that some fundamentals in private credit markets may be weakening.

The increased interest in private credit has led to a decrease in spreads as well as an increase in covenant-lite deals. If

William Charlton Managing Director Pavilion Alternatives Group

Issue 10 | 37

AMERICAS FINANCE

Cryptocurrency and regulation:

How the recent past offers a potential insight into how the seemingly impossible can be achieved As digital currency technology increasingly enters the mainstream consciousness, its disruptive potential and power is invariably being compared to that of the internet in the 1990’s. Like the internet, the sudden rise of digital currencies poses serious questions about how they should be classified and incorporated into our legal system. Should Bitcoin be classified as an asset or viewed as a means of exchange? If people treat it as an investment, then how should their gains be taxed? How should smart contracts be overseen? These and a myriad of other questions are forcing governments and regulators to question how they can approach the digital currency domain without stifling innovation while at the same time protecting consumers.

The internet provides a helpful precedent as to how governments and legal systems can adapt to accommodate new rapidly developing disruptive technologies. As demonstrated with the internet, while cyberspace is nowhere, the people, companies and systems that deliver internet services are located in nation states. There are any number of control points, from the internet service and hosting providers that manage the flow of bits, to the financial services firms that control the flow of money which regulators can target to control online activity. The internet is a regulated space, however it isn’t regulated the same way everywhere and online transactions aren’t regulated identically to their offline analogues.

38 | Issue 10

Currency of the Internet (COTI) sees the rise of cross border e-commerce and digital currencies as a historic opportunity to boost the GDP of emerging economies by trillions within the next decade. Current payment methods and infrastructures aren’t built for the challenges of today’s cross border commerce, marketplaces, and person-to-person transactions. In order to fulfil the unrealised potential, there needs to be an informed debate about how the legal system can adapt to digital currencies. There are two ways to frame a discussion: Can these technologies be subject to legal and administrative oversight? And should they be? Many blockchain developers and advocates, especially digital currency evangelists from the earlier years, see the answer to the second question as obvious, and the first nearly so.

The decentralized architecture of consensus computing is a firewall against government intervention. The blockchain is not just immutable; it is “censorship resistant.” No higher authority can command a blockchain to do something, any more that it can order around the internet. There is no “there” to regulate. Regulation and the blockchain are antithetical.

The experience of the past twenty years suggests that governments and powerful private institutions will not so easily be disintermediated. Where they had a strong desire to regulate online activity, they found ways to do so. A similar pattern seems likely for

digital currency adoption: Where the stakes are high enough, governments will not simply defer their authority, they will adapt it. On this basis, COTI has designed its payments solution to combine elements of traditional, scalable, compliant payments systems with elements of decentralized, transparent and reduced processing fees of digital currencies. COTI’s payments transaction network and native digital currency were both designed with future regulatory oversight in mind, and as inherently not conducive to money laundering or other illicit activity.

To date most western governments recognize the basic legitimacy of digital currencies, but have stated a desire to create an overarching legal framework. Any future laws will have to take into account a number of complex questions, not least whether a digital currency exchange or a miner should be treated as a money transfer agent or a bank under state and federal laws in the U.S. Is a digital currency exchange a derivatives marketplace subject to regulatory requirements issued by the Commodity Futures Trading Commission (CFTC)?

Internationally, should digital currency service providers be required to obtain verified information about their customers and the destination of their transactions, as regulated financial institutions are under Anti MoneyLaundering/Know Your Customer (AML/KYC) rules? Are profits on appreciation in digital currencies subject to income tax as assets,

AMERICAS FINANCE currencies, or neither? At this relatively early stage of the digital currency era, there are many more questions than answers. As such, COTI has adopted the stance of engaging with regulators globally to share its experience as an international digital currency initiative, with a view to help shape regulatory frameworks that encourage, rather than stifle, innovation.

Like the internet in the 1990’s, digital currencies are beginning to emulate the broader society they seek to serve, and will face the same political and economic challenges as online

communities did. As digital currencies grow and become a mainstream phenomenon, corporate entities, users and regulators will call for government intervention to enforce neutrality rules and privacy protections as happened with the internet. Blockchain activity has already been proven to be subject to legal enforcement, and regulation is likely to follow within the next few years – indeed, in several jurisdictions, digital currency-specific regulation has already come into effect. Although COTI can’t anticipate future laws, it can and has designed its payments network and native currency to be

AML compliant and transparent on how transactions take place, providing consumers and merchants with remedies in the event of errors or fraud. It is hoped that this level of transparency and accountability will encourage others follow suit and lead to more widespread adoption of this transformative technology.

Nir Gazit CEO COTI

Issue 10 | 39

AMERICAS BUSINESS

The Challenges of Complying with Conflicting Regulations:

Reality Versus Practicality We are all familiar with silo-orientated organisations having a right hand that never quite knows what the left hand is up to.

While large organisations are addressing this challenge internally in a continuing efficiency drive, the problem is in a different league altogether when poor communication between regulatory bodies results in conflicting requirements. This can lead to an organisation in an effort to comply with one regulatory requirement fall foul of another. This conflict is a significant problem to market participants on both a national and international scale.

Regulators need to talk The issue is that regulatory bodies act independently of each other, and the market, they have different objectives and often make different interpretations of international guidelines. Regulators are understandably keen on market transparency, protection and confidentiality, but it doesn’t take much imagination to realise that transparency and confidentiality are often mutually exclusive.

40 | Issue 10

MiFID and GDPR conflict The MiFID II transparency requirements around transaction reporting require personal information about the actual individual person executing a transaction, and this collides with the General Data Protection Regulation (GDPR) around individuals’ personal information. Fraud and identity theft is increasing at a time that transaction reporting requires a large amount of personal information required to be captured across multiple industry infrastructures, and this surely increases the risk of personal data not being protected. It would have made sense for the regulators to have asked market participants how they keep individuals’ personal data confidential, and, in parallel ellicit suggestions from market participants as to how they could increase the transparency of individuals’ transactions. Armed with this knowledge the regulators could have improved the legislative and regulatory requirements around transparency and confidentiality with all players on board form the get go.

AMERICAS BUSINESS

How it started Back in 2004/05 it was apparent that the FED in the US was uncomfortable with the level of outstanding unsigned confirmations for Credit Derivative Swap (CDS) across the global CDS market.

The major market participants, who accounted for most of the transaction volume, worked together to address the issue. Known as the G14 Dealers, they agreed among themselves a set of selfregulated targets to reduce this back-log, and to track and report progress against these targets to the FED on a regular basis. These became known as the ‘FED Targets’. Through working collaboratively together, the G14 market participants not only reduced the backlog and average time confirmations remained unsigned, but also developed an industry standard electronic confirmation messaging language, the Financial products Markup Language (FpML). Participants of trades then used technology to electronically match confirmations and eliminate the manual, lengthy and time-consuming process around paper confirmation. This electronic matching not only eliminated the back log of paper confirmations but was also scalable to support increased trading volumes across the global markets. This is a great example of market participants, who understand their products and processes, introducing changes to increase control in a self-regulated environment and providing ongoing transparency to the regulatory community.

Independent interpretation of 2009 commitments In 2009, the G20 summit in Pittsburgh agreed four commitments around Global over-the-counter (OTC) Derivatives: •

Reporting OTC Derivatives to Trade Repositories

•

Increased use of central counterparties for OTC Derivatives

•

Execution of OTC Derivatives on electronic trading platforms

•

Increased use of collateral and risk mitigation techniques.

Each G20 country then independently interpreted the global Pittsburgh OTC Derivatives commitments and developed them into local legislation. Not only did each country interpret the four high level commitments differently but they also implemented different regulatory requirements - Dodd-Frank (US), ESMA (Europe) and JFSA (Japan) – and had different compliance timeframes.

Depending on the location of their primary regulatory supervisor, market participants were then faced with the challenge of having to comply with the different requirements when products were being traded between market participants across national borders.

It is understandable that each country wanted to assume control of implementing the changes given that most countries had to bail out organisations domiciled in their countries using taxpayers’ money. But it is in times of stress that we need global collaboration and harmonisation across regulators and not local protectionism by local regulators.

Market impact Fast forward to 2014/15 and many market participants had to implement bespoke tactical solutions to comply with the differing regulatory requirements across the globe. Moreover, it is doubtful that any regulator has a full and accurate transparency over the global OTC Derivative market place.

The solution – a collaborative approach A small group of the G14 Dealers (albeit a few names have disappeared due to the bankruptcies in 2008) again started to work together to understand how to simplify and automate this complex, costly and fragmented infrastructure. They identified opportunities to optimise collective investment in technology and resources to increase control, capacity and client service, while delivering against regulatory requirements, through collaboration, innovation and market participation.

Issue 10 | 41

AMERICAS BUSINESS

There is little doubt that a collaborative approach, bringing together market practitioners is logical for matters of regulation and market safety. The FCA is sensibly using the sandbox approach to provide an environment where participants can collectively design, develop and test solutions to meet regulatory objectives.

The Monetary Authority of Singapore (MAS) adopts a similar approach.

Ongoing regulatory consultation with market participants is also imperative ahead of introducing regulatory rules and requirements even sometimes at a very basic level. A simple and recent example where this hasn’t happened is with the implementation date of MiFID II. Given the significant ‘go-live’ challenges that MiFID II imposes on all market participants it would have made sense for the implementation date to be on a Monday (so that the preceding weekend could be used to migrate, test and deploy) or in the quiet market period between Christmas and New Year 2017 to minimise and mitigate the risks of go-live for all market participants. However, the regulators decided to choose Wednesday 3rd January 2018 for its implementation which is firstly in the middle of a week and secondly the day after the first full global trading day of 2018.

What regulators should do On the basis that regulators have access to everything, and don’t like surprises, there are three broad processes that would assist regulators when formulating regulations: •

Consult with market participants who have a deep understanding of the market and its processes and have the expertise to suggest workable solutions to meet multiple regulatory objectives in a sustainable and efficient manner.

•

Harmonise interpretations and regulations through cross border regulatory conversations and by working with the global international governance bodies.

•

If they’re looking at a market that is subject to other regulations (e.g.

GDPR), sit down and consult with the other regulator(s) (e.g. MiFID II) to ensure that there are no conflicting requirements. Regulatory bodies have differing objectives and lens of focus. This is understood, but all large organisations have different objectives across different departments and they work together to ensure that they are all achieved by talking and communicating.

People affect change communicating and collaborating and this leads to the right changes being made for all.

Stuart McClymont Co-Founder and Managing Director base60 Consulting

Issue 10 | 43

AMERICAS INVESTMENT

Five Data Challenges Every Index Provider Faces Indexes drive countless financial decisions, but providers need to modernize As the popularity of index-based investing grows due to transparency and lower fees, pressure among index providers is increasing. And for good reason. Index-based funds that follow the S&P 500, Dow Jones and Russell 2000 for instance, tend to beat 80 percent of actively managed funds. This lower-fee style of investing makes a meaningful difference to an investor’s return. It should come as no surprise that last year, according to Morningstar passively managed funds attracted almost $505 billion, compared with outflows of $340 billion from active funds.

is a complex and very time-consuming process that involves equal amounts of industry knowledge, mathematics and data analysis.

So, what does this mean for index providers? The valuation and movement of an index can have an even greater impact on financial markets and investors. Index providers are under more pressure to meet the highest levels of data quality and precision in their calculations. But it turns out developing and managing an index

Processes across the industry are largely manual, and in some cases even date back 60-100 years. There are many different types of indexes, each with their own unique set of calculations. An index might be weighted, for example, based on a stock’s price or its market capitalization.

44 | Issue 10

With all of the progress we’ve made in machine learning, algorithms and big data analytics, the industry has been surprisingly slow to adopt new technologies to streamline and accelerate the management of indexes and their time to market.

Why? Historically it’s so operationallyintensive and the financial markets – and indexes - never take a vacation.

Depending on the how an index is calculated, there are various factors to be considered such as the liquidity of constituent components, or the relative weightage of each component. Some key attributes and terms associated with an index include: Weighting Methodology – Indexes can be composed by weighting their constituents in different ways. Price-weighted, marketcapitalization-weighted, and equallyweighted are three examples.

Free-Float Adjusted Factor (FAF) – Not every share that has been issued in the market is freely tradable. Strategic holdings, for instance, are considered illiquid. The free-float adjusted factor is a measure of the ratio of liquid shares to the total.

Cap Factor – In order to not allow any one constituent of an index to have undue influence on its value, a cap factor may need to be employed to constrain its impact on the index.

AMERICAS INVESTMENT

In order to achieve the high-degree of accuracy required, it can take several days and countless employee hours to manage an index. Processes include Index Review, Index Rebalancing, Index Backtesting, Ad-hoc Enquiries and Factsheets, Industry-sector Classification, Calculation of the index itself, after having worked out the FAF and Cap Factor. On any given day, challenges include: 1. Consolidating data from multiple internal and external sources (Reuters, Bloomberg, MarkIt, FactSet, Exchanges, etc.)

2. Ensuring data quality and eliminating data duplication 3. Analyzing large volumes of structured and non-structured data including securities trading data, market data, newswires, social media, annual reports, etc.

4. Extensive reviews and re-balancing of indexes

through a series of streamlined tasks such as universe selection, benchmarking against historical data and a makerchecker review process.

The key to managing a successful index today? The ability to sift through an enormous amount of data from multiple sources and to calculate it accurately and quickly. The good news is that progress is being made and some global market index providers are adopting new approaches. Advanced data analytics and parallelized, machine learning algorithms that incorporate various index needs can automate processes and drastically alleviate bottlenecks to reduce employee hours and resources. This enables the index provider to automate many of its previously manually intensive functions - such as bringing rebalancing down to seconds instead of days - and eliminating any previous human error or data quality issues.

More importantly, by saving countless employee hours in operating a portfolio of indexes, modern day index management can help index providers shift resources to what will drive new revenue: expansion and diversification of their portfolio by bringing new products to market quicker.

Partha Sen CEO and Co-Founder Fuzzy Logix

5. Back-testing and creating new indexes

Issue 10 | 45

AMERICAS BUSINESS

Rising above the Competition with Next Generation

Customer Experience

46 | Issue 10

AMERICAS BUSINESS

The modern consumer is now more influential than ever. Empowered by newfound digital technologies, consumers are now able to dictate how and when they interact with financial services organisations. Additionally, they come with increasingly high expectations of a great experience whenever, wherever, and however they engage.

effort engagement. This is the preferred model for today’s connected consumer as it provides them with a choice, and ultimately the flexibility and efficiency that they desire.

Yet for organisations with global ambitions, that are looking to provide a seamless and consistent CX across borders and time zones, language must also be at the forefront of the design.

In line with these evolving consumer demands, we are now seeing a global trend of brands proritising providing a great customer experience (CX). Gartner predicts that 89% of companies will compete mostly on the basis of customer experience – this figure was 36% in 2010.

Naturally, consumers will always favour using their preferred language in all aspects of their daily lives. A brand’s customer engagement platform may well address every want and need of the consumer, but if it doesn’t enable these interactions to take place using their desired language, then all that is being achieved is a high-effort, poor customer experience. Ultimately, brands that speak to customers in their preferred language will find themselves at a significant advantage.

As a result, banks, insurance companies and other industries alike are pouring significant resources into developing omnichannel capabilities that cover a broad spectrum of channels while providing a low

Below are three consumer trends that are fueling the growing importance of an omnilingual service model:

•

The demand for self-service. Voice only interactions are now regarded as a less preferred means for consumers to utilise. They are resourceful enough to identify the answers that they are looking for themselves. Subsequently, they more often turn to self-service channels such as websites, forums, FAQ’s, virtual assistants and chatbots vs voice. Yet language is a potential barrier to the success of these channels due to their nature.

It is therefore crucial that selfservice options are available across languages, so that customers can easily locate and decipher the answers they are looking for.

Issue 10 | 47

AMERICAS FINANCE

Banco BMG. For the second consecutive year, recognized as best bank for investors relations.

We believe that the adoption of best practices should derive from principles, not from requirements.

That is how we have built, with our investors, a relationship based on transparency, respect, fairness and value generation. And that is why we are very pleased to be awarded, for the second time, as the “Best Bank for Investor Relations Brazil�. A recognition of the values that have always been part of our history.

We do it because we believe it!

2016 winner

2017 winner

With 87 years of solid presence in the Brazilian financial market, we are a multiproduct retail bank focused on payroll credit card to Social Security and public servants. www.bancobmg.com.br/ir 124 | Issue 9

AMERICAS BUSINESS

•

Real-time expectations. Time is a priceless commodity, and because of that consumers require a level of engagement that is instantaneous, and is available whenever they may require it. From the customer’s perspective, the ideal online CX is one that provides them with their answers with as little effort and as quick as possible, therefore brands that can communicate across channels in realtime 24/7, are held in higher regard.

This factor of time heightens the value of deploying a real-time translation and interpretation solution that can instantly eliminate language barriers.

•

A global market. From a broader perspective, globalisation has made markets far more accessible for brands, whilst also diversifying the ones that their previous successes have been built upon. As a result of this, all brands must plan to provide multilingual support to their customers.

Multilingual support across the omnichannel is the standard that brands should be setting in order to meet the evolving CX demands of the digital consumer.

Given the emergence of new and evolving communications channels, traditional language strategies no longer suffice. With brands now able to equip themselves with newly developed language solutions that operate in real-time across all channels, there is little excuse for brands to not support their global customers in their preferred language.

Multilingual omni-channel support enables more effective interactions and heightens the CX on a global basis. Both parties are able to benefit from such communications, as consumers have a platform through which they can reveal their desires, and brands are then able to listen to such demands and develop the customer journey accordingly. Having the capability to ensure that this occurs across markets, via a globally consistent CX platform, is essential for brands in today’s highly competitive market.

With disruptive new players continually entering the marketplace, and with brand loyalty a diminishing factor, customer experience is proving to be the ultimate differentiator. If these expectations are not realised, then the consumer will simply turn to a competitor that places a greater emphasis on multilingual customer care.

Supporting the language preferences of consumers across all channels should be viewed by brands as a priority to ensure that they attract and retain customers. By investing in this level of CX, brands will see themselves differentiate from competitors, leaving them in the best possible position to progress and adapt.

Tom Tseki Vice President & General Manager GeoFluent & Customer Care Solutions Lionbridge

Issue 10 | 49

For the second year in a row, we are proud to announce that "Global Banking & Finance Review" has recognized Mibanco as:

THE BEST MICROFINANCE BANK IN PERU 2017 This institution rewards leadership, commercial strategy, financial achievements and innovation within the global financial community.

Without doubt, this distinction encourages us to continue working every day for financial inclusion in Peru.

www.mibanco.com.pe

AMERICAS TECHNOLOGY

Back to the Future of Networking Outcome-Driven Networking empowers network managers to determine desired business outcomes and rely on the infrastructure intelligence to automatically execute the required configurations and policies networkwide to achieve that outcome. This is best enabled by Cloud-Delivered SDWAN, according to Michael Wood, Vice President of Marketing, VeloCloud As a consumer, our behaviours are based on desired outcomes and businesses that cater to consumers have long created an outcome-driven environment for us. For instance, you need to bake a particular-sized cake, but know you can’t find the appropriate-sized pan locally unless you decide to embark on a multi-store shopping venture. Instead, you open your Amazon application, enter in a few keywords, find the pan, and swipe right to “buy now” with one-click.

Wait a day or two, and that cake pan arrives at your door. You didn’t have to call the company, talk to someone about what size you needed, find out if it’s in

stock, give them your address, provide your credit card, and decide on shipping options. The entire process is automated for you. You can also check the order status at any time in their intuitive GUI, or get automatic alerts through the whole process.

The concept is not new in the consumer world, but it’s much more complex to implement in the networking world.

However, Outcome-Driven Networking now makes it possible and this can dramatically simplify and streamline network behaviour that would traditionally require network managers to manually configure each and every action on every node in the network to execute policies and achieve desired results.

Let’s look specifically at a corporate wide area network (WAN). Using OutcomeDriven Networking, businesses can now shape specific outcomes – such as “prioritise voice traffic between all branches” or “securely isolate financial data traffic from office and guest traffic.”

All processes can now be simplified and executed via a central interface, with single-click commands. This eliminates the need to spend weeks sending out technicians to build and test those capabilities manually across every company site.

Steps toward Outcome-Driven Networking

Technology evolves in many small steps.

The creators of the first Ethernet network may have harboured some grand vision of universal networking, but what mattered at the time was they wanted a simple outcome: to link all the computers in a building to a central laser printer. From there it was a step-by-step development from coaxial cable to twisted pair, to wireless and ever increasing speeds, to the Ethernet as we know it today.

Network design and implementation has learned to follow that evolutionary sequence. The company begins with a network as “state of the art” as is

Issue 10 | 51

AMERICAS TECHNOLOGY

needed, and then upgrades as useful capabilities or developments come onto the market. Among the most recent developments is the Software-Defined WAN (SD-WAN) that separates the control plane from the data plane to create a far more flexible and responsive network – an essential step towards Outcome-Driven Networking.

Outcome-Driven Networking provides a different mind-set, a new approach to WAN connectivity. Instead of planning any process or network change by thinking about each step that needs to be taken for it to happen and configure policies and nodes to ensure it happens, organizations need only to start with the desired outcome and allow the SDWAN model to implement the necessary network modifications. This is what is called “outcome-driven networking.�

52 | Issue 10

The key tenet is that all the changes to the network and its control are dictated by the desired business outcome and the inherent intelligence, network behaviour analysis, and automation in SD-WAN propagates throughout the entire network.

Sophisticated SD-WAN solutions are available today that enable OutcomeDriven Networking, based on a set of key pillars: Abstraction and Automation, Ubiquity, Awareness and Self-Learning.

Abstraction requires being able to translate a desired outcome into the discrete actions that the network and any adjacent functional areas need to take. For example, understanding the context of an application-centric policy to determine the appropriate prioritization, network links, gateways, and security functions to be allocated.

This abstraction layer is critical to aligning business outcomes to the underlying infrastructure, but it is not a simple task. It requires new levels of intelligence and comprehension.

Automation takes us way beyond replacing a standard Command Line Interface (CLI) with an intuitive Graphical User Interface (GUI) in order to accelerate the time to provision network and security functions. This is the way to migrate from manual device-by-device processes and maintenance windows that take weeks to complete, to policy-based automation that cuts network-wide deployment from weeks to minutes. As DevOps and cloud computing continue to force networks to be more agile, organizations are going to have to rely more on automated solutions leveraging application-centric policies to meet the needs of the business.

AMERICAS TECHNOLOGY

Self-awareness and self-learning are needed to accelerate the prior decisions that will be accomplished by automated roll-out. Once the required business outcomes have been assessed by the network team, suitable policy and performance levels are carried out by Outcome-Driven Networking, which continues to monitor itself, learn and take corrective action in real-time rather than simply transmit a warning and wait for human intervention. This will reduce dependence on error-prone manual interactions.

from guest and corporate traffic – across the network. Depending on the size of the remote office, removing a firewall from each site could result in a savings of several hundred to tens of thousands of dollars per location..

The potential impact of OutcomeDriven Networking migration

Whereas rolling out services in the legacy environment was limited to deploying two to four sites per week.

With Outcome-Driven Networking, once global policies have been defined, any devices rolled out to remote or cloud locations should not require manual configuration or reconfiguration of the network. Single-click secure provisioning means that deployment and time required for on-going operations are dramatically reduced. Instead of needing four to nine months to deploy to all 75 sites the same task could be completed in less than a week. As well as almost 95% time saving, this could accelerate the rollout of new revenue-producing applications, while freeing IT staff to focus on other strategic priorities.

There are so many potential benefits from Outcome-Driven Networking: the planning, analysis and decision-making saved by a self-learning system, the huge reduction in manual processes made possible by automation, the reduction in on-site technicians and truck rolls thanks to a central interface with ubiquitous reach, and not to mention the reduced downtime loss from a self monitoring and correcting network.

Ubiquity means that configurations and application-centric policies need to extend across the entire environment.

Because organizations operate with globally dispersed data centres and branch offices – and most already use cloud computing – pervasive WAN connectivity is vital. So too is the ability to ensure that the desired outcomes and underlying configurations are intelligently deployed and maintained throughout. This means that systems need to maintain context, so that different configurations can be applied to different devices as long as the outcome criteria are met. To ensure appropriate outcomes, any new policies and attendant WAN configurations must be quick and easy to create and deploy across any complex global network in real-time.

Let’s use an example from ESG’s recent white paper on Outcome-Driven Networking to illustrate this concept.

Take a global enterprise with 75 remote sites as an example. Assume the original corporate network included legacy WAN solutions that back-hauled traffic to the data centre over dedicated MPLS circuits. Unless the company had spent a considerable amount on dedicated firewalls at each remote location as well as having sufficient IT staff with the skills to configure and operate those devices, we can assume that there was originally no network segmentation.

Using Cloud-Delivered SD-WAN, Outcome-Driven Networking allows segmentation of network traffic to mitigate risk by separating sensitive customer payment card or personal data

Outcome-Driven Networking’s intelligent routing and service integration would also allow direct access to the cloud from remote offices, reducing the amount of traffic backhauled to the data centre by as much as 20%, while eliminating the need for a router at each remote location.

Perhaps one of the hardest areas to quantify, but one that could yield the highest return, is the improvement in customer experience achieved by establishing priorities on an application-by-application basis (including SaaS or cloud-based applications) – such as ensuring that customer-facing voice and video applications are assured performance, even in the event of an outage. Given how impatient modern consumers are, ensuring consistently high performance will help to reduce churn.

Issue 10 | 53

AMERICAS TECHNOLOGY

Combining these benefits from the outcome-driven SD-WAN solution, an enterprise with 75 remote locations could savea lot of money, at least eight months deployment time, plus additional on-going savings from efficiencies (global policies, zero-touch, AI, and ML) and most importantly, improved customer experience.

The bigger picture As the pace of business accelerates, organizations need innovative solutions to stay ahead. Digital transformation, cloud-based computing, and DevOps are all driving more agile and responsive IT services for business.

Beyond agile and responsive networking, business will need an intelligent solution that can actually address and maintain a desired business outcome. The WAN’s critical role makes it a strategic asset and IT teams must increasingly focus on the outcomes that impact business, rather than configuring and managing network devices in isolation.

54 | Issue 10

Outcome-Driven Networking tightly aligns IT and the WAN with business goals. To make this transition, organizations need innovative technology capable of redirecting IT teams’ efforts from tedious, manual tasks for configuring and maintaining a reliable and secure WAN, to driving positive business outcomes. OutcomeDriven Networking marks the transition from complex, costly, and timeconsuming manually operated WANs to fully automated, self-aware, and application-centric policy-driven SDWAN environments.

The ultimate business outcome must be the continuing success in a highly competitive environment. OutcomeDriven Networking can power this initiative: Start with the business outcome and allow the network to handle the rest.

Michael Wood Vice President of Marketing VeloCloud

Get the

Print Magazine

delivered to your Doorstep

Subscribe at

GlobalBankingAndFinance.com

Global Banking & Finance Awards® 2017 AWARD WINNERS Global Banking & Finance Review is privileged to honour those financial institutions who have achieved outstanding results and who stand out in their particular area of expertise in the banking and finance industry.

Global Banking & Finance Review would like to congratulate the award winners and look forward to their continued success. The awards were created to recognize companies of all sizes that are prominent in particular areas of expertise and excellence within the financial community. They reflect the involvement of leading financial organizations and recognize the accomplishment, achievement, innovation, strategy, progressive and motivating changes taking place within the financial sector.

Titles Best Investor Relations Company Africa 2017 Best Equities Research House Africa 2017 Best Financial Guarantee Provider for SME's Africa 2017 Most Innovative ESG Risk Protection Company Africa 2017 Best Insurance Company Albania 2017 Best Corporate Governance Bank Albania 2017 Best Life Insurance Company Andorra 2017 Fastest Growing Private Bank Andorra 2017 Best CSR Bank Andorra 2017 Best Private Bank Andorra 2017 Best Insurance Company Angola 2017 Fastest Growing Commercial Bank Angola 2017 Best Commercial Bank Angola 2017 Best Mobile Banking Application Angola 2017 Fastest Growing Investment Bank Angola 2017 Best Cash Management Bank Argentina 2017 Best Consumer Finance Bank Argentina 2017 Best SME Bank Argentina 2017 Best Online Broker Argentina 2017 Best Research House Argentina 2017 Best Investment Management Company Argentina 2017 Best Foreign Commercial Bank Argentina 2017 Best Motor Insurance Company Armenia 2017 Best Trade Finance Bank Armenia 2017 Best Retail Bank Armenia 2017 Best Mobile Banking application Armenia 2017 Most Socially Responsible Bank Armenia 2017 Most Innovative Leasing product "Green Leasing" Armenia 2017 Best Aviation Leasing Company Asia 2017 Best Commodity Trading Platform Asia 2017 Best Islamic Exchange Asia 2017 Most Innovative Global End-to-End Shariah-Compliant Investing Platform Asia 2017

Company Names Mota-Engil, SGPS, S.A. African Alliance Securities Ghana Limited African Guarantee Fund African Risk Capacity Insurance Company Limited Sigal Uniqa Group Austria NBG Bank Albania Assegurances Generals Andbank Crèdit Andorrà Crèdit Andorrà Global Seguros, SA Banco Sol Banco de Fomento Angola Banco Económico, SA Banco Prestígio Banco Santander Río Banco Cetelem Argentina SA BICE (Banco de Inversión y Comercio Exterior) Portfolio Personal S.A. Portfolio Personal S.A. Puente ICBC Argentina Ingo Armenia Insurance CJSC ARARATBANK Inecobank Inecobank Evocabank ACBA Leasing BOC Aviation Limited Bursa Malaysia Berhad Bursa Malaysia Berhad Bursa Malaysia Berhad

Best Forex Education Broker Asia 2017 Best Introducing Broker Affiliate Program Asia 2017 Best New STP Broker Asia 2017 Best FOREX Customer Service Broker Asia 2017 Best Institutional Broker Asia 2017 Best Execution Broker Asia 2017 Fastest Growing ECN Broker Asia 2017 Best Investment Management Company Asia 2017 Best Trading and Execution Exchange Asia 2017 Best Credit Insurer Asia Pacific 2017 Best New Trade Execution Asia Pacific 2017 Best New STP and New ECN Broker Asia Pacific 2017 Best CFD Broker Asia Pacific 2017 Best Fund Administration Company Asia Pacific 2017 Best Forex Education Provider Australasia 2017 Best Customer Service Bank Australia 2017 Best Agribusiness Bank Australia 2017 Best Corporate Advisory Firm Australia 2017 Best Institutional Debt Trading Firm Australia & New Zealand 2017 Best Bank for Asset Management Austria 2017 Fastest Growing Commercial Bank Azerbaijan 2017 Best Internet Banking Azerbaijan 2017 Best Non-Life Insurance Company Azerbaijan 2017 Best Corporate Bank Azerbaijan 2017 Best Life Insurance Company Azerbaijan 2017 Best Medical Insurance Services Provider Azerbaijan 2017 Best Microfinance Bank Azerbaijan 2017 Best Saving Bank Bahamas 2017 Best Islamic Banking Product (It'eman Account) Bahrain 2017 Best Islamic Credit Card Program (easy 36) Bahrain 2017 Best Islamic Retail Bank Bahrain 2017 Best Telecommunications Company Bahrain 2017 Best Islamic Corporate Bank Bahrain 2017 Fastest Growing Life Insurance Company Bahrain 2017 Best Reinsurance Company Bahrain 2017 Best Asset Management Bank Bahrain 2017 Best Investment Bank Bahrain 2017 Best Bank for Debt Capital Market Bahrain 2017 Best Finance Training Provider Bahrain 2017 Best Motor Insurance Company Bahrain 2017 Best Islamic Private Bank Bahrain 2017 Best Islamic Bank for Treasury Services Bahrain 2017 Best Islamic Leasing Advisory Provider Bahrain 2017 Best Inter-Dealer Broker Bahrain 2017 Best Electronic Payment Service Provider Bahrain 2017 Best CSR Bank Bahrain 2017 Best Customer Service Bank Bahrain 2017 Best Retail Bank Bahrain 2017 Best Private Bank Baltics 2017

Fort FX Marquis FX Salmaforex Skyline FX Starfish FX Valour FX FXTM Fosun International Limited Broctagon Exchange Atradius Fullerton Markets Fullerton Markets OANDA SANNE Learn to Trade Pty Ltd Heritage Bank Rural Bank PPB Advisory Eliseo Financial Partners Limited Schoellerbank Azer Turk Bank AGBank Azerbaijan Industrial Insurance AFB Bank OJSC Qala Hayat Insurance company Mega Insurance OJSC AccessBank CJSC Fidelity Bank Khaleeji Commercial Bank Khaleeji Commercial Bank Al Baraka Islamic Bank Batelco Kuwait Finance House (Bahrain) Al Hilal Life Trust Re Gulf International Bank Gulf International Bank Gulf International Bank Bahrain Institute of Banking & Finance (BIBF) Solidarity General Takaful Al Salam Bank-Bahrain B.S.C. Al Salam Bank-Bahrain B.S.C. Ijara Management company ICAP Middle East WLL Arab Financial Services Company (AFS) National Bank of Bahrain National Bank of Bahrain BBK Luminor

Dr. ​Rui Vicente, CEO, Dixtior Consulting

Ms Tran Quynh Chi -Head of Re-Insurance Department, Mr Le Tuan Dung , CEO, Ms Nguyen Hong Van ,Chairman, Ms Le Thi Quynh Hoa ,Head of Business Development at VietinBank Insurance Company

Mr Kyaw Myo Win, Head of Business Development and Mr Myo Min Thu, Managing Director, AYA Myanmar Insurance

Best Commercial Bank Barbados 2017 Best Retail Bank Barbados 2017 Best SME Bank Belarus 2017 Best Corporate Bank Belarus 2017 Best CSR Bank Belarus 2017 Best Retail Bank Belarus 2017 Best Core Banking Solutions Provider Belgium 2017 Best Trade Finance Bank Belgium 2017 Best Private Bank Belgium 2017 Best Treasury Bank Benin 2017 Best Trade Finance Bank Benin 2017 Best Wealth Management Bank Bermuda 2017 Best Retail Bank Bermuda 2017 Best Wealth Management Company Bermuda 2017 Best Microfinance Bank Bolivia 2017 Best Business Bank Bolivia 2017 Best Customer Service Bank Bolivia 2017 Best Retail Bank Bolivia 2017 Best Digital Banking Bolivia 2017 Fastest Growing Retail Bank Bolivia 2017 Best Life Insurance Company Bosnia 2017 Best Islamic Corporate Bank Bosnia and Herzegovina 2017 Best Retail Bank Bosnia and Herzegovina 2017 Most Innovative Commercial Bank Botswana 2017 Best Life Insurance Company Botswana 2017 Best Wealth Management Bank Brazil 2017 Best Agriculture Financing Bank Brazil 2017 Best Commercial Bank Brazil 2017 Best Retail Bank Brazil 2017 Best Customer Service Bank Brazil 2017 Fastest Growing Retail Bank Brazil 2017 Best Travel Insurance Company Brazil 2017 Best SME Bank Brazil 2017 Fastest Growing Investment Bank Brazil 2017 Best Fund Administration Bank Brazil 2017 Fastest Growing Commercial Banking Brazil 2017 Best Investor Relations Bank Brazil 2017 Best Takaful Provider Brunei 2017 Fastest Growing Foreign Bank Brunei 2017 Best Retail Bank Brunei 2017 Best Retail Bank Bulgaria 2017 Best Corporate Bank Bulgaria 2017 Best Trade Finance Bank Bulgaria 2017 Best Credit Insurance Provider Bulgaria 2017 Best Financial Software Service Provider Bulgaria 2017 Best Pension Fund Provider Burundi 2017 Best Retail Bank Burundi 2017 Fastest Growing Retail Bank Cambodia 2017 Faster Growing Commercial Bank Cambodia 2017

First Citizens Bank CIBC FirstCaribbean International Bank Belinvestbank JSC Belagroprombank JSC Belagroprombank JSC Belagroprombank JSC Sopra Banking Software KBC Bank NV ABN AMRO Bank Ecobank Benin Ecobank Benin The Bank of N.T. Butterfield & Son Limited The Bank of N.T. Butterfield & Son Limited LOM Financial (Bermuda) Limited BancoSol Banco Mercantil Santa Cruz Banco Mercantil Santa Cruz Banco Mercantil Santa Cruz Banco de CrĂŠdito De Bolivia S.A. Banco Union UNIQA Bosnia Bosna Bank International Nova Banka AD Banja Luka FNB (First National Bank) Botswana Metropolitan Life of Botswana BTG Pactual Sicredi Cooperative Bank Banco do Brasil S.A Banco Bradesco Bancoob BRB - Banco de BrasĂ­lia S/A Allianz Global Assistance Brazil Banco Daycoval Banco Ribeirao Prato Banco Finaxis Banco ABC Brasil Banco BMG Takaful Brunei Maybank Brunei Standard Chartered Brunei TBI Bank EAD DSK Bank Postbank Coface Bulgaria Sirma Business Consulting Jubilee Insurance Company of Burundi Ecobank Burundi CIMB Bank PLC Cambodia Post Bank Plc.

Best Commercial Bank Cambodia 2017 Best Internet Bank Cambodia 2017 Fastest Growing Bank for Loans Cambodia 2017 Best General Insurance Company Cambodia 2017 Best Insurance Customer Service Company Cambodia 2017 Best CSR Company Cambodia 2017 Best Telecommunications Company Cambodia 2017 Best Bank for Premier Banking Cambodia 2017 Best Customer Service Bank Cambodia 2017 Best Mobile Payment Solutions Cambodia 2017 Best Bank for Loans Cambodia 2017 Best Retail Bank Cameroon 2017 Best Corporate Bank Cameroon 2017 Best Motor Insurance Company Cameroon 2017 Best Health Insurance Company Cameroon 2017 Best Private Wealth Management Company Canada 2017 Best Banking CEO Canada 2017 Best Retail Bank Canada 2017 Best Commercial Bank Cape Verde 2017 Best Retail Bank Cayman Islands 2017 Best Wealth Management Bank Cayman Islands 2017 Best Wealth Management System Central & Eastern Europe 2017 Best Energy Broker Central and Eastern Europe 2017 Best Customer Services Bank Chile 2017 Best CSR Bank Chile 2017 Best Bank for Loans Chile 2017 Best Retail Bank Chile 2017 Best Credit Insurance Company Chile 2017 Fastest Growing Retail Bank Chile 2017 Best Credit Cards Chile 2017 Best Private Equity Firm Chile 2017 Best Investment Bank Chile 2017 Best Internet Bank Chile 2017 Best Mobile Bank Chile 2017 Best Micro Finance Company Chile 2017 Fastest Growing Investment Bank Chile 2017 Best ECN Broker Chile 2017 Best Foreign Exchange Bank Chile 2017 Best Brokerage House Chile 2017 Best Fund Management Company China 2017 Best SME Bank China 2017 Best IB Program China 2017 Best Green Bank China 2017 Best Retail Bank China 2017 Best Trade Finance Bank China 2017 Best Forex Provider China 2017 Best Leasing Company China 2017 Best Consumer Finance Company China 2017 Best Investment Bank China 2017

Canadia Bank Foreign Trade Bank of Cambodia Tomato Specialized Bank Forte (Cambodia) Insurance Forte (Cambodia) Insurance Smart Axiata Co., Ltd Smart Axiata Co., Ltd Vattanac Bank Vattanac Bank Wing (Cambodia) Limited Specialised Bank Kookmin Bank Cambodia PLC United Bank for Africa Cameroon SA Standard Chartered Bank Cameroon SA Zenith Insurance SA Zenith Insurance SA Desjardins Private Wealth Management David McKay, Royal Bank of Canada (RBC) Royal Bank of Canada (RBC) Banco Interatlântico Butterfield Bank (Cayman) Limited Butterfield Bank (Cayman) Limited Comarch 42 Financial Services Scotiabank Chile Scotiabank Chile Banco Santander Banco Santander Coface Banco de CrÊdito e Inversiones BancoEstado de Chile Activa Private Equity Banchile Inversiones Banco de Chile Banco de Chile Fondo Esperanza Banco Bice Continental FX S.p.A. HSBC Bank (Chile) BCI Corredor de Bolsa China Asset Management Co., Ltd. DBS Bank (China) Limited Juno Markets Industrial Bank of China Industrial Bank of China Industrial Bank of China BMO Capital Markets ICBC Financial Leasing Co Home Credit International ICBC International

Mr. Dav Liew, Senior Marketing Consultant, Valour FX

Maryam Al Shorafa, VP - Head Of Corporate Communication & Marketing, Ajman Bank

Ms. Pham Thi Hien, Deputy General Director, An Binh Commercial Joint Stock Bank

Issue 7 | 29

Mr. Joseph Chan, CEO, AsiaPay

Mr. Winyou Chaiyawan, CEO, The Thai Credit Retail Bank Public Company Limited

(On the right)Â Viktor Fischer, Deputy CEO, ACOLIN Fund Services AG

Fastest Growing Asset Management Company China 2017 Best Banking Group Colombia 2017 Best Investor Relations Colombia 2017 Best Commercial Bank Colombia 2017 Most Innovative Pension Fund Colombia 2017 Best Corporate Bank Democratic Republic of Congo 2017 Best Retail Bank Democratic Republic of Congo 2017 Best SME Bank Costa Rica 2017 Most Innovative Bank Costa Rica 2017 Best Brokerage House Costa Rica 2017 Best Commercial Bank Costa Rica 2017 Best Retail Bank Costa Rica 2017 Fastest Growing Corporate Bank Costa Rica 2017 Fastest Growing Investment Bank Cote d'Ivoire 2017 Fastest Growing SME Bank Cote d'Ivoire 2017 Best Retail Bank Cote d'Ivoire 2017 Best Commercial Bank Côte d'Ivoire 2017 Fastest Growing Corporate Bank Côte d'Ivoire 2017 Best Leasing Company Croatia 2017 Best Fund Management Company Croatia 2017 Best Retail Bank Croatia 2017 Best Investment Bank Croatia 2017 Best Commercial Bank Cuba 2017 Best Retail Bank Cuba 2017 Best Private Bank Cyprus 2017 Best Group Pension Provider Cyprus 2017 Best Investor Relations Bank Czech Republic 2017 Best Trade Finance Bank Czech Republic 2017 Best Retail Bank Czech Republic 2017 Best Private Bank Denmark 2017 Best Financial Education Provider Denmark 2017 Best Consumer Finance Bank Denmark 2017 Best Retail Bank Dominican Republic 2017 Best Internet Bank Dominican Republic 2017 Best Microfinance Bank Ecuador 2017 Best CSR Bank Ecuador 2017 Best SME Bank Ecuador 2017 Best Islamic Commercial Bank Egypt 2017 Best General Insurance Company Egypt 2017 Best Takaful Company for Life and Health Egypt 2017 Best Islamic Mortgage Finance Company Egypt 2017 Best Asset Management Company Egypt 2017 Best Brokerage House Egypt 2017 Best Investment Banking Company Egypt 2017 Fastest Growing SME Bank Egypt 2017 Fastest Growing Bank for Micro Financing Egypt 2017 Best Investment Bank Egypt 2017 Fastest Growing Retail Bank Egypt 2017 Best Bank for Treasury Activities Egypt 2017

EFG Corporation Grupo Aval Grupo Aval Banco de Bogotá Porvenir Rawbank sa Rawbank sa Banco Improsa Banco Lafise BAC Puesto de Bolsa S.A Banco Lafise Banco Lafise Banco Cathay de Costa Rica BGFIBank Cote d’Ivoire BGFIBank Cote d’Ivoire Guaranty Trust Bank Cote d'Ivoire Societe Generale de Banques en Côte d'Ivoire BICICI UniCredit Leasing Croatia d.o.o.

Erste Asset Management Ltd Addiko Bank d.d Zagrebacka Banka Banco Popular de Ahorro (BPA) Banco Popular de Ahorro (BPA) Bank of Cyprus Ancoria Insurance Public Ltd MONETA Money Bank, a.s.

KBC Bank NV Equa Bank a.s.

Danske Andelskassers Bank Tradimo Interactive Ekspres Bank Denmark Banco Múltiple BHD León S.A. Banco Múltiple BHD León S.A. Banco Pichincha Banco Pichincha Banco ProCredit-Ecuador Abu Dhabi Islamic Bank (ADIB) Misr Insurance Company Libano-Suisse Takaful Egypt Amlak Finance EFG Hermes EFG Hermes EFG Hermes Banque Misr Banque Misr Arab African International Bank EGBANK (Egyptian Gulf Bank) QNB Alahli

Best Corporate Bank Egypt 2017 Best Retail Bank Egypt 2017 Best SME Bank Egypt 2017 Best Trade Finance Bank Egypt 2017 Best Commercial Bank El Salvador 2017 Best Retail Bank El Salvador 2017 Best Islamic Finance Technology CEO of the Year EMENA 2017 Best Pension Fund Estonia 2017 Best Credit Insurance Company Estonia 2017 Best Asset Management Company Estonia 2017 Best Non-Life Insurance Ethiopia 2017 Best Retail Bank Ethiopia 2017 Fastest Growing Commercial Bank Ethiopia 2017 Best Commercial Bank Ethiopia 2017 Best Customer Service Bank Ethiopia 2017 Best Internet Bank Ethiopia 2017 Best White Label Solutions Provider Europe 2017 Best Forex Customer Support Broker Europe 2017 Best Credit Insurer Europe 2017 Best DCC Treasury Management Provider Europe 2017 Best DCC Solution Provider Europe 2017 Fastest Growing Energy Broker Europe 2017 Best Corporate Social Responsibility Banking Group Europe 2017 Best STP Broker Europe 2017 Best Payment Solutions Provider Europe 2017 Fastest Growing Alternative Finance Company Europe 2017 Best Private Equity Firm Finland 2017 Best CFD Broker France 2017 Best Online Research Provider France 2017 Best Forex Broker France 2017 Best Procurement Management Solution Company France 2017 Best Internet Bank Gambia 2017 Best Commercial Bank Gambia 2017 Best Islamic Banking Marketing Campaign (Al Majd) GCC 2017 Best New Deal Advisory GCC 2017 Best New Corporate Finance Advisory GCC 2017 Best New Financial Advisory GCC 2017 Fastest Growing Credit Insurance Company GCC 2017 Best Core Banking Solutions Provider Georgia 2017 Best Retail Bank Georgia 2017 Best Corporate Bank Georgia 2017 Best Forex Education Provider Georgia 2017 Best New Forex Company Georgia 2017 Best Fund Management Company Germany 2017 Best CSR Bank Germany 2017 Best Cloud Banking Provider Germany 2017 Most Innovative Banking App Germany 2017 Best Bank for Consumer Finance Germany 2017 Best Indices Provider Germany 2017

QNB Alahli QNB Alahli QNB Alahli QNB Alahli Banco Agrícola Banco Agrícola Mohammed Kateeb Path Solutions LHV Asset Management KredEx Krediidikindlustus AS LHV Asset Management The United Insurance Company SC Addis International Bank S.C. Bunna International Bank Awash International Bank S.C. Abay Bank S.C. United Bank, Ethiopia TRADOLOGIC Destek Markets Atradius Monex Financial Services Monex Financial Services ARRACO Global Markets BNP Paribas Group GLOBAL FX ACI Worldwide ID Finance Bocap Investment Ltd IG Group France Trading Central X-Trade Brokers Ivalua Guaranty Trust Bank (Gambia) Limited Guaranty Trust Bank (Gambia) Limited Barwa Bank Trussbridge Advisory (DIFC) Limited Trussbridge Advisory (DIFC) Limited Trussbridge Advisory (DIFC) Limited Coface Credit Insurance GCC Ltd. Alta Software Liberty Bank JSC Bank Republic HDFOREX HDFOREX TBF Global Asset Management Germany GLS Gemeinschaftsbank eG MAMBU GmbH o2 Banking. Telefónica Germany GmbH & Co. OHG Santander Consumer Bank Germany Solactive AG

Mr. Mel Carvil, Member of the Board of Directors, Home Credit B.V.

Angela Gruzdova , FBS

Mr. Matjaz Zadravec, CEO and Managing Partner Royal Vision Capital Limited

Issue 7 | 29

Dr. Edem Bart Williams, CEO, Nordea Capital Limited

Yadi Supriyadi, Marketing, Salma Markets Companies Corp., Mai Ngoc Nguyen, Marketing CTO, Salma Markets Companies Corp., Marketing, Salma Markets Companies Corp.

Best Private Bank Germany 2017 Best Retail Bank Ghana 2017 Fastest Growing Savings and Loans Company Ghana 2017 Fastest Growing Corporate Bank Ghana 2017 Best Pension Trustee Ghana 2017 Fastest Growing Retail Bank Ghana 2017 Most Innovative Mobile Life Insurance Provider Ghana 2017 Best Life Insurance Company Ghana 2017 Best New Life Insurance Company Ghana 2017 Best New Savings and Loans Company Ghana 2017 Best CSR Bank Ghana 2017 Best Pensions Fund Manager Ghana 2017 Best Mutual Fund Manager Ghana 2017 Best New Corporate Bank Ghana 2017 Best Bank for Investor Relations Ghana 2017 Best New Mobile Payment Solutions Provider Ghana 2017 Fastest Growing Health Insurance Company Ghana 2017 Best Corporate Bank Ghana 2017 Best Customer Service Bank Ghana 2017 Best E-Commerce Bank Ghana 2017 Best Electronic Payment Solutions Provider Ghana 2017 Best New Asset Management Company Ghana 2017 Best Brokerage House Greece 2017 Best Investment Bank Greece 2017 Fastest Growing Asset Management Company Greece 2017 Most Innovative E-Branch Project Greece (Piraeus Bank) 2017 Best Retail Bank Grenada 2017 Best Customer Service Bank Grenada 2017 Best Mobile Banking Platform Guatemala 2017 Best Internet Bank Guatemala 2017 Best Retail Bank Guinea 2017 Best Retail Bank Guyana 2017 Best Commercial Bank Guyana 2017 Best CSR Bank Guyana 2017 Best Retail Bank Honduras 2017 Best Commercial Bank Honduras 2017 Best Customer Service Bank Hong Kong 2017 Best Credit Insurance Company Hong Kong 2017 Best Trade Finance Bank Hong Kong 2017 Best Asset Management Company Hong Kong 2017 Best Wholesale Bank Hong Kong 2017 Most Innovative Banking Product (Tesla Value Loan Program) Hong Kong 2017 Best Corporate Bank Hong Kong 2017 Fastest Growing Payments Solutions Provider Hong Kong 2017 Best Investor Relations Service Provider Hong Kong 2017 Best Hedge Fund Hong Kong 2017 (KS Asia Absolute Return Fund) Best Trade Finance Bank Hungary 2017 Best Corporate Bank Iceland 2017

Bankhaus August Lenz & Co. AG Access Bank Ghana Limited Pan-African Savings and Loans Company Ltd uniBank (Ghana) Limited United Pension Trustees Ltd uniBank (Ghana) Limited BIMA Enterprise Life Prudential Life Insurance Ghana Best Point Savings & Loans Ltd uniBank (Ghana) Limited FirstBanC Financial Services FirstBanC Financial Services The Royal Bank Stanbic Bank Ghana Limited Zeepay Ghana Limited Acacia Health Insurance Zenith Bank (Ghana) Limited Zenith Bank (Ghana) Limited Zenith Bank (Ghana) Limited eTranzact International PLC Nordea Capital Limited NBG Securities Investment Bank of Greece Alpha Trust DINN! Republic Bank Republic Bank Banco Agromercantil de-BAM Banco Agromercantil de-BAM Societe Generale de Banques Bank of Baroda Guyana Republic Bank (Guyana) Limited Republic Bank (Guyana) Limited Banco Ficohsa Banco Ficohsa Nanyang Commercial Bank Euler Hermes Hong Kong Services Ltd China Minsheng Banking Corp., Ltd (CMBC) BOCHK Asset Management Limited United Overseas Bank Hong Kong ORIX Asia Ltd United Overseas Bank Hong Kong ANX International Financial PR (HK) Limited Gen2 Partners LTD KBC Bank NV Arion Bank-Iceland

Best Investment Bank Iceland 2017 Best Retail Bank Iceland 2017 Best Corporate Governance Company Iceland 2017 Best New Digital Leasing Company India 2017 Fastest Growing NBFC Company India 2017 Best Bank for Co-Branded Credit Cards (Permata Hero Cards) Indonesia 2017 Best Bank for Social Media Indonesia 2017 Best Islamic Corporate Bank Indonesia 2017 Best Life Insurance Company Indonesia 2017 Best Savings Bank Indonesia 2017 Best Investment Banking Company Indonesia 2017 Fastest Growing Asset Management Company Indonesia 2017 Fastest Growing Corporate Bank Indonesia 2017 Best Takaful Family Provider Indonesia 2017 Best Retail Bank Indonesia 2017 Best Corporate Bank Indonesia 2017 Best Mutual Funds Provider Indonesia 2017 Best Reinsurance Company Indonesia 2017 Best Financial Advisory Firm Ireland 2017 Best Asset Management Company Israel 2017 Best Payment Solutions Provider Israel 2017 Best Digital Bank Israel 2017 Best Investment Bank Italy 2017 Best Bank for Social Media Italy 2017 Best Corporate Bank Italy 2017 Best Life Insurance Company Jamaica 2017 Best Investment Bank Jamaica 2017 Best CSR Programme Jamaica 2017 Best Leasing Company Jordan 2017 Best Life Insurance Company Jordan 2017 Best Payment Solution Provider Jordan 2017 Best Reinsurance Brokerage Jordan 2017 Best SME Bank Jordan 2017 Best CSR Islamic Bank Jordan 2017 Best Islamic Bank Jordan 2017 Best Islamic Business Bank Jordan 2017 Best IT Banking Solution Provider Jordan 2017 Best Asset Manager Jordan 2017 Best Internet Bank Kazakhstan 2017 Best Corporate Bank Kazakhstan 2017 Best SME Bank Kazakhstan 2017 Best E-Commerce Bank Kazakhstan 2017 Fastest Growing Finance Advisory Kazakhstan 2017 Fastest Growing Corporate Bank Kazakhstan 2017 Best Private Bank Kazakhstan 2017 Fastest Growing Commercial Bank Kenya 2017 Best General Insurance Company Kenya 2017 Best Life Insurance Company Kenya 2017 Fastest Growing Reinsurance Company Kenya 2017

Arion Bank-Iceland Arion Bank-Iceland Mannvit Origa Leasing Edelweiss Capital Permata Bank Permata Bank Bank Muamalat PT Asuransi Jiwasraya (Persero) PT Bank Victoria International PT Danareksa Sekuritas PT Indo Premier Investment Management China Construction Bank Indonesia PT Sun Life Financial Indonesia PT Bank Mandiri (Persero) Tbk. PT Bank Mandiri (Persero) Tbk. PT Mandiri Manajemen Investasi PT Reasuransi Indonesia Utama ( Persero ) Hegarty Financial Management Migdal Capital Markets WIC WorldCom Finance Ltd Israel Discount Bank Banca IMI ING Bank Banca d'Alba NCB Insurance Company Limited Sagicor Bank Scotiabank Comprehensive Leasing Company Jordan Insurance Company ProgressSoft Corporation APEX Insurance Capital Bank of Jordan Jordan Dubai Islamic Bank Jordan Dubai Islamic Bank Jordan Dubai Islamic Bank Pio-Tech Al Arabi Investment Group (AB Invest) Kazkommertsbank Nurbank JSC Nurbank JSC Alfa-Bank JSC "SkyBridge Invest" Qazaq Banki ATFBank JSC KCB (Kenya Commercial Bank) APA Insurance Ltd Kenya Liberty Kenya Holdings Zep Re (PTA Reinsurance Company)

Best Telecommunications Product (M-PESA) Kenya 2017 Best Telecommunications CEO (Bob Collymore) Kenya 2017 Best Customer Service Bank Kenya 2017 Best Corporate Governance Bank Kenya 2017 Fastest Growing SME Bank Kenya 2017 Best Retail Bank Kenya 2017 Best Internet Bank Kenya 2017 Best Internet Bank Kosovo 2017 Best Retail Bank Kosovo 2017 Fastest Growing Commercial Bank Kosovo 2017 Best CSR Bank Kosovo 2017 Best Fund Management Company Kuwait 2017 Best Asset Management Company Kuwait 2017 Best Investment Company Kuwait 2017 Fastest Growing Investment Bank Kuwait 2017 Fastest Growing Islamic Bank Kuwait 2017 Best Islamic Retail Bank Kuwait 2017 Best General Insurance Company Kuwait 2017 Best CSR Campaign Kuwait 2017 Best Mobile Application Kyrgyz Republic 2017 Best Retail Bank Kyrgyzstan 2017 Best Private Bank Kyrgyzstan 2017 Fastest Growing Commercial Bank Kyrgyzstan 2017 Best Life Insurance Company Kyrgyzstan 2017 Best Commercial Bank Kyrgyzstan 2017 Best Retail Bank Lao People's Democratic Republic 2017 Best Multi-Asset Liquidity Provider Latin America 2017 Best Retail Bank Latvia 2017 Best General Insurance Provider Lebanon 2017 Best Mobile Payment Solutions Provider Lebanon 2017 Best Insurance Company for Customer Service Lebanon 2017 Best Life Insurance Company Lebanon 2017 Best Credit Insurance Company Lebanon 2017 Best Bank for Investor Relations Lebanon 2017 Fastest Growing Commercial Bank Lebanon 2017 Best Corporate Bank Lesotho 2017 Best Internet Bank Lesotho 2017 Best Telecommunication Company Lesotho 2017 Best Internet Bank Liberia 2017 Best Retail Bank Liberia 2017 Best Microfinance Bank Liberia 2017 Best Wealth Management Company Liechtenstein 2017 Best Agri-Business Bank Lithuania 2017 Best SME Bank Lithuania 2017 Best Corporate Bank Lithuania 2017 Best Private Bank Lithuania 2017 Fastest Growing Private Bank Luxembourg 2017 Best Fund Administrator Luxembourg 2017

Safaricom Ltd Safaricom Ltd I&M Bank Ltd, Kenya I&M Bank Ltd, Kenya Sidian Bank KCB (Kenya Commercial Bank) Barclays Bank of Kenya Limited Banka Ekonomike NLB Banka BPB Kosovo BPB Kosovo National Investments Company (NIC) National Investments Company (NIC) National Investments Company (NIC) Warba Bank Kuwait International Bank Kuwait Finance House AIG MEA Limited - Kuwait KAMCO Investment Company OJSC Optima Bank CJSC "Demir Kyrgyz International Bank" CJSC Kyrgyz Swiss Bank CJSC BTA Bank Jubilee Kyrgyzstan Insurance Company Commercial Bank Kyrgyzstan International Commercial Bank Lao Limited DIF Markets SEB Latvia Fidelity Assurance & Reinsurance Co. SAL PinPay Trust Insurance Company SAL Arope Insurance The Lebanese Credit Insurer LGB Bank LGB Bank Standard Lesotho Bank Nedbank Lesotho Vodacom Lesotho Pty Ltd Guaranty Trust Bank (GTBank) Guaranty Trust Bank (GTBank) AccesBank Liberia Kaiser Partner Medicinos Bankas Siauliu Bankas AB Citadele Bankas AB Citadele Bankas DNB Luxembourg S.A. Vistra Fund Services Luxembourg

Best Private Bank Luxembourg 2017 Best Trade Finance Company Luxembourg 2017 Best European Long-Term Growth Fund Luxembourg 2017 Best Fund Management Luxembourg 2017 Fastest Growing Commercial Bank Macau 2017 Fastest Growing Corporate Bank Macedonia 2017 Fastest Growing Retail Bank Macedonia 2017 Best Internet Bank Macedonia 2017 Best SME Bank Macedonia 2017 Best Bank for Loans Macedonia 2017 Best Corporate Bank Macedonia 2017 Best Retail Bank Macedonia 2017 Best Customer Service Insurance Malawi 2017 Best Asset Management Company Malawi 2017 Best Retail Bank Malawi 2017 Best SME Bank Malawi 2017 Best Commercial Bank Malawi Best Cash Management Malawi 2017 Best Trade Finance Bank Malawi 2017 Best Investment Bank Malawi 2017 Best Customer Service Bank Malawi 2017 Best Internet Bank Malawi 2017 Best Islamic Asset Management Company Malaysia 2017 Best Asset Management Company Malaysia 2017 Best Corporate Bank Malaysia 2017 Best General Insurance Company Malaysia 2017 Best Life Insurance Company Malaysia 2017 Best Investment Bank Malaysia Best New Islamic Asset Management Company Malaysia 2017 Best Islamic Retail Bank Malaysia 2017 Best CSR Bank Malaysia 2017 Best Islamic Commercial Bank Malaysia 2017 Best Islamic Finance Training Provider Malaysia 2017 Fastest Growing Life Insurance Company Malaysia 2017 Best Takaful Company Malaysia 2017 Best Islamic Commodities Trading Company Malaysia 2017 Best Internet Bank Malaysia 2017 Best Investor Relations Banking Group Malaysia 2017 Best SME Bank Malaysia 2017 Best Travel Insurance Company Malaysia 2017 Best Non-Life Insurance Provider Maldives 2017 Best Takaful General Insurance Company Maldives 2017 Best Commercial Bank Mali 2017 Best Non-Life Insurance Company Malta Best Corporate Advisory Malta 2017 Best Fund Administrator Malta 2017 Best Investment Brokerage Company Malta 2017 Best Life Insurance Company Mauritius 2017

ING Luxembourg Northstar Europe S.A. Carlisle Management Company, SCA Carlisle Management Company, SCA Luso International Banking Ltd Sparkasse Bank Makedonija AD Skopje Sparkasse Bank Makedonija AD Skopje Komercijalna Banka AD Skopje Halkbank AD Skopje R.Macedonia Eurostandard Bank Stopanska Banka a.d. Bitola Stopanska Banka a.d. Bitola Charter Insurance Company Limited NICO Asset Managers Limited FDH Bank FDH Bank EcoBank First Merchant Bank First Merchant Bank CDH Investment Bank NedBank Malawi Limited NedBank Malawi Limited Public Mutual Bhd Public Mutual Bhd Standard Chartered Bank Allianz Life Insurance Malaysia Berhad Allianz Life Insurance Malaysia Berhad Maybank Investment Bank Berhad Maybank Islamic Asset Management Sdn Bhd (Malaysia) Bank Islam Bank Muamalat Malaysia Berhad Maybank Islamic Berhad IBFIM (Islamic Banking and Finance Institute Malaysia) Hong Leong Assurance Berhad Etiqa Takaful Berhad Ableace Raakin SDN BHD Hong Leong Islamic Bank Berhad AMMB Holdings Berhad OCBC Bank (Malaysia) Berhad Tune Protect Allied Insurance Company of the Maldives Amana Takaful (Maldives) PLC Eco Bank Mapfre Middlesea PKF Malta BOV Fund Services Limited Exante Investment National Insurance Co Ltd

Fastest Growing General Insurance Company Mauritius 2017 Fastest Growing Commercial Bank Mauritius 2017 Best Bank for International Banking Services Mauritius 2017 Best Offshore Solutions Provider Mauritius 2017 Best E-Commerce Bank Mauritius 2017 Best Retail Bank Mauritius 2017 Best Fund Administration Company Mauritius 2017 Best Insurance Provider MENA 2017 Best Islamic Research House for Banking and Finance MENA 2017 Best Health Insurance Third Party Administrator Service Provider MENA 2017 Best Private Bank MENA 2017 Best Islamic Fund MENA 2017 (Emirates REIT Fund) Best Retail Takaful Provider MENA 2017 Best Real Estate Investment Company MENA 2017 Best Bancatakaful Provider MENA 2017 Fastest Growing Retail Bank Mexico 2017 Fastest Growing Corporate Bank Mexico 2017 Best Foreign Trade Finance Bank Mexico 2017 Best Internet Bank Mexico 2017 Best Commercial Bank Mexico 2017 Best Investment Banking Company Mexico 2017 Best Retail Bank Mexico 2017 Most Innovative Trading Platform Mexico 2017 Best SOFIPO Mexico 2017 Best Microfinance Bank Mexico 2017 Best Leasing Company Mexico 2017 Best Asset Management Company Mexico 2017 Best Electronic Payment Service Provider Mexico 2017 Best Investors Relations Company Mexico 2017 First Wastewater Utility in Middle East for Total Reliance on Solar Energy for Primary Power 2017 Best Aircraft Leasing company Middle East 2017 Best New Performing Fund Middle East 2017 Best Banking Technology Provider MEA 2017 Best Islamic Banking Technology Provider MEA 2017 Fastest Growing SME Bank Moldova 2017 Best Commercial Bank Moldova 2017 Best Non-Life Insurance Company Moldova 2017 Best Wealth Management Company Monaco 2017 Best SME Bank Mongolia 2017 Best New Commercial Bank Mongolia 2017 Best Leasing Company Mongolia 2017 Best Project Finance Bank Mongolia 2017 Best Corporate Governance Bank Mongolia 2017 Best Investment Bank Mongolia 2017 Best Commercial Bank of Mongolia 2017 Fastest Growing Retail Bank Mongolia 2017 Best Insurance Company Montenegro 2017

NIC General Insurance Co. Ltd ABC Banking Corporation Ltd ABC Banking Corporation Ltd Acutus Management Ltd SBM Bank (Mauritius) Ltd SBM Bank (Mauritius) Ltd SANNE Gulf Insurance Group Dubai Center for Islamic Banking and Finance NEXtCARE Claims Management LLC Barclays Bank Emirates REIT SABB Takaful Emirates REIT SABB Takaful Banco Ve por Mas Banco Ve por Mas Bancomext Bankaool Citibanamex PC Capital Banco Inbursa Kuspit Te Creemos Compartamos Banco Unifin Financiera SAB de CV SOFOM ENR Sura Asset Management Mexico STP MEX Unifin Financiera SAB de CV SOFOM ENR Tanqia ALAFCO Aviation Lease & Finance Company Royal Vision Group ICS Financial Systems Ltd ICS Financial Systems Ltd FinComBank CB Moldova Agroindbank SA Moldasig BNP Paribas Wealth Management Monaco Capital Bank of Mongolia Bogdbank XacLeasing LLC Ulaanbaatar city bank National Investment Bank Chinggis Khaan Bank Trade and Development Bank of Mongolia Capitron Bank UNIQA

Best Retail Bank Morocco 2017 Best Corporate Bank Morocco 2017 Best SME Bank Mozambique 2017 Fastest Growing SME Bank Mozambique 2017 Fastest Growing Commercial Bank Mozambique 2017 Best Internet Bank Mozambique 2017 Fastest Growing Retail Bank Mozambique 2017 Best Retail Bank Mozambique 2017 Best Customer Service Bank Mozambique 2017 Fastest Growing Corporate Bank Mozambique 2017 Best Bank for Mobile Banking Applications Myanmar 2017 Best Bank for Card Services Myanmar 2017 Best Private Insurance Company Myanmar 2017 Best Life Insurance Company Namibia 2017 Best Corporate Bank Namibia 2017 Best Customer Service Bank Namibia 2017 Best Custodian Bank Netherlands 2017 Best Private Bank Netherlands 2017 Best Real Estate Investment Management Company Netherlands 2017 Best New STP Broker New Zealand 2017 Best New Introducing Broker Partnership Program New Zealand 2017 Best Retail Bank Nigeria 2017 Fastest Growing Agri Business Bank Nigeria 2017 Best Private Bank Nigeria 2017 Best SME Bank Nigeria 2017 Best Non-Pension Asset Management Company Nigeria 2017 Best Mutual Fund Provider Nigeria 2017 Best Investor Relations Bank Nigeria 2017 Best General Takaful Company Nigeria 2017 Best Family Takaful Company Nigeria 2017 Best Fund Manager Nigeria 2017 Best Corporate Social Responsibility Initiatives Nigeria 2017 Best Corporate Finance Advisory Nigeria 2017 Best Company in Corporate Governance Nigeria 2017 Best Forex Provider North America 2017 Best Private Equity Firm Norway 2017 Fastest Growing Islamic Retail Bank Oman 2017 Best Islamic Retail Bank Oman 2017 Best Customer Service Bank Oman 2017 Best Social Media Bank Oman 2017 Best Islamic Corporate Bank Oman 2017 Best Life Insurance Company Oman 2017 Best Health Insurance Company Oman 2017 Best Corporate Bank OMAN 2017 Best Asset Management Company Sultanate of Oman 2017 Best Private Bank Oman 2017 Best IT Service Provider Oman 2017 Best Remittance Exchange House Oman 2017

Attijariwafa Bank Arab Bank BancABC part of Atlasmara Capital Bank Mozambique Barclays Bank Moรงambique Banco Unico Banco Unico BCI Bank Mozambique Barclays Bank Moรงambique Barclays Bank Moรงambique Kanbawza Bank Limited Kanbawza Bank Limited AYA Myanmar Insurance Sanlam Namibia Bank Windhoek Nedbank Namibia Limited BNP Paribas Securities Services ING Private Banking CBRE Global Investors Brickhill Capital Brickhill Capital Guaranty Trust Bank Plc Nigeria Unity Bank Plc Fidelity Bank Plc Fidelity Bank Plc Stanbic IBTC Asset Management Limited Stanbic IBTC Asset Management Limited Access Bank Plc Noor Takaful Plc Noor Takaful Plc Stanbic IBTC Asset Management Limited The Nigerian Stock Exchange Dunn Loren Merrifield The Nigerian Stock Exchange BMO Capital Markets Argentum Fondsinvesteringer-Norway Bank Nizwa Maisarah Islamic Banking Services Bank Sohar Bank Sohar Alizz Islamic Bank National Life & General Insurance Company National Life & General Insurance Company Bank Muscat United Securities BankDhofar Macro Software Systems LLC Oman UAE Exchange Centre LLC

Best Bancatakaful Leader Oman 2017 - Mr. Tabrez Farooquee Best New Takaful Provider Oman 2017 Best Project Finance Transaction "EPTL" Pakistan 2017 Best M&A House Pakistan 2017 Best Investment Bank Pakistan 2017 Best Payment Solutions Provider Pan Asia 2017 Best Commercial Bank Panama 2017 Best Digital Bank Panama 2017 Fastest Growing Corporate Bank Panama 2017 Best Retail Bank Panama 2017 Best Investment Management Company Paraguay 2017 Best AFP Peru 2017 Best Asset Management Company Peru 2017 Best Insurance Company Peru 2017 Best Microfinance Bank Peru 2017 Best Commercial Bank Philippines 2017 Fastest Growing Asset Management Company Philippines 2017 Best Life Insurance Company Philippines 2017 Best Bank for Loans Philippines 2017 Best Retail Bank Philippines 2017 Best Non-Life Insurance Company Philippines 2017 Best Real Estate Developer Philippines 2017 Best Fund Management Company Philippines 2017 Best Agri Business Bank Philippines 2017 Best CSR Bank Philippines 2017 Best Bank for Corporate Governance Philippines 2017 Best Investor Relations Bank Philippines 2017 Fastest Growing Cash Management Bank Philippines 2017 Fastest Growing Retail Bank Philippines 2017 Best Trading Platform Poland 2017 Best Corporate Bank Poland 2017 Best Retail Bank Portugal 2017 Best Bank for Advisory Banking Portugal 2017 Best New IT Consultancy Provider Portugal 2017 Best New Software Provider Portugal 2017 Best Digital Bank Portugal 2017 Most Innovative Private Bank Portugal 2017 Best Corporate Bank Portugal 2017 Fastest Growing Bank for Capital Markets Portugal 2017 Fastest Growing Investment Bank Portugal 2017 Fastest Growing Private Bank Portugal 2017 Best Money Exchange Qatar 2017 Best Motor Takaful Provider Qatar 2017 Best Corporate Bank Qatar 2017 Best Islamic SME Finance Company Qatar 2017 Best Retail Bank Qatar 2017 Best Islamic Asset Management Company Qatar 2017 Best Internet Bank Romania 2017 Best Private Bank Russia 2017

Takaful Oman Insurance S.A.O.G. Takaful Oman Insurance S.A.O.G. Habib Bank Limited Habib Bank Limited Habib Bank Limited AsiaPay Limited Banistmo S.A. Banistmo S.A. Metrobank, S.A. Banco General PUENTE AFP Integra Sura Peru PacĂ­fico Seguros Mibanco Metropolitan Bank & Trust Company Philam Asset Management, Inc Manulife Philippines Bank of the Philippine Islands RCBC Bank (Rizal Corporation Bank) Charter Ping an Insurance Corporation Megaworld Philequity Management Land Bank of the Philippines Land Bank of the Philippines China Banking Corporation China Banking Corporation CTBC Bank Philippines Corporation CTBC Bank Philippines Corporation X-Trade Brokers Bank Pekao SA Banco Santander Totta Deutsche Bank AG, Sucursal Portugal Dixtior Dixtior Banco BNI Europa Banco Invest Banco Finantia Banco Finantia Banco Finantia Banco Finantia Qatar UAE Exchange General Takaful Company Mashreq Bank First Finance Company Ahli Bank QSC The First Investor Libra Internet Bank Alfa Bank

Best Mobile Banking Application Russia 2017 Best Corporate Governance Bank Russia 2017 Best Mortgage Bank Russia 2017 Best Corporate Bank Russia 2017 Best Internet Bank Russia 2017 Best General Insurance Company Russia 2017 Best Mobile Banking Application Rwanda 2017 Best Internet Banking Application Rwanda 2017 Best Bank for Social Media Rwanda 2017 Best Micro Finance Bank Rwanda 2017 Fastest Growing Commercial Bank Rwanda 2017 Best Insurance Company Rwanda 2017 Best Retail Bank Rwanda 2017 Best Customer Service Bank Rwanda 2017 Best Commercial Bank Rwanda 2017 Best Leasing Company Saudi Arabia 2017 Best Retail Bank Saudi Arabia 2017 Best Islamic Bank for Real Estate Financing Saudi Arabia 2017 Best Islamic Corporate Bank Saudi Arabia 2017 Best Public Equity IPO Fund Saudi Arabia 2017 Best Bank for Social Media Channels Saudi Arabia 2017 Best Islamic Retail Bank Saudi Arabia 2017 Best Mobile Banking Application Saudi Arabia 2017 Best Islamic SME Leasing and Finance Company Saudi Arabia 2017 Best Commercial Bank Saudi Arabia 2017 Best Loyalty Programs Saudi Arabia 2017 Best New Fund (Derayah Free Style Saudi Equity Fund) Saudi Arabia 2017 Best Performing Saudi Equity Fund KSA 2017 Fastest Growing Money Market Fund KSA 2017 Fastest Growing Corporate Finance Advisory Saudi Arabia 2017 Best Investor Relations Bank Saudi Arabia 2017 Best Private Bank Saudi Arabia 2017 Best Asset Management Company Saudi Arabia 2017 Best New Fund Management Company Saudi Arabia 2017 Best Real Estate Finance Company Saudi Arabia 2017 Best Money Market Fund House Saudi Arabia 2017 Best Takaful Operator Saudi Arabia 2017 Best Health Insurance Company Saudi Arabia 2017 Best Corporate Finance Advisory SĂŠnĂŠgal 2017 Best Insurance Company Serbia 2017 Best Retail Bank Seychelles 2017 Best Foreign Bank Seychelles 2017 Best Retail Bank Sierra Leone 2017 Best Commercial Bank Sierra Leone 2017 Best Credit Insurer Singapore 2017 Best Mobile Trading App Singapore 2017 Best Online Trading Platform Singapore 2017 Best Corporate Governance Company Singapore 2017 Best Alternative Credit Specialist Singapore 2017

The Ural Bank for Reconstruction & Development-UBRD BNP Paribas Russia Bank Saint-Petersburg JSCB Avangard JSCB Avangard AlfaStrakhovanie Guaranty Trust Bank (Rwanda) Ltd Guaranty Trust Bank (Rwanda) Ltd Guaranty Trust Bank (Rwanda) Ltd Unguka Bank Ltd Access Bank Rwanda LTD Soras Group Cogebanque I&M Bank (Rwanda) Limited Bank of Kigali Saudi ORIX Leasing Company Riyad Bank Alinma Bank Alinma Bank Saudi Kuwaiti Finance House The Saudi Investment Bank Al Rajhi Bank Al Rajhi Bank Al Yusr Leasing and Financing Riyad Bank The Saudi Investment Bank Derayah Financial MEFIC Capital MEFIC Capital KPMG Saudi Arabia Banque Saudi Fransi Bank Aljazira NCB capital Ashmore Investment Saudi Arabia Deutsche gulf finance Alawwal Invest Aljazira Takaful Bupa Arabia Impaxis Capital Generali Osiguranje Srbija Nouvobanq Barclays Bank Seychelles Limited Guaranty Trust Bank (SL) Ltd Rokel Commercial Bank (Sierra Leone) Ltd COFACE OCBC Securities Private Limited OCBC Securities Private Limited ESR Funds Management (S) Limited EFA Group

Best Customer-Centric FA Firm Singapore 2017 Best Financial Advisory Firm Singapore 2017 Best Trade Finance Bank Slovak Republic 2017 Best Retail Bank Slovakia 2017 Best Corporate Bank Slovakia 2017 Best Asset Management Company Slovenia 2017 Best Forex Education Provider South Africa 2017 Best Home Finance Provider South Africa 2017 Best Property Development Company South Africa 2017 Best Real Estate Investment Company South Africa 2017 Best Business Bank for Entrepreneurs South Africa 2017 Fastest Growing Commercial Bank South Africa 2017 Best Online Payment Solution South Africa 2017 Best Securities Broker South America 2017 Best STP Broker South East Asia 2017 Best Asset Management Company South Korea 2017 Fastest Growing Investment Company South Korea 2017 Best Development Financing Bank Southeast Europe 2017 Best Investment and Trade Centre Southern Africa 2017 Best Private Bank Spain 2017 Best Investment & Securities Outsourcing Provider Spain 2017 Best Insurance Company Spain 2017 Best Custodian Bank Spain 2017 Most Innovative Mobile Banking Application Spain 2017 Best Investor Relations Bank Sri Lanka 2017 Best SME Bank Sri Lanka 2017 Fastest Growing Life Insurance Company Sri Lanka 2017 Best Internet Bank Sri Lanka 2017 Fastest Growing Retail Bank Sri Lanka 2017 Fastest Growing Commercial Bank Sri Lanka 2017 Best Investment Bank Sri Lanka 2017 Best IF Education Provider Sri Lanka 2017 Best Mobile Banking Application Sri Lanka 2017 Best Brokerage Research House Sri Lanka 2017 Best Islamic Retail Bank Sri Lanka 2017 Best Trade Finance Bank Sri Lanka 2017 Most Innovative Holding Group Sri Lanka 2017 Fastest Growing Auto Financing Company Sri Lanka 2017 Best Treasury Bank Sri Lanka 2017 Most Innovative Finance Product (Vallibel Auto Draft) Sri Lanka 2017 Best Business Bank St. Kitts and Nevis 2017 Best Internet Bank Suriname 2017 Best Investor Relation Bank Sweden 2017 Fastest Growing Wealth Management Company Switzerland 2017 Best Life Insurance Company Switzerland 2017 Best Private Banking Switzerland 2017 Best Corporate Governance Company Taiwan 2017 Best SME Bank Taiwan 2017 Best Internet Bank Taiwan 2017

Professional Investment Advisory Services Pte Ltd Professional Investment Advisory Services Pte Ltd KBC Bank NV Vseobecna Uverova Bank-VUB Vseobecna Uverova Bank-VUB KD Skladi doo Slovenia Learn to Trade Pty Ltd SA Home Loans Billion Group (Proprietary) Limited Rebosis Property Fund Limited Mercantile Bank VBS Mutual Bank EFTsecure Gateway powered by Callpay Credicorp Capital Firewood Global Ltd Mirae Asset Global Investments NH Investment & Securities The Black Sea Trade and Development Bank Botswana Investment and Trade Centre (BITC) Banca March Inversis SegurCaixa Adeslas CecaBank Openbank SA National Development Bank PLC National Development Bank PLC Arpico Insurance PLC Commercial Bank of Ceylon plc Pan Asia Banking Corporation PLC Pan Asia Banking Corporation PLC NDB Investment Bank Ltd First Global Academy (Pvt) Ltd National Development Bank PLC LOLC Securities Ltd Amana Bank Habib Bank Sri Lanka Sunshine Holdings PLC Vallibel Finance Plc Citibank, N. A, Sri Lanka Vallibel Finance Plc St. Kitts-Nevis-Anguilla National Bank Limited Hakrinbank Swedbank CA Indosuez Switzerland Helvetia Insurance Bank Vontobel AG-Switzerland Chailease Holding First Commercial Bank Taipei Fubon Bank (Fubon Financial Holding Co., Ltd)

Best Non-Life Insurance Company Taiwan 2017 Best Customer Service Bank Taiwan 2017 Best Bank for CSR Taiwan 2017 Fastest Growing Securities Brokerage Company Taiwan 2017 Best Wealth Management Bank Taiwan Best Commercial Bank Taiwan 2017 Best Foreign Corporate Bank Taiwan 2017 Best Life Insurance Company Taiwan 2017 Fastest Growing General Insurance Company Tanzania 2017 Best Commercial Bank Tanzania 2017 Best E-Commerce Bank Tanzania 2017 Best Investment Bank Tanzania 2017 Best SMEs Bank Tanzania 2017 Best Insurance Company for CSR Tanzania 2017 Best General Insurance Company Tanzania 2017 Best Equity House Thailand 2017 Best Investment Banking Company Thailand 2017 Best SMEs Bank Thailand 2017 Best Trade Finance Bank Thailand 2017 Fastest Growing Retail Bank Thailand 2017 Best Bank for Auto Financing Thailand 2017 Best Investment Bank Thailand 2017 Best CSR Company Thailand 2017 Best Forex Broker Thailand 2017 Best Mobile Banking Application Thailand 2017 Best Bancassurance Distribution Network Thailand 2017 Best Bank for Home Loan Thailand 2017 Best Corporate Bank Thailand 2017 Best Comparison Website for Expats Thailand 2017 Best Corporate Bank Trinidad & Tobago 2017 Best Customer Service Bank Trinidad and Tobago 2017 Best Internet Bank Trinidad and Tobago 2017 Best Commercial Bank Tunisia 2017 Best Credit Insurance Company Tunisia 2017 Best Sukuk Provider Turkey 2017 Fastest Growing Corporate Bank Turkey 2017 Best Co-Branded Credit Card (TEB&TOTAL Card) Turkey 2017 Best Private Bank Turkey 2017 Best Retail Bank Turkey 2017 Fastest Growing Life Insurance Company Turkey 2017 Best General Insurance Company Turkey 2017 Best M&A Advisory Turkey 2017 Best Forex Broker Turkey 2017 Best Forex Customer Service Broker Turkey 2017 Best Credit Insurance Company Turkey 2017 Best Multi Asset Funds (SMART Funds) Turkey 2017 Best Banking Contact Centre Experience Turkey 2017 Best Internet Bank Turkey 2017

Fubon Insurance First Commercial Bank CTBC Bank Cathay Securities Corporation King's Town Bank Mega International Commercial Bank Citi Taiwan Nan Shan Life Insurance UAP Insurance Tanzania Ltd United Bank for Africa Tanzania Barclays Bank Exim Bank (Tanzania) Limited Covenant Bank for Women Tanzania Ltd The Heritage Insurance Company Tanzania Ltd The Heritage Insurance Company Tanzania Ltd Bualuang Securities Public Company Limited Bualuang Securities Public Company Limited Kasikornbank PCL Kasikornbank PCL The Thai Credit Retail Bank Public Company Limited Thanachart Bank Siam Commercial bank AIA Company Limited FBS Markets INC Bank of Ayudhya Public Company Limited (Krungsri Bank) TMB Bank TMB Bank CIMB Thai Bank Public Company Limited SaveSavvi.com First Citizens Bank Ltd Republic Bank Limited Republic Bank Limited Arab Tunisian Bank Compagnie Tunisienne Pour L'assurance Du Commerce Exterieur "Cotunace" Burgan Securities Burgan Bank Turkish Economy Bank - TEB Yapı Kredi Bank Yapı Kredi Bank Anadolu Hayat Emeklilik Allianz Sigorta A.Ş.

UNLU & Co Destek Yatirim Menkul Degerier AS (Domino Forex) Destek Yatirim Menkul Degerier AS(Domino Forex) Euler Hermes Insurance Turkey Garanti Asset Management Odeabank A.Ş.

Odeabank A.Ş.

Best Mobile Banking Application Turkey 2017 Best Pension Funds Management Company Turkey 2017 Best Asset Management Company Turkey 2017 Best Operation Center Innovation Project Turkey 2017 Best Supply Chain Finance Service Provider Turkey 2017 Best Factoring Company Turkey 2017 Best Insurance Technology Provider Turkey 2017 Best Bank for Customer Service UAE 2017 Best Retakaful Company UAE 2017 Fastest Growing Asset Managers UAE 2017 Best SME Bank UAE 2017 Best New Representative Office for NRIs UAE 2017 Fastest Growing Life Insurance Company UAE 2017 Most Innovative Payment Solutions Provider UAE 2017 Best Investment Holding Company UAE 2017 Best Sharia Compliant Property Finance Company UAE 2017 Best Islamic Finance CSR Company UAE 2017 Fastest Growing Holding Company UAE 2017 Best Media Company CEO UAE 2017 Best Remittance Exchange House UAE 2017 Most Innovative Securities Brokerage Company UAE 2017 Best Health Insurance TPA Service Provider UAE 2017 Best Trade Finance Bank UAE 2017 Best Cash Management Bank UAE 2017 Best Wealth Management Bank UAE 2017 Best Training Institute for Forex Trading UAE 2017 Best Corporate Bank UAE 2017 Best Forex Broker UAE 2017 Best Life Assurance Company Uganda 2017 Best General Insurance Company Uganda 2017 Best Internet Bank Uganda 2017 Most Innovative Bank Uganda 2017 Best Housing Finance Bank Uganda 2017 Fastest Growing General Insurance Company Uganda 2017 Fastest Growing Life Insurance Company Uganda 2017 Best Fintech Fund UK 2017 Best Low Latency Connectivity Solutions Provider UK 2017 Best Forex Education Provider Europe & UK 2017 Fastest Growing Commercial Bank Ukraine 2017 Best Bank for Premier Banking Ukraine 2017 Best Bank for International Banking Services Ukraine 2017 Best Pension Funds Provider Ukraine 2017 Fastest Growing Equity Trading Provider Uruguay 2017 Best Investment Management Company Uruguay 2017 Best Trade Finance Bank of Uzbekistan 2017 Best Industrial Equipment Leasing Company Uzbekistan 2017 Fastest Growing Private Bank Venezuela 2017 Best Corporate Bank Venezuela 2017 Best Research Company Vietnam 2017

Odeabank A.Ĺž.

Yapi Kredi Asset Management Yapi Kredi Asset Management Ziraat BankasÄą UbiQ Innovations Yapi Kredi Faktoring A.S. Agito Union National Bank Emirates Retakaful Limited EFG Hermes UAE Abu Dhabi Commercial Bank (ADCB) Yes Bank Alliance Insurance Company Network International L.L.C Al Hail Holding LLC Amlak Finance PJSC Amlak Finance PJSC Global Development Group Sole Proprietorship LLC Nashwa Al Ruwaini UAE Exchange FAB Securities LLC Aafiya Medical Billing Services LLC Emirates NBD Bank Emirates NBD Bank Emirates NBD Bank Professional Traders DMCC Invest Bank PSC HYCM UAP Life Assurance Uganda Limited UAP - OLD Mutual Uganda Limited Standard Chartered Bank Uganda Guaranty Trust Bank Uganda Housing Finance Bank NIC Holdings Ltd Sanlam Life Insurance (U) Ltd Santander InnoVentures Gold-i Ltd Learn to Trade Pty Ltd RADABANK Bank CLEARING HOUSE ING Bank Ukraine OTP capital D&P Corredor de Bolsa Puente Joint-Stock Commercial Bank "Asaka" Uzbek Leasing International Banco Plaza Venezolano de Credito StoxPlus JSC

Best Customer Service Bank Vietnam 2017 Fastest Growing Retail Bank Vietnam 2017 Fastest Growing Finance Company Vietnam 2017 Best Bank for Fixed Income Bonds Vietnam 2017 Best Life Insurance Company Vietnam 2017 Best Life Insurance Company in Public Health Responsibility Vietnam 2017 Most Innovative Consumer Finance Company Vietnam 2017 Best Consumer Finance Company Vietnam 2017 Best Banking Technology Vietnam 2017 Best Mortgage Bank Vietnam 2017 Best SME Bank Vietnam 2017 Best Priority Banking Services Vietnam 2017 Best Margin Trading Product Vietnam 2017 Best Digital Bank Vietnam 2017 Best Equity House Vietnam 2017 Best Brokerage House Vietnam 2017 Best Insurance Company for Customer Service Vietnam 2017 Best Delivery Finance Product Company Vietnam 2017 Best Retail Bank Vietnam 2017 Fastest Growing SME Bank Vietnam 2017 Best FX and CFD Research House Western Europe 2017 Best Fund Distribution Network Western Europe 2017 Best Online Broker Western Europe 2017 Best OTC Brokerage Western Europe 2017 Fastest Growing Brokerage Company Western Europe 2017 Best STP FX Liquidity Provider Western Europe 2017 Best Internet Bank Zambia 2017 Best Customer Service Bank Zambia 2017 Best Bank for International Banking Services Zambia 2017 Best Corporate Bank Zambia 2017 Best Retail Bank Zambia 2017 Fastest Growing Commercial Bank Zambia 2017 Most Innovative Banking Product (Youth Account) Zimbabwe 2017 Best Digital Bank Zimbabwe 2017 Best Securities Broker Zimbabwe 2017 Best Banking CEO Qatar 2017 Best Wholesale Banking Group Qatar 2017 Best Fund House India 2017 Best Asset Management CEO (Mr. Nimesh Shah) India 2017

Vietnam International Bank (VIB) An Binh Commercial Joint Stock Bank (ABBANK) Mirae Asset Finance Company Vietnam Bank for Investment and Development of Vietnam JSC (BIDV) Baoviet Life Baoviet Life Home Credit Vietnam Finance Limited Company Home Credit Vietnam Finance Limited Company Sai Gon Joint Stock Commercial Bank Saigon-Hanoi Commercial Joint Stock Bank (SHB) Saigon-Hanoi Commercial Joint Stock Bank (SHB) Standard Chartered Bank (Vietnam) Tan Viet Securities Incorporation National Citizen Bank Bao Viet Securities Bao Viet Securities VietinBank Insurance Donga Money Transfer Company VietinBank VietinBank JFD Brokers ACOLIN Fund Services AG DIF Broker JFD Brokers JFD Brokers Sucden Financial AccessBank Zambia Cavmont Bank Limited Indo Zambia Bank Ltd First Alliance Bank (Zambia) Ltd Cavmont Bank Limited Bank of China Zambia Limited Peoples Own Savings Bank (POSB) Steward Bank Limited IH Securities Dr. R. Seetharaman, Doha Bank Doha Bank ICICI Prudential AMC ICICI Prudential AMC

Call For Entries INVITING BANKS

INVITING BUSINESS

INVITING

SHOWCASE YOUR ACHIEVEMENTS

FINANCIAL ORGANIZATIONS

LEADERS

Submit your nomination today to awards@gbafmag.com OR Submit Online at GlobalBankingAndFinance.com

2018

EMEA 80 Issue 10

EMEA INTERVIEW

Digital

Banking

Innovation As the first fully digital bank in Spain, Openbank is leading the way in banking innovation. We interviewed Patricia Benito, Chief Digital and Business Officer at Openbank to find out more.

To begin can you tell us a little about Openbank SA? Openbank is our digital native bank, our Fintech and the Santander Group digital bank. This gives us the best of two models: the dynamism of a startup and the solidity of a financial group of the size and trajectory of Santander.

It is a bank that today has one of the most advanced technologies in the

world in terms not only of functionality for our customers, but also in the application of intelligent algorithms and use of the cloud.

The recent relaunch of Openbank demonstrates the solid position and leadership that the Santander Group holds in technological innovation in a practical way, doing what we know how to do, which is banking for our clients, applying the latest technologies to their day to day banking.

We have adapted our culture and corporate philosophy to that of a digital bank, with all the flexibility, horizontality and efficiency that this implies.

Issue 10 | 81

EMEA INTERVIEW

Key Facts of Openbank.

• Digital retail bank with € 7 billion in deposits • Investment platform with more than €1 billion AUM

•

We have incorporated an expense classifier by type, where expenses can be compared to the previous month.

• Web-services and APIs for 100% of customer services

•

Also the possibility of turning off credit cards temporarily if misplaced.

• Artificial Intelligence based credit risk, anti-money laundering, fraud and commercial algorithms

•

We have also reinforced security, and simplified the operation for our customers, with four-position alphanumeric codes that are easy to remember and secure

•

Our new app and web include a photo or avatar chosen by the customer that enforces passive phishing security.

•

You can defer an expense made with the card, at any time, with just a few clicks with a smartphone

•

We have integrated the most important functionality of a professional investment platform for everyone to use with the best usability. We have democratized investment.

•

We have incorporated what we call "social investing": we tell you what equities are most ​​ bought and sold by our customers, in aggregate

•

All these features are available on the website or the app, one single app for everything.

• More than 1 million customers • Fully cloud based digital front-end

• Independent banking license, fully owned by Santander Group

You are the first fully digital bank in Spain.

What are the advantages for customers?

The new value proposition of Openbank was designed from scratch, answering the following question: how would a client design a bank making the most of new technologies? The result is today´s Openbank, a bank that greatly simplifies things for the client such as: •

•

82 | Issue 10

Attention 24/7 and each client has a number of assigned relationship managers who will always look after them. Premium client segments have a dedicated manager.

Web and application built from scratch, with a modern, simple, customer-focused usability.

EMEA INTERVIEW

Let’s talk about the technology you use.

What role does artificial intelligence play?

At Openbank we use Machine Learning and other artificial intelligence methods across all our business cycle, including AML and fraud detection, credit risk algorithms, to improve customer experience, and of course, for commercial applications including product propensity.

We have already in place a new cloud based data architecture model that has enabled us to take 100% of our credit risk decisions based on Machine Learning algorithms. This has increased

the access to credit of our customer base, and reduce the risk of default. This has also enabled us to do risk based credit pricing.

In terms of improving customer service and experience, Machine Learning allows us to offer a high degree of personalization understood at all levels, web content and communications, all tailored to each customer.

In general, we have the luxury of being a digitally native company, so it is easy for us to integrate the datification of every process into our business.

Issue 10 | 83

EMEA INTERVIEW

As one of the first banks in the world to use cloud-based IT infrastructure, can you explain the advantages of this type of infrastructure?

Openbank becomes one of the first banks in the world with a complete banking offering that houses its software and back office services, risk management, customer relationship management (CRM) and interfaces (APIs), all in a fully encrypted form, with the maximum security of the market and with replicas in different locations in Europe. This technology is fully tested and has the approval of the European Central Bank.

Advantage: - High security levels (99.999999%) - Operational flexibility for changes: campaigns, monitor what works best, weekly update of app and web ...

- Customization of the offer to customers (ads, offers ...): use big data - Risk-weighting algorithms Online security is a major concern for customers. What does Openbank do to help ensure a secure environment?

Innovation and user experience combined with the security and robustness of the Santander group, without losing sight of compliance to international regulations and high standards of security while adapting us to the demands of the digital world.

We innovate to reinforce our security; the bank is investing in security mechanisms to customize our web and app including, as I said before, a photo or avatar that the client chooses and that reinforces the passive security against phishing.

84 | Issue 10

What are some of the new features clients can enjoy?

A) Openbank Wealth: new platform, open architecture in pension plans and funds, new broker (social investing, visual ...)

B) OpenYoung: a range of products (account and card) for children to manage their savings with parental supervision.

C) A single App: an all-in-one app that customers can access to all the functionalities in one session.

•

Single app

•

Single session

•

Simple to use

•

Personal and fair

•

Start from the customer

What are your future plans for development?

We have just completed our payment methods offer, now including, besides our own wallet, Samsung, Android and Apple pay. In the next two years we should work on our international expansion to other key Santander markets. We will also continue evolving our platform, including the launch of robo-advisory and next generation machine learning applications.

Though you should expect to see a continuous release of new products and services every month, we will resist the temptation to use new technologies if they will not contribute to a better customer experience. At Openbank we think that technology follows the value proposition to customers, and not the other way around.

EMEA INTERVIEW

Patricia Benito Chief Digital and Business Openbank

Issue 10 | 85

EMEA INVESTMENT

Investing in Turkey

Key Developments Enhance Turkey’s Position as a Centre for International Investment

86 | Issue 10

EMEA INVESTMENT

Turkey has faced challenging times over recent years due to the turbulences in neighbouring countries, security concerns and a failed coup attempt. Foreign direct investment figures have inevitably been negatively affected by these unfortunate events. However, with its strong economy and solid efforts made by the Turkish government to improve the investment environment, Turkey remains an attractive location for foreign investors and continues to be one of the emerging markets offering many investment opportunities.

According to figures published by the Central Bank of the Turkish Republic, foreign direct investment reached USD 4.1 billion in the first half of 2017 with an increase of 50.1% when compared with the same

period in 2016. Information revealed by the Turkish Ministry of Economy shows that investors from all over the world continue to invest in Turkey due to the many opportunities triggered by its solid economic fundamentals. The top twenty countries, which invested in Turkey between 2010-2017 include countries such as the Netherlands, Austria, the UK, Spain, the USA, Russia and Gulf countries such as the United Arab Emirates, Saudi Arabia, Kuwait and Qatar. There have been many features which have encouraged foreign investment into various sectors.

Turkey has a unique intercontinental position, acting as a bridge between Europe and Asia. This is particularly attractive for investors seeking to access multiple

markets such as the Middle East and CIS countries. Due to the political uncertainties and security issues in the Middle East, many foreign investors choose Turkey to manage their regional operations in those countries.

Turkey has one of the most liberal foreign investment policy and legal regimes among the OECD countries and treats foreign and local investors equally. Although there may be sector specific restrictions, in general, there are no limitations on foreign ownership or control in Turkey. Foreign investors can establish their business without any restriction on nationality or place of residence. Investors can invest through various channels such as establishing a new company, a branch or liaison office or through share acquisitions.

Issue 10 | 87

EMEA INVESTMENT

To develop a sustainable financial environment and attract foreign investment, the Turkish government established the Istanbul Finance Centre. Under the finance centre project, plans are underway to enable foreign investors to issue foreign exchangebased securities and to have leading roles within the country’s capital market.

Acknowledging the need for an improvement of international trade, Turkey continues to take important steps to increase its cooperation with other countries. It has been a member of the World Trade Organisation since 1995 and a member of the EU Customs Union since 1996. Furthermore, Turkey signs various regional and bilateral trade agreements for the liberalisation of trade reciprocally and the elimination of tariffs and quotas on international trade.

Currently, Turkey is also party to Free Trade Agreements with 27 countries.

Another feature attracting foreign investors’ attention is the extensive investment incentive regime. There are various investment schemes (i.e. general, regional, large-scale or strategic investment schemes), which provide valuable benefits to foreign investors such as customs duty exemption, VAT exemption, VAT refund and tax reductions, social security premium support, income tax withholding allowance, interest rate support and land allocation. In 2016, the incentive scheme was amended and introduced a project-based support system concerning projects with strategic qualifications for the country and projects covering medium and high technology industrial products. Again in 2016, a new and comprehensive law was introduced to provide special incentives for R&D and design investment projects in Turkey.

Turkey has an official organisation, the Investment Support and Promotion Agency (“ISPAT”) to promote Turkey’s investment opportunities. ISPAT provides various services such as consulting, coordination and business facilitation services, including the establishment of business operations, making incentive applications or work/resident permit applications etc. Foreign investors can benefit from the services of ISPAT free of charge while investing in Turkey.

88 | Issue 10

Steps taken by the Turkish government to further develop foreign investment have also been supported by the Turkish legislator. In parallel to the approaches in the EU and across the world, structural reforms have been made in recent years to Turkish laws to create a more professional, transparent, equal and accountable business environment.

In 2012, the new Turkish Commercial Code (the ‘’TCC’’) and the new Turkish Code of Obligations entered into force, replacing the very old predecessors, to provide more flexibility to foreign investors. As a significant novelty, the TCC removed the restrictions on the single shareholder company and enabled foreign investors to establish a business in Turkey without the need for a Turkish business partner.

In 2016, the Law on Protection of Personal Data, which is very much in line with EU data protection laws, was published to ensure protection of privacy and personal rights. In the same year, the Law Amending Certain Laws for Improvement of the Investment Environment numbered 6728 was enacted (the “Amendment Law”) to reduce investment costs and create a more investor-friendly environment as well as encourage local and foreign investors to do business in Turkey. The Amendment Law amended various laws including but not limited to the TCC, bankruptcy law, various tax laws including corporate and stamp tax laws, the law regulating checks etc.

Furthermore, a new Law on International Workforce was published to facilitate procedures for obtaining work permit/ visa for foreign individuals and to support qualified foreign employment.

EMEA INVESTMENT

As of January 2017, a new Industrial Property Code was published to provide better protection to intellectual property rights in line with EU intellectual property laws. Finally, with the amendment of the Regulation on the Implementation of the Turkish Citizenship Law, foreign investors, providing that they meet certain requirements, can now obtain Turkish citizenship together with its combined benefits (such as access to all Schengen Zone countries, full and excellent medical assistance).

In addition to governmental and legislative movements, judicial reforms have been important to accelerate settlement of commercial disputes. Accordingly, the Istanbul Arbitration Centre (“ISTAC”) was established to provide new and efficient ways to resolve commercial disputes.

Also, a mediation system has now been introduced to enable fast and easy completion of disputes and has recently been made compulsory for disputes between employees and employers.

Considering the concrete steps taken to provide a better environment for foreign investment, we believe Turkey has a promising future for investors despite the challenges Turkey has endured over the years.

Selin Başaran Savuran Associate Gün + Partners

Görkem Bilgin Managing Associate Gün + Partners

Issue 10 | 89

EMEA TRADING

Why are capital markets still managing by policy?

All banks have strict policies in place at all levels to manage both financial and non-financial risk. Technology plays a key role in effective risk management.

It can help by collecting, storing and monitoring large amounts of data. In turn, the data is analysed and used to spot upcoming trends or recurring trends to help develop new working practices to lessen or mitigate risk.

single conversation can now integrate fixed line phone, mobile, SMS, email or instant message. For financial institutions to be compliant with MiFID II, all conversations regarding a trade must be encrypted, untampered and time stamped. This is increasingly difficult (and costly) when using multiple media platforms, especially if the recordings aren’t all stored in one place.

What is managing by policy?

Many firms will attempt to comply with MiFID II by ‘managing by policy’.

This means mandating all regulated communications so they happen on recorded landlines and via tracked terminals.

With MiFID II on the horizon for January 2018, communications monitoring requirements will be increasing massively. Monitoring and recording employee communications can provide the evidence needed for compliance purposes and can also protect businesses and their employees in the event of any regulatory investigation.

Traders use multiple communication methods in their working lives, interchanging technology frequently. A

90 | Issue 10

With MiFID II, will managing by policy be sustainable?

Creating numerous policies for staff to abide by is fundamentally incompatible with modern working practices. Traders are ‘always on’ and need to work whenever and wherever they are.

More regulation also means that policies become more complex, even contradicting each other. With both MiFID II and GDPR hitting in 2018, this is likely to increase further. Managing by policy is likely to add further complexity into a firm’s approach to regulation.

For instance, each trading floor in a financial firm has its own set of policies which staff must abide by. The trading floor manager must ensure that all trade based calls are recorded and monitored. An often-used policy that still exists is to ban all mobile phones on the trading floor. To enforce this, mobile phones are often stored in lockers. This is problematic though as important communications could be coming through on the mobile device which the employee is unaware of.

EMEA TRADING

Ways to implement compliant technology for the recording and storage of data Bring Your Own Device (BYOD) is popular because it is convenient for employees and can reduce costs for employers. But ensuring use of BYOD devices in a compliant way can be problematic. Installing a recording solution can overcome this, but the solution does need to consider private as well as business use. This is going to be particularly important when GDPR comes into effect in May 2018.

SIM based recording solutions are effective from a compliance perspective, but they record all calls and SMS messages, meaning that all personal calls and messages are recorded as well as business calls. An alternative to this is to use an app based recording solution. These can separate out business and personal calls by providing a different number for business calls.

This solution does require the user to use the app for business related calls that are need to be recorded, so it is really important that the firm has a clear policy in place to ensure users dial from the application to ensure compliance is maintained.

The benefits stretch beyond compliance

effective solution. But, those businesses who can analyse those recordings to deepen their understanding of what is happening across their organisation have a huge commercial advantage.

More recordings equal more insight which can help to improve client experience, increase productivity whilst also meeting regulatory requirements.

Cloud migration is now ubiquitous, even in capital markets. Early fears around security have largely been put to rest and the benefits are clear, including greater flexibility, reduced capital expenditure and overall cost effectiveness.

MiFID II is proving to be a watershed in cloud migration within capital markets because more firms are effected, with far greater numbers of employees and more conversations than ever before needing to be recorded. So, the rise of integrated, cloud based recording solutions which time stamp each recording is a really

Andrew Fawcett Product Manager TeleWare

Issue 10 | 91

EMEA BUSINESS

What Merchants Need to Know About Protecting Customers and New Regulations A guide to understanding GDPR implications

Millions of people work, shop and play online every day, leaving behind volumes of data that can include sensitive information.

A study by IDC estimates that by 2020 there will be 5,200GB of data for every consumer on earth. In total, that works out at 40 zettabytes, or 57 times more than every grain of sand on every beach.1 Regulators have increasingly become concerned with how companies capture, manage and protect the swathes of data they hold on their customers. Within the European Union (EU), these concerns have resulted in the General Data Protection Regulation (GDPR), a new regulation which aims to give consumers greater rights and security over how their data is used.

GDPR is the most comprehensive framework of its kind in the world and will have profound implications not just for businesses operating in the EU, but any that hold data on EU citizens. Companies in breach of GDPR could face severe fines, and with an implementation date of 25 May 2018, time is running out to ensure compliance.

Merchants, which frequently come into contact with sensitive customer information like payment details, will have to be especially ready.

What is GDPR?

GDPR at a glance

GDPR will effectively replace the EU Data Directive, which was established in 1995, during the early days of the internet, but is now considered inadequate to deal with current challenges. This is understandable considering the average smartphone today has 10x more processing power than a PC in 1995,2 while eCommerce sales are over €500 billion a year in Europe alone.3

— GDPR was adopted in 2016 and will become effective on May 25, 2018

The new legislation establishes guidelines on how companies should handle customer privacy, store data securely, and respond to security breaches. It also attempts to offer a unified standard of operating across Europe so that companies do not have to deal with several regulatory environments.

— Fines can be up to 4 percent of annual worldwide turnover or €20 million, whichever is greater

For the first time, obligations will be placed on data controllers and data processors.

In other words, GDPR will affect not just an organisation (the controller) but also its outsourcing provider (e.g., a cloud computing company, or a third-party payment provider). Previous legislation placed responsibility solely on the controller.

Data management, portability and customer rights

GDPR also addresses the export of personal data outside the EU. The legislation makes it clear that it does not just apply for European companies, but any business processing the data of EU citizens, even if not based in the EU.

— Applies to businesses in the EU and any company worldwide that holds data on EU citizens — Applies to data controllers and data processors

— Claims can be made by individuals and organisations

At the heart of GDPR are a number of changes to the way that customer data is handled. Under the legislation, customers will have to give explicit permission for companies to hold data about them. But that’s not all, companies must also provide evidence that this consent has been given.

One potential implication is that merchants may have to alter their auto-renewal and subscription payment processes.

Issue 10 | 93

EMEA BUSINESS

Companies can no longer store a customer’s personal data simply because it may prove useful in the future, or so they can pass it on to another provider.

From now on, the responsibility will be on businesses to justify why they’re retaining customer information, otherwise it may have to be erased.

There’s another important element too, one that has a historical precedent. In 2014, a Spanish property owner who’d had his house repossessed wanted this fact removed from Google searches. He took the case to the European Court of Justice (ECJ) which ruled that Google had to delete those references to him.

GDPR: Key implications for merchants

Consent

Companies will have to actively get consent to store a customer's personal data

Customer Profiling New restrictions on using data for customer profiling Security and Data Breaches Data Portability

Data Transfer

Data breaches have to be reported within 72 hours of discovery

* The EEA includes EU countries and also Iceland, Liechtenstein and Norway. It allows them to be part of the EU’s single market.

It’s also important to realise that data does not just mean information held on a database. GDPR makes no distinction between physical and digital data: it could be customer details held on paper, or in old files at a warehouse, for example. This would now have to be made available in the event of a consumer request. Yet a recent survey in the UK by Compuware showed that 71 percent of retailers do not always know where their customer data is stored.4

A business must erase an individual’s personal data in

Timescale

Consumer has right to request transfer of personal data in certain circumstances Prohibitions on transferring data to non-EEA* countries without adequate safeguards

Right to be Forgotten certain circumstances Security

retained forever because a regulator might ask for it. In others, the erasing of data has not been high on the priority list as there’s been no reason for doing it.”

Given that GDPR becomes law in May 2018, merchants should already be looking at how GDPR will have an impact on their procedures. According to William Long, a Partner at law firm Sidley Austin: “If they haven’t started already then it is imperative they begin, due to the volumes of work involved and the potential ramifications for being in breach.”

The right to be forgotten is a particular challenge for organisations because of the rich web of information that’s held in databases. Whereas companies may have previously been concerned about how to

Under the regulation, firms can face fines of €20 million or 4 percent of global revenues, whichever is greater. And that’s just for ‘serious breaches’. Such things as failing to keep proper breach logs, or failing to report

Businesses must have security systems that are appropriate to the level of risk

This quickly became known as the ‘right to be forgotten’ and, following the ECJ case, it has been included in GDPR. As such, businesses will need to implement new policies on data retention and deletion.

According to Catherine Moore, President of J.P. Morgan Merchant Services in Europe, this will mean a new mindset for some firms: “In certain industries, data might be

94 | Issue 10

store and archive information, now the focus is turning to what information is held and how they can access it. For example, a merchant may have to remove someone’s personal information from all of their payment transaction record histories; if they so request.

EMEA BUSINESS

a breach within a set timescale, will carry fines of up to €10 million or 2 percent of global revenue.

GDPR also allows individuals to make a claim for damages for non-financial loss. Merchants, and third party payment providers, who may unknowingly store credit card details, are frequent targets for attacks by cyber-criminals so they will have to ensure especially tight protocols in this regard. Payment providers may also start offering value-added data protection services as a means of reducing the investment required by merchants, and helping them win more business.

One area that will also be changing is the credit card authentication standard PCI DSS. Although this is unconnected to GDPR, a new standard, PCI DSS 3.2 is set to become operational in February 2018.

Companies who implement this standard will be some way to becoming GDPR compliant, at least as far as payments are concerned. For example, multi-factor authentication (MFA) becomes mandatory in PCI DSS 3.2, offering retailers a way of protecting customer personal details.

The emergence of the DPO One of the ways in which businesses can manage the new regulatory landscape is by appointing a data protection officer (DPO) with company-wide responsibility for ensuring that protection guidelines are followed. Employing a DPO will be mandatory for publicly-owned bodies, companies that regularly and systematically monitor data subjects on a large scale (such as banks or web analytics companies), or firms that handle data of a highly sensitive nature. However, it is a best-practice approach that is relevant for all companies.

Choosing such a person is a crucial part of the process. As Joel Cullin, Head of Legal for J.P. Morgan Merchant Services in Europe says: “The DPO should be an individual who has a significant amount of autonomy within the organisation and is the data protection champion.” This is because compliance with GDPR will

depend on many different skills — legal, technical and financial. Appointing an effective DPO will be one way of helping an organisation keep the right side of its duties under GDPR.

Company-wide involvement A key aspect of preparing for GDPR is understanding that it’s an issue for everyone within the company. Devising a response will require a coordinated approach across the organisation, because one change can have an effect on another department. For example, making changes to consent may entail customers filling in lengthy forms, which may have an effect on online purchases, leading to an increased amount of shopping cart abandonment.

So, making changes is not just the responsibility of one department — there’s a need for firms to take a wider view.

GDPR could entail huge volumes of work: from amending contracts to make them compliant, changing privacy policies and notices, and altering company procedures to deal with data subject rights.

in reputational benefits, especially if the provisions they implement are in advance of what is required by the letter of the law.

In short, implementing GDPR may mean major changes but it should benefit businesses and customers alike. Don’t delay, however, the time for action is now: companies who haven’t started thinking about it, may find it’s already too late.

GDPR: Opportunities for merchants — Increased trust between companies and their customers — Protection of enterprise reputation — Standardisation of processes across the EU — Better data security and reduced threat of breach

Conclusion Merchants are going to have to radically rethink the way they do business. There are obvious ways in which organisations will have to change, e.g., in obtaining customer consent and shifting data retention policies.

But there are more subtle changes too: there will need to be a shift in company thinking, to ensure that customer concerns are at the heart of company policy.

GDPR shouldn’t just be thought of as a burden: the organisational changes will mean greater transparency and will also offer more security for customers.

Restricting the effectiveness of cyber criminals, and reducing the threat of breach, will be especially advantageous for merchants, which are frequent targets for these attacks. Companies that act quickly and robustly in implementing these changes may also find they will benefit from a greater degree of trust from their customers. By prioritising data security, they are demonstrating a willingness to put customer concerns first, which could result

Catherine Moore President J.P. Morgan Merchant Services Europe 1 International Data Corporation (IDC), The Digital Universe

in 2020: Big Data, Bigger Digital Shadows, and Biggest Growth in the Far East. Available at: https://www.emc.com/ leadership/digital-universe/2012iview/executive-summarya-universe-of.htm. Accessed March 2017.

2 Tech Advisor: “How technology has changed the world in 20 years.” Available at: http://www.techadvisor.co.uk/opinion/ windows/how-technology-has-changed-world-in-20years/. Accessed June 2017.

3 eCommerce Europe: “European B2C e-commerce turnover

forecast to reach the €500 billion mark this year.” Available at https://www.ecommerce-europe.eu/press-item/europeanb2c-e-commerce-turnover-forecast-to-reach-the-e500billion-mark-this-year/. Accessed June 2017.

4 http://resources.compuware.com/hubfs/Collateral/ White_Papers/31465_Test_Data_Privacy_wp_6_002. pdf?submissionGuid=4b16c4bd-d809-4255-8b9b9a2a2df5e4fa

Issue 10 | 95

EMEA BANKING

"The Black Sea Trade and Development Bank Seeks to Play a Stabilizing Role in the Region - says President Delikanli"

Ihsan Ugur Delikanli President and Chairman of the Board of Directors The Black Sea Trade and Development Bank

96 | Issue 10

The Black Sea region was one of the worst hit by the last global financial crisis and has just started recovering after several years of recession. Only in 2016 did most of the BSTDB’s eleven member countries experience an upturn resulting in a collective regional growth reaching 1%. In 2017 the Region is posting improved GDP output numbers, and we estimate a growth rate of around 3% in 2018. The acceleration of growth, however, is not matched by domestic credit and the Bank expects challenging credit market conditions.

The particularly high degree of volatility and underlying policy uncertainty in credit markets means that international lenders may still be reluctant to provide financing for longer maturity periods. In the current environment of extremely low interest rates, credit availability in the Black Sea region remains limited for most small to medium sized businesses.

EMEA BANKING

Against this background, the Bank seeks to play a stabilizing role in the Region. Our strategic objective is to enhance support to Member States in implementing their economic and investment policies, in a climate of regional cooperation. We continued to provide much-needed medium to long-term financing during the financial crises, when private investment almost collapsed.

Today the Bank is expanding its activities to facilitate access to affordable capital for the public and private sector, and in particular to small and medium-sized enterprises.

The volume of intra-regional trade declined from almost USD 315 billion in 2011 to below USD 165 billion in 2016, though a positive trend is emerging in 2017. So, BSTDB is increasing focus on supporting trade finance activities in our countries and striving to contribute to the recover and strengthening of intra-regional trade.

The Bank’s Trade Finance Program offers a variety of facilities to stimulate import and export transactions, especially in capital goods. Acting like a regional Export Credit agency, the Bank offers import financing loans through local Financial Intermediaries while encouraging buyers to purchase goods and services from Member Countries.

BSTDB’s operational activity remains robust, with our outstanding portfolio reaching EUR 1.2 billion, mostly Attracting financing from outside the Region for projects in Member covering core economic sectors of manufacturing, energy, Countries is a critical objective of BSTDB as a regional development transportation, telecommunications, as well as agribusiness bank. Capitalizing on our position as the best-rated financial and the financial sector. In line with the Bank’s Strategy for institution in the Black Sea region, the Bank successfully issued its 2015-2018, we have enhanced our efforts to increase the first benchmark USD 500 million bond last year. As well as this, we share of the real (i.e. non-financial) sector operations, which attracted hundreds of millions through long-term bilateral loans from now exceed 65% of our outstanding portfolio. Furthermore, the non-regional development Bank has achieved a much banks, such as KfW of better balanced geographical Germany, Nordic Investment distribution of the portfolio The Black Sea Trade and Development Bank, Development Bank of across member countries, Bank (BSTDB) is an international finanAustria, to support economic which is one of our key cial institution established by Albania, and social infrastructure, strategic objectives. We renewable energy and SME are increasing involvement Armenia, Azerbaijan, Bulgaria, Georgia, sector development in our in major regional projects, Greece, Moldova, Romania, Russia, Turcountries. This additional capitalizing on our wellkey, and Ukraine. The BSTDB headquarfunding helps our efforts established cooperation ters are in Thessaloniki, Greece. BSTDB to offer growing levels of with major IFIs. Recently, we financing to companies and co-financed the Ankara Etlik supports economic development and banks in our Region, in the and Konya hospital projects regional cooperation by providing loans, midst of a prolonged period of in Turkey, the Fraport credit lines, equity and guarantees for weak external financial flows. project supporting the projects and trade financing in the public modernization of 14 regional BSTDB continues to airports in Greece, the Shahand private sectors in its member counenhance its cooperation Deniz gas pipeline project tries. The authorized capital of the Bank with partners in in Azerbaijan, which will is EUR 3.45 billion. BSTDB is rated longdevelopment active in the bring gas through Georgia Black Sea region. Over term “A-” by Standard and Poor’s and to Turkey and eventually the past three years, the to Southern and Western “A2” by Moody’s. For more information Bank signed framework Europe. We seek involvement on BSTDB please visit www.bstdb.org. cooperation agreements in the ongoing Southern Gas with over a dozen global Corridor project, as well. and regional development institutions promoting With a view to promote greater better synergies and investment in infrastructure effectiveness of its financing. In recognition of BSTDB’s efforts, in the Black Sea Region, BSTDB signed a Memorandum of a number of independent financial publications, including the Understanding with the Global Infrastructure Hub to exchange Global Banking and Finance Review magazine, awarded BSTDB key knowledge and opportunities. By means of this MoU, we have as the Best Regional Development Bank in Southeast Europe increased our capacity to contribute to regional infrastructure and globally in 2015-2017. development while considering country specific conditions.

Issue 10 | 97

EMEA BUSINESS

36 | Issue 10

EMEA BUSINESS

THE GDPR PARADOX:

More data, more agility

With GDPR incoming in less than 6 months, there has been a renewed focus on data policy compliance. The severe operational and regulatory fines, which have been debated ad nauseam at this point, threaten to penalise the compliance laggards, with severe consequences for their corporate reputation and bottom line. The question is, then, how do companies continue to improve their efficiency and productivity, while simultaneously trying to draw value from increasingly large data sets. Can it even be done?

This article aims to outline the best data governance measures financial institutions can implement for their data, to mitigate risk and improve enterprise agility, all the while navigating a data environment where the variety, volume, and velocity of data makes it that much more difficult to trust the data being accessed. Those few companies that excel at managing this paradox will be in a very strong position to rise to the top of their respective industries.

Move to the Lake All businesses are now, to one extent or another, data businesses. Some organisations may exploit this data better than others, but in every case there is the potential for data exploitation. Since data can add lots of value to a business, this potential should ideally be realised in every business. This does necessitate some form of infrastructure to store and retrieve data from, and brings us neatly to the debate between data warehouses and data lakes.

While some people confuse data lakes with data warehouses, in reality they are both optimized for different purposes.

Data warehouses were designed to store structured and processed data and for storing relatively small and specific data sets. Data lakes, on the other hand, were conceived for the cheap storage of large sets of unrelated, raw data. A malleable configuration means that the data lake is much more agile than the traditional data warehouse, and so gives businesses the liberty to respond to changing circumstances quickly and cheaply. Moving from a data warehouse to a lake has many benefits, from increased agility to lower costs, but it is also more complicated to

manage, and so requires dedicated attention to stop the lake turning into a data swamp.

This is where your “A Team” comes in.

Build your “A Team” One of the first things to do is to invest in and build your GDPR compliance team.

This often starts with the hire of a Chief Data Officer (CDO) who understands how data is used at every level of the business and can help implement appropriate data governance measures for the company.

Once this role is established, the team can be expanded to include different areas of specialty, such as compliance and security, depending on the size and needs of the company. All these different roles will help maintaining and drawing value from your data infrastructure, even as more and more data is brought into the business. They should also be charged with developing an action plan should a breach occur, so that as little time as possible is lost in the return to full operations, and the company is not too bogged down in corporate processes to respond appropriately.

Issue 10 | 99

EMEA BUSINESS

Mind your Metadata One of the lake’s principle advantages, the common storage and access of data, is also one of its weaknesses because there have to be shared standards when it comes to metadata. A wealth of metadata is what makes the data in the lake so searchable and trustworthy. Knowing the data lineage and the relationship between one piece of data and the rest, are essential to maintaining that integrity, reaping the most value from the data, and facilitating the compliance process. If anyone contributing to the lake does not affect good stewardship of the data they are adding, the lake can quickly become unmanageable, creating problems for GDPR compliance. It is therefore important that strict policies on the preservation of metadata be implemented company wide.

Automate A significant benefit of metadata is that it allows for a certain level of automation, freeing your A Team from some of the routine that tends to dominate IT departments. For example, the reporting of both regulatory compliance and business

100 | Issue 10

insight can easily be programmed, as long as the system can find markers by which to identify the data. Institutions should also aim to have a consistent, centralized mechanism for automating the workflows associated with data use policies – including enforcement controls such as sign-offs. While this creates more data, it simultaneously frees the team to act creatively in its problem solving, and allows you to use the expertise of your A Team to increase enterprise agility.

Conclusion Financial institutions can no longer afford to ignore where their data resides, who has touched it, what it means and whether it’s current, and will have to adhere to specific data security and integrity protocols if they wish to maintain both their reputation and bottom line. The four pieces of advice above are a good start for businesses seeking to take advantage of the current technological trends, and will help these businesses increase their data consumption while increasing enterprise agility. It does not fix every issue, and there will be a “cultural reckoning” upon the implementation of GDPR. But companies who action these measures will find themselves more prepared to handle the demands of GDPR with agility.

Felix Van de Maele Co-Founder, CEO Collibra

EMEA FINANCE

Why RegTech will play its winning hand in 2018

The aftermath of the 2008 financial crisis resulted in significant new financial services regulation. With it came a much higher compliance burden for companies operating in the industry. Regulators aimed to ensure the mistakes of the past would not blight the financial landscape of the future by placing more controls on risk, capital management and transparency.

Regulatory Tech – or RegTech as it’s more commonly known – is a term created by the Financial Conduct Authority1. It is a subset of FinTech that, “focuses on technologies that may facilitate the delivery of regulatory requirements more efficiently and effectively than existing capabilities". As the regulatory focus on data, reporting and oversight continues to increase, RegTech is evolving as an area specifically geared towards the compliance, security and regulation aspects of FinTech. Essentially it’s about developing technology that can help financial firms to better comply with regulations in an agile, comprehensive and costeffective way.

102 | Issue 10

EMEA FINANCE

So far in 2017, the FCA has issued fines2 for compliance breaches totalling more than £225m. With so much at stake, companies are investing heavily in RegTech to help them achieve compliance. Investors are pouring millions into the innovative startups leading the industry. Londonbased DueDil3 has raised around £20m since its inception in 2011 and has become one of the most well recognised RegTech superstars. DueDil’s platform pulls together data from thousands of sources including company websites, financial filings, news reports and registry data to form a comprehensive database offering detailed insight to support due diligence.

RegTech in practice As the compliance landscape increases in complexity, RegTech is taking centre stage. Often RegTech systems use existing data, but in a way that offers new and timely insight into regulatory processes, automating compliance and risk management tasks by pooling and aggregating data from a range of sources.

Often this data is too complex, too varied, too expensive, or just plain impossible to review manually.

Innovative RegTech companies are automating these complex processes to significantly reduce the cost of achieving compliance. They are helping financial services companies meet regulatory obligations by, for example, providing aggregated global credit and anti-money laundering (AML) risk data, providing onboarding, screening and monitoring tools for due diligence and know your customer (KYC) processes, and the recording, storage and analytics of regulated telephone conversations.

New year, new rules In 2018, we will see RegTech play an even more important role in the industry.

Massive changes are afoot in the financial sector. The Markets in Financial Instruments Directive II (MiFID II) and the EU General Data Protection Regulation

(GDPR) will come into force in the first half of the year. Both have serious teeth in terms of the changes that organisations need to make, and the financial penalties that they risk should they fail to comply.

One of the most discussed aspects of GDPR is its explicit mentioning of fines.

Whereas the Data Protection Directive simply stated sanctions had to be defined by the Member States, GDPR exactly details what administrative fines can be incurred for violations. Under GDPR, companies can be fined up to 4% of their global turnover for a breach. With such a significant overhaul of the data protection landscape, regulators will want to make examples of companies failing to achieve the new standards.

Who will win in RegTech?

For most financial services companies, the issue will be the scope of the new regulations. Compliance will not be straightforward and some regulations even contradict each other. When one regulation insists that all records of a transaction are kept for five years whilst another provides rights to remove this data, which one prevails?

access, view and delete this data, how can companies ensure they can offer this capability? How will they even know what data they hold? A technology approach to the problem is the only way many organisations will be able to address these challenges effectively.

A positive outlook

No business wants to damage its reputation or bottom line by falling foul of the regulators. For most, noncompliance is not an option. This simple fact means RegTech is poised for growth, as companies look to technology solutions that support compliance with rules and regulations that are in place now, as well as those that will be implemented in the future.

According to FinTech Global4 the outlook for RegTech in London in particular, is very positive. As financial institutions continue to face ever-increasing regulations, accompanied by spiralling costs and complexity, they become even more receptive to innovative companies that can offer technology-based solutions. That’s why, for me, RegTech is a sure bet in 2018 – and beyond.

The winners in the RegTech sector will be those that can answer questions like this with practical solutions. And that means companies will require skilled workers, not just those with a good working knowledge of the new regulations, but a practical mind able to interpret these initiatives for various sectors. They will need to come up with new business processes and systems that meet the regulations efficiently. This is non-trivial, especially in legacy systemheavy environments like banks.

A great example of where RegTech is already helping address compliance challenges is in the voice space. Just imagine how much personal data is held within call recordings. These are ubiquitous. Many companies across a range of sectors store call data. With GDPR offering customers new rights to

Tom Harwood Chief Product Officer and Co-Founder Aeriandi 1 “Home.” FinTech Global, fintech.global/.

2 2017 fines.” FCA, 14 Dec. 2017, www.fca.org.uk/news/newsstories/2017-fines.

3 “A solution for Compliance.” DueDil, www.duedil.com/ solutions/compliance.

4

http://fintech.global/

Issue 10 | 103

EMEA INSURANCE

Innovative Healthcare Insurance Tal Hisham Nazer has been the Chief Executive Officer of Bupa Arabia since 2008. Under his leadership, Bupa Arabia has become one of the fastest-growing and successful health insurance companies in KSA. Bupa Arabia is an associate of Bupa, the global healthcare company with 29m customers in 190 countries.

104 | Issue 10

As a leader in healthcare insurance in the Kingdom, what initiatives do you feel have led to your continued success?

What advice do you have for decision makers and their families looking to secure healthcare coverage?

We continuously research the newest advancements in our field to ensure that our services take less time to be delivered. We also always strive to give our members the highest quality services. That is done by making sure our employees work in a highly motivating environment that allows them to prosper.

We, at Bupa Arabia, always strive to provide the best healthcare for our members and their families. We do not limit ourselves to merely providing the best high-quality health insurance services, but we go beyond - seeking to provide them with holistic healthcare in their daily lives. That is why we created Tebtom, a set of unprecedented and unique & tangible healthcare services such as, Doctor on Call, Maternity & Child care and Chronic Care services.

EMEA INSURANCE

How has technology impacted the way you do business?

With the rise of digital solutions and the massive increase of mobile penetration into the Kingdom, Bupa Arabia has realized the potential of digital channels to offer convenient services to members. Bupa Arabia was the first in the industry to offer online services to its members. Our members can track their claims and preauthorization requests, obtain an insurance certificate, and access their membership cards online through our website.

At Bupa Arabia, we don’t make promises we cannot keep. We pledged to guide our members, and members of the community, to be with them stepby-step as they work towards living healthier and happier lives. We also thought about ways to make it easier for our coverage members to find the clinics and hospitals covered under their network.

sets of health services such as those included in the Tebtom Program; which include medication delivery, maternity care, home-based vaccinations, wellness services and telemedicine.

We also reach out to the entire community through the health tips and articles that we frequently post on our social media. Â

We have also invested in digital channels (online services and the Bupa Arabia mobile app) to allow our members to access unprecedented

Issue 10 | 105

EMEA INSURANCE

This year you launched a new point of care program. How does this program ensure members receive the best health insurance services?

We have created this program, which we have called Rahatkom, after going through an in-depth research to ensure the satisfaction of customers. The program works in a way that promotes a seamless and integrated member experience from the moment the member enters the hospital, until the member gets the treatment required. The Rahatkom program also provides a transparent relationship where members can provide their comments, assisting in the continuous improvement of all services provided by Bupa Arabia.

106 | Issue 10

Can you tell us about Tebtom Healthcare Services and how it benefits Bupa Arabia members?

The Tebtom program offers many healthcare services such as Bupa Doctor, Maternity & Child care as well as Chronic Care, among others, to support members whenever and wherever needed. Over 2 million have used the Tebtom program. These services were created to cater to member’s healthcare needs and lifestyles, keeping our promise to be the healthcare partner of choice by providing the most valuable services. The Doctor on Call service allows its members to communicate 24/7 with Bupa’s doctors to answer various health questions.

Similarly, Maternity & Child Care offers valuable services such as home-based vaccinations for children under the age

of 2; this ultimately reinforces Tebtom’s promise and saves an abundance of time and effort. This service also creates an unparalleled healthcare service for the mother and her child during the 9 months of pregnancy and following birth. Moreover, the Chronic Care service relieves members with long-term conditions and provides services to help them manage their case. The periodic checkups include a home based lab at home or work as well as medication refills and deliveries based on the member’s schedule.

EMEA INSURANCE With more than 1000 employees, what is the work environment at Bupa Arabia like?

#1 as a great workplace for females.

Bupa Arabia’s females work at all levels including Directors.

Our company has achieved the best ideal working environment stimulating to increase production, creativity, and innovation at work, nationalizing jobs, and encouraging the employment of women.

We were ranked 7th in Saudi Arabia in the “Great Place to Work” rankings in 2016.

The wellness of our employees is a concern we take closely to heart. We believe that a happy employee is a stress free and healthy employee. That is why we created all possible facilities that help our employees manage their time and personal health, and work.

We also created special agile work programs that help stay at home females work from home.

In line with the Saudi Arabia 2030 Vision, to provide job security and stability for Saudi nationals and increase their numbers in the workplace, we have exceeded ‘Saudization’ requirements, with 65 percent of our workforce being Saudi nationals.

Our Human Resources department also pays special attention to recruiting Saudi women into its workforce and helping them develop their skills to enable them to become successful in the health insurance sector. We have received numerous awards ranking us Number

We are one of the few gold members of an association called Qaderoon, which promotes the inclusion of people with disabilities in the workplace. This is a new movement in Saudi Arabia and we are proud to be one of the leaders in it.

We have renovated all of our offices and branches to accommodate wheelchairs and provide accessibility. Our workforce includes employees with disabilities and our workplace is accommodated for them as needed.

Mr. Tal Nazer is a Board member of Arabian Medical Marketing Co. Ltd Nawah. Mr. Tal Nazer is also a Board Member of the Human Resources Development Fund (HRDF) since 2013, a member of the Young Presidents Organization (YPO) since 2005, a member in WEF's Young Global Leaders (YGL) since 2013 and a board member of Choate Rosemary Hall since 2015. Mr. Tal Nazer holds an MBA from The Wharton School, Pennsylvania, USA (in Finance and Buyouts, 2001) and a BA in Economics from the University of California at Los Angeles (Dec 1996).

Some of the services we offer employees are, for example; Free Daycare Services where employees can leave their children ages 3 months to 2 years where our trained professionals take care of them.

We also have In-house gyms with personal trainers, serving healthy meals in our canteen, and a library that’s open for all employees with the latest and most read books being available for reading. Our vast collection that is continuously updated ranges from top finance marketing, self-development, management, business and audio books.

As a healthcare organization, we understand that our employees need support when they are sick or injured and should not be discriminated against. We do not terminate employees who fall ill with chronic conditions especially those with fatal illnesses.

Tal Hisham Nazer CEO Bupa Arabia

Issue 10 | 107

EMEA TECHNOLOGY

Laying the foundations: The road to digital transformation in 2018 Across the globe, banks are investing heavily in emerging technologies in a bid to achieve digital transformation.

Earlier this year, IDC predicted that there would be $1.2 trillion spend on digital transformation technologies in 2017 – and banking would be one of the sectors with the fastest growth. According to a recent McKinsey paper1, however, whilst it’s apparent that digital is penetrating all sectors, only 39 per cent of banks are actually digitized.

Experts, such as Forrester2, expect that financial services organisations will start to get serious about digital transformation in 2018, yet their main prediction is that many providers will fail to differentiate or find new ways to specialise and create value for customers. Without engaging customers and creating new offerings in line with their demands, is it really realistic to foresee the sector achieving digital transformation next year?

To remain competitive, it’s critical that the financial sector invests and innovates with emerging technologies, such as AI, Blockchain and cloud computing – to be more agile; to engage more fluidly with customers and bring game-changing approaches to the workplace to enhance their competitive edge.

Yet, only a third of businesses in this sector are digitally prepared, leaving a big question mark over the heads of the remaining majority – but what’s the hold up?

108 | Issue 10

EMEA TECHNOLOGY

The pressure pot

Legal incentives to digitise

A plethora of challenges currently face the sector. No matter the outcome of Brexit, for example, there is likely to be convoluted consequences regarding trading across European markets. With conversations and agreements still in play, it’s not yet possible to realise the state this will leave the industry in. Furthermore, financial services organisations are hungry for skills. PwC3 found that 72 per cent of global banks, insurers, and other sector organisations say the technology skills gap is growing.

Combine this with pressures to commoditise and adhere to legal requirements set out by regulatory bodies, and it is clear to see the pressure pot is on boil.

On 3rd January 2018, the MiFID ll4 regulation deadline will hit the sector. In a bid to inject transparency across assets, financial organisations will then have to consider how best to adhere to the new rules aimed at keeping record of phone and electronic data for better audit and surveillance trails. Financial services companies will no longer be faced with aspirational approaches to digitalisation, but instead will have to comply with legal guidelines that require more reporting and recording that ever.

Adoption of emerging technologies is not only a driver for digital transformation and a key component to remaining competitive, it’s also another burden to add to the list.

In its report, ‘top financial services issues of 2017’, PwC identified the landscape of challenges facing the sector.

Amongst low interest rates and changing regulations, it identified that aging technology infrastructure at many firms cannot cope with demands of a highly networked, mobile-first client base. How can these businesses transform digitally if their existing technologies aren’t able to support modern solutions?

According to Peter Wannemacher, senior analyst at Forrester, “to become a digital business, you need to digitize back-end financial processes.”. However, worryingly, a majority of businesses are still using manual processes to automate their digital estate. This is not only a timeconsuming process – but a costly one. Imagine a stock trading floor, for example. Typically, these offices are full of energy, noise and sales. Yet, when critical functions are down, such as the phones not working, brokers cannot trade and the tumbleweed settles in. When these critical lines of communication are down, financial services are reliant on engineers manually testing each unit and its software.

Automating this process is far more productive alternative. Not only will it offer the ability to analyse trends over time to detect such things as operational and compliance issues early, but also increase the ability react accordingly to any issues that arise, resulting in an improved competitive advantage.

Time is money in financial services.

Therefore, reliability and efficiency is key for IT operations. A fresh proactive automated IT approach eliminates manual user error, maximises trader productivity, thus improving business performance. To maximise uptime and minimise risks when it comes to their business-critical voice trading systems, it’s imperative that organisations in the sector invest in the right tools and solutions that support their ability to comply.

The pressure to transform financial practices digitally is mounting but in tandem, the deadline for these regulations is nearing with little time to prepare. At a time where digital transformation is a must for financial services businesses – both from a competitive edge and a legal compliance standpoint - the need for validating, certifying and automating communications and collaboration workflows is unprecedented. In order to achieve digital transformation at the front-end, financial services companies must lay the foundations first – investing in technologies that transform the back-office to propel innovation.

Simon Richards EMEA/APAC Managing Director tekVizion 1 Jacques Bughin, Laura LaBerge, and Anette

Mellbye. (n.d.). The case for digital reinvention.

Retrieved December 28, 2017, from https:// www.mckinsey.com/business-functions/digitalmckinsey/our-insights/the-case-for-digitalreinvention

2 Forrester. (n.d.). Retrieved December 28, 2017, from https://www.forrester.com/report/Predictions 2018 Financial Services Companies Get Serious About Digital Transformation/-/E-RES140220

3

P. (n.d.). 20th CEO Survey - PwC Global. Retrieved December 28, 2017, from https://www.pwc.com/ gx/en/ceo-agenda/ceosurvey/2017/br

4 MiFID II. (2017, October 18). Retrieved December 28, 2017, from https://www.fca.org.uk/markets/ mifid-ii

Issue 10 | 109

EMEA BUSINESS

Managing Business Risk in the Digital Economy Paul Taylor, Partner and UK Head of Cyber Security at KPMG, says current business risk models fail to take account of the digital industrial revolution.

The next industrial revolution, often called Industry 4.0, promises to be as transformative of the business landscape, in the same way as previous industrial revolutions transformed society. This transformation, driven by industrial digitisation, is set to radically reshape business models, disrupt market monopolies, merge previously separate industry sectors and dramatically speed up the pace of innovation.

Old boundaries between industries, products, and services will be obliterated.

There will be convergence within an integrated digital industrial ecosystem.1 One example is the recent convergence of the automotive and software industries around the ‘connected car’. Industrial digitisation will also create a shift in production similar to the invention of the moving assembly line, opening up a future digital industrial supply chain where products are digitally developed, manufactured, and monitored in realtime from factory floor to shop floor, and beyond through a single, holistic, integrated process.2

110 | Issue 10

Connected supply chains with smart sensors will allow the real-time monitoring and measurement of vast automated assembly lines. The merging of the physical and virtual worlds in manufacturing will enable product developers or customers to convert virtual 3D visualisations of future products into digital files to be autonomously custom-made by 3D printers and other machines.

The unrelenting pursuit of better, faster and more efficient ways of deploying and creating technology has driven innovation in our businesses and across our economy.

The pressure is on to reap the benefits of connecting every system, from highprofile innovations, such as connected cars and medical devices, to the tasks that allow product fulfilment and inventory management across a vast and distributed network of retailers.

Why business risk strategies are out-ofdate In Industry 4.0 cyber security will be as important as physical security. Business risk strategies have not caught up with the

EMEA BUSINESS implications of the transformation from a traditional to a digital economy. Whilst every business department and industry sector is increasingly going digital, information and cyber security risks remain poorly understood in the boardroom.

hidden vulnerabilities - from security misconfiguration to broken authentication systems - is one of the threats of most concern to businesses worldwide.

A recent paper by (ISC)2 , an international non-profit membership association of professionals working in information and cybersecurity entitled ‘What Every Business Leader Should Know About Cyber Risk3, points out that, whilst everything from business IP to business-critical assets is now vulnerable to cyber-attack, many boards do not treat cyber risk as comparable to legal and financial risk. As a result, businesses don’t invest the same time and resources in developing a cyber risk management strategy as they invest in mitigating against other risks.

There are some steps that can be taken to turn the situation around. Businesses must start by accepting that cyber risk is a business risk like any other, not merely a technology problem, and align their spending priorities accordingly. This starts from the realisation that cyber risks are intertwined with other business risks especially as cyber-attacks often spill over into the physical world; for example, (ISC)2s recent white paper points to a cyber-attack on the German steel industry11 that caused physical damage to a factory.

Lloyd’s of London now estimate4 that a serious cyber-attack that takes down major cloud providers could cost the global economy up to £92 billion. This would be similar to the fallout from a catastrophic natural disaster. There is growing evidence of the financial risk to business from a cyber-attack. Cyber security vulnerabilities have triggered mass recalls of 1.4 million cars5 and 500,000 connected pacemakers.6 Cyber-crime has resulted in multimillion pound thefts7, tumbling share prices, major customer losses and multiple CEO resignations8. A DDoS attack recently affected a significant proportion of the USA’s internet9. Upcoming data-privacy laws, such as GDPR, will expose businesses to fines and class action lawsuits, with the result that information and cyber risk is now closely intertwined with legal risk.

The lack of understanding of cyber risk extends to other organisations responsible for creating and maintaining our digital economy. Many of those responsible for developing the software, applications, sensors, devices, systems and networks that underpin modern businesses have little or no training in cyber security. This is producing a digital economy with a hidden plethora of vulnerabilities, the equivalent of a physical economy composed of millions of goods that are riddled with latent safety defects. The largest ever survey10 of cyber security professionals, published this year, found that

Risk management for a digital economy

This means cyber security expertise can no longer be siloed in the IT department; all business units must be collectively held responsible for online security as part of a holistic risk-management strategy based on a comprehensive view of cyber risk across the company. This means cyber risks should be added to the company risk register, and a governance framework should be created to include cyber risk management.

A board member should be included in all substantive cyber risk discussions. Crucially, companies need to audit and take control of the digital assets they hold, just as companies seek a full inventory of all their other assets.

The key to securing Industry 4.0 is for businesses to manage and mitigate risks to our digital economy just as they manage risks to our traditional economy, by recognising that the two are inextricably linked.

Paul Taylor Partner and UK Head of Cyber Security KPMG

1 https://assets.kpmg.com/content/dam/kpmg/pdf/2016/05/ factory-future-industry-4.0.pdf

2 Gabriëls, X. (n.d.). Die Fabrik der Zukunft. Retrieved December 28, 2017, from https://home.kpmg.com/be/en/home/ insights/2016/02/factory-of-the-future.html

3 Https://edu.isc2.org/cyberrisk/. (n.d.). Retrieved December 28, 2017, from http://edu.isc2.org/cyberrisk/

4

Kollewe, J. (2017, July 17). Lloyd's says cyber-attack could cost $120bn, same as Hurricane Katrina. Retrieved December 28, 2017, from https://www.theguardian.com/business/2017/jul/17/lloydssays-cyber-attack-could-cost-120bn-same-as-hurricane-katrina

5 1.4M Vehicles for Bug Fix. Retrieved December 28, 2017, from https://www.wired.com/2015/07/jeep-hack-chrysler-recalls-1-

Businesses must track and protect data in transit in the same way as they use systems such as GPS ‘track-and-touch’ to monitor and protect physical assets on the move. This is even more important with the introduction of GDPR, which will widen the definition of a privacy breach to include any unauthorised access to personal data, even by employers or other departments of the business.

Crucially, information, cyber security and data privacy must be built in to every product, business process, and service at design stage. Every digitised product and service; from smart meters, to connected cars, from automated manufacturing, to employee location-tracking must be designed with security and privacy as a central consideration.

4m-vehicles-bug-fix/

6 Hern, A. (2017, August 31). Hacking risk leads to recall of 500,000 pacemakers due to patient death fears. Retrieved December 28, 2017, from https://www.theguardian.com/technology/2017/ aug/31/hacking-risk-recall-pacemakers-patient-death-fears-fdafirmware-update

7 Treanor, J. (2016, November 08). Tesco Bank cyber-thieves stole £2.5m from 9,000 people. Retrieved December 28, 2017, from https://www.theguardian.com/business/2016/nov/08/tescobank-cyber-thieves-25m

8

Ken Sweet and Michael Liedtke, THE ASSOCIATED PRESS. (2017, September 26). Equifax CEO resigns in wake of data breach. Retrieved December 28, 2017, from http://torontosun. com/2017/09/26/equifax-ceo-resigns-in-wake-of-data-breach/ wcm/bdca59ee-1956-485e-a8c8-47424d36713f

9 Turton, W. (2016, October 21). This Is Why Half the Internet

Shut Down Today. Retrieved December 28, 2017, from https:// gizmodo.com/this-is-probably-why-half-the-internet-shut-downtoday-1788062835

10 "https://iamcybersafe.org/wp-content/uploads/2017/06/EuropeGISWS-Report.pdf"largest ever survey 11 "https://www.isc2.org/-/ media/609C97216F1B46099C3ABCDEC4C929D2.ashx"points to a cyber-attack on the German steel industry

Issue 10 | 111

EMEA TECHNOLOGY

The Construction Industry needs a Digital Platform for Guarantees and Bonds Why is the construction industry still working with paper versions of these vital documents in the digital era? It’s a question asked by Simon Streat, VP Product Strategy, Bolero International.

In the highly competitive world of construction, where the pressure to perform is unrelenting and the penalties for failure can be severe, guarantees and bonds are essential instruments to provide the protection that companies are looking for.

The variety and complexity of handling these documents can be daunting, as businesses with offices dispersed across the UK strive to manage everything from parent company guarantees to bonds covering performance, land clearance, advance payments for plant and off-site materials, as well as the guarantees required of house-builders for defects liability by regulatory bodies such as the NHBC.

While lawyers may find a steady stream of work from disputes arising from guarantees and bonds, those responsible for these documents within the industry know that without the original, a business can do nothing to either amend the document or receive what is due to them as a beneficiary.

112 | Issue 10

In the absence of the original guarantee, the bank or surety provider has no obligation to compensate a developer when a contractor falls down on the job or the supplier fails to deliver specialised plant or prefabricated building components.

Stuck in the paper era

Unfortunately, the majority of businesses in the construction sector are limited by paper-based processes, using spreadsheets in an attempt to gain some degree of visibility and control. This is not easy when thousands of guarantees and bonds may have multiple signatories or beneficiaries and most relate to projects managed by staff in remote, regional offices.

Guarantees used by construction companies, for example, are often remitted to head office for supervision, leading to mistakes and hugely unnecessary delays.

Far too much time is consumed completing amendments to match the evolving nature of projects, as, for instance, when a business hits its targets early and wants to

end or reduce payments for the guarantee its bank is providing. Without the original document, the bank will potentially ignore such a request.

Lack of visibility for the builder, developer or indeed, the surety-provider, not only makes this difficult, it also will frequently lead to such potential cost-reductions being entirely overlooked. And of course amending a paper document when these three parties are typically involved (as well as obtaining confirmation from a national organisation’s regional offices), can take days or weeks if the guarantee is distributed by traditional means. In a digital world, this time is significantly reduced as all parties will have access and visibility to the guarantees involved.. If a builder completes ten houses, a guarantee may be called up ten times before it is terminated, each occasion taking up time and resources. The process of termination itself also needs agreement from all parties before the document is sent on to the bank.

None of this is straightforward. At any time, businesses engaged in construction, depending on their size, are likely to have

EMEA TECHNOLOGY

paper documents constantly in physical transit, flowing back-and-forth, racking up costs and consuming precious staff-hours.

Digitisation is safer, smarter and faster

It makes it all the more incomprehensible that the construction industry, which is constantly embracing and driving innovation in all other areas, has yet to grasp the huge efficiencies of document digitisation. Once documents have been digitised, they can be securely exchanged over a single, cloud-based platform that gives full and secure visibility. Speed of exchange is only constrained by the internet, negating the need for documents to be couriered between the parties and their regional offices, which is when they are frequently mislaid, lost or sent to the wrong address.

Electronic guarantees or bonds, by contrast are constantly visible to all the parties on a digital platform, including banks and surety-providers, but only the legal holder can amend them, with every action automatically and irrevocably logged.

Why stick with paper-based processes?

When documents can be passed securely between builders, contractors, suppliers, developers, banks, surety companies and regulators at the click of a mouse, it seems inconceivable that any of these organisations would want to stick with paper-based processes, even if they have already managed some sort of ad-hoc integration of guarantee management with treasury systems.

Digitising their guarantees, bonds and the workflows that have evolved around them, will achieve major gains in costreduction and release of working capital.

No longer will businesses routinely lose money paying for bank guarantees that have outrun their original purposes but which have never been updated. The problem of lost documents will itself disappear, while the laborious process of couriering paper around to gain acceptance for amendments or terminations will be consigned to the construction industry’s history along with timber scaffolding.

If the industry is serious about embracing all the advantages of the digital era it must now leave paper in the bin and start managing vital documents such as guarantees and bonds on a cloud-based digitisation platform.

Simon Streat VP Product Strategy Bolero International

Issue 10 | 113

EMEA TECHNOLOGY

Between the Hackers and the Regulators…

Mobile security can be a weak link when it comes to both cybercrime and compliance, says Alistair Millar of Altodigital Mobile working has become a way of life - so much so that it’s difficult to remember all the fuss surrounding the whole BYOD issue. At the time, those who decided on a BYOD policy took measures to counteract the risks of allowing remote access to company data from employee devices.

For example, they strengthened their firewalls and introduced tiered systems of mobile access.

As a result, many businesses felt even stronger than ever – invincible even. However, in reality the number of security breaches continues to rise. High profile victims such as Uber, which recently revealed being hacked late 2016, exposing the personal information of 57 million customers and drivers, the credit rating company Equifax and Yahoo have contributed to the shock headlines by admitting their own breaches and showing that nobody is immune.

114 | Issue 10

It seems cybercrime is a real leveller. Earlier in 2017, the UK government released the results of a cybersecurity survey which revealed that seven in ten large businesses had identified a breach or attack. However, the survey points out that small businesses can be hit particularly hard by a cyberattack, with nearly one in five taking a day or more to recover from their most disruptive breach.

EMEA TECHNOLOGY

This is not to say that mobile access has been responsible for all these breaches. However, cyber criminals will always find the weakest links. Today, mobile devices are increasingly under attack. In fact, in a study for Check Point software, 20% of companies polled said their mobile devices had been breached and nearly all (94%) expected the frequency of mobile attacks to increase.

The problem is similar to all security weaknesses. The more secure and robust the mobile operators make their systems, the smarter the criminals become in creating malware to penetrate them – with spyware becoming equally sophisticated.

Mobile apps are another target, especially those which enable users to store personal details.

Increasingly these are being used by workers in the field such as insurance risk assessors, sales reps and customer service agents. They can store significant amounts of data – often customer information and personal details – and are extremely vulnerable to hackers.

At the same time, many businesses are also migrating their data to the cloud (it’s suggested one in three now use cloud storage) and bringing a whole new set of concerns. They need to ensure that their security is at least mirrored by that of their cloud provider. If a company is using cloud services, they are themselves still liable for the security of any data forwarded to those services.

Issue 10 | 115

EMEA TECHNOLOGY

All these issues are currently coming to a head as the deadline for compliance with the new General Data Protection Regulations (GDPR) in May 2018 comes closer. Now businesses face being hit from two sides – the hackers and the regulators. With the promise of severe penalties of up to £20 million, it’s difficult to know which is the greater threat. Gartner appears to agree, noting that “by 2019, 30% of organisations will face significant financial exposure from regulatory bodies due to their failure to comply with GDPR requirements to protect personal data on mobile devices.”

Point of no return Yet, we’ve come down the road of no return when it comes to remote and mobile working. To deny employees access to corporate data when out of the office could be akin to surrendering to the competitors, so great are the productivity gains.

So how can businesses – and especially small businesses without a huge IT department – exercise ‘due diligence’ and protect their data to the required levels? As I see it, there are four main areas to consider:

1. Is security housekeeping up to date?

Updating patches regularly would have negated many of the problems associated with the recent WannaCry ransomware attack. Easier said than done for many hard-pressed small businesses where patching can be seen as a hassle. However, making sure the latest anti-virus and antimalware software is in place and firewalls and gateways are up to date is a vital first step to protecting data.

116 | Issue 10

2. Protect against data leakages

A mobile security strategy should be developed. This should include who can access what, a policy on mobile apps and storage of confidential company details – not just on mobile phones, but also on laptops, tablets and USB sticks which can be easily mislaid.

Education is key here. For example, some people like to save work in multiple locations to ensure accessibility and to know there is a back-up. But this doubles or trebles even the vulnerable spots. If the laptop is left on a train, it could fall prey to anyone with the basic skills needed to break into it. Any file sharing applications used could also be compromised.

Employees should be made aware of potential security threats and be responsible for ensuring passwords are strong and they carefully manage and protect both their own personal data and the company information entrusted to them.

EMEA TECHNOLOGY

Businesses should protect other potential weak spots such as mobile printing. If documents are sent to print from a mobile phone to an office, they can easily then get into the wrong hands. They should ensure to use printers that hold documents until a user enters the right PIN code or other authentication and use encryption.

3. Put the right authentication processes in place

Adaptive authentication based on certain parameters can ensure that while employees have easy access to low risk data, a company’s confidential information is kept safe and only access by those with the right authority and trust.

This may mean that access to some parts of the network require only a single password, whereas reaching HR data, for instance, requires two-factor user authentication and a digital certificate, even for the same user.

4. Security at every point

An increasing number of organisations are implementing several layers of mobile security to plug every vulnerability. This can include mobile device management, mobile application management as well as anti-malware and anti-ransomware.

There’s no one size fits all here, just a policy of adding protection at any weak point.

At the same time, all these measures can’t prevent the mobile worker from doing their job as efficiently and productively as possible – otherwise all the advantages of mobile working will be lost. It’s a balance between benefits and responsibilities and only those who get it right will win out in the end.

Alistair Millar Group Marketing Manager Altodigital

Issue 10 | 117

EMEA BANKING

A Strategic Response to Open Banking Open Banking has the potential to be a game-changer for the banking industry.

The gatekeepers (banks) are being forced to share their single most prized possession – customer data – in order to create a more vibrant ecosystem that promises to maximise consumer welfare.

Banks can be thought of as companies that use information (credit scores, cash flows histories, payment trends and asset prices) to make decisions (granting credit, deciding level of interest rates and fees) through the use of complex technological systems (payments infrastructure, trading systems and customer databases).

Since bank behaviour is so similar to Big-Data tech firms, opening the database to other services providers will be transformative. What makes it even trickier for banks is the fact that the onus on ensuring data security will most likely be placed on the banks themselves.

Open Banking’s Impact on Banking An often quoted statistic is that the average bank customer is more likely to stay with their bank than remain loyal to their husband or wife. Stickiness of banking customers works heavily in favour of incumbents and strong initiatives like ‘current account switching’ have not changed the statistics dramatically.

118 | Issue 10

However, Open Banking has all the prerequisites to change the old rules of the game. Simon-Kucher & Partners sees at least three potential consequences that should be considered by incumbent banks in their strategic response to Open Banking.

Competitors: the emergence of Fintech-Fintech collaboration So far, the prevalent business model has seen incumbent banks collaborating with Fintechs to leverage each other’s strengths: a wide client base meets better technology, for instance. Open Banking has the potential of creating collaborations among leaders in the fintech space and crowding out incumbent banks from the latest innovation. Marketplaces for banking products are already emerging parallel to traditional channels, championed by the most successful disruptors. The collective approach will get more common as Payment Services Directive 2 (EU-wide) unlocks customer data and the ability to make payments on behalf of someone else’s ‘customer’.

EMEA BANKING

Issue 10 | 119

EMEA BANKING

Customers: the dawn of planet of the millennials Fintechs are attracting mostly technologysavvy millennials who over the coming decade will be the most powerful consumers (if they aren’t already). Fighting for a share-of-wallet of these consumers could be the differentiator for a bank’s longterm profitability. As more millennials start to occupy centre stage in the economy, banking services will be channelled more through non-traditional players. Banking will remain an intergenerational industry, with parents opening accounts for children before they even understand the basic concepts of finance, but millennials have proven much more likely to challenge the status quo, to try new experiences, even in financial services. For banks, Open Banking could mean the loss of an exclusive relationship with their customers. The risk is that they become pure back-office servicers while new players capture more of the value chain.

Products: commoditisation and margin erosion As the barriers to entry fall due to the sharing of customer data and new players enter the market, the industry runs a risk of price wars being triggered to grab additional market share. Pressure on margins and profitability is common in industries that went through a shakeup of competition rules and saw the entry of innovative competitors, the airline industry being a prime example. Also, considering the stickiness of the average bank customer, new disruptors will necessarily compete on price as well as quality of service to convince customers to move.

This will likely result in further battles for the last basis point. Open Banking will definitely put pressure on the profits generated by traditional banking products by making them more comparable and more easily accessible.

120 | Issue 10

Crystal Ball 2027 The threat to the traditional banking business model as it stands today is real. It is entirely likely that the bank of 2027 will look very different from today’s version - just as today’s banks differ quite significantly from their 2007 iteration.

Banks will need to create moats in order to ensure that their core business remains intact. In order for banks (High-street, Challengers and everyone in between) to get their Open Banking strategy right, they need to fully understand their customer needs and expectations in a digitallybanked world.

Traditional banks have a high value proposition which they should not neglect as part of their future customer retention and acquisition strategies: •

•

• •

Access to central banking infrastructure means that banks are guardians as well as beneficiaries of the people’s trust in the financial system The ability to offer a full financial product suite through the use of financial leverage An often under-appreciated presence on the high-street Years of insights into customer behaviour

However, banks have been hamstrung by legacy issues. They have yet failed to capitalise on their core advantages.

The threat and the opportunity of Open Banking is hard to ignore anymore. High street and Challenger banks both need to press home their advantages at this critical inflection point.

Banks will need to implement several-toall of the following 10 strategies to remain competitive in the ‘new world’ of a postOpen Banking era:

10 strategies for banks to remain competitive in the post-Open Banking environment •

Enhanced approach customer segmentation: Understand customers’ real needs and address these through strong segmentation strategies. Young tech-savvy consumers need to be pursued and retained aggressively in the immediate future. However, as more people start to adapt to managing

EMEA BANKING

their finances digitally, longer-term segmentation strategies need to address these customers through differentiated and targeted offerings.

•

Advanced analytics to aid customer segmentation: Identify the business units most vulnerable to Open Banking. Develop analytics to identify customers within those business units most likely to be unprofitable in a range of (pessimistic, realistic, optimistic) post-Open Banking scenarios. Banks will need to decide

whether they can offer incentives to these customers to stay and increase profitability through cross-selling initiatives or decide on alternative lowcost ways to service this segment in the future.

•

Optimised digital customer journeys: Equally fundamental is to ensure that digital experiences align with customer expectations. As more and more banking relationships evolve into ‘digital-only’, they need to become simpler, yet flexible enough to guide

Issue 10 | 121

EMEA BANKING

customers to suitable product and service configurations. The digital journey needs to promote customer confidence. Banks need to convey that customers’ financial interest are top priority even with reduced human interactions. Banks have failed at this fundamental task over recent years but digitisation offers a golden opportunity for them.

•

Solution-oriented approach to innovation: Product and service design need to accurately align to divergent demands. The purpose of a solid customer journey is to aim to solve a consumer problem, not just offer a fancy financial product.

Banks need to be vary of customers becoming uncomfortable with featureheavy Open-Banking solutions and communicate effectively how their offering solves specific problems and makes lives simpler.

•

Improved loyalty strategies: Reduce customers’ incentive to act (e.g.: move money to a different bank) for short term gains. Loyalty schemes and reward structures need to be dynamic – able to react to tail-risk events such as an abnormally large number of outbound payments made by an Open Banking-related API. The value proposition also needs to be tailored to convey the bank as a “pair of safe hands” that provides a “hassle free” service.

•

Enhanced pricing models: Review the pricing strategy and product architecture to generate more feebased income through innovative services. A good digital product offering will be vital here to increase customers’ willingness to pay. A simple example is a Good / Better / Best solution that offers a no-frills account, a premium account that incorporates a degree of advisory services and a tech-heavy all-inclusive package. Such a comprehensive product offering presents increased monetisation opportunities and needs to replace the one-size-fits-all Internet Banking model that is prevalent today.

122 | Issue 10

•

•

A coherent customer communications strategy: A new product roll-out is toothless without a strong sales communications strategy. Sales teams need to be trained in the basics of behavioural economics and incentivised suitably for maximum impact. Communicating value to the client will be crucial in an Open Banking world with a hyperfragmented product suite.

Heavy investment in technology infrastructure: The core objective of Open Banking is to unlock the closed ecosystem in which banks operate. Ignoring the quality of the technology infrastructure will leave banks vulnerable to inestimable operational risks.

•

Develop a Fintech strategy: Banks may choose to acquire or incubate the Fintech start-ups most likely to eat into their core business, run them initially as independent subsidiaries with a view to integrating them at a future date. Another option can be collaborating with established Fintechs. Smaller banks will want to collaborate early with large Fintechs to offer bundled products that can help compete with big banks. Developing a strong pricing configuration and roll-out strategy before going to the market will be key for the Challenger banks.

•

Leverage high-street presence: Finally, banks need to make effective use of the one advantage that other players will never have. Physical presence must not be wasted and needs to be used to be augmented with a more fleet-footed sales process in-branch. Banks will need to provide tailored advisory services that clients are asking to cope with an increasingly complex and uncertain world. Branch numbers and sizes will be reduced but customers will still want them at least in the medium term. These will be captive customers for banks whose willingness to pay needs to be optimally captured.

Conclusion Banks are effectively information technology companies. It is inevitable – by design – that their business will be affected by the Open Banking initiative. A range of impacts will be felt through changing behaviours displayed by customers and by competition. Banks will need to respond early and decisively in order to thrive. Big banks that do well will be the ones that focus on innovating their core business, invest in technology and monetise their digital propositions.

Small banks have the opportunity to innovate too, use their systemic vantagepoint and couple it with newer technology to truly challenge big banks. They may choose to fend off or collaborate with Fintechs depending on their proposition.

The Challenger bank of today that ends up as a digital leader in the Open Banking era will be the one that acts like a Fintech while optimally utilising the access it has to the same infrastructure available to the big banks.

Gianluca Corradi Director Simon-Kucher & Partners

EMEA BANKING

“Your basket contains: one microwaveable lasagna, and a mortgage.

Proceed to checkout?”

The idea of buying financial services from a tech firm or online retailer is no longer fanciful – in fact, it’s started to seem like an attractive option for consumers who are frustrated by the traditional banking sector’s apparent resolve to stay stuck firmly in the 20th century.

Retail banking was once the most “unchallenged” of industries, with new entrants to the market facing significant barriers to entry, such as obtaining startup capital and creating a national network of branches. The arrival of Tesco Bank to the UK in 1997 should have raised the alarm, showing how a new entrant could exploit its hundreds of physical stores and enormous financial muscle to provide banking services to its customers. Then came Amazon, which since 2011 has surpassed $3 billion of loans1 to small businesses through its Amazon Lending division.

It’s not their enormous market capitalisations that make companies like Amazon such a threat, but rather the fact that they have consistently demonstrated their ability to provide

fantastic shopping experiences and customer service that puts their High Street rivals to shame. New online-only entrants harness the power of new technology, such as chat bots and predictive analytics, to dispense with the most frustrating elements of traditional banking, such as endless phone queues and long lunchtime lines at the branch.

Losing the race for relevance Little wonder, then, that almost nine in ten (85%) senior technology decision makers in the banking industry in Europe believe they are being overtaken by disruptive competition.

According to Avanade’s latest in-depth research into attitudes towards disruption in the retail banking industry, there is widespread recognition that investment in technological innovation is absolutely critical if established institutions are to have any hope of catching up with new digital challengers.

Issue 10 | 123

EMEA BANKING

Established banks are facing a race for relevance, where nimble startups (as well as established giants in the retail and technology sector) are far ahead in delivering great customer experiences and better financial products and interactions.

Perhaps the only positive for the traditional banking sector is that they understand the urgency of investing in technology to improve the services they provide, with 88% saying they need to improve customer experience. This includes factors such as increasing personalisation, providing a more seamless experience across multiple channels, and closing physical branches and embracing onlineonly services.

Strangled by legacy IT One of the main factors holding back the established banks from embracing new technologies is the fact that they are lumbered with a web of legacy infrastructure that is strangling any

124 | Issue 10

attempt at innovation. The only answer is to cut the Gordian knot, and make significant investment in replacing legacy IT systems. Expensive as this may be in the short term, the only alternative is to continue spending significant sums on administering clapped out, unreliable systems.

This makes poor business sense, with around half of banks saying that they spend more on maintaining their old IT infrastructure than challenger institutions do for their much more modern systems.

With almost half of respondents saying that legacy IT costs too much to maintain, and two fifths believing that their IT department spends time on maintenance, now is surely the time for banks to embrace the power of the cloud.

Optimising operations and efficiency Currently less than a fifth of bank infrastructure is deployed on private cloud,

and barely 10% on public cloud. In spite of this, banks realise the cloud is key to achieving operational efficiency, improving productivity, and deploying new services for customers.

Challenger institutions are making great strides with services based on cognitive automation, machine learning, and robotic process automation, benefitting from the scale and flexibility of the cloud.

But moving IT infrastructure to the cloud can only be the first step, and almost every bank appreciates that it must engage third party services to access the skills and resources they need to develop and deploy new customer services or boost employee productivity.

Reimagining the customer experience Challenger banks offer a dazzling array of slick new services, from mobile money management to automated customer chat bots, but the basis of a great customer

EMEA BANKING

experience (CX) is actually quite a simple matter. Consumers’ main demand is access to a full range of services and products, coupled with the reassurance that their personal data is protected by industry-leading security technology, along with a desire for engaging digital interfaces on their chosen device.

These goals are highly achievable for any retail bank, with almost nine in ten of our respondents believing that their organisation could improve the way they personalise services for their customers, while more than half plan to remove human interactions from their retail services. Yet 64% admit that they struggle to provide a truly seamless experience – hardly surprising given their reliance on legacy technology and low levels of cloud adoption.

Most banks regularly hear the complaint that smarter, more disruptive competitors outperform them in

delivering great customer experiences, and a clear majority (91%) say that they will need to spend more to improve the services they provide. On average, however, only 14% of annual IT budgets go towards enhancing CX – compare that to the 19% spent on maintaining legacy infrastructure, and the cost of old IT systems is put into stark relief.

No-one is claiming that updating decadesold IT infrastructure will pay for itself overnight; however, the only alternative for established banks is to sink further into obscurity and irrelevance while their more nimble competitors forge ahead, unencumbered by branches and legacy technology. The one advantage the banks still hold over the disruptors is their large customer base; it’s high time, then, to begin treating them as valued consumers, and investing in the services they crave.

Paul Bowen Banking Lead Avanade

1 Rolfe, A. (2017, June 12). Is Amazon a bank: ramps up lending in challenge to big banks. Retrieved December 28, 2017, from http://www.paymentscardsandmobile.com/ is-amazon-a-bank/

Issue 10 | 125

EMEA INVESTMENT

126| Issue 10

EMEA INVESTMENT

Macroeconomic trends in the healthcare sector As early and growth-stage investors we are obsessed with understanding where value creation will lie in the future. For Mercia’s Life Sciences & Biosciences team, this means focusing on the areas of healthcare where we can have the maximum impact on improving patient outcomes and reducing healthcare system costs. In this article, Dr Ash Patel explores the macroeconomic trends that we believe will drive value creation in healthcare for the next generation of businesses.

Increased life expectancy and the aging population Let’s start with a big one. This is probably the single greatest challenge facing our societies at present. Modern science (and with it modern medicine) has been an overwhelming success in the human story. The average life expectancy of an individual living in a developed economy has grown consistently since World War 2, resulting in a female child being born in the UK today expecting to live to 82.8 years on average compared to 71.5 years for the same child being born in 1951. This is as a result of improved childhood survival due to vaccines, the massive reduction in infectious diseases over this period, and the increasing availability of treatments for chronic illnesses such as hypertension and heart disease.

Along with challenges posed to governments about how best to provide long-term pension incomes for a population now living for significantly longer than previous generations, a significant challenge lies in the provision of healthcare. Many of the healthcare systems we have in Europe and North America were originally designed in the period after the Second World War, when the population demographics were entirely different. As a result, a new generation of technologies are required to reduce the cost of caring for an increasingly elderly population, whilst also dealing with the physiological challenge of providing interventions for the elderly. Surgery and anaesthesia were always designed with young patients in mind, and as our population ages, we are going to have to develop better technologies that are more suitable for dealing with patients with multiple existing health issues, but still expect (and deserve) a high quality of life post-care. These technologies must work both en-masse and at scale, in order to bring down the cost of complex care which is vital for the NHS.

As a trained hospital intensive care doctor, it’s clear to me in the clinical environment that new technologies are needed to ensure older people can benefit from surgeries that both prolong and improve the quality of life. At Mercia, we believe the next generation of technologies that help this segment will be drivers of innovation and value generation. Companies like Canary Care (a Mercia Technologies PLC portfolio company) are building technologies that help older people live independently for longer, bringing dignity for users, peace of mind for carers, and reduced costs for payers like the NHS or local councils who will potentially have fewer people needing expensive residential care. We believe companies like these will form vital parts in a healthcare ecosystem geared towards an older population.

Acceleration of development in “emerging” markets Over the last few decades, the majority of commercial interest in healthcare has been focused on Europe and North America, but the coming years will see an increase in expenditure from high-growth “emerging” markets. The BRICS countries (Brazil, Russia, India, China and South Africa) have seen pharmaceutical sales double between 2006 and 2011 – so crucially, maintaining cost-effectiveness at a scale is of paramount importance. These high growth markets consist of a blend of public and private care provision and encourage a consumer mentality towards purchasing care. Novel organisational structures are also required to meet this growing demand for single country populations that in effect, are larger than the whole of Europe.

It is anticipated that some of the most valuable healthcare companies in Europe will generate a large proportion of their sales from BRICS economies. In my opinion, key features of success in these economies will include targeting so-called diseases of plenty (obesity, hypertension and diabetes) which are becoming increasingly prevalent as societies are lifted out of poverty. For example, in China 10% of all adults are currently thought to have diabetes. This is up from 5% of all adults in 1980. In absolute terms, this represents a patient population of 110 million, with further growth in this disease expected to result in 150 million patients by 2040. This is likely to result in market demand for new products and services such as targeted therapeutics that are optimised for the genetic make-up of the Chinese population, improved diagnostic tests, and methods of delivering care to in a cost efficient manner across a population sizes that are measured in the billions.

Issue 10 | 127

EMEA INVESTMENT

128 | Issue 10

EMEA INVESTMENT

Key challenges for new entrants to the market will be understanding rapidly changing regulatory landscapes, navigating the political risks associated with being a foreign company in economies with varying levels of restrictions, and the challenges of intellectual property protection in jurisdictions where traditionally, it has been difficult to defend a product or service from imitators.

However, with the BRICS economies predicted to overtake most of those in Western Europe by the middle of the century, we believe there is a significant chance that the most valuable companies may be those that serve these markets first. We’ve backed exciting companies like Concepta, which is bringing the latest fertility technologies to China and aiming to help millions of couples start a family. These kinds of opportunities in emerging markets show that it’s entirely possible to solve problems and capture value on a greater scale outside of Europe and North America.

The 4th Industrial Revolution Scarcely a day goes by without a tech blogger talking about the upcoming revolution in “digital health.” Whilst digital health covers a wide variety of innovations, we are particularly interested in computational health as this actually reflects what is happening – computers helping to deliver healthcare. With recent high-profile failures, including IBM Watson being “benched” by prestigious US cancer centre MD Anderson, as reported by Forbes, it’s easy to think that computers in healthcare may be over hyped.

While current technologies may struggle to accommodate for all of the complexities in healthcare, this is often because the data used to train these systems is often incomplete. Considering that Google’s DeepMind system trained itself on 10 million YouTube videos before it learnt to recognise an image of a cat - you can start to sympathise with systems that have access to only thousands of medical records which then try to do something as complex as recognise cancer.

If we consider that the 1st industrial revolution was the advancement of steam engines in the 18th Century, the 2nd was the growth of electricity, the 3rd was the movement from analogue to digital machines and the 4th is the development of data-driven tools – then these are instruments that gather, analyse and store data on a scale that has previously never been seen before, and it is these machines that will power the computation technologies of the future. Data really is the new oil. Interestingly, electronic medical data (which is perfect for systems like IBM Watson to process) is growing at a rate of 48% per year. Put into context, by 2020, 94% of all medical data available will have been created after 2013. This fresh data is largely electronic and ready to be processed.

The opportunities for new companies to emerge in this space are significant and Mercia is working with many of these organisations already through our managed fund activity. These companies are data-capturing companies that allow us to understand healthcare problems better (sleep-focused portfolio company SleepCogni), image recognition technologies that spot problems in X-rays that clinicians may miss (Manchester Imaging – dental imaging), regulatory technologies that ensure the latest developments stay on the right side of government regulators (new portfolio company Miotify), and even tools that let clinicians understand the needs of their patients better by improving communication and tracking outcomes (Health Centrified). These businesses all solve problems that affect global populations. This isn’t just about value capture – it’s about genuine value creation. And in my opinion, computational technologies in healthcare will change the world of medicine and in doing so will generate immense value.

Furthermore, 80% of all medical data is unstructured, sometimes hand written, making it hard for super computer systems to process it. This results in a serious lack of data to train with.

If the systems were trained better, the performance would be better, which would lead to significant reductions in the cost of healthcare delivery at almost every point in the value chain and improved patient care - transforming healthcare as we know it.

Unfortunately, this seems a distant dream at present, but the 4th industrial revolution will change that.

Dr Ash Patel Investment Manager Mercia

Issue 10 | 129

EMEA BANKING

The Revolution of the Banking Industry What our phones can do today is vastly different from ten years ago. As most of us remember, phones had no integration between your camera, calendar, and music, and were essentially just for making calls and playing Snake. But that changed when the first iPhone launched in 2007, giving us the world in the palm of our hands.

The iPhone revolutionised not only the way people communicated but how they accessed information, with each model faster and packed with more features than its predecessor.

Now imagine if your bank account could integrate different financial products into one place for you, without the need of multiple accounts. At the moment this might seem like a stretch, but open banking could have a similar effect on the finance industry as the iPhone did with communications.

The new regulation will see banks legally required to open up their customer data to third parties through secured APIs (Application Programming Interfaces). This will take effect from January 2018, under PSD2 (EU regulation) and open banking (the UK counterpart).

130 | Issue 10

Two sides to the coin Banks, traditionally held back by legacy structures, have not innovated at the same pace as fintechs, which is especially true after the financial crisis. There are two sides to the coin when it comes to the regulation: on the one hand, the regulation aims to foster innovation, and provide greater transparency and choice for consumers, helping banks to ‘catch up’ with their fintech counterparts. But on the other hand, some have argued that the regulation will reduce banks to nothing1 more than wholesale service providers. This could leave them with little to no contact with the end customer.

Though, too many people are overlooking what I see as the main benefit of open banking: collaboration. Rather than centring on what sort of threat open banking poses, the focus should be shifted to how banks can work together with those companies that are not only innovating, but excelling in their fields.

APIs: fostering innovation For innovation and development to really take off, banks need a way in, and APIs have become their door. APIs are the most

obvious and practical means to access and deliver these fintech innovations to their customers. By integrating various third-party services to create new products or enhance existing ones, APIs can help banks attract new customers whilst also strengthening their existing relationships.

The product development process can occur quicker if banks connect to fintechs via APIs. This will help banks to respond to rapid changes in digital technology, and will also offer a chance to pursue new distribution channels and improve digital banking for customers.

According to the World Retail Banking Report (WRBR)2, 78.3% of banks are counting on APIs to help them improve their customer experience, with fintech firms in agreement. The report also highlights that the banks believe this could lead to new revenue streams.

Standing out from the crowd We all want to be unique, and part of the iPhone’s appeal comes from the fact that it can be customised to individual needs and tastes. This, unfortunately, is not true when it comes to banking.

EMEA BANKING

More often than not, people are limited to generic one-size-fits-all products and services, forcing them to open multiple accounts to access different services depending on their requirements. As our financial needs are all different and we find ourselves in an increasingly technologically enabled age, it’s no surprise that people want to be able to customise their banking options too.

But the tides are changing, as a World Retail Banking Report (WRBR)3 states that 91.3% of banks surveyed expect to partner with fintechs at some point in the future.

By working together, banks and fintech firms can take advantage of each other’s strengths, and ultimately deliver a better customer service than either of them could on their own. This will also create opportunities for more growth within their respective industries.

In this digitally-connected world, banks will need to adapt in order to thrive. APIs can make it easier for banks and fintechs to learn from each other, and to develop new and innovate ways for their customers to access financial products. But whatever way open banking goes, it really could be the iPhone moment for those ready to embrace the opportunity.

Steve Lemon VP, Business Development & Co-Founder Currencycloud

1 "http://www.wired.co.uk/article/open-banking-psd2regulation-banking"

2 "https://www.worldretailbankingreport.com/" 3 "https://www.worldretailbankingreport.com/"

Issue 10 | 131

EMEA FINANCE

PSD2 - The pinnacle for a

harmonised payment playing field Payment experts and senior bank managers are facing fresh challenges with Payment Service Directive 2 (PSD2) coming into force in January 2018.

Here, Bertrand Lavayssiere, Partner and Managing Director at zeb, takes a look at the background to this latest step in a long journey towards a harmonised payment system across Europe, and the impact this new regulation is set to have on the industry.

As far back as the turn of the century, payments have featured prominently in discussions amongst EU leaders. In the Lisbon Agenda in 2000, they outlined their vision of creating a level playing field for European citizens and corporates in the Eurozone. This initiative was called the Single Euro Payment Area (SEPA), and they sought to improve the efficiency of crossborder payments and turn the fragmented national markets for euro payments into a single domestic one. It was anticipated at the time that such an initiative would create a 2% GDP growth.

132 | Issue 10

It took close to 14 years to see any noticeable change, however. Two tangible signs of movement were changes introduced in the PSD1 and the SEPA instruments rulebooks. The aim of PSD1 was to harmonise the generic terms and conditions of a payment for EU members.

This had previously proved extremely difficult to do, owing to the fact that each market had its own commercial laws. A good example to illustrate such difficulties can be seen with the definition of what constitutes the transfer of ownership being complete in a transaction. In certain countries, this is when the bill is issued, whereas in others, it is when the payment is received. There are similar differences with payment terms, too. PSD1 provided a solution to these challenges and as such was rightly seen as a revolution for commercial law and payments terms. It also brought about significant change to the structure of the revenue stream for banks in the payment space.

The SEPA initiative harmonised two major payment instruments: credit transfer and direct debit. The initial rulebooks were the subject of heated debate. This resulted in compromise which, for many, was seen as a regression to the local market practices, although subsequent versions did improve the situation. The launch of the SEPA instruments has generally been seen to be a great success, evidenced by the fact that the other instruments were decommissioned by law.

These significant initiatives and the subsequent IT investments did not, however, yield the expected results. The EU examined the 2% GDP growth projection and published a document that showed the actual growth figure to be no more than 0.3%. It is noticeable that a number of payment instruments in widespread use - in particular, cards and cash - were only marginally affected by SEPA. From a micro-perspective, such as a bank’s viewpoint, this created a healthy review of the payments business model. It subsequently led to some major projects designed to reinvent their payment offerings and engineer recuperation of risk of revenue losses and investment costs.

PSD1 also invented a new player, the Payment Service Provider (PSP). The views of the law makers wEre that payments could be done by a dedicated unit which did not necessarily need to be a banking group, and this paved the way for further major transformations within the payments industry.

In light of this, there was a perception from regulators that there was still more to be done - the cake was, so to speak, only half-baked. PSD1 has not yet changed the equilibrium, nor the market shares, among market participants.

Cross-border payments remain at a mere 2% of transactions at euro level. The main reason is that, although payments are

EMEA FINANCE

at the core of the banking activities, they are linked to other banking activities such as current account management, credits, savings, securities dealings, which are generally fixed and unlikely to change. For many of us, the most astonishing result has been that for a payment instrument used for close to 50% of electronic transactions - i.e. debit or credit cards the actual standards adhered to are the ones from international card schemes (Visa, MasterCard, and the like) - not exactly a very European approach, is it?

So, have the regulators created PSD2 in an effort to revolutionise card and cash payments? Not really, in my opinion - it is about refinement of the PSPs. PSD2 will create new bodies replacing the PSPs: the account aggregators (AIPSP) and the payment initiators (PIPSP). The aim is to facilitate new players in the payment field. One of the features of PSD2 is that account holders (banks mainly) should be able to provide the AIPSP and PIPSP with access to their customers’ data. This will certainly be of interest to non-traditional players, such as start-ups, who, for first time, will be able to access the payment data of a customer base easily. The jury is still out on how exactly this is will transform the payment market.

Along with PSD2, the European Central Bank and the EU have pushed a new SEPA instrument, SCTInst or Instant SEPA credit transfer, which will allow funds to be in the payee’s account in less than 10seconds.

It will be launched in November 2017 and demonstrates how close we now are to real-time payments.

To conclude, the efforts of the regulators are geared at streamlining and accelerating the pace of the payment market, building on past successes in some areas. From a customer perspective namely individuals, professionals and SMEs every market survey reveals the same findings: “we are happy with our current payment instruments so why adopt a new one?”

The message to the industry and policy makers is clear customers will only adopt new payment instruments if they create sufficient value. Effectively disrupting the market share of instruments means fighting against the well-entrenched payment habits of satisfied customers.

One hypothesis with PSD2 is that facilitating new players with integrated services, including payments, will change the rules of the game - a bit like PayPal did when it created an easy payment solution for the eBay market place.

Google, similarly, has created several successive concepts of payment wallets, yet none of these have yet delivered the anticipated success.

True growth and development of payment instruments will only come with valueadded service. So, whilst PSD2 is one step closer to achieving the goals first set out in the Lisbon Agenda, there’s still a long road ahead in order to reach the end goal of a truly harmonised payment system.

Bertrand Lavayssiere Partner and Managing Director zeb

Issue 10 | 133

EMEA TECHNOLOGY

WHAT DOES THE FUTURE OF AI HOLD FOR FINANCIAL SERVICES? 134 | Issue 10

EMEA TECHNOLOGY There is an impending risk to the economy posed by banks introducing artificial intelligence (AI) technology, according to a report recently published by the Financial Stability Board (FSB). With the aim of reducing the risk of unintended consequences from Opaque systems, companies are being called on to employ more specialist staff to oversee their AI strategies. But, are these concerns real, and how can the challenges associated with AI be resolved?

AI technology firms are actively acknowledging the issue of Opaque AI and exploring how employees can leverage different types of AI for different situations, depending on the specific business objectives they set and the degree of AI-transparency they demand. There is tremendous potential for financial services that are willing to explore the power of AI technologies.

A common understanding of AI is based on the type of technology that has ‘human level’ cognitive skills, also known as AGI or ‘Artificial General Intelligence’.

Despite some impressive progress in a series of specialities, from playing Go to driving cars, AGI is not developed enough to take over the market and not ready to take over the world, should it ever want to do so. The likes of Elon Musk and Mark Zuckerberg neglect to mention that AI is something that’s already in common use in a business context today, and that the real risks associated with it are not concerned with doomsday scenarios and the end of human civilisation.

AI, as used by financial services organisations, appears in two particular flavours – Transparent AI and Opaque AI. Each one has diverse uses, applications and impacts for businesses and users. For the uninitiated, Transparent AI is a system whose insights can be understood and audited, letting us reverse engineer each of its outcomes to see how it arrived at any given decision. On the other hand, Opaque AI is a system that cannot easily reveal how it works. Not unlike our human minds, this AI can find it challenging to explain exactly how it has arrived at a certain insight or conclusion.

Opaque AI has the potential to introduce a range of benefits in the right circumstances. Having to be transparent is a constraint on AI and will limit its power and effectiveness, and in some instances an Opaque system might therefore be the preferable solution. As such, there is no ‘good’ or ‘bad’ AI – only appropriate or inappropriate use of each system, depending on what the business needs.

Banks currently using the technology are less interested in AI taking over humanity, and more focused on the very real risks posed if it is used incorrectly in the world today. These concerns are related to regulation violations, diminished business value and significant brand damage, to name a few. These can spell the success or failure of a major financial institution.

The issue of bias presents one potential problem with an Opaque system. Without the user’s knowledge, an Opaque AI system may begin to favour policies that break an organisation’s brand promise. It can be straightforward for an AI system to use ‘neutral’ data to infer sensitive customer traits, which it can then use to make non-neutral decisions. For instance, an Opaque AI in a bank may interpret seemingly neutral customer data and use it to start offering better deals to people based on, gender, sexual orientation, race, political affiliation, etc.

For obvious reasons, this could lead to disastrous results.

The choice between Transparent and Opaque becomes all the more crucial in highly regulated industries such as the financial services industry. Proper use of Opaque AI in lending can result in better accuracy and fewer errors. But if banks are asked to demonstrate how these operational improvements were achieved though reverse-engineering the decision process, that becomes a challenge or even a liability.

Financial services firms can determine whether or not they are using AI correctly, and which type of AI works best, by deciding how much they are willing to trust it. To have complete reliance on an AI system, either the AI needs to be Transparent so that business management can understand how it works or, if

the AI is Opaque, it needs to be tested before it is fully implemented. These tests have to be vigorous, thorough and go beyond searching for viability in delivering business outcomes, looking also for unintended biases. In some areas of financial services, Opaque AI appears to be ruled out completely because of its lack of explainability.

Employees must be able to switch confidently between the different flavours of AI. Staff should be able to oversee AI strategies to reduce the risk of unintended consequences from systems that were Opaque. The GDPR will be enforced in Europe from May 2018, mandating that companies must be able to explain exactly how they reach certain algorithmic-based decisions about their customers. Organisations that are able to use some sort of a switch to increase transparency by forcing the methods used

by AI to make decisions from Opaque to Transparent will have a significant advantage: they can much more easily comply.

Financial services firms must better understand the benefits and risks of AI and engage with AI technology that can be trusted, controlled, and adapt to ever-changing regulatory and customer requirements. By achieving this, they will have the means to balance improvements in customer experience and reach better decisions against the liability of non-compliance and privacy violations. Ultimately, they would do well to ask the all-important question: is my AI right for me?

Dr. Rob Walker Vice President, Decision Management & Analytics Pegasystems

Issue 10 | 135

EMEA FINANCE

Convergence is key for the future of mobile payments From the payments sector to the world of marketing, many industries have been investing both time and money into mastering the art of convergence in recent years. This form of development, which demands continuous synergy between different sectors and technologies, now accounts for much of the disruption of businesses worldwide.

This disruption is now, however, producing immense success across the board. Many of today’s most innovative and unique product propositions are the result of combining multiple solutions from various sectors, all working together to generate new business offerings and improve efficiency. One of the most sought after types of convergence amongst businesses today is with mobile payments technology, which has contributed to a huge shake up in the way consumers interact with services and complete transactions.

Convergence and mobile payments Mobile payments technology itself stems from the convergence of mobile, payments technology and telecommunications, unified to create an unprecedented solution which caters to the convenience demanded by modern consumers and streamlines the payment process for merchants. This technology has not only revolutionised the payments sector, but is now a driving force behind the

136 | Issue 10

innovation of other industries, as companies increasingly look to diversify their products and create a seamless consumer experience.

In today’s business landscape, effective integration with mobile payments technology is becoming ever more vital; its versatility enables merchants and services of all types to advance their own payment solutions and capture their share of the market. Now more than ever, companies are reversing the traditional ‘data first, payments second’ model and adopting payment-led strategies to ensure simple and fast transactions above all else. Convergence with mobile payments has been at the forefront of this transition for many services worldwide, and now this payment method is predicted to generate $1,080bn in revenue globally by 2019.

However, this relationship now inevitably means that mobile payment providers must maintain such high rates of convergence with others to continue their own growth.

The good news is that advancements in technology are always creating new business opportunities which need to be monetised. Yet for mobile payments providers, they must now also think up new ways to advance their own offerings, to streamline the payment process for consumers, attract new partners and encourage further collaboration.

EMEA FINANCE

Creating compelling solutions In a world where technology is rapidly evolving and encouraging new players into every market, diversifying your product proposition has never been more crucial.

Mobile payments providers are therefore constantly advancing and adapting their platforms, in order to continue their own growth and open up their services to more potential partners.

Mobile payments companies are now offering businesses a myriad of new ways to implement mobile payment strategies at all stages of a customer journey, whether it be an SMS-verified payment from a mobile wallet or a QR code payment embedded within an app. Yet the rising calls for convergence between services now mean that many partners are equally dependent on one another to drive developments which offer benefits for each business. Â

With more organisations integrating mobile technology into their payment models every day, it is now critical that all parties are able to work closely to combine their individual products and create compelling solutions which allows them to fully thrive within their market. By bringing together multiple solutions from both mobile payments providers and the companies implementing their technology in this way, more revolutionary services will be developed and businesses will be able to own the entire journey of their customers, whilst laying the foundations for future integration with other services and products.

A collaborative approach Huge movements towards a more collaborative approach are already being made across other vertical markets such as hospitality and retail, where mobile payments are helping merchants to build their services and offer consumers more simple and secure ways to transact.

Issue 10 | 137

EMEA FINANCE

Today, mobile payments are also enabling these merchants to continue driving sales over periods of low funds amongst consumers, which often occurs in the days leading up to payday. While this mainly benefits merchants, this feature makes the appeal of mobile payments even larger, which will inevitably attract more services.

As a result, payments providers, network providers and new services are collectively entering new spaces to continue their expansion during this period of aggressive digitalisation and competition.

However, working alongside companies which serve a range of customer needs is also helping the providers of mobile payments to bolster their own offerings and can, in many ways, ensure their products remain both elaborate and versatile enough to continue their convergence across various sectors.

In this increasingly digital age, companies are no longer able to thrive on their own capabilities alone. While convergence with mobile payments exists as just one way for businesses to develop unique solutions, it is certainly the key to streamlining payment One of the most effective integrations with processes and ensuring the growth of all mobile payments to date is perhaps evident businesses involved, and will undoubtedly within the media sphere. In recent years, play a critical role in enhancing the experience traditional media companies have been forced of consumers. If executed correctly, this form to digitalise to remain competitive and fill of development will prove invaluable for all of the gap left by outdated revenue streams. those involved.

Converging with mobile payments providers has been instrumental to their transformation; it has enabled them to create solutions which allow readers to purchase content instantly and without leaving their device, offering a more frictionless experience and driving conversion rates.

138 | Issue 10

Shane Leahy CEO Tola Mobile

Rising to the occasion

every day

PROUD TO HAVE BEEN NAMED BEST RETAIL AND WEALTH MANAGEMENT BANK IN BERMUDA AND THE CAYMAN ISLANDS. At Butterfield, we know that when we exceed expectations in every way, every day, we rise. That’s why we’ve spent more than 150 years honing our banking and wealth management skills to help clients achieve their goals. Our commitment to excellence in serving our clients, and supporting our employees and the communities where we live and work has been recognised with prestigious Best Retail Bank and Best Wealth Management Bank awards in both Bermuda and the Cayman Islands.

Visit us online to find out more about Butterfield’s award-winning services.

www.butterfieldgroup.com