Global Business Outlook Issue 01 2023

EV

RECHARGING TURNS COSTLIER

EV prices have been steadily decreasing, but they may not be falling as quickly as once predicted

Expensive affair called EV recharging

As Global Business Outlook celebrates its inaugural year of the award ceremony, we cherish our long journey with the aim of being the leading business media services provider, apart from recognising industry talents on a global platform.

However, this landmark year comes at a time when the world is reeling under a deep economic crisis, job cuts, and trade warfare between Russia and the European Union. In pursuit of an outright victory in Ukraine, Russian President Vladimir Putin weaponized Moscow’s energy supplies, thereby causing Europe to almost freeze in the dark.

The continent is talking about an energy crisis never experienced before. Despite falling from its peak in August of last year, natural gas price is still three times higher than its long-term average. However, there is no immediate threat of gas supplies being run out anytime soon, as the US-led G7 energy price caps kick in.

Amid the geopolitical crises, the brave new world of automobiles remained in the background. Since energy prices have skyrocketed, it has become essential to find a replacement for crude oil and natural gas, which up until now has been the spark driving the engines of these vehicles. Not only are environmentalists increasingly calling for their usage to be restricted, but the cost issue is also affecting the road transportation industry immensely, which is making people switch to alternative energy sources.

Since the price of oil is increasing, people are switching to electric vehicles, which are considered cheaper as compared to petrol or diesel vehicles. However, EV charging has now become expensive. Our latest GBO cover story revolves around these circumstances and encompasses all the major aspects of the EV industry.

Thomas Kranjec Editor kimberly@gbomag.com

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Growth dilemma of US energy sector

While 2022 was marked by higher oil prices, it seems that the US companies did not cash into it to maximise their growth throughout the year. The latest Dallas Fed energy survey suggests that the growth pace in the industry has slowed down in the fourth quarter of 2022 despite the energy sector facing not many steep challenges.

How the sector will pan out in 2023?

As per an ING report, energy prices may be off those highs witnessed in 2022, with immediate supply worries easing recently. Demand concerns, however, are weighing on sentiment for oil. So the sector may remain on the tightening trajectory.

"The key supply uncertainty for the oil market this year has been how well Russian supply would hold up following a number of countries banning Russian exports, along with an increased amount of self-sanctioning. Russian supply has held up better than many were expecting, with India, China and a handful of other smaller buyers increasing their purchases of Russian crude oil, given the steep discounts available. As a result, exports in October were 7.7 million barrels a day (MMbbls/d), down just one hundred thousand barrels per day (Mbbls/d) Year-on-Year (YoY)," it said.

"However, the impact of the EU ban on Russian crude oil is still playing out, and we will have to wait until early February for the ban on Russian refined products. The ability of India and China to absorb a still more significant amount of Russian oil is

The US energy sector is not really in the most comfortable position to boost growth as fast as the White House wants it to

likely limited. As a result, we expect Russian supply to fall in the region of 1.6-1.8MMbbls/d Year-on-Year in the first quarter of 2023. As for the G-7 price cap, we expect it to have a little direct impact on Russian oil supply for now, given that at US$60/bbl, it is above where the Russian Urals are trading," the study elaborated further.

While a de-escalation of the Ukraine crisis may not ensure pre-war oil trade flows, it will remove supply risks from the market.

"The decision by OPEC+ might appear to be the right one, at least in the near term, as it offers stability to the market. Given that most of its members are producing well below their production targets, OPEC+ supply cuts work out to an effective cut of around 1.1MMbbls/d. In aggregate, OPEC+ production was 3.22MMbbls/d below target levels in October," the report said.

However, the cuts may prove to be more destabilising in the medium term, given the expectation of a tighter market throughout 2023.

"High energy prices, a gloomier macro outlook and China’s zero-COVID policy have all weighed on oil demand this year. At the beginning of 2022, global oil demand was expected to grow by more than 3MMbbls/d YoY and hit

pre-COVID levels. However, demand is estimated to grow at a more modest 2MMbbls/d this year, leaving it below preCOVID levels. While for 2023, demand is expected to grow in the region of 1.7MMbbls/d. Almost 50% of this growth is expected to come from China with the expectation of an economic recovery," it said.

What the report has to say on US' energy market

The response from US producers to the higher oil price environment has been unimpressive.

"This appears to have also given OPEC+ confidence to cut supply without the risk of losing market share. US crude oil supply is forecast to grow by less than 600Mbbls/d to average around 11.8MMbbls/d in 2022. While for 2023 supply is forecast to grow by less than 500Mbbls/d to around 12.3MMbbls/d. This growth is much more modest than the supply growth seen in previous upcycles," the report said.

The study also noted the shift in the mentality of US producers from producing as much as possible to focusing on shareholder returns, thus showing discipline in terms of capital spending. Supply chain issues, labour shortages and rising costs have also played a role in the more modest

Analysis \ Natural Gas

Industry Natural Gas

supply growth expected in 2023.

US Energy Information Administration to shares similar emotions. In December 2022, it said that even though oil output would reach a record 5.6 million bpd by January 2023, it would constitute a third of the growth rate in Permian Basin output for last September.

The country saw a dip in the number of active drilling rigs by seven in the first week of January 2023, as per the energy firm Baker Hughes.

The total rig count fell to 772—184 rigs higher than the rig count in January 2022, and 303 rigs lower than the rig count at the 2019 beginning.

Oil rigs in the United States fell by three to 618. Gas rigs fell by four to 152. Miscellaneous rigs stayed the same at two.

The rig count in the Permian Basin and Eagle Ford stayed the same.

Crude oil production, within the country, however, increased to 12.1 million bpd level by December 30, 2022. U.S. production levels also went up just 300,000 bpd versus the 2021 tally.

Gas prices spiked to over five dollars per gallon across the country, reaching a high of 120.31 dollars per barrel in March 2022. It then went back down to just under 79 dollars per barrel.

As per a report from MarketScale, the

phenomena may have contributed to drop-offs in recent US shale output production growth.

While US' energy output is set to reach a record 9.32 million barrels per day (bpd) in January 2023, the month-over-month US shale oil production increase is small, sitting at 94,500 barrels per day more than the month before compared to the 207,500-bpd month-over-month increase in August 2022.

Joe Palaia, Vice-President of Business Development at Pioneer Energy, told MarketScale, "I personally think that that has a lot to do with the price of oil right now. So, we’re back down on the USD 75 per barrel range, which is a more modest price per barrel, barrel of oil. And so, you’ve got the producers, you know, that have been burned in the past by you know, the whole drill, baby, drill mentality."

"You produce as much as possible, quickly as possible. These producers have been burned bad by that in the past. So, their stakeholders in the street are demanding them to exhibit more fiscal responsibility, not get too ahead of themselves, you know, borrow money wantonly, and tend to drill with abandon," he added.

"In fact, instead what they’re doing is they’re being much more measured on,

"I personally think that that has a lot to do with the price of oil right now. So, we’re back down on the USD 75 per barrel range, which is a more modest price per barrel, barrel of oil. And so, you’ve got the producers, you know, that have been burned in the past by you know, the whole drill, baby, drill mentality."

-Joe Palaia

you know, how much they develop, focused on good financial returns, and satisfying their stakeholders. So, I think if anything is showing there’s maturity happening in the oil field, oil companies are being much more physically responsible. I think there are some other factors, other things which are driving the market, right now. Obviously, we still have ESG concerns and something that’s of great significance and importance to these stakeholders and then therefore to these oil companies. So, they’re out there trying to implement policy to reduce emissions, produce oil in a more responsible manner," Joe Palaia remarked.

"I think also we’ve got some pressure from the Biden administration on these oil companies. Hey, we need to produce more, we have this whole energy security issue where we need to, mindful of trying to, produce oil domestically, not only for our own needs, so that we don’t have to import oil from others that perhaps we would rather not have to import oil from, but also so that we can provide energy for our allies," he commented.

"And so, I think that there is push coming from the administration, but you know, how much that’s influencing whether these oil companies are going to drill and produce more? I don’t know. All I know is that it’s definitely a factor. It’s a force acting on the industry right now, and we’ll have to see, you know, in the months ahead how much that really impacts the number of holes that are being put in ground, the amount of oil produced. So that’s pretty much my take on what’s going on right now, and I hope this is useful,” Joe Palaia further said.

We had earlier mentioned about the energy survey from Dallas Fed. The survey respondents informed that the sector witnessed higher costs for the eighth quarter in a row. However, the price hike pace slowed down towards 2022 end.

The supply chain snags persist, thus resulting in longer waiting times for oil and gas producers to access raw materials and equipment. As per oilprice.com, the US energy sector is not really in the most comfortable position to boost growth as fast as the White House wants it to. The prioritization of shareholder returns over output growth appears the best strategic option right now.

Amid this, the optimism expressed in the Dallas Fed survey is an important indication of the state of the industry. However, the optimism is not that strong either, given the increasing uncertainties ahead. So we are not going to see any drastic policy change from stakeholders anytime soon, thus slowing down both production growth and new investments. Moderate spending will be the go-to formula in 2023.

Pioneer Natural Resources’ chief executive Scott Sheffield told Reuters that the production growth in the shale patch in 2023 would be even more modest than 2021. He predicted that this year’s annual increase at just 300,000-400,000 bpd, noting that drillers were running out of their high-quality acreage.

Some 39% of Dallas Fed survey respondents said that their companies’ spending would increase moderately; with a quarter saying they expected significant increases in spending.

The immediate outlook for the US oil industry reads “caution above all”. Uncertainty remains rife, as noted by Sheffield who said, “Because they would charge another 30% to 40% more, and we don’t know what is going to happen in three or four years, by the time we’ve made that investment.”

US oil and gas output will remain close to record highs in 2023, but the figure won’t return to the pre-pandemic level anytime soon.

UK's HNWI increased by 6.3% to 609,400. Their combined assets increased 7.4% to $2.27 trillion

How to capitalize on a growing HNWI market?

High inflation, war, unstable markets and the recent rapid growth of the UK's high-net-worth individual (HNWI) market have presented lucrative opportunities for banks and wealth management companies.

According to Capgemini's 2022 World Wealth Report, the number of HNWI in the UK increased by 6.3% in 2021 to 609,400. The amount of money these people owned increased 7.4% to $2.27 trillion.

Due to the recent market upheaval, clients have understood the importance of wealth management services. However, market conditions are incredibly competitive, and they are changing. Therefore, businesses with the expertise and capacity to provide excellent client experiences, build emotional connections, and

target growing sectors will come out on top.

What does HNWI clientele want?

Wealth managers must meet high expectations from HNWI clients. They desire customized offerings and cutting-edge goods and services.

As a result, there is a lot of interest in new asset classes like ESG, cryptocurrencies, and nonfungible tokens (NFTs). They also demand prompt advice and suggestions that can anticipate their requirements and aid in accomplishing their particular goals.

Consumers would want such capabilities to be given digitally, in a smooth, open manner similar to what they receive from Uber or Amazon. These clients are comfortable — and frequently prefer — using self-directed digital

GBO Correspondent

tools to manage their portfolios, even though handholding might be crucial. Additionally, they desire real-time orchestration of their digital ecosystem trips by wealth managers.

The market created Fintech businesses for this era and the digital world. However, the concept is familiar to established banks and wealth management companies specializing in traditional relationship management.

While the industry has historically focused on assisting customers in achieving their goals and satisfying their lifestyle demands, today's level of personalization requires more technology and data-

driven insights than face-to-face contact can deliver. It can be hard to adjust to these new standards. However, banks and wealth management companies can target high-growth markets and adopt the data-driven business models, delivery technologies, and personnel required to offer distinctive client experiences and fulfill client expectations by embracing these strategies.

Concentrate on upcoming growth segments

Several market segments are responsible for the majority of the growth in the HNWI market.

Yet, according to our survey, only 27% of wealth management companies actively pursue these groups through tailored engagement tactics.

One of these developing client sectors is tech wealth, which has produced a rapidly expanding group of ultra-whose HNWI's clients are loaded with IPO cash. Techsavvy HNWIs want integrated offerings, personalization, and support for active investment from wealth management companies. But, most people favour family offices over big banks or wealth management companies.

Additionally, with women expected to inherit 70% of the world's wealth over the next two generations, they represent one of the customer sectors with the most significant growth. They are less assured than males are that they can create and expand it, nevertheless. These customers place a high value on connections, purpose, and needs-specific content. By concentrating on that group, Ellevest, a FinTech company with a gender-conscious investment algorithm, has quickly developed.

Similarly, millennials are the beneficiaries of a substantial generational wealth transfer and desire increased digital engagement,

but many also require assistance with the fundamentals. The "Wealth Coach" and "Wealth Bootcamp" services offered by HSBC in Hong Kong are examples of how banks and financial firms may use education to attract younger customers.

LGBTQ+ people are a relatively new client sector that has arisen, and they frequently encounter difficulties with the legal and financial systems during significant life milestones. These customers value an all-encompassing strategy, from investments to legacy planning. According to our poll, 30% of global wealth managers indicated they did not understand the demands of LGBTQ+ clients, demonstrating that the sector still needs to be educated on how to best address these needs.

Finally, to attract customers early in their journey toward more fantastic wealth, the affluent masses use new technology and offer enhanced experiences. For example, the purchase of Nutmeg by JPMorgan Chase in 2021, a British robot advisor focused on the market, is seen as essential to the New York bank's UK retail strategy and is evidence that this is a tried-and-true path to growth.

How do you get there from here?

Success in this market requires combining individualised products, talents, and services to set a company apart in customers' eyes. This process begins with using important data sources like FinTechs.

Existing banks have a ton of data but frequently struggle to turn it into insights that can personalise interactions and spur growth. A company can gain a competitive advantage by investing in artificial intelligence and machine learning (AI/ML) algorithms to produce real-time actionable insights.Similarly, HNWI clients anticipate being able to access their portfolios and other services online, in real-time, around the clock, and from any device. As a result, businesses must adopt new delivery technologies to guarantee a consistent customer experience across all channels.

In many circumstances, collaborating

Industry Wealth Management HNWI

with or acquiring a FinTech that has already built it is the quickest and most cost-effective method to offer new digital products, services, and delivery alternatives. In addition, because so many capabilities are required, producing them on your own is nearly impossible. As a result, working with your competitors can be pretty beneficial.

The next step is to examine your talents and areas where skills can be upgraded or learned. For example, hiring individuals with product, technical, and data capabilities may be necessary to implement new business models. Additionally, it is beneficial to have talent that reflects the variety of the markets you're targeting and is aware of their customers' needs.

If your personnel know the significant sector demands, it could be simpler to attract LGBTQ+ clients. The appointment of a chief client officer within the company can be helpful since many organizations believe this is a cost-effective method to meet the higher expectations of expanding consumer groups.

Finally, the desire for increased transparency is the primary motivator behind many of the wants and preferences of these developing categories. For example, in our global survey, 27% of HNWI clients expressed dissatisfaction with their prices, primarily due to a lack of pricing transparency. In addition, 64 per cent of respondents indicated that they preferred paying fees based on factors like investment performance or service quality.

Banks and asset management companies can forge deeper emotional bonds with customers as they cautiously observe the changing economic landscape. Companies that provide clients with individualized experiences that inspire confidence will position themselves better to forge more profound, enduring relationships.

Foolproof ways to attract young HNWI

Create a consistent, pertinent, practical, worthwhile, and distinctive client experience. Wealth managers need a clear, audacious vision

for developing a smooth, customised, and engaging user experience that will delight their clients better than anyone else. This experience must allow customers to access company functions efficiently and promptly whenever and wherever they choose, across mobile, social, internet, and offline channels, on any device or platform. So, for example, an interaction with a bank may start online, go to the contact centre, and then end up in the branch.

Financial services must provide a shared, connected platform to assist this trip and spare users from repeatedly explaining the context. Furthermore, it must be adaptable and scaleable to facilitate continual innovation as client and business demands evolve.

Drive design and innovation via interaction and data. A thorough understanding of your clients is the foundation of your user experience design. What jobs are they attempting to finish? What led them to engage with you in the first place? What results are they seeking? For instance, offer a fast access page that requires fewer clicks if consumers want a quick view of their investment positions or account transactions. Gain insights about how to make client interactions with you quicker, simpler, easier, and more meaningful by using ongoing engagement and usage data analysis.

Establish the technological prerequisites for creating a smooth customer experience. A business and technical examination of your products, platforms, apps, and services should be performed by a partner. Map them against your technological capabilities and strategic goals, then suggest a rollout of the necessary upgrades to achieve your business goals. A national bank client, for instance, sought to give consumers access to their financial data across all their personal and commercial accounts. To improve service and client satisfaction, we streamlined their provisioning and entitlement system so that advisers could access and manage customer information without IT help.

Number of ultra-high net worth individuals in 2021 North America

233,590 Asia

169,889 Europe

154,008 Australia

24,245 Latin America

10,337

Middle East

9,717 Russia and CIS

6,542 Africa

3,270

Source: Statista

Integrate the processes of design and development into one. Work jointly on a road map for developing and optimising the customer experience across all channels with your design and development teams. Every project strategy should include user validation and intelligent testing procedures. It should employ an agile design and development methodology that enables your teams to experiment, validate, fail, and improve prototypes quickly and iteratively. Start with the mobile channel, which provides a close connection with the customer and allows for quicker feedback and more deployment options, testing, learning, and improvement options. Modify the company's organization and culture to place the customers' needs and desires at the forefront of all business decisions. Establish a new culture of creativity, constant improvement, and customer focus throughout your company. In addition, everyone should regularly check social media to see what HNWIs are saying about your company, your competitors, and their goals, priorities, and issues.

Look for ways to use technology to streamline the onboarding of new business units so your company can immediately seize growth opportunities. Examples

include allowing advisers to onboard new clients with various account types on mobile devices, such as tablets, laptops, or smartphones, and enabling advisers to bring on new clients with multiple account types.

Digitization the road ahead?

Product director of Temenos, Alexandre Duret, while interacting with Private Banker International, talked about digitisation, the new trend in wealth management sector.

“First and foremost, digitisation underwent a considerable push since the first times of the pandemic, when a traditionally high-touch industry had to cope with 100% remote client interactions. While most firms now provide omnichannel capabilities to their clients, the next step will be to combine the best of both worlds into a hybrid advisory approach that enables clients to balance automated self-service and human interactions,” he said, while explaining the phenomenon, which is getting popular among the HNWI individuals.

“Whereas the rise of robo-advisers may have been overstated in recent years, the advent of hybrid-advisory could be the industry’s response to empower a new generation. A cohort of clients who expect the same level of experience they get from Big Tech, together with an exclusive relationship with their financial institution,” he added.

Firms are seeking tailored, hyperpersonalised relationship with their HNWI clientele, based on their knowledge of such individuals.

Their current strategies include investment planning built from the ground up for the client or next-best-product recommendations based on their situation, preferences, past choices, or peer group comparison.

In order to provide hyperpersonalisation, these companies require a lot of data which can be time consuming as well, so they are investing in analytics platforms and AI technologies as well, in order to augment their advisors and get an

Industry Wealth Management HNWI

edge over the competitors.

“Another way to differentiate is to offer investment opportunities that others don’t. In this respect, digital assets have been receiving much attention lately, including the most traditional private banks. On the one hand, regulators worldwide are progressively setting up frameworks to overcome legal uncertainties,” advocated Duret.

Overpriced stocks and low-rate bonds are prompting investors to diversify their assets. These digital assets have opportunities and risks, and these are far bigger in scope than Bitcoin or crypto currencies in general.

“There are hundreds of cryptocurrencies to choose from, such as tokenised securities and now non-fungible tokens (NFTs) that enable investors to own a fraction of realworld assets like art or vintage cars. The good news for private banks is that there is an ecosystem of fintechs they can leverage to build their own offering,” Duret said.

As per his opinion, in contrast with the volatility and speculative nature of certain crypto currencies, sustainable investing or ESG investing (Environmental, Social and Governmental Investing) represents another prominent trend among these new age HNWI individuals. ESG Investing, wIt which started as a European regulation, is now seen globally as a great opportunity to retain and attract customers as it reconciles the client’s financial interest with the values they believe in.

“By screening the companies they invest in based on ethical, social and governance criteria, firms help protect their clients’ investment from future adverse events such as tougher regulations or fines on these companies. Furthermore, by selecting investment instruments according to their sustainability goals, clients are empowered to place their assets where they can make a difference. This is why we believe that 2022 will see the concepts of value-based investing and impact reporting spread across the industry,” Duret remarked while explaining the phenomenon in detail.

He also said that Cloud adoption will be another trend to look out for in this field, as this disruptive tech and its scope will continue to grow in next few years. Firms which cater to the HNWI individuals will adapt to Cloud as well, since it’s a costeffective solution and protect the latter’s profit margins as well. The Cloud solution is also providing other competitive advantages, from quicker time to market to better scalability and higher security.

“Building upon these cloud technologies, Software as a Service (SaaS) is a business model which will continue to attract more firms in 2022, levelling the playing field between them and the new entrants, and between the private wealth industry as a whole and the rest of financial services,” Duret said.

As per a Capegemini report, while COVID-battered economies continued their recovery path in 2022, boosted by stock market gains, global high net-worth individual (HNWI) population also went up by 7.8% and 8%, respectively. Now, the wealth management comapnies will require new and improved ways of delivering personalization to augment client experience, as the HNWI category keeps growing bigger.

While equities remained the go-to asset class, along with healthy stock market returns, United States maintained its dominant position in HNWI wealth and population. These particular individuals showed measurable interest in emerging asset classes, especially in ESG and digital, and vocalized their desire for better digital and personalized offerings. Firms that leverage cloud, Artificial Intelligence/ Machine Learning, and digital technologies to strengthen their core and augment capabilities will be well-positioned to personalize client experiences and engagement across channels and products.

With digitization and AI coming into the play, the playing field has reached to another level altogether and it will be interesting to see how these wealth management companies adapt to these changes

David Reina, Senior Lecturer in Marketing at SDA Bocconi School of Management says, electric vehicles are not environment friendly as advertised

Prajwal Wele

According to the Royal Automobile Club (RAC), the cost of charging an electric car at pay-as-you-go public charge stations has increased by 42% in recent months. The RAC reported that the average cost per kilowatt hour (kWh) for using the chargers has risen by 18.75p, to 63.29p. According to recent statistics, a driver who only uses quick or ultra-rapid public chargers pays about 18p per mile for electricity, compared to about 19p for gasoline and 21p for diesel. The increase has been attributed to the rising gas and electricity wholesale prices.

During a press conference, Royal Automobile Club spokesman Simon Williams said, "It remains the case that charging away from home costs less than refuelling a petrol or diesel car, but these figures show that the gap is narrowing as a result of the enormous increases in the cost of electricity. These figures very clearly show that it's drivers who use public rapid and ultra-rapid chargers the most who are being hit the hardest."

Refueling EVs becomes 'expensive affair'

An AA survey of 12,500 drivers showed that rising domestic energy prices are putting many people off from switching to electric cars. Some 63% of respondents said the increase in home electric bills is contributing to them sticking with petrol or diesel models, while 10% stated it was the main reason.

Prof David Reina, Senior Lecturer in Marketing at SDA Bocconi School of Management, Milan, and SDA Bocconi Asia Center has an altogether different take on the EV market. He told Global Business Outlook that there are two remarkable things that need to be considered. According to him, above 90% of those who bought a fully electric car in the past would buy another one. And second that more than 400 BEVs models will be launched in the next five years which means there will be possible demand for EVs in the future. According to Reina, it is not just Tesla that can come up as a winner in the EV market, the other players also have a chance. He says people will switch from traditional cars to EVs as the cost of ownership is significantly lower and maintenance and repair costs of EVs are much cheaper.

On whether the United Kingdom government should come up with a possible solution for EV, Reina says, "In any case, as for the United Kingdom scenario it would be wise to implement policies to make the EV option more affordable for larger segments of the population. The policies should be combined with a parallel plan concerning renewable sources of energy and diffused energy storage. Otherwise, a bottleneck for the growth of electric cars would be created even if the big subsidies are given to people".

EV industry recession-proof?

McKinsey report stated in order to envision what may lie ahead for the EV market it is important to understand how

the EV sector was changing before to COVID outbreak. The report stated EVs have grown in popularity among drivers over the last few years. Early adopters have fostered 60% growth year-overyear for the past decade. This switch to EVs is being made because of their quiet engines, favourable environmental effects, and cheaper fuel. Considering that total auto sales have been down over the past two years, this rise is no small accomplishment. Additionally, a Boston Consulting Group (BCG) analysis from earlier this year even forecasted that by 2030, sales of cars using internal combustion engines (ICEs) would surpass those of EVs. This switch to

EVs is being made because of their quiet engines, favourable environmental effects, and cheaper fuel. Considering that total auto sales have been down over the past two years, this rise is no small accomplishment. Additionally, a BCG analysis from earlier this year even forecasted that by 2030, sales of cars using internal combustion engines (ICEs) would surpass those of EVs. It’s clear electric cars were on the rise up until the COVID outbreak, but how is the current situation when experts around the world predict a recession to hit in 2023?

According to Reina, there will be no negative impact on EVs despite the looming recession. "Electric cars will basically cannibalize two market segments: premium price and low price. And the former is resilient to economic crises, while the latter is going to shift from cars owned by customers to cars shared by them," Reina said. But on the other hand, according to Nissan Motor Corporation CEO Makoto Uchida, the recession will be going to have extreme economic volatility.

He said in the month of September 2022, businesses and revenue plummeted, which resulted in widespread salary cutbacks, furloughs, and layoffs. It’s fair to presume that during a recession many will be less inclined to adapt to new technology, delaying non-essential investments until the situation stabilizes. Additionally, consumers are likely to opt for more economical choices when possible, avoiding premium consumer goods. Moreover, with the massive increase in oil prices, gas-powered vehicles are not economical to operate, which makes it harder to argue that EVs will help drivers save money on fuel. But on the other side, "EV prices have been steadily decreasing, but they may not be falling as quickly as once predicted.

EVs have grown in popularity among drivers over the last few years. Early adopters have fostered 60% growth year-over-year for the past decade. This switch to EVs is being made because of their quiet engines, and favourable environmental effects

However, despite all the concerns about the future of electric cars, EVs have shown significant resilience in the past few months, even in the face of the recession", Uchida said.

Electric Vehicles market takes a dive

Europe: According to figures from the Italian Foreign Car Maker Association, sales of battery-electric vehicles fell by only 58.1% last month, while registrations for gas and diesel-powered cars dropped by 97.5%. According to data from the Federal Motor Transport Authority, hybrid and fully electric vehicle registrations increased by 208% and 56%, respectively, in September in Germany, while total vehicle registrations declined by 38%. According to data from EV-Volumes, this trend is also seen in practically every other nation in the world. This resiliency has led to a large increase in the market share of EVs.

Additionally, EVs are not only proving to be more durable in the midst of a declining auto industry, but they are also showing some recovery signs. For instance, major automakers are reporting the same amount of showroom traffic in September of 2022 as they had in the same month in 2021. Even the completely electric and hybrid car models sold more in September, according to Chinese automaker BYD. China: China being the biggest market for EVs in the world declared that electric vehicles would be given top priority in 2023 stimulus measures, extending EV subsidies and tax benefits for two more years. In order to counteract the economic slowdown brought on by COVID-19 and economic slowdown, the nation has also committed to investing in EV charging infrastructure. China will invest up to USD 1.5 billion to install 200,000 EV chargers by the end of 2023,

20,000 of which would be public ones, according to CleanTechnica. USA: Democrats in the USA have put up the Green New Deal, a programme for economic recovery that intends to "power all modes of transportation and produce all of the nation's electricity from renewable sources by 2030." Even though the agreement has received harsh criticism from Republicans, Joe Biden has stepped up the fight for the nation's sustainability goals. California and 14 other states, which make up more than one-third of the US auto market have come up with their own carbon emission standards. This act illustrates that there is a significant portion of the USA that is eager for higher sustainability standards, which would bolster EV growth.

Electric Vehicles zero carbon emission reality?

According to David Reina, EVs are not as

Coverstory Energy Electric Vehicle

environmentally friendly as advertised. He said, "Instead of looking at electric mobility as a means to reach the carbon emission goal, which is basically impossible, we should pay much more attention to the fact that electric cars and trucks would significantly lower the overall CO2 emitted by the industry."

"Difference in performance, for a combustion engine is wasting 80% of the energy generated by radiating heat in the environment, whereas an electric engine is wasting 20% of energy. Differences in recyclability for electric cars are much simpler than traditional cars. In practice, they are almost 100% recyclable. Furthermore, used EV batteries can be refurbished and turned into energy storage. A phenomenal business and a good thing for the planet, as energy storage demand is a consequence of greater use of sun and wind, which are intermittent and enable nations to increase power generation without increasing CO2 emissions. Therefore, the car industry is going to become both a formidable source of raw materials and a fundamental enabler of growth in renewable sources of energy," David Reina

added.

Industry prioritizing investment in more sustainable solutions

Now that a recession is on the horizon, some people are not only keeping to their word but are really choosing EVs over fuel-powered vehicles in terms of manufacturing, sales, and investment. For instance, Volkswagen is prioritizing the production of electric vehicles, opening its Zwickau facility, which produces the ID.3. Renault is ceasing to sell ICE vehicles in China in favour of an all-electric lineup. A joint venture in Asia introduced a new low-cost electric automobile brand. On the other hand, more than just automakers are placing bets on environmentally friendly EV

technology. China's two biggest power utilities recently invested a combined €3.63 billion in the construction of over 450.000 charging stations. All these examples demonstrate how the industry is shifting investment and clearly driving the market towards more sustainable solutions.

Consumers shifting towards Electric Vehicles

Even customers expressed their support for electric mobility plans and demanded the development of more environmentally friendly, fuel-efficient, and climatefriendly modes of transportation. This might be attributed to consumers switching to greener modes of transportation as a result of the obviously better skies that followed a few weeks of having fewer fossil-fuel-driven cars on the road. According to Accenture Consumer Research, over 50% of respondents think that following the COVID pandemic and the Russia-Ukraine war they will make more environmentally friendly decisions.

COVID-19 has already changed consumer habits. The overall link between stay-athome activities and better air quality had raised consumer eco-awareness, which is advantageous for both the environment and the EV market.

Future of Electric Vehicles looks bright

Despite the COVID pandemic and Russia-Ukraine war, EV sales are surprisingly climbing for some markets, brands, and automobile models, significantly outpacing Intercontinental Exchange (ICE) sales. The need for more environmentally friendly modes of transportation is also being recognized by governments, companies, and consumers. In many ways, COVID-19, lockdowns, recession, and energy crisis may have served as a wake-up call to society. Now that the opportunity to develop recovery plans to meet the next impending global disaster -- global warming -- has presented itself, this may have been the case. EVs are an

established solution that we can use to accomplish this, therefore demand for them will only increase. Therefore, all signs point to the global crisis not ending, but rather accelerating the EV boom in the long term.

Worldwide sales of Electric Vehicles

Over 6.75 million electric vehicles were sold globally in 2022. Sales are anticipated to climb to USD 9.5 million by the end of 2023. Given how wellreceived electric vehicles have been on the market, more people are now

inclined to purchase them. Tax breaks and cash refunds are only two of the financial incentives that several nations offer to promote the purchase of these eco-friendly electric automobiles. In the future, increasing consumer expenditure on electric vehicles will be a result of increased government backing.

In China, sales of electric vehicles nearly tripled to 3.3 million in 2022, making up about half of the global total. Sales increased significantly in both Europe (by 65% to 2.3 million) and the United States (more than doubling to 630 000). Compared to other markets, Chinese electric vehicles are often smaller. The price differential with conventional cars has dramatically narrowed as a result of decreasing production costs. In China, the median cost of an electric vehicle was just 10% higher than that of comparable conventional vehicles, as opposed to 45% to 50% on average in other significant markets.

In contrast, sales of electric vehicles are trailing in the majority of emerging and developing nations, where only a few models are frequently offered at prices that are out of reach for consumers in the mass market.

According to International Energy Agency (IEA), around 10% of electric cars sold out worldwide in 2022, and the figure for global truck sales was just 0.3%. So far China is the only country where electric cars have been widely used, thanks to significant government assistance. The future of electric unit sales is expected to reach 16,206.900 cars in 2027. Even more, innovative ways for e-mobility services such as carsharing, ride-sharing, and ride-hailing will also raise consumer EV awareness.

International Energy Agency

Executive Director Fatih Birol said in a press conference, "Few areas of the new global energy economy are as dynamic

as electric vehicles. The success of the sector in setting new sales records is extremely encouraging, but there is no room for complacency. Policymakers, industry executives and investors need to be highly vigilant and resourceful in order to reduce the risks of supply disruptions and ensure sustainable supplies of critical minerals. Under its new Ministerial mandate, the IEA is working with governments around the world on how to strategically manage resources of critical minerals that are needed for electric vehicles and other key clean energy technologies.”

Electric Vehicle faces challenges

Experts say there will be significant supply chain issues that could scuttle the optimistic future of electric vehicles. To keep up with the growing demand for electric vehicles, plenty of raw materials are constantly needed. Meanwhile, rising competition is driving up the price of raw materials. Metals including aluminium, steel, copper, lithium carbonate, graphite, and nickel have all seen an increase in price.

Lithium prices, a key mineral for automobile batteries, were roughly seven times higher in 2022 than they were at the beginning of 2021. Nickel and cobalt prices also increased. If these costs remain at their current levels, the cost of battery packs might rise by 15%, reversing several years of declines. The Russian invasion of Ukraine has increased pressure, since Russia supplies 20% of nickel to the world.

As the market for electric vehicles expands, a skilled workforce is also in great demand. More professionals with knowledge of electric car engineering, production, and repair are required. Engineers need to be adaptable in the face of changes in the industry, thus they require comprehensive education.

Over 6.75 million electric vehicles were sold globally in 2022. Sales are anticipated to climb to USD 9.5 million by the end of 2023

Why Hong Kong elites are buying property in Japan

In August 2022, a group of Hong Kong purchasers went to Tokyo for the shopping trip of a lifetime: a real estate bargain hunt propelled by the historically weak yen, the Bank of Japan's unshakeable insurance policies, and sushi priced at $440 per person.

The tour, organized by Hong Kong-based property brokerage JP Invest, came in the wake of a spike in interest from hedge funds and wealthy buyers looking to capitalize on the sudden drop in the yen value to a 24-year low.

A premium car dealership in the exclusive Azabu-Juban neighbourhood known for selling antique Porsches for around $600,000 was among the souvenirs purchased by retail and institutional buyers on a tour of Tokyo, taking advantage of the yen’s 20-year low against the US dollar.

The trip costs HK$128,000 ($16,300) per person. It included nights at the Aman hotel in Tokyo's Otemachi business district, the traditional Gora Kadan onsen in the nearby spa town of Hakone, and a seven-day hotel quarantine package in Hong Kong after that. Meals included a reservation at Ginza's Sushi Yoshitake, a 13-seater, a three-Michelin-star eatery known for its abalone in a sauce made from its liver.

On the wealthy package tour, flown across the Japanese metropolis in a chauffeured Bentley, participants were expected to focus on the post-pandemic opportunities in the Tokyo real estate market. Analysts predict that cash-strapped hotels built/renovated before the tourist-free Olympics, which have sat virtually unoccupied since 2020 would be particularly interesting.

As interest rate hikes are devastating the yen and the property markets in Hong Kong, the super-rich are investing in Japanese real estate

Sachiko Okada, a Japanese real estate analyst at Goldman Sachs said, "Hong Kong-based real estate funds and private equity are expecting a revival in Japan's inbound tourism story, and they see this as a good chance to buy hotels. They may now physically travel to Japan to view the homes and make investment decisions. Moreover, it is simple to invest because the interest rate is low."

According to Kelvin Chung, director of JP Invest, the company receives eight to ten inquiries a day and ran its first such tour in May 2022 to meet the resurging desire among wealthy buyers to visit Japan following the country's relaxation of entry restrictions in April this year.

Customers are occasionally unanimous in their support of purchasing goods from Tokyo retailers. Chung also noted that every consumer or household spent an average of HK$3 million to HK$10 million on purchases in Tokyo.

Real estate agents believe that the excursions highlighted the allure of the lower yen and how the Tokyo market looked to be

immune from the recessionary concerns circling other capitals.

Analysts claimed that a portion of that was due to the meagre loan rates available to purchasers in Japan due to the central bank's steadfast resistance against tightening repo rates.

Meanwhile, in Hong Kong

Except for a temporary decline in 2020 due to the coronavirus pandemic, Hong Kong property prices have relentlessly risen in residential areas. As a result, they were seen as one of the safest bets of the previous decade.

Despite criticism that homes are overpriced, the housing market has defied its detractors and driven prices higher in 3/5th of the interest-rate rise cycles since 1993. It is due to the desire to house a population of 7.4 million people with limited space for expansion and a general belief among many city residents that real estate is a safe investment.

However, a slower-than-expected economic recovery in the city from the fifth wave of COVID-19, combined with a

sharp increase in borrowing costs in 2022 - four rate increases by the Fed thus far to control inflation - could pour cold water on the market, according to industry experts.

Real estate agents claim that several homeowners have sold their apartments at substantial losses or discounts.

According to Wan Chan, chief district associate director at Centaline Property Agency, "The pace of turnover for second-hand transactions has slowed down slightly due to the repeated outbreaks and the increases in interest rates in the United States, and some owners have also begun to face the reality and increase discounts."

The Federal Reserve raised interest rates by 75 basis points in 2022 for the second consecutive month to rein in inflation, which reached 9.1% in June 2022 and is far above its goal rate of 2%. To assist in preserving the peg between the US dollar and the local currency, the de facto central bank of the city, the Hong Kong Monetary Authority (HKMA), has followed the Fed's lead.

However, because local lenders have held the prime rate steady for the previous four years,

many homebuyers have not experienced the same amount of rise in their mortgage rates. Following the Fed's decision, major banks kept their prime rates the same, although market watchers anticipate a slight increase in those rates in the coming days.

The higher mortgage payments on their family debt will put some additional strain on customers, according to Standard Chartered CEO Bill Winters. He said, "Central bankers increase interest rates to stifle economic growth and so bring inflation under control. Like everywhere else in the world, we will experience that in Hong Kong.”

According to the bank's chief financial officer, Andy Halford, Standard Chartered will wait and see interest rates. "We will amend that if we determine it is appropriate. There have been a few changes to the prime rate in the past. So breathe easy," the CFO advised. "Nevertheless, we will continue to monitor it," he concluded.

Financial Secretary Paul Chan mo-PO informed the Post in advance of the Fed's decision that commercial banks in the city will be forced to hike their prime rates but probably not at the Fed's scale and speed. Due to buyers' worries about rising interest rates and the economy's prospects, Hong Kong's real estate market has slowed recently. Since March 2022, mortgage payments based on the Hong Kong interbank offered rate have increased as US rates have gone up.

Ricacorp Properties published a report which states that the number of transactions that resulted in losses reached 695 in the first half of 2022, the highest figure since 2011. Around 94.6% of transactions during that time were profitable sales, the lowest percentage since 2010.

In addition, the average gain was the smallest since the first half of 2016, at 66%. For instance, a 566-square-foot apartment at The Mediterranean in Sai Kung recently sold for a

"The pace of turnover for second-hand transactions has slowed down slightly due to the repeated outbreaks and the increases in interest rates in the United States, and some owners have also begun to face the reality and increase discounts."

loss of HK$2.54 million, or 24% of the original price, according to Century 21 Goodwin.

Centaline, St. Barths in Ma On Shan also had a 592-square-foot apartment that was sold at a loss of HK$1.25 million (US$157,983).

According to Rita Wong, head of the valuation and consultancy, CBRE Greater China, increased interest rates alone negatively impact home values since they impact affordability and investment returns. She said that several other elements, such as slower economic development, higher unemployment, and COVID-19-related travel limitations, are more likely to impact costs.

Hong Kong's economy shrank by 4% in the first quarter of 2022, and Chan, the city's financial head, has warned that the pandemic's slow recovery may force the government to lower its annual growth prediction for the second time in three months in August.

According to CBRE data, real estate values have risen twice during rate-hiking cycles in the last 20 years. But perhaps things will be different now. "Those times were supported by good economic expansion."

However, Wong believes the market fundamentals are far more complex this time. The economic climate was "pretty good" during previous higher rate cycles, according to Eric Tso, chief vice-president at mReferral Mortgage Brokerage Services. This time, he noted, "the economy is only now beginning to recover."

The Centa-City Leading Index, a measure of occupied residences by the Centaline Property Agency, is one indicator of the pressure on the real estate market. From a peak in early August 2021, seven months before the US started raising interest rates; it had fallen by 6.2%.

The reduction occurred when the fifth wave of COVID-19 cases raged this spring, driving many residents and foreigners out of the city due to coronavirus quarantines.

Due to the virus's containment, travel between Hong Kong and mainland China was still restricted, which decreased the demand for investments.

Albert Wong, honorary chairman at AA Horses Mortgage Brokerage Services, said that the decline in housing values in Hong Kong, which began in 2021, is a result of the double blow of antigovernment protests and the coronavirus pandemic on the city's economy.

According to Wong, "the housing market will often feel the impact of the interest rate hike six months later." It hints at the housing market beginning to feel the effects of interest rate rises that started in the 2022 second quarter.

In JP Morgan's analysis, residential prices rose by 13% with a prime rate hike of 300 basis points beginning in November 2004 but fell by 4% during an increase of just 12.5 basis points starting in 2018.

Cusson Leung, head of Hong Kong research, conglomerates, and property at JP Morgan, noted that rising interest rates generally reduce demand for all economies. But won't hiking interest rates result in less demand for housing? No, not always.

The International Monetary Fund calculated that the city's house prices were up to 30% overpriced in the third quarter of 2021 and warned that a "disorderly correction" in the real estate market might be dangerous for the local economy.

The IMF predicted that property prices would rise by 5.8% in 2022 and more than 7% annually by the end of 2026. The IMF warned that "a severe house price correction might produce an unfavourable feedback loop between house prices, debt service capacity, household spending, and growth, significantly harming banks' balance sheets." When faced with rising interest rates and declining income, lowincome people may experience severe financial stress.

The average gain was the smallest since the first half of 2016, at 66%. For instance, a 566-squarefoot apartment at The Mediterranean in Sai Kung recently sold for a loss of HK$2.54 million, or 24% of the original price, according to Century 21 Goodwin

Ramaphosa cancels Davos trip

Cyril Ramaphosa cancelled his travel to the World Economic Forum in Switzerland, as South Africa struggles with an unprecedented energy crisis that has caused daily power shortages of between eight and eleven hours.

Anger is growing as offices, hospitals, factories, and tens of thousands of small companies are being forced to close, while outages are also causing an increase in crime, disruptions in traffic, and significant wastage as food supply systems collapse.

Protesters in eastern suburbs of Johannesburg intercepted highways with burning tyres, while a newspaper in the township of Soweto ran the headline “Unplugged” on its front page and listed dozens of local businesses that were struggling.

electricity, has apologized to its customers but has not stated when extra power will be added to the national system.

The largest industrialised economy in Africa has been experiencing a worsening power shortage for a number of years. Analysts attribute the shortfall to corruption, a lack of competent workers, and an ageing fleet of primarily coalfueled power plants.

PH outlines a five-year development plan

The Philippines' government has outlined a detailed five-year, all-encompassing plan to foster economic growth post-COVID.

A minor but important portion of the large document is devoted to aviation. Experts say it is significant

because the government is open about the fact that not enough has been done to upgrade the airport's infrastructure for far too long.

The plan's key priorities include modernizing current airports, particularly those in tourist areas,

access roads to airports (primarily to boost the possibilities for airfreight), raising service standards, and developing a new category of "gateway" airport supplied by "feeder airports."

"While the government recognizes the need to improve the country’s air transport infrastructure by building new airports and improving existing facilities and technical capabilities, huge investments are needed to catch up with the burgeoning demand for air travel," Kris Francisco and research analyst Valerie Lim said.

Kris Francisco and Valerie Lim emphasized that time is crucial in responding to the air transport sector.

Eskom, the South African utility that generates

Anger is growing as offices, hospitals, factories, and tens of thousands of small companies are being forced to close

Real Estate

Dubai real estate transactions boom

The housing boom coincides with an inflow of Russians who have bought homes in some of Dubai's most sought-after neighbourhoods after Moscow was subjected to more stringent Western sanctions as a result of its invasion of Ukraine.

The Dubai Media Office in a statement said, "Dubai's annual real estate transactions have crossed the milestone of half a trillion dirhams for the first time. The sector witnessed transactions worth a record 528 billion dirhams in 2022, a 76.5% increase from 2021."

In Dubai, the real estate industry makes up around one-third of the total GDP. It has steadily grown since the COVID-19 pandemic,

as Dubai's restrictions were eased up far sooner than the rest of the world.

According to a report by Bloomberg, citing the brokerage Betterhomes, Russians were the largest foreign purchasers of real estate in Dubai last year. It claimed that the emirate registered more than 86,000 residential sales transactions in 2022, beating the previous record of 80,000 in 2009.

“Dubai's real estate sector has demonstrated its ability to sustain its rapid growth and enhance its attractiveness as an investment magnet,” said Sultan Butti bin Mejren, director general of the government's Dubai Land Department.

Thai export to grow by 2% in 2023

Shippers organization in Thailand predicted that the country's exports will increase by about 2% this year due to increased demand from China as the country reopens.

However, the council anticipates a decline in export growth in the first quarter of this year as a result of a downturn in the global economy, according to Chaichan Chareonsuk, chairman of the Thai National Shippers' Council.

"We have to see the impact of China’s re-opening in the second quarter,” he said, adding that the Thai baht THB’s appreciation would also impact the competitiveness of exporters. At 33.305 to the dollar, the baht was trading at its highest level in nine months.

The council stated in a statement that it anticipates a 1% to 3% increase in exports in 2023. The council predicted that the exports were set to grow 6% to 6.5% for the full year in 2022, but were expected to show a 7.5% drop in December last year.

Meanwhile, Thailand’s November imports expanded 5.6% to reach 23.65 billion USD, resulting in a trade deficit of more than 1.3 billion USD. The 12-month imports went up 16.3% to over 280 billion USD.

Finance sector 'banks on' cybersecurity

Banks are eager to evaluate the potential of experiencing business or data disruptions and to identify cybersecurity risk exposure due to the growing unpredictability of cyber threats

Cyber threats are a common phenomenon in the financial sector. Banks need able network security for the protection of their businesses, along with sensitive financial data and assets.

The average cost of a data breach in the banking sector in 2021 was USD 5.72 million, according to IBM and the Ponemon Institute, with expenses anticipated to increase in future.

The banks must embrace more sophisticated security solutions as they move towards digital transformation.

Identity-based access is the way forward

The crucial first step the financial sector may take to protect itself from cyberattacks is recognising the dangers associated with interacting with third-party contractors. For instance, it's impossible to predict how much of a bank's internal network an attacker with access to a vendor will be able to access through the hacked vendor.

And to make matters worse, many hackers who breach a third-party vendor also leave behind backdoors that let them return later unimpeded by cybersecurity measures.

The access of third-party providers to corporate networks cannot be simply barred despite the significant security risks. The daily operations of financial services depend heavily on third parties and banks are unable to operate without them.

The best initiative that financial organisations can take is to embrace a security framework built on identity-based access, often referred to as the zero trust model. This security strategy enables banks to control access, monitor network activity, and stay safe even if their third-party vendors are compromised.

In order to execute their tasks, users are only given the absolute minimum access to the data and resources they need thanks to the zero trust structure, which helps prevent information from getting into the wrong hands.

A crucial component of identity-based access, strong authorization techniques like multi-factor authentication (MFA) enable banks to restrict third-party access without jeopardising vendors' ability to deliver their valuable services.

How to strengthen current security standards

Zero trust access solutions enable banks to reduce thirdparty risk by actively monitoring and documenting a vendor's behaviour on authorised applications, in addition to more strictly regulating access.

Security experts and business owners may monitor vendor access requests and retain complete insight into what's happening inside their networks because all activity is logged and available for real-time audits.

Banks must implement cutting-edge solutions that lower the chance of breaches and minimise the harm imposed by cybercriminals.

Although cybersecurity has long been a top concern in the financial sector, the current digital setting makes it even more crucial for security experts to take action. Financial institutions are better able to defend themselves from

attacks by integrating zero-trust frameworks into their basic infrastructure.

The zero trust security approach will take care of the outside threats while fostering successful third-party collaborations, apart from preserving a great customer experience.

Importance of cybersecurity

Almost every industry has been impacted by the necessity of cybersecurity. Sectors like financial and healthcare consider strong cybersecurity to be a standard operating procedure. Both client trust and financial data are in danger. Trust is crucial in the financial sector.

However, customers are still reluctant to divulge their private information. According to a recent McKinsey survey, no industry received a 50% trust rating for data protection.

The most alarming stat is that 87% of respondents said they would avoid doing business with any organisation they believed to have poor security practices.

Data breaches in the banking and financial industries do happen frequently, but not every time because of malicious players. A lack of appropriate user authentication mechanisms or inadequately secured third-party apps is said to be the common causes behind these breaches.

Data breaches in banking & finance sector Attackers gained access to the accounts of three million

Banking & Finance Cybersecurity

business clients of Morgan Stanley in January 2021. The breach was made public and implicated a third-party provider. Client names and addresses, social security numbers, dates of birth, and company names might all be accessed by attackers.

The vendor's server had a vulnerability that was effectively exploited, according to the bank. Despite the swift patching of the vulnerability, the attackers were still able to get the decryption key for the encrypted files.

Crypto exchange Bitmart experienced a significant security breach in December 2021. Attackers took off with cryptocurrencies worth USD 200 million.

Millions of clients of the online trading platform Robinhood were impacted by a data security issue that was disclosed in November 2021. The business disclosed that an "unauthorised third party" was able to get hold of the full identities of two million people and the email addresses of another five million people.

"Additional personal information" was taken for 310 users. After the intrusion, the perpetrators allegedly demanded a ransom.

According to reports from Dark Reading, Ramy Houssaini, Global Cyber Resilience

30% of all cyberattacks involve insider threats

Only 5% of corporate folders are securely protected

86% of breaches in 2020 were financially motivated Cybercrime results in a $2.9 million loss every minute Cybercriminals launch cyberattacks every 39 seconds

Ransomware damage costs will rise to $20 billion by 2021

The frequency of data breaches has increased by 67% since 2014

US allocated a budget of USD 18.78 billion to cybersecurity for 2021

Executive, said, "Financial Services organizations are leading targets of cyberattacks. That explains why they are vanguards for adopting new protection technologies, all while under the constant watchful eye of regulators and other industries waiting to follow their lead as they strive to combat ever-evolving attack vectors. Yet in the case of securing firmware and the hardware supply chain, we are seeing potential blind spots."

"A shift in priorities is critical if we are going to effectively protect the technology supply chain. Financial organizations must continue to serve as trailblazers and close the firmware security gap," he added.

Cost of financial breach in 2022

The financial sector, after healthcare, has the second-highest average cost per breach, according to the 2022 IBM report. Financial firms experienced breaches that cost an average of USD 5.97 million, compared to USD 10.10 million for the healthcare industry.

A data breach's average detection and containment time decreased by 10 days, or 3.5%, from 287 in 2021 to 277 in 2022, according to the Cost of a Data Breach study. The average time it takes to stop a breach decreased in 2022 as well, going from 75 days in 2021 to 70 days in 2022.

Banking & finance: Risks & challenges

First, the banking and finance sector needs to keep up with the rapid changes in technology and digital transformation. Artificial intelligence (AI), cloud computing, and digital services all have a significant impact. Banks must use more modern applications, gadgets, and infrastructures to meet customer demand. These further increase their attack surface.

Next, the regulations governing banking and finance become increasingly intricate every year. Standards for data protection and privacy are always evolving, and

penalties for non-compliance are rising. Any industry needs to manage thirdparty risk. Banking and finance must, therefore, exercise special caution in protecting the security of third-party suppliers and other parties. The financial services industry's potential susceptibility to cyberattacks is highlighted by thirdparty breaches. After all, it depends more and more on vendors and suppliers who cannot provide efficient cybersecurity.

Finally, the danger to a business increases as the hybrid workplace becomes more common. For industries that must safeguard highly sensitive data, remote and hybrid work creates a more difficult problem.

Recently, the Consumer Financial Protection Bureau (CFPB) issued a circular stating that financial institutions, including nonbank financial firms like fintech companies and credit reporting agencies, may violate the Consumer Financial Protection Act if they fail to adequately protect the personal data of their customers (CFPA).

CFPB’s data security circular: Key takeaways

The CFPB addressed the use of MFA by covered organisations as its first security measure. The CFPB cautions that a business is likely in violation of the CFPA if it has not implemented MFA for its employees (or an adequately secure counterpart). Businesses must offer customers the option of using MFA to access their systems and accounts, or else they run the danger of breaking CFPA regulations.

The CFPB discusses password management, warning that a covered organisation that has sufficient password management policies and procedures runs the danger of being held liable under the CFPA. According to the CFPB, this also includes utilising default enterprise logins or passwords, failing to have mechanisms in place to monitor for breaches at other

businesses where employees may be reusing logins and passwords, and failing to notify users when a password change is necessary.

Finally, the CFPB asserts that businesses could be held accountable for unfair practises under the CFPA if they do not routinely update systems, software, and code (including those utilised by contractors) or fail to update them when advised of a serious vulnerability. The CFPB does not go into greater detail regarding how frequently businesses must update their systems, software, or code to be in compliance with the CFPA, leaving its position open-ended.

Protect mobile & online applications

The correct solutions must be put in place to safeguard a bank's applications. To achieve goals like intrusion detection and prevention, data and communications security, and access control, cybersecurity solutions are needed. To achieve these, solutions ranging from advanced analytics (such as ML) to rule-based methods (such as expert-driven non-models) can be used.

Identify risk exposure

Banks are eager to evaluate the potential of experiencing disruptions and to identify cybersecurity risk exposure due to the growing unpredictability of cyber threats. It's critical for banks to estimate the possible dollar exposure they may have due to cyber risk. Organizations begin by qualitatively cataloguing the cyber risk areas to which they are exposed.

Review existing cyber defences

Banks must frequently test their cybersecurity measures. To do this, specific tools and solutions are employed to mimic an attack and find system weaknesses. A framework for evaluation and challenges around the cybersecurity landscape is established using qualitative methods.

Businesses could be held accountable for unfair practises under the CFPA if they do not routinely update systems, software, and code (including those utilised by contractors) or fail to update them when advised of a serious vulnerability

Open banking is enabled by a series of technologies, regulations, and services that aim to allow developers to create new banking services

Is open banking working?

You may have borrowed from a bank to buy a home, and you probably use your checking account for making most of your monthly payments. But technology is increasingly creating options to maximize the value you get from your bank, beyond those basic services. With open banking, third-party providers (TPPs) can help you save money, borrow more easily, and pay painlessly. In the UK, regulations already require banks to cooperate with authorized TPPs. In the United States, some banks

voluntarily make data available, and that trend is likely to continue, with or without it becoming a requirement.

What is open banking?

Open banking is the practice of enabling secure interoperability in the banking industry by allowing third-party payment services and other financial service providers to access banking transactions and other data from banks and financial institutions. Third-party organizations

are able to access the data through the use of application programming interfaces, or APIs. As the global economy continues to evolve, open banking is becoming more popular, because it allows for faster, more secure transactions anywhere in the world and it gives consumers more opportunities, through the use of third parties, to manage their finances.

Open banking is enabled by a series of technologies, regulations, and services that aim to allow developers to create new banking services, new banking business models, and new

commerce capabilities. New customer expectations and technology-centric regulations are important lubricants for open banking to thrive. Three forces combine to make the open banking dream possible: changes in banking regulation, changes in culture, and changes in technology.

For the consumer, open banking promises to provide more choices, better service, and frictionless commerce. For example, you might want to use Amazon,

Paypal, and Facebook to send money or gifts securely to friends with a simple click or swipe. No more logging in to your bank to enter payee details or account numbers; just click “send $200 to Ruby,” and you’re done. Or, instead of clicking, ask Siri, Alexa, or Cortana. A second example would be when you want to use a third-party financial planner who needs secure access to your accounts.

In open banking, that third-party financial planner could securely access all your spending habits with no hoops for you to jump through to make that happen. Risk and compliance used to be portrayed as a thankless and challenging job, replete with legal, technical, and cultural complexity. New technology and tech-centric regulations provide a wind beneath the wings of developers making banking systems more agile, intelligent, and automated -- and perhaps for the first time -- cool.

How open banking works?

Open banking allows third-party payment

service providers and other financial service providers to access the personal and financial information of their customers’ banks. Before this can happen, the customer must grant access to the sharing of information, usually via an online consent form following a terms and conditions agreement. The thirdparty providers then access the relevant shared data via exposed APIs.

Those APIs are able to process transactions from one bank to another without requiring the tedious steps consumers have had to take in the past. APIs can also look at a consumer’s transaction history to help identify relevant products and services that personalize the customer experience. Examples include a new credit card that offers a lower interest rate or more cashback than their current one, or a savings account that earns more interest than the consumer’s current savings method.

At the heart of every open banking API call is data, so agile access to data is the first port of call in any innovative system. But although every fintech business wants an agile, efficient, scalable data lake, most have a data swamp: balkanized data sources, a mix of old and new, real-time and streaming data, and a maze of organizational barriers. Combatting this requires an efficient integrated system. Before you can expose the data in your applications via APIs, you must first ensure that you are working with a complete, accurate view of all the data and that the data that users are working with is fresh, accurate, and up-to-date. That is the value of integration. Once integrated, the data in your applications can be exposed securely and directly via APIs.

There are generally two ways to accomplish this data integration: application integration or data virtualization. Physical integration enables the APIs to call directly to your backend systems in a secure way. On the other hand, data virtualization is exactly as its name sounds. You use an integrated virtual layer of your data instead of physically combining all your sources.

In open banking, that third-party financial planner could securely access all your spending habits with no hoops for you to jump through to make that happen

Data virtualization allows teams to turn dozens of independent data sources into one virtual data warehouse with nearly the same performance as a single system. So, instead of over-using ETL to create a bigger data swamp for APIs, data virtualization leaves data where it is. This provides a unified interface to customer information as if it was, indeed, a single system. Both integration solutions can be considered to help you take your data swamp.

Benefits of open banking

One benefit of open banking is the ability to connect data (via APIs) from several accounts in order to efficiently share between financial firms, consumers, and third-party payment service providers. This has slowly been reshaping consumer experience and the competitive landscape of the banking industry, due, in part, to disruptions from third-party providers.

The ability to access networked accounts is beneficial both for the consumer and the institution. Lenders can get a better understanding of their consumer’s situation through a comprehensive view of their finances, helping them assess the risk level and offer optimal account terms. At the same time, it helps the consumer gain a better understanding of their own financial situation before making any financial decisions.

Digital natives entering the marketplace expect real-time customer service from their financial providers. Firms can take advantage of new technologies to streamline costs. This is an opportunity for the new business channels offering expanded products, along with faster launch periods in the market.

Open banking's impact on the market

Open banking benefits small businesses over the market leaders because it opens up new avenues for opportunity. New businesses can now enter the market with smaller, more affordable alternatives to traditional financial services. Larger, established banks will have to work hard so as not to

be disrupted by the market newcomers. The intent of this is to drive down costs while encouraging the adoption of modern technology and improved customer service. Rather than simply administering financial transactions, taking advantage of open banking can allow all institutions to form relationships with their customers.

Risks associated with open banking

The safety and confidentiality of finances, as well as other personal data, is a top priority both for users and financial institutions. However, as with any digitally-based service, there is always the potential for data breaches. APIs are not without a certain amount of risk, with most concerns stemming from poor security, hacking, and insider threats. The existence of malware designed by third-party app providers to infiltrate an account and wipe the data remains an issue as well. There is also the concern of payment service providers mishandling their own customers’ data to gain an advantage in the market.

Today’s API security technology is very advanced and an ideal fit for the needs of open banking. It has robust authorization and authentication capabilities to manage API access and traffic. The key capabilities include Single system management of traffic for all gateways, including embedded micro gateways. You can define access and security policies like rate limiting and throttling between different consumers. Robust security standards such as OAuth2, HTTPS, JWT, HMAC, XML sig, Kerberos, CORS, WSI, and ISO 27001. Along with today’s robust security standards, many countries have taken steps to mitigate the security risks of open banking by putting regulations on the industry. For example, the European Union has updated its Payment Services Directive, specifically addressing open banking practices in the PSD2.

Risks aside, traditional banking is falling to the wayside in favor of open banking and the entrance of smaller, non-traditional

Number of open banking users worldwide in 2020 EuropE

14.5

12.9

9.1

6.2

8.3

AsiA

North AmEricA

south AmEricA

AustrAliA

by region (in millions)

Source: Datapoint

institutions ready to compete in the market. Those that try to adapt to new technologies rather than those who maintain the status quo will have more success in the long run.

Case study of Africa

Let’s talk about how open banking is creating a revolution in Africa’s economic landscape, as reported by ‘PYMNTS’. According to International Monetary Fund (IMF) data, there are more than twice as many mobile money accounts as there are bank accounts across the countries in that part of the world.

In Mali, there are 935.6 registered mobile money accounts per 1000 adults, which show an exceptionally high level of technological penetration. However, the same data shows that the number of depositors with commercial banks is just 195.1 per 1000 adults.

These numbers may suggest that open banking is facing a dead end on the continent, as it is still lacking a considerable base of

account holders for it to be worthwhile.

Some of Africa’s biggest banks are betting big on APIs that enable Fintechs to access their data and services. The rest is following the traditional account-to-account payment method and it is proving its value even among the unbanked population.

As per Ecobank’ FinTech lead Djiba Diallo, the pan-African bank’s open banking strategy is as much about expanding the reach of its services and allowing third parties to build on top of its infrastructure as it is about enhancing the offering for existing customers.

“It’s about connecting the bank’s services or enabling fintechs to connect with the bank’s services, be it for enabling payment, be it for collecting money, [opening] accounts or to create tokens to withdraw money on our ATMs,” Diallo explained to PYMNTS.

Elaborating further, she said that Ecobank partners with telcos and mobile money operators to allow them to leverage its technology and services, apart from creating useful products that can be used to withdraw cash from ATMs and for digital payments.

Across Africa, banks are growing their API catalogs and creating sandbox environments to embrace mobile money and allow fintechs to tap into their payment rails, ATM networks, account opening and lending services.

These solutions are helping the fintechs to hold the most potential for segments of the African population which were outside the traditional banking ambit in the past.

Richard Southey, the chief digital experience officer at pan-African bank Absa, told PYMNTS that “open banking kind of plays are important in that banks on their own are never going to be able to develop all the bespoke applications, which are going to be important towards an informal trader, for instance.”

“Fintechs are starting to solve those problems [and] we are seeing more and more banks getting involved putting out API marketplaces for fintechs to climb on

The Central Bank of Nigeria (CBK) has now a “Regulatory Framework for Open Banking”, defining how the country’s banks should approach data sharing with third parties. The CBK also hinted that an open banking mandate would come soon

to,” he added further.

While Ecobank was moved to open up its infrastructure to third parties to enable the fintechs to reach new customer segments that the legacy banking model has traditionally underserved, many African countries are also considering a governance pattern in this sector, similar to what the European Union has in form of a second payment services directive (PSD 2).

That particular reform helped Europe’s open banking movement as it created a legal mandate for banks to share account data with authorized third parties and allow payment initiation via open APIs.

In October 2021, the Central Bank of Egypt (CBE) adopted a new set of regulations governing the country’s Instant Payments Network (IPN).

These rules allowed approved mobile phone applications to provide payment services and instant transfers, and revealed the mobile-centric nature of Africa’s open banking sector approach.

The Central Bank of Nigeria (CBK) has now a “Regulatory Framework for Open Banking”, defining how the country’s banks should approach data sharing with third parties. In a strategy document for 2021-2025, the Central Bank of Kenya also hinted that an open banking mandate would come soon.

“CBK will work to define standards for effective and appropriate API development and mandate robust but secure data portability in the market,” the five-year plan said.

Regulatory-driven approaches in two major parts of the world

In July 2018, the Hong Kong Monetary Authority issued an ‘Open API Framework’ and listed out a four-phase approach for banks to implement Open APIs. It starts with product and services-related information sharing, and concludes with sharing of transactional information and payments initiation services. While banks will be required to develop APIs, they will be able to restrict API accesses to those Third Party Providers with which they

choose to collaborate.

In Australia, like other Open Banking initiatives, the upcoming Consumer Data Right Act (CDR) will allow consumers to share their data with authorised Third Party Providers. The CDR will be applied to the financial sector first, followed by energy and telecommunication arenas and steadily will cover all areas of the formal economy. The CDR is also the first Open Banking legislation to introduce the concept of ‘reciprocity’.

Under the ‘reciprocity’ clause, a system will be created in which all eligible entities will participate as data holders and data recipient, in order to create a ‘more vibrant and dynamic’ digital economy. The policy supports the principle that an accredited data recipient should also provide equivalent data, when customer asks for it.

Conclusion

A Deloitte report remarks that open banking initiatives are still in implementation stages. It pitches for companies and financial regulators to raise consumer awareness. Even the creation of a safe and fully functioning cross-industry data sharing ecosystem will take a huge amount of time. While the barriers between financial services and other industries break down, firms’ relationship with their customers, along with the distribution of risk and liability between firms and sectors, will change as well. The report advocates the regulators to “break down their own sectoral and geographical siloes and put the protection and fair use of customer data at the top of their agenda.”

Financial services firms wishing to participate in this open banking ecosystem will need a radical review of their long-term strategies, along with a fair assessment of their technological and operational capabilities. They also quickly need to realise that putting customers in control of their data is going to be the perfect way ahead for the sector.

A Deloitte report says remarks that open banking initiatives are still in implementation stages. It pitches financial regulators to raise consumer awareness

Analysis

Private Digital Banking: The future is here

GBO Correspondent

The cost disparity explains why exclusive private banks will soon be replaced by digital private banking

Fintech technologies are transforming how we interact with financial institutions as the banking sector undergoes rapid change. The modern banking experience emphasises ease, security, and style in their operations.

More than ever, customers are demanding quick and accurate responses to concerns about money-related matters, but traditional banking resources aren't keeping up with the trend.

To address this, several businesses have already begun offering digital solutions to meet these constantly shifting consumer expectations.

Before the present trend of giving financial services online, banks used to offer these conveniences to wealthy customers who could afford private bankers. The benefits of a traditional personal banker formerly made high-level, customised service and wealth management available only to the rich. However, individualised financial management instruments are starting to appear to make it easier for ordinary people to get such solutions.

Advantages offered by private bankers

They establish a personal connection with their customers, streamlining and reducing banking stress. Because of their intimate relationship, customers working with these personal bankers frequently receive the best rates, conditions, and swift loan approvals. In addition, there is never a need to wait in line to address problems as banks may swiftly resolve any troubles they encounter over the phone or by email.

Wealth management is an essential service private bankers provide, and a team is often available to help with any potential

investment options. To develop their equity, account holders can use these services to put their current assets to work. This is essential for long-term increased financial growth and generational wealth.

However, the cost of admission for these services is typically prohibitive. Depending on where you live, there may be different requirements for private banking, but in general, you need at least USD 1,000,000 in deposits or investments to be eligible. Sadly, this enormous "pay wall" has prevented most of society from accessing these premium wealth management benefits.

Changing banking and financial services in the digital age

Although individuals can succeed independently, making an informed choice takes far more time and effort. A professional may shorten the process and offer targeted counsel rather than having to figure out the specifics.

A personal banker would have been a luxury before the development of technology. However, with the development of artificial intelligence, machine learning, and other technologies, anyone can now access a private banker with ease.

Banks are rapidly creating better customer-focused technology and providing mobile apps due to customers' growing desire for user-friendly financial services.

While getting expert counsel in person for your problem can be beneficial, digital banking services do away with the need for high salaries, enabling fintech apps to provide low-cost services to their users. In addition, anyone with an internet connection can use online services to profit from a private banker. These advantages include managing aggregate accounts, offering online payment and deposit alternatives, and receiving goal-based investing advice, all from the comfort of a smartphone.

Why is digital private banking the future of fintech?

Consumers need a smooth connection between online banking activities and financial instruments in the digital age. Moreover, they seek a seamless, practical experience tailored to their particular demands. In response, financial institutions have made investments in their digital infrastructure to let users manage their money from anywhere.

Fintech products can now use artificial intelligence to examine your accounts, investing goals, and spending habits, giving them a more thorough insight into your financial situation than a busy private banker ever could. These technological advancements enable more people to access previously restricted services and save expenses. The future of banking is already here, thanks to your smartphone's instant access to specialised financial services around-the-clock.

Banking & Finance Private Banking

An artificial intelligence tool would likely know more about you after 10 seconds of studying your financial habits than a financial counsellor would after an hour-long conversation.

Given the influence of digital innovation, this parallel could seem clear. But is it clear enough to change how you feel about financial institutions? It ought to be. The cost disparity explains why exclusive private banks will soon be replaced by digital private banking.

Undoubtedly, having a group of committed financial experts is advantageous. However, digitising banking can considerably reduce costs, apart from providing access to previously closedoff resources, and aid in creating individualised financial plans.

Most consumers use their banks for checking, borrowing, investing, etc. If you have a high net worth, you probably work with a private department of the bank that is only accessible to you. Likewise, most financial institutions have private banks that they only offer to their most valued clients. In two ways, this grants you access to superior goods and services:

White glove treatment clients of private banks interact with a team of professionals rather than a teller. They are constantly maximising your wealth in the background. It serves as your financial concierge.

Access to restricted sources

You can access resources through private banks that are unavailable to everyone else. For example, they provide access to various investments, lower loan interest rates, retirement and education planning assistance, charitable giving counsel, and more.

Simply putting "private" before "bank" provides an impression of exclusivity that appeals to the highly affluent. You've hired a group of people. Resources and ratings that others lack are available to you. At whatever time of day, you can depend on rapid responses. But, of course, whether or not you use it, that experience might cost 1% to 2% of your net worth annually.

Although an educated, well-paid person with the responsibility of optimising your account

may be preferable to a digital offering, their services are substantially more expensive. People whose net worth is in the hundreds of thousands, as opposed to the hundreds of millions, cannot afford that.

More consumers can gain from a private banking experience on the internet. More and more people will have access to personal bank benefits because of digital private banking, which has various advantages.

Reasons to switch to private digital banking

Access to resources previously only available to wealthy people

High-net-worth individuals use their resources to further their financial objectives. They employ private banks to acquire reduced borrowing rates, special pricing, and alternative investments. Lower interest rates on credit lines, favourable currency rates, and chances to invest in specialised funds are a few examples of this. Many of the same products and services can be found in a private digital bank but at far lower costs. For example, consider how fractional shares and low-interest borrowing against investments offered by internet brokerages have lowered the barrier to entry for trading. In addition, you can see how the digital ledger technology behind blockchain is transforming the payments sector and democratising access to digital assets.

The need for better financial resources is driving innovation in the sector. As a result, more people have access to unique private banking resources daily.

You may take control of your finances for a small fee

Any private bank you phoned with USD 1 million to handle would probably recommend investing in one of their total market funds. These have significant

An artificial intelligence tool would likely know more about you after 10 seconds of studying your financial habits than a financial counsellor would after an hour-long conversation

management costs, but you can buy similar funds for far less.

Most private banks have a threshold for individualised services due to their teams of skilled, highly compensated professionals who can only manage a small number of accounts. For instance, to obtain a separately maintained account, you must have a particular quantity of money (SMA). You can do this with the help of an advisor to choose your investments by hand. If you fall short of the requirement, your funds are invested in a public pool.

Many options are available, whether one has USD 100 or USD 10 million. Financial instruments driven by the software are less expensive since, once established, the programme requires far less upkeep than a financial advisor's office does. Additionally, you can make your portfolio precisely what you want it to be. For instance, M1 offers commission-free portfolio management and a vast selection of assets.

Companies can do much more for more people when goods and services are 1s and 0s in a database. The equivalent of not paying management fees of 1% to 2% is making 1% to 2% more money. Undoubtedly, having a personal librarian handpick your books is preferable to using Google. But if you need a new book 99.9% of the time, Google is a perfect replacement. Products and services for digital private banking will aid in removing extra profit and costs.

Tools that improve with time

If you declare, "I want to attain these highlevel goals," a team in private banking will work to make it happen. They download every transaction file you have, perform analyses, transfer funds, and watch for the markets to close.

Automation can result in the same thing. You don't have to manually manage every financial transaction by creating

81% of people do online banking

35% of customers have increased their online banking usage during COVID

6% of new banking customers indicated they were using mobile banking for the first time

56% of banks offer mobile check deposits

74% do not make mobile deposits

49% use their bank's bill pay

75% write three or fewer checks a month

51% do not use their phone for online banking

complex rules like intelligent transfers and autoinvest. Instead, automated tools will apply your rules using high-level instructions, so you don't need to worry about the specifics or stages.

Of course, it differs from the human touch. You can ask Alexa to buy the most recent iPhone for you or arrange for a personal shopper. Both arrive at your home. One is absurdly expensive, whereas the other is economical. Most individuals choose the option that saves them money and time while also allowing them to purchase a new phone.

The most significant benefit of automation is that it continually improves. Institutions are slow to innovate, while software does so quickly. Artificial intelligence is already transforming the banking sector thanks to fraud detection, virtual chatbots, and tailored suggestions. Whenever we change our platform at M1, hundreds of thousands of customers immediately benefit from it. Everyone benefits when the situation improves.

The experience of private banking online will only improve

Nothing prevents digital private banking from becoming a service that is available to everyone. Giving more individuals similar experiences is the only way to make this cost-effective. It won't be a white glove, but it will assist you in choosing the best financial course of action.

Evolution of fund industry in Mauritius over next 5 years

The Mauritius IFC is celebrating its 30 years of existence this year. From modest beginnings in 1992, the financial sector has now emerged as a matured, resilient, and diversified financial centre. It has become a jurisdiction of choice for fund managers investing in the Asian region and African continent with around 1000 global funds now domiciled on the island. Over the years, the country has succeeded to position itself as a key partner in building a mission in Africa by connecting the developed countries to the

African continent with a view of driving quality capital and making impactful investments. Fighting climate change has become everyone's battle and the Mauritius IFC is taking part in this battle by mobilizing capital through financing and investments that support the African continent’s transition to net zero. The 2021 Report of Capital Economics, commissioned by the Economic Development Board, indeed highlights that the Mauritius jurisdiction has driven USD82 billion of investment in Africa, contributing to USD6 billion in tax revenue and generating 4.2 million jobs. Many factors have been instrumental to the success of our IFC. Mauritius is seen as a well-regulated, innovative, and competitive jurisdiction. It can boast to have a robust regulatory environment that complies with international standards. In fact, it is currently one of the few jurisdictions which comply with all 40 FATF Recommendations. This remarkable achievement comes following the enactment of the Virtual Asset and Initial Token Offerings Act 2021. The laws and framework of the IFC are very flexible and innovative with the latest product offerings being the revamping of the Special Purpose Fund and the Variable

From its heyday, the Mauritius financial centre has evolved into a mature IFC with a bright future

Recipient of Global Business Outlook Awards 2022

Capital Company structure in the fund space and the plethora of licensed activities available under the newly enacted virtual assets framework. Mauritius is a good place to conduct cross-border investment given the deep pool of talents present on the island, the track record of the professionals all helping and supporting the fund managers, the world-class infrastructure, and its wide network of DTAs and IPPAs. The political stability and certainty of the legal system of the jurisdiction are not to be discounted in the eyes of fund managers and investors who demand certainty and stability when evaluating a fund jurisdiction.

No doubt, the global trends in the fund industry will continue to shape the future landscape of our local fund industry. In the face of these global megatrends, a major challenge for Mauritius will be to prepare itself to be a green, smart, innovative, and digital financial centre in order to remain a compelling fund jurisdiction.

The industry will continue to undergo a massive transformation in the next five years and beyond. New technologies and innovation have accelerated the pace

of transformation. Mauritius and its ecosystem of service providers have not been spared from change with the transfer from a paper world to a digital world. The industry will increasingly see fund administrators and service providers modernizing and digitizing their business models in order to remain efficient and competitive as the industry continues to rapidly consolidate and evolve.

Compared to other markets in the financial sector, the fund administration industry is still treading behind when it comes to digitalization. The area of investor servicing and transfer agency is where there is a pressing need to innovate. Streamlining fund administration operations by the use of automation will be vital and will enable firms to further manage costs, mitigate risk, and enhance efficiency. For instance, firms can use AI and machine learning to increase process automation in back-office systems and to replace longstanding manual tasks. There is a need to catch up and provide levels of service, real-time data and information, and customer experience at par with the bestof-breed in financial services like banks. In the few years

to come, hopefully, we shall see the next generation of fund administrators having systems and platforms which come with a high level of automation, and digital portals with flexible access to data. They will be equipped with an online platform for electronic onboarding where the e-application form has replaced the paper subscription form, investors provide their due diligence electronically and fund managers are offered access to the platform to track the status of the investor application online and on a real-time basis. Firms will have in place centralized technology platforms to automate workflows associated with many processes like Economic Substance compliance, FATCA/CRS compliance, payment processing, annual filings and returns, and transaction monitoring to name a few to improve operational efficiency. Leveraging emerging technology will thus be high on the agenda of the fund administrators who want to differentiate themselves from the crowd. As clients and investors become more sophisticated and techsavvy, they expect a best-in-class digital experience. Over the years, ESG and impact investing have grown in importance, permeating all areas of alternative assets and becoming mainstream investments. Although ESG disclosures are still voluntary in many countries, ESG regulation is accelerating, which means that ESG compliance and reporting are becoming a top regulatory priority for many funds, fund managers, and institutional investors. There is a pressing demand from institutional investors for funds to swiftly implement an efficient system to collect, verify and report on ESG metrics. Technology is a key consideration for fund managers faced with the need to have efficient ESG reporting systems. Instead of investing and developing an in-house ESG reporting solution, more and more fund managers will look at outsourcing to third-party service providers who have the technological tools and can give them quick and easy access to a secure platform. For such fund managers, outsourcing ESG administration may be a more cost-effective solution.

The landscape in the fund industry is becoming more complex and sophisticated. Service providers like fund administrators have no choice but to adapt to this trend. To take the Mauritius IFC to the next level, it is clear that all initiatives taken around digital transformation need to be accelerated. From its heyday, the Mauritius financial centre has evolved into a mature IFC with a bright future provided that it can turn challenges into opportunities and stay afloat in the current winds. Our IFC must remain competitive and innovative to be the key regional partner that connects Asia, Europe, and the US to Africa and supports regional development.

Customers begin to believe tech companies will take over banking in the future

What will banking look like in 10 years?

Correspondent

In light of the constantly evolving global challenges, banking will look considerably different in ten years from how it does now. Smartphones will significantly influence how customers handle their money as branch visits are being progressively replaced by banking apps. Bank cards will become obsolete, making smartphones a crucial component of how customers interact with financial institutions.

Cash handling, formerly a distinctive aspect of banking, will likewise be discontinued. Instead, the majority, if not all, of the currency will be digital. According to UK Finance, only 17% of all payments made in the UK were done in cash. With the expectation that this number will continue to fall over the coming ten years, there is plenty of room for digital payments to surpass all

other payment methods.

Additionally, all financial hardware will probably be obsolete over the next ten years. The software will handle all banking transactions online and will be further optimised to improve the user experience.

Current client requirements

As legacy financial systems are replaced, there will be greater demand for seamless and individualised banking. Customers do not want to be forced to wait for payment clearances or receive generic services. All financial assistance must be customised quickly to keep the customers happy.

The future of banking appears to be one of complete accessibility and inclusivity. Peer-to-

GBO

peer payments will be smooth regardless of where people bank, making it commonplace to send money to pals, recover shared expenses, or even just split a bill.

The struggle for customer retention and engagement will be another development to keep an eye on. Longtime customers of established banks have flocked to their services, but challenger banks like Monzo and Revolut offer customers more financial options. Finally, ensure customer loyalty. This will result in increasing rivalry between banks and generous reward programmes.

Gen Z's expectation of banks

As they experience their first recession, Gen Z will require institutions to respond to their specific pain areas.

Banks that won't penalise Gen Z customers for their lack of stability or financial understanding are what they seek. They want banks that understand their financial objectives. This generation will use banks as their financial advisor and place to put their first salaries.

The financial industry will be under more pressure to innovate, and this generation will

be ready to voice their opinions.

Gen Z wants to spend and save at the same time. Therefore, they are seeking services like cashback offers that won't significantly change how they shop. Although Gen Z must negotiate the cost-of-living crisis, they shouldn't sacrifice their well-being.

The decade of banking after that

We will witness a radical transition from traditional banking to brand-new, hyperpersonalised experiences. The financial economy is already boosted by fintech innovation, increasing business-to-consumer (B2C) and consumer-to-consumer (C2C) payments.

Gen Z is computer adept enough to adapt to the changes over the next ten years. In addition, they will make the most of digital opportunities to earn and save extra money.

Our interaction with financial services will be governed by our mobile devices, which will play a more significant role in our daily lives. As a result, we know that exciting developments in the financial sector and technological advancement will substantially impact banking over the next ten years. Watch this space.

Two in five consumers predict tech companies taking over the banking.

The future of banking will undoubtedly be different and primarily digital.

According to the survey, traditional institutions, primarily regional and community banks and credit unions, have a window of opportunity to satisfy the demands and preferences of their potential clients and gain a competitive edge, but only if they move swiftly.

According to a nationwide poll by Alkami Technology, "Digital banking is no longer optional or a nice-to-have but a must-have that fosters growth, loyalty, and great experiences."

Younger generations are "bringing fresh and different expectations that create a substantial potential for every financial institution prepared to adapt."

Banks that won't penalise Gen Z customers for their lack of stability or financial understanding are what they seek. They want banks that understand their economic and individualised objectives. This generation will use banks as their financial advisor and place to put their first salary

The company surveyed 1,500 US bank account holders who use digital banking to varying degrees. In addition, the surveyors used the respondents' age, region, gender, and ethnicity according to the 2020 US Census. Among the main conclusions:

Younger generations are vulnerable because almost a quarter of them are uncertain about the future of their present primary financial institution. People who interact digitally with their financial institutions, whether through websites or mobile applications, tend to use more products than those who don't. The more frequently they do so, the more products they use. Customers of regional and local financial institutions are less likely than all other groups to think their financial relationship will improve over the coming year.

No matter the generation, offering a superb digital banking experience will significantly enhance the use of other products. Using digital platforms to deliver personal financial management services is a frequently underutilized strategy for attracting customers.

The window for trend analysis has passed

The harsh assessment that financial institutions need to move quickly to supply digital services for customers comes on top of the report's main conclusions.

The survey claims that "consumers do not expect that financial institutions of the future will look like or do what financial institutions of the present do now." On the other hand, it was discovered that 44% of banking consumers think a tech business will be a future bank.

Digital predictions

According to 65% of clients, most Americans will consider online primary banks.

The Alkami sample consisted of individuals who actively used online banking, as was already mentioned. The research did, however, show that

the definition of "active" covers very fundamental activities like checking account balances, paying bills, and moving money—a pretty low threshold, in other words.

The research claims that everything "underscores the urgency and relevance of financial institution leaders acting right away to best adapt and serve consumers."

The preference for primary financial providers is shifting

The two younger adult generations, Gen Z and Millennials, who range in age from 22 to 45, are more likely to say that their primary financial provider is a neobank, significant technology business, or fintech firm. Baby Boomers and Generation X are significantly more likely to use local, regional, or community banks and credit unions.

Regional and community bank growth

As account holders consider extending their primary financial institution connection over 2023, regional and community banks and credit unions are rarely at the top of their list. Only 27% of the customers who use those institutions the most anticipate increasing their deposits, loans, or other transactions. Comparatively, the percentages of consumers who predominantly used the different categories of providers—major national financial institutions (35%), neobanks (51%), fintech (53%), and extensive technology businesses (57%)—were all substantially more likely to grow their ties.

According to the study, "There is a striking divergence in expectations that may affect consumer behaviour. To address this possible risk to organic growth, regional and community banking institutions must act quickly."

It is unsettling to find that two-thirds of customers in a significant new study which predict that by 208, most consumers will regard their primary bank as an online one. Millennials and Gen Z perceive large tech companies and online-only banks as more critical to their financial needs.

Average Age of Adoption to digital bank account

Brazil

25–34 (55%

Malaysia

18–24 (20%)

Philippines

35–44 (16%)

Ireland

25–34 (34%)

Mexico

25–34 (22%)

Hong Kong

35–44 (23%)

Singapore

18–24 (39%)

United Arab Emirates

18–24 (31%)

Germany

35–44 (17%)

Spain

18–24 (22%)

South Africa

35–44 (18%)

India

8–24 (33%)

Portugal 18–24 (22%)

News Banking

ME banks can benefit by financing energy industry

responsible for 97% of green bonds, up from 13% four years earlier.

Banks in the Middle East stand to gain a lot by financing the oil and gas industry, which makes them switch to greener, more sustainable technologies, according to Boston Consulting Group (BCG).

The group said regulators and policymakers might address the challenge by establishing carbon prices that adequately represent the cost of greenhouse gases and are aligned with

Singapore banks

international carbon price levels.

A new report by the consultants said there should be additional financial and non-financial incentives to assist decarbonization and create environmental and business policies that support climate goals.

The report said that green bonds in the region increased by 38% between 2016 and 2020, and in 2020 alone, Middle Eastern governments were

Singapore banks face asset quality pain

Following a solid performance in 2022, the three biggest banks in Singapore may experience an increase in bad loans and slower loan growth in 2023 as macroeconomic conditions get more challenging.

DBS Group Holdings Ltd., OverseaChinese Banking Corp. Ltd., and United Overseas Bank Ltd. are entering 2023 with strong profitability and asset quality metrics following substantial profits in the first three quarters of 2022. It is mainly due to increased interest income and improved margins. While the banks' net interest margins may increase further in 2023, they

may be hindered by a downturn in the economy in important markets as countries concentrate on inflation control.

Ivan Tan, an analyst at S&P Global Ratings said, "Banks' gross nonperforming loan ratios could, however, weaken slightly over the next 12 to 18 months because of economic headwinds and increased vulnerability of small and midsize enterprises. We have become more circumspect on mainland China and some regional

It also insisted on two recommendations, first, funding non-bankable green projects with lower risk-adjusted returns or larger investments. Examples of such projects include assisting the research and development of cuttingedge technologies like renewable energy and carbon capture, utilization, and storage. And the second is increasing the risk-adjusted returns of private capital investments in green projects by using a variety of risk mitigation tools.

economies to which Singapore banks are exposed."

Meanwhile, the Asian Development Bank lowered its growth prediction for developing Asia from 4.9% to 4.6% in 2023 in its December 2022 report, citing ongoing lockdowns in China, the Russia-Ukraine war, and sluggish global development.

US banks show different quarterly results

Wall Street's top investment banks saw their financial fortunes diverge, with Morgan Stanley (MS.N) profiting from more wealth management revenue and Goldman Sachs (GS.N) suffering from higher costs and a rise in rainy-day funds.

According to Refinitiv IBES statistics, Goldman recorded a profit of $3.32 per share in the fourth quarter, falling short of the Wall Street estimate of $5.48, which caused its shares to decline by 6.5%.

The statistics show Morgan Stanley's shares increased by 6% after the company posted adjusted earnings of $1.31 per diluted share, far higher than analysts' projections of $1.19 per share. The bank disclosures bring to a close the main US banks' inconsistent fourthquarter reporting cycle.

"This round goes to Morgan Stanley, as they appear to be one of the stand-out bank earnings," said Edward Moya, senior market analyst Americas at OANDA.

Morgan Stanley's wealth management division saw revenue increase by 6% in the quarter as interest income increased amid the US Federal Reserve's interest rate hikes through most of last year.

Goldman Sachs posted a net loss of $660 million as a result of rising provisions for credit losses.

Bank of Japan

BOJ keeps interest rate unchanged

The Bank of Japan (BOJ) kept its interest-rate targets unchanged despite considerable pressure from investors on the bank's new 0.5% cap for the yield on 10year government bonds

The Japanese central bank decided to leave short-term interest rates at minus 0.1% and its target for the 10-year Japanese government bond yield at around zero. The bank reiterated that it intends to cap that yield at 0.5%. Analysts had predicted that the yield curve control range would continue to broaden, with some speculating that the BOJ's accommodative policies may come to an end as it battles to contain increasing inflation.

The BOJ stated it will continue to implement quantitative easing measures to help the economy and reaffirmed its goal of 2% annual inflation. It predicted that short-term Japanese inflation will continue high before easing by the middle of 2023, after which it was predicted to pick up speed once more.

The BOJ unexpectedly raised the cap from its prior ceiling of 0.25% to 0.5%. Investors interpreted that the bank was joining the Federal Reserve and other Central Banks in raising interest rates, despite Governor Haruhiko Kuroda's assertion that it was not the start of a cycle of monetary tightening.

Strong dollar threatens global economies

The increase potentially aggravates a downturn in the global economy and intensifies central banks' concerns about inflation

Aonce-in-a-generation rally in the value of the US dollar was witnessed recently, thus threatening an already sluggish global economy and exacerbating concerns about inflation.

As per the current developments, the currency stays on the defensive side, amid the US Federal Reserve’s frequent raising of its benchmark interest rates throughout 2022.

Because the dollar is the dominant currency in international trade and banking, its movements have a significant impact. The food and gasoline shortages in Sri Lanka, Europe's record inflation, and Japan's ballooning trade deficit reflect the currency's strength.

The ICE US Dollar Index, which compares the dollar's value to a basket of the country's main trading partners, has increased by more than 14% in 2022 alone, putting it on pace to have its most extraordinary year since its inception in 1985. The euro, the Japanese yen, and the British pound have all registered multidecade lows in 2022. Emerging-market currencies have taken a beating: The South African rand has lost 9.4%, the Hungarian forint has dropped 20% and the Egyptian pound has fallen 18%. Foreign investors have been withdrawing funds from other markets and placing them with higher yields in the United States, contributing further to the dollar's climb.

The dollar is also rising due to the global poor economic outlook amid the Ukraine war. As its multi-decade property boom ends, ‘world’s manufacturing hub’ China is underperforming now, with the COVID lockdowns taking a toll on its economy.

Recently, the Chinese Yuan and the dollar broke through a crucial threshold, with the dollar purchasing more than 7 Yuan for the first time since 2020. Japanese policymakers started publicly worrying that markets were escalating after remaining silent as the yen lost one-fifth of its value in 2022. A stronger dollar benefits the US by lowering import costs, supporting attempts to control inflation, and giving Americans a record level of relative purchasing power. However, it is placing a strain on the rest of the world.

Raghuram Rajan, a finance professor at the Booth School of Business at the University of Chicago, said, "I think it's still early days." He lamented the effects of Fed policies and a strong dollar on the rest of the globe while serving as governor of the Reserve Bank of India previously. "We're going to see high rates for a while. The weaknesses will increase."

The World Bank predicted a global economic downturn

and "a run of financial crises in emerging markets and developing nations that would cause them permanent harm."

Rising dollar values have worsened smaller countries' problems by raising the food and energy imports’ costs. These nations are witnessing a crunch in their foreign currency reserves. Even though commodity prices have been cooling off, developing countries are still under considerable pressure.

Frontier markets are already on the verge of collapse; a strong dollar is the last thing they need.

The central banks of emerging markets have taken strong measures.

To combat inflation and safeguard the peso, which has fallen over 30% against the dollar in 2022, Argentina boosted interest rates recently to 75%.

Ghana too increased its repo rates to 22%, but its currency is still losing value.

The Ukraine conflict has caused a record rise in inflation across Europe, which is exacerbated by increased energy prices.

Christine Lagarde, president of the European Central Bank, raised the alarm at the meeting on September 8, 2022 about the euro's 12% decline, by saying it has "added to the accumulation of inflationary pressures."

Although ECB slowed down its record pace of interest rate hikes, its VicePresident Luis De Guindos said that the Central Bank won't revise its mid-term price stability goal of 2%, suggesting more rate hikes will follow in 2023 as well.

The uncompromising message increases worry that financial pressures are increasing for emerging nations outside of well-known weak links like Sri Lanka and Pakistan, which have previously requested assistance from the International Monetary Fund. The IMF's latest country to initiate negotiations is Serbia.

The dollar's strength increases the cost of repaying debts borrowed in the particular currency by governments and businesses in emerging markets. Data from the Institute of International Finance shows that emerging-market governments will have USD 83 billion in US dollar debt due by the 2023 end.

An economist at the UN Conference on Trade and Development named Daniel Munevar observed, "You have to look at this through a budgetary lens. As 2023 approaches, your currency suddenly depreciates by 30%. To make such [debt] payments, you'll undoubtedly have to reduce your spending on healthcare and education."

US Treasury Secretary Janet Yellen admitted that emerging economies, particularly those with sizable loans denominated in the dollar, could face difficulties due to the currency's gain.

However, she stated in July 2022 that she wasn't concerned about a cycle that could halt global economic growth.

The dollar's strength has impacted Wall Street, impacting the profits made by American businesses abroad and controlling investments in commodities like gold and oil.

Russ Koesterich, co-head of Global Asset Allocation at BlackRock, said, "The strong dollar has created a headwind for just about every major asset class."

Investors and economists are boosting the possibility of international intervention to assist weaken the dollar, although they are cautious that the likelihood of such a measure is still low.

For example, to reduce the dollar's value in response to worries that it was harming the world economy, the United States, France, West Germany, the United Kingdom, and Japan initiated the Plaza Accord in 1985.

Paresh Upadhyaya, director of the currency strategy at asset-management company Amundi US, said, "There could be some rationale for a coordinated intervention to weaken the dollar. A strong dollar is increasingly becoming a significant negative headwind for central banks outside the United States."

The Chinese central bank has tried to support the Yuan by increasing the dollar liquidity available on the market. It has decreased the number of reserves banks must retain against their foreign exchange deposits and consistently sets the daily fixing, which serves as a benchmark for the currency, at a higher level than what the market anticipates.

Politicians in Japan worry that the yen's decline to a 24-year low against the dollar harms the economy.

Because of increasing energy prices and the weaker yen, imports increased by 50% in August 2022, contributing to Japan's

One British pound would have been able to buy almost two U.S. dollars as recent as 2007, that rate is now one pound to US$1.20

highest monthly trade deficit (2.82 trillion yen, or approximately USD 20 billion).

Five ways the dollar could disrupt the global economy: Increased inflation

Wood, metals, and petroleum are traded in US currency. The dollar's strength makes these products more expensive in local currencies. In 2021, USD 100 in gasoline cost between £72 and £84 in British pounds. Gas per litre in US currency has also risen dramatically.

Inflation happens when energy and raw materials grow, raising consumer and company costs. When the dollar goes up, it makes it cheaper for the US to buy goods from other countries. This may help keep inflation down.

Threats to low-income countries

Most developing nations owe US dollars, so many owe more than they did a year ago. Many may need help finding the ever-increasing local money required to repay debts.

It's happening in Sri Lanka and could spread. Either they raise taxes, print inflationary money, or borrow more. Depending on the path taken, the results could be a severe recession, hyperinflation, or a sovereign debt crisis. Developing nations with sovereign debt issues may take years or decades to recover, which is hard on their citizens.

Increased US trade deficit

The high dollar will cause less foreign demand for US goods. The difference between what the US exports and what it imports, called the trade deficit, is already almost USD 1 trillion annually.

Both Presidents Joe Biden and Donald Trump promised to reduce it, especially as it related to China. However, some economists are concerned that the US

trade deficit increases borrowing costs and reflects the fact that many manufacturing jobs have relocated abroad.

Deglobalisation will worsen Tariffs, quotas, or other import restrictions are the simplest way to stop a trade deficit from growing. Other countries respond to US protectionism by taxing and obstructing US goods. A stronger dollar boosts protectionism. It threatens world trade in an era of "deglobalisation" due to weakening western connections with China and Russia.

Eurozone worries

Weaker EU members like Portugal, Ireland, Greece, and Cyprus are now less vulnerable to investors driving up their borrowing costs to crisis levels. The EU's European Stability Mechanism (ESM) and Eurozone investment banks retain a large amount of their national debt.

The rising dollar forces the ECB to raise interest rates to support the euro and regulate import prices, especially energy. It'll squeeze debt-ridden Eurozone nations. Italy, the ninth-largest economy in the world, has government debts that exceed 150% of GDP.

The ultra-strong currency increases concerns about a global slump. Inflation and income erosion reduce consumer spending. Protectionism reduces commerce and investment. Finally, sovereign debt difficulties threaten many emerging nations and the Eurozone.

The Euro weakened against the dollar as well. One Euro was worth US$1.33 at the beginning of 2007 and now is priced at only US$1.12

British economy headed for a perfect storm

By 2024 the overall price level will be some 15% higher than was estimated in the autumn of 2021

The Bank of England’s (BoE) forecast of a 15-month recession, along with inflation well into double digits, and worse, the sharpest fall in living standards on record, shocked Brits. It should not have been the case. Ukraine war has caused global price hikes and economic woes; these are turbulent times. In Britain, the crisis has exposed our extreme vulnerability caused by 40 years of wrongheaded economic policy.

This economic conjuncture is the bleakest witnessed in the country’s history. Every dysfunction, whether it’s poor productivity, the threadbare welfare state, the menace of predatory finance, inadequate human capital, a systemic aversion to risk-taking, or a paucity of public investment, has emerged at the same time to create a perfect storm.

One could also add the carelessness about who owns the UK’s national assets, a lack of economic resilience in critical sectors, overheated property prices, exit from the EU’s single market, impotent regulatory agencies, weak business investment, the list goes on.

Worse, the resulting analysis from the country’s political class is desperately inadequate. On the (increasingly dominant) right of the Conservative Party, the answer is seen as doubling down on the Thatcherite brew that is the proximate cause of the crisis: a commitment to small-state economics, low taxes, and minimal intervention to “unshackle enterprise” from imagined over-regulation. And the left is yet to offer a systemic, comprehensive response,

notwithstanding interventions like the popular proposal for an energy price freeze.

Activists demand full-blooded, top-down “socialism” while the broader liberal-left tradition (plainly the direction Labour’s Keir Starmer wants to take his party) fails to work out feasible, practical reforms, leaving a vacuum. In the face of an economic and social emergency, dramatized by millions being unable to pay fuel bills potentially as high as £5,000 in 2023 but with roots that go very much deeper, the political response is not good enough.

The facts are these: inflation will only retreat little by little in the years ahead. By 2024 the overall price level will be some 15% higher than was estimated in the autumn of 2021, a forecast already quaintly outdated. The Bank of England is projecting five successive quarters of recession, extending into the last three months of 2023. On both these indicators, Britain’s performance will

be the weakest in the G7.

The country thus confronts continuing “stagflation", stagnant growth and ongoing inflation, until at least the mid-2020s, if not beyond. Business investment is running below its dismal long-term average as confidence drops sharply, while hitherto buoyant inward investment from overseas firms has stagnated, both impacted by Brexit. Exports have been savagely hit by the loss of access to EU markets and that loss has not been compensated for by growth elsewhere. In the first quarter of 2022, the UK’s current account deficit was 8.3% of GDP, a scale normally only seen by emergent and basketcase economies.

The Sterling has fallen by more than 10% against the dollar since March 2022. Bank of England officials had hoped that interest rates would peak around 3% after the recent rise to 1.75%, but that seems improbable as inflation climbs, simultaneously interacting

The Bank of England is projecting five successive quarters of recession, extending into the last three months of 2023. On both these indicators, Britain’s performance will be the weakest in the G7

with the weakness of the currency. The market expectation is that rates will now peak at 4% over the next 12 months, but even that may be an underestimate given the need both to contain inflation and support the sterling. As a result, a generalized fall in house prices is increasingly likely: Capital Economics forecasts a decline of 7% over the next two years, with others chiming in with even gloomier predictions.

British consumers’ willingness to spend is closely correlated with buoyancy in the housing market: A decline in house prices, although much needed by first-time buyers, will have the unwelcome side effect of adding momentum to the coming recession. Beware: If the administration mishandles economic policy by prioritizing inflationary tax cuts, poorly targeted help with energy bills, and ill-conceived, unproven deregulation to “unshackle” enterprise, the recession could be much deeper and more protracted than even the Bank’s recent forecast. The British economy’s vulnerabilities are being cruelly exposed. Where can these vulnerabilities be found and what can be done to remedy them?

Poor productivity becomes acute

Poor productivity, long the bane of the UK economy, has now become acute. Ever since the 2008 financial crisis, the productivity growth rate has slumped, leaving little scope for wages to grow. Indeed, after rising by around a third on average for every decade since 1970, over the last 14 years, real wages have broadly stagnated, a trend now made starker by prices rising faster even than nominal wages. The 3% drop in the real value of regular pay between April and June 2022 compared with last was the sharpest on record. The pain is manifesting itself in the wave of industrial unrest. One in five households is predicted to have exhausted its savings by the end of 2024, and this is happening as the basic level of benefits has dropped to £77 per week, the lowest in relation to average pay on record.

Both the Resolution Foundation think tank and the National Institute for Economic and Social Research warned that the combination of falling living standards and desperately weak income support could push well over a million families into destitution by the next election. The number could rise even higher depending on the scale of support the new government offers households facing dramatic hikes in energy bills. Voices as various as money-saving experts Martin Lewis and Tory mayor of Tees Valley Ben Houchen are right to warn that Conservative leaders have not begun to grasp the avalanche of social distress about to overwhelm so many, with families having to choose between shivering or starving.

Yet the deep-rooted deficiencies of the British economy go unaddressed. Take the skills deficit in the British workforce, which is as immune to successive state efforts to encourage training as ever, exacerbated by weak middle management. Over £3bn of unspent Apprenticeship, Levy funds have been returned to the Treasury over the last three years. Colleges, the locus of reskilling and training, report that they are unable to recruit teachers or lecturers at prevailing public sector wages, and so are unable to meet the demand for courses in fast-growing industries like robotics or AI. The average number of days an employee spends on training each year fell by 18% between 2011 and 2017.

Public services generally have been weakened by the austerity of the former coalition government, and the tardiness of its successors in loosening the purse strings. Education spending in real terms is projected only to recover to 2010 levels in 2024 -- and then only if the government is prepared to ratchet nominal spending up in line with the sharp rise in inflation since the 2021 plans were signed off. The NHS, with a record backlog of 6.7 million -people waiting for treatment, including for acute and chronic illnesses, is reeling. People are fearful about the consequences of falling ill

UK Inflation Rate

July 2021

2% Oct 2021

4.2% Jan 2022

5.5% April 2022

9% June 2022

9.4% July 2022

10.1% August 2022

9.9% September 2022 13.2% October 2022 11.1%

as news spreads about waiting lists and the difficulty of even getting an appointment with a GP. From the Passport Office to the criminal justice system, public provision is failing. The decimation of our public realm was not caused by an act of God or even belttightening required by underlying economic circumstances. It is an active choice by Conservative politicians who value tax cuts and limited public borrowing over highquality public services. The results are there for all to see.

Equally worrying is the lack of economic dynamism. The UK stock market now rarely raises new risk money for start-ups, scale-ups, or flotation. There is only one fully-fledged technology company in the FTSE 100. Enduring weaknesses in investor and bank support for businesses, especially small- and medium-sized businesses, persist. Loans to businesses are largely still made against the collateral of bricks and mortar rather than ideas, new technologies, and business plans. Nor can build a dynamic economy while rewards for those at the top remain lush, with incomes at the bottom under such intense pressure. The right believes that inequality and growth go together -- as the necessary consequence of offering generous rewards to risk-taking

wealth creators -- but the UK seems to have the worst of both worlds, with the highest inequality in Europe and growth rates that are truly dismal.

And the storm is getting heavier

The annual inflation rate jumped to 11.1% in October of 2022 from 10.1% in September. It has become the highest inflation rate since October 1981. The main contributors to this crisis are housing and household services (26.6% vs. 20.2%), with increases in natural gas (128.9%) and electricity (65.7%) prices snuffing the life out of common Brits. Prices for food and non-alcoholic beverages (16.2% vs. 14.5%) are also maintaining higher ranges. There has been a change of guard as well, with Conservative MP Rishi Sunak replacing Liz Truss, who resigned on October 20, after a tumultuous 45-days reign, which saw a disastrous ‘Mini Budget’ weakening the COVID-battered economy even further through unplanned tax reforms, energy bill cap and stamp duty.

However, Rishi Sunak’s appointment at 10 Downing Street hasn’t brought much cheer. The inflation ratio came down from its all-time high of 13.2% to 11.1%. That’s the only good news if the writer has to be that optimistic.

Now, the Confederation of Business Industry forecast says that Britain’s economy will shrink by 0.4% in 2023.

The CBI’s forecast marks a sharp downgrade from its last forecast in June, when it predicted growth of 1.0% for 2023. Also, the UK GDP won’t return to its preCOVID level until mid-2024.

To make matters worse for the Brits, consumer product prices will rise by 5.7% in the coming months.

Bloomberg cited a Bank of England report, where chief financial officers surveyed by the apex bank said that they expect prices to be growing at an annual rate of 7.2% till 2023 end and by 3.9% in the following three years.

A Guardian report says that up to half a

The bigger problem is in form of product shortages and supply chain stretches in supermarkets, where a huge number of Brits go for staple shopping.

million of the most vulnerable Brits haven’t got government help to pay their energy bills since October, with an estimated 1.3 million vouchers for homes with prepayment meters either lost, delayed or unclaimed. All UK households are supposed to receive £400 during the winter period of 2022-23 under the energy bills support scheme, announced in February 2022.

Analysts have warned of a 30% collapse in the domestic property market, perhaps the biggest demand slump since the 2008 Global Financial crisis. New homebuyer enquiries have plunged to their lowest level, reveals the stats from RICS Housing Surveyors Report.

Average home price has dropped some 1.4% to £263,788 in November 2022, according to the building society’s house price index. It was the third monthly decline in a row, and the biggest drop since June 2020. Annual house price growth slowed down sharply to 4.4% in November 2022, from 7.2% in October.

Average five-year fixed mortgage deals are still above 5% and resulting in higher costs and this has continued to keep the demand on the lower side.

This slowdown came after a two-year COVID-induced home buying frenzy, as property transactions in September 2022 went down by 32% from their 2021 peak.

As per the British Retail Consortium data, prices of meat, eggs and dairy are rising. Supermarkets are going through product shortages and supply chain stretches.

Not only eggs, aubergine, cucumber, peppers and tomatoes are getting short in supplies and won’t please those who were thinking to consume veggies to meet their nutritional needs.

North-East UK has been the biggest sufferer of this food crisis, with areas such as Birmingham and Liverpool facing the maximum brunt. As per the Consumer Research Data Centre at the University of Leeds, some 45% of this particular area of the country needs “extra support".

Families in Yorkshire and the Humber,

the West Midlands and the North West too are struggling to afford nutritious food.

The area around Birmingham and Liverpool is also having poor online delivery access and high levels of fuel poverty. The residents are either from the low-income category or lack car access to the nearest food bank/supermarket.

Seven in ten Parliamentary constituencies have at least one area in need of urgent help accessing affordable food. Research by an educational charity called ‘Sutton Trust’ shows that over half of UK, schools are witnessing a steady rise in pupils who can’t afford lunchtime meals and yet are not eligible for a free school meal.

Things have indeed gone out of hand, so much so, that Finance Secretary Jeremy Hunt asked the banks to support the Brits struggling to pay their mortgages amid the ongoing cost-of-living crisis.

There is no hiding from the fact that UK homeowners have been hit with higher mortgage payments, thanks to the Truss government's disastrous mini-budget, which deteriorated the cost-of-living crisis in 2022. Borrowing costs have gone up, along with the payments on variable-rate mortgages. Even the ones, who need remortgage, are facing higher rates as well.

While average five-year fixed mortgage deals are ranging around 5% (in some cases, have gone above that ratio as well), this has put additional pressure on households amid soaring energy and food bills.

Even if the lenders want to provide assistance to these vulnerable Brits, the lack of guidance from banking regulators is proving to be a major roadblock for them.

The winter of 2023 won’t be a kind one for the Brits. This time, they are faced with a tough choice between shopping for high-end products or stocking up on food and other necessities as the winter steps in.

Pound sterling against the dollar

Oct 2021

£1 = $1.3

Nov 2021

£1= $1.3

Dec 2021

£1= $1.2

Jan 2022

£1= $1.2

Feb 2022

£1= $1.3

Mar 2022 £1= $1.3

Apr 2022 £1= $1.2

May 2022

£1= $1.2

Jun 2022 £1= $1.1

July 2022 £1= $1.1

Source: Datapoint

Africa grows, so does income inequality

The richest 0.0001% own some 40% of the African wealth. The continent’s three richest billionaire men have more assets than the bottom 50% of the remaining population (650 million people).

While massive reductions in the numbers living on less than USD 1.90 a day have been achieved in Asia, Africa has hardly made any progress. The World Bank estimates that 87% of the world’s poorest will be in Africa by 2030.

Before COVID, several sub-Saharan African economies saw record-breaking growth. Over the past 20 years, Ethiopia and Rwanda witnessed annual growth rates of over 7.5%, which were among the fastest in the world.

However, because income data at the subnational level are occasionally unavailable, it is less certain if the benefits of economic expansion have been distributed fairly among the people.

The statistics demonstrate that till 2010, African countries made great strides toward reducing regional income inequality, contrasting sharply with the rest of the world.

When we looked more closely at the variables influencing regional disparity, we discovered that growth was primarily attributable to advancements in the foundational infrastructure that allowed lagging regions to catch up to national levels more quickly. For example, the number of night lights per person more than doubled in the most underdeveloped areas, with oilexporting nations and frontier markets like Ghana and Kenya seeing the most significant increases.

The reduction of regional inequality made little to no

Extreme poverty on the continent is increasing and the wealthiest of Africans are getting even more affluent

progress in fragile states. Even in countries that had decades of prosperity, progress stood still, likely due to the postpandemic widening of regional inequality.

For instance, compared to leading regions, access to clean water, power, and cellular services is two to four times lower in lagging areas. It is due in part to the significantly lower public investment per capita. In lagging regions, two to three times fewer people have completed their primary and secondary education.

The disparity is significantly broader in nations with usually inadequate access to public services and unequal distribution. Burkina Faso has leading regions with over 20 times higher access to electricity.

What were the main factors in the recent decline in regional inequality? We discovered four major reasons:

Macroeconomic stability: A persistent and intense inflation depresses consumer purchasing power, reduces government spending, and disincentivizes private investment, and these increase inequality further.

Trade openness: Convergence is supported by more

accessible access to international markets, which raises the value of a nation's resources like raw materials, which are more readily available in underdeveloped areas. Additionally, it increases the number of workers in urban areas, which may cause the income per capita of regions with greater urbanization to drop if infrastructural development and the general rise in economic activity in city centres cannot keep up.

Strong institutions and political stability: Civil wars obstruct citizen-centric governance, and weak institutions increase the probability that regions will lag.

Well-targeted investments: We examined the effect of investments on regional inequality using mineral discoveries as a proxy and discovered that progress is locationdependent. The most probable assets to have an impact by generating jobs and boosting economic activities in underdeveloped regions are those outside capital cities.

What steps may be taken by policymakers to remedy these disparities?

Sub-Saharan Africa would have to follow a policy framework

Africa is quickly becoming the global centre of extreme poverty. In Asia, the number of people surviving on less than USD 1.90 per day has drastically decreased, but this figure is increasing in Africa. If current trends continue, according to the World Bank, 87%

of the world's impoverished people will reside in Africa by 2030

built on three fundamental pillars: A carefully thought-out fiscal redistribution plan with a distinct investment blueprint for underdeveloped regions, introducing macroeconomic balance to encourage inclusive growth, and establishing structures to guarantee political stability and fair governance.

Governments must also enhance capabilities for data collection and analysis. Only 12 Sub-Saharan African nations make their subnational public budget allocations available. The governments would provide a more accurate picture of regional inequities by making this data more easily accessible, enabling policymakers to target their initiatives better.

The Oxfam report

Extreme inequality of wealth is increasing in Africa. Seven of the world's most unequal nations are found here, making it the second-most unequal continent, in terms of the distribution of wealth.

According to an Oxfam report, the poorest 50% of Africans, or about 650 million individuals, are wealthier than the three richest billionaires on the continent. Africa is quickly becoming the global centre of extreme poverty. According to the World Bank, 87% of the world's impoverished people will reside in the continent by 2030.

The majority of underprivileged women and girls are from Africa. The world's most significant levels of gender inequality are now combining with economic inequality, thus forming a strangling web of exclusion.

A boy from a wealthy Kenyan household has a one in three chance of attending a secondary school, as against the 250 girls from low-income families, out of which only one can avail of this opportunity. Most unpaid caregiving and domestic labour are also performed by women and girls. Women in Malawi devote seven times as

much time to domestic duties and unpaid care as men.

"Women are disproportionately impacted by climate change due to gender inequalities and gender roles and responsibilities. They are 14 times more likely than men to die in a climate catastrophe and make up 80% of people displaced due to climate change," observed the Institute for Security Studies in 2022.

"The international community has made strides in recognizing that climate action must consider gender equality. But this year’s United Nations Climate Change Conference (COP27) was another missed opportunity to advance meaningful gender participation," it said.

Observations from the report

Because they suffer most from climate change, women are often at the forefront of developing effective mitigation and adaptation strategies. Across Africa, they have emerged as leaders in coming up with solutions such as drought-resistant seeds, better soil management, or guiding reforestation and restoration efforts.

Women still have less autonomy over their decision-making, including migration choices. Gender norms and family responsibilities play a role, and women also have less access to resources and information than men to inform these decisions. In family situations, men are most likely to migrate to earn an income, leaving women to carry the household burden. This involuntary immobility puts women at risk of climate change impacts because they are trapped while caring for households and children.

Yet, migration and urbanization can be effective adaptation measures that empower women. They can increase autonomy, mastery, remittances, and social standing and disrupt gender norms. While women have comprised a steady share of migrants for

decades, the number moving independently for work, education or to meet their families' needs has grown significantly. The number of female international migrants in Africa increased from 6.2 million in 1990 to 10.5 million in 2020.

Also, risky debts are reducing social spending as well.

Africa's economic future seems bleak. According to the IMF, 24 of the 45 nations in sub-Saharan Africa, including South Africa and Nigeria, are not likely to have a significant economic rebound. Above all, unaffordable debt has returned to burden Africa's people.

Although there have been some unusual individual examples, there is a significant chance that a continental crisis will impede progress for the ensuing ten years as population growth accelerates.

Spending on public services is already severely restricted by the risky lending practices of Chinese and European financial markets, along with some African governments. For example, in Uganda, debt repayments are at historic highs, and government spending on health and education has been reduced by 12%.

But the narrative isn't always subpar. African nations as a whole are making progress against inequality. It is a testament to them that they are succeeding despite overwhelming odds and difficulties, and it exposes the many nations that are simply not doing enough.

African nations are now ranked according to how committed they are to reducing inequality.

This study also ranks African countries according to their policies to narrow the wealth gap by considering taxation, increasing social spending, and labour rights. The CRI was produced by Oxfam and Development Finance. It draws a compelling picture. All African nations are struggling with the same toxic legacy,

including extreme inequality, a history of expropriation by colonial powers, and frequently failing economic policies imposed by the IMF and the World Bank. However, countries have significant differences in addressing this legacy and closing the gap between the rich and the poor. The CRI demonstrates that African nations can opt for a route toward equal prosperity.

The CRI demonstrates that nations like Namibia and Ethiopia fight inequality with unusual vigour. According to economist Joseph Stiglitz, Namibia is the second-best country in Africa for its government's efforts to combat economic inequality, which has been steadily declining since 1993. In Africa, it tops the list for dedication to social spending. As a result, investment levels are strong, enabling the government to finance programs like universal free secondary education and recent increases in social safety spending.

Global wealth distribution inequality has gotten much worse over the last few decades.

For instance, as of 2022, about 70% of the country's wealth is held by the wealthiest 10% of Americans. This indicates that the other 90% owns only 30% of the nation's wealth. Another example is South Africa, where the richest 10% own 65% of the country's wealth.

Additionally, many people do not have access to high-class financial services (i.e., services provided only to accredited investors), which are widely available to wealthier residents. By giving individuals access to a way to make, store, receive, send, and invest their money, cryptocurrencies can help to narrow the wealth gap.

6.2 million in 1990 to 10.5 million in 2020

The number of female international migrants in Africa increased from

Innovation is in our DNA: Mashreq Al Islami

Mashreq Al Islami is a one-stop shop for all of the corporate world's Islamic banking needs and offers client-centered, Shariah-compliant solutions. Mashreq Al Islami, which stands for the Islamic Banking Division, is the strength of Mashreq Bank for Shariah Compliant products and services.

Global Business Outlook caught up with the EVP and Head of Islamic Banking, Mashreq Bank, Ibrahim Al Mheiri, who shared his views about personal finance, technological changes in the banking sector, 'The Happiness Account', shifting towards mobile banking, 'Gold Current Account', and much more.

You have been awarded the 'Most Innovative Islamic Banking Window – UAE 2022'. Tell us about it. We are delighted to receive the 'Most Innovative Islamic Banking Window – UAE 2022' award from a reputable institution. Mashreq, historically, has been known as a pioneer in innovative banking services in the region. From being the first bank to introduce ATM and POS machines, it continues to innovate across the financial services sector through its digital banking, customer facilitation and automation channels. The drive towards digital banking is being spearheaded by our Group CEO Ahmed Abdelaal, and Group Head of Retail Banking,

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Mashreq Al Islami’s aim has always been to empower customers and take convenience to the next level

Fernando Morillo. The bank functions in an agile model, with digitization at the core of our banking operations. Product sales is the latest area to be digitized, alongside key services and compliance requirements, such as expired business licensing documents, residence visas, passports, and emirates IDs. These can now be easily updated by customers using their mobile/online banking.

Mashreq Al Islami claims to offer the best Personal Finance in UAE. What makes you different from your competitors?

Personal Finance is a document-intensive and processheavy structure to provide cash for personal needs to customers. Not only is a set of contracts required to be entered into with clients at various stages of the sale transaction, but it’s also a combination of sales and purchase transactions with a time gap. Our teams have worked very hard to digitize this entire process whereby clients’ onboarding, underwriting, and approvals –leading to the Shariah contracts executions - are all done digitally, streamlining the customer journey and saving valuable time.

How has Mashreq Al Islami accustomed to the technological changes in the banking sector?

Digital banking has been and is continuously evolving at an accelerated pace. We keep ourselves ahead of the most relevant and customer-centric solutions, helping us build scalable and intuitive digital experiences for our customers. Customer interactions are dominated by digital platforms and have already overtaken the more traditional channels. It is no coincidence that the share of digital banking transactions across our Retail Banking sector is more than 96% today – this is not a technological revolution, more simply customer expectation.

Innovation and digitization are in the DNA of our banking solutions spread across the following: Mobility banking, interactive mobile and wearable interfaces, and branch banking through tablets, interactive teller machines, digital sales and services.

Can you tell us about 'The Happiness Account' initiative which you have introduced?

At Mashreq Al Islami, evolution is in our DNA, and our aim has always been to empower customers and take convenience to the next level. Following the measures undertaken by the UAE government to prioritize the happiness of both its citizens and residents, it was only natural for us to introduce the Happiness Account

Personal Finance is a documentintensive and process-heavy structure to provide cash for personal needs to customers. Not only is a set of contracts required to be entered into with clients at various stages of the sale transaction, but it’s also a combination of sales and purchase transactions with a time gap

for those who transfer their salary to Mashreq. The account can easily be opened in just ten minutes through Mashreq’s mobile banking channel. Not only do customers enjoy a bonus of up to AED 2,000/- for successful salary transfers, but they also receive reward points on their account, depending on the online and mobile banking transfers that they choose to do. International transfers are free of charge and there is no minimum balance requirement.

The Islamic Banking sector in the Middle East has grown 14% on average in recent years. What is your take on it?

The Islamic Banking sector is still very much in its infancy and is far from reaching its full potential. If we take the UAE as an example, the market share of Islamic Banking is between 25% - 30%, and it’s a similar story for most other GCC countries, aside from Saudi Arabia, where the Islamic banking market is at a more advanced stage.

There is no doubt that Islamic banking is fast gaining in popularity. Not only are Islamic banks adapting to the demands and needs of customers and amending their more traditional ways of operating, driven in part by the massive influx of digitally savvy millennials into the banking sector workforce, but customers are also demanding solutions that are comparable to global banks and are not just content with the Shariahcompliant label.

I feel there is huge potential for further growth, not only in the Middle East, but also in the large population centers across the Islamic world, including Indonesia, Pakistan and North African countries such as Algeria, Tunisia and Sudan. For instance in Egypt, the largest Middle Eastern market, has a minimal market share of 5% in Islamic banking, so there’s clearly huge scope for growth.

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What kind of changes has Mashreq Al Islami witnessed in the banking sector after the COVID era? How do you plan to deal with them?

While digital transformation was on the agenda of most companies, particularly in the financial services industry, this was accelerated by the COVID pandemic. Various lockdowns and working-from-home initiatives meant banks had to adjust their models to meet the huge demand for digital services. Physical cash transactions dropped amid heightened health concerns, as did in-person visits to branches. Banks have had to invest heavily in their digital infrastructure to take the customer journey online, while ensuring customer service and personalization remain at the very forefront. We are at the forefront of this transition.

With more people shifting towards mobile banking in the last few years, how has Mashreq Al Islami managed to deal with the shift?

The UAE has one of the highest smartphone penetrations across the globe - more than 80% of the population owns a smartphone and is connected to the internet. Similarly, 97% of all our transactions are now conducted by our customers digitally. Our Mobile Application is one of the best across the region, and we see a huge number of our customers using their mobile phones and executing transactions through this medium. Mashreq Al Islami has invested heavily in mobile banking solutions and the app to make this happen, and we will continue to innovate to ensure the customer’s digital journey with us is as smooth and seamless as possible.

What kind of benefits do you offer Expats and Emiratis who do banking with you?

Given the fact that the UAE is home to a 90% expat population, it is imperative that we cater to both their needs and those of our national Emirati customers. Our various propositions reflect the needs, spending patterns and requirements of these unique and different customer sets. Complementing this approach, we have specifically launched a premium Solitaire credit card for Emirati customers, with special offers catering to Emirati dining and shopping places, specifically designed personal finance & home finance solutions for Emirati Customers as well. For expats, the Cards, personal loans, and home finance solutions are designed specifically keeping their needs in mind.

Your 'Gold Current Account' initiative is popular among the masses. Tell us about it?

Mashreq Al Islami Gold Current Account offers a range of transactional banking services and benefits which include: 'No Minimum Balance' requirement, higher cash withdrawal limit, high transaction limit, free cash withdrawals from over 3,500 ATMs across UAE and over 1.76 million VISA/PLUS ATMs around the world, and unlimited teller transactions, mobile banking, internet banking, phone banking (dedicated Gold toll-free number) and utility bill payment facilities.

Added Privileges

A skilled and dedicated Relationship Manager is assigned to manage and oversee your relationship with the bank. Accredited by the Chartered Institute of Securities and Investments (CISI), UK, they are Shariah

A qualified team of Shariah certified Wealth Advisors who can help you with a wide range of Shariah compliant investments, foreign exchange, Takaful, Ijarah Home Finance and business account services

certified and well-equipped to tailor financial solutions to match your needs.

A qualified team of Shariah certified Wealth Advisors who can help you with a wide range of Shariah compliant investments, foreign exchange, Takaful, Ijarah Home Finance and business account services.

A dedicated Gold Service Assistant with a direct line and a 20-minute call-back promise, in case they cannot be reached.

Access to over 10 Mashreq Gold locations across the branch network and added convenience of online and smartphone banking is provided. In addition, the added privileges also include preferential rates on deposits, remittances and forex, preferential profit rates on finance facilities, priority processing of transactions, free Platinum debit card offering free international & UAE ATM withdrawals, free for life Mashreq Al Islami credit card with a wide range of lifestyle privileges.

They also provide access to Salaam - A loyalty program that rewards your entire banking relationship, three free Marhaba (Bronze in Dubai) and Golden class (Abu Dhabi) airport services per annum, invitation to exclusive Gold events in line with your lifestyle

needs, and lounges with full service capabilities including meeting rooms that provide discretion and confidentiality.

Going forward, what are Mashreq Al Islami's plans?

Mashreq Al Islami continues to aspire towards:

Overall Corporate Positioning: The Islamic Window of Mashreq Bank offers the most Comprehensive Corporate, Consumer, Treasury, Business Banking, and Digital Solutions – comparable to or better than the fullfledged Islamic Banks.

Retail Specific Positioning: Most Innovative & Digitally Enabled Retail Solutions for Individual and Business Banking Clients across the Industry, without compromising the essence of Shariah.

Invest In Digital Capabilities: We are planning to further invest in our digital capabilities through different innovative products and solutions that will be introduced in the future.

Increase Operations Capacity: We are planning to increase our operations capacity in the region where Egypt represents a top priority for us along with Pakistan, Saudi Arabia and Oman.

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Are sanctions affecting Russian economy?

Russia's economic ties with countries across the world have seen a significant shift as a result of sanctions over the last six months

GBO Correspondent

Russia's economic ties with countries across the world have seen a significant shift as a result of sanctions since 2022 March. In the three decades that followed the fall of the Soviet Union, Russia agreed to the principles of globalised capitalism. Even while political connections between Moscow and the West were frequently

unsettling; their economic ties had always been strong.

Russians from the middle class may readily purchase cheap trips to Europe or the newest Western consumer products, such as jeans and smartphones. It would just take a few minutes to complete simple financial transactions like sending or receiving money abroad.

Now, that era might be permanently over. After the Kremlin decided to send its soldiers to invade Ukraine, the United States and its allies in Asia and Europe moved rapidly to impose sanctions against the Russian economy.

They also banned Russian ships and aircraft from entering their ports and airspace, implemented export controls for some cutting-edge technologies, and imposed an embargo on Russian oil and coal, in addition to freezing nearly half of Russia's financial reserves and booting several of the country's largest banks out of the SWIFT payment system.

A database from Yale University's Chief Executive Leadership Institute shows that since the start of the conflict in Ukraine, more than 1,200 global firms have either discontinued or restricted their operations in Russia. Some of these companies are Visa, IKEA, Apple, McDonald's, and MasterCard.

The new sanctions regime has had conflicting consequences thus far. The gross domestic product (GDP) of Russia decreased by 4% in the second quarter compared to the same period in 2021. This fall is predicted to increase to 7% in the third quarter.

Along with pushing inflation into double digits, the new supply limitations have also hurt Russian manufacturers by denying them access to imports that are necessary for putting together their finished goods. For instance, during the first half of 2022, Russia's car output fell shockingly by 61.8%.

Nevertheless, the Russian economy has thus far shown more resilience than many had anticipated. The Russian rouble, which lost more than 30% of its value in late February and early March of 2022, subsequently recovered and became the year’s best-performing currency).

Since reaching a record of 17.8% in April 2022, inflation has been steadily declining, reaching a low of 14.9% in August. Between January and July 2022, Russia's current account surplus reached a record high of USD 167 billion, more than tripling from 2021.

No significant impact on life despite sanctions

Sanctions have not significantly impacted life, at least not yet, in Moscow. There appear to be construction workers everywhere as part of the annual street reconstruction programme

Since the start of the conflict in Ukraine, more than 1,200 global firms have either discontinued or restricted their operations in Russia. Some of the wellknown companies on that long list include Visa, IKEA, Apple, McDonald's, and MasterCard

in the Russian capital. Pubs, restaurants and cafes in the downtown area are crowded with wild customers. While many Western-owned establishments have been closed for months, shopping centres are nevertheless crowded with customers. The typical customer encounters a wide variety of goods, including international treats, when shopping.

The International Monetary Fund revised its forecast for Russia's economy in 2022, estimating a 6% decline in GDP rather than the initial 8.5% estimate. Even though it is a significant reduction, it is not as severe as some of the original projections.

According to Anton Tabakh, head economist at Moscow-based credit assessor Expert RA, two reasons were supportive of the Russian economy in the first half of the new sanctions regime. The first was a sharp increase in the export of commodities, particularly energy. A government report estimates that Russia will make more than USD 337 billion from energy sales in 2022, a 38% increase over 2021. An increase in government spending is the second factor.

Due to declining worldwide demand and the implementation of new embargo limitations, Anton Tabakh claimed that Russia's export boom has certainly peaked. Interacting with Reuters, he also pointed out that following a dramatic decline in early 2022, Russia's imports have gradually started to recover. The stabilisation of the rouble and enhanced logistics have been the key reasons behind this recovery.

Domestic businesses get a boost

The sanctions have turned out to be an unexpected source of opportunity for certain Russian businesspeople. The mass exodus of multinational corporations from Russia has opened up opportunities for domestic businesses to increase their market share, particularly in industries like food products, cosmetics, clothing, tourism, and construction, according to Nikolai Dunaev, Vice President of Opora Russia, a national association of small and medium business owners.

Nikolai Dunaev said, “There is an overall fall in demand among consumers, but this is not being felt as severely in Russia because much of the remaining demand has shifted toward domestic producers.”

In addition, non-Western economies are becoming more crucial to Russia's plan for responding to sanctions. For instance, Tabakh said that recent increases in manufacturing in Asia and the Middle East have made it simpler for Russia to find alternatives for the majority of Western goods.

At the same time, Moscow has started using parallel import strategies to close economic gaps. Under these strategies, Russian businesses import Western-branded products from other countries, such as smartphones, cars, and clothing, and then resell them on the Russian market without the consent of the trademark owners.

The most important question, though, is how much of Russia's economy will be able to go through its "structural transition" over time. Will Russia be able to successfully restructure its economy on a new basis, or will it be destined for decades of economic and technical stagnation?

According to Chris Devonshire-Ellis, founder of the pan-Asian investment consulting firm Dezan Shira & Associates, there are two significant factors that may potentially be to Russia's advantage.

The first is that Moscow is home to many of the natural resources that are vital to the development of the global economy.

He said, “When you look at Russia, it has the first, second and third highest reserves globally of practically everything. From energy to diamonds, to fresh water, to rare earth and other minerals, it’s an extremely rich country.”

He also pointed out that the Kremlin was not geographically isolated despite its current isolation from the West.

Russia -9.71% Poland -0.78% Belgium -0.51% Germany 0.40% Italy -0.31% Austria -0.28% Spain -0.22% France -0.16% UK -0.09% USA -0.04% China +0.02%

www.statista.com

Estimated longterm change in annual GDP as of 2022

According to government statistics, China's GDP expanded by 3% in 2022, which is one of the weakest rates in the nation's modern history.

The data released by the National Bureau of Statistics stated that the Chinese economy grew by 2.9% in the third quarter,

Research and Development

Nigeria to dedicate 0.5% GDP to R&D

In order to fast-track meaningful development, Nigeria will start allocating 0.5% of its Gross Domestic Product (GDP) to research and development, according to President Muhammadu Buhari.

Buhari said this in his speech at the "Science, Technology, and Innovation Expo

China’s economic growth worst in 2022

dropping the target from official announcements amid worsening economic conditions. Even still, the growth in the fourth quarter was much higher than some experts had anticipated.

down from a 3.9% annual growth rate during the period of July to September.

The Chinese economy performed the worst in 2022 since 1976, the final year of Mao Zedong's three-decade rule.

China’s government had set a goal of 5.5% growth, before

Carlos Casanova, senior economist for Asia at UBP in Hong Kong said, "The data exceeded expectations over the board, which means fewer risks to Q1-23 growth. We have revised our growth forecast for 2023 to 6%."

However, Casanova said that the latest official statistics contained warning signs for longterm growth, including the first official decline in the population since 1961.

2023" opening ceremony in Abuja.

Buhari who recalled the 5th Edition of the Science, Technology and Innovation Expo 2021, said, "In tandem with the decision made by the African Union Executive Council in 2006 to establish a target for all member states of 1% of GDP investment in Research and Development (R&D) in order to improve innovation, productivity and economic growth, the government now will dedicate 0.5% of the nation’s GDP to R&D. We have made an effort in actualizing this through our communication to the National Economic Council to come up with modalities in achieving this noble intention of the government."

The President also congratulated the winners of 2023's 774 Young Nigerian Scientists Presidential Award (774-YONSPA). He commended their creativity and competitive spirit towards their academic.

The President congratulated the winners of 2023’s 774 Young Nigerian Scientists Presidential Award

Economy

Hong Kong GDP to grow by 3.8%

As activity increases in the wake of the reopening of the border with mainland China, Hong Kong's economy will grow by 3.8% this year and the unemployment rate will drop to 3.3%, according to one of the city's top business groups.

However, the 4,000-member Hong Kong General Chamber of Commerce also issued a warning that there may still be obstacles in the way of the local economy's recovery from rising interest rates and weaker global demand.

“The recent rollback in COVID-related restrictions and the resumption of crossborder activities will prove to be the most effective catalyst for the economy to recover quickly. It is a long-awaited much-needed shot in the arm for the business sector. We hope that very soon the

remaining restrictions can be dropped so that normal border crossing can be restored," CEO George Leung Siu-kay said.

After the economy contracted for three consecutive quarters, extending the recession, Hong Kong revised its fullyear forecast in November to a 3.2% contraction.

Meanwhile, the lobby said that the jobless rate would ease to 3.3% this year.

Middle East set for FDI boost

According to a report released by Lumina Capital Advisors, the Middle East is expected to experience a record year for foreign direct investment (FDI) inflows in 2023 as corporates and funds look to establish themselves and participate in significant infrastructure projects in the area.

The advisory firm, which focuses on transactions between the UK and Middle East, said that "regional presence for aspiring global firms is now seen as a must, rather than a nice-to-have."

The high-tech desert metropolis of Neom and the Red Sea Project, which focuses on tourism, are among the seven massive infrastructure projects in Saudi Arabia that will cost $690 billion to construct, according to the report.

According to FDI Standouts Watchlist 2023, major economies from the Middle East and North Africa region, including Qatar, Oman and Saudi Arabia, are expected to carry the strongest investment potential into 2023.

Lumina Cross-Border insights report stated that Saudi Arabia is expected to surpass the UAE in receiving foreign direct investment in 2023. The report also stated that FDI into Saudi Arabia and the UAE hit record highs with $40 billion in 2022, showing a rise of 58% over the previous year.

The business lobby said that the jobless rate would ease to 3.3% this year

Erbium: New malware that's creating havoc

The 'Erbium' malware targets user data stored in Google Chrome, Microsoft Edge and Mozilla Firefox and steals sensitive user data such as passwords and banking details

Cybersecurity has always been a huge concern, especially in the current digital era, and now another threat to cybersecurity has emerged in the form of ‘Erbium’ malware. While it is spreading at a rapid pace, it is also stealing sensible individual information such as passwords, credit card details and cryptocurrency wallets. The malware has been classified as a data and information-stealing tool.

The advent of this malware is not good news for gamers as it is getting spread through pirated games and game titles’ cheats. It is basically a Malware-as-a-Service (MaaS), or to say it in layman's terms, subscription malware. What is even scarier is that its monthly price has shot up from USD 9 to USD 100. Its yearly subscription fees currently stand at USD 1,000. Its subscribers get services such as frequent updates, customer support and other tools.

A cyber-intelligence company named Cyfirma had identified the malware, after probing some of the gaming cheat codes.

More details emerge

It was the cybersecurity firm Cluster25 who spilled details about the malware. When Cyfirma stepped in to probe the matter further, they found out that Erbium has been advertised on hacker forums with Russia links, another disturbing development that comes amid the ongoing Ukraine war and the sanctions war between Moscow and the West. The Cluster25 study also said that Erbium has spread to the USA, France, Spain, Italy, Vietnam, Malaysia, Colombia and India. As of now, experts

GBO correspondent

Analysis

say that the malware is found only in cheat game codes, but if not controlled, may spread all over the internet through various distribution channels.

Erbium’s mode of operations

The malware targets user data stored in Google Chrome, Microsoft Edge and Mozilla Firefox and steals sensitive user data such as passwords and banking details. What sounds even more dangerous for the booming cryptocurrency market is that the malware is also targeting the digital currency wallets installed as browser extensions. As per Cyfirma, the malware is also avoiding detection from the existing internet firewalls and other cybersecurity mechanisms. Desktop wallets (computer programs entrusted to store and manage users’ private keys of crypto accounts) like Exodus, Ethereum, Litecoin-Core, Monero-Core, and Bytecoin have felt the Erbium onslaught as well, while twofactor authentication codes from apps like Trezor Password Manager, Authenticator 2FA and Authy 2FA are getting stolen as well.

It has other dangerous abilities such as taking screenshots from PC and laptop monitors, stealing Telegram authentication files, Steam and Discord tokens. And after the

theft, all of them get passed onto the darknet with the help of an in-built API system (Application Programming Interface).

Till now, RedLine stealer used to be the default option for the darknet operators to indulge in data theft, but with Erbium emerging as a cheaper alternative and with features such as a dashboard containing sensitive data stolen from affected computers, the domain of cyber security is facing a new challenge altogether.

Erbium is using three URLs for its operations, including the tried and tested Content Delivery Network (CDN).

What are the malware’s key abilities?

Cyfirma has listed some of them below:

It’s ability to enumerate paths, files, and folders, along with the capability to load other libraries in their memories.

It can access system information of the user’s computer, before attacking it. The malware has network communication ability as well.

Apart from scanning and stealing data from the user computer’s installed applications, information from various installed applications.

It can also obtain cryptocurrency wallet (web browser extensions) information of the investors, apart from

Analysis \ Malware

snatching authentication data (2FA) and password-managing software. These targeted cryptocurrency wallets are Exodus, BitecoinCore, Atomic, Armory, Bytecoin, Dash-Core, Electrum, Coinomi, Ethereum, Litecoin-Core, Electron, Monero-Core, Jaxx, and Zcash.

The phenomenon called Erbium Cyfirma, while preparing its threat assessment report on Erbium, cited a cyber threat actor with Russian links, who advertised the malware on a dark wave forum. He claimed he spent a considerable time developing the malware.

The firm said in its study, “Recently CYFIRMA’s research team detected a new sample of Erbium stealer in the wild. We observed one of the recent gaming campaigns where the threat actors lure gamers/players who want to acquire an unfair or prohibited edge over other players with the malicious binary posted on MediaFire [a free service for file hosting]. Threat actors are spreading

this malware using drive-by-download techniques and pretending as cracked software/game hacks.”

It also found out that these threat actors were offering the gamers malicious binaries in the form of software (sort of cheat codes) that give the latter edge over their rivals. Its initial price range was between USD 9 to USD 150, with subscription plans ranging from one week to one year. In 2022, the subscription price has shot up to USD 1000, because cheat codes matter a lot in online gaming.

Cluster25 cited a Telegram bot as the medium of administering the malware into the user computers. It said, “Cybercrime is constantly evolving within an underground market where it is not uncommon to come across new proposals for the purchase of MaaS solutions. In Cluster25’s opinion, Erbium could become one of the most used info stealers

Erbium could become one of the most used info stealers by cybercriminals due to its wide range of capabilities and due to the growing demand for MaaS

by cybercriminals due to its wide range of capabilities and due to the growing demand for MaaS.”

What are the remedies?

Gamers need to steer clear from downloading crack files or softwares which comes with luring promises of ‘cheat codes'. Have good anti-virus mechanisms in your PCs, laptops and keep on updating the devices with the latest security solutions.

Don’t download pirated software and scan all downloaded files on an audio-visual tool. You can also let the anti-virus entities scan your computer from time to time.

The malware needs to be included on the cyber-security threat list and advertisements need to be put up online on ‘Erbium’, cautioning the users.

As we talk about the ‘Erbium’, let us revisit some of the previous malware attacks that have been as notorious as 'Erbium'.

Creeper virus

Legendary computer scientist and mathematician John von Neuman came up with the idea of a code being able to reproduce and spread itself. His work was published in 1966 and five years later came Creeper Virus, written in PDP-10 assembly language and exactly mimicking the same behavior as predicted by Neuman. ARPANET (Advanced Research Projects Agency Network), considered the predecessor of the modern-day internet, became the medium through which the virus spread. Although it didn’t harm the systems it affected, the connected teletype machines (electromechanical devices used to send and receive typed messages through various communications channels.) used to flash the message, ‘I'M THE CREEPER: CATCH ME IF YOU CAN.’

Another computer science pioneer Ray Tomlinson sorted the issue out by writing a rival program.

Brain virus

In 1986 ‘Brain Virus’ hit the headlines for all the wrong reasons. It was the generation of Personal Computers and floppy disks, completely opposite of those interconnected teletype machines. BRAIN was developed by Pakistan-based Alvi brothers (Amjad and Basit Farooq), who were trying to create a virus that would target pirated medical software. They also put a clause attached to the whole program, which would enable the customers to reach out to the Alvi brothers for ‘disinfecting’ the particular software whose disk boot sector got attacked by the ‘Brain’.

Eventually, the brain virus goes categorised as the first IBM PC virus and like Creeper, was harmless in nature.

Morris worm

In 1988, malware named Morris worm became the first widespread computer worm, with a reproduction ability sans the help of another program. Not only did it spread like a wildfire, but caused monetary damages as well. The virus, named after New York-based Cornell University student Robert Morris, infected 10% of internetconnected computers within 24 hours of its release and forced many of those systems to halt by creating copies of itself.

Although Robert Morris introduced the virus as more of a concept study to identify internet security flaws, he became the first person convicted under the 1986 Computer Fraud and Abuse Act.

ILOVEYOU

Unlike Morris, 24-year-old Philippines resident Onel de Guzman launched ‘ILOVEYOU’ malware with criminal intentions in 2000. His motive was simple, stealing other customers’ passwords and using their Dialup Internet accounts. Onel de Guzman developed it using Windows 95 and the malware used the operating

Although Robert Morris introduced the virus as more of a concept study to identify internet security flaws, he became the first person convicted under the 1986 Computer Fraud and Abuse Act

system’s flaws to a good extent.

Millions of infected computers ended up sending out copies of the malware and passwords back to Onel de Guzman’s email ID, apart from erasing files of the targeted computers. Not only the whole phenomenon caused huge financial damage but also shut down the UK Parliament's computer system. The malware used to get spread with an email having an 'I Love You' subject line.

Mydoom

Four years after ‘I Love You’, came ‘Mydoom’ in 2004. This malware attack chose email as its medium to infect computers. Its working procedure was very simple, attack the computers via email, take control of the system and send multiple copies of the virus. During its peak, the malware created USD 35 billion in financial damages, back in the early 2000s. Unlike Morris and Guzman, Mydoom's creator remains anonymous to date, and neither that person’s

motive has been known. The virus also used the infected computers to attack the SCO Group, a firm that went after Linux’s IP (Intellectual Property) Rights. Microsoft too came under this malware attack.

Zeus Trojan

This malware came in 2007 and if reports are to be believed, still infects computers and websites with routes such as phishing and drive-by downloads. Trojan virus, whose coding and operating manual got revealed in 2011, is a common tool used by darknet threat actors. Another variant of this virus came out in 2014, whose favorite target is the banking sector as it can easily steal details such as passwords.

CryptoLocker

This ransomware is also connected with Zeus as it uses the Trojan virus to create botnets while taking the help of the infected

Trojan malware is Emotet. It belongs to the category of Polymorphic malware (malware with the ability to change its codings, mutate while keeping the original algorithm intact and evade established cybersecurity mechanisms).

It also spreads through phishing and email attachments

computers. One of the botnets (Internetconnected devices used to perform data theft, sending spam links to the infected computer, and giving the cyber hacker the infected device access) called Gameover Zeus, used an early version of ransomware ware named CryptoLocker, encrypting the infected computer’s files, stealing sensitive data and then forcing the affected user to pay in digital currency to get back his/her computer and data access. CryptoLocker not only had a faster spreading rate but a formidable encryption code that was difficult to crack. Although law enforcement agencies managed to stop its spread back in 2014, variants of it are still around.

Emotet Trojan

Another variant of the Trojan malware is Emotet. It belongs to the category of Polymorphic malware (malware with the ability to change its codings, mutate while keeping the original algorithm intact and evade established cybersecurity mechanisms). It also spreads through phishing and ‘email attachments’. It has also emerged as a medium to deliver peers such as Trickster and Ryuk.

Mirai Botnet

The botnet discussed here targets the Internet of Things (Entities with sensors, Higher computing ability, better software than conventional PCs, and laptops with the ability to connect and exchange data with other similar devices.) Its primary targets were CCTV cameras and home routers which didn’t have secure passwords.

Paras Jha, a college student in the US, was the main brain behind the botnet. His initial plan was to attack the Minecraft server hosting but ended up shutting down internet services on the US east coast. He also took part in illegal activities such as creating click fraud botnets and infecting over 100,000 computing devices, such as home internet

routers, with malicious software. He had two other associates, namely Josiah White and Dalton Norman. Paras Jha also launched cyber-attacks on New Jersey-based Rutgers University, shutting its central authentication server down. In 2018, Paras Jha was ordered to pay a compensation of USD 8.6 million, along with a six-month house arrest for his actions.

NotPetya Wiper

This one rose to prominence in 2016, with the ability to lock down affected computers’ data, encrypting their master file table. Its medium of attack was the phishing route. It was part of a Ukrainian accounting software package and kept Europe on its toes. It also used to display random addresses to its victims for sending ransoms.

As per the cybersecurity experts, there was an alleged involvement from the Russian intelligence to reprogram it as ‘NotPetya’ malware and use it against Ukraine post-Crimea fallout.

Clop

While we are discussing the Erbium malware, there is another one named Clop or Cl0p, which is another ransomware variant that has been termed one of the principal cybersecurity threats of 2022. The victims can’t access their computer data, but the threat actor can. It's a part of a trend called ‘Ransomware as a service’. Here, professional hackers work for money or even in exchange for a share of the ransomware amount.

Given Erbium’s ability to evade state-ofthe-art cybersecurity mechanisms, gamers and crypto investors need to practice the best practice as of now, awareness. Avoid downloading pirated software and keep on updating your systems from time to time.

Paras Jha, a college student in the US, was the main brain behind the botnet. His initial plan was to attack the Minecraft server hosting but ended up shutting down internet services on the US east coast

AI dominates cross-border payments territory

Artificial Intelligence (AI) is playing a critical role in enhancing the effectiveness and security of crossborder international payments, according to Buckzy Payments Inc.

Artificial Intelligence's reputation as a science-fiction technology that could only be used in movies and comic books has given way to its practical application in a wide range of routine commercial operations in the finance sector. This also applies to international payments, where Artificial Intelligence is already automating procedures to speed up transactions, boost security, and enhance customer service quality.

In January 2022, Abdul Naushad, President and CEO of Buckzy Payments, made the first remarks on Artificial Intelligence's capabilities in the payments industry when he discussed its value in minimising human errors and quickly

computing credit scores for consumers. But since then, AI has advanced quickly, and decision-makers in the payments industry are now looking into how the solution may assist them to address other paymentrelated problems.

With over 35% of firms reporting its use in 2022, a four-point rise from 2021, recent research from IBM demonstrates that Artificial Intelligence adoption is increasing globally and across all industries. Around 37% of financial services organisations intend to employ Artificial Intelligence to achieve a competitive advantage, according to another Nvidia survey.

Abdul Naushad asserts that fintech companies risk falling behind their competitors if they don't embrace Artificial Intelligence and integrate it into every aspect of their operating plan.

The Soli sensor was introduced in the Pixel 4 smartphone

Technology

Artificial Intelligence

During an interaction with Global Banking and Finance, he said, “We already see fintech implementing Artificial Intelligence-based solutions for a range of functions – many are installing Artificial Intelligence-powered chatbots on their websites or apps to offer instant, personalised responses to customer queries. But customer expectations are constantly evolving, and efficiency and quality of service are at the top of the list of their demands. Expect, therefore, to see the next fintech leverage Artificial Intelligence-based smart speaker technology to enable users to complete transactions verbally on any device, without first needing to dial a number.”

There is a claim that a computer or robot is only as intelligent as the person who programmed it. However, Artificial Intelligence merely refers to the fact that machines have intelligence that is activated by artificial action rather than human action, which causes the machine to react in a particular way. In other words, a machine can mimic what we do naturally.

We require AI to find solutions to issues and enable fintech to simplify cross-border payment

services. They are better able to fine-tune their operations through intelligently created apps that cater to their primary target markets' personal financial management.

Artificial Intelligence and machine learning are not only for big banks. Fintechs now have access to a whole new, bright world of opportunities thanks to Artificial Intelligence. The days of needing a huge budget and a sea of professionals to help create a smooth financial experience are long gone. Today's smaller companies are challenging the major players for market share by coupling superior customer service with their products better clarity and security, all through Artificial Intelligencepowered solutions.

Fintech websites can incorporate Artificial Intelligence software that serves as customer support agents through pop-up chat boxes on your screen.

They may not deal with the most difficult problems, but they are frequently programmed to assist with straightforward tasks. Since the 'bot' is pre-programmed with

answers to common queries, customer care is available around the clock. They can even indicate which questions will benefit from further human assistance.

A crucial application of Artificial Intelligence is determining a customer's creditworthiness. Why? Banks and other financial institutions still need to turn a profit because they are companies. Therefore, knowing someone's creditworthiness can help them determine the cost (the risk) more accurately. This is frequently done by looking at simple personal data.

Instead of relying on outside sources, a fintech may determine whether a customer is a risk or not from their own data. The good news is that everybody is treated fairly. When a fintech uses Artificial Intelligence, the cost is minimised, which results in a lower price for credit-worthy customers. If the risks are significant, a bank would be required to charge uniformly.

Additionally, Artificial Intelligence has the potential to significantly lower the danger of online fraud. Since it can detect fraudulent or suspect activities much faster than human intervention, customers and organisations can feel more secure about cybersecurity, particularly when it comes to financial transactions.

Fintech is currently keeping our financial transactions secure and our costs cheap. However, the field of Artificial Intelligence is always expanding, and with every passing year and our lives becoming more digital, Artificial Intelligence will be available to expedite every procedure. Only our financial institutions' ability to keep up with it is the main obstacle.

If we are to shift our finances even more online, there can be no future for finance without Artificial Intelligence. All banks and fintech need to do is to provide their human workforce with the equipment they need to meet demand. Fintechs must stay up with the market as our financial lives become more complicated.

For global financial stability, continued

expansion in international e-commerce, and notably for the eradication of poverty, crossborder payments are essential. Therefore, having a frictionless Artificial Intelligence-based solution for international payments is crucial.

To put that into perspective, consider the following: Firstly, the United Nations has set a target of reducing remittance charges to 3% by 2030. Secondly, the G20 has made improving cross-border payments a priority and asked the Financial Stability Board (FSB) to come up with solutions. Lastly, the Committee on Payments and Market Infrastructures (CPMI) has published a list of 19 "building blocks" to improve cross-border payments.

Meanwhile, the UAE’s investment in Artificial Intelligence across the last decade reached USD 2.5 billion and the UAE is the biggest regional investor in Artificial Intelligence in the region according to a report by Microsoft and Ernst and Young.

The Artificial Intelligence Maturity Report in the Middle East and Africa says that the bulk of the investments went toward social media and Internet of Things (IoT) projects. Another eight technologies also saw significant artificial intelligence investment in the UAE. These technologies included machine learning, smart mobility, and gamification.

According to the study, 18% of UAE businesses consider Artificial Intelligence as their main digital technology priority. The UAE’s achievement in applying Artificial Intelligence at scale is because of the fact that business leaders in the region understood its value proposition and prioritised Artificial Intelligence-based projects.

The Artificial Intelligence Maturity Report in the Middle East and Africa finds that 94% of the companies in the UAE report involvement in Artificial Intelligence at the executive management level which is the highest in the Middle East and Africa (MEA) region.

The report also finds that Artificial Intelligence leadership capability in the region is also high compared to other regions in MEA.

According to the report, 46% of the leadership in UAE companies are reportedly competent or very

(in billion US dollars)

Source: www.statista.com

Technology Artificial Intelligence

competent in Artificial Intelligence as technology, while close to a quarter is highly competent.

AI is the way ahead and here are examples to prove it

There is no doubt in the fact that the recent spurt in fintech companies has given consumers new ways of managing their money. AI-powered chatbots deployed by these firms are taking care of customer queries that were unimaginable a decade back.

Now, traditional banking mechanism has taken note of these disruptive solutions and is now introducing their own measures, again guided by AI and robotics. This healthy competition is helping the financial sector as all these measures are cutting down costs, apart from being customer friendly.

Chatbots are converting frequently asked questions (FAQs) into simulated conversations, thereby adding a personal touch to customer conversations. If the customer forgets his/

Why AI is necessary?

The significance of Artificial Intelligence (AI) and its succeeding elements have long been recognized. It is viewed as methods and tools for improving the world. Also using these high-tech AI devices doesn't require any special training. You only need to look around to see that Artificial Intelligence has probably streamlined most of your work. Artificial Intelligence is important because it makes life simpler. Human effort is greatly reduced by these technologies, which are a significant benefit to people. They are capable of being automated. The last thing that can be expected or sought during the operation of parts incorporating this technology is manual intervention. These AI tools are practical and effective because they accelerate your tasks and processes with assurances of accuracy and precision. These technologies and applications are not only relevant to our regular and everyday lives; they also contribute to make the world a error-free environment. It is affecting and holds importance for other domains as well. AI has also made an impact in medical and transportation industry.

her password, these chatbots are there to help the person out. AI, guided by machine learning, is also helping these banks to process large volumes of data. Also, since the system is continuously evolving, it is identifying potential frauds as well, in terms of scanning suspicious transactions and providing a boost to processing sensitive financial documentation. And yes, all these things are happening with a reduced likelihood of security risk.

No wonder, the Middle East and Africa are seeing AI as an investment area to upgrade their fintech sector.

Portugal-based data science company Feedzai claims that their software called ‘OpenML Engine’ can help data scientists employed by banks, as the latter can build their own custom fraud detection models while using the fraud-specific assistance through the software. The company was founded in 2011 and got classified as a unicorn start-up after a Series D funding round pushed its value above $1 billion.

Feedzai is now known as the world’s first RiskOps platform for financial risk management and Quadrant Knowledge Solutions, in 2022, named the firm as a technology leader in its study called “SPARK Matrix: Behavioral Biometrics, 2022”.

Also, artificial intelligence is generating expenditure reports as well, which too far quicker than a normal human capacity. Even the risk factor is low here. AI can even power technologies to help human workers with tracking and automation processes, thus making the bank employees’ lives easier by simplifying and quickening cumbersome processes such as compliance, data entry, fraud and security, apart from making them able to watch, learn and verify anomalies in customer behaviour to track down frauds.

Talking about the fintech sector excelling in customer service, the credit again goes to AI and its products, namely chatbots, and virtual helpers. It is also helping these companies to save costs of developing front offices and helplines.

And this technology will grow as the partnership of deep learning algorithms and AI will continue refining things like understanding human language and formulating convincing responses, handling transactional calls and traditional helplines. This will reduce the manual management (human-guided) of these operations to a great extent.

United States-based Kasisto is a company working on a conversational AI Platform and it is offering services for consumer banking, business banking and insurance. It is providing products that can help customers to set financial goals, get spending alerts, break down spending patterns, figuring out due bills.

Kasisto’s AI services are also designed to refer the customer to a live agent if it cannot handle a query, ensuring that qualified human professionals are giving those customers much-needed financial inputs.

Also, how can we forget about AI’s ability to offer data analytics and key insights to these fintech companies, in terms of making quick decisions? Firms specialising in personal financial management give their customers crucial insights into the latters’ spending based on income and expenditure habits. This forms the core of new-age personalised financial management policies.

US-based Narrative Science has developed a software called Quill, which can reportedly help financial institutions generate narrative reports from data sets like sales records, using natural language generation that transforms data into plainEnglish stories.

Also, fintech companies are providing loan application methods without the need for credit reviews by banks. One such company is Affirm, which is utilising AI to mine data from potential borrowers, in order to create a glimpse into their creditworthiness, followed by a “soft” credit score. The firm is checking customer variables like geo-location, web search histories, job profiles and social media activities, a 360* different way of

approaching than the traditional metrics of deciding a credit rating.

Personalisation is becoming more and more important in the fintech sector and businesses are now having the ability to deliver customercentric banking experiences. The combination of AI, machine learning, analytics and human professionals is doing the wonders for these firms right now and will continue the same trajectory in future as well.

These AI-powered chatbots and virtual assistants have been utilized by traditional financial institutions like American Express and HSBC.

With labour costs rising on the offshore outsourcing front, robotics and AI will become a preferred method of saving costs, and this will reduce the risks of human errors as well.

In fact, Wall Street has fully embraced AI to help gauge market movements. There are technologies available that can evaluate companies with the help of variables like earnings calls and public press releases to analyse speech patterns, semantics, and word usage. This method is helping to eliminate human bias while analysing businesses. This AI-powered ecosystem is also assessing big data spanning decades, before making predictions on the future of the companies.

AI can also help businesses to learn and comply with corporate regulations. MindBridge is offering AI platforms which are helping companies to deal with these regulatory activities.

This technology is still in the research phase, and there’s no point in launching it hastily, as it would end up ruining the user experience and drive unwanted backlash. It’s pretty much understandable because we will not be able to react calmly if our computer deletes an ultra-important file, takes illegal action on the internet, or does anything worse

US pushback against China in semiconductor race

Beijing's attempts to monopolize the critical chip industry are being thwarted by Washington and its allies

As Washington intensifies its efforts to limit Beijing's capacity to develop cutting-edge chips and establish supremacy over strategic technology, China will have a more challenging time catching up to the United States and its allies in the semiconductor industry.

In September 2022, Washington restricted sales of specific Nvidia and AMD advanced graphic processor units (GPUs) used in supercomputers and artificial intelligence applications to China.

The action came after the US Commerce Department said that shipments of electronic design automation (EDA) software used to create next-generation chips to China were prohibited.

Washington has been pressuring Taiwan, South Korea, and Japan, to form a "Chip 4" industry alliance to isolate China from the global tech ecosystem. Washington has also stepped up efforts to develop its domestic industry with the passage of the CHIPS Act, which provides $52 billion in subsidies to companies that manufacture chips in the US.

Chris Miller, author of the book Chip War: The Fight for the World's Most Critical Technology, said, "The US is attempting to consolidate its pivotal role in the global semiconductor ecosystem and ensure that China is unable to create the most cutting-edge chips. Control of semiconductors is essential to military power as well as the future of the global economy, from cloud computing to autonomous driving."

Since the US and China have been fiercely at trade war with one another, semiconductors have become one of the most heated battlegrounds. The wafer-thin chips produced today could

determine tomorrow's global balance of power because they are viewed as essential to unlocking future technological advancements and being the lifeblood of the modern economy.

Although Taiwan produces more than 90% of the world's high-end chips, China, like other major nations, depends mainly on this source. However, China has recently made significant progress in strengthening its local sector.

After years of failing to move past a 14nm node, TechInsights researchers announced in July 2022 that Semiconductor Manufacturing International Corporation (SMIC), China's national champion, has probably developed the ability to create a 7-nanometer (nm) chip. The length of transistor gates is a common way to compare semiconductors, with a shorter gate typically indicating a higher processing capacity.

Beijing-backed SMIC has recently announced additional plans for a fourth factory in the northern city of Tianjin as it ramps up foundry capacity.

This is the first concrete evidence that they have overcome an ostensibly impenetrable barrier. After that, however, they must gradually enhance the design and increase output to

produce higher-value chips.

Since the top Dutch manufacturer ASML was denied an export permit due to US pressure on Amsterdam, China has been prevented from getting the most up-to-date machinery for manufacturing sophisticated chips, known as extreme ultraviolet (EUV) lithography machines.

However, Chinese companies may still produce high-end semiconductors using less effective deep ultraviolet (DUV) lithography tools, with longer beam wavelengths generally used to etch patterns on less sophisticated devices.

Despite Washington's ambitions to broaden its ban on chip manufacturing equipment, China has been stockpiling ASML's DUV lithography machines, purchasing 81 units just in 2021.

Ray Yang, a consultant director at Taiwan's Industrial Technology Research Institute, said, "SMIC can build a 7nm process with DUV, maybe even produce it in large quantities, but that does not make it cost-effective."

Yang compared it to driving a consumer car at Formula 1 speeds, saying, "with DUV resolution, but you are pushing the technology to its boundaries."

China mainly depends on SMIC for the chips it urgently

Analysis \ Semiconductor

Washington has long been concerned about Huawei's connections to the Chinese military, which led to the Trump administration adding the business to the "Entity List" of sanctioned companies in 2019. Huawei is one of China's largest tech companies

needs, perhaps for special non-commercial reasons, he claimed, as Huawei is no longer allowed to employ international foundries.

The rising Chinese military will use these advanced weapons, among other noncommercial purposes.

Washington has long been concerned about Huawei's connections to the Chinese military, which led to the Trump administration adding the business to the "Entity List" of sanctioned companies in 2019. Huawei is one of China's largest tech companies.

Utilizing technological advancements from the private sector to strengthen China's defence industry has been elevated to a national priority under Chinese President Xi Jinping, and its Military-Civil Fusion Strategy has become a cornerstone of industrial policy.

"Chips are essential for intelligent weapons,” according to Douglas Fuller, a technology development expert at the City University of Hong Kong, who says many officials are worried about the growth of China's semiconductor industry because of this.

Even though it is thought that China still lacks the expertise to build chips smaller than 7 nm, companies like SMIC and Shanghai Micro Electronics Equipment Co are hustling to create their homegrown machinery to end the deadlock.

China has not yet produced a wellfunctioning ArF lithography machine.

While using foreign tools to produce chips, China is years behind; when using domestically produced tools, China is decades behind.

Chinese companies can still design semiconductors smaller than 7 nm even if they are not yet able to manufacture them.

In 2021, Alibaba debuted the Yitian 710, a 5nm server chip made for a variety of internetof-things (IoT) applications, which is one of China's most cutting-edge innovations.

However, Washington's most recent regulations are expected to make developing semiconductors with a manufacturing process smaller than 5 nm more challenging.

The upcoming gate-all-around (GAA) design, commonly regarded as a remedy to the physical restrictions of downsizing chips to infinitesimally smaller sizes, is a vital component of the next-generation processors.

Since GAA will only apply to 2nm nodes and under, which haven't yet arrived, the ban currently affects China's pipeline. Still, it won't affect their products or revenue for years, as 2nm nodes might eventually account for half of the output of Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest chipmaker.

Cadence, a well-known American EDA supplier, has joint ventures in China and charges less for its design software there than it does for US clients. China might therefore apply pressure on the company there through this relationship.

Yang stated that if China could not buy the requisite lithography equipment on the open market, it would make every effort to do so.

This "may mean reverse engineering, IP theft, or strategically acquiring foreign enterprises," he added, adding that this has frequently occurred with other important technologies in the past.

China invests heavily in carbon and other non-silicon materials to pursue technological advances. Beijing's 14th FiveYear Plan includes funding for research into carbon fibre, graphene, silicon carbide, and other carbon-based composites.

Who will win the Chip Wars?

In Taipei, a joke states that if China invades Taiwan, the only buildings that the People's Liberation Army can't afford to destroy our microchip manufacturing facilities. The nation in charge of cutting-edge chips will determine the direction of technology, and Taiwan has the world's best chip fabrication foundries (or "fabs"). China would have a virtual monopoly on the most

Industry Semiconductor

cutting-edge fabs if the mainland and its rebellious province reunited successfully. Given what Xi Jinping wants for Taiwan, it is understandable why the US government is concerned.

For this reason, the United States has taken several actions recently to hinder China's attempts to produce sophisticated semiconductors. First, building new fabs is technically difficult and prohibitively expensive. According to a recent analysis by Boston Consulting, a major chip facility currently costs more than a new nuclear power plant or a next-generation aircraft carrier. For cutting-edge manufacturing chips, Taiwan's Fab 18 cost $17.5 billion to construct.

China's attempt to control future technologies is under attack from the US on two fronts. The first step in the approach is to increase America's market share in the world's chip fabs, which has declined from a peak of 37% in 1990 to barely 12% today. Joe Biden signed the Innovation and Competition Act in August 2022, allocating an astonishing $52 billion to support US chip manufacturing and technology development. Although the EU is making similar noises, America has prioritised it as a national issue.

A programme initially recognised and implemented by President Trump, it is an effort by Biden to reverse the hollowing out of US manufacturing and is backed by the Republican Party. The new Act, which has bipartisan support, is intended to penalise US businesses that invest in China, especially in industries with competition for dominance, like chip manufacturing.

Frightened, Xi has pushed China to expedite the pace of legislation in the areas of big data, cloud computing, artificial intelligence, internet banking, and the digital economy to improve its technological independence. A business sector in the West increasingly aware of the

geopolitical implications of having such a high percentage of its global fab capacity situated in Taiwan is enthusiastically supporting America's effort to stifle China's technical advancement.

The semiconductor market that Intel once dominated recently began to fade, but the company is now actively playing catch-up. The startup announced ambitions to create system processors to rival Apple's top-of-the-line M1 series in January after luring away Apple's director of Mac system architecture. Within three years, Intel wants to reclaim its top position as the global integrated design and fabrication leader.

However, Intel's conflict extends beyond Apple. It must compete with Taiwan Semiconductor Manufacturing Company, which controls 92% of the world's most cutting-edge five-nanometer semiconductors and holds a 50% worldwide market share in advanced chips overall. Under the leadership of its new CEO, Pat Gelsinger, Intel hopes to regain the upper hand by emerging as a top supplier of contract chips.

Along with finishing the construction of a fab in Oregon, Intel also has new fabs planned for Arizona and Ohio. A further $80 billion is designated for Europe, with negotiations underway for locations in Germany, Italy, and Ireland. It is a large undertaking that will cost staggering amounts of money. Several analysts question Intel's capacity to pull it off.

Deng Xiaoping's deregulation of the Chinese economy in the 1980s led to globalization. In that case, it is conceivable that de-globalization, the retreat to national interests and autarky, will result in slower or even poorer global economic growth. Even if the chip war doesn't end in a real-world war, both America and China will lose.

Joe Biden signed the Innovation and Competition Act last month, allocating an astonishing $52 billion to support US chip manufacturing and technology development

Why is crypto’s bug extermination plan ineffective?

The Bored Ape Yacht Club's Provenance Hash had an undetected bug for years

In February, Bored Ape Yacht Club (BAYC), the leading collection of non-fungible ape-based tokens, caught the attention of Twitter user Brodan, an engineer at Giphy. There were 31 identical entries in a record intended to cryptographically demonstrate the reliability of the bored monkeys, which was supposed to be impossible. "Some of your apes are super-suspicious," wrote Brodan.

Brodan's question remained unanswered six months later, even after the newsletter Garbage

Day brought it to people's attention. The issue begs the question of whether there is anything fundamentally flawed with the notion that a group of amateurs can successfully hold massive projects to account. Unfortunately, the situation is widespread in the crypto business and the larger open-source community.

The "provenance hash" is a mysterious record cited as the root of the problem. Yuga Labs, the company that created BAYC, created the document to demonstrate that there was no irregularity in the original distribution of the NFTs. Some apes are more rare and precious than others, which presented a challenge for the team to overcome. However, they were distributed randomly among the first 10,000 applicants in the "mint" phase. They published a provenance hash, a list of

Technology Crypto Bugs

cryptographically generated signatures for each of the 10,000 apes, to show that the apes had been pre-generated and pre-assigned without disclosing their characteristics. It was proof of the random distribution instead of allocating a few valuable ones to insiders.

So far, so good, but 31 signatures were the same and proved that the provenance hash record was faulty. It could have also meant that Yuga Labs could have theoretically altered them to suit the buyer's preferences.

When questioned about the duplicates earlier this summer, Yuga Labs at first cited circumstantial evidence that it hadn't been a scam: either of the 31 apes had particularly desirable qualities, nor had they gone to someone with insider connections. However, the response, though accurate, was also inadequate. "Nothing's gone missing, has it?" would only be a partial response if you discovered that the firm that installed your burglar alarm had never connected it.

When pushed, the business looked into the issue more thoroughly and discovered the root of it: while creating the provenance hashes, it caused a server hosting the photos of the gorillas to experience a rate-limiting error. Due to this oversight, the company unintentionally created cryptographic signatures of the error message "429 Too Many Requests" 31 times instead of

the cryptographic signature of a monkey's picture. Oops.

While interviewing Emperor Tomato Ketchup, a co-founder of Yuga Labs, about whether the multi-year delay between the issue and its solution undermined the argument for provenance hashes.

What's the point if no one is verifying these things? Since this initiative was already being closely scrutinized, Atalay speculated that this might be why it went undiscovered for so long. The instant this project exploded, the provenance hash lost some importance. After then, it would have been blatantly clear if even one pixel in the entire collection had changed.

In that case, provenance hashes can be used to disprove claims of favouritism, but if no claims are made, it is understandable why no one would examine the hashes. However, a few months ago, the market discovered that Yuga Labs had committed another longstanding error. Despite vowing to forgo it, the business maintained control over the power to generate new apes anytime it pleased. Unlike the provenance hash, the community quickly discovered that capability, and Yuga Labs announced in June 2021 that the error would be corrected "in the next day or two."

It took more than a year before Atlay said, "Even though we had planned to do this for a while, we held off out of great caution. I feel at ease doing it now. I'm done."

These problems are not exclusive to Yuga Labs or the crypto industry as a whole. For example, Google's Project Zero cybersecurity group discovered a new Android security flaw last week. The exploit had been manipulated by hackers "since at least November 2020," so it wasn't new to them. Google notified the open-source development team of the bug's underlying cause; however, in August 2016, the team turned down a proposed repair a month later.

For practically every Android phone on the market, that translates into years of significant security flaws, even though the issue is readily apparent in the public record.

Uncertainty regarding the time the

Uncertainty regarding the time the vulnerability existed in the code can lead to severe issues in other circumstances.

For example, a bug that has been present in the commandline program Curl for 20 years was found in April

vulnerability existed in the code can lead to severe issues in other circumstances. For example, a bug that has been present in the command-line program Curl for 20 years was found in April.

And in December of last year, a vulnerability in the logging program Log4j was found, which the National Cyber Security Centre described as "possibly the most serious computer vulnerability in years." The weakness was scarcely complicated, and an attacker would not have needed to make many attempts until they could have potentially taken over "millions of computers worldwide." However, it had lain dormant in the source code for eight years. That omission was embarrassing for those who supported the open-source software security approach and also disastrous because it meant that affected software versions were widely distributed. The ongoing cleanup procedure might never be finished.

Little bugs, big issues

Open-source software supports many aspects of the modern world, including Log4j. But with time, the model's fundamental presumptions have begun to reveal their shortcomings. The world should look for issues with a small piece of software that is utilized and reused by hundreds of other programs and ends up on millions of computers. Instead, it appears that people are more willing to rely on software without double-checking how widely used and valuable it is (As usual, a pertinent cartoon from the website XKCD comes to mind).

Perversely, crypto has addressed some of these issues by making finding flaws economically beneficial. For example, a prominent software developer like Apple or Microsoft will compensate users who identify security problems. This practice is known as a "bug bounty." The goal is to encourage bug reporting rather than malware abuse and support the crowdsourced research that open-source software promotes.

When a crypto project begins, it has a builtin bug bounty that runs around the clock. If you are the cunning person who discovers a bug in the right crypto project, your bug bounty could be all the money the project has. Therefore, when North Korean hackers found a flaw in the video game Axie Infinity, they made off with more than $500,000,000. Of course, the drawback of such a strategy is that while flaws are promptly found, the project typically fails.

The $162 million at risk at Compound Labs

It turns out that millions more than we initially believed are at risk after the popular decentralized finance, or Defi, staking platform Compound through a bloodbath. According to Robert Leshner, the founder of Compound Labs, a very bad upgrade has left about $162 million up for grabs.

The cost of comp, the native token of Compound, has decreased by around 4.8%.

The CEO of Compound first noted in a tweet on Friday that there was a limit on the number of comp tokens that could be unintentionally issued, adding that "the impact is bounded, at most, 280,000 comp tokens" or $92.6 million.

However, Leshner disclosed on Sunday morning that the cash pool that had previously been depleted had been refilled, leaving additional 202,472.5 comp tokens, or around $66.9 million at the current price, vulnerable to attack.

According to some, the biggest-ever fund loss in a smart contract issue, including a core developer at Defi platform Yearn, although investors don't appear to be very concerned.

The largest-ever money loss was ignored by the cryptocurrency market, according to Mudit Gupta, a core developer at decentralized cryptocurrency exchange SushiSwap. As a result, Defi's future is promising, but there is still much to learn because this is unknown ground.

the cash pool that had previously been depleted had been refilled, leaving additional 202,472.5 comp tokens, or around $66.9 million at the current price, vulnerable to attack

Paris to hold vote on shared scooters

According to Anne Hidalgo, mayor of Paris, voters in Paris will decide whether or not to outlaw free-floating electric scooters. The three scooter businesses that are now operating in the city name Dott, Lime, and Tier, have operating permits that are scheduled to expire on March 23, 2023. The future of those services could have a significant impact on the entire micro-mobility industry.

"If Parisians want to own their own scooter, there’s no issue. But we have a real issue with free-floating scooters. It’s not climate-friendly. Employees working for these companies are not properly treated," the Mayor of Paris.

"That’s why I’m going to ask a question to Parisians in a vote that is going to take place on April 2nd so that I can understand what they want," she added.

Each operator currently has a fleet of 5,000 electric scooters. Although the vote won't take place until a few days after the licence expiration, scooter businesses will still be permitted to continue operating until March 23. The licences will remain in effect until more information is available. Around 40% of people living in Paris are satisfied with free-floating scooters.

Meta & Microsoft vacating offices in US

Microsoft and Meta are closing their offices in Seattle and Bellevue, respectively, in the US state of Washington. The decision was taken a few days after Twitter made a comparable cutback in spending amid hazy macroeconomic conditions.

The parent company of Facebook, Meta, has confirmed its plans to sublease offices in Bellevue and downtown Seattle. The headquarters of Facebook is in Menlo Park, California.

The report adds that Microsoft will

According to an Ipsos poll, 40% of people living in Paris are satisfied with free-floating scooters

not renew its lease on the 26-story City Center Plaza in Bellevue. The lease ends in June 2024. Microsoft's main office is located in Redmond, Washington.

The report also emphasizes that Microsoft and Meta are closing their offices since many of their employees prefer remote work arrangements. However, a recession in the global economy is putting pressure on both tech behemoths. In November 2022, Meta laid off 11,000 workers worldwide. The company's Seattle office saw the exit of 726 employees. Meanwhile, Microsoft has not made widespread workforce reductions despite taking steps to limit expenses. Microsoft stopped hiring for several positions in July 2022 in order to reduce costs. Apart from Microsoft and Meta, Twitter is also cutting down on expenses by giving up office facilities across the globe.

Apple postpones launch of AR glasses

According to Bloomberg, Apple Inc. has decided to delay the release of its thin augmented reality glasses indefinitely owing to technical difficulties, but it still intends to introduce its first mixed reality headset this year.

The mixed-reality headset from the iPhone maker, which blends augmented and virtual reality, will debut at this year's spring event and will cost about $3,000.

The Meta Platforms Quest Pro virtual and mixed-reality headset, which it released late last year for $1,500, half of the Apple products, would be a competitor to Apple's mixed-reality device.

According to the report, the Cupertino, California-based company now plans to focus on lowering the price of the follow-up version of its mixedreality device, expected as soon as 2024 or early 2025, instead of working on the AR glasses.

Apple engineers plan to use more affordable components to bring the price down, but the cheaper headset will have the same fundamental AR/VR "mixed reality" features. The chips in the mixed reality headset will be on par with the iPhone, rather than the Mac-level chips used in the first AR/VR headset. The report says Apple may also use lower-resolution internal displays and cheaper components.

Social Media

Discord acquires Gas app

Discord, a chat service, recently disclosed that it has purchased Gas, a popular app among teenagers for its upbeat take on social media.

Users of Gas register with their school, add friends, and answer polls about their classmates. The poll questions, however, are meant to increase users' confidence rather than undermine it. Teens might be asked to choose which of four friends is the best DJ or has the best smile. The chosen individual will then receive an anonymous message with a compliment.

Nikita Bier, the creator of the app Gas, previously sold a similar one called 'tbh' to Facebook in 2017. Tbh has since been discontinued.

Since its launch, Gas has 7.4 million installs and approximately 7 million users, according to statistics from Sensor Tower. A premium

option called "God Mode," which provides users with suggestions about who their secret flatterers are available to users.

"At this time, Gas will continue as its own standalone app and the Gas team will be joining Discord to help our efforts to continue to grow across new and core audiences," Discord wrote in an announcement.

Since its launch, Gas has 7.4 million installs and approximately 7 million users, according to statistics from Sensor Tower.

News Banking

Alphabet to lay off 12,000 workers

In an internal email, Google and Alphabet CEO Sundar Pichai said he took 'full responsibility' for the job cuts.

Google's parent company Alphabet Inc. announced that it is sacking 12,000 employees, around 6% of its workforce, as Silicon Valley struggles to recover from recent layoffs and an uncertain future.

Alphabet, whose shares rose 3% in pre-market trading, is making the cuts as it deals with a threat to its long-

held position atop the technology industry.

Alphabet has long recruited top talent to create companies like Google, YouTube, and others that reach billions of users. However, it is now in a competitive position with Microsoft Corp in the emerging field of generative artificial intelligence.

Ericsson shares slide to its lowest level

As sales of 5G equipment stagnated in high-margin regions like the United States, Ericsson posted lower-thanexpected fourth-quarter core earnings. The Swedish company's shares fell to their lowest level since 2018.

Ericsson is the latest tech company to show the effects of consumers cutting expenses amid concerns about a global economic slowdown. Microsoft and Google parent Alphabet, which have announced thousands of job cuts this week, are among other companies that are firing employees.

By the end of 2023, Ericsson intends to minimize costs by 9 billion crowns ($880 million). According to Chief

Financial Officer Carl Mellander, this would entail lowering the number of consultants, real estate, and employees.

Referring to the cuts, Mellander said, "It's different from geography to geography, some are starting now, and we'll take it unit by unit, considering the labour laws of different countries."

He wrote, "While this transition won't be easy, we're going to support employees as they look for their next opportunity. Until then, please take good care of yourselves as you absorb this difficult news. As part of that, if you are just starting your work day, please feel free to work from home today."

Google has more than 5,500 staff in the UK. But it is unclear how many of these will be affected by the cuts, according to a recent filing with Companies House.

The price of Ericsson's shares fell as much as 8% early before falling to 5.7%. Since February of last year, they have fallen by about 40% following a US investigation into potential payments by the company in Iraq. The company's gross margin for the fourth quarter of 2022 fell to 41.4% from 43.2%.

Wallet Technologies