The digital revolution in banking has been a game-changer as routine transactions have become seamless
In June 2023, the United States Senate passed a bill to suspend the debt ceiling, providing a respite for the domestic and global economy. This action prevented a disastrous federal default and was completed in just a few hours. While the major financial crisis was averted, the question remains whether the world's largest economy has truly recovered. This edition of Global Business Outlook will answer this question and address other issues as well.
The battle between the United States and China for control of the semiconductor sector is an important topic. This industry, worth over $500 billion, is projected to grow massively by 2030. Both nations are fighting for control over the supply chains of these chips, which not only power our lives but are also used in military and strategic hardware.
Thailand has seen a surge in foreign investment applications between January and June 2023, with a 70% increase from the same period in 2022. China is now the biggest investor, followed by Singapore and Japan, with a focus on electric vehicles. 'The Land of Smiles' has now become the latest regional hub for the automobile industry.
The cover story of this edition of Global Business Outlook will revolve around the trend of digitization in the banking industry. While online banking, mobile apps, and AI-powered chatbots have made our lives more convenient, there is a debate about whether these solutions have made us lose the human touch through interpersonal engagements with banking professionals.
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Central banks are the primary monetary authorities of a country or a group of countries (European Central Bank for the European Union member countries). These institutions are responsible for formulating and implementing monetary policies, maintaining price stability, and promoting the overall strength and soundness of the financial system. Central banks are typically established by governments and operate independently to ensure their effectiveness and credibility.
Commercial banks are privately owned financial institutions that cater to the financial needs of individuals and businesses. These profit-oriented entities play a crucial role in the economy by facilitating the flow of funds. Standard services offered by these banks include accepting deposits, granting loans, providing credit facilities, facilitating payments, and offering various financial products.
The relationship between central and commercial banks is complex and multifaceted. This can be summarized in the following points.
Central banks have the authority to set and implement monetary policies. They control the money supply, manage interest rates, and regulate the overall credit availability in the economy. Commercial banks play a crucial role in the successful transmission and implementation of these monetary policies. They borrow funds from the central banks, and the interest rates set by the latter influence the ratio at which commercial banks lend to their customers.
Central banks also act as lenders of last resort to commercial banks during financial distress or liquidity shortages. They provide emergency funding to solvent but illiquid banks to
maintain financial stability. This function helps ensure the strength of the banking system.
Central banks are responsible for regulating and supervising commercial banks. They set prudential regulations, such as capital adequacy requirements and risk management standards, to ensure the safety and soundness of the banking system. Central banks also conduct regular inspections and audits to monitor the financial health of commercial banks and enforce compliance with regulations.
Central banks are also entrusted to oversee and operate a country's payment and settlement systems. Commercial banks rely on these systems for efficient and secure fund transfers between accounts. Central banks establish payment system rules and regulations to ensure smooth functioning and reduce systemic risks.
These apex banks possess the sole authority to issue and control the national currency. They supply commercial banks with physical cash and maintain reserves of commercial banks to facilitate their day-to-day operations. Commercial banks hold accounts with the central bank, and these reserves play a crucial role in determining a bank's liquidity and ability to meet its obligations.
It is important to note that the specific relationship between a central bank and commercial banks can vary across countries and jurisdictions, depending on the legal and regulatory frameworks in place.
Commercial banks accept deposits from individuals, businesses, and other entities. They offer various deposit accounts, such as savings, current, and fixed deposit accounts. Depositors can store their money in these accounts and have the ability to withdraw funds as needed. Banks may also pay interest on certain types of deposits.
One of the primary functions of commercial banks is to provide loans and credit facilities to borrowers. Banks evaluate the creditworthiness of individuals, businesses, and other organizations and grant loans based on their assessment. This lending function supports economic activities by providing funds for investment, business expansion, housing, and consumer purchases.
Also, these lending bodies facilitate the smooth transfer of funds by providing payment and settlement services. They issue and process checks, offer electronic fund transfers,
220,271
209,840
138,275 US Bank
68,759 Capital One
62,726 PNC Bank
60,452 Truist Bank
51,428 Bank of New York Mellon
42,419 State Street Bank and Trust Company
40,297
and provide debit and credit card services. Banks act as intermediaries in payment transactions, ensuring money's secure and efficient movement between accounts of individuals.
Commercial banks also act as intermediaries between depositors and borrowers. They collect funds from depositors and channel these funds to borrowers needing financing. By matching the surplus funds of depositors with the deficit funds required by borrowers, banks play a crucial role in efficiently allocating financial resources to the economy.
These lending institutes also facilitate foreign exchange transactions for individuals and businesses engaged in international trade and investment. They offer currency exchange services, enable global money transfers, and provide foreign exchange hedging products to manage currency risk.
Some commercial banks engage in investment banking activities, which include underwriting securities issuances, facilitating mergers and acquisitions, providing advisory services, and assisting with capital raising for corporations and governments. Specialized divisions within commercial banks typically perform investment banking functions.
Apart from the above roles and operational responsibilities, these banks often provide wealth management services to high-networth individuals (HNWIs) and other commercial institutions. These services may include investment advice, portfolio management, retirement, and estate planning.
Banks also offer financial advisory services to clients, helping them make informed decisions regarding their financial goals and investment strategies.
Commercial banks actively manage risks associated with their operations. They have risk management departments that identify, measure, and mitigate various types of risks, including credit, market, liquidity, and operational risks. Banks employ risk management techniques and strategies to ensure the safety and soundness of their operations.
It is worth noting that the specific range of services offered by commercial banks may vary depending on factors such as the size of the bank, its geographical location, and the regulatory environment in which it operates.
Let’s take the banking system of the world’s largest economy, the United States, as a case study for this article.
The Federal Reserve System, which is the country’s central bank, collaborates closely with commercial banks to carry out monetary policy reforms, monitoring of lending bodies, and ensuring financial stability. The Federal Reserve regulates commercial banks in the United States, and they cooperate on several projects. Now let’s discuss the banking structure of the European Union.
In charge of managing monetary policy and preserving financial stability inside the Eurozone, the European Central Bank (ECB) is essential. The ECB closely collaborates with commercial banks in the Eurozone to ensure regulatory adherence and to jointly address issues with monetary policy and financial stability.
Then comes the United Kingdom, where its central bank, the Bank of England works closely with commercial banks to carry out
monetary policy reforms, uphold financial stability, and regulate the industry. The Bank of England's regulatory framework and involvement with commercial banks are crucial to guarantee a robust financial system within the European country.
The interaction and stability of the financial system depend significantly on the link between central and commercial banks. Collaboration between these organizations is essential for the efficient application of monetary policies, the preservation of financial stability, and the smooth operation of the economy. Despite the difficulties and problems, the relationship is still vital, and resolving them will result in future financial systems that are stronger and more resilient.
In conclusion, central and commercial banks have a complex and interconnected relationship within the financial system. As the primary monetary authorities, central banks are responsible for formulating and implementing monetary policy, maintaining financial stability, and regulating the banking sector. On the other hand, commercial banks provide a wide range of banking services to individuals, businesses, and other organizations.
Central and commercial banks' relationships involve collaboration and cooperation in various areas. Central banks rely on commercial banks to transmit and implement monetary policy and maintain the banking system's stability. Commercial banks, in turn, depend on central banks for liquidity support, regulatory guidance, and oversight.
The roles and functions of commercial banks complement the objectives of central banks. Commercial banks act as intermediaries, mobilizing funds from depositors and channelling them to borrowers, which supports economic growth and development. They also facilitate payments, provide credit, and offer financial services that contribute to the
overall functioning of the economy. Effective coordination and communication between central and commercial banks are crucial for achieving monetary stability, financial soundness, and economic prosperity. Through regulation, supervision, and collaboration, central and commercial banks collaborate to allocate resources efficiently, mitigate risks, and foster a secure and resilient financial system.
As the financial landscape evolves and new challenges arise, the relationship between central and commercial banks continues to adapt and grow. Constant dialogue and cooperation between these institutions are essential to address emerging issues, promote financial inclusion, and support sustainable economic growth across the globe.
Central and commercial banks' relationships involve collaboration and cooperation in various areas. Central banks rely on commercial banks to implement monetary policy and maintain the banking system's stabilityAnalysis \ Commercial Banks
According to a body that examines disputes in the credit default swaps (CDS) market, UBS is the sole entity to succeed the Credit Suisse Group after the two banks merged.
The result is that Credit Suisse will no longer serve as the reference entity for its outstanding CDS, a form of insurance against holding hazardous debt. Instead, UBS will take over as the new reference entity.
An investor noted that there should be no significant market effects since the outcome was generally anticipated. The CDS contracts would not be activated, and UBS would not be responsible unless a new credit event occurred.
It was anticipated that the emergency takeover of Credit Suisse by UBS may result in the loss of thousands of jobs, the departure of important personnel, and a difficult integration task. Still, for many UBS investors, it is a good deal for Switzerland's largest bank. According to a report, Swiss banking giant UBS plans to fire 35,000 workers, or over 50% of the Credit Suisse staff, as part of the emergency rescue takeover of its rival in March 2023.
The two banks reportedly had a combined workforce of almost 120,000 employees after UBS acquired Credit Suisse in an emergency deal, with 37,000
working in Switzerland. Most of Credit Suisse's private bankers will stay at UBS.
Since UBS finalized the three billion Swiss Francs ($3.4 billion) acquisition of Credit Suisse in June, investors have begun to share the optimism of UBS Chairman Colm Kelleher, who has emphasized the many prospects and potential difficulties coming from the transaction.
According to sources, several fund managers who own UBS stock believe the company paid a fair price to acquire Credit Suisse, some even called the deal a steal.
During an interaction with Reuters, Guy de Blonay of Jupiter Asset Management said, "UBS is being fairly modest about the full extent of the benefits it can receive from this politically sensitive transaction."
As Switzerland's second-largest bank teetered on the brink of failure, UBS agreed to acquire Credit Suisse in a rescue operation organized by Swiss authorities, becoming a joint firm in charge of over $5 trillion in assets.
UBS said merging the two companies might take three to four years. During that time, the bank intends to run two parent companies, UBS AG and Credit Suisse AG, each with its subsidiaries and offices.
In the end, the agreement should allow UBS to get the competitive advantage it needs to expand its size and reach in critical regions.
Another investor said, "UBS got Credit Suisse for basically nothing, so the deal will pay out for them."
In a regulatory filing in May, UBS highlighted tens of billions of dollars in potential costs and benefits from the takeover.
It stated that it anticipated fair value adjustments to the merged group's financial assets and liabilities to have a negative impact of $13 billion and an additional $4 billion in potential litigation and regulatory costs resulting from outflows.
However, a 16 billion franc gain from the write-down of Credit Suisse's AT1 bonds and
$34.8 billion from purchasing Credit Suisse at a fraction of its book value would more than outweigh these factors.
Additionally, it acquired a public guarantee to cover losses of up to nine billion francs. As a result, UBS now has a significant risk buffer to enable it to digest its nearby rival.
Deka Investments' Andreas Thomae claimed that in a typical transaction "they wouldn't have had this buffer."
Fund managers also questioned whether competition watchdogs would have authorized the merger, which would have given the combined bank a market share of more than a quarter of Swiss domestic loans (26%) and domestic deposits (26%) in normal conditions.
Thomae continued, "The authorities have approved the arrangement because they needed to locate someone immediately. It's a good bargain for UBS if everything goes according to plan."
However, Thomae pointed out that UBS inherited a problematic legacy from Credit Suisse, citing legal concerns that UBS has stated might cost the company billions of euros.
According to different management styles, the biggest danger for UBS is the departure of many of Credit Suisse's top millionaire and billionaire client advisers.
He said that competitors have stolen entire teams from Credit Suisse and that some clients will likely do the same.
In the worst-case scenario, up to half of the assets Credit Suisse managed before significant withdrawals started in October might eventually go to rival wealth managers.
The fund manager anticipates a challenging next two years for UBS but is also more optimistic about the future. However, he added, "Over a three to fiveyear period, the transaction definitely does pay off."
Even more assured was Cash Cow Jupiter fund manager de Blonay. He told Reuters that in the long run, profitability should
improve, assisting the company to achieve a much higher valuation.
"UBS is in an excellent position to restructure rapidly, control outflows, and decrease risks," he said.
Since the deal's initial announcement, UBS shares have increased 5.1%, significantly trailing the STOXX Europe 600 Financial Services Index (SXFP).
De Blonay asserted that the share price movements likely represented market hesitancy surrounding the takeover, but he anticipated a positive change "after the dust settles" in the share price.
JP Morgan analysts anticipate a significant increase in UBS stock as the acquisition benefits become clear. By the 2024 end, the bank wants the price to increase from 18.22 Swiss francs to 27 francs.
According to analyst Kian Abouhossein, UBS is a wealth management powerhouse with the potential to bring in 150 billion dollars in new client money annually.
The total assets under administration at Julius Baer, which has supplanted Credit Suisse as Switzerland's second-largest wealth manager, would be the equivalent of that volume every three years.
One insider anticipates it will be absorbed into UBS, even though the Swiss public and politicians favour a spin-off to promote choice and competition.
Investors applauded the decision for the company, which was Credit Suisse's top performer in 2017, with a pretax profit of 1.4 billion Swiss francs.
UBS and Credit Suisse together would have a market share in Switzerland that is just inside allowable bounds, according to Deka's Thomae.
He declared, "From UBS's perspective, the business is a tremendous asset, a good cash cow."
A document from a parliamentary committee revealed the investigation into Credit Suisse's collapse would keep its files
sealed for 50 years, much longer than the customary 30 years. Swiss historians are concerned about the degree of secrecy.
According to reports, potential penalties for violating confidentiality (the requirement to keep the files secret for 50 years) ranged from a ban on speaking before the committee to a prohibition on speaking for six months to three years in prison and fines.
While there may be concerns over the loss of jobs and integration challenges resulting from the emergency takeover, investors in UBS have expressed optimism over the potential benefits of the acquisition. The deal is a good bargain for UBS, with fund managers praising the company's ability to restructure rapidly and control outflows.
The future of Credit Suisse's Swiss operation remains uncertain, but UBS is expected to absorb the company, which was its top performer in 2017.
Overall, UBS shareholders hope the acquisition will pay off in the long run, with JP Morgan analysts predicting a significant increase in the company's stock price.
While there may be concerns over the loss of jobs and integration challenges resulting from the emergency takeover, investors in UBS have expressed optimism over the potential benefits of the acquisition
Banking
Chatbots
The digital revolution in banking has been a gamechanger as routine transactions are now seamless, which also provides 24/7 access to account information
The banking landscape has undergone a fundamental transformation towards digitalization and automation in a time of fast technological innovation. As digital platforms and artificial intelligence continue to streamline financial services, a perceived absence of human connection in banking has been seen. The traditional face-toface contacts that historically characterised banking experiences are now yearned for by close to half of all banking consumers worldwide. Online banking, mobile apps, and chatbots have unquestionably made life more convenient, but they have also made us saddened by the loss of the human touch, empathy, and certainty that come only from interpersonal engagement.
The digital revolution in banking has been a game-changer as routine transactions are now seamless, which also provides 24/7 access to account information. Some clients, however, feel cut off from their banks as a result of the automation. Remote help and virtual assistance has replaced traditional in-person encounters, creating the impression of diminished accountability and confidence. Customers frequently find themselves negotiating knotty issues, without the confidence of a human counsel who comprehends their particular circumstances. As a result, there is a desire for a deeper level of human connection than a simple business transaction, leading some to wonder if banking has forgotten its fundamental ideals of trust and empathy.
Additionally, the human connection in banking is essential, especially during major life events or financial crises. Customers frequently ask their dependable advisors for emotional support and direction during uncertain times. Technology can analyse data and offer advice, but it finds it difficult to grasp the subtleties of human emotions and unique situations. Customers yearn for the empathy that can only be offered by a human, someone who can relate to their challenges, fears, and aspirations. Therefore, even while technology has brought incredible convenience, it has unintentionally increased the need for human connection in deeper and more vulnerable situations.
Share of banking customers who prefer to use mobile devices or tablets to communicate with their bank worldwide
Pioneers 45%
Pragmatist 39%
Sceptics 32%
Traditionalists 7%
In 2022, by customer type (In Percentage)
Source: Statista
A few demographics' financial knowledge and inclusion have been influenced by the decline of human connection. People who are less techsavvy or don't have access to technology run the risk of falling behind as digital banking becomes the standard. It can be difficult and unpleasant for older generations used to traditional banking procedures to adjust to digital platforms. Similar to how vulnerable groups may be shut out of the banking system, compounding already existing disparities, are individuals with poor access to technology or financial literacy. The absence of human assistance can act as a barrier, making financial decisions difficult and perhaps putting one in danger of financial traps.
Some banks have made an effort to close the gap by incorporating personalised customer service through numerous channels after realising the importance of the human element. They use human-like chatbots, deliver video consultations, and offer interactive tools to improve the client experience. These initiatives seek to utilise the effectiveness of technology while emulating the warmth and connection of human engagement. However, challenges persist in finding the ideal balance between automation and human interaction. Straying too far in either direction can lead to dissatisfaction among different segments of customers.
Furthermore, the loss of the human element
in banking may have long-term effects on client loyalty and bank brand loyalty. Fostering a true relationship with customers is essential for increasing their loyalty, and this frequently calls for a personal touch. Customers will be more likely to trust and remain loyal to banks that prioritise client interaction, personalised service, and empathy, becoming brand evangelists who recommend their institution to friends and family. On the other side, banks that just rely on automated services might find it difficult to build long-lasting emotional relationships with their clients, which would result in higher client churn.
Banks must adopt a hybrid strategy that combines technology with emotional intelligence to address the desire for human engagement. Banks can offer individualised services that connect with clients on a personal level by utilising data analytics to gather insightful knowledge about their preferences. Furthermore, providing frontline staff with thorough training and guidance can improve their capacity to offer sympathetic, individualised assistance to clients in need. Banks can walk the narrow line between innovation and empathy by fusing the effectiveness of technology with the human touch, ensuring that customer experiences remain the core of their success.
However, the difficulties in maintaining a human connection in banking go beyond the intrusion of technology. Changes in cultural norms and shifting
consumer expectations are both very important. Modern consumers may bring these expectations into their relationships with banks since they are used to instant satisfaction and on-demand services in other areas of their lives. As banks work to implement automated solutions to satisfy customer needs for speedy resolutions and prompt replies, they inadvertently undermine the value of the human touch. Finding the correct balance in this situation is even more difficult since banks must simultaneously meet consumers' changing expectations and maintain the personalised touch that appeals to them on a deeper level.
Moreover, the COVID-19 pandemic hastened the transition to online banking and remote communication. Lockdowns and other social isolation tactics led to a reduction in foot traffic at conventional brick-and-mortar branches, driving both clients and banks to adopt digital substitutes. Although digital solutions were essential for maintaining continuity throughout the pandemic, they also highlighted the risks associated with relying primarily on technology. Customers encountered issues with remote support, prolonged response times, and a lack of individualised help. This further strengthened the perception that something vital was missing in the customer experience - the human connection.
The importance of the personal touch in banking was badly missed during the pandemic-induced change. In times of adversity, many consumers sought comfort in interpersonal interactions, and their loss was acutely felt. A yearning for in-person contacts and the confidence of a caring financial advisor became clear as the world struggled with uncertainty. The pandemic served as a sobering reminder that despite the quick development of technology, the human touch continues to be an essential component of the
banking experience.
One crucial aspect that distinguishes humans from machines is empathythe ability to understand and share the feelings of others. Genuine connections are based on empathy, which also fosters a relationship of trust between clients and their banks. While technology is capable of gathering enormous quantities of data and providing individualised recommendations, it struggles to convey true empathy. Some forward-thinking banks have been investing in creating compassionate cultures inside their organisations as a result of realising this restriction. They teach their staff how to listen intently, comprehend consumer needs, and act compassionately. By doing this, these banks hope to create long-lasting relationships that go beyond simple business dealings and promote a sense of loyalty and fulfilment.
The idea of financial advice and counselling is closely related to the human connection in banking. Traditional banking connections frequently entailed long-term alliances with dependable consultants who comprehended the complexity of their client's financial problems. These advisors provided individualised guidance in light of a thorough comprehension of the objectives, risk tolerance, and financial aspirations of their customers. However, several institutions have moved away from conventional financial counselling models as a result of the development of automated financial advisory platforms, sometimes known as roboadvisors.
Robo-advisors cater to clients looking for affordable and effective investing options by providing algorithmdriven investment advice. These platforms have benefits in terms of accessibility and convenience, but they might not have a human touch or the capacity to take complex emotional elements into account, which can affect financial decision-making. As a result, some users can feel alienated and uneasy about entrusting an automated system with their financial destiny.
Meanwhile, research conducted by Foolproof, a Zensar company has also revealed that customers are frustrated with their banking experience and are craving a more human connection. The research showed that
nearly 46% of the surveyed customers want human interaction, and 29% stated that they want more high street branches. Around 47% say chatbots are not answering their questions, and 23% believe their banking experience has gotten worse in the last 12 months. Only 19% of people over the age of 55 think their banking experience has improved, and 74% of people don’t think banking is personal enough.
To know more about banking and its need for human connection, Global Business Outlook caught up with Mr. MVS Murthy, CMO of Federal Bank, who shared his views about the importance of human connection in banking, the era of digital banking, and much more.
One crucial aspect that distinguishes humans from machines is empathy - the ability to understand and share the feelings of others. Genuine connections are based on empathy, which also fosters a relationship of trust between clients and their banks
GBO: How would you define the 'human connection' in banking and why is it important for customers?
MVS Murthy: Money needs assurance, and it comes from explaining how earnings can be deposited, used to pay for products and services, invested for goals, invested to create long-term wealth etc. Be it investing or buying an asset, it can not happen without a human touch. What if something goes wrong? Or what if I need to go to the branch urgently tomorrow morning?
Human connections will always be important to manage these what-ifs. Of course, customers will evolve and will use technology efficiently, but they definitely want to know that there is a human at the core. We know of instances like tolls, parking, amusement parks which all have efficient tech powering them and have encountered frustrations when it’s not working. The number of humans or the number of interactions may be less but it's the pivot of any efficient experience.
Every time a situation where a customer’s faith is reinforced in the bank, the customer becomes an evangelist and reassures others to give it a try. Customers' trust value for the brand can be gauged by organisations through the Net Promoter Score (NPS) method, a metric that can be an eye-opener for brands/banks/ organisations to improve their connection with customers and turn them into loyal ambassadors.
Could you please enlighten us about the reasons making customers feel that their banking experiences are lacking human connection?
Formerly for everything, we come to the bank. Technology has come into the banking industry, and it is imperative in the modern banking landscape to keep up with digital advancements and changing customer preferences. For the sake of the human touch, we can’t expect only manual withdrawal of funds without ATMs or mobile banking, such banks would only cause customer inconvenience and become extinct.
Rather, banks can choose to classify segments as high touch or low touch basis in the long run. A new banking customer may require a high touch on basics, but an existing customer
There is no right proportion. There is the right sentiment - both about people and technology
may require a high touch on a new product. So, banks will need to actively look at the maturity cohorts of customers and markets and decide which customers need how much support.
The banking sector is not losing the human touch, but it is losing the consistency of humans due to attrition. And this is an area any company in the service space needs to work harder. Inconsistency of service delivery or culture of service is the primary reason that customers complain of a 'lack of human connection.' Dexterity and efficiency are both needed for a superior experience.
If there are downsides to focusing on the 'human connection' in the digital age, how can the banking sector overcome them?
The banking sector can take several measures to overcome these challenges and foster a strong 'human connection' despite the digital landscape. First and foremost, banks should invest in customer-centric technologies that enhance personalization, such as artificial intelligencedriven chatbots capable of empathetic responses. These technologies can mimic human interactions and create a more positive customer experience.
Additionally, banks should strive to strike a balance between digital and human touchpoints. Offering multiple communication channels, like video calls or virtual meetings, can provide customers with the option to engage directly with bank representatives when needed, further strengthening the human connection.
Furthermore, training bank employees to be proficient in digital tools and empathetic communication is crucial. This ensures that when a customer chooses to interact with a real person, they receive personalized and attentive service that fosters trust and loyalty.
What should be the key strategies for banks to maintain the 50:50 balance between technology and the 'human touch' in their services?
There is no right proportion. There is the right sentiment - both about people and technology. If people lack empathy and the technology is subpar, the customer experience suffers a double whammy of dissonance. Both people and technology get better and more intuitive over time.
Technology gets obsolete with time. Humans
become wise with experience. So, you need the combination of the latest technology and talented people over time. There is no perfect mix, any note can have a soliloquy or be in chorus with the larger mix in a performance. It is still the age of humanity served by technology.
What changes could customers see in the banking sector in the future?
Customer relations in the banking industry will probably undergo considerable change as a result of ongoing technological improvements. Artificial intelligence, chatbots, and virtual assistants, among other innovations, will continue to improve the effectiveness and accessibility of customer assistance. These technologies can execute transactions, handle routine queries, and provide individualised advice, freeing up human personnel to work on more challenging and valuable jobs.
Can you provide examples of successful initiatives by banks or financial institutions that have effectively addressed the issue of missing human connection in banking?
Missing human connection is not about the absence of humans alone. It is about unskilled personnel, or it is about dead-end technology without human support. To the credit of the banks and the financial institutions, especially in India, they have juxtaposed the best of both.
Across the world, there are banks of multiple sizes, there are ecosystems within and around banking powered by technology, and there are commerce ecosystems functioning famously by leveraging tech with sharing and cross-pollination of data from digital economies. Farmers, manufacturers, pharma companies, banks and consumers are getting integrated into human intelligence-created and artificial intelligencepowered economies that are vying for scale.
Examples of very effective and innovative use of technology in banking include robotic wealth advisories in banking apps, the use of AR filters in social media for effective engagement, use of chatbots to respond to queries that provide seamless customer experience across platforms.
Managing personal finances, particularly budgeting can be a daunting task. However, there is a wealth of strategies and resources that can empower individuals to take control of their finances and accomplish their financial goals. Among the strategies, envelope budgeting stands out as one of the most effective approaches.
In this insightful article, Global Business Outlook delves into the essence of the envelope budgeting system, unveiling its potential to revolutionize your financial management practices.
The Envelope Budgeting System is a simple yet powerful budgeting method where you split your income into different categories and allocate cash to physical cash envelopes or virtual equivalents. Each envelope represents a specific expense category, such as food, transportation, entertainment, or utilities. By allocating a predetermined amount of money to each envelope, you create a visual representation of your budget.
In order to implement the envelope budgeting system, you need to follow a step-by-step process. The first step is to identify your spending categories by carefully analyzing your monthly expenses and categorizing them based on your spending behaviour. This will help you understand where your money is going and how to allocate it effectively.
Once you have identified your spending categories, the next step is to set the budgeted amounts for each category. This requires a careful review of your financial goals and priorities, as well as an assessment of your income, fixed costs, and discretionary spending. Allocate a specific amount of money to
Regular follow-up and adjustments are key components of the envelope budgeting system
each category based on what you can realistically afford and what meets your financial goals.
After you have established your budgeted amounts, you can distribute cash into envelopes. Take the allotted cash for each category and put it in individual envelopes that represent each expense category. Alternatively, if you prefer a digital approach, you can use budgeting apps or software that simulate the envelope system and allow you to allocate virtual funds to each category.
When doing your daily expenses, it is important to spend money on the appropriate envelopes. For example, if you are planning to shop for groceries, use cash from the grocery envelope or deduct the amount from the virtual funds earmarked for groceries. This physical or digital constraint encourages discipline and prevents overspending as you can
only spend what's available in each envelope.
Regular follow-up and adjustments are key components of the envelope budgeting system. Continuously monitor your spending and keep track of how much money is left in each envelope or category. This way, you can keep an eye on your financial habits and make necessary adjustments. If you find you have overspent in one category, you may need to adjust your budget for the following month by reducing spending in another area to maintain a balanced budget.
By following these steps of identifying spending categories, determining budgeted amounts, allocating cash into envelopes or using digital equivalents, spending from designated envelopes, and tracking and adjusting your budget, you can effectively implement the envelope budgeting system. This method allows you to take control of your
finances, make conscious financial decisions, and work toward your financial goals.
The envelope budgeting system offers numerous advantages that contribute to effective financial management. First, it offers improved control and visibility into your finances. By handling cash physically or using virtual envelopes, you become more aware of your spending habits. This heightened awareness helps you curb impulsive buying and encourages more informed financial decision-making.
Second, the envelope budgeting system is simple and accessible. It is easy to understand and implement, making it suitable for people of all financial backgrounds. Whether you are new to personal finance or a seasoned budgeter, the envelope system requires minimal setup and can be adopted quickly.
Another advantage is the reduced dependency on credit. By using cash from envelopes instead of relying on credit cards or loans for everyday expenses, you can reduce your debt and interest payments. This approach will help you create a stronger financial foundation and avoid falling into the
trap of over-borrowing.
Flexibility and adaptability are key features of the envelope budgeting system. Unlike rigid budgeting methods, the envelope system allows you to adapt your spending to changing circumstances. As long as you stay within the amount allocated for each category, you have the freedom to reallocate funds and adjust your budget to meet your changing needs.
The envelope budgeting system inherently encourages saving. By setting a specific savings limit, you make a habit of setting money aside for future goals or emergencies. This will help you build a solid financial cushion and work toward achieving your financial goals.
Implementing the envelope budgeting system can also reduce financial burdens. Knowing exactly how much money you have set aside for each expense category can help you clearly identify your financial limits. This knowledge helps remove the uncertainty and anxiety associated with managing your finances.
The envelope budgeting system makes it easy to track financial goals. By dividing the funds into dedicated envelopes for specific destinations, whether it is saving for a vacation or paying off debt, you can track your progress and stay motivated. The visual representation of envelopes serves as a constant reminder of your goals.
Increased accountability is another benefit of the envelope budgeting system. With physical envelopes or virtual equivalents representing your budgeted categories, you have a tangible reminder of your financial commitments. This responsibility will help you stay disciplined and avoid overspending in a particular category.
When you share finances with a partner or family members, envelope budgeting encourages open communication and collaboration. By
including everyone in the budgeting process and assigning envelopes to each individual, you create a sense of shared responsibility. This promotes financial harmony and strengthens teamwork in managing household finances.
The consistent implementation of budget planning can lead to long-term financial stability. The discipline and control fostered by this method will help you avoid unnecessary debt and build savings. It lays the foundation for a solid financial future and ensures you are well-prepared for any unforeseen circumstances.
The envelope budgeting system improves decision-making by providing a clearer understanding of your financial situation and spending habits. With this knowledge, you can identify areas where you may need to make savings. You get the ability to prioritize your spending based on what is really important to you and your financial goals.
Taking control of your finances through the envelope budgeting system gives you a sense of empowerment and confidence in your financial decisions. By actively managing your money and making conscious decisions about how your funds are used, you can be more proactive about your financial future. This sense of control and empowerment can have a positive impact on other areas of your life as well.
Lastly, at a time when digital transactions dominate our financial landscape, envelope budgeting offers a refreshing approach to money management. By using physical or virtual envelopes to allocate cash for different spending categories, this method helps individuals take control of their finances. Through heightened awareness, improved discipline, financial prioritization, and a deeper understanding of one's spending, the envelope budgeting system enables
individuals to achieve their financial goals and build a more secure future.
While the envelope budgeting system may not be right for everyone, it is a valuable tool worth considering, especially for those looking for a tangible and straightforward approach to budgeting. By implementing this system, you can develop better spending habits, reduce dependency on credit, and increase your savings.
Remember that the envelope budgeting system is just one of many budgeting methods available. Finding a system that fits your financial goals, preferences, and lifestyle is important. Experimenting with different approaches can help you find the most effective way to manage your money and achieve financial success.
Ultimately, taking control of your finances is a journey that requires dedication and discipline. The envelope budgeting system provides a solid foundation to start building your financial future. With careful planning, tracking, adjustments, and insights, this method can help you save for your dreams, and achieve long-term financial well-being.
The envelope budgeting system is not a magic solution, but rather a tool that can help you become more aware of your financial decisions and develop better financial habits. When implementing the envelope budgeting system, it is important to remember that flexibility is key.
Life circumstances can change and your budget should be able to adjust accordingly. Review your budget regularly, track your spending, and make adjustments as needed. If you find that certain categories are constantly requiring more or less funds, do not hesitate to reallocate your resources to better reflect your priorities.
The envelope budgeting system improves decisionmaking by providing a clearer understanding of your financial situation and spending habits. With this knowledge, you can identify areas where you may need to make savings
Wassim Mansouri, the first vice governor of Banque du Liban, the central bank of Lebanon, took over Riad Salameh's responsibilities on July 31st, ushering in a period of cautious optimism and stoking expectations of a delayed return to budgetary restraint.
Mansouri faces the difficult task of restoring the credibility of the long-abused central bank in the midst of the biggest financial crisis in the nation's history, which was made worse by years of wealth theft by the political elite of the country.
Wassim Mansouri is a former lawyer and lecturer at the French-speaking political science department of the Lebanese University. He is a Sunni and was appointed to the Banque du Liban (BDL) in June 2020. His predecessor Riad Salameh, the former governor, is wanted by INTERPOL on embezzlement charges. Mansouri is also the co-founder of Booxium.
The economy of Lebanon has been experiencing a large-scale multi-dimensional crisis since 2019, including a banking collapse, a liquidity crisis and a sovereign default. It is classified as a developing, lower-middle-income economy. The nominal GDP was estimated at $19 billion in 2020, with a per capita GDP amounting to $2,5001.
‘The Spring 2021 Lebanon Economic Monitor’ found that Lebanon’s economic and financial crisis ranks among the worst economic crises globally since the mid-nineteenth century. Nominal GDP plummeted from close to $52 billion in 2019 to an estimated $23.1 billion in 2021.
Wassim Mansouri stated on his first day in office, "It is necessary to put an end to the policy of government borrowing from the central bank and limit the process to matters of emergency only and for a limited period of time, provided that it is legalized."
The Code of Money and Credit was promulgated by Legislative Decree N° 13513 of August 1, 1963. It is the main regulation of the banking and financial system in Lebanon. The law covers the regulation of money, the role and functions of the Central Bank of Lebanon, the activities of banks, and the activities of professions linked up to the banking profession.
The Code of Money and Credit is the main regulation of the banking and financial system in Lebanon. It covers the activities of banks, including their role in regulating money and their relationship with the Central Bank of Lebanon. This law sets out the rules and regulations that banks must follow in their operations, including requirements for capital adequacy, liquidity, and risk management. It also establishes the framework for the supervision and regulation of banks by the Central Bank of Lebanon.
In order to bring fiscal policy back into compliance with Lebanon's 1963-established Code of Money and Credit, he attempted to develop new regulations for financial interactions between the government and the central bank.
To continue funding the government while shielding himself from the potential of any future liability, Wassim Mansouri seeks to acquire legal and legislative cover for his conditions from both the executive and legislative authorities.
He demanded that fiscal changes be put into place within six months, including the adoption of capital controls, the approval of the budget for 2023-2024, the reorganization of institutions, and the enforcement of financial discipline.
The financial markets welcomed Salameh's retirement
"It is necessary to put an end to the policy of government borrowing from the central bank and limit the process to matters of emergency only and for a limited period of time, provided that it is legalized"
after troubled 30-year tenure. In the week leading up to his resignation, the US dollar's value decreased relative to the Lebanese pound, going from 99,000 to 88,500.
Arab Bankers Association CEO George Kanaan said, "It feels like a breath of fresh air has just blown from a hole that has suddenly opened in a thick, impenetrable wall that was built between the central bank and literally the entire world."
"All of a sudden, we are informed that he is eager to submit statistics, collaborate with the government, educate the Parliament, and discuss issues. He also wants items to be made legal under the appropriate legislation so that he can work," he said.
"This is not the same as before. This new beginning is fantastic. The question is, What needs to happen next right away? A number of improvements, beginning with legislative reforms, are the solution. Then, we may start to envision how the situation will ultimately be resolved," he added.
The political class in Lebanon does not understand the need for the reforms or thinks that if they are implemented, they will affect them, which is why they have been stopped. And in that scenario, spring will pass quickly.
Wassim Mansouri's success is not guaranteed after all. There is no proposed legislation that would give the state legal protection for any loans made by the central bank. Furthermore, there is no indication that such a draft law could be passed during a legislative session.
Najib Mikati, the caretaker prime minister, has not submitted a draft law allowing the government to obtain bank loans for foreign currencies. He reportedly held off due to its unlawfulness, leaving it up to Parliament, according to sources in the local media.
The central bank's strategy of lending to the government has been a major factor in the depletion of cash reserves and the collapse
of Lebanon's once-thriving banking and financial sectors, which has been exacerbated by the government's failure to put reforms into place and reduce waste and corruption.
The government is currently looking for a loan of up to $1.2 billion over a six-month period to pay for the wages of employees in the public sector, the military, and security, as well as the price of necessary imports and market interventions as needed.
Where Salameh failed, will Mansouri succeed?
The Parliament is still bitterly divided, and the administration has been in long-term caretaker mode, making it challenging to approve any legislation that would be contentious. Financial sources state that the central bank's reserves are currently only between $9 billion and $10 billion.
The Lebanese Forces, the Lebanese Kataeb, reformist MPs, and several independent MPs are among the groupings that refuse to enact laws in the absence of a president. Since Michel Aoun's term as president ended in 2022 October, the presidency has been without a president because the Parliament cannot agree on a replacement. Therefore, if a legislative session is held, they will probably skip it. While some groups, such as the Free Patriotic Movement, have made attendance at meetings subject to certain requirements, others, most notably the Amal movement and Hezbollah, have shown little to no interest in them.
When asked if Mansouri will be able to bring about change in light of the current political impasse, Kanaan responded that the incoming governor does have supporters who want him to be successful.
He's not by himself, Kanaan assured. He has a large following of supporters. He cannot accomplish it on his own. If he insists on the reforms, the vice governors of Lebanon’s central bank, Bashir Yakzan, Salim Chahine, Alexander Mouradian and Wassim Mansouri will likely be forced to
resign on their own.
"I believe that other parties in Lebanon— though perhaps not necessarily political organizations—want the reforms to be implemented. Without a doubt, those reforms are urgently needed throughout the world, not only in Lebanon. Everyone wants to see those changes. Lebanon is currently experiencing a flow of liquidity and a positive economic environment that is pointing higher, which relieves pressure for reforms. Everyone would argue that if everything is going well, there is no need for reforms because everything will eventually move in the proper direction without them. And that would be regrettable," he said.
In order to allow time for "action," as members of his entourage put it, Wassim Mansouri has been circumspect during his first few days in office and has abstained from making any additional pronouncements to the media. However, this means that it is challenging to forecast what will happen in the end.
It is too soon to comment on the course of action that the deputy governor of the central
bank wants to take, according to Fadi Khalaf, secretary-general of the Association of Banks in Lebanon, who spoke to Arab News. "We are now in the waiting and watching phase," he said.
There is no doubt that Salameh, whose term as governor was extended four times between the administrations of the late President Elias Hrawi and Aoun, had the support of the majority of political parties.
He continued to pay the deficits and running costs of the Lebanese state despite his persistent opposition to the political elite's policies.
The cost of producing power, which could cost the central bank up to $2 billion annually, was one of its largest outlays. Treasury advances were used to transfer the funds to the Ministry of Energy, the bank was never reimbursed for them.
Salameh stopped the process in 2020 as a result of this. The largest drain on the bank's required reserve as well as the already depleted state treasury continues to be the electrical sector.
Salameh's financial sleight of hand protected Lebanon from many of the effects of the conflict and crisis in neighbouring Syria until the financial crisis of 2019 arrived, despite the fact that these issues posed Lebanon with difficult economic challenges. This led to the collapse of the banking
There is no doubt that Salameh, whose term as governor was extended four times between the administrations of the late President Elias Hrawi and Aoun, had the support of the majority of political parties
industry and a worsening of the dollar exchange rate, resulting in a crisis that grew worse when the administration of former Prime Minister Hassan Diab defaulted on Lebanon's foreign debt in 2020.
Under the condition of anonymity, a banking expert told Arab News that borrowing "will continue, whether directly or in accordance with the law," largely carrying on Salameh's legacy.
The expert stated that although the state's finances must be improved and money spent more wisely, "the central bank's dollars will go to the state's expenditure items."
The window of opportunity for Mansouri to make significant change is narrow. It will just take a few weeks, according to Kanaan.
"In a few weeks, he either takes a step forward, which is followed by a variety of other reforms, and at that point, we are really moving forward in the correct manner. Or else he goes. The second option is that he gives in and carries out his duty like Riad did before him," he noted.
The International Monetary Fund, for its part, thinks that a reform strategy with five main axes—restructuring the banking industry, updating monetary policy, implementing a new fiscal strategy that achieves debt sustainability, and addressing the institutional environment—is necessary for Lebanon to follow in order to achieve economic recovery, enhancing systems against corruption, money laundering, and terrorism.
The former finance minister of Lebanon, Raya Al-Hassan, asserts in an interview with "Sky News Arabia Economy" that if confidence in the financial system is not restored, it will be impossible to do so. This is at a time when the majority of the reform plans for Lebanon are centred on the necessity of reforming the financial system and using a new strategy.
Without a political agreement to fill the vacancies in the key positions in the
Lebanese state administrations, including the presidency of the republic and control of the Central Bank, in addition to the leadership void that threatens the army after about four months, there is no acceptable political stability. From now on, take into account the fact that financial stability in Lebanon is a must for regaining investor confidence.
Al-Hassan asserts that the process of regaining confidence will be gradual and that it will require cumulative reform processes that could take three to four years. This process requires political agreement on a future road map and the parliamentary approval of reform laws, leaving one to wonder if there is currently a consensus at the national level regarding this course of action.
Al-Hassan contends that Lebanon is vertically divided on both a political and an economic level. He emphasizes the importance of political stability before discussing Lebanon's economic identity and notes that this process is cumulative and calls for the restructuring of the state's outmoded departments and agencies.
Issues concerning Lebanon are being raised by the International Monetary Fund. Without reforms, the country would continue to see triple-digit inflation, and public debt in the Middle Eastern nation could reach nearly 550% of GDP by 2027, the International Monetary Fund warned in a report published in June 2023.
IMF officials visited the country in March 2023, amid reports of Lebanese officials making limited progress on reforms suggested by the global financial body. These suggestions included the restructuring of the country’s debts and its ailing banking system, revamping its "barely functioning" public electricity system and improving the overall governance.
In short, challenges for Mansouri are aplenty, as Lebanon is running against the time to set its house in order.
The former finance minister of Lebanon, Raya Al-Hassan, asserts in an interview that if confidence in the financial system is not restored, it will be impossible to do so. This is at a time when the majority of the reform plans for Lebanon are centred on the necessity of reforming the financial system, using new strategy
Federal prosecutors stated that Swiss bank UBS has agreed to pay a total of $1.4 billion in civil penalties for misdeeds and fraud in the sale of residential mortgagebacked securities that date back to the global financial crisis. According to the bank's own statement, the settlement deals with a 'legacy matter' that dates back to the months of 2006 and 2007 before the financial crisis.
The deal puts an end to the US Department of Justice's last legal action against some of the biggest financial institutions for making false promises to consumers who bought those mortgage-backed securities. The Justice Department reports that the sum recovered in the cases to date is $36 billion.
is almost identical, compared to the value of the home mortgages it generated between 2005 and 2007, when it stopped issuing residential mortgage-backed securities. In a statement issued in 2018 in response to the Justice Department's accusations, UBS previously claimed
In order to encourage people to borrow money from banks and boost spending in the heavily dependent on consumption Philippine economy, the Bangko Sentral ng Pilipinas (BSP) has maintained the present restriction on credit card fees. This means that the cardholder's maximum interest rate or finance charge will continue to be 3% per month or 36% per year on any outstanding credit card amount.
Similar to this, there is a 1% cap on the monthly add-on fees that credit card companies can impose on instalment loans. The maximum processing cost for using credit card cash advances remains at P200.00 per transaction. After a six-month
period, the credit card transaction caps are up for review.
"The BSP's decision to maintain the current ceilings on credit card transactions strikes a balance between providing consumers with access to credit card financing at steady rates and ensuring the long-term viability of banks/credit card issuers so that they can continue to provide quality service to their clients," BSP Governor Eli Remolona Jr. said, Zawya reported.
Credit card receivables posted
that $1.5 billion worth of residential mortgages were generated during those three years. USB said that the vast majority of loans underlying the 40 RMBS listed in the complaint were originated by other financial institutions.
double-digit growth of 29.0% year-onyear as of May 2023, higher than the 17.1% registered a year ago, BSP data showed.
Russia raised interest rates to 12%, following the rouble's decline to its lowest level in 16 months. The ruble crossed the 100-dollar mark, causing Russia's central bank to call an urgent meeting. The Bank of Russia said that it had increased interest rates from their previous level of 8.5% in order to combat August's 4.4% inflation rate. The Russian economy is under increasing pressure as a result of increased imports that are outpacing exports and escalating military expenditures related to the conflict in Ukraine.
"Steady growth in domestic demand surpassing the capacity to expand output amplifies the underlying inflationary pressure and has an impact on the rouble's exchange rate dynamics through elevated demand for imports," the Bank of Russia said in a statement.
The bank claimed that although 'inflationary pressure' was increasing, its goal was to reduce inflation—the rate at which prices rise—to 4% by 2024. Western nations have imposed sanctions on Russia as a result of its invasion of Ukraine in February 2022. After the war initially started, the rouble fell, but was later supported by capital controls and oil and gas exports. Russia lost approximately a quarter of its value relative to the US dollar.
In order to launch a smartphone-based remittance service for moving money from Thailand to Myanmar, major Thai lender Kasikornbank announced that it has teamed with Myanmar's Kanbawza (KBZ) Bank. Since the military took control of Myanmar in February 2021, more and more young people emigrated to work in nearby nations like Thailand. The banks want to satisfy the demand from these workers for money transfers to their relatives in Myanmar. An international remittance started via the Kasikornbank app is transferred in kyat, the currency of Myanmar, to a KBZPay account. Up until the end of October, there will be no remittance fees.
This assistance aids KBZ Bank in safeguarding the Thai baht. Since the takeover, Myanmar has been running low on dollars, which has led to efforts to switch the currency for import payments from dollars to baht as a substitute. It will be simpler to convert kyat into baht if remittances from Thailand to Myanmar rise.
An unofficial remittance network called Hundi has been used by workers from Myanmar to transfer money home. However, Myanmar's military government is cracking down on transfers made outside of authorised banking channels and promoting remittances made using conventional means.
The federal minimum wage has been $7.25 per hour, or $15,080 per year, since 2009
The federal minimum wage for nonexempt workers in the US is $7.25. Although it should be a decent wage, there is a different reality. Since the late 1960s, the hourly rate has stayed the same in line with the cost of living. The income of a minimum-wage worker supporting a family of four is much below the poverty threshold.
Although states have minimum wage rates higher than $7.25 and are continuing to raise them (26 US states will be presenting their minimum salaries in 2022), people who make the minimum wage still find it difficult to sustain their livings.
The federal minimum wage has been $7.25 per hour, or $15,080 per year, since 2009. Economists, however, consider this as an unjust one. The minimum wage in 1968 was $10.15, 28.6% higher than the one in 2018.
During his administration, then US President Barack Obama signed an executive order to raise the minimum wage for select government employees to $10.10 on the grounds that the federal rate should also be increased to that amount. Even though this campaign failed in Congress, several states passed their minimum wage increases due to federal inactivity.
Early in 2021, the Senate and the US House of Representatives referred the ‘Raise the Wage Act’ to a panel. Under the proposed legislation, the federal minimum wage would gradually rise to $15 by 2025. However, the proposal became a dud.
The effort to raise the minimum wage has been mostly worker-driven since 2013. Workers from all walks of the American economy have made their discontent known.
Currently, thirty states pay more than the federal wage minimum, in addition to Columbia, Guam, and the Virgin Islands. Cities, on their own, have also acted. New York's $15 minimum wage is higher than the federal counterpart of $10. Some 22 states increased their minimum wages at the beginning of 2022. Pennsylvania Governor Tom Wolf also modified an earlier executive order in January 2022 to forward the $15-per-hour minimum wage increase for state employees.
Florida voters decided in November 2020 to raise the state's minimum wage, starting at $10 an hour on September 30, 2021, and continuing until it reaches $15 an hour in September 2026.
On the ballot for the November 2022 midterm elections
were increases to the minimum wage in Nebraska and Nevada.
Initiative 433 in Nebraska, which called for a minimum wage hike to $15 from the existing $9 per hour in 2026 and annual cost-of-living increases after that, was approved by a margin of 17 points.
If Question two is approved, Nevada's current minimum wage structure of $10.50 for businesses that do not provide health insurance and $9.50 for those who do will be replaced in 2024 with a single $12 per hour minimum wage for all workers.
Columbia voters approved a proposition in the November 2022 election that will raise the $5.05 minimum wage for workers who get tips until it is equal to the nontipped minimum wage by 2027.
President Franklin Delano Roosevelt stated, "By living wages, I mean more than a mere subsistence level—I mean the earnings of a decent living," in 1933, five years before the first minimum wage became a legal requirement.
The Fair Labor Standards Act, which established the first minimum wage in the US, was enacted in 1938. At just $15,080 per year, full-time employees today are significantly below 2022’s poverty level of $18,310. A family of four living on the minimum wage falls $12,670 short of the $27,750 poverty level.
Employees find it challenging to work second jobs, go to college, or get childcare due to fluctuating work patterns, split
shifts, and the dreaded "clopening" (closing the store at night and reporting to work early the following day to open it).
Minimum-wage workers are also susceptible to pay reductions due to wage theft, including unpaid overtime, lost time cards, and any unpaid time spent at work.
At the height of the COVID outbreak, workers at grocery stores, some large merchants, and delivery companies were required to work on the front lines without being provided with paid sick time or health insurance.
Retailers either gave bonuses or temporarily increased salaries. However, Whole Foods, Instacart, and Amazon employees said this wasn't enough. When the US was in lockdown in March 2020, these workers organized walkouts to demand safer working conditions.
According to the US Bureau of Labor Statistics, 73.3 million employees received hourly pay in 2020, accounting for more than half (55.5%) of all salaried workers in the country. Two hundred forty-seven thousand people in that group made $7.25 an hour. In 2020, about 75% of people who made less than the minimum wage worked in service-related fields, primarily in employment that involved food preparation and serving.
According to the BLS, only 2% and 1% of hourly-paid men and women, respectively, received wages equal to or less than the federal minimum wage. In contrast, roughly 2% of hourly-paid coloured workers made the minimum wage or less, compared to about 1% of White, Asian, and Latinx workers.
According to the Economic Policy Institute, if the ‘Raise the Wage Act’ had been implemented and the federal minimum wage had been raised to $15 by the 2024 end, nearly 40 million workers would have received an increase in income.
The proposed measures would have
brought significant benefits to many workers. Some 38.6 million adults aged 18 and older would have experienced positive changes in their working conditions and livelihoods.
Additionally, the policies aimed to particularly benefit 23 million women, ensuring fairer and more equitable workplaces. For the 11.2 million parents (including single parents) in the workforce, the proposed measures would have provided better resources and support to balance their work and family responsibilities.
Furthermore, the proposed changes would have positively impacted the lives of the parents of 14.4 million children, fostering a more supportive and inclusive environment for families. Overall, the proposed measures sought to address the needs and challenges faced by diverse workers, aiming for a fairer and more inclusive workforce.
Businesses opposed the ‘Raise the Wage Act’, claiming that it was a one-size-fits-all solution that would force companies to fire employees, scale back expansion plans, and raise prices.
These organizations included the National Retail Federation (NRF) and the National Federation of Independent Businesses (NFIB). Generally speaking, the legislation would harm low-wage and early-career workers and hurt the economy in several other ways.
The nonpartisan Congressional Budget Office (CBO) concluded that raising the minimum wage to $15 in 2025 would benefit up to 27 million workers, significantly fewer than the Economic Policy Institute's estimate, but would cost an estimated 1.4 million jobs. The CBO also came to the conclusion that the income
of the 0.9 million people would have increased above the poverty line.
In recent years, a number of significant hourly-paid US firms have set companywide minimum salaries. They include well-known stores like Amazon ($15 an hour), Target ($15 an hour), Costco ($24 on average per hour for hourly employees), and Walmart ($18 on average in total pay, benefits included).
In many states, cities, and municipalities, the minimum wage is higher than the federal minimum, now $7.25 per hour. Additionally, several businesses have introduced minimum wages more significantly than the statutory minimum wage.
For companies in California with 26 or more employees, the minimum wage is $15. For companies with fewer than 25 employees, it costs $14.
In Florida, the minimum wage is $10. The minimum hourly pay in the Sunshine State will rise by a dollar a year on September 30 until it hits $15 in 2026. After then, the state will resume updating its minimum hourly pay following inflation.
The American minimum wage is no longer a living wage. Even though many states pay more than this, minimum-wage workers still need help getting by.
The federal minimum wage, now $7.25, has stayed the same to reflect inflation for over 50 years. However, there is a growing effort to raise it among employees, policy experts, state and local governments, and even some businesses.
In Florida, the minimum wage is $10. The minimum hourly pay in the Sunshine State will rise by a dollar a year on September 30 until it hits $15 in 2026. After then, the state will resume updating its minimum hourly pay following inflation
Despite the debt crisis is over, that doesn't mean that the world's largest economy is out of the woods yet
The United States Senate in the first week of June this year provided a respite for the domestic (and of course, the global markets) economy, by narrowly passing a bill to suspend the debt ceiling, sending the legislation to President Joe Biden’s desk and averting a disastrous federal default, all in just a few hours.
“Tonight’s vote is a good outcome because Democrats did a very good job taking the worst parts of the Republican plan off the table. And that’s why Dems voted overwhelmingly for this bill, while Republicans certainly in the Senate did not,” the Senate majority leader, Democrat Chuck Schumer, said after the voting process.
Joe Biden and Republican House Speaker Kevin McCarthy sealed the fresh debt ceiling agreement after weeks of high-stakes budget negotiations to prevent global financial chaos from unfolding.
The debt limit, which is also a law, limits the total amount of money the federal government can borrow to pay its bills, along with salaries for federal employees, the military, social security and medicare, as well as interest on the national debt and tax refunds.
The US Congress is primarily entrusted to go for votes to raise or suspend the ceiling so it can borrow more. The cap in 2023 currently stands at roughly $31.4 trillion. This limit was breached in January this year, but the Treasury used 'extraordinary measures' to provide the Biden government with more cash.
The matter got complicated further at the Congress level, due to the growing ideological polarisation, the parties were finding it difficult to come to common terms and raise the debt ceiling.
Treasury Secretary Janet Yellen earlier warned that without more borrowing, the Biden government will not have enough money to meet all of its financial obligations as soon as 5 June. However, with the Senate's last-minute mad rush, the crisis has been averted.
In May 2023, Republicans put forward a deal to keep spending for key agencies at 2022 levels during the 2023-2024 financial year and limit growth to 1% annually over the next decade. The proposal would have also repealed key priorities of the Biden government (priorities like student loan forgiveness and tax incentives for electric vehicles). The Republicans' deal also wanted more work requirements for those receiving healthcare and food welfare.
However, the latest deal ensures a freeze on non-defence budgets for 2024, followed by a 1% rise the following year and no budget caps after 2025. The compromise would avert a situation where the federal and military employees would have been serving without salaries, social security cheques getting stopped, businesses and charities depending on government funds looking at peril, and the whole country going into default.
Yes, a similar situation occurred in 1979. Then, the Treasury put the blame on an accidental cheque processing issue, but it almost put pressure on the global financial system, where over $500 billion in US debt gets traded
every day (as per 2023 data).
Moody's Analytics now predicts that if another debt standoff happens in the United States, the result will be stock prices falling by almost a fifth and the economy contracting over 4%, along with the loss of over seven million jobs. Just because the debt crisis is over, that doesn't mean that the world's largest economy is out of the woods yet.
The US economy is now showing signs of cooling as hiring and inflation have eased slightly, mentioned the Federal Reserve in its Beige Book survey of regional business contacts.
The survey stated that the economic activity was little changed in April and early May of 2023. This data will now go to the Fed officials and monetary experts, who will assess the effects of their 14-monthlong monetary policy tightening campaign. During the timeframe, interest rates were raised to a range of 5% to 5.25% from near zero. The Beige Book also shows that the US economy is still growing, and inflation is mostly on a downward trajectory.
Now some officials are reportedly batting for rate hikes to be paused, while another section, wary of the persistent inflation, feels that the Fed needs to do more. Job openings have surged in April 2023 to a three-month high, suggesting that the American labour market remains hot. The unemployment rate is at 3.4%, a half-century low.
Talking about inflation, the Fed’s preferred gauge picked up in April by more than forecast, it has come down below 5%, compared to the 8.26% in 2022, but still well above the Fed's 2% target. The gains here are the rise in the sales of new homes, the highest level since March 2022.
The CEO confidence measure published by the Conference Board reveals that the world’s top business leaders are
overwhelmingly anticipating a recession in the United States over the next 12 to 18 months. It will be a one-short one, with a limited global spillover. An outsized 87% of the survey participants envision the recession, while 6% anticipate the phenomenon to be a deep one.
As per reports, companies are in the midst of an earnings recession, suggesting that their profits have contracted for two straight quarters, starting with a 4.6% drop from the 2022 end.
Profits for S&P500 companies shrank just over 2% in the first quarter of 2023. This figure is better than the previous forecasts of a 6.7% drop, but that doesn't mean that the pain is not there, as analysts polled by FactSet are now expecting a 6.4% contraction for profits in the coming months.
Many companies raised prices following the pandemic and although consumers were more than willing to pay, thus resulting in record profit margins for the businesses, these high price tags have made consumers concerned in the long run, thus impacting consumption.
In the 2023 first quarter, companies specialising in areas like raw materials, utilities and healthcare saw big profit
contractions, along with their communications and technology peers, thus suggesting the potential demand slowdown among the consumers due to inflation and the resultant high prices.
Businesses are also dealing with high costs and a tight labour market. Profit margins and overall earnings are expected to fall throughout 2023, according to a report by Wells Fargo Investment Institute.
While FactSet research shows that the number of companies citing recession declined for a third straight quarter, the tally is still above the five-year average. And Wall Street's concern and discontent are not unjustified either.
You have the minutes of the Federal Open Market Committee’s March 2023 meeting, where policymakers of the US central bank considered pausing interest rates after the failure of two regional banks (the mishap was quickly followed by two more) and a forecast of the banking sector stress potentially tipping the country's economy into recession.
"Aggregate deposit outflows from regional banks have stabilized following authorities' moves to shore up confidence and stem contagion" — Janet YellenTreasury Secretary Janet Yellen
First Republic’s mortgage book had a carrying value of $136.8 billion
In May 2023, the Biden administration seized troubled First Republic Bank and promptly sold all of its deposits and most of its assets to the country’s biggest bank, JPMorgan Chase, in order to arrest the sector going downhill, which started earlier in the year with the downfall of the Signature Bank and Silicon Valley Bank.
Treasury Secretary Janet Yellen is doing her best to calm down the anxious stakeholders, by saying that the country's banking sector is on the 'stabilization' path, but the situation still remains dicey.
The recent series of bank collapses have resulted in a crisis of confidence. Customers are withdrawing money from medium and small-sized banks and placing this capital in larger financial institutions.
"Aggregate deposit outflows from regional banks have stabilized following authorities' moves to shore up confidence and stem contagion," Yellen stated recently, while also talking about Fed's new lending tool for banks, in order to improve the latter's access to liquidity.
The failed banks used the short-terming funding option to grow quickly, while their assets got heavily invested in Treasury bonds and mortgage-backed securities, entities which carry performance risks, in case the Fed tightens its monetary policy. Also, these banks reportedly contained a
large portion of uninsured deposits and short-term liabilities that generally get withdrawn in a blink of an eye.
These three banks had asset and liability duration mismatches, which made them vulnerable to uninsured depositor runs. When these depositors started withdrawing their money en masse, that spelt doom for these banks.
Just take the First Republic as a case study. While SVB had 57% of its assets in bonds and the unrealised losses on these portfolios spooked its depositors, at First Republic, only 15.5% of its assets were in bonds and they were mostly held to maturity, with the bank having no urgency to recognise the losses from rising Fed rates unless it was forced to sell these bonds.
However, First Republic assets caused the ‘Big Bond Holdings’ problem for the institution. For example, it had interestonly home loans that weren’t due to get any principal repayments for 10 years, something similar to a 10-year bond, booked at face value in the accounts.
These interest-only home loans were made at cheap rates to customers like the other bank CEOs, as part of First Republic’s strategy of growing its wealth-management business. The bank used this lending to win deposits and help grow both sides of its balance sheet. Experts dubbed the whole business model looked like a fallible one.
And that happened, as the institution lost over $100 billion of customer deposits in the 2023 first quarter, 41% of which came at the 2022 end. The bank was ultimately left with $55 billion of insured deposits, $20 billion of uninsured deposits and $30 billion of those term deposits from other big banks.
First Republic’s mortgage book had a carrying value of $136.8 billion in 2022 and it estimated its immediate resale value at $117.5 billion, resulting in a $19 billion loss. This loss amount was well over First Republic’s core regulatory capital of $13.9 billion.
On May 4 2023, shares of two other regional banks, PacWest Bancorp and
in 2022 and it estimated its immediate resale value at $117.5 billion, resulting in a $19 billion loss. This loss amount was well over First Republic’s core regulatory capital of $13.9 billion
Western Alliance, went down by 51% and 39%, respectively.
Given the fact that most of the regional American banks deal in holdings, the equity bases of these financial institutions are insufficient to sustain big losses on these holdings. This year has so far been about reduced deposits and increased funding costs hurting American banks’ profitability and business models.
This ongoing stress has the potential to translate into a credit crunch, with regional lenders tightening their lending standards after the recent series of bank failures. This will reduce credit availability for small businesses, low-income households, and most importantly, the commercial real estate sector.
While one can easily blame the failed banks' management for their erroneous business calls, Fed's role can't be overlooked either, which in the pursuit of controlling the sky-high inflation, went on a rate hike spree since the early months of 2022.
Regional and small banks have been the prime sufferers of these monetary policy moves. Not only have they endured losses on long-dated securities, but these banks also encountered massive outflow of deposits to larger banks and money market funds. All these things have resulted in lower profits and higher funding costs for these banks.
While the Fed pursued an ultra-loose monetary policy stance (even during the COVID period) till 2022, regional banks got large deposit inflows, despite having poor loan demands from households and businesses. The banks invested in these capitals into lower-risk, long-term US Treasury bonds and mortgage securities.
These investments were always subject to interest rate risks, along with the recorded duration mismatch between banks’ assets and liabilities with long-dated securities and short-dated demandable deposits.
The value of these bonds went downhill as the Fed started raising the interest rates in
March 2022, given the fact that these interest rates and bond prices are related to each other and bond prices go down when interest rates rise.
Rising interest rates resulted in losses for these regional banks. With depositors withdrawing funds and investing in these capitals somewhere else to generate higher returns, the regional banking sector had no option apart from selling their long-term bonds prematurely at a loss. SVB, First Republic and Signature, all three banks became the victim of this process.
The sector is currently witnessing a contrasting picture. On one hand, in March 2023 alone, the mutual fund sector suffered a 6% loss, reflecting a dented investors' sentiment, and then you have the update of banking shares making strong rebounds in the market.
Biggies like Wells Fargo, Goldman Sachs, Morgan Stanley, Citigroup and Bank of America are presently performing strongly in the stock markets, but it doesn't mean that all is okay now. The series of banking collapses have exposed a vulnerable area of American banking, which is the regional lending institutions' trading on government bonds and securities and then suffering whenever Fed raises interest rates.
The debt ceiling crisis has been averted for now. As per the current GDP trends compiled by CapitalSpectator.com, the odds of the world's largest economy going into a recession remains. The numbers also suggest that the country will continue to expand in the coming days. Also in May 2023, the nation added 339,000 jobs, thus defying any slowdown talks.
However, as inflation continues to dominate the economies around the world, the United States has another demon to deal with, in the form of its crisis-ridden domestic banking sector. And addressing the worries around this particular sector, in all likelihood, will be the biggest test for the Joe Biden government in the coming days.
The series of banking collapses have exposed a vulnerable area of American banking, which is the regional lending institutions' trading on government bonds and securities and then suffering whenever Fed raises interest rates
Even while economists and scholars make compelling cases for why a certain natural amount of unemployment cannot be eliminated, experts asserted unemployment has a significant negative impact on the person, society, and the country as a whole. The unemployment rate can be interpreted in many ways depending on how it is calculated. In addition, underemployment can also be extremely detrimental to society's economy. Unemployment figures include people who have low-paying or low-skill jobs that don't provide enough full-time hours for benefits or a living wage.
Global and national emergencies can trigger both unemployment and underemployment. For example, when the COVID-19 pandemic hit, more than 10 million Americans were out of work in the first two weeks. The situation was so serious that the Coronavirus Aid, Relief, and Economic Security (CARES) Act extended unemployment benefits to self-supporting workers. Employed and part-time workers under Pandemic Emergency Unemployment Assistance and benefits provided for up to 39 weeks beginning on or after January 27, 2020 and ending on or before December 31, 2020.
The cost of unemployment to the individual is not difficult to imagine. When someone loses their job, it often has an immediate impact on their standard of living. Before the Great Recession, the average savings rate in the US had fallen towards (and sometimes below) zero. There are anecdotal reports that without a paying job, the average person is just weeks away from serious financial trouble.
Even those who qualify for unemployment benefits and other forms of government assistance find that this is not enough, as
Prolonged unemployment can lead to skills depletion and, in essence, deprive the economy of useful talent
these benefits often replace only 50% or less of their regular income. This means that these people consume significantly less than usual. However, the economic consequences can go beyond merely reduced consumption. Many people turn to their retirement savings in times of need, and when those savings run out, there are long-term consequences.
Prolonged unemployment can lead to skills depletion and, in essence, deprive the economy of useful talent. At the same time, the experience of unemployment (either direct or indirect) can change the way workers plan for their future. Prolonged unemployment can lead to greater scepticism and pessimism.
Similarly, the lack of income from unemployment can force families to deny their children educational opportunities and deprive the economy of those future skills. Moreover, there are other costs for the individual. A study published in ResearchGate has shown that prolonged unemployment affects workers' mental health and can worsen physical health, and shorten lifespans.
The social cost of unemployment is difficult to calculate, but no less real. When unemployment becomes a pervasive problem, calls for protectionism and severe immigration restrictions are often louder. Not only can protectionism lead to destructive retaliation between countries, but trade cuts also harm the economic well-being of all trading partners. Other societal costs include the way people interact with each other. Studies have shown that periods of increased unemployment can be associated with both less volunteering and higher crime.
The economic cost of unemployment is likely to become more apparent when viewed through the lens of the state chequebook. Unemployment can result in higher payments from state and federal governments for unemployment benefits, food aid, and Medicaid.
Unemployment is also a dangerous condition for several
economies. For example, almost 70% of what the US economy produces goes to private consumption and unemployed workers.
Even individuals who receive government assistance cannot spend as much as before. When those workers stop producing, the economy's gross domestic product (GDP) declines and the nation veers away from the wise use of its resources. That is a significant problem for anyone who believes in Jean-Baptiste's idea which says that the production of things generates its own demand.
It is also important to note that businesses suffer from rising unemployment. Taxes levied on corporations provide the majority of funding for unemployment benefits.
In many countries, the COVID-19 pandemic, and the Russia-Ukraine war has exacerbated stalled labour market trends. It has also changed labour market conditions. South Africa is expected to have the highest unemployment rate in the world. As the most industrialized country on the continent, unemployment is estimated to reach 35.6% in 2025. Slow economic growth and tough labour laws have combined to discourage companies from hiring workers. Unemployment has hovered around 20% over the past two decades.
Bosnia and Herzegovina is estimated to have the highest unemployment rate in Europe at over 17%. It is followed by North Macedonia (15.0%) and Spain (12.7%). These unemployment
rates are more than double the forecasts for advanced economies in Europe. The US unemployment rate is forecast to be 4.6%, which is 1.2% higher than current levels. This suggests that the current job market strength will weaken as US economic indicators weaken. One indicator is the Conference Board's Leading Economic Index, which fell for the tenth straight month in December 2022. Lower manufacturing orders, falling consumer expectations and shorter work weeks are among the indicators being tracked. Like the US, many advanced countries are seeing labour market strength, particularly in the UK, Asia and Europe. However, it is unclear how long it will last.
Contrary to some of the declining economic indicators, the labour market is one of the strongest areas of the global economy. Even as the tech sector reports mass layoffs, US jobless claims fall below recent averages. (It's worth noting that the tech sector accounts for just 4% of the workforce). Over 4.8 million jobs were created in 2022, more than double the average between 2015 and 2019. The recovery from the pandemic has impacted those numbers. Some analysts suspect companies are reluctant to lay off despite a bleak economic outlook. At the same time, the labour market is absorbing workers who have lost their jobs. Experts give an example of the manufacturing sector. They say, although the ISM purchasing managers' index fell in January 2023, hitting 47.4 (a reading of 48.7 and below), this generally indicates a recession as factories are not shedding many workers. Instead, manufacturers are confident that conditions will improve in the second half of the year. Also, strong labour markets are a key challenge for central banks around the world. This is because the resilient labour market is contributing to high inflation numbers. But despite recent rate hikes from
central banks of several economies, the impact hasn't triggered any major waves of unemployment yet in 2023. It typically takes around a year for monetary policy actions like this to have their maximum impact. Evidence shows that monetary policy needs more than three or even four years to combat inflation. The good news is that there may be other ways to contain inflation. Addressing supply-side dynamics, such as preventing supply shortages and improving transportation systems and infrastructure, could cool inflation. As investors closely monitor economic data, rising unemployment could coincide with higher interest rates, but no solution has yet been found.
According to a new ILO report, mutually reinforcing crises, including rising debt levels, are disproportionately hitting developing countries, widening the global employment gap between high and lowincome countries and widening existing inequalities exacerbated by the COVID-19 pandemic. Global unemployment is expected to fall to 191 million below prepandemic levels in 2023, bringing the global unemployment rate to 5.3%. The report stated that estimates show lowincome countries lagging far behind in the recovery process.
The ILO report believes low-income countries in Africa and the Arab world are unlikely to return to pre-pandemic levels this year. For North Africa, the unemployment rate in 2023 is projected to be 11.2% (10.9% in 2019); for Sub-Saharan Africa, 6.3% (5.7% in 2019); and for the Arab States 9.3% (8.7% in 2019). Other regions have managed to reduce their rates substantially below pre-crisis levels, with 6.7% in Latin America and the Caribbean (8% in 2019), 6.3% in Northern, Southern and Western Europe (7.0% in 2019), and
7.8% in central and Western Asia (9.2% in 2019).
Beyond unemployment rates, a new indicator developed by the ILO, the employment gap, provides a broader measure of unsatisfied demand for employment, particularly in developing countries. All who would like to work but do not have a job are recorded. Lowincome countries have the largest employment gap at an alarming 21.5%, while the rate in middleincome countries is slightly over 11%. High-income countries have the lowest rates at 8.2%. In addition, lowincome countries represent the only country-income group where the job gap rate has increased over the long term, from 19.1% in 2005 to 21.5% in 2023, the report said.
Mutually reinforcing crises, including rising debt levels, are disproportionately hitting developing countries, widening the global employment gap between high and low-income countries and widening existing inequalities exacerbated by the COVID-19 pandemic
The patriotic millionaires are notable on both sides of the Atlantic for being unusually outspoken and forthright
Taking a grim view of the ongoing global economic downturn, the Bank of International Settlements has advised the governments to raise taxes or cut public spending after central banks kept interest rates too low for too long in the face of higher inflation.
Closing the gap between government income and expenditure would 'calm down inflation,' stated the Basel-based organization.
Talking about raising taxes, should the rich be taxed more? While the answer may get an overwhelming 'no' among the community of the High-Net-Worth-Individuals (HNWIs), going by one's correct imagination, this article will talk about a different reality.
Gemma McGough, despite being unemployed till 2017, joined the United Kingdom's top 1% and became a multimillionaire by selling her business, Product Compliance Specialists. She had a job where she would never have to work again.
Then she read Naomi Klein's book, "This Changes Everything," which explores how capitalism affects the environment. It was a significant change in her thinking.
She established ‘Eleos Compliance’ in 2019, based on the B Corp values of transparency and social and environmental accountability. Despite taking a salary, most of her income now comes from investments, bonds, and rental properties.
Although wealth taxes are familiar, many of these levies were eliminated in the 1980s and 1990s. Today, just four European nations— Spain, Norway, Switzerland, and Belgium— collect net wealth taxes, with additional levies on specific assets in France and Italy
McGough examined the tax she was paying on her salary vs. the lower rates on income from the sale of assets after finding herself suddenly inundated with alarmist mailings from accountants.
She came to two conclusions: first, the country's tax system was unfair, and second, she might be making more of a contribution. She had put in a lot of labour over 20 years to develop her first firm, but many others have put in similar amounts of effort only to be left with "a mortgage and many more hours to work."
Since 2020, McGough and her husband have donated about £400,000 ($509,946) for reforestation, rainforest preservation, and strategic land purchases.
In 2021, she joined Patriotic Millionaires UK, a club of multimillionaires and billionaires who support higher taxes on the wealthy. McGough was one of four British "wealth-holders" to do so.
McGough is a founder member of the UK arm of the group, which has expanded to 20 members since its establishment in the US in 2010. The organization now has 240 members in the US. They participate in regular meetings, use WhatsApp to organize media activities, and speak out in favour of net wealth taxes at parliamentary gatherings. There is a mix of founders and CEOs, uneasy heirs, and former financiers like Gary Stevenson, a former Citibank trader who now raises awareness of inequality.
They bring together relationships, knowledge of finances and taxes, position, access, and a few well-known figures, notably the Disney family fortune. The recent "Cost of Extreme Wealth" open letter, presented to the World Economic Forum in January 2023, included the signature of actor Mark Ruffalo too. Former British engineer and consultant Phil White added a triedand-true political strategy to his Davos trip by holding up a cardboard sign that read, "Tax the Rich."
Additionally, there is a growing level of coordination with ‘Millionaires for Humanity’ in Copenhagen and Taxmenow in Germany, Austria, and Switzerland.
The patriotic millionaires are notable on both sides of the Atlantic for being unusually outspoken and forthright; US chair Morris Pearl, a former BlackRock MD, has discussed how COVID-19 increased his wealth and how he doesn't check his bank balance because he doesn't need to.
“When you've won the game, why say anything?” McGough stated while interacting with Wired UK. She may be more inclined to feel like she has "enough" now because of her "hard-up" working-class upbringing.
When she was 16 years old, she quit school to start her first job and founded her
first business with her ex-husband using "two laptops and a list of contacts." Her RF compliance business was in a growing sector at the right time, and she was able to hire people from the European Union, which helped her succeed.
The Patriotic Millionaires are keen to highlight the economic case that wealth taxes could promote stability and support both a healthy, educated workforce and a middle class of customers with disposable income, so paying more tax may benefit wealthy business people. But for McGough, it's about fairness and common sense in a time of growing inequality and declining public services.
The richest 1% of British citizens outpaces the aggregate wealth of the poorest 70%. She argues that if you have so much money that you no longer require a functional society that is a problem in her eyes.
With a dash of pragmatism, the organization bases its suggestions on studies into wealth taxes and inequality. McGough asserts that inheritance taxes will always remain the same. According to research by the Wealth Tax Commission at the LSE and the University of Warwick, the group is advocating for an annual wealth tax in the UK of 1%-2% on fortunes above £10 million, which would touch about 20,000 people but potentially bring in up to £22 billion annually. That would almost be sufficient to provide a salary boost in line with inflation for the whole public sector.
Although wealth taxes are familiar, many of these levies were eliminated in the 1980s and 1990s. Today, just four European nations—Spain, Norway, Switzerland, and Belgium—collect net wealth taxes, with additional levies on specific assets in France and Italy.
The arguments against a wealth tax range from the statement "I pay enough already," which McGough claims she has heard a lot of, to concerns about the
expense of administration, the possibility of capital flight, and the potential rise in tax evasion and avoidance. In the 1970s, Harold Wilson's government could not enact a wealth tax in the UK due to administrative difficulties and concerns about a market confidence crisis.
Regarding capital flight, it is acknowledged that some affluent people may relocate their wealth due to tax increases. However, according to Cristobal Young, an assistant professor of sociology at Stanford University, the majority would likely continue to exist. The remaining 95% of billionaires reside in the nation where they were born, received their education, or established their firm, as opposed to the 5% who lead a transnational lifestyle between London, Switzerland, and tropical tax havens.
A new class of conscientious multimillionaires is working with Tax Justice UK to use their connections to promote new wealth taxes to all-party parliamentary parties directly. Even though the group is generally opposed to this form of impact of wealth on politics through private lobbying and its erosion of trust in democracy, events focused on tax, investments, and social mobility are scheduled for 2023. The invitations to Westminster are considered a necessary evil for the time being.
Because the Patriotic Millionaires are wealthy, their argument for taxing the wealthy may be persuasive. In 2021, researchers from King's College London and the University of St. Gallen Switzerland, examined data on wealth taxes from 1880 onward in 45 nations. They discovered that the forces of industrialization and democracy and the start of wars do not frequently hasten the implementation of wealth taxes. Instead, they had primarily served as an emergency tax when nations experienced the shock of an economic downturn. Similar to McGough's business success, everything may depend on timing.
Switzerland
16.4%
Luxembourg
16.2% Iceland
13.5% Australia
11.2% Hong Kong
10% United States
9.7% New Zealand
9.6% Denmark
8.5% Netherlands
8.5% Sweden
7.8%
(In Percentage)
Source: Statista
Countries with the highest proportion of millionaires in 2021
According to a government assessment, Australia will see decades of slower economic growth as its population ages, which would strain the budget and increase the nation's debt. Taxation was conspicuously absent from the suggested measures.
Treasurer Jim Chalmers stated that
providing relief for utility costs for the average household. In the future, Chalmers added, the task would be to manage the transition from fossil fuels to renewable energy sources, from IT to AI, from a younger to an older population, and from globalisation to fragmentation. All of this needed to be accomplished despite the slowing economy.
the economy would be shaped by digital technology, climate change, renewable energy, ageing, and the need for increased aged care during the next 40 years.
Chalmers stressed that the Labour government's immediate priority was to reduce the country's cost of living crisis without increasing inflation,
According to official figures, Dubai's gross domestic product (GDP) increased 2.8% year over year in the first quarter of the year to AED 111.3 billion ($30.3 billion), driven by growth in the transportation and storage industry. The economy of the Emirate expanded by 4.4% in 2022.
"The continued high growth in the first quarter of the year is yet another testament to Dubai's strong fundamentals, sustainability,
According to the analysis, annual growth will only be an average of 2.2% from now until 2063, compared to 3.1% over the previous 40 years. Some of that slowdown would be due to climate change, with the report estimating rising temperatures could cost between A$135 billion ($87.41 billion) and A$423 billion in lost activity over the 40-year period.
and resilience, as well as its capacity to constantly create new pathways for enterprise and innovation to flourish,"
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council said.
A 10-year economic plan that Dubai unveiled earlier this year, D33, aims to quadruple the size of the economy and elevate Dubai to the status of one of the world's top financial capitals. With a 48% contribution, the transport and storage sector was the main driver of overall growth. According to data released by the Dubai Data and Statistics Establishment of the Dubai Digital Authority, this was followed by the banking and insurance industry, which accounted for 15%, and trade, at 10%. Also, transportation outperformed all other sectors with a significant growth of 10.3%.
A 10-year economic plan that Dubai unveiled earlier this year, D33, aims to quadruple the size of the economy
As inflation slowed in July, consumer spending remained solid, and retail sales performed better than anticipated for the month, according to data from the Commerce Department. In contrast to the 0.4% Dow Jones projection, the advanced retail sales report indicated a seasonally adjusted gain of 0.7% for the month. Sales increased strongly by 1% when vehicles were excluded, above the prediction of 0.4%. The best monthly gains since January were seen in both indices.
The year 2022 saw a record high in the median salary that employees needed to accept a job, indicating that inflation is still present, at least in the labour market. The average reservation wage, or the lowest pay offer that would be considered acceptable to leave a job, increased to $78,645 during the second quarter of 2023, according to the most recent New York Federal Reserve employment survey. This is the highest level ever recorded in a data set that dates back to the beginning of 2014, up approximately 8% from just a year ago. The amount has increased by more than 22% over the last three years, which includes the COVID-19 pandemic period. The figure is significant since wages are now widely acknowledged as an inflationary force. While the total inflation rate has decreased since peaking
at its greatest level in more than 40 years in the middle of 2022, other variables have kept it substantially above the Federal Reserve's goal rate of 2%.
The New York Fed data is consistent with a tracker from the Atlanta Fed, which indicates that while overall salaries are increasing at a 6% annual rate, job changers are experiencing a 7% rise.
The figures demonstrated a consumer who was able to keep up with price rises that have been common over the last two years despite the fact that they were not adjusted for inflation. Indicating strong demand, the consumer price index increased 0.2% month over month.
Spending at online shops jumped by 1.9% in July, while spending at restaurants and bars increased by 1.4% and sporting goods and related outlets by 1.5%. Furniture sales fell 1.8%, and electronics and appliance retailers reported a 1.3% decline. Despite higher petrol prices at the pump, petrol station sales increased just 0.4% on a monthly basis. The US economy may avoid the widely anticipated recession that will be brought on by a series of Federal Reserve interest rate increases.
The reservation wage is the highest level ever recorded in a data set that dates back to the beginning of 2014, up approximatel 8% from just a year ago
The US government agency overseeing car safety, the National Highway Traffic Safety Administration, recently warned automakers to refrain from abiding by a nearly three-year-old state law that calls for them to share vehicle data with owners and independent auto repair shops.
A government attorney warned in a letter that granting consumers and mechanics access to the vehicle systems may also make them vulnerable in front of the threat actors, who could then access the car’s steering, acceleration, braking, or electronics systems.
When Massachusetts voters overwhelmingly supported a ballot measure allowing people to fix their cars in 2020, the dispute began. The Alliance for Automotive Innovation, a trade association for international automakers, filed a lawsuit to stop the rule from going into effect. It claimed that the statute put Massachusetts's vehicles in danger of manipulation and was preempted by federal vehicle safety regulations, making it an unassailable matter for the state's voters. The federal judge presiding over the lawsuit has not yet decided on the case, and so far, the federal government has kept quiet about it.
The right-to-repair movement is currently facing yet another setback. While the state claims that the law benefits all types of car buyers, the federal authorities deem the reform hazardous for auto safety.
What does the recent development in the right-to-repair case mean for car owners, mechanics, and dealers in the state? Confusion reigns at this stage.
"Massachusetts consumers don't know their rights because of how long this is taking," said Tommy Hickey, the director of the Massachusetts Right to Repair Coalition (and currently, a Maine group attempting to enact a similar law there), while interacting
The right-to-repair movement is currently facing yet another setback
Correspondent
with the media. In the meantime, new automobile owners in Massachusetts have been left without access to safety and comfort amenities due to the legal dispute.
In defiance of the legal impasse, the Massachusetts attorney general sent documents to new car buyers in June advising them of their legal right to access any technical data generated by their cars to assist with diagnosis, maintenance, and repairs. First Assistant Attorney General for Massachusetts, Pat Moore, questioned the timing of the federal government's intervention in the matter in a statement.
The federal government's stance in Massachusetts is at odds with its overall views on the right to repair. President Joe Biden directed the Federal Trade Commission to draft new regulations in 2021 that would make it more difficult for
manufacturers to restrict who can fix their products.
Who owns the mountains of data generated by 21st century's increasingly software- and computer-chip-enabled cars? This is a basic question that Massachusetts tried to address amid the conflicting letters, claims, and legal documents.
For many years, the auto sector was praised as an example of one practising the right to repair, which is the theory that once you buy a product, you get to choose how to restore it. Car repair has traditionally been the purview of the do-it-yourself. Due to this, aftermarket component producers and independent car repair businesses have made billions of dollars in tuning and servicing vehicles.
Massachusetts voters were the first to modernize the idea in 2012 when they mandated that automakers include an onboard port allowing anyone with a low-cost gadget to access a car's data.
Automakers promised independent repairers and owners access to the equipment and software provided to their own franchised dealerships under the terms of a nationwide agreement made possible by the law.
Since then, however, the auto industry has moved online, and almost all new cars now come equipped with a telematics system that gathers data on how they are operating, including how quickly they are travelling, where they are going, how hard the driver is braking, and whether or not everything in the car is functioning properly. Since this information can be transferred wirelessly, several automakers claim they no longer need to include an onboard connection in their automobiles.
Owners and managers of repair facilities are concerned that the auto industry will use these developments to restrict access to the data required to diagnose and fix automobiles and instead direct repair work to their franchise dealerships. In Massachusetts, 75% of voters approved the ballot item granting the updated right to repair after concluding that new technology and the possible gaps it generated required a new statute.
"Everything that your car does—all of the data it generates and all of the functions it has after you buy it—that belongs to you," asserts Nathan Proctor, who oversees the Right to Repair campaign at the US Public Interest Research Group, an advocacy group.
Automobile manufacturers shouldn't be able to bind you to their services. According to him, the continuous conflict in Massachusetts is "very frustrating."
However, the auto industry and the US Department of Transportation have stated that they think it is risky to allow more people access to car data. The Massachusetts law compelled them to establish an open data platform too rapidly, which put security in danger, according to the complaint brought by the ‘Alliance for Automotive Innovation’ in 2020.
The automakers may be correct—to a point, according to Josh Siegel, an assistant professor of engineering at Michigan State University who specializes in connectedcar security. The Massachusetts law gave the sector around a year to develop an open data platform, which was probably insufficient time to establish a secure system. He claims that hastily put-together available telemetry systems may enable illegal access and control.
The present position of the federal government contends that open systems are hazardous regardless of how well they are constructed. They are said to be harmful by nature. However, Siegel disputes this. He asserts that everyone— right-to-repair proponents, specialists in car safety and cybersecurity, and manufacturers—can work together to create a data-sharing mechanism. It should be "designed with the needs of the public and manufacturers in mind and with care and attention paid to security from
the start," as he argues that one standard should be created for the entire US.
Beyond disagreements over law and policy, Massachusetts has had odd practical repercussions from the struggle between the state, the auto industry, and the federal government. Kia and Subaru decided to deny new car buyers in the state access to their telematics systems starting in 2021. The automakers claimed they took this action to comply with the law. They argued that because the open data platform required by the law did not yet exist, the only option to do so was to restrict access to their telematics systems completely.
Because of this, Massachusetts automobile purchasers who invest in the newest models cannot use Kia Connect, which offers remote climate control and stolen vehicle recovery, or Subaru's Starlink service, which includes emergency roadside assistance and remote start.
Subaru and Kia owners in the state are unhappy with the issue, which doesn't appear to be going away anytime soon. The NHTSA advised automakers against following Subaru and Kia's example and turning off their telematics systems in Massachusetts. It did so because some safety features "could facilitate better emergency response in the event of a vehicle crash." Dominick Infante, a representative for Subaru, claims that the carmaker isn't altering its position.
He claimed that compliance with the Massachusetts Data Law is impossible for any automaker. Subaru maintains its commitment to giving customers a choice in auto maintenance.
A Kia representative declined to comment and asked the ‘Alliance for Automotive Innovation,' the company's trade association, which also refused to comment on ongoing legal matters.
Everyone will now wait for the Massachusetts judge to make the final
decision regarding the statute that the state's people approved—as well as the future of auto repair in Massachusetts, the US, and elsewhere. While Massachusetts voters overwhelmingly supported the right-to-repair ballot measure, the ‘Alliance for Automotive Innovation’ filed a lawsuit to stop the rule from going into effect, claiming it put vehicles at risk of manipulation and was preempted by federal vehicle safety regulations. The federal judge presiding over the lawsuit has yet to decide on the case, leaving car owners and mechanics confused and frustrated.
stage critical illnesses, customers don't need to pay a premium for the following year, while receiving policy coverage on a continuous basis, without adjusting the premium amount as per the increase in age.
FWD Life Insurance Plc (“FWD Insurance”) recently hit the headlines by winning the Global Business Outlook Innovation Award for offering the “Most Innovative Life Insurance Product” in the form of its 'CI Fixed Pay' plan, which is a game-changing lifelong coverage against critical illnesses.
Founded in 2013 as part of the FWD Group, FWD Thailand is a fast-growing insurance company offering broad life and health protection and services, plus a range of investment-linked and savings products.
With a customer-led approach, 'CI Fixed Pay' has set a pioneering standard in the Thai insurance industry, by introducing a first-in-the-market life insurance plan that offers a premium waiver while ensuring uninterrupted coverage until the age of 90. The plan also includes a lump sum pay-out of 25% of the sum assured for critical illnesses at an early stage.
The Thai customers availing the 'CI Fixed Pay', will get benefits in case of illness with four earlystage critical illnesses, and 15 late-stage critical illnesses. If diagnosed with one of the four early-
'CI Fixed Pay' was first launched in 2019, covering only 7 critical illnesses. This year, it expanded its scope of coverage to 19 critical illnesses, including both early and late stages, without an increment of the premium rate where customers can select a premium payment period from 5 years, 10 years or 20 years. This benefit is now available to both existing and new customers.
The insured will receive an assured 25% 'Survival Benefit' if diagnosed as one of four early-stage critical illnesses. If he/she is diagnosed as one of 15 late-stage critical illnesses, he/she will get 100% of the sum assured or the total premium paid, deducted from the paid benefits of early-stage critical illnesses.
If the policyholder passes away, his/her family will receive 100% of the sum assured or total premium paid, deducted from the paid benefits of early-stage critical illnesses. Also, when the insured reaches the age of 90 or the maturity of the contract with no claim incurred, he/she will receive 100% of the sum assured or total premium paid, whichever is greater. The tax deduction will be up to 100,000 Thai Baht,
FWD is committed to creating a unique and different insurance company with a vision of changing the way people feel about insurance
applicable for all premium payment terms; either on the 5-, 10-, or 20-year plan.
FWD is committed to creating a unique and different insurance company with a vision of "changing the way people feel about insurance."
Through its customer-led approach, the company is dedicated to encouraging everyone to live their lives their way, while offering a variety of innovative products and services that go far beyond simple risk protection to accommodate the various needs of consumers and resonate the brand promise of ‘Celebrate living’ in every stage of life.
Ms. Alisa Areepong, Chief Proposition Officer of FWD Insurance, told the Global Business Outlook, “We are truly honoured to be recognised by the Global Business Outlook for our continuous commitment to accelerating innovation and transformation in Thailand’s insurance industry. In today's fast-paced world, it is easy for people to overlook their health, preparedness, and long-term insurance planning. As we continue to develop solutions that empower our customers to celebrate living, CI
Fixed Pay with Lifelong Critical
Protection cuts through the varying pace of lifestyles and environments. Our dedicated focus is to provide customers with peace of mind, even when life throws them a surprise, by providing long-term protection for both life and critical illnesses up to 90 years of age, with fixed premiums throughout the policy term.”
FWD Group is a Pan-Asian insurer operating in Hong Kong & Macau, Thailand, Indonesia, the Philippines, Singapore, Japan, Vietnam and Malaysia with over 11 million customers across the 10 Asian markets, including some of the fastest-growing ones in the region and in the world. Empowered by digital technology, FWD, which reached its 10-year anniversary in 2023, is currently focused on making its insurance journey simpler, faster, and smoother for customers, with innovative propositions and easy-tounderstand financial products.
China has been the key player behind Thailand's latest economic recovery
Thailand's investment applications between January and June 2023 jumped 70% from the corresponding period in 2022, driven by foreign investors' projects in the electronics, food, and auto sectors, the Southeast Asian country's government stated recently.
In the first six months of 2023, applications totalled 364.4 billion baht ($10.37 billion) and Foreign Direct Investment (FDI) surged 141% on-year to 304 billion baht, the Board of Investment (BOI) said.
China was the biggest investor, with projects worth 61.5 billion baht, while Singapore and Japan followed with 59 billion baht and 35.3 billion baht, respectively, the BOI remarked further.
Understanding the 'China' picture China has been the key player behind Thailand's latest economic recovery. As per the BOI, Thailand's higher first-half pledges were helped by the automotive and related
New Energy Automobile, both from China. As per the BOI, these two companies are expected to file investment applications in the second half of the 2023-2024 financial year.
Great Wall Motor made its entry into the Thai market in 2020 by acquiring a factory from General Motors. The facility will witness a capital spending of 22.6 billion baht ($647.38 million), in order to become a regional production centre for EV and hybrid cars.
The Chinese automaker will also start producing its popular compact 'Ora Good Cat EV' in Thailand from 2024 onwards, apart from bringing in its subsidiaries MIND Electronics, HYCET and Nobo Auto into the Southeast Asian country.
Great Wall's rival venture SAIC Motor, another Chinese company, which owns MG Motor and has a partnership with Thai conglomerate Charoen Pokphand Group, will be investing 500 million baht to expand its existing plant for EV parts and battery manufacturing. SAIC Motor entered the Thai market in 2019.
Talking about BYD, the Chinese EV giant has already invested 17.9 billion baht to set up a new facility in Thailand that will start producing 150,000 passenger cars per year in 2024. These cars will also be exported to Southeast Asia and Europe.
Lastly, China's Hozon New Energy Automobile is also working with Thailand's Bangchan General Assembly to locally produce the electric NETA V model from 2024 onwards.
In short, Chinese automakers have flooded the Thai market, but why? We will discuss it next.
China's domestic car market has matured and a post-COVID GDP growth slowdown, has made carmakers’ cost of acquiring new Chinese customers “just so high”, said Tu Le of Detroit-based consultancy Sino Auto Insights, while speaking with The Economist.
Also, since 2023 beginning, a price war has broken out in China between EV marques, a competition which has even seen Elon Musk's Tesla reducing its car prices. However, the Chinese automobile businesses are now seeing foreign expansion as a potential growth avenue. China exported $21 billion worth of cars in the first quarter of 2023, 82% more than in the same period in 2022.
Right now, technology has become the new battlefield for Beijing and the United States-led West, with each imposing export restrictions on the other. Add the geopolitics in the mix, you have a situation which will be deemed as 'risky' for Chinese businesses, including automakers.
At the same point in time, given the growth stagnation in the domestic market, these vehicle makers are mulling the global expansion route to keep their venture profitable. Thailand, despite being an American ally, has emerged as the neutral ground for these carmakers. The Southeast Asian country is also a member of the Regional Comprehensive Economic Partnership, with limited restrictions on trade in intermediate goods.
Also, Thailand becomes a strategic investment destination for Chinese automakers as the economy is growing in Southeast Asia at a steady pace. Car sales in the region rose by 23% in 2022, to 3.4 million.
"But the carmakers also have designs on the lucrative Western markets. Research by Allianz, a German insurer, finds that Chinese firms accounted for about 4% of battery-EV sales in Germany between January and March, three times the share a year earlier. Some, including BYD, are even attempting to conquer the American market, as Japanese firms had done before them (though sour relations between the two governments and America’s protectionist subsidy regime for EVs complicate this effort)," comments the Economist report.
In this scenario, Thailand becomes the crucial piece of the puzzle for these Chinese
automakers, both in terms of dominating the Asian supply chains and fast tracking their expansions throughout the world.
In 2022, Thailand received $3.4 billion in foreign direct investment from companies in China, more than the amount it received from America or Japan.
In February 2023, the Southeast Asian country unveiled a list of registered vehicles, dominated by Chinese companies. BYD with its Atto 3 claimed the first spot, followed by Hozon’s Neta V. Tesla's Model Y was the only American car maker featured in the list.
SAIC Group was the first Chinese company to enter the Thai market. In 2012, it established a joint venture with the CP Group, and its MG brand entered the Southeast Asian country in 2014. The debut was a superhit one, as some 31,005 MG models were sold in the country that year, thus helping MG to enter the list of top ten car brands in the Thai market.
In 2021, Great Wall Motor entered the
Thai market and its ORA models became popular in a very short span of time. From January to September 2022, Great Wall Motor sold over 8,000 EVs in Thailand, thus becoming the new energy vehicle brand with the highest sales volume in the Southeast Asian country. Since then, Great Wall Motor has launched several models in the Thai market, including the likes of Haval H6 HEV, JOLION HEV, and ORA. Most of these products have proved to be market hits.
As per the China-based EV research institution 'EV100 PLUS', Chinese car manufacturers value Thailand’s large market, welfare measures, and favourable policies.
"Thailand’s automobile market relies on brands from other countries, and most of the cars in the country are produced by foreign car manufacturers that have established local factories. As the largest automobile producer and second-largest automobile sales market among ASEAN member states, Thailand is the third-largest automobile exporter in Asia, second only to Japan and South Korea, with over half of automobiles
SAIC Group was the first Chinese company to enter the Thai market. In 2012, it established a joint venture with the CP Group, and its MG brand entered the Southeast Asian country in 2014. The debut was a superhit one, as some 31,005 MG models were sold in the country that year
produced in the country being exported," said a KrASIA article, based on a feature written by Chebai Think Tank.
As per the Federation of Thai Industries, some 1.88 million vehicle models were produced in Thailand in 2022, of which 840,000 units were sold domestically and one million were exported. The 'Vision Thai Research Center' also predicted that the overall domestic market size for EVs will reach 50,000 models by 2023 end, a yearon-year increase of 270% compared to 13,454 models in 2022.
Manufacturers operating in Thailand can source car parts from the local market. This significantly reduces logistics costs, apart from speeding up the production rates.
To become Southeast Asia's EV manufacturing and export hub, Thailand has formulated the “30@30” policy, which calls for the replacement rate of domestic EVs and the production capacity of new energy vehicles to be above 30% by 2030.
The Thai Board of Investment (BoI) is also providing tax exemptions for EV suppliers for up to eight years. The
National Electric Vehicle Policy Committee of Thailand has also released a plan to transition to zero emissions in support of the plan. The Thai Ministry of Finance has invested THB 2.9 billion ($85.5 million) as part of its car purchase subsidy.
And last but not the least, there are currently 18 projects underway in Thailand that involve battery production, module production, and module assembly, all associated with the EV supply chain.
As per 2021 stats, there were over 2,000 charging stations across Thailand, a figure which the government is trying to increase to 12,000 by 2030.
China's neighbour Japan, with whom Beijing also shares contentious geopolitical ties, is now facing the heat in the Thailand market. Japan entered the Thai market in 1962, when Nissan tied up with Siam Motors, resulting in a profitable, decades-long relationship.
The same Siam Motors is now in talks with several Chinese automakers about potential partnerships, particularly for high-
end electric vehicles, as per reports.
The Chinese companies are making the best use of Thailand's EV industry policies, thus reshaping the local market there and forcing Thai firms to have ties with Japanese companies to seek new partnerships.
China surpassed Japan as Thailand’s top foreign investor in 2022. The same market, which used to be dominated by Tokyo-based automakers, is now seeing a successful influx of Chinese EV ventures, thus contributing directly to the Southeast Asian country's ambitious dream of becoming an EV manufacturing and export hub by 2030.
Of the nearly 850,000 new cars registered in Thailand in 2022, only around 1% were EVs, according to government data. However, between January and April 2023 the same proportion rose to over 6%.
BYD is now the market leader, followed by China’s SAIC and Hozon, and American automaker Tesla, a development which will definitely bother Tokyo.
Only 11 newly registered EVs in 2023 came from Toyota, Thailand's dominant brand that along with its partner Isuzu and Honda, sold nearly 70% of overall new cars and trucks in the Southeast Asian country in 2022.
Toyota, which alongside its group companies has already invested nearly $7 billion in Thailand, along with employing 275,000 staffers, told Reuters that it was considering EV production in the country. The Japanese automaker is putting the bait on its electric bZ4X and an upcoming electric pick-up truck to change the tides.
What’s next?
Deloitte stated in its report, "The Second Growth Curve for Chinese OEMs that Chinese car manufacturers have made a transition over the past decade from an approach focused on product export to value chain globalization."
It is in this context that Chinese car manufacturers are exploring overseas markets through full value chains, such
as R&D, manufacturing, logistics and transportation, and automotive finance. In doing so, they are paving the way for the comprehensive export of Chinese automobile brands and products.
President of Geely Holding Group and CEO of ZEEKR Intelligent Technology told the media in 2023 that China’s EV industry has become globally competitive due to the decade-long government effort. The official also suggested the industry, in general, undertake a large-scale exploration of overseas markets to further boost innovation and growth.
While Europe has emerged as a major hotspot for EV sales, Southeast Asia, given its steady economic growth and climate goals, can very well become the next lucrative hub of such vehicles.
In Thailand, Japanese cars used to account for roughly 90% of that market as gasoline generation peaked. However, the country is now looking to up the production capacity of new energy vehicles to above 30% by 2030.
As the Thai government is offering incentives for the EV makers to project the Southeast country as the upcoming EV hub, Chinese businesses have grabbed the opportunity with both hands, resulting in an early market lead.
Chinese manufacturers have the golden chance to accelerate their production rates and help Thailand to improve its sluggish EV conversion rate. However, experts believe that these businesses must offer competitive pricing to lure away traditional fuel-powered vehicle drivers. An increased R&D investment will help things further.
"In addition to core technologies, localized solutions should be tailored to meet local requirements, and different product strategies should be developed and adjusted to fit different markets according to the specific models," stated the Chebai Think Tank.
Of the nearly 850,000 new cars registered in Thailand in 2022, only around 1% were EVs, according to government data. However, between January and April 2023 the same proportion rose to over 6%
The new
The new labour reforms make several aspects of working in Oman, such as leave benefits, compensation, and contracted hours, crystal clear. In accordance with the tenets of ‘Oman Vision 2040’, Sultan Haitham Bin Tarik issued the Labour Law Decree, which focuses on the labour market.
The 98-day maternity leave for women and the 15-day paternity leave for fathers have emerged as notable measures from the latest reforms, which also enable employers to set productivity goals and terminate staff members who do not meet them.
According to the legislation, if an Omani worker replaces a non-Omani employee, the latter's contract could end. The Labour Law aims to create a climate that adapts well to change by enacting legislation that is adaptable, robust, effective, and capable of addressing both immediate and long-term problems.
The law prioritizes national strengths and sets them up to take centre stage within a framework that protects rights and obligations, increases private sector institutional performance, and successfully influences administrative procedures.
The new laws enacted in Oman affirm and uphold the principle that employment is a fundamental right specifically reserved for Omani citizens. These laws also strictly prohibit anyone else from working in the Sultanate of Oman unless they meet the specific conditions and statuses outlined by the law and relevant decisions.
A crucial aspect of these regulations is the emphasis on transparency and accountability in the employment sector. Each establishment operating within the country is mandated to
laws enacted in Oman affirm and uphold the principle that employment is a fundamental right specifically reserved for Omani citizens
publish its annual strategy for localization and replacement, both at its workplace and on its official website.
This strategy must include a comprehensive report on various aspects of their workforce, such as the number of Omani employees employed by the organization, their respective pay scales, and relevant demographic information, including gender statistics. The aim is to ensure fairness and equal opportunities for Omani citizens in the job market.
Organizations are also required to disclose information regarding any open positions within their establishment. This measure is to encourage more Omani citizens to apply and secure employment opportunities within their country.
Additionally, the new law makes it obligatory for every organization to develop a comprehensive plan that focuses
on the hiring and development of Omani citizens for leadership positions within the company. This plan must be diligently executed with a commitment to promoting the growth and advancement of qualified Omanis to assume higher responsibilities and positions of leadership.
These new laws underscore the Sultanate of Oman's dedication to empowering its citizens in the workforce and ensuring that they have a fair chance to thrive and succeed in their careers within the country's boundaries. By prioritizing localization and the employment of Omani citizens, the government aims to foster economic growth, inclusivity, and long-term prosperity for its people. It also advocates for the creation of workable retention methods for the Omani workforce.
The Labour Law in Oman is the culmination of a
nationwide effort that involved various specialized bodies as well as representatives from different production stakeholders. A ‘Joint Dialogue Committee’ has been established to facilitate communication and cooperation between these production parties.
The primary responsibility of the Joint Dialogue Committee is to examine and propose ideas that can effectively regulate the labour market while strengthening the relationships between the parties involved in production. This entails analysing and aligning labour standards, both on the Arab and international levels, to ensure that the country's labour practices adhere to best practices.
Moreover, the committee aims to enhance productivity, promote competitiveness, and strike a balance between the interests of employees and employers. By coordinating the activities of social partners in the labour market, they seek to foster a harmonious working environment that benefits all stakeholders.
These efforts are in line with the broader objectives of promoting inclusive and sustainable development within the nation. The comprehensive ten-section law oversees various aspects of employment, including laws governing working hours, leave stipends, remuneration, and the employment of young people. It also addresses critical concerns related to safety and health at work, acknowledging the importance of safeguarding employees' well-being.
Furthermore, the Labour Law incorporates provisions regarding trade unions and the General Trade Union. It outlines procedures for the resolution of labour-related disputes and the implementation of corrective actions. The law's comprehensive coverage ensures that employment practices are conducted fairly and responsibly, promoting a conducive and equitable working environment in Oman.
The labour reforms have taken women into
consideration as well. These benefits include a 98-day maternity leave provision and a daily childcare allotment of one hour. Additionally, it permits the use of a yearlong unpaid leave term for child care. Moreover, the law requires companies to provide a designated rest area in workplaces with more than 25 female employees.
Notably, the law permits the organization of work in particular sectors in line with the circumstances particular to each sector, promoting establishment stability and enabling the employer to run their firm in accordance with the sector's particular characteristics.
The law authorizes the employer to permit a worker to temporarily work for another employer with the Ministry of Labour's approval. This clause facilitates company operations and lowers the employer's cost of hiring overseas workers. If a worker doesn't provide the required level of productivity, the law gives the employer the right to end the employment relationship. This is allowed after informing the employee about the problem areas and giving them at least six months to address the issues.
When put into practice, this rule can increase workplace productivity and encourage employee competitiveness. The law also permits the dismissal of non-Omani workers, which speeds up the 'Omanization' process if an Omani worker is hired to take their place.
According to the law, employees or their representatives must inform the settlement committee promptly to resolve any disputes and ensure that operations in the establishments continue without interruption.
The Labour Law has undergone significant enhancements with the
incorporation of new leave rules that consider the socioeconomic characteristics of workers. This comprehensive bill went through meticulous development, undergoing multiple stages of scrutiny before being successfully passed into law. The proposed bill was initially presented to the three production parties, setting the foundation for a collaborative approach to labour reform.
Following that, a workshop regarding the proposed law was held with 125 participants, including representatives from these production parties, various governmental entities, and professional associations.
The subsequent amendment to the draft statute, which was once again offered to the three production parties, was one result of the workshop. The appropriate governmental authorities were then given the updated draft.
The proposed legislation was forwarded to the Oman Council, which is composed of the State Council and the Shura Council, for evaluation as part of its legislative process. Eventually, a Royal Decree was utilized to put the legislation into effect.
Since launching its nationalization drive, Oman has intensified its efforts to regulate foreign workers, aiming to curb undesirable practices in the labour market. In 2022, the Ministry conducted extensive investigations at approximately 12,045 locations. With a strong commitment to eradicating any negative trends, the government has significantly increased inspection measures. The year 2022 witnessed a substantial number of labour complaints, reaching 66,469, along with 27,954 reported cases of job desertion, and nearly 17,000 workers were subjected to detainment as part of these measures.
The Ministry of Labour reports that over 7,000 foreign employees were detained this year for violating labour regulations.
The new Labour Law aims to establish a responsive and efficient legislative framework that can adapt to the ever-changing labour market dynamics. The emphasis is on flexibility, resilience, and the ability to effectively address current and future challenges.
To maintain efficient operations and avoid work interruptions caused by disagreements or strikes, the law requires employees or their representatives to promptly inform the designated settlement committee to begin resolving disputes.
In general, the recently implemented Labour Law in Oman is a significant and forwardthinking measure in promoting a constructive and all-encompassing workplace atmosphere. Moreover, this move is in line with the nation's overarching aim of achieving sustainable development.
The implementation of the law went through extensive consultations with stakeholders and shows a commitment to bringing modern labour practices to Oman.
Human history has yet to have a better century for global trade, industry, or organization building than the one we live in now. The 21st century is an era of technological marvels. But this has only come about through large-scale collaboration between individuals, groups, and organizations. Therefore there is a demand for outstanding leadership than ever before. Corporations worldwide are looking for visionaries who can build high-performing teams.
To remain pertinent in a landscape with multiple factors and challenges, we must all think, connect, collaborate across boundaries,
and adapt. However, prevalent beliefs about leadership are compartmentalized and frequently linked to remote authoritative roles or functions, causing many individuals to doubt their leadership abilities. Consequently, there is a lack of leadership and confidence in the traditional process of 'the leader.'
Leadership is associated with cultural approaches to authority, an organization's legacy, and growth opportunities. Recognizing that a multicultural team has diverse
perspectives will add value and facilitate strategic decision-making by utilizing this diversity to promote innovation.
A remarkably consistent finding is that business acumen and "soft" leadership skills are now more important at the top than technical and functional expertise. Currently, members of senior management have more in common with their colleagues than with the individuals they manage. To be successful at the C-suite level, one must be an effective communicator, a team player, and a strategic thinker. They must have a global perspective and be able to provide insightful commentary on crucial business decisions.
C-suite, or C-level, is a widely used slang term for senior executives and supervisors at the highest levels of a corporation. They are considered the most significant and influential group within a company. Typically, this level of achievement requires a wealth of experience and progressive leadership abilities. While many C-level executives once relied on functional knowledge and technical skills to ascend the corporate ladder, most have developed the visionary perspectives required to make sound upper-management decisions.
79%
An astounding 40% of leaders will fail in the first 18 months of their job
Three out of every four companies report that leadership could be improved
It is believed that only 10% of all business leaders have a natural talent for leading
Around 80% of companies struggle with finding employees with relevant leadership skills
Around 50% of employees have cited bad leadership and management as their main reason for leaving a job
Source: thrivemyway.com
In other terms, the C-suite refers to the top management positions within a company, where "C" stands for "Chief." C-suite occupants include a variety of chief officers (CEO, CIO, CFO, etc.). These highly compensated and influential administrators are, nonetheless, firm employees.
"The C-suite is deemed the most important and influential group of individuals within a company. Reaching this high echelon typically requires a plethora of experience and finely-honed leadership skills. While many C-level executives formerly relied on functional know-how and technical skills to climb the lower rungs of the corporate ladder, most have cultivated more visionary perspectives needed to make sound upper management decisions," commented Investopedia on this particular leadership profile.
Once an individual reaches the C-suite, leadership skills and a firm comprehension of business fundamentals are more important than technical and functional expertise. Chief Information Officers must be able to construct business models, Chief Financial Officers must develop risk management strategies; and Chief Human Resource Officers must design a competitive succession plan and talent structure. For instance, a CEO would expect a CIO to discuss market expansion and how the company's systems could support that expansion. What would the difficulties be?
What would be the long-term effects of the necessary IT expenditures to support the expansion? The CIO would be required to respond to these queries.
C-suite executives, including CEOs, CMOs, CIOs, and CFOs, share similar leadership characteristics, including the ability to inspire and align others around shared objectives, an adaptive mindset, and a comprehensive understanding of the business. Even though these fundamental
qualities have withstood the test of time, different eras indeed require other skills.
What does effective leadership look like in the context of the present and the future? What additional traits should the executive suite embrace?
A vision for the medium to long term that strikes a balance between prudence and practicability. The ideal C-suite elite is like a chess grandmaster in that they never make a single move but instead plan out multiple game variations in their minds. This attitude is one of their most distinguishing characteristics.
Possessing the ability to motivate, inspire, and align the team with a common objective. Crucial to this is emotional intelligence, which has two facets: first, the ability to perceive, comprehend, and effectively manage one's emotional state, and second, the capacity to empathize with others and understand their emotional states. Leaving aside this textbook definition, the adage "People join companies; people leave managers" captures the essence perhaps best.
The values of solidarity, proximity, modesty, optimism, and courage have gained traction in society and businesses. According to Edward D. Hess, a professor at UVADarden, it is essential to define humility because some people mistake it for passivity or submission when discussing the need for humility and a willingness to listen to dissident voices. Rather, it is the capacity to subdue one's ego and connect creatively with others. This is the key to having an open mind because it enables you to process new information without becoming defensive. IESE Professor Sebastian Reiche concludes, "Research supports the positive concept of humility, connecting it to curiosity and openness to learning and being taught by others."
Leaders in the C-Suite must be resilient and able to manage adversity by focusing on the available resources and possibilities. Alongside this, they must also be equipped with a sound decision-making process and pertinent data for the issue at hand. They
should also be efficient and results-focused in an increasingly competitive business environment.
Innovative behaviours are closely related to the leadership style of superiors because leaders are the ones who establish organizational goals, make decisions on adopting and implementing new ways of doing jobs, and motivate employees. The crisis has accelerated the profound changes already underway before the pandemic.
They must be capable of teamwork and humanizing the company. Prof. Reiche states, "Successful leadership is the result of a collective and collaborative endeavour, so there is an element of 'Batman' in this concept. Batman lacked superhuman abilities such as flight, laser vision, and lightning-fast speed, but he was intelligent enough to surround himself with those who did – and still hold his own. No leader can combat the crisis independently without a concerted effort to physically separate, wear masks, make responsible decisions, and pursue collaborative efforts to develop treatments, save small businesses, and adapt to virtual realities.”
They must always be open-minded and transparent in communication. Not only must corporate goals and values be clear, but they must also be communicated. This is why C-suite leaders must communicate clearly and empathetically and establish forums for connection rather than one-way channels. In this regard, IESE Professor Yago de la Cierva asserts that excessive communication is preferable to silence.
"Successful leadership is the result of a collective and collaborative endeavour, so there is an element of 'Batman' in this concept. Batman lacked superhuman abilities such as flight, laser vision, and lightning-fast speed, but he was intelligent enough to surround himself with those who did – and still hold his own" — Prof. Reiche
According to a report, the olive oil business in Southern Europe's Mediterranean region is suffering from harsh heat. Especially noteworthy among the top producers of olive oil are nations in South Europe like Spain, Italy, and Greece. Last year's olive crop was poor in Europe, and this year's yield may also be low. The report stated that high temperatures are bad for olive trees because they either drop their fruit to conserve moisture or grow fruit at the expense of their well-being.
The production of olive oil in Spain decreased to approximately 620,000 metric tonnes from the five-year average of about 1.3 million metric tonnes, according to Kyle Holland, who covers oils and oilseeds for market research firm Mintec. As a result, Spain, the largest producer of olive oil in the world,
saw a fall in average production of more than 50%.
"After such a shortfall from the previous harvest, the last thing the industry needs is another poor crop. Bulk prices for olive oil have doubled compared to what it was last year," Walter Zanre, the chief executive of Filippo Berio UK, an arm of one of the world’s biggest olive oil brands, said.
In spite of the ongoing challenges facing the global petrochemical industry, the picture is still gloomy for Petronas Chemicals Group Bhd (PetChem) of Malaysia. While there are hopes that the petrochemical behemoth's profitability will improve next year, most experts anticipate
that the firm, which underperformed market forecasts in the first half of 2023, will continue to have a difficult second half of 2023.
According to a report by Maybank Investment Bank (MaybankIB) Research, PetChem will face similar difficulties in 2023 as a result
The production of olive oil in Spain decreased to approximately 620,000 metric tonnes from 1.3 million metric tonnes
of persistent macro headwinds. These include high interest rates and inflation, supply-side surpluses from new polyolefin capacities in China and the United States, as well as lower production volumes from statutory turnarounds or scheduled maintenance in the third quarter and fourth quarter of 2023.
As a result, the brokerage has decreased its PetChem earnings projections for 2023–2024 from 24% to 18%. Despite PetChem's poor performance, Maybank IB Research expressed optimism that the worst was most likely over. Maybank IB Research maintained a hold on PetChem with a higher target price (TP) of RM7 a share, up from RM6.85. PetChem posted a lower net profit of RM1.16 in 2022, as compared to RM3.95 in 2021.
Namibia could experience an oil boom, thanks to several major discoveries that indicate there may be additional oil yet to come. With a recent spate of new discoveries, it appears that Namibia's exploration of its oil and gas potential may be swiftly paying off. Some have even dubbed Namibia the 'new Guyana' as a result.
In order to ensure that the country has a stronger input in the exploitation of its resources and in response to the lessons learnt by many other African countries, the government is encouraging external finance in the industry as well as pursuing partial ownership of operations.
As they look for lowcarbon crude potential that may increase their longevity during a global green transition, several
international oil giants, including TotalEnergies, Galp, Shell, QatarEnergy, Chevron, and ExxonMobil, have invested in oil and gas exploration efforts in Namibia. Energy analysts anticipate a swift transition of Namibia's oil and gas industry as a result of the findings made in the Graff-1, Venus-1, and Jonker-1X projects in 2022 and 2023 that indicate there may be a significant amount of petroleum still to be found. Recently, Namibia made its third notable find in the Orange Basin with Shell and QatarEnergy.
In an effort to increase medicine sales in the UK, pharmaceutical corporations are pouring tens of millions of pounds into the NHS's underfunded services, including supporting the redesign of patient care and paying the salaries of medical staff.
Additionally, drug companies pay generous consulting fees to influential healthcare professionals, such as GPs who served as clinical leads for NHS England and have received up to £480,000 each from industry since 2019. Drug companies also fund organisations that advocate for more funding in their disease areas.
The expenditures are made public as part of a study that reveals the expanding influence of Big Pharma in the UK's healthcare industry. An analysis of more than 300,000 drug company transactions during 2015 reveals a rise in spending on activities other than research and development (R&D).
In 2022, payments to UK health groups and professionals—including donations, sponsorship, consulting fees, and expenses—reached a new high of £200 million, excluding R&D. The top spenders were pharmaceutical corporations looking to market profitable drugs for illnesses like obesity, diabetes, and heart disease. While payments to healthcare groups during the same period nearly tripled to £156.5 million, the total spending was nearly twice that paid in 2015.
A significant amount of petroleum still to be found in Namibia
Earlier in May of this year, came one disturbing news from China. A man from the country's Baotou City became the victim of a cunning scam involving AIbacked deepfake technology.
The scammer used AI-powered face-swapping technology to impersonate the victim's close friend during a video call. The individual was asked to transfer 4.3 million yuan to his 'friend' and the man reportedly believed that his 'buddy' urgently required funds for a deposit during a bidding process, thus falling for the scam.
He only came to know about the crime as the real friend turned up and mentioned that the person in the video call wasn't him. As per the Reuters report, the police managed to recover the lion's share of the stolen fund. However, the incident has become one more addition to the growing trend of AI-driven fraud all over the world. China has already implemented a tough set of regulations since January 2023.
Prabuddha Ghosh
In deepfake, algorithms analyze and learn patterns from vast amounts of data to generate highly convincing and realistic outputs
Around 15% of Americans encounter altered videos or images often
Deepfake, in plain language, is a product of artificial intelligence, where deep learning (a method which teaches computers to process data in a way inspired by the human brain) is deployed to create fake videos/images, with a pinch of next-level realism.
In deepfake, algorithms analyze and learn patterns from vast amounts of data to generate highly convincing and realistic outputs. Once the tool is ready, it is then applied to complete heinous tasks like manipulating videos/images to that extent, where the outputs look too real to have even a doubt about.
The threat actors, before conning someone with deepfake, start their homework by collecting a huge tranche of visual and audio data about the target individual, and they take the help of public sources like social media or photos of the individual's public appearances. This data is then used to train a deep learning model to mimic the deepfake's target.
banked on exploiting raw human emotions. For example, as per an 'ARS Technica' report, one couple in the United States sent $15,000 through a Bitcoin terminal to a scammer after believing they had spoken to their son. The 'son' was an AI-generated voice, which mimicked the person's 'nervous voice' and told the couple that he needed legal fees after being involved in a car accident that killed a diplomat.
According to the US Federal Trade Commission, impostor scams have of late emerged as an extremely common one in the country. In 2022, the above category of crime generated the second-highest financial losses within the country. Out of 36,000 reports, over 5,000 victims were scammed out of $11 million over the phone. With deepfake getting sophisticated faster than anyone's imagination, expect the tally to go higher in 2023 too.
Source: cdc.gov
"Deepfake scams have been around for some time primarily focusing on misinformation and social engineering. With advances in AI, deepfake scams are likely to focus on becoming more convincing to the intended victims primarily by engaging in adapted and manipulated live conversations and engagements," Mr. Muzammil Patel, Head of Strategy, Finance and Operations and Co-founder of Acies, told the Global Business Outlook.
"Deepfake scams are likely to become more and more sophisticated as the innovations in AI move from conversational text engagements to image and video-based generation. We are likely to move into an era where you cannot believe what your eyes see without a form of revalidation," the official stated further.
Here are some compelling facts and incidents about the disturbing trend. These deepfake crimes are mostly
While the year 2023 has so far been all about generative AI tools like ChatGPT bringing disruptive changes in day-to-day activities of the global economy and opening up new possibilities, it has also created a situation where AI voice-modelling tools can use to improve text-to-speech generation, create new modes for speech editing, and even bringing elements like voice cloning into the play. While these innovations can be used for online humour purposes, the same tools can also be exploited by threat actors to produce near-perfect voice simulations and cause financial scandals.
Noted computer scientists Matthew Wright and Christopher Schwartz, in an article on The Conversation, stated, "As computer security researchers, we see that ongoing advancements in deep-learning algorithms, audio editing and engineering, and synthetic voice generation have meant that it is increasingly possible to convincingly simulate a person’s voice."
"Even worse, chatbots like ChatGPT are starting to generate realistic scripts with adaptive real-time responses. By combining these technologies with voice generation, a deepfake goes from being a static recording
Around 52% of Americans have changed the way they use social media
Globally, 71% of respondents say that they do not know what a deepfake is
to a live, lifelike avatar that can convincingly have a phone conversation," the experts added further.
As of June 2023, there is a steady growth of services ready to produce moderate to high-quality voice clones for a fee. Some of these deepfake tools need just a sample of only a minute long, or even just a few seconds of an individual's recorded conversations, in order to produce a 'Convincing Voice Clone'.
So how can one stay protected against such deepfake voice calls?
"The simplest way to identify a deepfake scam is to create a form of two or multifactor authentication between individuals. Engaging with machines through two-factor authentication has become the norm. This norm is likely to extend to engagements between humans," Mr. Muzammil Patel told the Global Business Outlook.
"Until video interaction systems and
video calling tools do not incorporate personto-person authentication protocols via multifactor secret words, PINs and other similar mechanisms, it is important for a similar verbal confirmation protocol to be established for critical conversations and financial transactions. It is equally important for people engaged in video engagement to look for tell-tale signs like unnatural movements, lack of eye blinking, poor video resolution and character inconsistencies," he added further.
Deepfake fuelling blackmails more?
As per the FBI, the number of reported sextortion cases in the United States increased by 322% between February 2022 and February 2023, as the probe agency noted the significant rise in the crimes involving AI-doctored images.
Selfies/videos uploaded on social media sites can be twisted into sexually explicit, AIgenerated images that are almost "true-to-
Around 57% of global respondents say they think they could spot a deepfake
Around 53% are confident in their ability to recognize altered videos and images
Around 38% say the public should be able to recognize altered videos and images
Source: cdc.gov
life" and nearly impossible to differentiate, the FBI stated further.
The investigators even warned against predators targeting juveniles online to coerce money out of them or their families. In some cases, these elements are even blackmailing the kids to get sexually graphic images.
Yes, sextortion is real and now, with the AI's help, the cancer is taking a monstrous shape.
"Enforcement agencies need to focus on the following areas: creating awareness among people who are victims along with step-by-step response mechanism which evokes trust in the victims that law enforcement is in control of and can remedy the situation," said Mr. Muzammil Patel, while adding, "Rapid response even for small scams. With the limited amount of law enforcement resources, it becomes harder to attend to every scam. However, as small scams are not nipped in the bud, it emboldens the scammers and makes available resources to them to become more sophisticated over time."
"Cross border inter-agency co-operation: Given that scammers can originate in any country and the victims can be in any country, inter-agency co-operation to eliminate scammer networks locally before they become larger global networks is critical," he stated further.
"Law enforcement needs to scour through the web and identify deepfakes and their sources and start tracking back the source of creation to eliminate scammers before they can take on active roles. This requires significant investment in AI and deep learning technology by law enforcement to enable quick identification and response," the expert opined.
Also, these criminals are not only stopping at blackmail, they are using the tech to execute romance scams and con people.
Cybercriminals are utilizing AI to create realistic and compelling online profiles, so compelling that these images appear genuine and attractive to potential victims.
AI algorithms are generating near-realistic profile pictures and engaging bios. The technology is even simulating human-like conversation patterns. AI has become the scammers' best friend to establish trust and emotional connections with their unsuspecting targets, thus setting the stage for heinous crimes.
We all know that thanks to generative AI, chatbots have now been programmed to simulate human responses and emotions, even to the extent of mimicking flirtatious behaviour. And this sophisticated tech is now being abused by scammers, in order to manipulate emotions, build rapport, and exploit vulnerabilities to gain the trust and affection of their potential targets.
AI algorithms can now analyze vast amounts of data from social media platforms to gather personal information about an individual. Aided by this information, cybercriminals are then crafting targeted messages that exploit specific interests, hobbies, or life experiences of their potential victims. These scammers are playing on the elements of human emotions, familiarity and trust. Emotional manipulation of the victims has become the key weapon here.
"Social media companies have a fine balance to work with between their ability to protect potential victims and their legal rights to act on information without investigation by law enforcement agencies. Social media companies consider themselves a medium for publishing rather than being the publisher and in general consider themselves absolved of the responsibility associated with content and engagement on their platforms," commented Mr. Muzammil Patel, while interacting with the Global Business Outlook
"However, scams on a platform erode trust in the platform and in the longrun impact the social media company’s ability to conduct business. For social media giants to deal with miscreants, the first step is the create teams focused on identifying deepfakes. Focusing efforts
on pre-emptively identifying modified content and having a clear and consistent mechanism of distinguishing between satire and malevolent intent is critical to nipping problems in the bud," he added further.
However, a recent report from Forbes has finally spoken about a potent solution against the deepfake menace.
"Using blockchain technology, digital IDs can provide verified proof of identity, adding trust and safety to interactions online. Decentralized identities, made with tools from companies like PolygonMATIC 0.0%, Nuggets and Unstoppable Domains, offer verified credentials for a user’s digital persona. Blockchain-verified profiles can offer a type of ‘proof of humanity,’ a place to store digital assets and identifiers, and a single point of access into the Web3 ecosystem — all while keeping the user’s privacy under their control. Meanwhile, AI can work to monitor and secure these profiles, keeping people from becoming the next victims of AI-wielding criminals," the report, titled 'How AI And Web3 ID Tech Can Defeat Deepfake Frauds,' commented.
In 2019, cybersecurity company Deeptrace's study found that over 96% of the videos developed in deepfakes were pornographic in nature, with a lion's share of the victims being women.
In another 2021 study by Euler Hermes, two-thirds of the surveyed companies had been victims of fraud attempts in the last twelve months.
"Deepfakes can cause serious issues to the global economy and markets which are attuned to responding to statements and news. News-based algorithms amplify the effect of market news and execute significant portions of transactions today. Where social media noise is amplified by deepfakes, it can cause serious volatility in markets and can create chaos in economic systems," Mr. Muzammil Patel said, while adding, "It could also be used to cause social disorder. Dealing
with deepfakes is no longer about protecting individual victims or dealing with smallscale miscreants. It is only a matter of time before coordinated and well-thought-out attacks on economic systems will originate from deepfakes and amplification of news caused by them."
Since 2020, Microsoft has been working on the 'Video Authenticator' tool. Facebook is developing Reverse Engineering, which detects fingerprints left by an AI model, and Swiss cybersecurity company Quantum Integrity is marketing an AI-based offering that tries to determine whether images or videos have been manipulated. Will the AI researchers, law enforcement agencies and the tech industry stakeholders come together, and deploy the quick fix against the 'intelligent' cyber criminals on an ASAP basis?
Only time will answer the question. Until then, we need to practice the virtue called 'caution'. Yes, technology has become a part and parcel of our life in the 21st century, but the same technology has been given a demonic form by threat actors. Staying constantly updated about this demonic form and practising caution around our digital life will be the best weapon for us, till the tech sector stakeholders come up with a potent weapon against the deepfake menace.
Microsoft has been working on the 'Video Authenticator' tool. Facebook is developing Reverse Engineering, which detects fingerprints left by an AI model, and Swiss cybersecurity company Quantum Integrity is marketing an AIbased offering that tries to determine whether images or videos have been manipulated
The Bank of England wants all shareholders to be treated equally, but convincing SoftBank to give up the right of precedence would not be easy or cheap for Revolut
The year 2023 should be a big win for Revolut, the United Kingdom's biggest fintech. The company announced its first-ever year of profits in March after tripling its profits from a year earlier, and it continues to hire at a rapid rate despite the gloomy mood elsewhere in the industry. This year, the company is also hoping to get its UK banking license.
Ever since it began offering prepaid cards in 2015, the company has attracted 25 million customers and has transitioned to services ranging from crypto trading to international money transfers. It is currently valued at $33 billion dollars. Obtaining the license would allow it to expand further, into insured deposits and lucrative lending products like mortgages and credit cards, in short, to act like a real bank.
However, the latest signs suggest that Revolut will be left behind. In May, the Telegraph reported that the Bank of England is preparing to reject the company's license application, bringing an unfortunate end to a process that has now dragged on for more than two years.
The Bank of England did not issue a formal decision on the matter. But a refusal would send Revolut a red flag that would hurt its growth prospects at home and abroad, says Stephen Kingsley, a veteran non-executive director and chair of several audit committees at financial institutions.
"It is pretty serious. A rejection, if it does eventually happen, is likely to be the result of an unflattering streak of own-goals scored by Revolut," Stephen Kingsley said.
In the context of the pandemic and the current malaise in the
banking sector, the application was bound to face delays from the authorities and additional scrutiny, but he said he inflicted a number of Revolut's wounds on himself.
The company has faced criticism for its latest financial figures, which were assessed by the auditor BDO. Arriving five months late on March 1, the report detailed deficiencies in the company's IT practices that caused three-quarters of the £476.9 million ($591.6 million) in revenue that could not be verified with complete satisfaction.
According to Kingsley, neither qualification nor delay in reporting is a ground for rejecting an application for a banking license. But Revolut's reaction to the report may have given regulators pause. He alleges the company erred in instructing its law firm to explain the findings in a way that would amount to a challenge to the audit report, a move the Bank of England likely denounced as disrespect for regulators would be laid out.
"This is outrageous. The problem is that Revolut did not take (the report) seriously. It needed a push, as if it were more of an insult than a professional observation," Kingsley said.
Ever since it began offering prepaid cards in 2015, the company has attracted 25 million customers
According to Devin Kohli, co-head of fintech venture capital firm Outward VC, concerns about Revolut's organizational and capital structure likely reinforce caveats surrounding the audit report. A string of executive departures since the start of 2023, including the firm's CFO, group COO and head of UK banking, have not helped the matter, he says, leaving the Bank of England speculating as to the cause of those turnovers.
"There’s a concern around why people cannot stay in senior positions for an extended period of time," Devin Kohli said.
Separately, according to the Financial Times, the regulator has objected to Revolut's hierarchical share structure and has reportedly called for the company to be flattened as a condition of approval. Its largest shareholder, Japanese conglomerate SoftBanks Vision Fund 2, holds what it calls preferred stock, which puts it at the front of the queue
when it issues dividends or in the event of liquidation. The Bank of England wants all shareholders to be treated equally, but convincing SoftBank to give up the right of precedence would not be easy or cheap for Revolut.
"If you are the largest shareholder, you would not be happy with that," Kohli said.
Fintech is reportedly preparing to release its 2022 financials ahead of schedule to address concerns about its accounting practices and IT systems, FT noted.
According to Devin Kohli, a banking license application is not just a tick-box exercise, it is also about image and feel. A clean bill of health from BDO is not in itself sufficient.
"It is quantitative and qualitative. The qualitative side is about culture and transparency—words the regulator is increasingly focused on. You cannot put numbers on that," Kohli added.
At stake is Revolut's attempt to overhaul its business model: from a money broker that earns nothing more than fees, to a full-fledged bank that profits from the spread between the interests paid to depositors and interest received on loans. As interest rates climb to levels not seen since 2008, Kohli says mortgage and other loan repayments are a huge profit driver for private banks. Revolut has a very large customer base that could bring a loan book but does not without a banking license.
Revolut's 'One App: All Things Money' vision, an attempt to replicate the success of superapp WeChat in China, is also on the bid. The aim is to offer the entire range of financial services, from checking and savings accounts to mortgages and loans to trading and payments, via a single interface. However, without the ability to lend, the vision becomes watered down.
The consequences of a refusal would also affect other areas. A UK banking license could also be an express ticket to other major markets such as the US and Australia. But according to economist Frances Coppola, who previously worked for HSBC and various other banks, with the same token, a formal rejection in the UK would not be met well by other regulators.
"It’s going to cramp their style," Coppola said.
There have been rumours among UK government ministers, who are under pressure to uphold the country's status as a fintech hub, about the possibility that Revolut could opt to relocate if it is rejected by the Bank of England. But Coppola and Kohli say such a drastic move is unlikely given the size of the local customer base and the likelihood of encountering similar obstacles elsewhere. Coppola says that if Revolut assumes it will be more easily taken down by other regulators, then this perception is wrong.
With a license issued by the Bank of Lithuania, Revolut can operate as a bank within the European Union. Banking services are currently offered in 28 EU countries. But in the UK, its largest market, a rejection would trigger something of an identity crisis. With money transfer not scalable enough and banking off the table, Revolut will need to find new lines of business to meet its growth goals.
One possible outcome would be Revolut pushing into new bank-related services, Coppola speculates, to make up for lost revenue opportunities. This could include digging deeper into cryptocurrency beyond simple trading and payments, or other services that fill the grey areas that come short of being licensed.
"Revolut needs to reassess what it is trying to achieve. If it is restricted from a regulatory perspective in the UK, it will have to find another way to achieve
superapp status within the confines of its existing e-money license. It is an express train. Before people get in, regulators want to make sure it doesn't crash," Kohli added.
Recently, Revolut expanded into Japan and the US, increasing its workforce from 1,500 to 6,000. In November 2020, the company broke even and became the UK's most valuable fintech company with a valuation of £4.2 billion. An $800 million funding round in July 2021 took the company's value to $30 billion back then, making it the UK's most valuable tech start-up at the time.
As Revolut does not have UK bank status, it cannot compensate victims of authorized push payment fraud. In the UK, the 85,000 protection of funds deposited with a bank through the Financial Services Compensation Scheme for e-money is not available. In March 2019, Revolut merged with Dax, the same year the company's chief financial officer, Peter O'Higgins, resigned. TechCrunch reported that he quit due to allegations of compliance violations, but Revolut denied he left for those reasons.
In July 2019, Revolut launched commission-free stock trading on the New York Stock Exchange and Nasdaq, initially for clients under its Metal plan. This was then made available to all users. Meanwhile, the company recently announced a global deal with Visa, following which it expanded into 24 new markets and hired 3,500 additional staff.
It is easier to define the Metaverse in terms of what it isn't. The Metaverse is not AR/VR, as users can interact with other interfaces (smartphones or computers). The Metaverse doesn't come from gaming, and this is demonstrated by the virtual gaming platforms themselves, which are turning to other markets or companies. The Metaverse is not Web 3.0, which unlike the former, only includes decentralized worlds, and the Metaverse is not desert, considering the fact that it will have 400 million monthly active users in 2023.
There are some compelling definitions of the Metaverse, such as the evolution of the current Internet from something we primarily observe. Or, as a venture capitalist and Metaverse expert Matthew Ball points out, projecting his vision into the future, a potentially interoperable network of real-time rendered 3D virtual worlds and environments that can be effectively synchronously and persistently experienced by an unlimited number of users with an individual sense of presence and data continuity.
Although there are many aspects of the Metaverse that can be difficult to define, it is clear that there is only one Metaverse. It includes various virtual worlds
The Metaverse can be thought of as a semantic field, or a set of words in a language
that coexist with the physical world, such as Decentraland, Fortnite, Roblox, Minecraft, and the Sandbox, but it's all part of a single entity.
To better understand the concept of the Metaverse, it might be helpful to use similes and metaphors. The Metaverse can be thought of as a semantic field, or a set of words in a language that relate to a specific domain of meaning. In the case of the Metaverse, the platforms it contains are organized according to their level of immersion, data continuity, and persistence. However, unlike a semantic field, interoperability between these platforms is not guaranteed. They are all part of a single set, but do not necessarily share or use the common data. It's as if the individual words in a lexical field have rebelled against common meaning and are now competing for supremacy. There is no alliance or interoperability between these platforms in the Metaverse.
In the competitive landscape of the Metaverse, platforms are constantly developing strategies to gain an advantage over their competitors. They protect
themselves from external threats and build systems to attract and retain users. It's similar to any other battle, where each side tries to anticipate the opponent's moves, bolster their defences, and win over those not directly involved in the conflict. Let us check out some examples.
In August 2022, Sandbox, a virtual world built on the Ethereum blockchain, launched Alpha Season 3. It registered more than 200,000 monthly active users (a more than significant milestone) and immediately hosted around 90 experiences, 27 of which originated Partners of Warner Music Group calibre. The opportunity to participate in new interactive play-to-earn games and access to exclusive events and projects drove the platform's revenue by 190% sequentially. The number of users who followed the initiative was surprising. The platform reached around 39,000 users a day and the website recorded 1.6 million visitors in March. The only hint of interoperability related to NFTs: owners of the largest collections of non-fungible tokens, such as Bored Ape Yacht Club, had the option to use the tokens as avatars in Alpha Season 3. This move resembled less a strategic alliance and more a special war patronage aimed at hegemony.
Commenting on the data for the third quarter of 2022, Roblox CEO David Baszucki cited strong growth in the platform's key operational metrics due to the synergistic impact of developers (around 4 million) and experiences (30 million, including games and events). He said these events have created high-quality experiences that appeal to broad, global audiences. Alongside this, however, Roblox said it is continuing a defensive capital allocation strategy focused on maximizing long-term shareholder value. Even then, the third quarter numbers are impressive: Revenue was $517.7 million, up 2% year over year, the average daily active user count was 58.8 million, a 24% increase from 2021, and hours spent on the platform increased by 20% to 13.4 billion.
In August 2022, Sandbox, a virtual world built on the Ethereum blockchain, launched Alpha Season 3. It registered more than 200,000 monthly active users
In September 2022 alone, Decentraland welcomed 56,000 daily users, a 6% increase from August. The reason, again, lies in the implementation of a precise tactic: in the same month, the platform offered more than 160 experiences, including a fashion event - a common strategy since Pride Week is organized in June, Art Week in August and the Music Week Festival in November.
From this, it can be deduced that victory comes from attracting as many eyeballs as possible. Similar to the engagement rate, which depends on the engagement of a piece of content, Eyeball Driven is a marketing strategy adopted by websites, social media or streaming services and adopted in the Metaverse, whose profit comes solely from the number of views received. The more users access the platform, the more visibility the platform gains. As more experiences and services are added, there will be more users. This is also of crucial importance in the Metaverse, since platforms first have to be known and tried out by users. And then you can look at other key performance indicators like engagement rates.
If successful, the profits for the platforms (and inevitably for the brands displayed in the window) can be large. This may also explain why Twitter announced on December 18, 2022 that it would ban users from advertising their presence on other social networks, a policy that was promptly withdrawn after user objections. This is also the reason for the increasing polarization and specialization of platforms in the Metaverse that are able to monetize the virtual footprints of visitors.
It is often said that all is fair in love and war, but both can come with significant risks. The lack of interoperability and standardization in the Metaverse leads to general anarchy as individual independent realities, governed by their own laws, co-exist.
It is worth noting that the lack of cohesion between platforms in the
Metaverse contributes to the proliferation of extremist movements and this makes money laundering easier and counter-terrorism more difficult. Since the monopoly on the legitimate use of physical force is one of the key features of the modern state, Metaverse needs an established body with a monopoly on the use of virtual force. The current lack of institutions would make it easier to carry out terrorist activities. For example, recruitment would be facilitated through augmented reality and artificial intelligence, coordination and training would be accelerated through the 3D reconstruction of possible targets, and the mere existence of the Metaverse would accelerate the creation of new potential targets for extremists like virtual spaces and buildings. Just as in the real world, in the Metaverse there is a need for a supranational organization that has the authority to enact general and individual policies that become part of the systems of rules for all participants and are not optional. Without this type of organization, it is more difficult to build a cohesive and orderly society within the Metaverse. It is important to be intellectually honest and to recognize that while interoperability can increase the risk of inappropriate use of data to influence user behaviour and decisions, it could also be a means of achieving better regulation of privacy, security and data protection. A higher compliance protocol may be a utopian solution in the real world, but it is possible that such a solution could be implemented in the virtual world of utopia within the Metaverse.
25.10 2014 27.33 2015
27.87 2016
29.19 2017
31.74 2018 48.49 2019 59.91 2020 63.67 2021 72.41 2022 75.88
The quest for oil has been the cause of wars, strange alliances, and diplomatic disputes for more than a century.
These days, the two largest economies in the world are fighting over semiconductors, the chips that not only power our daily lives, but get used in defence and strategic hardware as well.
These microscopic silicon shards drive a $500 billion worth industry, which is projected to grow massively by 2030. The key to becoming an unrivalled powerhouse lies with whoever controls the supply chains, a complex web of nations and businesses that manufacture semiconductors.
Both China and the United States are aware of the above reality, with Washington showing some desperation to gain the industry lead by cutting off Beijing from the American supply chain.
According to Chris Miller, author of ‘Chip Wars’ and associate professor at Tufts University, there is no doubt that the two nations are involved in an arms race in the Asia-Pacific region.
"It takes place both in traditional areas, like numbers of ships, or missiles produced, but increasingly, it's taking place in terms of the quality of Artificial Intelligence (AI) algorithms that can be used in military systems," Chris Miller added.
The United States is ahead, but the chip war it started with China is not only changing the sector’s dynamics, but affecting the global economy too.
Designed in the US, produced in Taiwan, Japan, or South Korea, and assembled in China are the chips that go into an iPhone. India, which is making more significant investments in the sector, might have an enormous impact in the future. The Indian semiconductor market, which was worth nearly $23.2 billion in
A consultancy's analysts, Capital Economics, predict slight declines of 5%–10% in the United States and Great Britain
2021, will likely reach $80.3 billion by 2028. The global chip market will have a compound annual growth rate (CAGR) of 6.7% around the same period. As per the 2021 stats, the semiconductor industry's market value was at $527.88 billion in 2021.
Even though Asia is quickly catching up with the industry trends, the US nonetheless claimed credit for the semiconductor invention. This happened partly due to government incentives like subsidies.
During the Cold War, Washington forged strategic alliances and business relationships in a region susceptible to Russian influence, using chip leverage. It is now using the same tactic against Beijing in the Asia-Pacific.
According to Jue Wang, a partner in Silicon Valley at Bain & Company, "It's what the semiconductor industry
calls Moore's law, basically doubling the transistor density over time, and that's a challenging goal to attain."
Even the top chip manufacturers are finding the journey challenging. Samsung was the first business to begin industrial-scale mass production of three-nanometer chips in 2022. Taiwan Semiconductor Manufacturing Company (TSMC), the largest chip manufacturer in the world and a significant supplier to Apple, followed later that year.
How small is a semiconductor? Much smaller than a human hair strand, which is between 50 to 100,000 nanometers. Supercomputers, artificial intelligence, and the Internet of Things use these potent, minor leading edge chips.
The chip industry, which powers appliances like refrigerators, microwaves, and washing machines, is also quite profitable. However, future demand is likely to decline.
Taiwan produces most of the world's chips, giving the independent island what its president calls a "silicon shield" and protecting it from China, which also claims the area.
Beijing has also prioritized chip production at the national level and is investing significantly in AI and supercomputers. Experts believe that China has been catching up swiftly in the last ten years, particularly regarding chip design capabilities. America is jittery over this.
The Joe Biden administration aims to block China's access to chip-making technology. Washington established extensive export curbs in October 2022, making it nearly impossible for businesses to ship semiconductors, chipmaking equipment, and software containing American tech to China. Additionally, it forbade US national residents from aiding in the "creation or production" of chips at Chinese factories.
The ASML company from the Netherlands threatens to lose around 25% of its previous
Chinese income. This is because the sole business that manufactures the most sophisticated lithographic machines, or "leading edge" chips, is this one.
The United States intends to produce more chips as well. The Chips and Science Act provides American semiconductor manufacturing enterprises with $53 billion in grants and subsidies. Important players are utilizing that. For example, the only facilities TSMC has outside of Taiwan are two $40 billion plants in the US.
Micron, the most prominent memory chip manufacturer in the US, has revealed plans to invest up to $100 billion in a computer chip plant in upstate New York over the next 20 years. Memory chips are crucial for supercomputers, military hardware, and anything with a processor.
As per the news, Impact Nano, a Massachusetts-based start-up that makes speciality chemicals for the semiconductor industry and others, raised $32 million in funding from investors including Intel Capital and Goldman Sachs Asset Management, in May 2023.
Intel Capital’s managing director, Sean Doyle, will also join the venture's board of directors. The development comes as a happy one for the American semiconductor sector, which needs massive investments in building up the broader supply chain in addition to the multibillion-dollar chip fabrication facilities.
The year-long Ukraine war has exposed the choke points in the chemical supply chain of the chip industry. One of them is the neon gas, which is produced at a large scale in the East European nation. Impact Nano is reportedly inventing new ways to produce chemicals that chip makers use and if the start-up succeeds in the mission, the US will gain a further edge over China.
The start-up's focus areas are increasing the purity of the chemicals, finding raw materials that are more
abundant and complying with ethical guidelines of the chip industry, thereby making the manufacturing process more environmentally friendly.
Beijing has made its first retaliatory move against Washington, by banning the use of Micron Technology chips in China. After concluding its seven-week probe into Micron products, the Xi Jinping government announced that the US chipmaker had failed to pass its cybersecurity review, claiming significant risks to its critical information infrastructure supply chain and national security.
However, the fact remains that the World’s second-largest economy is suffering as a result of US limitations. Now, expect the Biden government to aggressively hit back as the US Commerce Secretary Gina Raimondo informed the media that her administration won't tolerate an effective ban on sales of Micron memory chips in China.
The restrictions have already reportedly caused Apple to abandon an agreement to purchase memory chips from Yangtze Memory Technologies Corp (YMTC), one of China's most prosperous chip makers.
This is expected to go similarly to the Huawei experience. After Samsung, the communications behemoth went from being the second-largest smartphone manufacturer in the world to being "almost dead," according to expert Mr. Bao.
That demonstrates how simple it was for Washington to bring down a Chinese technology enterprise. China's options for responding to that could be better. The US used to target certain Chinese businesses. But this time, the entire nation is included in the scope.
At a time when its economy is experiencing a severe slowdown, withholding goods or services or enacting its export limits could cause more harm. Beijing has filed a complaint with the World Trade Organization (WTO), but it might take years for a resolution.
According to experts, China will increase investment in and support its domestic chip manufacturing business.
"We will concentrate on national strategic necessities, gather strength to carry out indigenous and leading scientific and technology development, and resolutely win the battle in vital core technologies," President Xi Jinping declared at the 20th Congress of the Chinese Communist Party.
The industry must deal with issues like growing prices, a rocky reopening of China's economy, and a short-term global recession caused by the Ukraine conflict. Since COVID severely damaged its economy, Beijing will want to proceed cautiously.
"US corporations, Taiwanese companies, Chinese companies, and companies from other nations will continue to communicate back and forth often. China will make an effort to create its own US-free supply chain. In contrast, the US will concentrate on excluding China from innovation networks at the cutting edge of logic and memory chips," Chris Miller noted.
That has significant effects on the world economy. Moreover, it will compel participants to choose a side, potentially preventing many from entering the Chinese market.
Sony will introduce the 'PlayStation Portal remote player,' a portable gaming system, by the end of the year. Gamers will be able to watch PS5 games from the comfort of their couch or bed thanks to the new gadget.
The PlayStation Portal, according to Sony, has an 8-inch LCD screen with 1080p resolution and can play games at a frame rate of up to 60. PlayStation Portal connects wirelessly to your PS5 and allows you to play games that are accessible on your console, in contrast to previously released standalone handheld gaming consoles like Steam Deck or ROG Ally.
The PlayStation Portal remote player has two controllers on either side that resemble the company's DualSense controllers and include adjustable triggers and haptic feedback. The portable gaming device may
function as a media player as well, by reflecting the PS5 screen. Games from Sony's planned PlayStation Plus Premium cloud streaming service and PS VR 2 games that require the headset will not be supported, despite the fact that it can connect to a Dual sense controller and has a 3.5mm headphone connector. To stream games from your main console, Sony recommends an internet connection with a minimum speed of 5Mbps.
According to two people with knowledge of the situation, Xiaomi Corp has received approval from China's state planner to manufacture electric vehicles (EVs), which represents a significant step towards the smartphone maker's objective of producing cars by the beginning of
next year.
The National Development and Reform Commission (NDRC), which oversees new investments and production capacity in China's car industry, approved Beijing-based Xiaomi's plans to manufacture EVs earlier this month. Only four ventures
The PlayStation Portal, according to Sony, has an 8-inch LCD screen with 1080p resolution and can play games at a frame rate of up to 60
since the end of 2017 have received NDRC approval, including Xiaomi. And it would be entering China’s car manufacturing sector at a time when the world’s largest auto market is wrestling with a series of issues, including a capacity glut and slowing demand that have stoked a bruising price war and hit supplier margins.
Xiaomi stated a target of mass producing its first cars in the first half of 2024 and promised to invest $10 billion over a ten-year period in the automotive industry. The NDRC has been hesitant in approving new EV production plans of companies because of concerns about overcapacity and falling demand in the market, therefore there were questions as to whether the timeframe could be met.
The ongoing dispute between Britain and Microsoft over the Activision Blizzard agreement took a new turn, raising more questions than it did answers about how the nation will approach deals in the post-Brexit period. Since opposing the deal in April, Britain's Competition and Markets Authority (CMA) has been embroiled in a legal battle with the American software giant over its $69 billion offer to purchase the "Call of Duty" producer.
It had stated that it was prepared to review the matter after Microsoft returned with a "detailed and complex" plan in July, just minutes after the US regulator had failed in its own attempt to stop the takeover in court. It said it would stick to its original decision to block it. But it will look at a separate restructured deal put forward by Microsoft, in which Activision would divest its cloud streaming rights to a third party – France’s Ubisoft Entertainment –excluding the European Union.
The carve-out is intended to preserve a contract Microsoft has with Brussels for the licensing of material to competing cloud providers. In response, EU antitrust regulators stated that they would now examine whether the additional conditions would have an impact on the concessions.
Netflix's crackdown on shared passwords went into effect in May, but despite a decline from June's record high, the number of new subscribers in the United States is still high, according to research firm Antenna. Netflix had said on X, now known as Twitter, in 2017, "Love is sharing a password," but its worldwide crackdown on passwordsharing hinted at its intention to generate new revenue streams in a saturated, competitive market. Since customers have so many options, like Warner Bros. Discovery's Max, Amazon.com's Prime Video, and Walt Disney's streaming service, attracting new members and keeping existing ones has become challenging. In early trade, shares of Netflix increased by 1.7%. Wall Street had expressed concerns that subscriber growth might be muted if password sharing occurred. Netflix's crackdown, though, was able to revive its
user additions.
After more than doubling in June, the video streaming service's gross subscriber additions dropped by 25.7% in July compared to the previous month, according to Antenna. However, it added, that its 2.6 million gross additions in July were generally higher than average. Last year, Netflix announced that it would restrict account sharing and that it was experimenting with different strategies in several areas.
In early trade, shares of Netflix increased by 1.7%. Wall Street had expressed concerns that subscriber growth might be muted if password sharing occurred
customers were unable to withdraw their money.
In the US, a second former FTX executive entered a guilty plea in a case connected to the abrupt demise and bankruptcy of the once-famous cryptocurrency exchange. One of the company's top executives, Ryan Salame, acknowledged operating an illicit money-transfer operation and breaking campaign financing
regulations. He consented to turn over to authorities more than $1.5 billion (£1.2 billion). The admission of guilt came before Sam Bankman-Fried, the founder of FTX, in his October trial. The so-called "former King of Crypto," Mr. Bankman-Fried, was detained last year on suspicion of fraud after FTX declared bankruptcy and many
Google announced the beginning of the Digital Futures Project in an effort to comprehend the broad ramifications of artificial intelligence (AI). The effort aims to combine perspectives from several fields, such as academia, public policy, and civil society, in order to shed light on the advantages and disadvantages of AI. A $20 million fund, overseen by Google.org, is the driving force behind this initiative and is dedicated to supporting globally renowned think tanks and academic institutions with funding.
According to Google, AI has the enormous potential to change many facets of human life, including
healthcare and urban planning. But the technology also raises issues with unfairness, false information, and security, to name a few. Google aims to facilitate a multilateral dialogue on public policy by supporting independent thinkers in exploring questions like: What impact will AI have on global security? How will AI alter labour and economic structures? What are the optimal
According to the prosecution, Sam Bankman-Fried's huge scheme was the cause of the fall. He is charged with abusing funds from FTX clients and investors to finance real estate, make political contributions, and cover losses at his hedge fund, Alameda Research. He was recently sent back to jail while awaiting trial despite his denial of the accusations. After joining Alameda in 2019, Salame rose to cochief of FTX's Bahamas division and became a significant donor to politics. He is the fourth top executive from Sam Bankman-Fried's enterprises to enter a guilty plea.
governance structures for responsible AI innovation?
So far, major organizations like the Aspen Institute, Brookings Institution, and MIT Work of the Future have received inaugural grants. Google made it clear that the fund would assist organizations all throughout the world and that it would soon reveal more information.
