International Finance - Jan-Feb 2022

Jan - Feb 2022

Issue 26 Volume 19

UK £4 Europe ¤5.35

www.internationalfinance.com

US $6

A decade into business, Onyxes has established itself as a market leader in IT and managed services in Iraq.

The Power of Technology Scope of digital banks in Singapore

Cryptos shaping world economy

A less fossil-fueled futureFinance | Jan - Feb 2022 | International

1

JAN - FEB 2022 VOLUME 19 ISSUE 26

EDITOR’S NOTE SUNJAY KUMAR EDITOR-IN-CHIEF INTERNATIONAL FINANCE

The ill-timed war

T

he war between Russia and Ukraine could not have come at a worse time than today when businesses and economies around the world are trying to recover from the disastrous effects of the COVID-19 pandemic. The war has certainly jeopardised the recovery trajectory and has the potential of leaving more than temporary shocks.

Russia is an important supplier of oil, natural gas, and metals.

Higher prices for those commodities are bound to inflict economic hardships around the world. Europe relies on Russia for nearly 40% of its natural gas and 25% of its oil.

The steep rise in crude oil prices has already led to massive inflation across the globe. The scarcity of wheat in some of the European countries including Great Britain is another havoc created by the war.

The war has also shaken financial markets; however, the effects are likely to be temporary. A comparative analysis done

by LPL Financial found that it takes an average of 43 days for a benchmark index to recover. The study has tracked incidents dating back to the Pearl Harbour attack in 1941 to the development of the US pulling out of Afghanistan in 2021.

One thing that has emerged is that a nation has to protect its sovereignty itself. Nobody else is going to fight a war for you. The US-led by President Biden had made that policy very clear when they withdrew their forces from Afghanistan. The entire NATO kept on warning Russia, but no nation eventually joined Ukraine in the war to thwart the Russians in their imperialist adventure.

Amidst all the ill effects of the war, our cover story this time, which was planned much before the war broke out, deals with the power of technology and how technology can transform a business.

skumar@ifinancemag.com www.internationalfinance.com

International Finance | Jan - Feb 2022 | 3

INSIDE

IF MARCH 2022

32

IN CONVERSATION THE 88 REVOLUTIONISING ROBOTICS INDUSTRY

ZMP started selling its products in 2016 and have installed it in 300 companies

WITHIN THE BUSINESS OF TRANSFORMATION A decade into business, Onyxes has established itself as a market leader in IT and managed services in Iraq ANALYSIS TECHNOLOGY

BANKING AND FINANCE

48

24 AI IS CHANGING THE LOGISTICS SECTOR

CRYPTOCURRENCY & GLOBAL ECONOMY

By 2030, artificial intelligence will help develop a new-age logistics paradigm

Market capitalisation of cryptocurrency reached $2.65tn in 2021

INDUSTRY

ECONOMY

66

100

5G IN BRAZIL

IMPACT OF COVID-19 ON EU ECONOMY

Brazil opened up a 5G tender with a view of $9 billion investment

IMF predicted that the Eurozone public deficit reached a new high of 10.1% of GDP in 2020

4 | Jan - Feb 2022 | International Finance

18

How is Robotics Improving Healthcare?

42

Will Digital Banks Change Singapore’s Banking Landscape?

58

Can the global economy survive without fossil fuels?

74

Covid-19 & its impact on aviation industry

94

RCEP and its impact on global trade

www.internationalfinance.com

Director & Publisher Sunil Bhat

80

Editor-in-Chief Sunjay Kumar Editorial Adriana Coopens, Jessica Smith, Lacy De Schmidt, Soumya Chatterjee Production Merlin Cruz Design & Layout Vikas Kapoor Technical Team Prashanth V Acharya, Bharath Kumar

INSIGHT RENEWABLES KEY TO ACHIEVING CLIMATE GOALS Global climate summit at Glasgow concluded with a mutual agreement of approximately 200 nations to work together

Business Analysts Alice Parker, Sid Nathan, Sarah Jones, Christy John, Gwen Morgan, Alex Carter, Janet George, Indra Kala, Rohit Samuel Business Development Manager Steve Martin Business Development Sunny Shah, Sid Jain, Ryan Cooper Accounts Angela Mathews Registered Office INTERNATIONAL FINANCE is the trading name of INTERNATIONAL FINANCE Publications Ltd 843 Finchley Road, London, NW11 8NA Phone +44 (0) 208 123 9436 Fax +44 (0) 208 181 6550

REGULAR EDITOR'S NOTE

03 06 08

Russia-Ukraine war could not have been more ill-timed

TRENDING Vodafone UK launches 5G standalone

NEWS Amazon to launches healthcare accelerator

Email info@ifinancemag.com Press Contact editor@ifinancemag.com Associate Office Zredhi Solutions Pvt. Ltd. 5th Floor, Sai Complex, #114/1, M G Road, Bengaluru 560001 Ph: +91-80-409901144

International Finance | Jan - Feb 2022 | 5

# TRENDING AVIATION

Gulf economies projected to grow faster in 2022

Emirates to resume all flights after 5G delay Dubai’s esteemed flight carrier Emirates recently announced that it will resume its flight operations to all of its US destinations after telecommunication operators delayed the roll-out of 5G networks around US airports, according to media reports. The flight carrier also mentioned that after the telecommunication companies delayed the rollout of 5G networks around the US airports, both Boeing and US Federal Aviation Administration issued a formal notice about the lifting of the previous restrictions. This enabled Emirates to safely restore full scheduled operations to all its US destinations by Saturday.

The economies of the six-member Gulf Cooperation Council is projected to grow at a faster pace in 2022, after several years, according to a poll conducted by Reuters poll of economists who cautioned the risk to that outlook was skewed to the downside, according to media reports. Saudi Arabia is projected to grow 5.7 percent, followed by Kuwait showing 5.3 percent growth, and the UAE registering a growth rate of 4.8 percent.

At a Glance Countries facing highest percentage of phishing scams US

37.4% UK proposes new cyber laws

Partnership for mobile payments

TECHNOLOGY The UK government recently announced that they are consulting on new measures for greater resilience among British businesses’ cyber security, according to media reports. This comes as a part of a £2.6 billion National Cyber Strategy and comes after high profile cyber-attacks were noticed in the UK. As reported by the UK government, new laws are needed in order to increase the security standards of the industry, outsourced by the IT services and are used by almost all UK businesses.

BAN K I N G Huawei is looking for ways to skirt around US restrictions that prevent it from using Google's Android software by installing NFC payments functionality across its smartphones with the help of the card consolidation app Curve. Hauwei users in Europe can now download Curve Pay to make mobile payments and also enjoy one percent cashback on all third party purchases made by phone and five percent across Huawei's online stores in the Czech Republic, France, Germany, Italy, the Netherlands, Poland, Portugal, Romania, Spain, and the UK.

6 | Jan - Feb 2022 | International Finance

Australia

23.6% The UK

10.2% New Zealand

4.3% Canada

3.3% Source- Statista

NEWS | INSIGHTS | UPDATES | DATA

Ones to Watch

HEALTHCARE

Sheikh Hamdan opens Medlab in the UAE Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, recently inaugurated Arab Health 2022 and Medlab Middle East Exhibition and Congress 2022 at Dubai World Trade Centre, according to media reports.

The four-day event saw 3,500 exhibitors from over 60 countries that showcased its innovation and technology.

It also offers a platform for cutting-edge technology and the latest innovations designed to tackle the most pressing health challenges of today and tomorrow.

The Medlab Middle East Exhibition is regarded as the region’s leading exhibition for the laboratory industry, is held in parallel to Arab Health. During the event, a series of panel discussions and keynote presentations from leaders within the industry will be held that will highlight the latest advancements within the sector. Medlab Middle East

will showcase the latest innovations from the laboratory industry via a range of product displays and talks.

Commenting on the opening, Solenne Singer, Group Director for Informa Markets, said that the next four days are an opportunity to celebrate the healthcare and laboratory industries while also providing a stage to showcase thousands of products to a global audience all under one roof. A vital attribute of both exhibitions is the platform for peer-to-peer networking.

By the Numbers

ARNOLD GOLDBERG PAYMENTS DIVISON LEAD, ALPHABET INC. Alphabet Inc has hired former PayPal Senior Vice President and Chief Product Architect Arnold Goldberg to lead its payments division and to look into cryptocurrency debit cards.

PRINCE ABDULAZIZ BIN SALMAN MINISTER OF ENERGY, SAUDI ARABIA Prince Abdulaziz bin Salman announced that Saudi Arabia is all set to lead the global hydrogen market, and the plan is in line with Saudi Vision 2030.

Countries best prepared against cyber attacks USA

0.824

Canada

0.794

Australia

0.765

Malaysia

0.765

Oman

0.735

Source- ITU

(Download speed Mbps)

JULIA LOPEZ MINISTER OF STATE FOR MEDIA, UK Lopez announced plans to protect essential services and that every UK organisation must take their cyber resilience seriously as we strive to grow, innovate and protect people online.

International Finance | Jan - Feb 2022 | 7

IN THE NEWS

FINANCE

BANKING

INDUSTRY

TECHNOLOGY

Banks will remove clickable links in email and text messages sent to retail customers

Singapore banks to tackle phishing scams Banks in Singapore recently announced that they will take up new measures like removing the clickable links in email and text messages sent to the retail customers to tackle phishing scams, according to media reports. The Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) mentioned that this move along with others will be put in place within the next two weeks.

Earlier this week, OCBC bank revealed that nearly 470 customers lost at least $8.5 million in December after scammers posed as the lender and sent SMS's with links to phishing sites to victims. DSB Bank warned its customers about a similar scam in which an SMS claiming to be from the bank told victims' that their account had been suspended and asked them to click on a link.

On its website, DBS said that those targeted will receive a fraudulent SMS claiming their account has been suspended and victims will later be directed to verify their details by logging into a phishing website. The SMS is sent from a generic

8 | Jan - Feb 2022 | International Finance

account, with SenderIDs such as INFO, INFOSMS, Notice and others. People who will click on the link will then be redirected to phishing sites asking for their username, password and one-time PIN. DBS released a statement, saying, “These phishing sites make use of various web addresses such as dbs-login6.com, online.webdbslistonline. com etc. The scammer will exploit the stolen banking credentials to take over the victim’s Internet Banking account. Customers are advised to be mindful of such scams."

Additionally, OCBC Bank started making goodwill payouts to victims but the industry is now taking more proactive measures. Apart from removing links, banks will set a threshold for funds transfer transaction notifications to customers to be set by default at $100 or lower. OCBC Bank also announced that they lost a total of S$13.7 million in recent phishing attacks up from the S$8.5 million reported in December. The bank also added that the number of customers affected also went up, from 469 to 790, as more victims came forward.

IN THE NEWS

FINANCE

BANKING

INDUSTRY

TECHNOLOGY

The offering uses machine learning and straight-through processing instant payment of supplier invoices

MasterCard unveils virtual card Banking giant MasterCard announced that it has unveiled a virtual card offering that uses machine learning and straight-through processing instant payment of supplier invoices, according to media reports. The company also mentioned that those slow and inefficient payment processes continue to hamper businesses, hitting cash flow for suppliers while being time-consuming for buyers.

Some other payments methods like ACH require buyers to guard sensitive bank account information, thereby adding another layer of complexity. The firm also uses Mastercard Track Instant Pay, which helps to simply and efficiently authorise an immediate payment to a supplier once they submit an invoice.

Machine learning uses invoices and also identifies that are likely to be rejected. This helps the firm enable the rest to be authorised for payment on the same day they’re received. With the help of the straight-through process, digital payments are sent directly to a supplier’s bank account via a Mastercard virtual card, with no manual intervention required.

10 | Jan - Feb 2022 | International Finance

Ron Shultz, EVP, new payment flows, North America, Mastercard, told the media, “Delayed payments create significant challenges for businesses financially and operationally, especially in today’s environment. Track Instant Pay helps solve these pain points by enabling buyers and suppliers to automate their manual payment processes, unlocking valuable time, working capital and choice."

Mastercard Track Instant Pay combines machine learning capabilities from Previse, which is artificial intelligence (AI) and data science company, along with Mastercard’s core commercial solutions and global payment network to transform how businesses send and receive payments. This solution is also a part of Mastercard’s comprehensive suite of B2B products and services designed to reduce complexity and risk, cut costs, and automate processes for businesses globally.

Mastercard also announced its partnership with BMO and Moneris Solutions Corporation to advance B2B payments. This unique solution will be available to Canadian business customers in early 2022.

AWARDS 2022

I

nternational Finance Awards recognises industry talent, leadership skills, industry net worth and capability on an international platform. After careful consideration of nominations by a qualified research team, winners are declared on the strength of their application and past accomplishments. Winning an International Finance Award is a recognition of their continual efforts and commitment to improving business performance.

Home-AD

Celebrating Excellence Nominations Open for 10th Annual International Finance Award 2022 Log on to: awards.internationalfinance.com

Business Dossier - Profuturo

PROFUTURO RECOGNISED AS ONE OF THE LEADING FUND MANAGERS IN MEXICO Profuturo wins the Best Pension Fund Manager Award at the International Finance Awards for the third year in a row

In recognition of the strength of its diversified investment strategy, designed to obtain the greatest benefits for its clients with a long-term perspective, Profuturo won for the third consecutive year the Best Pension Fund Manager Award at the International Finance Awards 2021.

This strengthens Profuturo’s position as one of the leading advisory and fund management companies in Mexico which has been offering better returns for people under 60 years of age . It also highlights Profuturo’s strength as it navigated through a complicated and challenging situation like the Covid-19 pandemic, which impacted the economy and business models globally.

In this regard, Arturo García, General Director of Profuturo said, “We are very proud of the progress made in a year that has been particularly difficult and challenging, supporting our clients to overcome the effects of this crisis, helping to protect and increase their savings, at the same time that we promote projects for the recovery of our economy.”

Profuturo - which is part of Grupo Bal, one of the most important business groups in Mexico, with more than 100 years of contributing to the growth and development of the country - has been working since 1996 helping to build the

wealth of Mexican families, offering savings services for the retirement of more than 6 million workers , representing 16.2 percent of the sector’s resources.

Further, for Profuturo it is a source of pride to receive for the third consecutive year the Best Pension Fund Manager Award, granted

by International Finance, a globally recognised magazine specialising in business and finance, which has evaluated and recognised talent, leadership and capacity of a wide range of companies in different productive and financial sectors around the world since 2013.

The National Commission of the Retirement Savings System (CONSAR, by its acronym in Spanish) has confirmed, for the second consecutive year, the first place to Profuturo in the MAS AFORE service indicator, which evaluates the attributes of the Fund Administrators of Savings for Retirement (AFORE, by its acronym in Spanish) and the quality of its services for workers.

This indicator assesses the agility and quality of care in the services; territorial coverage of branches; use of non-contact service channels; promotion of voluntary and solidarity saving; and attention provided by the Afores to registered requests.

It is also worth mentioning that since last year, Profuturo has promoted various initiatives to facilitate and accelerate the provision of services, such as the instrumentation of self-service modules in branches that speed up customer service, as well as the provision of digital tools that facilitate interaction with users.

In response to the health emergency, Profuturo prioritised care and protection of the health of its customers and collaborators, for whom it provided free medical service during the onset of the pandemic, as well as care and protection measures, both in the branches as in face-to-face services. For this reason, in addition to its outstanding work environments, the company endorsed its accreditation as a Socially Responsible Company and a Great Place to Work.

In addition, in recognition of the strength of its investment teams and processes, focused since 2019 on the UN Principles for Responsible Investment, Profuturo obtained the Morningstar Silver distinction , the highest awarded among the Afores in Mexico, after the evaluation

In response to the health emergency, Profuturo prioritised care and protection of the health of its customers and collaborators, for whom it provided free medical service during the onset of the pandemic, as well as care and protection measures

annually carried out by this prestigious company, specialised in independently analysing investment companies around the world.

Always with the vision of putting clients at the centre, Profuturo maintains its commitment to continue working hard to improve its solid investment management strategy, exploring new markets and increasing the performance of its different tools as well as teams, to provide its clients and to the Mexican market the best results and experiences.

IN THE NEWS

FINANCE

BANKING

INDUSTRY

TECHNOLOGY

Amazon will continue to accept payment in Visa credit cards in UK

Amazon reverses decision

SA to dominate hydrogen markets

Retail giant Amazon recently announced that it will continue to accept payment in the UK from Visa credit cards, reversing a decision to ban the cards that were announced in November 2021 and was due to start on Wednesday, January 19th. Amazon sent an email to its customers saying that it was working closely on a potential solution that will enable customers to continue using their Visa credit cards on Amazon, but the company did not mention what the solution was or how long it might be in place. If changes related to Visa cards are made, customers will be given prior notice.

Saudi Arabia’s minister of energy, Prince Abdulaziz bin Salman, recently announced that the Kingdom is all set to dominate the global hydrogen market even though some do not support the idea of it, according to media reports.

This announcement was made during the Davos agenda organised by the World Economic Forum, where the minister said that the world has a generous amount of energy to exploit, coming both from fossil fuels and renewable sources of energy. He added saying that the Kingdom needs to let all countries decide their own choices regarding resources of energy, based on their national resources and abilities.

America's Favourite Food Delivery Services

in the past 12 months

Doordash

Uber Eats

Grubhub

KFC

Domino's Pizza

Pizza Hut

Papa Johns

Postmates

54%

47%

37% 37%

14 | Jan - Feb 2022 | International Finance

33% 23%

19% 13%

(Based on a 2021 online survey of 3,044 US adults who ordered food online) Source --Statista Global Consumer Survey

JPMorgan will use microservices architecture to accelerate software development

JP Morgan to spend $12bn on tech

PayPal rolls out BNPL in Germany

Tech giant JP Morgan Chase recently announced that the company will spend more than $12 billion on technology in 2022, and this will see a contribution of 8 percent rise in expenses that has a chance of hurting the bank’s profitability target.

Reporting fourth-quarter results, JPMorgan set out technology spending plans that will use microservices architecture, cloud and modern engineering practices to accelerate software development. JP Morgan will also use AI and machine learning to get more value out of its data and stress its commitment to cybersecurity.

The company is planning to redesign the way it attracts and retains the best technology people.

PayPal is launching an extension to buy its own buy now pay later (BNPL) service in Germany, thereby enabling users to pay in full for online transactions upto $1000 in 30 days after completion, according to media reports. Users who select the service will fund the full amount debited to their account when the 30 day period is over, thereby letting go of the need to set an alert to remind them of the due date. To use the options, users have to select “Payment with PayPal” while checking out and then select “Payment after 30 days” to complete the transaction.

African countries with the highest oil production Algeria

Egypt

Gabon

South Sudan

Libya

Nigeria

Angola

Republic of the Congo

57.6 18.3

30.0 86.9

10.4 64.5

(volume in million metric tonnes) Source: BP/Statista

8.4

15.8

International Finance | Jan - Feb 2022 | 15

Emirates NBD emerges as the fastest growing corporate bank in Egypt The bank secured EGP 2.54 bn loans to finance the construction of the new ‘ZED’ project in Sheikh Zayed

Mohamed Berro, CEO of Emirates NBD – Egypt

E

ven though Emirates NBD Egypt is fairly new, especially when compared to its competitors, it has rapidly become one of the most trusted banks in Egypt. International Finance Magazine has just granted Emirates NBD Egypt the “Fastest Growing Corporate Bank in Egypt” Award for 2021, concluding what many believe to be an extremely fruitful year for the bank, despite all restrictions caused by the Covid-19 pandemic.

Since its inception, the bank’s management has diligently set its sights on the market’s leading position while strategically utilizing all its available resources and assets to provide reliable products and services to its customers, whether individuals or corporates. The bank has also

committed itself to playing an active role in the country’s economy with countless projects and initiatives especially tailored to drive the market, further digital transformation, and ultimately, achieve financial inclusion.

The reputed International Finance magazine specializes in business and finance institutions around the world and recognizes international industry talent, leadership skills, industry net worth and capability. This award comes after five consecutive years of awards and international recognition of the great leaps the bank has achieved which contributed to enhancing financial

Business Dossier - Emirates NBD Egypt

flows, new banking services that support digital transformation and overall investment in Egypt.

Emirates NBD Egypt joined the bank’s syndication loan with “Ora Developers Egypt” to secure EGP 2.54 billion loans to finance the construction of the new ‘ZED’ project in Sheikh Zayed. ‘ZED’ Sheikh Zayed is a new multipurpose integrated project, consisting of 6 phases that will include 4,500 fully finished residential units, along with commercial and administrative spaces.

The bank also contributed to the top-up of tranche "C" granted to "The International Co. for Multiple Oils Extraction" with a total amount of EGP 200 million. The syndication was arranged by 7 banks where tranche "C" reached EGP 3 billion, and the participation of Emirates NBD Egypt is estimated at 7 percent of the total value of the loan, as financing this tranche will be used to complete some construction work in the factory and purchase the raw materials needed for the production of crude and refined oils.

Recently, the bank provided a loan of EGP 2 billion to a consortium of four companies; “The Arab Contractors”, “Orascom Construction”, “Hassan Allam Construction” and “Metito Water Treatment Group” to build the largest agricultural drainage treatment plant in El Hammam at the North Coast. The new plant will be used to irrigate half a million feddans of reclaimed land in West Delta with a capacity of 6 million cubic meters per day. The project also includes the construction of a 120 km water corridor to transport agricultural drainage water from the Delta governorates to the treatment plant in El Hammam.

The bank’s participation in this project is in line with the state’s national plans to enhance development for the benefit of the overall economy in Egypt.

Emirates NBD Egypt also offers its clients a variety of products and services, in addition to supporting small and medium-sized businesses as well as large and multinational corporations. In December 2020, Emirates NBD Egypt achieved an increase in their corporate portfolio by 9 percent in comparison to the previous year.

“Over the past years, we were keen to create chances, opportunities and contributions towards our customers, employees and the society,” said Mohamed Berro, CEO of Emirates NBD – Egypt. “We are aware of the essential role the bank plays in driving the economy and are keen to continuously develop our services and offerings in line with the global changes and the needs of our customers. All these plans and joint efforts contributed to cementing our position as one of the top banks in the last five years.”

The bank’s capacity to undertake further obligations rests on its competent system and its innovative product development. Decisions regarding business development are only made after intricate research to understand the nature of the market and its variables.

Mr. Amr Azab - Head of Corporate Banking

In December 2020, Emirates NBD Egypt achieved an increase in their corporate portfolio by 9 percent in comparison to the previous year.

The bank prides itself in tailoring new products and services for both individuals and corporations.

Furthermore, the bank engages in social responsibility initiatives where it can give back to society. Just recently, the bank signed a cooperation agreement to raise the public schools’ female teachers’ efficiency and maximize the effects of integrated education. The bank has also provided tailoring skills and business management training to female heads of households to provide them with a fixed income. In addition to another agreement to renovate “The Model Centre” for assisting the Blind and Visually Impaired young people. This step aims to facilitate their everyday activities, assist with their educational paths, and ultimately, qualify them for potential jobs.

Emirates NBD Egypt is supported by a large network of 68 branches spread across all governorates, serving current and new clients, and offering banking services to individuals and corporates. Through such an extensive network, the bank plans to expand further to accommodate more customers and offer a wider array of products and services.

If the bank maintains its current pace, it should rest assured that the bank will achieve similar awards in the ensuing years while reflecting Emirates NBD Egypt’s position within the top banks in Egypt for many years to come.

TECHNOLOGY

ANALYSIS

HEALTHCARE ROBOTICS IN HEALTHCARE

Medical robots assist in surgeries, streamline hospital logistics, and enable providers to pay more direct attention to patients.

How is Robotics Improving Healthcare?

IF CORRESPONDENT

Automation driven by digital healthcare technologies, such as robotics and artificial intelligence, can significantly contribute to the longterm sustainability and profitability of healthcare.

Robots play a significant role in improving the performance of healthcare workers, which is repetitive Robots and monotonous but requires either allow constant attention to detail. surgeries to Practicing medicine be performed requires a combination of with better diagnostic and surgical skills accuracy than that only highly trained unsubsidized doctors and nurses can human reliably offer. Robots have surgeons or increasingly entered medical allow remote settings over the past four surgeries decades. Medical robots assist in surgery, streamline hospital logistics, and enable providers to pay direct attention to patients.

Robots exist everywhere, from sci-fi to the automation industry, and are at the stage of revolutionary participation in healthcare. The notion that robots perform tireless tasks, freeing medical staff from routine tasks, is best suited for medical assistance. In addition, the involvement of robots makes medical procedures safer and less expensive for patients.

A medical robot is a robotic system used

18 | Jan - Feb 2022 | International Finance

in medical science. For example, an accurate computer-assisted surgery uses technology with telemanipulators. It is a robotic arm with an endoscope, while the other two manipulator arms have interchangeable tools, such as scissors and grippers. Such surgeries are also called masterslave telemanipulator systems, where surgeons operate programmable machines using computeraided technology.

Types of Robots in Healthcare The healthcare industry uses the following types of robots in low-risk activities. The da Vinci System, a commonly used generic surgical robot that focuses on a wide range of surgical procedures in urological, bariatric, and gynecological, is the most widely used robot in healthcare. In addition, Stryker's MAKO system specialises in orthopedic surgery, especially knee replacement.

Surgical robots either allow surgeries to be performed with better accuracy than unsubsidized human surgeons or allow remote surgeries where human surgeons are not possible with the patient.

Robotic surgery is a type of surgery performed using a computerised system.

Pharmaceutical robotic systems help in dispensing drugs in retail pharmacies and help read the information sent by the hospital information systems. They also update the status of the prescribed medications in the system. In

addition to scanning and using bar codes to verify medicines, these robots can package, store, and distribute prescription packages.

Rehabilitation robots facilitate and support the lives of people with disabilities, the elderly, or those with impaired organ function. They are also helpful for rehabilitation and related procedures, such as training and therapy.

Telepresence robots allow off-site medical professionals to move from remote locations, look around, communicate, and engage. Ava Robotics, an iRobot spinoff, are intelligent telepresence robots deployed at the hospital. They enable isolated doctors at home to be present in emergency rooms and allow nurses to see patients.

Disinfection robots can sterilise entire room using vibrating ultraviolet light. They are used to fight the Ebola virus and help kill microorganisms using special UV disinfection techniques.

In addition, with future advanced technology working on nanobots, small robots are on track to help treat complex diseases such as cancer, type 1 diabetes, or infection.

How do Robots Help in Healthcare?

The

SwabBot

robot,

developed

to

conduct

COVID-19 swab tests, has recently taken a step forward in the healthcare domain to facilitate medical procedures.

Until recently, robotics has begun to share regular work in medicine. For example, some robots go hand in hand with specialist doctors for surgery and help in the operation theatre. These collaborative robots, called cobots, are for direct human-robot interaction in the shared space.

Cobot, for example, can cut a patient's bones more accurately and safely using a laser beam. Here, the robot is trained to minimise bone and soft tissue damage, which helps in faster recovery.

The robotic hair transplants promoted in the health market are credited with accuracy and speed.

However, they rely on cobots for proper surgery in small places and transporting dangerous substances.

Robotic medical assistants monitor critical patient statistics and alert nurses when a human presence is required in the room. These robotic assistants automatically enter information into the patient's electronic health records.

You can now see robotic vehicles carrying supplies through the corridors of the hospital. Robots are also helping with surgery, allowing doctors to perform surgery with smaller incisions instead of inch-long incisions. Robotics is also having a significant impact in other areas of medicine.

International Finance | Jan - Feb 2022 | 19

TECHNOLOGY

ANALYSIS

HEALTHCARE ROBOTICS IN HEALTHCARE

Mechanical robots first came into practical use in surgical settings in the 1980s. However, there was full development in the technology only after 1990. Puma 560, for example, in 1985, found the cannula to be in the right place for a brain biopsy.

Subsequently, specialised cameraguided robotic surgical systems, such as Neuro-Mate, Minerva, and robot-assisted microsurgery systems, have been used in brain surgery settings. In addition, accurateengineered micro-mechanical robotic appendages have proven beneficial in surgical settings that require highly accurate positioning for patient safety and operational effectiveness.

Robotic surgical systems, such as one named “da Vinci Surgical System,” are beneficial in a wide variety of surgeries, including spinal, neck, head, and urological surgeries.

The lengthy time of the laparoscopic procedure makes surgery in urology very expensive.

Surgeons use remote-controlled surgical instruments to reduce the severity of necessary surgical cuts. In addition, they give the doctor better control over the procedure at hand.

Robots in pharmacy assist pharmacists with many repetitive tasks, from prescribing a drug to delivering it without error.

The use of Robots in pharmacy has grown. The Children's Specialty Hospital, Al Jalila, one of Dubai's best pediatric specialty hospitals, became the first to use robotics in its outpatient pharmacy. The authority is looking to automate its inpatient pharmacy workflow by extending the benefit of Pharmacy Robotics.

Generally, the robotic arms can pick

20 | Jan - Feb 2022 | International Finance

the right capsules, medicinal packets or collect and label the medicine.

You can use the robot to deliver blood or urine samples and other items to the appropriate hospital staff.. In addition, robotics find applications in phlebotomy, where they can help collect blood samples and label them accurately, which saves time and reduces the workload on nurses.

Self-propelled robots work with humans to deliver food to patients who have to live in seclusion in their own homes, effectively eliminating the risk of spreading the infection.

Rehabilitation robots serve patients of stroke and those having neurological disorders. They help patients to perform rehabilitation exercises. While engaged in these activities, these robots provide a video gaming experience using 3D video technology.

Robot-assisted rehabilitation therapy helps the patient recover faster. It also allows caregivers to undertake heavy-duty tasks, such as transporting elderly patients during rehabilitation care.

The robotic system acquires patient-specific data like power used, range of motion, balancing capacity, etc., contributing to customising the treatment based on the individual’s progress.

The exoskeleton is helpful for rehabilitation therapy procedures such as walking training to help paralyzed patients recover after a stroke, brain injury, or spinal cord injury. Soft robotic gloves are another example of a wearable robot designed to aid individuals unable to hold objects due to chronic neuromuscular or musculoskeletal disorders.

For example, Cyberdyne's Hybrid Assistive Limb (HAL) exoskeleton, which uses sensors mounted on the skin to detect small electrical signals in a patient's body and respond to joint movements, is designed to help rehabilitate patients with lower limb disorders. These disorders include spinal cord injuries and strokes.

Although expensive, these devices are life-saving.

The shortage of healthcare professionals and the lack of special care in remote areas are the main factors for using robots in telemedicine. Telerobotics, which are modeled as human-sized robots, facilitate remote patient monitoring, communication, and timely and specialised patient care.

Patients in remote areas can access high-quality emergency consultations for stroke, cardiovascular, and burn services.

In addition, advisors can remotely log into robotic systems and clinical data and act on alerts.

Functions of robots include non-contact-based temperature measurement through infrared light and sending and receiving

patient photographs to assist the doctor in the diagnosis.

These robots can move around the hospital, supply themselves wherever they are wanted, and monitor patients in quarantine due to infectious diseases. If patients need urgent help, the robot acts as a telephone portal for doctors.

Usually, several items are displaced daily in an average hospital setting, including batches of medicine, meals, linen clothing, and garbage pounds. As a result, healthcare workers often have to commute to and from the hospital.

Autonomous robots meant for mobile transport can tackle many of these tasks. These robots help reduce waiting time and work stress. These robots can navigate freely throughout the hospital using sensors. Robots are also used to carry patients. Such robots are highly beneficial for the care of elderly patients.

Challenges to Tackle The adoption of robots in the healthcare domain is slow. Selfguided vehicles require installing navigation equipment in a dedicated

hall or entire facilities, such as floor tracks. Other robots operate with the help of a laser-drawn map of the hospital, which includes elevators, turns, and automatic doors. This process is also quite expensive.

Robotics requires a relatively high capital investment that delays the adoption of this technology. Hospitals with limited bed capacity cannot invest in automated technology for ROI. Evolving technological advances in the future may add cost to sophisticated robots. Then the requirement of technology-driven infrastructure. In addition, technical skills and space limitations hinder the robotic process. Also, reliability concerns are present. Uncertainty exists in complex processes.

However, the increased adoption of AI technology is making them more reliable. Robotics is an ever-evolving domain. Healthcare organisations may avoid adopting it first and opt for a wait-and-watch approach.

Training human staff for robotic tasks is costly. However, the goal of robotic technology is to complete human skills, reduce workload, and enable professionals.

Can Robots Replace Medical Crew?

Though robots provide more accuracy, minor damage, and easier and faster access, they are not a replacement for surgeons.

Robotic assistants cannot replace basic human contact. The surgeon is always in complete control of the system. Instead, robots are for enhancing the skills of the professionals, improving their efficiency, and reducing their workload.

Although technology is expensive and some have taken years to implement, robots are changing healthcare. Organizations are adopting robotic technology to automate their work in healthcare.

It is worthwhile for medical professionals to look at robotics’ vast potential and future benefits in healthcare. They are exploring ways to utilize innovative but mature robotic technology and engage in it to automate their hospitals and medical services.

editor@ifinancemag.com

International Finance | Jan - Feb 2022 | 21

RSwitch Ltd establishes itself as a leading e-payment service provider in Rwanda It wants to expand the financial services ecosystem by delivering interoperable solutions using the best capabilities and the most reliable technology On 25th September 2021, RSwitch Ltd was awarded and recognized “The Best E-payment Service Provider in Rwanda” by the International Finance, a business and finance magazine published by UK’s International Finance Publications Limited.

The firm is focusing on expanding the financial services ecosystem by delivering interoperable solutions using the best capabilities and the most reliable technology.

Founded in 2003, RSwitch is a national e-payment switch licensed as a payment service provider (PSO) certified to process international schemes namely Visa, MasterCard and UnionPay international (UPI) and driver of the proprietary brand called Smartcash, enabling electronic payment, clearing and settlement of local transactions.

RSwitch is helping Rwanda realise its national dream of a cashless and inclusive economy in Rwanda, which is supported by a safe, robust, and efficient payment system and other financial solutions. The company won the ‘Best e-payment Service Provider in Rwanda’ award for the year 2021 at the International Finance Awards.

RSwitch’ s main vision is to connect all

East Africans with all their e-money; with a mission of expanding the financial services ecosystem by delivering interoperable solutions using the best capabilities and the most reliable technology. The company’s vision is to run Rwanda’s electronic payment system and has over the years expanded to serve as a financial interoperable solution company. It has since expanded to include various international schemes, value-added services, and a mobile interoperable platform. RSwitch has an inhouse card personalisation bureau and card production. Some of its top clients are BPR Bank, Zigama CSS, Cogebanque, Urwego Bank, Copedu and Unguka Bank.

RSwitch has been Certified PCI DSS version 3.2 (Payment card Industry Data Security System) since 2014 and repeat every year the same since then. In addition to PCI DSS, RSwitch is also internationally certified with other operator and security accreditations like PCI PIN Sec. RSwitch is also currently delivering the mobile interoperability (RNDPS) project which was initiated in 2018 by the National Bank of Rwanda as a catalytic solution to further the National Payment Strategy as well as the government of

Business Dossier - RSwitch

Rwanda’s Vision 2050. RNDPS is designed and tested to deliver an instant, centralised, secure, and highly efficient ecosystem which is conducive to the cashless agenda with the following key pillars: (1) Enhance the efficiency of retail payments, (2) Improve the customer experience, and (3) Create opportunities to increase transaction volumes.

At forefront, the following use cases are being delivered: Person-to-Person (P2P) transactions across the financial institutions network, Person-to-Business (P2B) or merchant payment; Bulk payment, Personto-Government (P2G) and vice versa, and other uses cases around the interoperability.

What RSwitch has to offer?

Transaction Switching RSwitch is connected to all commercial banks in Rwanda, mobile networks and some microfinances in order to facilitate the transaction switching. All commercial banks in Rwanda accept Smartcash cards, which is an affordable card used in payment on all terminals in Rwanda.

Third Party transaction Processing (TPP) and 3D Secure RSwitch is certified by Visa, UPI and MasterCard for processing on behalf of banks, when it comes to transactions done internationally or locally using the international schemes. In addition to transaction processing, RSwitch also provides reporting services, dispute management and other services as per request.

RSwitch has the capability to process transactions done on different merchants using the 3D secure verification of transaction security.

Online payment transaction processing RSwitch has also the capability to onboard merchants who need to receive their payments online through different schemes namely Smartcash, Visa, MasterCard and UPI, as well as Mobile Payments (MoMo) on a very affordable price and settlement done in a very short time.

Mobile transactions Interoperability RSwitch has the mandate and the capability

Mathieu F. Rwiyereka, Ag. Chief Executive Officer, RSwitch

to provide the technology of switching the mobile transaction interoperability. Currently, two mobile networks available in Rwanda and two commercial banks have joined the network and have passed the technical testing level and are preparing to be in live environment in very few days.

Cards Production RSwitch has a quick and reliable card bureau, which produces cards, both payment and non-payment cards at an affordable price and in a short time.

RSwitch has also partnered with external perso bureau for production of international schemes.

Cards Management The RSwitch switch has the module of managing cards, verifying the security around the card; blocking stolen cards, managing the limit of amount transacted per day per card, or number of transactions per day per card, verifying the security on the card and so many other services on card management.

Other financial institutions are also in process of joining the network, and RSwitch is ready to facilitate whoever is willing to join and comply with the financial industry mandate of being interoperable.

ATM and POS driving, management and support RSwitch is the only company in Rwanda having the capability to drive, manage, maintain and support ATM and POS terminals from one stop center with the qualified systems and staff who are experienced with more than 15 years of experience.

TECHNOLOGY

FEATURE LOGISTICS

AI IN LOGISTICS

AI is Changing the Logistics Sector 24 | Jan - Feb 2022 | International Finance

A

rtificial intelligence (AI) has significantly grown in 2021 and embedded itself as an essential part of society. AI affects almost every sector, from drones delivering our packages to tools finishing our sentences.

Artificial intelligence has had a way to automate every process across different businesses. In the logistics and supply and demand industry, AI has proved to

FEATURE ARTIFICIAL INTELLIGENCE

By 2030, artificial intelligence will help develop a new-age logistics paradigm IF CORRESPONDENT

be a game-changer. According to a report by McKinsey, by the year 2030, artificial intelligence will help develop a new-age logistics paradigm. The shipping industry faces many challenges, and artificial intelligence contributes to overcoming them quickly. Considering the accelerated growth, it is time that the logistics industry advances to a smarter transformation.

Robotics means using intelligent machines to automate the supply chain management procedure. The revenue is expected to grow in the supply chain management system using robotics in logistics services. Robots can contribute towards easing and automating various

services such as routing, storing, packing, and delivering. While there are general robots to get the job done, the logistics industry is dependent more on AI-driven robots. AIassisted robots help to solve complex problems without any human intervention. Intelligent robots will also help evolve the learning tasks while easily implementing complex behaviors.

AI-assisted robots can replace human intervention and partially regulate the process by themselves. When robots regulate the processes, it becomes more successful and predictable. The use of drones will become more predominant. AI can also help to introduce radio-frequency identification.

It helps to sort and identify every product anonymously and deliver it to respective warehouses. Therefore, artificial intelligence can help streamline the production process, which will help ease the delivery phase management process for human employees.

International Finance | Jan - Feb 2022 | 25

TECHNOLOGY

FEATURE LOGISTICS

AI IN LOGISTICS

Leading reasons to use AI for marketing Artificial Intelligence will help to skyrocket the predictive capacity Artificial intelligence is capable of enhancing the company's efficiency. It contributes towards network planning and predictive demand. Companies will be more active when your business can forecast the planning and improve capacity planning. When businesses understand what they should expect, they can reduce the number of vehicles for transport for the location where the demand is high. This will eventually play an important role in lowering the operation costs. The technology is utilizing artificial intelligence to its total capacity.

As a result, the organizations will bring changes in their business. This will also contribute towards providing better solutions while reducing risk capacities.

Organizations will also be able to modify their functioning to get extra benefits.

However, artificial intelligence will help provide faster solutions with equations with complete accuracy. Predictive analysis is significantly growing in the logistics and supply chain industry.

Despite the rise of technology, there is a significant scarcity of people.

The logistics industry is facing grave challenges. Big companies are making the most use of predictive analysis through AI. However, it is necessary to implement it correctly in your business.

Autonomous vehicles are one of the best use cases of AI in logistics.

Artificial intelligence can prove to be highly beneficial to the transportation process. AI leads to the launch of self-driving vehicles that will help meet the supply chain's demands.

Furthermore, it will also help to lower transportation costs. AI will automate

26 | Jan - Feb 2022 | International Finance

vehicles into making them driverless.

Well, different companies have also started to implement this practice. The introduction of driverless cars will allow vehicles to work by themselves.

Nonetheless, driverless vehicles may not be permitted in many countries, considering their risks. Driverless technology can indeed contribute to revolutionizing logistics. With the help of self-driving vehicles, people will reduce fuel use, thereby optimizing routes that can help avoid manual mistakes.

Back-office operations are highly crucial in the logistics sector. With the help of artificial intelligence and robotic process automation (RPA), employees will speed up the business procedure. If your logistics business has data-related tasks, it can eventually be automated with AI. This will allow the companies to save money on back-office operations. The combination of AI and RPA is known as cognitive automation.

Companies can enjoy the benefit of saving time while increasing employees' productivity. The introduction of cognitive automation in business will help to meet accuracy and productivity.

Furthermore, the technology will help replace human resources that can also help to reduce human errors. The launch of AI-powered contract management software will also help to promote accuracy. Furthermore, it will also help to save time. Several companies are developing AI-powered software to manage agreements, especially law firms.

Data quality improvement is essential for the primary functioning of logistics. However, artificial intelligence can help to enhance it. Artificial intelligence is capable of various aspects such as Machine learning and natural

Improve customer experience

82%

Delivering better performing content

64%

Improve performance metrics

57%

Increased use of analytics

50%

Discovery of more valuable audience

46% Source- Statista

language processing (NLP). It will help you recognize the information, thereby helping you achieve the correct information. With the help of NLP, businesses will be able to identify terms and phrases that are repeated regularly. Machine learning will further contribute to drawing connections across essential points, which will help evolve the technology. Artificial intelligence is crucial for global connection. This will help develop accuracy for businesses, especially in the logistics sector. Furthermore, it will also contribute towards promoting data usage. Artificial intelligence is crucial for resources that help avoid risks and drive more solutions.

Artificial intelligence will help to create a synergy of business. It will help to maximize the resources. Business

FEATURE ARTIFICIAL INTELLIGENCE

data enrichment will contribute to the growth, especially across multiple locations. Artificial intelligence will help to improve information authenticity.

Logistics companies focus on bringing improvements, especially for day-to-day operations. This will help to stay ahead with the high-demand arena.

Better transportation forecasting It is anticipated that AI can help to improve productivity by 2035 by more than 40%. The e-commerce sector is constantly expanding due to the use of AI in logistics. Furthermore, it will also result in better output and supply.

When you have significant business growth, it can eventually be great. AI can have linkage across different databases, especially in the transportation chain.

When there is a proper roadmap

for business growth, feasibility will increase in no time. The AI software will also help to meet demand forecasting.

Logistics companies can focus on route rail and vehicles. It will help optimize the storage for ocean shipment, which will help improve production delays.

Furthermore, there will be less risk of bottlenecks as well. The transportation sector has become extremely chaotic.

The implementation of AI in logistics is helping to overcome various challenges.

Some of the common challenges it is helping to overcome are the shortage of shipping containers, equipment, and trucks, which has often resulted in transport delays. However, AI is helping to overcome these challenges.

When cargo is moved worldwide, it can be a considerable challenge for businesses. However, things will become

easier when enterprises are connected via state-of-the-art technology. The inclusion of computer vision artificial intelligence will allow firms to observe things better, especially in the supply chain industry. Artificial intelligence is contributing towards identifying the different challenges and damages. As a result, it is helping to overcome these challenges by implementing accurate measures. IBM Watson is a prime example of using AI-powered computer vision for logistics. The machine is powered to identify how damaged train wagons appear. When the cameras are installed along the track, IBM Watson will eventually determine the status and process the information.

The visual recognition capacity of the robot provides 90% accurate results maximum time. Amazon is also using computer vision to identify and unload the inventory. This vision can help them reduce or unload the inventory in thirty minutes which is usually impossible for general settings.

Artificial Intelligence is paving the way for big and clean data.

Artificial intelligence is not only connected to robots but has several benefits. The introduction of Big data can help to ease many. The logistics companies can identify what the future of their business would look like with the implementation of AI. However, it can help enhance various sectors, especially in route optimization. This will also help to build transparency across supply chain systems. The generation of clean data is highly crucial to the functioning of businesses, especially to implement AI in logistics. It is difficult for many companies to measure their efficiency gain because data generation is done from multiple points. While

International Finance | Jan - Feb 2022 | 27

TECHNOLOGY

FEATURE LOGISTICS

AI IN LOGISTICS

these cannot be done manually, they can be done using algorithms. Businesses are using algorithms to improve their source, and the algorithm further identifies various issues and contributes to enhancing data quality. This eventually helps to build transparency across businesses. While managing Big data, businesses should also focus on data cleansing. If any company has an incomplete shipment, AI can help fulfill it in no time. However, companies must stick to precise decisions, which will help determine deductions across the unknown quantity. The AI algorithms only need 5 to 10 percent accurate data for better functioning. At the same time, it is necessary to perform data enrichment, which will help build accuracy across the platform to determine the fulfillment of shipment properties.

Smart roads contribute to the growth of AI. Not many have been focusing on it, but AI is helping grow intelligent roads. Apart from driverless cars, AI is also bringing about intelligent roads.

Big companies need to come up with different solutions to satisfy the needs of their local customers. Nowadays, the roads are being built using LED lights and solar panels. While this is not having any significant development, it surely contributes to the logistics sector. Highways with LED lights and solar panels can produce a high amount of electricity. When colorful lights are across the roads, drivers will be more attentive to the streets. Heat is also one of the main benefits, which prevents the roads from being slippery during winter. The introduction of intelligent roads will contribute significantly to logistics. However, businesses must understand how they will be

28 | Jan - Feb 2022 | International Finance

implementing the brilliant roads for the proper functioning of their business.

There will be less risk of delivery delay because of unacceptable weather conditions on intlligentroads.

Integrated Roadways are extremely popular for developing Smart Pavement System. This type of pavement system has various benefits. One of the major benefits is allowing cars to be connected to the internet. Therefore, the drivers will gather all critical information regarding accidents, traffic jams, and more. Furthermore, all the information provided will be real-time. The creators also claim that the system will be able to analyze vehicles' position, which will further help them get detailed navigation for the success of businesses.

AI will also help in the growth of automated warehousing.

The trend of AI to automate warehouses is increasing. It will help conduct various operations such as inventory processing, information analysis, etc.

Artificial intelligence will therefore help in increasing profit and efficiency.

Artificial intelligence can help to predict a certain number of products. Once the prediction is made, the company will deliver the particular products to the respective warehouses at a muchreduced cost. As per reports by Vero Solutions, a maximum number of companies will be able to automate the warehousing process in the coming system. Artificial intelligence will also help to integrate how the workforce

FEATURE ARTIFICIAL INTELLIGENCE

is being managed. Furthermore, they will help to verify and analyze the routine tasks. However, automating the warehouses will require the use of computer vision. Implementing computer vision will help businesses recognize and organize business properly. Furthermore, it will also improve quality control for the business's success. If a company has several warehouses, artificial intelligence will integrate them into a specific location. Furthermore, it will also help find the best solutions for transporting the products.

Route planning with predictive analysis Route planning has several real-world

benefits. Artificial intelligence can play an essential role in unlocking all these benefits, and route planning is also challenging to implement in the real world. Traditional route planning will consist of only a few factors that follow the rule-based elements. While these are ineffective, it is nearly impossible to replace them overnight. Businesses must identify the necessary skills to update this. Route planning with artificial intelligence is significantly on the rise.

The businesses will need to adjust to different factors. Some factors that will impact route planning because of AI are traffic patterns, customer preference, changing route behaviors, and local road regulations. These are subjective factors and will depend on local knowledge.

The coming in of predictive analysis can surely help in the growth of businesses.

It will help to lessen the delivery cost while increasing the delivery timeline.

Furthermore, it will also reduce shipping costs and improve asset utilization.

Predictive analysis may use different historical data to determine statistical algorithms, use data and machine learning. The combination of present and past data will eventually help identify future growth.

Artificial intelligence has come a long way, and it is being anticipated that companies will be able to use AI to its full potential in the future. Implementing enterprise data will further contribute to better fleet management, improved customer experience, lesser safety risks, and an eventual increase in the business margin. Artificial intelligence will be able to promote faster deliveries. However, implementing AI in logistics will only bring about a win-win scenario. Nonetheless, the stakeholders must implement a robust logistics transportation ecosystem

that will require maintenance and investment for growth. Artificial intelligence will continue to grow in the coming times. However, it is up to the organizations to plan for its benefits. Digital workers are becoming intelligent, and therefore, the human workforce can contribute towards intertwining complex solutions. The implementation of artificial intelligence in logistics will bring about a seamless future. However, collaboration should be promoted across different fields to encourage employee productivity.

The road ahead Artificial intelligence will need to focus on data engineering. This is one of the most crucial aspects of AI that will help to bring analysis and collection of information. However, it is necessary to understand how the particular implementation will help grow logistics.

The introduction of new methods will help transform the entire supply chain industry. Artificial intelligence is undoubtedly helping to change the logistics industry, and it can alter how to manage everything at the warehouse while promoting logistics networks. As a result, the logistics industry can depend on this new technology to change.

editor@ifinancemag.com

International Finance | Jan - Feb 2022 | 29

Business Dossier - iQ Technology Services

THE HORIZON IS WIDE FOR iQ iQ aims to usher in a new era by harnessing technology in Iraq iQ is an Iraqi company that was founded in 2005 with a mission to bring unparalleled internet access and speed to Iraq. iQ’s services have enabled millions of Iraqis to access the Internet and connect with the rest of the world.

International Finance Magazine sat down with iQ CEO Asoz Rashid for an interview on not only the company’s expansion plans, but also on its goal to usher in a new era in Iraq.

Excerpts from the interview:

Tell us about iQ’s founding principles and how did it all begin?

It all started in 2005 with the aim of bringing internet access to Iraq so that it acts as a gateway to the rest of the world. Despite facing enormous challenges, we have managed to overcome every obstacle to reach the desired position.

Millions have benefitted from our services -- whether it’s the average citizen, the government, or businesses. We are proud to have enabled Iraqis to access the best possible broadband there is. This success motivates us to step outside of our comfort zone and show the country the holistic benefit that technology can provide.

What is the driving force behind iQ’s success?

We don’t want Iraq to fall behind the rest of the world. Our aim is aligned to achieve this goal as we strive for more technological advancements. Giving the best to Iraqis and the country is the core of our existence. We want to usher in a new era of automation and inspire the people to become the leaders of a modern, progressive and liberal nation.

Our mission is to provide the best technology-based tools that will allow

Iraqis to utilize their full potential, not only as individuals, but also as a society at large. All of this is fundamental to our brand objective. We want Iraqis to be the best and most heightened version of themselves.

Why did iQ do a rebranding in one of the strangest periods the world has ever seen?

The year 2021 was an eventful year for the entire world and iQ was no exception. In order to cement and fortify our changes internally during this period, we wanted our efforts to yield results in making iQ an all-encompassing tech company as opposed to just an ISP. This also coincided with a major overhaul of our internal management in late 2020.

The success of the rebranding was the culmination of months of hard work by our marketing and brand-new administration teams.

We wanted to build an image and core set of beliefs that best-represented iQ -- a liberal, progressive, innovative, collaborative, driven, and pragmatic organization that aims to solve the problems we all face in society by harnessing technology.

What did the ‘Expand Your World’ campaign signify?

The ‘Expand Your World’ campaign was a unique concept that essentially became the foundation of our rebranding. It was the first time that we had opted to use the power of marketing. We wanted to create something special that truly depicted our objectives.

‘Expand Your World’ is an invitation for users to become the best they can be by unlocking and leveraging the limitless possibilities that the Internet has to offer. Essentially, we want to give our users the ability to express themselves in new ways by introducing new mechanics and concepts.

The purpose is to broaden their knowledge of the world, which in turn will lead to the development of the country.

With ‘Expand Your World’, we wanted to make it evident that iQ was now a major player in Iraq’s burgeoning technology industry. So, it is cardinal to continue to provide customers with the tools to make their lives better and expose them to the sheer might of technology.

Tell us about iQ Digicare and its impact? iQ Digicare was inspired by the objective of supplying customers with more transparency and ease when managing their broadband services. While we already had a self-care application in place, we felt the need to update our interface. In order to eliminate any blind spots, we knew we had to start from scratch to create something not only beneficial, but also attractive.

After several months of hard work by our inhouse development team, we were finally able to launch iQ Digicare -- a new self-care application with a slick design and contemporary features -- designed specifically to ease the customer’s experience. iQ Digicare essentially allows customers to have quick and easy access to manage their accounts from the comfort of their own phones. It includes a range of features such as recharging, checking iQ’s coverage map, checking internet speed, and seeking tech support.

Overall, its launch has been a remarkable success.

In our first month alone, we saw 20,000 downloads across iOS and Android platforms. We now have over 70,000 downloads across all platforms. With new planned updates for the app, we think this number will grow concurrently with the customer base.

What lies in the future for iQ? The year 2022 and beyond will be the period when iQ will truly come alive. We have a lot of projects, innovative solutions, and services in the pipeline and we cannot wait to launch them. This year will truly be the moment when we show the country what we have been saying all along, that we are a pioneer in technology with bold resolutions to all the problems we face in the region.

We are looking to focus more on the tech industry and as many will now know, we are also the first company in Iraq to have its own internal Research and Development Department. The team is focusing heavily on all our upcoming projects and formulating new perspectives on how we operate technology. The department is indeed the game-changer and breath of fresh air that the technology industry in the country is yearning for.

While we are focusing on developing our technological capabilities, our firm foundation will always lie in fiberoptic telecommunication. The future will also witness expanding our network infrastructure, improving further on our internet speed and services.

Within the Business of Transformation A decade into business, Onyxes has established itself as a market leader in IT and managed services in Iraq.

IF CORRESPONDENT

32 | Jan - Feb 2022 | International Finance

COVER STORY ONYXES

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TECHNOLOGY

COVERSTORY ONYXES

INFORMATION TECHNOLOGY

O

nyxes, a market leader in information technology and managed services provider space in Iraq was established in 2011 as a part of March Holding Group.

Onyxes is headquartered in Baghdad and has offices in the UAE, Egypt, and Pakistan serving the MENA region. Over the years, the company has been at the forefront in embracing new technologies and helping organizations innovate, grow and stay ahead of the competition in today’s digital world.

Over the past 10 years, Onyxes has provided end-to-end solutions to their clients across different sectors empowering customers to unlock new perspectives, distill actionable insights and make more datadriven decisions. Some of their work entails: The first successful implementation of a big data solution in the Middle East for a telecom client driving real insight on customer behavior Implementation of the first security operation center (SOC) in Iraq The first partner to deploy a deep packet inspection (DPI) project in collaboration with Sandvine for a telecommunication firm The first and only DELL Titanium Partner in Iraq Onyxes is playing a pivotal role in the transformation of the digital landscape across Iraq through its compelling offerings for clients across multiple sectors. Their services drive efficiencies and allow customers to get the highest value out of their technology investments.

Onyxes has provided end-to-end data center solutions for banks and other financial services players. This has helped in boosting financial inclusion in Iraq and enabled people to access basic financial services. They have also closely worked with the government to drive the digitization agenda by designing and implementing the national data center and launching e-governments services with GSCOM (The

34 | Jan - Feb 2022 | International Finance

General Secretariat For The Council of Ministers).

Onyxes provides modular, secured, and scalable cloud solutions to accelerate business initiatives and get to market faster by reducing the time and energy consumed in devoting the infrastructure components required to support IT requirements of businesses.

One important consideration in Onyxes Managed Service product is bundling the software, hardware and BPM services with its IT solutions. This pillar focuses on improving the customer experience when it comes to solution customization and technology modernization.

Today, Onyxes has a team of over 160 professionals, from 9 nationalities with diverse backgrounds. It is led by a collective of industry experts bringing a range of experience and expertise to their clients each day.

Also, Onyxes is certified ISO 9001 ( Quality Management System), ISO 45001( Occupation Health and Safety) and ISO 20000 ( Structured Management System).

Why start your IT journey from Onyxes?

With a wealth of expertise, they have successfully completed over 300 projects spanning across multiple dimensions in the Middle East. The company derives its strength from the methodology of bundling solutions with services mixing that with the flavors of the team experience to support their customers at all positions. Onyxes has teamed up with world's top technology innovators which unlock its capabilities to design and deliver powerful solutions on both software

COVERSTORY ONYXES

platforms and infrastructure technologies levels which also includes cloud services, AI applications, and block-chain.

They work with different sectors; governments, oil and gas corporations, financial services and telecoms, supporting them in driving performance and elevating consumer engagement. Onyxes being an agile company, is able to address clients' specific requirements quickly and develop tailored and unique solutions.

Onyxes is a one-stop-shop for businesses to receive cutting-edge digital solutions, together with other IT services.

The company has executed multiple unique projects, each different in terms of industry segment and geography, serving both public and private sector. Some of Onyxes’ clients include: LUKOIL, Eni, and Petrochina (Petroleum) Zain Iraq, AsiaCell, and Awal Telecom (Telcoms) Sumerbank, Trade Bank of Baghdad, Bank of Baghdad, Al Mansour Bank, and the Central Bank of Iraq (CBI) (Banking) Switch, ZainCash, Amwal, and Arab Payment System (Financial - payment gateways and wallet applications) Government Sector: State Organization for Marketing of Oil (SOMO), Prime Minister's office, Ministry of Interior and Council of ministers.

How company provides answers to client’s problems Telecom: Onyxes has been managing the IT operation services for Zain Iraq since 2014, encompassing the IT

network, BSS (Business Support Solutions) and OSS (Operation Support System). It has transformed the user experience for 16 million subscribers across Iraq.

Oodi: Onyxes contributed to the first digital mobile services in Iraq through infrastructure platforms implementation and completed the integration with the BSS stack.

This achievement was a major key player in the customer’s digital experience journey Asiacell: Onyxes team supported Asiacell with their journey in a couple of projects such as infrastructure modernization that led to impact and improve millions of subscriber’s experiences.

Also their team is handling the support of the infrastructure covering the L2 and L3 of the operations.

Financial Sector: Onyxes always strive to improve the customer experience and touch people's lives through its innovative solutions.

Onyxes had supported Iraq wallet (ZainCash) to adopt the latest data center technologies that enabled the customers to use their mobile payments solutions and facilitate the means of payment with no need of cash.

Their focus on the payment industry continued when they collaborated with

International Finance | Jan - Feb 2022 | 35

TECHNOLOGY

COVERSTORY ONYXES

INFORMATION TECHNOLOGY

Switch (E-Gate). Onyxes worked side by side with Switch to provide infrastructure, security and software to enable them to cater the best services to their huge number of card holders.

They have worked with the largest banks in Iraq, building powerful software platforms and world-class data centers complying with PCI DSS requirements all the way through to application licensing and SLAs (Service level agreements).

Public Sector: They built the national data center for the Iraq government (The Council of Ministers) and are the key partner in the Government’s journey of driving digital transformation to help them deliver services and programmes more efficiently and transparently.

Top partners in the business of transformation Onyxes Technologies strives for excellence and continuously certifies its people to ensure that they are equipped with the latest technical skills and tools.

They are the first and only certified DELL EMC Titanium Partner in Iraq. As an advanced Services Delivery Partner, they are authorized to support the full portfolio of computer platforms and systems that help organisations store, manage, protect and analyse data providing better outcomes.

In addition to that, Onyxes is one of the leading Microsoft Gold Technology partners in Iraq and a Microsoft Large Account Reseller (LAR).

They are also a Fortinet Advanced partner in Iraq providing fraud and cybersecurity solutions for their customers.

In addition, Onyxes has a partnership with Oracle, Cisco, Splunk , TrendMicro, MongoDB APC and many other technology firms. This makes them a one-stop shop for all types of customers.

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Delivering superiority has always been the top priority at Onyxes Technologies.

We have designed Onyxes as a fully-fledged platform providing an end-to-end solution from consulting, professional services, infrastructure to business application and managed services.

We enable our clients, across different verticals, to reach new standards of excellence and performance which provide their customers with a new and richer experience. We are also redefining the way governments connect with their citizens to enhance their lives through introducing new e-citizen services.

Through the power of technology, your wins are our wins.

COVERSTORY GLOBAL ENERGY CRISIS

Source: Eurostat

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TECHNOLOGY

COVERSTORY ONYXES

INFORMATION TECHNOLOGY

Expert certified team Onyxes is ensuring having the right people for the right tasks in all domains, their teams are highly classified through the 300 delivered projects and running operations. Such achievements could not have been accomplished unless they have a highly skilled and certified team. Their team of experts are certified with the leading technology providers on the various specialties of IT such as: Network and Security technology providers (Cisco, Fortinet , Splunk ,TrendMicro, Paloalto, Aruba, Juniper).

Servers and storage technology providers (DellEMC, HPE, Cisco, IBM , Huawei).

Operating system technology providers (Microsoft, Oracle, Redhat, VMware, Cetrix) Business support systems such as CRM, charging & billing systems, Mediation, PRM. OSS tools for infrastructure and applications monitoring, Core Banking ( Temenos ) T24, Activation and Registration modules.

Their team expertise is extended to the management domain as they run operations through a battalion of expertise armored with high level certification such as ITIL, CISSP, CISA, CISM, CAIS. As a mature player in the managed services provider space, Onyxes is carving its own place in Iraq and parts of the Middle East.

As the company embarks on its journey in the post-pandemic era, International Finance

38 | Jan - Feb 2022 | International Finance

COVERSTORY GLOBAL ENERGY CRISIS

Onyxes' mission is to bridge the gap between businesses and technology. We are following the principle of gap analysis. Our goal is to be the most efficient and deliver business growth and success to the client through our solutions.

Magazine spoke to the CEO of the company, Ameen Al-Sabbagh in an exclusive interview. Excerpts from the interview: What makes Onyxes different from other players in the market?

The workforce is the key differentiator which keeps us ahead of our peers. We have a highly professional and agile team, with well-rounded competencies. A diverse workforce with people from different backgrounds also helps us to understand the world around us better and gives us a diverse lens to our approach to challenges.

Having the right partnerships with domain leaders is also central to our success and robustness. And last but not least, we have been fortunate enough to work with clients across industries, who are all pioneers, and working with them has kept us inspired.

What has been the most successful solution provided by Onyxes till now? Cite examples of unique problems faced by a client at a critical juncture that was solved by the company?

Onyxes became the first Big Data implementer in the Middle East. This was a project for a Telecom company based in Iraq that required technical aid to enhance its customer service, make data-driven decisions, and test a new product. As a result, the Onyxes team helped to: Test the market Assess the viability of the new product offerings Improve customer experience Provide more accurate forecasts of the upcoming network demands Where do you see Onyxes 10 years from now?

Ten years seems to be a good time horizon for us and we are confident of reaching the zenith within this timeframe by a decade from now. We see ourselves as the top provider of managed services across industries

not only in Iraq but also in the entire Middle East. We believe that the world of the future will benefit a lot from security, AI, IoT, and cloud technologies. Here is why they are the primary focus of our team today.

Tell us more about the core philosophy of the company which separates Onyxes from other players in the market?

It is very simple. Onyxes' mission is to bridge the gap between businesses and technology. We are following the principle of gap analysis. Our goal is to be the most efficient and deliver business growth and success to the client and get them their maximum outcome out of their capital investment.

Is there any plan to expand the company’s footprint in other geographies?

We are already on firm ground in Iraq. Onyxes also has an office in Dubai, UAE. We have two operations offices in Egypt and Pakistan. Over the next decade, we want to be a significant player in the entire Middle East region.

What has been the most significant achievement of the company in recent days?

Onyxes Team enabled the infrastructure technology in the launch of DARI platform that the Iraqi government published to secure lands and houses for the citizens of Iraq which has a great impact on solving one of Iraq main social problem. The efforts of the team concentrated to design, implement and overcome the technology challenges for this platform to fulfil the needed capacity and ensure the services availability.

editor@ifinancemag.com

International Finance | Jan - Feb 2022 | 39

Business Dossier - Vi Markets

Transforming the online trading landscape in Kuwait The company obtained a big share of the Kuwaiti market and the Middle East

Mr. Yol Phokasub

Based out of London and Kuwait, since its inception in 2010, VI Markets is one of the leading companies that offers a global presence with local knowledge and expertise through its whollyowned and affiliate offices throughout the Middle East, Europe, South America, and Central and South-East Asia. Along with its long-time partner One Financial, VI Markets provides investors in Kuwait, the Middle East, Europe, South America, and Central and South-East Asia, with a trading service that offers investors to trade forex and CFDs

on indices, commodities, energies, bonds, and futures. VI Markets is also regulated in the United Kingdom by the Financial Conduct Authority (FCA).

Over the last ten years, VI Markets has become one of the frontrunners that have received significant milestones. The company has also obtained a big share of the Kuwaiti market and the Middle East. VI Markets is also moving closer to becoming internationally recognized for the services it offers. The

company also provides a wide range of instruments on Forex and CFDs, along with many exotic currency pairs such as USD/SGD USD/ZAR. These services are offered with no commission, but the spreads are minimal. Eventually, the company plans to expand internationally, keeping its VI Markets vision in mind.

Talal AL-Ajmi, VI Markets is well-known in the community and is one of the first names that pops up when people talk about investment. His outstanding work ethic has made him the centre of attention for people interested in investment and never let go of a chance to aspire to the new generation of youth looking for leadership and success. Additionally, his continuous media appearances on magazines covers and a few other local newspapers. He has also appeared in regional and international media, and televisions indeed booked him a seat as one of the most influential men in 2018. Al-Ajmi is a prime example to be recognized, especially in the fields of stock markets, online trading with a great deal of knowledge, and much more.

He founded and established Version International Markets in Kuwait and currently holds the CEO and a board member at One Financial Markets. VI Markets provides Kuwait investors with a tailored online trading service partnered with One Financial Markets. With his expertise and extensive experience in the finance and investment field, he has changed the concept of trading by providing his clients with the proper education and obtaining the FCA licenses that insured credibility and professionalism. VI Markets has won multiple awards since its inception, thereby establishing itself as one of the leading companies in financial services.

During an early stage of his career, he managed a few of his family businesses with his cousins and brothers.

After this stint, he returned to Kuwait; as he wanted to pursue his dream, he started working in an investment company to gain more knowledge. After working for a couple of years in this field, he got inspired to move forward and build his empire. He held various positions in several financial companies and eventually became a financial broker to launch a new job as an entrepreneur.

Being an inspirational leader, he believes that anything is possible through education and hard work.

No doubt that the journey to success was full of obstacles and challenges faced by any other business. AlAjmi, during the inception of his company, faced multiple challenges, the main one being to secure funding in the beginning. His goal has been to promote sustainable development via education; he established VI Markets in a modest building with few employees; knowing that this field faced fierce competition from different existing companies, he still managed to move forward and build it step by step. He kept his eye on the goal to educate the Kuwaiti people interested in trading and then let them

With his expertise and extensive experience in the finance and investment field, he has changed the concept of trading by providing his clients with the proper education start their journey by managing their portfolios.

Social media was a tool that he used best to his advantage. He managed to attract a massive base of people following his from existing and new traders from Kuwait and the Middle East by sharing his daily trades and educating them on how to manage their portfolios. This allowed him to become closer to the audience interested and supported his success. Al-Ajmi also wanted to start an initiative focused on women in Kuwait and the Middle East; since he knew that they have shared the same desire to enter the financial market but were shy to open up during workshops done by the company.

And that's how he came up with the idea of "Yasmeen".

It is a forum exclusively for women. It is designed to support female empowerment in business, and financial investment through bespoke educational services and outstanding personal support tailored training and trading solutions that help grow and pursue commercial and educational goals.

The company comes armed with an international awardwinning research team that informs clients of the latest events, news, and market developments. VI markets also promote awareness education and establish successful traders through one-to-one training and guidance.

The company also helps its clients by providing all the information they need and exposing them to various kinds of analysis trends offered by the trainers.

VI Markets' clients are provided with an electronic portal managed by the client to ease the process of trading and to facilitate a more straightforward payment solution. This provides transparency and helps the clients have control over their money.

VI Markets also pay close attention to innovation and works hard to provide its clients with all the new technology associated with trading to comfort their experience. The company's mission is to educate and raise awareness about online trading. When it comes to customer service, they provide the best experience through listening and being close to clients, and meeting their needs and expectations.

BANKING AND FINANCE

ANALYSIS

DIGITAL BANKS SINGAPORE BANKING

MAS had announced that they would be issuing 5 digital banking licenses

Will Digital Banks Change Singapore’s Banking Landscape?

IF CORRESPONDENT

Singapore is famous for its cultural heritage, educational infrastructure, venture capitalists, and business environment. However, we often forget that it is the banking capital of Southeast Asia. With the introduction of new digital banking, the market is now all set to be fragmented.

The global digital banking Brazil is landscape has been everimportant evolving and ever-changing. to the global But as we move towards oil industry an era of digitalization, a and will be lot is yet to change. From responsible for surging demand for online the production and mobile alternatives of nearly 50 to witnessing a shift from percent of traditional banking systems, the world’s Singapore is on the verge of a offshore oil in new era of conceptualization.

2040 New digital players in the market are transforming the banking landscape. After a decades-long practice of traditional banking, Singapore has decided to shift towards the digital banking sector.

The Monetary Authority of Singapore (MAS) announced in 2020 that they would be issuing 5 digital banking licenses. However, with regulators increasing licensing allocation and setting benchmarks for a new generation of banking, there is an untapped opportunity, which is yet to begin. This untapped opportunity in the market

42 | Jan - Feb 2022 | International Finance

can boost the banking system for existing and new entrants. New players such as technology experts and non-banking firms will incorporate innovative practices. They will increase the market diversity and transform the banking landscape.

Impact of Digital Banking in Singapore Virtual banks are poised to change the digital banking landscape of Singapore entirely. They will promote innovation with localization, which will open global boundaries further. Besides being a step towards innovation, it also encourages the small and medium-sized enterprises (SMEs) and operations associated with the licensing of digital banks. Like any other traditional bank, the system in digital banks remains the same. The outflow of customer deposits, from their original bank accounts to their new ones, would help generate monetary resources for the new digital banking sector.

It will also help launch new yet simple products such as credit cards, debit cards, and more at a cheap and affordable interest rate. If able to garner the customer deposits as planned and expected, these new players will give their business partners a competitive edge, which was only held by traditional banks earlier. As per the Allianz Global wealth report, about 98% of Singaporeans aged above 25 have a bank account. Out of this, 60% do physical transactions, while 20% conduct business through digital banking channels.

Difference Between Digital & Traditional Banks Traditional banking and digital banking might seem like two different terms with their own meanings, but they are cut from the same cloth.

The only difference between them lies in their usage of digitalization and the internet. With the onset of digital banks and virtual banking systems, traditional banking is on the back foot as more and more customers move towards the age of digitalization. However, what sets them apart?

Well, traditional banks are what our everyday lives involve, transacting at an ATM, going to banks to solve queries, collecting and applying for credit cards through physical presence, and much more. This system has a better customer retention and satisfaction rate than digital banks. However, it is also a time-consuming process for customers to come to the physical locations to do bare necessities. On the other hand, digital banks offer the same services as traditional banks. Rather than going in person to do the transactions, customers can manage their activities online with a simple tap on the phone. Hence, digital banks have lower fees, as it costs more to run a physical bank but less to operate a digital one.

However, with the onset of digitalization, the future does seem bleak for traditional banks. With digital banks’ acceptance in the Singaporean sector, the traditional banks would have to give better

engagement and customer experience to ensure their clients stay with them. The sense of urgency to create a seamless transformation in conventional banks to digital banking would help them in customer retention and client engagement. The banks in Singapore have been ardent followers of technological upgrades as the hub of banking in Southeast Asia. Hence, to deliver innovation into the financial service sector, there must be healthy competition between digital and traditional banks.

Challenges for Digital Banks Migrating into a new sector can never be a one-day affair.

But moving on the same path while focusing on the banking sector’s growth is an evolution that Singaporeans are willing to delve into. It is how the company, field, and the government try to face these obstacles and produce solutions that make them different. The most important and strenuous part is the initialization of the business.

It is the foundation and the blueprint of how the sector would run and who would be its cash cows. Thus, the first and foremost step is bringing the whole industry together with best-in-class expertise.

The CEOs, CFOs, and employees need to have prior digital banking experience, whether in Singapore or other countries. The more experienced they are, the better it will be for the sector as the experience will help them plan for the longer term. The foundation has to be made with proper consideration of every aspect: education, work experience, internships, references, and other sections.

International Finance | Jan - Feb 2022 | 43

BANKING AND FINANCE

ANALYSIS

OIL AND GAS PRE-SALT RESERVES

The company’s operations, including licensing, comprise the second set of problems observed after research and case studies. Licensing might sound easy to bag: just some paperwork, some ticks, and you get authorization to run digital banks; however, it’s the opposite. As it is a new segment, the acceptance rate for digital banking in Singapore is 42% (McKinsey Report 2021). This figure signifies that the primary account for cash of the Singapore citizen will not be in the new segment, i.e., digital banks but in their traditional banks. This aspect makes it difficult for new companies to get approval on licenses.

Hence, operating the business with proper guidelines and compliance terms is necessary for any business, especially the ones emerging currently. One should understand that a new company and a sector in total will be under close observation to see if they follow the laws as per protocol. The third and the most challenging segment of setting up digital banks would be the technical difficulties related to cyber threats, obsolete technologies, advanced mechanisms, and much more complex issues.

Traditional banks and digital banks have different sets of technological upgrades. Hence, as the name ‘digitalization’ indicates, all the operations would be online.

Besides the technical difficulties and upgrades, digital banking has to meet the privacy guidelines for every client. As fraud and impersonation are prevalent worldwide, it is right to be following all the privacy laws and regulations to keep the customers safe.

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Trust is a crucial issue, especially for Singaporean customers who have been following the traditional banking structure for decades.

Therefore, one cannot expect them to take a leap of faith and follow the digital banking structure. Hence, there is a need to build trust and follow a system. These challenges may portray that the future is bleak for digital banking. However, digitalization is a step towards modernization that has to be taken at some point in the near future. The traditional banking model might have worked for a few more years.

But with customers and clients not wanting to waste their time, money, and effort on such things, the step towards innovation and modernization was imperative.

Digital Licensing Presents a Lucrative Opportunity Digital banking has grown immensely in the western world.

Now, it is ready for growth in Asia.

And as the demand for it soars, the new digital banking partners are transforming traditional banking towards digitalization.

While digital banks are often startups, not all startup stories need to be profitable; some can also be failures. Thus, one must keep governance, regulations, funds, and other things in mind before moving towards this direction. Asia’s step towards digitalization began in 2015 with the Chinese companies.

These businesses moved towards digitalization and expanded their regions slowly and shrewdly towards Hong Kong and other places. After the immense success of Chinese licensing partners, the

Singaporean government went on the same tangent by 2019, with Malaysia, Thailand, and Pakistan following suit. As the market develops and the people gear up for this new change, there are different ways to tackle the obstructions. The first and foremost problem of the initialization stage is setting up the operations. As mentioned earlier, the acceptance rate for users to shift from traditional banking to digital banking is 42%; hence, the first issue to tackle is trust.

Moreover, the PWC survey on acceptance of digital banking in Singapore showed that around 99% of customers want to have a digital bank account while also having their primary account as the traditional one. Hence, it indicates that the customers in Singapore will keep the digital banks as their second account rather than their first one.

These observations reiterate that

rather on your performance in the initial stages. The first and foremost goal is to bag the customers’ trust and then provide operations and services similar to traditional banks or better to be at par with their brand value.

The Way Forward

the main challenge Singapore’s new digital banking sector will face is TRUST. A famous quote for such scenarios is, “Rome was not built in a day.” Similarly, you can not win the customers’ trust in a short span, especially when they have been using traditional accounts for decades.

The first step towards customer trust in Singapore would be to build a different value proposition than the traditional banks. This approach can put digital banks at the forefront to win the hearts of the new customers in Singapore. Firstly, digital banks can offer many items in exchange for customers’ funds, from lower interest rates to better coupons and gift cards. Providing clients with better returns on investments can encourage them to opt for digital banking. Digital banks can thus slowly convert customers from probable clients to full-time digital bank users.

Secondly, digital banks can provide competent services that help in differentiating them from their traditional counterparts. Customers wouldn’t even think about shifting from their traditional bank if the services were the same. The best way towards what the customer wants would be to conduct surveys. This strategy would help the new sector in becoming successful. Thus, as the companies venture into the new segment, they should have a longrun thought process rather than a short-term one. The initial benefits to the customers have to be bigger and better than the traditional banks, or at the least on par with them.

As stated, traditional banks and digital banks are of the same essence, with the only difference being transacting business online in digital banks. Hence, there might be customers who simply might not trust you based on what you say but

Many factors are necessary to lead the emerging sector in Singapore —the right structure, best-inclass technology, reputed and loyal employees, a set workforce, a regulatory team of counselors, and much more. The path forward would be to innovate, digitalize and modernize with time. There might be many setbacks and opportunities to further the digital banking movement into evolving into a world-class sector. However, one cannot forget the importance of the proper foundation to have smooth and seamless business operations.

Other than this, it’s the age of the internet, where one is closer to a distant relative, friend, or loved one over a digital channel than other mediums. This fact means that users who have phones and use the internet are increasing rapidly. The recent Google report on its users in the region stated that the Southeast Asian hub in 2020 hit the number of 400 million Internet users. This extensive use of the Internet would generate $300 million by 2025.

However, the bottom line remains the onset of globalization and moving across boundaries with the tap on your phone. It’s about going digital with locals!

editor@ifinancemag.com

International Finance | Jan - Feb 2022 | 45

Business Dossier - TEB Asset Management

TEB Asset Management’s achievement glorified

In 2021, they came up with 6 thematic Mutual Funds which garnered them a growth of 18.52%

O

ur mission is to reflect the institutional understanding of international standards that global power partnership has given to the portfolio of our investors and to be the locomotive institution in the development of capital markets with our innovative investment culture.

TEB Asset Management aims to be the institution preferred by national and international investors by providing sustainable customer satisfaction.

As part of the International Finance Awards 2021, TEB Portfolio Management was selected as the "Best Asset Management Company in Turkey".

TEB Asset Management CEO Yagiz Oral stated that they have adopted an innovative asset management approach in a changing and developing world and said, “As TEB Asset Management, we serve our customers with our

wide distribution channels for both investment and pension funds. As a asset management company, it gives importance to sustainability; We offer innovative products to investors with our sensitivity to environmental, social and corporate governance issues. We are proud of being deemed worthy of Turkey's best asset management company award with our leadership in multi-asset management, our wide product range and our role in Robo advisory.

Oral, who stated that as TEB Asset Management, they established 6 new thematic mutual funds as of 2021, “We have achieved a growth of 18.52 percent in the total assets we manage as of 30.09.2021, together with the new funds we have established. Benefiting from the global experience of BNP Paribas, especially in sustainability, we offer investment alternatives suitable for the risk preferences of our customers for their assets and savings. We aim to continue our growth by further expanding our product range with innovative products in the coming year.”

BANKING AND FINANCE

FEATURE CURRENCY

I

CRYPTOCURRENCY GLOBAL ECONOMY

t all started with Bitcoin, first introduced as a white paper in 2009 as Peer-toPeer Electronic Cash System. Since then, various types of digital currencies have been added, with the market cap reaching $ 2.65 trillion. Niche group of investors profited from the mysterious blockchain technology since the cryptocurrency was least common to individual investors over the globe. In 2014, companies such as Overstock accepted Bitcoin as one of the payment methods against online purchases.

The same is followed by famous companies such as Master Card, Pavilion Hotels, AXA Insurance, Starbucks, Visa, and PayPal. Very recently, in March 2021, JP

48 | Jan - Feb 2022 | International Finance

FEATURE CRYPTOCURRENCY

How Can Cryptocurrency Reshape the Global Economy?

Market capitalisation of cryptocurrency reached $2.65tn in 2021

IF CORRESPONDENT

Morgan came out with a cryptocurrency exposure basket containing 11 unequally weighted reference stocks. Further, in May 2021, Goldman Sachs endorsed it as a new asset class. Many investors see cryptocurrency as an inflation hedge.

However, on an individual front, cryptocurrency may have the potential to disrupt our lives similarly as the Internet and mobile phones did over the years. The

objective of mobile phones was to allow people to stay communicated over a gap of kilometers.

The Internet came with the aim of sharing knowledge through a commonly accessible platform. Later both became a part of our lives and changed every aspect, from alarm clocks to silent music for sleep. On the economic front, the cryptocurrency may potentially disrupt

International Finance | Jan - Feb 2022 | 49

BANKING AND FINANCE

FEATURE CURRENCY

CRYPTOCURRENCY GLOBAL ECONOMY

economies with its capacity to kill central banks. We can consider the example of the bitcoin network here. Firstly, Bitcoin cannot be double-spent since it is unique and secured via cryptography. Thus, you can spend the same bitcoin twice.

Secondly, algorithms back the trust of bitcoin though it is decentralized. It means that unless nodes approve the transaction, the transaction cannot be included in the public distributed ledger of Bitcoin. Thirdly, it does not need an intermediary to produce and distribute the currency.

Many central banks over the globe are adopting the elements of cryptocurrency to come up with CBDCs (Central Bank Digital Currencies). Thus, cryptocurrencies may have the potential to change how the economy runs.

Why are cryptos becoming more popular?

In the case of a regular transfer of foreign currency from India to an intermediary in the USA, the sender from India has first to pay INR to an intermediary. Then the intermediary checks specific details, charges a fee, and sends the USD to the recipient. In the case of digital currency, it has no borders. Mr. A could have directly sent the currency to Mr. B without any intermediary.

In the case of the traditional financial system, the system fails if the currency is manipulated. The money will not hold actual value, and investors won't get a return on their investments—naturally demotivating.

During a constant rise in inflation, cryptocurrency (for example, Bitcoin) can be considered a hedge. In the pre-COVID scenario, high inflation levels affected the stability of the fiat currency. Post COVID-19, the adoption of blockchain technology has considerably increased.

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In a state of hyperinflation, people look for a big cushion to protect the impact of wealth and purchasing power.

Investors are betting on cryptocurrency to let it become the mainstream asset. Since March 2020, the digital currency has surged eight times. In 2020, the Covid-19 pandemic disrupted economies across the world, forcing them to impose strict lockdowns for a considerable period. It also had devastating consequences on the world economy, with a significant fall in asset prices. The growing fears created an extreme environment for the acceptance of cryptocurrencies.

With the limited supply of cryptocurrencies like Bitcoin, the value of Bitcoin surged. Investors love volatility rather than a one-sided market.

With enough volatility, the fame for cryptocurrencies increased manifold.

How countries are responding to cryptos?

The overall response across central banks of various countries is lukewarm. While some countries are highly supportive of cryptos, other central banks are cautious due to the extreme levels of volatility.

Controls on capital and taxation issues have increased concerns and responses.

However, many major banks are looking forward to developing CBDC to match the modernized financial system and speed up payments.

In the recent FOMC meeting held on September 22, 2021, the Chairman stated that FED is evaluating whether it should be part of the mainstream society and create a central bank digital currency (CBDC). It has taken a scan and learn stance.

In September 2021, the PBOC declared all crypto-related transactions as illegal.

FEATURE CRYPTOCURRENCY

The total market capitalization of cryptocurrencies is

$ 2.65 trillion

as of November 21, 2021, with around

14000 cryptos

trading over the globe. On the same date, bitcoin’s dominance is

42.2 percent,

followed by Ethereum at

19.6 percent

Most expensive crypto coins Bitcoin

$10,825.32 Russian Miner coin Hence, financial institutions cannot involve themselves in cryptocurrencies.

It has taken an aggressive stance against the cryptos.

The ECB aims to complement the existing financial system with digital currency rather than replace it. Next, the Italian payments giant is said to be contributing to the ECB for its expected CBDC. Thus, it has taken a defensive stance.

BOJ has started experiments in April 2021 to evaluate the technical feasibility of developing a CBDC of its own. The experiment’s first phase is expected to be completed by March 2022.

The Bank of England has created a CBDC task force to coordinate the UKbased CBDC. Further, it has established engagement groups to gather information on the non-technological aspects.

$10,390.81 Bitcoin Cash

$1,557.24 Jinn

$746.66 Dash

$674.91 Ethereum

$474.48 Zcash

$356.99 Obyte

$330.48 Bitcoin Gold

$319.54

How will global investments be impacted?

Due to the lowest level of correlation between the traditional market instruments and cryptocurrencies, these are held as assets and are treated as an effective tool for aggressive diversification. It hedges the portfolios against potential risks. It is the main reason for the rise in crypto transactions across various exchange-traded products.

However, few experts believe that a crash in cryptocurrency will have a broader impact on the overall market, similar to how MBS (Mortgage Backed Securities) contributed to the 2008 crisis leading to a global financial crisis. The total market capitalization of cryptocurrencies is $ 2.65 trillion as of November 21, 2021, with around 14000 cryptos trading over the globe. On the same date, bitcoin’s dominance is 42.2 percent, followed by Ethereum at 19.6 percent. At the outset, cryptocurrencies are expected to be treated either as a speculation vehicle or as a hedgingsupport against inflation.

How can cryptocurrencies benefit the economic world?

There is no intermediary required for the exchange of cryptocurrencies. It leads to increases in the speed of transactions.

Since there are no intermediaries, transaction costs are lower. Lower transaction cost implies efficiency in exchange and an increase in the volume of transactions. There is less need for a physical structure where people will come and transact. Fixed costs are lower due to non-requirement of wages, rent expenses, or utility bills. There are even traders with no minimum deposit requirement criterion.

Further, there are no geographical

International Finance | Jan - Feb 2022 | 51

BANKING AND FINANCE

FEATURE CURRENCY

barriers to cryptocurrencies. Thus, there is no centralized agency to monitor the transactions. This facilitates easy and quick trade for corporations.

One bitcoin is trading at $59,150 as of November 2021. Most people won’t be able to buy even a single bitcoin!

Hence, you can purchase cryptocurrency fractions, which further amplifies the volume and feasibility of transactions. A person in India can start from as low as Rs. 100. Cryptocurrencies can become common currencies between economies, facilitating more trade.

A peer-to-peer network backs the blockchain system of cryptocurrency.

Thus, the transactions are decentralized, unlike the traditional financial system.

The user of cryptocurrencies believes that they should have complete control over their money instead of a banker. Also, multinational entities usually take loans in domestic as well as foreign currencies.

Adding the option of Cryptocurrencies can diversify the exposure. Thus, cryptocurrencies can provide access to a diversified loan portfolio.

Moreover, the sender and recipient information is kept confidential in the blockchains. There are numerous security layers around the information which increases the mining activity.

Entrepreneurs can receive payments in more currencies. It helps them get better financial coverage and a liberated financial connection. The Cryptocurrency network is backed by distributed ledger technology.

It is automated and digitized too. Thus, it eliminates the risk of fraud and corruption, the biggest dent in the traditional financial system. Neither companies nor individuals can manipulate it.

Cryptocurrencies to enable global financial inclusion: Especially

in

developing

countries,

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CRYPTOCURRENCY GLOBAL ECONOMY

cryptocurrencies help buy the resources and provide financial services due to their quick access facility. It, therefore, accelerates the economic and social development of the global economy.

The system is decentralized, i.e., not in the control of one single person or authority. Thus, neither corporations nor individuals can exploit it, unlike the traditional financial system. This, in turn, reduces the probability of fraud.

Cryptocurrencies are much helpful for developing economies since they can increase their economic and social status. Entrepreneurs get more control, and thus, access to capital becomes much easier due to the advent of blockchain technologies. Everything contributes to the rise in economic activities.

The crypto-based economy is moving towards open source, global access to all regardless of nationality or socioeconomic status. The global financial inclusion due to cryptocurrencies can provide access to critical financial products to over 1.7 billion people over the globe who have remained unbanked or underbanked. It is estimated that the annual GDP will boost by $ 3.7 trillion for emerging economies.

Blockchain projects are also deployed in electricity data management and commodity trading.

Blockchain technology helps to increase the realtime speed and efficiency along with transparency. Thus, blockchain will increase the rate of transmission.

Without any need for an intermediary, blockchain can record and settle energy trading transactions. Since all parties are using the same platform, there is no need for reconciliation.

How blockchain & cryptocurrencies can help build a greener future?

Every benefit to humankind comes with a cost to the environment. The information

It is estimated that the annual GDP will boost by

$ 3.7

trillion for emerging economies As per the University of Cambridge, mining pools use

78%

of renewable energy

Top 10 largest cryptocurrency accepting companies

1. Microsoft 2. Dell 3. Dish Network 4. Expedia 5. Intuit 6. Monoprix 7. Time Inc 8. New egg 9. Overstock 10. Tiger Direct is stored in blocks of data in an electronic format. The data is tabulated to allow easy filtering of information. Due to the early stage of blockchain technology, there are a series of allegations regarding

FEATURE CRYPTOCURRENCY

the significant consumption of energy and increased carbon emissions.

The bitcoin mining activity indeed consumes a lot of computing power, and these systems need a cool place for storing the data. Thus, there are environmental consequences due to an increase in bitcoin mining activity.

However, the situation was similar to the introduction of the internet back in 2002. The entire process is undergoing a substantial change. The momentum over the last decade was unexpected. Everything is in the midst of a transition towards clean, green, and more sustainable options to reduce carbon emissions. Over time, economies of scale will change the base technology and provide better opportunities.

Taking a look at the present system of financial networks, it engulfs

more energy than what the bitcoin network consumes. The significant energy consumption of the traditional financial system is attributed to the growing number of ATMs, operations of bank branches, maintenance and upgradation of data centers for banking transactions, and the entire global banking system.

On the other side of the story, we have cryptos that use renewable energy sources. The energy used by miners would anyway go waste if unused.

As per the University of Cambridge, mining pools use 78% of renewable energy. The excess capacity generated from renewable sources is used efficiently by crypto miners.

Also, there is a possible transition from PoW (Proof of Work) to PoS (Proof of Stake). With the launch of Ethereum

2.0, the process shifted from proof of work to proof of stake. It is noted for significantly lower consumption of energy. PoW powers the Bitcoin network that demands a high energy level to mint new coins and validates the transactions.

On the other hand, PoS allows miners only to validate the number of coins they hold. It allows the reduction of hardware requirements which further reduces energy consumption.

As a result, the Ethereum network consumes 100 TWh lower than the Bitcoin network.

To help the corporations reduce their carbon footprints, a growing class of green assets, namely Carbon Utility Tokens (CUT), have emerged. The sale of these tokens contributes to carbon neutrality. Investments are made in carbon capture and carbon offsetting programs. With the increased visibility of cryptocurrencies in the balance sheet of companies, CUT helps corporates reduce the carbon footprints against each coin. Thus, blockchain technology has the potential to move towards a greener future.

Change is the law of nature. If people do not change with the advent of technology, nature will put them on the back foot. Cryptocurrency is the future of the banking world. It has a tremendous capacity to transform the businesses that do not have access to banks. Hence, upgrade yourself, buy cryptocurrencies, study them, invest in them, trade them but don’t stay passive while the entire mob is reaping the benefits of the cryptocurrency.

editor@ifinancemag.com

International Finance | Jan - Feb 2022 | 53

Business Dossier - Warba Bank

Warba Bank pioneered innovative digitalbanking services that position it as a digital-first bank

Mr. Shaheen Al Ghanim, Chief Executive Officer, Warba Bank

Warba Bank was established on February 17, 2010 to help revive the economy of Kuwait. During the same year, Warba Bank joined the Islamic Banks Register at the Central Bank of Kuwait. By leading in digitisation, it has established itself as a leader in the sector and has provided a blueprint for its peers. In an interview with International Finance Magazine, Shaheen Al Ghanim chief executive at Warba Bank described the bank’s varied offering of digitally delivered products and services, which have resulted in high ratings from its appreciative customers.

IF: How has Warba Bank adapted to the Covid-19 pandemic?

Shaheen Al Ghanim: Covid-19 has had a pounding effect on the banking sector and macro-economic factors.

Despite the challenges, Warba Bank managed the situation efficiently and effectively through the implementation of sound measures to ward off the negative implications of Covid-19.

For example, through our customerservices initiatives, we are committed to strengthening our service quality to customers. We have developed various new processes and operations to combat the impact of Covid-19 on our society. Our key initiatives show how Warba has played its part. As an example, we launched an integrated queue-management system for our branches. Customers can book appointments digitally to visit their desired branches through the bank’s mobile banking app and the website. All Warba branches follow a firm policy for SOPs (standard operating procedures); limitations on the number of people in branches apply to employees and visitors to protect them from Covid-19. The policy is in line with the

Warba was the first bank to offer a

banking app for youth in the region

best practices and standards dictated by the Ministry of Health and Commerce and Industry. Also, out of transparency, Warba is publicly disclosing all incidents of Covid-19 cases discovered in its branches.

The bank continues to serve its customers during lockdowns and curfews. Since the start of the pandemic, Warba, either directly or indirectly, has served customers, namely through home delivery of card products, the call centre being available 24/7, and IT (information technology) applications and systems being maintained to an uptime of 98.86 percent during the fiscal year 2020.

We have also put forth a strategy to utilize social media and the direct channels of the bank in comforting the public. We continue to educate and spread awareness to the public about the Covid-19 SOPs and the benefits of vaccines through our far-

reaching social-media channels.

Warba Bank has launched three digital wallets to retail customers for fast and contactless payments, namely Samsung Pay, which is available to Warba customers with a Mastercard credit card on Samsung devices; Fitbit Pay, for Warba customers with any active Warba credit card on compatible Fitbit smartwatches and trackers; Garmin Pay, available to Warba customers with a Mastercard credit card on compatible Garmin wearable devices.

We also introduced a fully digital onboarding service allowing new customers to open the saving account Al Sunbula through fast, simple and secure steps in less than five minutes. The service does not require customers to visit a branch in person.

On the retail-banking innovation front, Warba Bank is continuously investing in the digitisation of

Business Dossier - Warba Bank

its banking products and services through the mobile and classic web to meet all the banking needs of its customers. This direction is in line with the bank’s long-term corporate strategy that was renewed to adapt to the ongoing circumstances created by the Covid-19 pandemic. The bank envisions leading the banking industry as a digital-first Islamic corporate and retail bank in Kuwait.

Where does Warba Bank stand on the increasing use of technology in all sectors of banking? Do you envisage the bank increasing automation and decreasing human contact?

In line with its vision to continue leading in the digital realm, Warba invests heavily in its digital banking apps and services available on iOS, Android and Huawei smartphone operating platforms for the retail-banking sector. In addition to offering essential products and services, Warba has pioneered several innovative digital-banking services that position it as a digital-first bank, especially in Kuwait. One of our top digital solutions available to retail customers is our youth banking app. Warba was the first bank to offer a banking app for youth in the region with a satisfying UX (user experience) and feature-rich interface. The

banking app comes with special features, offers and discounts tailored for the segment. We also provide an in-app Mastercard Send-remittance service; the Mastercard Send service in our banking app is called Super Transfer Service. Being the first-of-its-kind remittance service in Kuwait powered by Mastercard, the service offers a unique value proposition of multiple payout channels, competitive rates, possibility of tracking payments and transferring full payments to beneficiaries without any operational charges to 30 plus countries.

And we offer our fully digital and first-of-its-kind loyalty programme in our app W-Pocket, enabling users to earn and burn loyalty points. Users earn points when paying telecom bills using Warba credit cards, inviting friends to bank with Warba and transferring personal salaries to Warba. To redeem loyalty points, users can burn points by getting certain banking services or converting points to cash.

Further, Warba partners with external companies to provide other methods for redeeming points, including the purchase of goods and services from listed merchants in the app in collaboration with the local digital-wallet solution BookeeyPay; subscription for buy-one-get-one-free offers from the popular

we offer our fully digital and first-of-its-kind loyalty programme in our app W-Pocket, enabling users to earn and burn loyalty points interfaces and navigational features are fingerprint and face-identification login services as alternate login methods for users who prefer logging in without password entry; bio verification for transactions through the banking app; dark mode theme on iOS. On the corporate-banking front, Warba launched the following digital services for clients through the corporate online portal during the year 2020: our salary-upload service for companies to transfer employee salaries directly, which is linked to the Ministry of Social Affairs and Labour; merchant services to reconcile company points-of-sale and payment-gateways transactions with different types of detailed merchant statements; dashboard services that summarise customers’ accounts and term deposits with the last 10 transactions; transfer service to easily transfer funds between a company’s accounts to beneficiaries in Warba Bank, local banks and international banks; enhanced access-management function to include sub-users’ access to accounts and daily transfer limits.

Entertainer App; and exchange of W-Pocket points for Oasis Club Miles from Kuwait Airways.

As well, we offer our first-of-its-kind in-app personal-finance-management service, which combines Warba’s key banking and financemanagement services as widgets on a single page in addition to new features for users, including My Portfolio, which shows previews of assets and liabilities in Warba with the ability to add balances from other locally available banks; My Cashflow, which provides snapshots of money-in and money-out from accounts in Warba; My Growth, which reveals patterns of saving in Warba accounts.

We also provide a fully digital financing product, Express Finance. Being the first of this type of digital service to market, it enables existing customers to get Al-Wafi financing of up to 250,000 KD against collateral, without the need to pay a single visit to a Warba branch. We offer a first-of-its-kind digital-money box feature called Hassala with intuitive funding methods that encourage customers to save. Also available is our innovative and personalised in-app banking advisory service Al Mustashar that identifies and suggests the best digital solutions for users’ banking needs. We have found that the most used

Do you have any examples of successful socialresponsibility initiatives or work undertaken in the community by the company?

The bank is extremely keen and open regarding its positive impact on society. As part of its corporate social responsibility (CSR), Warba Bank launched the social-banking and gamification app Fayez for Warba customers and the public with an intuitive user interface. The app comprises two components: comprehensive fitness tracking features to promote social well-being and healthy lifestyle as well as sports prediction and social engagement based on the concept of gamification.

The bank has also partnered with many charity organisations to enable and encourage customers to donate digitally. The donation methods span beyond the traditional cash donations and include donating points earned on Fayez and W-Pocket. The bank also supports SMEs (small and medium-sized enterprises) by featuring them in Warba’s CSR vlogs (video blogs) on social media, especially amidst the fallout period of Covid-19.

The bank is actively releasing Covid-19 educational videos for digital banking and IT-security awareness, customer financial knowledge and rights, and many other topics mandated by the Central Bank of Kuwait.

INDUSTRY

ANALYSIS

OIL AND GAS FOSSIL FUEL USAGE

Global temperatures could rise by more than 3°C and the world economy could shrink by 18% in the next 30 years

Can the global economy survive without fossil fuels?

IF CORRESPONDENT

As the news regarding climate change becomes more and more alarming, we have also come to understand that humanity’s use of fossil fuels is severely damaging our environment. Fossil fuels cause local pollution where they are produced and used, and their ongoing use is causing lasting harm to the Robots climate of our entire planet. either allow Nonetheless, meaningfully surgeries to changing our ways has been be performed very difficult. In 2020, the with better Covid-19 pandemic brought accuracy than trade, travel, and consumer unsubsidized spending to a near-standstill. human With billions of people surgeons or recently under stay-at-home allow remote orders and economic activity surgeries plunging worldwide, the demand for and price of oil have fallen further and faster than ever before.

This has made some experts ask the question if this crisis could be the push the world needs to move away from oil. One asked: “Could the coronavirus crisis be the beginning of the end for the oil industry?” Another: “Will the coronavirus kill the oil industry and help save the climate?”

In 2020, the annual greenhouse gas emissions declined by 4-7 percent due to the world coming to a standstill and some of the world’s most polluted

58 | Jan - Feb 2022 | International Finance

cities enjoyed clear skies. The idea that a pandemic could help ave the planet misses crucial points.

Firstly, damaging the world economy s not the way to deal with climate change. When it comes to oil, we still need to find a suitable replacement. in terms of its availability and fitness for purpose.

Although the supply is finite, oil is plentiful and the technology to extract it continues to improve, making it ever-more economic to produce and use.

The same is also largely true for natural gas.

Having said all of that, climate change is very real and we are seeing its more clearly than ever.

Fossil fuel usage has roughly doubled since 1980, however, in the present day, coal consumption is falling in many parts of the world. Oil and gas usage, on the other hand, is still growing. Data shows that despite alternative energy sources such as renewables have become cheaper comparatively, the share of fossil fuels in the world’s energy mix still remains high compared to a decade ago.

According to a report by REN21, fossil fuels’ share in the global energy mix was 80.2 percent in 2019, compared to 80.3 percent in 2009. The report further revealed that renewable energy share in the energy mix has grown to 11.2 percent in 2019 from 8.7 percent in 2009.

In 2019, we witnessed 15 extreme weather events, primarily as a result of climate change and caused more than $1 billion in damage each. . Four of these events each caused more than $10 billion

in damage. The large-scale use of fossil fuels tops the list of factors contributing to climate change.

But the concentrated energy that they provide has proven hard to replace. Why?

Impact of Covid-19 on fossil fuels The effect of the Covid-19 pandemic can still be felt and seen all over the world. Natural gas prices in Europe have soared by over 400 percent since the beginning of 2021. Electricity prices have also increased by over 250 percent during the same period. Meanwhile, in the US natural gas price has more than doubled.

Natural gas is mostly used for electricity and to generate heat in the UK during the winter season.

Furthermore, the price of coal in the US has soared by nearly 400 percent this year to reach $270 per ton. The crisis is as we understand is considerably worse in Europe. Electricity prices in the continent have soared significantly as well. Natural gas prices have surged as well to $30/mm Btu. This is resulting in inflation which means prices for energy-intensive metals are also increasing.

For example, prices of metals such as nickel, steel, silicon have increased due to the energy crisis.

Besides metals, prices of fertilizers have ramped past 2008 record highs to nearly $1,000 a ton. It is noteworthy that the prices were around the $300 to $450/ton mark in the last couple of years. The price

Natural gas prices in Europe have soared by over

400 percent since the beginning of 2021

Electricity prices increased by over

250 percent during the same period

for copper too has increased to a record high of $4.50 per pound. Copper is an important metal and raw material for the solar or wind energy industry, which emphasis is growing day by day as and is seen as an important factor to tackle climate change.

In Britain, renewable power production this year was much lower than normal as a result of a windless summer. The region meets around 24 percent of its energy needs through the wind. However, due to low production this year, it means the UK has to rely on coal. Over the years, Britain has transitioned away from coal as an electricity source. Prime Minister Boris Johnson said that the UK remains committed to wind

International Finance | Jan - Feb 2022 | 59

INDUSTRY

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OIL AND GAS FOSSIL FUEL USAGE

power generation. He went on to say that he wants the UK to become the ‘Saudi Arabia of wind power’ with offshore wind farms generating enough electricity to power every home in the UK in the next 10 years.

However, the landscape is pretty different in the present time.

Soaring electricity prices is a matter of growing concern for politicians across Europe. The crunch in the gas market is forcing countries to revert to coal. This goes against Europe’s fight against climate change and the fact that the UK hosted the 2021 United Nations Climate Change Conference, more commonly referred to as COP26 at the SEC Centre in Glasgow.

In Asia, thermal coal prices also keep hitting record highs. In short, there isn’t enough coal to meet demand. Economies in the region are slowly resuming activities and are in the process of an economic revival, be it China, Malaysia or India. It has led to greater demand and is one of the primary causes of an emerging electricity crisis in China. Coal stockpiles are running low in India too, however, the government claimed there are enough stockpiles to keep the wheels running.

Climate change & fossil fuels During the beginning of winter in 2021, the northern hemisphere witnessed a series of very cold and extreme weather events. If the same trend is seen happening next year, the northern hemisphere witnessed a series of very cold and extreme weather events. In order to deal with climate change, we must start by understanding the fossil fuel

60 | Jan - Feb 2022 | International Finance

Global greenhouse gas emission Carbon dioxide (fossil fuel)

65%

Carbon di oxide

(Forestry and other Land use)

11% 16% 6% 2% Methane

Nitrous oxide

Fluorinated gases

system, how energy is produced and used. While there is no denying that fossil fuel companies are immensely powerful, in the United States and around the world, their lobbying prowess is not the key reason that their fuels dominate the global energy system. Similarly, the transition to an all-renewable energy state is not a simple task to say the least.

As we have seen during the 2020 Presidential elections, the politics of blame is quite popular. For years now, fossil fuel companies have denied the problem to policymakers reluctant to enact the policies needed to force real change. It has been easier for everyone to stick with the status quo.

Since we are standing at a critical juncture of climate change, what we need is technology and strong

policy to move in a new direction.

Throughout history, humanity’s energy use has moved toward more concentrated, convenient, and flexible forms of energy. By understanding the advantages of current energy sources and the history of past transitions, it can help us understand how to move toward low-carbon energy sources.

With a greater understanding of the climate challenge, we are making huge strides in developing the technology we need to move toward a low-carbon future. Still, understanding how we got here and why the modern world was built on fossil fuels is crucial to understanding where we go from here.

Bio-based energy system Prior to the technological revolution, solar energy met all our needs. This balance between human energy use and sunlight sounds like a utopia, but as the human population grew and

became more urban, the biobased energy system brought problems. This is when fossil fuels opened new doors and options.

First coal, then oil and natural gas allowed rapid growth in industrial processes, agriculture, and transportation. The world today is unrecognizable from that of the early 19th century before fossil fuels came into wide use.

Along with this, human health and welfare have improved immensely, and the global population has increased from 1 billion in 1800 to almost 8 billion today. The fossil fuel energy system is the lifeblood of the modern economy. Fossil fuels powered the industrial revolution, pulled millions out of poverty, and shaped the modern world.

Greatest challenge to humanity While fossil fuels helped us advance our technologies and society, the world slowly understood the huge disadvantages it comes with. Currently, we understand

the devastating effects of Co2 has had on Earth. As a result of the release of these gases, along with the massive deforestation, burning fossil fuels is warming our planet faster than anything we have seen in the geological record. One of the greatest challenges facing humanity today is slowing this warming before it changes our world beyond recognition.

With eight billion of us present on the planet, the impact of Co2 is being clearly witnessed. But going back to the old ways and relying on biomass for our energy needs is clearly not a solution. But, we still have to find a solution to get back to reliance on real-time solar flows and perhaps nuclear energy to meet our needs. While there are a lot more of us now, compared to a century earlier, we are also a part of a vastly larger and more integrated global economy, and using much more energy. But we also have technologies today that are much more efficient than photosynthesis

at transforming solar flows to useful energy.

Alternatively, wind turbines and solar photovoltaic (PV) cells convert solar energy flows into electricity, in a process much more efficient than burning biomass, the pre-industrial way of capturing solar energy. With rising demand, the cost for wind and solar PV have been dropping rapidly and they are now mainstream cost-effective technologies. Some existing forms of generating electricity, mainly nuclear and hydroelectricity, also don’t result in CO2 emissions.

Bringing these together presents us with an opportunity to decarbonise or eliminate CO2 emissions from the electricity sector. Electricity generation is an important source of emissions, responsible for 27 percent of U.S. greenhouse gas emissions in 2018.

editor@ifinancemag.com

International Finance | Jan - Feb 2022 | 61

Business Dossier - TRANSOM Sats cargo

TRANSOM Sats, paving a new way for air cargo in Oman It is also the exclusive cargo handler of the national carrier, Oman Air and Salam Air, where the company supports the airline’s hub

The Covid-19 pandemic was a health and a humanitarian crisis, as well as an economic shock.

The pandemic brought the world to a standstill and every economic sector was impacted by the virus.

While essential sectors like oil and gas, energy, real estate, and aviation saw a sharp decline, a few emerging industries became our saviors. Among the frontline workers who made it possible for us to keep some semblance of sanity during these trying times, the cargo industry barely receives the recognition it deserves. Air cargo is a critically important industry.

During the crisis, it became the lifeline of society by delivering critical medical supplies and vaccines across the globe and keeping international supply chains open.

Additionally, for many airlines, cargo became a vital

source of revenue when passenger flights were grounded.

Introduction to Company TRANSOM SATS’ started as a joint venture between Oman Airports and SATS from Singapore and the company aims to serve the local aviation industry and the Sultanate of Oman while strengthening Oman’s position as a cargo hub and the cargo gateway to the GCC. The company aspires to be the best cargo handling terminal in the international arena while keeping its Omani identity intact. TRANSOM SATS operates from the three dedicated freight aircraft bays, with 284 permanent staff along with the capacity to handle 350,000 tonnes of cargo annually. It also boasts a warehouse with an area of 23,000 square meters.

The company provides cargo services to more than 34 world-leading airlines flying to and from the airport and it is also the service partner for the national carrier, Oman Air where the company supports the airline’s hub operations at its head office in Muscat.

In order to keep up with the fast-paced and changing demands, TRANSOM SATS stepped up its transformation, made some tough calls in order to be more efficient and financially sustainable.

The Company operates from its state of the art brand new facility since 2018, and this has benefitted its customers and users of the facility. TRANSOM SATS‘ customized

self-service kiosk and electronic signature delivery pads are just some of the features that set it apart from its competitors, making it one of the best cargo terminal operators in the region.

The critical role of TRANSOM SATS TRANSOM SATS cargo is one of the most efficient cargo terminal operators at Muscat International Airport. Its capabilities were put to the test during the pandemic crisis.

The company made sure that food supplies didn’t stop due to airport closure during the pandemic. The PPE kits were also delivered almost immediately as the supplies came through from the aircraft.

The company also ensured the timely processing and handling of the vaccines so that they reached the Ministry of Health in the desired condition and in the quickest possible time. Additionally, the company helped manage the supply of food as we coordinated with the various government ministries and the national carrier Oman Air, to ensure an adequate supply of eggs, vegetables and meat from India, Africa and Europe to the Sultanate.

Transformation through digitalization for a more secure future S.T. Tan, CEO of TRANSOM SATS said, “We had our digitalisation plans on hand, but the pandemic forced us to quicken the

Business Dossier - TRANSOM Sats cargo

pace of transformation. As a result, we introduced many digital initiatives the past year as our response against the virus, as well as continuing our efforts to be more efficient and productive with the help of technology. We have also obtained the IATA CEIV certification in Pharma and Fresh, and it allows the industry to know that we have in place the right processes and facilities and equipment to service special cargo for the industry and the country. Digitalization is the way to go for the air freight industry.”

Two of the key innovations are the SelfService Kiosk and the mobile app.

on manpower cost and stationery cost.

Key Features: 1. Convenience for all customers including walk-in customers 2. Easy to operate – Perform transactions with minimal/no data entry 3. Pay charges in SSK using multiple payment modes – credit card, PreDeposit (PD a/c) and Credit.

4. Generate Pick Orders for Inspection/ Delivery 5. Customers can log in using a username and password or signed-in using a unique QR code triggered by the customer.

Self Service Kiosk (SSK) Implementation of SSK made the whole documentation process transparent and the customers were empowered to take control of their shipments. Being available at various locations of the building, and on a 24/7 basis, users can process their documents easily and efficiently. The SSK promotes social distancing as human interactions were not necessary, thus saving

Benefits of SSK are: 1. Convenience: eliminate waiting time at the counter. With SSK, the customer can complete transactions of 30+ shipments in less than 1 minute.

2. Ease of access to information: all data including shipment status are available. This gave a clear view of the charges and status of the shipments.

3. Lower costs: Reduction in manpower and

associated costs.

4. Paperless environment- Usage of paper was drastically reduced where the invoices and pick orders are sent to their email address electronically.

Mobile Application The mobile app allows users to view and transact the operations through their mobile phone, thus providing convenience as well as the freedom to operate as and when they need.

Benefits of mobile Application are: 1. Speed-up cargo clearance: real-time alerts and information on the documents/ cargo awaiting clearance 2. Reduce waiting time: eliminate waiting time at the counter by processing transactions on the phone and performing transactions anytime & anywhere.

3. Normal transaction for a single shipment at the counter- 15mins 4. Transaction via mobile app for 50 shipments –10 seconds.

5. Lower costs: Reduction of cost, especially manpower and stationary.

The road ahead The company’s performances are being measured through key performance indicators (KPIs) and the information are being shared with the public. This is the company’s service promise to its customers and users of its services. The key to customer satisfaction is to keep its service promise to its customers through meeting its KPIs. Moving forward, the company will primarily focus on building a sustainable environment. In order to remain relevant in the market and be successful, sustainability is important for the company’s security, survival, and a better future.

TRANSOM SATS plans on growing a sustainable business by remaining financially strong and investing in technology and training to deliver its best services to its stakeholders and customers. TRANSOM SATS will also offer tailored-made services for niche markets to meet the unique needs of its customers. In all, the Company works to fulfil its role to serve the industry and the Sultanate of Oman.

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INDUSTRY

FEATURE TELECOM

BRAZIL TELECOM 5G BRAZIL ECONOMIC DRIVER

5G Could Become the Next Big Economic Driver in Brazil MOUMITA BASU

Brazil opened up a 5G tender with a view of $9 billion investment

F

or a commoner, the meaning of 5G would be to increase the speed of data sent from one party to another. By 2021, we all know that everything is on the internet, right from buying groceries to completing an educational degree. The advent of 5G also touches upon the transformation of Industry 3.0 to 4.0 and AI, Blockchain and IoT in most economies. Industry 4.0 is transforming the way businesses function and 5G could be the next significant factor determining the success of developing countries.

Speaking about developing countries and the 5G network, Brazil opened up a 5G tender with a view of $9 billion investment. One of the agendas in pumping $9 billion in Brazil was to accelerate

the development of agriculture, businesses, and industries to compete with the developed nations.

The result of agriculture and industries also diverts our minds to a less-discussed aspect of 5G being an economic growth driver than just an internet speed enhancer.

PriceWaterCooperhouse predicts that by 2030, 5G would add $330 billion to the global gross domestic product and $15 billion to the manufacturing sector.

Why will 5G Be the Next Big Economic Driver?

Infrastructure plays an essential role in an economy to uplift the gross domestic product

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INDUSTRY

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BRAZIL TELECOM 5G BRAZIL ECONOMIC DRIVER

(GDP), and the introduction to Industry 4.0 means the use of digitisation in every industry possible. A white paper published by Nokia claims that in Latin America, there is only one broadband service for five families, making it difficult for them to reach out for new sources. The 5G network spectrum will thus play a crucial role in supporting the deep-tech services for digitisation to work efficiently in the face of the scarcity of broadband services.

5G spectrum will improve the telecom sector by a colossal margin and will be helpful in the overall infrastructural development of the country.

Infrastructure includes development in logistics, transportation, network connections, public services, etc. By economic law, with the rise in infrastructure, there would be more jobs and thus rising gross domestic product in the global market. A $50 billion infrastructure investment in Brazil is the right step toward developing livelihoods and disposable income. A significant challenge in this segment would be 5G spectrum deployment at the right time at the right place.

In Brazil, 5G would be more focused on the mining and agriculture sector.

5G would bring more digitalisation in the primary industry of the economy like the agriculture and manufacturing sector. It would help to be an integrated ecosystem between the technology partners and agribusinesses. Industry leaders understand the disadvantages of operating without technology and the internet in today’s competitive world. Industry 4.0 focuses on the use of 5G-powered smart farming and agriculture practices. The 5G-powered farm includes machine-to-machine data transferring, proper rainwater and crop harvesting, livestock tracking and

68 | Jan - Feb 2022 | International Finance

In Brazil, 5G would be more focused on the mining and agriculture sector. 5G would bring more digitalisation in the primary industry of the economy like the agriculture and manufacturing sector. It would help to be an integrated ecosystem between the technology partners and agribusinesses management, adequate water irrigation and drone sprayers giving real-time data to the farmers or companies.

Countries like Brazil are primarily based on agriculture, and thus, having precision agriculture practices is necessary to increase productivity. 5G in the industrial sector enhances the use of machine learning and data monitoring.

Gone are the days when employees collected data and analyzed it. Today, AI machines and IoT have taken over these roles. Due to intense competition and a shorter product life cycle, deep-tech is necessary for the manufacturing sector.

High-end technologies are entirely dependent on high bandwidth internet and network connection. In Brazil, industry leaders are adopting foreign manufacturing techniques like cellular IoT, augmented reality and virtual reality. Brazil has been a supplier of automobiles, manufacturing 2 million vehicles per year. Automotive being the core manufacturing sector of Brazil, the

companies are trying to adopt the 5G spectrum for efficiency and effectiveness to extend the market share.

It is believed that 5G will offer 10 Gbps speed for businesses to transfer and simulate data in real-time quickly.

The introduction of 5G will benefit the manufacturing sector in various ways. It integrates more machines to gather a single stream of data, followed by companies using 5G networks for advanced predictive maintenance. It can establish a better assembly line at the production unit and efficiently manage resources. All these practices will lead to better production and reflect on the growth of the country’s economy.

The telecom industry of Brazil could see a change in paradigm after setting up 5G spectrum on a pan-country basis. Stretching out the use of 5G to the secondary sector would solve problems from the roots. For example, retailers and wholesalers should be given 5G cards by the telecom providers in Brazil

FEATURE IOB APPLICATION

for better connectivity. Brazil is the 9th largest economy and a contender for being the largest economy in the world. Implementing 5G in the country means more job creation, faster payment methods, less margin of error, digitalization of all government activities, including tax payments and customs payments.

One of the backbones of any country is the logistics and supply chain industry. Logistics acts as a bridge between the supplier and the customer.

Introducing 5G in transportation and logistics would increase the process by 5 times. We all are aware of the data and paperwork required for each shipment.

The 5G spectrum will ensure that all the operations are transparent and with no delay in lead times.

Brazil's tertiary and service sector contributes 65 percent to the total GDP. The 5G telecom network in health, financial, retail sales, e-commerce would lift the economy. 5G in the health

sector means an advanced tool for the management and doctors to make apt decisions at the right time, tracking patients’ movement inside the facility, identifying hotspots when there’s an outbreak, etc. Speaking about 5G in the financial sector boils down to better monetary analysis, better financial decisions, improved cash management techniques, faster and better transfer of financial data, and better investments.

Last but not least, 5G telecom networking will play a massive role in transforming the e-commerce industry.

Since 2010, we have seen a rise in last-mile delivery and e-commerce platforms like Amazon. Hyper data mining is possible due to 5G technology, allowing companies and governments to understand consumer behavior better.

The companies can sit on a heap of data and analyze it within seconds. Brazil is a country with a majority workingage population; 5G telecom networking would mean better service for the

younger generation, more spending, and a rise in the country’s GDP. The open 5G telecom network development will create a competitive and secure ecosystem in Brazil, helping them be in the ambitious game of globalization.

Implementation of 5G telecom network in Brazil In a developing democratic country, the superiors and democrats vest most of the power, leaving the commoners with old/scarce resources. This approach shouldn’t be the case while implementing Brazil's 5G network spectrum. $9 billion is a considerable investment for any developing nation, and that investment shouldn’t be debt in the future. 5G is expected to be available in Brazil by July 2022, making these nine months crucial for proper planning and implementation of 5G spectrum deployment.

Deploying 5G to more than 200 million active mobile connections will

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BRAZIL TELECOM 5G BRAZIL ECONOMIC DRIVER

be an enormous task for the Brazilian Government. The main job for the government would be to assign the 5G contract to the right company carefully. According to an interview with the superintendent of Anatel, telecommunication and technologies are directly related to the country’s success because they move the most diverse sectors of the economy.

Rolling Out the 5G Telecom Network in Government Offices Government offices and providers are the locus point for all the citizens. The government carries out most of the public services, and implementing the 5G spectrum in these services would improve the overall living index of the country. For example, in South Korea, the government has set up 5G telecom network dongles that are less costlier than broadband for visitors to use whenever necessary. When measuring the growth of an economy, we have to consider factors like the happiness index, living standard index, and security index. With the introduction of 5G, all of the mentioned factors could see a positive marginal change.

Along with government ownership, the private players should also get the 5G spectrum allotment depending on the auction basis. For example, there is enormous competition between Airtel, Reliance, and Vodafone Idea to win India’s 5G telecom spectrum bid.

The private players have a hierarchy that is beneficial for developing the system, resulting in the economy’s growth. Privatization will also enable huge companies like Petronas in Brazil to collect data and store them faster, increase communication speed, rely less on other networks, and make better use of Internet of Things technology like

70 | Jan - Feb 2022 | International Finance

Deploying 5G to more than

200 million

active mobile connections will be an enormous task for the Brazilian Government. The main job for the government would be to assign the 5G contract to the right company carefully

RFID chips and Navigators.

One of the significant challenges for Brazil would be to eradicate the difference between urban and rural society concerning the arrival of 5G. Thus, the responsibility falls on the private players to enter the local markets with 5G technology in Brazil. Due to globalization, privacy is being affected on a large scale. Recently, we have seen many legal cases concerning data breaches and cyber security. With the advent of 5G, companies and individuals could develop better software systems requiring high bandwidth.

The introduction of 5G in Brazil will improve its status at the global level.

But it could still encounter a few issues.

Firstly it would be the involvement of the US and Huawei in Brazil concerning the 5G spectrum, followed by the announcement of the 5G network in only developed parts of the cities. Such bias development could be a hindrance for development. The next issue would be disagreements concerning the auction notice between the technical areas of the federal audit court. Last but not least, placement of antennas all over Brazil.

Industry 4.0 started in Germany using Drones, AI-powered machines, blockchain technology, and the Internet

of Things. Due to globalization, Industry 4.0 is spreading like fire, and we can already see the effects in Brazil with the introduction of data-driven technology.

The major industries of Brazil are iron and steel production, automobile assembly, petroleum processing, chemicals production, and cement making. The leaders of these companies should make an effort to implement 5G as much as possible and reduce the reliance on 4G and slower broadband services.

What lies ahead All the technology and software in Industry 4.0 will require high-speed internet, and thus 5G will play an essential role in deciding the future of Brazil’s economy. Implementing the 5G telecom network in Brazil would be a tough challenge for the government, especially when determining the providers and handling the barriers within a democratic society. But with a $9 billion investment of 5G telecom spectrum, the government and businesses can surely increase job opportunities for Brazilians. The government could focus on improving the standard of living for the citizens and visitors, thus attracting more tourists and increasing the tourism revenue.

Being a primarily agrarian country, using 5G in agricultural practices will surely enhance the entire pipeline of the secondary and tertiary markets. The 5G implementation would be like a domino effect, improving from the primary to the tertiary sector. Yet, an addition to this chain would be wholly integrating the data collected and information shared.

editor@ifinancemag.com

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Business Dossier - Commercial Bank Finance Services

Providing a safe and secure trading platform for QSE-listed assets CBFS’ business mission is to become a “Brokerage House of Choice” for its domestic and international clients

Subah Al-Kuwari, Marketing / Sales Support Officer | CBFS,

Commercial Bank Finance Services (CBFS) is one of the top three licensed brokerage houses in Qatar, regulated by the Qatar Financial Markets Authority (QFMA). Established in 2011, CBFS is a wholly-owned subsidiary of Commercial Bank with paid-up capital of QAR 700 million. Our business mission is to become a “Brokerage House of Choice” for our domestic and international clients by offering them first to market and best in class products and services leveraging digital technology to help them meet their financial goals.

CBFS provides customers with secure platforms to trade on Qatar Stock Exchange-listed stocks, bonds and Treasury bills. Customers can trade directly through our numerous channels during the trading hours i.e. online and mobile trading applications from anywhere during market trading hours. Clients can also call directly at our dealing room phone lines to place their trades. CBFS

also provides periodic local and global market economy and company research for clients to help them make informed investment decisions.

International Finance Magazine spoke to Subah Al-Kuwari, Marketing / Sales Support Officer | CBFS, where he discussed how CBFS provides the best customer service, how Qatar has become one of the most attractive markets globally, the impact of Covid on the business and the long-term plan of the company.

Providing best in class experience at every client touchpoint

CBFS long term strategy remains centred around clients and we continue to invest in our product and service offerings that are relevant and provide them with best in class experience at every client touchpoint. Covid-19 has fundamentally shifted the way we interact with our clients with more and more financial transactions executed through mobile, online and other self-serve channels. Our goal is to enable clients to execute 100 percent of their transactions from anywhere using our best in class self serve platforms.

Almost half of our trade transactions now are coming from mobile and online channels which are up almost 10-12 times over 2019. Covid-19 has reaffirmed the investments we have made in technology platforms, products and people as part of our strategic plan, as it has given us a greater degree of resilience and the ability to adapt quickly to capture the changes in customer behaviours that have been accelerated by the pandemic.

As a market leader in innovation, we excel in bringing the best practices, new technology and new products that are relevant to clients' changing needs. Last year, we introduced Margin Trading Product, which is the first pure margin product in the country that allows clients the flexibility to take advantage of market opportunities, at the same time offering flexibility for clients to hold long term positions for potential capital appreciation and earning attractive dividend yields. Another marketleading innovation was to offer clients a fully digitised onboarding experience that reduced account opening time from an average of 5-6 days to within one hour and led to substantial enhancement in client experience and delight.

Several other new products are in the pipeline for next year including Liquidity Provisioning, Market Making, Investment Advisory etc.

Our “Award Winning” Trading Mobile Application which will help equip the young audience with the tools necessary to achieve a bright, successful financial education with simple & easy navigation tools Making trading attractive for the younger generations We aim to expand our services to the younger domestic client base by offering the best in class technologydriven products and services. We are tailoring special packages for this promising but under-served segment.

By doing so, CBFS will become the first brokerage house in Qatar to take this step forward towards engaging the youth of this country in financial services offerings. This year we launched our “Award Winning” Trading Mobile Application which will help equip the young audience with the tools necessary to achieve a bright, successful financial education with simple & easy navigation tools and the latest market research.

During the peak of the pandemic, when the whole country was under lockdown, we at CBFS were resilient and none of our services was affected due to a robust Business Continuity Framework that we had put in place.

All our efforts and focus is geared towards creating a market-leading franchise that offers the best brokerage services for our domestic and international clients. In the end, industry profitability level will be supported by the growing retail share; increase in margin funding interest income, and distribution of financial products despite the pricing pressure and contracting yields. Entities with established information technology (IT) infrastructure, enhanced product suites, strong balance and controls will fare better driving economies of scale and ROI while delivering top of the line experience to clients.

INDUSTRY

ANALYSIS

AVIATION GLOBAL AIR TRAVEL

With major airlines facing losses, many employees were laid off, or were asked to either go home without pay or face salary cuts

Covid-19 & its impact on aviation industry IF CORRESPONDENT

The aviation sector is not a stranger to rising to the challenges of a crisis. There is no denying that 2020 was an exceptionally difficult year for all of us, and the aviation industry was no exception. In fact, this sector was one of the most hard-hit.

With major airlines facing losses, a large number of With major employees were laid off, while airlines facing many were asked to go home losses, a large without pay and others faced number of salary cuts. Industry revenues employees were totaled $328 billion, around laid off, while 40 percent of the previous many were years. It was also predicted asked to go by experts that the aviation home without industry will achieve its 2019 pay and others numbers only by 2024. faced salary Keeping the financial woes cuts. aside, the long-term effects of Covid-19 on the aviation industry is slowly emerging. The obvious ones are concerns regarding hygiene and safety, which have definitely become more strict. The health, safety, and well-being of passengers and staff is the aviation industry’s number one priority. In order to follow through, airports around the world have introduced many new health and biosafety measures to ensure the safety of the passengers and that their efforts directly reflect and match with the current consumer trend. Airports and

74 | Jan - Feb 2022 | International Finance

airlines along with the world have come together to resume global connectivity. At present, the rate of global vaccinations offers a hope that a return to normalcy is possible in the near future.

Leisure trips will fuel recovery Experts estimate that while business travels will take longer to recover, and even then, it is only likely to recover to around 80 percent of prepandemic levels by 2024. Additionally, remote work and other flexible work arrangements are likely to remain in some form, even post Covid-19, which will lead people to take fewer business trips.

In previous crises, leisure trips or visits to friends and relatives tended to rebound first, and this was first witnessed in the UK, after 9/11 and the 2008 global financial crisis. Not only did business trips take four years to return to the pre-crisis levels after the attacks on the World Trade Center but they also had not yet recovered to pre-financial-crisis levels when Covid-19 broke out in 2020. Hence, it is expected once Covid-19 subsides, the rise in leisure trips will lead to the recovery of business travel.

There are some air carriers that are highly dependent on business travelers, both those who are traveling in business class and economy seats right before they travel. While leisure passengers fill up most of the seats on flights and help cover a portion of fixed costs, its overall contribution to net profit is negligible, and marginal at best. Most of the profits

earned on a long-haul flight are generated by a small group of high-yielding passengers, often traveling for business. But this pool of profit-generating passengers has shrunk because of the pandemic.

Relearning flight economics After seeing the extensive effects of Covid-19 on the aviation industry, many experts have suggested that airlines should reevaluate the economics of their operations, especially long-haul flights. For example, currently, most carriers price point-to-point nonstop flights at a premium. Travelers who value time over price—mostly business travelers—book these nonstop flights. On the other hand, people who travel for leisure even those traveling in premium classes, are more price-sensitive and may choose an indirect routing. This large gap between nonstop pricing and connect pricing may need to narrow.

Secondly, lower business traffic may require network changes. Over the last few years, airlines have added many flights between hubs and smaller cities, using small-size widebodies such as the Boeing 787. These flights work primarily due to high-yielding business demand. With business demand subdued, economics favor larger aircraft flying less frequently. Many carriers may find that

Global air traffic (in millions)

Domestic 4224 4499 4812 5137 5304 2401 3480

International 2918 3122 3839 3632 3738 936 1644

Year 2015 2016 2017 2018 2019 2020 2021

Source: ACI World

larger aircraft such as Airbus A350s or Boeing 777s— which have lower unit costs—become the base of the long-haul network.

Thirdly, airlines may also look at reconfiguring the layout of their cabins to address the increased share of leisure traffic. Additionally, products may also shift in order to cater to premium-leisure passengers, such as the growth of premium-economy cabins or the development of business-class seats

International Finance | Jan - Feb 2022 | 75

INDUSTRY

ANALYSIS

AVIATION GLOBAL AIR TRAVEL

more suitable for traveling as couples or groups.

Covid-19 and its effect on air control traffic Last year marked the end of ten years worth of consistent growth in global passenger traffic. The ongoing pandemic managed to bring the airport around the world to a virtual halt in the second quarter of 2020, resulting in airport traffic revenue losses across all regions. While many countries have since then started to gradually reopen many parts of their economy, many states were confronted with more brutal waves of infection, and several states and countries decided to reimpose lockdown to control the spread of the virus.

Countries like France, Poland, Canada, India, and Chile had to increase or re-instate partial lockdowns in an effort to control the spread of a second, third, or even fourth wave of infection. While most countries have moved away from complete lockdowns, and currently they are trying to limit the infections with targeted and less disruptive restrictions, there are a large number of states and countries that have retained either partially or totally restrictive regulations for international travel including self-quarantine on arrival. 2020 represented a 64.6 percent decline in global passenger traffic compared to 2019. Europe and the Middle East were the two most impacted regions with similar declines of 5 percent compared to the projected baseline.

The Asia-Pacific region started recovering earlier and faster than other regions and ended the year by registering a decline of 61.3

76 | Jan - Feb 2022 | International Finance

Unemployment impact of Covid-19 on industries supported by air transport worldwide (in millions)

Middle East Africa North America Latin America Europe Asia Pacific

0.9 2 2 2.9 5.6 11.2

percent. Asia-Pacific, however, recorded the highest traffic loss of all regions with a loss of 2.15 billion passengers in 2020. Comparatively, Latin America-Caribbean was the least impacted of all regions posting a decline of 61.1 percent.

After the ‘great lockdown of 2020’, international passenger traffic was virtually non-existent in the second half of 2020 and international passenger volume ended with below 1 billion passengers, which is 75 percent less compared to 2019.

Globally, domestic traffic volume for 2020 was recorded slightly above 2.4 billion passengers, a decline of 54.7 percent compared to 2019 volume.

Air tickets are set to become more expensive As the pandemic hit, a lot of air carriers had to borrow money to stay afloat and cope with high daily cash burn rates. The airlines' industry collectively amassed more than $180 billion worth of debt in 2020, which is ironically

very close to the amount of revenue collected that year. And with debt levels still rising, it has become even more difficult to repay those loans back. In order to recuperate these costs, ticket prices are going to get higher. Experts estimate that ticket prices are going to rise by 3 percent and as air travel slowly returns to normal, it will likely outpace supply initially. But it will also take time for airlines to restore capacity, and this will bring delays in bringing aircraft back to service, and crew retraining might result in a demand gap, resulting in higher short-term prices. For some other cases, airline rescue efforts provided by the country's government come with strings attached. We are already witnessing a reemergence of, or increase in, the level of state ownership and influence. For example, TAP Air

Portugal, Lufthansa Group, and AirBaltic all received state aid along with an increase or reintroduction of government shareholdings.

The surge in travel for the second half of 2021 Currently, we are undergoing the biggest vaccination campaign accompanied by positive signs and prospects of recovery. With the Covid-19 pandemic slowly subsiding, travelers and industry stakeholders are eager to resume traveling. Additionally, industry experts have also forecast a surge in travel for the second half of 2021, with some terming the comeback of the aviation industry with a “postwar like a surge” in travel.

Even then, there has been a lot of uncertainty surrounding the recovery of the aviation sector. It is imperative that governments

around the world have to learn to strike the balance between supporting the airline industry and how to preserve conservation by taking specific measures. But it is important to keep in mind that government interventions can have ambiguous effects on competition.

With an effective vaccination campaign largely distributed in the second half of 2021, and added enthusiasm from passengers to start flying again in the second half of 2021 will add to its recovery. The third and fourth waves of infections are possible but rapidly contained and limited to specific regions.

But, the fear to travel is still largely present among the population, along with prolonged economic downturn and slow airline fleet recovery. The third and fourth waves of infections are likely and could spread to multiple regions.

Based on these developments, it is predicted that global passenger traffic is now expected to recover to 2019 levels in 2024 and, most of it will be driven by the recovery of domestic passenger traffic. Globally, domestic traffic accounts for 58 percent of total passenger traffic as of 2019. If new variants of the virus are effectively contained, even then, it will take airlines at least 2023 to recover to the 2019 levels. The recovery of international passenger traffic will require one more year, thus getting back to 2019 levels only in 2024. In the long run, it is predicted that global traffic may take up to two decades to return to previously projected levels.

editor@ifinancemag.com

International Finance | Jan - Feb 2022 | 77

Business Dossier - Central JD Fintech Group

Providing safe, convenient, and rewarding payment experience to drive Thailand’s cashless society Central JD Fintech Group won in the ‘Best New Fintech Company’ and ‘Best New Digital Payment App in Thailand’ category Mr. Yol Phokasub

C

entral JD Fintech Group is a result of a business partnership between Central Group, Thailand’s leading retailer and omni channel businesses in Thailand and Digi-Lifestyle, and JD.com, one of the world’s Top 3 largest e-commerce businesses and the most profitable retailers and JD Technology, one of the leaders of technology in China. The company was established as part of a joint venture of Financial Intelligent Platform Services Development Company and digital technology and fintech services in Thailand with the value of over $250 million.

This year, Central JD Fintech Group won in the ‘Best New Fintech Company’ and ‘Best New Digital Payment App in Thailand’ category at the International Finance Award 2021. Notably, this is the first time a Thai company has won two awards on an international platform in the fields of fintech and digital payments.

The group management undertakes by a holding company, Central JD Fintech Holding Co., Ltd. and conducts key business operations by its two subsidiaries which are: Central JD Money Co., Ltd., providing electronic wallet service (Dolfin e-wallet) and digital payment business (e-payment) and Central JD Company Fintech Co., Ltd., providing digital intelligent platform that offers various of products according to customer needs, including credit services, insurance services, as well as other financial products/services. With the digital technology services, Central JD Fintech Group is ready to provide the digital technology to enhance the quality of life with the intelligent platform, ready to move Thailand into a full digital society.

Central JD Fintech, a company that combines the unparalleled expertise in Digi-Lifestyle from Central Group – Thailand's largest retailer – with advanced technologies and innovation from JD Technology, China's digital technology leaders, has provided digital financial solutions such as e-payment, digital lending, and e-insurance through ‘Dolfin application’. The company’s goal is to become Thailand's premier e-finance and fintech service provider, leveraging cutting-edge technology to excel in all aspects of personal finance management to make digital financial services available to all sections of Thai society.

It aims to achieve its goal by improving Thai’s quality of life and preparing them for the transition to a fully digital, cashless society, together with accessible financial innovations that satisfy different demands on an individual level through the integration of financial technology, AI (Artificial Intelligence), and Big Data Analytics. Through their world-class innovation, this e-wallet provides unrivaled safety and simplicity for Thai shoppers on any payment occasion. Today, the Dolfin application has over 3 million users.

Mr. Yol Phokasub, Chairman of Central JD Commerce Company Limited and Director of Central JD Fintech Company Limited said, “As a result of the Covid-19 pandemic and digital disruption, the consumer market and consumer lifestyles are transitioning to the digital age. The

demand for financial services via digital channels has grown at an exponential rate. We have developed a smart platform, Dolfin, which offers complete digital financial solutions that make digital financial services accessible to all Thais, while elevating their quality of life and transforming lifestyles for the fully cashless society.

“We offer e-payment, digital lending, and e-insurance services through the Dolfin application that provide our customers with easy-to-use financial services. Since the launch of the application in 2019, the application now has over two million registered users. We consider these two prestigious awards we received as confirmation of our full dedication, and it also portrays the full willingness of Central JD Fintech to provide world-class digital financial solutions”.

Dolfin is the first application in Thailand to employ e-KYC

Dolfin is Thailand's first e-wallet application to use e-KYC (electronic know-your-customer) for user identification verification throughout the registration process, combining the capabilities of face recognition and optical character recognition (OCR) technology to ensure the highest level of security. Precise face recognition and OCR technologies are applied to ensure complete confidence in the platform's security while also allowing for a much friendlier user experience during the sign-up process – both created and optimized to meet actual usage circumstances in Thailand. The Bank of Thailand's regulatory sandbox has passed and certified this industry-revolutionizing technique for public use.

Customers can successfully become Dolfin Wallet users and enjoy the secure and convenient e-wallet and e-payment services with just two simple steps for ID card scan and face scan. Customers' information will be securely validated against a trusted government database, and their identity will be confirmed using biometrics recognition technology.

The only Thai e-wallet with open-loop merchant networks

Dolfin Wallet, with its goal of providing the finest e-payment experience to its users, offered a variety of payment alternatives, including close-loop with Dolfin's own merchants and open-loop via the PromptPay infrastructure, which has over 6 million payment points. Since early 2021, Dolfin Wallet has also been authorised by the Bank of Thailand to allow users who have completed e-KYC to make payments at PromptPay acceptance locations around the country without having to physically validate their ID card using a card reading device, as was previously required.

Moreover, Dolfin Wallet, the first e-wallet operator in Southeast Asia and the second in Asia, debuted its payment by QR credit card with VISA and Mastercard in September 2021. Users of Dolfin Wallet would be able to make e-payments with their credit cards

without having to carry their actual cards to numerous QR credit card acceptance sites. Furthermore, they will be able to obtain all perks from the card issuer in the same way as they would if they used their physical credit card.

Dolfin's digital lending products, namely Dolfin Money, use advanced big data analytics to develop an information-based credit underwriting model that provides a fast and simple digital lending platform where an applicant does not need to provide any documents, either physically or electronically, and the loan approval can be done in a matter of minutes using the pre-active approval approach. Dolfin Money was established in July 2020 as a cash loan option as well as a ‘Buy Now Pay Later’ option to meet the needs of the applicant.

In May 2021, Dolfin platform also launched digital insurance brokerage service, namely Dolfin Insure, to offers new experience to purchase insurance with fully digital process which Dolfin customers will be offered preliminary instant-protection with the reasonable premium price by risk-based pricing model through AI and big data analytic that relevant with multiple driving behavior factors and car insurance claim history.

INDUSTRY

INSIGHT

ENERGY RENEWABLES CLIMATE GOALS

Global climate summit at Glasgow concluded with a mutual agreement of approximately 200 nations to work together.

Renewables key to achieving climate goals IF CORRESPONDENT

Just words won't solve global warming. Perhaps, a rational execution-based structure with public-private partnerships would. Global climate summit at Glasgow, Scotland 2021 concluded with a mutual agreement of approximately 200 nations to work together for combating the global climate crisis. New pledges were taken up by leaders mainly on deforestation, coal financing and methane gas pollution, to name a few. Moreover, the US-China deal and carbon trading stirred the global media.

However, many climate activists, politicians and legal experts weren't convinced much by the hoax promises and political gimmick. They believe the demand for a pragmatic execution approach to combat climate change is the need of the hour. Though the Covid-19 pandemic was a nightmare, it bestowed the urgent need for sustainability and renewables.

The ozone layer self-replenished the bizarre void, air quality index improved, and reduced carbon emissions which were all the indirect positive consequences of the Covid-19 lockdown in many countries. Nations took the oath unanimously to achieve net-zero carbon emissions in the imminent

80 | Jan - Feb 2022 | International Finance

future. But mere words and pledges wouldn't solve such a massive global crisis. It would need a higher degree of international collaborations, public-private partnerships, new policies, subsidizing and promoting electric vehicles, making EV infrastructure robust, and much more.

The year 2020 witnessed the instant surge of clean energy demand. The addition of 260 GW of renewable energy was 50 percent higher than the 2019 total renewable energy capacity. However, we are still behind the net-zero carbon targets, penetrating EVs into automobile markets and building a sustainable lifestyle.

For these, we need profound policies, new and better technologies, and the involvement of young entrepreneurs. Here are the rational and pragmatic actions to catalyse sustainable energy and the use of renewables by combating the global climate crisis.

Every year calls to cut global greenhouse gas emissions grow louder, yet emissions remain unsustainable. International climate targets demand emissions to peak as soon as possible and then quickly drop to net-zero levels by the second part

INSIGHT ENERGY

Global climate summit at Glasgow, Scotland 2021 concluded with a mutual agreement of approximately

200 nations to work

together to combat the global climate crisis

of this century. The energy sector accounts for the great majority of global CO2 emissions, emphasizing the need for a greener energy system. The Covid-19 pandemic reduced global carbon dioxide emissions in 2020. However, without systemic reforms to the energy sector, this reduction will be only temporary.

The fast expansion of usage of wind energy, solar energy, and electric vehicles has demonstrated the ability of new clean energy sources to reduce emissions. Net-zero emissions will necessitate the deployment of these technologies on a much larger scale, in tandem with the development and widespread deployment of many other clean energy solutions currently in the early stages of development, such as numerous applications of hydrogen and carbon capture. The IEA's Sustainable Development — a path for attaining international climate and energy targets — envisions the global energy system reaching net-zero emissions by 2070, integrating behavioural changes as well as a fundamental shift in energy system technology.

The research focuses mostly on the sustaina-

ble development scenario, but it also contains a parallel Faster Innovation Case that investigates the technological implications of attaining worldwide net-zero emissions by 2050. The report tries to analyze the obstacles and possibilities involved with a quick transition to clean energy. The paper examines all aspects of the energy system – from fuel conversion and power generation to aviation and steel manufacturing. It also includes all forms of renewable energy such as hydro energy, solar energy and wind energy.

Role of government to reduce carbon emission Some countries have already enacted or proposed net-zero laws, while others are debating their net-zero initiatives. Many businesses have also declared carbon-neutral goals. Governments and corporations can be encouraged by the success of renewable energy technology. However, meeting these objectives will necessitate a far greater focus on the transportation, industrial, and construction sectors, which now account for more than 55 percent of CO2 emissions from the energy system.

International Finance | Jan - Feb 2022 | 81

INDUSTRY

INSIGHT

ENERGY RENEWABLES CLIMATE GOALS

Countries using wind and solar power most (2020)

Germany- 42%

The UK- 33%

Australia- 17%

Turkey-13%

The US- 12%

Brazil- 10%

China- 10%

India- 10%

Governments have a disproportionate role to play in facilitating transitions to net-zero emissions. Long-term aspirations must be supported by thorough clean energy programmes that include actions suited to local infrastructure and technological requirements. Policy toolkits need to be implemented to catalyse the reduction of carbon emissions.

Taking action to reduce emissions from existing assets would be highly beneficial. If the government tries to enhance markets for innovations in their early stages of adoption, that would help innovators to deliver products faster. Creating and improving infrastructure would allow the deployment of technologies at the earliest. Furthermore, increasing funding for research, development, and demonstration would make the innovations impeccable and would lead to world-class products. This would lead to an increase in international technological collaboration as well.

Economic stimulus measures in response to the Covid-19 problem provide a critical chance to take immediate action that may improve the economy while also promoting clean energy and climate

82 | Jan - Feb 2022 | International Finance

Japan- 10%

goals, including the five sectors listed above.

Effective government action is required to boost the early adoption of renewable energy technology.

The aim is to incentivize their use in order to close the cost and performance gap with conventional technologies. They have a significant role to play in making this happen, maximising private capital contributions through proper laws and regulations, and ensuring that all linkages in clean energy technology value chains are handled. Solar photovoltaics (PV) and lithium-ion (Li-ion) batteries are two instances of how technological design has resulted in remarkable advancements.

How can the Government implement renewable technologies?

Clean energy technologies benefit from market-pull mechanisms. Stimulating demand for clean technology, goods, and services makes them more marketable. Market deployment increases economies of scale and learning-by-doing, which helps to enhance technical performance and lower costs. Depending on the complexity of the value chain and the value to consumers, among other variables,

INSIGHT ENERGY

How oil prices have changed in the past 20 years Country

2001

2011

Countries leading in per-capita Co2 emissions (in metric tons) 2021

Saudi Arabia 17.6 The US 17.6

Australia Brazil China India Iran Malaysia Nigeria Russia Saudi Arabia

$0.57 $0.90 $0.40 $0.60 $0.22 $0.28 $0.28 $0.35 $0.22

$1.23 $1.60 $1.10 $1.16 $0.18 $0.58 $0.41 $0.82 $0.18

$1.13 $1.13 $1.17 $1.38 $0.06 $0.48 $0.40 $0.68 $0.62

different technologies will necessitate different deployment incentive methods.

Following the market launch, R&D support will be maintained. Supporting a dynamic portfolio of competing concepts at various degrees of maturity for each priority area increases success prospects, as does favouring solutions with quick innovation potential. Historical data demonstrates that continued R&D is necessary even after commercialization to drive the creation of new designs and components, as well as to reduce costs and enhance performance. Diversity and competitiveness assist in accelerating growth while also leaving room for unforeseen occurrences.

Final electricity consumption doubles under the sustainable development scenario. This expansion is being driven by the usage of electricity to power automobiles, buses, and trucks, generate recycled metals and provide heat for industries, and supply the energy required for heating, cooking, and other appliances in houses.

According to the faster innovation case, electricity output in 2050 will be approximately 2.5 times more than it is today, necessitating a pace of devel-

Canada 15.7 Australia 14.9 South Korea 13.3 Japan 10.4 Germany 10.4 Russia 9.8 Iran 8.3 The UK 8.1

opment comparable to adding the whole US power industry every three years. Meanwhile, annual additions of renewable energy generation would need to be around four times the current record, which was set in 2019.

In addition to the increasing need for energy from various sectors of the economy, a significant amount of new generation is required for low-carbon hydrogen. In the Sustainable Development Scenario, the worldwide capacity of electrolyzers, which create hydrogen from water and energy, increases to 3300 GW from 0.2 GW. These electrolyzers would take twice the amount of power that the People's Republic of China generates today to produce the low-carbon hydrogen required to achieve net-zero emissions. This hydrogen acts as a link between the power industry and businesses where direct usage of energy would be difficult.

Capturing CO2 emissions in order to utilize or store them sustainably (known as CCUS) is a critical technology for achieving net-zero emissions.

CCUS is used in the Sustainable Development Scenario to produce synthetic low-carbon fuels and to remove CO2 from the atmosphere. It is also critical

International Finance | Jan - Feb 2022 | 83

INSIGHT

INDUSTRY

ENERGY RENEWABLES CLIMATE GOALS

Countries using wind and solar power most (2020) China The US Brazil India Germany Canada Japan Italy France

895 292 150 134 132 101 101 55 55

for manufacturing some of the low-carbon hydrogen required to achieve net-zero emissions, namely in areas with low-cost natural gas supplies and sufficient CO2 storage. Simultaneously, the usage of contemporary bioenergy triples from current levels. It is used to either directly replace fossil fuels (e.g., biofuels for transportation) or to indirectly offset emissions through its use in conjunction with CCUS. The stability of today's global energy system is largely supported by developed global markets in three primary fuels—coal, oil, and natural gas— which account for around 70 percent of worldwide energy consumption. In the Sustainable Development Scenario, electricity, hydrogen, synthetic fuels, and biofuels account for a similar amount of demand as fossil fuels do now.

Policies and innovations to deliver wind energy, solar energy efficiently to the masses is the need of the hour. It's the only way we can make an imminent improvement in the use of sustainable energy to reduce greenhouse gas.

Biomass energy is the most versatile renewable energy on the list. It has the unique ability to be used as a fuel in solid, liquid, and gaseous forms. With

84 | Jan - Feb 2022 | International Finance

the excessive use of biomass, we can curb the greenhouse gas caused by the consumption of fossil fuels.

The hydrogen solution is going to be the miracle solution to achieving climate goals.

Theoretically speaking, the major consequence of using hydrogen would help to store surplus renewable energy when the power grid cannot gulp more than its capacity. It could be the replacement of petrol, diesel in transportation, which constitutes the 3rd largest factor of climate change. It could act as a replacement of fossil fuels in fuel and chemical production as a nil carbon feedstock.

Heavy industry and transportation role in the reduction of carbon emission: Energy efficiency, material efficiency, and avoided transportation demand (e.g., substituting walking or cycling for personal automobile trips) play key roles in decreasing emissions in long-distance transportation and heavy industries. Hydrogen and CCUS are responsible for almost half of all emissions reductions in the steel, cement, and chemical sector. The utilization of alternative fuels like hydrogen, synthetic fuels, and biofuels ranges

INSIGHT ENERGY

Clean energy investment globally 2019 ($) China US Japan India Brazil Australia UK UAE

83.4 bn 55.5 bn 16.5 bn 9.3 bn 6.5 bn 5.6 bn 5.3 bn 4.5 bn

Source: Statista

between 55 and 80 percent in the trucking, shipping, and aviation sectors.

Reaching net-zero emissions will be dependent on how we manage the emission challenges posed by these industries' long-term assets, many of which were recently developed in Asian economies and will be operational for decades. The circumstance emphasises the importance of hydrogen and CCUS technology. It will be vital to ensure that new clean energy technologies are ready in time for major investment choices. Strategically scheduled investments in heavy industries, for example, might help save around 40 percent of cumulative emissions from current infrastructure in these sectors.

The electric power sector decarbonizer contributes more to emission reductions. Electrification constitutes approximately 20 percent of cumulative savings relative to the Stated Policies Scenario in 2070, making it the greatest single contributor to CO2 abatement. The role of CCUS (Carbon Capture, Usage, and Storage ) would be vital because the function of CCUS evolves during the projection period. Initially, the emphasis is on decarbonizing existing assets in the power sector and heavy industries, but over time, the emphasis switches to

carbon removal from the atmosphere, offsetting emissions in sectors where they are difficult to reduce. CCUS contributes the fourth-largest share of cumulative emission reductions in 2070, accounting for 15 percent of the total.

While sustainably generated bioenergy plays an essential role in reducing emissions in the short future in the Sustainable Development Scenario, such as in transportation, it also offers extra potential in other sections of the energy sector, such as industrial uses. Hydrogen with a low carbon footprint and synthetic fuels such as ammonia and synthetic hydrocarbon fuels can be used. The usage of these fuels will grow over time across many sectors and lead to a 6 percent reduction in emissions by 2070. These four technology families are crucial for decreasing emissions, particularly in sectors with difficult-to-lower emissions, such as manufacturing and long-distance transportation. However, the increasing awareness and accessibility to different technologies will help these industries implement those changes.

editor@ifinancemag.com

International Finance | Jan - Feb 2022 | 85

Business Dossier - Access Bank

Access Bank surpasses expansion expectations in Africa

The universal bank is located in 17 countries and has more than 600 branches worldwide

Bank is driven by its vision, 'To be the world’s most respected African Bank’. With more than 49 million customers, presence in 17 countries and more than 600 branches worldwide, it’s easy to say they are well on their way to making this a reality.

Strong growth expectations across the African continent have led Access Bank to invest in a robust expansion strategy which is supported by its extensive experience in the oil & gas sectors, and the largest retail network in Africa.

With the group's expertise, easy access to international markets and teams of highly qualified and experienced professionals, Access Bank has positioned itself as the strategic partner of choice for companies and public-private institutions.

It has its sight set on stimulating the growth of its network in international trade and payment centres, using this as a platform to showcase Africa’s potential to the rest of the world.

Access Bank universally employs over 28,000 people in its operations in Nigeria, the UK, The Gambia, Zambia, Kenya, Rwanda, Congo, Sierra Leone, Guinea, Ghana, South Africa and Mozambique along with representative offices in China, Lebanon, India, and the United Arab Emirates.

49

million customers countries branches worldwide

17 600

Access Bank serves the various markets through four business segments: Retail, Corporate, Commercial and Corporate banking.

Supported by values such as excellence, innovation, leadership, empowered employees and a passion for customers, Access Bank sets standards for sustainable business practices that nurture and unleash the talent of its employees, adding value to customers and providing innovative solutions to the markets and communities it serves. It is guided by ethical behaviour and maintains strong compliance policies, anticipating and mitigating against risks associated with banking.

IN CONVERSATION

TECHNOLOGY

HISASHI TANIGUCHI CEO OF ZMP

ZMP started selling its products in 2016 and have installed it in 300 companies

Revolutionising the robotics industry in Japan PRITAM BORDOLOI

Founded in 2001, ZMP is a Japanese robotics company, and it is based on the researched results that encourage the Kitano Symbiotic System project, and it is under the jurisdiction of Japan’s MEXT. Their first product, the humanoid robot PINO debuted in 2001. ZMP also released the humanoid robot Nuvo in 2005 along with the music robot Miuro in 2006. In 2009, the company released Robo Car, targeting the next generation.

In 2008, ZMP and 3 other Japanese robot companies teamed up to promote the diffusion of robotic technologies in everyday life. Titled, Association for Market Creation of the Future Generation Robots', it gained a lot of attention in the Japanese robotics market. In 2015, Sony and ZMP teamed up to form a joint venture called Aerosense which was used to create commercial drones for the survey and inspection of difficult to access areas. Following that, Aerosense also released videos of two prototypes. ZMP started selling its products in 2016, and at present, more than 300 Japanese companies have ZMP products installed.

In an exclusive interview with International Finance Magazine, ZMP Chief Executive Officer Hisashi Taniguchi discusses the history of the company, Japan’s Robotics industry, the company’s product and services, and the vision for the company among other things.

IFM: Can you tell us a bit about the Robotics market in Japan? What are some of the changes we can expect to witness in the coming years?

Hisashi Taniguchi: In the last few years, logistics robots in factories and warehouses have started to spread rapidly. In addition to manpower saving due to the shortage of labour, the recent pandemic has also accelerated this.

88 | Jan - Feb 2022 | International Finance

TECHNOLOGY ROBOTICS

Image: www.japantimes.co.jp

There are only a few domestic companies with some experience in this field, on the other hand, cheap imports from China and India are increasing.

In the future, users will be looking for solutions that can be installed on a full scale, have the reliability to operate stably and automate entire factories and warehouses. This will require not just a single robot, but a holistic solution that works together with a variety of IT systems and external devices, such as our Robo-Hi.

Can you tell us about ZMP’s logistics support robot CarriRo series?

We started selling the product in 2016 and have installed it in a total of 300 companies. We offer three main types of robots to cover all logistics in factories and warehouses.

The first is a cart-type robot that follows the operator, that tows a variety of cage carts and a pallettype robot that can get underneath pallets to transport palletized goods.

The second type is the unmanned forklift, a walkie type and a reach type.

The third type is the automatic towing of 1.5, 5 and

25 tonne cargo trolleys between factories, warehouses and other buildings, both outdoors and indoors.

How can robotics reshape the logistics sector in the future? How can robots improve the supply chain?

Until now in the logistics industry IT systems have been split up into separate systems such as inventory management systems (WMS), picking systems and berth management systems for managing trucks.

Conventional external control devices such as PLCs and RFID have also been added as required, but all independently.

By using ROBO-HI to link CarriRo, IT systems and external devices, the entire supply chain can be optimised. ROBO-HI provides a solution to improve the productivity of the entire supply chain.

What are some of the challenges the robotics market will have to overcome in the near future?

At present, most of the products are offered to large companies that have the financial resources and skills to introduce new products.

Therefore, it is important to greatly improve the ease of use and reduce the cost through further mass

International Finance | Jan - Feb 2022 | 89

TECHNOLOGY

IN CONVERSATION

HISASHI TANIGUCHI CEO OF ZMP

production so that even SMEs can easily and cheaply introduce the system.

Can you tell us a bit about the ‘CarriRo Connecting Partners’ programme?

This is a duplicate of the answer to question 3, but we currently have nearly 20 companies participating.

We would like to increase this number to over 100 to provide solutions and support throughout the country. We are also planning to establish a similar network overseas.

The demand for autonomous delivery robots is on the rise and has picked up since the pandemic. What is the potential for your Delivery robot DeliRo? How do you see this segment expanding?

The pandemic has increased the demand for noncontact services internationally. The Japanese government is concerned by the fact that Europe, the United States and China have already deregulated their services. They are about to lift the ban on the use of remotely monitored delivery robots on public roads.

ZMP has been conducting ongoing demonstration tests with Japan Post since 2017. ZMP has also partnered with ENEOS since 2020 to conduct a food delivery last mile demonstration to turn gas stations across Japan into robot stations.

We have also received many enquiries from service players in other industries, and we are confident that 2022 will be the year of delivery robot services in Japan.

We are laying out RoboMap, a map for automated driving, as infrastructure not only in warehouses and factories, but also throughout the city, including the roads we travel on

construction in 2023. In 2023 and beyond, buildings will have multiple robots passing through security gates, getting in and out of lifts, delivering packages to each floor and cleaning. We want to take Japan's achievements to the world.

How has Covid-19 impacted your business as well as the market? What is the outlook for the robotics market in the next five years?

Sales of autonomous driving development support solutions for the automotive industry, which require visits to test courses and companies, fell sharply when these were banned, but began to recover in autumn after the emergency declaration. We expect demand for autonomous driving of EV buses and EV trucks to increase as society becomes more carbonneutral in the future.

We expect demand to increase.

CarriRo, RakuRo, DeliRo and PATORO are growing on the back of labour shortages and the rise of contactless services, and we expect them to grow impressively from next year onwards as a result of deregulation.

What is your vision for the company going forward?

Where do you see ZMP in the next 10 years?

Since last year, our vision is to "robots into social infrastructure". We are laying out RoboMap, a map for automated driving, as infrastructure not only in warehouses and factories, but also throughout the city, including the roads we travel on.

ZMP has teamed up with a leading urban design company to create a nationwide infrastructure called RoboTown.

ZMP is also providing RoboMap and Robo-Hi as infrastructure for condominiums, office buildings, shopping centres and other commercial buildings, train stations, hotels, schools and hospitals that are currently under construction or that will be under

90 | Jan - Feb 2022 | International Finance

editor@ifinancemag.com

Business Dossier - Alistithmar Capital

Alistithmar Capital

Changing the financial landscape of Saudi Arabia Over the past couple of years, the company has achieved significant growth in AUM with broadened product and services

R

iyadh-based Alistithmar for Financial Securities and Brokerage Company (Alistithmar Capital) is a major player in the financial services industry. The company offers a wide range of products and services like asset management, brokerage and investment banking. Over the past couple of years, the company has achieved significant growth in AUM with broadened product and services offering and delivering superior performance.

Superior Performance

In terms of performance, Alistithmar Capital’s public equity funds have significantly outperformed their respective benchmarks in 2021 on a year to date basis. This was a repeat of the stellar performance of these funds in 2020 and 2019. This success was a result of leveraging the company’s research capabilities, fund managers experience, advanced infrastructure, and dynamic investment philosophy. In fact, Alistithmar Capital’s public equity funds demonstrated their superior performance against their respective benchmark not only on an annual basis but also

over longer time horizons. In the 3 years and 5 years categories, these funds continued to produce significant excess returns over respective benchmarks.

The funds’ performances not only stood out against the respective benchmark but also against their respective peers. Alistithmar Capital’s flagship funds SAIB Saudi Equity Fund and SAIB Saudi Company Fund ranked in the top quartile against their respective peers in 2021 on year to date basis, which was also witnessed in 2020 and 2019. Similarly, these funds at the end for the periods in question also ranked in the top quartile against peers in the three years and five years categories respectively.

This showcases the investment team’s adaptive decision making and consistent selection capabilities.

Increasing Business

On the business size aspect, Alistithmar Capital experienced significant growth in the value of the assets they manage. By the end of September 2021, the company’s AUM increased to SR32 billion ($9 billion) from SR5 billion ($1 billion) at the end of 2017.

Alistithmar Capital’s AUM increase in the reference period

is +515 percent which notably outpaced the industry’s AUM increase of +89 percent during the same period.

Additionally, the company’s ranking has improved from being ranked number 13th by the end of 2017 to being ranked 6th by the end of Q3 2021 in terms of AUM. This was also seen in the Alistithmar Capital’s AUM share of total AUM where it has increased to 4.3 percent from 1.3 percent for the same period. This increase in value and share reflects investors’ appreciation of the company’s superior performance and outstanding customer service.

Regarding the real estate unit of the firm, Alistithmar Capital has also successfully launched a series of private real estate funds, all of which offered its investors a unique opportunity to participate in prime real estate investments in Saudi Arabia. The latest real estate fund launched was Kaden Alistithmar Fund with a size of SR2 billion, which invested in high-quality income-generating real estate assets. The fund was fully subscribed before the end of the subscription period reflecting investors’ confidence in the company.

The Saudi government launched the Financial Sector Development Program in 2017 that aims to develop the financial sector. In relation to the asset management industry specifically, the program set a number goals such as increasing the value of managed assets, attracting foreign investors, and increasing investment products, which Alistithmar Capital was able to build a strategy to benefit from these goals as displayed by a surge in AUM and product offering.

Outstanding Service

In terms of the Alistithmar Capital brokerage unit, the company was able to successfully execute clients’ transactions of over SR70 billion annually from the period 2017 – year-to-date 2021. In addition, the firm was able to maintain its leading position in a growing market. The Saudi equity market traded value registered an increase of around 148 percent during the period.

Despite this remarkable increase in value traded, the firm sustained its ranking in the top ten in each of the years for the period in question.

It is important to acknowledge the changes taking place in the brokerage industry. The Saudi market has hit an important milestone when it was included in a number of global equity indices (the MSCI Emerging Markets Index, FTSE Russell Emerging Markets, S&P Dow Jones Emerging Market Indices) during the period.

This development resulted in an increased number of foreign investors and a significant increase in trading activities. Nevertheless, Alistithmar Capital has built up its capabilities throughout the years to benefit from such a trend as evidenced by the successful handling of the annual transaction value and maintaining a leading position in the industry.

The future direction

The Saudi Arabian Capital Market Authority, the Saudi financial markets regulator, announced their strategic

SAIB Saudi Companies Fund vs Benchmark 113.0%

113.0%

66.3% 52.3%

39.6% 27.6%

YTD

3 Years

SAIB Saudi Companies Fund

5 Years Benchmark (S&P Saudi Sharia)

SAIB Saudi Equity Fund vs Benchmark 118.7%

105.0%

53.7% 39.7%

38.2% 23.9% YTD SAIB Saudi Equity Fund

3 Years

5 Years Benchmark (TASI)

plan for 2021–23 where they aim to further develop the Saudi market and make it an attractive place for local and foreign investments. The main pillars of this strategy are to facilitate funding, encourage investment, promote confidence and build capacity. The plan offers many exciting details such as increasing the AUMs as a percentage of GDP from 17 percent in 2019 to 27 percent in 2023, as well as increasing the number of listings annually. Alistithmar Capital aims to leverage its expertise to develop its own strategies based on these governmental strategic plans so that it can not only benefit but also respond more effectively to any future changes in the Saudi financial markets landscape. The company will continue to invest in people, processes, and systems to cater to an even wider range of clientele. It is Alistithmar Capital’s continuing mission to create value for its investors by delivering outstanding performance, increasing the value of assets under management, sustaining a leading position in brokerage, increasing product offerings and refining the overall customer experience. Meeting the expectation of current customers has always been a priority and in order to continue serving effectively, as well as attracting new clients, Alistithmar Capital will leverage its current technological capabilities, adopting new technology where necessary, to refine and expand its reach. The company is looking forward to exploring future opportunities in the Saudi Arabian financial markets.

ECONOMY

ANALYSIS

GLOBAL TRADE ASEAN TRADE AGREEMENT

RCEP is considered extremely important because all the 16 countries negotiating the RCEP together account for a third of the world's GDP

RCEP and its impact on global trade IF CORRESPONDENT

On November 15, 2020, 15 countries- including the Association of Southeast Asian Nations (ASEAN) and five regional partners — signed the Regional Comprehensive Economic Partnership (RCEP), arguably the most significant free trade agreement in history. RCEP and the Comprehensive and Brazil is Progressive Agreement for important Trans-Pacific Partnership to the global (CPTPP), which concluded in oil industry 2018 and is also dominated by and will be East Asian members, are the responsible for only major multilateral free the production trade agreements signed in the of nearly 50 Trump era. So what is RCEP? percent of To give a brief introduction, the world’s RCEP is a proposed agreement offshore oil by between the member states of 2040 the Association of Southeast Asian Nations (ASEAN) and its free trade agreement (FTA) partners. The pact covers trade in goods and services, intellectual property, etc. RCEP was introduced during the 19th Asean meet held in November 2011, and the negotiations for the same began during the 21st ASEAN Summit in Cambodia in November 2012.

RCEP is considered extremely important because all the 16 countries negotiating the RCEP together account for a third of the world's gross domestic product (GDP) and almost half the

94 | Jan - Feb 2022 | International Finance

world's population, with the combined GDPs of China and India alone making up more than half of that. RCEP's share of the world economy could account for half of the estimated $0.5 quadrillion global (GDP, PPP) by 2050. RCEP aims to create an integrated market in the participating countries, thereby making it easier for products and services of each of these countries to be available across this region. The negotiations will focus on trade in goods and services, investment, intellectual property, dispute settlement, e-commerce, small and medium enterprises, and economic cooperation.

RCEP is expected to connect around 30 percent of the world population and its output. And, if this gets the proper political context, RCEP is expected to generate significant gains. According to media reports, RCEP could add $209 billion annually to world incomes and $500 billion to world trade by 2030. Experts also estimate that RCEP and CPTPP together will offset global losses from the U.S.-China trade war, although not for China and the United States. Additionally, the new agreements will make the economies of North and Southeast Asia more efficient, linking their strengths in technology, manufacturing, agriculture, and natural resources.

Countries benefiting from the RCEP agreement As mentioned before, the effects of RCEP is quite impressive even though its agreement is not as

rigorous as CPTTP. RCEP primarily incentivises supply chains across the concerned regions and caters to necessary political sensitivity. Its intellectual property rules add little to what many members have in place. The agreement says nothing about labour, the environment, or state-owned enterprises, all of the critical chapters covered in the CPTTP agreement.

But, it has also been observed that ASEAN-centred trade agreements improve over time.

Talking about the agreement's benefits, the Southeast Asia region will generate $19 billion annually by 2030. Still, it will be less than Northeast Asia because it already has free trade agreements with RCEP partners. RCEP is also expected to improve access to Chinese Belt and Road Initiative (BRI) funds, enhancing gains from market access by strengthening transport, energy, and communications links. RCEP's favourable rules of origin will also attract foreign investment.

The geopolitical significance of RCEP Everyone concerned with the subject knows and recognises the value of a significant, East Asian trade agreement. Even though the agreement is incorrectly labelled as 'China-led', it triumphs for

World’s biggest trade blocs United States - Mexico-Canada agreement

$24.37 trillion

European Economic area

$18.85 trillion RCEP

$25.84 trillion Source: Statista

the ASEAN middle-power diplomacy. Still, neither China nor Japan, both of which are the region's largest economy, were politically accepted as the primary architects for the project. This issue was resolved way back in 2012 by an ASEAN-brokered deal that included India, Australia, and New Zealand members and put ASEAN in charge of negotiating the agreement. Without such "ASEAN centrality," RCEP might never have been launched. Additionally, RCEP

International Finance | Jan - Feb 2022 | 95

ECONOMY

ANALYSIS

GLOBAL TRADE ASEAN TRADE AGREEMENT

will also help China strengthen its relations with its neighbours, previously described as unusually slow, consensual, and flexible.

With accelerating trade relations between China and its neighbours, RCEP will also accelerate Northeast Asian economic integration. Regarding this, Japan's ministry of foreign affairs noted that negotiations on the trilateral China-South KoreaJapan free trade agreement, which has been sitting idle for a long time, are expected to become active as soon as they can conclude the negotiation RCEP. Xi Jinping, in a high profile speech, in November 2020, promised to speed up negotiations on a China-EU investment treaty and a ChinaJapan-ROK [South Korea] free trade agreement.

Finally, RCEP and the CPTPP are decisive counterexamples to the global decline in rules-based trade. If it is observed that RCEP is spurring mutually beneficial growth, its members, including China, are expected to gain influence worldwide.

Objectives and scope of the RCEP agreement The primary goal of the RCEP agreement is to establish a modern, comprehensive, high-quality and mutually beneficial economic partnership that will facilitate the expansion of regional trade and investment while contributing to global economic growth and development. The RCEP agreement is declared to work together and support an open, inclusive and rulesbased multilateral trading system

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within the World Trade Agreement (WTO) framework. Hence, the objectives of RCEP are in line with the WTO rules.

Additionally, the RCEP agreement aims to complement the WTO and extend it to areas not covered or beyond its provisions. RCEP constitutes for sure a significant improvement and deepening of integration in the region compared to the prior system of ASEAN Plus One FTAs. The RCEP agreement also plans to strengthen states' position within the global value chains and build more robust and deeper regional value chains. The agreement will also boost competitiveness between parties involved to drive overall productivity, the key to long-term competitiveness and economic growth.

The agreement comprises 20 chapters. The base chapters talk about concentrating on trade in goods, including rules of

origin, customs procedures and trade facilitation, sanitary and phytosanitary measures, standards, technical regulations, and conformity assessment procedures, as well as trade remedies. The agreement also covers trade-in services, including specific financial services, telecommunication services, and temporary movement of natural persons (related to trade in services). The agreement also mentions provisions on investment, IPRs, electronic commerce, competition, SMEs, economic and technical cooperation, government procurement, and legal and institutional areas, including dispute settlement.

It is also noteworthy that the RCEP trade agreement features a diverse group of countries at different levels of development, different levels of sophistication of firms, and varying sizes. Each signatory

ASEAN GDP per capita Singapore

$1,075 bn Brunei

$484 bn Malaysia

$365 bn Thailand

$350 bn Indonesia

$332 bn

The Philippines

$241 bn Vietnam is significantly other in terms of economic need. RCEP agreement is said to be mutually beneficial to countries at a different level of development, thereby providing a much-needed level of flexibility and special provisions and treatment for Cambodia, Laos, Myanmar, and Vietnam and adding additional flexibility for the least developed states. Many experts worry it may create potential tension among the group itself for all these reasons.

Political extension of the RCEP agreement The RCEP agreement was completed in 2021 and currently is open for accession by other states 18 months after its entry into force. As an original negotiating state, India could become an additional member thanks to its fast-track accession possibility, and this could introduce the original plan of ASEAN Plus Six.

$71 bn Source: Good News Southeast Asia

Currently, India has decided to optout of RCEP due to concerns over the potential of excessive imports, particularly from China within the scheme of the current agreement that could endanger domestic industry and agricultural sectors.

Therefore, the Indian government's entry would require extra safeguard measures and renegotiation of the terms by all parties involved. RCEP countries account for $25.8 trillion of global GDP with 30 percent of the world's population.

The road ahead Once the agreement comes into effect, RCEP will become the world’s largest regional trade agreement in terms of GDP and population. Given its expected impact on the world

economy, the agreement extends beyond the typical FTA in trade in goods, including those in these in services and investments. Talking from a geopolitical perspective, RCEP constitutes the first case in which China enters a multilateral regional trade agreement. Due to its size, RCEP has the potential to create significant qualitative and quantitative effects regionally and globally both in the short and the long run. It is also expected to strengthen the economic position of the region as the main focus of economic activity spurring growth and playing a crucial role against the fight of the Covid-19 pandemic.

This trade agreement also increases the likelihood of establishing the world’s largest regional value chain with the growing role of intraregional economic activity.

Experts have also mentioned that the cultural, social, economic, and political heterogeneity of the block might pose a challenge to its functioning, and the progress of the deal will likely depend on the balance of costs and benefits for all participating states. Realizing the potential benefits of this megaregional FTA will crucially depend on addressing the major challenges in particular divergent political and economic interests of this diverse group. It is also important to look at RCEP from a broader perspective. Over several decades, the global trade will likely develop into a system of several large RIA’s or mega-regional trade agreements with a significant role in the global trading systems. editor@ifinancemag.com

International Finance | Jan - Feb 2022 | 97

Business Dossier - Max Capital Management Holding Ltd

Bringing innovation to management

MCM has educated more than 5,000 GIC members worldwide with an experienced and dedicated global team with the aim of managing a knowledge-sharing platform

M

ax Capital Management Holding Ltd, also known as MCM is a Global Investment Holding and Project Management Consultant (PMC) that specialises in project management’s conception to implementation, Customer Relationship Management (CRM) and event management.

In 2016, MCM launched the Global Investment Community (GIC) and educated more than 5,000 GIC members worldwide with an experienced and dedicated global team with the aim of managing a knowledgesharing platform and finding more opportunities around the world. This educational knowledge ranges from due diligence to identification, analysis, evaluation and more in the property and business investment life cycle. Through MCM’s exclusive and trusted global network, it can be implemented with proven investment experience, PILC / BILC strategies, and a willingness to share knowledge with

respected MCM GIC members.

MCM has also successfully managed more than 30 projects with a combined total value of Projects Under Management (PUM) of over $10 Billion in more than 10 countries.

MCM also successfully managed various types of projects, ranging from property development, e-commerce and e-learning platforms, hospitality, healthcare, and many other sectors.

MCM expanded its expertise with a rapid level of development, thereby making its presence known in two countries annually. This shows how strong the business network of MCM is.

MCM strengthens its performance through Property Investment Life Cycle (PILC) and Business Investment Life Cycle (BILC). These two strategies have several stages to facilitate dealings in properties and businesses. Both of these strategies are also educational and informative and are indeed very helpful to GIC members.

MCM adheres to the core value of People before Profit: Trust and integrity to achieve encouraging results in this arena. MCM also appeared in multiple media and press released all over the world, and boasts more than 500 coverages.

MCM attributes its success to its founder, Adj. Prof. Maxshangkar, who has an MBA in International Business (distinction) from the University of East London, United Kingdom. He began MCM by selling healthcare products and water purification systems. Then, he jumped from one field to another until he found the door of opportunity through the property.

His main motivation began to soar after he had to deal with the 2008 Global Financial Crisis until he founded the Property Investment Life Cycle (PILC) strategy to solve the problems faced by the people.

In turn, this led him to found the establishment of the Max Capital Management (MCM) group.

Maxshangkar is often invited as a speaker in many private investment seminars. He never stopped sharing the main value that he has always held which is People before Profit because he believes that that value will make him more ambitious and continue to achieve success together with his loyal members.

High ambitions interspersed with high values and knowledge have made MCM one of the companies that have successfully secured many projects on a global scale in more than 10 countries such as Malaysia, Singapore, Indonesia, Vietnam, China, Hong Kong, Germany, US, UK, New Zealand, Australia, India and others.

MCM will further expand its influence by becoming project management consulting, strategic planning and marketing/branding strategies for local and internationally renowned property developers and business owners. With a large number of projects that have been successfully managed and handovers, the experience possessed by MCM indirectly increases customer trust towards a better base.

As mentioned above, MCM also always has a strategic partner

who acts as a Project Management Consultant (PMC) in several projects specializing in project management’s conception to implementation. The collaboration usually amplifies the user experience with an increased potential to reach for a greater customer base especially in the property development industry. But now MCM also extends through other industries as well which are FinTech, eCommerce, Healthcare and EduTech industry.

There are 4 countries that attract MCM with the potential and opportunities that can be offered. The country is Hong Kong which is the 3rd largest financial hub, Malaysia which is strategically located in the heart of the South-East Asia region, Indonesia which has the 4th largest population and New Zealand with the World's Freest Economy status.

These four countries have great potential for MCM to further expand business and investment.

Along with Malaysia, MCM has witnessed success in several other countries like the United Kingdom, United States, New Zealand, Australia, Russia, Japan, China and Malaysia.

The economic downturn caused by the pandemic is likely to increase crime in many countries. Therefore, one of the MCM’s managed projects, Code7 took the initiative by developing a security technology that, to some extent, can ensure public safety through a mobile app known as CODE7 Protection. CODE 7 was founded in 2018 as a platform that allows all security companies to embark on this inter-ecosystem as ONE with the MISSION of enhancing and upgrading security standards to the next level, with everyone's safety as their PRIORITY. CODE7 provides several security services to the public through the CODE7 Protection app, including on-demand requests for "scheduled patrol" and "home protection," as

well as an extensive coverage area throughout Malaysia. They also provide security assistance, CCTV alert, loitering, attempted break-in, and stranger approach. CODE7 has formed a strategic partnership with MCM as part of its plan to broaden its customer base and strengthen its marketing efforts.

Global Brand Partners Pte Ltd (GBP) was founded by an apparel veteran with a strong market network that designs, develops, and markets innovative performance and styledriven men's, women's, and children's apparel, footwear, and accessories for global distribution. GBP, one of the world's largest fitness and health brands, has launched a performance footwear and apparel collection under the brand BeachBody which is an International Sports Apparel Brand that competes with NIKE, ADIDAS, and PUMA. Following an outstanding performance, MCM entered into a joint partnership with GBP as an angel investor. Currently, the market has begun to penetrate renowned wholesale distributors in the United States, United Kingdom, Germany, Japan, and the Middle East.

MCM also partnered with Plantonic Singapore Pte Ltd, which produces the world's first four-inone revolutionary products that are not harmful and are beneficial to the environment, humans and animals as a whole, which employs an effective formula inspired by ayurvedic and traditional medicines. It is made with all-natural and plant-based ingredients like shilajit, a mineralrich resin, seaweed, ginseng root, and furthermore. This tonic acts as a fertiliser, revitalier which allows plants to thrive while protecting them from diseases and fungal infections.

As part of their global expansion plan, Plantonic appoints MCM as their global Project Management Consultant (PMC) into the global market, including Malaysia.

ECONOMY

FEATURE ECONOMIC RECOVERY

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EUROPEAN ECONOMY COVID-19 ECONOMY IMPACT

FEATURE COVID-19 ECONOMY IMPACT

IMF predicted that the Eurozone public deficit reached a new high of 10.1% of GDP in 2020

Impact of Covid-19 on the European Union Economy IF CORRESPONDENT

T

he pandemic has bludgeoned the global economy heavily, especially the European Union (EU). While most nations struggle to get back on their feet, the EU’s road to economic recovery has been commendable.

The sheer intensity of the Covid-19 pandemic has a significant response in Europe and the Eurozone’s fiscal policy, both at national and international levels. Eurozone member states use fiscal measures to respond quickly and forcefully. Their responses aimed to minimise the danger of corporate failures and increased redundancies, paving the way for a rapid recovery from the crisis.

Government involvement has taken the form of various tools, including widespread usage of short-term labour programs, deferment of social security contributions for businesses, and stateguaranteed loans, among others. The fiscal budgets of member states

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deteriorated significantly in 2020 because of these initiatives.

According to the International Monetary Fund (IMF) predictions, the Eurozone public deficit reached a new high of 10.1 percent of gross domestic product (GDP) in 2020, with debt exceeding 100 percent of GDP (at 101.1 percent) for the first time. The European Central Bank’s (ECB) significant involvement in keeping the interest rates low reduced the dangers of these statistics.

Europe has managed to break some of its taboos throughout this crisis.

Although far from ideal, the European Recovery Plan accord is a significant step forward. EU-wide borrowing funds the proposal, which mixes £360 billion in loans to member states with £390 billion in grants, something that was inconceivable. The Eurozone’s battle against the crisis is now no longer the duty of the ECB only; the union-wide fiscal policy is tackling it.

Implementing this recovery plan and targeting assistance to the most vulnerable nations could boost confidence and increase monetary policy efficacy. The rehabilitation strategy clearly defines priorities.

Member states' recovery plans must enhance growth potential and employment while contributing to green and digital transformations to qualify for loans and grants from the European program. The plan’s proper execution will be difficult in the face of several points of contention, such as the European Union’s (EU) need to boost its own tax revenues to return the subsidies it has received.

All European countries appear to recognize the degradation of public finances. Government involvement was necessary to absorb part of the shock of Covid-19, and the EU will address the question of decreasing

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EU GDP from 2018 to 2025 (in billion dollars) 2019 2020 2021 2022 2023 2024 2025

$15,682 $15,263 $17,078 $18,353 $19, 340 $20, 270 $21,215

government deficits and indebtedness later. Member states have tightened their fiscal policies too soon in the past, notably in the aftermath of the sovereign debt crisis, hampering economic development. As a result, the European authorities’ measures to the current turmoil represent a clear positive shift in this regard.

Fiscal constraints have been eased, particularly those limiting government deficits to 3 percent of GDP and public debt to 60 percent of GDP. This enhanced adaptability has aided in combating the pandemic’s economic collapse.

The European Council, comprising

the heads of state and government of the EU’s 27 countries, later agreed to further measures. Financial aid has been offered as loans from the EU to member states, primarily to help cover the rising use of short-term employment schemes.

Impact on the UK The scale of the epidemic’s economic downturn is unmatched in contemporary history. Some estimates suggest a 9.8 percent fall in UK’s 2020 GDP, the biggest reduction since records began in 1948 and the largest in over 300 years.

During the first shutdown, the UK's GDP was 25 percent lower in April

FEATURE COVID-19 ECONOMY IMPACT

2020 than just two months before in February. Economic activity increased in the spring and summer of 2020, indicating the economy’s opening. This opening was followed by increased Covid-19 cases and more lockdowns in the autumn and winter, resulting in a drop in economic activity.

After a rapid recovery when the economy reopened, economic growth slowed in the summer of 2021. This slowdown was first attributed to the proliferation of the Delta strain and the resulting huge number of persons forced to self-isolate. The disruption of global supply networks, which has

resulted in supply shortages of some items, is a more lasting problem. Many businesses are also having trouble finding qualified employees.

Inflation has increased in 2021, partly due to supply issues, and may continue doing so through 2022. Consumers may consequently become more cautious in their spending, slowing economic development. Another critical topic is how the conclusion of the furlough program in September 2021 would influence the labour market and, as a result, consumer spending.

Even assuming there will be no reappearance of the virus that will

significantly impact the economy, there remains a tremendous amount of uncertainty about the economic outlook and how robust and sustainable the recovery will be.

The average projection for GDP growth in 2021 among economists as of September was 6.8 percent. There is a rise in expectations as statistics reveal a good rebound in the spring and early summer.

Impact on Germany Germany’s GDP contracted by 1.8 percent from January to March in 2021, somewhat more than projected,

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compared to figures from the final quarter of 2020. Private consumption was most affected, with people spending 5.4 percent less on goods and services.

On the positive side, building investment increased by 1.1 percent.

Imports of goods and services increased by 3.8 percent at the start of the year, while exports only increased by 1.8 percent. Germany’s GDP dropped by 3.4 percent from the same time in 2020. In the fourth quarter of 2019, the economy shrank by 5 percent compared to the previous year’s fourth quarter, before the Covid-19 outbreak.

Stringent lockdowns due to restrictions aimed at preventing the spread of Covid-19 led to the shuttering of businesses across Germany.

Although Germany did a good job handling the epidemic, the economic impact has been significant. The country’s aggressive public health response has resulted in Europe’s lowest death rates. Containment efforts, on the

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other hand, resulted in a significant dcline in company activity, particularly in contact-intensive industries.

Economic activity began to resume following the re-opening in late April, but a fresh wave of illnesses in the fall prompted yet another round of lockdowns. In all, the GDP shrank by more than 5 percent in 2020.

Impact on France Last year, the Covid-19 pandemic reduced overall production by 8.3 percent, plunging the French economy into a severe recession. The statistics were marginally better than the 9 percent decline since France was spared a second Covid-19 shutdown in the latter half of the year. During the last three months of 2020, the French economy declined only by 1.3 percent.

On the other hand, the government predicted that the economy would contract by a considerably worse 11 percent this year. The French economy

increased by 1.5 percent in 2019, placing it among Europe’s outstanding performers, although last year’s dip was the country’s worst since World War II. France saw a significant increase in spending recovery, climbing to 80 percent after plunging by nearly 50 percent during the first lockdown — a recovery of +60 percent. The silver lining was that consumer expenditure rose the greatest of any country between the two shutdown periods. After initially falling to 50 percent of pre-pandemic levels, expenses increased by 80 percent between the first and second lockdowns.

Impact on Other EU Nations The Covid-19 virus outbreak prompted many European nations to shut down large portions of their economy to combat the infection. These restrictions severely harmed the Italian economy.

From March 9, 2020, through the end of May 2020, the entire country was under lockdown, with catastrophic results: Italy’s GDP decreased by 5.4 percent

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in the first quarter and 12.4 percent in the second. The major causes of GDP reduction were a drop in domestic demand and investment.

The national industrial output index fell by 17.5 percent in the second quarter, bringing production to an all-time low. However, despite being particularly heavily struck by the pandemic, Italy’s expenditure has improved, and it is now back to 70 percent of pre-pandemic levels — an astonishing 40 percent recovery.

In Spain, spending fell to 50 percent below average during the first lockout and then increased to 75 percent during the second lockdown, indicating a recovery of 50 percent.

Impact on Industries Most manufacturing-based industries recovered relatively quickly in the third quarter of 2020, as there was gradual relaxation in the restrictions.

As a result of various measures, such as recognizing “essential” sectors and creating green lanes to ensure crossborder transportation and supply chain functionality, economic recovery quickened.

However, there are significant disparities in performance not just between sectors but also within them.

Large swathes of the digital business, as well as the healthcare industry, have succeeded well. Chemicals, construction, and the food and beverage industry may probably rebound in a V-shaped pattern.

Despite the early shocks, the automobile and textile sectors look to be on the mend since the lockdowns began.

Industries that rely on human contact and connection — such as the cultural and creative industries and the aircraft sector (due to reduced mobility and tourism activities) — have taken a significant

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impact because of the crisis, and they are likely to continue to suffer longer.

According to sectoral and value chain evaluations, the pandemic functioned as a digitalization accelerator. The capacity of firms to adopt digital explains some varied patterns in the Covid-19 impacts.

Streaming services, for example, have mostly benefited from the crisis in the creative industries. However, it has increased unemployment, which economies must handle.

Challenges Ahead Europe confronted the pandemic with courage and inventiveness, and the countries across the region are now experiencing a robust but rocky economic recovery. It currently faces two policy challenges: inflation management and fiscal support reduction. While there is a great deal of uncertainty around inflation, central bankers have a lot of experience dealing with it and can use their powers rapidly and flexibly.

Unwinding the emergency expenditure measures that governments used to boost their economies, on the other hand, is a large and challenging undertaking. If policymakers make a mistake, they risk repeating the sluggish recovery that followed the 2008 global financial crisis.

Every quarter that goes by without attaining full employment adds to the difficulty of re-engaging people in the labor market. Emerging European economies are less concerned about the issue because they used less stimulus and had higher prospective growth rates. They would, however, see a drop in demand for their commodities from their advanced European rivals.

Changes in monetary policy would have little effect on the current drivers of inflation. Instead, fiscal policymakers would need to avoid inducing a wage-

price spiral. Fortunately, in many modern European economies, where labor market slack remains large, the probability of such second-round impacts is low.

Policymakers may find themselves in a predicament comparable to the early phases of the global financial crisis more than a decade ago. There is a compelling case to be made for reducing extremely high budget deficits. However, this will need robust revenue growth and, as a result, increased activity, which larger transfers to families in need may aid.

There should be an increase in spending on recruiting incentives and investment tax credits. It will be difficult to get the timing of the fiscal support withdrawal quite right. To avoid undermining the recovery’s momentum, it appears that erring on the side of withdrawing too little fiscal support rather than too much is the wiser course of action, especially in economies with considerable budgetary headroom.

Outlook In Europe, a more durable recovery is taking hold, aided by incremental improvements in vaccination rates and mobility. Strongly supportive macroeconomic policies and Covid-19 assistance packages have helped prepare the road for recovery by preserving employment ties and safeguarding private sector balance sheets.

However, there remains uncertainty, partly because of the risk of new infection waves and virus variants amid uneven vaccination rates across countries. As a result, it is critical to boosting vaccination rates, particularly in growing European economies, and firmly support international initiatives to improve global vaccine availability.

editor@ifinancemag.com