Author: itsupport

Is the alcohol industry drying up?

Posted on by itsupport

Since time immemorial, alcohol has been a part of the social fabric of human life on earth. The earliest evidence of intentional alcohol production stems back to 7,000BC, from fermented residues found in neolithic pottery jars from northern China. The Sumerians in Mesopotamia were brewing beer as far back as 3,000BC, while the Romans believed wine to be a daily necessity, with soldiers required to drink one litre per day. From our ancient ancestors through to the present day, alcohol has played a fundamental role in shaping human culture and socialisation. Omnipresent at almost all social events – from the celebratory to the sombre – alcohol is a conversational lubricant for some, a crutch for others, and simply part and parcel of everyday life for many millions more.

Ubiquitous and ever-popular, alcohol has become one of the largest and most powerful industries in the modern world. With the global alcohol trade valued at an astonishing $1.17trn in 2021 – and still growing – booze is very much big business. And while it may look like the alcohol industry is going from strength to strength, recent changes in consumer behaviour suggest that the market as we know it today may be in danger of running dry. The early signs of a culture shift on booze started emerging in 2018, with the publication of an influential new study on alcohol habits.

Years of public health campaigns have succeeded in improving our collective alcohol-related knowledge

The report, published by Berenberg Research, found that Gen Z were drinking 20 percent less per capita than Millennials – who, in turn, drink less than Baby Boomers and Gen Xers did at the same age. While previous generations may have marked the passage into adulthood with binge drinking and hard partying, today’s youngsters are much more temperate, shying away from excessive alcohol consumption and instead prioritising their mental and physical health. With more than a quarter of Gen Zers now teetotal, the alcohol industry may need to prepare itself for a sobering future.

Time, please
Almost overnight, the pandemic dramatically transformed social habits the world over – including our social drinking habits. The initial lockdowns saw a surge in alcohol consumption, particularly in those aged 40 and above, with 8.6 million UK adults admitting to drinking more frequently during the early months of the pandemic. Interestingly, while older people found themselves drinking more during lockdown, younger people were increasingly drawn to sobriety.

There has been a general decline in drinking since the end of the government-mandated lockdowns

According to research carried out by the University of New South Wales, Australians aged 18–24 were most likely to have decreased their alcohol consumption during lockdown, with 44 percent of adults in this age group reporting that they were drinking less. The trend isn’t just confined to Australia, either – British charity Drinkaware recently reported that there has been a general decline in drinking since the end of the government-mandated lockdowns – and Gen Z were once again at the forefront of this teetotal movement.

With fewer opportunities to socialise with friends, drinking somewhat lost its appeal among young people during lockdown. Fatigued by virtual drinks and zoom parties, Gen Z found themselves drawn to more traditional, tactile hobbies such as sewing, knitting and gardening. In Britain, 60 percent of those aged 16–29 reported taking up a new hobby during lockdown, while retailer John Lewis saw sales of sewing machines rise by 127 percent in April 2020, bolstered by viral DIY trends on social media.

What’s more, as young people in their millions flocked back to their parental homes during lockdown, a diminished sense of independence and near-constant familial presence may have prompted youngsters to pursue more family-friendly activities during this time. A Pew Research Centre study published in July 2020 estimated that 52 percent of Americans aged 18–29 were living with one or both parents – the largest percentage of young adults to do so since the Great Depression. Now, over two years on from the first global lockdowns, many of those who returned back home still live there, often out of economic necessity. If these new living arrangements are indeed here to stay, the social lives of these so-called ‘boomerang kids’ will undoubtedly have to change too – and the weekend boozing so often associated with young adulthood may well be a thing of the past.

Generation sensible
While the pandemic has certainly had a profound impact on our social habits, it is not the only factor behind this new wave of sobriety. In fact, youth drinking has been in decline across most high-income countries for the last 20 years. Today, young people are more likely to be completely teetotal than any generation that came before, and those who do drink alcohol tend to both drink less often and consume smaller amounts. Dubbed ‘generation sensible’ by some commentators, this new cohort of youngsters is generally considered to be more cautious and risk averse than previous generations, both in regards to their physical health and their mental wellbeing.

An increased awareness of the dangers of drinking may be one reason why young adults are increasingly choosing sobriety. Years of public health campaigns have succeeded in improving our collective alcohol-related knowledge, and for the health-conscious youth of today, drinking may simply not be worth the risk. And they have good reason to be cautious – alcohol consumption remains the leading risk factor globally for mortality and morbidity among those aged 15–24, and, as a depressant, is also linked to poor mental health. For Gen Z, the mental toll of drinking is a real sticking point – 86 percent of zoomers feel that mental health is as significant a consideration as physical health when considering drinking.

Indeed, anxiety surrounding alcohol consumption is another driver behind the decline in youth drinking. Often stereotyped as a generation plagued by anxiety, some young adults find alcohol consumption to be a source of stress, rather than an escape from it. As the first generation to have never known a world without the internet, Gen Zers are likely to have had an online presence across multiple social media platforms from a very early age. As such, they are hyper aware of their online image and are anxious of having it ruined by their drunken behaviour being caught on camera for all to see.

According to a study carried out by advertising agency Red Brick Road, 49 percent of Gen Z say that their online image is always at the back of their mind when they go out drinking with friends – so no wonder zoomers find it hard to let their hair down on a night out. Sobriety, or at least a more mindful approach to drinking, may help Gen Z to feel more in control of what is being posted of them online, alleviating any anxiety of drunken moments being inadvertently shared with the masses. After all, in an age where everyone is Google-able, the boundaries between private and public life are more blurred than ever before – as Gen Z knows only too well.

Drying out
While young people may be leading the sober curious trend, zoomers aren’t the only generation embracing a teetotal lifestyle. Across the globe, people of all age groups are beginning to reconsider their relationship with alcohol, cutting down or cutting out alcohol from their diets in an effort to prioritise health and wellbeing. Alcohol-free challenges such as ‘Dry January’ and ‘Sober October’ have been steadily growing in popularity since the mid-2010s, with millions of social drinkers signing up to commit themselves to a completely sober month. This year’s ‘Dry January’ saw 35 percent of legal-aged US adults quit alcohol for the entire month – marking the highest participation rates ever recorded for the challenge.

The Virgin Mary pub in Dublin, Ireland is alcohol-free

Across the pond in Britain, almost eight million people planned a month off drinking in January 2022 – a 22 percent increase on last year’s participation figures. What’s more, research has shown that approximately seven in 10 people who complete ‘Dry January’ continue to drink less six months later, making the challenge a useful stepping stone to sobriety for many.

Elsewhere in the world, long-held traditions and customs surrounding alcohol are also beginning to wane. Japan is known for its Nomikai gatherings – a feature of its business culture that usually involves an after-work get-together for co-workers over drinks. While in the past, Nomikai has been a central feature of working life in Japan, recent changes in attitudes towards drinking suggest that the practice could soon disappear. Over 60 percent of respondents to a 2021 survey said that they thought that work-related drinks gatherings were now unnecessary, meaning that for the very first time, more Japanese workers oppose Nomikai culture than support it.

This shift in attitudes has coincided with – and perhaps led to – a decline in drinking across Japan. According to the country’s National Tax Agency (NTA), alcohol consumption in Japan fell from an annual average of 100 litres per person in 1995, to 75 litres per person in 2020. This drop in drinking has had a significant impact on the country’s budget – taxes on alcohol accounted for five percent of Japan’s overall tax revenue in 1980, but by 2020, this figure had shrunk to 1.7 percent.

With alcohol tax revenue at its lowest level in 31 years, earlier this year the NTA launched a contest designed to boost alcohol sales among young people. The ‘Sake Viva!’ competition, which was open to 20–29-year-olds over the summer, asked entrants to develop business plans that would breathe new life into the country’s waning alcohol industry and tempt youngsters back to the bottle.

While Japan may be an outlier in its efforts to actively encourage alcohol consumption among its population, other countries around the world have noticed a similar decline in both drinking and sales. In 2021, alcohol sales in Scotland fell to their lowest level in 26 years, while in Italy, per capita alcohol consumption fell by 23 percent in the decade between 2006 and 2016. In Australia, meanwhile, drinking has fallen among all age groups, and is now at its lowest level since the early 1960s. From Europe to Australasia, the figures tell a similar story. With greater health awareness and health consciousness spreading across the globe, we are witnessing a real-time shift in attitudes towards drinking. As the harmful effects of excessive drinking become too numerous to ignore, is alcohol consumption set to become as socially unacceptable as smoking?

Social stigma
It seems somewhat inconceivable that something as ingrained in our social life as alcohol could become seriously stigmatised. And yet, we have seen it happen before. Indeed, the first half of the 20th century has been called the ‘golden age of the cigarette.’ Cheap, accessible, and – most importantly – fashionable, cigarettes boomed in popularity during the early 1900s, with approximately half of the population of industrialised countries smoking cigarettes by the late 1950s. In the UK, up to 80 percent of adult men were regular smokers by the mid-20th century, and the habit was fast spreading among women, too. Smoking was seen as not just socially acceptable but aspirational, glamourised in Hollywood releases and even publicly promoted as a ‘healthy’ lifestyle choice. In 1946, Reynolds Tobacco Company famously introduced a print and radio campaign that attested that ‘more doctors smoke Camels than any other cigarette.’

Thanks to both the effectiveness of the campaigns created by tobacco companies and, of course, the addictive nature of the product itself, cigarettes were omnipresent in all forms of public life in the mid-1900s. But, little by little, the tide began to turn on cigarettes, as new studies started to make associations between smoking and fatal illness. Then, in 1964, US Surgeon General Luther Terry published a report that definitively linked smoking cigarettes with lung cancer. The evidence was irrefutable.

And yet, the tobacco industry didn’t disappear overnight. In 1974, 10 years on from the report’s publication, half of British adults still smoked. Over the following decades, governments on both sides of the Atlantic ran a number of public health campaigns aimed at improving awareness of the harmful effects of smoking. This education drive – coupled with new legislation encouraging people to cut down on cigarettes or stop smoking altogether – saw the number of smokers drop dramatically by the end of the century.

In a matter of decades, smoking went from socially ubiquitous to socially stigmatised. And there are some early signs that alcohol could be heading the same way. According to a study carried out by Red Brick Road, 41 percent of Gen Z associate alcohol with ‘vulnerability, anxiety and abuse’ – and this apprehensive outlook on drinking has translated into rising sobriety among young people, with 26 percent of Brits aged 16 to 24 identifying as fully sober. Across the British population as a whole, 20 percent do not drink alcohol, marking a three percent increase in the proportion of non-drinkers since 2015. What’s more, a third of pub visits are now completely alcohol-free, demonstrating a shift towards sober socialising even in traditionally boozy environments. Sobriety, it seems, is having a moment. And as the world begins to grapple with a worsening cost-of-living crisis, non-drinkers may soon find that they are protecting their wallets along with their health.

Pinching pennies
The COVID-19 downturn was branded a ‘once in a lifetime’ economic event. And yet, just two years on from the start of the pandemic, the world stands on the precipice of another devastating recession. On both sides of the Atlantic, higher-than-expected inflation has seen prices of everyday goods skyrocket, severely impacting household budgets and causing many families to tighten the purse strings. In times of hardship, ‘unnecessary’ purchases are the first things to be struck from the weekly shopping list, and for many, a night at the pub falls under this ‘frivolous’ category.

The price of everything from food to fuel is rising, and alcohol is certainly no exception. The average cost of a pint of beer in the UK has shot up by 70 percent since 2008, hitting £8 for the very first time in some London establishments. At such eye-watering prices, it’s perhaps no surprise that Britons have been cutting down on boozing in an effort to save some pennies. According to a survey carried out by YouGov, 27 percent of Brits say they are now spending less on alcohol compared to last year, while seven percent of respondents have cut out drinking altogether, citing cost-related reasons.

There is a long-held belief that the alcohol industry is recession-proof. The argument, as put forward by some market analysts, is fairly convincing – that hard times can lead to hard drinking as people look to ‘self-medicate’ during periods of intense stress. But the reality is rather more complicated. The global financial crash saw a period of price stagnation and falling beer sales, and global alcohol consumption would have fallen by two percent in 2009, had it not been buoyed by increased consumption in Brazil, Russia, India and China. What’s clear is that in times of economic hardship, drinking outside of the home takes the biggest hit, as financial anxieties see people going out less and staying at home more. With many households already reporting that they are spending less on alcohol, it’s not difficult to imagine that this trend will continue as the cost-of-living crisis worsens over the winter months.

The current crisis is set to last at least into the second half of 2023, and household spending power is expected to plummet by a staggering £3,000 in the UK – a contraction in household income twice as severe as was triggered by the global financial crash. While the alcohol industry may be recession-resilient, it certainly isn’t recession-proof when people are forced to count every penny.

Evolving tastes
The alcohol industry is facing a double dilemma. In the short term, the escalating economic downturn may lead individuals to re-evaluate their drinking habits in an effort to make savings. In the long term, a sustained societal shift towards sobriety and a more temperate approach to alcohol consumption could see this long-profitable industry run dry.

One thing is for certain, though – the alcohol industry won’t be admitting defeat anytime soon. Already, brands are responding to their customers’ new teetotal preferences. The low-and-no alcohol industry has boomed in recent years, with off-premises sales reaching an impressive $3.1bn in 2021. In Britain, sales of low-and-no alcohol beers have almost doubled in the last five years, with alternative versions of popular brands helping the sober curious to make the switch. Whether they fancy a Budweiser or are more partial to a Becks, customers are now spoilt for choice when it comes to alcohol-free options. Long gone are the days when pubs could only offer non-drinkers a tepid lemonade – and the low-and-no alcohol market shows no sign of slowing down anytime soon (see Fig 1).

The world’s largest brewer, Anheuser-Busch InBev, has set itself an ambitious target of having low-and-no alcohol beers account for a fifth of its overall sales by 2025. While it may not reach this lofty goal, the ambition alone marks something of a culture shift in how some of the world’s most powerful beverage companies are looking to market and promote their products. Alcohol-free is not merely a fad, but a lucrative new revenue stream – one that could be worth more than $1.7trn by 2028.

Today’s non-drinkers have more choice than ever in where they choose to enjoy a booze-free tipple, too. Sober-friendly ‘dry’ bars have been popping up in cities across the globe, creating safe and inviting spaces for teetotallers to enjoy a night out. From Dublin’s alcohol-free pub, The Virgin Mary, to swanky speakeasy Getaway in Brooklyn, this new wave of abstemious establishments cater to both the committedly sober and those who simply want to experience a different kind of night out. Often softly lit, with trendy, ‘instagrammable’ decor, these sober bars tend to focus on creating an experiential offering for their customers – yet another aspect that appeals to the growing Gen Z clientele.

Having recently surpassed Millennials as the most populous generation on earth, Gen Z’s buying power is growing, as is their power to shape and dictate future consumption habits. As young people around the world increasingly embrace sobriety, the alcohol industry will need to follow suit – as paradoxical as it may seem. This new trend poses a challenge, certainly, but also an unmissable opportunity. If brands can shift their focus towards producing and marketing more alcohol-free alternatives, they could play a key part in promoting a healthier, more moderate future for teetotallers and regular drinkers alike. Cheers to that, indeed.

A snapshot solution for delivering personalised wealth management services

Posted on by itsupport

It is often said that photography is part art and part science. It relies on myriad factors and culminates in one moment, when the shutter button is pressed and released and light rays are redirected to a single point, capturing and documenting a single moment in time. If you get everything right, you capture a moment of perfect expression. If you don’t, your subject is blurred or moving out of frame, or worse. But the journey to taking the perfect photo begins long before that. It is a pastime that does not just rely on technical factors, light or equipment. Photography is framing, choice of primary subjects, background, colours and above all, message. A good photograph is one that triggers an emotional response.

Wealth management requires the same level of attention and multidimensional mindset to properly meet clients’ needs and to create a contextualised image. When observing a picture it is crucial to approach it not just analytically, but in an emotional sense too, because we’re looking at a unique perception of experience. We must fully understand it and create a connection. It is the same in wealth management, a sector where customers, by type and need, are difficult to frame in a single category. A crucial element of being a wealth manager is the ability to come at the same subject from a different perspective, and to understand that what works in one instance does not necessarily work each and every time.

A crucial element of being a wealth manager is the ability to come at the same subject from a different perspective

The essential relational aspect that defines a good wealth manager is just this, the ability to take a picture that accurately reflects the needs of their client. This is what endears customers to us. Financial performance is not the most important aspect. We obviously do our best in this regard, but critically we provide integrated analysis capability, enabling us to ‘frame’ a client at 360 degrees. Being able to provide the right answer to a client based on their activity and preferences as well as taking into account alignment with regulations is – and continues to be – one of the most rewarding factors in the market. This is because it is a dual approach that delivers a unique and personal experience and one which guarantees full transparency.

By delving into the client’s universe where the most personal themes are combined with technical needs, the job of a wealth manager becomes more than just that of a passionate trader and a financial portfolio manager.

A new picture
Though 2022 has been marked by uncertainty and inflationary pressures, economies recovering from the pandemic have seen the global HNWI population rise by eight percent, and, according to a report published by Capgemini, “wealth management firms will need new and improved ways of delivering personalisation to augment client experience” if they are to capture this new wealth.

Becoming a more resourceful partner for our clients, offering them the opportunity to be supported by a leader in the international markets and capable of proactively servicing clients by delivering any type of personalised service for their requirements is the key to building up an influential market position. Indeed, the wider market trends include the beginning of generational wealth transfer, which will see an influx of Gen X, Gen Z and Millennial clients all with an entirely different set of needs and expectations that wealth management firms need to be prepared for.
Being perceived as a true partner means acknowledgement as a qualitative contributor and a reliable professional, it is a relationship we hope to nurture throughout a lifetime through a personal mix of values, culture and hard work. We don’t just work in terms of global risk and portfolio balancing.

It was the photographer Edward Steichen who said “a portrait is not made in the camera but on either side of it,” and it is a similar sentiment to what we aspire to as wealth managers. We know the pattern of the markets, but we wish to gain a better understanding of our clients, and in forging these relationships, ourselves too. This is why managing wealth is not simply the ability to navigate in the financial markets, but a whole lot more.

Bringing quality of service to the Forex market

Posted on by itsupport

In recent years, a slew of investors have made the move from traditional markets to forex, recognising the vast potential within the sector. With a daily turnover of more than $5trn, forex is the world’s biggest and most liquid financial market, drawing those looking to capitalise on the opportunities. FX trading is at the heart of M4Markets – a CFD broker that also offers trading in commodities, indices, shares and crypto, partnering with leading financial institutions to provide a deep liquidity pool. Founded in 2019 by a group of financial experts, the brokerage offers two platforms – MT4 and MT5, with accessible prices enabling traders of all experience levels to invest. World Finance spoke to M4Markets to hear more about the services on offer, its customer-centric approach and how the brokerage is using technology to optimise trading conditions for its customers.

What is M4Markets background and what were your goals from the outset?
M4Markets was founded by investors and traders who had long-standing experience in investment banking, bringing a wealth of valuable knowledge and insights. One of the forces driving the birth of M4Markets was the lack of quality service in the FX and CFD industry. We wanted to build a brokerage where all clients would be treated equally and where they could enjoy a premium service.

Our resources and tools are available to everyone, without any discrimination

We also wanted to build a brokerage that was fair and transparent, which is why we invested in best-in-class technology and have ensured that we are very transparent about all costs and charges.

How do you define CFD trading and what are the advantages of trading CFDs?
Trading CFDs (contracts for difference) allows you to trade the value of an underlying asset without owning it – meaning it can be bought at a lower cost than buying the asset outright. It’s easier to execute, provides more flexibility and is faster paced than traditional investments in markets such as stocks, futures and indices. Of course, it should also be mentioned that there are increased risks with trading CFDs, which is why risk management is crucial.

M4Markets prides itself on its customer-centric approach; what are the key tenets of this and how does it benefit traders?
We believe all traders, whether they’re investing $5 (which is our minimum deposit) or hundreds of thousands of dollars, should be treated equally. We understand that whatever amount is being invested is important to the trader, and we make sure that our support teams make time to assist all our traders equally. At the same time, our resources and tools are available to everyone, without any discrimination. This means that all traders have equal opportunities in the markets, no matter what their investment background is.

How does your approach differ from other brokers?
At M4Markets, we believe our traders are our biggest assets, and we do our best to ensure they have every opportunity available to them. We aim to be completely transparent, and we have ensured that our trading environment is one of the best in the industry.

What advantages are there to trading with M4Markets?
As a multi-regulated broker, we offer various layers of protection to our traders as well as an extremely competitive trading environment, with low costs and a multitude of assets available to them.

What is the current trading environment like and what are the key challenges for the future?
The industry is currently being reshaped by tighter regulation across the globe. This is ultimately in the interests of traders, but we expect that as regulation continues to change, there will be challenges to overcome. How this develops remains to be seen.

How can technology help overcome the challenges?
As the forex industry is extremely liquid, changes are very rapid and technology helps make sure that when a client wants to place a specific trade at a specific price, they can. We understand that fast execution and low latency is crucial and essential in offering a stable and reliable trading environment, so we have invested in cutting-edge technology to help deliver the best possible service.

How does M4Markets differ from competitors with its use of technology?
We offer the two most popular trading platforms in the industry: MT4 and MT5. These offer vast resources to traders, while at the same time being very user-friendly. We are also one of the few companies to offer two copy trading systems – one of these is available through an app and connects traders to a huge community of other traders, while the other is more exclusive and allows traders to choose their mentors.

What’s your vision for the future?
We are expanding our regulatory profile and we are also testing new tools and resources that we hope to make available to our clients. We are beyond excited with our growth so far – we have managed to establish ourselves as one of the key competitors in the sector, and we look forward to the opportunities the future presents for both us and our traders.

Innovative banking in Bulgaria helps facilitate the green transition

Posted on by itsupport

Our constant desire to develop, be sustainable and to seek innovation is one of the more typical traits of Postbank and has been for more than 30 years now. During this time, we have proven ourselves as one of the most successful systemic banks in Bulgaria. Logically, we also grew to be a reliable partner, employer and socially responsible company. Furthermore, we have established ourselves as an institution that customers trust and offer them solutions for their future. This would not be possible without the efforts of our entire team. This is why I would like to thank all my colleagues, customers, shareholders and the strong international group of Eurobank to which Postbank belongs.

We offered our customers several next-generation innovations: we were the first bank to introduce Smart POS that turns a smartphone into a POS terminal, the first certified bank to offer instant payments, and the first metal credit card in the Bulgarian market. Another innovation we launched is our unique next-generation mobile wallet ‘ONE Wallet’ with which customers have an even better customer experience and we will soon be announcing further upgrades. Our customers have active and flexible control over their funds 24/7 which is an irreplaceable convenience nowadays.

Furthermore, in the past two years we started a complete overhaul of our branch network and invested in modern digital express banking zones which were immediately recognised as a preferred alternative to banking at a register. Thanks to the intuitive devices in these zones, our customers can easily and quickly carry out a major part of the main banking operations after simply identifying themselves with their debit or credit card, without having to be registered for internet banking.

Green future
The products and services we offer our customers are developed in line with the contemporary market needs. Excellent customer experience is a permanent part of the bank’s corporate policy. We will continue developing it, investing in new technologies and a green future aligned with our ESG strategy.

Our main goal is to be as useful as possible to our customers, providing them an excellent experience and offering them modern solutions, spaces and concepts that best meet their needs at any time and any place. Therefore, we maintain uncompromising standards regarding the quality of our broad spectrum of products and services. Being leaders in the field of digital banking is not only a challenge, but also a motivation to continue growing in this field because our customers appreciate it and expect it from us.

We help businesses adapt by applying no-waste, energy efficient and smart technologies

Our well-functioning model is to use the most advanced technological infrastructure in balance with the human factor, offering clean, fast, personalised and secure services 24/7, servicing our customers – both individuals and companies – large, medium and small, and to contribute to improving the perspectives for the Bulgarian economy and society.

Our strategy is to actively manage our impact on the environment, not to restrict sectors from lending. We realise that implementing the green transition is a complex and lengthy process and we see our role as one in which we help businesses adapt by applying no-waste, energy efficient and smart technologies, investing in innovations of all kinds.

We are confident in the role we have to play in carrying out the green transition – it affects all economic agents, not only businesses but households as well – and without our participation it would not be possible. The significance of introducing energy efficient and smart solutions in both companies and households alike is especially noticeable now, when energy prices are unpredictable, inflation is high, and consumers are trying to find ways to minimise their expenses and save their funds. This is why we offer a broad range of different products to meet the needs of our customers.

Environmental, social and governance (ESG) initiatives become increasingly important within the banking sector since institutions correct their strategies and practices in order to have even better results. Financial institutions have the opportunity to use these initiatives and make them strengths in the market. We recognise our key role in setting the example for our customers and strive to offer eco-friendly products in our loan portfolio in order to be in line with market trends and our customers’ changing needs.

This is why, and in relation to the abovementioned market trends, social commitment regarding ecology and the changing needs and interests of more and more customers investing in energy efficient improvements and homes, we will soon launch the market-first green mortgage. This innovative product offers financing for purchasing an energy efficient property (class A and above) or other energy efficiency improvements on existing property (for example purchasing solar panels), aiming at improving the energy characteristics of the real estate. Customers will receive a special interest discount on the interest rate of the mortgage and will be able to save on their monthly expenses for the mortgage.

An efficient offering
We have analogical solutions for business – we offer both standardised products and such that cater to the specific needs of our customers and are in line with the specificity of their activities, so we have a solution to all kinds of situations: purchasing energy-efficient machines, electric vehicles, introducing energy efficiency measures in manufacturing premises, we have solutions for improving process efficiency and energy and raw material consumption. In early 2023 we will also launch a ‘green’ corporate loan for business.

I would like to point out that Postbank was the first to de facto start the wave of consolidations in the market – initially with the deal for the Bulgarian branch of Alpha Bank in 2016 and later with the acquisition of Piraeus Bank Bulgaria in 2019, carried out for a record-breaking four months which demonstrates our solid expertise. These acquisitions were especially important for us as they provided us a larger market share, bigger branch network, more customers, new opportunities to invest and digitalise and better customer service.

Our main goal is to grow organically but we are ready for new consolidations and will not miss a single convenient acquisition opportunity. The Eurobank group also undertook a series of acquisitions of other banks in the region in 2021.

Last year Postbank completed 30 years of successful presence in the Bulgarian market. On this occasion, a special event was organised and echoing comments made then, Eurobank Group takes pride in Postbank’s achievements during these 30 years and enjoys its leading position in the Bulgarian market. The group will remain open to market opportunities to further grow if and when they arise.

It is important to us that shareholders appreciate what we do and wish to support us in our plans for developing business in the Bulgarian market.

Sustainability with substance for Nigeria’s largest bank

Posted on by itsupport

‘Sustainable finance’ is one of the industry’s most overused terms, but at Access Bank it has substance, forming a crucial part of its DNA. While ESG (environmental, social and governance) has been somewhat sluggishly adopted by the industry as a whole since it was introduced in the global arena in the 1960s, Nigeria’s largest bank has creatively embraced every strand of these principles. Recognising that ESG stretches beyond the commitment to minimise the business sector’s effect on society and the environment, Access Bank goes the extra mile. Whether supporting the fight against malaria or providing upcycled pencils to thousands of children, each initiative is designed to do good – inspiring fellow industry players to follow suit.

The history and challenges of ESG
The ESG guidelines were established some six decades ago in its nascent form and continue to develop. The traditional business orthodoxy that valued profit above all else meant that it was acceptable to externalise the various destructive consequences that businesses were wreaking on the environment. Especially so when, back then, the chime of climate change warning bells seemed so far off, and any doom-laden predictions they presaged seemed likely to remain uncrystallised for several centuries.

However, as environmentalists and scientists began to shine a light on irresponsible business practices and the detrimental effects of these on both human and ecological health, the need for scalable guidelines and principles around sustainability became clear, and institutions needed structures through which they could be held to account. In 1987, the Brundtland Commission of the United Nations (World Commission on Environment and Development) released the Brundtland Report, complete with guidelines that organisations needed to adopt to achieve sustainable development. In 1992, the United Nations Environment Programme (UNEP) issued the Statement of Commitment by Financial Institutions – which rippled into the creation of the UNEP Finance Initiative.

Fast forward through several governing bodies, working papers, and initiatives, and we arrive at the Nigerian Sustainable Banking Principles (2012), which Access Bank initiated and led. And, underpinning all of this is the growing body of evidence pointing to the unmistakable benefits of sustainable finance. For example, from a meta-study carried out by Fidelity International, a leading investment management UK-based company, incorporating sustainable finance improves corporate performance and can boost stock market value, among other benefits.

Moreover, employees and investors are interested in companies that take corporate responsibility and sustainability seriously. According to the ‘Global Sustainable Fund Flows: Q2 2022 in Review’ report, there has been a steady but dramatic increase in sustainable fund inflows – from $5bn in 2018 to nearly $70bn in 2021, with a gain of $87bn of net new money in the first quarter of 2022, followed by $33bn in the second quarter. There’s no denying there are challenges – presently within Nigeria, no metrics for measuring industry-wide performance exist, and there isn’t a generally accepted framework for the implementation of ESG, for example.

But it’s important to highlight the progress that has been made. On a broad scale, Nigerian financial institutions have recorded, among other things, the implementation of waste management and energy efficiency practices, automation of environmental and social risk management systems, development of financial products and services targeted at women, improvement of maternity leave policies, and the creation of women networks.

The Access Bank ESG formula
In a bid to tackle climate change and its hazardous effects, Access Bank has launched a series of initiatives aimed at reducing carbon emissions and moving Nigeria – and the world as a whole – toward the global Net Zero vision. So, what initiatives have the green-minded bank come up with? In an effort to reduce its carbon footprint, it has pioneered waste recycling within Nigeria’s financial sector, expanding its recycling operations to 75 locations across the country.

Incorporating sustainable finance improves corporate performance and can boost stock market value

Keen to put existing materials to good use, the upcycling project ‘paper-to-pencil’ resulted in eco-friendly writing instruments, made available for over 10,000 school children. Old tyres, meanwhile, have been given a new lease of life as material used for furniture.

To continue this theme, the bank collaborated with SME Funds in 2017 to execute the ‘green social entrepreneurship programme.’ This empowered 238 entrepreneurs in the field of clean cooking stove technology. Some 70 percent of the beneficiaries were women, who also benefited from start-up capital. Since the launch of the programme, beneficiaries have produced and distributed 7,500 litres of bio-gel, with returns exceeding $39,317.28 – reaching 598 households and impacting 2,100, with 287 metric tonnes of CO2 eliminated in the process. During the pandemic, the bank offered support to families in need by way of the ‘family cooking support programme,’ providing clean cooking technologies to those experiencing lockdown constraints.

Through this programme, Access Bank also distributed over 5,000 litres of biofuels to support more than 2,500 families in 100 communities. In addition, the programme benefited over 900 small-business owners. To offer a set of tangible figures – the programme saved beneficiaries a daily $3.25 per family, along with time savings of 225,000 minutes, while 8,000 tonnes of CO2 was eliminated.

Community support on every level
Access Bank’s ongoing investment in its host communities is far-reaching across the pillars of health, education, sport, arts, environment and social welfare. Over the years, Access Bank has invested about $38m in a range of strategic CSR initiatives, reaching 1,519 communities and impacting 30,623,790 lives and a further 834 NGOs. Through the bank’s employee volunteering scheme, employees have invested over 2.7 million hours of their time and resources, impacting over 530 communities across the six geo-political zones in Nigeria. This true mark of staff engagement is testament to the seriousness with which Access Bank approaches sustainability.

The bank’s online financial literacy platform, Access 9ijaKids, has garnered much attention. Launched during the pandemic, the free-to-use platform provided financial literacy education to over 100,000 children and parents. The platform and its engaging games were played by some 1,700 children.

Promoting financial inclusion, the bank has launched initiatives – large and small – to empower women. ‘Womenpreneur Pitch-A-Ton,’ for instance, is an initiative through which businesswomen within Nigeria and beyond are provided with world-class business training, finance, and mentoring opportunities. So far, over 250 women across Africa have received free mini-MBA certifications and financial grants worth $21,123. The Access Bank W Power Loan initiatives, meanwhile, disbursed loans worth $30m to some 1,300 women, helping to support asset acquisition and infrastructure upgrades, providing business working capital.

Responding to a rising need for financial support among homes and businesses, Access Bank unveiled a business recovery fund intervention programme to support individuals, businesses and communities affected by the nationwide protests to end police brutality. As of the bank’s last report, 66 businesses have been supported with interest-free loans. A total of $7,493,817 has been distributed to businesses to catalyse growth and sustainability. In addition, 105 micro-businesses have availed themselves of grants and funds disbursed to the tune of $55,757 across eight states in Nigeria.

At the height of the pandemic, the bank led the fight against COVID-19 and rallied several leading private organisations through the private sector Coalition Against COVID-19 (CACOVID). Under the auspices of the coalition, the bank donated $2,497,939 and raised over $87,427,872 alongside other organisations and individuals who clubbed together to provide medical equipment, treatment, training, testing and isolation centres to all states in Nigeria. The coalition also provided the Nigerian Centre for Disease Control with over 60,000 testing kits and spearheaded a palliative drive to feed 1.7 million households in Nigeria. These are only a few examples of initiatives the coalition and Access Bank independently launched to mitigate the effects of the pandemic.

The ‘maternal health programme’ is another Access Bank brainchild, developed in partnership with HACEY Health Initiative. The bank’s commitment to improving maternal health has also secured best-practice training for 540 health workers, and the distribution of 75,000 long-lasting insecticide nets to pregnant Nigerian women and mothers of children under the age of five.

Sustainability in governance
Inclusion and diversity are high on the agenda at Access Bank. The bank’s board of directors – comprised of 35.3 percent women, 64.7 percent men and a healthy mix of varied cultural backgrounds – reflect its commitment to improving diversity and inclusion within its organisation and the country as a whole.

Access Bank sits on the board of the HIV Trust Fund – a private-sector-led platform focused on obliterating the HIV/AIDS epidemic in Nigeria. Through the fund, the bank, along with other leading organisations, has raised N62.1bn ($141m) towards accelerating the achievement of the UNAIDS (Jointed United Nations Programme on HIV/AIDS) 95-95-95 epidemic obliterating strategy.

Fighting malaria is another key concern. Access Bank sits on the board of Corporate Alliance on Malaria in Africa (CAMA). Through this alliance, it has begun mobilising private sector capabilities and resources for sustained support towards lowering malaria incidence and prevalence in Nigeria and beyond. The goal, according to the bank’s representative and Head of Sustainability, Omobolanle Victor-Laniyan, is to save 50,000 lives in Nigeria and other countries across Africa by 2023. So far, it has donated insecticide-treated nets, malaria rapid diagnostic test kits, and multiple doses of IPTp-SP to primary healthcare facilities in over 12 communities in Nigeria. The Alliance has also benefited over 6,600 pregnant women across Oyo, Ogun and Lagos, Nigeria.

Working with the United Nations Environment Programme Finance Initiative (UNEP FI) and other leading global banks, Access Bank contributed to the development of the Principles for Responsible Banking (PRB). The Principles serve as the global benchmark for banking institutions with regard to knowing the requirement for becoming responsible banks. Being the only West African Bank on the Core Group, Access Bank served as Africa’s Consultative Lead on the Principles. In this capacity, it has helped galvanise other banks into becoming signatories to the Principles.

Access Bank’s efforts haven’t gone unnoticed – in recognition of its ESG and sustainable finance achievements, Access Bank has been the recipient of several national and international Awards including the Central Bank of Nigeria Award for Sustainable Bank of the Year (three-time consecutive winner); the Karlsruhe Award for Outstanding Business Sustainability Achievement (six-time consecutive winner); and World Finance Award for Most Sustainable Bank (11-time winner). As Access Bank consistently demonstrates, it pays to be good.

Mexico’s comeback currency: a story of effective monetary policy

Posted on by itsupport

King Dollar dominated the headlines in 2022. The mighty greenback attracted massive ‘risk off’ sentiment, driven by a new war in Europe – the tragic Russia-Ukraine conflict – and a raging inflation crisis. Central banks, almost everywhere, have stepped up interest rates as fast as they dare in response, despite clear recession and stagflation risk. Yet the Mexican Peso has defied the global currency storm, rising above the dollar and euro. “In fact,” explains David Razú Aznar, CEO at Afore XXI Banorte, “the exchange rate has returned to levels close to those prior to Covid.” Then, a dollar bought 24.26 pesos “but by the end of the third quarter of 2022 it had already dropped to 20.07.”

To underline Razú Aznar’s point, not long before World Finance went to press MXN had strengthened again, with a dollar buying almost 20 pesos. This is the consequence of consistent hawkish action from Banxico – 11 consecutive increases by late September 2022 – led by Victoria Rodríguez Ceja, the first woman to run Mexico’s central bank.

But to understand the bigger picture, and to understand just how far the peso has come, we need to roll back to 1994, to the so-called ‘Tequila Crisis.’ This was a current account deficit storm part-caused by short term USD denominated debt instruments called ‘tesobono’. Because Mexican foreign exchange reserves were shrinking the Mexican government introduced short-term debt instruments for investors, which also gave them a measure of devaluation protection. That didn’t stop investors pulling their money out of the country. “In just one day in December 1994,” remembers Razú Aznar, “the Mexican Peso lost 22.27 percent of its value, going from 3.94 to 4.88 pesos per dollar.”

It was just the start. Just a few weeks later one dollar bought seven pesos. “This motivated the reform that would give autonomy to Mexico’s central bank Banxico, prioritising currency stability,” says Razú Aznar. Currency freefall is always terrifying, decimating spending power for workers while wages and public confidence can stagnate. Yet nearly a decade and a half after the 1994 crisis the 2008 global financial seizure hit. The massive financial panic caused by the subprime mortgage loan crisis had major implications for the Mexican exchange rate.

“In fact, the Peso experienced a depreciation against the dollar of half its value,” remembers Razú Aznar, “when the exchange rate went from 9.93 pesos per dollar at the end of the third quarter of 2008 to 14.90 pesos per dollar in the middle of the first quarter of 2009.”

From nadir to investor respect
1976 was a low point for the peso – a crushing devaluation. Since 1954, parity had been fixed at 12.5 pesos per dollar. In September 1976 the federal government established the parity at 19.90 pesos. But a month later the price descended steeply to 27.97 per dollar. This, says Razú Aznar, “was a classic example of the unfortunate macroeconomic and monetary policy that Mexicans are afraid of because although there were early external factors that influenced the outbreak of the crisis, in the end the internal management was the cause.”

Mexico’s foreign public debt escalated from $4.2bn at the end of 1970 – 12 percent of GDP – to $19.6bn by the end of 1976. This was equivalent to 35 percent of GDP – a staggering deterioration. But this was not enough to finance non-stop public spending growth remembers Razú Aznar, “so the government established compulsory credit from Mexican commercial banks, resorting to financing the fiscal deficit from the central bank. All of this caused an increase in inflation until it reached 27.2 percent in 1976. The devaluation was inevitable due to capital flight.”

Mexican monetary policy, carefully plotted, has strengthened the peso

Despite capital markets nervousness over global recession risk, the difference between monetary management from the Mexican authorities today compared with the past is profound – a night and day difference, in fact. Mexican monetary policy, carefully plotted, has strengthened the peso. Since the middle of 2021, as other national central banks tightened their own money supply, central bank Banxico has upped its reference interest rate, surging from four percent in March to its current level – 9.25 percent. This is the highest level since 2008.

“And this upward cycle of rates implemented since June 2021 is giving results, as has been emphasised the International Monetary Fund (IMF), when stating that the rate increases helped strengthen the credibility of the central bank, prevented inflation from taking hold, and have prevented the Mexican peso from being a source of instability for inflation.”

Given the scale and speed of interest rate rises by the US Federal Reserve, determined to fight the inflationary storm hitting global goods and services, Banxico has maintained the reference rate spread between the US and Mexico, “so rates in our economy remain attractive and the net inflow of capital is controlled to avoid a possible weakening of the peso,” confirms Razú Aznar.

Practically, the upward interest rate cycle, implemented since June 2021, continues to ring-fence the peso’s reputation. Public debt is another challenge President Andrés Manuel López Obrador has taken head on, a crucial undertaking given the pressures on emerging economies emerging from the pandemic. Mexico has come out of the experience in stronger shape than many developed countries.

Public debt realistic and manageable
“The ratio of public debt to GDP,” says Razú Aznar, “currently represents 49.1 percent for Mexico, within which the external debt only contributes 15.9 percent. The weight of external debt has dropped from 19.1 percent in 2020, due to a Ministry of Finance strategy of taking advantage of the country’s financing conditions before the current increase in interest rates across the world.”

According to the International Monetary Fund, advanced economies’ gross government debt as a ratio of GDP climbed from 103.9 percent to 123.2 percent between 2019 and 2020 – a huge rise. In late 2022 this ratio is still around 112.4 percent overall. Across emerging and middle-income economies this ratio, in contrast, increased from 54.5 percent to 64.7 percent and remains at 65.1 percent in 2022, overall. “For some countries, such as Brazil, it reaches 88.2 percent today,” points out Razú Aznar.

“In Mexico, this fiscal measure rose from 53.3 percent in 2019 to 60.1 percent in 2020, but was later reduced to 56.8 percent in 2022.” This means meaningful balance of payments safety, in comparison to many other economies that now look increasingly vulnerable to debt over-reach.

Remember, says Razú Aznar, that Mexico is a major crude oil exporter, and that the income of the Mexican federal government depends significantly on this vital resource. “This is why the fiscal performance of the country was remarkable during the pandemic since its price went practically to zero.” But with a major recovery in the crude oil price, the resilience of the peso’s value is further supported.

This has not gone unnoticed by the global credit rating agencies who now increasingly judge Mexico’s credit grading as among the most reliable of all LATAM countries and emerging economies. This confidence boost is crucial reiterates Razú Aznar. “Sovereign risk ratings affects both a country’s financing conditions and are a reference point for debt issuers in the economy.”

In late 2021 when DXY dominance was re-building, one dollar bought almost 22 pesos. A year later, late 2022, one dollar buys 19.5. It’s just as impressive against the euro. By late 2021, a euro bought 24.5 pesos. By early November 2022, a euro was buying 19.4 pesos – a 20 percent depreciation in favour of MXN.

Pension power provides stability
Mexico’s retirement fund industry in Mexico, the Afores, has long been the main vehicle for channelling the savings of most Mexicans. A founding administrator of retirement savings in the Mexican pension system, Afore XXI Banorte has been at the heart of the pension system for 25 years. But any change must be sustainable, as well as closely stuck to.

25 years after the start of the defined contribution pension scheme, Afores has now accumulated close to $250bn – about 18.5 percent of Mexico’s total GDP. “This source of financing for national investment is another major factor that works in favour of the country’s macroeconomic stability, reflected in the recent strength of the peso,” Razú Aznar points out.

“An excellent example of this is the role that the Afores have played with domestic sovereign debt. As of October 2022, Banxico reported that non-residents reduced their participation in the sovereign debt market implying a net outflow of 110.2bn pesos ($5.2bn). Nonetheless, the Afores at the same time, have increased their total position by 82.6bn pesos ($4.2bn) in sovereign debt, which is equivalent to 75 percent of the net outflow reported by non-residents. This has somewhat contributed to the strength of the Mexican Peso.”

And such leverage will be increasingly important. In 2020 President Obrador launched a bill to reform Mexico’s pension system. This carefully choreographs gradual increases in the contribution rate from 6.5 percent of wages to 15 percent by 2030. “This will enhance the scope of the Afores as a source of financing for economic activity,” believes Razú Aznar. “It is estimated assets managed by the Afores will reach 56 percent of GDP in 2040, compared to pre-change estimates of 35 percent.”

“We are very pleased,” finishes Razú Aznar, “to contribute responsibly to the macroeconomic stability of the country and, at the same time, to support the proper management of public monetary policy in Mexico.”

Building a more sustainable airline industry

Posted on by itsupport

We travel to see and understand the world, learning more about other people and places with each flight. At the same time, our travel and emissions contribute to climate change, impacting the same world and nature we seek to understand. How do we balance the critical utility of travel to connect people, promote the beauty of our planet, and power economies, while also limiting the impact on the environment we have at the same time?

This is the question we all face in the airline industry. JetBlue is proud to have been one the first airlines to sign the Climate Pledge to achieve net zero carbon emissions by 2040. We approach our sustainability efforts with the core belief that a healthy environment is more than a nice goal – it’s crucial for our business and the protection of the beautiful destinations that we fly to. To hold ourselves accountable during our drive to achieve net zero carbon emissions, we have set a series of specific, measurable, dated, and aggressive decarbonisation targets and will soon be sharing our near-term science-based target approved by SBTi.

In the short and medium term, we continue our focus on in-sector reductions with moves like investing in sustainable aviation fuel (SAF), growing a more fuel-efficient aircraft fleet, electrifying our ground service equipment, and championing improvements to the aging air traffic control systems that have the potential to not only reduce fuel burn, but offer a better travel experience for everyone. We’re also thinking long-term and exploring innovations on the horizon with alternative fuel technology like electric or hydrogen-based aircraft. This is a focus area of our JetBlue Ventures subsidiary, which invests in and partners to accelerate the future of lower-carbon travel technology.

But we also know we cannot achieve our net zero goals alone. Partnerships will ultimately be the most pivotal thing to help us all reach our sustainability targets. Whether it is working with regulatory bodies and governments for policy support, joining consortiums like the Sustainable Aviation Buyers Alliance (SABA) and Aviation Climate Taskforce (ACT) to share best practices, or partnering with like-minded businesses to find collaborative solutions, these partnerships require balancing priorities and mutual trust. For JetBlue, finding and championing those immediate opportunities to make an impact helps show everyone what is possible when we work together and encourage each other to push forward.

Sustainable flying
One of the most promising solutions we see to reach net zero, and the biggest example of where partnerships are critical, is with sustainable aviation fuel. SAF drops directly into existing aircraft and infrastructure with no impact to safety or performance and typically offers 80 percent reduction in emissions per neat (before blending) gallon on a lifecycle basis. Because of this, once SAF reaches commercial viability at scale, it will be a game-changer for our industry, driving down our emissions significantly and quickly. But despite the technology being well proven, SAF has long suffered from a ‘chicken and egg’ problem: there is a very limited supply available, which keeps prices high. With high prices, there is suppressed demand and ability from airlines to buy more of it. To reach the economies of scale necessary to increase supply and drive down the price premium, we need support.

Partnerships will ultimately be the most pivotal thing to help us all reach our sustainability targets

Public policy is one way we can advance SAF. Government incentives can close the price gap between SAF and conventional jet fuel, such as the United States’ recently passed Inflation Reduction Act. We hope to see more state-based programmes like the successful California Low Carbon Fuel Standard (LCFS) programme in the Northeast US where JetBlue and so many other world airlines operate. In the absence of further policy support, all SAF for regular supply is likely to be delivered into California only. We regularly engage in advocating for these federal and state policy measures, participate in industry groups, and work directly with current and future SAF producers to encourage the emerging market.

Another way we can signal demand to the market is through the help of corporate partnerships. As more and more companies focus on their own sustainability goals, they are increasingly looking at their ‘Scope 3’ emissions: indirect emissions organisations are not directly responsible for but that exist within the value chain, such as those produced through corporate travel. By offering JetBlue-issued SAF Certificates to organisations, we have found a way to help offset the cost premium of the SAF JetBlue purchases, while also giving corporate customers the ability to directly and meaningfully reduce their business travel emissions. This not only allows us to continue to buy more SAF but furthers the entire market – encouraging a more sustainable future of flight.

This represents a shift in mindset for many. Only when we stop thinking about just where we can affect change within our own areas of expertise and start thinking about how we can collaborate for shared benefit, we realise our true potential and further our shared goals. At JetBlue, we recognise that we are in this together and welcome those partnership opportunities. We invite you aboard.

Kuwait’s digital banking transformation

Posted on by itsupport

Money – how it’s acquired, saved, invested, or spent – shapes a great deal of our modern day lives. It’s capable of moving entire markets within a matter of hours, and with it hurling global populations to where the demand is. At the centre of these shifting tectonic plates lies the banking and financial sectors, simultaneously driving change and responding to the newly arising market needs.

Since its birth in the early 1940s, Kuwait’s banking industry has adopted the latest global trends and technologies, paving a path for other GCC countries to follow suit. With the worldwide migration of services to the digital sphere – a shift that was catalysed by the COVID-19 pandemic and its ensuing lockdowns – Kuwait’s banking sector is steadfast in its commitment to keeping abreast of the global industry’s developments.

In 2019, Kuwait hosted the International Banking Conference ‘Shaping the Future,’ which gathered regional and international banking pioneers and market experts to discuss the future of banking digitisation, cementing Kuwait’s forward-looking efforts to digitally transform and evolve – especially in the banking industry – as part of the national 2035 vision for ‘New Kuwait’ to become a regional and international financial and trade hub.

Fast forward to February 2022, the Central Bank of Kuwait (CBK) announced that it will start receiving applications for digital bank licenses between the months of February and June of 2022, a decision that was met with excitement from industry insiders and consumers alike. Despite the news garnering a lot of hype for ushering in the market of digital-only banks, which operate entirely online, it also encouraged the traditional banks to expedite their digital transformation efforts to remain not only relevant, but ahead of the competition.

Among the market leaders whose digitisation efforts continue to set the tone for competition is Kuwait International Bank (KIB) – a bank that is no stranger to adaptation and innovation. Going beyond the narrow-sighted approach to digitisation, which limits it to developing digital alternatives to existing services and products, KIB utilises almost 50 years of experience and market insight in reimagining its inner workings and surrounding ecosystem to serve its comprehensive digital transformation strategy. But before delving any deeper into KIB’s digital transformation journey, let’s first pause for a moment to consider what digital transformation is.

It certainly is not a set of digital products and services delivered through a website or mobile application. What it is though is a complete paradigm shift in the way the banking sector interacts and serves its market, as well as the role it plays in society. As with any top-down reform, the digitisation of the banking sector requires institutions to take apart their building blocks and rearrange them in alignment with the philosophies, mindsets, and needs that drive the digital sphere, bearing in mind the entire ecosystem which spans staff, customers, market, and society. With this in mind, let’s trace the footsteps of KIB, as a market leader, along its journey of digital transformation.

A solid foundation for a solid service
No matter how aesthetically appealing a structure is, no one in their right mind would ever invest in it unless it’s built atop solid foundations. The same can easily be said of services, especially when they’re as critical as banking and financial services that involve managing customers’ hard-earned wealth. With decades of experience, KIB is no stranger to building solid foundations – a notion that it’s been applying in the recent years to build a reliable digital infrastructure that’s capable of lifting the weight of its extensive, all-encompassing digital banking arm.

By investing in its digital infrastructure, KIB guarantees that all of the digital-first services and products it offers through its online portal and mobile app are seamlessly smooth and glitch-free. More importantly, KIB continues to invest generously in fortifying its digital infrastructure cybersecurity front, safeguarding its customers’ data and transactions against any fraud or theft. KIB, in its digital transformation journey, took a major step earlier this year by signing up with one of the biggest consulting firms in the world, with a mandate to modernise the bank’s IT infrastructure and build up its digital capabilities.

Experience is king
As soon as the digital infrastructure has been setup and its security shields put up, it’s time to start designing a customer journey that flows smoothly from one touchpoint to the next without hassle. With youth – aged 15 to 24 – making up almost one-fifth of the Kuwaiti population, followed by a whopping 52.32 percent of people between the ages of 25 and 54, understanding the mindsets of these majority age groups and their everyday needs is essential to the success of any bank’s digital solutions.

With this understanding in mind, KIB spared no effort to understand its customers’ every need and aspiration, designing tailor-made programmes that suit them, whether they are part of the tech-savvy youth whose entire consciousness was formed in the digital ether, or established adults who require management of bigger assets and more varied investment portfolios. However, this rings true to both traditional and digital banking, and KIB made sure their services and products succeeded however customers sought them out.

The real hallmark of the KIB digital experience is the integration of services that takes customers on a very smooth ride from the first sales or marketing touchpoint all the way to service fulfillment. To ground this in reality, it was essential for KIB to map out every single customer journey in utmost detail, making sure that the necessary in-app tools are developed to serve every milestone. Needless to say, these journeys were designed so that they can be fulfilled entirely in-app or on the bank’s online banking portal, without the need for visiting a physical branch or submitting any paperwork.

KIB utilises almost 50 years of experience and market insight in reimagining its inner workings

KIB took integration further still by collaborating with the Public Authority for Civil Information in Kuwait (PACI) on utilising its database and digital ‘Mobile ID’ app to facilitate an online onboarding process for new customers. The bank will now be able to easily identify new users through PACI’s Mobile ID and quickly verify and extract the required data. Upon obtaining their digital signature, KIB will easily register them as new customers and complete the online account opening transaction in much less time.

Recently, KIB also successfully managed to set up its digital factory; an innovation-focused concept staffed with the necessary resources and tasked with upgrading the bank’s offering. As a result, the bank has started the development of several different digital solutions and products catering to all its major customer demographics. The team operates under a philosophy of dynamism and agility; adopting design-thinking methodologies, agile working protocols and utilising the latest technology solutions to ensure fast response to customer needs and market changes.

Change comes from within
What many institutions fail to see, though, is the equal need to restructure the work force in-line with the altered digital workflow. Digital is agile, it’s 24/7, it’s adaptive and responsive, and it’s certainly innovative – merits that KIB made sure were adopted by its staff, to deliver a second-to-none online banking experience to its customers.

Through a series of training programmes that KIB offers periodically to its staff, the bank continues to put great emphasis on the necessity of developing its human resources in parallel to developing its services and products in order to deliver an impeccable, well-rounded, premium digital service to its customers.

With change not being the typical constant in the traditional banking context, succeeding as a digital banking service provider requires upgrading the institutions’ inner working, shedding any underlying systematic and bureaucratic obstacles that impede change. Instead, an adaptable mindset that allows for more agility ought to be adopted, enabling the institution to respond swiftly to market changes as they arise.

Big wins start with big data
Among the most valued byproducts of going digital is the ease of data collection. Every transaction, interaction, campaign, or even complaint is a chance for banks to collect more data about their customers and the market. And unless you’ve been living under a rock for the past couple of decades, then you certainly know that data is the only commodity that can really propel any business forward, and banks are no exception. Data means better understanding of customers, which leads to a more personalised experience and higher retention. It also means more accurate campaign targeting that is capable of boosting any campaign’s ROI.

In addition to applying the above, KIB also uses the wealth of customer data it’s collected over the years to partner with market leaders whose products and services are sure to add value to KIB’s customers. In the recent years, KIB has collaborated with automotive giants like Al Ghanim and Behbehani, along with worldwide favorite furniture brand IKEA to offer easy and flexible financing of their products, with a host of value benefits, delivered conveniently at their showrooms. Digital banking, like everything else within the digital sphere, is still maturing and shifting, allowing for new opportunities to rise. In this ultra-marathon, only the patient and vigilant can come out triumphant.

A leading approach for sustainability

Posted on by itsupport

Energy is the driving force behind many of the economic and societal benefits we all enjoy today. It is fundamental to achieving the broader community sustainability and improved economic conditions we all seek. But these benefits have come at a grave cost to our planet.

Now our challenge, as a company, an industry and a society, is to ensure that we work together to protect the Earth for future generations. To do so, we must support conservation, expand renewable energy deployment and ensure prudent use of our energy resources. If we are to continue improving people’s lives and driving positive societal impacts, we must find a responsible transition and timeline to a lower carbon economy that reasonably balances the interests of all stakeholders: customers, communities, employees and investors. Chesapeake Utilities Corporation has a key role to play.

We’re a diversified energy delivery company, listed on the New York Stock Exchange and offering sustainable energy solutions through natural gas transmission and distribution, electricity generation and distribution, propane gas distribution, mobile compressed natural gas utility services and solutions, and other businesses.

Chesapeake Utilities has a long history of supporting sustainability initiatives, and we recognise that we live in a world where there is much more work to do. Over the past few years, we have increasingly emphasised environmental, social and governance (ESG) considerations as essential factors in assessing performance and future opportunities. In an industry transitioning to lower carbon, ESG offers energy delivery companies an opportunity for sustainable investment. We can do the right thing for society and the environment while continuing to deliver results for our shareholders.

Over the past decade, we’ve achieved industry-leading growth and financial performance – this has only been possible because we deliver on our commitments. If we say we are going to do something, we do it. In ESG terms, this means leading the transition to a lower-carbon future, promoting a diverse and inclusive workplace, furthering the sustainability of the communities we serve and operating our businesses with integrity and the highest ethical standards.

A team effort
The collaboration of our team, in coordination with the oversight of our board and its committees, is reflected throughout our disciplined approach to how we conduct business and our decision-making process. That collaboration has resulted in ESG being interwoven in our strategic plan, enterprise risk management models, business trends and development opportunities, executive compensation programme and business practices.

We must find a responsible transition and timeline to a lower carbon economy

In our more than 160 years of operations, we’ve earned a reputation as a good corporate citizen. Our employees are valued and respected contributors to both our team and the communities where we live and work. Chesapeake Utilities’ employee-centred culture attracts, develops and retains high-functioning and diverse team members who share the values that drive our business. We see the benefits of encouraging diverse ideas and solutions from our employees, who are empowered to participate in our strategy development and decision making. We understand that investing in the development of our people encourages ingenuity and creative problem solving.

We prioritise team members as our greatest asset. Without great people, you have no chance of becoming a great company. Our exceptional growth and performance are entirely related to how our team members serve customers, build infrastructure, develop projects and support our business. Each member of our organisation plays an important role in the company’s success. I’m honoured to lead a team that makes a meaningful difference everywhere they live and work.

Chesapeake Utilities’ focus on people extends beyond our company too. We have been significant financial supporters of local communities and charitable organisations. Through our SHARING Fund programme, we help eligible customers facing financial hardship and provide grants for appliance purchases and repairs for those who qualify. Additionally, in support of our commitment to the communities we serve, we continue our decades-long energy conservation programme that serves customers in Florida; the programme includes energy audits at no cost to the customer for homes and commercial properties upon request.

Advancing sustainable energy
When it comes to environmental impact, our energy delivery businesses have been part of the largest reduction in carbon emissions in US history, as we, and others in the industry, have displaced more carbon-intensive fuels with natural gas and propane. Our electric utility has virtually eliminated wholesale purchases of coal and oil-generated power. All our operations have assessed opportunities to reduce emissions, and we are actively engaged in several projects that will continue to lower our internal carbon output.

We are working hard to develop waste-to-energy production facilities that improve agricultural and landfill environmental conditions in our service areas and produce renewable natural gas (RNG). Beyond potential financial support, Chesapeake Utilities contributes significant energy market and project management expertise to waste-to-energy projects. The physical assets of our energy delivery businesses are also available to transport RNG, provide conventional gas service, operate gas processing facilities or build solar or combined heat and power (CHP) electric generation. Long-term, the projects we support will play an important role in advancing sustainable energy and offer our company an economically sound business opportunity.

Last year, for example, we announced the completion of a 33-mile pipeline project to transport RNG to Aspire Energy, our natural gas infrastructure business unit in Ohio. We worked closely with Fortistar LLC, which developed the RNG production project in conjunction with landfill operator Rumpke Waste & Recycling at one of its landfill sites in Shiloh, Ohio. The project captures more than 20,000 tonnes of methane per year. RNG from the landfill is transported by Aspire Energy and dispensed in compressed natural gas (CNG) vehicle fuelling stations by a Fortistar affiliate. The landfill produces enough RNG to displace approximately 6.9 million gallons of gas equivalents (GGE) per year; that’s enough to fuel 725 biofuel trucks.

We also announced the grand opening of a CNG fuelling station in Savannah, Georgia. When CNG vehicles are fuelled with RNG, the greenhouse gas emissions are reduced by up to 90 percent or can even be carbon negative, depending on the source of the RNG. Our Marlin Compression affiliate contracted with Southern Company Gas to construct the facility, which is one of the largest public access CNG stations on the East Coast. It is located at the newly constructed Port Fuel Center, less than one mile from the Port of Savannah. The port moved 479,700 shipping containers in January 2022. The trucks make their way in and out of the port, driving right by the station. A new 1.2 million-square-mile distribution centre is 100m from the station. We are working to provide an RNG fuelling option at the site.

This new CNG station opened in the second quarter of 2022. In September 2022, Marlin Compression and the Port Fuel Center received a CNG Implementation Energy Matters Award. The award was presented by Georgia Public Service Commission Vice Chairman Tim Echols during the Clean Energy Roadshow at Savannah State University in Savannah, Georgia, and recognises environmental excellence throughout the state of Georgia.

Without great people, you have no chance of becoming a great company

Our Economic Development programme identifies business initiatives to provide innovative energy options and resources for our customers and communities. We engage with government and community officials – at federal, state and local level – to plan, develop and expand energy solutions that help promote sustainable growth opportunities and environmental benefits within our communities.

These projects often involve several subsidiaries and business units under the Chesapeake Utilities Corporation umbrella. For example, a collaborative effort led to our subsidiary Eastern Shore Natural Gas Company (ESNG) extending natural gas to Somerset County, Maryland; one of only three counties in the state without access to natural gas. The Somerset extension is supporting economic development in local communities and provides an immediate opportunity to decrease greenhouse gas emissions by displacing fuel oil and wood chips as energy sources.

Continued corporate governance
Our strong corporate governance supports the company’s many growth initiatives and is embedded in our way of doing business. We engage at all levels to provide transparency and promote accountability to our shareholders, employees, regulators and other stakeholders about the way we operate.

We are grateful to have been recognised as Best for Corporate Governance in the United States in the World Finance Corporate Governance Awards. It lauds the leadership of our board of directors, the active engagement of our teams across the enterprise and the capabilities and professionalism of our governance team to adapt and perform at the highest levels. We are truly honoured to receive this recognition and will continue doing all we can to contribute to greater sustainability and societal advancement.

Africa’s new financial hub

Posted on by itsupport

In the span of a generation, Rwanda has emerged from the ruins of conflict and is today regarded as Africa’s most inspiring success story. Having laid the strong foundations needed for sustainable transformation, Rwanda is not shying away from dreaming big. Though relatively small in terms of landmass, the country has the potential to become the financial hub of Africa anchored by the Kigali International Financial Centre (KIFC). Established in 2020, KIFC’s main objective is to advance the competitiveness of Rwanda’s financial sector and position it as the most attractive financial destination in Africa.

KIFC represents what Rwanda aspires to become – a country that is attractive to local, regional and international investors. To achieve this goal, building a sound and vibrant financial services sector backed by fintech-led innovations has become paramount in order to widen and diversify financial products and legal structures offerings. Currently, the financial sector is relatively small. It contributes three percent to the country’s gross domestic product (GDP) valued at an estimated $6.9bn. In 2021, the sector grew by 20.3 percent in total assets. Notably, it includes a well-established banking industry with 11 commercial banks, some of which are foreign.

Rwanda is also making progress in developing vibrant capital markets, registering a steep increase in size over the last decade. Today, total market capitalisation is valued at $3.6bn. With 10 listed companies, the Rwanda Stock Exchange is already benefiting from cross-listing opportunities due to being a member of the East Africa Stock Exchanges Association, a regional initiative to integrate regional bourses and benefit from synergies in terms of greater capital mobilisation. By building a reputation as an outward-looking global financial destination, Rwanda wants the financial sector to be a major cog in economic growth. By 2035, the country intends to increase its contribution to GDP to 5.2 percent and 11.8 percent in 2050.

A new hub for finance
To achieve the ambitions of becoming a financial hub, Rwanda Finance Limited (RFL) is shouldering the task of putting KIFC on the world map. The agency is responsible for developing, promoting and positioning KIFC as a unique hub capable of facilitating international investment and cross-border transactions. It is also providing a base conducive to the structuring of various investment vehicles that will tap into regional trade and business expansion opportunities. These cut across investment funds, special purpose vehicles and holding structures, among others.

Through tangible strategies, RFL is determined to adopt best practices across the legal and regulatory spheres and leverage on its robust governance framework and compliance to achieve international best practice standards.

Rwanda has been one of the best performers in terms of economic growth. For over two decades, annual GDP growth rate averaged 7.1 percent. It reached an all-time high of 20.6 percent in the second quarter of 2021. During the year, the economy grew at around 11 percent. The impressive and sustained growth has come with socio-economic transformation, key of which is declining poverty and increasing foreign direct investments. It has also seen Rwanda consistently ranked at the top of African nations in various international surveys. In 2020, it was ranked second in the World Bank Ease of Doing Business Index and fourth in sub-Saharan Africa by the World Economic Forum (WEF) Global Competitiveness Index. Marketing KIFC is not difficult as the fundamentals are right and the environment is ideal.

Other transformations, which are auxiliary in promoting KIFC, include deliberate measures by Rwanda to invest in world-class aviation infrastructures making Kigali an African air travel hub due to its geographic location and high-quality conference facilities, such as the Kigali Convention Centre. Today, Rwanda is regarded as a global conference hub, second only to Cape Town in Africa for business tourism. These factors, coupled with significant investments in ICT and innovation, as well as being part of three regional economic blocs, mean that KIFC has the wherewithal to compete.

Though still in its infancy compared to other financial hubs like Casablanca, Cape Town, Johannesburg and Mauritius, KIFC is already becoming a natural choice for investors. The centre has seen peak interest among regional and African-based investors looking for alternative financial domiciles for their investments on the continent. Chief among them has been institutional investors seeking to establish investment funds and special purpose vehicles to fund regional projects.

The result has been the domiciliation of more than $600m worth of funds. These include the $350m FEDA fund, an African trade and export fund established by AfreximBank supporting and fostering intra-African trade, the $250m Virunga fund between the Qatar Investment Authority and Rwanda Social Security Board and the $10m Angel Investment SPV, a regional special purpose vehicle registered in Kigali by a network of African based angel and venture capital investors under the umbrella of Dakar Network of Angel Investors.

The growing stature of KIFC is being recognised. In September 2021 it made a debut on the Global Financial Centres Index (GFCI). Besides being among the top five IFCs in sub-Saharan Africa, it was identified as one of the most promising financial centres in the coming decade. It was also ranked among the highest across a number of metrics including security, resilience, corruption and cleanliness. Being on the index sets the benchmark for KIFC and exerts more pressure to modernise to a world-class financial hub.

Taking up the challenge
This is a challenge KIFC is willing to embrace. To start with, Rwanda has tightened its anti-money laundering and counter financing of terrorism laws. This is critical considering that the global financial sector is becoming increasingly integrated, something that is demanding high degrees of integrity, transparency and confidence. It also helps build high levels of trust among investors, particularly international investors who are under strict obligations not to invest in jurisdictions that facilitate illicit financial transactions.

Rwanda is regarded as a global conference hub, second only to Cape Town in Africa for business tourism

Rwanda has also enacted other laws that are crucial not only in fostering increased cross-border investments but also giving investors diverse options to structure and set up investments. Besides, new tax laws provide incentives in terms of freedom to repatriate profit and capital across the region. Other recently passed laws have opened the country to new financial actors and entities such as trusts and corporate service providers, funds and fund managers, foundations and trusts, among others. In total, 18 laws have been introduced over the last two years to foster and boost international financial services and activity.

KIFC understands that to be competitive, sustainability is core. On this, the centre is developing avenues for environmental, social and governance (ESG)-driven investments. Rwanda is already seeing an accelerated shift towards green and sustainable financing having recently joined the Financial Centres for Sustainability. The country is also positioning itself to attract gender-focused investments.

In its Vision 2050 blueprint, gender equality and empowerment of women is at the heart of national transformation. These efforts are being recognised with a recent WEF report ranking Rwanda ninth in the world for closing the gender gap, the highest in Africa.

Closing the gender gap, coupled with promoting the up-skilling of finance professionals through partnerships with the private sector and educational institutions, means investors will not have to rely on wide pools of expatriates. This is important even for Rwanda in terms of creating employment opportunities for the new crop of young people bustling with innovative ideas. In fact, the new generation is driving Rwanda’s emergence as a fintech hub.

By providing tax incentives for forward-thinking fintechs and enacting critical laws to establish a pro-business regulatory framework for the growing fintech ecosystem, Rwanda has seen an increasing number of unicorns choose Kigali as a base to consolidate their regional operations. Among them is cross-border payments firm Chippercash. A unicorn valued at $2.2bn, the firm plans to commence operations in Rwanda after being granted an e-money issuer licence to offer money transfer services.

Driving sustainable growth
KIFC is committed to leveraging on this exciting fintech ecosystem to churn out innovative financial products and services that are essential to driving the growth of the centre. Apart from attracting investments, it is also important in promoting entrepreneurship. More critically, there is a strong push by the government for Rwanda to shift to a cashless economy and to achieve nationwide financial inclusion. For this reason, KIFC is building an innovation-friendly regulatory environment and attracting investment funds and venture capital to drive the fast-growing fintech sector.

Earlier this year, Chancen International, a KIFC partner, secured the first round of funding for its innovative Future of Work Fund. The $21m investment will enable it to expand access to tertiary education by providing student financing for 10,000 young people in Rwanda and South Africa.

With KIFC’s outstanding status as a serious hub, RFL is looking into the future. In October, it launched the pivotal Sustainable Finance Roadmap. The roadmap provides the path for mobilising increased private capital specifically on green and sustainable investments. This is crucial not only in ensuring KIFC continues to be dynamic, but also in strengthening its position on the continent as it heads confidently into the future.