Author: itsupport

The human algorithm of fintech innovation

Posted on by itsupport

The financial industry is evolving at unprecedented speed. Traditional banking and investment models are being challenged by nimble fintech start-ups, and with them comes a new breed of entrepreneur: visionary, ambitious, and willing to take risks in markets historically dominated by established institutions. In the UK alone, the fintech ecosystem comprises over 3,300 fintech firms as of late 2024. Moreover, UK fintech investment reached $7.2bn in the first half of 2025, underscoring both growth and the intensity of competition. But what drives these individuals? What personality qualities distinguish the fintech founder who succeeds from the one whose venture falters?

At Hogan Assessments, we have spent decades studying how personality influences career trajectories and leadership effectiveness. Our research shows that entrepreneurs in the financial sector often display a combination of high ambition, strong cognitive ability, and a willingness to challenge the status quo. These traits can be powerful catalysts for innovation, but they also carry potential pitfalls.

The double-edged sword of ambition
Ambition fuels growth, attracts investment, and motivates teams. In fintech, where speed-to-market can define success or failure, ambitious leaders can move quickly, inspire followers, and secure funding. However, unchecked ambition can lead to overconfidence, excessive risk-taking, and ethical lapses. Ambition may get you the job, I often tell founders, but self-awareness helps you keep it.

In recent years, high-profile failures have underscored how ambition, when divorced from feedback and humility, can harm organisations. The lesson for investors and boards is clear: ambition is essential, but it must be balanced with integrity, self-awareness and humility. Entrepreneurs who recognise their limitations, solicit feedback, and maintain perspective tend to create ventures that are resilient, sustainable, and trusted by clients and partners alike.

Cognitive agility and adaptability
Fintech founders face an environment of constant change; shifting regulations, emerging technologies and rapidly evolving consumer expectations. Cognitive agility, or the ability to process complex information and pivot strategies effectively, is therefore critical. Entrepreneurs who combine creativity with disciplined decision-making are better equipped to navigate uncertainty without jeopardising their organisations. In the UK context specifically, with the regulatory framework evolving and market pressures mounting, this quality becomes even more important. The best founders I have worked with don’t merely tolerate change, they anticipate it, restructure accordingly, and embed learning loops within their teams. Adaptability isn’t a soft skill: it is a strategic differentiator.

Ambition is essential, but it must be balanced with integrity, self-awareness and humility

Start-ups, by nature, involve risk. Successful financial entrepreneurs tend to tolerate uncertainty and remain composed under pressure. However, extreme risk-seeking behaviour, especially when coupled with low conscientiousness or high narcissism, can threaten both the company and its stakeholders. For boards and investors, evaluating risk tolerance and decision-making patterns is as important as assessing technical skills or market insights. In the UK fintech ecosystem, where investment valuations and exit timing are under pressure, founders’ risk-temperament often determines whether ventures grow sustainably or collapse under volatility. In our work at Hogan, we see that founders who manage risk by building governance into their culture, maintaining transparency and surrounding themselves with trusted advisors, are far likelier to succeed.

Building sustainable leadership
Ultimately, the most effective fintech entrepreneurs are not those who are fearless or flawless, but those who balance ambition with ethics, decisiveness with reflection, and innovation with governance. Boards, investors, and partners benefit from understanding these traits: they inform leadership development, succession planning and risk management. In a sector defined by rapid disruption, personality matters. Recognising the strengths and potential derailers of financial entrepreneurs can help stakeholders support ventures that not only grow quickly but endure. As fintech continues to reshape global finance, a nuanced understanding of the people behind the innovation will be as important as the technologies they create.

In the UK specifically, this insight is essential. The nation remains Europe’s leading fintech hub, even as capital markets and investor sentiment recalibrate. With over 11 of the UK’s most profitable fintechs posting combined $3.3bn in profits before tax in 2024 and employing more than 26,000 people, the foundation is strong. Yet leadership risk abounds. In such a vibrant environment, boards and investors must look beyond business models and ask: Who is behind this venture? How do they respond when the spotlight dims? The technology may drive disruption, but personality determines whether that disruption is sustainable.

If there is one truth to take away, it is this: the ideal fintech founder is not the one who never falters, it is the one who recognises when to pause, learns from their mistakes, seeks counsel, and leads with integrity. In an industry defined by change, such human qualities are not the soft option; they are the hard requirement of longevity.

The German economic miracle, then and now

Posted on by itsupport

Postwar Germany has appeared to the world as a model democracy and economy for fully seven decades. From the first postwar chancellor, Konrad Adenauer, through Willy Brandt, Helmut Schmidt, Helmut Kohl, and the 16 years of Angela Merkel’s leadership, Germany’s postwar political and economic stability appeared rock-solid, so much so that the Federal Republic could readily absorb the decrepit communist economy of East Germany within a year of the fall of the Berlin Wall.

No doubt, there were bumps along the way in the decades following the Second World War, from the Red Army Faction/Baader-Meinhof terrorism of the 1970s to the inflation and stagflation that followed the oil price shocks of that same decade. For the most part, however, Germany’s economy grew steadily and inclusively, led by world-beating manufacturing exports. But now Germany is firmly in the grip of a malaise. The country’s export-led economic model has been unable to cope with its loss of competitiveness to China, and resentment of immigration has reached its highest level in the postwar years following Merkel’s decision in 2015 to open the country’s borders to over a million migrants. Germany, like much of the West, is experiencing a rising far-right populist tide, with Alternative für Deutschland questioning the fundamental assumptions and norms of political behaviour that have governed Germany since the Federal Republic’s founding in 1949.

The miracle workers
To understand how we got here, it helps to go back to the beginning. Conventional accounts of the Wirtschaftswunder – West Germany’s miraculous economic ascent after the Second World War – locate its origins in the Ludwig Erhard-engineered currency reform and the George Marshall-inspired European Recovery Programme, both introduced in 1948. The Marshall Plan, as the ERP was informally known, was signed into law on April 3, 1948, by US President Harry Truman. Disbursements began immediately, with initial aid shipments reaching Germany in early July.

In exchange for receiving Marshall Plan aid, the German authorities were required to balance the budget, contain inflation, dismantle rationing, remove wage and price controls, encourage private enterprise and liberalise trade. In effect, they were asked to implement what came to be known a half-century later as the ‘Washington Consensus.’

A key element was Erhard’s currency reform, inaugurated midway between Truman’s signing of the ERP and the arrival of the first aid shipments. On June 20, 1948, the Deutsche Mark replaced the Reichsmark as legal tender in the Bizone, the western zone of occupation administered jointly by US and British forces. The monetary overhang that fuelled inflation on the black market and created shortages in the controlled economy was removed by converting Reichsmarks into Deutsche Marks at a rate of roughly 10 to one.

Erhard, as the highest German economic official working under the occupation authorities, administered the introduction of the Deutsche Mark. One day later, acting on his own authority, he unilaterally abolished most price controls and rationing.

Eliminating the monetary overhang, together with fiscal retrenchment and the removal of price controls, led to the miraculous reappearance of goods on previously barren store shelves. Farmers now had real money with which to buy equipment and fertiliser, much of which was provided by the US through the Marshall Plan. The prospect of real revenues encouraged them to bring produce to market, alleviating food shortages. Exchange-rate stabilisation enabled firms to export while also selling at home, leading them to hire, invest and ramp up production.

The rest is history, or so say triumphal accounts of the Wirtschaftswunder. Over the subsequent quarter-century, West Germany grew by an unprecedented six percent per year. By 1973 the Federal Republic of Germany had become the world’s third-largest economy.

Two new books by Carl-Ludwig Holtfrerich, a former professor of economics at the Free University of Berlin, and Tobias Straumann, a professor of economics at the University of Zurich, push back against this conventional account.

Holtfrerich insists that Erhard actually played no role in designing the currency reform, despite having claimed credit for it for the remainder of his political career.

Straumann, for his part, argues that German economic recovery was far from secure following the reforms of 1948. West Germany’s economic miracle would not have endured without the 1953 London Debt Agreement, which eliminated all possibility that the country would be saddled with massive reparation obligations to its wartime enemies, as happened after the First World War.

The London Debt Agreement was the culmination of several years of negotiations between a German delegation headed by Hermann Josef Abs, a senior Deutsche Bank official, and 20 creditor countries, of which the US, the UK and France carried the most weight. In explaining the outcome and why it was so different from debt and reparations negotiations after the First World War, Straumann posits a straightforward ‘lessons of history’ hypothesis. Negotiators on all sides drew a straight line from the economically crushing and politically humiliating reparations burden imposed on Germany in 1921 to the downfall of the Weimar Republic and the rise of Adolf Hitler and the Nazi Party. After the Second World War, they understandably sought, at all costs, to avoid a similar sequence of events.

Memories of reparations
Historical lessons were drawn, to be sure, but the full story is more complex, as Straumann eventually acknowledges. The influence of the Cold War was critically important in the 1950s and created an imperative for economic recovery that was absent among the victors in the aftermath of the First World War. With the Soviet Union threatening Western Europe, it was urgent to get the West German economy, Europe’s most important source of capital goods, running on all cylinders. This meant not overburdening Germany with reparations, but it also presupposed normalising the Federal Republic’s financial relations with the rest of the world, so that German firms could borrow abroad and export without fear that their goods would be garnished.

Ludwig Erhard was chameleon-like, able to successfully bend his policy posture to the prevailing winds

Under the London Debt Agreement, the new West German government committed to service and repay Reich and Weimar-era foreign borrowings and post-Second World War loans from Western governments, but not Nazi-era war debts and occupation costs. All reparations obligations were put off until that far-distant day when the two Germanys might be reunified. Another important difference from the aftermath of the First World War, not unrelated to the first, was European integration.

Proceeding in parallel with debt negotiations, the French government, with leadership from Foreign Minister Robert Schuman, launched a scheme for joint control of French and German heavy industry; what became the European Coal and Steel Community. The Soviet threat highlighted the need to return the operation of Western Europe’s heavy industry, and specifically German heavy industry, to full capacity. But this required assurance that Germany’s industrial might would not again be used to threaten France and other neighbours. The Coal and Steel Community served this purpose. It is hard to imagine that the Community could have been successfully launched absent progress on the debt front. In an aside, Straumann describes how the French plan was sprung on UK Foreign Minister Ernest Bevin and other British officials, whose startled reaction was strongly negative, presaging an enduring ambivalence about what became the European Community and then the European Union.

Finally, the London Debt Agreement enabled the new German government to begin normalising relations with Israel, despite the horrors of the Holocaust. Without it, the Federal Republic would not have had the resources and political will to send DM3bn worth of German goods to the Jewish State, or to pay for Israel’s desperately needed imports from Britain’s oil companies.

Deutsche Mark’s real father
Whereas Straumann’s book is a political narrative, Holtfrerich’s is a biography, the subject of which, Edward Tenenbaum, was the real author of the currency reform. Holtfrerich’s account starts with the immigration of Tenenbaum’s Jewish parents from Polish Galicia, his childhood in New York, and his education at the International School of Geneva and Yale. An interesting parallel, not drawn by the author, is with Harry Dexter White, architect of the Bretton Woods system, another component of the monetary system that supported the Wirtschaftswunder.

Tenenbaum served as an intelligence officer in the Twelfth Army Group during the Second World War, and in the Office of Military Government, United States (OMGUS), which administered the American occupation zone. After being discharged in 1946, he continued to work as a civilian adviser to OMGUS, and it was in this capacity that he designed the currency reform. In Army Intelligence and then at OMGUS, Tenenbaum worked closely with a more senior economic expert, Charles Kindleberger, subsequently an accomplished professor of international economics and economic history at MIT. Kindleberger’s appearance in the book is more than incidental.

Holtfrerich describes how, during an academic sabbatical in Cambridge, Massachusetts, in 1975–76 – that is, fully a half-century ago – he learned from Kindleberger of Tenenbaum’s role in the currency reform, thereby planting the seeds for the present book. He reveals how Kindleberger withheld, presumably out of kindness, the fact that he had for a time been in charge of selecting targets for America’s wartime strategic bombing campaign, as a result of which Holtfrerich’s father lost his life in 1944.

As for why Erhard rather than Tenenbaum received – and continues to receive – popular credit for the currency reform, Holtfrerich offers three explanations. First, Tenenbaum was remarkably self-effacing, for reasons that elude even his biographer. When confronted with the fact that Erhard was stealing his thunder, Tenenbaum is said to have casually replied, “Who cares who gets the credit?”

Second, Erhard, in contrast to Tenenbaum, was unrelenting in his self-promotion. Such is the difference between economists and politicians, it is tempting (if self-serving) to say. Erhard was also chameleon-like, able to successfully bend his policy posture to the prevailing winds. Before and during the war, he had been an advocate of strong state direction of the economy. With the advent of the Marshall Plan, he became a champion of sound money, private enterprise, and competition.

Third, postwar West Germany was desperately in need of a positive self-image, given the Third Reich’s horrific actions and the guilt bequeathed by acknowledgment of that history. It was desperately in need of leaders, even heroes. The idea of a home-grown currency reform led by a German fit the bill. Today’s Germany reflects the legacy of the postwar Wirtschaftswunder: rich, democratic and firmly anchored in Europe. But nothing is guaranteed forever. To preserve the gains made over the postwar decades, Germany once again needs an economic overhaul and political leaders who are equal to the task.

The birth of modern investing

Posted on by itsupport

What does it take for an idea to change an industry forever? In finance, a handful of academics daring to think differently and make some money by putting their ideas into practice, a university willing to nurture unorthodox ideas, a new technology – and a good dose of luck. That argument lies at the heart of Tune Out the Noise, Errol Morris’s latest documentary, which premiered in New York last March. The film revisits the birth of modern investing at the University of Chicago in the 1960s and early 1970s, when a group of researchers didn’t just develop another theory – they changed the very fabric of financial markets. Their ideas reshaped how ordinary Americans thought about their future, while revolutionising the global investment industry.

Efficient markets
It is difficult to imagine in an era when algorithms make split-second trading decisions, but more than half a century ago the markets ran on intuition. Investing was more of an art than a science, dominated by professionals trying to outsmart the market by spotting opportunities others had missed. As Eugene Fama – one of several Nobel Prize winners featured in the documentary – recalls in the film, the conventional wisdom at the time was to trust a person with special stock-picking skills who could “beat the market.” That mindset began to crumble with the rise of the efficient-market hypothesis (EMH), a theory Fama helped pioneer. The idea upended conventional investing. What if asset prices already reflect all available information, and everything else is just noise? If markets are efficient, then consistently beating them is impossible – prices move only when new information emerges. The logical conclusion was that success depends not on instinct, but on diversification and disciplined risk management.

The film presents a vision of America and its ability to question itself that is fading away

The timing was perfect. The 1960s brought a computational revolution that gave investors access to stock prices and company data. Markets could finally be analysed with scientific precision. Out went hunches; in came data-driven strategies that laid the groundwork for passive investing. As Fama says in the film, “Markets work; prices are right.” In other words, you can’t beat the averages, but you can outperform the professionals by embracing the market itself. If that was the case half a century ago, it is even more true today, says Aaron Brask, a Wall Street veteran who teaches finance at the University of Florida. “Markets were not that efficient when Eugene Fama wrote his dissertation on the topic in the 1960s. If they were, it would imply that Warren Buffett, Charlie Munger, Walter Schloss, Philip Fisher and Seth Klarman were all lucky. Fast forward 60 years, and we now have an incredible amount of money, brains and computing power devoted to sniffing out investment opportunities. This makes it significantly more challenging to beat the market. There is less dumb money, and markets are more efficient.”

Fama’s ideas sparked a financial revolution, making passive investment the go-to option for millions of investors. Thus the index fund was born, powered by data and algorithms rather than intuition and luck. Wells Fargo launched the first index fund in 1971, while John Bogle, the legendary financier whose name would become synonymous with low-cost investing, created the first index mutual fund available to individual investors in 1976. Although the case against active investing remains strong for most investors, there are some, albeit fewer, active managers who can still beat the market, says Brask: “Buffett and other active value investors come up with an idea of how much a stock should be worth based on its fundamentals. This figure is often referred to as a stock’s intrinsic value. Then they compare that value to its market price. In the end, their value investing equates to buying stocks for significantly less than they think they are worth. In some cases, higher quality or growing fundamentals might warrant higher valuations.”

The power of diversification
One of the theory’s most enduring insights was the importance of diversification. Where old-school investors sought a single big win, Chicago’s researchers promoted the opposite: spread your bets. They found that mixing the stocks of established firms with smaller, high-potential firms, could reduce volatility without sacrificing returns.

Errol Morris, director
of Tune Out the Noise

This gave rise to modern portfolio theory, now a bedrock of contemporary finance. Among its early advocates were David Booth and Rex Sinquefield who went on to found Dimensional Fund Advisors, the Austin-based investment firm that turned the EMH into a money-making machine.

Booth features prominently in the documentary, which at times borders on a promotional piece for Dimensional, one of its backers. Yet Errol Morris, an Oscar-winning filmmaker, handles the material with his trademark subtlety. His conversational style – punctuated by deceptively simple questions like “Why did you get sick of French?, Why would you do that?, You failed in air-conditioning?” – allows the story to unfold naturally. The result is a thoughtful exploration of how finance evolved from intuition to evidence. “The film emphasised the human element. The academics interviewed were humble and relatable. It was good to see some of the giants of finance talk about their work in their own words,” says Matthew Garrott, Director of Investment Research at Fairway Wealth Management, a US wealth management firm.

Shaped by randomness
One of the film’s most striking messages is the importance of chance. Financial markets are chaotic systems shaped by randomness rather than rational decisions. Sheer luck also brought together the brilliant minds who pioneered passive investment at the University of Chicago, although its reputation for rigorous economics likely helped. The creation of the Centre for Research in Security Prices by the economist James Lorie in 1960 was a turning point that brought together two revolutions, a financial and a technological one, offering investors a trove of long-term stock and bond data.

Luck shaped the individuals too. Eugene Fama almost missed his chance to go to the University of Chicago, receiving a last-minute scholarship that changed his life. Myron Scholes, another Chicago veteran, Nobel laureate and early champion of computerised trading, stumbled into the art of deciphering financial data by accident: in 1963 he took a programming job despite having little experience. When the six other programmers failed to show up, Scholes found himself assisting academics with financial research – a twist of fate that set his career in motion.

Then there was David Booth and Rex Sinquefield, the pair who turned academic theory into practice by founding Dimensional Fund Advisors. In 1969, Booth narrowly avoided the Vietnam draft when a sympathetic officer deferred his conscription so he could pursue a PhD at the University of Chicago. Sinquefield did serve in the army, but his poor eyesight spared him from partaking in possibly lethal combat in Vietnam. Today the firm manages nearly $800bn in assets, and the University of Chicago’s prestigious business school is named after Booth.

Still not perfect
The documentary touches only lightly on the unintended consequences of this intellectual revolution. Critics argue that the very theories that democratised investing also sowed the seeds of excess. Researchers who pioneered the EMH have been accused of creating a monster: an elegant idea that encouraged blind faith in the infallibility of markets, pushing investors and regulators to underestimate the dangers of asset bubbles and the need for oversight. Some critics claim that the efficient market hypothesis has been so successful that too much passive investing has undermined market efficiency, leaving a shrinking minority of investors to feed new information into prices.

For its proponents though, the theory still holds water. “Many smart traders exist, and behavioural biases are not more or less than in the past. Hence, the impact of irrational traders on efficiency is unchanged.

It can also be shown that bubbles are consistent with an efficient market,” says Robert Jarrow, advisor at the data and AI provider SAS and Professor of Investment Management at Cornell University. “There is a continuum of less efficient to more efficient. Markets with more pricing events like US large cap stocks are more efficient. The market for selling your house is much less efficient. The US stock market is not perfectly efficient, but it is efficient enough that active managers are at a significant disadvantage,” says Garrott from Fairway Wealth Management.

Even the most rational systems are built on human assumptions

Even the equations used to justify investment strategies have faced fierce criticism. Take the Black-Scholes model, Scholes’s great contribution to financial economics, with its recipe for sophisticated risk management and portfolio diversification. A mathematical triumph in theory, it also became the justification for an explosion in speculative trading in derivatives. Designed to hedge risk, derivatives have turned into highly leveraged bets stacked upon other bets. The financial alchemy enriched traders but also destabilised markets, culminating in the credit crunch and the near collapse of global banking in 2008. As one commentator would put it at the time, the model became “an ingredient in a rich stew of financial irresponsibility, political ineptitude, perverse incentives, and lax regulation.”

A different America
Ultimately, Tune Out the Noise is not just about finance. The film presents a vision of America and its ability to question itself that is fading away. Passive investing, after all, means accepting average returns – a notion that, as Sinquefield wryly notes in the film, was not regarded at the time as “the American way,” but eventually came to be. David Booth’s own story underscores that tension. A former shoe salesman, he recalls in the film: “When I went home at night, I wanted to feel good about myself.” His words evoke an older America, one that prized diligence, honesty and modest success, now eclipsed by the speculative frenzy of crypto trading and the pursuit of quick profits.

At its core, the film is also about information: the flood of data, the promise of efficiency, and the human struggle to separate signal from noise. The EMH rests on the belief that data doesn’t lie. Yet in an age of algorithmic trading, that certainty feels less solid. Markets move at machine speed, and active management faces extinction as AI systems take over. Tune Out the Noise leaves viewers with a quiet unease – that even the most rational systems are built on human assumptions, and that the next investment revolution may be about rediscovering human judgment.

The resale and circular economy boom

Posted on by itsupport

Second-hand shopping has come a long way. What was once the preserve of charity shops and car boot sales has evolved into one of the fastest-growing sectors in global retail. Today’s resale market is a vibrant, tech-driven space powered by savvy shoppers who care about both value and sustainability. It is the circular economy in action, where products are designed, used and reused to give them a longer life.

From fashion to electronics, buying pre-owned has become a mainstream habit that is changing the way people, and brands, think about ownership and waste. For marketplaces and investors, this shift opens up huge opportunities, but it also brings new challenges as they navigate a fast-moving and increasingly sophisticated resale landscape.

A recent report, Second-Hand, First Choice: The Psychology of Recommerce by Retail Economics and MPB, values the global recommerce market (excluding cars) at around $220bn – and it is expected to grow by almost 80 percent by 2028 across the US, UK, France and Germany.

Rising living costs have made value a key concern for shoppers, but this boom isn’t just about saving money. It reflects a deeper cultural and generational shift. Younger consumers, especially Millennials and Gen Z, are turning away from fast fashion and throwaway tech in favour of items that reflect personality and ethics. Buying second-hand has become a lifestyle statement, a way to shop with purpose and express individuality.

Resale also delivers real environmental impact. Every pre-owned purchase helps extend the life of an existing product, reducing the need for new manufacturing and cutting carbon emissions. For consumers who want to live more consciously, resale offers a simple, rewarding way to support a more responsible and less wasteful economy.

The professionalisation of resale
Today’s marketplaces are polished and tech-enabled, combining convenience with trust. Depop, for example, has redefined fashion resale by blending social media-style discovery with commerce, while Vestiaire Collective has built a reputation for authenticated luxury fashion. Vinted, ThredUp and eBay have all expanded certified pre-owned programmes, further embedding resale into the mainstream retail ecosystem.

At the heart of this transformation is technology, but it is the way it is used that really makes the difference. AI now helps shoppers find exactly what they are looking for, suggesting items, setting fair prices and curating personalised experiences. Smarter logistics make buying and selling seamless, with integrated systems that handle shipping, returns and reverse supply chains efficiently. Many platforms also use expert authentication teams or even blockchain-based certificates to verify the provenance of high-value items. Together, these innovations have removed much of the friction and doubt that once surrounded second-hand shopping, giving the resale market the same polish and professionalism as traditional retail.

For investors, the rise of the resale and circular economy is a clear market opportunity with long-term value potential. The appeal lies in the combination of growth and strong ESG credentials. Venture capital and private equity firms are increasingly backing businesses that extend product lifespans through refurbishment and repair models that generate healthy returns while supporting sustainability goals. The investment logic is straightforward: as resources become scarcer and regulation around waste and emissions tightens, circular business models are positioned to outperform. The sector’s resilience during economic downturns, driven by consumer demand for value, adds another layer of stability, making resale and refurbishment a rare mix of defensive and growth investment.

Funds are now focusing on scalable, technology-led platforms that make circularity efficient across industries such as fashion, electronics and furniture. For investors, supporting these companies is a way to futureproof portfolios against changing consumer expectations and regulatory pressure. The circular economy is proving that profitability and responsibility can go hand in hand, and that is an equation the finance world is increasingly keen to back.

Retailers rethink ownership
For established retailers, the resale revolution is proving both a challenge and an opportunity. Traditional linear business models – sell, discard, repeat – are increasingly at odds with consumer expectations and ESG commitments. In response, many brands are integrating resale and repair directly into their operations.

Patagonia’s Worn Wear programme, IKEA’s buy-back initiatives and Gucci and Burberry’s certified pre-owned collections all signal a shift towards more circular retail practices. These initiatives extend product life and tap into new revenue streams. By facilitating resale within their own ecosystems, brands can control quality and capture residual value that once leaked into third-party marketplaces. This approach also allows retailers to demonstrate tangible progress against sustainability goals, something investors and consumers increasingly demand.

For all its growth, the resale sector’s success ultimately hinges on trust. The risk of counterfeit goods and misrepresentation remains a persistent challenge, particularly in luxury and electronics categories. The platforms that will endure are those investing heavily in authentication and verification.

AI algorithms capable of spotting anomalies in photos, blockchain-based provenance records, and specialist teams that inspect and certify goods before listing are fast becoming industry standards. These measures not only protect consumers but also preserve the reputations of brands entering the pre-owned space. Insurance integration complements this framework by offering financial protection against misrepresentation or faults.

Consumers want confidence that their purchases, whether refurbished electronics, luxury handbags, or vintage furniture, are protected. Insurers are responding with products tailored to these needs, covering risks such as counterfeiting, misrepresentation, or faults.

Companies like Bolttech, Cover Genius and Embri are working with marketplaces and retailers to offer embedded insurance, making coverage easy to access at the point of sale. Platforms like Oyster integrate protection plans directly into online checkouts, ensuring that buyers receive reassurance without extra hassle. By providing this safety net, insurers help legitimise the resale sector, encouraging customers to buy higher-value items with confidence. For marketplaces, offering embedded insurance has become a key way to build trust and stand out, providing peace of mind for their users.

In the UK, Back Market covers refurbished mobile devices against damage. Its General Manager, Katy Medlock, explains: “While the refurbished tech movement is growing in the UK, many people still consider pre-loved gadgets a risk. Our insurance is part of an ongoing commitment and we hope this will give more customers peace of mind that their refurbished device is covered and the confidence to swap something ‘new’ for something that’s ‘like new’.”

The sustainability equation
The environmental benefits of resale are undeniable. Extending the life of products reduces the need for new manufacturing, conserving raw materials and cutting carbon emissions. The impact is particularly profound in industries with heavy resource footprints: fashion, which accounts for around 10 percent of global emissions, and electronics, where production involves significant energy use and mineral extraction. Buying a refurbished smartphone or laptop, for instance, avoids the carbon cost of producing a new one, an advantage that resonates with climate-conscious consumers.

For all its growth, the resale sector’s success ultimately hinges on trust

Yet sustainability in resale is not automatic. The rise of ‘fast resale,’ quick turnover of second-hand goods driven by trends and social media, can encourage overconsumption rather than replace new purchases. In such cases, environmental benefits may be diluted. True sustainability depends on quality refurbishment and systems that prioritise reuse over replacement. The most responsible players are taking this seriously, investing in transparent supply chains and low-carbon logistics. Their challenge now is to ensure that the circular economy remains genuinely circular, rather than just a new form of fast consumption with greener branding.

As resale becomes a major global industry, regulatory scrutiny is inevitable. Variations in warranty rules and return policies across markets can create confusion and limit cross-border trade. A move towards greater standardisation would benefit both consumers and platforms, simplifying compliance and fostering trust. Another challenge lies in logistics. Managing returns and restocking adds cost and complexity. Efficient reverse supply chains, capable of collecting and redistributing products at scale, are critical to maintaining profitability. The winners in this space will be those who master operational efficiency as well as consumer engagement.

From trend to norm
The trajectory of the resale market points to continued acceleration. Consumer awareness and technological sophistication are converging to make second-hand desirable. For marketplaces, the opportunity lies in scaling responsibly: combining convenience with credibility and profit with purpose. For retailers, the challenge is to embed circularity as a structural component of their business models.

Those who succeed will redefine the meaning of ownership, turning products from disposable commodities into long-term assets with multiple lives. The future of consumption will not be defined by constant replacement but by continuous renewal. The rise of the resale market shows that extending the life of products is economically advantageous.

With $197bn in clothing resale sales last year and projections of $350bn by 2028, along with multi-billion-dollar valuations for refurbished tech platforms, the numbers speak for themselves. Beyond the figures lies something more profound: a reimagining of the consumer economy that prizes longevity over disposability and purpose alongside profit. Companies that recognise and adapt to this transformation will define the next wave of retail.

Copper and cocoa: the new geography of power

Posted on by itsupport

As climate change and the green transition gather momentum in 2025, unlikely commodities such as copper and cocoa are now reshaping global economic stability the way oil once did. Copper prices have surged more than 20 percent so far this year, driven by supply crunches, green infrastructure and data centre demand. Similarly, cocoa has seen extreme price volatility, due to African climate shocks, hitting record highs in early 2025, before plummeting almost 50 percent.
Together, they highlight a broader geopolitical shift away from fossil fuels towards essential commodities and natural resources. With copper driving the energy transition and cocoa shaping food supply chains and ethical trade, they have become the dual bellwethers of a changing world order.

They also represent how resource power and strategic assets are increasingly concentrated in the Global South, in West Africa’s cocoa heartlands and Latin America’s copper belt. In many ways, copper and cocoa are now the ‘new oil’ – strategic, scarce and representative of both innovation and global inequality.

Underpinning the climate transition
Copper is essential to electrification, being used in electric vehicles, solar panels, wind turbines, hydropower plants, grid upgrades and more. Demand for copper from data centres, where it is used in cooling systems, internal connectivity and power systems, has increased exponentially, supported by the surge in artificial intelligence.

According to the International Energy Agency (IEA), copper demand could hit 31.3 million tonnes by 2030, a considerable increase from 2021’s approximately 24.9 million tonnes. “China’s massive grid expansion and urban development have been the single largest recent driver of copper demand. Continued Chinese industrial stimulus and infrastructure spending are therefore key factors underpinning copper prices,” António Alvarenga, Professor of Strategy and Entrepreneurship at Nova School of Business and Economics, explained. He added: “However, copper mine output has grown only about one to two percent annually, despite rising demand, and new projects take around 15–17 years to develop.”

Copper production is highly concentrated in Zambia and Democratic Republic of Congo, along with Latin America’s copper belt, including Chile and Peru. “This concentration of resources is quietly reshaping global alliances, as countries compete to secure long-term access, much like the oil geopolitics of the 20th century,” Sunil Kansal, head of Consulting and Valuation Services at Shasat Consulting, said.

Copper and cocoa mark a shift to the commodities of the future, scarce and economically resilient

As such, any mine accidents in these key countries can have a profound impact on copper production and drive prices up. Chile’s El Teniente mine had a deadly accident back in July this year, which led to a major production halt and drop in output. This was also seen at the Komoa-Kakula copper mine in DRC in April due to a flooding event and roof collapse. Older mines and chronic underinvestment have boosted copper prices and caused supply chain bottlenecks too lately.

“Many of the world’s major copper mines are aging, and the average copper content (ore grade) is declining, meaning that more rock must be processed to extract the same amount of copper,” Franck Bekaert, senior emerging markets analyst at Gimme Credit, highlighted. “Additionally, permit delays and ecological constraints are hindering the launch of new projects, which is driving up costs. To meet the growing demand for copper, significant investments will be required,” Bekaert added.

Political instability in major producing countries, such as worker strikes and environmental protests, as well as governance issues such as rising corruption have also contributed to supply woes. At present, copper inventories are at record lows, according to Benchmark Intelligence, even as green infrastructure demand from the US and EU soars.

As the world races to electrify, copper’s scarcity is fast becoming a structural risk to global growth, much like oil shocks once were.

How climate shocks impact cocoa
“When the Ivory Coast and Ghana sneeze, global chocolate catches a cold. Cocoa just had its ‘oil moment’: a near 500,000-ton global deficit in 2023–24 pushed inventories to multi-decade lows and sent futures above $10,000/ton at the peak in January 2025,” Francisco Martin-Rayo, co-founder and CEO at Helios AI, said. One of the biggest reasons for this was the El Niño weather pattern in the 2023–24 season. This caused volatile weather patterns, such as unusually heavy rain, followed by hotter and drier weather across key cocoa-producing countries such as Ghana and the Ivory Coast. Cocoa is very sensitive to weather changes as it grows only in limited areas of warm, humid equatorial conditions, with 70 percent of the crop coming from West Africa (see Fig 1). These temperature extremes caused decreased cocoa yields and a rise in crop diseases such as swollen shoot virus and brown rot. The diseases also meant that the remaining yield was of lower quality, further escalating prices. Aging West African cocoa trees are another factor contributing to higher prices. These can severely dampen yield capacity because of decreased soil fertility. Older trees can also be more vulnerable to diseases and pests and become weaker with time.

Farmers then need to invest large amounts in replanting and farm rehabilitation. However, consistently low farmer incomes make such investments difficult to maintain, creating a vicious cycle of aging trees, low productivity and low incomes.

“Cocoa demand has grown steadily. Western holiday consumption and an expanding middle class in Asia/Africa support baseline demand. However, extremely high prices can dampen consumption: in 2025 European and Asian cocoa grindings fell as manufacturers faced higher costs,” Alvarenga said. The factors affecting cocoa go beyond just determining chocolate and related product prices – they represent a systemic crisis in agricultural supply chains today, defined by climate volatility, worsening soil degradation and widespread farmer poverty. With much of the crop still tied to smallholder farmers, cocoa is a social commodity, intimately linked to human issues such as food insecurity, forced migration and income loss and inequality, sitting at the heart of debates about ethical sourcing and fair trade. Even as prices pull back slightly now, the structural issues driving cocoa price volatility remain.

Strategic assets
Much like oil in past decades, both copper and cocoa supply has been highly concentrated in a few regions. This has significantly shaped new geopolitical alignments and trade tensions. One of the biggest ways this has materialised is through consumers now actively seeking to diversify suppliers, to reduce supply chain and security risks. Copper, as a strategic metal and asset, is now crucial to countries’ decarbonisation plans. As AI and other cutting-edge technologies gather pace and require more electricity, copper’s status as the ‘new oil’ is likely to keep growing. As such, major copper consumers including the US and EU are now trying to find more suppliers to spread supply risks.

“The US launched a section 232 national security investigation into copper and China has pivoted away from Chile by sourcing more from DRC, Russia and Zambia. These moves have created new alignments – such as China deepening ties with African producers, Western nations seeking alternative mines or stockpiles,” Alvarenga highlighted. This geopolitical strategising and positioning mimics past resource wars over oil, creating new alliances between industrial powers and resource-rich countries. “As with oil, these relationships can lead to trade frictions, resource nationalism, and competition for influence. For investors, this concentration magnifies geopolitical risk but also signals long-term strategic value,” Edward Nikulin, weather model expert at Mind Money, said.

For cocoa, Ghana and Ivory Coast’s governments wield considerable supply influence through export regulations and price-setting, acting as a kind of producer bloc, similar to OPEC. “We are seeing the emergence of coordinated action by Ghana and the Ivory Coast to demand fairer terms, echoing the resource diplomacy once seen in oil markets,” Kansal said. This is through the ‘Living Income Differential,’ which raises export prices to ensure that more cocoa income reaches farmers directly to improve living standards and reduce child labour, poverty and deforestation.

“The joint $400/ton ‘Living Income Differential’ set a de-facto floor under farmgate economics, while EU deforestation rules (EUDR) are forcing farm-level traceability (GPS coordinates, plot IDs) and reshaping trade flows toward compliant suppliers,” Martin-Rayo explained. “Expect more local processing in Abidjan and San-Pédro and more origin diversification to Ecuador/Brazil a classic resource-security realignment.”

Cocoa farming is increasingly using more tech such as satellite imagery, robotic pollination, ground sensors and drones. These monitor pests, growth rates and soil moisture in large plantations in real time, helping yields to become more stable, which can boost cocoa’s economic and strategic importance. Similarly, more major copper companies are focusing on responsible copper production practices, addressing sustainability and labour concerns that are key to attracting the next generation of investors. “Over the past five years, copper and copper miners have significantly outpaced the S&P 500 and broad commodity indices. Dedicated copper ETFs and mining stocks have been popular. Upside for investors comes from expected supply deficits: pent-up demand from EVs/renewables could lift prices if new mine output lags,” Alvarenga said.

However, he emphasised that policy intervention risks like stockpiling and tariffs remain, which could suddenly decrease copper flows. Although cocoa is more volatile and speculative than copper, Martin-Rayo calls its oil-like status a regime shift. “Think of cocoa as smaller than oil, but newly ‘systemic’ for food manufacturers and retailers.”

The road ahead
2025 highlights the start of a ‘post-oil’ resource era – one where sustainable and ethical commodities hold power. The ‘new oil’ may be mined, grown or digitally verifiable, instead of liquid. Both copper and cocoa mark a shift to the commodities of the future, scarce and economically resilient in an increasingly fragmented world, with investors demanding balance between transparency, accountability and growth.

Fashion industry’s supply chains fight a tariff storm

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Recent geopolitical developments have underscored the fragility of global supply chains, reminding businesses in constantly evolving sectors such as consumer goods and fashion that the strength of supplier relationships is one of the few persistent sources of resilience. Maintaining such relationships through responsible purchasing (based on environmental and social considerations, not just cost and quality) is not only ethical, but strategically necessary. The fashion industry is one of many that is feeling the weight of tariffs – disruptions that come at a time when it is struggling to make progress toward previously stated climate and sustainability goals. According to a 2025 benchmarking survey by the US Fashion Industry Association, 100 percent of 25 leading apparel brands and retailers identified the current administration’s protectionist stance and volatile trade relationships as a top challenge, and more than half flagged policy uncertainty, especially retaliatory tariffs, as their primary concern.

Rather than responding with short-term cost-cutting, though, major consumer-goods companies are making strategic investments to build resilience. For example, retailers such as Walmart and Target have front-loaded inventory to absorb tariff shocks ahead of the holiday season; and Apple chartered cargo flights to transport 1.5 million iPhones from India, an option made possible by increasing production with a key supplier. These are not just logistical moves; they are evidence of why trust-based, responsive supply-chain relationships matter. Responsible purchasing practices are the glue that holds supply chains together in uncertain times. Gartner reports that nearly half of large enterprises have renegotiated supplier contracts or shifted sourcing strategies to manage risks associated with the tariffs. Tools like supply-chain finance are increasingly being used not just for liquidity, but as buffers against volatility. Such trends reflect a growing consensus: resilient, transparent, and values-aligned supply chains are key to avoiding major disruptions and maintaining competitiveness.

Catwalk conundrum
Unfortunately, the fashion sector is a laggard in this regard, scoring just 66 out of 100 in Cascale’s Better Buying 2025 Garment Industry Scorecard, with year-on-year declines in key areas of responsible purchasing, including cost negotiation, payment terms, and product development (see Fig 1).

This is concerning, given that upstream effects can spread when tariffs or other external shocks hit. Production costs often need to be renegotiated, and without strong supplier relationships, shifts in production can increase delays, labour risks, and reputational exposure. The trend is also concerning for its climate implications. The fashion industry, with its complex global supply chains, is particularly vulnerable to such ripple effects. The US tariffs that went into effect on August 7th directly affect sourcing hubs with an outsize influence on the industry’s carbon footprint. Cascale finds that just 1,800 factories in nine countries account for over 80 percent of measured carbon emissions from the apparel, textile, and footwear industries (see Fig 2). Of these, six countries – China, Bangladesh, Vietnam, India, Turkey and Pakistan – have been directly affected by the new tariffs.

Responsible purchasing practices are the glue that holds supply chains together

Shifting sourcing away from these hubs might avoid short-term tariff costs. But it could also disrupt ongoing efforts to reduce emissions from these major sources. We saw this in 2018, when tariffs against China drove a production surge in Vietnam. Since it typically takes an average of 14 months for brands to add new suppliers, such rapid shifts cause a ripple effect: labour violations, longer lead times, and quality issues. Without coordinated planning, they risk undermining climate goals and working conditions alike.

Global appetite for sustainability
Though fashion is a $3trn industry, it is expected to have only a minimal formal presence at this year’s United Nations Climate Change Conference (COP30). As in previous years, travel budgets are being cut, and many teams are being downsized, as the industry slims down in the face of market volatility. Unlike climate-focused gatherings like Climate Week NYC or London Climate Action Week, COP30 will focus more on adaptation finance, carbon pricing, and nature-based strategies than on redrawing trade or sourcing lines.

Nonetheless, those in the industry should pay close attention to get a sense of the global appetite for sustainable finance and investment. Brazil is using its COP30 presidency to promote major initiatives such as the $125bn Tropical Forests Forever Facility, a blended-finance tool designed to help close the $1.3trn annual climate-finance gap by 2035. More-over, the discussions about carbon pricing could have a greater impact on international trade and value chains than any industry-specific trade reform.

In short, COP30 will not offer any direct relief on tariffs, but it could shape the long-term rules of the game, linking sustainability targets, sourcing practices, and competitiveness factors through policy levers that lie beyond the fashion industry’s immediate control.

Fair purchasing practices
As trade-related costs persist, industry leaders must shift their mindset. Their businesses’ resilience will not come from diplomacy or a presidential handshake, but from trust-based relationships, fair purchasing practices, and innovations to drive sustainability. Brands and retailers should view tariffs not only as cost burdens but as stress tests for their supplier partnerships. Companies that default to price-driven strategies risk eroding their ability to deliver quality, speed, and innovation to today’s conscientious consumer.

As trade-related costs persist, industry leaders must shift their mindset

By contrast, companies that lean into transparency and collaboration – sharing forecasts to ensure continuity, smoothing demand through level loading, and offering fairer payment terms – are more likely to avoid spikes in labour violations and preserve the market signals needed to sustain decarbonisation investments.

At a time when tariffs and climate-related shifts can alter sourcing strategies overnight, resilient partnerships are more than operational tools. They are strategic differentiators, signalling accountability, stability, and ethical leadership to a growing list of stakeholders who are thinking about the long term.

The evolving role of the CFO

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Once guardians of budgets and balance sheets, CFOs are now architects of strategy and transformation. The Super CFO, a global CFO survey, finds that ‘super CFOs’ are emerging to combat challenges. Finance leaders have moved from reporting performance to designing it. Enter the Chief Value Officer (CVO), reflecting finance’s role in total value creation. Value is no longer defined by profit but by the Integrated Reporting Framework’s six capitals.

The CFO role has transformed over the last two decades, moving beyond traditional accounting and control functions. Historically, CFOs focused on financial stewardship, including financial reporting and recording transactions. A reactive role has transformed into a strategic partner to the CEO, acting as a ‘co-pilot,’ identifying future opportunities. This double act is critical in managing modern economic unpredictability: the CEO focuses on market opportunities while the CFO steers the organisation through financial stress-testing and scenario planning.

The CFO role is strategic leadership that delivers long-term value to stakeholders. Businesses face more demands from boards, investors and regulators. “Over the past 10 years, the role of CFO has changed from one of financial management and compliance to a strategic leadership tasked with driving change,” says Dan Benson, managing director at executive search firm Morgan Philips Group. This strategic leadership shift has expanded the CFO’s mandate to include greater internal collaboration and external focus.

Deana Murfitt, COO and Executive Coach at Breakfast People, concurs: “The modern CFO is market-facing, having moved away from the confines of the traditional finance function. CFOs are now true business leaders: analysing market trends, pitching to Venture Capital (VC) and representing the corporate voice.”
An unforgiving business landscape fuels this transformation: supply shocks, inflation spikes, and investor scrutiny. CFOs have swapped the back office of spreadsheets for the unpredictability of boardroom strategy. While changes happened before Covid-19, the pandemic accelerated the CFO role. CFOs became catalysts for change across their businesses. AI, data analytics, technology and non-financial metrics have shaped this.

Modern finance leaders are architects of value creation, not just guardians of cost

Benson notes that CFOs are now at the centre of growth initiatives. “Amid a changing and challenging business landscape, CFOs are increasingly focused on driving growth, leading on M&A and raising capital or by driving organisational change to ensure businesses evolve at the pace required to compete,” he says. One CFO who has witnessed the changing role is Rafał Zborowski, founder and managing partner of advisory firm, Braincapital.pl.

He explains, “My career started with a strong focus on financial control and performance management in large organisations like Polkomtel (a mobile operator in Poland), where the priority was cost optimisation and operational efficiency.” Zborowski has seen this first-hand. “Over time, the CFO role has shifted dramatically, and so has mine. At Empik’s Learning Systems Group, I was not only responsible for finance but also for all other supportive functions like IT, HR and legal, which allowed me to lead major transformation programmes, including ERP implementation and process automation,” he says.

Risk, resilience and ESG
The Super CFO study by Egon Zehnder finds 82 percent of finance leaders report a broadening of responsibilities, including direct ownership of ESG alongside M&A and corporate strategy. These figures highlight the shift from operational control to value creation. Earlier generations of CFOs managed performance; today’s CFOs engineer it.

As CFOs extend their reach, their risk remit has expanded too. They now oversee operational, financial, reputational, and environmental risks. “CFOs today are value protectors and value creators, shaping the future by aligning capital, risk management, and strategic ambition,” says Zborowski.

This responsibility intensified post-pandemic, when CFOs led the response to unprecedented volatility. In an article for FM Magazine, Zborowski described re-engineering the business model of a global education group within days of lockdowns. These lessons have become standard practice. From liquidity stress-testing to scenario planning for geopolitical shocks, CFOs now anticipate disruption rather than reacting to it. ESG has expanded the scope: over half of respondents integrate environmental and social risk into financial decision-making.

The digital imperative
Finance blurs as automation and analytics reshape decision-making. AI automates reporting, aids forecasting and improves risk analytics. “Today, the CFO is no longer reporting the numbers but using digital tools and insights to guide innovation and long-term value creation using all available tools, including AI,” explains Zborowski. Protiviti’s Global Finance Trends 2025 study finds 72 percent of finance teams now use AI, more than double the rate a year earlier.

Once reserved for CTOs, CFOs are taking ownership of digital transformation projects. The finance function provides the discipline, governance, and data rigour to make digital investment deliver measurable results. Benson observes that this shift is also changing how company value is perceived. “The digital revolution of the past 10 years is a significant driver in this change, with investment in tech-related businesses dramatically up. For a CFO, this means the value of a company is linked with their tech stack and capability, meaning many strategic CFOs are the drivers of digital transformation within an organisation.

“The CFO’s role is not only to secure financing and monitor performance, but to challenge existing business processes and create the atmosphere for transformation,” Zborowski adds. AI’s impact goes beyond automation. CFOs use models including hyper-accurate forecasting, autonomous compliance using NLP to track global regulations and real-time risk analytics, auditing transactions for anomalies. Once optional for finance leaders, digital literacy is a core component of financial literacy. Successful CFOs will be those who can harness AI and digital transformation for insight.

From CFO to CEO
60 percent of CFOs aspire to be CEOs and 35 percent already co-lead with the CEO, per the Egon Zehnder report. Today’s CFO acts as a de facto deputy CEO, balancing capital allocation with leadership. Benson explains, “While in the past the CFO may have been an ‘ultimate destination’ role, it is increasingly viewed as a stepping stone to CEO and, latterly, NED opportunities.”

The CFO challenge is integrating systemic risks into financial models:
• Cyber risk: No longer an IT problem; a financial liability. CFOs must stress-test the balance sheet against the cost of breaches, including regulatory fines, legal liabilities and brand damage.
• Geopolitical and supply chain risk: CFOs map financial assets and supply costs against political instability.
• ESG integration and carbon pricing: CFOs guide investment toward green technology by implementing an internal carbon price on capital expenditure. Measuring new costs relies on technology.

The CFO position gives a 360-degree view of the business. Zborowski’s accumulated experience, which includes comprehensive knowledge of financial control, IT systems, HR, and legal, enabled the ultimate pivot to CEO. “Later, as CEO of a private equity-backed company, I applied these skills to redesign the business model and drive growth,” the CFO-turned-CEO explains.

Yet not every CFO aspires to be CEO. Due to the demands of their jobs, 64 percent of European CFOs and 50 percent of North American CFOs are considering early retirement, according to Egon Zehnder. The larger the company, the higher the likelihood that a CFO considers early retirement.

To make that leap, technical excellence alone is no longer enough. While 60 percent of CFOs aspire to the top post, 46 percent cite networking and visibility as the biggest barriers, followed by knowledge gaps. Current and future CFOs must develop skills through learning and organisational exposure.

BDO/ACCA advises on skills needed for the pipeline: the next generation must develop experience beyond the core finance function, including involvement in strategic change programmes like IT delivery or M&A integration. This prepares them for a C-suite partnership. Ultimately, organisations must support this development. Boards are seeking diversity of thought.

Benson believes that boards now prioritise agility, resilience, and communication. “Beyond strategy definition and driving change, CFOs must demonstrate workplace agility and lead through challenging times with resilience, flexibility and clarity.” The skillset is no longer confined to financial analysis; it is about executive leadership. Firstly change management: to lead large-scale digital transformation projects, managing stakeholder impact. Secondly, communication: the skill to be a ‘financial storyteller,’ translating data into clear narratives for stakeholders, including investors, regulators and media. Thirdly, digital fluency: not only using technology, but understanding AI and cloud computing.

The road ahead
Few titles will face greater pressure or opportunity than the CFO. Technological progress, regulatory scrutiny, and a volatile global economy demand sharper insights. “The CFO role will continue to broaden as we face a world of greater uncertainty and faster change,” says Zborowski. “Challenges such as ESG integration, cybersecurity and geopolitical volatility will increasingly define their agendas. Advances in AI and digital transformation present an enormous opportunity to enhance decision-making and reinvent business models.” That balance between caution and innovation will determine which finance leaders succeed. As AI and automation take on transactional tasks, the CFO’s comparative advantage will lie in human judgement; connecting data with vision and performance with purpose.

Zborowski concludes with a clear view of the opportunity ahead: “Having worked as both CFO and CEO, the opportunity lies in stepping fully into the role of transformation leader. Those CFOs who can combine strategic vision and execute complex change will be the ones who drive sustainable long-term growth and position their companies to thrive.”

The finance function has come a long way from counting the numbers. The CFO of the future will not just measure value; they will define it.

A TikTok deal China will love

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After four extensions of the statutory deadline to ban TikTok or force its Chinese owners to divest, US President Donald Trump has now signed an executive order transferring the app to US ownership. The announcement follows years of diplomatic sparring, bureaucratic manoeuvring, repeated efforts by federal and state governments to curtail the platform and even a ruling from the US Supreme Court. Has the fate of America’s most viral social media app finally been decided?
Those expecting closure will be disappointed. This latest ‘framework consensus’ still leaves China with significant leverage over TikTok. What looks like a victory for the US may well be Chinese President Xi Jinping’s biggest strategic triumph yet.

On the surface, the agreement does look like a grand bargain for America. Oracle and a consortium of US investors would control 80 percent of a newly created American entity that would run TikTok’s operations in the US. All US user data would remain on Oracle’s servers in Texas, and the new company would license TikTok’s prized recommendation algorithms and retrain them on American data. Six of the entity’s seven board seats will be held by Americans. In other words, Americans’ data and TikTok’s servers and algorithms would all appear to be firmly under US control. And the deal even carries financial rewards for the Trump administration, in the form of a multibillion-dollar payment from investors (effectively a fee for brokering the settlement with the Chinese).

Look more closely, however, and the picture is less reassuring. After all, global investors already own roughly 60 percent of Byte-Dance, TikTok’s parent company, while the company’s founders own another 20 percent and its employees the remaining 20 percent. Thus, the deal merely raises US ownership of the American operation to 80 percent, leaving ByteDance with just under 20 percent – but still the single largest shareholder. More tellingly, the intellectual property behind TikTok’s algorithms remains firmly in Byte-Dance’s hands. Far from acquiring the recommendation engine outright, Oracle and other US investors are only receiving a licensed copy.

This deal merely replaces one form of dependence with another

Algorithms are not static assets. Unlike a car or a house, they cannot be transferred once and for all. They are dynamic, data-driven systems that demand constant retraining, fine-tuning, and significant engineering support to remain effective. Oracle may be able to inspect the code, copy it in full, and retrain the licensed version on US data. But the new American TikTok will still depend on China for periodic updates. This raises difficult questions: will Oracle even receive those updates; and, if so, can it meaningfully monitor and audit them?

To be sure, what makes an algorithm powerful is not only its architecture but also the data on which it is trained. Yet because the US version will rely solely on American user data, Oracle will lack access to the vast global dataset that makes ByteDance’s cutting-edge models so powerful.

Diplomatic tool
China, meanwhile, will hold the legal levers to restrict or impose conditions on any transfer of ByteDance’s technology. Since 2020, China has classified personalised recommendation algorithms as sensitive technology under its export-control regime. That means every export of updates or improvements to TikTok’s algorithm is subject to Chinese government approval. The Chinese authorities therefore can make TikTok a diplomatic tool. Should tensions rise over Taiwan, tariffs, Ukraine, or restrictions on Nvidia chip exports, China could delay or withhold licensing approvals, using TikTok as yet another bargaining chip. In this way, the platform has been transformed into a powerful instrument of Chinese statecraft.

Faced with a licensing arrangement that is governed less by legal terms than by shifting geopolitical winds, US investors in the new TikTok should brace themselves for heightened uncertainty. Rather than shifting TikTok from Chinese to American control, this deal merely replaces one form of dependence with another.

Yes, ByteDance will no longer oversee daily content recommendations; Oracle will, easing the US government’s most immediate security concerns. But China will retain residual control over TikTok’s algorithms. It has the freedom to set the scope of the licence, determine the frequency of updates, and decide whether the US version can keep pace with the global one. Far from diminishing China’s influence, the deal risks entrenching it.

With this agreement, the fear of Chinese access to Americans’ data or direct manipulation of algorithms may fade. But it will be replaced by a subtler and more enduring risk: technological dependence on China, which holds a chokehold over TikTok’s powerful recommendation engine. The Trump administration has simply traded one vulnerability for another. That said, a less competitive US version of TikTok might not be bad for America. Some may even see it as a blessing in disguise. A less competitive TikTok would be a less addictive TikTok. That would ultimately benefit American teenagers – whether or not they realise it.

Africa’s digital boom faces a growing cyber threat

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At the turn of the millennium, Africa was a metaphorical desert in terms of internet access and broadband connectivity. A quarter of a century later, the continent has recorded tangible successes in opening up the digital space. Granted, only 38 percent of Africans are connected to the internet compared to a global average of 68 percent. However, it is indisputable that the continent is home to a burgeoning digital ecosystem that is anchoring economic development and job creation for its young population, 70 percent of whom are under the age of 30. The push towards financial inclusion exemplifies the transformative impacts of digitalisation.

Today, Africa is the bastion of mobile money, with 1.1 billion registered accounts in sub-Saharan Africa. This is more than half of the 2.1 billion global accounts. More fundamentally, the continent accounts for 74 percent of all mobile money transactions globally, with over 81 billion transactions handling a staggering $1.1trn in value in 2024.

The question is no longer whether cybercriminals will strike – but how often

Unfortunately for Africa, the unprecedented digital transformation is coming under serious threat from cybercriminals. The continent has become a fertile ground for attacks, which come in all forms from phishing, malware, ransomware, identity theft, hacking, business email compromise, social media fraud, to large-scale breaches and even digital sextortion. Once a technology problem, cyberattacks have morphed into real threats not just for businesses, but the stability of the socio-economic order.

“Cybersecurity is not merely a technical issue; it has become a fundamental pillar of stability, peace, and sustainable development in Africa,” said Jalel Chelba, Afripol acting Executive Director. He added that the menace is a major threat to the digital sovereignty of states, the resilience of institutions, citizen trust and the proper functioning of economies.

Topmost concern
From government agencies, financial institutions, telecoms and betting companies, to critical infrastructures and all spheres of life, the question is no longer whether cybercriminals will strike, and when. Rather, it is a matter of how often. A survey by audit firm PwC in East Africa confirms this fact. In the region, 74 percent of businesses reckon cyber risks are the topmost concern. Macroeconomic volatility and geopolitical risks rank way below, at 51 percent and 12 percent respectively.

In recent years, companies like Eneo in Cameroon, South Africa Airways, Kenya Urban Roads Authority, Telecom Namibia, Morocco’s National Social Security Fund and even Bank of Uganda (BoU) have fallen victim to attacks. BoU offers a glimpse of just how determined hackers are. In November last year, a breach of IT systems by a group calling itself ‘Waste’ saw the bank lose $16.8m from its coffers.

Across the continent, the rising challenge of cybercrime is bringing about massive losses, with scammers siphoning away in excess of a whopping $4bn annually. The amount is equivalent to 10 percent of GDP. Kenya, Nigeria, South Africa, Egypt, Morocco, Uganda, Ghana and even war-ravaged and poverty-stricken South Sudan are among the countries bearing the brunt of the problem, which is compounded by low digital literacy rates. Research shows that only 50 percent of African countries include computer skills in their school curriculum, compared to a global average of 85 percent.

Tragically, experts reckon that although the challenge of cyberattacks in Africa borders on a crisis that risks wiping out gains in digitalisation, measures to tackle the problem do not inspire confidence. The continent is largely deploying fragmented policies and interventions to fight cybercrime. More worrying is that Africa continues to depend on the global community not only for direction and support, but also for funding operations designed to cripple cybercriminal networks.
“The complexity and fluidity of cyberattacks means that Africa requires urgent and coordinated actions to deal with the problem,” says Ewan Sutherland, Visiting Adjunct Professor at LINK Centre, University of the Witwatersrand (Wits) in South Africa. He adds that the continent cannot fully exploit the benefits of deepening connectivity and digitalisation without watertight mechanisms and systems to deal with cybercrimes.

Interpol, in its 2025 Africa Cyberthreat Assessment Report, paints a picture of Africa as a ‘landscape in flux’ as far as cybercrime is concerned. The report contends that a growing share of reported crimes in the continent are cyber-related. The problem is entrenched in western and eastern Africa, where cybercrime accounts for more than 30 percent of all reported crimes.

Interpol is taking leadership in helping Africa deal with the problem. In August, a mission dubbed Operation Serengeti 2.0 managed to dismantle cybercrime and fraud networks across 18 countries. The operation led to the recovery of $100m, the dismantling of 11,400 malicious infrastructures and the arrest of 1,210 cybercriminals who had targeted nearly 88,000 victims. A similar operation last year in 19 countries led to the arrest of over 1,000 suspects and the dismantling of 134,000 infrastructures linked to $193m in financial crimes that had targeted 35,000 victims. Notably, Interpol’s operations continue to be foreign funded, specifically by the UK and Germany governments as well as the Council of Europe.

Realisation that a booming digital revolution is fast becoming a source of increased vulnerability and economic loss is forcing Africa into action, albeit with each country carving its own path on how to deal with the problem. This emanates from the fact that continental ambitions under the African Union Convention on Cybersecurity and Personal Data Protection, popularly known as the Malabo Convention, have not amounted to any concrete actions. Despite being adopted in 2014 and coming into effect in 2023, the convention is seen as archaic in a fast-changing environment characterised by new technologies like artificial intelligence, cloud computing, internet of things and blockchain, among others. Using AI, for instance, criminals are building more sophisticated tools like WormGPT, FraudGPT, and DarkBERT that facilitate targeted, effective and harder-to-detect attacks.

Besides, the fact that only 15 countries have ratified the convention undermines any efforts towards regional or cross-border cooperation in combating cyberattacks, whose masterminds transcend borders. Chinese nationals, in particular, remain as key architects in instigating attacks in the continent. In the Interpol-led operation for instance, authorities in Angola dismantled 25 cryptocurrency mining centres where 60 Chinese nationals were found to be illegally validating blockchain transactions to generate cryptocurrency.

“African countries are enacting the necessary laws and building homegrown capacity to deal with cybercrimes,” states Mugambi Laibuta, a Kenyan-based privacy and data protection specialist. He adds the fact that 46 countries have data protection laws that mandate reporting of attacks within 72 hours shows the continent is waking up to the seriousness of the problem.

Huge losses
Kenya is a case in point. Data by the Communications Authority shows the country recorded 2.5 billion cyberthreat incidents in the first quarter of 2025, representing a 201.7 percent increase from the previous quarter. GDP losses in the country due to cyberattacks is estimated at 3.6 percent.

Being a pioneer in the mobile money space, digital lending and fintech innovations, the country has become a playing field for hackers and scammers. Recently, the Central Bank of Kenya established a cybersecurity operations centre as part of measures to fight the menace. The centre is equipped to provide critical services such as cyber threat intelligence, incident response, digital forensics and investigations.

“Governments in Africa must realise that cybercrime has the potential to cripple the digital revolution success story,” observes Ali Hussein, a Kenya-based digital transformation consultant. He adds that for this reason, the continent needs sustainable approaches to digital security.

One critical approach that is bearing fruit, albeit on a small scale, is collaboration with international partners. The fact that Interpol in collaboration with Afripol and partners like Cybercrime Atlas, Fortinet and Kaspersky can execute operations to dismantle cybercrime ecosystems gives the continent a solid foundation on which to build on. Experts contend that by plugging in more public and private sector institutions, Africa might not eradicate cybercrime, but has the potential to stem the tide.

“Africa must realise that depending on the international community is a stopgap intervention. In the long term, governments must take the lead in disrupting cybercrime networks,” notes Sutherland.

On this, a growing number of governments are demonstrating some steps in the right direction, particularly in the area of enacting laws and regulations and crafting national cybersecurity strategies that clearly outline the guiding principles for dealing with the menace. These cut across technology transfer, capacity building and information sharing, among others.

Increasing budgets
Critically, Africa understands that it cannot win the war on cybercrime through fancy strategies and policies on paper. For that reason, governments and private companies are increasing cybersecurity budgets to invest in robust systems, which are not cheap. Global consulting firm Kearney gives context in terms of funding. To address investment gaps and secure a sustained commitment to cybersecurity, countries must spend a staggering $22bn between 2022 and 2026. In Kenya, banks are already budgeting as much as $4.6m annually towards cybersecurity.

Any organisation not embedding cybersecurity in its strategy is walking blind

“Any organisation that is not embedding cybersecurity in its strategy is walking blind,” observes Laibuta. He adds the fact that a majority of companies are directing resources in hiring qualified personnel and talent training is an indication that most take the risks of cybersecurity seriously.

For Africa, the reality is that digital evolution is intricately entangled with cyberattacks, which continue to be a moving target. While separating the two is bound to be elusive, the trick in sustaining the digital economy boom lies in building an insurmountable gap and a rock-hard wall when it comes to vulnerabilities.

Markets are the driver of energy transition

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Despite strong global momentum to accelerate decarbonisation, fossil fuels still have a strong hold of the energy use across most sectors. The IEA reports that industrial energy consumption is still dominated by fossil fuels, in particular coal; and transportation relies on oil products for nearly 91 percent of its energy. As of the first half of 2025 however, the global energy supply shows a more positive picture as renewable energy overtook coal as the leading source of energy for the first time in history. But that was no miracle; that is market logic in action. The environmental commodity markets have played the role of scaffolding by providing the framework and support on which the energy transition can be built.

To explain the concept of environmental commodity with a simple analogy: If a homeowner wants to lower his or her carbon footprint, they might install some solar panels. But presuming they live in a block of flats, they might ask a friend to put solar panels on their roof instead. The flat owner helps the friend to finance that and in return can claim that they have neutralised the carbon output of their flat. What those homeowners are doing is creating a marketplace for decarbonisation opportunities, which is exactly what is happening at a macro-level between energy producers, corporates and major industry. It allows people who want to make moves to decarbonise, but who might be constrained. It allows them to invest in the move to decarbonise elsewhere. Similarly, it also enables people who have the opportunity, but not the finance, to get their projects off the ground.

The levers of transition
Emissions Trading Systems (ETS) that put a price on emissions were first launched in 2005. In addition, renewable energy certificates (GOs, IRECs, RECs) that link clean energy generation with consumer demand and fuel mandates (LCFS, REDIII) that reward low-carbon alternatives have gained their importance as tools to put a price on emissions and address environmental impact. These markets exist not to virtue-signal but to account for the cost of emissions and make decarbonisation bankable. Just as in other markets, traders, like us at STX Group, come in to facilitate pricing structures and climate solutions that simplify sales and manage risk for both the buyer and the producer. This market mechanism brings more investment to the market and is therefore an essential part of the commodities markets.

Carbon is finally being priced appropriately — and investment is following

The energy transition is ultimately executed through three levers: efficiency, switching towards renewable fuels and feedstocks, and carbon capture. But these levers only move at scale when markets make them investable; for example, when carbon emissions have been properly priced. The good news is, carbon is being appropriately priced and, as a result, environmental commodity markets have been growing rapidly over the last 20 years. New regulations are also taking effect, especially in Europe, across multiple industries. In shipping, FuelEU Maritime is reshaping fuel demand. In aviation, ReFuelEU mandates are driving uptake of sustainable fuels. RED III is pushing EU member states to increase renewables in power and heat. CBAM is levelling the playing field between domestic and foreign producers in the EU. All these regulations put more pressure on European refineries to ramp up their production of clean energy products. These regulations and increased renewable energy also translate into growing demand for certificates, and that demand makes the transition investable. The future growth of the ‘sustainable economy’ is driven largely by the widening net of regulatory compliance but also has become a lifeline for energy companies operating on markets rapidly shifting towards renewables.

While the pace of change to decarbonise the global economy is arguably still slow, we cannot ignore the emissions that have been capped and addressed because of market schemes like the ETS and a large variety of environmental commodities. To give a sense of the scale, the global EAC market has grown to over 2,400 TWh annually since its formalisation in the early 2000s, representing a size equal to more than 60 percent of the total electricity demand of the European Union. It now covers approximately 40 percent of the EU’s total GHG emissions and generates €38bn in revenues in 2024.

By my latest count, more than 70 countries now operate carbon pricing systems. Clean fuel mandates and schemes are spreading across North America and Asia. In Europe, numerous clean energy policies and regulations are making carbon a balance-sheet cost for major heavy industries including aviation, shipping and manufacturing. There are plenty more schemes similar to the existing regulation that we expect to see make a big impact in the coming years, such as sustainable aviation fuel certificates (SAFc), white certificates to drive energy efficiency and biofuel mandates. One thing is clear: emissions now carry a price, and that price is rising.

I strongly believe that market mechanisms are the most efficient way to align political ambition, corporate obligation and consumer demand to decarbonise, at an affordable cost. Without them, the transition risks becoming slower, costlier and more divisive.

The replication crisis

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The replication crisis in science refers to the experimental finding that many or most experimental findings don’t hold up when scientists try to repeat them. Unlike those other scientific results, it seems that this one has legs – the issue started to become very visible in areas such as medicine, psychology and biology in the mid-2000s, but other fields including economics are not immune.

Since verification is a key step in the scientific method, this calls the whole scientific project into question. Blame for it is often put down to the ‘publish or perish’ ethos, where academics are under pressure to come up with novel findings that will make interesting papers, but another factor is a (rather unscientific) respect for authority. As Jay Bhattacharya, Director of the US National Institutes of Health, told the New York Times, “You have, in field after field after field, a kind of set of dogmatic ideas held by the people who are at the top of the field. And if you don’t share those ideas, you have no chance of advancing within those fields.”

In other words, the problem is not just that experiments do not replicate. It is that theories endorsed by leaders in the field replicate without end.

Respect my authority
An early example of the phenomenon occurred in 1923 when an eminent scientist called Theophilus Painter published a paper that announced that, according to his microscopic observations, human cells contained 24 pairs of human chromosomes. Other scientists repeated his observations and came up with the same number.

However, in the 1950s new methods were developed in which cells were placed onto microscope slides, giving a better view, and it soon became obvious that there were in fact only 23 pairs. Still, Painter’s influence was such that many scientists preferred to stay with his count. Indeed, textbooks from the time showed photographs of chromosomes, in which there were clearly 23, and yet the caption said there were 24. A variation on this occurs when new results are simply ignored because they don’t agree with current theories.

New results are simply ignored because they don’t agree with current theories

A cornerstone of modern economics is the random walk hypothesis, which states that price changes in the stock market are due to random fluctuations. In their 1999 book A Non-Random Walk Down Wall Street, Andrew Lo and Craig MacKinlay recounted that “when we first presented our rejection of the random walk hypothesis at an academic conference in 1986, our discussant – a distinguished economist and senior member of the profession – asserted with great confidence that we had made a programming error, for if our results were correct, this would imply tremendous profit opportunities in the stock market. Being too timid (and too junior) at the time, we responded weakly that our programming was quite solid thank you, and the ensuing debate quickly degenerated thereafter. Fortunately, others were able to replicate our findings exactly.” The random walk hypothesis was thus falsified and never spoken of again (not).

Don’t blame the butterfly
I had first-hand experience of something similar while doing my doctorate on model error in weather forecasting. The general view at the time (around 2000) was that forecast error was primarily due to chaos, aka the ‘butterfly effect,’ rather than the model itself. It followed that by making multiple model runs starting from slightly altered initial conditions, it should still be possible to make probabilistic forecasts: a technique known as ensemble forecasting. My thesis though showed there was a simple test: if forecast errors grew exponentially in time (line curves up), they were probably due to chaos, but if they grew with the square-root of time (line curves down), then they were due to the model. During a talk at a main European weather centre, when I showed a plot of forecast errors growing almost perfectly with the square-root of time, I was interrupted by the institution’s research head who said confidently that the plot must be wrong, since error growth has positive curvature, not negative.

After the talk, we agreed that someone should replicate my results. When that was done, they were identical to the ones I had shown – however, it made absolutely no difference. The consensus remained that the errors were primarily due to chaos, so the expensive ensemble forecasting systems were not at risk (though not everyone was convinced, including New Scientist magazine which ran with the cover article ‘Don’t blame the butterfly’).

Replicate this
Of course, you might think that replication should be less of a problem in finance, if only because of the amounts of money that are often at stake. You can’t just make up a wacky theory about the stock market with made-up data and hope that no one will notice. Or say that a line curves up when it obviously curves down. However, in another sense it may be that the opposite is true.

Biology has progressed remarkably since the textbooks of the 1950s. Not only can biologists correctly count chromosomes, they can also engineer what goes on inside them. Economics and finance in contrast seem stuck (the random walk hypothesis dates back to 1900, and people are still arguing about it). Instead of replicating tired ideas, maybe it is time to look at data in a new way. But that is a topic for another column.

China’s Latin American power play

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When Peru opened a new $3.6bn mega-port in late 2024, it was the latest of the giant projects that China has built and funded in Latin America under its global, trillion-dollar Belt and Road programme. And it was typical of many other B&R projects.

First, China gets much more out of it than Peru because the port, named Chancay, slashes shipping time between Latin America and Asia by two whole weeks. This means Chinese state-owned container vessels are shifting electric vehicles and many other manufactured goods into the region much faster than before and shifting raw materials back home to feed China’s enormous factories.

Second, the financial arrangements cost Peru a lot more than they do China. For a relatively small investment of about $1.6bn of the total $3.6bn, state-owned port giant Cosco has booked a 60 percent stake.

Third, courtesy of the Peru government, which rewrote the rules of foreign ownership, Cosco gets exclusive use of the deep-water port for up to 60 years. Overall, the deal is so beneficial for China in the long term that President Xi, who formally opened the port, promised in early 2025 at least another $9bn in credit for B&R-type projects in Latin America. “We ride the tide of progress together to pursue win-win cooperation,” he told Latin American dignitaries in Beijing. Although the Chinese economy has weakened in the last two years, there is still money on the table for the right B&R projects. Typically, the funds come from what a UN report described as “a complex web of policy banks, commercial banks, state-owned enterprises, sovereign funds and public–private partnerships.”

New infrastructure
Until recent years, B&R-funded projects were mainly to build conventional infrastructure such as new roads, railways, airports, dams and ports. For instance, the Chancay port is one of at least a dozen wholly or partly owned or run by China. Now though, China’s state-owned and controlled giants are moving in new directions. Currently, according to recent studies, PowerChina has invested in no fewer than 11 Latin American countries including, once again, in Peru, where it acquired two electricity suppliers for some $3bn in a deal that gave China virtual control over the nation’s electricity distribution. In other energy coups, Chinese companies are running Latin America’s largest solar plant in Jujuy, Argentina and a wind farm in Coquimbo, Chile.

While China has been assiduously cultivating Latin America, the US has neglected it lately

Huawei is one high-tech Chinese company that has established a strong foothold in new infrastructure such as artificial intelligence, smart cities and 5G technology. By 2020, in Curitiba, Brazil, Huawei was running over half of internet connections. Although not officially under the B&R umbrella, Brazil has quietly become Beijing’s biggest trading partner in the region. “Even though Brazil is not formally part of the Belt and Road, we are in many ways very much aligned with its spirit,” Tulio Cariello, director of content and research at the Brazil-China Business Council, told Dialogue Earth, a non-profit environmental media outlet. “We have been receiving investments in infrastructure for quite some time now – especially in the energy sector – but also in ports, storage, logistics and more.”

In a region hungry for foreign investment, Brazil is one of 20 other countries to sign deals with China, the most recent being Colombia. Of these nations Brazil, Argentina, Peru, Chile, Ecuador and, most controversially, Venezuela have gone in the deep end – to the regret of numerous activist organisations that argue Beijing has too much control over their countries’ future.

For instance, China is also heavily invested in Peru’s mines, hydropower, transmission and copper projects. On top of existing projects, Brazil is discussing with Beijing a trans-continental rail link that would run from the Amazon (where China already has significant interests) to the Pacific, thus bypassing the Panama Canal.

Argentina, which was only too pleased to grab an $18bn currency swap lifeline from Chinese banks to tide it over a debt crisis, is also home to B&R-financed hydropower dams and space-tracking facilities, the latter of great concern to the US. Billions of Venezuela’s debt to China is paid in oil exports, much to the detriment of the domestic economy.

The main attraction for China remains Latin America’s critical minerals, notably the ‘lithium triangle’ that links Chile, Argentina and Bolivia. This has aroused fierce domestic criticism over the wholesale export of raw and rare materials that could be exploited much more profitably at home.

Deals with dictators
In the first years of B&R in Latin America, it was Chinese officials who opened the door, preferring to work with dictatorships – or at least authoritarian governments – rather than with democratic, market-led nations. Talking to Dialogue Earth, Colombia-based expert on China, Parsifal D’Sola, puts it diplomatically by saying that Beijing has tended “to favour state-to-state relations, which facilitates the entry of projects and financing in countries where decision-making is concentrated in a small group and the market plays a secondary role.”

Others put it more bluntly. China’s role in such countries is that of “an incubator of populism,” argues Evan Ellis, professor of Latin American Studies at the US Army War College Strategic Studies Institute. “It’s not that China’s trying to produce anti-democratic regimes, but that anti-democratic regimes find a willing partner in the Chinese.” Until President Xi’s promise of $9bn or more of extra credit for Latin America, China had held the purse strings tighter in the last two or three years, at least for big-ticket projects, as Beijing waits for the original investments to pay off. And they are paying off handsomely.

In 2024, total trade between China and Latin America and the Caribbean (the LAC region) hit $518bn, according to official Chinese figures. China imports agricultural produce to feed its 1.4 billion people, and metals and minerals to supply its high-tech industries such as BYD, the world’s largest manufacturer of electric vehicles that, incidentally, has taken over a former Ford-owned plant in the Bahia region of Brazil.

In short, Latin America sells to China vast quantities of low-value products such as soy, copper, lithium, iron ore and oil while buying high-value machinery, electronics, electric vehicles, turbines and other cleverly mass-produced technologies. Economists would say that Latin America is on the wrong end of the supply chain. Yet China is widely applauded for its consistent, long-term implementation of an economic strategy while Latin America’s nearest neighbour and natural economic partner – the US – sat on its hands. For instance, in the last few years few American companies even bothered to bid for the many infrastructure projects that B&R was able to snap up under Uncle Sam’s nose.

Peru’s Chancay Port provides a good example. It is an investment that capital-rich America could have made to its enormous benefit. Yet Peru, a nation of 38 million, has a substantially bigger trade with China than it does with the US – and it can only get bigger.

While China has been assiduously cultivating Latin America, the US has neglected it lately, even though the US is still the region’s biggest trading partner. Former President Joe Biden visited South America just twice while Donald Trump made just one visit to the region in his first term. Trump has gone out of his way to put the region offside rather than cultivate it, for instance by imposing punitive tariffs on Brazil and by threatening to seize the Panama Canal.

Although it is far too late, senior US military are increasingly concerned about Beijing’s leverage in Latin America. General Laura Richardson of the US Southern Command has warned that “China is on the 20-yard line, to our home land,” citing Chancay Port’s potential to be used for military vessels spying on American naval and commercial ships.

Strategic think tanks like the Atlantic Council has warned: “If a conflict were to break out in, for example, Taiwan or the South China Sea, this global network of 38 Cosco-operated ports could pose a serious logistical challenge for foreign militaries looking to move ships or supplies to the Indo-Pacific.”

Some B&R projects go wrong. New research shows that up to a third globally aren’t completed or run into trouble – a dam in Ecuador is mired in dispute over structural defects, and recipient nations all too often end up with unsustainable debt burdens against which China extracts payment in kind; for instance, Venezuela’s oil exports. Complaints about severe ecological damage at Chancay were quickly shut down.

Yet only one nation has signed itself out of B&R. Although he told Trump that “our canal’s sovereignty is not negotiable,” Panama’s president Jose Raul Mulino kicked China out of planned projects there. Others are nervous of Beijing involvement and, like Mexico, prefer to remain outside the fence.

In the meantime, China’s trading boom looks unstoppable. In 2021 trade with Latin America was worth over $450bn. Three years later it was worth $518bn for an increase of over 40 times since the turn of the century. And there are plenty of experts who predict $700bn within another decade.

Money without borders

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Anti-migrant movements in different developed countries like the US, UK and parts of Europe are taking a new shift. Many individuals who oppose globalisation argue that migration policies have created unfair labour conditions, widened global inequalities and contributed to political instability in underdeveloped countries. Yet the other side of the story is equally strong. Migration has indeed enabled millions of households to survive, build resilience and even prosper.

Remittances, the money migrants send back to their home countries, are now considered one of the most important sources of external financing for developing economies. In fact, in many countries, remittances have surpassed foreign direct investment (FDI). As per the World Bank’s Global Remittance Report, there remains a large data gap between officially recorded flows and actual remittances, as migrants often rely on both formal and informal transfer systems.

The World Development Report 2023 notes that around 184 million people migrated globally in 2023 due to economic, domestic and political reasons. At least 77 countries now rely on remittances for more than three percent of their GDP, and in about 30 countries, remittances account for over 10 percent of GDP. For low- and middle-income countries (LMICs), remittance inflows exceeded $650bn in 2023, a figure higher than FDI for many economies. By 2026, the global remittance market is predicted to exceed $800bn, underscoring its critical role in economic development. Migration patterns, fintech innovation and geopolitics are shaping this huge market, making it more dynamic than ever before.

Remittance drivers
From consumer brands to tech giants like Procter & Gamble, Apple, Amazon, Alibaba, Google and Microsoft, outsourcing and hiring across borders is now part of business models. Developed economies with high GDP are also confronting structural challenges like aging populations, low birth rates and persistent labour shortages. Countries like Japan, Germany, Italy and the UK increasingly rely on foreign workers to sustain their industries. At the same time, poor infrastructure and low wages in home countries continue to push individuals to migrate in search of better opportunities.

While anti-migrant campaigns and rising nationalism seek to limit immigration, the global demand for labour shows no sign of slowing down in 2026. This continued demand sustains the flow of migrant workers and, with it, the flow of remittances. Another dimension is climate change, which is becoming a central driver of migration. By 2050, millions of people are projected to be displaced due to extreme weather conditions, global warming and disruptions to agriculture. By 2026, these factors are already accelerating migration patterns.

The World Meteorological Organisation highlights that there is a 48 percent chance that global temperatures will exceed 1.4°C above pre-industrial levels in the next five years. Regions like Southwest America and Southern Europe are expected to be drier, while parts of Africa, Brazil and Australia will face heavier rainfall and flooding.

These weather disruptions are reshaping mobility. Skilled workers in Alaska or Canada, facing harsh winters, may seek opportunities elsewhere. Likewise, extreme heat in Brazil is likely to push workers toward countries offering both better pay and more favourable climates. Regardless of the economic necessity, political instability, or climate disruption, migrants consistently send funds back home. These cross-border cash flows not only secure the livelihoods of families but also stimulate local economies. The use of remittances is also evolving. Traditionally, funds were directed toward household consumption such as food, rent or education. Migrants are leveraging their earnings for investment opportunities in their home countries, financing small businesses, purchasing property or supporting community projects.

This shift means remittances are no longer simply tools of survival but also drivers of entrepreneurship and economic diversification. Both sending and receiving countries benefit from this where migrants strengthen their financial security abroad while simultaneously stimulating economic growth back home.

A fintech makeover
Before the technological boom, sending and receiving money across borders was costly, slow and often inaccessible. According to the World Bank’s 2020 data, the global average cost of sending $200 was between six and seven percent, far higher than the UN Sustainable Development Goal (SDG) target of three percent. In Africa, costs often exceeded 10 percent, making remittances especially burdensome for low-income migrants. The fintech revolution has transformed this landscape. Instant money transfers are now possible thanks to digital platforms that complete transactions in seconds rather than days. Migrants no longer need to stand in long queues at remittance centres; with the tap of a mobile app, they can send funds home almost instantly. This convenience has redefined the experience of sending and receiving money across borders. Equally transformative has been the rise of mobile money services. Platforms such as M-Pesa in Kenya, Easypaisa in Pakistan, and bKash in Bangladesh have given millions of people access to financial services for the first time. By allowing recipients to receive funds directly on their mobile phones, these systems eliminate the need for bank accounts, which remain inaccessible for many in rural or underserved areas.

The dominance of mobile money is set to expand further. By 2026, analysts predict that mobile money applications will become the primary channel for remittances in many developing countries. In regions where traditional banking infrastructure is limited, these digital platforms are emerging as the backbone of financial inclusion, ensuring that remittances reach families quickly, securely and at a fraction of the previous cost.

Cryptocurrencies and stablecoins have added a new dimension to remittances. Stablecoins, backed by assets like the US dollar, offer a less volatile way to transfer funds. While cryptocurrencies remain riskier, they are increasingly popular in regions with weak financial systems. At the same time, central banks are experimenting with Central Bank Digital Currencies (CBDCs).

Although still in their early stages, CBDCs could become a secure and low-cost remittance channel within a few years. Security is another frontier where fintech has made advances. Digital wallets now incorporate biometrics, facial recognition and multi-factor authentication, reducing the risk of fraud. Moreover, by moving migrants into the formal financial system, these innovations allow governments to collect data, improve transparency and even broaden their tax base. The result? By 2026, digital transformation will have made remittances not only cheaper and faster but also more integrated into everyday financial life.

The geopolitical cut
Remittance channels are deeply influenced by geopolitics. Changing alliances, sanctions and rivalries will shape how money moves across borders in 2026. Countries under heavy sanctions often experience reduced remittance flows, as migrants resort to informal networks such as hawala or unregulated crypto transfers. These alternatives undermine transparency and weaken oversight. At the same time, shifts in global financial power are producing new dynamics. For example, Russia and China are working to develop regional payment systems to reduce dependence on western platforms, potentially redrawing the global remittance map. Governments are also seeking to better track remittances and encourage the use of formal systems. India, for instance, has introduced diaspora bonds, enabling its large migrant population to invest directly in infrastructure projects. Other countries are introducing policies to incentivise banking channels over illegal transfers. By 2026, the emphasis will be on making remittances not just transparent and secure, but also strategically aligned with national development goals.

Is the $800bn milestone enough to understand the future of remittances? The answer is more complex. In countries such as India, Bangladesh, the Philippines, and across Latin America and throughout Sub-Saharan Africa, remittance inflows are expanding at double-digit rates. These regions rely heavily on migrant earnings, and the steady increase highlights the resilience of remittances even in times of global uncertainty.

The digital remittance market has already surpassed $800bn as of 2024, and projections suggest it will continue to grow rapidly. With a compound annual growth rate of around 8.5 percent forecast from 2026 to 2033, the sector could reach as much as $1.5trn by 2033. This scale not only reflects rising migration but also the speed at which digital platforms are transforming the industry. Yet challenges persist. Economies with weak digital infrastructure risk falling behind in this transformation. In several parts of Sub-Saharan Africa, limited internet connectivity, inadequate regulation and gaps in financial literacy hinder the widespread adoption of digital channels. Without targeted investment and policy support, these countries may not fully capture the benefits of the digital remittance boom. While digital channels are quickly dominating, traditional money transfer operators remain relevant in certain regions. Countries like Nigeria and some parts of Latin America continue to rely on conventional platforms due to low digital penetration. Yet, experts estimate that within a few years, more than 50 percent of global remittances will be digitalised. Remittances carry both opportunities and risks. On the opportunity side, they improve household welfare, finance education, and stimulate entrepreneurship. Governments can channel these funds into development initiatives such as infrastructure, healthcare and small and medium enterprise (SME) support.

The rapid rise of fintech offers another opportunity: digital channels bring millions of previously unbanked people into the financial system. By 2026, fintech platforms could provide consistent economic growth and the financial security that developing economies urgently require. Yet risks remain. Heavy dependence on remittances can make economies vulnerable to downturns in host countries. If a host economy faces recession or imposes restrictive policies, remittance flows could decline sharply. Furthermore, strict regulations or heavy taxation may drive migrants back toward informal transfer systems, undermining transparency. Geopolitical conflicts and sanctions also remain a constant threat to the smooth flow of funds. The future of remittances is promising, but it is not without pitfalls. The key lies in making them affordable, transparent and resilient.

The road to 2026
Remittances are far more than financial transfers. They are lifelines for families, catalysts for fintech innovation, and drivers of economic growth in both host and home countries. By 2026, the global remittance market will not just be a story of money moving across borders but of resilience, opportunity, and transformation. Predictions from global analysts suggest steady growth well into the next decade. Yet, the key question remains: can governments, financial institutions and fintechs keep remittances affordable, transparent and impactful? If they can, remittances will evolve from survival tools into engines of prosperity; a bridge not just between countries, but between present needs and future opportunities. n

Is computing power ABS on the horizon to fund AI?

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JP Morgan suggests that $5trn will be spent on the build-out of data centres worldwide from 2026 to 2030, while McKinsey expects that the total investment could reach $7trn during the same period. In aggregate, these forecasts imply a base-case annual capital expenditure of $1trn. Headline figures vary across financial institutions and consulting firms. Their guesstimates, however, all point in the same direction.

To put the scale of this annual capex into perspective, Bank of America estimates that it costs $50bn to build one gigawatt (GW) of data centre capacity. At that rate, $1trn of annual investment would fund approximately 20 GW of new capacity, three times New York’s installed electricity capacity of roughly 6.7 GW.

Silicon Valley, meanwhile, seems to move fast to meet this goal. 2025 has just witnessed a web of circular financing deals in which hyperscalers and fast-growing AI unicorns increasingly investing in each other, blurring the line between customers, suppliers, and investors. OpenAI, Oracle, and SoftBank has committed $500bn for their Stargate project over the next four years while CoreWeave signed a $14bn deal with Meta to supply computing power, to name just two examples. According to Goldman Sachs, the consensus capex estimates for AI hyperscalers alone might reach $394m by the end of 2025.

The million-dollar question is how such investment will ultimately be financed. For hyperscalers such as Meta, this size of commitment in AI investment is consistent with the scale of their balance sheets. The route to funding such investment is less clear, however, for standalone AI developers. OpenAI generated approximately $20bn of annual recurring revenue (ARR) in 2025, yet the AI poster child has committed to invest $1.4trn over the next eight years, according to Sam Altman.

To answer this question, it is useful to examine how AI investment has been funded to date. Hyperscalers funded early AI investment with their own cash flows. In 2025 alone, Meta, Microsoft, Amazon, and Alphabet collectively sit on around $500bn free cash flows. Then the debt capital market was tapped as this once-in-a-lifetime technological breakthrough in the 21st century started to appear promising. Constrained by balance-sheet leverage ratios, they started to shift debt off balance sheet recently.

A case in point is Meta’s Hyperion Data Center in Louisiana. In October 2025, Meta announced a joint venture with Blue Owl Capital to develop this project through a special-purpose vehicle (SPV) called Beignet Investor. According to the Financial Times, this SPV has raised $30bn in total, comprising $27bn of loans from private credit funds and $3bn of equity from Blue Owl.

Looking ahead, Morgan Stanley addressed the funding question in a report published in July 2025. The bank estimates that capex in data centres by 2028 could reach approximately $3trn, half of which could be covered by hyperscalers’ own cash flows. A further $200bn could be funded by corporate debt issuance. Specifically, it points out that another $150bn could be funded via data centre asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS).

Data centres have already been financed off balance sheet
Data centres are not new to the securitisation market, but their use of structured finance remains limited. The first-ever data centre ABS in the world was issued in February 2018 by Vantage Data Centers, a data centre operator in key US markets. Rated A- by Standard & Poor’s, the securitisation notes raised $1.125bn, allowing Vantage to expand in existing and new markets. Three years later, Blackstone issued the first-ever CMBS in 2021, raising $3.2bn to finance the its $10bn acquisition of data centre operator QTS Realty Trust in June 2021.

For computing power ABS and potentially more exotic financing vehicles to emerge at scale, clearer evidence of AI monetisation might be required

In Europe it is still at its early stage as there are only two ABS deals so far. In June 2024, Vantage raised £600m in securitised term notes regarding two data centres located in Wales, UK, making the first-ever data centre ABS in Europe. One year later, it issued another €640m in securitised term notes in June 2025 for four data centres located in Frankfurt and Berlin, Germany, the first-ever data centre ABS in continental Europe.

According to the New York Times, 27 data centre ABS deals have been issued raising $13.3bn in 2025, increased 55 percent year-over-year.

Why computing power is structurally securitisable
At present, data centre securitisation deals are all issued by data centre operators, with long-term contractual cash flows from tenant lease payments, from either co-location customers or hyperscalers. Proceeds are typically used to refinance existing debt and expand data-centre capacity.

Against this backdrop, the web of circular financing in 2025 has brought some of the neocloud providers to the fore, offering AI developers access to computing power on a rental basis. The GPU-as-a-Service (GPUaaS) model shifts AI infrastructure spending from upfront capex to flexible operating costs for AI training and inference.

Leading players have recently secured a number of long-term contracts with hyperscalers. Nebius, an Armsterdam-based neocloud company, for example, has signed an agreement with Microsoft to provide GPU services with the total contract value up to $19.4bn through 2031 and a $3bn agreement with Meta over five years. These long-dated contractual obligations would create predictable and stable cash flows, allowing computing power to be securitised in the same way data centre operators issue data centre ABS & CMBS to expand capacity in the competitive GPU-as-a-Service market.

While no high-profile securitisation transactions have yet emerged, the Financial Times reported that some technology bankers have seen ABS deals on AI debt in recent months. Details of these deals remain limited.

Where the securitisation thesis breaks down, for now
That said, the picture has become more mixed in recent months, with early signs of strain emerging across the AI landscape. Often as a canary in the coal mine, equity capital markets have begun to reassess the sustainability of AI-driven investment. Oracle shares have plummeted 43 percent as of December 23, 2025 from their highest level earlier in September when Oracle inked a $300bn computing power deal with OpenAI. In this deal, OpenAI will purchase computing power capacity worth $300bn from Oracle over five years, per the Wall Street Journal. The shift has also been reflected in the derivative markets. Oracle’s five-year credit default swap (CDS) skyrocketed from around 37 basis points in July to 151.3 basis points in November 2025, the highest level since 2009, per Bloomberg.

The web of circular financing in 2025 has brought some of the neocloud providers to the fore

The scale of the market sentiment reflects widespread concern about the feasibility of Oracle’s recent expansion. In its latest 10-Q earnings report, Oracle disclosed $248bn of additional lease commitments, largely tied to the build-out of AI infrastructure.

The main concern around Oracle is twofold, per Bloomberg. First, there is a mismatch between the duration of Oracle’s lease commitments and its contracted revenues. While lease obligations are expected to spread across 15 to 19 years, most of its contracts are due in the next five years, exposing a company at the epicentre of AI infrastructure build-out to renewal risk and potential excess capacity if demand softens. Second, it might under-depreciate its GPUs and need to upgrade their servers in the middle of a lease. It currently depreciate IT equipment over six years as most of its peers do. However, there is no answer as to how long GPUs can last for as ChatGPT was only introduced three years ago on November 30, 2022.

Similar pressure has been evident elsewhere. CoreWeave and Nebius shares have slid 55 percent and 30 percent from their respective peaks as of the end of 2025.

Despite these sharp equity corrections, the broad picture for AI infrastructure funding is still resilient. In an interview with CNBC in December 2025, Sung Cho, co-head of public tech investing and US fundamental equity at Goldman Sachs, however, reinforced confidence in the sustainability of AI funding. He claimed that, viewed in aggregate, 90 percent of the capital expenditure to date in AI is funded by hyperscalers’ operating cash flows with only 10 percent financed by corporate debt, the majority of which is issued by Meta, whose credit ratings are higher than those of the US government.

For computing power ABS and potentially more exotic financing vehicles to emerge at scale, clearer evidence of AI monetisation might be required. In the near term, a viable B2B2C model, where AI adoptions translates directly into productivity boost and margin expansion for end customers, could serve as the first dawn. Once such economics are established, computing power ABS deals might become mainstream, diversifying the spectrum of financing options available to the AI industry.