Author: itsupport

A masterclass in minimising environmental impact with a sustainable mindset

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Sustainability is a top priority for companies in today’s business landscape. In our pursuit to be as transparent as glass, BA Glass has a well-established sustainability strategy that has been part of its organisational culture for over 20 years. A sustainability strategy that is based on six key pillars – people, social accountability, shareholders, environment, consumers and customers – which strengthen and motivate us daily, to do more and to never stop trying new things, driving us to set and meet ambitious targets.

Our sustainability journey starts with the very essence of what we produce: glass. As glass container producers, we embrace the time-honoured human tradition of glass, driven by its unique properties: non-polluting, non-deforesting, inert, non-contaminating, reusable, and infinitely recyclable. This ambitious strategy has guided us to be the only glass packaging company to reach the highest score – an A – in the Carbon Disclosure Project (CDP), joining a group of only 299 companies in the world. CDP is a not-for-profit organisation that runs the global disclosure system across value chains to manage their environmental impacts.

In 2020, we set an ambitious target of reducing CO2 emissions by 50 percent (scope one and two) until 2035 and received its official approval from the Science Based Targets initiative (SBTi), a prominent organisation that promotes the establishment of ambitious science-based emission reduction targets, in accordance with the Paris Agreement. In just two years, we decreased by 20 percent the CO2 emissions per ton of glass produced, in direct and indirect emissions, scope one and two. With a clear vision for reducing our carbon footprint, we have embraced numerous actions and initiatives, namely the transition from fossil fuels to clean energy sources. This energy shift was notably accelerated by the installation of 80,000 m2 of solar panels, resulting in a significant reduction of more than 4,100 tons of CO2 emissions every year.

The integration of cullet (recycled glass) into our production process represents a significant part of our ongoing efforts to minimise our environmental impact. Thanks to its characteristics, glass is 100 percent recyclable, forever. It can be incorporated into the production of new glass containers without any loss of its original qualities. This not only reduces the need for additional raw materials, but also leads to substantial reductions in CO2 emissions. We embraced numerous initiatives to increase the glass collection in all the countries in which we have production facilities, aiming to reach a 90 percent collection rate, a powerful initiative under the Close the Glass Loop, driven by the European Glass Association where BA has two board seats. Aside from recycled glass, another crucial aspect of our strategy is the reduction in weight of bottles and jars, which directly impacts our carbon footprint. In 2022, our innovative lightweight designs led to an impressive reduction of 2,500 tons of CO2 emissions (scope one and two), significantly minimising our environmental impact. Two years ago, we launched PURE, our sustainable brand.

PURE was created with the aim of making glass more environmentally friendly through conscious design, where nature comes first in every part of the creation process. As a result, we are challenging customers and brand owners to review their options on packaging design, embracing more sustainable options. Although our emissions in scope one and two are higher than in scope three, we are also devoting resources to reduce indirect emissions. Many initiatives with transport companies are being developed, and we are very optimistic concerning the significant CO2 reductions ahead. We are partnering with our suppliers in this common journey, debating their carbon reduction action plans and remain willing to actively participate in their initiatives. All these accomplishments, on our journey to be more sustainable, were possible due to the support of our shareholders.

Over the last three years, they have allocated €22m specifically for the development of technologies aimed at reducing emissions and minimising environmental impact. An example is the development of the ECO Furnace, an innovative new technology that will allow us to reduce the use of gas by green energies. This substantial investment in R&D projects underscores their dedication to driving positive change and securing a sustainable future. Besides the environmental concerns, BA’s sustainability journey goes beyond environmental responsibility. We aim to foster a positive impact on our employees and the communities where we operate. Our top priority is to empower our people by going beyond what we produce, creating career opportunities and promoting the development of their skills, through training programmes and enriching experiences that enable individuals to take on new challenges and expand their thinking. Moreover, we are always seeking to create a positive impact within our communities. Our ‘Glass Seeds’ project aims to promote equal opportunities and meritocracy in our local communities through educational support.

For BA, sustainability goes far beyond the production of glass packaging. It is about having a green and sustainable mindset in every action we undertake. Through our long-term commitment and with an ambitious roadmap, we believe that we are not just envisioning a more sustainable future, we are actively shaping it, aiming to be as resilient and eco-friendly as the material we produce – glass!

Transforming the economy by putting people first

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Banco de Reservas de la República Dominicana, known as ‘the bank of all Dominicans,’ is at a pivotal moment in its history. Serving as a catalyst in the Dominican economy, the bank has a strong reputation for participating in activities that promote the sustainable development of the country’s main productive sectors, support its sports and culture, and protect the environment.

As part of the celebrations for our 82 years of service, Banreservas is proud to be opening a third representative office. Located in Miami, close to the Dominican Consulate, it will attract new business opportunities to the country as well as serving the Dominican diaspora. Our existing representative offices located in Madrid and New York, along with the new office in Miami, will allow Dominicans to access banking products and services managed from within the Dominican Republic.

These offices make Banreservas the only Dominican bank to go beyond its borders with an international presence in the US and Europe. They demonstrate our genuine interest in encouraging the economic growth of the nation and promoting the prosperity of all Dominicans, wherever they are.

The bank supports its clients to integrate ESG principles into their operations

Our digital strategy also supports these aims, with the Tu Banco app and website boasting 1.2 million active users as well as a monthly average of 7.2 million digital transactions recorded over the last five months.

We pride ourselves on our inclusivity and accessibility: our dual offices, launched in 2021, provide customers with an innovative combination of traditional and digital banking services, including the MIO electronic wallet. Digital account holders, meanwhile, can open a savings account directly in the app or online without having to visit a branch. This new feature saw 50,000 accounts opened in the first month following launch.

Our customer service chatbot, ‘ALMA,’ helps clients via WhatsApp, and our new Digital Token feature allows account holders to authorise transactions by generating unique and temporary codes to authenticate access. Banking with us is safer than ever as a result. Furthermore, we are the only bank in the country whose app doesn’t consume data – all Dominicans should have access to banking services, no matter their means.

Impressive results
2023 has seen an improvement in our financial performance thanks to strong leadership. The loan portfolio has grown by 15 percent, total deposits are up 18 percent and perceived profits are up 34 percent, from a year previously. Banreservas has achieved results that represent a milestone for the firm, our loan portfolio exceeding DOP$500,000, with a non-performing loan ratio of 0.73 percent (the lowest in our history). As of September 2023 our market share was 32 percent, making us one of the country’s leading financial institutions. The Covid-19 pandemic revealed opportunities for improvement in many aspects of the way we live. Continuing with the same patterns of production, energy and consumption is no longer viable – together we need to transform these habits into ones that will lead us along a path of sustainable, inclusive, long-term development.

Taking this into consideration, and wishing to achieve better risk management, since 2021 Banreservas has implemented an environmental and social risk management system (SARAS) whose purpose is to monitor environmental and social risks within our investment and credit activities. One of its main strategic objectives is to develop environmental and social awareness in the next generation in order to achieve a sustainable future. We do this in-house too: our internal Culture of Sustainability programme includes virtual workshops for raising awareness, training and empowering our employees in institutional sustainability.

We have been keenly aware of the importance of ESG since long before the pandemic, however. Since 2017 Banreservas has been part of the United Nations Global Pact, thereby committing to working towards the Sustainable Development Goals (SDGs), presenting an annual progress report on the adoption of sustainability in the company’s activities. In addition, Banreservas is an active member of the National Business Support Network for Environmental Protection (ECORED), using its online evaluation tool ‘IndicaRSE’ along with other international standards to ensure we are pushing forward with our sustainability agenda.

The bank promotes clean energy by offering loans for sustainable solutions

In 2007, the Dominican Republic passed legislation on renewable energy as part of its commitment to reducing its greenhouse gas emissions by one-third by 2030. The main objective of this law was to increase the contribution of renewable energy sources in electricity generation to 25 percent by 2025. To comply with the legislation we launched ‘Renueva Verde Banreservas,’ a new financial service programme to facilitate families’ and companies’ switch to clean energy solutions. The programme is an invitation to incorporate environmentally friendly solutions at home and at work, offering financing of up to 80 percent of the value of the product, with fixed rates from 6.45 percent for up to three years, payable in installments of up to 84 months. Also available are partnership with businesses, financial education programmes, and special offers on products and services provided by companies in the Reservas family.

Together with its investment banking team, the bank supports its clients to integrate ESG principles into their operations, develop resilience and risk management and unlock new business opportunities in an evolving market landscape. Within its credit offer, the bank promotes clean energy by offering loans for sustainable solutions such as solar panels, hybrid and electric vehicles, scooters and electric bicycles.

We have also signed an agreement with Interenergy Systems Dominicana, a division of the InterEnergy Group and its Evergo technology platform, to install electric charging stations in the parking lots of our offices nationwide. We strive for energy efficiency in our own offices too, achieving power usage effectiveness indexes as low as 1.5 in our data centres.

As a result of all these initiatives, Banco de Reservas de la República Dominicana has been awarded 43 Sustainability 3Rs certifications by the Dominican Republic’s Center for Agricultural and Forestry Development. With most of the awards at gold level, we are the most recognised financial institution in the country in this regard, a sign of how seriously we take our responsibility of contributing to the country’s sustainability goals.

Supporting Dominican society
We contribute to the development of Dominican society through the work of our Sustainability and Social Responsibility Department. This work includes our focus on financial education and inclusion, which promotes a savings culture for sustainable economic wellbeing. Whether Dominicans are right at the beginning of their financial journeys or seeking financial rehabilitation, our financial education and culture workshops can help. The ‘Preserva’ programme, meanwhile, provides access to low-cost banking products aimed at promoting savings and good credit.

We support entrepreneurship through our ‘Cree Banreservas’ programme. It supports the sustainable development of innovative projects by Dominican entrepreneurs through specialised technical mentoring. Development of the productive sector is also key: the Banreservas ‘Coopera’ programme promotes the socio-economic development of national producers. It does so through the promotion of social projects for the production of goods and services located in vulnerable communities. Social inclusion is at the heart of the ‘Banreservas Accesible’ project too, promoting access to job opportunities within the Banreservas’ family for people with disabilities.

The bank carries out even more sustainability activities through ‘Voluntariado Banreservas,’ our solidarity and commitment programme. Plugging into two of the main focuses of the bank – social responsibility and sustainability, and human capital – it carries out community benefit projects covering areas as diverse as the environment, health, education and culture.

Looking to the future
Banreservas is dedicated to improving quality of life in the Dominican Republic through strategies that support the country’s long-term development. This is only possible through a combination of effective management of resources and prioritising the most vulnerable in society.

As a leading government-owned financial institution, we are well placed to compete with private banks to support the needs of our people.

Celebrating success with next-level trading

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Mitrade has dedicated its efforts in expanding its contract for difference (CFD) product range, reflecting its strong commitment to providing traders with an even more diverse and comprehensive set of trading products. This will benefit traders by offering them a one-stop trading platform to trade faster and smarter – capitalising on a wider array of market opportunities.

Mitrade is an Australian-based CFD broker that embarked on its journey in 2011 with a vision to revolutionise online trading. Over the years, it has emerged as a prominent global trading platform with over 2.4 million users, licensed by different regulatory bodies such as ASIC, CIMA, and FSC (Mauritius), catering to traders from around the globe. Offering an extensive selection of over 400 markets, Mitrade has become synonymous with unparalleled opportunities for traders to engage with a diverse array of financial instruments, spanning stocks, commodities, currencies, indices, and cryptocurrencies. Recognised as a popular trading app, Mitrade has garnered over a million installations across both Google Play and the iOS App Store. This extensive usage demonstrates the trust and preference traders have for this platform to meet their trading requirements. Currently, the trading platform is accessible through mobile applications, desktop, and web trader platforms.

Award-winning platform
Mitrade has established itself as a prominent global trading platform, continuously receiving acclaim as an award-winning entity from its early days up to the present moment. These accolades underline the platform’s dedication to offering outstanding services and innovative solutions to traders. Earlier this year, Mitrade received an award for ‘Best Multi-Asset Broker’ from World Finance. The award recognises Mitrade as the go-to platform for traders, allowing them to have an impressive selection of over 400 trading products such as forex, shares, commodities, indices and cryptocurrencies. By offering such a wide range of products, Mitrade makes it possible for traders to explore different markets and make investment decisions based on their preferences.

Top-picked trading products
Throughout the year, Mitrade has seen remarkable growth on its trading products. User favourites like NAS100, XAUUSD, AAPL, and EURUSD stand out for their exceptional performance in trading volume. Notably, VinFast Auto (VFS) shares have stood out among the new additions this year, constituting 2.8 percent of the total volume of US shares traded. With this widened scope, Mitrade is determined to elevate its offerings even further – Mitrade ensures traders have access to an extensive portfolio of assets, enabling them to diversify their investments and leverage a broader range of market movements.

We are committed to giving traders the edge they need in the fast-paced financial markets

Hassan Haidar, Head of Dealing at Mitrade, conveys his enthusiasm for the ongoing initiatives in launching new products, saying, “Mitrade is an all-in-one trading platform, crafted for traders of all levels, designed for ease of use and flexibility. We are committed to giving traders the edge they need in the fast-paced financial markets. This broadened range of CFD products, combined with our intuitive trading platform, underscores our steadfast promise to offer our clients diversification and flexibility.”

He goes on to express gratitude, saying, “I want to take this opportunity to extend a heartfelt thank you to all our users who have supported Mitrade on this incredible journey. Your feedback and support have been instrumental in shaping our platform into what it is today. We remain dedicated to continuously improving and innovating to meet your evolving needs. Your trust and loyalty are the driving forces behind our continuous efforts to enhance your trading experience. We look forward to many more milestones together.”

Low spreads and zero commission
In the world of financial markets, traders aim to maximise profits by leveraging advantages. Low spreads and zero commission fees are two critical elements that, when combined, create an environment empowering traders by reducing costs and increasing potential gains. Low spreads are pivotal because they directly influence the trades’ breakeven point and potential profitability. A narrow spread means lower initiation costs and a smaller movement required in the trader’s favour to turn a profit. This is especially vital for day traders and scalpers, for whom even small price movements can significantly impact profitability.

Mitrade’s offering of low spreads enhances the trading experience for their users, making them a competitive choice for traders seeking cost-effective solutions. Zero commissions on trades revolutionise online trading by removing the conventional fee structure associated with buying and selling financial instruments, benefiting traders of all levels. This reduction in trading costs is particularly advantageous for frequent traders and those with smaller capital. It also levels the playing field for beginners or those with limited funds, enabling them to learn and experiment without the worry of excessive expenses. Additionally, the absence of commission fees allows for more calculated risk management and encourages a dynamic trading approach.

This model promotes greater portfolio diversification, spreading risk and potentially enhancing overall success. For traders employing longer-term strategies, it allows them to hold positions without the pressure of ongoing fees. This transparency builds trust between traders and their chosen brokerage, eliminating potential conflicts of interest. In essence, zero commissions on trades provide a substantial advantage, streamlining trading for greater accessibility, efficiency, and transparency, while also giving brokerages a competitive edge in the market.

Revolutionising trading
With a focus on speed and efficiency, Mitrade has seamlessly integrated TradingView, a platform trusted by over 550 million users, into its trading interface. This integration brings a powerful set of tools to traders’ fingertips. They can now easily perform technical analysis, which involves studying historical price charts and patterns to make informed decisions about future price movements. This is a crucial aspect of trading, as it helps traders identify potential entry and exit points for their trades.

In addition, Mitrade’s comprehensive platform is bolstered by a suite of educational resources and analytical tools with an AI feature. One of the product highlights was MitradeGPT; an integrated version of ChatGPT and FXStreet news insights into the platform, making Mitrade the first in the CFD world to have this kind of feature. With MitradeGPT, users are able to access real-time insights, personalised guidance and a quick summary to navigate the complexities of financial markets – filtering out the noise from the bustling news environment. These recent product updates aim to equip traders with the knowledge and insights needed to make informed trading decisions. It encompasses market analysis, live webinars, tutorials, and a range of other resources designed to enhance traders’ skills and understanding of the financial markets.

Effective risk management is a cornerstone of successful trading, particularly in volatile market conditions. In any trading platform, when market fluctuations are swift, there’s a potential for losses to exceed your account balance rapidly, potentially resulting in a negative balance following a forced liquidation. To mitigate this risk, Mitrade offers a valuable feature known as negative balance protection.

This safeguard ensures that even if losses temporarily surpass your account balance, the platform will promptly reset it to zero. This feature provides traders with an extra layer of security and confidence, enabling them to navigate the markets with greater peace of mind. It underscores the platform’s commitment to creating a safe and supportive trading environment for all users.

All-in-one educational resource
This year, Mitrade has also revealed the expansion of Mitrade Academy’s educational resources in 10 languages. This launch shows Mitrade’s dedication to helping traders worldwide by giving them easy-to-understand learning materials in their native languages. By offering an extensive range of educational content, including tutorials and trading guides, in languages such as English, Spanish, Thai, Vietnamese, and more, Mitrade aims to break down language barriers and foster a more inclusive and informed trading community. Mitrade welcomes both existing and new clients to explore our all-in-one trading platform and discover how easy it is to manage multiple investments on a single platform. The company’s steadfast dedication to innovation, user-centricity, and educational empowerment distinguishes it as a leader in the trading industry.

Comprehensive trader support
Mitrade’s 24/5 multilingual local customer service is a testament to their commitment to providing tailored and accessible support to traders worldwide. With a team proficient in various languages, they ensure that assistance is available whenever traders need it, from Monday to Friday.

This localised approach means that traders can communicate in their preferred language, facilitating clearer and more effective resolutions to their queries or concerns. This personalised service not only fosters a stronger sense of trust and reliability but also reflects Mitrade’s dedication to creating a global trading environment that feels truly welcoming and inclusive for all.

Championing a more sustainable aviation future

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With COP28 just around the corner, sustainability is undoubtedly front of mind for most organisations. The aviation industry is making extensive efforts to address the current climate challenge, reduce its carbon footprint and create more sustainable air travel options.

But how can airlines realistically reduce their environmental footprint? While we know that a plane will never be more sustainable than a train or an electric vehicle, Wizz Air is on a mission to become a pioneer in sustainable aviation and has already delivered on a number of important milestones in terms of its sustainability strategy.

Pioneering sustainable aviation
Wizz Air proudly holds the title of the most sustainable low-cost airline according to the World Finance Sustainability Awards, with the lowest carbon emissions intensity in Europe, if not the world.

In the fiscal year 2023, we achieved an impressive 53.8 grams of CO2 per passenger per kilometre, marking an 11 percent reduction compared to the previous fiscal year. This achievement is the lowest emissions intensity ever reported by Wizz Air in a single fiscal year. We are not just setting records; we are setting industry standards and leading by example.

One of the key drivers behind our sustainability success is our commitment to continuous fleet renewal and focus on technology and innovation available here and now. The latest Airbus A321neo aircraft we operate is significantly more fuel-efficient than previous generation aircraft. Wizz Air boasts one of the youngest fleets globally, with an average age of four years, well below the average fleet age of its major competitors, which is around 10 years. Not only does this benefit our environmental efforts by reducing emissions intensity, but it also enhances the passenger experience with quieter and more comfortable flights.

We also believe that consumer sentiment is changing – passengers are choosing low-cost airlines over traditional network carriers, who are unable to meet the same efficiencies or achieve the same carbon emission reduction results. Switching to fly with Wizz Air can reduce a passenger’s CO2 emissions by almost 50 percent compared to flying with legacy carriers.

Future fuel
One of the cornerstones of Wizz Air’s sustainability strategy is the integration of sustainable aviation fuel (SAF). While we are working with Airbus on their zero-emissions hydrogen aircraft, which is 20–25 years away from now, we see SAF as a bridge between the present and a more sustainable aviation future, on top of fleet renewal and investments in operational efficiency. Although SAF holds immense potential to reduce carbon emissions by up to 80 percent over the fuel’s life cycle compared to using fossil jet fuel, we acknowledge the challenges it poses. Biofuels and e-fuels, while promising, have a limited supply, making them expensive and difficult to obtain.

Nevertheless, Wizz Air is actively addressing these challenges. We have forged partnerships and invested in SAF, both securing volumes for the mandates that are coming in 2025 in Europe and trying to help new technologies come to life.

We have four agreements in place with the world’s leading SAF producers, including Neste and OMV. We also made our first equity investment of £5m into Firefly, a UK-based biofuel company developing the technology to produce SAF from sewage sludge, and participated in a $50m investment in CleanJoule, a US-based company making biofuel from renewable agricultural residues and other waste biomass. These strategic alliances will not only help us secure a stable supply of SAF, but also drive innovation in this crucial area of sustainable aviation.

A brighter air travel outlook
There has been an upturn in passenger numbers following the challenges posed by the Covid-19 pandemic, the industry is recovering and people are flying again. It is clear, now more than ever, that the path to a more sustainable aviation industry involves investing in new technologies and embracing innovation. While Wizz Air has given the freedom to travel to more and more people, it has also proven that growth and sustainability can be achieved simultaneously.

By investing in the latest technologies, embracing SAF, and working collaboratively with partners, regulators, and stakeholders, we are leading the charge towards more sustainable air travel. We support legislative initiatives that mandate SAF use and encourage governments to invest in its production to ensure appropriate supply for the demand that is foreseen. In that regard, the European Union is a standard setter in terms of global climate policy, and we welcome such regulatory approaches.

With our holistic approach to sustainability and continued focus on resource efficiency, we are confident we can contribute to the communities we serve and the planet whilst also lowering our cost structure, strengthening the trust of our customers, and improving access to capital over the long run.

Boardroom balance: A top down approach to diversity and inclusion

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Boardrooms have the innate power to change the future not only of companies but the overall economy. When it comes to fully utilising their power, diversity of opinion is the cornerstone of a successful, powerful board. For a board to have a holistic viewpoint, it is vital that under-represented parties are heard. In fact, the configuration of the board of directors has been a vital research topic in the corporate governance realm for many decades now. During the last few years, the literature in the corporate governance field explicitly stresses the importance of gender diversity in the boardroom.

Several jurisdictions have enacted gender quota legislations to mandate the appointment of female directors on corporate boards. Gender legislation endeavours to address the ethical aspect that female directors have been significantly under-represented despite equal competence. Indeed, the Norwegian government was a pioneer in this field since it was the first to establish a 40 percent female quota in 2003. There now seems to be a widespread recognition among both company boards and stakeholders in relation to the benefits that derive from diversity, especially with respect to gender.

Shockingly, in 1983, based on the 10-year growth rate of the ranks of women directors, Elgart forecast that it could take about 200 years for women to attain equal representation in top corporate boardrooms. While the corporate world grapples with the imperative of fostering gender diversity, one bank emerges as a beacon of progress: the Bank of Cyprus. At our bank, the balanced participation of women and men in the decision-making process is imperative to the fundamental principles of democracy and human rights. Its advanced initiatives in championing board gender diversity set a laudable benchmark in the corporate governance sphere. A closer examination reveals the nuanced strategies and deep-rooted ethos that make the bank a trailblazer.

The historical foundations of the Bank of Cyprus provide a lens though which one can comprehend its unwavering commitment to gender diversity. Founded in 1899, the bank has not just been a silent spectator but an active participant in the socio-economic metamorphoses unfolding within and beyond the borders of the jurisdiction. In tandem with the societal changes, the bank illustrated a proactive consciousness toward the changing dynamics of gender roles. As women in Cyprus and abroad began to carve out spaces in the corporate world gaining visibility and prominence, the Bank of Cyprus acknowledged the imperative to reflect these changes within its organisational structure and leadership. To this end, the bank adopted policies and practices with the aim of promoting gender inclusivity at board level. This was not merely a symbolic nod to the trends of the time but a robust commitment to cultivating an organisation where, not only do women participate, they also lead.

Real data: An exceptional record
Quantitative data provides compelling evidence of the pioneering spirit of the Bank of Cyprus in the field of gender diversity at board level. In fact, official data – released in the 2022 Corporate Governance Report of the Bank of Cyprus – demonstrate that the board is comprised of 40 percent female representation. This progress is a culmination of years of meticulously planned strategies, manifesting the genuine commitment of the bank to gender equality. The empirical data of Bank of Cyprus provided in terms of gender equality tells a tale of unwavering, sustained commitment that has been nurtured and strengthened over time. The 40 percent female representation stands even stronger against the background of official data released on the subject; according to the 2020 OECD Analytical Databases on Individual Multinationals and their Affiliates (ADIMA) women are severely under-represented. Indeed, women in accordance with the ADIMA make up only 16 percent of board members in the top 500 MNEs.

The triumph of the Bank of Cyprus is not coincidental; it is the result of a gamut of calibrated strategies. Through meticulously crafted policies, recruitment strategies, and professional development programmes tailored for women, the bank has actively sought not only to accommodate, but also actively promote and celebrate female leadership within its ranks. In fact the bank sets explicit diversity goals, which strictly adhere to quantifiable targets with the aim to provide clear direction for its diversity mission. Additionally, in the process of candidate selection for board position nominations, the bank official considers in their suitability processes the impact of a nomination of a board member on gender diversity.

Behind the business rationale
The rationale behind the gender diversity commitment of the Bank of Cyprus is supported by a plethora of research and evidence that detail the correlation between gender diversity and business performance. In the aftermath of the financial crisis, one of the key issues of the board composition debate has been board diversity. Extensive research has indicated that gender diversity in the boardroom will lead to innovative ideas, increased competitiveness and performance, as well as better decision-making. Indeed, diverse teams contribute to a richer brainstorming ecosystem, crucial for banking in the current age of constant innovation.

The balanced participation of women and men in the decision-making process is imperative

Board quality and board diversity are interconnected since a diverse board are less prone to ‘groupthink,’ which has been defined as a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when the members’ striving for unanimity override their motivation to realistically appraise alternative courses of action.

It has also been suggested by bulk literature on the subject that the presence of female directors on corporate boards significantly contributes to the efficiency of corporate governance and increased corporate reputation.

Further to the link between gender diversity at board level and increased governance performance as well as innovation galore, there is evidence to suggest boosted financial returns are linked to gender diversity on the board. The McKinsey research showed that “companies in the top quartile representation of women in executive committees perform significantly better than companies with no women at the top.” In fact, in a 2013 report issued by Ernst and Young it was underlined how gender diversity can aid the improvement in company results in terms of better average growth and a higher return on equity.

The diversity journey
The path of gender diversity on the board is a perpetual one as societal change does not remain stagnant and societal dynamics are fluid. Plans on the horizon include intensified mentorship drives, partnerships with academic entities to sculpt the next generation of female financial leaders, and rigorous training sessions to eliminate unconscious biases in hiring and promotions.

While statistics provide a compelling story, the path of the bank in the journey to gender diversity is more profound. This is just a start. At Bank of Cyprus, we believe that financial institutions should continually search for new ways to use their expertise to further empower investors and promote gender diversity at all levels of leadership around the world.

The 40 percent board gender diversity of the Bank of Cyprus is a testament to the institution’s ability to introspect, evolve, and lead. Gender diversity is not regarded by the bank as a mere box-ticking exercise. On the contrary, it is an intrinsic part of its ethos, a commitment to reflecting the society it serves, and a strategic imperative to ensure sustainable growth.

In the vast landscape of global banking, where institutions grapple with the challenge of genuine gender inclusion, the bank shines brilliantly, offering lessons, inspirations, and a roadmap for others to emulate. As the world continues to champion gender equality, it is institutions like the Bank of Cyprus that will be remembered not just for their business acumen but for their role in reshaping gender inequalities.

Embracing innovation and AI in fund management

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Spanning Belgium, Slovakia, Hungary, Bulgaria and the Czech Republic, KBC is a banking and insurance group with some 42,000 employees and 12 million clients. We offer a wide range of products and services such as investment funds and discretionary management for all types of clients: retail, private banking, and wealth clients, and we aim to cater for the varying needs of all. At the core of our day-to-day motivation lies our motto: ‘Everyone invested all the time.’

KBC Asset Management acts as the group’s investment arm, working with 2.8 million retail and institutional investors, developing products for intra-group distribution and providing investment fund sales and advisory support.

Digital first with a human touch
We believe that investing is a healthy financial habit for everyone, and innovation allows us to keep clients feeling comfortable when investing and so keep them invested. We do this in a personalised yet efficient way – we are also embracing AI, which helps us to change the way we interact with our clients in all market segments. Our Solution Development team takes solutions from idea to launch and initiates changes and challenges to existing solutions to make sure they match our clients’ needs at all times. A talented team works together to ensure proper asset allocation in managed funds and portfolios. The Solution Support team offers clients direct investor support, providing personal, relevant, and up-to-date information, training, and after sales services, and it does this by putting digital channels first.

Making investing a healthy habit
We take every opportunity to introduce innovative solutions to fit our clients’ needs. Over the last 10 years, KBC Mobile – our award-winning mobile banking app – has evolved into an all-in-one platform that is now the gold standard. Our virtual assistant, ‘Kate,’ has been the logical next step in the digital client experience, helping clients navigate investment options on digital channels, where over half of KBC’s investment plans are now sold.

AI models help in stock picking and optimising fund portfolios

We also added a ‘turbo’ feature on our digital service: investing with your spare change. The principle is simple; each time a client pays with their debit card, KBC rounds up the amount to the nearest Euro and automatically invests it. The client invests their spare change and gains investment experience with no effort whatsoever. The ‘turbo’ can be accelerated by a factor of two or three, enabling the customer to put even more aside if they wish. They can also activate or deactivate the ‘turbo’ at any time in KBC Mobile.

Investment innovation
We have broadened our digital offer both for first time investors and customers who want to respond to the challenges of today and tomorrow. Customers can invest in themes close to their heart via thematic investing in KBC Mobile, either periodically or as a lump sum.

This is done without any human assistance via personal portfolio advice by ‘Kate’ to keep clients feeling comfortable when investing. Our smart advisory engine, based on AI, screens portfolios held by private and wealth clients on a daily basis. It performs a detailed analysis of each portfolio based on different risk and return factors and proactively formulates personalised advice. It is an E2E process that also takes into account clients’ personal investment preferences.

By embracing AI in fund management, KBC can respond faster to market developments. AI models help in stock picking and optimising fund portfolios. This enables us to respond to market developments faster and more efficiently for our clients. Two of our funds are even managed by AI; a balanced fund whose asset allocation and asset classes are determined with the help of AI-controlled models, and an equity fund whose stock picking is done by AI.

Responsible investing for 31 years
Since our first launch in 1992, KBC has systematically strengthened its policy, considering society’s constantly changing expectations and growing insights. Credibility is a core value for us; therefore this is monitored by the Responsible Investing Advisory Board, which is completely independent of KBC and consists of leading academics from several universities.

We work hard every day to get – and keep – everyone invested by providing tools and products that make investing easy, personal, valuable, and reliable. Using the power of data, our key focuses are innovation and employee and client satisfaction. By focusing on digitisation and creating value for our customers in a sustainable way, investing truly is becoming accessible for everyone.

A rich portfolio of innovative financial solutions

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For over 30 years Postbank has worked with a clear strategic vision for the future and the sustainable growth of its business. The bank offers innovations for an excellent experience for its customers and employees, and it invests in a green future in line with its ESG strategy. The excellent consumer experience is an immutable part of the bank’s corporate policy.

Through the development and implementation of every high-tech solution and the provision of services with exceptional added value, the bank reaffirms its ambitions to be a key leader in the financial services market and its desire to be the bank that offers its customers innovative concepts and solutions combined with flexibility and efficiency. Postbank provides an excellent experience and personalised financial products and services to its current and future customers, combining the latest technologies with a tailored approach, and professional consultation.

Continued growth
Postbank will continue to grow and the acquisition of the Bulgarian branch of BNP Paribas Personal Finance in 2023 is another step towards expanding its market share and taking an even stronger and more stable position in the ‘big four’ of the banking sector. This acquisition allows Postbank not only to strengthen its position in the consumer lending segment, but also to enter into a promising and fast-growing market that Postbank is eager to further develop by offering many more products to both new and existing clients.

The bank has started replacing the vehicles from the company fleet with hybrid and electric ones

As a result of the deal, Postbank strengthens its leadership position in retail banking and now occupies second place in the consumer lending market, adding a new client base to its portfolio and acquiring a portfolio of over BGN960m (€491m) in consumer loans. It generates significant opportunities for cross-selling as well as implementing innovative digital solutions for client convenience. With the successful finalisation of the deal, a team of exceptional professionals with a proven level of expertise and strategic vision in banking joins the Postbank team.
A new brand revealed

With the first-of-its-kind conference ‘Retail Reload – powered by AI’, in November 2023, Postbank introduced its new brand, ‘PB Personal Finance by Postbank’, which officially became part of the leading financial institution in June 2023. The special event, organised in partnership with Mastercard Bulgaria, brought together over 250 representatives from leading companies. Alongside internationally renowned speakers, they discussed the latest trends and innovations in artificial intelligence in the retail business.

The addition of the new brand, ‘PB Personal Finance’, is not only part of Postbank’s strategic development as a systemically important bank, offering innovations and personalised financial solutions for the convenience of its customers, but also of great importance for Eurobank Group as it expands its operations into significant regional markets. Just a few months later, Postbank reported excellent results and solidified its leading position in the consumer lending market by offering financial products to more than 1.2 million customers and providing BGN6.9bn (€3.5bn) in loans to households. Under the new brand ‘PB Personal Finance by Postbank’, clients will continue to receive a variety of attractive products and fast services in order to fully meet their expectations and high demands. The creative approach and innovative ideas are deeply embedded in the values of both companies and this is the key to a new understanding of banking that is shared and will integrate into a new ‘Beyond Banking’ concept, providing more value and benefits to clients.

On the road to success
In 2023, the financial institution received over 20 prestigious national and international awards for its innovative products, services, and corporate social responsibility. Postbank received the highest global accolade, Top Employer for 2023, from the international independent Top Employers Institute. Following on from these outstanding results, the financial institution won the award for successful digital transformation in the Bank of the Year awards of the Bank of the Year Association.

Postbank has received a Baa3 long-term deposit rating with a positive outlook by the international rating agency Moody’s Investors Service. At the same time, the rating agency has assigned a Baa2 long-term rating for Counterparty Risk Ratings (CRR) to Postbank. The robust capitalisation, strong recurring profitability, and growing deposit base of Postbank have been thoroughly evaluated and reflected in Moody’s report. The agency highlights that the bank’s strong profitability also supports its ability to generate sufficient capital internally.

Such an assessment from a global agency like Moody’s is recognition of the effectiveness of the bank’s work, the high standards it maintains in its operations, and the even higher goals set and achieved together with its team. Postbank are delighted that its efforts have been recognised at the international level, which once again emphasises and supports the progress it is making towards a vision of being a systemic bank in the market, with a strong presence, strictly following a strategy of sustainable development and setting trends in the country’s banking sector.

Green ideas
Traditionally, the banking sector is engaged with the financing of activities, which are directly or indirectly related to the development of other spheres of the economy, with banks being key participants in the ‘green transformation.’ Postbank’s strategy is focused on sustainable financing through priority support for activities with low or net-zero footprints, including credits for renewable energy sources, as well as for energy efficiency. Over the past few years, the bank has taken significant steps and implemented valuable initiatives to demonstrate its readiness to play a key role in the transition to a low-carbon and sustainable economy on the way to achieving long-term national and global goals.

Postbank introduced a special ‘Eco Auto Loan’ for financing fully electric or plug-in hybrid cars under preferential terms for its customers and a green business loan, intended for companies with projects for improving the environment.

Postbank is steadily transitioning towards renewable energy sources

Regulators expect the bank to support the implementation of the Green Deal by introducing various incentives and requirements for its clients. At the same time, prudential requirements for assessing and managing the environmental, social and governance (ESG) risks to which it is exposed are tightening. This calls for flexibility and innovation and new approaches and ways of doing business. The good news is that Postbank is already working on this.

Green light for new opportunities
The bank’s ESG strategy is being developed in two directions – the first relates to the internal processes and everything the organisation does, while the second addresses the clients and what they do with the funds the bank lends them. For 11 years Postbank has been internally tracking three indicators – the carbon footprint of the energy consumed, the amount of water used and the volume of paper used, and thanks to the efforts made, a significant reduction has been achieved in all three indicators. Thanks to the photovoltaic power station in the head office, Postbank is steadily transitioning towards renewable energy sources. This photovoltaic power station has a total installed capacity of 388kWp and its operation could save around 173 tons of coal annually, with close to 205 tons of CO2 emissions avoided.

The introduction of environmentally friendly, recyclable materials in the improved bank premises, the installation of LED lighting, as well as the introduction of the latest generation of more efficient and environmentally friendly air conditioning systems, are just some of the sustainable actions taken by Postbank on the road to a green economy. The bank has started replacing the vehicles from the company fleet with hybrid and electric ones and has also built an installation for the required power supply on the territory of the head office.

Postbank will continue to transform and innovate, demonstrating its modern signature among financial institutions in Bulgaria and a rich portfolio of innovative financial solutions for the exceptional convenience of its customers and over 3,000 satisfied employees.

Innovating and disrupting a complex industry

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In August 2019, Greg Webb joined Travelport as Chief Executive Officer. The travel technology company, which powers bookings for hundreds of thousands of travel suppliers worldwide, had recently been taken private and was about to undergo a tremendous digital transformation with the intention of solving some of the biggest problems in travel retailing.

But then, in March 2020, the pandemic hit, and the global travel industry went from all-time highs to a low of only five percent of expected volumes overnight. While travel initially ground to a halt, the pandemic eventually amplified and accelerated the need for the industry to get modern. Webb used this time to streamline Travelport’s operations, doubling down on the company’s investment in technology to ensure its next-generation platform, Travelport+, was ready when travellers were.

A next-generation platform
Travelport+ is the only modern retailing platform built for travel agencies. It connects buyers (traditional travel agencies, online booking apps, corporate travel management companies, and more) and sellers of travel (airlines, hotels, trains, car rental companies, etc) through a single, independent marketplace. Similar to Amazon, Travelport+ eliminates back-end complexities that cause long, mind-numbing searches for the perfect hotel room or make it difficult to shop and compare flights or car rentals.

The company’s global presence brings a variety of cultures, opinions and ideas to the table daily

Consumers expect digital experiences to be intuitive, frictionless, and fast. Other businesses have pushed the boundaries of digital innovation, but the travel industry has lagged. According to research by Travelport, booking travel is often regarded as tedious as evaluating mortgage or car insurance options. In fact, on average, travellers visit 38 websites before they book a trip. The lack of price transparency, difficulty in comparison shopping and the feeling of hidden costs all further erode consumer trust.

Webb is keen to improve upon the lack of transparency in the travel industry and is a longtime advocate for greater industry collaboration. His focus on transparency extends to Travelport’s corporate culture as well, where he regularly prioritises all-company town hall meetings, direct weekly communication, and more.

Investment in technology
Travelport continues to evolve its modern retailing platform with enhanced tools and new solutions that are designed to be intuitive, frictionless and fast. Additionally, the company is always looking for new areas to expand into, and in March 2023, the company announced the acquisition of Deem, a leading corporate travel management platform. Deem shares a similar goal of modernising a complex industry, more specifically offering the corporate travel landscape a more customer-centric booking tool. Just five months after the acquisition, Travelport had fully integrated the Deem and Travelport+ platforms, allowing shared corporate travel customers to book and manage their work trips in the same way they would their personal trips. This means more self-service, intuitive recommendations, real-time updates and changes that can be made on the go.

Supportive and transparent leadership
Webb’s vision and strategic direction have been instrumental in driving Travelport’s growth. His passion for the travel industry and his commitment to excellence have made him an inspirational and respected leader in the sector. It has also made Travelport a company that continues to lead the industry.

The company takes pride in cultivating a diverse and inclusive workplace where employees are encouraged to think differently and try new things. Travelport is committed to equality, prioritising a work environment where all employees can confidently, and comfortably, share their opinions and challenge the norm. The company’s global presence brings a variety of cultures, opinions and ideas to the table daily, something Webb believes is vital to Travelport’s success.

Change is for the brave
Looking to the future, Travelport continues to be committed to simplifying the complexities of the travel industry by inventing new solutions where there currently are none. Webb and the Travelport team work with industry partners who share their passion for delivering exceptional experiences and creating best-in-class technological solutions. The company continues to invest in the latest advancements, such as cloud computing, data-driven intelligence, machine learning and AI capabilities. The result is a more efficient and personalised travel retailing experience, which will continue to drive the industry towards a bold new era.

The rise of Neobanks

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As the digital movement takes the globe by storm and the influence of Gen Z grows stronger, there has been a fundamental shift in the preferences and choices of the average banking customer. Customers are prioritising convenience and untethered access to their essential services at all times and that is becoming a requirement rather than a choice. While the global banking industry was moving steadily towards digitalisation, the Covid-19 pandemic triggered a reality-shifting chain of events that catapulted developing technologies to the very top of the priority list for consideration.

It also compelled banks and financial institutions to invest heavily in developing reliable digital channels to retain and expand their customer base. Digital banks, or Neobanks, as they are also known, have several benefits over traditional banks, including full user-centricity, not to mention convenience, agility, and further-reaching financial inclusion, all at considerably lower costs than traditional banks.

The Covid-19 pandemic necessitated disruptive growth in the digital banking landscape, accelerating trends towards increased digital adoption, remote banking, contactless payments, and fintech innovation. Lockdowns and social distancing measures prompted a surge in demand for convenient and frictionless financial services, leading to the rapid adoption of digital banking solutions.

Financial institutions, including Neobanks, responded by enhancing their digital capabilities, focusing on digital onboarding, and collaborating with fintech companies to meet the evolving needs of consumers in a digital-first environment. This period also witnessed a heightened emphasis on security measures and an increased focus on financial wellness tools.

The changes brought about by the pandemic in the digital banking sector are expected to have a lasting impact. The shift towards digital channels is likely to endure, with consumers continuing to prioritise online and mobile banking for its convenience and efficiency. Remote work trends are expected to influence how individuals approach banking, fostering a preference for flexible, remote-friendly solutions.

Ongoing collaboration between traditional banks and banking technology providers is anticipated, driving sustained innovation in digital financial services. The emphasis on security, financial wellness, and broader digital transformation efforts within the financial industry are likely to persist, making digital banking a central and enduring aspect of the post-pandemic financial landscape.

What Neobanks can offer
Innovation is the hallmark of Neobanks, and there are new facets emerging every day, including cutting-edge technologies like AI and blockchain that are utilised to significantly improve customer experience and meet the demands of their daily lives. There is no doubt that the benefits of Neobanks far outweigh traditional banking when it comes to convenience, so much so that this is often the decisive factor in choosing one bank over its competition.

Another key appeal of Neobanks is the great reduction in costs to both the bank as well as the customer, featuring low and sometimes even zero fees for some basic services. This is very attractive to the cost-conscious customer and encourages them to browse more of the bank’s products and services and benefit from them. Agility is also a profound benefit of Neobanks, allowing for new technologies to easily integrate with the bank’s app at a fraction of the cost compared to traditional banks, with minimal service interruption.

The ICS BANKS award-winning digital banking platform is built from the ground up on an open backend structure and a rich catalogue of APIs to ensure it stays up to date with the latest technologies available, giving our clients the power to vigorously compete in today’s quick-paced market. Our powerful backend transactional system allows the bank to extend out-of-the-box retail and corporate products and services, enabling them to compete and grow their customer base beyond traditional banks.

Putting customers first
Today’s tech-savvy users have higher expectations from their banking providers, taking for granted everything from personalisation and security to cost-effectiveness and accessibility. With the growing trend of personalised banking and catered financial products, consumers are more inclined to go with the bank that best suits their situation and needs. Top of the list for consumers is a user-friendly experience via intuitive mobile apps and online platforms that simplify on-the-go banking transactions.

Another key draw is the transparency of the fee structure: small print is no longer an acceptable practice, and consumers are unwilling to make any commitments unless they know exactly where their money is going. Convenience and accessibility are also crucial, with consumers favouring Neobanks that provide features like mobile cheque depositing, online bill payments, 24/7 customer support, and most importantly, digital onboarding processes. This saves a lot of time – not to mention the excessive paperwork – required to open a bank account, making them the main driver in expanding financial inclusion. Some Neobanks go even further by incorporating social features, fostering a sense of community and shared financial experiences.

Security remains a top priority, with trust often placed in Neobanks that prioritise robust measures like two-factor authentication and advanced encryption. Ultimately, consumers seek assurances of reliability and stability, whilst considering factors such as the Neobank’s financial health, regulatory compliance, and history of dependable service. Neobanks that can meet these expectations are poised to attract and retain customers in a competitive market.

Neobanks encounter multifaceted challenges in the financial industry, and ICSFS, as a technology provider, offers tailored solutions to address these issues. ICSFS is a leading provider of modern banking and financial technology powered by a solid, agile, and digital banking platform as part of its DNA. Neobanks can form strategic partnerships with technology providers such as ICSFS to obtain expertise and solutions to navigate complex and evolving regulatory environments, improved security measures, revenue diversification, effective marketing, robust technology infrastructure, and leveraging data analytics technologies to enhance customer experiences.

The pressing need for robust cybersecurity measures is met through ICSFS, which delivers advanced security protocols, encryption methodologies, and regular security audits to safeguard Neobanks and build trust with customers. Privacy and security are also substantial concerns for Neobanks, with the increasing risk of data breaches and unauthorised access to sensitive information. To mitigate these security challenges, ICSFS has recently obtained the iSMS (Information Security Management System) ISO/IEC 27001 Standard Certification, addressing any possible vulnerabilities through periodic audits and adopting advanced technologies like biometrics for enhanced identity protection in addition to rigorous security protocols aimed at preventing cyber-attacks.

Furthermore, ICSFS supports Neobanks in their global expansion endeavours by developing solutions for cross-border services and compliance with international regulations, facilitating the seamless entry into new markets. In essence, the collaboration between Neobanks and technology providers like ICSFS plays a pivotal role in overcoming the dynamic challenges within the financial landscape. ICSFS is a one-stop-shop for Neobanks not only for its agile and future-proof technology platform, but also by offering a complete array of products and services that encompasses both retail and corporate banking services.

Enriching customer journeys
ICSFS launches innovative products that are constructed on a secured and agile integration on a single platform, such as ICS BANKS. This is a fully integrated end-to-end financial and banking software with many suites that future-proof business and financial activities, through a broad range of features and capabilities, with more agility and flexibility to enrich customers’ journey experience.

With the current digitisation storm and fast progress pace, ICSFS offers strong tools not just to make an impact, but also to be the leader. One of ICSFS’ strengths lies in its focus on the individual requirements and support for each of its clients.ICSFS offers agile and highly secure universal, digital, and Islamic core banking platforms with a multitude of modules and software products covering the entirety of banking activities from individual and retail banking to corporate, wholesale, agency and commercial banking, microfinance, finance leasing, investment and wealth management solutions. Its flagship banking solution, ICS BANKS, uses the latest industry-approved digital technologies to cover all of the banking business and offers a wide array of digital touchpoints to accommodate the fast-paced life of the banking consumer.

ICS BANKS banking software solution comes built in with a broad range of supporting products including powerful tools such as E-KYC and digital onboarding, blockchain technology, business intelligence, enterprise resource planning, document management system, management information systems, business processes management, payment systems, Islamic and conventional lending and trade finance, RegTech, credit facilities and risk management, investment and treasury, dynamic application and advice builder, in addition to a rich catalogue of open banking with APIs to ensure its flexibility for integration with the majority of available third-party fintech providers as part of its infrastructure, delivering high availability, scalability, low total cost of ownership (TCO), and impressive performance.ICSFS also aids Neobanks in achieving profitability by offering strategies for revenue diversification, minimising income leakage, assistance in expanding product portfolios, and optimising monetisation models. Recognising the reliance on technology, ICSFS offers scalable and secure infrastructure solutions, mitigating risks associated with system outages and cyber threats.

A hybrid future
The future of digital banking is marked by transformative trends and technological advancements. Key directions include the continued integration of advanced technologies, contributing to enhanced automation, personalisation, and security within digital banking processes. Open banking ecosystems are anticipated to foster greater collaboration, allowing seamless sharing of financial data through open banking and promoting innovation. Personalised and contextual banking experiences, service offerings that are expanded beyond traditional banking, and a focus on comprehensive financial ecosystems are expected to define the landscape. AI is profoundly influencing digital banking across various domains, transforming customer experiences and operational efficiency. In the realm of personalisation, AI leverages customer data to provide highly tailored experiences, offering personalised recommendations, targeted marketing, and customised financial advice.

While the trend towards digital banking is notable, it is unlikely that all banks will transition to a digital-only model in the near future. Factors including the diverse customer preferences, varying regulatory landscapes, and geographic considerations contribute to the continued coexistence of traditional and digital banking. Furthermore, some individuals still value in-person interactions and physical branches, particularly in regions with specific demographic characteristics or limited adoption of digital services. Regulatory frameworks also play a role, with certain jurisdictions mandating the presence of physical branches or setting specific standards for banking services.

Additionally, the diverse banking needs of customers and the challenges associated with a complete digital transition, including technological investments and organisational changes, contribute to the persistence of traditional banking models. Many banks are adopting hybrid approaches, combining digital and physical elements to cater to a broad range of customer preferences and needs. While digital transformation is a key focus for many institutions, the transition to digital-only banking is likely to be a gradual and complex process, varying across regions and institutions.

The future of CFD trading: trends and perspectives

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Contract for differences (CFD) trading has become increasingly popular for individuals wishing to participate in the financial markets. With worldwide popularity came increased competition, which quickly led to CFD brokers looking for cutting-edge solutions that could win over larger audiences. This article explores the trends either already emerging in the market or having a high probability of being adopted by industry players in the near future.

Integrated trading ecosystems
It is becoming evident that MetaTrader platforms, which have played a major role in CFD trading for a long time, are seeing an increase in competitors as major CFD brokers develop their own platform solutions. The events of September 2022, when MetaTrader platforms were banned from Apple’s app store, showed how dangerous it might be for brokers to rely on an external service provider for their main product. Although the apps were restored in the app store after a six-month ban, the concerns stayed, pushing many brokers to develop their own platforms for trading.

The task provided ample opportunities for innovation and rethinking of how trading platforms should work and what they should include. As a result, an industry-wide trend of integrated trading ecosystems has been developing. Such systems include everything a trader needs seamlessly incorporated into one platform.

One example of such a system is OctaTrader, developed by the international CFD broker OctaFX. This platform aims to integrate everything a trader needs in one seamless space where expert analytics, deposits and withdrawals, and profile management options, are all at hand. OctaTrader allows users to trade without any extra logins or app switches, helping them save time, which is especially important in the fast-paced financial markets.

The OctaTrader platform is available for mobile users using iOS and Android devices, as well as for web traders. Some of the extensive web trading functionality includes charts, the most popular indicators, technical analysis tools, multiple timeframes, and much more. The platform also has a multilingual user interface.

Launching its own trading platform was a major step forward for OctaFX as it allowed the firm to provide its clients with a single, comprehensive, and consistent trading system, which makes trading quicker and more efficient. To further enhance the trading experience, OctaFX is developing a unique hub with every kind of expert analytical information, which will be available for clients within the trading platform.

Artificial intelligence
Recent developments in artificial intelligence (AI) can potentially change the CFD trading industry. AI algorithms can analyse vast amounts of data and identify patterns and trends that may not be apparent to human traders. They can therefore be used to develop strategies and optimise portfolio management.

Traders can significantly improve their performance with forecasts powered by machine learning algorithms that adapt to changing market conditions while incorporating historical data. AI can assist traders in managing risk, which is a crucial aspect of trading. By analysing market volatility, AI algorithms can help traders set ‘stop loss’ orders and adjust position sizes based on predefined risk parameters. Additionally, AI can monitor the market in real time and alert traders to potential risks or anomalies that may impact their positions.

Launching its own trading platform was a major step forward for OctaFX

Another way traders can use AI is automated trade execution based on predefined rules and parameters. By removing human emotions and biases from the trading process, AI can enhance trade efficiency and improve overall trading performance. Considering the above, an AI assistant or advisor can become integral to any trading ecosystem.

Blockchain technology
Initially popularised by cryptocurrencies such as Bitcoin and Ethereum, blockchain technology has gained significant attention due to its potential to transform traditional processes and even whole industries. One of the key advantages of blockchain technology in CFD trading is enhanced transparency. Blockchain provides a decentralised and immutable ledger that records all transactions and interactions between the broker and the trader involved in the trading process. This transparency allows traders to verify the authenticity and accuracy of trade data, ensuring fair trading conditions and enhancing trust between the parties.

Blockchain technology offers several security features that can mitigate some of the risks associated with CFD trading. The decentralised nature of blockchain makes it highly resistant to hacking and fraud attempts. Each transaction on the blockchain is cryptographically secured and linked to previous transactions, making it virtually impossible to alter or manipulate trade data. This ensures that traders’ funds and personal information are protected from unauthorised access.

The transparency of the blockchain can offer some comprehensive opportunities for auditing in CFD trading. Since every transaction is recorded and stored on the blockchain, auditors and regulators can easily access this information and use it to monitor and investigate any cases they find suspicious. Additionally, blockchain-powered smart contracts can automate compliance processes, such as Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, making it easier for traders to adhere to regulatory obligations.

Potential challenges
The above trends, which have already gained some traction among CFD brokers and traders, have the potential to revolutionise the industry. These technologies can enhance trading efficiency, increase market accessibility, and enhance security and transparency. However, it is important to note that while trading ecosystems are already being widely implemented, the practical application of AI and blockchain technologies is still in its early stages, and there are regulatory and technical challenges that need to be addressed.

AI can assist traders in managing risk, which is a crucial aspect of trading

In the case of AI technologies, which rely heavily on machine learning, CFD brokers might need a lot of time to let those systems learn from experience and improve their performance. To enhance fraud prediction, integrate chatbots for customer support, or make accurate market forecasts, AI systems need to be trained on very high-quality data. Additionally, such projects often require the involvement of professional developers and supplementary technical capacities, which can be costly.

As for blockchain, even the initial cost of such a complicated system is very high. The software and hardware needed to implement blockchain, as well as the costs of its maintenance, may outweigh its benefits, especially for small- or medium-sized brokers.

Another major challenge of blockchain-powered systems is how hard it is to modify the data involved in a completed transaction. Entering data into the blockchain might also take more time when compared with traditional methods, which is often crucial for online brokers that process thousands of transactions every day.

Both AI and blockchain technologies also face scalability issues. An AI system will most likely need high-capacity computing resources to process the increased transaction and data volumes during peak market hours. Similarly, blockchain has several scalability issues, including low performance efficiency, limited storage capabilities, and functional extension difficulties.

Another potential challenge is regulatory compliance, as introducing AI and blockchain solutions may not adhere to all the regulatory guidelines requiring the disclosure or additional protection of customer data, such as the General Data Protection Regulation (GDPR) in the European Union.

Overall, while AI and blockchain technologies offer CFD brokers numerous potential advantages and use-cases, addressing these challenges is crucial for their successful implementation.

The complex issue of tax on multinationals

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Agreed at European level in October 2021, EU directive 2022/2523 has implemented the second pillar of the OECD agreement to ensure a worldwide minimum tax for multinational enterprise groups and large domestic groups in the EU. By imposing this minimum tax on multinational companies, the signatory countries of the OECD (Organisation for Economic Co-operation and Development) multilateral convention hope to raise €130bn–€170bn in tax revenue worldwide for the companies concerned (those with a turnover of at least €750m).

The issue that this regulation is intended to address is that the legal entities of which multinationals are composed have a separate legal personality and are taxed in their respective countries under different tax regimes. As a result of the ability of multinationals to influence transfer prices and thus locate profits in the country of their choice, the mobility of capital, the development of the digital economy and transfer prices, profits were often realised by structures established in what the OECD considers to be tax havens or at least places with tax regimes that are perceived to be “too lenient”.

The central idea of this system, which is very complicated to set up, is rather simple and because of its significant yet ignored side effects, simplistic: no matter in which country a multinational declares its profits, they must be taxed at the same minimum rate. When the company pays less than 15 percent tax in a foreign country where it has a subsidiary, the country where its head office is located will recover the difference between the effective rate paid and the 15 percent rate, so that the total tax paid reaches the said 15 percent threshold (IRR income inclusion rule – in this case, it is the parent company that is taxed).

Alternatively, countries may provide for a so-called qualified domestic minimum top-up tax (QDMTT): in this case, any additional tax paid will be borne by the subsidiary in the country in which it is established. The central idea of this system therefore appears to be to increase tax revenues while discouraging local companies from setting up abroad, because they will not be able to benefit from local tax incentives.

A flawed system
It should be noted that the system put in place is flawed from the start due to the exclusion of certain important sectors from this regulation: extractive industries and companies offering regulated financial services, international maritime transport companies and, with certain exceptions, public entities, international organisations, non-profit organisations, pension funds and investment funds are excluded.

Tax is not just a tool for financing or a method for distributing wealth

In addition to these exclusions, a number of adjustments have been made, such as the possibility for companies to declare a reduced tax base or the exclusion, for the first five years and under certain conditions, of certain Chinese companies. While the aim of these regulations is clear, the means used to achieve them are not really adequate.

This system benefits the largest countries, since they will either increase the number of taxpayers subject to corporate tax, or they will benefit from the dissuasive effect of the system put in place, since companies established in their country will be reluctant to relocate certain activities abroad.

On the other hand, the situation will become more problematic for some other countries, especially developing countries, for which corporate tax is very important and which often grant tax exemptions to companies setting up in their territory.

According to the figures put forward by certain international organisations, 60 percent of the revenue from this minimum tax would benefit the G7 countries, while developing countries would only receive three percent of the revenue. The imbalance is such that some have proposed the introduction of positive discrimination for the smallest countries, subject to certain conditions. Alongside developing countries, it is the traditional tax havens and, above all, the smallest European states, such as Belgium, Luxembourg or Ireland, that will lose part of their tax appeal, which, because of their small size and the limited importance of their markets, is their main attraction.

The first negative effect of this minimum taxation is that it is likely to increase inequalities between rich and poor countries; in reality this amounts to making the former richer and the latter poorer in the name of theoretical tax justice. It should be noted, however, that some emerging countries, such as Argentina, have wished for an even higher tax rate, an attitude that is not understandable in the long term.

It is not impossible that we will observe the opposite phenomenon: in other words, a levelling down of taxation on company profits in certain countries that currently apply a higher effective rate. Indeed, while this regulation will highlight the allegedly inadequate nature of the level of taxation in certain countries, it could also inspire others to lower their level of taxation to the threshold deemed acceptable by the OECD, thus becoming more attractive than they have been in the past. We should not lose sight of the fact that the new 15 percent rate is, in some cases, much lower than the rate of corporation tax, especially in Europe.

Compatibility with EU treaties?
Another problem with this minimum tax is linked to the Treaty of Rome, which institutes, among other things, the free movement of capital. The question arises as to whether this regulation might not hinder the free movement of capital between European companies, since under the new rules this capital will be subject to an ‘additional’ tax that is not provided for under the tax law of the country of destination of the funds, and compliance with these measures will entail costs for the companies concerned. We can be sure that this issue will sooner or later be referred to the Court of Justice of the European Union.

An attack on tax competition
Regardless of what has been said, the essential point here – and there should be no mistake about it – is that the new regulations constitute an attack on tax competition. Of course, the OECD rejects this accusation, arguing that the agreement has no other purpose than to set multilaterally agreed limits on tax competition. This is clearly an understatement.

The first negative effect of this minimum taxation is that it is likely to increase inequalities between rich and poor countries

In fact, developing countries and smaller countries did not really have the power to oppose this agreement: if they agreed to these limits, they did so under pressure, since, in practice, these countries will suddenly lose their attractiveness to potential investors. Furthermore, if they want companies already established in their country to remain there, they will have to take measures to increase their effective tax rate (by acting on the rate or the method of calculating the tax base), to ensure that the 15 percent threshold is reached, in the hope that some of the companies already present will not leave to avoid complications. This is likely to affect local businesses too.

Under the pretext of tax justice, which mainly serves the richest countries, we are witnessing a form of inter-state coercion, when even in Europe, certain companies benefit, in practice, from regimes that are out of line with ordinary law in terms of effective taxation (for example, the deduction of research and development costs). In any case, this time things have gone one step further, with the decision to tax income that the State that was competent to do so had chosen not to tax.

This once again raises a fundamental problem in international taxation: the issue of assessing the adequacy of another country’s tax system. However, this discussion should not take place since it is the needs of each country that determine the importance of tax to be levied and the needs of one country are not those of another.

It therefore seems incongruous to force, in fact or through a treaty, a country to levy a higher tax than it really needs to. It will be left with no choice though, if it does not want the ‘surplus’ to be taxed to reach the 15 percent threshold. At this point the company will be taxed by the country in which the parent company is established, and it will have lost everything.

Furthermore, considering that one cannot assess the severity or “adequacy” of a country’s tax system simply by looking at tax rates and the method of calculating the tax base does not really make sense. Tax is not just a tool for financing or a method for distributing wealth. It also serves as an economic incentive or as a means of encouraging or discouraging certain behaviours deemed to be, depending on the circumstances, favourable or harmful to society.

In conclusion, the fact that an effective tax is low can be attributed to a whole series of reasons other than the desire to engage in unfair tax competition. However, the minimum tax on multinationals seems to be based on a genuine assumption of tax dumping, without taking into account the specific situation of each country.

Under these conditions, it is even feared that in the future such a regulation could be provided for smaller companies; at the very least, since the principle seems to be accepted, it is hard to imagine what would prevent the leading member states from proceeding in this way. This is a well-known modus operandi that has been employed many times, always under the cover of a higher value, such as tax justice or an always vague general interest.

A strategy to shape a sustainable future

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At Swisscom we want to embrace all the opportunities the digital transformation has to offer to boost Switzerland’s prosperity but we’re committed to minimising its potential risks, protecting the environment and creating a fairer world.

Our sustainability journey began in 1998 when we were the first telecoms company to gain ISO 14001 environmental management system certification. This provides assurance to both internal and external stakeholders that the company’s environmental impact is being measured and improved effectively. Since 2010 we’ve only used energy from renewable sources, including electricity we produce ourselves from the 104 photovoltaic plants we operate.

Other milestones include launching our mobile phone recycling programme, Swisscom Mobile Aid, in 2012, opening one of the most modern and energy efficient data centres in Europe in 2014, rolling out energy efficient cooling systems for our mobile phone stations in 2018 and putting 100 electric vehicles into operation in 2021. Since 2022, our subscriptions, network and devices have been carbon neutral and our customers enjoy carbon neutral internet surfing, streaming and calls.

In 2023 we were delighted to be named the world’s most sustainable telecoms company in the World Finance Sustainability Awards for the third time in a row. This award confirms that we are on the right track towards achieving our ambitious sustainability goals. Each recognition motivates us to work even harder and to consistently pursue the goals we have set.

We believe that digitisation can promote sustainability. We’re part of the ‘Digital with Purpose’ Global e-Sustainability Initiative (GeSI). This requires telecoms companies to make a significant contribution as an industry to achieving the 17 sustainable development goals of the United Nations Agenda 2030 by taking steps in areas such as protecting the environment and operating sustainably. We want the networked world to be accessible to everyone but also to highlight the risks of participation, such as encountering fake news and cyberbullying, and the misuse of personal data, to help people protect themselves.

New sustainability strategy
After Swisscom adopted five new group goals in 2021, which came into effect in January 2022, we decided to review the sustainability strategy we launched in 2018 to align it with these goals more closely and address both the environmental changes and the changes in the requirements of stakeholders that had taken place since.

We want to become carbon neutral across the entire value chain of our business

We carried out in-depth analysis in four areas that included identifying the strategy’s strengths and weaknesses where we found that some areas had grown in importance. These were staff-related issues, such as diversity and the future of work, data protection and security, governance and corporate ethics. We also identified challenges in our aims to have a bigger impact in the area of CO2 reporting and reduction with suppliers.
As a result, we adjusted our strategy to include two new ‘for the people’ issues – employer attractiveness and diversity, and equal opportunities – also addressing the issues of corporate ethics and data protection and security. The existing environmental aspects of climate change, renewable energies, energy efficiency and the circular economy were left unchanged.

Our new strategy, entitled ‘Responsibility means moving forward – now not someday,’ is based on the UN’s 17 sustainable development goals and outlines targets for 2025 that will have an impact either within Swisscom or outside it. They can be divided into three areas – responsibility for the environment, responsibility for the people and responsibility through action.

Responsibility for the environment
To help cap the global temperature rise at 1.5 degrees Celsius, we want to become carbon neutral across the entire value chain of our business in Switzerland by 2025 – a step towards our ultimate goal of net zero across the whole group by 2035, including the Italian subsidiary Fastweb, which offers fixed-line mobile and communications services. By 2025, our operational CO2 emissions will be more than 90 percent lower than in 1990. We’ll also save one million tons of CO2 a year together with our customers. This is the equivalent of two percent of Switzerland’s CO2 emissions.

We aim to meet these targets by continuing to use only 100 percent renewable electricity in our business and improving energy efficiency by 20 percent compared to 2020, including through fresh air cooling for our mobile network, electrifying our vehicle fleet, using heat pumps and reducing our CO2 emissions through carbon reduction programmes with suppliers. We use a circular approach to our own products where we consistently use recycled plastics. Our long-term goal is for all our own-brand products to be fully recyclable.

Other ways we’re working towards carbon neutrality are through innovative data centres and by using waste heat and generating solar power. We’ll offset all the unavoidable emissions that remain. To develop the circular economy further, we’ll use Mobile Aid to improve the longevity of mobile phones and bring used resources back into circulation through repair, reuse and recycling. These aims are desirable from an economic as well as an ecological perspective.

Outside Swisscom, we’ll empower our customers to reduce their own CO2 emissions through products and services, such as digital solutions for working from anywhere and Internet of Things-supported services to remotely optimise and monitor vehicles, buildings and devices to reduce their emissions.

Responsibility for the people
In my role as Head of Sustainability and also as a mother of two children, I see the importance of strengthening media literacy in society. This is why our explicit goal is to support two million people a year in the use of digital media by 2025 at the latest. We also want to promote diversity and inclusion at Swisscom as a workplace by offering attractive working conditions, opportunities for flexible working and equal opportunities.

We want to become one of the top three Swiss information and communication technology (ICT) employers and will use our career portal and social media to promote Swisscom as one of the best. Employees benefit from a great working environment with opportunities to promote their health, network internally and volunteer. Working conditions are fair.

We aim to inspire talented people, including young talent, to join the company and develop them for the future. We will increase the proportion of employees under 40 and women working for Swisscom in management and at all other levels – we have targets around the recruitment process, promotion and succession planning to help us boost the proportion of women. We also provide education and training days to add to the employability of staff.

To support people in their use of digital media and strengthen their skills, we’ll use our Swisscom Campus portal to provide opportunities for training and learning to children, young people, parents and older people, helping them to benefit from digital media while using it safely. We also offer technical solutions and guidance and our call centre employees go above and beyond in helping customers with their questions in this area.

We want to expand ultra-fast broadband with the goal of 50–55 percent coverage for homes and businesses at speeds of 10Gbps and are continuing to expand the fibre-optic network (fibre to the home or FTTH) to achieve this. This will make our services more accessible and boost competitiveness, digital fitness and quality of life in Switzerland.

Responsibility through action
Ethical working practices have become increasingly important for companies and brands and we want to meet the high standards our stakeholders expect. We operate according to ethical principles and train all our employees in them.

Data ethics is a new issue in our updated sustainability strategy, encompassing data security and data protection. We train our employees each year in how to handle data and work in a lawful and value-orientated way. We also provide training for cyber security specialists.

We’re committed to ensuring fair working conditions and protecting human rights for workers throughout our supply chain. We monitor how well our supply partners comply with social and ecological standards to verify this. By 2025, our goal is to improve the working conditions of 150,000 people involved in our supply chains each year.

A vision for the future
Our sustainability strategy recognises that digitisation is rapidly changing our society and economy for the better but that there are also risks that need to be addressed and minimised. As a business we need to constantly adapt to this fast-moving environment and help to educate people to use digital media effectively while protecting themselves from potential harms.

Swisscom has an important role in influencing and accelerating digitisation so it’s essential that we do this sustainably to protect people and the planet and safeguard all our futures. The expectations and needs of our customers and other external stakeholders are changing in terms of sustainability and by working with them we can identify the key issues we need to focus on. We’re proud to lead the way in developing and implementing the highest standards in this area.

Paving the way with digitisation and a customer-first approach

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IDFC FIRST Bank has been at the forefront of a technological revolution in banking. India’s journey into digitisation has been extraordinary, making digital currency accessible to millions, and IDFC FIRST has been fundamental in embracing, operating, and disseminating this technology. Launched in 2022, India’s Central Bank Digital Currency (CBDC) is currently available through select banks including IDFC FIRST and was piloted in Mumbai and Delhi under the guidance and control of the Reserve Bank of India. The CBDC is not a token or a bitcoin; it is the digital rupee, a unit of legal tender that holds the same value as the physical coins and banknotes that share its name, and which crucially represents a liability on the central bank’s balance sheet. In other words, it doesn’t just resemble money; it is money. Using some components based on blockchain technology, the CBDC was initially limited to the settlement of secondary market transactions and made the inter-bank market more efficient upon launch. But government collaboration with trusted banks like IDFC FIRST led to multiple benefits, creating a means by which many millions of previously unbanked people in India could store, save, and transact money via smartphone. This has not only enabled IDFC FIRST bank to uphold its core value of putting the customer first, but it has also firmly placed the bank at the cutting edge of digitisation across the country and the international industry.

Enhancing the customer experience
The bank’s customer first approach brings about a raft of benefits – digital and otherwise. We were the first universal bank to offer monthly interest credit on savings as well as credit cards with free lifetime reward points, zero interest on cash withdrawal at ATMs, and low APR. To give an idea of numbers, IDFC FIRST Bank has a balance sheet of Rs. 2,399,416,596 crores, serving customers across the entire expanse of the country via more than 800 branches, 250+ asset service centres, 900+ ATMs, and over 500 rural business correspondent centres.

It is only through technology that high levels of financial inclusion can be achieved

At IDFC FIRST Bank, we like to see things through the prism of our three core philosophies: guided by ethics, powered by technology, and being a force for good in society. We keep a close eye on emerging technologies that cater to the evolving needs of our customers – new and loyal alike. To us, staying on top of market trends is essential, and our investment in best-in-class technologies has helped us to develop customised solutions.

Digital technologies, especially payments, have transformed consumer habits. What the customer needs determines our business strategy. We aspire to provide the best user experience and put the customer at the centre of all journeys, including payments. The customer has multiple choices so it is important to constantly innovate on product features, UI and UX. It is also important to create trust in every single transaction and address disputes and reversals in a timely manner to ensure continued engagement, loyalty, and trust.

Working at the pioneering edge of financial inclusion in a country as vast and complex as India means that we must also place ourselves at the cutting edge of technology. It is only through technology that high levels of financial inclusion can be achieved, especially in a country where the journey towards a cashless society began in 2016.

Disrupting for a smarter future
So how do we go about adopting digital tools whilst also remaining true to our ‘customer-first’ mantra? The answer lies in constantly looking at and investing in the latest technologies with a view to helping our customers navigate financial transactions in a swift and secure manner.

Broadening access to the widest possible range of customers is key to our success. For example, we have recently collaborated with ToneTag – a global leader in voice technology. This allows us to provide soundwave-based contactless payments for the acceptance of CBDC by merchants. We are proud to be one of only four banks allowing customers to participate via a digital wallet – an exceptionally handy feature.

In a more geographically specific example, in the city of Kochi, in Kerala, we have partnered with technology start-up Anantham Online to facilitate the digital payment and collection of parking fees for customers using the Kochi Metro system – an important transport network connecting road, rail, and waterways in that city. Again, through our innovative use of technology, we have provided our customers with an improved experience for their daily transactions. This fact also applies where there is a large diaspora of Indian professionals and students living abroad – in countries like Singapore and the UK, to mention two. The successful establishment of Unified Payment Interfaces (UPI) through international protocols and interoperability will enable money transfers to and from bank accounts held in India by non-resident Indians.

Online safety is also a priority for most customers. At IDFC FIRST Bank, we always strive to make the banking sector safer and more user-friendly. A priority is to tackle the untapped market, which is still very significant. As previously stated, it’s imperative to find solutions and business models that effectively reach out to them. Each payment instrument holds a sweet spot. A lot of innovation can be applied to offline payments – an area on the up – spanning feature phone payments, cross-border payments, and the like.

One such example is our recent participation in a pilot project for offline payments involving a digital payment system designed by Swedish company Crunchfish, with which we signed a digital cash commercial agreement. Being part of this Reserve Bank of India (RBI) supervised project puts us at the vanguard of India’s banking sector revolution, and the potential rewards – both at a societal and a financial level – are significant, because the solution to the issue of offline payments will open up the customer base, provided we can smooth the path to inter-bank interoperability. And this is why we will continue to invest in these areas.

Defining the customer journey
Digital technology, particularly for payments, has transformed consumer habits, boosting efficiency beyond anyone’s imagination. As our business strategy is guided by our customers’ needs, we aspire to provide the best user experience possible, putting the customer at the centre of all journeys, with regards to payments and beyond. Adopting cutting-edge technology the way we do is not always plain sailing; it’s important to instil trust in every single transaction, cutting no corners. If a dispute arises, it must be addressed and resolved in a timely manner to ensure continued engagement, loyalty, and trust, particularly in the digital age when news of poor – or exceptionally good – services travels fast, far, and wide.

Our investment in best-in-class technologies has helped us to develop customised solutions

Like all banks, IDFC FIRST Bank has to contend with the shifting sands of government-implemented frameworks. For example, the November 2016 announcement by Prime Minister Narendra Modi banning the use of 500 and 1,000 rupee notes caused huge disruption – effectively making 86 percent of the country’s bank notes illegal tender. But this move also created many opportunities, as vast numbers of people were suddenly forced to find alternative methods of payment. It is therefore the responsibility of any bank stepping into this landscape to equip its existing customers with the tools to navigate complex financial terrains, and to reach out to empower swathes of new customers with the promise and delivery of future resilience and inclusivity, through the provision of accessible digital banking platforms.

As for the growth of the bank, our profit trajectory is strong. The bank has guided for ROE to reach between 13 and 15 percent by the exit quarter of FY25. We are confident in reaching this comfortably by the target date, despite setbacks including legacy corporate income reversal and, of course, the far-reaching impact of Covid-19. Our predicted ROE will be made reality in part thanks to our tech-centric approach and eagerness to try new innovation, touching the lives of millions of Indians in a positive way.

Combined, our customer-first philosophy and forward-thinking attitude will help us grow into a world-class, technology-led bank with a climbing ROE.

The small cap premium – down but not out

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In 1906 during a country fair in Plymouth, Sir Francis Galton asked several hundred people to guess the weight of an ox. None of them got the answer right, but incredibly, the average of the guesses was remarkably close to the actual weight. It was a phenomenon that became known as the ‘wisdom of crowds.’

Several decades later, Nobel laureate Eugene Fama took inspiration from Galton in his 1970 work on the Efficient Market Hypothesis, which states that share prices are accurate reflections of all relevant information and are therefore not over or undervalued. The implication was: you can’t ‘beat the market.’ But does this always hold true?

Over the past decade, rises in American large cap indices have been fuelled by mega caps. Vast network effects created by their market leading, scalable offerings have erected a barrier to entry for smaller competitors. There’s plenty of potential left in some of these ‘modern monopolies,’ which have a place in our portfolio.

Historically, however, small cap long-term returns are superior to those of large caps. According to the Ibbotson SBBI dataset, the annual yield of US small caps beat large cap returns by 1.7 percentage points over the 1926 to 2022 timeframe. For someone investing $1 in 1926, this translates into a return of $49,052 on small caps, compared to $11,535 for large caps.

For some time, large caps bucking this long historical trend was mainly a US market phenomenon. European small caps (particularly in Sweden) have performed strongly until recent years, when a change became apparent here, too. Is the shift permanent? Or do small caps still yield a premium, and if so, how can investors profit?

Small cap characteristics
The term ‘small cap’ usually implies a capitalisation in the approximate range of $250m–$1bn. Index suppliers use their own criteria, often some percentage of total stock market cap. The median component of Russell 2000 – the small cap index most commonly used in the US – has a market cap of around $1bn; Russell 2000 is comprised of the 2,000 smallest companies in the Russell 3000 index, which in turn includes the 3,000 largest US shares. S&P Small Cap 600 omits unprofitable companies, resulting in more of a quality tilt.

The performance of small caps relative to large caps will revert to its historic trend

In Europe, the most common broad small cap index is MSCI Europe Small Cap, which includes 1,000 listings. There is a plethora of local market indices, such as the Swedish Carnegie Småbolagsindex, used as a benchmark by many small cap equity funds here. This index includes listed shares with a market cap of less than one percent of Nasdaq Stockholm.

The sector representation in small cap indices differs from that in large cap indices, affecting quality and valuation measures. These sector differences are also very important to adjust for when comparing small caps to large caps in a particular market, as well as when comparing small caps across geographical markets.

The small cap market captures investor interest for a number of reasons that we shall look at.

Growth potential: Finding a share that rises very significantly is much more likely among small caps than among large caps. One obvious factor is that small cap growth starts from a smaller base – achieving exceptional share price growth is harder for mega caps with a market cap running into hundreds of billions or even trillions. The high-growth prospects among small caps lure many investors, but picking winners is not that easy, as many younger small cap companies are more financially vulnerable through economic downturns.

Dispersion: Unlike large cap indices, small cap index developments don’t hinge on the success or failure of a handful of large companies. The 10 largest index components comprise 20 percent of MSCI World, but only three percent of Russell 2000. The vastness of the small cap universe yields a wide range of quality and growth attributes.

Sector representation (which affects quality) varies among small cap indices on different markets. The percentage of higher-quality companies in small cap indices relative to large cap indices is larger in Europe (particularly in Sweden) than in the US. Over time, 10–20 percent of small cap indexes have consisted of companies with declining profits. This ratio is usually smaller in Europe than in the US, reflecting differences such as the US small cap biotech sector with its many unprofitable hopefuls.

Generally, the quality level of small caps indices has declined somewhat in recent years. This development further boosts the importance of selectivity and active management.

Liquidity: Smaller company shares are often significantly less liquid than large company shares, hampering market participation for large investors and hedge funds, which in turn keeps liquidity subdued. Theoretically, higher transaction costs and lower liquidity motivate a liquidity risk premium in small caps. Financial information from and equity analyst coverage of smaller companies is also lower compared to large caps. Due to lower market transparency, inefficiencies and asset mispricing can provide opportunities for small cap investors.

The small cap premium debate
The long-term yield advantage of small caps versus large caps is well established. But are small cap yields superior even when adjusting for risk exposure?

The existence, size and causes of the small cap premium have been fiercely debated. The Capital Asset Pricing Model (CAPM), developed in the 1960s, posits that yield expectations reflect the risk level of an asset relative to that of the market portfolio, as expressed by the asset’s beta value. According to CAPM, superior yields on small caps merely compensate for a higher beta value, so there is no advantage in risk-adjusted returns. CAPM and the ‘efficient market’ theory have not fared too well. In 1981, economist Rolf W. Banz showed that the superior relative returns of small caps cannot be explained merely by CAPM beta – there is an additional small cap premium. Further risk factors have been identified over the years. The Fama-French three factor model of 1992 comprises market risk, a small cap premium and a value premium. The small cap premium actually has quite narrow support in the Banz study. It has also declined over time – due to increasing investor interest, it has been suggested.

In recent years, however, a number of interesting academic studies by Clifford Asness and others have shown that the small cap premium still exists at a significant level when adjusting for quality. If loss-makers and low-quality companies are eliminated, the small cap premium is alive and well, in a somewhat modified form. Note that within small caps, the value segment has developed better than the growth segment in eight out of 10 decades. The larger prevalence of lower-quality loss-makers among growth companies is a likely explanation.

A market suited to active managers
For maximum alpha, investors want to employ highly proficient asset managers who are active in less efficient markets. High outcome dispersion translates into more opportunities to pick winners and avoid losers. Richard Grinold’s ‘fundamental law of active management’ uses the terms ‘information coefficient’ (managing skill) and ‘breadth’ (opportunities to put the skill into good use).

In general, the dispersion is far higher among small caps than among large caps (particularly outside the US). Emerging markets, tech and biotech are other high-dispersion areas of particular interest to active managers. Institutional investors and analyst forecasts are relatively less common on the small cap market. It can take the small cap market longer to price new information, and the resulting inefficiencies favour investors who do their own fundamental analysis.

Small cap exposure
In our view, the performance of small caps relative to large caps will revert to its historic trend. Strategically, equity portfolios should have ample small cap exposure. Limiting investments to large caps excludes considerable growth potential – the small cap exposure of MSCI ACWI, a global index, is zero.

Portfolio share: The share of small caps in an equity portfolio will be governed by return targets and risk tolerance. Small caps make up 14 percent of the broad global index MSCI ACWI IMI, which includes 99 percent of global equity market cap. It is reasonable for investors to hold about 15 percent of a global equity portfolio in small caps with diversification across sectors and regions.

Active, lean management: Small cap index investing is best avoided – studies show that filtering out low-quality companies is key to achieving a significant small cap premium. Some smart beta funds do this. We prefer skilled, active managers, with geographic market specialisation and an AUM in the lower range. Research has shown that alpha generation ability scales badly, as funds grow too large to trade in less liquid assets. When selecting a fund, check on its size when the track record was accumulated – the game plan may have changed.

Portfolio allocation: Structurally, private investors with a long-term investment horizon do not need the high daily liquidity available in large caps that some large institutional investors require, and can benefit from the small cap premium over time.

However, many small caps are less global and more exposed to their domestic economy than multinational large caps. It follows that cyclically, small caps can be more impacted by domestic monetary policy tightening and sharply higher interest rates such as we are now experiencing in the US and Europe. Given that a downturn for 2023 was widely expected, small cap absolute valuations are already quite low. Furthermore, relative to large caps, small cap valuations in Europe and the US are also historically quite low. As markets work through this cyclical downturn, there are both relative and absolute opportunities to consider small caps

Digital assets: the new financial frontier

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Change is an omnipresent variable in all areas of life in today’s society and is evident in the business world. The doors that the digital universe opened a few years ago have remained open and the transformation is permanent with new technologies helping to revolutionise companies and clients. With this environment at MoraBanc, being adaptable to change is now integral to the DNA of the company and those of us who are part of it. Our focus today is on daily business and our sights are set on what is to come in order to take advantage of the opportunities offered by a future that appears to have arrived early.

MoraBanc, Andorra and the world in general find themselves facing a new moment of disruption with the arrival of blockchain technology and artificial intelligence affecting many different sectors, including the financial services. These new technologies create opportunities and require significant adaptation to take advantage of them. It is essential now more than ever to work with a dual vision, the short-term vision to provide service today, and the long-term vision to evolve and move forward to meet the needs of our clients.

In the rapidly evolving world of digital assets, which encompasses cryptocurrencies, tokens and decentralised platforms, traditional banks are not mere spectators.

They are, in fact, central players with a unique and indispensable role in this financial revolution. Traditional banks have centuries of experience under their belts, having built trust with millions of customers worldwide. As the allure of digital assets grows, many consumers and investors naturally turn to their trusted banks for guidance and assurance. This trust factor is something that new entrants in the digital asset space might find challenging to replicate.

Moreover, banks are uniquely poised to offer solutions that seamlessly bridge the gap between digital and traditional assets. Imagine digital wallets directly linked to regular bank accounts, or the ability to effortlessly convert between fiat and cryptocurrencies. These integrated services can provide customers with a holistic financial experience.

Deep-rooted experience
Regulation is another arena where traditional banks shine. The digital asset landscape is fraught with regulatory challenges, and start-ups often struggle in navigating this complex terrain. Banks, with their deep-rooted experience in compliance and established rapport with regulators, can lead the charge in shaping a regulatory framework that ensures the safety and legitimacy of digital asset transactions.

The vast infrastructure of traditional banks, from their global transaction networks to extensive customer service operations, can be harnessed to offer robust digital asset services. Whether this means facilitating large-scale crypto transactions, ensuring top-notch security for digital asset storage or crafting educational resources for the uninitiated, banks have the resources and expertise to deliver these services at scale.

Innovation in the financial sector is often seen as the domain of nimble start-ups. However, traditional banks, with their resources and reach, can collaborate with innovative platforms to create hybrid models. These collaborations can yield products and services that meld the innovation of the new age with the reliability and expertise of traditional banking.

Lastly, with their significant capital reserves, banks can propel the growth of the digital asset ecosystem. Whether this occurs by investing in promising ventures or offering lending services with digital assets as collateral, banks can further weave these assets into the fabric of the broader financial system.

The digital asset revolution is as much about the convergence of the old and the new as it is about technological innovation. Traditional banks, with their vast resources and trust, stand at the crossroads of this new frontier. By embracing the potential of digital assets, they can ensure their continued relevance and leadership in the ever-evolving financial world.

The road map for MoraBanc Digital
Similarly to our vision for the future of banking with digital assets, we are also focused on the permanent updating of the digital banking service, where MoraBanc is a benchmark in Andorra. Since 2016 we have included digitalisation as a key element of our positioning in our DNA, making a firm commitment in recent years. Focused on the client, the principal purpose is to provide a service 24 hours a day, every day of the year, in order to facilitate the banking operations of our clients and customers.

Banks are uniquely poised to offer solutions that seamlessly bridge the gap between digital and traditional assets

In 2023, we increased this commitment in order to be more agile and efficient as an institution, but above all to be able to provide clients with more autonomy in the most common operations and queries. This is the great challenge we have set ourselves and the efforts we are making as a team are one of the arguments for receiving two World Finance awards, one for the Best Mobile Banking App in Andorra and another for Best Consumer Digital Bank in Andorra.

Over the last few months we have renewed digital banking with a new app-first digital experience, since 70 percent of digital access is via mobile device, by offering: the Bizum service for instant payment between individuals, widely used in Spain, the ability to become a client 100 percent digitally, and developing new functionalities for contracting new products such as cards and loans, as well as the generation of bank certificates. All of these new digital features are aimed at enabling branch staff to focus on providing more value-added advice and services to clients.

Associated with bank digitisation, the GarminPay service was also introduced. This service offers the possibility to make payments through a watch to MoraBanc cardholders using the wallet integrated in Garmin sports watches. We are the first bank to allow this operation in a country where, for now, the most common payment systems such as Google or Apple are not available for Andorran cards. We have been able to find an alternative for our clients by combining imagination and innovation in Andorra.

More agility
The roadmap for the coming months also includes two major initiatives from our 2022–24 strategic plan that will transform us as an institution and make us better prepared for the challenges of the future. We are currently working on a plan to transform and simplify various internal processes that have a direct impact on the procedures carried out by clients, making them simpler and therefore more agile.

Moreover, as mentioned above, the incorporation of digital assets into the client’s digital channel will make the new investment offer in this new asset class more accessible and will revolutionise the way in which people and companies exchange value in the very near future.

This is part of our approach to digitalisation, always with clients and users at the centre of everything, and it is our task to respond to their needs with real, practical and agile solutions in the present, while at the same time working to get ahead of the doors that technology opens to the future.