Author: World Finance

Africa’s 56 million missing homes: Shelter Afrique confronts the crisis

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Shelter Afrique is a pan-African development finance institution, funding low cost, high volume housing in 44 countries across the continent. According to its centre of excellence, there is an urgent crisis in urban housing, with 56 million homes needed in African cities – and that number is growing year-on-year. Andrew Chimpondah explains how Shelter Afrique forms public-private partnerships with governments in order to create homes that cost in the region of $20-30,000 – homes that the majority of people can actually afford.

World Finance: Andrew, how urgent is the need for more urban housing in cities across Africa?

Andrew Chimpondah: Yeah, thank you Paul for the opportunity. I think for us as Shelter Afrique, we view the need for housing as a crisis. We have our centre of excellence that has estimated the shortage of housing at 56 million units throughout the whole of Africa. 56 million units!

And the biggest challenge in Africa is affordability. We need to have products that the majority of Africans can afford. And we do that through the creation of public private partnerships, so that we can achieve development impact.

World Finance: Tell me more about these partnerships – how is Shelter Afrique tackling this housing crisis?

Andrew Chimpondah: So we at Shelter Afrique have realised that for you to get a low-cost house, you need to enter into a partnership with the governments, the 44 governments that are members of Shelter Afrique. That they provide land, and possibly infrastructure support or subsidies; then we can provide funding for the top structure, so that the end result is a house that costs in the region of $20,000-30,000.

We also use that as a way of influencing the policies, the housing policies in our member states so that they provide an enabling environment to create sustainable public-private partnerships.
And then lastly we also have a trade finance product, to also fund countries that want to import building materials like cement, also building materials, to support their house construction.

World Finance: Now I know that you’re working on a number of bond issuances – half a billion US dollars in Nigeria; the same in east Africa, as well as a bond for Francophone Africa – with that funding in place, what can we expect going forward?

Andrew Chimpondah: Going forward what you can expect is that we have now built a pipeline of housing projects in the region of $1bn. Now we need to make sure that we fund that pipeline. That’s very important for us. So we want to look, going forward we want to see our assets under management growing; we want to see ourselves being able to support that pipeline.

And I think more importantly, we are looking forward to the 20th to 26th June, where we are holding our 40th anniversary in Yaoundé in Cameroon, where we’ll be able to promulgate the Yaoundé declaration in terms of 40 years in housing. How have the policies in the member states been effective, and if not, what changes do we need to make in terms of the policies? And you’ll be glad to know that we collaborate with the UN Habitat, we collaborate with the United Nations Economic Commission for Africa, where we’re actually developing a model, a law, which is a benchmark of housing policy that should create an enabling environment to support the growth of low-cost, large-scale housing.

Last but not least we’re pleased to report in our audited financial results for 2020 a profit which we’ve delivered of $2m, and we’re looking forward to delivering more profit for our member states so that the capital they’re investing in Shelter Afrique continues to grow and gets reinvested in housing.

How HBL’s digital payment solutions are expanding financial inclusion

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Bank digitisation is a worldwide trend; but its benefits are particularly notable in countries with a large unbanked population. Pakistan is one such country, where HBL is at the forefront of its digital banking drive. Sagheer Mufti explains how the bank has transformed from a legacy bank to a digital one: leveraging technology to help digitise the flow of money across individuals, institutions, and businesses.

World Finance: Sagheer, HBL was the very first commercial bank established in Pakistan – how has it transformed from a legacy bank, to a digital one?

Sagheer Mufti: Thank you for the question, because we’re very proud of our legacy. HBL, since inception, has a history of innovation in customer service.

For example, early on we decided to create a branch network so we can be wherever our clients are, including an international footprint. We brought credit cards and ATMs to the Pakistan market 50 years ago. And as the digital landscape started evolving in financial services, we have embraced it fully – to the extent that we view HBL today as a technology company with a banking licence.

The end goal remains the same: be a customer-centric organisation, by having mobile-first channels, data-enabled decisioning, and an agile organisation to increase speed-to-market. Our success today in achieving pole position in digital is based on enabling our clients to enjoy banking services and channels that fit in with today’s lifestyle – be able to get information you need about your transactions, your wealth, or be able to transact when you want, from where you want, in a secure manner.

World Finance: A core component to this transformation is your digital payment capacity; tell me more about HBL Pay.

Sagheer Mufti: Absolutely! HBL digital payment solutions enable HBL customers to enjoy a cashless ability to transact with ease. Big data is enabling us to do lead generation, product personalisation, and react much faster to client feedback on our products and services.

The bank’s ability to maintain a leadership position in HBL pay, its cash management proposition, is about a one-stop online banking solution for all of HBL’s customers.

HBL Pay’s new payment gateway continues to power more and more ecommerce merchants. Being one of the first banks to offer open banking capabilities since last year has allowed us to on-board customers and partners quickly and remotely. Allowing them from the safety of their offices or homes to join HBL’s payment systems.

World Finance: Now, Pakistan has the fifth largest population in the world, but a financial inclusion rate of just 21 percent; is digitisation helping?

Sagheer Mufti: Oh, absolutely. Financial inclusion is at the core of HBL’s business philosophy, as it supports Pakistan’s national agenda, and allows us to better serve the communities that we do business in.

The bank believes that leveraging technology to digitise the flow of money across individuals, institutions, and businesses, is a necessary step; and greatly assists in achieving its financial inclusion agenda. We are seeing this happen every day.

A very good example was by HBL becoming a lead partner with the government of Pakistan in the disbursement of the largest social safety net initiative in the country’s history – and in fact, in south Asia – with $1bn during COVID-19 being disbursed to 12 million Pakistani families.

ACY Securities: 10 years of empowering traders to make smarter decisions

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With enormous diversity in tradable assets, and a commitment to cutting-edge technology, ACY Securities pitches itself as half Wall Street and half Silicon Valley. All Darwish and Justin Pooni discuss ACY’s award-winning partnership programme, the educational products in place to help empower the company’s traders, and its key achievements through the turbulent 2020, and ambitions for 2021.

World Finance: The World Finance Forex Awards recognised your partnership programme as being the best for 2020; what sets it apart?

Alla Darwish: So when it comes to forging successful commercial and business partnerships, finding the right partner is crucial. ACY’s backbone is fintech; so when it comes to systems, we have tailored solutions to brokers, fund managers, FIX-API offerings, and even introducing brokers. And even if professionals wanted to take part in ACY’s global reach and presence, they can always apply to work directly with ACY, and represent us in specific regions around the globe, under the regional manager programme.

ACY Partners offers bespoke solutions designed by you and tailored by us. So if our clients want a certain liquidity provider, a product, or even a price range, or a commission structure, we’ve got them covered. We not only offer the best technology in the market, but the best customer service they could experience with any broker.

World Finance: Justin, ACY’s vision is to empower your customers, to help them make smarter decisions; how are you delivering on that promise?

Justin Pooni: Well yes that’s right; our vision as a company is all about empowering clients with the tools and resouces they need to make smart informed trading decisions. And we’ve been delivering on that vision every day for the past 10 years, I’m happy to say.

There are two distinct areas that we focus on when it comes to arming our clients. Number one is the education and tradable market analysis, and number two is the technology and exceptional trading environment.

On the market education front, we have three video reports that go out to clients every day. The Asian Open, the London Open, and the ACY Securities daily report, which is a comprehensive breakdown of the movers and shakers of the day. These products provide traders with a full wrap of markets, including tradable market analysis, that they can use to enter and exit their trades.

On top of that, we also have a suite of structured and self-paced educational products that allow clients to grow as traders, regardless of their level of skill or experience.

In terms of the technology and the trading conditions, our ultra-fast execution speed, direct access to Equinix Servers in New York and Asia, combined with the low cost of trading, ensures that traders can trade with confidence.

World Finance: Obviously it’s been a turbulent year, but ACY has been growing steadily – what have been your key achievements this year, and what are your ambitions for 2021?

Justin Pooni: Well certainly 2020 was a tough and challenging year on many fronts, but we have managed to soldier on strongly and achieve some pretty incredible things. Some of them include introducing share CFDs and ETF CFDs, to give our clients access to over 1,000 instruments across six asset classes.

We enjoyed strong organic growth in key markets, including the Middle East, south-east Asia, and of course Australia.

2021 is actually shaping up to be another very strong year for us: marking our 10 years in the industry, which is just an incredible milestone. And on the technology and trading front, we’ll be making further investments to our technological infrastructure; ensuring even faster speeds of execution.

And we’ll be looking to roll out some exciting trading tech that could transform the client experience as we know it. So watch out for that.

And of course we’ll continue to introduce more and more new instruments, so our clients have the choice to trade from a very wide selection of instruments. At the end of the day it’s all about our clients.

‘Our people perform miracles’: How Foresight keeps drilling through COVID-19

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While everybody’s lives and businesses were transformed dramatically in 2020, spare a thought for the energy industry, and the people who quite literally keep the world’s lights on. Dr Ravi Mehrotra is founder and mentor of Foresight Offshore Drilling, part of Foresight Group International; he discusses how the pandemic devastated oil prices, forced oil operators to become more nimble, and how the agility of Foresight’s people were critical to the business’s success through the crisis.

World Finance: Dr Ravi, how has the pandemic affected the oil industry – and drilling in particular?

Dr Ravi Mehrotra: April absolutely devastated oil prices, as lockdowns and travel restrictions forced people to stay at home. E&P companies also cut their planned capex spends by about $100bn. So the drilling sector has been particularly hard hit, with contract delays, suspensions, cancellations and terminations. Plus the inevitable squeeze on day rates.

Oil prices are recovering, but Moody’s suggests demand may not return to 2019 levels until at least 2025, if at all. Decarbonisation is becoming a priority. And with the upcoming inauguration of President Joe Biden, we may see demands for oil companies to substantially reduce their carbon outputs. So even beyond the pandemic, this is a challenge the industry needs solutions to.

World Finance: How did Foresight respond and adapt?

Dr Ravi Mehrotra: By becoming more agile, more nimble, so that our operations could continue successfully through this low earning period. Like a lot of companies we experienced issues with crew change logistics. Our operations and HR teams came up with really brilliant solutions to overcome those challenges, and make sure our people were appropriately quarantined.

We’ve always been a relatively small business in this industry – but we make that a strength. Larger corporations only have their one way of doing things, they’re very rigid. We can be more agile, we can adapt to different customer needs. The client is at the heart of what we do, so we make sure we’ve fully understood their needs, and then we develop solutions to match.

World Finance: It sounds like your people are really vital to Foresight’s success.

Dr Ravi Mehrotra: Absolutely. Our people really are exceptional, we have teams who regularly perform miracles to get critical milestones achieved for our clients. Our fleet has been at 100 percent utilisation, running at an amazing 99.7 percent uptime with excellent safety performance.

In 2002 we created our own training institute, fully approved by the International Association of Drilling Contractors. Now all our intake is through this academy, and it’s these long-term employees who have been trained up within the company that are such a strong asset.

It’s been a challenging year, but thanks to our people it’s been a successful one. And looking ahead we’re optimistic. We’re going to remain agile, and see if we can scale up to medium size, with a critical mass of jack-up and land rigs in our operations.

EVO Banco: Our one goal is to make our customers’ financial lives simpler

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EVO Banco is one of Spain’s key challenger banks; disrupting the national industry with a 100 percent digital banking model. Head of Disruptive Innovation and Big Data, Pedro Tomé, explains how EVO combines traditional banking with innovative technology to offer the best financial products and services to its customers; and Digital Innovation and Big Data Director, Javier Gonzalez, discusses the bank’s customer communications strategy, and its focus areas for technological development in the coming months.

World Finance: Pedro, what makes EVO Banco different in the Spanish banking market?

Pedro Tomé: I would like to start saying that EVO Banco is a traditional bank. We have bank accounts, we have loans, we have mortgages. All products and services that other competitors also have.

But some people identify or define EVO Banco like a new, neo bank. This is because we offer new products and new services, and the rapid functionalities that these kinds of new players also offer. We try to take the best of these two worlds and give that to our clients.

So we want to use the technology to help the people; we want to use this technology to make their lives easier. We are digital, we have an innovative DNA, and the clients understand how we are: that we are different from the rest.

These are more or less the points that define why we are different from the rest in the field.

World Finance: Javier – technology has transformed the way that banks interact with their customers. What’s EVO’s strategy?

Javier Gonzalez: Well, there is just one goal in our interactions with our clients, which is to make their lives simpler. Make their financials transparent. This means making better services and improving the customers experience while reducing our own inefficiencies.

We have just one physical branch, so our interaction with the client lies in our digital channels – particularly in our mobile app. And there in our app, we are bringing a high quality digital service, with a great user experience. So finally the client can do anything related with her money in an easy way.

And we want the user to be part of this. Our clients must be part of this process. We hear what they are demanding, and we have different mechanisms to interact with them.

For instance, from the very beginning we had a beta testing programme, where some early adopters gave us feedback about the new features or products in the app.

We are also leveraging the power of machine learning techniques, combining with real time solutions. So we can offer at the right moment what the user really needs.

World Finance: And what are EVO’s focus areas for the coming months?

Javier Gonzalez: Well, our main intention is to keep positioning EVO as one of the most innovative financial institutions in Spain, and also in Europe. So to achieve this goal we will continue to strengthen the bank’s digital acceleration strategy.

We also always have to offer high value financial and non-financial services. Alliances with different fintech companies are of paramount importance in this strategy. We work alongside different startups, such as our robo-adviser Finizens, or our collaborative model with Booking or Rentalcars is a very good proof of this.

We expect to keep developing our own technologies. Improve the life of our users by simplifying their relationship with money.

We are also advancing, knowing the use of biometric technology to validate transactions, that’s something that’s coming soon. So we are working on biometrics and voice to deliver and seamless, agile and secure user experience to our customers in doing whatever operation they want to do.

World Finance: Now finally, Pedro, World Finance has recognised EVO Banco as the best consumer digital bank in Spain for 2020; what does this award mean to you?

Pedro Tomé: This award represents that we are on the right track, encouraging the sector to change and to evolve. The banking sector is moving towards an update, to evolution and change. From humility, EVO Banco is driving this change. And as far as possible lead the change.

We like thinking differently, and we like doing different things. Awards like this not only acknowledge our commitment but encourage to keep us making efforts to our performance ourselves. So thank you for it, thank you for this award.

Atradius: Innovation will be key to 2021 – but make sure you’re getting paid

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As a trade credit insurance provider, Atradius is very much a first responder to distressed businesses. Andreas Tesch, Atradius’ Chief Market Officer, says the company expects global insolvencies to have only increased by four percent in 2020, thanks to government stimulus packages. However as those packages begin to expire through 2021, it’s more critical than ever that businesses exhibit caution when selecting their customers: because if the business you’re selling to doesn’t survive, neither will yours.

World Finance: Andreas, it’s been an unimaginably turbulent year; how has the crisis looked from your perspective?

Andreas Tesch: Well Paul, you’re right: turbulence is the right way of describing the economic impact of the COVID-19 crisis on 2020. In fact 2019 already ended quite rocky, with protectionism looming on the horizon. And when the COVID-19 crisis hit, it had a disastrous impact on economic development.

As Atradius, we expect the GDP globally to contract by more than five percent in 2020; and even worse, global trade to contract by more than 15 percent. But there’s also good news, in the sense that governments have been very quick in responding to this crisis. And with massive stimulus packages they avoided an economic catastrophe.

In fact, for 2020 we only anticipate a very small increase in global insolvencies of around about four percent. But that’s mainly due to the stimulus packages that have been put in place, which will expire in the course of 2021.

World Finance: Now, you’ve written about the need for businesses to pair innovation with caution – what do you mean by this, and where is the balance?

Andreas Tesch: Well in fact, what this crisis has told us is that innovation and the ability to adapt to changing situations is key to success. And as a credit insurer, and an insurer of trade receivables, what we mean with caution is always making sure that ultimately you’re being paid by your customer.

So, what’s the right balance between the two? That will differ from industry to industry. When you look at where innovation can be seen, it’s in processes, it’s in products. And looking at the retail sector as one example, we’ve seen a massive shift during this crisis from high street retailers which continue to disappear, to online traders, to ecommerce companies. And those companies are in a lot of instances in place for less than five years, they’re still in a loss-making situation, and their balance sheet is fairly weak.

Still, they have a bright future in front of them, they’re growing very rapidly – which is also where we as a credit insurer had to innovate, and had to adapt our way of assessing such companies using things like artificial intelligence rather than classical financial matrices, balance sheet analysis. Because those would no longer fit this new environment.

World Finance: Finally, what’s your outlook for the year ahead – what will it take for businesses to prosper?

Andreas Tesch: Well, innovation is going to be key for 2021 as well. It’s not going to be an easy year, because the COVID-19 impact will last for a good part of 2021 as well. Still, we expect that GDP will bounce back, and then we will see an increase of more than five percent in 2021.

Nevertheless, as I’ve mentioned before, the stimulus packages will expire, and that will lead to a substantial increase of insolvencies in 2021. So caution is going to be a key theme to be successful in 2021, next to innovation, and making sure that you select the right customers that will survive – even once these stimulus packages have expired.

XSpot Wealth: Democratising wealth management

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In 2014, two investment professionals created XSpot Wealth, a wealth management business at the intersection of flexibility, transparency, technology and fees. Dimitris Kantzelis is one of those co-founders, and XSpot’s current CEO; he discusses the void created at the lower-income end of wealth management as a consequence of MiFID II, and how introducing XSpot’s AI and trading algorithms to the industry enabled the business to offer a convenient, transparent, low cost and flexible wealth management solution for everyone.

World Finance: Dimitris, why did you create XSpot Wealth?

Dimitris Kantzelis: Well Paul, it was a period of rapid regulatory changes in Europe, with MiFID I and MiFID II coming into place. And we knew that if Europe decided to push for those changes, big banks and traditional wealth management providers wouldn’t have any other option than increasing their fees; making it almost impossible for smaller clients – clients with less than €1m in their accounts – to make money in the long term.

At the same time, we had a going momentum of millennials: people who wanted to start with very low amounts, less than €10,000 possible, and they were seeking digital, robust services for an early retirement.

So, XSpot Wealth was built exactly for this: to help people of every level of income, taking ownership of their financial future.

World Finance: So how do you actually achieve that? How does XSpot innovate in order to deliver on that promise?

Dimitris Kantzelis: The key for us was the use of smart technology. We knew that big banks and traditional wealth managers, they were doing everything manually. Whereas on the other hand, us: we were already using artificial intelligence and trading algorithms when working. So we knew that if we apply some of those rules, we could democratise investing, making it available for everyone.

So, this required big investments in technology, long hours of programming, and filtrating investment strategies in order to bring these investment plans, making them available to everyone. Offering great flexibility, big transparency, and some of the lowest fees in the market.

World Finance: Why would someone choose XSpot Wealth over another wealth manager or bank?

Dimitris Kantzelis: Well I would say everything, but this could be summarised down to five key points.

Convenience: it’s so easy to open an account with us, it takes less than 30 minutes, and even if you have a question our excellent support team is there to help you.

Transparency: we’re fully transparent in the entire process, showing every bit of detail someone needs to know before opening the account, but also throughout the entire process.

Diversification: we give a very big variety of investment plans, matching almost every investment and risk profile. This is great and we let someone choose among those.

Low cost: because we believe that with low costs we help you boost your investments and grow your account even more in the long-term.

And, flexibility: flexibility in changing the plans whenever you feel like, or taking money out, because we don’t enforce high or hidden fees in our accounts.

World Finance: So looking ahead, what are your plans for the coming year?

Dimitris Kantzelis: Yes, after the COVID year 2020 being a bit turbulent – but we had great results in all our investment profiles, which makes us really happy. Our next target for 2021 is to enter another two European countries, reach the first target of 10,000 clients.

And from there onwards jump to the second target, which is 100,000 clients and €1bn assets under management. Then it would be natural to expand outside Europe and the Middle East, towards Asia and the US.

An excellent time for commodities: trading through the COVID-19 crisis

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HYCM was one of the first retail forex brokerages to be regulated in the UK. With over 40 years’ experience and representation in the UK, Hong Kong, Cyprus and Dubai, the business has seen a lot of market turmoil; its Chief Currency Analyst, Giles Coghlan, outlines how traders have been responding to this year’s record high volatility, and explains why commodities are a good pick as the world looks forward to a vaccine.

World Finance: Giles, how have HYCM and your traders responded to this year’s crisis?

Giles Coghlan: Well, HYCM already has experience in successfully withstanding some of the biggest market crashes and major volatility over the years, so, our clients can be sure that they’re trading with one of the most solid and secure brokers in the world.

In fact, in terms of traders generally, they do favour volatility; so you do tend to see an uptick in trading activity whenever you get global events like these causing large swings in asset prices. And many brokers have been reporting increased volumes at this time. So generally speaking, it has been quite good for business.

However, the record high volatility also provides challenges. It is a very difficult investment environment, and the kind of uncertainty in markets at the moment favours a much shorter-term horizon, as longer-term investments – particularly early in the year – were crowded with considerable uncertainty.

For traders it actually has been a really good time to take advantage of some of our free online webinars and workshops, that are located on the HYCM website, and hosted by myself every week; in order to really enrich and deepen their trading skills and knowledge.

World Finance: So with your analyst’s hat on, what assets do you think will perform well in today’s environment?

Giles Coghlan: Well this is one topic that I’ve been speaking a lot with HYCM clients about. And this could be a really excellent time for commodities, as global growth starts to get going again on global vaccine hopes.

Now this could also be a very, very good time for gold. The Federal Reserve is set to keep interest rates at low levels right through 2023; the US is on the verge at the moment of releasing a large stimulus package, and quantitative easing levels are at record levels. So one of the key areas that we’ll be looking at is how quickly the Federal Reserve looks at raising interest rates. And as long as they keep interest rates low, you would expect that to be very good for gold, which has grown and gained in value in all of the last major financial crises that we’ve had. So gold long still looks good right now – but we need to keep a careful eye on what the Federal Reserve does.

Copper also looks very good from a medium-to-long term. Electric vehicles are growing in popularity, and they’re thought to account for about 9.4 percent of copper demand by 2030. And the current level is 2.4 percent. So we are over the medium term expecting a good boost in copper prices. So you would expect dips in copper to find buyers in the medium term.

Another interesting commodity is nickel. According to Morgan Stanley, electric car sales are seen to boost nickel the most of all the commodities used in producing an electric vehicle. So they predict that over the next five to 10 years there’s going to be a heavy investment in nickel mining, and a greater demand for nickel itself. So over the next five to 10 years, the commodity nickel could be a great investment.

World Finance: And how about currency trades?

Giles Coghlan: Well I think the currencies that you’d expect to benefit from this environment are currencies that are pro-cyclical in growth. So, typically the Australian dollar and the New Zealand dollar would benefit from a boost in commodity prices. If the US dollar weakens, that would further benefit the Antipodean currencies like the Australian dollar and the New Zealand dollar. And perhaps an AUD/JPY long, or a NZD/JPY long, could be a great trade over the medium to longer term, as we come out of this medical crisis.

Learn more, and watch Giles’ free webinars, at HYCM.com

More digitisation, at a faster pace: How Baiduri Bank responded to COVID-19

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One year after Ti Eng Hui was appointed CEO of Baiduri Bank, the first Bruneian started experiencing symptoms of COVID-19 – and the world turned upside-down. Six months into the global crisis, Ti discusses how Bruniean people and businesses have been affected, how the financial services industry responded, and how Baiduri Bank’s commitment to ongoing investments in technology and staff training payed dividends this year.

World Finance: Mr Ti, what has life been like for your customers since March? What new financial challenges are they facing, and how is Baiduri Bank supporting them?

Ti Eng Hui: So, COVID-19 has affected Brunei, like other countries. And the industries affected very much are the tourism industry: the airlines and the hotels.

So working together with my colleagues in the Brunei Association of Banks, together with the regulators MBD and also the Ministry of Finance, in early April we rolled out a financial relief package for those companies – businesses and individuals – affected by the COVID-19 situation, where their loan repayments can be deferred until next year for a period of 12 months maximum.

So that has really helped in terms of the financial stress that they’re facing. So yeah, that’s what we did at the beginning, very quickly.

World Finance: And how has Baiduri Bank had to adapt to this extraordinary year?

Ti Eng Hui: So what we’ve done is that we need to make sure that the staff are comfortable coming into work at the bank. So what we’ve done is we activated our business continuity plan, like other banks.

At the same time we need to make sure that staff who need to work in the head office can come in, feel safe to work. So we have done a lot of sanitisation, cleaning, giving them a lot of support in terms of the health packages to strengthen their immunity. Practise social distancing among the staff.

Secondly what we’ve done for those customers who need to come to the bank: we need to do all the scanning, the social distancing, just to make sure that when they come in they see a space that they are comfortable to come in. Obviously we encourage them to go digital. We launched a new mobile banking service in March. So that new channel has really, really helped us, in terms of diverting the traffic away from the branch network.

World Finance: When we talked last year, you spoke about the importance of ongoing investments into technology and into staff training; I suppose this year really has just highlighted the importance of those investments?

Ti Eng Hui: Yes, definitely. You know, our online transactions now account for more than 90 percent of overall banking transactions. And we continue to see that number climbing.

What we also see is that there’s a lot of online payments being made – those we see tremendous growth throughout COVID-19 and also now. So I think the digitisation has really gone a lot faster than before. And we have also rolled out internally more online training for our staff.

So really digitisation is the way to go, online is the way to go, and more and more we see the need to do even more, just to make sure that we are one step ahead. Because we know there could be a second wave, a third wave of COVID-19. You know, we just have to be prepared for it.

World Finance: Finally, on a corporate level, has this disrupted your mission or your strategy at all?

Ti Eng Hui: I think we are very firm, and we are very clear on what we want to achieve. COVID-19 has delayed the pace a bit, but it’s something that we can pick it up. Definitely we think that it has given us a clear idea of what we need to do more – especially online payments, online training. Everything that’s online.

So really I think given the good infrastructure we have in the country in terms of internet access, it’s something that we can definitely do a lot more coming up. So strategy-wise, continue the same strategy. But towards more digitisation, at a faster pace.

Firmenich celebrates 125 years of sustainable, inclusive, innovative business

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Firmenich is the world’s largest privately-owned perfume and taste company. More than half of the world’s population interact with one of Firmenich’s products every single day; but it’s still a family-owned company, with sustainability at its core. Gilbert Ghostine is Firmenich’s CEO; he explains that sustainability has been one of the company’s fundamentals since its foundation, and discusses the three strands to Firmenich’s ‘inclusive capitalism’ business model: people, planet, and society.

World Finance: Gilbert, why is sustainability such an important principle for Firmenich?

Gilbert Ghostine: Sustainability has been ingrained in our history – and at the same time, in our DNA – as an organisation.

When our founding fathers put together the values of the company, sustainability was one of them. It is at the heart of our inclusive capitalism business model. So this is part of our way of doing business.

At the same time it is important for the planet, because you need 3.5 tonnes of petal rose to make one kilo of rose essential oil that we use in your soaps, in your perfumes, in your shampoos. So the only way is to harvest it in a very sustainable way.

World Finance: I’m really interested by this inclusive capitalism concept; and you’ve identified three strands to that – people, planet, and society. Tell me in practice what you’re actually doing: let’s start with people.

Gilbert Ghostine: I’ll give you a few examples. First, Firmenich received back in December 2018 a global gender equality certification. It’s not only about equal pay, it’s at the same time equal opportunities for coaching, for mentoring, for career progression in the organisation.

The other example that I will give you is that over two percent of our colleagues around the world are people with different abilities. In the normal jargon these are disabled people; yet for us, these are colleagues with different abilities, because they bring a different skillset to our organisation. When some people lose a sense, they will develop the other senses. And that’s why we have visually impaired colleagues on sensory panels all over the world. And that’s a way of Firmenich embracing our colleagues in a camaraderie spirit and a different way.

World Finance: And how about planet – how does Firmenich ensure its business is environmentally responsible?

Gilbert Ghostine: We participated as a company at COP21 in Paris, back in 2015; and this is when we realised that incremental actions on climate are not good enough. They need to be exponential. And we took the opportunity to announce from Paris the boldest environmental goals for our industry.

One of the goals that we set ourselves is that we will be running at 100 percent renewable electricity before the end of 2020. And guess what? Before the end of February, we will be able to announce that we are running at 100 percent renewable electricity globally.

Second, we managed to decouple our output growth from our carbon emissions. Since 2015 we have grown our output by 18 percent, while reducing our carbon emissions by 30 percent.

Back in 2018, Firmenich was one of only two companies in the world out of the 7,000 that are assessed by CDP to receive a triple A: A for climate, A for water, and A for forestry. And we are very proud that for the second year in a row, in 2019, we are receiving triple A from CDP.

World Finance: And your third strand is sustainable growth for society; what innovations are you bringing to market here?

Gilbert Ghostine: As a company, we leverage our knowledge in science to help address some of the biggest societal challenges that exist in the world today.

We were approached by the Bill and Melinda Gates Foundation back in 2014 to help address a serious sanitation issue in emerging markets. You know, 2.5 billion people on this planet have only access to public toilets – and one of the challenges in these public toilets is that most of the time they are dirty and they smell bad.

Who understands the science of smell better than anyone else in the world? It’s Firmenich! Because we have been investing in understanding the receptors in the nose and the science of smell since the 1930s.

We managed to come with breakthrough technologies that could neutralise these malodours; and they are available today in markets like Bangladesh, India and South Africa.

The other example has to do with wellbeing. One of the challenges that our generations face today is this combination of obesity and diabetes. Firmenich came with a new technology called TastePrint that could remove 100 percent of the sugar from the products that you eat, while maintaining the same taste and the same mouthfeel. And the last calendar year, in 2019, we removed one trillion calories from the food that people consume.

World Finance: Firmenich is celebrating its 125th anniversary this year – what’s your vision for the next 125 years of the business?

Gilbert Ghostine: Well, I can’t have a vision for the next 125 years, but I would say, knowing well our shareholders and the way they think, they will always pride themselves on being a role model company in social, environmental, and ethics.

World Finance: Gilbert, thank you very much.

Mexico’s opportunities outweigh tax complexity and regulatory uncertainty

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Luis Gerardo Del Valle Torres is managing director of Mexican Law Firm Jáuregui y Del Valle, and author of The Mexican Federal Tax System – Its review under Economic and Legal Principles. In the book he identifies a number of Mexican taxes that disincentivise investment, and suggest they should be revised – but far from easing the compliance burden, Mexico is making international investment more complex. But so is the rest of the world, argues Luis; and Mexico offers greater foreign investment returns that outweigh the uncertainty.

World Finance: Luis, Mexico’s tax system is notoriously complex – what do international investors need to understand?

Luis Gerardo Del Valle Torres: Well, that is right Paul – but all tax systems are complex in the world. And the bad news is that it’s just getting worse.

The OECD has come up with BEPS – Base Erosion Profit Shifting – and that just makes the rules much more complex everywhere.

But Mexico offers higher returns than many other countries do.

Mexico does offer less regulations than other countries do – and that creates more uncertainty. But if you have the right advice, the system is not necessarily more uncertain, because then you’ve got the experience of people that know and understand how the system works.

World Finance: How do international investors typically approach Mexico? What investment vehicles are popular?

Luis Gerardo Del Valle Torres: We have to consider that Mexico is a civil law country. Certain features exist so that international vehicles – JV, Joint Venture vehicles – may be used for investors to participate in, have non-Mexican law applicable, and so get the internal rate of returns that are expected, and still have foreign law applicable.

Investors generally feel more comfortable applying the law of their own jurisdiction – so generally the idea is to find a jurisdiction that is friendly to the country where the investors are based, and that actually has the appropriate links with Mexico. That is what we generally focus on.

World Finance: In your book you identify a number of taxes that disincentivise investment, and suggest they should be revised?

Luis Gerardo Del Valle Torres: That’s right, Paul. For example, there is this provision in the OECD Base Erosion Profit Shifting actions that disallows interest deductions with related parties when they exceed a certain percentage of EBITDA. Mexico is now disallowing interest deductions – but not necessarily with related parties or when paid abroad, but in any situation. So that just puts companies that are in favour of leveraging in a difficult position.

Mexico is as well frequently revising the tax treatment of foreign vehicles that are treated as tax transparent. This transparency is actually key to create joint venture vehicles that will then invest in Mexico – and when these provisions are revised, sometimes this is not taken into consideration.

So you have to learn to navigate in the tax system, as in any other country.

World Finance: But despite these complications, Mexico does remain a jurisdiction full of investment opportunities?

Luis Gerardo Del Valle Torres: Definitely. There are huge investment opportunities; tax systems are complicated everywhere, and Mexico offers foreign investment greater return than many other countries do.

The US is still the largest economy in the world – that proximity gives us certain advantages.

Mexico still has salaries that are lower than those in the US, and that represents an advantage. But it’s not only that: we’ve created a workforce that is very talented, and that has grown in its technical capabilities. So there is a lot of investment in manufacturing, aerospace, automotive; fintech is quickly growing in Mexico. But also when you see the returns, for example, that you get when investing in real estate projects, hotels, condos; these greater returns make up for that complexity and that uncertainty that you can navigate when you have the right advice.

World Finance: Luis, thank you very much.

Luis Gerardo Del Valle Torres: Thank you Paul.

JIB: A model of ‘honest, sincere, and satisfying’ Islamic banking for Jordan

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For 38 years, His Excellency Mr Musa Shihadeh was CEO and General Manager of JIB, one of Jordan’s oldest Islamic banks. But as of May 2019, he has stepped into the role of Chairman of the Board of Directors for the bank. He discusses the bank’s latest financial results, its commitment to financial inclusion and sustainability, and his vision for the future of the bank as a model of applied Sharia.

World Finance: Mr Shihadeh, talk me through the bank’s latest financial performance.

Musa Shihadeh: Our performance last year was good. Profits saw about 10 percent growth, and deposits was 7.5 percent.

This was because of expanding our technological transactions done through ATMs, phone banking, and branching.

This enhanced our business and led to that success.

World Finance: Now JIB has a real commitment to financial inclusion and sustainability; why is this mission so important to the bank, and to you personally?

Musa Shihadeh: We at the bank have a mission and strategy that we should serve every community person. Therefore we stress and concentrate our business on these transactions; try to help people to get under our umbrella of services. This will help to end poverty and unemployment, keep the economy stable and progress.

This stability will be resulted to our success and benefit as a bank.

World Finance: How does that position JIB in the Jordanian banking sector?

Musa Shihadeh: Jordan’s market has 25 banks. Four of them have Sharia application systems. We are the first in Islamic banks, and the third in all banks in Jordan.

World Finance: As I mentioned, although you are now Chairman of the Board of Directors for the bank, you were CEO and General Manager for 38 years, and saw some quite extraordinary changes in financial services during that time; what are you most proud of from your 38 years of leadership?

Musa Shihadeh: I’m proud of having the bank as a prominent bank in Jordan, with good relations with local and international banking systems. Satisfying every customer’s needs. And being a model for Islamic banking, applying Sharia in our products, that enhanced different banks to go and apply the Sharia principles.

World Finance: And what are you looking forward to in your new role on the board?

Musa Shihadeh: I’m looking that this bank will continue as a model for those who want to apply Sharia, and be honest, sincere, and satisfying the stakeholders.

World Finance: Musa Shihadeh, thank you very much.

Musa Shihadeh: Thank you very much.

Why are cryptocurrencies still so exciting for traders?

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Libertex is a multinational CFD and cryptocurrency broker. Its comprehensive investment platform offers 213 tradable assets to 2.2 million clients across 40 countries, and has won over 30 international awards. Marios Chailis, Chief Marketing Officer for Libertex Group, explains why cryptocurrencies are still such an exciting asset for online traders, their potential future outside of the trading space, and why due diligence is still absolutely vital. You can also watch the other half of this interview, where he discusses Libertex’s more traditional CFD and forex offering.

World Finance: You’ve described crypto as one of the best opportunities for traders in recent years; why is it still so exciting?

Marios Chailis: I think it’s a ground-breaking new technology that has seen tremendous interest worldwide. This has led to excitement among traders that haven’t seen anything like that in their lifetime.

I think we can all agree that it’s something that came out of nowhere, and over a very short period of time was absolutely everywhere – and a very hot topic being discussed among everyday people.

We saw that hype coming into its peak during the crypto hype of a couple of years ago; but since then, the interest has remained very high. That period of time, you know, there was, we need to understand that it’s still in its infancy. And we haven’t seen a lot of the applications that people might have hoped to see in a very short period of time. But we feel over the next few years, as long as technology companies and financial service companies continue to invest into research and development, on blockchain and crypto, very exciting things are going to come, and that’s where we’re going to see the real realisation of this vision of blockchain and cryptocurrencies.

World Finance: The crypto ecosystem is evolving beyond simple trading or peer to peer transfers with more business exploring using crypto as a payment method; tell me more.

Marios Chailis: I mean, 100 percent! We anticipate that eventually – and again, without wanting to put extra hype on this! – once the technology is mature enough, and a lot of companies invest into it, we see this becoming… I wouldn’t say a complete replacement of fiat currency, but definitely a much more advanced and popular payment method.

We see all these kind of companies already developing products that are relevant to this. I think the only remaining barrier is getting peoples’ trust and adoption worldwide. But especially in emerging markets, where you don’t have the traditional financial systems and payment systems and banking systems, cryptocurrencies and blockchain technology’s definitely going to be a differentiator, and something that we are going to see adopted very quickly.

World Finance: You raise a very important point of trust, because during the hype that you mentioned, we saw a number of ICOs that were not exactly… trustworthy at all!

Marios Chailis: 100 percent. So, that’s why I mentioned something that’s going to happen over a long period of time. When something, you know, is buzzed and a lot of people are talking about it, unfortunately scammers or untrustworthy individuals will try and profit from it.

What I would advise traders is to adopt a more cautious approach. Actually not even just traders, every person who’s interested in blockchain or crypto. Just do their due diligence, read up on the companies that they’re considering to partner with or to work with, and make sure that they work with long established, trustworthy companies, with the right people, and the technology that they claim they have.

I think that’s the main thing, and, you know, time will tell which of these companies will change the world!

World Finance: Marios, thank you very much.

Marios Chailis: Thank you.

Libertex strengthens one-stop CFD shop with indices, explores equities

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Libertex is a multinational CFD and cryptocurrency broker. Its comprehensive investment platform offers 213 tradable assets to 2.2 million clients across 40 countries, and has won over 30 international awards. Marios Chailis, Chief Marketing Officer for Libertex Group, introduces the company and platform, and explains how Libertex is working with regulators to ensure it’s offering profitable and trustworthy services to its clients. You can also watch the other half of this interview, where he dives into Libertex’s cryptocurrency offering.

World Finance: Marios, introduce us to the company behind those numbers.

Marios Chailis: Thank you Paul. So, Libertex was established more than two decades ago. We operate in multiple jurisdictions, mainly in Europe, Latin America, and Asia.

The company has been enjoying tremendous growth over the last several years. We’ve invested a lot in our in-house technology, developing our own applications and trading platforms, which is something that enabled us to sort of stand out from a crowded marketplace. And I would like to think offer a better product to the many traders who choose to work with us.

World Finance: As you say, it is an incredibly crowded marketplace; is the platform what really sets you apart?

Marios Chailis: Well it’s definitely one of the main things. Credit is due to our founder – he identified that mobile trading is the way to go. So we invested a tremendous amount of money and research into developing our mobile trading applications. And we were, I would say, one of the pioneers of online mobile trading.

Obviously you can trade any kind of CFD, forex, cryptocurrencies; but we’re really strengthening our indices offering right now. We’re also looking into getting into shares, equities, traditional equities. And we’re discussing multiple joint ventures with some high profile partners that unfortunately I can’t name right now! But: very exciting things are on the way.

World Finance: Now I mentioned that you are available across 40 different countries; how are you working with regulators to make sure that you’re offering profitable and trustworthy services to your clients?

Marios Chailis: Well, the industry has changed quite a bit over the last few years. Starting with Europe, ESMA introduced a lot stricter guidelines about how financial service companies need to operate.

We’ve taken that at heart and we positioned regulation and compliance as one of our number one priorities. So across Europe and all our other entities worldwide, we try to adhere to the strictest regulation – even in the places where the local regulation is more lax.

So, all our KYC checks, all our compliance methods, even our back office teams; they all go through the same level of due diligence as our most regulated entities.

We understand that the industry is going to head in that direction globally, eventually – following the example set by ESMA in Europe. We’re really, really pushing for that, and it’s something that we welcome.

We fell it’s going to clear out some of the outfits that are less trustworthy! And allow companies like ours to shine, and continue providing the service that we strive for.

World Finance: And what would you say is most important among the services and support that you offer to your customers?

Marios Chailis: You know, we put a lot of emphasis on education. It’s one of the things that really sets us apart.  We have a tremendous team that works 24 hours a day to produce amazing content in regards to education, training seminars, webinars, all kinds of material that our traders find very interesting, and really helps them position themselves better before they start trading.

So we like to take care of them from the moment they open their trading account, and making sure that they are as knowledgeable as possible before they place their first trade.

World Finance: Marios, thank you very much.

Marios Chailis: Thank you.

How Banco Popular Dominicano makes banking easier for its customers

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“One of our biggest challenges through our digital transformation has been changing the habits and mindset of our clients to adopt digital behaviours,” says Francisco Ramirez, Executive Vice President of Personal Business and Branches for Banco Popular Dominicano. He explains how the bank managed to migrate transactions, become the most downloaded financial services app in the Dominican Republic, and help the country significantly grow its financial inclusion rate.

Francisco Ramirez: Banco Popular Dominicano offers a wide range of digital products and services, that allow our customers to interact with the bank and fulfil all of their financial needs.

Our app Popular, which is the most downloaded app in the Dominican financial system, offers our customers a handful of digital solutions. The app – together with the capabilities provided through our online banking website, which is the most visited of the financial industry in the country – meets our customers’ individual needs, and makes their day-to-day mobility easier.

To migrate transactions, we have deployed the latest generation of smart ATMs. Through these ATMs, customers can make online withdrawals and deposits, as well as pay their loans and credit cards with cash or funding from their accounts. These capabilities are both highly convenient and time-saving for our customers.

We have also opened digital channels, where customers give us their opinions and suggestions, and even ask for information.

Our customers have reacted excellently to our new digital offerings. Today, more than 80 percent of our transactions are digital, and more than 50 percent of our clients are using our digital platforms.

One of our biggest challenges through our digital transformation has been changing the habits and mindset of our clients to adopt digital behaviours. Another challenge has been strengthening our cybersecurity and tech infrastructure, which will enable us to rapidly deliver innovative products, channels, and services, that are better adapted to our changing customers’ needs.

According to the World Bank Global Findex, in 2017, the Dominican Republic surpassed the Latin American average of financial inclusion, with 56 percent of Dominicans over 15 years old with a bank account. This represents significant growth in comparison to the year 2011, where the financial inclusion index in the country was only 38 percent.

We encourage entrepreneurial culture through several programmes. One of them is Challenge Popular, which is a design marathon where participants propose new services or products, emanating from an intense creative process of 48 hours guided by mentors. And after, the best proposals win prizes.

Another programme is Impulsa de Popular, which is a competition that seeks to encourage young entrepreneurs in the growth of their innovative projects, and enables them access to seek capital for their business initiatives.

Last year we also launched another programme to support our SME clients that want to become franchises – as well as those that want to acquire an already established franchise.

Finally, we also have Banquero Joven Popular, which is an initiative from our corporate social responsibility division. This programme seeks to educate young people in school about the functioning of ethical and sustainable banking, while improving their financial education, entrepreneurship, and leadership skills.

Banco Popular Dominicano will continue to focus on promoting digital sales, improving digital experiences, promoting innovation, transforming traditional branches, and strengthening cybersecurity; and we will strive to achieve all of this while adhering to our model of responsible banking.