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here is no denying that startups are driving the new age of business innovation, and capital. For the next wave of business solutions, multinational corporations are increasingly relying on entrepreneurs to ideate, solve issues and eventually build an ecosystem of innovators, entrepreneurs, investors and stakeholders. There is no denying that technology plays a critical role across almost every business today, so today’s entrepreneurs not only need to have a keen eye on financials, but a sound knowledge of technology as well.

The September issue of International Finance provides a macro view of the world of entrepreneurship and various trends within the sector. Godfrey Reggio said “Its not that we use technology, we live technology.” It is irrefutable that technology unites, binds us and connects us in ways one couldn’t deem possible a few years ago. Keeping this in mind, this issue’s cover story is about Kenya’s economically marginalised getting a new lease of life through a blockchain-backed alternate currency, provided by Bancor. While m-pesa revolutionised Kenya’s financial sector, the hinterlands of this East African country still need financial and technological connectivity. While the Africa story is crucial to the global technology narrative, the movers and shakers are still the bigger economies in Europe and UK. We delve into a story about UK fintech and the possible impact of Brexit on the sector. As feared, has the UK lost its charm as the world’s fintech hub and have cities like Berlin and Paris stolen its thunder? Read on to know. An interesting feature not to be missed is Bahrain’s startup story. The Arab nation, which is the hub for Islamic banking in the Middle East and an oil producer, has now begun scouring for quality entrepreneurial talent. Several initiatives and major funds led by the government are now becoming a focal point for the region’s startups. Another analytical piece not to be missed from the mystical land of the Middle East is parallels between Islamic banking and blockchain technology. This issue also features some exciting and new startups like Libryo, Mosaic Smart Data and Digital Fingerprint – all creating waves in the world of insurtech, legal tech and regtech. The tech wave has hit the stock market as well – UK’s stockbroking app dabbl finds a place in this issue of International Finance as it democratizes investing for those who are new to stock markets or who are risk-averse. Finally, don’t miss our top experts who discuss about legal aspects of running a startup, how to nail that investor pitch, how to keep an eye out for ecommerce fraud and much more. Hope you enjoy reading this issue of International Finance!

INSIDE Septembe r 2 018




Singapore a model nation for new-age technology management


The crisis in European banking today

Bancor provides Kenyans a viable currency alternative

UK fintech continues to dazzle despite Brexit fears


How Rija Javed is breaking the glass ceiling


SMEs - are they the new financially excluded?

Director & Publisher Sunil Bhat

Editor Sindhuja Balaji

Editorial Thai IoT startups harness big data


Adriana Coopens, Jessica Smith, Lacy De Schmidt, Sangeetha Deepak, Karan Negi

Production The Blockchain mirrors Islamic notion


Merlin Cruz

Design & Layout Jaison George

Business Analysts

Low crude output the reason for Bahrain’s startup fortune


Investing in stocks made easy on apps


Business Development Manager

Libryo helping companies with legal compliance


Sunny Shah, Sid Jain, Ryan Cooper

Steve Lloyd, Sid Nathan, Christy John, Jane Paul, Mark Smith, Gwen Morgan, Sarah Jones, Ayesha Misba

Steve Martin

Business Development Accounts Angela Mathews, Jessina Varghese

How Startups Can Ace An Investor Pitch? Job Andreoli


Ten Mistakes Made By Startups


Registered Office INTERNATIONAL FINANCE is the trading name of INTERNATIONAL FINANCE Publications Ltd 843 Finchley Road, London, NW11 8NA

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Bancor provides

Kenyans a viable currency alternative

A solution to the big catastrophe the people in Kenya are facing as a result of rising poverty and no possibility of sustainable living Sangeetha Deepak


ven by the standards of world poverty, Kenya is mired in despair because half its population lives below the poverty line. Somewhere between a quarter and half of Kenyans earn less than $1 each day. This means, the country is on the brink of an economic collapse. But this year will have restored hope in the lives of its people. The good news is Bancor. Bancor has created an open source protocol for Smart Tokens with a focus to establish a decentralised liquidity network that allows tokens to connect with each other—forming the Bancor Network. The Bancor Network’s community currency project powered by blockchain will reflect the possibilities to “create and manage currencies” with a purpose to curb poverty through the stimulation of local commerce. Will Ruddick, Bancor’s new Director of Community Currency, explains: “Essentially what that means is that few tokens can have a common connector—a connector that gives them the ability to create a price between both. For example: One token now all of a sudden has a price against the other, and it’s done at a smart contract level. There is no actual exchange going on. We are a liquidity provider. We provide the extra liquidity Kenyans need to be able to own the smart contract exchange between them.” Now, the marginalised communities in Kenya can see the potential to “create tokens amongst themselves to buy goods and services.” This is known to be the first step toward a more progressive development. In fact, the progression somewhat owes itself to the blockchain integration which is distinct from other digitised complementary currencies such as Sardex, WIR, or Brixton Pound. These digitised currencies have a simple database to store a ledger in a secured format, much like a typical banking software. Instead, in the case of Bancor “what we want to do is on blockchain and [integrate] that into these tokens, smart contracts, or Bancor Protocol,” says Ruddick. The way Bancor has created the Bancor Network Token is a first of its kind. It might be the biggest help to the poor in the country, who are disproportionately affected by socioeconomic deprivation. The liquid token “is the ability to have multiple connectors and they can all be tokens,” which is so versatile and precisely what the communities in Kenya


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need. This versatility even extends to other cooperators or communities wanting to create a new token within the existing one. “So the emergence of millions of these types of liquid community currencies and the connection between them is really the game changer in events here. It is sort of the phase transition to create your own currency,” he says. Some years ago, Ruddick founded a non-profit foundation in Kenya called Grassroots Economics—which is an analytical outcome of his expertise in the field of econophysics. The field applies physics-based modelling to modern economies.The analogy here is—what are the significant particles and how they interact in an environment. The particles are people participating in a market economy . “All of a sudden what came out of it for me was that the one thing that you could change in society to get the maximum possible change for the better was: who gets to issue money and how?” But the challenge was linked to one of the most potent arguments for poverty change. The Bangla Pesa by Grassroots Economics, for instance, being the very first complementary currency in Mombasa drew a legal battle for Ruddick and the team. Its trading utility only confines it within a particular slum—Bangladesh in Mombasa. This colourful paper voucher issued to low-income traders and service providers to fight poverty was accused of forgery. As he recalls, “there was a national security meeting” held as a result of the media’s attempt to sensationalise their legitimate efforts. “We ended up in jail,” he says. It took the team six months to have their charges dropped by the Attorney General’s office and bring to light the actuality of their work. “After a few days, even the media caught onto it; ‘looks like these poor people are just barter trading vouchers’. We were really lucky in a lot of ways too,” he recalls. After all, Bangla-Pesa is a representation of local value and can only complement official monetary worth when national currency is chronically unavailable—which it often is. Likewise, the Bancor Network is quite logical: it’s sort of like having an email address. “The communities in Africa are very vibrant. There are 5000 shops in one street” is a case in point. The people are empowered in a good way and they are able to connect with other people from different communities. Bancor’s project is planned to stimulate the

Cover Story

poor who seek to purchase goods and services from the market even when they lack regular currency. It is possible that during certain seasons of the year people’s food consumption can go down by two-thirds because the inflow of money is short. They are under distress because there are goods or services to trade. Then there’s the fact that under such an unforeseen circumstance: a grocer who failed to trade his groceries won’t make enough money to serve his home. In the same slum, a vegetable vendor might face a similar problem because of low sales. However, the introduction of tokens with designated values will enable both traders to honour them as means of exchange, similar to a barter system. IIn the Bancor movement, the pioneering communities are those involved with direct transactions on the streets. For this reason, “Kenya is a very special place” because the country is quite familiar with using M-pesa—which is an already existing money transfer service. In Kenya, “the people, the resources are highly undervalued” as a consequence to its growing poverty index. “So the question is why make all those people dependent on scarce Shillings,” he points out.“We are not trying to get rid of the currency but let’s give these people the ability to create their own resilient economies.” The movement is indeed supporting the national currency. There are so

many people in the world who want credit—and yet the interest requirements mean credit supply can only grow a bit faster than people pay off their debts. The World Bank observed there is a two-plus trillion dollar deficit in the credit supply . There is a mighty reason to present these communities with an opportunity to give their own credit at zero interest because the value of the currency will lower if the sale of goods and services drop. Keeping this in mind, the “Bancor Protocol is saying we need a whole economy of currencies. A healthy economy itself is not so much one that ties to a community currency but rather it’s a community of currencies,” as Ruddick concludes.

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UK’s fintech continues to dazzle despite Brexit fears F

intech has been the buzzword in the UK for the past few years, with London being heralded as the hub for financial technology. The UK has done some exciting work in the field of fintech, even becoming one of the first nations to float the concept of a regulatory sandbox for companies to test their concepts in controlled environments. Then came along the big shocker - Brexit. The economic impact of Brexit was speculated far and wide. Even now, British politicians are panning out how this can affect the economy but its hard to tell how this will affect UK’s financial services industry. The impact of Brexit on UK’s economy cannot be overlooked - net migration of EU citizens into Britain halved in the 12 months to September last and investors are worried that the UK has lost its sheen as a professional destination. Data from Google has suggested that young professionals are not as enamoured to look for


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Even as UK inches closer to Brexit, the country’s fintech industry appears to be unhinged as it continues to attract talent, opportunities and funds

jobs in the UK as compared to the late 2000s, even during global recession. Bank of England governor Mark Carney has said Brexit explains the weak growth in investment in Britain. However, a report in PwC has stated that the impact of Brexit on early stage fintech startups is minimal. Shortly after UK’s decision to leave the EU, there was a lot of buzz about European cities like Berlin and Paris becoming the next fintech hub in Europe. But the PwC report finds that despite Brexit, the country’s fintech scenario is looking up. Some examples include the London FinTech “bridges” forged with China, South Korea, Singapore, India and Australia. Japanese firm Softbank, meanwhile, has said the headquarters for its £80bn technology investment fund will be located in London, which is an encouraging sign for investment.


Meanwhile, the focus on the fintech industry has begun to shift even outside of central London. UK’s greater Birmingham is now the largest cluster of any UK city outside the capital. This increase is being driven by firms such as HSBC, KPMG, PwC and Deutsche Bank expanding their presence locally. Smaller digital and cyber security companies are capitalising from this emerging global BPFS hub as companies look to local experts to help deal with new technology challenges and cybersecurity threats. There has been a 20% increase in the number of companies since 2010, with the total number of fintech

companies now standing at over 2,145. Birmingham is home to 13,135 BPFS firms, more than any other UK city outside London, with the sector generating £13.2 billion per year. PwC’s latest survey economic crime and fraud revealed cybercrime to be the most prevalent type of fraud experienced by organisations, affecting half of respondents. 42% of businesses expect this to continue to be the most serious, in terms of business impact, in the coming two years. Nicola Hewitt, Commercial Director at the West Midlands Growth Company, said: “Greater Birmingham is very well-placed to respond to the technological challenges that are emerging every day, with incredibly talented employees specialising in cybersecurity being hired by local firms. Greater Birmingham has the largest number of tech start-up incubators and accelerator hubs outside London. This, combined with the largest regional BPFS and technology sectors, has created the ideal environment for new and established fintech businesses”. Specialist insurer Beazley is expanding its presence in Birmingham as part of its drive to grow its UK regional insurance market activities. The company’s Birmingham-based underwriters will be among the first employees to occupy new, state-ofthe-art offices that will also house Beazley’s out-of-London operational support centre for its UK and European business. Ian Fantozzi, Chief Operating Officer at Beazley, said: “Birmingham’s position as financial services hub and its rich talent pool made it the obvious choice for Beazley to build an operational base outside London.” Smaller firms in Greater Birmingham are also looking to meet the demand from global businesses for expertise in financial services technology. This has resulted in a burst of new technology businesses such as Falanx, a tech SME specialising in cyber defence and intelligence services. The

firm relocated to Birmingham from Reading as it was attracted by the recent regeneration and investment pouring into the region. Jay Abbott, Executive Director of Falanx, said: “With oversaturated tech hubs in the south of the UK, Birmingham has opened a lot of doors that would not have ordinarily opened for us. The access to talent that the city offers has allowed us to cultivate our cyber security services and focus on innovating technology in a fastmoving, cutting edge space.” The region’s world-class universities provide the perfect platform for budding tech entrepreneurs to grow, with Birmingham City University specialising in areas such as data mining, cloud networks and the Internet of Things. Greater Birmingham’s expertise in this field is ensuring that the talent developed at these universities is being retained by Birmingham’s businesses. Tim Kay, Director and Digital Lead at KPMG moved from the firm’s London office and has seen first-hand how Birmingham’s booming tech sector has transformed the region: “With tech, you can’t be subscale. You need to be big enough to compete with cities like Barcelona and Berlin, and Greater Birmingham is well placed to do that. One of the reasons KPMG has done so well in the region is due to business demand. An unparalleled number of BPFS firms are increasingly turning to us to advise them on everything from data analytics to GDPR regulations.” The UK’s tech talent is increasingly looking to locate to the region – attracted not only by the city’s career opportunities, but by the high quality of life that Greater Birmingham offers. The average salary in the West Midlands grew at the fastest rate of any region last year, including London, with this competitive salary offerings inciting businesses and individuals alike to flock to the region. Recently, UK’s Cass Business School signed a deal with Chinese based accelerator BGTA and Chengdu Financial Group to establish a fintech

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United Kingdom

“Cass, with its long tradition of delivering expert-led financial education, and network of key technology partners, have supported the growth of London’s fintech ecosystem in many ways. Through our partnership with the Chengdu Financial Holding Group and BGTA, we are keen to support Chengdu in realising its vision of becoming a global fintech hub and stand ready to respond to a steady demand for training courses going forward.”


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trianing centre and develop a fintech summit. Cass Business School, as part of this deal, will help with the research and development of a fintech centre to educate professionals. Dimitrios Fountas, Business Development Director at Sir John Cass Business School, added: “Cass, with its long tradition of delivering expert-led financial education, and network of key technology partners, have supported the growth of London’s fintech ecosystem in many ways. Through our partnership with the Chengdu Financial Holding Group and BGTA, we are keen to support Chengdu in realising its vision of becoming a global fintech hub and stand ready to respond to a steady demand for training courses going forward.” These developments point to how even a major political shake up like Brexit has kept the UK’s fintech sector relatively safe. UK leads the way in financial innovation, and appears to want to maintain that caveat for years to come.

How the Access Bank UK is a leader in trade Finance

The Access Bank UK offices in the heart of the City of London

The Access Bank UK Ltd outlines why impeccable customer service and strategy is at the core of their successful business model as a trade finance bank


he Access Bank UK Limited, a wholly owned subsidiary of Nigeria’s Access Bank Plc, provides Trade Finance, Commercial Banking, Private Banking and Asset Management products and services for customers in their dealings with Organisation for Economic Cooperation and Development (OECD) markets, and supports companies keen on investing in and trading in subSaharan Africa, MENA and Asian markets. Herbert Wigwe, Chairman and NonExecutive Director said: “The Access Bank UK was founded to establish a credible, sustainable OECD hub for the Access Bank Group. This was achieved with commendable efficiency while also becoming a successful and profitable business on its own right. Fundamental to the Bank’s growth is our operational culture built upon strong customer relationships and the delivery of high quality services.” The Bank’s constant efforts, strategic partnerships, increasing customer footprint and high performance numbers have resulted in their winning the Best African Trade Finance Bank UK, by International Finance Awards.

moderate appetite for risk, passion for customer service and commitment to build long-term relationships by working in partnership with its customers. The Bank plays a key role in the Group’s vision to become the world’s most respected African bank. As a policy, the Bank refuses to chase unsustainable yields as a route to growth but focuses on building businesses through the strength of valued customer relationships. Many high net worth customers, who utilise The Access Bank UK for trade finance and commercial banking services, also use its asset management and private banking for their UK personal financial interests. Such duality has proven beneficial for customers at a time when business and financial environments across Sub-Saharan Africa, Europe and the USA remain challenging, added Wigwe. The Access Bank UK provides a number of services to support business activities in Sub-Saharan

Africa and across the world. They were awarded Confirming Bank status by the International Finance Corporation as part of their Global Trade Finance Programme, strengthening trade finance capabilities further. The Access Bank UK Limited was also the first Nigerian Bank in the UK to be appointed as correspondent bank to the Central Bank of Nigeria to undertake infrastructure work on behalf of the Nigerian government. The Bank also issue Letters of Credit on behalf of the Nigerian government and Nigerian National Petroleum Corporation (NNPC). Recently, they were awarded the Capital Finance International Award for Best Africa Trade Finance Bank for the third consecutive year. The Commercial Banking team offers relationship-based service for corporate and individual customers, offering a wide range of products and services with a choice of competitive rates, market leading systems and top quality service.

Industry Validation and Superior Customer Service Strategy

The Bank is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA. The Access Bank UK Limited – Dubai Branch, situated in the iconic Gate Building of Dubai International Financial Centre (DIFC) is regulated by the Dubai Financial Services Authority (DFSA). Much like its parent company, The Access Bank UK Limited works on developing a sustainable business model for the environment in which it operates, and this is reflected in its


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The Access Bank UK DIFC Branch situated in the iconic Gate Building of Dubai International Financial Centre

Company Profile

Strategic Location For Better Service

The Access Bank UK Dubai Branch offers a broad range of products and services to assist customers with trade and investment needs in Nigeria and Sub-Saharan Africa. The DIFC Branch is committed to building a long-lasting relationship in the region in line with the approach that has proven effective for The Access Bank UK. The combination of the Dubai office together with its presence in the UK and Nigeria delivers a wealth of expertise that benefits customers. One of the core values of the Bank is to build long-term relationships and work closely with customers to understand their goals to help create a strategy designed to meet their needs. A team of accomplished individuals lead the endeavour to deliver superior financial solutions for business and individuals. Many staff members have spent time working in the SubSaharan, West African and international marketplaces. Jamie Simmonds, CEO & MD said: “Our people are fundamental to our Bank’s continued development. They provide the skills that deliver our focus on service and customer relations. Reflecting this, during the year, we selectively recruited additional members to the team and also invested more in professional development. We were the first Nigerian bank to achieve Investors in People accreditation. We have now advanced our status to Gold. We believe that our consistently low staff turnover rate reflects in part the advances we have made in training and development. The Bank is currently working in partnership with BPP professional apprenticeships and Chartered Institute of Personnel & Development (CIPD) programmes”. The Access Bank UK Limited is committed to workforce diversity and encourage a sense of individual ownership while also fostering team spirit. The Bank’s endeavour is to help employees realise their potential through the provision of continuous learning opportunities and the tools and

training to support professional growth.

Growth Numbers

The Access Bank UK recently announced its Annual Report and Accounts for 2017. The Bank recorded yet another year of significant all-round growth, achieving and exceeding target for all the main growth strategies. Operating income was up 45% year-on-year to £36.2m, with all four strategic business units performing well. Pre-tax profits overall grew by a substantial 76% to £22m and the return on equity rose to 16.6%, up from 13.54% in 2016. Trade Finance revenues increased year-on-year by 15% to £19.8m while the commercial banking team achieved an increase of 113% year-on-year to £11.5m. Asset Management and Private Banking incomes rose by 15.3% to £1.5m. The Bank continued expanding the depth and breadth of the services in the recently opened office in Dubai and in its first full year trading it has delivered income of £671k covering all of its Direct Costs. Jamie Simmonds commented on the recently published results: “The Access Bank UK continued to build the trust and loyalty of our customers by providing consistent support throughout a period when the business environment in key markets has often been extremely challenging. In doing so, we have developed even stronger relationships with our existing customers whilst also attracting new ones, creating a solid platform for further growth in an improving economic environment”. Herbert Wigwe added: “This year marks the end of The Access Bank UK’s 9th full year of trading during which time the Bank has gone from strength to strength, routinely meeting and often exceeding all its annual growth targets despite the long-lasting worldwide financial and economic challenges arising from the global crisis of 2008. Looking forward to 2018 we are well prepared to take advantage of an improving economic outlook, in our market place and we are confident The Access Bank UK will continue to make good progress as we embark on our

Throughout my experience in financial services my guiding principles have been to deliver excellent customer service and provide innovative solutions for the customers and markets we serve. I have been involved in the turnaround of several existing businesses by going back to these basic principles and rebuilding from the ground up. When I established The Access Bank UK Ltd in 2008 it was at a turbulent time in banking but we set the risk appetite, the processes and procedures and developed products that our customers wanted. We have built the Bank steadily but sustainably and have a balance sheet of

over £1.5bn

Jamie Simmonds Chief Executive Officer & Managing Director

third five-year plan with the declared aim of helping to establish Access Bank Group as ‘Africa’s Gateway to the World’.”

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Invest HK Channels UK fintech talent for Asia markets


Sindhuja Balaji

espite Brexit fears, the United Kingdom’s fintech sector continues to dazzle. A report by PwC UK states that since 2008, the UK’s stature as a fintech capital has been growing rapidly - the sector represented £6.6bn in revenue in 2015 and attracted £524mn in investment. The 60,000-strong workforce is more than the number of fintech employees in Singapore, Hong Kong and Australia. It’s only natural for other countries to seek UK’s innate fintech talent. The Hong Kong government’s FDI arm Invest Hong Hong aims to bring onboard fintech companies from the UK to explore business in Hong Kong, mainland China and Asia by entering the UK Fintech Awards. This year’s winners were regtech startup Mosaic Smart Data, followed by insurtech company Digital Fineprint, blockchain startup AidTech, stockbroking app Revolut and fintech Railsbank. Winner Mosaic Smart Data and runner up Digital Fineprint are scheduled to visit Hong Kong next month to attend the Hong Kong Fintech Week 2018, scheduled to run from October 29 to November 2 in Hong Kong and Shenzhen, in addition to other benefits of winning the Invest HK UK Fintech Awards 2018. International Finance got talking to the founders of the two startups on their victory, their company and the road ahead:


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Mosaic Smart Data and Digital Fineprint - two UK fintechs won the InvestHK UK Fintech Awards 2018 and will be heading to Hong Kong next month to present at the Hong Kong Fintech Week 2018. Read on to find out what their award-winning ideas are all about


Matthew Hodgson

CEO and founder of Mosaic Smart Data

Mosaic Smart Data helps financial institutions in the fixed income, currency and commodities (FICC) market harness their data intelligently to service and predict client needs under new regulatory regimes. It empowers financial market professionals with usable, data-driven tools in the RegTech space. Its MSX platform aggregates multiple sources of transaction data, enabling financial institutions to easily build a comprehensive view of client, counterparty and prime broker trading activity, and meet regulatory requirements.

Congrats on winning the InvestHK Fintech Awards. What does this victory mean to you?

This award is extremely timely for us as we are actively talking to potential clients in Asia. We are seeking to expand globally to take advantage of the incredible up-swell in interest in data analytics in the FICC markets. Establishing a presence in the Asian markets through Hong Kong will allow us to better meet our current and future clients’ needs. We recognise the size and diversity of the Asian markets and Hong Kong is a key gateway to Asia. We look forward to working alongside the InvestHK team to draw on its expertise and connectedness.

Tell me a bit about your company and what problems you are aiming to address?

Mosaic Smart Data came out of my experience working in the FICC markets for many years. In the past, my teams amd I had no way to answer some fairly fundamental questions about our business, such as, what can we do to improve the service we deliver to clients? Or, what we could do to attract more business from our clients? We didn’t have the data, the single view over all the business we were transacting which would give us those answers. It was possible to create a historical report to get some information, but that is like driving while only looking in the rearview mirror. What you really need is a real-time view.

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So, Mosaic Smart Data was born. We have an ambitious mission to empower financial market professionals with the best data-driven tools to answer the questions they need to ask and provide those answers in real-time and in a visual language they can understand at a glance. We deliver the platform to sell-side or large buy-side firms in three stages: aggregating and normalising clients’ data to provide a solid data foundation; application of advanced real-time and predictive analytics and an intuitive display to bring those analytics to the sales and trading teams’ desks.

Why is Hong Kong, perhaps Asia, a big market for you?

The FICC markets are becoming increasingly global. A number of Asian cities are quickly catching up with traditional financial centres such as New York and London. Not only are Western banks putting significant energy into their Asian subsidiaries, but many Asian banks are maturing into powerful market actors in their own right. This, coupled with a number of countries really embracing the potential of fintech, makes an Asian presence essential for any company with global ambitions. We are looking forward to working with InvestHK to strengthen our ties in Hong Kong and use it as a springboard for our further efforts in East Asia. This is a region with some of the fastest growing economies, doing some of the best research in emerging technologies. It is an incredibly exciting time to be in Asia for a young fintech firm like Mosaic Smart Data, and we are looking forward to making the most of our opportunities here.

What technologies do you believe the next wave in financial investment will focus on?

We are in a really interesting time in financial technology investment. There is clearly a lot of money looking to enter the market and that can mean an increase in speculative investments, vaporware and products which are simply jumping on a bandwagon, rather than truly innovating. We have to always look at what problem the technology is solving. There is a tendency sometimes to take exciting new technology and then look for somewhere to apply it. That’s the wrong way around. You need to start from a real business problem and then ask what tools are needed to solve it. For example, artificial intelligence is getting a lot of attention at the moment. Yet, in the FICC markets, banks’ data is distributed across different databases and messaging languages. In that state, any insights from AI are going to be incomplete at best. You have to fix the core problem, the underutilisation of data before you can really create value from machine learning. The Mosaic Smart Data team has a lot of experience in the financial markets and we work very closely with our clients. We are not taking out-of-the-box analytics and fitting it into the markets, but building a solution from the ground


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up. We are targeting the questions our clients need answered and delivering results in the way they want to see them.

What do you think about the synergy of data-driven startups and financial institutions?

Financial institutions hire some of the brightest and best technologists. But that doesn’t mean that they want their own people working on every problem and building every tool. Our clients often take the view that their own technologists should focus on ‘technological alpha’ - the highly proprietary tools which are generating value. While some algorithms and machine learning tools fit into that category, the underlying platform that organises the data and generates much of the day-to-day analytics doesn’t. That’s where we provide value. A bank doesn’t lose out because it is running the same analytics platform as its rival. So, it makes sense to buy rather than build. That way, the bank gets analytics faster and more cost-effectively, while freeing its own technologists up to work on the projects which provide added value. This kind of relationship provides a perfect synergy between fintech and institution, enabling both to thrive.

As exciting as fintech is, one cannot ignore the threat of cyber attacks. How do you make your product and customers immune from these threats?

Our technology deals with the transaction data within the bank, which is highly sensitive. Therefore, security is our highest priority. Mosaic Smart Data’s platform, MSX, sits within the clients’ firewalls and security systems so that it doesn’t create new risk exposures. We also think carefully about the internal securities, so the platform has completely customisable permissions built into it ensuring that no user can see any data that they are not entitled to view.

What are your plans for 2018?

Data analytics is really front of mind for all market actors, buy-side, sell-side, custodians and regulators. Mosaic Smart Data’s platform has something to offer all of them. We are looking to be the gold standard in FICC data analytics and that means we are having to move extremely quickly to meet the global demand for our platform. This year is all about scaling. We will continue to onboard new clients globally, on both the sell-side and buy-side. We are also releasing analytics for new asset classes and developing new features for the platform in response to customer need. It has been an extremely busy year so far and shows no signs of slowing down.


Erik Abrahamsson CEO, Digital Fineprint

An insurance-focused startup, DFP is helping SME insurers and brokers to drive actionable insights from open data by using AI and predictive analytics Congrats on winning at the InvestHK Fintech Awards. What does this victory mean to you?

We are very excited to win the InvestHK Fintech Award and the possibility of tapping into the Hong Kong market. Hong Kong is a very attractive option and we are grateful for the support of strong local partners such as InvestHK. This competition saw some amazing contestants and it is an honour to be named as one of the two winners. We are looking forward to attending Hong Kong FinTech Week in October this year and establishing our footprint in driving a technological revolution in the industry across Asia and globally.

Tell me a bit about your startup and what problem you are aiming to solve?

The problem we address is underinsurance of small businesses, first in the UK and then in the world at large. To solve it, we started Digital Fineprint, which is now an analytics company that helps insurers and brokers to find new data points to help protect more businesses more completely. We

drive actionable insights from open data by using machine learning. We support the entire distribution process of insurance, ranging from identifying new leads and targeting and converting prospective customers, to real-time monitoring of existing business customers and maximising existing customers’ lifetime value. Since our launch in 2016, we received US$3.1m in funding from Pentech Ventures and Eos Venture Partners, formed partnerships with the world-leading insurers such as QBE, Hiscox, Zurich and built a completely outstanding team.

How does social data revolutionise the lending industry?

Technology and new business models are changing the entire industry. Large, complex and highly regulated entities are being forced to learn how to innovate and roll out new ideas in agile ways. Open source data including social data is transforming insurance in significant ways, from improving customer engagement to providing new tailored products. When the data is used correctly, it can help insurers make

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more accurate assessments and translate it into better, more efficient service and consequently, a better customer experience.

Do you believe the insurance industry is behind on technology? How can a startup like yours address the gap?

Insurance as an industry have seen a slow start in adopting innovation and agility. Today, however, insurance companies understand the value that harnessed data and technology can play in the value chain, and they are interested in engaging with new business models and collaborating with insurtech startups. We fill the gap by helping SME insurers and brokers to drive actionable insights from that data by using AI and big data analytics. Instead of spending hours online trying to find out which insurance policy to buy, we use data and AI to create a fully rounded profile of that customer and their insurance needs and offer them tailored product recommendations. Our approach is focused on the customer journey and helping insurers engage with customers on the channels that they want to be engaged on in the most effective way.

Why is Hong Kong, perhaps Asia, a big market for you?

Since Hong Kong is an established insurance hub with several regional HQs for insurance companies, it is the right place to be. In the past three years, the online market for insurance has seen triple-digit growth in China. Innovators such as Zhong An and Ant Financial has helped pave the way for more B2B service providers in the industry. To further quantify the market potential, we have already received interest from insurers in Hong Kong and across Asia, which shows an existing demand for our company’s product offerings. On a personal note, I also attended Hong Kong University (HKU) for my undergraduate degree, so coming to Hong Kong feels like coming home!

What do you think of working with larger insurance corporations to make their processes more efficient?

We find that it differs a lot, nad we have been lucky to work with extremely nimble and innovative insurers such as Hiscox and QBE, among others. Once the corporations not only see the potential benefits but fully committed to embracing the technology, the efficiency can be achieved much quicker. But this approach is difficult and it requires a wider cultural change to embrace innovation.

With regulations like GDPR, cyber insurance is a very real and necessary fix. Your thoughts? Yes, absolutely. Almost one-sixth of all small and mediumsized businesses suffered a cyber attack within the last year, which is the 80% spike compared to the year before. This put in perspective the scale of the risk and emphasises the importance of data protection online. Those businesses that


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adopt the right safeguards and procedures can leverage this as a strength and gain an advantage. We hope that our technology can be used to help protect more small businesses, and we are partnering with leading insurers to make it happen.

Tell us about your partnership with Hiscox and the potential to help smaller businesses insure themselves?

Hiscox themselves wrote a great blog post on this topic, which you can find here: In a nutshell, small and medium-sized businesses are some of the most vulnerable customers in the entire insurance market. According to one recent industry report, over 40 percent of SMEs surveyed said that if they are faced by an uninsured loss of ÂŁ50,000, they would go out of business. So our partnership with Hiscox aims at addressing this underinsurance in the commercial lines. As part of the partnership, we developed a solution that provides small businesses that come to Hiscox with a more personalised service and policy recommendations based on the online profile of their business that matched with potential risks exposure. It is been a highly productive and resulting journey and we have learned so much from our partners at Hiscox.



November 5 and 6, 2018 in Zurich

Highlights of the 7th Annual Conference


\ Digital Identities and their growing importance in our lives \ WeChat: an experience report \ The future of Wearable Payments \ PIN on Glass: promising idea with pitfalls \ Digitalisation in payment transactions \ Digital transformation of banks \ Swiss Corporate API: the importance of centralised API solutions for Switzerland with ďŹ rst use cases



Human. Digital. Culture.

The Knock-out of the Check-out

Jochen Werne, Bankhaus August Lenz

Frank Rehme, gmvteam

Money in Times of Robots Prof. Christian Rieck, Frankfurt University

Win your FREE ticket Enter our weekly draw to win a free ticket for the Swiss Payment Forum 2018. To participate visit Code: IFM

New technologies bring about new security and regulatory challenges for governments and financial institutions. The Singapore’s example, however, shows it is also an opportunity to capitalise on the financial system’s strengths - Giovanni Puglisi

Singapore a model nation for new-age technology management


inancial institutions are ramping up investments in new technologies, including Artificial intelligence (AI), machine learning and data analytics on a global scale. In Asia, China is leading the way in investments, but Singapore certainly stands out as one of the best examples in terms of regulatory innovation and adaptation. It comes as no surprise given its solid financial system, supported by savvy consumers, access to talent and capital, and most importantly its outstanding governance. The Singaporean government has implemented several initiatives to keep its financial services industry ahead of the curve and to boost innovation by creating a system where both banks and fintech start-ups can foster and experiment with new technologies in a safe environment. The Monetary Authority of Singapore (MAS) in partnership with the Infocomm Media Development


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Authority and the Institute of Banking and Finance have launched a number of initiatives to boost the use of AIenabled products, services and processes in the financial industry. MAS unveiled its ‘regulatory sandbox’ guidelines, under which it relaxed legal and regulatory requirements, so that financial companies can test and innovative financial products without having to worry excessively about invasive regulations. This also offers an incentive for overseas fintech companies to set up business in the citystate. The FinTech Office, comprising various government entities, including MAS, the Economic Development Board, Infocomm Media Development Authority (IMDA) and Spring Singapore was created in 2016 to advise financial firms on various fintech-related issues, including government grants, and on local regulatory requirements in the finance industry.


For AI technologies to actually add significant competitive advantages to banks and fintech companies, further improvements on existing data processing capabilities and, above all, on regulatory issues are needed. A key challenge for financial organisations is how to continue innovating and growing their business in an environment that is experiencing increased scrutiny, as more regulators around the world are tightening regulation in various areas. Andrew Godwin, Director of Studies, Banking and Finance Law at the University of Melbourne Asian Law Centre, said “To be proactive, dynamic and responsive, regulators need to develop a better understanding of the technology itself and collaborate with the businesses that are developing these technologies so that regulation can be appropriately designed and does not unduly stifle innovation. This is one of the key objectives of the regulatory sandboxes that have been launched in places like Singapore”. It is difficult, if not impossible, to regulate the use of technology itself and one of the challenges with the new technologies and their uses is that they don’t fit neatly into the traditional regulatory categories. Instead, regulators need to focus their attention on regulating those parties that use the technology. Cryptocurrencies and ICOs are a good example of where efforts to regulate should focus on exchanges, platforms and other infrastructure providers. However, this can be a challenge in the case of platforms that work purely in the cyberspace, such as public distributed ledger platforms that operate across many jurisdictions and do not have a centralised management or governance entity. “The next steps in the development of sandboxes are likely to involve passporting arrangements, where countries agree on common standards for the regulation of certain financial products and services and where entities licensed in one jurisdiction are permitted to operate in another jurisdiction”, Mr Godwin added. Regulators and financial companies in Singapore are working with research

institutions to develop a better understanding of the technology itself and conduct research on the policy, legal, regulatory, ethics and other issues relating to AI. The Singapore Management University has set up a five-year research programme, funded by a $4.5 million grant from the IMDA and the National Research Foundation, on AI technologies and data use. In recent years, there has been mounting pressure on banks and other financial institutions to adapt to Andrew godwin changes such as the Director of Studies, Banking & Finance Law, University development of a truly of Melbourne Asian Law Centre open banking system, in which customers are given companies to build defence against control over their data and can transfer cyber threats and attacks. Essentially, the data held by a financial institution to the purpose of security analytics is to a range of third-party service providers profile companies and analyse data to and new payment platforms. build a firewall that is comprehensive”. The trend in the banking sector To ensure that the banking system in shows continuing disintermediation and Singapore remains safe, the government a key issue is whether financial entities keeps a very tight rein on cybersecurity, can adapt and transform themselves especially as the city-state inches sufficiently fast in an ever-changing towards its goal of becoming a Smart regulatory environment. Financial Nation. MAS has recently announced its institutions are increasingly promoting plans to strengthen and increase the greater data democratisation which requirements on cyber resilience in the allows end users to access relevant financial industry by issuing a public information more easily, and gives consultation on cyber hygiene practices them more autonomy over their such as strong authentication, controlled web protection and an overall better use of administrative privileges and customer experience. This, however, proper patch management. Such move comes at a cost for banks as they is central when it comes to dealing need to invest more to acquire the with cyber security, notably in light of necessary capabilities, but it also raises some attacks that have resulted in the question of how financial companies breaches to local bank accounts. To can use data to play a more integrated prevent this from happening again, approach to security through the use of the Singapore’s Cyber Security Agency new technologies. (CSA) has teamed up with US-based Eugene Lee, Head of Business threat intelligence centre to conduct Development at Connectivity Global, joint cyber security exercises to said “in the digital age, a company’s better protect the country’s financial behavioural traits and the various services sector and facilitate sharing of organisation practices can easily be intelligence information. understood using security analytics that collect all the data churned from the company. With the data collected the information can be shared among

International Fin an ce


Thai big data

startups harness big data

for competitive



he business potential that lies in big data is still largely untapped in Asia and there is an ever increasing shift when it comes to using data in business. In the digital age, companies are acquiring more data than ever before and the universe of data keeps expanding leaving some organisations totally unprepared. The challenge of efficiently making the best use of unstructured data coming from a variety of channels remain a key one in the years ahead. Data can turn into competitive advantage for businesses and the ability to make the best use of them result in big digital payoffs for organisations, enhancing decision-making and reinventing fully or partly business models. However, the risks for companies is to amass an enormous set of data that are not clean, which makes them worthless when it comes to making good and solid business decisions. Therefore, companies can either decide to streamline data internally or they can rely on the external support of startups which focus on acquiring, and building innovative products around big data. In most cases,


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Three Thai startups are tapping into the power of big data to help companies manage their businesses better - Giovanni Puglisi

the second option is the most effective. The trend of companies buying startups with the specific objective of coping with ‘the big data revolution’ doesn’t seem to be fading anytime soon. When a new startup comes up with technological advancement in big data and machine learning, usual catches the eye of bigger companies, and this has also been the case for Southeast Asia startups.

Here are three Thai big data startups collaborating with multinational companies in various sectors either through direct partnerships or separate deals:

DRVR, a Bangkok-based startup and fleet management application provider, works with a number of major corporations, including Tata Communications, was selected as its global internet of Things (IoT) connectivity partner to achieve its goal of making Asia’s vehicle fleets the smartest and most cost efficient in the world.


Failing to keep up pace with the proliferation of Big Data and the increased power of machine learning could prevent companies from achieving a substantial shift from standalone things to more intelligent collaborative environments, through greater connectivity delivered by Internet of Things (IoT). As sensors spread across almost every industry, IoT is going to trigger a massive influx of big data also in the transportation sector, which has been considered for quite some time one of the next industries in line to get disrupted by the use of new technologies such as Big Data, IoT and, Artificial Intelligence (AI). Most transpo-tech companies promise to automate process, providing real-time solutions for customers, through much faster search options and the digitalisation of the whole application process. Mr Henderson, Co-Founder & CEO of DRVR, says: “much of the problems are with manual processes and opaque paper trails. Through the automation of processes and by giving visibility through IoT Sensors and using technology such as Distributed Ledgers, DRVR promises to solve them”. DRVR can deploy its own sensors and devices and in more advanced markets can use the existing infrastructure to help customers improve their supply chain. GPS tracking and Fleet Management has been around for decades, but many companies offer simple solutions with no understanding of the environment and customers’ business needs. Mr Henderson notes ‘we understand the culture of ASEAN, so we have developed unique solutions which address some of this region’s most pressing problems’. Thailand lies at the centre of Southeast Asia; it is the East-West and North-South crossroad of the region, and there is an increase in integration across the region. “Just few months ago no trucks could legally crossed the ThaiMyanmar border, while now hundreds do each day and we expect this volume to grow significantly once regulations get up to speed with reality”, Mr Henderson adds.

TalentTech - Get Links, using AI and Big Data to disrupt the recruitment industry

As aforementioned with the ramping growth of data and channels or touch points, multiple data streams make it difficult for organisations to gain a single view of the ecosystem and their customers. Breaking down data streams and utilising analytics enables service providers to better understand their customer behaviours, while also improving customer verification, accuracy, and speed. This also applies to the recruitment sector, where the streamlining of the process through algorithms helps to match candidates with companies in a quicker and more refined way. Pichaya Srifar, Co-founder & Chief Technology Officer at GetLinks, a Bangkok-based startup focused on helping tech companies find and hire top talent, says: “the recruitment industry operates on a long tail effect. The demand may not be met immediately even on a streamlined platform

like ours”. However, through analytics, this startup can track the funnels in the process, and find solutions to individual problems. Having a self-service marketplace that places candidates in less than 48 hours, as opposed to the average three to six weeks, it is one of the ways GetLinks aims to disrupt the traditional recruitment model GetLinks takes a different approach to building its users database. The startup relies on Big Data to create a scalable, self-service service, and with the data collected it is able to gain invaluable insights into how to create a platform unlike any other. Through its A/B testing and machine learning, it continuously build a more personalised experience. The more data is collected, processed, and fed into a machine-learning algorithm which learns how to process, the more likely is to reproduce the right match. Traditional recruitment processes carries the problem of human bias and subjectivity that reduces diversity and leads to suboptimal selection decisions, However, collecting data is far faster than trying to understand and provide for every single eventuality. Despite systems and algorithms working 24/7 in real time, they are not yet sufficiently sophisticated to replicate human empathy and decision-making. Mr Srifar stresses: “That’s why, though the GetLinks marketplace is entirely automated, from screening to making of job offers, we still strongly believe in the power of human touch to build genuine human relationships”.

MarTech - Zanroo, fastest growing startup in Southeast Asia

Zanroo enables real-time big data analytics to help companies find actionable insights that enhance campaign activation and crisis management. It delivers social insights through listening, monitoring, and engagement because of its software and innovative tools, which empower companies by giving them a clear and consolidated view on their Return on Investment (ROI) . Zanroo places great importance on the clients’ confidentiality: It does not work with companies’ internal data, but uses data from the company’s social media channels and other external data sources from blogs, forums, news sites to analyse the data and categorise it to provide companies with powerful insights. In less than five years, Zanroo has been able to put together more than 300 leading brands among its clients, which span vertically from e-commerce to banking. Zanroo works with both large multinational companies and smallmedium enterprises (SMEs). Chief Marketing Officer, Daud Charles, notes: “Both big companies and SMEs come with their respective challenges which is where positioning is critical. Larger companies are more mature in terms of social listening and digital marketing and they are more likely to be familiar with tools and deliverables, while SMEs are less savvy and resource constrained and require relatively more hand holding”.

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Bangkok Insurance is Thailand’s trusted non-life insurer The non-life insurance sector in Thailand is increasing steadily, and Bangkok Insurance is aiming to become the market leader

Dr. Apisit Anantanatarat President, Bangkok Insurance Public Company Limited



side from its pristine beaches and booming tourism, Thailand has a lot to offer. The World Bank says that the Southeast Asian nation has made remarkable progress in the past four decades moving from a low-income country to an upper-income nation in less than a generation. The GDP growth in the Q1 of 2018 is 4.8% and all year growth is projected to reach 4.1% (Bank of Thailand), substantially increased from 3.9% in previous year, mainly contributed by continued growth of export which greatly benefited from recovery of world’s economy and major trade partners of Thailand, especially USA. In addition, government spending in infrastructure projects is expected to grow significantly, which the disbursement is expected to be valued at 200,000 million baht this year (Standard Chartered). Meanwhile, tourism sector has maintained a key growth engine of Thailand’s economy this year, heavily benefits from recovery of world’s economy and government stability. Rising confidence of investors and business sectors is also anticipated following the certainty of general election in early next year. One of the leading reasons for this surge in economic performance was social welfare, which includes insurance. According to Oxford Business Group, low penetration rates, aging society and increasing rates of liberalization has propelled the Thai community’s awareness for insurance.

However, Thailand‘s economy in 2018 is expected to be negatively affected by rising inflation, interest rate and oil price as well as fluctuation in global economy. And this creates a compelling case for the insurance sector. Between life and non-life insurance, latter has grown slightly faster in recent years with a CAGR of 12.8% compared to 11.3%. The penetration rate of non- life insurance premium to GDP in Thailand is considered high, which is 1.7% in 2016 (Swiss Re), compared to 1.85% of Asian countries and is ranked first in ASEAN. The average growth rate of non-life insurance market over the past 10 years is about 8.4%. The number of people employed in this sector were 31,659 by the end of 2017. The obvious and immediate need for non-life insurance products has spurred great demand in Thailand. One of the leaders in this segment is Bangkok Insurance (BKI) – the third largest non-life insurer by Direct Written Premium for more than a decade with a portfolio that consists of motor insurance (38%), marine (3%) and miscellaneous (49%). BKI is a listed company with a market share of 7.0% at the end of 2017. It was also ranked top five in most product lines; second in fire, fourth in marine, seventh in motor and second in miscellaneous by the end of 2017. In the end of 2017, the company held the paid-up capital of 1,064.7 mn THB and the total asset amounted to 60,102.8 mn THB.

Gross Premium Written by Products Mil. THB,%

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Market Share

With the aim of becoming the most preferred non-life insurer in Thailand, the company has been operating on diversified product ranges and customer-centric policies. Financial stability is also emphasized to maintain sustainability growth as well as customer’s confidence. The company’s overall strategic direction remains


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unchanged for years; disciplined underwriting and growing on the basis of financial strength. Thus, unreasonably lowprice competition and high risk-exposed accounts have been strictly avoided. As a result, BKI could generate the highest net profit among SET-Listed Insurers over the past several years.


Giving Back to Society

Bangkok Insurance is determined to make contribution to Thai society. The Company has established policy to promote and support charitable activities in education, religion, arts and culture, community development, and public health. The company coordinates with governmental and private institutions to arrange social responsibility projects. Some of its contributions are to His Majesty’s royal charity, The Ananda Mahidol Foundation, The Chai Pattana Foundation, and the H.R.H. Princess Sirindhorn’s royal charity project for graduates returning to rural areas to teach. Moreover, Bangkok Insurance has been issuing scholarships to students in rural areas since 1994. Since 1997, the company has supported projects to promote reading by supplying primary and secondary educational institutions in rural areas. Community development is a major aspect of BKI’s CSR mandate, which includes provision of clean drinking water for students in rural areas and constructions of toilers for schools in rural areas. Since 1995, the Company has been engaging in projects to promote income from handicraft production in the villages in Mookdahan Province by training local villagers to weave baskets from plastic filament and assists in locating markets in which to sell handicrafts. BKI is also invested in promoting public health, spearheading initiatives such as ventilator donations to Thai hospitals, development of the Heart Disease Building Project, the Mobile Medical Project, blood donation to the Thai Red Cross Society Project and supporting the Sirindhorn National Medical Rehabilitation Institute.

Bangkok Insurance Public Company Limited

Quick Facts Name:

Bangkok Insurance Public Company Limited Location: Thailand HQ: Bangkok Business: Non-Life Insurance Product: Non-Life Insurance Turnover (latest): 15,941 million baht in 2017 Employee: 1,500 President: Dr. Apisit Anantanatarat

Branches/Global footprints: 34 branches and 25 BKI Care stations nationwide 5 affiliated companies Asia Insurance (Cambodia) Plc., Bangkok Insurance (Lao) Ltd., PT. Asian International Investindo Ltd., Bangkok Life Assurance (Cambodia) PLC. Asia Insurance International (Holding) Ltd.

International Fin an ce


Why startups must cash in on this indian hillstation’s modest downtown culture Abandoned by modernity, now the small-town could refresh the likes of a startup destination because of its self-effacing characteristics


magnificent part of the Nilgiris, on the northern side of the gorge, resides Coonoor, a small town where the hills exude a lovely whiff of eucalyptus and breathe freshness into the air. The town’s roots of civilisation are long-established in harvesting the tea plantations and building homestays in its more secluded neighbourhoods. To erode this culture for the sake of an enhanced business climate is a slow progress. Yet, a report published by YourStory two years ago spotlights Ooty, a popular tourist location heading uphill from Coonoor could be a prospect for a diverse entrepreneurial community because of its undisturbed territory in commerce. There, as well as in Coonoor, some young people have purchased homes they can frequent, carrying urban talent with them, in order to manifest their interest of settingup a business.


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Of one such example is Café Diem. Café Diem is a descendant of those quaint cafés, with its signature style—it’s owned by a resident in Coonoor, Radhika Shastry, a former Managing Director of Resort Condominiums International in Bangalore. Café Diem, built in January 2017, is a take on Carpe Diem—which signifies seize the moment. “I have always lived by the motto of Carpe Diem and therefore it struck a chord with me,” as Shastry recalls, her journey to start the Café has a lot to do with her passion for cooking. In fact, it is her first accomplishment in the food business. Prior to her entrepreneurship in Coonoor, she was spearheading the Southeast Asia region for Resort Condominiums International. “So after RCI, I was still consulting for them. I spent two weeks in Bangalore and two weeks in Coonoor. But I’ve got a home here in Coonoor, and eventually wanted

Startup Insights

to live here. So I wondered to live here I will have to do something—and my interest in cooking and food and things like that was a great opportunity,” says Shastry. Most of the time tourists and locals in town are on the lookout for a nice, snug place to visit. For one, Shastry recognised that some parts of Coonoor has an air of colonial presence while other parts will remind tourists of its centurial tribal culture—and in the midst of this soulful neighbourhood “a quaint place with its own character would work very well.” Word that there is a Café like that

in town has stoked a lot of interest. Its regulars in the last one year have been purely organic. The Café is built on the backyard of Shastry’s house, and the guests will have to walk through the house garden to get there. There is a deck erected for them to relax and enjoy the panoramic view of the picturesque encloses: “I kind of visualised a very quaint, hillside café ...So I was trying to get all the factors right—I wanted to give [my guests] a very unique experience.” This year, the Café celebrated Independence Day by hosting families from the defense force—a very special note to them because of the town’s close connect with patriotism. Competition is low-key in Coonoor since there are not many imaginative businesses set-up in the neighbourhood. In fact, she says “I’ve created a niche market in town with a café serving an international menu, but vegetarian.” It is the place to go for vegetarians and others who would like to relish the taste of good food—has become the unique selling point of Café Diem. The food is cooked vegetarian because Shastry is always keen not to “serve anything” she cannot taste—and that can be a very rare quality yet to be discovered in the food business; in addition she capitalises on the reality that vegetarians are forced to relish the limited servings on a menu, which the Café tries to reinvent on day-to-day. It is in a small-town like Coonoor

that one can experiment without too many inhibitions. Café Diem’s menu concocts classic recipes that can be found nowhere else; the best being, sourdough base thin crust pizzas, served with exotic toppings like ratatouille, or smoked bean curd. Now, the pizzas are a real speciality. Because the dough is not made from yeast, instead “we create our own culture” Shastry says. There is an interesting feedback on the smoked bean curd—that it seems to taste like smoked bacon. The pumpkin coconut soup is a must-have. The delectable lemon tarts are caramelised on top, but nothing beats the savoury cakes, a chef’s speciality. Freshly risen breads from the oven is always on the menu. The menu is hand painted. Each decor is bought from different parts of the world like “table mats are from South Africa”; a symbol of free-spirit at the Café is that townies would love to revisit. In comparison with other hill towns such as Guwahati, Coonoor reeks naivety in its downtown culture as there is not much startup creation in the territory—therefore it being a natural enthusiast and non-judgemental about the values a business is likely to embrace is inspiring—unlike where in cities having vibrant communities there is always collision of ideas. In fact, startups should chance upon this small-town charm to launch high-tech projects in agriculture, environmental conservation and hospitality, therefore nurturing the town for a deeper level of community engagement.

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The bumpy journey of Uber so far Uber is undoubtedly one of the most successful companies in the world. It is also one of the most scandal-plagued. With Travis Kalanick resigning last year and former Expedia CEO Dara Khosrowshahi taking up the leadership mantle, where does Uber go next? Sindhuja Balaji Ride-sharing app Uber has made life so easy for millions of people around the world. The very idea of having a cab at your disposal at any given time of day at nominal fares was revolutionary to public transport. It all began in 2009 when founders Travis Kalanick and Garrett Camp couldn’t find a cab in Paris. They wondered what if they could use their smartphone to get a cab? That’s how the idea of Uber was born. In March 2009, Kalanick and Camp launched UberCab – a smartphone app that allows a user to book a cab. It was not until July the following year that Uber successfully connected its first rider to a black town car for ride across San Francisco. Soon after, the name Cab was dropped from its name and Uber became the go-


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to taxi-hailing service in San Francisco. With headquarters in San Francisco, Uber has US offices in New York, Chicago, Washington DC, Seattle and Los Angeles. Worldwide, some of their biggest offices are in London, Sao Paolo, Amsterdam and Mexico City. Uber has democratized ride-sharing. Not only has it helped individuals develop an alternate source of income as drivers but also provided a viable alternative for cross city travel for various purposes. Uber’s success inspired similar startups in other regions and countries like Grab in Southeast Asia, Ola in India, Careem in UAE and Lyft in the USA to name a few.

Brand Equity

Kalanick and Camp initially raised $200,000 in seed, followed by $1.3mn in an angel round but what followed were a series of continuous multi-million and billion-dollar investments. In 2017,

Moreover, the US Department of Justice announced an investigation in August 2017 into Uber for supposedly paying off officials for acquiring permissions to operate in foreign


a consortium of investors including Softbank. Didi Chuxing, Sequoia Capital and Tencent among others led one of the biggest rounds of funding for Uber with $8.7bn. Uber was valued at over $40bn prior this round of funding. Now, the company is valued at $62bn. But the company, which has been a benchmark for startup success, has had its fair share of controversies over the years: In November 2017, Bloomberg reported that Uber paid hackers $100,000 to cover a cyberattack that exposed the data of 57 million people. The company published this incident in a blog post, with CEO Dara Khosrowshahi admitting that Uber is actively changing the way it does business. This was not the only data-related scandal Uber got into. In October 2017, there was a report that Uber’s iPhone app supposedly allowed it to record a user’s screen and access user info secretly, according to a Business Insider report. The ride-hailing app also got into hot water outside the USA. In September 2017, Uber lost its licence to operate in London on account of multiple offences by drivers and lax approach to safety checks.

countries. One of the biggest blows to Uber’s reputation was the lawsuit filed by Alphabet’s autonomous car division Waymo, for having stolen the designs of its self-driving car technology. Even on the personnel front, the company suffered several setbacks. One of the most notable setbacks was a blog post by Uber employee Susan Fowler who spoke at length about gender inequality and sexual harassment, especially since her complaints to human resources were ignored. A lot of what happened – good and bad - at Uber was under the leadership of Travis Kalanick. The young cofounder of Uber was a controversial figure in Silicon Valley, despite being wildly successful as CEO of one of the most highly valued Silicon Valley companies. In June 2017, Kalanick resigned from his post as CEO of Uber. According to Reuters, venture capital firm Benchmark, whose partner Bill Gurley is one of the largest shareholders of Uber in addition to investors First Round Capital, Lowercase Capital, Menlo Ventures and Fidelity Investments – all wanted Kalanick out. However, Kalanick lost his mother rather suddenly in a boating accident around the same time and he issued a statement that he wanted to

step down from his post at this difficult time. Kalanick, however, remains a member of the board at Uber. But finding his replacement was not an easy task. Reports suggested that the board members and investors wanted someone who could take on Uber’s mess head on – specifically make the company profitable and pave the way for an IPO, stated a Reuters report. Kalanick’s resignation was the latest to join the high-level executive team exits at Uber – vice-president of product Ed Baker, vice-president of engineering Amit Singhal, chief brand officer Bozoma Saint John, chief people officer Liane Hornsey, head of policy for Uber India Shweta Rajpal Kohli, in addition to the company’s top lawyer and chief financial officer. In August 2017, Uber appointed Dara Khosrowshahi, former CEO of travel platform Expedia to head the company. The Iranian-American Khosrowshahi has been tasked with a monumental task – of changing the company while ensuring it is ready to go public next year. He brought in new leaders and pushed for the enforcement of strong corporate values. One of the biggest challenges for the 49-year old CEO is to find a CFO – a position that has been vacant since 2015. He told Fortune executive editor Adam Lashinsky that he’s being picky, as he wants a great CFO who can lead the company to an IPO. According to a report by The Conversation, Khosrowshahi’s challenges don’t end with replacing employees. Uber has made headlines for its toxic culture, and he is tasked with bringing about transparency, diversity and accountability – all of which have taken a hit in recent years. The meteoric rise of companies like Uber can be an example for new age consumer startups. But what separates a financially successful company from a being a reputed one is its culture, and this defines its brand equity in the long run.

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blockchain mirrors Islamic finance how

In value and principle, the technology annihilates a fear of corruption and a risk of human error—that is true to the core of Islamic finance


he trajectory of the modern Islamic banking and finance ‘both in letter and spirit, came into existence’, more than half-century ago. In 1974, the Islamic Development Bank (IDB) was set-up by the Organisation of Islamic Countries. The primary focus of IDB is to release funds for development projects in member countries and its operations are interest-free based on Shariah principles. Second is the Islamic Banking System, also called Islamic Finance House, which was instituted in Luxembourg in 1978. This establishment was an early attempt to introduce Islamic Banking in the West. Years later, the Islamic Bank International of Denmark, in Copenhagen, and the Islamic Investment Company in Melbourne, in Australia was founded. Islamic finance is an age-old practice. Always, the key factor in the sector is that it is interest-free. There is no


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scope for any interest-based transaction: whether it is in the guise of payments or collection. There are strictures between what is permissible (halal) and what is non-permissible (haram). The financial principles are translated under an assortment of interpretations, which originally stems from Islamic law. Tim Lea, CEO of Veredictum and cryptocurrency expert, writes: “In fact, several Islamic scholars hold the view that Bitcoin is more Halal than fiat money (e.g. US dollars) in use today. For example, in Islamic literature, money needs to have intrinsic value. This is not true for paper-money in use today, but is true for Bitcoin because its value comes from the proof of work protocol.” It is clear that Islamic finance wants to create new reforms that encourage the community to operate their ethics in a futuristic financial ecosystem. The sector’s guiding

Analysis/Islamic Banking

vision to welcome a future founded on centurial values is quite possible if it harmonises with innovation. The quintessence of innovation here is blockchain. The mechanism of blockchain allows people to collaborate with each other; by eliminating the existence of a central authority. Designed as an open ledger system, the technology has garnered human interest and has established trust in people “not by powerful intermediaries like banks, governments, and technology companies, but through mass collaboration and clever code,” according to Don and Alex Tapscott, who wrote the book Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business and the World. The technology provides access to all parties to track information—without necessitating on third-party verification. Each block is robust. The log of transactions is firmly secured against tampering or revision. It is unimaginable to break or modify parts of the technology without an official disclosure. Blockchain ‘is still in a stage of infancy’. It is entering a new phase, as tons of financial institutions across the Organisation for Islamic Cooperation countries are vowing to rely on solutions

related to it. The Saudi Arabian Islamic Development Bank has instructed its staff to research and develop blockchain-based products, which is Sharia-compliant. The Jeddah-based Islamic Research and Training Institute has signed an agreement with a local firm Ateon and a Belgium-based firm SettleMint to attract Muslim investors. Firms in Canada and Indonesia have already received Sharia-compliant certification for their financial products. Last June, Emirates Islamic Bank had announced its plan to integrate blockchain with cheque payment. In fact, the cheque system was first invented by the Islamic world around the ninth century: a sakk which was used as an international cross-border cheque. The build of such financial inclusions centuries ago has found its way back to the current period of time. Today, the Emirates Islamic Bank is the first in the sector in the UAE to make headway in securing the cheque payment method. The initiative is termed Cheque Chain. The Bank will issue new cheque books with a unique Quick Response code on each page in addition to twenty random characters. The intent to register the cheque on blockchain might prevent fraudulent acts and reduce the limit of bad transactions.

As part of this regime the Islamic world is forming a niche community in blockchain adoption. Founder of IFCC Zareen Roohi Ahmed spotlights the opportunity for Islamic finance using blockchain. First: the technology helps to smoothline transactions. For example: when a pious Muslim visits a restaurant serving pork and alcohol, it obstructs him from using an Islamic credit card—although his food or beverage consumption was purely halal. Uncertainties during similar transactions can be smoothed over using blockchain. “Addressing the digital revolution that is happening right now will foster competitive advantage for the Islamic Finance industry,” said Hazik Mohamed, PhD, Islamic Finance. “Digital revolution in financial services is under way, and digital disruption has the potential to shrink the role and relevance of today’s banks, while simultaneously creating better, faster, cheaper services that will be an essential part of everyday life in the new economy.”

International Fin an ce


Low crude output propelling Bahrain’s interest in startups In the quest for a richer economy, it seems the Kingdom of Bahrain knows where it is headed next—with a million dinars to spend and a borderless trade zone for immigrants


or the uninitiated, the Kingdom of Bahrain, which is geographically located in the Persian Gulf was served as a trading point between Mesopotamia and the Indus Valley, 5000 years ago. Although, the region’s ancient trade system has sprung many popular theories there is very little known about Bahrain’s early years, according to the US Department of State. In 1935, Britain’s main military base was established in Bahrain. This is because in the 1830s, the United Kingdom became a protectorate of Bahrain as a result of military conflict with Ottoman Turkey. The Kingdom is not recent in trade, war and politics, so to speak. A colossal part of the Kingdom’s economy is directly linked to oil and petroleum production amidst other industries. Included is aluminum smelting, iron pelletisation, fertilizer production, Islamic and offshore banking, insurance, ship repairing and tourism. Agriculture contributes to only one percent of the economy. But the unforeseen development in startup community—seems to refute the notion that the global startup community can only have a handful of players, led by the USA, in terms of talent, capital and ecosystem.


The Seedstars MENA Summit held last December at the Corporate Hub 9 in Manama featured Bahrain’s sparkling ecosystem which stimulates a healthy business climate, somewhat different and away from the cliché. Simon Galpin, the managing director at Bahrain Economic Development Board, said: “The Bahraini ecosystem doesn’t have to be the same as the one in Dubai to become a really important catalyst of economic growth.”

Entrepreneurial Leadership. It is important to observe Seedstars’ intent to host the Summit in the region which is symbolic to Bahrain’s business development configured in a global setup. Perhaps, it was the success from the first edition that cajoled the organisers to host the event in Manama again. A study by Ernst & Young reports: 70% of young Bahrainis are ‘interested in the idea of starting their own business’ in comparison to anyplace in the Gulf. The Bahrain Economic Development Board in partnership with Fintech consortium announced their plan to build Bahrain Fintech Bay. This The Summit was was to pronounce the Kingdom as a attended by more financial hub. Really, Bahrain may even than 150 industry countervail the startup trend in the members including United States because entrepreneurial entrepreneurs, ideas travel faster than they ever have. venture capitalists, And establishing a company in Silicon students Valley is expensive. Realising this fact, and major there is considerable support found in stakeholders the Kingdom. Whether the support is like EBD, necessary in the guise of bankrolling, or corporate hub through an attractive business climate— CH9, global it is obtainable. accelerator This year’s Pitch@Palace 1.0: The 500 Brightest and Best of Bahrain’s Startups Startups is further proof that Bahrain is cracking and the the code to have a plan forward. The Babson event in the grace of HRH Prince Salman Global bin Hamad Al Khalifa, the Crown Prince, Center Deputy Supreme Commander and First for Deputy Prime Minister, and HRH Prince Andrew, Duke of York—concentrated on

enabling local entrepreneurs to connect with potential industry forces such as corporates, investors and mentors. As part of the event, a boot camp was organised for 17 startups to refine their pitching skills. Of the startups, 12 were staged to deliver their skills during a three-minute pitch in the presence of industry experts. This is to explain that Bahrain is formulating new regimes to reorganise startup exposure and disintegrate business complexities. Last year, the Amazon Web Services zeroed on Bahrain for its first-time establishment in the Middle East. Fortunately, this move has hurled a great deal of opportunities toward cloud services. It is possible to regenerate the success of Silicon Valley by accumulating the necessary research knowledge and the skilled manpower to scale Bahrain’s economy. For now, entrepreneurs are seemingly interested in Bahrain because of its precision in favouring small-andmedium-sized enterprises. Bahrain is caricatured as the type of place where startups would want to be and thrive. It consist of a free trade zone area which ties into a very promising start. The Kingdom has even identified the correlation between bankruptcy and innovation, in particular. For example: the Bankruptcy Law hopes to carve a new approach toward insolvency and business failure.


From The Economist: “The wider lesson is not to stigmatise failure but to tolerate it and learn from it: Europe’s inability to create a rival to Silicon Valley owes much to its tougher bankruptcy laws.” Keeping this in mind, the Kingdom is focused on encouraging entrepreneurs to take risks in business ventures; by fully understanding the legalities laid in good faith. Mohammed Altawash, managing founder of CH9, said: “there would be no reason why [entrepreneurs] would not do it.” Early this year, the Kingdom launched a venture capital fund worth $100 million for startups. The fund, also known as Al Waha Fund of Funds is created to secure startups in Bahrain and across the region. Speaking to Arabian Business, Al Rumaihi, chairman of the Bahrain Development Bank, said: “This is very exciting news for the startup ecosystem both here in Bahrain and across the Middle East. “We know that access to capital is one of the biggest constraints on


Sept embe r 2 018

growth for startups, so this fund will help businesses in Bahrain and across the Middle East to get access to the capital they need to expand.” That’s the idea behind the fund: to feed the startup scene and welcome other venture capital funds to Bahrain. Areije Al Shakar, Bahrain Development Bank senior vice president and head of business services, said: “We need VCs to come, spend more time and be present here. “With Al Waha, these VCs will be here a lot more, and they [startups] won’t have to wait for an event or to travel to try to get access to funding or expertise. “That will further support the growth of our ecosystem. At the same time, we have a lot of startups that are choosing Bahrain because of ease of set-up costs, access to talent and friendly regulatory environment, but they also need that kind of funding and expertise, and Al Waha will hopefully be able to resolve that.” The Economic Development Board

has even predicted a future with India by establishing an office in Mumbai. Using Bahrain as the medium, many startups in parts of India can route their products and services to the Gulf market. The synthesis here is to grasp the extended support given by the Economic Development Board—and reformat the facilities to best suit earlystage entreprises.


A CAUTIONARY TALE What is Europe’s Banking Crisis about and how will it affect its future?


he European economy has always been the object of envy of the entire world. Being the second largest in the world, having an annual GDP of more than $1.7 trn. It has accomodated the some of the highest standards of living in the world, and the most prestigous investment interests from all over. For a long while, that has replaced with a uncertainty about its future. In simple terms, Europe has been in a longterm financial crisis– and some of the important nations it holds together have been on the verge of a collapse—one whose ramifications stand to cripple the entire global economy. It’s been ten years since it began, and it has been the subject of endless analysis, counter- analysis and speculation.The European Banking Crisis has become a major global daily topic – and its consequences and ramifications arediscussed at length.


Sept embe r 2 018

- Karan Negi

The Euro is under threat of collapse. It was formed proudly in 1999 as an integrator of various prominent economic nations within Europe, as a means to bring an era of shared prosperity -- and allow a never seen before economic soveregnity within the continent. Now, it has been on an increasing volatile and uncertain path for the better part of a decade. As acknowledged by Jean-Claude Trichet himself, during his tenure as the European Central Bank president, who had stated : “We have in front of us a global crisis of sovereign risk and we [the eurozone] are the epicentre of this global crisis.” To start with, let’s focus on when the crisis became most apparent. When Lehman brothers collapsed in 2007/2008, triggering the sub prime mortgage crisis that severly weakened the entire world – European banks were also severly affected. Since, they were directly explosed to all the bad debts in the US – they experienced a severe fall in bank

lending and investment. This bought about a recession and led to the fall of real estate prices – which further increased the losses of many major banks. This is only half the story though. In fact if anything the crash only revealed that banks across European countries had been carrying bad debts even before the recession. Most major European countries had already fallen in the bad habit of having surplus deficits—and their banks were identified to share similar traits to their US counterparts. They were leveraged up to the brink and relied too much on borrowed money. This was emphasised by Kiyohiko G. Nishimura, the Deputy Governor of the Bank of Japan in 2012, where he criticised “the excessive risk taking of European financial institutions.” The ‘Eurozone’ as its called, once proudly integrated—now shares the collective blame for reckless fiscal irresponsibility. Greece for example has become a generational cautionary tale - infamous for having the highest debt, collapsing under its own weight, and requiring urgent stimulus packages – but other countries like Italy, Spain and Ireland, among others were all culpable in letting their deficit run much higher than it should have been. It also did not help that markets were under the assumption that the Eurozone debt was impervious after the 2007/2008 crash. Hence, investors were wiling to hold low- interest rates, even in countries with high debts. That did not end well for any party involved. Also, Eurozone countries that had debt problems are also generally uncompetitive. They have a higher inflation rate, and high labour costs. This means that there is a lesser demand for their exports, a higher current account deficit and challenges towards driving economic growth. Germany – the biggest and most stable economy in Europe, had hence was required to get other countries out of trouble by lending them to cover up the deficits. It is by far the most economically stable nation in Europe— and has reluctantly agree to help out. It has also, imposed strict austerity

measures on the economically struggling nations –which have also resulted in their own problems and backlashes. Major nations across europe have had turbulent elections in recent years – no doubt motivated by the economic severity. The European economy also continues to be under heavy scrunity worldwide. There is some hope, as of 2017, the euro grew to a 2.5 % rate – suggesting a slowly forming stability across the region. France and Poland also experienced growth in the same year—of 1.9% and 4.6% respectively. However there is enough data that suggests that the crisis is far from over. The latest statistics indicate that Greece, Italy and Portugal have anon performing loan ratio of over 10%, and have only provisioned around 50% of these losses. The Total GDP of the European Union in the last 10 years is also in the negative. Sure, Eurozone debt is gradually decreasing, but it still remains historically high. Milton Ezrati, Chief Economist of Vested, laid out premonitions of a warning sign, in an article for Forbes he wrote. He stated : “But Berlin knows Greece and others in this predicament cannot keep their austerity promises. Even the International Monetary Fund (IMF), sometime ally of Berlin in this regard, admits that German demands are impossible.” He mentioned how past austerity measures have weakened the Greek economy and made the country more politically fragile. In the same article, he paied emphasis to the fact that Unemployment in the country

had risen to over 25 %, with youth employment being on the verge of 50%. “ Europe will go through another financial crisis, probably centered in Greece, but not necessarily.” he also stated in the article itself. German chancellor Angela Merkel finally in June of this year, publicly revealed her vision for the bailout – after being coy on it for an extended period. Under her watch, the current body responsible for lending money— the European Stability Mechanism (ESM), will continue its lending efforts. It however, will also monitor each country, making sure they are following fiscal rules strictly. While the future is, as always uncertain, it is important to note that fiscal responsibility is what built Germany to what it is – and measures to introduce it to other nations via this channel may go a long way into controlling the deficit and minimising further losses.

International Fin an ce


India undecided on bitcoin, but bullish on blockchain

Investor and government sentiment is still divided over bitcoin and other cryptocurrencies, but its underlying technology blockchain is what’s making inroads with India’s highest bureaucrats and governments Sindhuja Balaji


itcoin in India has had an eventful journey so far. The cryptocurrency made its foray into India a few years ago, with a handful of traders mining bitcoin on unauthorized channels. Soon, this gave way to cryptocurrency exchanges such as Zebpay, Unocoin and Coinsecure among others, becoming a fast-growing investment option for young and savvy investors. The price of bitcoin currently stands at a little over $8,000, which is around 5.6 lakh INR. The average upper middle-class Indian earns around 1 lakh INR a month, making the popularity of bitcoin as an investment by the average


Sept embe r 2 018

Indian is nothing short of lucrative, especially in comparison to conventional investments such as real estate and stocks. However, the Indian government has not been so favourable to bitcoin’s growing popularity. In April, the country’s central banking authority Reserve Bank of India stated that it would not deal with or provide services to any individual or business entities dealing with or settling cryptocurrencies, and regulated entities already providing such services would have to cease doing so by July 5th, 2018.


Meanwhile in Asia, bitcoin is only growing in popularity for cross border payments. In a press release, BitPay CEO Stephen Pair said that the company has plans to expand its services into Asia – one of the fastest adopters of cryptocurrency transactions and wallet adoption. For instance, Japan has allowed bitcoin as a legal form of payment since 2017 and is being widely used across industries like retail and hospitality. Trade between South Korea and USA is expected to touch $200bn and according to a Forbes story, bitcoin and bitcoin cash can greatly reduce cross-border transaction fees. There is no denying the bitcoin wave. Reports in the Indian media suggest that instead of a sweeping ban against cryptocurrency, the government is considering classifying them as commodities instead. Abhishek Pitti, CEO of Nucleus Vision says, “The government has reduced fiat inflow into crypto within India but many of these exchanges have moved to a peer-to-peer strategy. Now, a separate committee has been formed within the Economic Affairs Ministry to draft a regulatory framework around cryptocurrencies and exchanges.” Pitti believes that once a regulatory framework has been established, crypto activities can be monitored. Pitti, who runs Nucleus Vision, is one of the few entrepreneurs working to introduce blockchain technology in bureaucratic processes by partnering with government agencies and officials. Founded in 2014 at Harvard University, Nucleus Vision is an endto-end technology solution provider that captures and provides previously inaccessible data to retailers and other ‘brick and mortar’ businesses through blockchain and real-time sensor technology. Nucleus Vision’s proprietary IoT sensor technology does not depend on any RFID, WiFi, Bluetooth, or even facial recognition technologies to identify any customer within its vicinity. The constant back and forth by the government stems from how new and revolutionary this technology is. Considering that bitcoin functions

on a distributed ledger and doesn’t need a middle man or a regulator, it is particularly daunting on regulatory authorities across the world. Experts still believe that while bitcoin and related cryptocurrencies are still courting controversy with authorities, blockchain technology is gaining acceptance across private and government institutions, even in India. “Blockchain technology appears to be universally accepted and we can see many governments, including the Indian government, adopting this technology. Within India, there is a lot of onus in improving the efficiency in the system through blockchain. Nucleus Vision has partnered with multiple state governments and related affiliations in working together on identifying use cases and improving the efficiency across these states,” explains Pitti. Nucleus Vision collaborated with the government of Telangana, Goa and NITI Aayog to host the International Blockchain Congress in August. The government of the state of Andhra Pradesh is in fact, among the first in India to run trials on blockchain technology for certain bureaucratic functions. Nucleus Vision is also partnering with the state government of Assam, a Northeast Indian state with a population of well over 30 million, to build a host of government-oriented blockchain apps. “I think most governments, including the Indian government, understand the underlying technology well, but are still continuing to evolve their understanding of how cryptocurrencies adopt such technology, and how they can wrap a framework around these digital assets to prevent tax evasion or money laundering — their two primary concerns,” explained Pitti. The renewed government investment, rising media attention and sustained investor interest have led to exponential growth of this space in the past few years, leading to drastic ebbs and flows in its value. This is why Pitti thinks investors, especially in the retail space, should be cautious with cryptocurrencies due to its high

volatility. “There has been an everincreasing number of retail investors jumping into the cryptocurrency space, either driven by their fascination of the underlying technology, or by their quest of making quick gains from a volatile asset class. The latter set of people may not necessarily understand the difference between the currency and the technology however they are not the type of investors who may wish to know this difference.” Bitcoin is no doubt a highly exciting asset class, but this is when investors must sustain their interest in the underlying technology to improve efficiency, especially within developing and emerging economies where such improvements will improve productivity and impact national GDP, adds Pitti. Blockchain and cryptocurrencies are interconnected, as ICOs are a wonderful way for start-ups to fund their use cases and generate liquidity in developing their ideas into fruition.” For investors to invest in ICOs, they need to have price discovery and liquidity which are only provided by trading exchanges. If the government is positive on blockchain and negative on cryptocurrencies, then effectively blocking a key source of funding to start-ups and eventually there will be another wave of brain drain from the country to another jurisdiction that shows more foresight in making this connection between the two.

International Fin an ce


Why the post-Brexit is good for SMEs Turns out, Britain’s chance to rewrite its character of governance has granted the domestic enterprises a milestone in international trade Sangeetha Deepak


The overwhelming debate over Brexit: where Britain is liberated from the European Union was referred to as a “historic mission” in British Prime Minister Theresa May’s speech on the final day of the Conservative Party Conference held last year. The Brexit phase is an arduous process—that isn’t exciting and easy on the British society, and especially on those who voted Remain. For onlookers, age is seen as the greatest fault line. As The Financial Times model observed that 2021 will be the year showcasing reversed results, if it is to be re-taken. In short, the model suggest that a good rate of Leave voters will have deceased and Remain voters will have a fair chance to alter the fate of Britain. But then, British Foreign Secretary Boris Johnson during his conference speech displayed sheer confidence toward the exit: that Britain is leaving the European Union with ambitious desires to become “a champion of free trade” and eventually rank in order of international repute: “global Britain.” In addition to this more self-assured political outlook toward Britain, there is much positive impact on small-andmedium-sized firms (SMEs) in the UK. Last year, a new report commissioned by international payments company, OFX noted the entrepreneurial shift postBrexit: where SMEs swiftly moved their focus toward global sales. The survey

covered 500 SME owners and senior managers. Of the respondents, twothirds were bullish about establishing business overseas; 48% of respondents increased international sales; and 26% of them were expected to start or increase exports in the next one year from the time of survey. These firms are trying to capitalise on Britain’s global aspirations. The survey saw inflation become a rising concern for most businesses, since the referendum. Nearly 28% of SMEs had their sales dip in the UK market and 48% of them attributed this fall to inflation rise. Because the value of British pound reduced overseas, the goods and services were marketed at affordable cost for international buyers. Indeed, as much as Remain voters were against the move, all that the Brexit vote intended, in part has come to fruition by strengthening the international trade for its taxing domestic market. The weak pound is UK SMEs greatest vantage point. About 49% of them increased the price of goods and services and 62% clipped exorbitant price tags on raw materials. On a more positive note, millennials are quite thrilled about Brexit. Young entrepreneurs aged between 18 and 30 are more likely to embrace Brexit, which is in brilliant contrast to the observation made by The Financial Times model.

Yet, a poll by YouGov UK advocated

that Britons aged 65 and above were more than twice as likely to support the European Union exit, which reinforces the model’s assessment. Referring to the OFX survey, 70% of SME owners firmly believe their market will improve postBrexit against a smaller percentage of contenders: 22% aged between 31 and 40; and 15% aged between 41 and 50, who are not fully ready to accept this watershed moment in the politics of the United Kingdom. However, in this regard, the majority of SMEs look to post-Brexit opportunities and new markets they can explore beyond the European Union. WorldFirst’s ninth quarterly Global Trade Barometer 2018 lays emphasis on significant numbers about SMEs’ scope for international growth. The survey reflected more than 1,000 SMEs to study the Brexit uncertainty on international trade. One in four SMEs, which represent 23% of the total has outlined plans to export to a new country in the current quarter. Likewise, 30% of businesses remain bullish about their presence in global markets. Jeremy Cook, Chief Economist at WorldFirst on its blog said the efforts invested by UK SMEs to extend beyond “their Brexit blues” and their ability to “develop coping strategies to push their exporting aspirations forward,” is compelling for both the domestic enterprises and foreign markets in trade.

International Fin an ce



The first quarter of 2018 demonstrates overseas transfers worth £48,000 as a result of international trade, which indicates up five percent from the last quarter of 2017. China and the United States have ranked steady on the index for imports and exports post-Brexit this year. The United States is perceived as an attractive target for UK

SMEs to start or build exports. Currently, the number of SMEs doing business in the United States stands equivalent to those companies trading with Western Europe. Because of the distinct market opportunities beyond the European Union, only 20% of the companies plan to magnify their European exports while 62% of them want to expand their export

base to the United States. Of the ten markets that witnessed the highest growth in payments from UK SMEs early this year, seven countries are located outside the European Union: Turkey, Norway, Morocco, Singapore, Russia, Indonesia and the UAE.

“The UK Government has not been shy in promoting the benefits of building a nation of exporters over the last year, but this survey shows that more needs to be done to support our smaller businesses,” Cook concluded, “These SMEs will be our global exporting pioneers post-Brexit and it is vital that the Government and wider industry does all they can to support them. This could mean anything from facilitating connections between UK small businesses and foreign counterparts, to offering advice and training on how to do business and communicate with international trading partners.”


Sept embe r 2 018

Startup Insights

Bupa Arabia’s illustrious

20-year journey in Saudi Arabia

The company aims to retain its position as a major insurance services provider in the market


audi Arabia’s insurance company Bupa Arabia has completed two decades in the market, signifying its strong foothold in the country’s insurance arena. Following its participation at the International Finance Magazine award ceremony in Dubai, Bupa Arabia was also inaugurated as “Top Insurance Company of the Year in the Kingdom” and “Best Investors Relations Company” in the insurance Industry. The event gathered several known executives and businessmen in the insurance and banking field. Tal Nazer, chief executive officer at Bupa Arabia, said, “Our presence represents a major achievement in recognition of our leading role in the health insurance sector and our efforts to cater to the demands of our customers in the Kingdom through the past 20 years. Winning these awards is a strong incentive for us to give more to our members and investors. We give special attention to our investors inside and outside the Kingdom which helped increase our portfolio of stakeholders.” Starting in 1997, Nazer Group and global insurance leader Bupa Global put their hands together to start Bupa Arabia. Through this strategic partnership, a successful healthcare journey took place serving members from diverse fields & sectors. As part of its efforts to be closer to its members, Bupa Arabia has developed many services & solutions to

ensure the best health care services are presented. In addition to health benefits of medical coverage, Bupa Arabia ensures that its members receive the best levels of healthcare through its innovative services & timeless medical approvals. Bupa Arabia also leads with its premier Tebtom service that has several facilities including home-vaccinations & medical tests. It also includes Telemedicine, a program that capitalizes on global expertise and several programs that ensure the comfort of its member’s in hospitals such as Rahatkom. In 2008, 40% of the company shares were offered to the Saudi public in the most successful IPO ever to take place for a health insurance company in the Kingdom. The initial offering was covered by more than 900%. After the successful offering, Bupa Arabia continues working on steady steps with a clear vision to become one of the most successful health insurance companies in the Kingdom. Bupa Arabia also builds on the initial expertise of Bupa Global that has over 1.2 million healthcare centers in 190 countries and has an experience that extends for over 70 years.

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Happening Technologies:

Art, Tech and much more The company is using artificial intelligence to manifest a connection between artists and significant others in the art business

What’s New/Art


rom Luxembourg, a country nestled in the Northwestern Europe, a young startup named Happening Technologies was founded by Adeline Pilon, who is an art enthusiast studying in ESCP Europe at the time. There is a lot of passion seen in Pilon’s efforts to replenish the ‘value’ of art market—both ancient and recent. In fact, the company offers a platform for 100,000 artists from the early 1800s to the present-time. Creative men and women from around the world look deep into social ethos over centuries to create an immersive way of depicting life. This extraordinary evolution of art deserves special focus. To not provide that focus is doing an injustice to not only the artist but more so to the art if the creative world don’t establish a grandstand view of what it truly is. Happening Technologies is willed to contribute heavily to art—with a dedication to bring attention from collectors, spectators, galleries, auction houses, family offices, private banks and insurers. “The art market is opaque, but often proves to be a source of financial performance. Technology today makes it possible to create a link between the actors,” Pilon said. Technology has vastly contributed to many facets of human works—with its application indulging a myriad of professions, from the the history of scientific investigation to mechanics of automobiles to the rise of architectural structures. In this context, the imminent breakthroughs in deploying artificial intelligence can encourage so many artists and others over the years. After all, “artificial Intelligence combined with historical knowledge of art” is one way to “demystify a market” that once struggled to recognise its own identity and become an attractive source of investment. Investors are always in search of versatile markets: where there is short-term change in stock patterns and no blemished valuations after large-scale quantitative easing. Pilon intends to transform the art market into a ‘fullfledged asset class’ by using artificial intelligence. In turn this can help it to win transparency in world finance. The global art market is valued at over $63.7 billion. This means, more than 8000 galleries and 260 fairs play a significant role in market contribution. “There’s real scope there. The art market is hard-pressed to self-finance, so to facilitate its development it is necessary to find other forms of liquidity. The two fields of art and finance are sizing each other up whilst trying to fill an informational gap,” she added. It is at this very moment when Happening Technologies step in to reinforce possible financial opportunities for both investors and the art market. Indeed, the company’s concentration of experts in art history, investment, data management and artificial intelligence is luring influencers from all directions. It has even established a strategic partnership with Luxembourg Institute of Sciences and Technologies which specialises in data management. This year Happening Technologies launched its first AIenabled product: Artist Profiles. Its ‘data-visualisation’ has

been launched in a web format and it will soon be released in a mobile format. It is “thus a quantitative database allowing each artist to propose different variables that make up the value of the artists and thus to measure the risk associated with it, the size and depth of their market, and the intermediaries from whom to sell or buy at best a work,” Pilon emphasised. Artist Profiles enables users to make quantified analyses on 80% of the art market in terms of ‘value’ and pursues it to provide informational efficiency—which is in a similar degree to what Bloomberg does for stock markets. In reference to this, she said: “We’re working on this market because it’s the most dynamic nowadays. It represents over 80% of its value. We’ve also decided to add design and decorative arts, and, over time, we will be able to push the art eras back to ancient times, and eventually integrate all collectable items.” When artists use the platform they are empowered to immortalise their presence in the market and at the same time frame the future by building a niche space for themselves. The data implemented is more than hard data—so even auction results, market trends, artist’s exhibitions, location of the highest number of sales and price evaluations are catalogued for the benefit of everyone in the art business. The platform is largely focused on five elements that furnish the correct information to anyone engaging in art business. First: where the artist is exhibiting the work and in what style. Second: sufficient media coverage about the artist and in what language it is available. Internet: online visibility into the journey of the artist. Fourth: where can collectors buy the collection by a particular artist. Fifth: insights from auction houses about the results on artist’s collection, price volatility and liquidity. “For this, we have collected, processed and analysed information collected from the media and art market agents, and so are able to offer analysis on: price, reputation in the media, frequency of exhibitions, auction sales results, gallery weightings, evolution of popularity...For advising fortune management, Artist Profiles is thus a tool which allows its users to speak in quantitative terms, but also to understand their client’s estate and the associated risks,” Pilon said. Continuing further, Pilon explained: “The initial parameters are expanding day by day thanks to the algorithm we’ve developed. We’re working on this market because it’s the most dynamic nowadays. It represents over 80% of its value.” So at this point the company plans to further the platform’s capabilities by incorporating other features such as “design and decorative arts,” and some day “be able to push the art eras back to ancient times, and eventually integrate all collectable items.”

International Fin an ce


The artist and the entrepreneur The present-century is witness to the second age of renaissance— where art nurtures a new wave of entrepreneurism


s we understand art and artist are immortal geniuses, whose potent work travel miles for many centuries. The constellation of their energies, is not only suffused in the paradoxes of life, but has begun to contribute to the works of the millennium— such as in redefining what entrepreneurs are: how they conceptualise, collaborate, inspire and self-perceive themselves to be. Although, artists are conflicted in the face of power and money, life and death, love and hate—they are inwardly empowered like no other. Entrepreneurs are exampled next to masters of art such as musicians and improv actors because they factor in spontaneity and operate amidst too many untold specifics. In fact, to quote Silicon Valley serial entrepreneur and academician Steve Blank: “They [entrepreneurs] see something no one else does. And to help them create it from nothing, they surround themselves with worldclass performers.”


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When artists address audience about their experience through words set to music or express their moods using themes and colours, the subject is glorified to a much deeper level—and allows the audience to understand and seek their own path. For example: when you (read: entrepreneur) refer to the 18th and 19th century literary thoughts of Rousseau, Goethe, Blake and Beethoven, who spotlight self-direction and originality, the meaning of their works, so precious, allows you to self-motivate and blaze new concepts. For this reason, entrepreneurs and young minds are cheered to visit gallerias or listen to old lyrics because of the knowledge the elements expose and the stories they tell—which are especially relevant to the modernist world. After all, forms of art represent the duality of human nature: politics, fame, money, talent, foes and allies that suit the foreseen and unforeseen challenges presented in the life of an entrepreneur.

What’s New/Art

A top-class business school, Babson College in Massachusetts presents an eclectic mix of performing arts, exhibitions and readings with entrepreneurial learnings. This approach, by all means, to an oldfashioned scholar, may sound as if the dynamics of business is washed on unnecessaries. But it is the ability to look beneath the surface and draw meaningful insights from play and dance, poetry and music, painting and photography. Dennis Hanno, dean of the Undergraduate School, said: “I do strongly believe having students with an interest in the arts creates a dynamic and interesting campus.”

Indeed, there is no one with more entrepreneurial instincts than an artist. Heidi Neck, associate professor of entrepreneurship, said: “There’s a lot we can learn from artists.” Potential entrepreneurs participating in creative expression have the power to invigorate their thought process and choice of decisions in long term. “As artists, we emerged as entrepreneurs largely because we were looking for alternatives to the traditional art world model,” said Sean Di Ianni, co-founder and chief operating officer at Meow Wolf, a Santa Fe-based art collective and production company. “What fueled our ability to make opportunities for ourselves was both a sense of strength in numbers and also a real enjoyment of the unpredictability of working collaboratively.” Art has always been a representation of both culture documentation and philosophical understanding, but now, it is an identified technique to exercise soft skills in business management. Certainly, this new business movement projects the question—Can art reconstruct the characteristics of entrepreneurship?—an emerging paradigm of how founders should imbibe creative forces to become profound artists, who evolve from a different genre of work. At Babson, the faculty encourage students to participate in any performance they are particularly fond of. This in fact, brings scope for students to power through psychological conflict during a real world struggle. Burl Hash, who witnessed the sights of student performance on campus for 11 years, voiced his views on uniting art and business: “You develop your management skills. You feel the pressure of putting on a good show.” For example: Staging a musical would include collaboration: scheduling rehearsals, hiring the cast, outlining a budget, designing the props, working on the screenplay and taking charge of production. In translation: the prerequisite skills to become a versatile entrepreneur would align with the tall order of putting up a show: Scripts

conquer new imagination. Meetings replace rehearsals. Employees form the cast. Raised capital spin off a company and of the sort. “This concept of creating something that few others see—and the reality distortion field necessary to recruit the team to build it—is at the heart of what startup founders do,” Blank writes. “It is a very different skill than science, engineering, or management.” Blank’s colleague, Tom Byers, who is a professor at Stanford agreed: “Innovation in both music and technology entrepreneurship is rooted in creativity and teamwork. Finding the harmony between creativity and teamwork, and developing a culture and a mindset that cultivates both of those things, is essential. “If you have one and not the other, you have no impact. That’s absolutely the case, whether you’re performing with a band or creating a company as a startup team.” By that definition, fine works of art is determinative in flexing peoples’ entrepreneurial calibre, and their efforts to closely observe the artistic process from time to time, could in fact, persuade them to transit upon a higher plane.

International Fin an ce


DABBL-ING IN THE STOCK MARKET MAdE EASY Stockbroking apps are dispelling the most common myths about stock market investments – one has to spend colossal amounts of money on stocks and trading platforms are too hard to comprehend. The success of apps like dabbl among others are a precursor to technology bridging the gap and simplifying the relationship between the stock market and investor Sindhuja Balaji

What’s New/Investment


he United Kingdom is the hotbed for fintech and is considered a pathbreaker for new and cutting-edge financial technology. It is also one of the most conventional investment markets in the world. So, the growing popularity of app-driven stockbrokers is pleasantly surprising and highly rewarding. One such app is dabbl. The UK-based app-only investing platform is making trading a lot more relatable and easy to comprehend. Unlike current trading jargon, which is hard to comprehend and involves a significant amount of number crunching, dabbl is trying to make stock-purchasing an engaging affair. Cofounder Mark Ackred says, “There is a big gap in the market for casual investors, who want to learn more about a stock they invest in but get thrown by complicated financial jargon. I wanted to create a platform where investors can choose the brands they like to and invest in them – and this is what a Fair Share revolution is all about.” The app allows anyone to purchase physical shares of more than 30,000 companies listed in the UK, European and US stock markets. In addition, Exchange Traded Funds (ETFs) have also been added. One of the most attractive features of the app is image recognition and an inbuilt search engine to allow for easy association of brands that own them. With technology and marketing taking centrestage, Ackred saw immense potential in connecting the general public with the stock market. Dabbl users will typically sign up for a £2 membership, which includes up to three trades a month. All trades are bundled and executed at 3 pm everyday, with additional trades costing £1 each – this pricing is highly favourable compared to the average 10GBP per transaction, as charged by UK’s top five stock brokers. The idea behind this low pricing is to enable investors – who would otherwise be priced out of the market - to start trading, says Ackred. Unlike major investment companies

that spend millions on personnel and technical infrastructure to track the stock market, dabbl’s deployment of technology has scaled down infrastructure costs significantly.

Freemium Strategy for Future Growth

This ‘freemium’ approach to revenue generation, similar to Skype and Spotify, is part of the new wave of innovators today – by initally rolling out free services, the hope is a loyal customer base will be created and the customers will be compelled to pay for quality services or a special value add by the company in the future. In the case of dabbl, the company is supposedly opening its first public fund-raising round and early adopters will be given a mark ackred chance to invest in the company. Cofounder, dabbl As for other future plans, Ackred is hopeful of adding 50,000 new users by more than one million have signed the end of FY 2018 and probably reach 100,000 by their second year of trading. up for access to its new cryptotrading service.

Investor Interest and Partnership with BlackRock

Less than two years in, and dabbl is already making an impact with investors and industry veterans. The startup has raised capital from high profile investors such as advertising mogul BBH’s Sir John Hegarty and Bestinvest founder John Spiers. A strategic partnership with Publicis Groupe is aiding them with marketing and branding. More recently, dabbl’s partnership with leading investment management firm Blackrock has firmed up their intentions to democratize investing. Through this partnership, investors can buy ETFs on an incremental basis – ETFs are an ideal way to track a market index like the FTSE, using a fund that charges a nominal fee and can be purchased or sold like a share. Ackred believes these partnerships will make dabbl’s business model sharper and relatable.


-Acorns – With more than three million users, Acorn is another app only investing platform with the financial backing of companies like PayPal, Bain Capital, TPG, BlackRock and Rakuten.

Website: about/ -Stash – You can start investing on Stash with an investment of USD5, and choose from a diverse range of stocks and ETFs.

Website: https://www.stashinvest. com/

What Else Is In The Market?

Robinhood – This is a stock brokerage app that allows you to buy and sell individual stocks for zero dollars a trade. It has around three million accounts and

International Fin an ce


A new-age platform for legal compliance As the world becomes smaller thanks to business, legal compliance can get complicated across borders. To ensure a faster and efficient platform for ompanies to get the legal lay of land, Garth Watson, Malcolm Gray and Peter Flynn created Libryo - Sindhuja Balaji

Why did the founders see the need for establishing a concept like Libryo?

Global regulation is not centrally coordinated. Law differs materially from country to country, and nationally as you cross internal borders and is increasingly complex and fragmented. If one is responsible for the legal compliance of a multinational organisation, this regulatory complexity takes on a whole new dimension requiring a never ending manual legal research project. This is either done expensively, inaccurately, or not at all. The same is true for law firms who for many corporate clients, often provide these services as loss leaders. The co-founders recognised a need to create a platform that was global, efficient and cost-effective, offering multi-national companies a better way to know and be updated of the regulations faced at each operation.

How does Libryo manage to provide clarity on legal affairs across borders?

Libryo has developed a very scalable data-structure. Utilising Libryo’s global database of regulatory law, enriched with metadata and content, the Libryo platform prescribes the precise sections of statutory instruments that regulate any given business operation based on the attributes of the


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operation. This allows users to know their regulatory legal universe and query it using normal language i.e conduct legal research without being a lawyer or having legal research skills.

Can you take me through the different offerings Libryo has?

Essentially, know your law, know your compliance, and crosscompare your law. What is different about Libryo’s offering from one customer to the next is that each company will have a number of sets of regulation that apply to them; one for each unique operation. The Libryo Platform thus provides unique legal collections for each operation. Within this, all users have access to the Libryo Platform’s full host of features including intuitive search, automated updates, plain language summaries per section, summary translations, document storage, specialist legal support and most importantly - truly site and context specific regulatory information available on demand.

Does the platform get updated periodically? How does this happen? Libryo Platform legal registers are automatically updated.

Libryo founders Peter Flynn, Garth Watson, Malcolm Gray

These updates can be viewed using the notifications module on the Libryo Platform. Users are also alerted via email whenever legislation is updated in their applicable legal register(s).

You have a prominent set up in Sub Saharan Africa - any particular reason?

Yes, in the past year, the business has expanded from five to 50 countries, 45 of which are across Sub-Saharan Africa. The founders are all South Africans and Libryo has its roots in a South African legal compliance consultancy.

Do you plan on expanding to other nations/ regions? And where to?

Definitely! We plan to expand the business further across four continents - Africa, Europe, North America and Australia - in the next 18 to 24 months and we plan to cover all regulatory law globally within seven years. We talk about seven continents in seven years.

How many clients does Libryo have and what sectors does the platform cater to?

We have over 130 customers and 6000 active users of the Libryo Platform. Customers already using the Libryo platform

include multinational companies in the telecommunications, energy, infrastructure, mining, banking and oil and gas industries, among others.

You have just raised $1mn in funding - what do you plan to do with this funding first?

We raised those funds last year and have executed well against the plan. We’ve expanded our team with critical hires to further develop product, automating many processes, ensuring customers gain maximum benefit from Libryo and growing the business into new markets.

What are your plans for the immediate future?

Our entry into North America (including Canada) is imminent. This will include (amongst other things) bringing all USA federal, state, county and city regulation into the Libryo Platform in a machine readable format. Given the progress we’ve made thus far we are now able to do that. Germany and India are also imminent new markets for Libryo.

International Fin an ce


Everything you need to know about TaxScouts In the fall of 2017, Mart Abramov responded to the unsettling concerns of taxpayers by setting up TaxScouts, a web tool to simplify the filing process - Sangeetha Deepak

So how did you arrive at the game plan to start TaxScouts?

TaxScouts was established in Autumn 2017. The idea was conceived last summer over a pint. I was complaining to Dan and Kaupo (my now co-founders) about my first-time tax assessment and the hassle in doing so. I had a great accountant to help me at the time but we mostly exchanged emails and documents. I felt the real value of working with my accountant was in taking his advice, and not the admin side of the task. And then, we looked into what it takes to automate the admin process. This, eventually led us to the establishment of TaxScouts.


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Why should taxpayers migrate to TaxScouts?

There are three reasons for people to consider TaxScouts: convenience, cost and assurance. Many of our clients who start using the service are first-time tax filers or they simply need help to complete the taxation process. While HMRC’s tax filing is great, it has limitations in extending help. Most web tools are ideal for users with experience. However, taxpayers are still left to their own devices in terms of understanding the requirements from their end. With TaxScouts, clients can sign up for £99 to get a personal accountant, who is equipped to help them with individual questions and prepare their tax return. This can

What’s New

take place on the web. By clarifying simple questions, we help clients build their tax profile and bring to their attention the potential tax breaks they could benefit from. In fact, the actual paperwork and tax calculations are done by us on their behalf. This ensures the process is done right and is time-saving.

How do you automate the fundamental requirements of tax preparation?

If we’re looking at end-to-end automation, it has two distinct parts: Automation for taxpayers and automation processes for accountants. For accountants sake, we’re going to be automating the admin task that is associated with authorising oneself as an accountant with HMRC, scanning the tax documents and retrieving tax data. For taxpayers, it’s primarily about helping them retrieve tax data and enable a simple web tool to manage the process. We’ve already integrated with HMRC. For example: We can retrieve all employment tax data directly from HMRC. Additionally, we provide convenient means for people to scan their tax documents using their phone and secure them in one place that can be directly accessed by accountants. In an effort to improve further we’re going to integrate with potential partners, who will enable us to retrieve necessary tax data directly. For example: Uber has integrated great APIs that allow us to automatically calculate mileage they’ve driven, which in effect, is a tax deductible expense.

The website speaks of the services being half robot, half human. Can you elaborate?

How is the app’s offering as a digital tax service more efficient than direct filing by a tax consultant?

Efficiencies come from two things: reducing admin task and TaxScouts offering a simple cloud-based tool for tax preparation processes. A lot of this task is otherwise handled in person, by email, or by phone. For example: some accountancy practices still require face-to-face meeting to learn more about their client and bring in their passports. Instead, all of this can be done on web.

What were the first-time challenges faced by your clients and your team while using the app to file returns?

A lot of work we do is about assurance. People seek advice when they’re not what to do with the task. There is a lot of effort invested in designing our service to build a simple web tool that speaks in understandable terms. Taxes and accounting are full of jargons and complexities—and hiding the complexities from taxpayers while offering them effortless ways to complete their taxation has been our major focus and challenge.

How is the customer fee packaged: on monthly or on yearly basis? We charge a fixed fee of £99. This is a full service—that includes everything needed to carry out someone’s selfassessment on their behalf.

Do you classify your digital tax services based on premium value?

We don’t offer any premium services at this particular time.

This mainly refers to the fact that we’re combining automation and taxation advice provided by accountants. We let our app do the admin-related work that is tedious in nature. This allows our partner accountants to do what they’re best at— that is providing additional help and advice to our clients.

International Fin an ce



Can you tell us more about TaxScouts’ clientele?

There are 10 million people in UK who file their personal tax return every year, and as you can imagine our clientele is very varied. We have the “usual suspects” of among our clients—such as people who are self-employed, people in the gig economy and landlords. But, a lot of investors and entrepreneurs come to us because they want someone to take care of their taxation without being charged hundreds of pounds for the service. Seemingly, expats are also part of our clientele as they earn in the UK, but live abroad. TaxScouts has been a convenient method for them to get their taxes done on the web when they’re unable to use HMRC’s services in the UK.

What has been your clients’ collective feedback on the app?

Feedback from our early clients has been extremely positive. We’re just getting started, but so far we’ve only received five-star reviews on Trustpilot. For us, this is very encouraging and indicates that there is a clear need to for a simple and affordable tax preparation service.


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Your company has raised £300,000 to scale up the product. What are your plans in the pipeline for this year and the next?

The work is pretty much defined for us. As I mentioned earlier, a lot of our value-added service comes from automating processes to onboarding a personal accountant. Automating the processes and data collection for both: the accountants and the taxpayers is what will consume most of our effort. We’ve already integrated with HMRC for the purpose of retrieving employment tax data and allowing accountants to authorise themselves as being our clients’ agents. Yet. There is a lot to be done—and we’re currently focused on digitising the KYC process for accountants and working with Uber.

Breaking the glass ceiling, one code at a time UK’s leading Fintech startup, MarketInvoice, has appointed Rija Javed as its CTO – her personal journey clearly dispels myths about women in STEM, software engineers today and how technology can make finance functions less complex and more useful - Sindhuja Balaji

Rija Javed

Chief Technology Officer


arketInvoice, one of London’s leading Fintech startups, appointed Rija Javed as its Chief Technology Officer earlier this year, making her one of the first female Fintech CTOs in London. Given that finance and technology are generally maledominated industries, the appointment of Javed in such a critical function for a startup like MarketInvoice is deeply meaningful and reflects winds of change for gender diversity at the workplace. Javed’s career trajectory has been anything but conventional - she pursued Electrical and Computer Engineering at the University of Toronto in Canada. She worked for Research in Motion (RIM) and IBM as both a software developer and tester. Eventually, the coveted Silicon Valley beckoned her as she joined gaming company Zynga as a software engineer. Javed recalls, “I was one of the handful of female employees in Zynga and the only female engineer on the team.” She observed that even within engineering, women tend to take up roles that are


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focused on the frontend rather than the behind the scenes infrastructure. “I went to high school with some talented and bright young women, who were skilled in math and sciences, but refrained from pursuing them professionally. There is a lot of unconscious bias as well as preconceived notions about women pursuing STEM-centric fields, especially within engineering,” she says. Javed believes there is immense talent and potential across the spectrum, but not enough is being done to promote women pursuing careers in STEM fields. She hopes that her appointment as one of the few female Fintech CTOs in London will pave the way for more women to enter the tech and finance workforce in leadership positions. “I still think that senior leadership positions are male-dominated and there isn’t enough thought given to ensuring diversity across the workforce. A conscious effort has to be made to ensure there is diversity – not just in favour of women, but all kinds of employees like different socioeconomic backgrounds.”


The quest for diversity isn’t just another corporate mandate to fulfill, but serves the greater need to harness the right kind of talent to solve complex challenges in business. This is where technology can play a pivotal role. As businesses adopt digital transformation faster than ever, technology has evolved over time and become more advanced, nuanced and intuitive. The role of a software engineer has never been more crucial than now, believes Javed. Their role is not just to develop reams of code and remain in the sidelines of organisations as “trusted technology support”- some of the best startups today are being led by immensely talented tech folks, as they’re using their expertise and tech-driven processes to make the overall business successful. “A combination of technical knowledge and hands-on experience leading a business area can broaden the scope of growth for a software engineer,” says Javed. Her own experience is testimony to the same. After working in Zynga, Javed chose to work for Wealthfront, an online financial advisor, where she took the lead on one of their biggest infrastructure project – to build their new brokerage and banking platform. This was after Javed built Wealthfront’s first mobile app. In her four-year stint with Wealthfront, she helped scale the business significantly. “Engineering is all about solving problems and ultimately improving the experience for the client. The combination of technology and financial services helps provide the solutions for clients that traditional industry hasn’t been able to solve on its own. This is what she hopes to bring to MarketInvoice as well. Until now, MarketInvoice has funded business loans and 90,000 invoices worth more than $3.2bn. The company plans to enhance its technology offerings in the future, and Javed will play a critical role in ensuring this. She will be responsible for enhancing MarketInvoice’s engineering, data science, product and design teams. “As people are the most important aspect of any venture, we’re looking to expand the team, especially in engineering.” Javed’s journey in technology and finance is a reflection of changing times, paves the way for more workplace diversity and scope for complex business challenges to be solved with innovation.

International Fin an ce


Phishing for trouble? This fraud prevention company can help Ecommerce merchants are tasked with the responsibility of protecting themselves from sophisticated fraudsters, but in reality, their defences aren’t as strong as they should be. Rei Carvalho, founder of fraud prevention company, Emailage elaborates on what businesses need to do to protect themselves and their customers, and to understand why the email address is the key to minimizing the risk of online fraud Sindhuja Balaji

Business Insights


commerce is hugely popular today. However, the sector is also prone to sophisticated phishing attacks. Every day, millions of people fall victim to account takeover, data breaches and bust out scams, which puts businesses at risk of short-term financial loss and long-term reputational damage. Fraud prevention company Emailage is helping businesses across the world improve their cyber defences and keep fraudsters at bay.

Tell me a bit about Emailage’s main business model Emailage is a global fraud prevention and identity verification company which harnesses crowdsourced network intelligence to provide a predictive risk score based on an email address. Through key partnerships, proprietary data, and machine-learning technology, We build a multidimensional profile associated with a customer’s email address and renders a risk score for potential transactions. In turn, those organisations using our solution receive significant savings as a result of identifying and stopping fraudulent transactions.

How is Emailage tackling online fraud?

We are the world’s only fraud prevention solution that uses email metadata as a core factor to predict and prevent fraudulent purchases. We harness positive and negative signals associated with email addresses to help customers balance effective fraud detection with great customer experience. Companies across the globe use our predictive scoring on transactions of all types. Our network’s constant growth enables 90% of fraud detected to be driven by attributes coming from our proprietary algorithms. Before our founding in 2012, companies relied on their own siloed technologies and databases to incorporate email addresses in their fraud tools. This consisted mostly of manual processes, one-to-one comparisons and maintenance of internal blacklists. In today’s fast-paced digital world, this becomes hard to sustain for many businesses, particularly for those at the smaller end of the scale. However, Emailage has managed to change the entire fraud landscape by breaking these silos with unparalleled global coverage and a commitment to unite companies in the fight against fraud – one of our core mission statements. Our unique technology allows us to use over 150 different datapoints to assess whether a transaction is being made from a genuine source. When a call is made to Emailage the data intelligence is summarized into an easy-to-digest risk score. The scores range from 1-999: 1 being the lowest risk, and 999 being the highest. We provide these scores to our customers, who then decide whether or not to authorise a transaction. Emailage’s contributory consortium model database monitors for transaction velocity and criminal behaviours across the world. This gives us a multi-layered approach to assess an email address and provide a holistic view. Since our launch we have mitigated over $1bn worth of

fraudulent purchases for our customers – something we’re extremely proud of. What’s more, in such a short space of time, we’ve grown our client portfolio to include four of the six largest issuing banks, five of the top 10 eCommerce retailers, three of the five biggest global airlines, the top three computer manufacturers and the top five P2P money transfer companies. Additionally, many more are part of the network through partnerships with the five largest antifraud platforms.

Why is the company focused on the APAC region for expansion?

APAC is a focus for growth given the region’s rising rates of online fraud – as many as one in five APAC consumers have been victims of fraud, according to a recent report by Experian[1]. With this in mind, we’ve recently opened offices in Sydney and Singapore. Expanding into the region means Emailage will be able to support more businesses in a diverse range of global markets, while further bolstering its customer support and product development operations. When it comes to fraud prevention, having the specific knowledge and expertise on the ground can add huge value to our customers – particularly in an environment where needs and challenges can be very bespoke to different companies. We are based predominantly in Brazil, North America, and EMEA, with 107 staff members in seven offices across the globe.

What is the extent of risk that businesses face today due to online fraud? Fraud is rarely conducted by a lone attacker, there’s often organised criminal groups working collectively to commit fraudulent activity. Collaborative movements span continents, and fraudsters will freely exchange strategies and share personal information over the dark web. The funds raised from fraud often support other criminal gang activities such as: money laundering, drug trafficking, people trafficking and even terrorist financing. With this in mind, an attack on a business could actually be funding serious organised criminal activity across the globe.

Can you elaborate on the technology expertise required to deal with online fraud?

At Emailage, we believe in a scientific approach to risk assessment. This belief is made real with heavy investment in knowledge of risk management and modeling. What’s more, collaboration plays a key role in our unique approach too. For instance, our predictive fraud risk score is powered by crowdsourced network intelligence – this providing the really powerful insight that sets us apart from other players in the market. As a result, our team of specialist fraud decision scientists have access to an immense hub of usable data and insight that they can put to effective use in the fight against fraud. Many of these scientists work on product improvement – ensuring we stay ahead of

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Business Insights

fraudsters whilst also meeting customer expectations – as well as working to improve our predictive fraud risk scoring. To maximize effectiveness, our fraud decision scientists also put a lot of emphasis on working collaboratively with customers. There’s enormous value that can be gained by taking this approach. Firstly, it helps Emailage to establish a constant loop of feedback – allowing us to stay in-tune with the challenges and threats our customers are constantly faced with. What’s more, it allows our fraud decision scientists to get insights into trends in real time – this then being fed back into our pool of data. Secondly, it allows our customers to interface with Emailage’s experts and get the best practices support they need. The end result of all of this is that our clients have the peace of mind that they are minimizing fraudulent transactions and can concentrate on doing what they do best – maintaining strong and secure operations whilst growing their business.

What is the biggest security lapse you see in the ecommerce sector today?

The biggest security lapse is a general lack of ability to perform robust digital identity validation in a way that doesn’t add friction to the customer experience. For example, Digital Transactions reported that 35% of the orders rejected by large retailers turned out to be legitimate – up from 25% in 2016. As a result, it’s important to build a clear picture of who’s behind a transaction. Verifying only standard transaction data, such as name or address, means there are still lots of unexplored gaps in an organization’s visibility. There’s no way to tell if the person behind a transaction is actually a fraudster using stolen information. The email address is perfect when it comes to verifying customer identity. For instance, an email is collected during every transaction and there is a lot of history attached to a single address that cannot be faked. This includes whether the email account is active and/or valid, the tenure and ownership of the address, and what its previous transactional behavior is. All of these factors are analyzed and assessed by Emailage when it comes to providing a risk score.

Online fraud is seldom done randomly – it’s usually an organized attack. How do you normally tackle the same?

The main result of sustained, methodical probing at scale is that fraudsters know exactly which companies are vulnerable


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to attacks, and how and when they should make their moves. Therefore, we believe that assessing fraud risk exposure, regardless of current fraud losses, is critical for companies doing business online. For a fraudster, obtaining information is easy, but controlling the email address is an entirely different challenge, one much more likely to cause issues. Of course, they could use a customer’s real email, but the window of opportunity is far too narrow, as the consumer themselves will be alerted of the transaction and may be able to stop it before it even goes through. Similarly, staging an account takeover attack and impersonating the real customer is a complicated process, and cannot be employed at a level that’s scalable – this slashing potential profits right from the off. As a result, fraudsters use the most common method of tackling this issue: creating a fake email address. This process is free and easy, requiring almost no time at all to create an email that ‘appears’ to be real. That’s why what we have created at Emailage is such a key differentiator in the risk assessment industry. We can cross-validate the email history and patterns of millions of emails, creating a clear picture of what a real email behaves like. With access to a continuously evolving pool of data and insight, emails that lack salient pieces of information, or don’t quite add-up are easily identifiable to Emailage as being potentially fraudulent. As a result, this greatly enhances our hit rates in cases such as CNP, chargebacks, and synthetic ID fraud in a scalable manner. It’s this scientific approach to fraud prevention that is the reason that we’ve become so trusted in the field in such a short space of time.

Is Angel Investment Right for

Wealth Managers? At the WBAF (World Business Angel Investment Forum) 2018 annual congress in Istanbul, a discussion was led by entrepreneur and angel investor Peter Jungen, on the question of whether wealth managers should get involved in angel investing


he world’s major economies are experiencing unprecedented growth with the gross domestic product of 120 countries growing faster last year than in any previous year. By far the biggest increase is in Asia in general, and China in particular with a third of the world’s GDP growth. In 2017 the US economy grew by four times, Europe’s by two times and China’s by twenty-eight times! The Chinese economy has already equalled that of Europe and at the current rate will surpass America within the next two years. Start up companies are a huge part of this growth. It used to be that a new business would take fifty years or more to reach global status, but now many of the household


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company names, especially in tech industries, have been around for less than twentyyears. But start-ups wouldn’t even get off the ground without angel investors, let alone achieve the success that they may deserve. However, angel investing is a risky business with around seventy percent of start-ups failing within the first five years. Despite the risks, more diverse investment is needed. At the WBAF (World Business Angel Investment Forum) 2018 annual congress in Istanbul, a discussion was led by entrepreneur and angel investor, Peter Jungen, on the question of whether wealth managers should get involved in angel investing. Here, Peter explores the topic further.

Business Insights

Wealth Management, Family Office An entrepreneur will spread the risks of and Angel Investment Angel investors tend to be entrepreneurial and not averse to taking risks with their own money. They will look at hundreds of start-ups and maybe invest in as many as fifty, depending on the available capital. But they also accept that it won’t be a one-off investment and they may need three times the initial amount. That is because many start-ups will struggle through the first phase of their development and, to prevent them from failing, they will require a further equal amount invested. At a later stage, a third injection of cash may be needed to promote the growth of the business. That will have to be taken into account when looking at opportunities so that the investments are not spread too thin. While they might feel passionate about the fledgling businesses and help to nurture their development, they also watch out for when the time is right to exit and look for the next prospective business. Wealth, or asset managers are responsible for investing the wealth of other people. Their remit is to protect and grow the assets and this leads them to invest in a wide-ranging portfolio of mixed risk investments. As the investments are often long term, an exit strategy is not as much of an issue. Similarly, the wealth of a family office is usually “old money” which has been accumulated over many years. It is generally invested with the view of protecting the assets for the future generations of the family. Is there a way of making a connection between asset management and angel investment? Asset managers might worry that they can’t afford to invest in start-up companies, but angel investors suggest that they can’t afford not to.

How Can Wealth Managers be Attracted to Angel Investment?

Angel investment is not for the faint hearted, and wealth managers, although they might feel like they are missing the boat, are not necessarily qualified to risk the assets in their care in that way.

their investments so, if seventy percent of their start-ups fail, they will hope that the success of the thirty percent will more than make up for the losses. If an asset manager did this without the requisite knowledge they would stand to make a substantial loss. It was suggested at the WBAF congress that there could be a secondary market for angel investment in which there is a fund into which asset managers could invest. It would mean a smaller return on the investment, but also less risk. An alternative is for asset managers to enter into a partnership with an angel investor, in effect going “piggy back” on their investments, which again reduces the risk. Advice on choosing a suitable product in which to invest is also important. The current boom in tech start-ups developing artificial intelligence, virtual reality, driverless vehicles, sustainable energy and information and communication technology is proving lucrative. With much of this technology growth being in China and India, cross-border investment is being encouraged. Investing in a start-up is a risk, but it is not always necessary to get in right at the beginning. There is still money to be made by waiting until a new business is already showing signs of success and investing in their growth.

younger family and board members taking control. They have been born into the high-tech age and don’t have the same, possibly outdated, views of the risks of investing in start-ups as their predecessors may have done. It is an exciting time for technology and it is advancing faster than ever before. The new generation of young entrepreneurs and investors want get in on the ground floor and be a part of it.

Are Second or Third Rounds a More Attractive Option?

The general consensus among investors is that second, and even third round start-ups might be an even more attractive proposition than those seeking initial funding. This is because by this point, the business has gone through the crucial teething phase, perhaps even experiencing some failure, and will have learned considerable lessons which will set them up well for the future. It could be perceived that the business is more likely to be successful at the second or third round stages, meaning asset The Evolution of Asset managers may consider the investment Management more palatable. Wealth managers, particularly those Want to find out more? You can involved with the assets of Family Offices listen to the full speech here could find themselves being given more latitude with regard to angel investing - with the succession of new generations. video-2018/ Those businesses that have come from old money are now more likely to have

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Job Andreoli Senior finance lecturer and leader of the Incubator at Nyenrode Business Universiteit

How start-ups can improve their pitches Job Andreoli, senior finance lecturer and leader of the Incubator at Nyenrode Business Universiteit elaborates on the top qualities a startup can incorporate to improve their pitch to investors Sindhuja Balaji

Pitch Perfect


itching is a vital part of any start-up’s journey, where entrepreneurs’ visions, ideas and products are scrutinised by the investors that could truly be the difference between success and failure. With a wealth of information available about how to impress, it is surprising that some are still tripped up by mistakes that could be easily avoided. Speaking as someone who is often pitched to for coveted spaces on a start-up incubator in the city-centre of Amsterdam, these are the key ways that I think start-ups can improve their presentation skills.

Be precise and open

There are two main aspects to a successful pitch; being precise and open about what you are asking for and selling yourself as much as the company. The first requires a large amount of preparation, learning everything possible about the audiences you are pitching to, including their prior investments, critiques and what appeals to them. The second is far more personal and perhaps only achievable if you are dedicated to and excited by your start-up idea. A study by researchers at Princeton suggests that humans categorise others in less than 150 milliseconds of meeting them and that lasting impressions of your character can form within 30 minutes, so every second of the meeting counts. In order to start the pitch impactfully, the first message must detail your request, how much money you are asking for, whether you are looking for active involvement from the investor and if you require access to their network . The potential investor will want to keep this information in the back of their mind throughout the pitch so that they can weigh up the cost and risk of the project. One of the biggest mistakes start-ups make is failing to be specific about the funding and support that they need. Generalisations or ballpark figures do not inspire confidence in investors who want to feel that their money will be treated with the same respect they have for it.

Use data to substantiate your idea

Another way to win confidence is to build credibility throughout the pitch by using hard data as personal proof of problem solving and achievements of the project thus far. It is important to consider that providing a range or an estimation will never be as effective as presenting actual data and explaining how you came to that conclusion. Naturally, investors are interested in numbers but what is often overlooked is that they also want to be exposed to the process.

Persistent, responsible and dedicated pitches have a lasting impact

There’s a particular set of traits and attitudes that entrepreneurs must display in order to win interest. It goes without saying that persistence and dedication are two of the key qualities that potential investors are likely to look for. They want to feel the contagiousness of your excitement

and visualise the dream, so it often helps to bring along a prototype or presentation. They are looking for evidence of how you interact with others and your awareness of networks and potential partners as well as your ability to attract people to the venture. But, crucially, overzealousness is off-putting and being closed to feedback could likely result in disappointment. Remembering at all times that you are trying to secure an investment in yourself as much as your start-up should encourage the right attitude. A key quality that I look for – and think is often lacking from – most pitches is a commitment to responsible leadership and a clear demonstration of how it benefits the start-up. Showing that the venture provides a real value and return on investment to its employees and society at large creates the picture of manager most would want to invest in. At Nyenrode Business Universiteit, our start-up Incubator, where students pitch for a small number of coveted places, has a real focus on responsible leadership and encourages sustainability and stewardship from all of its ventures. Just a few months ago, a group of female students pitched for a place at our Incubator, showing a real commitment to their growth as responsible leaders. Although in its infancy, they are currently developing a social enterprise that will aim to bring female issues to light in a contemporary and sustainable manner though a unique business model. The venture will empower women by crushing the gender inequalities caused by menstruation. Their initial pitch stands out as an example of best practice, with a contagious sense of excitement and prototype product which gave us a feel for their vision. A clear openness to building and improving their idea secured them the one space that became available after a more developed start-up, Aquible, moved to California to roll out their plant-based protein product made from water lentils. When asked how she prepared for this winning pitch, one of the student entrepreneurs replied that she wanted to reach people on an emotional level whilst still stressing the seriousness of contemporary women’s issues. She aimed to open a dialogue about this and gave an impassioned and colourful pitch. It is this kind of entrepreneurship that investors enjoy to foster. Pitching is a challenge that all start-ups face and, with a huge amount of competition, success can be pivotal to whether the company is able to develop further. Ensuring that start-ups go beyond excellent preparation, exact figures and data and an interesting demonstration is key. If you can showcase why you are a worthy leader to partner with, your company will automatically inspire twice the confidence in a potential investor.

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Ten Biggest Legal Mistakes Tech Startups should avoid Every young business makes mistakes, and that’s pretty much how you learn. But wouldn’t it be handy if startups already knew what NOT to do before they encounter a problem while doing business? Karen Holden, director of A City Law Firm talks about the top 10 legal goofups that startups should avoid


his month my company A City Law Firm marked its ten-year anniversary, which has made me think back to our first year, how we started and some of the early mistakes we made. For one thing, within a year of our launch, we had to restructure the entire business and there were so many hurdles we had to overcome – in the early days it really was about survival. What’s fascinating is many of the mistakes we made back in 2008 are the same mistakes that many tech start-ups make time and time again. I know this because over the past decade we have represented hundreds of tech businesses – from start-ups to big businesses – and I find that time and time again the same issues crop up.


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Karen Holden

Director, A City Law Firm

Startup Insights

So, what are they?

Not having a strong shareholders agreement – or discussing, formulating and documenting the business plan with co-founders

Not having good staff contracts or hold this to ransom causing a costly dispute or loss of your code or design. options to incentivise them A large part of any company’s budget will be put towards recruitment, training and retention of its employees. Despite this, there is a real risk that those key people could walk out of the door leaving you without the requisite skill pool you need, but worse yet, there is a real possibility that they may also take all of their knowledge of your business and pass it to a competitor. Many businesses focus on many things but staff retention and protection against staff competition is often neglected. This is especially key in the tech world as the opportunities for work are so great. From a legal standpoint, it is important to: • Have tight employment, contractor, consultancy and sub-contractor contracts in order to protect your IP and confidentiality. It is also important to have restrictive covenants to avoid staff taking your know-how in terms of clients, IP or staff to a competitor or setting up on their own.

I intended to found my business with three others, however, I soon realised that our goals and objectives were sadly not aligned; our work ethics were very different and our long-term motivations out of sync. Luckily, I had drafted a very good partnership agreement so managed to break free from what would have been a disastrous relationship. Luckily this enabled me to continue with A City Law Firm with just me at the helm, but not all businesses I have encountered can say the same. Not only do you have to be careful to choose the right partners, but you need to clearly document your goals in a shareholder’s agreements. This means that as founders you can build upon the platform you have created together, but if it goes wrong you have a means to address the problem not just having to wind up the company. The key is choosing the right partners, talking candidly and asking the tough questions • Consider EMI options as they can at the beginning. give staff the feeling of being part of the fabric of the business and as you Having poor contracts or no succeed so do they in terms of profit contracts – hitting your cash flow sharing without actual cost in the short You need to understand your term to you. This also can attract more marketplace, your competitors and what specialist experts to the team where you need financially to be able cash is not readily available ; to grow. Overall though the key is to find ways Cash is king. Be realistic with to incentivise and look after your team. budgets and prices and ensure your If you can communicate your vision to contracts protect you - not only with the team so that they are working side clients but with employees, suppliers by side with you, this inspires loyalty and and contractors. It is fundamental that dedication as you are all working from you closely monitor payment timescales the same plan with the same goal. with clients, especially if you are working on large projects. Corporate clients may Intellectual Property & the mistake expect 60 – 90-day payment terms but of that ‘handshake deal’ your sub-contractors will not. IP ownership can only be granted or It’s also important you pay yourself a transferred (“assigned”) in writing. reasonable salary, especially when you As such, if your freelance coder or are seeking investment, otherwise, if the developer has no contract with your founder is distracted, the business is not business then they could actually own going to progress. Any investor will want the IP that they have helped design, to see this factored into any business not you. plans and financial models. If there is a dispute, then they could

You need to ensure you have checked these contracts carefully and that you actually have one carefully drafted in your favour. Many tech companies work with friends and often make arrangements based on goodwill, but when a dispute arises without a contract you are at the mercy of the designer. If you are bringing your designing or coding in-house, then it is especially key to convince an investor you have secured long-term staff and that the IP ownership will effectively transfer to you. Many businesses fail to check that their proposed company name or branding is free to trademark. This should be carefully checked before a large budget (or large budget relative to the size of your business) is set aside for branding and marketing as otherwise, you may find yourself having to start all over again.

Rushing to Investment and giving up equity in the company

I managed to self-finance my business throughout without taking in partners or investors. I did consider these at points along the way and even had offers of mergers and partners coming into the business but having carried out checks into these entities, I often found hidden skeletons and things I was too anxious to continue to explore. If you are seeking investment, which is often a necessity for tech companies scaling up, it is vital that you carry out your due diligence on what’s available, what the risks are and who the investor actually is. - Do they understand your sector? - Have they got the resources to add more money at a later date if that’s what you need? - Can you approach them if things go wrong? - Do they have competing interests in the marketplace? - What is your exit plan for them? - Have you also explored grants

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Startup Insights

available for tech, innovation offerings, R & D credits and other means of funding? Many people are often dazzled by the cheque and sign a contract… but that’s just the start of the journey. It is important that you consider whether you want to get involved unless you are certain you have aligned goals, exit plan and can handle a crisis together.

affects those in financial markets but includes among many others those in advertising, legal services/legal tech, recruitment, packaged holidays etc. Knowing your marketplace, sector and taking advice is essential prior to any public offering.

Don’t let the cat out of the bag

If you don’t have a signed NDA and if you discuss a potential or pending patent you could lose the rights. Discuss the details of your tech, design or offering in as much detail as you can to secure an investor or client, but where possible secure an NDA to protect your Not taking experienced advice and confidential trade secrets or ideas or creating an ecosystem Patents. They may be hard to enforce, Tech developers are necessarily often a concern of many so they don’t geared to be financial directors or Not being investor ready bother, but it’s a deterrent; it protects HR managers yet running a business When start-ups do find the right you Patents and it’s a good starting investor, a common pitfall is they are not these roles become fundamental. Not point for an injunction if someone tries investor ready because they haven’t got getting good advisors on board early to reproduce your tech. enough is a common mistake. A good their house in order. For example, they have not allocated lawyer, accountant and tax advisor saves you money and pain at a later and issued shares correctly. Their articles do not reflect the workings of the stage, especially if they can secure you EIS or another favourable structuring. A company. If an investor picks this up, it good FD helps secure investment and can make tech founders look careless cash flow by managing the budgets and could scare off the investor. and financial forecasts, they also add More broadly other things that the commercial know-how into your put investors off include inaccurate passionate pitch deck. Downloading statements that have been put in templates; googling advice I appreciate writing… such as: happens because of the costs involved, -“This is unique to the market, no one but if you want your business to succeed else is doing this”. This is often a bold you need tailored, personal advice and statement that just isn’t upheld or support. I know this is something I have accurate; benefited from greatly as I brought in - “I don’t need a salary for 1-2 years; consultants to help me and train me in I can use 100% investment on the my areas of weakness. Admitting these business”; wrong! No one will invest in gaps in my knowledge and bringing someone who can’t eat and pay their experts in has helped me scale up. bills! - “My business is valued at £10 million Not having skin in the game & because it’s going to be worth that in asking too little two years when we build our technology”. If you are seeking investment for your Can you support that with figures and tech business you need to start with market research? Be realistic and able securing some capital yourself or to evidence all assertions. through your contacts. This shows investors you have faith in your offering, Not understanding how markets which then means they are more likely are regulated to match. This is something I hear Many businesses, especially those in disruptive markets, need to be regulated frequently from equity investors, so try or are covered by additional regulations friends and family first. Another common mistake is asking for too little which or laws. cannot be sustained and then you have Many fintech or ICO companies to go back to the platform or investor for need to be regulated and choose to money which could result in them losing risk investment or token raises prior to taking proper advice or considering the faith in your financial model. You need to proper process exposing you to an FCA forecast and present realistic figures so you don’t ask for too much or too little. investigation. This is not an issue which only


Sept embe r 2 018

Best practices for a lucrative private equity exit The last critical step of the private equity (PE) investment process, the exit, can greatly affect the final return on investment. Even after years of doing all the right things— including taking a proactive approach to ownership, aligning performance incentives, and being thoughtful about M&A—a poorly planned or executed exit can turn a good deal into a mediocre one. Private equity exits are becoming more challenging. Buyers are more sophisticated—and more demanding—than


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Private Equity exits have become challenging. But they can be lucrative and valuable if PE firms can stick to these three best practices suggested by McKinsey & Co.

ever. Rapid technological change makes it tough for buyers and sellers to reach a shared understanding of risks as well as potential sources of value. And many owners struggle to create value past the initial one to three years of the holding period, during which the primary value levers are pulled. Together, these challenges make the exit process trickier to successfully execute and lead to a widening spread between strong and weak exits. For the past four years, the global value of PE exits

Investor Insights

surpassed $500 billion per year. In 2017 alone, PE firms completed 2,475 exits. As the number of exits grows and the market remains “hot,” the list of challenges has increased, making successful exits tougher and more complex. In 2017, overall M&A multiples in the United States, including PE multiples for secondary buyouts, remained at their highest levels in more than a decade at 10.5, compared with 9.4 in 2014.2 In such an environment, deals are expensive and sellers expect increasingly better terms. Despite the complicated environment, PE investors can overcome these obstacles and achieve exit excellence through three distinct actions.

Three best practices for exit excellence

At the beginning of every deal, best-in-class PE firms have a vision for both the exit route and timing that they continue to refine. Indeed, successful sellers force themselves to regularly revisit this exit vision—often every six months—through the duration of the holding period, as the constellation of influencing factors is always in flux. In addition to frequent checks against the original exit strategy, the most successful PE investors undertake three critical activities that lead to exit excellence.

Perform a readiness scan 18 months before the exit

As part of exit preparation, successful sellers execute a readiness scan of the company and the exit environment 18 months prior to the anticipated exit and refresh it a year later. The initial scan is close enough to the anticipated exit that owners can have market and cycle visibility, and it is also still far enough out to address potential weaknesses in the investment story and establish a meaningful performance track record. Say a scan uncovers production delays in the launch of a new product or an increase in customer churn. Over the course of 18 months, it is reasonable for management to fix those problems and get performance trending in the right direction before these issues might turn off potential buyers.

The readiness scan should address a few key questions:

Is the proposed timing still right? What is the expected nearterm market situation and performance trajectory? Is there noise in the market about the company’s industry? Are exit valuations in the sector attractive, and how are they trending? Is the originally anticipated exit route—a dual listing, IPO, or trade sale, for example—still valuable and still the best path forward? Beyond the sources of value identified upon acquisition and in the first one or two years of the holding period, what other performance improvements might lead to capturing more value? What performance milestones must be reached to confidently engage in discussions with potential buyers or investors?

Does the company have a healthy pipeline of valuecreation initiatives that could extend after the sale to the next owners? And is the management team ready to commit to executing those initiatives after the change of ownership? To perform the readiness scan, many of the most successful PE investors create an exit committee, which often consists of the fund’s investment committee members, the responsible deal team, and, if applicable, the head of portfolio operations and other members of the operating team.

Focus management on continuing to capture value while preparing for the exit and posttransition process

Creating value through performance improvements in the first few years of the holding period is critically important, but the best owners continue to push hard on value creation throughout the entire period. Indeed, as potential acquirers look closely at the final 12 to 18 months prior to exit, management must ensure that the company demonstrates a track record of performance improvement that can be carried forward to create future value. The ability to further improve performance will depend on current market conditions and, of course, on what value levers have been pulled. Consider, for example, a company that has captured all potential upside from transactional pricing optimization in the initial one to three years of the holding period. Management may then shift to consider additional value-based pricing opportunities for particular client situations or services. Similarly, when a company has already streamlined its supplier base and renegotiated major procurement contracts, it might consider ways to remove risk from its supplier base. While the main focus of the management team should be on pulling the remaining value levers that result in immediate impact, it should also work to identify additional long-term ways to create value. Transactions attract buyers only if buyers are convinced that they will be able to add value throughout the upcoming ownership period. That means to motivate buyers, sellers must leave a few clear, strategic options and performance-improvement opportunities on the table. Sellers should maintain this sometimes counterintuitive mind-set throughout the entire ownership period and develop concrete, actionable strategies that a new owner can execute from day one. Sellers and management should also be prepared and willing to openly discuss why these opportunities have not been pursued. Perhaps market timing was not quite right for certain opportunities, for example, or the company has not yet attained the required level of technology maturity or scale.

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Investor Insights

“A combination of technical knowledge and hands-on experience leading a business area can broaden the scope of growth for a software engineer.”

Prepare management to address potential problems and give forthright answers to buyers’ difficult questions

Obviously, investors are disconcerted by unpleasant surprises such as poorly explained risks. Nasty surprises often crop up in nonoperational matters such as substantial unfunded pension liabilities, pending litigation or labor disputes, pending changes in regulation, or particular exposure to certain macro risks. Also, sellers must be diligent in their analysis of how a company is positioned in its market and realistic about valuecreation potential. For fear of souring a potential sale, many PE investors are not as forthcoming as they should be. In our experience, however, buyers almost always uncover such material issues, and the more sellers and company management are prepared to talk through these, the better. So just as an auditor should analyze and reveal the good and the bad to a client as soon as they are uncovered, sellers— and company management—should disclose issues to potential buyers as quickly as possible and preempt their questions.


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For example, in its first sale attempt, one PE-held building materials company that supplied products only to a specific niche construction segment failed to determine its exact exposure to fluctuations in the overall construction cycle. At that moment it was in a favorable position, with more fundamental headroom for near-term growth than the broader construction industry. Despite this advantage, the failure to disclose its full risk exposure to potential investors killed the potential transaction. In its second attempt, however, the company’s management spent a significant amount of energy appropriately articulating the nature of the cyclical risk and its underlying drivers. This effort led to a more informed buyer and, ultimately, to a closed deal. In addition, certain operating or back-office issues, often related to IT, are recurring concerns for strategic buyers. Problems with IT integration and past underinvestment have proved to be ordeals during many integration efforts. Any signs of potential IT integration issues tend to either deter buyers or substantially lower valuations.

By putting themselves in potential buyers’ shoes and by taking care of these issues—even if doing so might postpone the exit—sellers are doing the right thing. It both takes the burden off the buyer, which now doesn’t have to deal with potential problems, and it tends to reflect favorably in a buyer’s valuation of the company. Further, it demonstrates management’s ability to deal with complicated matters. Exits are rarely easy. But a concerted effort to improve exit performance— one focused on readiness, continuing value creation, and transparency—can ultimately have a huge impact on returns. And of course, the best possible exits set up new investors to continue to create value.

About the authors:

Alastair Green is a partner in McKinsey’s Washington, DC, office; Wesley Hayes is a partner in the London office; and Laurens Seghers is an associate partner in the New York office, where Eyal Zaets is a consultant.

‘Have backbone; disagree and commit’ Identify your strengths

All leaders have their own talents, which are used in different ways to bring out the best in themselves and others. Write down what you believe are your strongest assets and skills. Keeping these in mind, decide what the best steps are for you to progress your career. Try not to compare yourself with others, but do approach people who inspire you to ask for their best advice.


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This is one of Amazon’s leadership tenets. Read on to know more about how leaders are made in one of the world’s largest companies through Aparna Mahadevan, senior solutions architect in Amazon’s Alexa Skills Team

Develop existing skills

Focus on developing the skills you already have. Exercising and building upon what you are already good at will allow you to efficiently work towards reaching your full potential. Becoming an expert in your field can give your more value as a leader, opening up new avenues for your future and teaching you how to be more receptive to new opportunities that arise.

Smart Tips

Find a mentor

A coach or mentor is invaluable in guiding you towards the best career path. A mentor will also teach you how to avoid common and recurring obstacles. Mentoring can be incredibly valuable for both parties, so try not to feel intimidated when approaching people. When looking to make your next career move, it’s worth investing in a mentor, even if you are fairly senior in your field.

Get a different perspective

Leaders need to be right, at least most of the time. To do this, you must not only have strong judgement and good instincts; but also seek out and act upon advice from people of different backgrounds and diverse perspectives, listen carefully and work to disconfirm their beliefs. Opening yourself up to different perspectives will help you make more accurate decisions that are driven by long term thinking and experience, rather than emotions. Leaders are externally aware and they look for new ideas and inspiration from everywhere.

Network, network, network

Networking can be difficult, especially if you’re naturally introverted, or in an environment where you are in the minority. However, networking can be pivotal for career advancement and achieving success as a leader. It helps you gain a greater understanding of the landscape outside of your own workplace and in turn, helps the outside world know more about you. Be curious (actively ask for somebody’s insight, most people love sharing their stories and giving advice), keep in regular touch with your network (you’ll be amazed by how much help you can receive throughout your career and even your personal life) and be yourself. When networking, it’s easy to just focus on discussing business, but remember that the people you meet also need to remember YOU. So try to inject your personality everywhere you can.

Take risks

Leaders must feel comfortable taking risks. As Amazon founder Jeff Bezos said recently, “To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Most large organisations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there.” Speed matters in business. Many decisions and actions are reversible and do not need extensive study. At Amazon, we value calculated risk taking and a bias for action - it’s a key attribute we look out for when hiring leaders.

Aparna MAHADEVAN Senior Solutions Architect, Amazon Alexa Skills Team One of Amazon’s core leadership policies is “have backbone; disagree and commit”. Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Brilliant leaders also have conviction and are tenacious, refusing to compromise for the sake of social cohesion. Once a decision is determined, they commit to it wholly. This is what we look for in leaders at Amazon.

Insist on the highest standards

Natural leaders have relentlessly high standards – a lot of people may think these standards are unreasonably high. But it’s so important that leaders are continually raising the bar and driving their teams to deliver high quality products, services and processes. The best leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed. Insisting on the highest possible standards also means accomplishing more with less, rather than just throwing resource at a problem. Constraints breed resourcefulness, self-sufficiency and invention – all of which are key leadership qualities we look out for at Amazon.

Say ‘no’ more often

Saying no isn’t just freeing – it’s necessary. If you disagree with a decision, explain your stance and give evidence. Every boss is unique, but as a rule, honesty is always the best policy.

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puneet taneja

Head of Operations at Intelenet Global Services

‘Customer experience must be a key priority for banks as card payment rise’ Banks can now ensure customer service excellence as the number of card payments rise



otal card payment volumes are expected to rise from 14.3 billion payments in 2018 to 21.9 billion in 2026, as customers increasingly swap cash for plastic money in the transactions that they make. This increase is in line with growing customer demands for a swift and frictionless shopping experience. As society shifts towards a cashless system, it is crucial for bank executives to ensure easy customer on-boarding, seamless payment processing and effective customer complaint handling.

to customers. A large part of payment processing includes monitoring suspicious activity. Contactless card fraud is now proving more problematic than cheque fraud, overtaking the latter in the first half of last year and hitting £5.6 million . By making use of the wide variety of technology available, a scalable solution to transaction authentication can be created to detect fraudsters. Automated systems and Artificial Intelligence (AI) programmes can be used to scour previous transactions and customer spending behaviour to single out Customer On-boarding suspicious activity. To combat fraud, it With the increase in consumer spending is not only imperative that banks track on cards, competitiveness amongst customer transactions in order uncover lenders who offer credit card services any abnormal activity, but also to have also goes up. Consumers have all of the right resolution processes in place the media channels and comparison for customers reporting fraud. sites at their disposal to shop for the best deals and finalise transactions. Effective customer service For card issuers, this multichannel To stay competitive, financial services environment presents new opportunities need to ensure a seamless customer for distribution innovation, but also experience across all channels. In the potential threats in the form of emerging digital age, customers demand more models. These models leverage self-service options, anytime, anywhere. alternative distribution networks to Banks and financial institutions can acquire customers and provide superior attract and retain customers by customer experience. For instance, providing a compelling omni-channel American Express have released experience across a number of a new range of credit cards that touch points. customers can sign up for at their local Expanding the service offering to supermarket, or via an in-app purchase include self-service options, chat-bots when they sign up for challenger banks, and telephone banking will further such as improve customer satisfaction by ensuring that clients who struggle with technology will still be able to access Based on the rapid increase in credit banking services. The industry can card usage, traditional players have tap into innovations that, for example, to equip themselves with the right recognise different customers’ voices technology to ensure speedy payment and keywords when they telephone processing. By automating certain a bank. This enables the bank to aspects of the process, including predict the purpose of their call and customer checks and transaction automatically forward them to the most verification, banks can free up staff relevant department, streamlining the members to take on more strategic customer experience and saves roles within the bank, including providing them time. a customised experience

Seamless payment processing

One large retail bank, realising that customers were acquired and served through streams of activity across channels, shifted from its classical “funnel” approach to acquisition to one focused on cross-channel “journeys” that follow customers across multiple interactions. Upon embarking on this change, the bank realised that inconsistencies across channels were making them a difficult institution to work with, as well as increasing operational cost and risk. As a result, the bank created a cross-functional, front-line-led response to build a unified customer experience across channels, targeting the most common journeys taken by customers during the first 90 days of their banking relationship. The result was a 40 percent increase in products per new account and a 30 percent drop in time to open new accounts. If the increasing usage of credit cards is met with a robust response from service providers, the upward demand will gain fast momentum and benefit all. Using the right technology to provide a seamless customer experience, while gaining customer trust through an effective payment processing and fraud prevention system, will give financial services firms a competitive edge in the age of the customer.

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Remote Gaming Duty should online gaming operators be looking beyond the UK?


uch has been written about the likely impact of the impending increase in Remote Gaming Duty (RGD) on UK-licensed operators. As the Government looks to recover an expected £400m shortfall in tax revenue resulting from its pledge to slash maximum FOBT stakes from £100 to £2, it has its sights set firmly on the online betting industry. At this stage, we still don’t know the exact percentage increase. Some experts predict that the duty, which currently sits at 15%, could rise as high as 25% and be brought in as soon as April 2019. Understandably, many in the industry, including the Remote Gambling Association (RGA), have serious doubts about the rationale, objectivity and likely implications of the increase. Whatever the increase in RGD, with the sector coming under increasing scrutiny, and now a less appealing tax environment, operators may want to look at other territories to make up for the fall in profits that they’re likely to suffer in the UK. But is the picture much different in other major markets


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Remote Gaming Duty (RGD) is likely going to increase, and will directly impact UK-licenced operators, compelling them to explore other avenues to make up for the profit deficit

around Europe and North America? As governments look to balance the books amid slower than anticipated economic growth in most regions, are they too looking to increase tax revenue from online gambling, and are they also looking to increase industry regulation to protect the vulnerable? When it comes to weighing up the opportunities for entering or expanding in different territories, operators need to look at the size of the market and current trends within betting behaviour, as well as the existing regulatory and tax landscape. As you will see from the list below, highlighted are some trends and likely developments in a few key markets. Across number of territories, there is uncertainty surrounding future or planned legislation and how it might impact upon operators.

Spain: operators looking to target a new market with huge potential for growth could do a lot worse than consider Spain. For a multitude of reasons, the market in Spain has remained relatively small, but the signs are that things are starting to change. Recent figures showed 14.5% year-on-


year growth in sports betting, and a staggering 51% increase in casino and 42% growth in poker. The launch of a shared liquidity network with France will surely see the poker vertical grow further still. Whilst Spain remains a relatively immature market with strict regulation, there is certainly an opportunity for more supply, hence why more operators have recently been allowed to apply for licenses. There is still a long way to go before Spain really scales up and becomes a big player at the European level. However, it can no longer be ignored.

Portugal: the Portuguese gaming regulator (SRIJ) opened a consultation into the country’s online gaming regulations in January, effectively putting the entire sector under review. The market up until this point has been stagnant, with regulation and high taxation rates making it very hard to drive any sort of margin through sports betting. Experts predict the Government may lower duties and streamline the requirements to obtain licenses in an effort to open up the market to foreign investors in order to drive growth (and its own tax income). Beyond this, we may also see the introduction of new categories and types of gambling into what up until now has been a very restricted market (only fixed-odds sports betting, mutual or fixed-odds horse racing and games of chance are currently available). The picture in Portugal is likely to change significantly over the next couple of years, and shrewd operators will be closely monitoring developments. Germany: With the licensing

debate still on-going, this creates much uncertainty around processing, especially in the wake of recent developments surrounding online casino, which led to a few high-profile operators pulling out of the market. Despite this, the German market still remains lucrative and is one of the largest in Europe.

Sweden: the Swedish government recently published its revamped national gambling policy, which will place a greater emphasis on consumer protection. The new legislation will also open a licensing window for online gambling operators, with the application process beginning on August 2018 and the new regulations coming into force on 1st January 2019. New Swedish online gambling incumbents will be taxed at 18% gross gaming revenue charge, with the government Owen Tustin placing no taxes on consumer play or winnings. VP Gaming, Relationship Management, Now that there is clarity emerchantpay over the new regulatory highly likely that over the coming framework, it is definitely an years the US will become one of the attractive proposition for operators. Of most attractive markets for sports course, that means that competition for licenses and share of wallet is set to betting operators. Evidently, the sheer scale and become even fiercer. pace of change occurring within United States: as has been widely many territories offers operators new reported, we’ve seen two US states opportunities for growth and expansion. (Delaware and New Jersey) take their In an increasingly turbulent regulatory first legal sports betting transactions environment, operators need to ensure over the past few weeks. Other states that they have the agility to react quickly that have already passed legislation, to what is happening in any given such as Nevada and Pennsylvania, are market. The online gambling industry likely to follow soon. has always been characterised by Analysts have predicted that the constant change, but you get the sense sports-betting industry in the US could that things are about to speed up a generate at least $7bn annually. Already whole lot more!! we’ve seen UK operators applying for licensure in New Jersey, and this trend is set to continue as UK operators eye up what could well be the biggest opportunity in online gambling for several years. Of course, each state is different, with its own regulatory and tax framework, so operators need to assess the opportunity in each state individually. Some states will take longer than others to become regulated. Given the populations of larger US states, it’s

International Fin an ce


Breaking Down DevOps Misconceptions Across Financial Services The term DevOps has been frequently misinterpreted in the financial servicessector. This article dispels myths about DevOps in this sector DevOps is first and foremost a cultural change. In essence it’s the amalgamation of software development and operations. It aims to improve operational excellence and bring integral value to the business. Although the process of combining software development and operations is relatively straightforward, and has already reported tangible success in improving efficiency and management practices, the DevOps methodology has attracted a fair share of confusion and therefore many businesses have not fully reaped the appropriate benefits.


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Increasing numbers of business and IT teams choose to adopt the process and actively implement DevOps into their day-to-day operations. Although numerous opportunities can be reaped, one must also note the challenges that have consequently been put under the spotlight.

Back to Basics

For businesses wanting to reap the full benefits of DevOps, the opportunities are sizable. Over a two-year period, DevOps has been proven to more than double the number of software releases and reduce the number of businessimpacting incidents by almost two thirds. The same


same programme is aiming for another doubling in the number of releases this year and a further 25 per cent reduction in business-impacting incidents. DevOps involves taking a holistic view of the processes that govern all functional teams, from Business, Development, Quality Assurance and Support, through to InfoSec, but is also tightly intertwined with the existing organisational processes such as compliance and audit.

Diffusing the myths

At Brickendon, our DevOps team was nominated as finalists in two categories of the inaugural DevOps awards in 2017, and has successfully saved financial services companies millions of pounds by implementing its innovative DevOps methodology. From our years of expertise, we’ve therefore set out to diffuse the most common DevOps misconceptions and help others benefit from DevOps restructuring: MYTH: DevOps is only about implementing changes across IT teams. Successful DevOps implementation looks not just at the software delivery, but at the end-to-end organisational process. This is with a view to transforming the isolated processes into a synchronised organisational procedure. The solutions require cooperation and collaboration from across the whole business. It brings together not just development and operations but the entire business delivery chain including change management, compliance and even the financial budgeting process in a very agile way. It removes walls, gates and transitions, increasing accountability for the full end-to-end software development and business process. MYTH: Project management becomes unimportant. Many think that by implementing DevOps there is no further need for documentation as communication between teams is integrated. In reality, software delivery consists of numerous moving parts, each in a constant state of flux, so it is virtually impossible to keep every team member up-todate. As a result, DevOps promotes the use of a centralised visual work board, such as a kanban board, which tracks every task, visualising the whole project to identify showstopping bottlenecks, gaps, dependencies and constraints to be identified, managed and escalated by the project management team early in the process. This increased transparency makes it vital that project managers are more involved directly with the project sponsors to define the strategic roadmap and ensure the plan stays true to course. MYTH: Security and compliance do not benefit from DevOps. Many believe the DevOps process enables development to take over the security function. To the contrary, DevOps integrates security into the IT process from inception, in order to ensure that InfoSec issues are identified at the start of the project and addressed early in the SDLC. MYTH: DevOps is a one size fits all, ready-made solution. On the surface, DevOps implementation, including collaboration,

Iya Datikashvili Director, Brickendon

integration and automation, seems straight forward, but there are many intricacies involved in the process. Although material information is available on DevOps, there is no off-the-shelf solution that can be simply applied to any organisation to transform it into a DevOps machine. The reality is that each team is at a different stage and some will naturally be more mature than others, so there is no use impeding teams already doing good work with a blanket approach. Each team needs to adopt and mature their DevOps journey individually. MYTH: Automation is only about integration, delivery and testing. Automation in DevOps goes beyond CI/CD, or functional and E2E system testing. It also addresses problems with scalability, consistency and reliability, and aims to support the rapid changes in business demands, while ensuring deployments are a low-risk process and industrialising them for speed and safety. The key for businesses is to remember that without a change in mindset and the promotion of accountability across the whole organisation, the full benefits of DevOps will not come into fruition. To put it simply: you build it; you break it; you fix it. With DevOps there is no place for passing the buck. By adopting the DevOps approach, organisations can save themselves considerable amounts of time and money. The approach also ensures that the software delivery is of a highly superior quality because the whole team is fully aware of what is happening at each stage of the process.

International Fin an ce


Are SME’s the new financially excluded?

The banking network is shrinking, and it is bad news for businesses as it can lead to financial exclusion, expected to hit SMEs the most


BS announced the closure of 162 branches at the start of May. “RBS branches in England and Wales, and the NatWest business in Scotland, had been earmarked for a new ‘challenger bank’ under the name Williams & Glyn,” according to the BBC: “However, that project is now not going ahead and the bank has reviewed its branch network… The latest branch closures follow existing plans to close 52 bank branches in Scotland that serve rural communities, and 197 NatWest branches.”[1] This continues an ongoing trend that has seen all major high street banks reduce their footprint on those same high streets (see graph below). We’ve reported before that 802 branches closed in 2017 alone. Some 1,500 towns had become branchless according to a 2016 report from the Federation of Small Businesses.


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Damon Walford CDO, ThinCats


Why does this matter to Britain’s businesses?

Government ministers warn of financial exclusion. The term ‘financial exclusion’ normally conjures up images of the socially marginalised – the elderly, sick, unwaged with no access to bank accounts, loan sources and the like that the rest of society takes for granted. ‘Financially excluded’ and ‘SME owners’ are terms you wouldn’t normally put together. But it is happening. The reduction of bank branches is indicative of a commensurate reduction in other services – in this instance, provision of loan capital to SMEs. The problem is, the reduction of banking staff means a reduction in skills. You can’t replace everything with a nifty algorithm. Some 12% of lenders didn’t understand the SME sector and a further 10% didn’t have the necessary understanding of borrower’s individual needs, according to Close Brothers. Only 20% of SMEs believe their bank’s advice always meets their needs. If this feels like a dig at conventional lenders, it really isn’t. Banks are caught in a cleft stick, as Deloitte explains in a recent report: “For almost a decade, banks have been given the ultimate mixed-message: ‘lend’ and ‘don’t lend’. Regulators want them to be less risky, but politicians don’t want to see small businesses starved of funding”[4] This dynamic – or lack thereof – saw bank lending collapse in the wake of the financial crisis as banks, caught in the eye of the storm, attempted to repair their balance sheets. After this, regulators – never ones to miss the opportunity to securely bolt a door once the horse is well over the horizon – imposed strict risk controls on their lending. While the chart below demonstrates that bank lending has recovered somewhat, it’s still below pre-crisis lending levels, regulation means that levels are unlikely to return to what they were

more than a decade ago. Indeed, as you can see from the graph below, gross lending declined year on year to 2017. The landscape has fundamentally changed, and a space has opened up, probably permanently. While the Deloitte study optimistically states that “2018 will bring about dramatic changes

in small business lending” as a result of General Data Protection Regulation, which compels banks to share this data with any authorised third party, meaning “more lenders, better credit decisions, and fewer bad loans”, this should come with heavy caveats. Banks will still have the same lending constraints. What’s more,

International Fin an ce



Banks will still have the same lending constraints. What’s more, quantitative data on which to base lending decisions will be more available, but one must have the skills to interpret the information and the operational freedom to act on that interpretation. The combination of reduced resources – indicated by falling branch numbers – and restrictive regulation pen banks in on both sides. Fortunately, while traditional lenders are hemorrhaging resources, alternative lenders – like us – are developing them. We know that no two businesses are exactly the same, and hands-on expertise is needed to determine the best way to structure an SME loan. ThinCats has been expanding its business development team to ensure that we can offer businesses loans that suit their needs, because we understand those needs. Even with a greater breadth of data, there’s still a strong likelihood that banks’ computers will still say no, or offer capital on terms that may make business owners wince. The good thing is, there’s now an alternative.


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Why CFO’s should be involved in The supply chain for financial stability Greater involvement in the supply chain will help CFOs achieve financial stability in the age of disruption

Will Lovatt

Vice President EMEA, LLamasoft



eading CFOs are forging a greater synergy with supply chain operations to safeguard their organisations against further financial disruption. Previously sitting in the periphery of the supply chain, those CFOs now recognise it as a source of cost reduction through increased efficiency and optimisation. The shift in CFOs’ supply chain involvement is a direct result of the cost-pressure that organisations are faced with in increasingly competitive markets – markets that have also become prone to various waves of disruption. From the financial crisis to natural disasters and political upheaval, there are associated costs that CFOs must contend with and a better understanding of their organisations’ supply chains, helps CFOs be better prepared for all eventualities.

Disruption on the rise

In 2016, one in every three organisations reported losses exceeding $1 million (approximately £750,000) in just one year according to the BCI Supply Chain Resilience Report, with loss of productivity, cost of working and damage to brand reported to have had the biggest impacts on organisations. And those losses are on the rise. Between 2015 and 2016, the loss of productivity rose from 58 percent to 68 percent while the cost of working rose from 39 percent to 53 percent. Reported damages to brand or reputation rose by almost 30 percent in the 12-month period, but the most shocking figure is the 43 percent of organisations that failed to insure for losses they encountered. CFOs that are yet to take a deeper interest in their organisations’ supply chain can mitigate the risks associated with disruption, no matter how unexpected. But achieving this requires the CFO to have the clearest possible visibility of the supply chain as a whole. 2016’s Supply Chain Resilience Report also revealed that 66 percent of respondents did not have full visibility of supply chains, so those CFOs ready to roll up their sleeves must be provided with a high level of visibility.

A clearer view

Once CFOs are provided with a greater view of the supply chain, they will be able to effectively recognise problem areas where greater efficiency and other cost saving measures can be applied, with the added ability to plan and model the supply chain for various disruptive scenarios. Nike is a prime example of an organisation using supply chain design to improve its competitive advantage and safeguard against disruption. The sports brand is in close competition with its rivals and has identified the reduction of lead times to the end customer as the area where it can glean a strong consumer-driven competitive advantage. Through close analysis of its supply chain, Nike has been able to meet is consumer target, reducing the lead time from 60 days to just ten days, reformatting its shipping network with strategically located nearshore facilities and investments in automation increasing efficiency.

Such a feat is only achievable with relevant data easily accessible for analysis, as well as the ability to collaborate easily with supply chain executives and other internal stakeholders invested in the supply chain. Providing CFOs with a clear view means ensuring that data is easy to access, digest and adjust for various readings and angles, providing separate narratives and outcomes when planning for different scenarios.

The key to supply chain success

In order to assert their influence on the supply chain, CFOs require the right supply chain design software that enables them to access, manipulate, share and discuss live data from all points of the supply chain. Only when provided with this digital toolkit can CFOs make informed decisions that impact the bottom line. Data manipulation is essential to effective scenario planning, ensuring that the supply chain is safeguarded against any potential disruption. Software that enables the user to run different scenarios and simulate the effects of disruption on the models being tested will help CFOs make certain that the supply chain can withstand the same realworld scenarios. Collaboration with executives and stakeholders across the supply chain is perhaps one of the most important aspects for the CFO, yet traditionally there would have been very little communication between either party. Effective supply chain design software must provide all who are invested in the supply chain with easy means of communication within the platform, providing an even greater level of visibility in supply chain operations while also promoting collaboration. While organisations are becoming increasingly prone to disruption and are counting the costs, the CFO is presented with a significant opportunity to take greater control in the organisation’s financial stability through smarter, more informed decisions based on clever use of data and easier collaboration. With the right supply chain design software, this is now entirely possible.

International Fin an ce


How the fight against NPL is shaping Europe’s debt market There is a big challenge to overcome NPLs in Europe’s debt market and businesses are trying to figure out the best way ahead without much damage to the economy


ince the 2008 financial crisis, European banks have been dealing with a serious non-performing loan (NPL) problem. NPL refers to loans where the borrower has not made scheduled payments within a specified period; once this period is up, banks must provision against potential losses should the customer fail to repay. Although the volume of NPL fell from its €1 trillion peak in 2016 to around €910 billion in Q3 2017, there’s still a long way to go to reduce NPL volumes to pre-financial crisis levels. High volumes of NPL matter, because they can be a significant drain on a bank’s performance. Not only do they require higher levels of provisioning, which decreases profitability and reduces regulatory capital, they also tie up a significant amount of human resources. These two factors mean that NPL can impact a bank’s ability to lend money, which will in turn have an adverse effect on the economy as a whole. Banks have recognised the scale of the challenge they face and are putting significant resources behind tackling


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NPL. While there is some divergence in approaches across Europe, the biggest weapon they have in their arsenals is to sell NPL portfolios on to debt purchasers who believe they can turn a profit on the loans in the long term.

NPL Divides Europe

The European NPL story is a nuanced one. The continent can be split and analysed in three main blocks, with each tackling the NPL problem in a different way, and with varying degrees of success.

Block 1 — Countries with NPL ratios above 20%

This block, which includes Greece and Cyprus, has seen little movement in the past three years with regard to average NPL ratios. Systematic barriers, such as restrictions in Greece on loan book sales, are limiting progress. The Loan Servicing Platform, a framework in Greece comprising investors and 3rd party servicers overseeing the effective restructuring and management of NPLs for a large number of banks in Greece, is expected to have an impact.


laws before the crash.

NPL and IFRS 9: Changing the Debt Purchasers Market

Block 2 — Countries above the EU average NPL rate (5%) but below 20%

This block, which includes Ireland and Spain, has seen the most improvement over the past three years, with falling NPL rates and increasing coverage ratios. These countries are actively addressing their issues through state Asset Management Companies, bad bank units and loan book sales.

One consequence of this drive to reduce NPL portfolios across Europe has been the rapid growth of larger firms in the debt purchasing market, as banks look to shed unprofitable portfolios. As a result, debt purchasers and debt collection agencies have become the preferred location for financially vulnerable customers. This development has been driven by regulatory pressure and amplified by a new force: the IFRS 9 accounting rules. Under the previous IAS 39 regulation, loans were classed as NPL at 90 days past due (DPD). However, under IFRS 9, Bruce Curry this border has moved to just 31 days. EMEA Collections & Recovery At this point, the bank must increase Business Lead, FICO impairment from 12-month expected credit losses to lifetime expected into future contractual and physical credit losses across all the customer’s extensions of a creditor’s accounts: a cliff-edge banks are operating models. naturally keen to avoid. Define policy changes for the return of exited customers. Banks Five Next Steps for Banks should assess the circumstances under NPL must be tackled as part of the which they will welcome back customers wider challenge banks face over the in the future. next few years: the need to attract Maximise restructure take-up new customers while retaining existing at optimal post-restructure default ones. Achieving this requires decision rates through developing analytics automation technology and analyticsand technology capabilities. In the driven NPL strategies. past, a lack of analytic precision was affordable; this cannot continue These strategies should be going forward. applied in the following five areas: Banks are faced with a serious challenge, but challenge breeds Define the treatment of the different IFRS 9 status in collections. As innovation: if lenders are to reduce their NPL problem, become more of June 2018, there is still no reference to IFRS 9 status within the collections risk customer-centric and survive in a shifting regulatory landscape, they must and operational routine vocabulary – leverage analytic and decision-making this needs to change. technology for competitive advantage. Develop clear retention and exit

strategies. There needs to be greater progress to understand what will happen to customers that change This block, which includes the UK, status, especially if they are retained by Germany, and France, is following the creditor and if so, on what a similar trend to Block 2 but with a revised conditions. much lower NPL rate. It includes large, Decide the main purchasers or systematically important countries to servicers of non-performing forborne the EU. They were largely protected from loans. After these purchasers have massive NPL rates due to tighter lending been identified, they should be planned

Block 3 — Countries at or below the EU average

International Fin an ce


What does it take to be a good CFO? Experts from ADNOC, Abu Dhabi Ship Building and Hala Group Etihad Airways weigh in on the opportunities and challenges of helming this critical title

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Reem Al Anbari Chief Financial Officer, Finance Division of ADNOC

What are the current top 5 challenges faced by CFOs today in the Middle East?

I believe that the current top 5 challenges faced by CFOs in the Middle East are: 1. How to constantly come up with business innovations, strategies, balance the need for efficiency with smart investments and pursue creative approach to partnerships that will unlock substantial value and free up cash within our business to increase our global competitiveness. 2. CFOs also need to challenge themselves and other key players in the business to keep abreast with the radical technological revolution and disruptive innovation to maintain cutting-edge advancements in running the business. 3. How CFOs play a critical role not only in ensuring finance and accounting functions but also perform a variety of roles in interfacing with other business players such as IT, HR, Procurement, Investments Controllers, etc. 4. CFOs, as key strategists, will be required to continually come up with ways on how to maximize use of our capitalboth human and monetary to create added-value to the company. We are expected to be not just the accounting experts but also as communicators, leaders and partners who are involved in all aspects of the business to maximize profit and optimize cost and pursue business growth with adherence to the international regulatory and compliance framework and with the least risk exposure for a healthy business practice. 5. And to do all these with limited or tight resources/budget, is definitely a big challenge, as well.

What would the practical applications be to the aftermath of VAT implementation?

We need to be technically well-versed on the VAT implementation otherwise we could face some issues for filing wrong returns, which our companies can be penalized for. Businesses should have a Taskforce or Implementation Committee led by the chief financial officer and Corporate Governance which have jurisdiction over all business departments, not just finance to oversee the VAT issues. Sales and Marketing, Human Resources, Procurement, and others will need to modify their systems to become VAT-compliant.

How can CFOs today take up the challenge to staying relevant in the digital age?

I believe that to learn selling skills would be an advantage

for CFOs. Another crucial skill for CFO is to have strong understanding of technology and how to leverage it because it keeps on changing fast and we need to keep abreast with it to make us more functional and pro-active. Aside from this, to go for international assignments and secondments are really good exposure to learn more technical and leadership skills and great depth and scope of business knowledge. CFOs need to be on the frontline to speak the language across the business so they are always informed and prepared which will help tremendously in enforcing their influencing and leadership skills and addedvalue to the company. CFOs need to be effective interpreters. We need to be able to translate numbers into meaningful information and story so we can relay more effectively the key insights to all players to fuel sustainable growth in the organization. How can CFOs and CEOs align further together with regards to the mission and organizations’ objectives? In my experience, the role of CFOs nowadays has become more multi-faceted and demanding than before. Previously, CFOs were only “accountants”, so to speak, who ensure that the organizations finances are in order and all accounting procedures are adhered to. Today, CFOs have taken a broader spectrum of responsibilities. We are now also expected to be: • Key strategists and leaders helping the CEO and other executive teams in decision makings • Effective communicators promoting results and convey business successes and growth both internally and externally • Catalysts of Change ensuring we adapt to latest global business trends • Business advisers, operators and partners ensuring that business run smoothly and according to the strategic direction and innovations the company would like to implement CFOs should now be expert on Enterprise Performance Management (EPM) process including strategy and business planning and management reporting. We are also expected to cover the full spectrum of risk and associated risk management frameworks, processes and systems of internal controls, treasury functions and oversee and understand the impact of International Financial Reporting Standards (IFRS) and accounting changes on existing and future models and metric. Likewise, CFOs must play the lead role in capital management which includes identifying and prioritizing investment opportunities and understanding the various financing options available.

International Fin an ce


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What is your best advice for CFOs to guide their finance teams through times of uncertainty?

I would advise CFOs to continually learn leadership, technical, communication and influencing skills. They also need to constantly upgrade their technological know-how, to be more focused and engaged on people management, risk management, change management, project management

and development of effective business strategy and innovation to be able to call themselves successful CFOs. They also need to broaden and strengthen their networking with other CFOs and share experiences with them regarding their business involvement. Sharing of knowledge I believe is very important to know and understand the best practices and new trends in the business.

Rizwan Chowdhari Chief Financial Officer, ADSB

What are the current top 5 challenges faced by CFOs today in the Middle East?

1. Uncertain macro conditions as a result of oil and political volatility 2. Attracting & retaining talented employees 3. Identifying and implementation of continuous improvement initiatives 4. Transforming traditional “accounting” organizations to “finance” organizations 5. Vision alignment of what is best for the Company between other members of the Senior Management Team, the Board and the Shareholders

What would the practical applications be to the aftermath of VAT implementation?

I think organizations in the Middle East at this point in time are just doing the bare minimum to comply with VAT regulations. This is because certain aspects of the regulations are expected to change and there is still a level of unclarity and so called “grey areas” in the regulations. Once these issues are all ironed out and all the countries in the Middle East are at the same level, we will only then truly be able to assess the practical applications

You will be presenting at the upcoming event. Which topic in the event (other than your own) interests you most? Why?

“Era of Digital Finance” – CFO’s and their organizations are yet to fully embrace this in the region. This is the future in my opinion and the more we talk about it and share stories of success and learnings

How can CFOs today take up the challenge to staying relevant in the digital age?

Have the willingness to take a risk, try pilot projects and if successful then go for larger implementations


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What are your views on the strategic approach to transfer pricing?

I believe that having an effective internal transfer pricing in an organization is essential. This increases accountability, enables decision makers to focus on the real issues at hand, which in turn should increase overall corporate performance

How can CFOs and CEOs align further together with regards to the mission and organizations’ objectives?

To me this alignment is of utmost important. As a strategic partner to the CEO, the CFO should have a say in what the organization’s objectives should look like. The CFO should have a seat at the table when these objectives are being discussed and finalized with the Board / Shareholders. Once corporate objectives are finalized, it’s extremely important for an organization’s leaders to cascade the objectives to their individual teams so that everyone is working on the same page and as such the chance of success is higher.

What is your best advise for CFOs to guide their finance teams through times of uncertainty?

Don’t settle on just “how things are”.. be motivated and always look for opportunities to become better and be open to change… whether it be something as simple as taking an online course to upgrade a skillset or recommending a new way of doing something which in the long run will save time and effort for an organization 

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Marta Wronska Former Head of Finance – Hala Group, Etihad Airways

What are the current top 5 challenges faced by CFOs today in the Middle East ?

Middle East is a very dynamic region and so the main challenges faced by the CFOs today relate to this dynamic. With the implementation of VAT many organizations face challenges such as technology changes to facilitate the VAT compliance, access to qualified resources who can drive the process internally but also building a general understanding of VAT concept across the organization. Innovation is always one of the key focuses for the Middle East Companies and therefore in the era of global digitalization it is more than ever important to not only keep up to day with new technologies such as blockchain or AI but to stay ahead through continuous investment in innovation. At the same time, finding the right, balanced level of investment in R&D and innovation is one of the challenges faced by the CFOs these days. More global challenge faced also by Middle East CFOs is managing the data – both in terms of GDPR compliance as well as being able to quickly and accurately use the big data capabilities developed in the recent years. With many Middle East companies investing heavily in technological capabilities to collect and store data – being able to use databases proficiently and leverage them for the daily business decisions is key to the modern CFOs. Another global challenge faced by Middle East CFOs is the cybersecurity. Within the businesses where the reliance on technology is high, cybercrime and fraud preventive framework is the key focus. With the global cost of cybercrimes increasing almost 5% YoY, organisations must ensure they have complete framework for detection, prevention and mitigation of the cybercrimes. Last but not least, careful observation of the global macroeconomic trends has always been high on the Middle East CFOs agenda but it is now of the utmost importance. With the domestic economies being very sensitive to the oil price fluctuations, it is no longer only oil and transport industry which are monitoring the trends regulary but any CFO operating in the Middle East markets.

the event (other than your own) interests you most? Why? I am especially looking forward to the “Chief Future Officer: Era of Digital Finance” session which will focus on the blockchain technology. Working with the Loyalty businesses under Etihad Aviation Group I have been watching the blockchain technology very closely and assessing it’s application to the loyalty business.

What are your views on the strategic approach to transfer pricing?

Many multinational Middle East companies already adapted transfer pricing framework and developed internal policies but the big challenge is yet to come. Often, introduction of the transfer pricing is perceived as extra cost but if applied correctly it can benefit the organization by reducing tax burdens.

What is your best advise for CFOs to guide their finance teams through times of uncertainty?

A management guru Peter Drucker said “Culture Eats strategy for Lunch” and I strongly believe in those words. In times of uncertainty the winning organizations are the ones whose teams stick together. Building strong corporate culture and creating bonds between team members is the key. Removing silos through open communication, feedback culture and reduced hierarchy structures is a good foundation for the strong teams. These esteemed speakers among other industry experts will be present at the 10th Annual MENA CFO Conference Dubai 2018. For more details, contact BernardineM@ or log on to http://www.marcusevans-conferences-middleeastern. com/marcusevans-conferences-event-details. asp?EventID=24454&SectorID=2#.W2wojCj-jIW

What would the practical applications be to the aftermath of VAT implementation ?

VAT implementation in UAE was a very smooth process despite initial concerns whether the timeframes are too tight. The change is always challenging and building the tax awareness among the organization takes time but the authorities ensured that the filing process is straight forward. You will be presenting at the upcoming event. Which topic in

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