Issue 26
Mr. Jemmy Paul Wawointana CEO, PT Sucorinvest Asset Management
Unique Investment Capabilities for South East Asia’s Investors Page 24
PLUS / Megabank: Bringing Reliability, Remote Access and Social Responsibility to Ukraine Oleksii Iatsenko, Chairman of the Management Board, Megabank JSC
Page 20
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EDITORS LETTER
FROM THE
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Chairman and CEO Varun Sash Editor Wanda Rich email: wrich@gbafmag.com
Dear Readers’
Web Development and Maintenance Anand Giri Head of Distribution & Production Robert Mathew Project Managers Megan Sash, Amanda Walker Video Production and Journalist Phil Fothergill Graphic Designer Jessica Weisman-Pitts Client & Accounts Manager Chanel Roberts Business Consultants Rick Saikia, Monika Umakanth, Stefy Abraham, Business Analysts Samuel Joseph, Dave D’Costa Advertising Phone: +44 (0) 208 144 3511 marketing@gbafmag.com GBAF Publications, LTD Alpha House 100 Borough High Street London, SE1 1LB United Kingdom Global Banking & Finance Review is the trading name of GBAF Publications LTD Company Registration Number: 7403411 VAT Number: GB 112 5966 21 ISSN 2396-717X. The information contained in this publication has been obtained from sources the publishers believe to be correct. The publisher wishes to stress that the information contained herein may be subject to varying international, federal, state and/or local laws or regulations. The purchaser or reader of this publication assumes all responsibility for the use of these materials and information. However, the publisher assumes no responsibility for errors, omissions, or contrary interpretations of the subject matter contained herein no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the publisher
I am pleased to present Issue 26 of Global Banking & Finance Review. For those of you that are reading us for the first time, welcome. Featured on the front cover is Mr. Jemmy Paul Wawointana, CEO of PT Sucorinvest Asset Management. Since its founding in 1997, PT Sucorinvest Asset Management has been committed to focusing on investors’ objectives and generating competitive returns. I spoke to Sucorinvest’s Chief Executive Officer, Jemmy Paul Wawointana about the challenges of 2020 and the new ways they are reaching out to their customer base. Read the full interview on page 24. Issue 26 is filled with exclusive interviews and insightful commentary from industry experts. For the last decade Bao Viet Life has been providing Vietnamese with the innovative life insurance coverage they need. Mr. Pham Ngoc Son, CEO of Bao Viet Life Corporation, provides an inside look at the life insurance industry in Vietnam, their life insurance products, business strategy, and how people can benefit from the financial protection they offer. Read the full interview on page 8. I recently spoke with Oleksii Iatsenko, Chairman of the Management Board of Megabank JSC, Ukraine about the various ways in which the COVID-19 pandemic has impacted the business. Find out how Megabank is bringing reliability, remote access and social responsibility to Ukraine. Read the full interview on page 16. Don’t miss our exclusive interview with Stuart Parkinson, Group CEO of Lombard International discusses the market leader’s keys to success. Read the full interview on page 20. We strive to capture the breaking news about the world's economy, financial events, and banking game changers from prominent leaders in the industry and public viewpoints with an intention to serve a holistic outlook. We have gone that extra mile to ensure we give you the best from the world of finance. Send me your thoughts on how I can continue to improve and what you’d like to see in the future. Enjoy!
Wanda Rich Editor
®
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Issue 26 | 03
CONTENTS
BANKING
12
A new model for SME banking
34
Why Banks Need to Radically Rethink Data
Kam Chana, Product Innovation Director, Temenos
Charlie Burgoyne founder and CEO of Valkyrie & Dr. Meredith Butterfield Principal Scientist at Valkyrie
BUSINESS
30
UK workers are driving a digital-first revolution Paige Erickson, Managing Director, EMEA, Workfront, an Adobe company
46
Why now is the time to shift the 'winning' culture and bias within organisations and how. Dr Cath Bishop
FINANCE
51
Continuous Planning: The New “Must Have” In Finance Dafydd Llewellyn, EMEA GM, insightsoftware
INVESTING
38
The SFDR – get it right from the start Kavitha Ramachandran – Head of Business Development & Client Management
TECHNOLOGY
42
Digital security infrastructure: Unlocking the door to a more secure workspace By James Shannon, chief product and technology officer at essensys
04 | Issue 26
8 BAO VIET LIFE CORPORATION, THE FIRST LIFE INSURER IN VIETNAM, REACHES A QUARTERCENTURY OF SUCCESS Mr. Pham Ngoc Son, CEO, of Bao Viet Life Corporation
CONTENTS
24 Cover Story PT SUCORINVEST ASSET MANAGEMENT: UNIQUE INVESTMENT CAPABILITIES FOR SOUTH EAST ASIA’S INVESTORS Mr. Jemmy Paul Wawointana CEO, PT Sucorinvest Asset Management
16 MEGABANK: BRINGING RELIABILITY, REMOTE ACCESS AND SOCIAL RESPONSIBILITY TO UKRAINE Oleksii Iatsenko, Chairman of the Management Board, of Megabank JSC
Issue 26 | 05
CONTENTS
20 30-YEAR TRACK RECORD MAKES LOMBARD INTERNATIONAL THE GLOBAL WEALTH SOLUTIONS PROVIDER OF CHOICE Stuart Parkinson, Group CEO Lombard International
22 RELATIONSHIP BANKING WITH HSBC UK: ‘CUSTOMER NEEDS ARE AT THE FOREFRONT OF EVERYTHING WE DO’ David Subba, Commercial Banking Relationship Manager HSBC UK
06 | Issue 26
32 BT ASSET MANAGEMENT SAI – CEO AUREL BERNAT TALKS GROWTH, TRANSPARENCY AND CONTINUING ITS UPWARD EVOLUTION Aurel Bernat, CEO, BT Asset Management SAI
INTERVIEW
Bao Viet Life Corporation,
the First Life Insurer in Vietnam, Reaches a Quarter-Century of Success For the last decade Bao Viet Life has been providing Vietnamese with the innovative life insurance coverage they need. In our exclusive interview Mr. Pham Ngoc Son, CEO of Bao Viet Life Corporation, provides an inside look at the life insurance industry in Vietnam, their life insurance products, business strategy, and how people can benefit from the financial protection they offer. Bao Viet Life has been in operation for 25 years now. How has the company changed over the years? Bao Viet Life was established in 1996, when it was the first life insurer in Vietnam with a turnover of only VND 1 billion and 1,200 contracts in the first year of establishment. Over 25 years, Bao Viet Life has continuously grown, demonstrating the bravery of a marketleading enterprise with its network of 76 member companies, nearly 400 regional offices covering 63 provinces, nearly 2,400 officers and approximately 200,000 financial advisors. For many years, exceeding the remaining 17 life insurers, Bao Viet Life has led the life insurance industry in Vietnam in terms of total revenue and new business revenue. Particularly in 2020, with 21.5% market share of total revenue, Bao Viet Life hit VND 28 trillion in total revenue and more than VND 6,300 billion in new operation revenue, had 16 million customers and paid corporate income tax of more than VND 150 billion.
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How is the Vietnamese market different from other insurance markets? Compared to other countries in the region such as Japan, Singapore and Malaysia, the proportion of people participating in life insurance in Vietnam is quite modest - only about 10% of the population, equivalent to 10 million people. The main reasons why people do not pay much attention to life insurance are: 1.
People's awareness of the role of life insurance in life is not sufficient;
2.
People compare life insurance with bank deposits for more interest rate losses.
However, in the past 5 years, with the participation of the government, ministries, agencies and insurance associations, many communication programmes have been launched to widely communicate to the people
about the role of life insurance in life. Besides, the coming of the COVID-19 pandemic has brought challenges and opportunities to the life insurance industry in Vietnam. According to a Nielson survey in 2020, Vietnamese people paid more attention to health and health insurance packages. That is also the main reason for the nearly 20% growth results of new operating revenue of the life insurance industry in 2020 compared to 2019. The insurance industry was one of the few industries with positive growth, while other industries suffered a heavy decline due to the impact of COVID-19. By the end of 2020, with 11% of the population participating in life insurance, Vietnam was a potential market that major insurance corporations around the world wanted to join. Therefore, Bao Viet Life - the only life insurer in Vietnam - is facing fierce competition from 17 foreign life insurers in the Vietnamese market.
INTERVIEW
What message do you have for those considering life insurance? In order to increase people's awareness of the role of life insurance in life, according to the direction of the government and the Ministry of Finance, Bao Viet Life Corporation has actively collaborated with the Insurance Association of Vietnam to promote common communication programmes for the life insurance industry in Vietnam. Besides, Bao Viet Life also actively implements
communication programmes and events to help people understand the vital role of life insurance protection. Protection is the core benefit of life insurance, followed by savings and investment benefits. Life always contains unpredictable risks such as accidents, fatal diseases, natural disasters, epidemics; life insurance is a lifeline to help customers and their families overcome crises and difficulties when the main source of income from the mainstay is no longer available.
Can you give us some key figures regarding the insurance business? By the end of 2020, there were 18 life insurance enterprises operating in Vietnam, of which only Bao Viet Life was a state-owned enterprise.
Items
2018
2019
2020
Total revenue (million VND)
Market BVL
86,488,078 21,507,293
106,919,238 25,451,556
130,649,489 28,037,185
New revenue (million VND)
Market BVL
29,605,773 5,268,728
34,452,724 5,680,063
41,904,080 6,328,663
Valid contract
Market BVL
8,677,911 2.303.858
10,274,336 2,465,545
11,644,037 2,624,314
Number of consultants
Market BVL Market BVL
723,316 219,791
826,510 251,335
849,254 164,702
321,616 66,032
261,421 41,421
367,281 44,278
Number of new recruits
Issue 26 | 09
INTERVIEW
Building strong relations with customers has always been a priority for Bao Viet Life. How do you maintain and grow the relationship with customers? Life insurance products are intangible and have a long premium, so the customers' trust in the insurance company is of the utmost importance. With that understanding, Bao Viet Life always directs all its activities to bring the most benefits and highest satisfaction to customers. With the advantage of being a Vietnamese enterprise, led and operated by Vietnamese people, Bao Viet Life is knowledgeable about the culture and habits of the population. Bao Viet Life's distribution channel network and member companies cover 63 cities and provinces, creating conditions for Bao Viet Life's staff and consultants to be close to customers. Since then, many wishes and requirements of customers are answered and resolved in the fastest way by Bao Viet Life.
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Not only that, but Bao Viet Life also never stops learning and monitoring the development of the life insurance industry in the region and around the world to launch new and preeminent products, bringing optimal benefits to customers. At the same time, support activities, customer care and training for staff and consultants are always updated and renewed, and we always direct customers to the central location. How have the investments made in technology improved customer engagement and processing times? Thanks to the ecosystem development, the frontend systems - for customers and consultants during and after the sale - and backend systems have been self-contained and seamlessly followed STP processes. For customers buying online, the whole process - from buying and issuing to printing e-contracts - is only about 15 minutes. With contracts purchased through consultants, thanks to the application of technology, Bao Viet Life has deployed an e-application
where customers declare information and sign directly. Documents attached by customers will be submitted directly to Bao Viet Life, reducing the time taken to issue contracts by more than 50%, while improving quality and efficiency. For the after-sales service, Bao Viet Life is implementing multi-channel services to receive requests from customers, directly from the customer portal or from the chatbot. The chatbot not only helps to guide customers and consultants on procedures, but is also a direct channel to receive and send requests to specialised departments, helping to reduce 20% of the time needed to receive and process requests. Are you launching any new products or services this year? Bao Viet Life continuously analyses and researches the needs of customers and in 2021, it will launch a new universal affiliate product.
INTERVIEW
How has Bao Viet Life adapted to the current pandemic? The COVID-19 pandemic seriously affected the global economy in general, and Vietnam’s economy in particular. Some provinces in Vietnam, such as Vinh Phuc, Hai Duong, Quang Ninh, Hanoi, Saigon, Gia Lai and Ha Nam, have implemented a social gap in 2020 and the first 4 months of 2021. However, in the challenge of always brightening up opportunities, Bao Viet Life has quickly looked for new recruitment and business solutions to adapt to a new normal way of life. With the development of technology, Bao Viet Life has quickly deployed recruitment, training and online training. At the same time, sales programmes and business activity promotion are also strongly deployed on the basis of Zoom technology. 76 member companies in the whole system of Bao Viet Life have deployed customer conferences and Zoom/online recruitment conferences.
In addition, Bao Viet Life promotes communication, emulation and direct support for member companies in the recruitment and support of the financial advisory team in approaching customers and selling. During the COVID period, the skill of using technology in the work of the financial advisory team was improved to adapt to the new way of doing business. What is your business strategy for the year ahead? In 2021, with strategic direction from Bao Viet Group, the entire Bao Viet Life system is determined to unanimously work together, unleash all resources to conquer the 2021 goal, and continue to maintain a pioneering and key role in the development of our home country’s life insurance industry, in order to bring the best benefits to our customers and the collective of staff and consultants.
Issue 26 | 11
BANKING
A new model for SME banking Five data-driven ways banks can revolutionize their SME relationships and build value SMEs, the lifeblood of our economy representing 90% of businesses around the world, have long been underserved by banks. Often seen as high risk and low value until the point at which they become visibly profitable; banks have typically had a reactive relationship with them. To add insult to injury, SMEs have been disproportionately affected by the Covid-19 pandemic but accounting for such a large amount of the world’s economies, they must be better served and nurtured. They are however misunderstood; they want and deserve much more than just cashflow management and funding and banks are in the prime position to help them. By adopting a new digital model and embracing innovation, banks can create a win-win situation for themselves and SMEs. Here’s how. Adopt an empowered business model Most early-stage companies need knowledge and support, as well as funding, to help them grow. Banks that can create innovative products and services to move upstream in the SME’s business cycle and do more to nurture early-stage businesses into scale-ups, can help them become profitable. At the same time banks can gather information to approve lines of credit faster, so the SME can respond to challenges sooner as they arise.
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For the bank, getting to know their SME customers early creates greater understanding and reduces risk. The proactive data-led approach allows banks to minimize operational costs by allowing more automated decisions on routine matters, allowing staff to focus on higher value activities. One bank pioneering this model is Canadian Western Bank (CWB). Partnering with Temenos, the bank developed a “Virtual COO” that supports SMEs with financial decision-making. The Virtual COO helps SME owners simulate different business scenarios with Explainable AI (XAI)-driven modelling, aggregating financial banking and business data to provide a consolidated real-time view of an SME’s financial health and lighten the administrative burden. Use open data to move beyond banking SMEs often struggle to manage business operations due to a lack of resources. Many technology platforms exist to provide this support, but a typical SME would need dozens of software packages to cater for all its operational needs. Banks are in the perfect position to bring this support together into a single view.
HEADER
Helping our clients to ensure their assets best serve them now, and in the future. Our 30 years’ experience means that we understand what matters when it comes to protecting and preserving wealth today, so that it can be passed on to future generations. Our measure of success is to see legacy live on. lombardinternational.com
Issue 26 | 00
BANKING
There is clear evidence to suggest SMEs want their banks to be more holistic advisors. Research from Accenture found that 31 per cent of SMEs are looking for close engagement from banks, seeking help to optimise their business. By embracing open data, banks can bring in data from other industries to provide new products and services for their customers, from recommending better utility providers to reduce costs, or linking with accounting software providers to develop additional services with broader data sets. This enables banks to take a more holistic view of their customers’ financial welfare and position themselves as a trusted advisor and guardian of data. ABN Amro has embraced open data to create several value-add API products supporting different business functions. Examples include its payments request application, Tikkie, and its Business Account Insights API, which allows SMEs to connect their ABN Amro accounts to their other financial systems (like ERP or TMS) and have a complete overview of real-time transaction details and balances. Innovative products and services like these suit the strategy of the bank whilst providing its customers solutions to their broader business needs.
Be Intelligent Banks have tremendous amounts of data, but most don’t create enough value from it. Intelligent banking uses AI and advanced analytics to analyse data and not only understand what is likely to happen, but to suggest courses of action and their implications. SME owners might be fantastic at floristry, design or manufacturing, but that doesn’t necessarily mean they are adept at managing their business operations or finances. By using a combination of data analytics and AI to help business owners make
14 | Issue 26
better-informed decisions, banks can support SME owners with experiential intelligence and knowledge, and simulate multiple scenarios to solve day to day problems and reach better outcomes. By taking a partnership approach the bank gets much greater insight into the business’ operations and growth intentions, as well as de-risking the investment by providing business support.
Santander UK and Funding Circle’s referral arrangement sees Santander proactively refer SME customers seeking a loan to Funding Circle. In return Funding Circle signposts borrowers to Santander for day-today relationship banking support. The relationship makes it easier for SMEs to access finance and shows how banks and alternative finance providers can work together for the benefit of SMEs.
Become a trusted partner, not just a product utility
A commitment to innovation is essential
In the drive to customer-centricity, banks need to change their relationships from transactional to trusted advisor status. One way is with a “nudge”, utilising behavioural economics to encourage behaviours and decisions more aligned to the survival and growth of the business. A nudge could drive reward-based engagement anchored to the SME’s growth rather than the banks’ intentions, ensuring time-poor business owners don’t miss key information and moments. Creative solutions like this create a relationship where the customer is much more actively engaged with their finances and the bank generates trust and value, increasing customer loyalty.
SMEs deserve better from banks, and technology makes it possible for banks to simultaneously create value for SMEs and themselves. The next generation of SME propositions requires a new service model, one that helps them survive the odds, achieve sustainable growth, and become self-empowered. Banks can enable this growth, not just with the implementation of cutting-edge digital technology, but also with a commitment to thinking differently, introducing new value add services and business models. All it requires is a fresh mindset and a culture of innovation within an organisation to see the value of SMEs.
Fund predictively and proactively Funding is the lifeblood of SMEs but there is a gap between what they are demanding and what banks are positioned to provide. In 2019, this gap was estimated to be 3 per cent of GDP or €400bn in the Eurozone. Banks can help to close this gap by acting as marketplaces or brokers for other lenders or investors, where the request falls outside their risk appetite. By doing this, banks can generate increased sales through brokering activity while maintaining their risk management and enhancing their customer relationships.
Kam Chana Product Innovation Director Temenos
More than... 40 Years serving Egyptian Economy 231 Branches in all Egyptian governorates 6700 Banking professionals at your service 611 ATMs
INTERVIEW
Megabank:
Bringing Reliability, Remote Access and Social Responsibility to Ukraine Oleksii Iatsenko became the Chairman of the Management Board of Megabank JSC, Ukraine in July 2019. He has been in senior management with the bank since 2010, during which time Megabank has established a foothold among the twenty most reliable banks of Ukraine, according to various rating agencies. When Wanda Rich, editor of Global Banking & Finance Review, spoke with him recently, she began by asking him about the various ways in which the COVID-19 pandemic has impacted the business. “It had an impact more in social aspects,” Oleksii explained. “In order to take care of our employees and customers, we had to change the usual mode of servicing. We have done - and continue to do everything in order to comply with the recommendations for the protection and safety of our customers and employees as much as possible.
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“The pandemic has had an impact on the amount of online services. Of course, at this time, customers began to actively switch to the bank’s online services. On the one hand, we saw a high demand there. On the other, there was a huge load on all our online systems and platforms - website and mobile application, self-service terminals, and all remote service facilities. We have calculated that within a year of the pandemic in Ukraine (March 2020 - March 2021), the number of payments - in particular, utility bills increased by 346% through the bank’s mobile application, which is todobank; by 48% through the bank’s online platform Integral Clearing Center for paying utility bills and making other payments, and by 46% through the bank’s self-service M-box terminals.”
Megabank has been fortunate to not experience a huge negative impact. “The segment of clients, which at one time was chosen by the bank as strategic - micro and small enterprises in the agricultural sector - received a minimal negative impact due to the pandemic and managed to adapt to the new conditions. Representatives of this sector had the opportunity, with our help, to receive support within government support programmes.” Oleksii emphasised that the bank took careful measures to ensure that the needs of employees and customers were appropriately met during this period. “It was the key task of the bank to transfer as many employees as possible to work remotely,” he said. “Before that, we analysed the minimum number of people needed to ensure the stable operation of all bank systems. For these employees, we provided transfer to and from work.
INTERVIEW
“Megabank also paid for laboratory tests for employees who showed the first symptoms of a viral disease, or who had had contact with a confirmed case. We also provided financial assistance to those who fell ill with COVID-19, and provided open branches with personal protective gears, information on distancing, regular disinfection of premises, etc.” Making as many online services available as possible was another necessary step to support customer safety. “Megabank has accelerated the implementation of online technologies in order to give customers maximum online services. As an example, to stimulate the social responsibility of our customers, we introduced cashback for paying utility bills using the bank’s mobile application and web portal.”
Creating satisfied customers is also the basis of Megabank’s product development strategy. “The driving force behind product creation is, first of all, our customers’ expectations,” he said. “We constantly monitor the requests of our customers, as well as market trends and new technologies. It is important for us to meet the needs of customers in the new products launched by Megabank.” In this vein, todobank also came about. “Customers’ requests led to the creation of todobank. Megabank has many customers who use banking services for making payments. “The bank processes a large number of customers’ transactions and, in fact, is a kind of a transaction hub,” Oleksii continued. “It became obvious that people needed a platform that would allow using a smartphone to make
all these payments without visiting a bank branch, in any convenient place and time. Megabank processes a large number of utility bills, so there was a task to implement their payment through a mobile application. This is how the idea of launching todobank was born. As for how todobank differs from others, all similar neobanks in Ukraine were launched primarily as a tool for issuing cards with their subsequent servicing. In order to become a user of any neobank application in Ukraine, you need to order and receive a card. A unique feature of todobank is that in order to become a client, you just need to download a mobile application and start using it, being the owner of any card of any bank. And if you wish, you can order a credit card from todobank. In addition, a prepaid card is available from todobank with which you can make certain transactions.”
Issue 26 | 17
INTERVIEW
Customer accessibility being always at the forefront of Megabank’s thinking, the application process for a todobank card is especially important. “You need to fill in a short questionnaire and take a photo of an identity document, and a courier will bring your card at a convenient time. You can also get it at any branch of the bank.” Oleksii also spoke to Wanda about the digital solutions offered by Megabank which include the clearing system, Integral Clearing Center. “This is one of the unique digital solutions that Megabank offers today. It is a unique feature of the bank that allows you to pay all utility bills in one payment. This year we plan to launch the possibility of paying in a single payment for all types of utility bills at all addresses that are in the possession of our client. In addition, the system allows you to view online the status of debts for all types of utility services, such as heating,
18 | Issue 26
gas, electricity, water supply, intercom, cable TV, internet, etc. Since last year it has also become possible to transfer meter readings - that is, the volume of consumed services for the accounting period. This can be done through the bank’s mobile application, and there is no need to contact each service provider separately. This significantly saves our customers’ time.” Megabank – and Ukraine as a whole are also ahead of the curve in terms of digital identification recognition. “This year, Ukraine became the first country in the world to make a decision at the legislative level that the electronic version of the passport is equivalent to its paper counterpart,” Oleksii said. “Megabank is fully prepared for this. Today our clients can go through identification with the help of Megabank and get access to the Diya application. Diya contains digital versions of clients’ documents: passports, driver’s license,
tax payer card, etc. In addition, our clients only need to present a digital version of their passport in the Diya application in order to get service at the bank branch. There is no need to carry a paper version of your documents with you. This is a big step forward in our bank’s paperless policy.” Agribusiness remains an important focus for the bank, and they make sure to open up financial opportunities and support the growth of clients in this sector. “Megabank has a large number of products for this sector,” Oleksii emphasised. “We adapt these products every year so that they remain relevant and in demand. The bank offers agroscoring, which allows making a decision on the issuance of a loan to micro and small agribusiness enterprises and private farms within 48 hours. It also provides a wide range of unsecured loans to farms to replenish working capital
INTERVIEW
between seasons. The bank participates in government programmes to support this sector of the Ukrainian economy and, together with foreign partners, the bank financed loans for the development of agribusiness, energy efficiency and green energy.”
transition to electric vehicles, and energy-saving technologies in construction as well as alternative energy sources. We also consider it our social responsibility to participate in the initiatives of local authorities on the population’s access to digital services.
Oleksii also went into how corporate and social responsibility are important now. “In 2019, Megabank was the first in Ukraine to become an associate member of the international independent network of banks, Global Alliance for Banking on Values,” he explained. “We purposefully joined the association because its values include responsible banking business, which involves the use of finances to ensure sustainable economic, social and environmental development, which are the values of Megabank today.
“During the pandemic, we could not stand aside. Megabank provided financial support to medical institutions by purchasing the necessary equipment.” Oleksii is confident that the coming year will see a marked difference from the past twelve months. “2020 for Megabank was a year of challenges and opportunities. I am sure that 2021 will be the year of success and growth for Megabank.”
“As part of our social responsibility, the priority areas of financing for us are energy efficiency; equipment and technology upgrade, including public utility providers which leads to the reduction of carbon dioxide emissions;
Oleksii Iatsenko Chairman of the Management Board of Megabank JSC
Issue 26 | 19
INTERVIEW
30-Year Track Record Makes
Lombard International the Global Wealth Solutions Provider of Choice Lombard International Assurance offers customised insurance-based wealth, estate and succession planning solutions on a global scale. Three decades’ worth of experience has brought them the expertise to help clients successfully navigate unpredictable times, with the challenging events of the past year proving no exception. Wanda Rich, editor of Global Banking & Finance Review, recently spoke with the Group CEO, Stuart Parkinson, to discuss the market leader’s keys to success, the principle benefits of unit-linked life insurance, and how much the industry has changed since Lombard International Assurance was founded in 1991. What are the key contributors to the success of Lombard International Assurance S.A. over the past 30 years? Lombard International Assurance is a leading provider of cross-border insurance-based wealth, estate and succession planning solutions for upper affluent, high-net-worth individuals, families and institutions. Our success is built on our 30-year track record in offering customised solutions that are proven and robust, but also flexible, portable and adaptable to the evolving lifestyles of our clients.
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Our multi-jurisdictional experience, agility and eagerness to tackle complex problems mean that we remain a provider of choice. We have exceptional in-house expertise to manage the demands of near-constant changes to regulations and market dynamics, an ever-greater emphasis on wealth longevity and the increasing social responsibility of our clients. Another key contributor to our success is the value we place on all our partnerships. Our 30 years’ experience means that we truly understand what matters when it comes to protecting and preserving wealth today, so that it can be passed on to future generations. This is what drives us. Lombard International Assurance S.A. has a history spanning thirty years. How do you see the state of the industry then and now? The Wealth Assurance industry is uniquely positioned at the intersection of asset management, private banking and insurance. As we look at the sector as a whole, we have seen a notable shift in the trend towards non-traditional assets, with greater focus on green growth and sustainability. The appetite for ESG investing is continuing to grow as HNWIs
INTERVIEW
re-examine where their wealth is being invested and who is managing their assets, reconsider the ‘purpose’ of their wealth, and align their assets with their non-financial goals and aspirations. The changing social demographics, modern family dynamics and the current transfer of wealth to the next generation are providing fresh opportunities and challenges for the industry. Clients, regardless of generation, are geographically diverse, invest in multiple asset classes, and often have personal and business requirements intertwined with cross-border lives - heightening the importance of the need to review wealth, estate and succession plans. How have you adapted business operations as a result of the current pandemic? As a leading and trusted global wealth solutions provider, being able to maintain our best in class service and solutions, whatever the circumstances, is key. We quickly adapted to new ways of working and launched new business practices and solutions, such as distance selling, e-signatures, remote working and digital communications. In addition, we continued to invest in our infrastructure and in our people, and also to innovate, ensuring that we were able to continue delivering the service experience our partners and clients have come to expect from Lombard International. What are some of the benefits of investing via insurance structures? Unit-linked life insurance, also known as Wealth Assurance or Private Placement Life Insurance (PPLI), is an established and internationally-recognised tool for wealth, estate and succession planning. It is adaptable to the most complex
of situations, and its robustness and flexibility make it highly complementary to other wealth management solutions. It can be tailored to suit the unique needs of individuals, their families and institutions, with the potential to enhance financial planning. The main benefits include asset and investor protection, consolidated tax reporting, international portability for investors who want to diversify their financial interests across multiple geographical regions, and access to international investment opportunities, including non-traditional assets such as private equity and real estate. Can you tell us about the strength of Lombard International Assurance’s business model from a financial perspective? Our 2020 financial results demonstrated the success of our endeavours, the strength of our business model, our market-leading expertise and the relevance of our solutions in supporting the ever-evolving wealth planning needs of the upper affluent, HNW and UHNW clients and institutions that we serve across the globe. We delivered a robust 2020 financial performance against the unprecedented global pandemic, which caused significant market volatility and disruption to everyone’s daily lives, including those of our partners and clients. I was proud that we achieved record Group Assets Under Administration (AUA) of €49.3 billion1 ($60.6 billion2) as of 31 December 2020. Furthermore, our financial strength ratings from AM Best have been reaffirmed at A- (Excellent), and KBRA reaffirmed an insurance strength rating of A, both for the third consecutive year. These ratings reflect the Group’s profitability and low-risk business strategy, the strength of our balance sheet and liquidity position, and our leading position in the unit-linked life assurance market.
We’ve had a strong start to 2021 and look forward to continuing the momentum throughout the year. What should we expect to see from Lombard International Assurance S.A. this year? Throughout 2021, our forward-looking strategy is focused on the continued and sustainable growth of the business, underpinned by operational excellence. Under this framework, we are further bolstering our technology and digital investments, enhancing our global connectivity, strengthening and leveraging the footprint of the Group and building differentiated product offerings, whilst also sharpening our market expertise. We are striving to become even more connected globally, ensuring that we continue to provide the level of service that our partners and clients expect across all the geographies in which we serve.
Stuart Parkinson Group CEO Lombard International
1. As at 31 December 2020 2. EUR amounts have been converted in USD using the spot rate at 31 December 2020 of 1.23
Issue 26 | 21
INTERVIEW
Relationship Banking with HSBC UK: ‘Customer Needs are at the Forefront of Everything We Do’ David Subba is a Commercial Banking Relationship Manager with HSBC UK, a role he has filled for more than five years. Global Banking & Finance Review editor, Wanda Rich spoke to him about how the role is evolving due to fewer branches and increased digitalisation, the part Relationship Managers play in aiding business clients to rebuild following the pandemic, and the importance of strong relationships during times of excessive challenge. At HSBC what role does relationship banking play? How important is it? Within HSBC UK relationship managers (RMs) play a vital role in supporting our customers in reaching their full potential. RMs provide tailored support to individual customers, ensuring they are making best use of the right products and also using the power of the HSBC network to engage with sector specialists and experts in more than 60 markets around the world. The role of the RM is essential in developing customer relationships and supporting businesses as they look to expand their operations and grow. Our
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RMs place the needs of customers at the forefront of everything they do and we aim to set world class standards that provide our customers with the best chance of success. Can you tell us about the Relationship Manager development programme and its importance? The RM is a role that develops and grows over time and as we strive to provide the best service for our customers it is vital that our RMs are provided with development opportunities which enable them to achieve an aspirational career within commercial banking. Our RMs join the Relationship Manager Development Programme which lasts a minimum of three years and is aimed at providing colleagues with opportunities to understand different types of businesses enabling them to build experience and knowledge. This benefits our RMs personally by developing skills and giving them the opportunity to find the areas that they excel in, which in turn gives our customers an even better level of service.
How do your relationship managers help support businesses clients? RMs provide a range of end-to-end solutions designed to help small and large businesses grow. That includes everything from day-to-day advice on managing cash-flow to longer-term strategic financing decisions and supporting businesses as they seek new pathways to growth. At HSBC UK our RMs work closely with customers to support their ambitions, whether that involves expanding overseas and understanding the nuances of exports and imports or striving to reach their sustainability goals which we can support through sustainable finance products. The relationships that our RMs build are vital to the success of our business and our customers. We also find that by nurturing relationships closely over a period of time that customers will be more likely to reach out and talk to us during the more difficult times, allowing us to understand the challenges they face so we can provide the right advice and effective financing solutions.
INTERVIEW
How is the role evolving, with the decrease in branches and increased use of digital channels? We’re increasingly seeing customers come to us for advice and support rather than just help with transactions. The pandemic has been a huge accelerator of digital change across society and businesses of all shapes and sizes have needed to adapt at pace. While digital enhancements such as cheque scanning and digital signatures reduce the need for customers to meet with RMs face to face within branches, RM still have a huge role to play in the future of commercial banking. Businesses are at different stages of their own digital journeys, with some far more advanced and others needing extra support. RMs continue to work closely with customers to understand their individual needs and provide them with the right digital banking tools that are required in order to fully understand their own cash-flow and financing needs. We’re also seeing an increased focus from business on the sustainability agenda as they look to incorporate sustainable operations into their day-
to-day business as they build back from the pandemic. Firms are feeling pressure from a number of external sources to put sustainability at the top of their priority and RMs are talking to them about the suite of sustainable finance products that can support their green ambitions. Businesses have never needed sound financial advice more than they do now as the economy looks to build back from the pandemic. The role of the RM has always been focussed on the strength of relationships and that will continue to be the case as technology and digital tools evolve. How have you had to adapt how you interact with clients due to the current pandemic? Throughout the pandemic the priority has been for our RMs to stay close to their customers. Businesses were facing truly unprecedented challenges unlike anything they had experienced before and to know that we were here to support them was vital. RMs were encouraged to speak with customers regularly and provided an essential role in breaking down and
David Subba Commercial Banking Relationship Manager HSBC UK
explaining the government COVID lending schemes so that customers could access the vital funds they needed as quickly as possible. As RMs we were also facing the same challenges as our customers, this was as much an unprecedented time for us as it was for them and during those fast-changing times it was essential that we fully understood the new schemes and how they could help customers. Through continued dialogue we were able to fully understand how customers were being impacted and provided them with the advice, information and finance they needed to get through.
Issue 26 | 23
COVER STORY
PT Sucorinvest Asset Management: Unique Investment Capabilities for South East Asia’s Investors Since its founding in 1997, PT Sucorinvest Asset Management has been committed to focusing on investors’ objectives and generating competitive returns, and has received various domestic and international awards. Wanda Rich, editor of Global Banking & Finance Review, spoke to Sucorinvest’s Chief Executive Officer, Jemmy Paul Wawointana, to talk about AUM growth, the challenges of 2020 and the new ways they are reaching out to their customer base. How was PT Sucorinvest Asset Management established and how has it developed over the years? PT Sucorinvest Asset Management has held an AM license since 1999 and manages a number of mutual funds that have won numerous accolades at home and abroad. Last year and in 2021, we were awarded South East Asia’s Best Asset Management Company by Global Banking & Finance Review. As of April 30, 2021, Sucor Asset Management has managed more than Rp 15 trillion in AUM. Holding the trust of more than 340,000 retail customers, Sucor Asset Management educates, serves and manages public funds for a better and more prosperous Indonesia.
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How has Sucorinvest adapted operations as a result of the COVID-19 pandemic? During the past four years we have reached out for more partnership with banks and other selling agents, which of course has positively contributed to our AUM’s significant growth. It has also bolstered our customer base’s shift to the retail segment, delivering more stability to our fund flow. These partnerships have proven to be very effective, especially during pandemic times, where most of our distribution channels have already had online channels for onboarding new customers and also for performing transactions, hence contributing significantly to our 2020 YTD 95.08% mutual funds’ AUM growth and 244.55% investor accounts’ growth. In 2021 we will continue to reach out to more distribution channels. We will also continue to offer financial education and inclusion to the general public and our partners through various webinars and other online channels, such as social media etc.
COVER STORY
Issue 26 | 25
COVER STORY
We continue to adapt and implement remote working and split teams for our daily business and operations. Meanwhile, all activities with our partners and engagement with our investors will remain being conducted via virtual meetings and various social media platforms. We foresee this norm will stay in the industry for at least a year and a half. Therefore, we are keen to innovate and always improve on how we communicate to our stakeholders. Why should investors choose Sucorinvest over other asset management companies? Firstly, as the most active asset manager in Indonesia, we hold a unique philosophy that finds value in each business and market cycle for our alpha creation processes. By combining the top-down and bottomup approach, we invest in assets that we believe will outperform their sector for our portfolio. In asset selection, we consider their valuation, growth potential, peer comparison, statistical analysis, microstructure, and any special situations that could affect the prevailing securities’ yield or return. Our philosophy has caused our mutual funds to outperform the benchmark and even its competitors - consistently in the past three to five years. Secondly, in line with our company’s vision - ‘To help people create wealth, and preserve it, so they can celebrate life’ - we took time to listen to and embrace our customers. You can see it in our interactions, our content, our comments, the IGTVs, the seminars we hold etc. We are not just active in our investment strategy, but also in our communication and education strategy. Our strong sales team and product development team have been the leaders in our active pursuit of client feedback, input and enquiries. We strongly believe our clients’ longterm trust and confidence in us are the most important values in the financial industry. One key to achieving that, we believe, is to maintain close relations
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with clients - even during market turbulence. This persistence has proven to be highly beneficial in developing strong, personal connections with our clients, and thus ensuring feedback, comments and enquiries flow easily and are settled constructively.
Sucorinvest Citra Dana Berimbang, recorded a positive performance of 29.37% throughout 2020 and outperformed its benchmark by 29.73%.
What are the current opportunities you see for investors right now?
In our 2021 pipeline we will launch three public funds, namely: Sucorinvest Sharia Sukuk Fund, a Sharia-based fixed income product; Sucorinvest Monthly Income Fund, a fixed-income fund with a distributed income feature, and Sucorinvest Sustainability Equity Fund, an ESG-based equity fund.
We foresee that ESG and Sharia investment will be a trend in Indonesia as the number of domestic investors continues to grow. Since last year, we have already prepared and built the infrastructure to support us in sustainable investing. We hope we can launch our ESG fund and additional Sharia product in 2021. How do your advisors help clients to achieve the best returns? We work closely with our clients to help them develop a clear understanding of their profiles and reasonable expectations for their investment objectives. This approach has helped us to determine the appropriate asset allocation and design customised investment portfolios to maximise the rate of return with due regard to risk. What advice do you have for them for riding out the increasingly volatile market? Always stay on your course. Making impulsive decisions based on shortterm fears of losing money can harm your long-term financial health. Diversification and taking a long-term approach would help reduce risk when investing in volatile markets. What was your best performing fund in 2020? We are delighted to close 2020 with all of our publicly available open-ended funds recording positive performances, as well as beating their respective benchmarks. Our balanced fund,
Have you launched any new products recently?
What is your long-term strategy for continued success? We are continuously committed to delivering consistent returns without disregarding any risk and regulations corridor. To increase our service quality for our growing number of investors, we expanded to social media by introducing a friend-like customer service that will find a solution to all their investment needs and questions. This helps us to reach wider audiences and increase brand awareness and loyalty. Indonesia’s financial market is experiencing the rise of new investors, despite the market turbulence since last year. In 2020, Indonesian Single Investor Identification (SID) has grown by 78.95%, and the majority of this growth came from the 20 to 35-yearold demographic. Last year, our number of investors grew by 244.52% to 281,448, thus our AUM composition has shifted to 61.04% heavier on the retail investor side, compared to institutional clients that only accounted for 38.96%. We expect this growth to continue, along with easier access to information and education on financial products in Indonesia. We have been shifting our focus to tap into the retail investor market in the last four years.
COVER STORY
Mr. Jemmy Paul Wawointana CEO, PT Sucorinvest Asset Management
Issue 26 | 27
Because you motivated us today we are recognized as t
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s to grow as a digital bank, the Best Digital Bank in Chile.
SANTANDER, CHILE’S BEST DIGITAL BANK We celebrate to have been chosen by Global Banking & Finance, as the Best Digital Bank and the Fastest Growing Digital Bank in Chile in 2020. Thank you for inspiring us to improve every day.
BUSINESS
UK workers are driving a digital-first revolution We’re now one year on from the ‘great home-working shift’ and in that time, much has been made about the accelerated digital transformation businesses have had to embrace, and how this might negatively impact a dispersed workforce. But has anyone stopped to gauge how those impacted individuals feel about this evergrowing proliferation of—and reliance on —technology? Well, they should, because in the UK at least, what you’re likely to find is that this digital revolution isn’t just being forced on companies by external factors, trends or pandemics. It’s a revolution being driven from the ground up, by the workers who are navigating digital solutions everyday to do their best work while away from the office.
working experiment, is a snapshot of the UK workforce prepandemic, before so much changed, almost overnight. We decided to run the same survey again in late 2020 to see just how much had changed in less than a year, but we couldn’t have predicted the scale of the evolution of digital work that our survey brought to light.
Ricoh UK and IBM found at the start of this year that managers were more likely to struggle with the technology demands of a work-from-home set-up, than employees who were largely “undaunted” by the transition. And Workfront’s 2021 State of Work report absolutely supports that conclusion.
UK workers are declaring good enough is no longer enough
Back in February 2020 we launched our ‘State of Work’ survey in partnership with the Center for Generational Kinetics (CGK) as a way to better understand how Millennials and Generation Xers approach work differently. This data, generated days before we all entered into a mass remote
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Jason Dorsey, President and Co-Founder, CGK noted: “With just eight months between the two studies featured in this report, a change of even three-to-five percentage points is statistically significant and worth noting. The fact that in some of the uncovered answers we see changes of five points, 10 points, or even more, is remarkable.”
Primarily, these leaps in attitude paint a different picture to one of fear or resistance to remote working or digital tools; or of business leaders forcing their employees into an unwanted transformation. Instead, we found the number of UK digital workers who say technology is ‘very important’ to manage their role increased by 24 points, while those who attribute technology to their ability to do their best work has risen by 18 points.
BUSINESS
And this isn’t just a recognition of technology’s influence. It’s a declaration from workers that they are no longer willing to accommodate a poor digital strategy at work. The number of workers who have quit their job due to outdated technology has risen from 21% to 32% in less than a year, while almost half (49%) of UK workers profess they are likely to leave a job if they become frustrated with their work technology—up from just a third (33%) back in February 2020. The ability to attract top talent too, rests on the quality of the technology in an organisation. The number of workers stating they have applied for a job because they heard a company's employees use great technology rose by 16 points compared to prepandemic data.
Perception of priorities Priorities have certainly shifted for modern workers. Today’s employees want to communicate and collaborate effectively. They want to be creative and feel that the work they do has an impact on the bottom line. As the team has been forced to work remotely, job satisfaction, success, and progression hinge almost entirely on technology being an enabler. Respondents to our survey recognise how essential technology is to the workplace. Over one-in-ten (12%) said that they rely on technology more than they did pre-pandemic. More than half (56%) saw technology as very important for fostering collaboration while 68% said they rely on technology to breed creativity and innovation—a rise of 19 percentage points from February 2020.
for a post-pandemic world is key. So, no matter what changes are thrown our way, everyone has the tools to continue doing their best work. A vast portion of your team is craving the use of digital tools and workforce management to enhance their own performance. Failing to deliver the right technology infrastructure to support this is failing your workforce—leading to poor strategic alignment, reduced productivity, frustrated workers and the risk of losing key talent—which is something that no business can afford in such an unpredictable and turbulent business climate. The digital-first revolution is here to stay. And UK workers are leading the charge.
A cross-generational concern And it’s not just young workers leading the technology charge. PreCOVID-19, just under a quarter (24%) of Gen X respondents considered leaving their job due to a lack of new technology, but the latest data shows this has grown drastically by 24 points during the pandemic to almost half (48%). In comparison, the same response from Millennials grew by 13 points to exactly half (50%). Clearly both Millennials and Gen Xers aren’t willing to wait or compromise, regardless of the wider hostile marketplace or rising unemployment rates. Of the workforce who confirmed they had actually left a role because workplace technology made their lives harder, the number from Gen X rose by 21 points, putting them almost level with the digitally native Millennial workforce who reported an eight-point increase.
Why businesses need to manage work to harness the digital-first revolution Remote working and the events of the past year have led to a more switched on, engaged and motivated UK workforce. Yet, as a result of the “Amazon-effect”, workers are used to instant gratification from technology in their personal lives and expect the very same experience from their technology at work. High expectations have led to very low tolerance for outdated or ineffective technology, and workers are prepared to vote with their feet rather than waiting for their employers to catch up. It is more critical than ever before for businesses to treat work as a tierone asset. All technology should lead towards freeing team members to be more engaged and productive now, and in the future. Building digital resilience
Paige Erickson Managing Director, EMEA, Workfront, Adobe company
Issue 26 | 31
INTERVIEW
BT Asset Management SAI – CEO Aurel Bernat Talks Growth, Transparency and Continuing its Upward Evolution
BT Asset Management SAI is the fourth largest asset management company in Romania and a member of Banca Transilvania Financial Group. Banca Transilvania as a core business is currently the largest bank in Romania, with over 500 branches across the country, and also a regional player. Aurel Bernat is the CEO of BT Asset Management SAI following almost 15 years within the asset management company, coming from a banking background and having achieved an EMBA at the University of Hull in the UK. He spoke to Wanda Rich, editor, Global Banking & Finance Review about a number of factors behind the company’s continued success, including its ‘keep it simple’ approach to making investment accessible and the support it offers to young investors. Congratulations on your award-winning success. BT Asset Management SAI has experienced significant growth since its establishment. What do you attribute this to? Thank you for congratulating us - we are honoured and proud to have the recognition from your side. Since our establishment in 2005 we’ve had an extraordinary journey, reaching a new milestone for BT Asset Management SAI during 2020 of more than 4 billion RON assets under management (roughly 800 million EUR) from over 40,000 customers. We can attribute our development to the significant growth in the local financial market of Banca Transilvania, our group leader. Since Banca Transilvania is the largest
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bank in Romania, the distribution network allowed us excellent national coverage and access to a large customer base. On the other hand, the last years of strong growth for the Romanian economy have been a trigger for success in our field of competence. Can you tell us more about your investment philosophy? Simple and performant products. The ‘keep it simple’ philosophy is something that we cherish, since investments should be considered easy to deal with, available to a large customer base and an automatic behaviour. Meanwhile, performance is a key factor in the asset management industry, so we offer our customers predictable and high-performing products. Both features are extremely important in a retailoriented business. How are your investment advisors helping to guide investors during this challenging time? Transparency is vital in our business, since a viable and consistent information flow is relevant to all investors. We choose to inform our customers on a weekly basis concerning the evolution of their investments and the market status, considering ourself as a reliable source of financial information and a solid ground for future investment decisions. Our commitment is emphasised by ongoing training of the entire distribution network and among the few asset managers, with a dedicated call centre service for both customers and prospects.
INTERVIEW
Aurel Bernat CEO BT Asset Management SAI
Are there any funds you’d like to discuss? During the last three years, BT Asset Management SAI has been one of the most active asset managers in Romania in terms of newly-launched funds. We developed a new product line comprising four thematic funds which are energy, technology, real estate and agriculture, investing in both the European market as well as the US. This strategy led us towards younger customers in search of broader market exposure, and for the future we see these types of funds as our main driver of development. Each retail investor can find among these products something which may exceed their expectations, as long as their goal is focused on long-term - and preferably recurrent - investment. What investment strategy do you recommend to young people entering the workforce and looking to start investing? Recurrent investing is likely to be the best strategy for the time being. Recurrency is easy to handle, can be started with small amounts of investment and since it is an automated process, should deliver a high degree of commitment and fulfilment by the end of each day. This type of strategy perfectly suits young investors who are not accustomed to market timing or exhaustive research, but have the will and power to act for their own future success.
What is your strategy for continued growth and success? Enjoying each project and each step forward, and not a single day passing without a smaller or larger corporate accomplishment. We are extremely positive about future development, since the asset management market has a low input in local GDP, which gives us the chance to increase our assets under management level at a faster pace. The monetary and financial context is favourable for our industry, low interest rates being a key element for a higher investing awareness and increasing the search for viable alternatives. If we add the future COVID-19 vaccination progress and a strong global economy response, the year ahead should be an outstanding one for BT Asset Management SAI.
Issue 26 | 33
BANKING
Why Banks Need to Radically Rethink Data Over the last year, the global banking industry has been faced with profound changes that require immediate transformation. The COVID-19 pandemic has revealed deep flaws in the models used at every level of their operations. To adapt and thrive, banks need to better understand human behavior, adapt to evolving customer needs and expectations and radically rethink not only the products and experiences they offer but the very architecture their businesses are built upon. By now, we know enough to realize that any models that were effective eighteen months ago are unlikely to be effective eighteen months from now. This comes down to the relationship between customers, products and experiences, which is fundamentally shifting. The signs were there long before the pandemic, and evolving consumer behaviors have dictated a set of new rules for modern commerce. From Gen Z to millennials, there is an entire population looking for novel solutions and experiences, for whom the concept of car ownership may be obsolete but are instead drawn to vehicle subscription models. They need new types of solutions and are increasingly finding them outside of traditional banking institutions with a new generation of agile financial services platforms and nimble digital providers. So how are we catering to this evolving class, continually understanding their journey and providing banking products that suit
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their needs? As a global industry, it is time to rethink assumptions and transform at the core. The age of 800 credit scores, diversified investments and the 50-20-30 rule has come and gone. Instead, we need to cater to people from a variety of backgrounds and environments who want to capitalize on—and finance— new opportunities. First, you must establish a strong foundation of proactive, intelligent systems that guide the customer journey and talk to each other, taking behaviors expressed by your customers, providing solutions and interacting across mediums and platforms. Then, you need to make sure that you’re not just gathering data and storing it as static information. For example, if you are looking at a 19-year-old with no credit history, they have a lot more depth that should be uncovered and considered. Data should be intelligible: it tells us how decisions are made and contributes to a larger understanding of an evolving customer journey with fluid, ever-changing needs. Finally, once the overall architecture is designed and the roadmap for what can be achieved is outlined, you can put new tools in place to grow and support your development. What are the products, the new solutions, the new experiences you can create? To get there, banks need to rethink the way they view their customers—from objects and bits of information that rarely get updated, to living, breathing, distinct individuals making unique
decisions. These models should be persona-specific, where each person is a collection of journeys and experiences: complex, dynamic` but never static. The biggest mistake we continue to see is banks using data as information, without truly applying it to understand people. This stems from an underlying architecture built more than 15-20 years ago, with the initial goal of storing as much data as possible. We need to shift to a more in-depth methodology that revolves around complex intelligence. It is not just about having data for the sake of data, it is about truly understanding people and therefore changing our very approach to data and the ways in which it is applied to better serve customers. Now is the time for banks to pivot quickly with the customer at the center of their strategy and with new tools to understand their behavior and new solutions to serve their needs. This is the moment to experiment, to take risks and test the waters as we chart a plan and put a stronger foundation in place to sustain our growth. New technologies, new products and new relationships to data aggregation are going to be the fuel for the future.
BANKING
Charlie Burgoyne Founder and CEO Valkyrie
Dr. Meredith Butterfield Principal Scientist Valkyrie
Issue 26 | 35
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2021 Issue 25 | 00
INVESTING
The SFDR – get it right from the start
Kavitha Ramachandran, Head of Business Development and Client Management (Continental Europe), based in Luxembourg, unpacks the current and future status of the Sustainable Finance Disclosure Regulation (SFDR), stressing the need for investment managers to follow a partnership approach to interpret and implement the complexities of the regulations. Driven by European Union regulatory change for financing sustainable growth and reorienting capital flows towards sustainable growth in the financial services sector, the Sustainable Finance Disclosure Regulation (SFDR) – promulgated in 2019 – is a bold step in the right direction to manage financial risk and improve transparency in line with ESG trends. The SFDR has now become a reality, with EU funds and non-EU AIFs marketed within the EU being obliged, as an initial step, to have updated their prospectuses by 10 March 2021, requiring investment managers to classify their fund product into one
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of three categories, corresponding to the relevant level of sustainability factors incorporated into their investment decisions. At Maitland, we witnessed an overall awareness from the industry ahead of the 10 March deadline, but what is crucial is that firms understand that the SFDR journey has only just begun. Firms cannot simply have complied by 10 March and consider the regulatory box ticked. They must prepare for the next phase and beyond in order to avoid significant business and reputational risk. Specifically, going forward, the SFDR provides the framework within which to inform all investors on how sustainability risks are taken into account in the investment decision-making process applicable to the relevant fund. Investors in ESG funds must be provided with significant additional information both prior to investing in the fund and during the life of the investment through periodic reports and information made available on the website of the management company.
The challenge For now, implementing the SFDR won’t all be plain sailing. It places a significant onus on fund managers to classify their own portfolios, which may involve an overhaul of many processes, including the investment strategy, risk management, reporting obligations, due diligence, and disclosures. And whilst sustainable investment expectations will inevitably become clearer over time, many firms are still confused about what exactly they need to do to get reporting right under the complex regulation. Contributing to existing headaches is a lack of clarity around what the SFDR means for sub-threshold AIFMs and close-ended funds. We find that general market practice is driving some of the decision- making. And so, against a backdrop of an increasingly complex regulatory landscape and shifting customer expectations, there has never been a more crucial time for fund managers to get the product categorisation right.
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INVESTING
It is vital that fund managers have the right expertise and people by their side to navigate the complex requirements of SFDR together.
Slick marketing talk or “greenwashing” will not be tolerated and compliance with the regulations will need to be fully thought through.
So often we see firms underestimate the sheer task at hand and try to go it alone. This is not well-advised. They would do better to engage an expert third party not only to provide support but also to provide interpretation within the context of market practice. Such an independent third party which understands the regulation and has access to multiple channels for expert guidance, is able to relay that information to firms in a digestible format, and then formulate a strategy to apply it to their business.
Now that the regulation is in place effective 10 March 2021, firms will be expected to continue with meeting the subsequent sets of rules, starting with the Principal Adverse Impact Statement (PAIS). The PAIS is intended to show investors and prospective investors how investment decisions made by a Financial Market Participant (FMP) have or may have adverse impacts on sustainability factors relating to environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. The requirement applies on a comply or explain basis (unless the FMP has an average of 500 employees or is the parent undertaking of a large group which has an average of 500 employees, in which case the FMP must comply by 30 June 2021).
What’s next? The SFDR is just the tip of the iceberg when it comes to the wave of ESG regulation we can expect in future. The focus of institutional investors and their capital allocations is certainly slanted towards sustainable finance and may become a regulatory requirement for future fund launches.
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Kavitha Ramachandran Head of Business Development & Client Management (Continental Europe)
TECHNOLOGY
Digital security infrastructure: Unlocking the door to a more secure workspace A return to the office is drawing nearer as the vaccine rollout continues. In response to the new world of work, many businesses will be working within flexible spaces as they adopt hybrid business models. A hybrid office model is an effective way to accommodate the preferences of a multi-generational and distributed workforce, but this can only be possible if such models are built on a platform of effective physical and digital security. The world’s biggest companies are buying into flexible working spaces, and security protocols and defences are a major concern for them. According to IBM, the global average cost of a security breach in 2020 was $3.8M USD. While the cost varies per industry, the biggest hit is to lost business and brand reputation, not to mention the time and operational resources to correct the damage. Therefore, if effective security measures can’t be proven or demonstrated by the flexible space provider, and/or landlord, they simply won’t occupy a space. As more companies look to flex as a long-term real estate strategy, having the right tools and partners in place can foster trust with your tenants
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and safeguard your proposition. So, what are the core considerations and components required to create a secure tech operating layer that reassures the integrity of your space, operation and infrastructure? But not only that, a secure system that provides the platform for delivering an enhanced customer experience.
Physical security Despite the increasing number of digital threats to businesses, physical security is the foundation for any security policy. How are you securing and managing access to the outermost perimeter of your space or building? Door access control is more than giving occupiers a means to unlock a door or access a space. It can enable user tracking and visitor management – two increasingly important elements to your operation as re-occupancy becomes a priority focus. Of course, access control has also evolved, which will become increasingly apparent as we return to the office. Traditional office attendance meant that patterns of people entering and leaving a building was far more predictable, and even
where people worked. But now, with working becoming far more flexible, the access control systems have had to become more advanced. Now they have to account for different people entering different buildings, working in different spaces and entering and leaving the building at ever varying days and times. For the digital experience to be a success, access systems must be secure and able to provide a seamless experience, regardless of which office within the system’s network one is entering. The importance of access control and personnel identity The two concepts are at the very heart of flex systems, and will play an ever more crucial role in the return to the office when it comes to security and safety. It is vital for landlords to understand who the occupiers are, the physical spaces they frequent and who they interact with. This covers all spaces within an office, including parking lots, work spaces, desks and amenities to name but a few. Not only does having an holistic view of a building allow for tighter security, but it also enables offices to be a safer space for people to return to amid the pandemic.
TECHNOLOGY
Issue 26 | 43
TECHNOLOGY
Knowing how often spaces have been occupied, by how many people and how often staff are interacting with physical objects provides greater insights for the occupier to know what cleaning and sanitising protocols should be put in place. Of course, safety measures such as this in the post-Covid world are going to be high on the agenda for every office worker, landlord and flexible workspace provider.
Network security When it comes to network security, processes and solutions should be in place to protect the platform from any attacks, and also ensure that all the systems work together seamlessly in one place. This includes having visibility and control over the range of devices connected to your network, and managing and monitoring wired, wireless and guest network logins around the clock. Secure Wi-Fi networks encrypt and authorise access based on specific and individual usernames and passwords rather than issuing a shared password common for WPA networks. Traffic must be appropriately encrypted and segregated by tenant, with dedicated VLANs and blocked inter-VLAN traffic. Firewalls are also essential to protect the infrastructure. Traditionally, to achieve such stringent security measures a landlord would have to work with up to 10 different vendors. There would be a system for CCTV operations, a network for access control, for desk booking, control systems and many more. This makes maintaining the security and operations complex, and has been a real challenge for landlords traditionally. But flexible working platforms can carry out these operations in one place, equating to a more secure and fluid network.
Cybersecurity Are you prioritising this critical, yet often left behind component of technology infrastructure? From malware and payment processing to compliance
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and phishing attacks, cybersecurity is a moving target if you don’t have a framework in place to manage the invisible threats in today’s increasingly digital world. Start by understanding which components and systems in your operation are vulnerable to attacks. Take steps to protect and monitor any possible weaknesses. Best practices include keeping cable patching and switch port configurations up to date to prevent risks to connected devices, firewalling and VLAN segregation to prevent targeted cyber-attacks on tenants on the same infrastructure, and real time protocol monitoring to contain and identify compromised devices.
The end-user experience Making space and service access simple and frictionless for customers is essential. Anything from printing and adding devices to door access and logging onto Wi-Fi can make or break productivity and a seamless experience. Occupiers will have to interact with the space and at some point, touch the security boundary – think adding devices like a printer, Alexa or a Sonos speaker. The fewer systems and touchpoints in the process, the simpler it is to bring new devices onto the network with minimal friction. In a post-pandemic office market, there’s a renewed focus on making the space a safe place that supports good health and wellbeing. Technology can help to monitor re-occupancy and track user behaviour throughout your portfolio. Tools such as smart access control systems and remote desk-booking minimise touch points throughout an office, making it a more comfortable experience for employees. And when speaking about experience there are two layers to it; the experience of the landlord, and that of the occupier. Occupiers will want to use spaces in a different way to landlords, and have offices that are customizable to their needs and desires, and those of the occupier’s employees too. Ultimately, the need for greater user experience will be higher than ever when we return to
the office en-masse. It will need to be consistent and reliant throughout the business and its many offices. Our relationship with offices will be more nuanced like never before, and the modern day workspace has to adapt to these new intricacies of the modern workers’ demands, and the demands enforced by the pandemic.
Secure digital infrastructure Ensuring the physical and digital security of the technology infrastructure is critical, as is being able to meet the different requirements for each tenant. Failing to do so can have serious implications The role of a space provider is to build and deliver workspace and services to occupiers, not to get bogged down with dealing with the minute details of technology management and compliance. By adopting a software and technology solution that can effectively incorporate a full tech stack, landlords can remove the core responsibility off their shoulders while also staying aligned with industry standards and compliance requirements, and satisfying tenants’ ever-evolving needs. Can your building afford not to keep up?
James Shannon Chief Product and Technology Officer Essensys
THE FUTURE OF TRADE IS HERE Contour is building the digital infrastructure for the global trade industry Our network seamlessly bridges the trade and trade finance industries Bringing an end-to-end Trade Service that can be fully integrated and tailored for each client Join our journey in building the future of trade
T H E T RU ST E D N E T W O R K FO R G LO BA L T R A D E
c o n t o u r. n e t w o r k
BUSINESS
Why now is the time to shift the 'winning' culture and bias within organisations and how. Who’s number one? Who are the winners? Who’s ranked highest? This winning-focused language still resounds inside many organisations, masquerading as a route to high performance. But it’s outdated, actually undermines performance and stifles creativity, resilience and wellbeing. It’s time to ditch the simplistic narratives based around winning and losing, challenge what winning really means and start to think about a more meaningful approach to success. The concept of ‘The Long Win’ offers us a way to shift our mindsets about what winning looks like through the 3Cs of Clarity, Constant learning and Connection.
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Clarifying Broader Success Criteria: Purpose and Perspective First, Clarity helps us to clarify broader criteria for success beyond short-term outcomes. It’s about clarifying how we work, the way we interact with others, and what really matters in the longer-term. Purpose and perspective give us a way of broadening success beyond simply being first in some arbitrary rankings or outdoing our peers. Purpose helps us to think about how our work fits into something worthwhile - how are we contributing to society, the environment or our local communities in a positive way? Perspective ensures that we don’t chase short-term goals that leave us empty or unfulfilled over the longer-term. Burnout and career dissatisfaction are growing phenomena in the workplace, and the shock of the pandemic has caused many of us to re-evaluate what really matters in our lives. A Constant learning Approach: Developing a Performance Mindset Second, a Constant learning mindset helps us to focus on how much we learn on a daily basis. Emphasising the learning process rather than future outcomes draws on the sports psychology findings from elite sport: Olympic athletes don’t focus on becoming world-class winners, they focus on becoming world-class at improving. Not because they don’t want to win, but because the best way to win is to maximise ongoing progress and growth as much as possible. Winning depends on various external factors beyond our control. In sport, results depend on competitors, perhaps referees and umpires, luck and the wider environment in which a sporting event takes place.
In business, results similarly depend on aspects beyond our control, competitors, the marketplace and wider social and economic environment. A learning mindset focuses on optimising the performance aspects we can control. This ‘performance thinking’ helps athletes to sustain high performance over time and not waste valuable energy and emotion by riding the rollercoaster of results – feeling great when you win and terrible when you lose. Win or lose, an athlete will look at what’s working well to build on, and what needs to be improved and changed. It creates a resilient way of thinking that is incredibly helpful in a world where we all face uncertainty and setbacks along the way. Organisational investment in learning is still often seen as an optional extra, as an add-on to the day job. But this shows a lack of commitment to high performance. Learning needs sit at the heart of how we work, furthered through daily habits and behaviours of feedback, reflection, challenge and experimentation.
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Investing in Relationships as a Priority Third, prioritising Connections acknowledges that we cannot succeed alone, whatever our role. Our relationships with others are crucial to exploring our potential both individually and collectively. So, what might we do differently if we recognise this? We can start to invest in people over tasks; ensure that we don’t just evaluate success on tasks completed, but on the quality of interactions and investment in relationships over time. Success becomes less about outdoing our peers, and more about collaborating with them. Defining Success Beyond Just Coming First: Exploring our Potential Together In the early days of my Olympic career, we had a focus in our training environment on who were the winners and losers on a daily basis. It was tough and I took it for granted that’s how it had to be. But it was exhausting and draining, and from a performance perspective, it took away any freedom to try new things, to experiment or make any improvements that wouldn’t bring immediate gains or to learn from each other. This culture limited our progress over time. When we came to race the rest of the world, we simply weren’t fast enough. We hadn’t made any of the technical changes that required us to go slower for a period whilst making the change, in order to go faster over the longer-term. And we were burnt out, as recovery and wellbeing had often been sacrificed. Elite athletes now understand that such a short-termist approach limits performance and often shortens careers. I remember a sports psychologist explaining this shift in thinking at final selection trials, one of the most stressful moments in the Olympic cycle when you are directly competing against your teammates for a place in the Olympic team: he pointed out that this wasn’t just me racing my
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teammates, it was us collaborating together to draw our best performances out from one another. Just as Federer and Nadal need and respect each other for enabling them to explore their full potential; each welcomes when the other raises the bar in some way. The performance experience becomes quite different, less fear-based and much more energizing. I went from sitting on the start line of my first Olympics feeling a huge pressure to win, to sitting on the start line of my third Olympics feeling excited about bringing my best performance and seeing where it could take me. The experiences were worlds apart, the results were too. In a different world, the orchestral conductor Benjamin Zander realised that fear of grades and assessment was reducing performance. It limited the opportunities to create new possibilities, to take risks when playing and find new levels of performance. With all the complex challenges that organisations face in the 21st century, finding sustained levels of high performance at the same time as exploring new possibilities seem to be two of the most valuable aspects of organisational success. The Language of Winning Too often I see the language of winning added in by default. It recurs in strategy documents, as companies strive to define a ‘winning strategy’, all the time moving further away from purpose and performance. It features in CEO speeches, intending to motivate, when they actually alienate. And it features in performance discussions, aiming to raise the bar, but actually limiting what we can do. Let’s set our sights higher than just outdoing those around us. Let’s ensure that our attempts to win aren’t holding us back. And let’s redefine success for ‘The Long Win’ to help us find a better way to explore what’s possible, together.
Dr Cath Bishop Olympian, author and former diplomat About Dr Cath Bishop www.cathbishop.com Dr Cath Bishop is an Olympian, former diplomat and business coach. She competed in rowing at 3 Olympic Games, winning World Championships gold in 2003 and Olympic silver in Athens 2004. As a diplomat for the British Foreign Office for 12 years, Cath specialized in policy and negotiations on conflict issues, with postings to Bosnia and Iraq. Cath now works as a business consultant, leadership coach and author, and teaches on Executive Education programmes at the Judge Business School, Cambridge University and is a Visiting Professor at Surrey Business School. Cath speaks at events globally on topics of leadership, high performing teams and cultural change. Her first book ‘The Long Win: the search for a better way to succeed’, published October 2020, was described by the Financial Times as ‘a deep and rewarding exploration of human motivation in sport, politics, business and our personal lives.’
Megabank has created a platform that made it possible to make the necessary payments using a smartphone without having to visit a bank branch, in any convenient place and at any time. Megabank serves a large number of utility bills of customers, which created the task to release a mobile application to meet customers’ needs. This is how the idea of launching todobank was born.
"The driving force behind the creation of products in the bank is customers’ expectations"
FINANCE
Continuous Planning: The New “Must Have” In Finance
Finance teams have always been integral in developing the short and long-term trajectories for businesses. Financial plans are used to drive strategic decisions for businesses - from M&A options to annual bonus allocations for employees. The traditional approach to financial planning typically involves an annual planning cycle performed by a dedicated team which manually obtains data from around the organisation, then models growth using topdown assumptions. But, COVID-19 happened. The COVID-19 pandemic has shown, in a dramatic fashion, how the levels of uncertainty and volatility can change overnight, making previous financial forecasts obsolete. In addition, businesses face a whole host of other global and local challenges - from macroeconomic events such as Brexit to local supplier shortages. With world events changing hour-by-hour, financial planning needs to be agile, and businesses need to adopt a continuous planning model.
What is continuous planning? In its essence, continuous planning is a rolling business plan which is kept up to date with real-time information either from data within the business, external data, or a mixture of both. It uses technology to allow rapid planning cycles to enable businesses to respond quickly to events, rather than being tied to inflexible annual or semi-annual plans. Continuous planning allows management teams to model and test the impact of internal and external factors on critical KPI metrics at any time. It also allows finance teams to focus on analysis and scenario forecasting, rather than manually gathering data, so they can make informed decisions about the future to drive better business outcomes. Increasingly, scenario planning is being supported by automated technologies, artificial intelligence, and machine learning to help understand the relationship between different sets of data.
What if? COVID-19, and the resulting lockdowns, demonstrated the benefit to businesses of real-time scenario planning. For example, at the start of the pandemic, supermarkets
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faced a number of questions. Will customers stockpile certain foods? Will they want to avoid shopping? How long will the lockdown last? Do we need to adjust staffing levels? Clearly it was impossible to know the answers to these questions, but a continuous planning model would allow for forecasts to be adjusted in real-time and updated as more information on shopping habits became available. With the ability to see the impact on business forecasts, management can make more informed decisions on costs and restructuring or take advantage of other market opportunities.
Successfully implementing a continuous planning model Like all transformational change, adopting a continuous planning model will involve the entire business and can be a complex process. To get the most from an investment in continuous planning, businesses should consider the following: 1. Understand your operating model Continuous planning involves understanding the key drivers of the business, which can subsequently be modelled and automated. A deep understanding of business drivers
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requires a business-wide approach incorporating the views from Finance, Sales, Marketing, and Operations. The key to understanding the drivers of the business is to extend the planning process to those on the frontline, in addition to the finance team, getting first-hand inputs from those in the field. 2. Prioritise the important data Businesses now have more data than ever before, and this level of data will only increase in the future. However, data, and its interactions with the different systems inside a business, needs to be understood then linked to the drivers of the business. 3. Tell the right data story Linked to understanding the key drivers and data of the business is determining how the business will be monitored by the executive management team. What are the metrics of success, and should these be monitored on a daily, weekly, or monthly basis? There needs to be a clear set of KPI’s that are used to measure business performance so that one planning scenario can be compared to another. Crucially,
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these business leaders may not come from a finance background and so will need to grasp the data story easily. Getting the right KPI and visualisation dashboards in place will support this need. 4. Find the right technology partner Finding the right technology partner will vary business to business and will be dependent on existing skills, the number of systems in use, and the fragmentation and complexity of data. Finance teams will need to embrace advancing technologies, particularly in relation to automation, predictive analytics, and data visualisation. Keeping data in siloed models in Excel is not the answer anymore - finance teams must adopt more automated solutions to do the heavy lifting for them. 5. Consider whether the finance team requires additional skills The finance team needs to possess a detailed understanding of the financial drivers of the business and the ultimate KPI metrics used to manage the business. However, the finance team of the future will also need to be scenario planners, strategists, and data scientists. These skills are needed to model potential scenarios using increasing volumes of data from internal and external sources. Introducing data analysts and data scientists to support the team is a must.
2021 and beyond Pre-COVID, many businesses may have thought they were not mature enough to require a new approach to planning. However, the last 12 months have shown the need for businesses of all sizes to be agile so they can respond to global challenges, or conversely take advantage of opportunities. The ability to model the answer to “what happens if we source materials from Brazil?” or “what happens if we increase the marketing budget in Europe?” provides businesses that adopt a continuous planning model with a strategic advantage over competitors. Successful continuous planning requires a strong understanding of business drivers, key dataflows, and collaboration across the organisation. And that’s why a continuous planning system that reaches into the wider business is the new “must have” in finance.
Dafydd Llewellyn EMEA GM insightsoftware
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