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IS TURKEY A SUITABLE INVESTMENT DESTINATION FOR UK INVESTORS?

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Sezer Sherif, Founder and CEO of investment group, Vector Capital

 

An exciting and resilient economy

Turkey can be an enigma to the casual investor. Steeped in history and holding strong religious sensibilities, this officially secular, multicultural, transcontinental country, is dynamic and outward looking, owing to its status as the gateway between the East and West. While the majority of its territory lies in Asia, its government is clear that its destiny lies within Europe as a member of the European Union, for which it is a key strategic partner on issues such as migration, security, and counterterrorism.

Defined by the World Bank as an upper-middle-income country, a status reserved for countries with a gross national income (GNI) per capita between $4,046 and $12,535, it is the 19th largest economy in the world and one of the fastest growing emerging markets. In fact its growth over the last two decades has been nothing short of remarkable, It grew 5.9% from a year earlier, in the final quarter of 2020, outpacing all G-20 nations except China.

Such has been the resilience of Turkey’s economy that rating agency Fitch revised Turkey’s outlook from “negative” to “stable” stating, “Turkey’s return to a more consistent and orthodox policy mix under a new economic team has helped ease near-term external financing risks derived from last year’s falling international reserves, a high current account deficit and deteriorating investor confidence,”

 

Sezer Sherif

Emerging markets promise new opportunities

With its young, fast-growing population and robust economic growth, Turkey offers a large consumer base and many trading opportunities. It is important to recognise that it aligns its regulatory and business environment with EU standards as an official EU membership candidate. Customs Union signed with the EU in 1995 offers further opportunities for European businesses and exporters across a broad range of sectors. This union is based on the free circulation of goods which are mainly textiles, machinery and chemical products, as well as plastics and transportation equipment between Turkey and the EU countries.

Foreign investors often choose Turkey to set-up a business because of its low taxes, developed markets and excellent infrastructure. Cities such as Ankara, Adana, Izmir, Bursa, and of course Istanbul, the country’s economic, cultural, and historic centre, are prime sourcing destinations for European businesses. Turkey is a globally recognised manufacturing hub for more than 250 international brands, across such industries as textile, automotive, electronics and construction. This is owing to its skilled labour force and lower costs of manufacturing, resulting from favourable exchange rates, as well as its locational proximity to Europe, which supports the acceleration of factory delivery times.

Investors and UK businesses should also take a close look at Turkey’s energy sector, which is a key area of development for the government, who are issuing a number of incentives to develop services and produces in such areas as geothermal, smart grid projects, nuclear, and renewables. For example the government is issuing green bonds to encourage investments into clean drinking water, and electric or hybrid vehicles that lower carbon emissions.,

 

Reward is rarely without risk

Investment in Turkey is not without its problems. High unemployment and a dependence on external financing have been ongoing concerns. Furthermore inflation levels for the last four years in the double digits can make it a tough sell for investors.

Fortunately, Recep Tayyip Erdoğan, Turkey’s President has made tackling these issues his immediate priority so as to achieve his government’s goal of making the country one of the ten biggest economies by 2030 through a reforms package that focuses on investment, production, jobs, and exports.

A good indication of the health and potential of Turkey’s economy can be gauged by what its business leaders are saying. Fortunately, the majority are confident that the future is a bright one for their companies, with 70% of CEOs interviewed for the PwC 24th Annual Global CEO Survey stating that they are confident in their own organisation’s growth prospects. Clearly, given its resilience, growth and hunger for inward investment, Turkey deserves a second look by any investor seeking to make strong returns.

 

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IF IT’S A LOSS, YOU’RE TOO LATE – WHY THE INSURANCE INDUSTRY NEEDS TO FOCUS ON FIRST NOTIFICATION OF RISK

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Simon Dicks, Insurance Channel Manager EMEA, Lytx

 

Insuring commercial fleets can be an expensive business. Average repair costs have increased by up to 40% in the past 8 years and disputes about who was responsible can drive up expenditure for both fleets and insurers.

Part of the problem is that the insurance industry hasn’t had the tools to forecast costs and premiums accurately enough in this sector. Underwriting decisions are still made in the same way they always have been, by looking back at historical data from previous years. This approach simply isn’t giving insurance companies an accurate indication of potential risk – or a proper indication of the impact of driver behaviour.

Technology is helping insurers to an extent by providing information about First Notification of Loss (FNOL) – automatically sending notifications when unusual G-force readings are captured within a black box tracking device as a result of sudden braking or impact. This is good, but far better is the ability to use proactive technology to detect when an incident is at risk of occurring and when a driver is distracted.

The only way to address this is to put a highly accurate level of camera technology both inside and outside cabs, supported by sophisticated technologies such as Machine Vision (ML) and Artificial Intelligence (AI). This way, we can see not just that an incident has happened, but why it happened. What’s more, we can assess risk before an accident happens at all and prevent it happening in the first place. We call this First Notification of Risk (FNOR) – and it’s a whole step up from FNOL.

Machine Vision scans the internal and external environment of the vehicle to identify distracted driving behaviours such as mobile phone use, eating, drinking, smoking, inattentive behaviour or failure to wear a seatbelt. AI, comparing the behaviour against a vast bank of accumulated data, is then able to determine the riskiness of that situation and whether it needs to be flagged to the fleet manager, driver, or insurer via a short video clip. The big difference in this approach is that it’s proactive, not reactive. For the first time, fleets and insurers can identify adverse driving and distracted driving in real-time for the first time.

This includes the ability to alert drivers of any momentary slip-ups or distracted behaviours. Using the same technology, drivers will receive an audio or visual alert to help keep them on track and to lessen the likelihood of a moment’s distraction becoming anything more.

When insurers have access to these insights, they can also start to see patterns from the data over time. For example, a fleet manager might start to see that there’s a peak in risky driving behaviours on a Friday afternoon when lots of drivers are rushing to finish for the weekend. As a result, they may decide to spread the shifts differently so as to avoid that pattern of behaviour.

When insurers are only looking at FNOL, it’s already too late. A driver could be unthinkingly driving whilst smoking, on their phone, and nobody would never know. Whereas with FNOR, both managers and insurers are provided with insights that remove the guesswork, and underwriters have the information they need to assess risk with far greater precision.

There’s still a long way to go in making the move towards FNOR. With so many different companies selling cameras and telematics systems and producing information in hundreds of different formats, claims data will have to be standardised before the sector can really transform. However, by starting to embrace ideas like FNOR, the industry can move towards a solution that saves them time, money and lives.

To find out more, visit  www.lytx.com/FNOR

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THE DIGITAL WEALTH, ASSET MANAGER AND FINANCIAL BROKER OF THE FUTURE: TRANSFORMING CLIENT COMMUNICATIONS

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By Christina Di Nolfo, Head of Solutions at Delta Capita

 

More than in any other profession in financial services, wealth managers and financial brokers are heavily dependent on personal interaction with their clients. While digital transformation has been on the agenda of many individual advisors for years, the pandemic revealed the painful inefficiencies of legacy communication models.

Studies from YChart mirrored the communication gap just a year prior to the lockdown. 75% of clients want proactive communication from their wealth manager or advisor. But nearly half of clients with over $500,000 or more in AUM said they received infrequent communications, with those with less than $500,000 invested, receiving even less of their advisor’s time.

Consequently, finance professionals have been quick to try out any communication software from Zoom to Slack to WhatsApp. However, these programs were not made for financial advisors, making adhering to compliance standards more complicated than ever and raising security concerns.

Christina Di Nolfo

Let’s take Zoom as a quick example. Whilst Zoom is a great communication tool and one which many of us are all too familiar with, it is only meant for video calls and is not a comprehensive communication platform. The Federal Trade Commission discovered that Zoom’s end-to-end encrypted (E2EE) wasn’t what it appeared to be. Instead of calls being E2EE between participants, the data was only encrypted between each meeting participant and Zoom’s servers – meaning it was not truly end-to-end encrypted.

But it’s not just Zoom. Any application not built with compliance in mind is a risk for your business and your customer.

A customisable, compliant, and fully interactive client portal for the digital wealth advisor or financial broker is essential to streamline communications and maintain compliance. But what does that look like?

 

The Wealth Manager of the Future

Customer experience is everything, and the wealth manager of the future can already benefit from an end to end digital customer journey platform. Imagine if you could:

  1. Onboard new clients in minutes
  2. Push secure content to your client on their chosen device
  3. Record every minute of your meeting, even as you switch between video, chat, screen shares, and more
  4. Collect signatures and obtain consent instantaneously
  5. Accept PCI compliant payments directly from your portal
  6. Provide disclosures and other vital documentation for clients
  7. Collect customer documentation in real time such as ID and proof of address

All of this is possible through Klarion, our end-to-end engagement portal. Completely customisable, Klarion offers an entirely digital process designed for the optimal user experience. Clients are not required to download complex software. Instead, they only need to click on a secure link that you send to them via email or SMS.

Klarion enables you to verify identities in real-time, manage essential sensitive data, accept payments, engage in a video call and more. And you don’t need to worry about compliance. Not only does our solution log every interaction and timestamp it within an end-to-end encrypted environment, but you can also benefit from PCI-DSS Level 1 and KYC/AML compliance features.

You no longer need to go back and forth with your clients over email or other communication channels, as you attempt to resolve issues or complete tasks. And you also do not need to invest time and resources in tracking down every slip of paper. Instead, you can focus on what matters: Keeping your client informed about their assets and providing value.

Financial managers using Klarion have shifted their self-service offering from 13% to 30%, and reduced call volumes by 2.2x without sacrificing customer experience or compliance regulations.

 

The Future Won’t Wait

Through the proliferation of technology, more and more customers will demand a comprehensive and cohesive user experience. To create a sustainable, client-focused financial management practice today, integrating technology with human sensibilities is critical.

But waiting to reinvent your customer interaction process means that instead of focusing on growth, you may well end up running after the competition.

Klarion makes it easy to get up and running. There is no need to worry about costly, complicated, or time-consuming system consolidations, as Klarion integrates seamlessly with current infrastructure as a white label front-end solution, while ensuring your brand is front and centre. Klarion sends information directly to your CRM (or other systems), saving you from data entry duplication and is customisable to whatever workflow is required.

 

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