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THE INVESTMENT IMPLICATIONS OF CLIMATE RISK – AN INVESTMENT MAN-AGER’S VIEW

In the final release of its three part series on climate risk, leading independent fixed income manager, Cameron Hume, looks at how attitudes to climate risk can be factored into long term investment decisions and whether those investment decisions can be used to drive the direction of travel with a global response to climate risk.

 

It is widely accepted that greenhouse gas (GHG) emissions must be decreased in order to avoid a potentially catastrophic increase in global temperature.

 

If we also accept that a global response is required to achieve a global reduction in GHGs, but that countries will act according to their own discretion, then the next piece of information we have is the recognition that companies will face different regulatory and legal regimes depending on which part of the world they operate in.

 

It is a complicated set of factors to consider and it can be tempting to put off any decision making. However, the Financial Stability Board has made it clear that action is required now.

 

The 2017 report by the Taskforce of Climate Related Financial Disclosures (TCFD), stated: “The large-scale and long-term nature of the problem makes it uniquely challenging, especially in the context of economic decision making. Accordingly, many organizations incorrectly perceive the implications of climate change to be long term and, therefore, not necessarily relevant to decisions made today.”

 

In a bid to help navigate the difficult process of taking on appropriate exposure to climate risk, the TCFD recommends the implementation of tried and tested methods that financial market participants are already familiar with. Improving disclosure is a key input to supporting better management of climate risk. The TCFD recommend considering climate risk in a framework consisting of Governance, Strategy, Risk Management and Metrics & Targets.

 

For Cameron Hume, Governance means that there is an agreed investment policy that all stakeholders are in agreement with. Strategy should therefore support development of policy and systems which incorporate informed Risk Management. Metrics & Targets must be built into portfolio measures, client reporting and disclosures to bodies such as the PRI.

 

The Cameron Hume Global Fixed Income ESG Fund, launched in 2018, follows the TCFD methodology while selecting issuers judged to manage their ESG risks better than their peers.

 

Chief Investment Officer, Guy Cameron, explains: “In Cameron Hume’s view, a key indicator of an issuer’s sustainability is the quality of its governance and risk management framework, which we know must take into account climate risk.

 

“A company that already has low emissions will be more likely to maintain low emissions in the future than a company with a stated aim of lower emissions but a bad track record of delivering on promises. Even those who reliably commit to a transition plan require access to significant funds, technology or personnel to make such a major shift in operations.

 

“Similarly, as many governments introduce legislation to reduce GHG emissions, inability to achieve the legally mandated targets may weigh on companies even as they transition.

 

“As the likelihood of governments imposing tough targets on emissions differs from country to country, we believe the best way to manage risk is to invest in the companies with the lowest current net emissions, accounting for gross emissions and mitigating factors. Such issuers will likely have the governance framework, risk management capability and strategy in place to allow them to embrace any new rules effectively.

 

“For these reasons, the Cameron Hume Global Fixed Income ESG Fund favours companies with lower net emissions currently, rather than those requiring significant changes.”

 

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BANKIA TRANSFORMS THE CUSTOMER AND EMPLOYEE EXPERIENCE WITH BIANKA BY IPSOFT

Developed with cognitive artificial intelligence, IPsoft’s conversational agent can carry out transactional tasks, perform different roles in customer service and assist branch employees

 

IPsoft, one of the largest independent leaders in enterprise artificial intelligence (AI), today announced that Bankia has launched its industry-leading conversational agent, Amelia® (known as Bianka), to serve customers in call centers and in the Bankia mobile app. Bianka will also help employees resolve their customers’ day-to-day requests.

Bankia, the fourth largest bank in Spain, continues to make progress in its digital transformation process using the most advanced technology in the market. Recognizing the potential of artificial intelligence and cognitive agents to improve customer relationships – both digitally and at bank branches – Bankia has chosen Amelia by IPsoft as the backbone of Bianka. Amelia is the most advanced technology in the market. She is the result of more than 20 years of research and development and has been repeatedly chosen as the industry leader by independent analyst firms, including Everest GroupForrester and Ovum.

Her cutting-edge artificial intelligence and natural language understanding are capable of recognizing customers’ contextual changes, intention and emotional state. This enables Bianka to hold human-like conversations and execute tasks independently.

Additionally, its advanced Machine Learning capabilities also mean that she constantly evolves over time to accumulate knowledge and improve the user experience.

 

Bankia customers will be served by Bianka in three areas:

  • Bankia Mobile Application – Once customers are logged into the mobile app, they can have a conversation with Bianka via chat or voice to request account information and complete transactions such as money transfers through Bizum.
  • Customer Service Center – Bianka will serve clients through the customer service center, where they can now ask open-ended questions when she asks, “How can I help you?” When interacting with Bianka, customers will always arrive at a resolution: from user identification to the execution of tasks, such as blocking a lost credit card and requesting a new one. Bianka will be able to resolve many customer requests quickly because she has access to the bank backend systems, allowing her to solve queries immediately. When the requests are more complex or require human intervention, Bianka will transfer the call directly to a human employee. As a result, human employees can focus on resolving more complex tasks that bring greater value to the client.
  • Support for branch employees – Bianka also provides guidance to branch employees on more complex inquiries, such as requests about insurances. Employees are no longer required to speak with another customer service agent when they run into a problem. They can instead interact with Bianka by chat, who offers timely and detailed information about the process while the human agent is serving a customer. This not only provides more help for employees when they need it, but also allows them to improve the customer experience with more immediate responses.

These services have been implemented for Bankia’s 12,000 branch employees since December 2019 with a resoundingly positive response.

 

Elena Sanz, Director of Bankia Channel Architecture; Gema González, Director of Conversational Agents; and Eva Valle, Director of Control of Operations, said:  “We are very satisfied with IPsoft’s support in Bianka’s launch, which is the bank’s response to the needs of our digital customers. At Bankia, we have been integrating artificial intelligence into many of our processes for several years with the goal of improving our clients’ experience and making their lives easier. Technology offers us the opportunity to create great products and services and additionally allows our human employees to get personalized advice for their clients in our branches or through remote channels. All of this makes our banking proposal unbeatable.”

 

Chetan Dube, IPsoft CEO, said: “Bankia has shown that it is truly at the forefront of the banking digital revolution and that it is committed to improving the experience of both customers and employees by using cutting-edge technology. Until now, as users, we have been continuously disappointed in the so-called digital service improvements that rely on frustrating and highly limited chats. However, by integrating true cognitive intelligence with the bank’s back-end services, Bankia has been able to offer a service that infinitely improves the experience of its customers and employees.”

 

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RISK AND INVESTMENT SPECIALIST, CARDANO, TAKES TO DOCUMENT AND EMAIL MANAGEMENT IN THE CLOUD WITH ASCERTUS AS IMPLEMENTATION PARTNER

Ascertus also providing document comparison tool, compareDocs 

 

Cardano, a privately-owned, purpose-built risk and investment specialist, has chosen Ascertus Limited as its implementation partner to deploy document and email management platform, iManage Cloud. Once implemented, iManage Cloud will securely centralise, store and structure over 10 years’ worth of documents in the firm’s corporate legal department, giving users including lawyers, the legal assistant and the compliance officer access to the content from anywhere and any device. The document comparison tool, compareDocs, will also be seamlessly integrated with the iManage solution. Ascertus provides tailored information and document lifecycle management solutions, on-premises and in the cloud, to professional services firms and corporate legal departments across the UK and Europe.

“In keeping with our business growth, including the assets under management, our legal team has expanded too, making document management essential for the legal department’s operation,” explains Miriam Lindsay, Senior Legal Counsel, Cardano. “Presently, we have a shared folder system for documents. Additionally, everyone uses their email inboxes to store information in a string of folders that potentially run into the 100s. It’s an inefficient way of keeping documents and requires a lot of time which could be better focused elsewhere.”

Cardano selected Ascertus as its implementation partner following recommendation. Ascertus is currently working closely with Cardano’s legal department to design and configure iManage Cloud so that the platform delivers efficiency and productivity gains to the users. For ease of information sharing, the folder structure in the iManage platform is being streamlined. Tags and metadata are being used to index content and facilitate search. The system will automatically assign numbers to documents in iManage Cloud for easy trackability.  iManage Cloud is being fully integrated with Microsoft Office 365, to enable users to save documents and emails directly from Outlook and Word into the document and email management platform. Users will have visibility of the documents and emails that have already been filed in the system, directly from their Outlook inboxes, saving them time and ensuring that there are no duplicate files residing in iManage Cloud.

“It’s clear to us that the Ascertus team has sound knowledge of iManage Cloud,” adds Lindsay. “They are working with us patiently and systematically to meet our system requirements. Their approach to working is very straightforward and professional – with a lot of emphasis on attention to detail.”

Ascertus is also providing Cardano with compareDocs, which seamlessly integrates with iManage Cloud. Users at Cardano will be able to compare any file type, review accept and reject changes in a live Word document and save it back to iManage Cloud.

“Due to the large volume of files that a corporate legal department has to deal with, the lack of document and email management capability can be hugely frustrating for lawyers,” comments Jon Wainwright, Sales and Marketing Director of Ascertus Limited. “Once deployed, iManage Cloud will deliver significant efficiency and productivity gains to the individuals as well as streamline the department’s operation to a large extent.”

 

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