Data is the key to unlocking investment for emerging markets
By Devin de Vries, CEO, WhereIsMyTransport
Over the past few years, the rapid economic growth experienced by emerging markets since the turn of the century has faced significant challenges. In the face of the pandemic, they were forced to be more adaptable than their mature market counterparts, taking on fresh debt. And while many economies have rebounded, recovery has been far from even. If emerging market economies are to return to their previous growth trajectories, then investment will be critical.
Those investments, at least in the cumulative sense, have to be big too. In 2020, for example, South Africa revealed that it would need just under US$87 billion just to finance its infrastructure development needs over the next decade. A year earlier, meanwhile, Bangladesh revealed that it would need somewhere around US$24 billion annually to meet its infrastructure needs. Those figures, which have undoubtedly climbed in the wake of the pandemic, are mirrored to varying degrees in emerging-market countries around the world.
Nowhere is the need for such investment clearer than in the transportation sector. Transport remains at the centre of life in busy and bustling cities. It is what keeps the city moving, getting people from A to B, and ensuring a stable economy. Without efficient, reliable, and safe public transportation systems, any attempts at improving a city’s economy is futile. This is especially true in emerging markets. But if these markets are to attract the kind of investment they need, data will be critical.
The power of transport
In order to understand why effective transport data is so critical to economic growth in emerging markets, there are a few things worth considering.
First off, there’s the time spent commuting and ultimately lost from an economic productivity perspective. Take Lagos, for example. A 2021 report found that by the time the average Lagosian reaches 55, they will have spent nearly seven years in traffic. Imagine what you could do and achieve if you were given an extra seven years back. Multiply that by the millions of people who live in the city and you can see how much of an economic cost traffic represents.
That’s to say nothing of the environmental costs (according to the World Economic Forum, mayors in more than 100 cities have said that investing in public transport could create 4.6 million jobs by 2030 and cut transport emissions) that come with all that traffic or the mental health costs that place a burden on healthcare systems around the world.
Even if you can’t give a city’s inhabitants back all of the time they spend in traffic, half an hour on either end would allow commuters to study further, spend more quality time with their family and friends, or even launch a side hustle.
In order to unlock that value, data is critical. After all, unless you know where pile-ups and traffic jams take place, you can’t begin to address them. That’s especially true in emerging market cities where public transport networks are often informal and don’t follow fixed routes. But the value of transport data goes much further than just making life easier for commuters.
Making business and investment easier
That’s true for governments and transport authorities: with the right data, they can map and plan new transport routes, tailored to each and every city. That, in turn, can drive investment. We’ve seen this first-hand, with data from WhereIsMyTransport used by the Sarajevo Canton in Bosnia and Herzegovina in evaluations that helped them secure an infrastructure investment loan from the European Bank for Reconstruction and Development (EBRD).
But public transport data can also be useful for attracting private sector investment. Retailers, for instance, can get a much better idea of where to locate their stores. In emerging market cities especially, it makes sense to have stores as close to transport hubs as possible. With most people relying on informal public transport, rather than their own vehicles, it’s vital to ensuring that companies receive maximum return on their investments.
There are further benefits from this kind of data too. Developers and construction companies can more easily figure out where to put their next big real estate project, logistics companies can plan the most efficient routes for their drivers, along with various other benefits.
Ultimately, the more they know about the opportunities in a specific city or market, the more willing organisations will be to invest and keep investing.
Beyond recovery, towards growth
It should be clear then that data, and transport data in particular, is crucial to securing the kinds of public and private investment that will take emerging market economies from recovery, towards sustained (and sustainable) growth. In order for it to have that effect, however, it’s critical that this data is accurate and up-to-date at all times. The fact that cities can attract this kind of investment while also improving the lives of their citizens, should make gathering and sharing the required data a no-brainer.
How to identify the signs that your IT department need restructuring
Eric Lefebvre, Chief Technology Officer at Sovos
For firms to execute transformations and meet their overall vision, it is crucial that their CIOs are able to recognise the signs that their department is in need of some internal change. In the current economic climate, CIOs working to fulfil their organisation’s priorities and meet business goals might hesitate to acknowledge that their IT department needs restructuring, never mind be able to identify the signs.
However, these problems rarely fix themselves and organisational restructuring requires conviction and determination from leadership for it to occur successfully. So, what are some of the key signs that CIOs should look out for?
Struggling to keep up with industry demands
CIOs unsurprisingly are working in an extremely demanding environment at the moment. Meeting these evolving demands is crucial for companies. When demands are not met and not handled properly, this can have a lasting impact on organisational goals and objectives, and even impact the way in which transformations are put into effect.
Depending on the organisation’s structure, the way in which being unable to keep up with demands manifests itself can differ. Despite double digit reductions across the industry, the search for talent across the tech world continues, project costs continue to rise as the cost of labour has increased and schedules have been disrupted by significant attrition. Many companies will also find business costs, such as that of third-party software, are higher than planned and technology debt continues to pile up faster than it can be sunset.
Whilst leadership teams might dedicate their department’s attention on the factors discussed above, they may find that their team will fall short when it comes to timely deliverables and helping maintain your organisation’s tech stack and guide its business transformations. Looking beyond the immediate problems of high costs and considering an internal reshuffle may be the solution for many IT departments.
Internal conflict within the team
Organisational designs with underlying issues can cause constant friction, especially when they go unacknowledged. An IT department that lives in conflict will certainly be reflected in results and less than successful tech transformations. CIOs will find that by adopting an organisational design which works through staffing issues, will better innovate, especially if they can all work together.
Department leads should have a strong understanding of their team’s work environment and guide them through any long-term or potential problems. When an individual is working in a demanding or complex industry, working well with your team shouldn’t be the main impediment to innovation. By acting quickly to eliminate internal conflict, CIOs can better lead and ensure their team’s focus is entirely on producing more optimal outcomes.
Delays are commonplace
When a large amount of your team’s time is spent setting objectives, budgets and timelines for the projects they are working on, it is vital that they are met. When delays are coming from the IT department, they will inevitably hinder the development of any business transformation, especially if it prompts teams to spend excessive amounts of time rearranging budgets and timelines and therefore hindering innovation.
IT departments are a crucial aspect in many different parts of a company’s transformations, so remaining on track when it comes to timelines and innovation is critical to operational plans. If delays have become commonplace in an IT team, and external factors are impacting projects, CIOs should look at restructuring an IT department to solve these issues.
The strongest team relationships do not happen by accident and are the result of good planning, strong leadership and a motivated team. CIOs can ensure this by providing vision and long-term strategy with clear goals and objectives to produce high levels of quality output.
When internal issues are noticed in an IT department, and are noticeably impacting team morale or productivity, this should indicate the need for departmental restructuring. Be that due to an inability to meet market demands, issues with productivity and meeting deadlines or internal conflict, these issues all risk a department’s functionality and an organisation’s ability to achieve its goals. In short, don’t overlook the warning signs!
Top banking trends of 2023 and global outlook of banking and fintech for the year ahead
Author: Professor Marco Mongiello, Pro Vice-Chancellor, The University of Law Business School
You’d be forgiven for assuming that the global outlook for banking and fintech will be dominated by the usual suspects:
Artificial Intelligence – AI plays an increasingly prominent role in banking and fintech by enabling personalised services, fraud detection, predictive analytics, use of chatbots and robo-advisors.
Blockchain and Cryptocurrency – the secure, decentralised and swift system for financial transactions that blockchain has brought to the fore a few years ago, is now becoming ubiquitous. An increasing number of transactions are recorded through blockchains technology, primarily in the cryptocurrency market.
Digital Banking and fintech – accelerated by COVID-19 pandemic, the adoption of digital banking is a trend that will persist as customers have become accustomed to the convenience and efficiency of digital banking. Moreover, fintech enables access to financial services for previously underserved populations in developing countries or less affluent social groups in more affluent societies. This includes mobile banking services, peer-to-peer lending platforms, and microfinance solutions.
Open Banking – another global trend is the use of open APIs (Application Programming Interfaces) that allow third-party developers to build apps to facilitate customers’ access to financial data and services from banks.
Nonetheless, the challenges posed by these rapid changes are reminders that banking, an industry that by its very nature needs to be conservative, risk averse and solid, wobbles on the unchartered grounds of fast and turbulent innovation, where entrepreneurship instead thrives. The underlying rationales of banking and fast digital innovation are not incompatible but do need solid operations and thought-through decision-making to avoid causing catastrophic collapses.
The recent examples of Silicon Valley Bank, Silvergate, FTX and Wirecard are stark reminders that digital entrepreneurship applied to banking doesn’t just bring to customers the visible transformation of valuable new services, but also dents (perhaps as an unexpected consequence) the rationale itself of the role of banks in the global economy. Moreover, the central banks’ ability to contain the effects of single banks’ defaults is no longer a certainty, as experienced just over a decade ago and more recently. The markets’ sentiments are hardly reassured by the commitments of even the most coveted players, such as the European Central Bank, the Federal Reserve, and the President of the United States himself.
Regulators are lagging behind and their attempts to catch up may cause further seismic shocks to the global banking system. For example, another trend that is emerging is one of artificial intelligence decision-centres (i.e., decentralised offices of banks which take autonomous decisions on behalf of investors) outside the most stringent regulatory environments, enabling banks to operate globally more efficiently and more competitively. And we can expect that regulators will close the gap either abruptly, as it is currently happening in China, where private banks are subject to an escalation of regulatory and monitoring restrictions, or more gradually as it is happening in Europe and in the US.
The questions we face, as individual or trade customers of our high street banks, as direct investors or clients of managed funds, are whether banking will become more user-friendly yet, for our daily use but riskier, too, or is it simply becoming more efficient, transparent and also safer.
I’m afraid that the answer is by no means an obvious one. Therefore, caution, level-headed decision- making and critical thinking have never been as important as these days. Whether you are looking after your family savings or growing your pension reserve, the imperative is that you keep updated about the providers of the financial services you rely upon as well as about the general regulations that apply to your financial transactions. This is where, for example, you need to be familiar with your rights in case of cyber fraud, as well as learning how to minimise the risk of becoming a victim thereof. Also, taking additional steps to evaluate the credibility, solidity and reliability of the online provider of that app that was recommended by a trusted friend, may prove a very good move.
Similarly, whether you are the CFO of a medium or large company, or are a sole trader wrestling with your own business’s finances, you need to reflect on what you really want from your bank in the first place. That is before you started to be swayed by the whirlpool of offers of ‘opportunities’ to multiply your financial investments. Chances are that your initial approach to your bank was dictated by either a need for financing your working capital, as per your budget and strategic plans, or to find a safe place for your temporarily idle liquidity. Perhaps you were also after some basic treasury services such as swift payments and debt collection. Maybe some other financial services closely related to your business operations, e.g. factoring. The advice is to give very careful consideration to services that are more remote from your business, because the trend for the next years is that more and more of those will be offered to you. But many new services will disappoint those who, sadly, cannot afford financial mishaps as they look to run and grow their business.
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