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GLOBAL STUDY: PEOPLE TRUST ROBOTS MORE THAN THEMSELVES WITH MONEY

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Research shows growing confidence among consumers and business leaders that robots handle finance tasks better than people

2020 has changed our relationship with money, people now trusting robots more than themselves to manage their finances, according to a new study by Oracle and personal finance expert Farnoosh Torabi.

The study of more than 9,000 consumers and business leaders in 14 countries found that the COVID-19 pandemic has increased financial anxiety, sadness, and fear among people around the world and has changed who and what we trust to manage our finances. In addition, people are rethinking the role and focus of corporate finance teams and personal financial advisors, according to the research.

 

COVID-19 has created financial anxiety, sadness, and fear 

The global pandemic has damaged people’s relationship with money at home and at work.

  • Among business leaders, financial anxiety and stress increased by 186 percent and sadness grew by 116 percent; consumer financial anxiety and stress doubled and sadness increased by 70 percent.
  • 90 percent of business leaders worry about the impact of COVID-19 on their organization, with the most common concerns centering on a slow economic recovery or recession (51 percent); budget cuts (38 percent); and bankruptcy (27 percent).
  • 87 percent of consumers are experiencing financial fears, including job loss (39 percent); losing savings (38 percent); and never getting out of debt (26 percent).
  • These concerns are keeping people up at night: 41 percent of consumers reported losing sleep due to their personal finances.

 

People see robots as a better way to manage finances

The financial uncertainty created by COVID-19 has changed who and what we trust to manage our finances. To help navigate financial complexity, consumers and business leaders increasingly trust technology over people to help.

  • 67 percent of consumers and business leaders trust a robot more than a human to manage finances.
  • 73 percent of business leaders trust a robot more than themselves to manage finances; 77 percent trust robots over their own finance teams.
  • 89 percent of business leaders believe that robots can improve their work by detecting fraud (34 percent); creating invoices (25 percent); and conducting cost/benefit analysis (23 percent).
  • 53 percent of consumers trust a robot more than themselves to manage finances; 63 percent trust robots over personal financial advisors.
  • 66 percent of consumers believe robots can help detect fraud (33 percent); reduce spending (22 percent); and make stock market investments (15 percent).

 

The role of finance teams and financial advisors will never be the same

To adapt to the growing influence and role of technology, corporate finance professionals and personal finance advisors alike must embrace change and develop new skills.

  • 56 percent of business leaders believe robots will replace corporate finance professionals in the next five years.
  • 85 percent of business leaders want help from robots for finance tasks, including finance approvals (43 percent); budgeting and forecasting (39 percent); reporting (38 percent); and compliance and risk management (38 percent).
  • Business leaders want corporate finance professionals to focus on communicating with customers (40 percent); negotiating discounts (37 percent); and approving transactions (31 percent).
  • 42 percent of consumers believe robots will replace personal financial advisors in the next five years.
  • 76 percent of consumers want robots to help manage their finances by freeing up time (33 percent); reducing unnecessary spending (31 percent); and increasing on-time payments (31 percent).
  • Consumers want personal financial advisors to provide guidance on major purchasing decisions such as buying a house (45 percent); buying a car (41 percent); and planning for retirement (38 percent).

 

Our relationship with money has changed, it’s time to embrace AI to manage finance

The events of 2020 have changed the way consumers think about money and have increased the need for organizations to rethink how they use AI and other new technologies to manage financial processes.

  • 60 percent of consumers say the pandemic has changed the way they buy goods and services.
  • 72 percent of consumers say the events of 2020 have changed how they feel about handling cash, with people feeling anxious (26 percent); fearful (23 percent); and dirty (19 percent). More than a quarter (29 percent) of consumers now say that cash-only is a deal-breaker for doing business.
  • Businesses have been quick to respond as 69 percent of business leaders have invested in digital payment capabilities and 64 percent have created new forms of customer engagement or changed their business models in response to COVID-19.
  • 51 percent of organizations are already using AI to manage financial processes, compared with 27 percent of consumers.
  • 87 percent of business leaders say organizations that don’t rethink financial processes face risks, including falling behind competitors (44 percent); more stressed workers (36 percent); inaccurate reporting (36 percent); and reduced employee productivity (35 percent).

 

Supporting Quotes

Felicity Burch, Director of Digital and Innovation at the CBI, said: “The pandemic has been a watershed moment for technology adoption. The financial services sector has innovated swiftly to support customers at a difficult time, and it’s fantastic to see businesses and consumers alike recognising the potential AI has for managing money. Trust will underpin the successful adoption of emerging technologies, and so firms must be taking steps like embedding robust governance processes, engaging employees, and addressing unfair bias in data.”

“Managing finances is tough at the best of times, and the financial uncertainty of the global pandemic has exacerbated financial challenges at home and at work,” said Farnoosh Torabi, personal finance expert and host of the So Money podcast. “Robots are well-positioned to assist – they are great with numbers and don’t have the same emotional connection with money. This doesn’t mean finance professionals are going away or being replaced entirely, but the research suggests they should focus on developing additional soft skills as their role evolves.”

“Financial processes in our personal and professional worlds have become increasingly digital for many years and the events of 2020 have accelerated that trend,” said Juergen Lindner, senior vice president, global marketing, Oracle. “Digital is the new normal and technologies such as artificial intelligence and chatbots play a vital role in managing finance. Our research indicates that consumers trust these technologies to accelerate their financial well-being over personal financial advisors and business leaders see this trend reshaping the role of corporate finance professionals. Organizations that don’t embrace these changes risk falling behind their peers and competitors; hurting employee productivity, morale and well-being; and struggling to attract the next generation of AI-empowered finance talent.”

 

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Fractional NFTs- A Positive Impact on the Market

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Non-Fungible Tokens (NFTs) have been making headlines for quite some time now. The phenomenon is getting a lot of attention from people across the world. NFTs generally cost a fortune but thanks to Fractional NFT(https://www.mesha.club/fractional-nft/) (F-NFT), people can acquire expensive assets for a few bucks.

 

What Are Fractional NFTs?

In simple words, Fractional NFT is a non-fungible token that has been divided into smaller fragments. Hence, different people can claim partial ownership of the same NFT. To understand this concept of NFT investing(https://www.mesha.club/nft-investing/), take an example of a cake that is sliced to serve several people. Considering that NFTs are unique and can’t be duplicated, fractional NFTs go beyond these restrictions by enabling people to divide their ownership.

 

Difference Between F-NFT(Fractional NFT) and Traditional NFT

A fractional NFT or segmented NFT represents a certain percentage of ownership or portion of an NFT. A traditional NFT is a whole while F-NFT is a part of it. Moreover, the segmentation process can be reversed to convert fractional NFT into a complete NFT. A single NFT with a buyback option allows the investor to purchase all the shards and acquire the original NFT.

To convert fractional NFT ownership into a single NFT ownership, the holder must initiate a buyback option by transferring a certain amount of ERC-20 tokens to the smart contract. This triggers a buyback auction which will happen in a fixed period. Therefore, allowing some time for NFT holders to make a decision. In case a purchase takes place during that period, fractions of the NFT are returned automatically to the smart contract and the buyer will have complete ownership.

 

Advantages of Fractional NFT

Democratization

The NFT market restricts small and medium investors as the assets are mostly high valued. So, only a few of them can afford to buy these NFTs. However, fractional NFT benefits newcomers and small investors by reducing the cost of the assets and opening up more opportunities for them.

Greater Liquidity

For a high-priced NFT, you have to wait for a wealthy investor who can afford it. F-NFTs are more accessible and easy to sell as you can split the ownership of an ERC-721 token into multiple ERC-20 tokens and sell each of them individually.

Price Discovery

With no or limited transaction history, it is difficult to find the right price for a whole NFT. However, splitting it into smaller tokens make it affordable and more people can trade the asset. Hence, making it easier for investors to assess its true value.

Increased Visibility for Creators

A fractional NFT has a more liquid market that lets digital creators go online and reach a wider audience.

 

Industries F-NFTs Can Potentially Disrupt

Art

Digital artists along with NFT owners will have the option to divide their assets into smaller segments and sell each F-NFT portion individually to investors. Thus, emerging artists can also easily sell their digital artworks in the market easily.

Gaming

Games that involve trading cards can also seek the benefits of the NFT market. People can sell their cards for impressive amounts. Also, they can auction their in-game items, such as guns, rare skins, and armor through F-NFT and sell rare gaming products to multiple buyers by fractionalizing them.

Collectibles

One of the popular fractional NFT use cases is collectibles that have great potential with crypto being sold for over $1 million. Recently, a collection of 50 CryptoPunks was offered for sale after being fractionalized. This allowed small investors to acquire the asset and get a share in the collection.

Domain Names

With the evolution of the crypto market, the domain names like .crypto and .rth are in demand. So, rare and popular domain names can be fragmented and sold to different buyers.

Real Estate

Luxury properties that were too expensive to afford earlier are now accessible to more people. These high-valued properties can be fractionalized into F-NFT so multiple investors can acquire them. Also, there will be no need for mortgages as tenants could hold different parts of the property together.

Music

The music industry is making the best of fractional NFTs as music artists can fractionalize their albums and sell them to fans without involving third parties. This also resolves the problem of the direct artist-to-fan relationship.

The concept of fractional NFT is still in its initial phase but we can expect it to grow rapidly and become the next trend in the crypto market. F-NFTs open more opportunities for small and medium investors to acquire digital assets at affordable prices. They can easily invest in valuable assets that have the potential to offer many-fold returns in the future. Also, it will encourage people to start their NFT journey without delay as they need not have millions of dollars to buy popular NFT pieces.

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Four tech IPOs you haven’t heard of that are likely to go public

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With the tech sector expanding drastically, Maxim Manturov, Head of Investment Advice at Freedom Finance Europe, explores four unfamiliar IPOs likely to go public that investors should watch.  

The technology sector is constantly evolving and making ground-breaking advancements that are shaping life as we know it. Helping with education, user experience, information storage, communication, and many more areas, technology is designed with what it can bring the user in terms of convenience.

With a sector of immeasurable popularity, comes a colossal number of companies investors must shuffle through. It is important to remember that name popularity does not always equal a good return on investment. All public companies begin from the same starting point and have tofile for an IPO. With media attention usually focusing on a few set names, we wanted to bring something new to the table for investors.

What are the new tech IPO investors can watch out for?

Trax Image Recognition was founded in 2010 and is currently headquartered in Singapore. Trax focuses on delivering technology that carries out merchandise scanning using a mobile app and specialised high-tech cameras. Operating in more than 90 countries, Trax delivers sale control and efficiency for some of the most well-known brands in the world including Coca-Cola, Unilever, Shell, and Heineken. Currently, Trax is a leader in its sector, holding 23 patents, and is included in Deloitte’s Technology Fast 500. Recently, Trax announced the acquisition of Qopius, a Paris-based company that provides in-store technology solutions using artificial intelligence in Europe. This new acquisition helped the company come to a valuation of more than £1.6bn($2bn).

Cohesity is a ‘secondary data storage’ company located in San Jose, California. Founded in 2013, Cohesity provides its customers a sanctuary to store non-critical data, such as backups, development copies, and analytics. Their primary customers include Cisco Systems Inc. and NASA whereby they provide data management services. Cohesity has filed with the U.S. Securities and Exchange Commission (SEC) for an IPO with a preliminary market valuation of £2.9bn ($3.7bn), a significant increase from its £2.2bn ($2.5bn) valuation last year. Cohesity’s total funding is £340m ($420m), and investors may see the IPO take place in the next couple of months.

Byju’s is an Indian startup company that has developed an educational app with a focus on the Indian and U.S markets. As of December 2021, it has more than 115 million registered users. Byju’s founders Bew Ravindran and Divya Gokulnath said the company could have had a revenue of £1bn ($1.3bn) in 2021. As of December 2021, the startup was valued at $21 billion($21bn), making it India’s most expensive startup and one of the most expensive EdTech projects globally. Byju’s expects a valuation of more than £36.4bn ($45bn) according to TechCrunch. The total investment over time has been £3.6bn ($4.5bn) and is due to go public at the end of 2022.

Rubrik is a technology startup company founded in 2014, based in Palo Alto, California. Rubrik specializes in cloud-based data management software and is the fourth biggest player in the data management and storage market. They have recently acquired a Seattle-based data management company called Igneous Software Systems. With this new acquisition, and as of the last funding round, Rubrik has a valuation of £2.7bn ($3.3bn). With total funding of £444m($553bn), Rubrik is one of the industry’s largest privately-held data protection software providers and is a company investors should keep their eyes on over the coming months.

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