Finance Monthly - January 2023

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Finance Monthly. Ed i t or ’ s No t e Hello and welcome to Finance Monthly Magazine’s first edition for 2023! As we welcome the new year, recharged after the holiday season and with new goals and hopes, I am excited to present our first edition for 2023! I hope you enjoy our collection of articles delving into the future of finance for the next 12 months, as well as the lessons 2022 taught us. Here are some of our favourite stories from our January edition: All of this and so much more - I hope you enjoy the content in Finance Monthly’s first issue for 2023! For more financial news and commentary, please visit our website to stay upto-date on industry news as it happens, join the conversation on our Twitter (@Finance_Monthly), like our Facebook page and follow us on LinkedIn and Instagram (@FinanceMonthly). Best wishes, Katina Male Editor Copyright 2023 Published by Universal Media Ltd The views expressed in the articles within Finance Monthly are the contributors’ own, nothing within the announcements or articles should be construed as a profit forecast. All rights reserved. Material contained within this publication is not to be reproduced in whole or part without the prior permission of Finance Monthly. Circulation details can be found at Universal Media Ltd PO Box 17858, Tamworth, B77 9QG United Kingdom 0044 (0) 1543 255 537 8. Follow us on Instagram Financemonthly Find us on Facebook Finance Monthly Stay Connected Tweet us @Finance_Monthly Monthly Finance 3 Forget Everything You Know About Economics 18. ESG Amid Economic Uncertainty 30. How Payments will Combat Economic Uncertainty in 2023 34. A LOOK AHEAD TO 2023 What Can We Expect in the World of Financial Crime in 2023?

Finance Monthly. Con t en t s 4 CONTENTS THE MONTHLY ROUND-UP News You Can’t Afford to Miss 6. 8. FRONT COVER FEATURE Amateurs Talk About Strategy, Professionals Talk About Logistics An Interview with Mario Medina ESG Amid Economic Uncertainty 16. BUSINESS & ECONOMY 18. ECONOMICS FORGET EVERYTHING YOU KNOWABOUT A LOOK AHEAD TO 2023

Finance Monthly. 5 Con t en t s 48. Web 3.0: The Next Big Thing 44. How the IoTWill Deliver More Power to Finance BANKING & FINANCIAL SERVICES The Future of Financial Services in 2023 How to Manage Finance During a Recession How Payments Will Combat Economic Uncertainty in 2023 What Can We Expect in the World of Financial Crime in 2023 5 Key Considerations When Taking Out Life Insurance for the First Time 24. 26. 30. 34. Amateurs Talk About Strategy, Professionals Talk About Logistics An Interview with Mario Medina 16. Paques Brasil Effluent Treatment System Buys a Majority Stake in Faxon Química Argea’s Acquisition of Cantina Zaccagnini Phoenix Pharma’s Acquisition of OCP Repartition Lokky’s €2.6 Million Crowdfunding 58. TRANSACTION REPORTS 61. 62. 64. How the IoT Will Deliver More Power to Finance Web 3.0: The Next Big Thing Luxury Retail Needs Luxury Payments Learning from Layoffs: Will Tech Leaders Make the Same Mistakes in 2023? 44. FINANCIAL INNOVATION & FINTECH 48. 50. 54. 38.

Finance Monthly. 6 THE MONTHLY ROUND-UP News You Can’ t Af ford to Mi ss The Mon t h l y Round -Up OIL PRICES HAVE RISEN AS CAP ON RUSSIAN CRUDE LOOMS The price of oil has risen as major producers agreed to continue to cut output and the G7 and its allies announced they plan to cap the Russian oil price. On Monday morning, 4th December, the price of brent crude rose by around 0.6% or over $86 per barrel. This comes after G7’s plans to cap the price of Russian oil at $60 per barrel in an attempt to put additional pressure on Russia over the country’s invasion of Ukraine. Meanwhile, oil producers’ group Opex+ said it plans to stick to its policy of reducing output. Opex+ is an organisation of 23 countries which has regular meetings to decide how much crude oil they can sell to the world market. Opec+ is a group of 23 oil-exporting countries, including Russia, which meets regularly to decide how much crude oil to sell on the world market. Analysts said that the group’s decision shows support to the oil market.

Finance Monthly. 7 The Mon t h l y Round -Up The Bank of England has raised UK interest rates to their highest level in the past 14 years. They’ve gone up from 3% to 3.5%. This is the ninth time in a row they’ve been hiked. This increase will result in higher mortgage payments for property owners and people who’ve taken out loans. It comes at a time when everyone across the country is faced with the cost-of-living crisis – right before the Christmas holidays. Inflation is currently sitting at 10.7% in the country – or over 5 times higher than the 2% target. However, it has slightly eased since November. Andrew Bailey, Bank of England Governor, said it was the “first glimmer” that soaring price rises were starting to come down but there was still “a long way to go”. UK INTEREST RATES RAISED TO HIGHEST LEVEL IN 14 YEARS ELONMUSK SELLS $3.6BN OF TESLA SHARES Multi-billionaire Elon Musk is no longer the richest person in the world after he sold another 22 million shares, worth $3.6bn in his electric car maker Tesla. This brings the total of Tesla shares Musk has now sold to almost $40bn. According to financial market data provider Refinitiv, he remains the biggest shareholder in the company with a 13.4% stake. Bernard Arnault, CEO of luxury goods group LVMH, has now overtaken Elon Musk as the richest person in the world. His net worth sits at $191bn, whilst Musk’s has dropped down to $174bn, according to Forbes.

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Bill Blain offers his views on the big themes everyone will be talking about in 2023. Bill Blain - Strategist at Shard Capital FORGET EVERYTHING YOU KNOWABOUT ECONOMICS A LOOK AHEAD TO 2023 Like every financial pontificator and prognosticator, I am going to present predictions for 2023. I could go tearing through the entrail or birds or try reading tarot cards, but experience teaches the best we can do is guess, and then carefully dress it up and hedge these guesses to present them as informed advice. But that’s not what readers are looking for. Readers generally want insights and ideas so here is my best advice for dealing with 2023. First, forget everything you ever thought you knew about economics and your perceptions of current markets! That might just be the best piece of advice I ever give. Chuck everything you think is sacrosanct in the bin and start again. Do so, and the current contradictory markets and theoretical economic morass might make a little more sense. Break it down and reconstruct the bits and pieces to make sense of your perceptions! Remembering, of course, to spice it with plenty of self-doubt. Remember the most significant danger to markets is people. The market, after all, is just an enormous voting machine weighing up the votes of every participant. Finance Monthly. Fron t Cove r Fea t ur e 9

Things get complicated when everyone is pessimistically careful causing the prices to become overly depressed. Hence smart money says to be fearless when others are fearful. Things get dangerous when market participants are optimistically careless causing prices to soar to euphoric levels. Know the mood and trade accordingly. We still seem trapped in a phase of over-optimism with investors jumping on any positive news to validate their hopes the market will go higher. After all, that’s what they have been doing since 2009, so surely, they can only ever go up. Nope. A lower-than-expected US Consumer Price Index pushes up prices for a while. Any hints of a Fed “pivot” to lower rate rises will push stock markets higher. If you want an example of over-optimism in the face of reality, it’s the high likelihood that the market believes that Central Banks can navigate a genuine soft landing. Why? They have never previously succeeded. Every known instance of economies overheating, and rampant inflation has been followed by a crash of some description as Central Banks either let inflation run on too long or engineer an economic crisis by hiking rates too hard. There is no such thing as a soft landing, but a good landing is one you can walk away from. The expectation that we can still avoid a damaging recession in 2023 is strong across markets. I don’t want to sound grumpy, but I still think a recession will happen because of rising rates, property sentiment dipping, and inflation which leaves consumers unhappy, nervous and not buying. For consumer societies to thrive, we need more, not less consumption. People spend even less when faced with tax rises, austerity spending, declining services, rabid inflation, industrial strife, and ongoing political sleaze. It’s a recipe for economic misery, and next year’s stagflation, in the UK, looks nailed on. To see where we are going, look back to where we have come from. 2022 was a watershed year. The third exogenous shock of the decade, the Ukraine War and Energy Price Shock, followed by COVID-19 in 2020 and Supply Chain Disruptions in 2021. We also have a critical endogenous shock underway. Quantitative Tightening as global Central Banks try to unroll the effects of monetary experimentation in the 2010s. You also must understand the key economic factors that drove “Forget everything you ever thought you knew about economics and your perceptions of current markets! That might just be the best piece of advice I ever give.” Fron t Cove r Fea t ur e 10 Finance Monthly.

markets and inflation through the 2010s. The first was monetary experimentation keeping interest rates low to drive economic recovery following the global financial crash of 2008. But we didn’t get an economic boom. What we got was galloping financial asset inflation as bond prices and stock prices went stratospheric. That distortion enflamed market exuberance and euphoria, triggering the stock market bubbles in Big Tech, disruptive tech and the stupidities of meme stocks, crypto and NFTs. At the same time, we had the second factor, a de-facto cap on global inflation: China. The Middle Kingdom became the “cheapest to deliver” manufacturer exporting deflation around the globe, and all supply chains led back to it. COVID and the building of a geopolitical stag fight between China and the USA profoundly changed that reality. It unleashed supply chain price instability as geopolitics changed and shut off the deflation spigot. The era of cheap money fuelling markets and downward pressure on prices is over. Make sure you understand that there is a new reality of real inflation and expensive money before figuring out what 2023 looks like. Although the indications are for inflation to moderate, I reckon it will prove stubbornly high and challenging to de-fumigate from Western economies. Let’s scribble down some possible scenarios and predictions for 2023. My starting point would be to worry about further shocks. What about another exogenous Finance Monthly. Fron t Cove r Fea t ur e 11

shock? Could COVID in China overwhelming the medical system create a judder moment triggering another China shutdown, making the Government look weak, causing the possibility of a deeper global recession, and the possibility of President Xi deciding to deflect by going outward bound on Taiwan? Could the Bird Flu that’s ravaged Christmas Turkey’s jump species lead to a second major pandemic? What are the chances Central Banks decide to go soft again and turn market accommodating? Slashing rates to avoid a market meltdown and a deep recession? These are all known unknowns, and none are binary. There are numerous others we could discuss, including political instability across the west, the dollar, and the great retirement causing a demographic crisis in the jobs market, and thus the economics of every firm that hires staff! Equally, there are a host of entirely unpredictable events that could occur. Dreaming up storyboards for disaster movies is fun but scary: the big West Coast earthquake, a super-volcano triggering a mini-ice-age, a meteor strike, a solar flare, an unwater landslide caused by ocean warming causing a tsunami to hit Europe’s Atlantic and North Sea Coasts, a storm surge in the North Sea flooding London and the Netherlands. There is any number of unimaginable events. Or it may be something financial. A big bank discovers its bust on the back of a housing crisis, a major hedge fund evaporating in a slew of downright stupid trades, or a pension fund exploding in a leverage/liquidity event. Don’t discount anything upsetting our cosy little apple cart of expectations. I think it is 100% likely the remaining cryptocurrency exchanges will collapse in a welter of liquidity events but if you were “My starting point would be to worry about further shocks.” Fron t Cove r Fea t ur e 12 Finance Monthly.

invested, there is no one to blame but yourself. What about bond markets? The consensus is bonds are likely to rally on the back of the pace of interest rate rises declining. That doesn’t factor in residual inflation remaining higher than expected, the effects of the sheer over-indebtedness of nations alike Italy, France, and even the USA, or the fact that Central Banks are trying to sell down their QE inventory creating a supply glut. The much-heralded bond rally may yet be premature. Or earnings? Stock markets are still rolling on hopes rather than the fundamentals of good versus bad companies and their earnings. The quality of earnings and their sustainability to competitive threats and a changing economy matter. There is still a shakeout on valuations and stock market multiples to come. In currencies, sterling has recovered all its losses since the Liz Truss mini-budget disaster but mainly on the back of adults being back in the Downing Street room, and dollar weakness. What does the coming year hold for US growth on the back of a weaker dollar and with all the effects that would have on the global economy? I predict the big themes for 2023 will be renewables, carbon mitigation, agri-business, soil enhancement, commodity weakness, healthcare in terms of AI, obesity and Cancer drugs, consumers and retail. I plan to continue exploring these topics in 2023. “I still think a recession will happen because of rising rates, property sentiment dipping, and inflation which leaves consumers unhappy, nervous and not buying.” Bill Blain Strategist at Shard Capital Finance Monthly. Fron t Cove r Fea t ur e 13

Business Economy. 16. Amateurs Talk About Strategy, Professionals Talk About Logistics An Interview with Mario Medina ESG Amid Economic Uncertainty 18.

Bus i ne s s & Economy Finance Monthly. 16 Originally from the Dominican Republic, Mario Medina moved to the US at the age of nine. He received his undergraduate degree from Nova University and has worked for Fortune 500 companies before co-founding Moveo Technologies. Finance Monthly talks all things Moveo Technologies with him over the next pages. Mario Medina Co-founder & CEO of Moveo Technologies Please tell us more about Moveo Technologies. Ground has always been a bit of a stepchild of the passenger transportation industry - air, sea, and rail receiving all the plaudits. Our company Moveo Technologies Corporation was envisioned to bring sophisticated logistics to the passenger ground transportation industry. In the process of moving away from the fax machines, spreadsheets, and phone lines, we needed not only to eradicate these, although they were essential, but we also needed to introduce a proactive dispatch system, which was capable of viewing and managing all ground logistics globally. A number of initiatives were undertaken to achieve the lowest incident rate in the industry, chief among them are ISO 9001 certification (a game changer for us in quality management), using machine learning and AI on our in house developed platform, and offering our back-end technology, without charge, to companies serious about passenger transport (e.g., Carnival Cruise Line and a Major League in the US). What makes the company unique? It is a combination of the projects we take on and our vision as a company, both of which put our focus on managing serious Amateurs Talk About STRATEGY; Professionals Talk About LOGISTICS logistics. The implications of this extend from the individual business traveler to the US Army’s OAW (Operation Allies Welcome), during which we provided logistical support and managed ground transportation for more than 30,000 stateside passengers. General Bradley says it best: “Amateurs talk about strategy. Professionals talk about logistics.” What are your favourite things about the sector? I love the fact that the industry has become so receptive to innovation and the appreciation we receive from customers when they get what we do.

Finance Monthly. Bus i ne s s & Economy 17 What are the challenges you frequently face and how do you resolve them? The biggest challenge by far is managing growth after COVID. We have grown 20 times larger as a company in the last two years. Even though COVID was a major challenge when business dropped off a cliff, the resolutionwas realising that we had an opportunity to make fundamental improvements that would position our company to scale. We invested heavily in research and development, focused on machine learning and predictive AI algorithms, to improve our logistical processes. Coupled with a new ISO certified quality management system, we secured the logistics and service for managing, scheduling, and transportation officials to all Major League games when they were not able to fly. What are your goals for the future of Moveo Technologies? The two most important ones in the pipeline are a planned expansion to 250 metropolitan service areas by the end of 2025 (we currently serve 100 MSAs domestically and internationally). Furthermore, we plan to offer a high-end air, land, and sea travel as part of an ‘uber’ (pun intended) service line.

The global economy is facing mounting challenges amid inflationary pressures, a costof-living crisis and market uncertainty. While businesses will undoubtedly be preparing to navigate this financial downturn and looming recession it is crucial that they do not lose sight of their environmental, social, and governance (ESG) initiatives and policies. After all, ESG is tied to the entire business and outlines risks and opportunities which will drive long-term and potentially even shorter and medium-term value for companies. In the 2022 Forrester/Dun & Bradsheet study of over 260 decision-makers across the UK, US and Canada, four out of five (97%) respondents stated that their company’s current ESG strategy created a significant or transformational increase in revenue. In comparison, 81% of participants said their company had experienced negative consequences by failing to meet their ESG goals, the most common being increased operational risk (43%) and increased financial risk (38%). With an increased drive towards sustainability and reaching global net-zero goals, companies must find the right balance of investing in their ESG strategy to drive longterm value, against short-term economic turmoil. Mark Mellen Director of ESG Enablement at Workiva ECONOMIC UNCERTAINTY Amid Bus i ne s s & Economy Finance Monthly. 18

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Bus i ne s s & Economy Finance Monthly. 20 The business case for ESG It’s crucial that companies recognise the direct value of focusing on ESG in their markets. In order to tackle material environmental and social issues, companies need to scale up their investments supporting these areas. This requires a clear understanding of not only the environmental and social benefits but also the associated financial benefits. For instance, the NYU Stern Center for Sustainable Business examined the relationship between ESG and financial performance in more than 1,000 research papers from 2015 to 2020. They found that companies were 76% more likely to experience a positive or neutral correlation between a long-term focus on ESG and improved financial performance. ESG helps illustrate where companies’ expenses are going and where they can improve their resource efficiency. In relation to identifying operational inefficiencies, companies can use ESG-related data to see where they may be spending more money than necessary to clean up their pollution and waste. They can then look into more cost-saving waste reduction strategies. Additionally, many businesses may have untapped financial benefits of ESG strategies that they’re currently not tracking such as avoided cost, where ESGrelated data can help identify instances where less money is needed to be spent. Access to consumers can also be dependent on how companies are demonstrating their ESG efforts. In fact, a 2021 PwC ESG consumer intelligence study revealed that globally 57% of consumers say companies should be doing more to advance environmental issues (e.g., climate change and water stress), 48% want companies to show more progress on social issues (e.g., D&I and data security and privacy) and 54% expect more from companies on governance issues (e.g., complying with laws and regulation and addressing widening pay gap). As a result, ESG reports that successfully meet customer standards can improve the chances of both retaining existing customers and expanding customer base. Employees are also increasingly concerned about their employers’ ESG efforts. For example, a 2020 Reuters survey of workplace culture found that of 2,000 UK office workers, 72% of multigenerational respondents expressed they were concerned about environmental ethics, while 83% of workers said their workplaces were not doing enough to address climate change. With there being significant costs associated with recruiting and retaining talent, it’s important that as with consumers, companies put the effort in meeting employee standards. Focus on material ESG issues Companies may be tempted to cover the universe of ESG issues, but this is not the best approach. Instead, they should understand which ESG issues are likely to have a substantial impact on enterprise value and finances of the company as well as the demand for its presence from stakeholders (i.e., material ESG issues). ESG issues, such as business ethics, greenhouse gas emissions and community relations can be dependent on a company’s sector, size, geographic location, among other factors and so it is important that executives understand which areas make the most sense to put their focus and resources into. For example, a company within the oil and gas industry will be focused on methane emissions while a company within the technology industry will not. 57% of consumers say companies should be doing more to advance environmental issues (e.g., climate change and water stress). 48% want companies to show more progress on social issues (e.g., D&I and data security and privacy). 72% of multigenerational respondents expressed they were concerned about environmental ethics.

Finance Monthly. Bus i ne s s & Economy 21 Understanding what the material ESG issues for a company are, begins with conducting an ESG materiality assessment. This is where companies can gain input from a broad range of stakeholders as to which ESG issues matter most -or are material. After gaining this input, and understanding connectivity to financial data, the company should obtain consensus with a cross-functional committee of leaders, management and the board. There is greater value in focusing on doing the best work when it comes to material issues and related performances that matter most to a company and its stakeholders, as opposed to simply doing an okay job at everything. A study from Mozaffar Khan found companies focused on material issues would have a 6% outperformance on stock prices while those that focused on immaterial ESG issues or no ESG issues at all would underperform the market by -2.6%. Overall, it’s in the company’s best interest to focus on material ESG improvement. Data transparency and one source of truth While ESG can allow businesses to identify cost-saving avenues, they need the right data to provide insights and help inform their decision on new opportunities. The future of ESG reporting will enable connectivity to financials and help companies calculate the impact of ESG efforts as opposed to merely reporting metrics. To achieve this, companies can harness cloud-based technologies, providing a single source of truth for all financial and non-financial data. This means the data collection and reporting takes place within one central location, where everyone can collaborate in real-time in the same workspace with everything tracked, and everything linked between financial and non-financial. In fact, Workiva’s 2022 survey found that globally, three out of four respondents expressed that technology was important for compiling and collaborating on ESG data, as well as validating data for accuracy (80%) as well as mapping disclosures to regulations and framework standards (85%). Propelling ESG reporting into a transparent, innovation-friendly, actionable and dynamic environment will streamline the steps needed for a company to make informed decisions. Nothing happens in a vacuum Currently, the recession, geopolitical conflicts and other factors are taking place alongside ESG. This is why it is important that companies effectively weigh where priorities should lay to successfully navigate through uncertainty. Dedicating efforts to ESG enables a greater understanding of risk and opportunities that can be costsaving and opportunity-generating. Even amongst economic turmoil, businesses will need to continue to walk the talk when it comes to climate commitments, advancing social issues and addressing corporate governance. Through effective ESG reporting, having one source of truth will bring together the financial and non-financial data to best inform decisions. With clear and transparent insight across the company, the particular ESG issues that are most fitting can be determined, and this will support in standing up to both existing and future scrutiny. Mark Mellen is the Director of ESG Enablement at Workiva, the world’s leading platform for integrated regulatory, financial, and ESG reporting. Workiva simplifies complex reporting and disclosure challenges by streamlining processes and connecting data and teams. Learn more at

Women in Finance Awards2022 FM WINNERS EDITION OUT NOW Click here or visit for more information Year upon year, the Finance Monthly Women in Finance Awards recognise and celebrate the excellence of Women across the industry – highlighting firms and individuals who work diligently to provide essential financial services. Monthly Finance

Banking Financial Services 24. The Future of Financial Services in 2023 How to Manage Finance During a Recession How Payments Will Combat Economic Uncertainty in 2023 What Can We Expect in the World of Financial Crime in 2023 5 Key Considerations When Taking Out Life Insurance for the First Time 26. 30. 34. 38.

Bank i ng & F i nanc i a l Se r v i ce s 24 Finance Monthly. Financial services institutions are increasingly digital. Consumer interactions and engagement with products and services build digital footprints, generating ever-increasing amounts of data that can reveal much about our identity and behaviours. FINANCIAL SERVICES The Future of in 2023 Harry Keen CEO & Co-Founder Hazy

Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 25 owever, these institutions have long been dubbed laggards when it comes to technology, innovation, and the speed at which they can digitally transform. Much of this is due to the legacy infrastructure in place, the regulatory landscape in which they operate, and security and governance protocols they have been hamstrung by. This means that data is not driving the valuable innovation it can do to improve automation, decision-making and risk management. In comes synthetic data. This is not ‘real’ data created naturally through real-world events. It is ‘artificial’ data that maintains the same statistical properties as ‘real’ data, generated using algorithms. Whether the aim is to make data available across an organisation or accessible to thirdparty partners it drives speed to innovation within financial services. This is already happening as the first banks start to roll out synthetic data across various use cases, from testing to AI model training to cloud migration projects. But in 2023, I believe the sector will open its eyes to the notion of synthetic data and how it can fuel growth, support overcoming longstanding obstacles, and totally rejuvenate the way financial services institutions meet and exceed the ever-evolving requirements of customers and regulators. Revolutionising data privacy According to Gartner, synthetic data will enable organisations to avoid 70% of privacy violation sanctions. Financial data, such as consumer transaction records, account payments, or trading data, is sensitive personal data subject to data protection obligations and is often commercially sensitive. Structured synthetic data has the potential to revolutionise the way financial institutions use data securely. Because this data preserves the statistical properties of real-life data, the strict privacy and security protocols that have previously blocked innovation can now be navigated with synthetic data. So, because no real individuals can be identified from the synthetic data, data protection obligations, such as GDPR, do not apply. This will undoubtedly be top of mind in 2023 for business leaders, with the fifth anniversary of GDPR in May. Since privacy compliance and information security regulations will no longer be an issue, the new artificially generated data can then be used to create new revenue streams. The banking sector can take their Open Data and data monetisation strategy even further in 2023 since synthetic data will enable them to package this data and sell it to third parties without the need for express consent. Seamless cloud migration There’s no doubt that the organisations that are succeeding in these trying times are those that can rapidly scale via the hybrid or public cloud. But well-regulated industries like banking and financial services have been reluctant to go all-in with the cloud. I get it. As soon as data leaves the company campus and servers, the control is lost. Synthetic data allows for a rapid, cross-organisational migration to the cloud without any of the added risks. Something that financial organisations can use to great effect in 2023. Instead of pseudo-anonymised data (created by traditional processes such as masking and anonymisation) that can still lead to re-identification or redacted data that loses most of its utility, with synthetic data generation, the dataset is totally new and holds no ties to the original. If used, in 2023, financial services can train on their real datasets onpremise – even behind the walls of separate departmental silos. Then, the artificial data can be released into the cloud. And since there’s no personal information in it, the synthetic data can be shared across silos within the organisation — allowing for cross-organisational strategy, insights and analytics like never before. The commercial impact of generative AI Generative AI underwent a huge step change in the latter half of 2022. Teams from OpenAI through to StabilityAI have been creating models that can conjure hyper-realistic text and images from seemingly thin air with very minimal verbal prompts. The realism of the responses you can get from these models is in some cases quite creepy and like nothing we’ve seen prior to this year. So how will this development impact business and society? The jury is still out, but what we do know is that these teams are making these models available for anyone to play with for free right now creating the perfect test ecosystem for developers, hackers and anyone who’s curious to test their ideas. I am certain that in 2023 we will start to see businesses forming around these tools. For example, there are already examples of text or formula autocompletion tools being embedded into Microsoft Office software that could greatly improve productivity and speed up learning curves of users. These types of efficiency-improving tools have the potential to impact businesses much further afield than just financial services. There are certainly some concerns and legal challenges that still need to be overcome before this technology can be commercialised. Who owns the output of one of a code autocompletion model if it was trained on data under different licences? Who owns the copyright to images generated from a model trained stock images under different licences? Despite these challenges, there is huge potential in this technology, and I believe we will all be hearing much more about it in 2023.

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27 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s The Bank of England’s recent announcement that the UK is facing its longest recession since records began will have caused concern for business leaders across the country. Many will be wondering how they can cut costs without negatively impacting staff morale or the services they provide to customers. It’s not just employers who are feeling anxious. With unemployment rates forecast to rise to 6.5% by 2025, many employees will be worrying about job security, against a backdrop of the cost of living crisis and rising interest rates. All of this does not make for a happy workplace. But over the years I’ve learned some important lessons about how employers can navigate choppy waters, conduct scenario planning, and cut costs without causing upset among their teams. Here are five key principles that business leaders should keep in mind. How to Manage During a Recession Julien Lafouge - CFO of Spendesk

28 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 1. Be directionally right — not precisely wrong Obsessing over minor savings in every area of your operation could mean that you ignore the bigger picture. You should take the same approach as a physicist — think about orders of magnitude and start with a high-level view rather than going granular straight away. With this outlook, you can perform sanity checks on a regular basis and not get sucked into the trap of fine-tuning every number to the second decimal. Putting everything under a microscope is a waste of time if the big numbers still don’t add up. Remember what your ultimate goal is and make sure you take big strides towards it — not baby steps. 2. Cash (management) is king Developing knowledge around the principles of cash management within any organisation is a good idea whether times are hard or not. While business leaders are often skilled in understanding and manipulating profit and loss, they often don’t know the ins and outs of cash management and cash flow. Making cuts across the board is never the right approach. Fat is always distributed unequally in businesses, so a surgical approach is required. Cut spending in some areas, while investing in others that will help you to grow more muscle. In an ideal world, you’ll cut out all of the things that don’t work, and further invest in all of the things that do. 3. Keep it simple Sophisticated business models with high levels of functionality and reams of features often aren’t suited to tough economic circumstances. Think about what it is that your customers really need at this time and focus on that part of your offering, and leave the bells and whistles for another day. In my experience, building a simplified business model can be more difficult than building one with high levels of complexity; but remember to focus on the larger orders of magnitude as you will have very little margin of error when the recession starts to bite. 4. Keep providing the good coffee You won’t make major savings by switching to a cheaper brand of coffee, but you will undermine staff morale. Not just because staff will waste time complaining to each other about the standard of the new brand, but they’ll also go out in search of decent coffee — time that a happy employee would otherwise be spending productively. “Making cuts across the board is never the right approach.”

29 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s It’s not just the coffee that you need to preserve; think carefully about cutting back on employee perks. If you need to make cutbacks, consider the biggest cost buckets first. No negotiation is taboo, even rent. Could you make savings by moving your team into a smaller office? I’ve seen facilities teams perform miracles in optimising office space. 5. Celebrate your victories Making sure everyone gets a pat on the back when the business has hit KPIs and significant milestones is essential for boosting morale. Take time to show everyone that their efforts are appreciated and give them an opportunity to let their hair down and share in the glory of their collective efforts. When times are tough, it’s important to ensure you focus on achievable goals. Revenue growth might not be possible, but growing market share may very well be realistic. When the turnaround comes, you’ll have a team of happy, motivated people hungry for more success, putting you in a great position to reap the rewards. In an economic downturn, technology can help with financial planning and forecasting, but there’s no crystal ball. Stakeholder management and communication are therefore key in these times. Be honest with your team and be absolutely clear about what you are trying to achieve. Cost-cutting is often necessary in the face of recession, but businesses shouldn’t cut back on spending which will negatively impact staff or the offerings of the company. By taking a simplified approach, focusing on the things that really matter and ensuring staff morale is high, businesses can put themselves in the best position to weather the economic storm. “Technology can help with financial planning and forecasting, but there’s no crystal ball.”

Bank i ng & F i nanc i a l Se r v i ce s 30 Finance Monthly.

From supply issues to soaring utilities costs, global businesses are now facing a very different environment to the challenges presented by the pandemic just two years ago. For those businesses based in the UK, political uncertainty, including the continued fallout from Brexit, three Prime Ministers, on top of a looming recession is all adding smoke to an already cloudy horizon as we enter 2023. Spencer Hanlon Global Head of Travel Payments and Head of Europe at Nium PAYMENTS will Combat ECONOMIC UNCERTAINTY How in 2023 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 31

The cost of doing business is already rising – and we expect this to continue into 2023 as businesses enter a period of consolidation and cost-cutting to combat rising inflation and expenses. In tandem, the customer base will shrink as spending is scaled back. Planning for this uncertainty is not easy. But as we step into the next year, agility will be key. Those that are able to react and adapt to new challenges and create a sustainable economic model for growth will be best equipped to survive. Crucially, taking advantage of the fintech and payments industry to maximise efficiency, cut costs and navigate changing regulations will be highly beneficial in creating a competitive edge. Here are my predictions on how businesses will benefit from payment innovation and expertise in 2023 to combat economic uncertainty: 1. Cost-cutting efforts will push business towards payment solutions that facilitate speed of delivery and overall efficiency. Inflation is the silent killer of businesses and personal wealth. That is why heading into 2023, in this period of economic volatility, businesses will be forced to take a step back and consider how they combat fluctuating costs while streamlining operations and responding to customer demand for reliability and speed of delivery. We’ve already seen the Bank of England’s efforts to support businesses by raising interest rates, but next year, businesses will look towards the payments industry for more help. So much so, that businesses will increasingly adopt modern payment tools to build speed and efficiency into cross-border products and services – helping to manage liquidity with instant settlement, keep customers happy, unlock new revenue streams and offset inflationary pressures. By increasing the speed of cross-border products and services, businesses can ensure they reliably pay and get paid in real-time, every time. Fundamentally, those who can modernise their processes successfully will be better equipped to survive this uncertain time with stable and reliable finances. 2. Payment provider innovation will allow businesses to accelerate their global ambitions. Many, if not all, businesses aspire to operate globally – taking advantage of talent, market appetite, and regulatory opportunities around the world. However, international expansion is often part of the long-term roadmap – a goal that follows funding, momentum objectives, or customer acquisition. But today’s economic challenges will seebusinessesaccelerate these global ambitions in the relentless pursuit of growth. Opportunities to expand their customer base and drive new revenue streams become harder to ignore when combatting inflationary challenges and squeezed budgets. As businesses adopt this global mindset, they will increasingly lean on payment providers as a reliable and flexible financial bridge into these new markets. With this support, businesses of all sizes will “Planning for this uncertainty is not easy. But as we step into the next year, agility will be key.” “Inflation is the silent killer of businesses and personal wealth.” Bank i ng & F i nanc i a l Se r v i ce s 32 Finance Monthly.

feel equal to larger enterprises, both in terms of resources and market opportunities. Unlike ever before, they will be able to leverage the same payment infrastructure to receive and send money in local currencies, at low exchange rates and in real-time. In turn, this will build trust with new markets and mitigate the effects of economic uncertainty. 3. As regulatory challenges persist, businesses will look for partners to remove the headache. In 2023, businesses will become increasingly attuned to the complexity of changing global regulations. It’s here that payment providers will play a key role in removing compliance as a hurdle to international growth, customer acquisition or revenue generation. Fundamentally, leaders want to spend their time focused on business growth, product development and customer experience. And so, managing different regulatory environments can quickly become burdensome and costly. Many do not factor into their roadmap that each market may require a new license to move money or different compliance standards for onboarding customers and verifying identities. As being compliant and adhering to regulations is of utmost importance, it can ultimately draw attention away frommore strategic endeavours that lead to growth. This means that as budgets are squeezed in 2023, businesses will want to ensure time and resources are spent on what will help, not hinder, the bottom line. The right payments partner will remove this headache, managing global regulatory compliance needs and requirements in real-time, so crucial resources and budgets are available to be allocated to growth. Final words Navigating uncertainty next year will require a considered approach. Businesseswill need to consolidate both to drive efficiency gains but also to hone in on the most productive parts of the business. For many, payments industry innovation and technology will be key differentiator in mitigating economic uncertainty. The need to streamline the business, facilitate speed and reliability in payments and remain regulatory compliant under new frameworks will all push businesses toward payment providers. It’ll be these partnerships that will help businesses unlock growth opportunities and offset 2023’s cost pressures. “In 2023, businesses will become increasingly attuned to the complexity of changing global regulations.” Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 33

Bank i ng & F i nanc i a l Se r v i ce s 34 Finance Monthly.

In light of new sanctions against Russia, the threat of money laundering fines increasing, and a recession in full force, it’s more important than ever to have solid anti-money laundering processes in place. Businesses simply cannot afford to leave themselves vulnerable to being targeted by money launderers, and thus expose themselves to breaches of the Money Laundering Regulations. Let’s take a look at how the past year is reflective of what AML trends to look out for in 2023. Bion Behdin - CRO at First AML What CanWe Expect in the World of FINANCIAL CRIME in 2023 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 35

1. Policy push for tighter regulation of Companies House could be delayed. There are massive overhauls across the globe in the public registers for companies. The UK and several other nations are campaigning to make identifying ultimate beneficial owners (UBOs) clearer andmore transparent. While this is happening in some countries, in others there is an increasing appetite for more privacy, such as with the European Union Court of Justice’s recent ruling in Luxembourg with regards to beneficial ownership of companies. The recession and this time of low economic growth may distract the policy push for tighter regulation of Companies House as the government wants to incentivise inward investment. 3. Technology will continue to make AML processes quicker and more efficient. Technology has the ability to speed up the time it takes to verify entities and individuals and will exponentially increase productivity across the AML sector over the next few years. The best thing about regulation is that it affects not only your business, but all of your competitors in the same way. This means that if you can streamline your businesses by processing tasks quicker, cheaper, and more effectively, it will lead to more satisfied customers and happier staff (who hate doing manual AML). Businesses have the opportunity to use compliance as a competitive advantage. 2. The Real Estate sector will remain a hub for money laundering. Real estate remains one of the faster-growing sectors for money laundering across the board, and the trend is expected to continue into 2023. Real estate is an attractive method of money laundering in many ways. It’s a great way to clean significant sums of money, it can be leveraged at a later date, and plenty of firms that operate in the sector have notoriously poor structures which prioritise faster transactions over compliance. We see significant amounts of cash in the form of ‘donations’ from other parties being used as home deposits across the UK that are difficult to verify and trace, and that trend is only increasing. 4. The recession could increase money laundering, with companies less likely to scrutinise transactions and more likely to deprioritise compliance staff. The biggest problem with money laundering is that it is inadvertently highly profitable for reporting entities. Because of this, firms may be more willing to deal with higher-risk transactions and scrutinise these transactions less. This is especially true if they are high-value, which money laundering transactions usually are. Recessions could also lead to firms de-prioritising compliance staff, who are already overworked at the best of times, exposing them to worse compliance processes. Bank i ng & F i nanc i a l Se r v i ce s 36 Finance Monthly.

5. Money laundering will be easy in the Metaverse. Money laundering in the Metaverse could become a real issue if it actually takes off. Although its user base is currently small, digital assets are a fantastic tool for launderingmoney. Since the Metaverse is essentially a space populated by virtual businesses selling virtual goods, money launderers can use the same real-world tactics of placement, layering and extraction to clean their money. They will be able to repeat this step over and over again using different amounts each time, making transactions extremely difficult to trace. 7. Specialist AML partners will increasingly be relied upon. Companies will continue to grapple with balancing cost, speed and transparency of business transactions in a competitive and volatile economy. As such, they will have no choice but to rely on specialist partners to keep them up to date with relevant AML legislation and ecosystem changes. 8. Regulatory authorities’ thirst for intelligence will continue to increase. We expect to see an increase in the use of the data collected when companies file Suspicious Activity Reports (SARs). Data collected from SARs can be used by up to 80 law enforcement agencies who conduct their own checks as a means for investigating and preventing criminal activity. This information is currently interrogated as a dataset thousands of times a year for keywords and names to help identify and direct an investigation. Particularly with the improvements being made to the SARs portal, we expect agencies will better utilise structured data and will allow better quality data into the system to be triaged, analysed and used more effectively across different departments. The bottom line The year ahead is full of new opportunities, especially with the further development of the Metaverse andweb3. This, along with the economic downturn, could lead to a rise in fraudulent activity. Businesses must stay alert and ensure that they are taking all the measures possible to avoid falling victim to money launderers. Thanks to new developments in AML technology, 2023 looks bright for compliance. Now’s the time to take advantage of new tech, so businesses - from real estate, and accounting to law - can stay on the right side of history, avoid hefty fines and come out of the recession shining. 6. Money launderers will exploit web3 as it develops. As web3 starts to develop and mature, we’ll see more creative ways for money launderers to exploit this space. And, as new regulations come in about government UBO databases, we’d expect to see a rise in even more opaque structures to try and hide beneficial ownership. “As web3 starts to develop and mature, we’ll see more creative ways for money launderers to exploit this space. “ Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 37

Life insurance is a key component of risk management for many adult Americans in a changing climate where violence, disease, and other threats are constantly looming unsuspectedly around the corner. LIFE INSURANCE FOR THE FIRST TIME KEY CONSIDERATIONS WHEN TAKING OUT Bank i ng & F i nanc i a l Se r v i ce s 38 Finance Monthly.

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