Is this the end of big cities?

Article by Manuela Andaloro for Corriere dell’italianita’.

Being an investor in the real estate market for years, I have grown quite an interest in the dynamics that drive the sales and rental markets. The golden rule has always been the same: location is key.

This was a cornerstone in the pre-COVID time. What about now? 

Will COVID cause a real estate vacuum in big cities and a boom in rural towns?

The latest developments suggest that the ‘smart working revolution’ will prompt people to flee overcrowded and expensive cities for greener and more sustainable areas. Thanks to speedy broadband connections and a reliable network infrastructure, many are considering moving to holiday homes, in the suburbs, the countryside or the mountains, at the beach or the lake. Lockdowns seem to have opened up new scenarios: living in nature, reconciling family, career and leisure time whilst keeping a well-paid job in the city is now possible.

Will the urban fabric undergo some deep changes then? And, above all, is this event large enough to be considered a structural change?

A shift towards a coveted more sustainable future, supported by the introduction of COVID-19-related rules, was inconceivable until a few months ago in a society devoted to extreme urbanisation. 

Social distancing and the ongoing pandemic have deprived big cities of their greatest charm – melting pots that attract and blend the lives and skills of different people. Those who love cities – and there are many of them – cannot wait to return to normalcy or, rather, to a new normal, because this epidemic, like every crisis, is also an opportunity to rethink and improve our lifestyle. And this is true also for large cities.

Famous architect Stefano Boeri, earlier this spring expressed his stance on the matter without any doubts: "In the UK people are expected to leave most densely populated areas soon". The same goes for Italy, where those who own a second home will most likely decide to move there or, at least, spend long periods there, making the most of the convenience and potential of smart working. Boeri considers this experience an opportunity to rethink one's way of life and stresses that "going through this tragedy without understanding its causes would be a real waste".

After all, what is the point of paying more than a thousand Euro for a room in central London, Paris, Milan, New York, if you can work from a larger house, perhaps with a garden, from any location?

Questions like this are frequently asked in public debates worldwide and many people answer without a second thought, especially in the wake of the recent lockdowns, confined to narrow spaces without any nature. It is not worth it, the future of our cities is at risk. 

The New York Times has published an extensive article on this subject. The analysis concludes that the Coronavirus could represent an unprecedented cut-off for urban concentrations.

Gabriele Albertini, the former mayor of Milan, talks about the lure of large urban hubs: “Should this situation persist for years, urban design will have no choice but to adapt. Cities have much more to offer than only a physical workplace: besides the work opportunities, we cannot forget also the social and cultural ones. It is wrong to limit a city only to its offices”.

However, the tendency to flee large cities is quite significant: as the Financial Times reported, in the City of London most companies are in no hurry to bring their employees back to their offices.

Many big companies are going down the same road – Google will not have its employees back in the office before spring 2021 while Facebook went the extra mile, announcing that half of its employees will work from home within the next 10 years.

Are the policies of some companies sufficient to generate a structural change leading to the opposite direction to what we have witnessed for hundreds of years, during which mankind has migrated to cities, or will this be merely a privilege for a few?

Will the housing market in cities hold up in the short term? What about megacities versus smaller, greener cities close to nature?

On top of that, there is a social factor to consider. Both private and working life is fuelled by physical presence, by one's network, by the readiness to seize new opportunities or participate in events... All of this is possible only in large cities.

Finally, we must take into account the inevitable commercial interests of the geopolitical stakeholders in big cities. The investors backing the construction of skyscrapers and offices in "prime locations" will clash with large companies for divergent interests.

The governance of the cities will not accept full time smart working indefinitely. The conflict will then affect access to public assets, events, public transport.

If buildings, theatres, cinemas, trains can no longer reach their full occupancy, costs will increase and the final consumer will have to bear them.

Not to mention health. How will countries deal with an increasingly elder population, dispersed in small towns?

Will we face increased health risks when living far from the major health facilities?

Politics will then come into play, taking one or the other side. Climate change will be a hot topic too: on the one hand, it is safe to say that less crowded urban areas ensure environmental sustainability and less pollution; on the other hand, however, we will have to rely less on public transport and more on private cars and we will have to build new homes and infrastructure.

There is clear evidence that megacities (cities with a population of more than 10 million people) such as New York, and London will suffer long-term impact.

The so-called “London crisis” goes beyond the fear of Covid, Londoners were happy to give up days that involved hours of travel squashed on tube and trains, unhealthy and expensive meals and stressful interactions with bosses and colleagues.

Unlike in other smaller cities, only 20% of employees has gone back to the office and to the City. The remaining 80% has little intention to return to a pre-COVID time.  Will London become a ghost town? The fear is real: the City remains empty, offices are deserted, cafes closed, few people around, public transport sees 70% less people. The result is catastrophic: the entire economic system on which the British capital was based is crushed. It is the business model of the capital that is going into meltdown: until now it was based on the idea of ​​concentrating millions of people in the centre.

The pandemic has made clear that current technology makes all this superfluous as everything can be done from home.

Someone compared the fate of London to that of the Northern England mines in the 1980s: when their model became obsolete, they were forced to close. Will the same happen to what used the most electrifying metropolis in the world?

And what about the city that never sleeps, New York City, will it ever wake up?

Not according to James Altucher, a best-selling author and former hedge-fund manager who wrote, in a recent article that went viral, that New York City is “dead forever” as its residents come to grips with the reality of the coronavirus pandemic and what it means for the fate of the Big Apple. Altucher isn’t alone, of course. The New York Times back in June asked the “agonizing” question: “Is New York City worth it anymore?” amid a mass exodus of an estimated 420,000 residents between March and May.

What about smaller cities?

What will be the normal way of city life when the pandemic passes? What will remain and what will disappear?

Like all change, it is difficult to predict. But lessons from history provide us with important knowledge: 

1.     Temporary change sometimes has little lasting effect.

2.     Lasting effects are often the acceleration of existing trends, rather than new, crisis-caused trends.

Working from home has overnight become endemic. Schools and universities switched remarkably quickly to almost exclusively online platforms. We might truly have an opportunity for our cities to shift to new ways of more sustainable urban living. This might be harder to achieve for megacities, easier perhaps for smaller, more adaptable cities. Businesses should seize the opportunity, implement the technology and leverage the current strong determination to achieve successful outcomes and more sustainable ways of living.

So will COVID cause a real estate vacuum in big cities and a boom in rural towns?

Through an exploration of trends the virus has brought to retail, office, hotel and residential real estate, as well as the air travel and vacation industries, a recent report by Fitch Ratings, makes some predictions for the future.

City center real estate may take a hit.

Newly remote workers may transform the residential real estate landscape because of a desire to move to suburban or rural cities. They need bigger homes to fit in their home offices, the report said. People also want outdoor living space because of their experiences during lockdowns.

“Within the big cities, there could be weaker demand for malls, non-grocery real estate and office space. Empty office and multi-family residential buildings may wind up meeting housing needs and bringing down housing pricing pressure in big cities, the report said.

Renting, rather than buying, apartments or homes may become more popular for several reasons. Some people may not be able to obtain affordable credit, while others will just feel uncomfortable taking on a big loan during the uncertain economic climate.

This may significantly increase demand for rental housing, which should boost demand for single-family and multi-family rental properties.

This could be different for student apartment complexes, since university classes are remote and fewer overseas students will attend because of how the pandemic has slowed international travel and impacted immigration figures. Some students may just attend college close to home, for budgetary reasons.”

For centuries, cities have played a fundamental role for mankind. If in the future, people will not spend most of their time in a lockdown and the social distancing issue will be at least partially solved, then the cities, especially those close to countryside, lakes, mountains and seaside, will again become the political, economic, social and commercial core of our society, at least for a large part of the population. A large question mark however remains on large megalopolis that confine people in small apartments and are not located close to natural escapes, shifting the real estate demand for new, sustainable locations.

 Manuela Andaloro

(info@smartbizhub.com) 

(Sources: CNN, Il Sole24Ore, Linkiesta, New York Times, Financial Times, The Conversation, Globest, Fitch Ratings)

COVID-19 LENS: LONGEVITY ECONOMY AND GRETA GENERATION. FINTECHS MUST THINK BIG.

Built for growth, the global economic machine has been brought to a screeching halt. Thanks to intervention on an unprecedented scale, a full-scale meltdown has been averted – for now.

On January 30th, 2020, 43 representatives from 32 UK FinTechs, 25 Swiss banks and financial institutions, 7 VCs, 19 Swiss FinTech players, and many others gathered in Zurich: over 180 experts met to talk innovation, sustainability, and investments.

We didn’t know then that our world was about to change for a while to come – perhaps forever – and that soon we’d have put our discussions about innovation and sustainability to practice.

5th UK FinTech Mission to Switzerland event, 30.1.20, British Embassy Bern, DIT, Zurich Insurance

Key discussions of the day focused on social shifts driven by the longevity economy, age diversity, and ethics reshaping the financial world. Our aging society has been affecting consumer trends, opening new opportunities for businesses and workforce, while increasingly, 40-year-old millennials have been leading the charge of socially-responsible and sustainable investing, both ultimately driving the greater good.

COVID-19 has changed the ball game in today’s global economy, society, and impact investment strategies, calling into serious question our ability to reach the Sustainable Development Goals (SDGs) by 2030 – if that was ever possible.

With the current crisis in full development, many hope that a “mindset shift” will occur once a “new normal” is achieved. Both optimists and pessimists seem to agree that western balance sheets will at best go back to 2008 levels. In terms of debt-to-GDP, we’re talking of 10 percent or more, plus unemployment at 15-20 percent coupled with the strong possibility of populist-enforced cuts in foreign aid and the very likely scenario of social unrest across the first world.

The financial meltdown (currently deemed to be worse than that of 1987 or indeed, as some say, similar to the Great Depression of the 1930s) will also very likely reduce traditional foundation funding. 

It is interesting, and very difficult, to think now of the topics we discussed on stage only a few months back, and to do so, wearing a Covid-19 lens. Most of the challenges we discussed – whether concerning the aging population among consumers and investors as well as in the workplace, or the attitude of millennials towards social good – have only worsened. Possibly, two key aspects will emerge and might be the staple to overcome the ever-greater challenges ahead: digitization and sustainability, sparking new discussions around a new way to work and to engage in less-social contexts, and around the increasing need for impact and sustainable investing.

“As the Chair of the International Accounting Standards Board recently noted, the current approach ‘will not prioritize planet over profit.’ What is important for both sides of the for-profit and not-for-profit divide is not what people are saying – but what they are already doing to be socially impactful. What are we paying for?  And what is the incremental impact of each government or corporate dollar to each SDG? In other words, we need a metrics process whereby everyone is seriously involved and stakeholder actions are competitive, comparative and, predictive.

If not, we will continue to witness a decline in both the effective statistics measuring the SDGs as well as the effectiveness of programs designed to serve them, with an expansion of the funding gap. The danger is that, by 2030, the international community will have spent $6 trillion with little to show, particularly to teenage Swedish activist Greta Thunberg’s generation.”

Governments are pumping out capital to try to save economies and bridge financing gaps around the world, but it is apparent that government funding alone is likely to be insufficient to solve this immediate crisis. Nor can it be relied on as the only solution for the longer-term investments required to build stable, resilient systems that can manage a planet headed toward a population of 10 billion people within the next few decades. 

We know that climate change will disproportionately affect those at the base of the economic pyramid; as we are experiencing with coronavirus-related deaths and job losses, the same is true for this pandemic. The crisis has highlighted the case for purpose-driven, inclusive finance across both the environmental and social sectors, which is at the core of impact investing.

An encouraging takeaway from the crisis is that the push for private capital to act more decisively as a force for good in society and to shoulder a portion of the investment burden does not have to come necessarily with attractive returns.

 Visionary leadership needed.

As the COVID-19 pandemic continues to create uncertainty, many FinTechs are under stress on a number of fronts. Access to funding – especially for some early-stage ventures, as many investors focused on established FinTechs with clear business models –, recent interest rate cuts and the economic slowdown have radically changed many industry assumptions.

Yet, as the broader economy shifts from response to recovery, COVID-19 may create new opportunities for some FinTechs. For example, as social distancing has taken hold worldwide, there has been very strong growth in the use of digital financial services and e-commerce, as well as an increased interest in doing the “social good”.

Keeping an eye on future opportunities, FinTech companies may be forced to reexamine their missions and business models after COVID-19. A key question is how to leverage both existing and newly-developed assets to seize new opportunities in the future. It could be an opportune time to think big and act boldly. First and foremost, it is apparent that social distancing is accelerating customers’ use of online – especially, mobile – channels to view and manage their finances. Because many FinTechs are purpose-built for the mobile channel, they often excel in offering presentation, on-boarding, underwriting, and data visualization services, as well as in providing the right context for transactions. These capabilities will likely become even more relevant and important as a greater number of financial transactions are conducted through digital channels.

FinTechs can play an important role, perhaps through strategic partnerships across a broad ecosystem of players – including financial institutions, retailers, and the government sector – in distributing benefits to more vulnerable sectors of the population. Indeed, many FinTechs made it their mission to democratize financial services by providing basic financial services in a fair and transparent way. 

COVID-19 and the Longevity Economy

Despite the outbreak, the global population continues to age, and we expect global life expectancies to creep higher over the long term. Although we may see some changes in consumption patterns post-COVID-19, the key drivers of the longevity economy will likely remain intact.

The “Longevity Economy” is redrawing economic lines (AARP research), changing the face of the workforce, advancing technology and innovation, and busting perceptions of what it means to age. Bank of America Merrill Lynch projected in 2019 that the global spending power of those aged 60-plus would reach $15 trillion annually by the end of 2020.

Increasing longevity had, until February 2020, spurred unprecedented economic growth and new opportunities for personal fulfilment. Markets have been evolving to meet their needs and aspirations, offering new opportunities.

Aging adults are not only consumers – they are our only increasing natural resource, a talent pool that can power businesses and enhance the communities of the future.

Over the next few decades, baby boomers and Gen X will pass a significant amount of wealth (calculated at $30T prior to the COVID crisis) on the millennial generation. With very high spending power, millennials have started to reshape the investing and FinTech spaces to better align with their ethical values.

FinTechs for social good

“Life is what happens when you are busy making other plans.”  As we struggle to bring into focus the long-term impacts of a post-COVID-19 world, Lennon’s quote is a poignant reminder of the uncertainties that lie ahead for sustainable and responsible investors. 

We are now approaching an inflection point in the crisis, where savvy investors are fundamentally reassessing economic, environmental, social and, governance factors to adjust to the new normal.

The time has passed for small commitments, hyperboles, and delays in embracing sustainable investing. Now is the time for leadership, investment, and action.  Companies and investment managers that remain on the sidelines will sacrifice their opportunity to shape their own, and the planet’s, future.

Within 36 months, there will no longer be a discernable distinction between sustainable and traditional investing, predicts the Responsible Investor.

We can only take note and act fast.

Manuela Andaloro

(info@smartbizhub.com)

Sources: Global Geneva, the Guardian, Deloitte, Gig Economy Data, Responsible Investor.

Republished also on Corriere dell’Italianita’

UK FinTech Mission to Switzerland 2020

Occupation: Prime Minister

Article by Manuela Andaloro for Corriere dell’italianita’.

At the end of January 2020, I took a few months off to welcome the arrival of our third child. I was going to leave behind a familiar and comfortable reality, with a stable balance and foreseeable dynamics. After four months, I prepare to pick up where I left off and to gradually reopen myself to the world, but the world I left, is not the world I am about to return to, nor the world I lived in with my family and that I have seen change in these few months.

What should we expect from the “new normal” that awaits us and from life after lockdowns?

 A recent cover story from The Economist talks about a “90% economy”, in which significant bits of the pre-COVID everyday life simply won’t exist any more. At least, until a vaccine and/or treatment will be found or the virus will have disappeared on its own.

 After the lockdowns, the factories have reopened and the streets are no longer empty, but the result is a 90% economy, where the use of public transport has decreased by a third, and domestic flights are nearly all grounded. Consumer spending has decreased by 40% and the same goes for eating out. Hotel stays are one-third of what they used to be. People are overwhelmed by financial difficulties, uncertainty, the fear of social uprisings or a second wave of COVID-19. More companies are filing for bankruptcy, unemployment is soaring, GDP is free falling. On the other hand, deaths caused by air pollution – 1.5 million each year, according to WHO – dropped to almost zero and the benefits for the environment are countless. This affects all the countries that have opted for more stringent lockdowns but also reflects onto those that have not implemented any type of closing measures.

The economic, social and political after-effects of COVID-19 are leaving deep scars in the society and spread out with a myriad of ramifications, creating a domino effect.

In this context, the need for stability on the one hand and for a sustainable change on the other is strongly felt by the vast majority of the population. Something is moving: change is in the air and expectations among the people are growing.

The task of all those who believe in free markets and western democracies is to ensure that these expectations are channelled towards the right kind of change.

Eventually, this pandemic might even increase the sense of solidarity both at a national level and globally. Perhaps, this time – unlike the crisis of 2007-2009 – the desire for a change will not lead to a surge in populism.

In this challenging scenario, I see more and more great opportunities opening up. Politics is one of them, a subject for which I have a strong passion, like so many other women.

Abigail Spanberger, Virginia 7th Congressional District seat winner, addresses the crowd as daughter Catherine, 4, playfully crawls between her mother's legs during the election night party, Nov. 6, 2018. Looking on are Spanberger's husband, Adam, right, and daughters Claire, 10, and Charlotte, 7. Spanberger defeated two-term Republican Rep. Dave Brat. (Bob Brown, AP)

World leaders attend a family photo session at the G20 in Osaka. Kim Kyung-Hoon/Pool/Getty Images

But, like so many other women, I often find the rugged roads of politics hard to walk and the tools needed to be out of reach. If in the corporate world we speak of a “glass ceiling”, in the political circles we could define it as a concrete ceiling: it’s out there for everyone to see.

Formal equality of the sexes does exist but the facts on the ground are different: over the last two millennia, politics has been ruled by men according to a gender conception that has prevented equal rights so far. As a matter of fact, in Italy, women are 51% of the population but only 30% are involved in politics. Simply put, a big portion of the population is not being represented and has little relevance in public policies, even those that concern women directly.

Everywhere in the world women are under-represented: only 24.3% of all national parliamentarians were women as of April 2019 (UN statistics); out of the 193 Member States of the United Nations, only 15 have a female leader (Pew Research).

In Switzerland, my current country, female voters outnumber their male counterparts by 10% (Swissinfo). Yet, women remain a minority in cantonal and federal politics.

Women in politics are confronted with a male majority in virtually all respects, even if there are big differences between the political parties. For example, the share of men in Switzerland’s strongest party, the conservative right Swiss People’s Party, is twice as high as the share of female members. The same applies to the centre-right Conservative Democratic Party.

Both the centrist Christian Democrats and the Social Democratic Party state that their share of female members is around 40%, while the centre-right Radical-Liberal Party does not reveal its figures. Apart from the Greens, no other party approaches parity.

 A closer look at the number of female delegates reveals a similar picture.

 Alice Glauser, People’s Party’s parliamentarian for canton Vaud, thinks this is problematic: “The structures were created by men for men”.

 Also in Italy, the figures are well known and merciless. No female Prime Minister, or President of the Republic, ever. Until the first Conte cabinet, throughout the seventy years of the Italian Republic, over fifteen hundred male ministers were elected, against only eighty-three female ministers, half of which were without portfolio. Today, three out of five female ministers are without portfolio. Only 13 mayors out of a hundred are women.

In this social context affected by COVID and with such a fragmented political framework, I rejoiced when I saw – at least, in Italy – strong and successful initiatives taking place with the aim of shaping the future political order. They advocate for equal opportunities bearing a constructive and democratic vision.

The first one is called “Prime Donne” (Women first), a school of Political Studies supported by Più Europa Association and presented to the Chamber of Deputies. It is a training course for 25 women selected among over two hundred candidates. It’s just a drop in the ocean, but it’s a start.

Fabiana Musicco, the spokeswoman of the school, explains further: “We work on contextual data that are often not known to the public. We aim at exposing the under-representation of women and showing how their increased presence, for instance in municipal executive councils, has contributed to changing the policies. We are talking about the structure of political parties, access to the leadership, how electoral rolls are created. We also offer training modules on the so-called ‘soft skills’, that is, communication abilities. Political verbal communication – even that of talk shows – is ruled by a masculine, aggressive speech style; we want to disrupt these patterns. We also want to bring up new proposals for a better work-life balance”. 

The second initiative, Prime Minister, is a school of Political Studies for young women (aged 13 to 19) which intends to “inspire a new generation of women by introducing them to politics – understood as the art of interpreting and guiding society –, discussing democracy, activism, social justice and female leadership.”

 “We are trying to build a new piece of the world, a dimension where we can find happiness in the community, where we can discover new ways of thinking and living”, says Florinda Saieva, 42, from Sicily. “We want to inspire the youngsters, to discuss with them about democracy, institutions, justice, sustainable development; we want to reflect on the power of active citizenship as well as on the absurdity of gender stereotypes that continue to relegate women to secondary roles and on the need, instead, for new female leaders. This can be seen as a gender equality challenge and a generational challenge – this is why young girls are our priority. What’s more, this is also a challenge to promote the South of Italy, where boys and girls go through huge difficulties. We mean to stimulate the talent and sensitivity of these young girls, hoping that these very girls may be the Prime Ministers of tomorrow. We all desperately need a change and I believe that after the horrible moment we are going through, we will be ready to make it happen”.

In this difficult moment we are experiencing, it is essential to grasp and guide this change, now more than ever. We need to start building new structures and synergies made for an economic, political and social future that includes and leverages that 51% of the population, breaking up with the past and, finally, disrupting these obsolete and harmful mechanisms.

Manuela Andaloro

(info@smartbizhub.com)

Switzerland: Gender equality, the Italian language and labour market.

“Inform to educate, publish to raise awareness, preserve to keep the memory, fight for a future full of solidarity, in which social values are shared and strive for a society based on true democracy.”

This the mission of “Corriere dell’Italianità”, a successful publication (both printed and digital) read across Europe as well as globally. The newspaper has a 57-year-old history, a very interesting and growing readership and is very well established within institutional and political environments.

But what is Italian-ness in Italy and the Italian-speaking part of Switzerland, as well as all over the world, and what shines behind old and tired stereotypes?
 
Established in 1962, Corriere dell'Italianità aims at raising awareness on Italian culture, in Italy, in the Italian-speaking Switzerland, and all over the world. A publication of excellence that increasingly leverages innovation, digitisation, social values and the core societal themes we see reflected in politics, economy, the labour market, science, sports and free time.  Headed by President Franco Narducci, member of Parliament of the Italian Republic (XV and XVI terms) and Vice President of the Foreign Affairs Commission, and spearheaded by Valeria Camia, director of Corriere, an experienced journalist with a strong background in the social policies sector and European universities.

I was delighted and honoured when I had the pleasure of giving an interview on my work and commitment to the cause of diversity and EQ-driven leadership to Corriere, and when I was later asked to join their outstanding board as a board member.

One of the first events I had the pleasure of attending took place on 23rd November 2019, where the Swiss Parliament President, Marina Carobbio Guscetti, offered a broad overview of the political scenario of the Swiss Confederation after the elections held on 20 October and the ballot for the formation of the Council of States.

Marina Carobbio with journalist Simona Cereghetti

Among the numerous relevant subjects discussed by President Carobbio, I reckon that a couple of pressing issues deserve a special mention as they also characterised the policy she adopted throughout her presidential mandate - which ended on 1 December 2019, after which she was elected to Councillor of the Assembly's upper house*.

In front of a crowded audience, Marina Carobbio answered the pressing questions of Simona Cereghetti – RSI's journalist and Berne correspondent. She started her reflection on gender disparities with the current situation in Parliament.

Today, the women sitting at the National Council represent 42% of all members, while the Council of States has 12 women (around 26%). Compared to the situation before the electoral round, these are extraordinary figures.

Thanks to an awareness-raising campaign supported by several social sectors (such as the "Helvetia ruft" campaign and the 14 June strike), today Switzerland lags behind significantly less with regards to equality between women and men in politics! Certainly, there remains ample room for improvement with the aim to increase female presence and visibility in key roles but the determination of Swiss women and the new-found unity goes beyond political parties and bode well for future development! Gradually, Swiss society is realising – both at an inter-generational and inter-party level – that remarkable results can be obtained through gender solidarity in terms of justice and reduction of inequalities between men and women.

At a closer look, it is clear that this achievement is also supported by men. This new attitude brings up other important subjects such as the traditional perception of the caregiver work, which is a task carried out mostly by women without a salary nor social insurance contributions.

A deception that will impinge upon their future retirement pension. In recent months or even weeks, discussions have been initiated in various working groups – both political and institutional ones – to examine the issue of workers leaving the labour market to look after not only their seriously ill children but also the elderly. “Within this ageing society”, said President Carobbio, “we can no longer postpone the issue of the role of women (and men) in care-giving activities. Facing the problem of gender differences becomes then a crucial issue because of its impact on social cohesion and, last but not least, on democracy – a kind of democracy that should guarantee not only equal rights but also equal opportunities.”

Along with the “genre” issue, the "Italian language" plays a decisive role in participation in political life and social cohesion in Switzerland. In a country founded on different cultures and traditions, expressed also linguistically, the use of all four national languages ​​must be defended and strengthened.

We must underline that, for this reason, Marina Carobbio has made a change in the parliamentary operations, imposing a widespread use of her mother tongue, Italian, following up on what Chiara Simoneschi Cortesi had done before: she was, in fact, the first Italian-speaking woman President of the National Council (2008-2009) who carried out part of her parliamentary work in her mother tongue. In a country where anglicisms are commonly used and English seems to be taking over national minority languages ​​between the various Swiss linguistic regions, the protection of the Italian language allows the safeguard of the history and culture of an important sector of the Swiss Confederation. A sector that struggles in finding a place of its own, squeezed between "the rest of Switzerland" to the north and the Lombard landscape to the south.

Manuela Andaloro

(Adapted from Valeria Camia’s article in Corriere dell’Italianita’)

*Marina Carobbio, role update: As of the 1st of December 2019, Member of Parliament Marina Carrobbio is a Councillor of the States: also a member of the commission on social security and health, a member of the commission on science, education and culture in which she promotes multilingualism, Italian-ness and gender equality and a member of the finance committee in which her political priorities are the climate crisis, pensions and labour mobility.

Switzerland’s new President for 2020. In Switzerland, the position of president is ceremonial. Switzerland’s executive is led jointly by all seven members of the Federal Council, known as les sept sages (the seven wise ones) by French speakers. The ceremonial role of the president rotates annually among Federal Council members. In addition to the diplomatic duties of the president, he or she chairs Federal Council meetings and has the tie-breaker vote on contentious decisions. In 2020 the role of president passes to Simonetta Sommaruga, Switzerland’s minister of the Environment, Transport, Energy and Communication.  

Social Media between society and democracy. Tech giants, is this how you want History to remember you?

Article and Cover Story by Manuela Andaloro for FocusOn Mag, August 2019.

At the inauguration of Brazil’s new far-right president, Jair Bolsonaro, in early January, a crowd of his supporters began a surprising chant. They weren’t cheering for Bolsonaro or his running mate or their party; instead, they were reciting the names of social media platforms. "Facebook!", "WhatsApp!" shouted the crowd.

They were crediting the platforms with their man’s victory, and they aren’t entirely wrong. During the campaign, a conservative pro-business interest group funded a massive disinformation campaign on WhatsApp (the popular messaging app owned by Facebook). False and damaging information about Bolsonaro’s left-wing opponent spread like wildfire in the run-up to the vote. This deluge, according to one Brazilian expert, played a role in Bolsonaro’s victory.

 Bolsonaro’s sympathizers and supporters are part of an increasingly dangerous worldwide trend. A troubling development, now familiar to many, is now evident: social media, once seen as a profoundly democratic technology, is increasingly serving the needs of authoritarians and their allies.

Many observers have noted that entrenched authoritarian states, like Russia and China, have gotten very good at manipulating these platforms to marginalize domestic dissidents and destabilize democracies abroad. What has gotten less attention is how authoritarian factions inside democratic states — far-right politicians and parties that are at best indifferent to democratic norms — benefit from the nature of modern social media platforms.

The American 2016 elections, those in Brazil in 2018, the ones in the United Kingdom in 2016 and in Italy in 2017 have demonstrated that social media are a tool that is unfortunately widely used for this type of activity.

Should we perhaps admit a rather painful truth? Has social media, perhaps, become an authoritarian tool in the manner in which they are currently being used?

How the far right gains an advantage using social media

The Journal of Democracy is one of the premier academic venues for analyzing the current state of democratic politics. Its most recent issue features an essay from Ronald Deibert, a political scientist and director of the University of Toronto’s tech-focused Citizen Lab, on the role of social media in modern politics. His conclusion?

“It seems undeniable,” Deibert writes, “that social media must bear some of the blame for the descent into neo-fascism.”

Ten years ago, Deibert’s view — now widely shared among journalists and scholars — would have sounded absurd.

The main characteristic of social media seem to be a vague democratic promise, but the rapid dissemination of information can be used against democracy through information overload and the dissemination of false news that leverage the fears of those who often have few means to understand the reality of the facts.

An always-on, real-time information tsunami creates the perfect environment for the spread of falsehoods, conspiracy theories, rumours, and “leaks.” Unsubstantiated claims and narratives go viral while fact-checking efforts struggle to keep up. Members of the public, including researchers and investigative journalists, may not have the expertise, tools, or time to verify claims. By the time they do, the falsehoods may have already embedded themselves in the collective consciousness.

A recent study found that conservatives were more than four times as likely to share fake news on Facebook as liberals. Another study, from researchers at the University of Oxford, found that conservative users were overwhelmingly more likely to spread “junk news” (defined as outlets that “deliberately publish misleading, deceptive or incorrect information”).

The University of Oxford’s Samantha Bradshaw and Philip Howard put out a report last year on the political abuse of social media platforms in 48 countries. They argue that in each of these cases, the use of tools like fake news and trolling undermine the health of democratic regimes and benefit authoritarians. The more anger there is out there, the more support is guaranteed to anti-democratic forces.

"Unfortunately, there is mounting evidence that social media are being used to manipulate and deceive the voting public—and to undermine democracies and degrade public life", they write. "Social media have gone from being the natural infrastructure for sharing collective grievances and coordinating civic engagement, to being a computational tool for social control, manipulated by canny political consultants, and available to politicians in democracies and dictatorships alike."

 A BuzzFeed analysis found that between 2012 and 2017, seven of the ten most popular articles about German Chancellor Angela Merkel on Facebook were false. Merkel is widely seen as a champion of European liberal values and inclusiveness, one of the major bulwarks against the far-right tide on the continent. Three of the seven false articles in the BuzzFeed list were attacks on her immigration record, all focusing on making immigrants seem like threats to Germany and Merkel unreasonably sympathetic.

Facebook’s role in Brexit and the threat to democracy.

In a recent viral and unmissable TED Talk that has garnered over two million views in just two months the journalist and Pulitzer Prize candidate Carole Cadwalladr has discussed one of the most shocking events in recent times: the very close vote in the United Kingdom in 2016 to leave the European Union. In her speech Carole mentions the "gods of Silicon Valley" for their role in helping authoritarians consolidate their power in different countries.

In her talk, Cadwalladr spoke to those whom she identifies as the chief culprits: Facebook's Mark Zuckerberg and Sheryl Sandberg, Google's Larry Page and Sergey Brin, and Twitter's Jack Dorsey.

"This technology that you have invented has been amazing but now it's a crime scene. And you have the evidence. And it is not enough to say that you will do better in the future because to have any hope of stopping this from happening again, we have to know the truth…because what the Brexit vote demonstrates is that liberal democracy is broken, and you broke it. This is not democracy: spreading lies in darkness, paid for with illegal cash from God knows where. It's subversion and you are accessories to it."

It’s not all bad, is it?

There are places where the democratic promise of social media, which has for example favoured the Arab spring or movements to counteract Orbán in Hungary and also Erdogan in Turkey, is not extinguished but they are the minority in relation to the damage that the social media platforms seem to be inflicting on the liberal order of democracies throughout the world.

Social media right now is functioning as a kind of parody of the classic “marketplace of ideas” mode of the public square. Instead of the best ideas winning out in free debate, there are so many bad ideas that the good ones simply get drowned out.

In August 2018, MIT Technology Review revisited its 2013 “Big Data Will Save Politics” cover, publishing a series of essays examining whether the technology had lived up to its promise. The overwhelming conclusion was that the magazine had been far too naive.

“Today,” editor-in-chief Gideon Lichfield writes, “technology feels as likely to destroy politics as to save it.”

M.

(Sources: TED, Umidigital, Uni Oxford, MIT, Vox, Journal of Democracy)

As published in Focus ON’s cover story, August 2019, download original article in Italian here.

Bringing EQ-driven leadership into companies.

Interview by Valeria Camia, journalist, web director Corriere dell'Italianità, to Manuela Andaloro Senior Advisor and Board Member, for Corriere degli Italiani

A successful entrepreneur, an ambassador of gender equality, and a mother, Manuela Andaloro tells her story. 

Business woman Manuela Andaloro has been the CEO of SmartBizHub since 2017. Together with her team, she does management consulting, especially in the field of new technologies and sustainability, working with multinationals and government agencies throughout Europe. Manuela travels often and is active in advocating and raising awareness on diversity, gender equality and on the balance between family and work. She was recently nominated for a major award on gender diversity. For many years, she has been advocating “diversity and inclusion” in companies. Could Manuela picture her current reality when, just a twenty-year-old student at IULM University in Milan, she got her first corporate role as an analyst at ACNielsen, working hard to keep up with her studies?

Manuela has been not only a successful entrepreneur in recent years, for over 17 years she has had important roles in leading financial companies in Europe, since 2012, she’s also a mother. A mother of two small children (4 and 6 years old), in Switzerland, a country in which achieving a balance between family and work is particularly complicated. Maternity leave is granted for only 3 months and fathers are excluded, as opposed to a European average of 6 to 12 months (or even 3 years in Germany) of leave, which in many cases can be shared equally between both parents. If wage parity remains a dream, the same goes for career opportunities, respect for diversity and promotion of social inclusion.

“Finding a balance between career and family is one of the hardest challenges that my husband and I – along with hundreds of parents with careers, I have met over the years – are facing in Swiss society, which in most cases still gives women the role of housekeepers and child carers. This concept is deeply rooted in the culture of this country. I still remember this chat I had with a doctor I had consulted because I felt tired after the birth of my first child and my return to work 5 months later. I remember the doctor asking me why I kept on working. It was shocking. And that was just the beginning. I was shocked again when I went back to work, first part time, then full time. Society in many cases expected me to be mainly a mother”, says Manuela, who considers herself lucky, because “there was still a job for me when my maternity leave was over if you consider that one in seven women in Switzerland loses her job when she becomes a mother.” Not to mention the economic situation, as private nurseries and kindergartens, that can provide more flexible times to allow parents to work, are very expensive and so precluded to many.

To be honest, Manuela actually had some thoughts about giving up her career, or taking a break. It was never easy to leave my children with the babysitter or at the nursery until late, to work and travel even on weekends, and being under the critical eye of society. But Manuela did not give up. She was courageous and aware of the need to break up with an obsolete, individualistic and non-empathic mindset, which does not leave enough space for women and is unable to cope with the new global picture of society and its stakeholders.

— Images, left to right: Manuela Andaloro moderating a FinTech international event in January 2019 in Zurich (credits: British Embassy Bern); speaking about adapting our working cultures to reflect a more modern world and diverse society, June 2019, Amsterdam. (Credits: EWPN, Money 2020); on stage speaking about new role models and leadership, October 2018, London (Credits: PayExpo); Balancing private life and work on a weekend. —

The trump card that can reconcile career and family, says Manuela, is a new type of EQ-driven leadership. “The best leaders of today invest their time and energy in understanding the people they work with and their teams. It’s the EIQ, or emotional intelligence quotient, which experts say has become today more important than IQ and is a better index of success for people, companies and society. This is why we must work to change the old mindset: a new approach will not only favour women but will also foster a type of leadership based on empathic soft skills. In the digital age and its new challenges, women should not be fighting to integrate themselves into a system that has proved to be disastrous as it supports only one model, the alpha personality, mostly very dominant figures. I met women that had old-fashioned leadership styles, not very cooperative and participatory, and men who lead in an inclusive way and pay attention to the social fabric outside and inside the company. Adopting a leadership based on arrogance, blind self-confidence and lack of empathy does not work today, in the face of the probable failure of liberal democracies, the negative influence of social platforms, the climate crisis, artificial intelligence and the associated risks. Both women and men should all work together to transform the mindset of companies (and politics), making room for the new facts on the ground”.

For women, it means they have to learn to believe more in themselves, to not settle for less and to act, without always waiting for the right moment in decisions concerning private and working life – to have a child or to accept a new role of great responsibility that involves changes. “Sacrificing one’s ambitions even before trying is harmful to oneself, to other women, to new generations and to the men that are witnessing this behaviour”.

On 14 June, over half a million women and men across Switzerland joined the demonstrations following the strike, plus all those who participated in a “digital” way. What do you wish for, Manuela? “I wish for strong governmental reforms and independent inspections of companies to assess corporate culture, and diversity within them. And I also expect each of us to raise awareness of issues of vital importance, in each of our daily roles, as mothers, fathers, teachers, workers, leaders. Starting from making our children aware of the importance of equality, inclusion and an open mind-set to face today’s new challenges”.

Valeria Camia with Manuela Andaloro

Manuela Andaloro is a senior professional with over 19 years of executive experience in global roles in financial services, business strategy and digital transformation, having lived in Milan, London and Zurich and worked for firms such as Nielsen, Financial News and UBS. Since 2017, she is the Founder of Swiss-based SmartBizHub, a management consultancy specialising in marketing, positioning, communications, sustainability, future tech and future work. Manuela is a professional speaker, a published author, and an editorial consultant for various leading publications on the topics of finance, social shifts, impact, culture and leadership. She serves as advisory board member of various Swiss and international organizations, and as a board member of the Weizmann Institute of Science in Europe. Manuela is a D&I champion and advocate for EQ- driven leadership, speaks English, Italian, German and Spanish and lives in Zurich with her husband and two children. 

As published in Corriere dell’ Italianita’ cover story, 30 July 2019 view original article in Italian here.

Do not wait for leaders. Become them.

“In terms of promoting diversity in the industry, there are some easy steps that could be taken to try and break the image of financial services as a realm of male domination. Increasing the number of women speakers at major industry events sounds like a no-brainer, but it’s still something event-coordinators struggle to do. Organisations like EWPN are playing such a vital role in breaking these patterns, not only by empowering women, but also by promoting women in the payments industry who deserve recognition, who would be overlooked, in many cases, by their male counterparts.”

— Angela Yore, MD, Advisory Board EWPN

Left to right, Chloe Templeton, Megan Caywood, Manuela Andaloro, panel moderated by Angela Yore

The world is in desperate need of great leaders—whether in business or in politics. Yet, many leadership opportunities are withheld from half of the workforce.

Even with all the progress we’ve made for equality in so many important ways, women are still severely underrepresented in business leadership positions. Women-led companies make up only 4% of Fortune 500 companies, a trend that holds steady throughout most business sectors.

According to the latest World Economic Forum’s Global Gender Gap Report, “Female talent remains one of the most underutilized business resources.” In some industries, like finance, this is especially clear.

In finance, as career level rises, female representation declines. Although 46 percent of financial services employees are women, at the executive level, it’s only 15 percent. (WEF 2017 data)

The outlook looks better than when I started my career 19 years ago, or even since my banking days 2 years ago, yet, much remains to be done, starting from raising awareness on role models who lead leveraging their high EQ.

New role models are crucial to break the cycles of outdated cultures, inspiring women and men to a new identity of leadership, one that leverages skills such as collaboration, empathy and trust, helping younger generations of women and men to rise to a new identity of leadership, one that doesn’t take only one form.

But how are we all driving steadily this very much needed change? What new real models for women and men are we raising awareness on? Men are as much trapped in most of this “alpha-male” world as women are. Times are changing, a clear reflection of this is the increasing number of millennials (women and men) who are less than fascinated by old corporate working models and by old and outdated environments.

The lure that many large corporations once had in attracting and retaining talents is long gone, replaced by new working models, attractive start-ups, high impact lean companies that favour calm competence over loud arrogant behaviours.

Millennials are not alone on their quest. It’s enough to think of how many people we know above 40, men and women, who are daily trying to change the way they work, to find more meaning in what they do, to leave behind the old ‘work life balance’ to find sustainable ways to create a winning synergy between their work and their life.

It was a great honour to join last year one of the leading events in the payments and Fintech sector for their first ever all-women panel.

Beyond the now well-known benefits of gender balance, our goal was to share learnings, experiences and stories from diverse female role models,  raising awareness on new, different types of female leadership and successes.

As the two thousand guests gathered, it became apparent that women represent still a stark minority  in the sector, and at the same time,  that interest in the topic of gender balance and of leverage of the female brains is ever so relevant for men and women alike. 

The payments industry is not unique in gender inequality: traditional payments companies have been technology and finance driven, both mostly male-dominated industries that have somehow landed in a fairly versatile space.

The panel I was invited to sit on was expertly moderated by Angela Yore, Founder of SkyParlour, EWPN board member and leading advocate for women empowerment in the FinTech space. Fellow panellists were Megan Caywood, then Chief Platform Officer at Starling Bank, now Global Head of Digital Strategy at Barclays Bank, and Chloe Templeton,  Head of Mutuals and Women in Finance at HM Tresurey, now International Policy Lead for Women's Economic Empowerment at the Department for International Development (DFID).

We spoke about the importance of empowering women and men to achieve diversity and close the gender gap, and of how to frame and invest in our own personal brand.

What follows is a snapshot of our panel discussion with key take-aways.

Question: “What to do about the fact that confident women leaders are often seen negatively?”

Megan: “Be confident anyway. We need confident women leaders. The world doesn’t benefit by us shrinking so that others aren’t intimidated.”

Question: “Can you tell us more about the Women in Finance Charter?”

Chloe: “In 2016 HM Treasury launched the Women in Finance Charter which commits signatory firms to make significant progress on improving the representation of women at the most senior levels of their organisation. Over 270 firms have signed the Charter, who together employ more than 750,000 staff.”

Question: “Why is the number of women on boards still so low?”

Angela: “When I say to the Fintech leaders I work with, ‘why is your board so lacking in diversity?’, the tame response I often get is that women are simply not applying! And it’s true that women only represent 29% of staff in the sector and white men dominate the boardroom. Men still make up the majority of high paid jobs in financial services but good things are beginning to happen and . California is leading the way as the first US state to require women on corporate boards and PwC is the first of the big four to ban all-male job shortlists.”

Question: “How can women’s voices be heard more?”

Manuela: “A famous statement of Christine Lagarde post financial crisis quotes `If Lehman Brothers had been a bit more Lehman Sisters ... we would not have had the degree of tragedy that we had as a result of what happened.` Beyond the obvious what this highlights is that women are normally naturally more risk-averse than men. Which is very good for most businesses but can be backfiring when it comes to promoting ourselves in the workplace and our role in society. Our own personal brand should be the best representation of our values across our personal and professional lives, and should be out there.”

M.

(info@smartbizhub.com)

———-

For more information:

Women in Finance Charter materials here.

Analysis of the Charter’s impact here 

Firms who want to sign the Charter can do so here

Payexpo 2019

Post-liberal: order and value

Article by Manuela Andaloro , published in Focus ON’s cover story, February 2019, download original article in Italian here.

The single currency has come a long way from the initial dream in which many did not believe. From the first discussions in 1960 on an economic and monetary union, to date, the currency of 340 million Europeans, used by another 175 million people in the world. Its success? It is about combining national identities with global ethos and customs.

One of the skills I have learnt working for twenty years for various companies and in three different countries (ed. Italy, United Kingdom, Switzerland), is being able to read people, finding the key to establishing human relationships based on understanding, trust, empathy: from team members and employees, to bosses, customers, various stakeholders with whom in the last two decades I have dealt and, often, from whom I had the pleasure of learning something.

When dealing with diversity, there are three fundamental aspects one must immediately consider, beyond language and working skills, cultural aspects, or similar experience:

1. A realistic awareness of one’s value, and the impact it has on others, on business and on society. 

2. Understanding the importance of constantly switching from looking at the big picture to paying the attention to details.

3.  Turning a fixed mindset into a growth mindset while staying humble – an essential skill.
   

This is what I call emotional competence: integrated skills that are not bound to cultures, nationalities, business ranks, age, generations, education and training. I am talking about skills that can be learnt every day, that make the difference, in my opinion, between those who bring in value, from those who subtract value in the medium and long term: I am thinking of human relationships, businesses, and companies.

Whether we are talking about the latest strategic business plan, a political initiative, the merger of two institutions, or the interpretation of financial statements, the emotional competence of the involved stakeholders is directly proportional to the success that they will achieve in the medium and long term.

Emotional competence and European single currency.

Twenty years ago a new currency was born, it was the single currency of what would be later known as the eurozone: the euro.

 It did not exist yet in the form of coins and notes we all know today, which were introduced a few years later, in 2002. In that year, the united currency became tangible for millions of Europeans and the old German marks, French francs, Italian liras, Spanish pesetas, and all the ancient variegated currencies of Europe became History.

Mario Draghi, President of the European Central Bank, once compared the euro to a hornet – a “mystery of nature” that should not be able to fly, but somehow, it does. 

Draghi used this metaphor during the tumultuous Greek debt crisis in 2012 when many wondered if the end of the euro was close.

Two decades after its birth, the euro flies high. Member States have grown from 11 to 19, and the size of the European economy has risen by 72%, to 11.2 trillion euros, second only to that of the United States, turning the positioning of the European Union into a global force that should not be underestimated.

The last two decades have often been turbulent ones for the single currency, from an initial exchange rate against the dollar of $ 1.16, the euro slipped to a nadir of only $ 0.853 in 2001, during the “dot-com bubble” that caused clamorous slips to digital investors of that time. From that moment on, it was a bull market until reaching a peak of $ 1.58 in 2008, just before the financial crisis.

This was the period when rappers like Jay-Z and models like Gisele Bündchen insisted to be paid in euros instead of dollars.

The euro maintained a favourable exchange rate against the dollar during the financial crisis, but a long decline began, once again, in 2014 due to fears related to the eurozone’s rupture.

A key factor was the traditionally interventionist behaviour that the European Central Bank adopted at that time, aimed at supporting economic activities in the areas affected by the recession – an intervention that normally suppresses the relative value of currencies.

Today the euro is stable at around $ 1.14, a position similar to that of twenty years ago.

But how successful was the single currency?

If we look at the annual Eurobarometer survey, the answer is, surprisingly, very successful, given the political and economic turmoil of recent years.

Faced with the question “has the euro been positive or negative for your country?”, on average, the citizens of the analysed European countries have answered positively in 64% of the cases. The same survey in 2002 resulted in only 51% of the population being satisfied with the single currency. The same research in 2018 concludes that in some countries of the block, three-quarters of the population has confirmed that the euro was “a good thing”.

But there are other parameters to take into account, and the great majority of them paints a positive picture.

The single currency is used today by around 340 million people in 19 countries. The euro is today a global reserve currency, stocked by central banks and multilateral institutions, such as the International Monetary Fund (IMF).

The Eurozone inflation has been kept under control, remaining on average at 1.7% in the last twenty years, just below the 2% policy imposed by the European Central Bank.

Yet, some economists are not convinced that the euro has been a success, due to the fact that since 2000 the GDP per capita in the eurozone has had a lower yield than expected (purchasing power being the same), growing by 15%, less than the US (19%) and the United Kingdom (20%).

A relative sub-yield.

Yet, this event has significantly less importance than the fact that the single currency has come out unscathed after the serious existential crisis experienced from 2010 to 2015, when the imminent crumbling of the eurozone was feared, at a time when countries like Greece, Italy, Ireland and Portugal ended up under the paralysing pressure of the bond market.

 The disaster was avoided thanks to an intentionally vague promise of Mario Draghi, in July 2012, that “we will do whatever it takes” to keep the united market together.

Some regard this episode as evidence that the creation of the single currency was a mistake, that binding economies with different levels of productivity and local institutions, along with a common currency with a single interest rate, would be a doomed project and would create financial, economic and social tensions.

“The euro’s main achievement is still being here, and it’s very likely that it’s here to stay”, writes Constantine Fraser, a European policy analyst at TS Lombard, and he adds “This slightly mad project of a supranational currency union with wildly different economies within it has lasted 20 years and has brought these economies and countries closer together”.

In many cases, older Europeans do not feel European “enough”, but the generational change and the advent of the new generations, grown up in an international environment favourable to integration, will promote the European Union. The eurozone must go on, because if it stopped, it would fall. There is a political will to make sure it continues to grow, but it is still uncertain how quickly and with what incremental changes.

Ten years after recovering from the financial crisis, political instability is now the biggest and most unpredictable threat to the eurozone. The toughest challenge for the European Central Bank during its third decade will be to secure the healthy survival of the union, threatened by the tumultuous background of a significant populist pressure rather than the stress of the financial markets.

Going back to the skills mentioned at the beginning and the much needed emotional competence, let us look at the big picture.

For several generations, the world has been governed by what we now call the “global liberal order”. Bombastic words, whose real meaning is that all men share some basic experiences, values ​​and interests, and that no group of men is inherently superior to another. Cooperation is therefore more favourable than conflict. All men should work together to protect their common values ​​and advance their common interests. The best way to promote such cooperation is to facilitate the circulation of ideas, goods, money and people across the globe.

Although the global liberal order sometimes poses difficulties and problems, it has proved its superiority over all other alternatives. The liberal world of the 21st century is more prosperous, healthy and peaceful than ever in human history. For the first time in history, hunger kills fewer people than obesity, scourges kill fewer people than old age, and violence claims fewer victims than accidents.

We have not died when we were 6 months old thanks to the medicines discovered by foreign scientists in foreign lands. At the age of 11, we have not been erased by a nuclear war, thanks to agreements made by foreign leaders at the poles of the planet, agreements that the new leaders of America and Russia have recently questioned and the expected outcome within 6 months does not look positive.

We should ask those who express their will to return to the golden pre-liberal or even colonial ages, to mention in which year exactly mankind was in better shape than in the 21st century. Was it in 1918? Or 1700? Or in the Middle Ages?

And yet, people all over the world seem to have lost their faith in our liberal order.

Nationalist and religious opinions that favour one group over the other are popular again. Governments seem to increasingly restrict the flow of ideas, goods, money and people. Walls are created, both physical, mental and in the virtual space. Immigration does not persuade, fees and duties increase.

 What kind of global order can replace the current one? So far, there seem to be only sketchy and untested solutions at a national level – think of the disastrous example of Brexit –, aimed at promoting the interests of a particular country. But nobody seems to envision how the world, together, should work. Leaving imperialism and global conquests for the history books and science fiction films, what solutions do we have and will leave to our children for the generations to come?

 There are real severe threats at the gates of our civilisation. They grow on a global scale, they care little of national borders, and they can only be resolved through global cooperation: nuclear wars, climate change, artificial intelligence and associated technological risks.

However, this is not yet our destiny, we still have a choice. We are still in time to propose a realistic global agenda, beyond commercial agreements. We have the choice to choose, to promote or to reject the leaders – in business, in society, in politics, among our acquaintances – that demonstrate not to have qualities such as understanding the big picture, empathy, humility, that are not aware of the impact of their actions on those who have less means to understand the reality, or worse, who understand and exploit it for their own purposes.

Let us remember the skills of those who, at any level, in any sector, bring in value and have the intrinsic qualities of true leaders: emotional competence.

New identities and solutions are formed in times of crisis. The euro has shown it, so has history.

Manuela Andaloro

(info@smartbizhub.com)

 As published in Focus ON’s cover story, February 2019, download original article in Italian here.

FinTech: the new finance between innovation and culture

This week I had the incredible privilege of hosting as master of ceremony and moderating one of the most important events in the annual calendar of Swiss financial institutions and UK-based successful FinTech companies: the 4th UK FinTech Mission to Switzerland. 

On January 24th, 2019, the UK FinTech Mission to Switzerland, organized by the Department for International Trade, brought together high-ranking government representatives, Swiss financial innovators, successful UK FinTechs, and famous leaders for two thought-provoking panel discussions.

Strong numbers behind a successful platform. The three previous events generated over CHF 50 million in signed business and provided a strong business platform for over 150 attendees. The 4th mission saw 28 UK and 33 Swiss companies present, discussing innovation and future impact on society in the over 115 one-to-one meetings that took place.

The driving forces that helped shaping success. High-ranking government representatives, including Jane Owen, Her Majesty’s Ambassador to the Swiss Confederation and non-resident Ambassador to Liechtenstein, Catherine McGuinness, Chairman of the Policy and Resources Committee, City of London, leading Swiss financial representatives, such as Jos Dijsselhof, CEO of SIX,  Switzerland's principal stock exchange, Noel McEvoy, Director Department for International Trade and the Scottish Development International for Switzerland and Liechtenstein, as well as senior representatives of the British Embassy Berne and the British Swiss Chamber of Commerce, were present and played a key role. Why do such events generate such great interest? As Jos Dijsselhof stated, the anwer is simple: because together we are stronger. Such strong platforms stimulate new business relationships amongst participants, resulting in job and wealth creation in Austria, Switzerland, Liechtenstein, and in the United Kingdom.

Is the current political turmoil a threat?

SIX’s CEO Jos Dijsselhof clarified early on in his speech that “Despite Brexit and the renegotiation of the terms of UK’s relationship with the rest of Europe, the bond between UK and Switzerland remains strong. The UK remains a leading center for FinTech in Europe. In 2018 alone, it attracted GBP12 billion of investment—of the respective EU total of GBP20 billion. At SIX we are predestined to play matchmaker in FinTech field. Finance and technology are in our DNA.”

What is SIX’s role? SIX is often defined as the backbone of the Swiss financial center “providing the technical infrastructure, running the Swiss stock exchange, as well as financial information, security, and payment services.” Among its shareholders and clients are 127 national and international banks. “It speaks for innovation, efficiency, stability, and security in the financial sector.”

What about Brexit? Jos addressed the topic in reassuring but careful terms: “what we do know is that with the UK's exit from the EU, Europe and the UK likewise face significant challenges – in both political and economic terms. We are discussing these challenges of Brexit, the risks – as well as the opportunities – for the financial industry, at length here with our peers in Switzerland. What remains undisputed is that the UK and Switzerland are significant economic and trading partners. If I were to quote just one figure, it would be this: each day there are over 80 direct flights between Switzerland and the UK.  Both countries benefit immensely from these close relations. Swiss companies provide around 93,000 jobs in the UK, while British firms account for about 27,000 jobs in Switzerland.

The UK and Switzerland are also investing in each other. Direct investments run into dozens of billions of Swiss francs. Swiss banks play an essential role in London's financial industry. Market access to the United Kingdom is vital to the Swiss financial market infrastructure. SIX generates up to 80% of its income in the area of trading with downstream segments (clearing and settlement) in European countries, particularly in the UK. “All areas that SIX does business in have offices in London; our stock exchange works closely with London's stock exchange and many other companies in the UK. All these touch points make the need for a good relationship evident, as it enables us to share knowledge, establish partnerships and build on each other's strengths.”

This means that significant disruptions must be avoided and that UK and Swiss financial service providers need to be able to continue doing business after Brexit in the same way as before. In a first step safeguarding the status quo and legal stability is essential.

Why Switzerland? Switzerland is to a certain extent destined to innovate. And it does so very well: Global Innovation Index named Switzerland to be the most innovative country in the world, not once, but seven times in a row. Many CEOs talk about the importance of innovation, but do they walk the talk? What are they doing in specific terms?

 How is SIX driving innovation? SIX has recently launched a venture fund worth 50 million Swiss Francs - around 38 million Pounds. The aim is to promote innovation in the Swiss financial sector. The Innovation Team is developing services for shareholders and the Swiss financial center. 

Let’s talk societal impact. “Our noblest task as entrepreneurs is to bring people together – across all cultures and languages, across all borders, despite potential political difficulties.” concluded Jos Dijsselhof.

Business does not divide people; it unites them. It invests in innovation and helps to ensure that new ideas spread around the world. Ideas that benefit as many people as possible.

What is the current status quo of the relationship between Switzerland and the UK ?

A very interesting update came from Noel McEvoy, Director Department for International Trade, who confirmed how vital is assuring continuity, to ensure this, only last week 5 agreements were signed while all efforts are being made to keep the dialogue going between the two largest financial centres in Europe, such as London and Zurich.  “Both nations are keen to grow and collaborate to ensure increased prosperity, and there are dialogues taking place on mutual market access.” he confirmed.

 Continuity and EU. At present, relations between Switzerland and the UK are largely based on the bilateral agreements with the European Union, which will cease to apply to the UK after its withdrawal from the EU. In preparation for exiting the EU, the UK has initialled five bilateral continuity agreements with Switzerland, covering trade, citizens’ rights, non-life insurance, land transport and air services.

The bilateral continuity agreements replicate the existing EU-Switzerland arrangements as far as possible and will come into effect as soon as the implementation period ends in January 2021, or on 29 March 2019 if the UK leaves the EU without a deal.

Panel 1: New Finance: How customer demand made it happen , with Stephen Ingledew, CEO, FinTech Scotland, Katharina Bart, Senior Contributor, Finews, Gavin Littlejohn, Chairman of FDATA Global and Convenor of the Fintech Stakeholder Group of the UK Open Banking Implementation Entity, Keith Phillips, Executive Director, The Investment Association, Michael Coletta, Blockchain Developer Emerging Technology Lead, London Stock Exchange Group and moderator Manuela Andaloro, CEO, SmartBizHub

How do we keep driving sustainable change?

One of the key discussions that took place on stage saw an incredibly knowledgeable line-up of top experts in their respective fields, such as Stephen Ingledew, CEO, FinTech Scotland, Katharina Bart, Contributor, Finews Senior, Gavin Littlejohn, Chairman of FDATA Global and Convenor of the Fintech Stakeholder Group of the UK Open Banking Implementation Entity, Keith Phillips, Executive Director, The Investment Association, Michael Coletta, Blockchain Developer Emerging Technology Lead, London Stock Exchange Group.

The goal of the panel was to portray the new financial landscape, acknowledge its driving forces, such as customer demand and client savviness, and discuss predictions on themes such as blockchain, international payments, machine learning, Internet of Things, and AI.

Q. Stephen, as CEO of FinTech Scotland, if you look at the FinTech ecosystem, at the fusion of financial services and technology, what do you think it can deliver from a social and societal impact perspective, in the short and long term?

A. Fintech is a movement, economic and social, it is vital to access new consumers who may not have been served in the past. It brings a diverse range of societal benefits, inclusion, and diversity.

Q. Katharina, customer demand seems to have shaped the industry. How do you see the role played by women and younger generations in finance? 

A. SRI (sustainable and responsible investing) and women are the Holy-grail in FinTech. Another aspect is diversity and inclusion, some way to go but over the past couple of years we have witnessed positive change and increased awareness. Another aspect is the fragmented provision of services in FinTech. It is a fast moving sector and trends change quickly, the new generation should not be seen as disloyal, they are simply savvy, choosier and more sophisticated.

Q. Gavin, in Switzerland, historically a conservative financial centre, the adoption of open banking has so far been very limited. How do you think open banking will benefit society as a whole and solve the ever growing challenge of complexity, when it comes to having access to the right product or solution at the right time, for example?

A. In a complicated product, a simple product is waiting to come out. Complexity drains the UX of benefits. Open Banking is a waypoint to further opening of the financial system. In my opinion pensions will next on the agenda. Collaboration is vital, it enables the industry and leads to enabling enabling technologies.

Q. Keith, if we think at the FinTech applications across the whole value chain, where do you see the most significant disruption coming from? 

A. The investment association is focused on the buy-side in FinTech, RegTech and WealthTech. Social mobile tech will likely be a major disruptor. A cluster of FinTech is focused on data, possibly a wave of disruption from that front too.

Q. Michael, what do you envisage for the future of FinTech? Where will real disruption (if at all) be coming from?

A. In terms of disruption, blockchain is not as great as is often made out to be. Disruption occurs in financial services as part of a complex ecosystem. Could a FinTech really disrupt and displace a large infrastructure player? Maybe but unlikely.

Q. When will FinTechs be judged like the large established players?

Gavin: It is a fundamental shift, they will be judged differently as per the current environment.

Q. Is it fair to judge the customers as loyal or disloyal? Were they ever loyal?

Katharina. Yes, they are simply savvy consumers. A semantic issue. Personally, I have been looking for a new bank for 18 months—still looking. Am I disloyal? No.

Gavin. Inertia Tax comes to mind, we should be looking at how to reduce the inertia tax (extra costs incurred and months spent looking for a different solutions) and friction.

Q. There seems to be a lot of energy and excitement around Open Banking. How do you measure the success of OB (since launching 12 months ago in the UK)?

Gavin. It is a process that will accelerate over the next 12 months. The shift to APIs is increasing in speed, so API growth will be a measure.

Panel 2: Is work working against us? Establishing new role models: Women in New Finance , with Catherine McGuiness, Chairman of the Policy and Resources Committee, City of London, Maria Leistner, Group Managing Director, General Counsel at UBS, David Bundi, Head RegTech, PwC Legal Switzerland, Angela Yore, MD & Co-founder, SkyParlour, Petra Arends-Paltzer, Founder, Swiss Legal Tech Conference and Manuela Andaloro, CEO, SmartBizHub.

In the early afternoon we were joined by an incredible group of change-makers who represent and stand for a new identity of leadership: I had the pleasure to discuss the future of work and the importance of raising awareness on different role models with Catherine McGuiness, Chairman of the Policy and Resources Committee, City of London, Maria Leistner, Group Managing Director, General Counsel at UBS, David Bundi, Head RegTech, PwC Legal Switzerland, Angela Yore, MD & Co-founder, SkyParlour, Petra Arends-Paltzer, Founder, Swiss Legal Tech Conference.

What is the status quo when it comes to women in finance and role models. Is work working against us?

Of the CEOs who lead companies on the 2018 Fortune 500 list, just 24 are women. That translates into a 4.8%, down 25% on 2017.

Why? Increasingly research suggests that one of the key reasons why women do not rise to the top in the same numbers as men is due to systemic barriers, funneling one particular type of person to the top, and that is not usually a woman.

Because of this, the focus should not be on integrating into a not-so-good system, but on transforming it and improving it. This is where often initiatives such as “lean in” leave many women wondering, should we lean into a system that is entrenched in a working world that’s outdated, limited and controlling, or should we instead go deeper and work on changing the culture?

New role models are crucial to break the cycles of outdated cultures, inspiring women and men to a new identity of leadership, one that leverages skills such as collaboration, empathy and trust, helping younger generations of women and men to rise to a new type of leadership, one that doesn’t take only one form.

The FinTech scene has gained increasingly attention over the past two years, its evolving trends seem to foster a culture of gender equality and to act as a catalyst for diversity.

Today in both Switzerland and in the UK, the percentage of senior women in Tech and Financial services, sits between 15% and 20%, and a July 2018  research by LendIt on women in FinTech found that:

1.         Average percentage of senior women employed at FinTech companies is 37%.

2.         Average percentage of women in the C-Suite at FinTech companies is 19%.

Better, but still not shifting the needle. And yet, the impact of women on the financial services industry and FinTech is more pronounced than in others.

Because organizational leadership often strongly influences product development and overall customer experience, FinTech companies with women executives are better positioned to respond to the needs of female customers, a major market segment with potential for growth that is frequently underserved by financial services providers.

So, is it possible that the so called “new finance” is helping to shape a new culture around the future of work, and having a significant impact on the success of the industry itself?

Panel discussion with (left) Manuela Andaloro, Catherine McGuinness, Maria Leistner, David Bundi, Angela Yore, Petra Arends-Paltzer

Q. Catherine, you chair the committee responsible for policy, strategy and direction for the City of London Corporation, you regularly meet with government and financial representatives from across the UK and the EU. What is the gender ratio at senior level you see in your role and also, if we look at the blending of work and life, it has never been more apparent than in today's always-connected and always-on culture, do you think the new generation’s quest for a better “work-life integration” will help changing the status quo permanently in the long run?

A. In the Square Mile we have 37% of women in the workforce. This needs to improve. The current mentality is still all “suits and ties”. However the millennials and younger generations are changing this by demanding flexible working patterns, and bringing even greater diversity. As a woman in my role: when I first started there was pressure for me to represent diversity, be a role model. This is not what I wanted, I was there for my role, irrespective of gender, it didn’t feel comfortable to be an advocate initially, but then I soon saw evidence in the workplace that women really were not being treated equally to men, when it came to promotions for example, so I decided I would step in and stand for gender equality and diversity.

Q. Maria, when it comes to career and employment, women and men increasingly want to be inspired by real life leading examples, in an effort to implement a permanent cultural change. There is however a lack of leadership models that stresses women’s hearts and minds when pursuing a career. What role do you think the cultural element and the belief that “they will not manage it”  plays in convincing many women to avoid the experience of motherhood, or to drop their careers?

A. Countries are different in what is culturally acceptable. I lived in the UK for a long time and have recently moved to Switzerland. There is no perfection anywhere on the topic if equality and diversity, however there has been some improvement in flexibility for women in leadership positions. The stats mentioned with regards to women in FinTech are very disappointing.  Technology itself and the tech world are a potential driver of change of diversity: it is a chicken and egg situation. Diversity and inclusion can significantly improve the FS sector. If we don’t change how we work, we won’t be able to address the needs of clients. Like Catherine, initially I resisted the role model label for many years, then came to realize that it is a duty, helping to change the status quo and raising awareness on the unconscious bias deeply embedded that plague the workplace and its culture.

Q. David, If what we read and hear about millennials holds true, they don’t seem to be driven by the thought of working hard for the next 40 years and then retiring. Rather, they are driven by the idea of building a life and career that can withstand the continuous reinventions that the 21st century will require. They take a lot of criticism in the media for sporting a sense of entitlement, but seem to have interesting strenghts such as embracing change, especially technological, wanting to work smarter, not harder, embracing their passions, professionally and personally. What do you think we can learn from their stance on work and life and how can we implement it sustainably in our working cultures?  

 A.     A very interesting quote of Steve Jobs that comes often to mind is “You need to find what you like.” The workforce of the future and the culture we create and bring forward must focus on how we can complement each other. The key is, what makes each and everyone special? The younger generation should be credited for their willingness to try and test. We should be looking for and hiring employees who don’t replicate what we do. The digitalization of business has changed the nature of how we work – and, accordingly, what skills we need to succeed, so even more so, the vital skills in the future will be around the human element and EQ. Personally I have a very good experience with diversity: it simply works and it impacts positively the business and its bottom line. We as panellists, as advocates, need to be bold and supportive to push diversity.

Q. Angela, while the world is a considerable distance away from achieving complete gender equality, the Nordics have emerged as a front runner. When people think of countries like Sweden, stylish designs and minimal lifestyles often spring to mind, but gender equality is one of the cornerstones of modern Nordic society. These countries continuously stand out in the Global Gender Gap Report, which measures equality in all areas from education, employment to economics. Out of these countries, Finland has the largest female labour-force participation, as 83% of women, including mothers, work full time. What do you think has worked well in these countries that could be replicated across Europe? Also, do you think quotas play a part in their success?  

A. Nordics have it right: The culture is there, policies are strong and enabling. Both elements are required. They are not present in a similar way in the UK, or elsewhere in the EU.  In the Nordics for example, 10% of income is spent on child care, that percentage increases to 35% in the UK. Culture eats strategy for breakfast. As CEO of my own company, I now get to make decision and stand for what I believe, but initially as senior woman in the tech corporate world it was tough, when I announced my pregnancy to my then boss, his comment was: “ Oh dear, Angela, this changes everything”.  I will let you digest that. I set off and started my own business and have never looked back. My advice to women, and men, who don’t fit in outdated cultures is simple: Be bold. It usually pays off.

Q. Petra, if we look back at 2008 and the financial crisis, a famous statement of Christine LaGarde (Managing Director and Chairwoman of the International Monetary Fund) still holds true: “if it had been Lehman Sisters rather than Lehman Brothers, if would still be here”. That obviously points at the fact that women are normally more risk averse than men,  however, that often has an effect on their careers and the risks they take, not going for “that” job or not doing really positioning themselves and their value in their organization.  What are the key drivers for change?

A. The key driver will be a change in client demand: Clients will seek out companies with diverse workforces. We have an incredible enabler these days: technology. Technology will work towards gender equality. In all this, role models will be vital to inspire women and men. Another vital element is to step out of the comfort zone, to ask, to demand equality. Self-confidence to genuinely establish  themselves is a key factor, and so is genuine collaboration among women.  

Q. How does performance affect the diversity drive?

Angela. The gender pay gap is disastrous. Take BBC News presenters: same role, same experience, male TV anchors earn 30% more than their female counterparts. What is the rationale?

Q. How do you feel about the pressure on males to hire female or face discriminatory allegations?

Maria. It is about the quality, of course performance is critical, pushing for diversity to get things moving more quickly might lead on certain occasions to errors. Personally, I am in favour of quotas. 10 years ago I was against but the speed of change on the gender equality topic has been too slow not to resort to quotas.

 Catherine: I am personally in favour of targets rather than quotas. But targets with teeth. Culture is what we need to address most of all.

Manuela Andaloro, Maria Leistner, David Bundi, Catherine McGuinness, Angela Yore, Petra Arends-Paltzer

Targets with teeth. When discussing the importance of gender equality in the workplace, concrete rather than glass ceilings, and bias embedded in cultures that belong to history books.  

Corporate culture creation, improvement, and change rests with the organization's top leaders. Through their actions, communications, and the values they embody, leaders set the example for others to follow, and the tone for what is important and valued in the organization.

The good news is that CEOs and supporting executives across the globe are realizing that corporate culture is not simply a feel-good catch-phrase, but rather the linchpin to an organization's overall performance.

Once CEOs embrace their role in establishing and leading the corporate culture, the sky is the limit for both personal, organizational and societal potential.

M.

(info@smartbizhub.com)

New finance: how customer demand made it happen

Article by Manuela Andaloro , with the contribution of Laura Prina Cerai, Senior Investment Advisor, Altrafin AG, and Vega Ibanez, former Senior Project manager, Julius Baer. Published in Focus ON’s cover story, 18th December 2018, download original article in Italian here.

The financial services industry is at a turning point – it has to reinvent itself or it will be reinvented by other players.

Increasingly start-ups and IT firms are attracting a wide variety of new clients interested in specifically tailored services, making it daily more challenging for the entire financial sector to compete and remain engaged.

If we look at access to financial data for example; within the space of just a few years we have gone from making deposits and transactions at bank counters and from phone calls to our client advisors to discuss investments and market trends, to home banking, mobile banking, online trading, AI investment platforms, and a wide variety of valid offers via different applications accessible from our smartphones.

It seems that the industry is changing dramatically directly in response to the demands of customers, who want flexible, new, digital and easily accessible financial service products.

Those who fail to adapt are lagging behind, especially players, banks and institutions who don’t understand the new needs that the ongoing revolution has brought to light. We are witnessing a crucial time of change and it’s only just beginning. 

But what led to such an acceleration and to the current financial revolution? 

To understand the present we need to go back to the financial crisis of 2007,  which we also discussed in a recent post on financial crisis and economies. 

How the FinTech world was born

During the last financial crisis of 2007-2008, plummeting share prices, bankruptcies, mergers and restructuring resulted in millions of job losses and triggered the beginning of a fundamental change in the banking sector. Regulators became determined to prevent the actions of one or a conglomerate of a few large investment banks (too big to fail) from hitting the economy and the public purse so hard (hence avoiding further possible bail-outs relying on taxpayers' money).  Regulation in the sector has multiplied exponentially and has catalysed most of the direct investments of banks in the last decade at the clear expense of the budget in innovation and improvement of services.

The emergence of new small banks in addition to the big investment banks coincides with a new approach to the services offered: the emergence of the so-called FinTech - new digital technologies in the financial sector - application-based technology that automates most banking processes and offers easy online access and self-service platforms to customers. Today, entire banks are built around a mobile application.

The FinTech industry is seen by traditional banks as an opportunity to participate in the development of the financial sector without the need to invest in in-house development. With thousands of job losses in the banking IT sector in the last decade and the priority given to adapting to regulatory pressure and strengthening budgets, FinTech has developed mainly through outsourcing, driven by the demand of customers disillusioned with and dissatisfied by traditional banks, who were seeking a greater choice of digital services.

This perfect storm led to the rapid growth of FinTech, attracting third-party investments and making it a major player in the banking industry with a customer base that includes some of the world's largest companies. One example is US investment bank JP Morgan Chase, which spent $9.5 billion on IT in 2016. Of the total expenditure, approximately $6.5 billion was spent to support existing IT, while the remaining $3 billion went to new development initiatives, of which $600 million in FinTech.

The incumbent banks have to cope with a crisis of the traditional models of bank and respond to the needs of an increasingly digital consumer, developing more personalised offers and focusing on an omni-channel structure at the expense of the concepts of proximity and territory.

Start-ups and companies that were first to invest in FinTech have therefore gained a wealth of skills and business models that constitute the future of personal finance. And so the traditional banks have begun to opt for a path of collaboration with these newcomers via supporting hubs, financing partnerships or direct acquisitions.

According to Price Waterhouse Coopers' 2017 figures (PWC source study), venture capital investments in the FinTech sector reached a total of $22 billion in 2016. The geographical composition of the capital raised shows that most investment has been concentrated in America and Asia. In Europe, although London has historically been and continues to be the European capital of FinTech, investments in 2016 fell by 34%, mainly due to the uncertainty surrounding Brexit. The slowdown in FinTech investment in the City is offset by the emergence of new ecosystems in Germany, France, Scandinavia and Israel. 

Although Italy is currently excluded from the main roles in the FinTech scenario, with no start-ups in the world top 100 indicated by KPMG, it invested a total of 33.6 million euros in 2016, up 77% on 2015 (source startup Italia). Most of the start-ups and investments in FinTech in Italy are concentrated in the mature sectors of asset management, retail banking (traditional payment transactions), insurance and peer-to-peer lending (P2P - i.e. direct private loans, without bank intermediation). Keeping up with the times of change, universities now offer FinTech courses in partnership with local start-ups.

The age of challenger-banks

In response to the unstoppable wave of consumer demand, Fintech players are adapting daily to provide all kinds of solutions for private and business customers, globally. Numerous banks and institutions no longer position themselves as "primarily online” and are now "only online".

From deposits and credit lines to payments, consumer and business loans, IMT, institutional investing, personal finance, the new generation of Fintech players is now working more and more strategically with artificial intelligence to digest and analyse large amounts of transactions and behavioural data, to gain a deep understanding of customer needs and match growing expectations.

Payexpo 2018, London. Panel with Chloe Templeton, Megan Caywood, Manuela Andaloro, moderated by Angela Yore

An interesting case is the steady success of the English "Starling Bank". Recently I was invited to talk about my experience in finance at a major event on payments and Fintech in London. One of the speakers on stage with me was Megan Caywood, Chief Platform Officer of Starling Bank (soon to join Barclays as Head of Customer Experience), she used an interesting definition to the describe the bank she helped create: "the digital, mobile-only challenger bank".  A bank that has at least a couple of elements that break with tradition: it’s a challenger bank, so a fully digitalised institution with a very light cost structure, and it’s led by a woman, CEO Anne Boden.

Brexit may be changing the financial geography of Europe, but, with best practices like those listed above, at the moment London remains a point of reference for innovation.

The other SPHERE OF “new finance”

2019 will definitely bring further use of automated technologies, further post-GDPR data protection policies, and increasingly strong content control and demands from an increasingly digital workforce and clientele.

We have so far analysed part of the "new finance", and of the response to consumer demands brought by the FinTech world.

There is another very interesting growing reality that has been competing for attention with the FinTech world and similar organisations operating in the world of crypto and blockchain technologies for some years now. The world of sustainable investing.

The so called “new finance” landscape seems increasingly polarised, driven by the forces shaping Fintech on the one hand, and by the need for sustainability on the other.

While the FinTech world comes from an evolution of consumer needs, regardless of age and school of thought, and from the response to post-credit crunch regulatory changes, the other sphere of new finance clearly seems to come from strong demands and needs of younger generations and women.

The millennials - and looking at figures, also increasingly women, no matter which generation they belong to, have been asking loudly for sustainable responsible investments for several years now.

Millennials, most of whom have grown up in the digital age, are - unlike their "baby-boomer" parents - more attentive and more exposed to the evils of the world, and more inclined to use investment strategies to remedy them.

Research shows that “boomers” see sustainability and investment as two separate universes, while millennials struggle to understand how to separate the two.

This generational change already seems to be visible in universities and many business schools report that demand for ESG (environmental, social and governance) investment courses is increasing and they are often overcrowded or overbooked. 

"In the nineties, letters of application to Stanford with references to the willingness “to alleviate poverty” in the world were seen as "soft", reports Matt Bannick of the Omidyar Network, a company for impact investments, but today over half of the applications to Stanford Graduate School of Business mention the Institute's commitment to social development goals”.

Bill Gates, Melinda Gates, Warren Buffet

The ultra-rich paved the way. In 2015, a group of millennials, some of whom belonging to the Ford, Rockefeller and Simmons families, launched "The ImPact", a network which aims to create "measurable social benefit" through its investments. Positioned as a generational response to the "Giving Pledge" initiative jointly launched in 2010 by Bill Gates and Warren Buffett, supported by over 125 signatures, each with an average wealth of $700m. Since then, there have been countless similar initiatives, and “Generation SRI” was born.

It's not just the millionaires who are succeeding in this context. It’s a well-known fact that the generation of millennials is less wealthy than that of their parents, yet the older “millennials”, who are almost forty and close to peak-earning, have clear demands and preferences. Over the next two decades, the boomers will pass on their fortunes, worth trillions of dollars - the largest transfer of wealth ever recorded - leaving the millennials quickly in control of about $24trn (Deloitte estimates). Very few people will enjoy the sumptuous pensions of their parents and it is estimated that they will be very determined about how their reduced pensions will have to be invested.

The millennials have experienced the financial crisis, so they are naturally suspicious of traditional institutions. Some people call them presumptuous, because they seem to want to change the world. But is this really presumption or is it perhaps necessity?

In a survey, the American company Morgan Stanley estimated that 75% of the millennials interviewed think that their sustainable investments will affect climate change, in contradiction with 58% of the entire population.

Millennials are also more likely to check the packaging of their purchases for example, and to choose sustainable products, and like all children, they try to influence their parents.

Technology, AI, robo-advisors and the likes, will amplify this force of new finance thanks to increased accessibility. As discussed in a previous post, players that will manage to engage with their audiences successfully will leave the competition at the starting blocks.

Technology leaves no room for impostors. Information on the positive or negative impact of any company will be more and more transparent and available to a growing clientele. Players who are not genuine in their approach to sustainability will find it difficult to hide among what’s on offer, unmasked by algorithms.

Re-writing the basics for a BETTER future

In truth, almost every investment has a social or environmental component. Technology will allow us to create more targeted offers for customers, aligning products, funds, ETFs and derivatives, with sustainable objectives, such as the 17 UN SDGs, the social development goals of the United Nations, and will help measure the impact of our work and our investments, and to ensure increased transparency.

The recipient, customer, consumer has shaped and created the offer. We now own the elements for a better future, brought on by accessible high-level information, slow but steady cultural change and improved awareness of the need for equality, and by a generation that is keen on sustainable approaches towards the way we pursue our businesses daily.

If properly leveraged, technology will enhance information, culture and understanding on the one hand and, on the other, the wise positioning of dynamics, market performance, trends, and the impact that each of us can have on their own future and on the future of our society. 

M.

(As published in Focus ON’s cover story, article by Manuela Andaloro for Focus ON, 18th December 2018, download article in Italian here)