Banking & Financial Services - Page 2

DigitalCFO Newsroom | 3 November 2022

Mobilewalla, a global leader in consumer intelligence solutions, is pleased to announce the launch of its newest offering for digital lenders, LendBetter, at the Singapore Fintech Festival 2022. 

Leveraging the industry’s most comprehensive repository of global consumer information, LendBetter is uniquely positioned to provide digital lenders with high-quality, AI driven predictive data and features at scale, helping them improve their credit assessment and customer acquisition process. LendBetter also offers financial institutions easy to integrate risk scores powered by sophisticated machine learning, which are highly predictive of credit–worthiness for new-to-credit borrowers. This enables digital lenders to extend loans to thin-file consumers, significantly increasing access-to-credit and positively impacting financial inclusion in emerging markets. 

Working closely with various financial technology companies in Southeast and South Asia during the past year, LendBetter has generated positive outcomes for these early customers improving acquisition quality with the usage of AI driven features as part of the credit assessment process.

“LendBetter’s deep insights into consumer behaviour have helped us improve our quality of acquisition by reducing fraud, allowing us extend credit with more confidence” said, Paramananda Setyawan, Chief Data Office with FinAccel, a leading financial technology company focused on reinventing financial services in Southeast Asia. “Our partnership with Mobilewalla complements our growth ambitions. We are very pleased to work with them to help more people get easier access to credit.”

“With our industry first offering LendBetter, Mobilewalla is excited to work with digital lenders across emerging markets to enable financial inclusion for the new-to-credit” said Anindya Datta, CEO and Founder of Mobilewalla. “Lendbetter provides access to AI driven, privacy compliant consumer data at scale, enabling them to approve more credit at a reduced default risk. Our partners find our future-proof features and scores to be highly predictive of consumer behavior, and easily integrable for a variety of use cases spanning customer acquisition, risk management, and fraud prevention.” 

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DigitalCFO Newsroom | 27 October 2022

The latest edition of the Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA^® (Institute of Management Accountants) found confidence in the economic outlook remaining well below the median reading over the past decade due to fears over inflation and a slump in business.

The Q3 2022 GECS, the largest regular economic survey of accountants around the world, can be accessed here or at https://www.imanet.org/insights-and-trends/global-economic-conditions-survey. The survey took place between September 2 and 14, 2022 and gathered 905 responses.

Globally, the survey found that nearly three-quarters of businesses are wrestling with increased costs, with the highest proportion of respondents reporting increased cost pressures for the last decade and over one in three worried about decreased income, with a similar proportion highlighting foreign exchange volatility as uncertainty and glimpses of recession dominate the latest economic outlook. 

Two developments underlined the precarious nature of the commercial environment. First, an increase in the number of respondents reporting “problems securing prompt payment,” which has risen to the highest level in four years. This could be the first sign of an increase in the number of organizations that may be experiencing cash-flow difficulties. Additionally, the survey found that there has been a noticeable rise in the numbers reporting “problems accessing finance,” with the most aggressive tightening of monetary policy in 40 years likely to hit corporate liquidity. 

The data further notes confidence in the economic outlook remaining well below the median reading over the past decade, while the other three indicators that are more closely related to economic activity – new orders, capital expenditure, and employment – all show a further deterioration. Taken as a whole, the series is consistent with slower global growth for the remainder of the year, coupled with inflationary pressures rising. 

 “Growing concern of increased interest rates in response to higher inflation and the result in tightening policy lies the risk where the global economy could slow more than businesses expect in 2023,” said Dr Josh Heniro, senior director of Southeast Asia at IMA. Commenting on the outlook for the Asia Pacific, he added, “The silver lining in the Asia Pacific market is that monetary policy has remained accommodative where the surge in inflation is within acceptable parameters in comparison with other regions, which could be the reason why we are seeing a recovery of confidence among our respondents.”

The survey also notes the growing divergence in confidence levels across the regions, with low levels in North America and Western Europe contrasting with the more upbeat perspective among the survey’s Middle Eastern and South Asian respondents. 

The findings in North America illustrate the impact of rising inflation and the global economy. After collapsing to a record low in Q2, North American confidence recovered slightly in Q3, but it is still the second weakest reading in the survey’s history. Even more worrying is that new orders, capital spending, and employment all deteriorated in Q3.

“Our latest Global Economic Conditions survey points to obvious ongoing challenges in the global economy, a reflection of the continued economic fallout from the Russian invasion in Ukraine, a further tightening of monetary policy in key jurisdictions, and a cost-of-living crisis,” Jamie Lyon, head of skills, sectors and technology at ACCA said. “One of the key risks will be how much and how quickly central banks will seek to further tighten monetary policy in the months ahead to tame inflationary pressures, and whether or not the global economy could slow more than business leaders expect in 2023.”

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DigitalCFO Newsroom | 26 October 2022

The global economy is approaching a recession as economists polled by Reuters once again cut growth forecasts for key economies while central banks keep raising interest rates to bring down persistently-high inflation.

One bright spot is that most major economies already in a recession or heading into one are starting with relatively low unemployment compared with previous downturns. Indeed the latest poll expects the smallest gap between growth rates and joblessness in at least four decades. But while that might deaden the intensity of recessions – most respondents say it will be short and shallow in key economies – that may also keep inflation elevated for longer than most currently expect.

A majority of the top global central banks are over two-thirds of the way to the expected terminal interest rate, but with inflation still much higher than their mandates, the risk is those rate expectations are too low. After being late to call the inflation problem, global central banks have spent most of this year frontloading rate hikes to catch up. Most economists and central banks are of the view there will be little work left to do next year.

Michael Every, global strategist at Rabobank, said “risk of a global recession” is what everyone’s talking about and has become mainstream in forecasts. “I think that’s pretty much a no-brainer when you look at the trend in all the key economies.”

Looking at the low jobless rate is problematic, Every said, because it is a lagging indicator and “the longer it stays stronger the more central banks will feel that they can continue to hike rates.”

Of the 22 central banks polled this time, only six were expected to hit their inflation targets by the end of next year. That was a downgrade from July surveys, where two-thirds of 18 were expected to hit their respective targets by then.

Analysts at Deutsche Bank wrote: “…history never repeats exactly, but since inflation forecasting has generally been so poor over the last 18 months, it’s worth us asking what normally happens when inflation breaches these thresholds. The answer is that it’s normally quite sticky.”

In the meantime global equity and bond markets are in disarray while the U.S. dollar is at a multi-decade peak in foreign exchange markets based on U.S. rate expectations. A strong 70% majority of economists, 179 of 257, said chances of a sharp rise in unemployment over the coming year were low to very low, underscoring how widespread the view is among forecasters that it won’t be a devastating recession.

Global growth is forecast to slow to 2.3% in 2023 from an expected 2.9% this year, followed by a rebound to 3.0% in 2024, according to Reuters polls of economists covering 47 key economies taken Sept. 26-Oct. 25. Those were all downgrades from polls taken in July.

Over 70% of economists, 173 of 242, said the cost of living crisis in the economies they cover would worsen over the next six months. The remaining 64 expected it to improve. While the inflation cycle is global in nature, made worse by a sudden surge in energy prices after Russia invaded Ukraine on Feb. 24, much will depend on how far the U.S. Federal Reserve was likely to push rates higher.

The Fed is expected to go for a fourth consecutive 75 basis points interest rate hike on Nov. 2, and economists say it shouldn’t pause until inflation falls to around half its current level. China, the world’s second largest economy, was expected to grow 3.2% in 2022, far below the official target of around 5.5% and also well below pre-pandemic growth rates.

Excluding the meagre 2.2% expansion after the initial COVID-19 hit in 2020, that would be the worst performance since 1976. India’s economy was also forecast to grow well below its potential over the next two years with medians showing 6.9% growth in the 2022-23 fiscal year and 6.1% next year. The euro zone economy was expected to grow 3.0% this year but flatline in 2023 before expanding 1.5% in 2024.

Source: Reuters

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DigitalCFO Newsroom | 26 October 2022

The consumer price index advanced 7.3% in the three months through September from a year earlier, compared with a median estimate of 7%, Australian Bureau of Statistics data showed Wednesday. That was the highest reading since the third quarter of 1990 when the RBA hiked so aggressively it tipped the economy into recession.

Three-year government bonds sold off, sending yields about 10 basis points higher and longer dated notes responded similarly, rising above 4% before retracing some of those gains.

The most significant contributors on a quarterly basis were new dwellings, up 3.7%, gas 10.9% and furniture, 6.6% higher, the ABS said.

“Labor shortages in the house construction industry, leading to rises in labor costs, contributed to the rise in new dwellings,” Michelle Marquardt, head of Prices Statistics at the ABS, said in a statement. “The continuation of material shortages added further price pressure.”

The RBA expects inflation will peak at just under 8% in the current quarter, suggesting today’s strong figures may not be a surprise. The result supports the central bank’s rapid tightening cycle that has lifted the cash rate to 2.6% this month from 0.1% in May in an effort to get control of inflation.

It has signaled further hikes are likely and financial markets and economists are currently predicting two more quarter-point moves this year to 3.1%.

“This is a very strong inflation print,” said Sean Langcake, head of macroeconomic forecasting for BIS Oxford Economics.

“Nevertheless, it is broadly in line with the RBA’s expectations,” he said. “Inflation remains uncomfortably high for the RBA, but they have already tightened conditions materially which will temper demand-driven inflation in 2023.”

Core inflation, a measure preferred by the RBA, accelerated to 6.1% last quarter from a year earlier, exceeding economists’ forecast of 5.5%. That reading of the trimmed-mean measure was the strongest since the series began in 2003.

Australia is far from alone in struggling with escalating consumer prices, but is fortunate that wage growth has so far remained contained. That allowed it to break ranks with global counterparts this month and downshift to a quarter percentage-point hike as policy makers elsewhere stick with outsized moves.

The Federal Reserve is expected to raise rates by 75 basis points again next month as it looks to cool inflation pressure. Central banks from the UK to New Zealand are also tightening sharply to rein in prices fueled by pandemic-era stimulus and later supply-chain disruptions.

Coles Group Ltd., Australia’s second-largest supermarket, predicts inflation will accelerate further as some of the nation’s prime east coast farmland is inundated by flooding.

“We do expect cost price inflation to increase given suppliers are still seeking further increase to cover their costs and obviously there’ll be some further disruption from the flooding,” Steven Cain, chief executive officer at Coles, said in an earnings call Wednesday.

He also highlighted mounting labor costs, saying “wage increases this year have been higher than they’ve been for quite some time.”

Today’s report also showed:

• The annual increase in the price of goods, up 9.6%, was the highest since 1983 and continued to outpace services, which gained 4.1%
• The third straight quarter of rent increases in Sydney and Melbourne
• Tradables prices, which are typically impacted by the currency and global factors, rose 8.7% from a year earlier. The Australian currency fell more than 7% against the dollar last quarter
• Non-tradable prices, which are largely affected by domestic variables like utilities and rents, advanced 6.5% on the year

Source: Bloomberg

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