by Alan Verschoyle-King, Global Head of Financial Institutions (FI) Payments at Western Union
Technology is transforming the world of finance. It’s encouraging new players to enter the market and inspiring different ideas and ways of thinking. While some established players are reinventing themselves to stay relevant, the need to collaborate with new disruptive start-ups to drive innovation across the sector, and into other industries, has never been greater. Here are the four main drivers of innovation that businesses of all sizes need to consider in the bid to stay relevant.
Attracting the Next Generation of Talent
To encourage innovation, businesses need to create environments that allow them to thrive. Having a diverse workforce, with a melting pot of opinions, cultures, religious beliefs, genders and skills, is a must in doing so. How can we solve problems, or come up with new ideas, if our employees all come from the same background, share the same beliefs, or have the same skills set?
Within this, there is an even greater need for businesses to attract the next generation of talent: the millennial workforce. By 2025, three in four of the working population will be millennials according to Deloitte. This is a generation that has grown up in a world driven by technology – the youngest millennials were aged 11 when the first iPhone came out – and they want to work for businesses that are tech-savvy and connected, just like them. Traditional companies risk losing out on the best talent because they’re not adapting their ways of working to suit the changing needs of the global workforce.
But when companies do manage to tap into the millennial workforce, the rewards are there for the taking. A Western Union example of this is when we developed our digital offering. To do this, we gave the team in charge the time to succeed as well as the freedom to fail, along with a ring-fenced investment budget. Importantly too the team itself was diverse with people from all age groups and backgrounds.
To enable innovation and stimulate creativity, businesses also need to establish a workplace that welcomes change. One way of doing this is through implementing a platform on which employees can raise ideas about new innovations and developments – when we feel we’re able to challenge and influence, we’re less likely to resent the innovation or development.
Incentives are also crucial. If we can see for ourselves the benefit of proactively suggesting new innovations – whether that’s through money, promotion, praise or an impact on the community – we’re far more likely to invest time and energy into channelling our creativity. A well-motivated workforce is more likely to drive change.
Encouraging Collaboration, not Stifling Competition
Encouraging internal creativity and nurturing intrapreneurship is not the only way we can facilitate the plethora of young talent coming through in the business sector. Seeing innovative start-ups as partners rather than competitors is also a must.
Incumbents, such as banks and traditional payments companies, have in the past seen the emergence of digital disrupters and new entrants in their sector as a threat. At Western Union we are fervent supporters of collaboration, rather than competition. Thankfully, this is a trend that the industry is increasingly waking up to, with more than four in five (82%) financial services and FinTech executives expecting to increase FinTech partnerships in the next three to five years according to PWC. PayPal’s recent partnership with HSBC is a great example of this in action, as is Fitbit’s collaboration with Santander.
In part, the ability to collaborate comes from the confidence of knowing the value that well-established companies hold for young disruptive FinTechs. While traditional players can learn to incorporate new ideas and informal business structures, the disruptors can gain from accessing established global networks and years of regulatory experience and expertise.
For example, today Western Union helps three in four UK universities take payments from Chinese students through tech platforms like WeChat by partnering with FinTech Geoswift, which is the market leader for payments into and out of China. Through our partnership, both of us are able to offer our customers an even better payments experience by increasing scale and capability.
Underlying all of these points – from encouraging creativity in all businesses, to choosing collaboration rather than stifling competition – is that constant focus on innovation: a word that is frequently overused and sometimes misunderstood.
It’s worth remembering that innovation comes in many forms. Important too is the need to differentiate between creativity and innovation. Unlike creativity, innovation does not just happen, it needs to be facilitated. I would therefore encourage businesses to consider having a separate team to help support the creation and development of new ideas – not the source of innovation, but the vehicle that helps to cultivate it.
It is this encouragement and facilitation of innovation – whether in a big business, a small startup, or a partnership between the two – that drives real change and continues to improve all of our services, all with the ultimate aim of better serving our customers.
Alan Verschoyle-King is Global Head of Financial Institutions and Partner Channels at Fortune 500 company Western Union.
Holiday bookings soar as Britons hope for travel restart
By Sarah Young
LONDON (Reuters) – International holiday bookings surged by as much as 600% after Britain laid out plans to gradually relax coronavirus restrictions, giving battered airlines and tour operators hope that a bumper summer could come to their rescue.
EasyJet said flight bookings from Britain jumped over 300% and holiday bookings surged by more than 600% week on week after the government indicated on Monday that travel could restart from mid-May, while holiday company TUI UK said that its holiday bookings surged 500%.
This summer is make-or-break for many airlines and holiday companies which are struggling to survive with close to a year of almost no revenue due to pandemic restrictions. Without it many will need extra funds after burning through cash reserves.
UK-listed travel stocks were buoyed after new bookings flooded in on Monday evening and Tuesday despite ongoing uncertainty over exactly how and when international routes can reopen.
Shares in easyJet jumped 9%, while British Airways-owner IAG traded up 6%, TUI and Jet2 both jumped 6% and Ryanair was 3% higher.
While British tourists are some of the biggest spenders in Europe, the presence of a more infectious variant of coronavirus in the UK could alarm some countries. France and Spain have shut their borders to most UK travellers due to variants.
UK holidaymakers will know more on April 12 when the government publishes a travel review. It has said that a lockdown ban on most international travel will stay until at least May 17.
That should give airlines time to plan their summer schedule, a process which takes months.
EasyJet said trips from the UK to beach destinations such as Malaga, Alicante and Palma in Spain, Faro in Portugal and Crete, Greece, were the most popular destinations with holidaymakers keenest to travel in August. July and September were the next most popular months.
TUI said destinations in Greece, Spain and Turkey were the most booked overnight, with people opting to go from July onwards.
Britain’s route back to normality is helped by rapid progress with its vaccine plan. Over 17.7 million people, or a quarter of the population, have already had a first dose of the jab. The government is also considering options for vaccine passports.
The airlines and travel companies hope such progress will mean that from May 17 the UK will end its holiday ban and remove a 10-day quarantine requirement, a big deterrent for holidaymakers, and some of its COVID-19 testing rules.
(Reporting by Sarah Young, Editing by Paul Sandle and Susan Fenton)
Concern over rich-poor divide seen on the increase during pandemic
By Matthew Lavietes
NEW YORK (Thomson Reuters Foundation) – People have become more concerned about the gap between rich and poor during the coronavirus pandemic, especially the young, the authors of a new global study said on Tuesday, urging governments to take steps to redress the balance.
More than 8,700 people in 24 nations were surveyed at the start and end of 2020 by the Glocalities market research agency, with the findings showing an increase in the share of respondents who thought income differences should be reduced.
As the coronavirus pummeled the global economy last year, the survey also found a 10-point rise in the percentage who said decent work and economic growth were the most important means of improving quality of life.
“It has slapped people in the face and made them realize that things are not going well,” Ronald Inglehart, one of the lead authors of the study, told the Thomson Reuters Foundation, referring to the pandemic.
“We need government intervention on a larger scale. We don’t want a state-run economy, but some of the resources need to be reallocated to balance off this powerful trend.”
Policies that will create “good-paying jobs” in the fields of child care, environmental protection and infrastructure would help address mounting frustration over income inequality Inglehart added.
Young people are particularly concerned about income disparities, the study found.
A third of respondents aged between 18 and 34 said they were more concerned about income inequality than unemployment or economic growth at the end of 2020, up from 29% at the start of the year – before the coronavirus had spread around the world.
“Feelings of being upset, being afraid, feeling let down, feeling like ‘I have no prospective anymore’ are on the rise,” said Martijn Lampert, who also co-authored the study.
“So this requires very wise and just government interventions to channel this unrest in a positive way.”
Inglehart said he sees evidence of such sentiments among the students he teaches at the University of Michigan.
“The job market is dismal … My best students, the stars, they’re finding jobs at a lower level than they’re anticipating. And the ones who aren’t stars are getting nothing,” he said.
The global economy is seen shrinking 3.5% last year, according to the latest estimates by the International Monetary Fund, and numerous studies have shown how the global health crisis has exacerbated economic inequalities.
As a result of the pandemic, the number of people living in poverty has doubled to more than 500 million, according to a report issued last month by the charity Oxfam.
Meanwhile, the collective wealth of the world’s billionaires rose $3.9 trillion between March and December 2020 to reach $11.95 trillion, the report said.
(Reporting by Matthew Lavietes; Editing by Helen Popper; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
Boon or bane? Malaysian island reclamation plan divides residents
By Rina Chandran
(Thomson Reuters Foundation) – The island of Penang on the northwest coast of Malaysia is known for its sandy beaches, the colourful wall murals of its capital Georgetown, and its fiery street food.
In time, it will also be known for three man-made islands that state authorities say are needed to provide housing and economic opportunities for an expanding population, while also generating funds for a modern transport network.
But the Penang South Reclamation (PSR) project, dubbed BiodiverCity, has pitted the government and businesses against fishermen and environmentalists who say it will wreck the lives of residents, and damage the coast.
“The area is rich in prawns and fish. If you build islands, what we will see is permanent environmental degradation,” said Mahadi Md Rodzi, chairman of the Penang Fishermen’s Association that represents about 6,000 fisherman.
“Fishermen have been told to upskill or get another job, but many of us are born fishermen and depend on the sea to live. The proposed compensation from the state is too insufficient for something that will affect our livelihoods forever,” he said.
Many fishermen have rejected the 20,000-ringitt ($4,950) compensation offered, as well as the Environmental Impact Assessment report, which conservationists say does not reflect the potential damage or propose adequate mitigation measures.
Authorities say BiodiverCity, which is a part of the Penang 2030 vision of improving liveability and sustainability, will be a “socially and economically inclusive development” with an emphasis on green spaces, clean energy and car-free transport.
The 4,500-acre (1,821 hectares) project comprising three lilypad-shaped islands will house about 15,000 people each, and use natural and recycled materials such as bamboo and timber for construction of homes and offices, according to the plan.
But the scale of the dredging and reclamation work over more than a decade will cause “massive and long-term environmental destruction”, said Evelyn Teh, an environmental researcher in Penang.
“Fifteen years of land reclamation is a long onslaught to any marine ecology and the fishery industry that depends on it. The reclaimed islands will bury existing fishing areas while deteriorating the surrounding marine water quality,” she said.
“Coastal communities who rely on the marine and coastal area for their livelihood will experience an irreversible negative impact,” she told the Thomson Reuters Foundation.
From Denmark to Singapore, planners have reclaimed land from the sea for decades for offices, apartments and tourism.
Cities and island states that are running out of space are reclaiming land, expanding vertically or going underground.
A United Nations-backed partnership is studying the prospect of floating cities that can help coastal cities at risk of flooding from worsening climate-change impacts.
In Asia, land reclamation has become a contentious issue, with Cambodia and Malaysia banning sand exports, while Jakarta has suspended its reclamation project, and a plan to build an artificial island in Hong Kong has drawn fierce criticism.
Malaysia has two other major reclamation projects underway: Melaka Gateway, a deep-sea-port and cruise terminal that is part of China’s massive Belt and Road infrastructure plan, and Forest City in Johor near Singapore, aimed at foreign investors.
Large-scale reclamation allows more flexibility in city planning, but also lets governments engage “more ambitiously and aggressively with the business of land-banking,” said Keng-Khoon Ng, a lecturer at UCSI University Kuala Lumpur.
“These island-making projects are designed to boost state coffers. They represent a colossal misappropriation of resources at a time of intensifying housing unaffordability and social injustice,” he said.
But the PSR is needed as Penang has “run out of land”, resulting in ad-hoc developments, fewer economic opportunities, and a shortage of affordable housing, said Eddie Chan, executive director of SRS Consortium, the project developer.
A quarter of residential units will be earmarked for affordable housing in the average price range of 350,000 ringgit, and a fishermen’s taskforce set up by the state government is addressing any social impacts, he said.
“With proper design and construction methods applied to dredging and reclamation, and pollution prevention and mitigation measures to minimise environmental impact, we are confident that reclamation can be done sustainably,” Chan said.
The PSR project, designed by Copenhagen-based Bjarke Ingels Group (BIG), is scheduled to break ground in March after approvals.
Reclamation has hugely benefited Penang, with parts of the Bayan Lepas industrial zone, as well as heritage clan jetties built on reclaimed land, said Joshua Woo, a former local councillor.
“There are fancy land reclamation projects for the wealthy, but there are also land reclamation projects for a city’s survival. PSR belongs to the latter group,” he said.
“The project will open up new economic opportunities and social spaces for us,” he added.
In fact, PSR is a “feasible solution” to address urgent environmental issues such as climate change and sea-level rises, said Farizan Darus, chief executive of government agency Penang Infrastructure Corporation that is overseeing the project.
“More than half of Penang island is hilly terrain, therefore the next best approach is land reclamation,” he said.
“Without strategic land, Penang’s growth will be stunted. Now is the best time to implement PSR to provide a much-needed economic boost to Penang, and prepare the state for the post-pandemic economy,” he added.
Meanwhile, an online petition by a local heritage advocate against the project, has garnered more than 115,000 signatures, while a group of residents have held several protests under the Penang Tolak Tambak (Penang Rejects Reclamation) banner.
In building PSR and using it to fund the 46-billion ringgit ($11.4 billion) transport network, the state is taking on a huge financial risk during an economic slowdown, and putting commercial interests above the environment and people, said Teh.
Particularly now, when the coronavirus pandemic has revealed deep-rooted inequalities in urbanisation, authorities should instead favour a “radical rethink on building back better”, she said, including low-carbon public transport networks.
“The government risks putting too much focus on a massively expensive and environmentally destructive project that will only benefit a small group of people at the expense of the wider population during an unprecedented economic crisis,” Teh said.
“Penang may be biting off more than it can chew.”
($1 = 4.03691 Malaysian ringgit)
(Reporting by Rina Chandran in Bangkok, with additional reporting by Beh Lih Yi in Kuala Lumpur; Editing by Astrid Zweynert. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
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