Real estate consultancy, JLL has published a new report revealing that the Data Centre market in Southeastern Europe has massive growth potential over the next two to three years as countries in the region become increasingly attractive to investors.

This rise in popularity has come as a result of the presence of highly efficient communication networks along the Western Europe-Asia axis and affordable costs for land, energy, construction and labour. Furthermore, the JLL report identifies that secondary markets in Europe, including Spain, Poland, and Romania, are projected to grow by an average of around 49 per cent. Meanwhile, the core FLAPD area (Frankfurt, London, Amsterdam, Paris, Dublin) is forecasted to not exceed 16 per cent.

The same report indicates that markets in Southern Europe are expected to grow between 30 – 55 per cent in the year ahead.

The widespread adoption of artificial intelligence (AI) and cognitive power processes is generating unprecedented demand for data centre capacity. This occurs not only in mature markets in the West but also in secondary or emerging markets, including Romania. The report also highlights those investments in the data centre industry in 2023 doubled compared to the previous year, totalling €2.34billion Europe-wide.

”The entire Southern Europe data centre market is booming. Bucharest could potentially triple or even increase its data centre capacity by up to seven or eight times in the next three years, following announcements of new large projects in or around the city by several investors in recent months”, stated Mihai Manole, CEO of Tema Energy and organiser of the DataCenter Forum, the event dedicated to the data centre industry in the region.

Benefits in Bucharest

Bucharest ranks ninth in the EMEA (Europe, Middle East, and Africa) emerging markets. Its data centres total 15 MW of power, according to a 2023 report released by real estate consultancy Knight Frank. However, projects already in development could increase this capacity to at least 50-55 MW in the relatively short term.

Last year, several major players announced their intentions and commenced projects to build large data centres in Bucharest, primarily due to its easy access to communication lines, electricity network, and qualified staff.

Southern Europe Data Center markets are booming

Not only is Bucharest rising in the interest of investors, but the entire Southeastern region of Europe is also boosted by its efficient and reliable connectivity.

Within this evolving landscape, Athens stands out as a promising market, drawing the attention of major players. The Greek capital already possesses the greatest IT capacity in the region, totalling 101 MW. However, the growth potential is enormous, as Microsoft plans to construct three data centres in the greater Athens area to provide cloud computing services in Greece, with a total budget of approximately 976 million euros.

Additionally, the French company DATA4, Digital Realty, and Sparkle, the international ‘arm’ of Telecom Italia, announced plans for new data centres. Greek company Lancom, having invested over 20 million euros to date, has initiated a new investment in Crete for the creation of another data centre, potentially serving as a gateway to the Balkans.

A similar situation is observed in Sofia, where in 2023 Equinix invested more than $12million in the expansion of an existing data centre, doubling the site’s capacity to 700 racks. Moreover, the entire data centre market in Bulgaria is projected to grow by 6.96 per cent from 2024 to 2028, reaching a market volume of $201.70million by 2028.

Similarly, Zagreb will experience consistent growth in the next couple of years. Digital Realty has already announced the expansion of its existing data centre in Zagreb, ZAG1, with an additional 1,600 m2 of ICT and technical space. Furthermore, Digital Realty plans to invest in building a second data centre in Zagreb, also at a hyperscale level, for the future.

Looking to the near future

Most international analysts believe that the dramatic reduction in available data centre space and power in the highly developed data centre countries (UK, France, Netherlands, Germany, Ireland, etc.) will lead more and more investors to turn to secondary markets: Eastern Europe and Scandinavia.

Thus, over the next two years, the main investments will be directed to places where the cost of land, energy and human resources is lower. They will also be where there are efficient communication nodes, sufficient (and green) electricity, and the technical capabilities to build and operate large data centres.

This March, The Fintech Times is shifting its spotlight towards insurtech, such as how advanced data analysis is driving efficiencies across the insurance sector.

From enhancing risk assessment accuracy to personalising products and services, insurers are leveraging data analytics to optimise decision-making processes, mitigate risks and cater to evolving consumer needs.

Industry experts share insights into the pivotal role of data in reshaping insurance operations and strategies worldwide.

Huge impact

Data analysis, particularly predictive analytics, have made major strides to improving risk assessment in insurance, says Ashleigh Gwilliam, director of insurance industry growth at customer lifecycle intelligence platform FullCircl.

“Vast amounts of information can be analysed allowing for more accurate pricing, individualisation of policies and mitigation of future losses.

“Algorithmic analysis is also having a huge impact on actuarial departments, identifying hidden trends in data that can uncover the real reasons for claims, advanced analytics can also identify key trigger moments when a claim is likely.

“Fraudulent claims are a key concern for every insurance company. Data analytics can improve detection rates – analysing documents and information for areas of potential miss-representation and inaccuracy – whilst ensuring claims are paid quickly and cost effectively.

“In BIBA’s 2024 Manifesto, it encourages brokers to “meet the needs of the modern economy” and “respond to emerging risks”. Advanced data analytics will have an increasingly important role in modern insurance decision, identifying trends and customer needs and driving innovation in products and services.”

Streamlining workflows

Rajeev Gupta, co-founder and chief product officer of Cowbell, an adaptive cyber insurance company, suggests that advanced data analytics, particularly in cyber risk assessment, enables businesses to gain clarity, simplify processes and improve efficiency and accuracy.

“Data analytics is not new to insurance. Actuaries have been analysing data for pricing and claims reserving for decades. However, the landscape has evolved lately, with advanced data analytics now used by insurers in all other areas of the business – from risk assessment and fraud detection to improving operational efficiency and even refining product roadmap.

“At Cowbell, we are actively assessing the cyber risk posture of over 39 million businesses in the US and the UK. With our rich data pool, we enable businesses to gain clarity about their cyber risk posture in relation to their industry peers in just minutes, while also simplifying and expediting the quoting process for agents, and making the underwriting process more objective.

“By automating processes and streamlining workflows, they are able to reduce costs, improve speed, and increase accuracy across various workflows.”

Improved efficiency

AI-driven tools are enabling personalised quoting, dynamic policy management and streamlined claims processing, according to Scott Logie, chief commercial officer at independent UK consultancy.

“Data analytics, particularly tools underpinned by AI, is powering more efficient, intelligent decision-making across the insurance pipeline and customer lifecycle.

“At the beginning of customers’ journeys, analytics is making quotes generation more personalised. Historically, insurers grouped customers into broad segments based on basic profiles. Now, machine learning models enable more datapoints to be analysed, creating accurate risk profiles for designing bespoke offers. We see this technology in action on comparison sites, which are underpinned by models trained on existing quotes for age, location, house type, and car make or model.

“Analytics is also used by insurers to manage ongoing policies. AI tools review customer data and suggest edits to premiums when a customer’s situation changes. For example, moving into a higher risk area or buying a more expensive car.

“Finally, AI is making claims decisions more efficient. Often, the basics around who, why, when and what are now dealt with automatically based on machine learning models trained on past claims. With fewer manual tasks, insurance advisors and experts can dedicate more time to complex cases and tasks that bring more value to the business.”

Better policy decisions

For Sarah Carver, head of retail banking, wealth and insurance at global financial services provider Delta Capita, insurers can make better, more informed decisions, optimise their internal processes and create value for both the business and the end customers by leveraging advanced data analysis.

“We see particular value driven in three key areas:

• Risk: Insurers can use advanced data analysis to both evaluate risk and then personalise risk assessments using both historical data and predictive scenario based modelling to predict future behaviour. This can also be meshed with individual behaviour patterns allowing for an enhanced risk picture and better policy decisions.
• Customer insights and servicing: Data-driven insights can help insurers understand customer preferences, behaviours, and needs better leading to much better servicing of these customers whether on a micro level of individual servicing or on a macro level to future product development and marketing strategies. Advanced data analysis can also help identify and prevent fraud before it occurs saving cost and retaining customer trust.
• Efficiency and precision: Whether in processing claims more efficiently through analysis to determine where time should be spent, setting precise pricing by using better data to offer both competitive pricing but also less generic ‘one size fits all’ approaches.”

Getting ahead

Alex Littlejohn, executive VP at US insurance brokerage Alliant Retail P&C, says that with the insurance industry’s increasing ability to understand analytics and uses for collected data, analytics are taking on a larger role in how underwriters review, charge and provide capacity on insurance programmes, in addition to leveraging claims analytics to understand how losses impact coverages.

“Assessments conducted based on insureds’ data affects how the insurance community rates and evaluates risks.

“From an insured perspective, analytics allow them to get ahead of underwriters’ decisions, enabling decision-making on limits and deductibles for programme optimisation, both prior to shopping the insurance market and then evaluating conditions they receive back from the market.

“We’ll always move forward in terms of how data and analytics impact decision-making, both in how clients decide to buy risk and mitigate their risk, and how insurance companies decide to provide capacity and charge for the risk.”

Better price risk

Insurance companies worldwide are adopting AI to understand better how insureds drive, says Rashid Galadanci, CEO and co-founder of Driver Technologies, an AI-based mobility tech company

“Specifically leveraging video telematics-based scoring, insurance companies can now underwrite and classify the risk based on how an individual, or even a whole fleet, really drives instead of traditional factors like credit scores or motion-only telematics, which miss critical factors like tailgating and traffic sign adherence.

“Telematics with video analysis is also incredibly valuable for the claims process for users as visual ground truth cuts substantial time and costs from the claims lifecycle and, in many cases, can eliminate any need for arbitration.

“Additionally, to assess and design safer communities, we must understand our current road infrastructure by studying anonymous road safety and road risk information to develop insights into the types of improvements we need.

“By analysing real-world, location-specific road risks derived from regular and image-based road segment data (RSD) using telematics and computer vision data, insurance companies can better price risk while educating their insureds with insights into the most dangerous intersections and best roadways to keep them safe.”

Better predictions

David Bairstow, chief product officer at EagleView, a provider of aerial insights for insurance companies in the US, underscores the critical role of data and analytics in helping insurers address significant challenges such as talent retention, increasing population density in disaster-prone areas, and economic pressures.

“The insurance industry is facing significant challenges. Employees with deep experience are retiring. Attracting new talent is proving difficult. Externally, more people now reside in areas often affected by severe events, increasing pressure on insurers to more effectively underwrite those property risks.

“Further, large-scale events also present challenges in effectively servicing insureds after such events occur. And recent inflationary trends continue to damage insurer economics.

“To stay competitive, carriers will need to use data and analytics to pro-actively assess climate risk and model property portfolio exposure. Being able to better predict catastrophic impact and forecast maximum exposure value – before events even occur – will help insurers manage their underwriting and pricing strategies.

“In the aftermath of large-scale events, property intelligence and analytics can be critical tools to help insurers better service their customers. For example, leveraging timely, high-resolution aerial imagery captured at scale across affected areas can help insurers to begin processing claims much faster and, in many cases, before First Notice of Loss (FNOL) is even filed by the insureds.

“Innovative data, analytics, and technology approaches like these will help insurers better serve their customers while also helping improve the structure and financial performance of the carriers’ property insurance portfolios.”

Improving accuracy

James Harrison, global head of insurance at Dun & Bradstreet, a business intelligence and data company.

“In today’s insurance landscape, the power of data analytics cannot be overstated. Advanced data analysis techniques are revolutionising how insurers assess risk, price policies, and make strategic decisions within the industry.

“One primary way data analysis is reshaping the insurance sector is through improving the accuracy of risk assessment. By leveraging vast amounts of data from multiple sources, insurers are better positioned to conduct real-time risk analysis for individual and systemic risks, which leads to precise underwriting decisions and reduced exposure to losses in a volatile risk environment.

“Moreover, data analytics enables insurers to personalise products and services to meet the evolving needs of customers. By analysing data like customer demographics, behaviour and preferences, lifestyle habits; insurers can tailor offerings, pricing, and coverage options according to the consumers; thus enhancing customer satisfaction and loyalty.

“Data analytics is empowering the insurance industry by utilising data-driven decision-making to optimise the entire value chain. In a competitive landscape today, insurers who embrace these technologies and leverage the power of data will not only simply survive but also set a precedent for a new era of more customer centric innovation.”

Digital advertising networks searching for new ways to target individuals across websites and devices could turn to second-party data sharing.

Internet cookies come in two flavors. First-party cookies store session data and facilitate website personalization by “remembering” a visitor and her preferences. For example, these cookies keep users logged into a website over distinct visits.

Third-party cookies track individuals across websites and have powered performance marketing for years. These tiny bits of code lead to relevant ad targeting and, for many businesses, superior returns on advertising spend.

Such tracking cookies, however, justifiably raise privacy concerns. Hence many observators, regulators, and companies have collaborated to remove most third-party cookies this year. This includes leading web browsers such as Google Chrome, Apple Safari, Mozilla Firefox, Opera, Brave, and Arc.

Despite the privacy enhancements, eliminating tracking cookies is not entirely positive. Visitors will see many offers for products and services they are not interested in, while advertisers — including ecommerce merchants — will spend more on ads to generate the same revenue.

A solution could be second-party data sharing, adopted already by many display networks.

Let’s explore three implementation techniques.

Programmatic Email Advertising

Programmatic email ads use hashed email addresses to identify specific people and show them relevant ads — without cookies.

The example below uses one of these ads for TactiStaff, a military-style walking stick.

The ad appeared in a daily email newsletter that offers sugar-free dessert recipes. That might not seem like a good place for a walking stick ad, but the ad was not aimed at the context. It targeted the subscriber.

The ad uses a simple HTML structure within the email: an anchor tag wrapped around an image tag.

Both the link and the image path include a hashed version of the subscriber’s email address as a parameter, making the process privacy-compliant.

When it tries to load the image, AOL mail, for example, calls the ad server, which includes that hashed email address. The ad server matches the hash to a known identity graph and produces a relevant, targeted ad.

This targeting works because the newsletter publisher shares its first-party data — the hashed email address — with the ad platform.

Informed Web Ads

Continuing with the recipe newsletter, assume this same publisher also shares data via the links to its own content.

The publisher appended each link with the subscriber’s hashed email address or similar identifier. If she clicked to read a sugar-free brownie recipe, that subscriber’s information would be passed to JavaScript on the website responsible for showing targeted ads.

The script would send the hashed email address to the ad server. The ad server would compare that hash to its database and deliver a targeted ad without a tracking cookie.

This data-sharing technique is a current and popular practice.

Active Logins

Another cookieless technique, less popular, for sustaining ad performance involves active logins.

The process requires three and sometimes four parties collaborating to deliver targeted ads: a publisher, an ad network, a community software provider, and an email service provider.

The individual shown an ad must have signed up with the publisher’s community. The parties share hashed email addresses or similar unique identifiers. This can be complex, but it functions as follows:

• An email service provider appends an email hash or other identifier to every link in every message its customers send — likely billions of emails.

• When he clicks a link and lands on a publisher’s website with the community software loaded, a subscriber is automatically logged in to the community based on the identifier.

• Once the subscriber logs in, the publisher shares first-party data with the ad server and generates a relevant, targeted ad.

Impact on Ads

Programmatic email advertising, informed web ads, and active logins are examples of advertising networks sustaining ad relevance and performance when cookies disappear. Advertisers using leading demand-side platforms may currently benefit from these approaches without knowing it.

Thus eliminating third-party cookies will disrupt advertising, but targeting is far from done.

The Financial Conduct Authority (FCA), the UK financial regulator, is working to create the right conditions for investment, innovation and sustainable growth in the UK. On its mission to achieve this, the regulator has published findings on its wholesale data market study.

The FCA study examined competition in the markets for credit rating data, benchmarks and market data vendor services. It has ruled out significant intervention because of potential unintended consequences, such as on the availability and quality of data, in a market relied upon by investors worldwide.

However, across all three markets, the FCA identified areas where competition does not work well. Users may be paying higher prices for the data they buy than if the competition was working more effectively.

As a result, the FCA has expressed its intention to take forward ideas to help support wholesale data being available on fair, reasonable and transparent terms. This is a part of its work to ‘repeal and replace’ assimilated EU law.

Sheldon Mills, executive director of consumers and competition, FCA said: “The quality and availability of wholesale data is integral to well-functioning wholesale financial markets. Our market study found that firms can access the data they need to make effective investment decisions.

“We do not believe the case has been made for significant interventions. However, we will examine ways to help support wholesale data being provided on fair, reasonable and transparent terms.”

The report is part of the FCA’s work to help strengthen the UK’s leading position as a global and vibrant financial centre, by creating the right conditions for investment, innovation and sustainable growth, built on globally respected high standards.

The FCA will continue to consider allegations of anti-competitive conduct in all markets including in wholesale data markets. Additionally, the FCA has powers to tackle this under the Competition Act.

Two fifths of regulated firms are reporting a rise in financial crime attempts, while more than a quarter admit to being victims, according to a recent survey by SmartSearch, a UK provider of anti-money-laundering software.

Conducted among 501 compliance decision-makers, the survey underscores the urgency for regulated firms to fortify their defences against increasingly sophisticated financial criminals.

The data reveals significant increases in financial crime across various sectors, with legal and property firms experiencing notable spikes. Twenty-six per cent of regulated firms fell victim to financial crime in the last six months – more than double the number (12 per cent) in 2022.

Nearly half of legal professionals, solicitors and conveyancers reported a rise in financial crime attempts in 2023, compared to 34 per cent the previous year. Estate agents and other property professionals reported the biggest increase in financial crime in 2023, rising from 17 per cent in 2022 to 37 per cent in 2023.

Despite a decrease in the finance sector, challenges persist, with 41 per cent of firms still facing heightened attempts.

Martin Cheek, managing director of SmartSearch, comments: “As the gatekeepers of the UK’s financial system, regulated firms in these sectors are on the frontline in the ongoing fight against financial crime. As attempts increase and more criminals look to exploit weaknesses to launder money and legitimise illicit funds, regulated firms must remain proactive and ensure their compliance processes are robust enough to withstand such attempts.

“For those firms that have already become a victim of money laundering or financial crime, I cannot think of a higher priority this year. As the threat level has risen, many firms have taken the opportunity to implement a digital compliance strategy, utilising the latest technology, along with real-time data to transform this onerous task into a seamless part of client onboarding and ongoing monitoring.”

Taking action

As the threat level continues to rise, experts warn that regulated firms need to ensure they have the correct measures in place, and that their compliance checks are suitably robust.

Tools such as electronic verification (EV) are growing in popularity, says SmartSearch, yet 52 per cent of regulated firms still rely on manual processes, while two-thirds regularly leave themselves open to risk because they do not ‘always’ run proper checks on new customers.

Alongside EV for detailed identity checks, SmartSearch’s platform combines sanction and PEP screening, individual and business searches and real-time intelligence from major data sources.

Embedded finance has been a game-changer for SMEs who previously struggled to obtain funding from traditional banks. However, fintech companies with embedded finance solutions have a responsibility to become regulation savvy even if they aren’t regulated.

Alexis Alexander, chief legal and compliance officer, Liberis explores how to employ a considered and educational approach to data privacy including traditional practices, while also accepting that there are additional considerations when it comes to embedded finance.

How to navigate data privacy risks in the embedded finance environment

Embedded finance presents ambitious businesses with a compelling raft of possibilities – they can obtain and retain customers in new ways, scale much faster, and even reinvent how their products and services are deployed.

Amidst the understandable excitement, analysts have projected that the embedded finance market will reach $1.9trillion by 2028 as global adoption continues to surge.

When it comes to the SME sector, in particular, embedded finance has been a game changer. Traditionally, SMEs have struggled to access the financial services that meet their specific needs, but embedded finance bridges the gap to provide ambitious companies access to products and services directly within their existing business tools and platforms. A small retailer, for example, now can process payments and manage payroll, all from a single platform.

At a time when nearly three-quarters of UK SMEs believe their bank is actively discriminating against them in favour of larger companies, embedded finance is also providing timely alternative funding sources that are both more accessible and more flexible. SMEs can bypass the banks and tap into a wider range of lenders, including peer-to-peer platforms and alternative finance providers such as fintech companies with embedded finance solutions.

Balancing risk with reward

But, as is so often the case, these new opportunities are accompanied by considerable risks. One area to consider carefully is data privacy.

Embedded finance relies heavily on data, both for the provision of financial services and for the customisation of products and services to individual consumers. This means that embedded finance providers must navigate the many risks and regulations associated with handling sensitive customer data.

To grow and remain resilient, providers must expand their risk awareness across new areas. Data acquisition, ownership, usage, retention, and disposal practices pose significant risks, alongside security concerns including data theft, breaches, and cyberattacks.

So how can embedded finance providers respond, and make sure they are doing their best to mitigate these risks?

Employing a considered, educational approach

The starting point is recognition and identifying the data flows in play.

As well as the robust cybersecurity and data protection policies that must be in place to protect against the myriad cybersecurity threats facing financial services organisations, providers now have to accept there are additional considerations when it comes to embedded finance.

A shift left mentality is key. Organisations need to map all their data points from the outside and build in security and data retention protocols at the start of any product build.

Education and good communication are key. When converging financial products and services into non-financial platforms or products, organisations should be mindful of the possibility of conflicts of interest and make sure that they are open and honest with customers about the terms and conditions.

Legal and compliance teams need to be in and amongst the business, not shut off in an ivory tower. They need to understand the products they are building. They also need to understand how they will ingest data, as well as train the business iteratively and frequently.

Embedded finance providers should also keep a close eye on the potential dangers of data exploitation or abuse, especially when working with non-financial partners who may lack the same degree of knowledge or experience in financial services.

A regulatory focus

Understanding the specific requirements that they must comply with is essential from both a business and IT security standpoint. They should embrace their technology’s vision whilst being mindful to incorporate feedback from regulatory bodies.

Fraud and threats from nefarious third-party actors have become increasingly sophisticated and hard to predict. With the rise of AI and the desire to reduce friction in the customer journey, cybercriminals and digitally savvy fraudsters are targeting any point of security weakness. Providers must spend as much time building a secure-by-design infrastructure to ensure highly beneficial tools such as AI cannot become a risk to customer safety and data protection.

Regardless of their position, every employee needs cybersecurity awareness training, including regular updates on the most recent threats and attack methods – which are becoming increasingly sophisticated. This shouldn’t just be a case of annual ‘tick box’ e-learning courses but creative and practical engagement with employees such as company hackathons or group bug bounty bashing.

Leaning on the latest technology

Automation and augmentation are also crucial when it comes to managing data privacy risks. Thanks to the latest AI and machine learning technologies, companies can receive actionable insights and notifications through a single interface. AI can be a real force for good here. Some tools can instantly detect compromised sensitive data. It can also detect when it has left the company environment too.

These technologies allow providers to better control and coordinate security throughout the entire digital corporate environment. Additionally, it helps to lower the volume and frequency of human error. In today’s financial services ecosystem, providers will simply be unable to effectively comply with the relevant rules and regulations if they ignore the power of AI and fail to use it for good. In turn, this will help someone else use AI for bad at the expense of their business’s data security.

According to Juniper Research’s recent AI in Financial Fraud Detection report, global business spending on AI-enabled financial fraud detection and prevention platforms will exceed $10billion globally in 2027, rising from $2.7billion in 2022.

This exponential growth will be fuelled by a new trend in AI-enabled fraud protection and data management: a focus on accessing fraud information from beyond a business’ transactions. To facilitate this, fintechs are already forging new partnerships with third parties, such as credit bureaus and payment networks, to boost data coverage and enhance algorithm learning.

An inability to harness AI in your controls and infrastructure will not only have a negative commercial impact but allow those using AI for harm to infiltrate, putting your customers and the business at risk.

The Ethiopian government is set to begin mining Bitcoin through a new partnership with Data Center Service — a subsidiary of West Data Group, according to Ethiopia-based Hashlabs Mining CEO Kal Kassa.

The partnership was announced by the country’s sovereign wealth fund, Ethiopian Investment Holdings (EIH) on Feb. 15.

Under the collaboration, the sovereign wealth fund will invest $250 million in establishing “cutting-edge infrastructure for data mining and artificial intelligence (AI) training operations in Ethiopia.”

Kassa said the deal includes setting up Bitcoin mining operations using Canaan Avalon miners and is part of the country’s broader strategy to leverage its technological and energy resources to attract international investment and foster economic growth.

However, the government has yet to confirm the news officially. EIH did not respond to a request for comment as of press time.

The news comes amid a spike in miner activity due to the impending halving, which is less than 65 days away and set to reduce mining rewards by 50%. Many miners have already begun expansion efforts to position themselves appropriately.

Changing regulatory landscape

The venture is not without its challenges and controversies, particularly concerning the energy-intensive nature of Bitcoin mining.

There’s an ongoing debate about the impact of such operations on local electricity supply, especially in a country where energy access remains a pressing issue for a significant portion of the population.

Despite these concerns, the Ethiopian government’s move towards regulating “cryptographic products,” including mining, reflects a cautious yet optimistic approach to embracing the potential economic benefits of Bitcoin mining.

This regulatory framework aims to ensure that the sector’s growth does not come at the expense of the country’s energy security or environmental commitments.

The new rules have paved the way for mining companies to set up shop in the country. Recent media reports revealed a significant increase in Chinese miners moving to the country as part of the BRICS movement.

Chinese miners

There has been a notable influx of Chinese miners in Ethiopia over the past few months, drawn by the country’s strategic initiatives and favorable conditions.

The trend is part of a larger movement that has seen Chinese Bitcoin mining operations relocate in response to regulatory pressures at home and the search for cost-effective, regulatory-friendly environments abroad.

Ethiopia’s low electricity costs, primarily due to the Grand Ethiopian Renaissance Dam, represent a primary lure for Chinese miners. This factor, coupled with the Ethiopian government’s openness to technological investments and its efforts to foster a conducive environment for high-performance computing and data mining, has made the country an attractive destination for these operations.

The dam’s role in providing affordable, renewable energy aligns with the miners’ needs for sustainable and economically viable power sources for their energy-intensive operations.

The arrival of Chinese miners is underpinned by broader geopolitical and economic considerations. China’s increasing involvement in Ethiopia, characterized by significant investments across various sectors, has established a solid foundation for such ventures.

The relationship is further reinforced by Ethiopia’s strategic importance to China as a partner in Africa, offering Chinese companies a hospitable environment for expanding their operations, including Bitcoin mining.

Previous research has suggested that a variety of payment options at checkout provides greater flexibility for customers, resulting in more completed purchases. Access PaySuite, the payroll software company, has found that a similar trend emerging in the insurance sector, especially when it comes to attracting Gen Z customers.

The Access PaySuite study found that 80 per cent of Generation Z individuals agreed that diverse payment options would significantly influence their choice of insurance provider. Following closely behind, 77 per cent of Millennials also expressed a similar sentiment. In turn, these results show a greater desire for flexibility in the sector.

Sixty-two per cent of consumers report that being offered a wider choice of payment methods would positively impact their insurance provider choice with a further 69 per cent saying this also impacted which insurance premium they chose.

Commenting on the survey’s findings, Andrea Dunlop, managing director at Access PaySuite said: “As individuals who have grown up in the digital age, it comes as no surprise that Gen Z and Millennials have developed high expectations for the websites, apps, and software they engage with on a daily basis, particularly in terms of their interactions with them.

“In the ever-evolving landscape of consumer trends, the heightened expectations of younger generations serve as a guiding light for the future of commerce. Businesses and industries that can adapt and innovate accordingly will undoubtedly experience the greatest success in the years to come.”

Costs outweigh value

As the cost of living crisis continues, many consumers are finding that the costs of their insurance premiums no longer merit the coverage. Access PaySuite revealed that travel insurance (35 per cent), pet insurance (30 per cent) and health insurance (28 per cent) were the most likely to be cut due to affordability concerns.

These concerns could stem from the fact that many users have come across hurdles during their payments process. Thirty-nine per cent said that payments continued to be made without the user’s awareness, while 35 per cent said they had trouble cancelling payments. Furthermore, 33 per cent said they were overcharged and the same number of respondents reported that their payments failed to go through.

Due to these problems, factors influencing user’s insurance premium and provider choices are primarily secure data handling (42 per cent) and the ability to spread payments (35 per cent).

Safe and secure data

This is paramount not only for the end user but for the insurer too. The report also highlighted that rising inflation has caused many users to turn to fraud as a way of making ends meet. Data from the Financial Ombudsman Service reported that across all financial products, fraud and scam complaints have increased by 39 per cent in Q2 2023 compared to Q1.

Access PaySuite’s report proceeds to analyse insurance work environments and the importance of building a trustworthy company culture which is reflected in its payment process.

In the current economic climate, the report identifies ways in which insurers can make payments more user-friendly. It found that 18 per cent of consumers still prefer to pay over the phone and 28 per cent still like the human interaction that stems from talking to an agent.

Dunlop concludes: “Our research clearly demonstrates the increasing demand for diverse payment options within the insurance sector, with today’s consumers seeking convenience and flexibility in managing all their payments, and paying for insurance policies is no exception.

“Insurers must adapt offerings to capture new markets, including younger generations. Flexible payments provide convenience for all, allowing seamless transactions for digital payment users and personalised support for those who prefer human interaction. Meeting these demands gives insurance providers a competitive edge in attracting and retaining loyal customers.”

Many individuals and small businesses grapple with a common challenge: limited access to traditional banking services. This underserved group encompasses those with minimal or no credit history, small businesses, and emerging demographics, including the youth and female populations.

Dmitry Borodin, head of decision analytics at Creditinfo, discusses the importance of using alternative data to achieve fair and accessible finance for underserved populations, including those with little or no credit history, small and medium enterprises (SMEs), and young and female demographics in emerging economies.

As the world of financial services continues to advance and grow, a substantial portion of individuals and small businesses remain inadequately served with financial products. This underserved group encompasses ‘thin file’ customers, who have little or no credit history, small and medium enterprises (SMEs), and young and female demographics in emerging economies.

The answer to achieving fair and accessible finance for these populations lies in the ethical acquisition and utilisation of alternative data. This includes information on telecom and utility usage, previous mobile or small loans, data on related parties, and self-reported data — all of which ideally obtainable through credit bureaus.

By combining alternative data with financial education programs and unbiased predictive models, we can boost financial inclusion and support the expansion of access to finance for these customer segments.

The importance of access to banking services in emerging markets

With limited financial services available in emerging markets, some populations remain excluded from traditional banking due to systemic issues and social complexities, such as:

• A lack of formal data
• Judgement and bias
• Prejudice and discrimination

This is especially the case in Africa, where 57 per cent  of citizens struggle to obtain the data required for an official credit score and women face more barriers than their male counterparts in accessing loans.
SMEs function as the backbone of the global business landscape, accounting for approximately 90 per cent of all businesses.

However, they face significant challenges in securing formal bank loans, which are vital for growth and resilience — especially in times of economic hardships like rising inflation. To combat current economic pressures, it’s important for countries to employ measures that facilitate better access to banking products for both individuals and small businesses. This step can ultimately foster a healthier and more robust financial ecosystem.

Bridging the gap with alternative data

Traditional credit scores rely on data from regular consumer bank transactions and previous payment records, leaving those without access to these facilities at a disadvantage when applying for loans. That’s where alternative data offers a solution to close this gap. It provides lenders with diverse types of information that contribute to important financial decisions. For example, payment activity, finance app use and even social media pages can help determine whether an individual is likely to pay back their loan.

Mobile payment apps have already contributed to these advancements. In Kenya, banking apps have driven a significant increase in financial inclusion from 26 per cent in 2006 to 83 per cent in 2021. These successes serve as a model for countries seeking to expand access to finance with alternative data.

The power of communication and technology

To establish the right regulatory framework for sharing alternative data safely and ethically, effective communication between credit bureaus and regulatory bodies is imperative. Regulations must be in place to ensure that alternative data is safeguarded and used responsibly. Transparent dialogue between regulatory bodies and financial institutions can ensure that people’s data enables lenders to make fair informed lending decisions.

Harnessing vast volumes of alternative data also requires the implementation of proper systems. This is made possible with artificial intelligence (AI) and machine learning models, which can efficiently analyse and extract actionable insights from unstructured data sources. Financial institutions must establish secure model management frameworks to oversee, control and deploy various algorithms constructed on alternative data.

Financial education: Giving consumers the key to independence

By arranging tailored financial education programs for underserved communities, financial providers can empower consumers and guide them toward financial inclusion. As choices for consumers with limited credit data grow, governments and financial institutions are responsible for providing the correct information and advice. That way, consumers gain the opportunity to develop the knowledge and skills required to make informed financial decisions.

While alternative data acts as a powerful tool for facilitating financial inclusion worldwide, several steps must be taken to guarantee the secure collection, appropriate utilisation and authorised distribution of this data. With the perfect combination of advanced AI, machine learning models, educational programs and effective regulatory communication, financial institutions can leverage this data to boost global access to finance and strengthen the economic stability of developing countries.

ESG Book has announced a strategic partnership with Manaos, a subsidiary of BNP Paribas and a modular investment services platform. The collaboration aims to simplify how institutional investors centralise portfolio data, connect ESG information, and report on the sustainability of their investments.

The partnership between ESG Book and Manaos comes at a time of growing market demand for high-quality, granular ESG and climate data. Increasing sustainability regulations worldwide are driving this demand.

According to a 2023 Bloomberg survey, more than 90 per cent of executives expect to significantly increase their spending this year on ESG data. Most respondents believe that investing in ESG data is necessary to keep pace with competitors or gain a competitive advantage.

Through this integration, Manaos’ clients gain access to a range of sustainability insights for security selection, analytics, regulatory compliance and client reporting. ESG Book’s comprehensive data suite, covering over 50,000 companies globally, including performance scores, raw attributes, SFDR data as well as emissions datasets, will be integrated with Manaos’ cloud-based platform.

This integration also helps institutional investors make investment decisions from a centralised and unified source.

“ESG Book’s exceptional data quality, extensive coverage and esteemed reputation within the industry constitutes a pivotal element to our aspirations to establish Manaos as the premier ESG data marketplace in Europe,” said Franck Delbes, CEO of Manaos.

While Dr Daniel Klier, CEO of ESG Book, also commented: “Driven by fast-changing market requirements and global regulation, demand for accessible, transparent ESG data is increasing worldwide. By combining Manaos’ industry-leading investment software with ESG Book’s next generation data, we are arming investors with a powerful toolkit to manage and navigate the increasing complexities of sustainable investing.”