OSLO, Sept 20 (Reuters) – Swedish energy company Vattenfall (VATN.UL) said on Monday it increased its emission reduction goals for 2030 and brought forward its net zero target by 10 years to 2040, by phasing out coal and increasing wind and solar capacity.
“The climate crisis is for real and not only do we have a responsibility to step up and move fast, we also see many opportunities for us at Vattenfall in being a leader in this urgent transition,” Chief Executive Anna Borg said in a statement marking the start of the company’s capital markets day.
Vattenfall’s previous targets aligned with efforts to limit global warming to 2 degrees Celsius, while the sharpened set of goals will match them to a 1.5 C target, it said.
The firm now aims to reduce the emissions from its operations, so-called scope 1 and 2 emissions, by more than 77% by 2030 from 2017, up from a cut of 38%.
It also raised its ambition for absolute emissions from use of sold products, known as scope 3, from a cut of 20% to 33% over the same period.
Between 2017 and 2020, Vattenfall said it had curbed emissions by 10 million tonnes of carbon dioxide (CO2) to about 12 million tonnes in 2020 and now eyed under 6 million tonnes in 2030.
To do so, it will switch its last units powered by coal – two heating plants in Germany – to a combination of biomass, heat pumps, power-to-heat, and natural gas, Vattenfall said.
It would also lift its current 3.7 gigawatts of wind and solar operations by four times and increase its electric charging points 25-fold from 2020 levels.
Vattenfall further seeks to help curb emissions outside its own business, by supporting the wider electrification of industrial processes, including in steel, cement, heavy transport and chemicals. read more
“We also commit to a Net Zero by 2040 target, meaning we will achieve net zero emissions in our full value chain by 2040,” Borg said.
This also covers all CO2 emissions from suppliers and customers, which will either have been eliminated or offset via negative emissions certificates.Reporting by Nora Buli; Editing by Steve Orlofsky
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Taking Financial Services to the Edge
Source: Finance Derivative
Authored by Pascal Holt, Director of Marketing, Iceotope
Edge computing, cloud, and AI are changing the competitive landscape for financial service organisations. In a highly sophisticated and digitally mature market, speed and efficiency have become paramount to securing an advantage in retaining customers and maximising profits.
For traditional retail banks, edge computing creates opportunities to improve customer service, reduce costs, and ensure regulatory compliance. It also enables banks to personalise their services by processing data quickly and effectively. These real-time analytics translate to bespoke value-added services that provide the customer with exactly what they need.
High frequency trading firms utilise edge computing to maximise profits on high-volume, low-margin trades. Edge computing brings computation and data storage closer to where the data is being generated.
Reducing latency issues can help a firm gain a competitive advantage in high-speed order execution.
Defining the edge
The edge is the physical location where things and people connect with the networked digital world and it’s changing the way we process data. We are moving towards a more interactive world. Data is no longer merely being pushed towards us on our devices, but rather it’s being collected or “pulled” from our interactions with Internet of Things sensors we encounter in our daily lives.
As a result, the data centre is rapidly changing to no longer be the centre of data. The need to handle, manipulate, communicate, store and retrieve data efficiently is moving processing capacity closer to the user than ever before. This phenomenon is known as “data gravity” and draws the physical location of digital infrastructure closer to the data source itself. This creates a new set of challenges – and opportunities – for financial service organisations.
Changing the competitive landscape
Financial firms are not only adopting cloud-based technology to deliver a much better service for their clients, but they are doing so to remain relevant. Artificial intelligence (AI) is one such example. For processing simple, repetitive tasks or extracting insights from large amounts of data, AI applications, in combination with edge computing, have the power to create significant competitive advantages.
Management consulting firm, McKinsey & Company, estimates that AI technologies could potentially deliver up to $1 trillion of additional value each year for global banks. They found that AI could “help boost revenues through increased personalization of services to customers (and employees); lower costs through efficiencies generated by higher automation, reduced errors rates, and better resource utilization; and uncover new and previously unrealized opportunities based on an improved ability to process and generate insights from vast troves of data.”
A more personal customer experience
Technologies like AI, machine learning (ML) and natural language processing (NLP) utilise the cloud but require edge computing for processing data closer to where the data is generated. For traditional retail banking firms, that creates an opportunity to improve customer service while reducing costs.
Going back to our “push” vs “pull” discussion, retail banking has historically been very much in the push category. All customers are given the same product information, regardless of whether it is relevant to them or not. With edge computing, the data gathered helps the bank better understand individual financial needs enabling them to customise advertising and product offerings accordingly.
HSBC is taking this type of customisation one step further with Pepper, a semi-humanoid robot, operating in several branches in the US. Pepper uses NLP to interact with customers. The data intelligence needed for Pepper to successfully and beneficially engage with human customers also requires real-time, low-latency analysis of large quantities of data. All of which is easily served through edge computing.
While Pepper may be a fun way to engage with customers, there are plenty of other use cases for edge computing in banking and financial services. Security and fraud detection/prevention is critically important as unauthorised financial fraud losses across payment cards, remote banking and cheques totalled £360.8 million in H1 2022, according to UK Finance. There is also a significant regulatory burden on modern banking and edge computing enables real-time monitoring of compliance to those regulations required by law.
Many banks have net zero targets they are trying to achieve by 2030. The Big Six US banks have announced a variation of carbon neutral and net zero plans in the last two years. In addition, the UN-backed Net Zero Banking Alliance is bringing together more than 100 banks from 40 countries to align their lending and investment portfolios with net-zero emissions by 2050.
From a data centre perspective – whether that be in the cloud, on-premises, in colocation, or at the edge – technology solutions are available today to help achieve these goals. Advanced liquid cooling solutions can achieve a 1.03 PUE or below. Precision immersion liquid cooling, for example, captures >95% of server heat inside the chassis, significantly reducing energy costs and emissions associated with server cooling.
Water consumption is negligible as little to no mechanical chilling is required.
Beyond sustainability, there are some unique considerations for edge computing. IT computing loads are usually required to operate reliably in locations not built specifically for IT equipment. Whether it is indoors around people or in harsh external environments, the equipment needs to be purpose built for edge computing. With precision immersion liquid cooling, the sealed chassis form factor provides the same kind of protected environmentally controlled conditions found in a data centre facility. It is also designed to withstand all types of IT environments with minimal impact on its local surroundings.
Edge computing is just starting to make an impact on the financial services industry. As technology continues to improve customer service and increase competitive advantages, it will become more important than ever for organisations to have the right solutions in place to enable those opportunities.
Many of these applications are pushing the limits of existing technologies and opening the door to new alternatives. Now is the time for organisations to take a bold step and embrace these new technologies.
Accounting Automation in the Future
Source: Finance Derivative
Accounting automation is the process of streamlining repetitive tasks in financial processes. For example, some processes like invoicing are time-consuming and repetitive. Automation can reduce manual labor and save businesses both time and money. Also, it helps improve accuracy, reduces errors, and provides more accurate financial reporting.
Accounting automation in the future will be increasingly important for businesses to stay competitive. But every new change comes with both advantages and challenges. Let’s dive in to get ready for this future trend.
Potential Future Benefits of Accounting Automation
Increased Efficiency and Cost Savings
Accounting automation is a great way to increase efficiency and cost savings. For example, AI bookkeeping uses advanced algorithms to automate many accounting tasks. So, companies can track expenses, prepare financial reports, and more using AI.
It reduces the time needed for manual entry. So, businesses can spend fewer labor hours on tedious processes. They can increase efficiency by freeing up resources for more strategic work. It also helps reduce errors and inconsistencies associated with manual processes. So, the cost of compliance is lower because of greater accuracy.
Improved Accuracy and Reliability
Accounting automation can improve accuracy and reliability in accounting processes. For example, Automating bank reconciliation is less prone to errors from human mistakes or miscalculations. You can automate the process to identify discrepancies between the bank statement and accounting records. It helps to ensure that financial reports remain accurate and reliable. So businesses can take corrective action faster than processing data manually.
Streamlined Business Processes
Streamlined business processes involve eliminating unnecessary steps, reducing paperwork, and automating repetitive tasks. This allows businesses to focus on higher-value activities, such as developing new products, improving customer service, and developing strategic plans for the future.
Making a Better Decision
Accounting automation can enhance decision-making in 3 ways.
1. It enables businesses to access real-time information from multiple systems. So they can identify trends for better decision-making.
2. Automated accounting also helps with forecasting, budgeting, and auditing tasks. It enables businesses to be more proactive in their decision-making processes.
3. Also, automated accounting tools can integrate with enterprise resource planning (ERP) systems. They can manage data across the enterprise and make concise decisions that are favorable to the company as a whole.
Increase Customer Satisfaction
Accounting automation can help businesses increase customer satisfaction by streamlining their processes and providing a more efficient customer experience. For example:
4. Automated accounting systems can automate tedious manual tasks such as invoicing, data entry, and payroll processing. This allows businesses to focus on other aspects of their operations that are more important for customer service.
5. Automated accounting systems can also provide customers with more accurate and timely financial information. The information can help them make better decisions about their finances.
6. Also, accounting automation enables businesses to respond quickly to customer inquiries. It helps reduce wait times and improve the overall customer experience. So, you can build better relationships with their customers.
Accounting automation takes place online or comes with cloud-based solutions. So, you can access your information and do your job from anywhere instead of being confined to one spot.
Challenges to Implementing Accounting Automation in the Future
Cost of Technology Infrastructure Upgrades
Automating an accounting system often requires businesses to invest in new hardware and software, such as servers and other associated equipment. These upgrades come with a hefty price tag that may be difficult for small businesses to afford.
There are also extra costs, such as installation fees, setup charges, software licensing fees, cloud storage costs, and maintenance fees.
Training Requirements for Staff Members
Accounting automation involves using advanced technology to automate certain processes. So, it creates a need for trained staff members who can handle the new technology. Training requirements vary depending on the type of software used.
Some common training includes record-keeping procedures, software applications, and troubleshooting skills.
Regulatory Compliance Issues
Accounting automation can be a time-saver, but it also requires firms to be aware of the applicable rules and regulations. Companies must ensure that their automated systems are compliant with relevant laws and regulations such as Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), and other applicable accounting standards.
Besides, they must also comply with legal requirements related to taxes, financial statements, and other reporting obligations.
So, businesses must consider the complexities of regulatory compliance when automating accounting.
Security and Data Protection Concerns
As businesses move their accounting processes to the cloud, they are exposed to a wide range of potential security risks. Data breaches can cause significant damage to the business’s financial and reputational integrity. Besides, the complexity of automated accounting systems can make it difficult to identify and detect suspicious activities or errors in the system.
To ensure data is kept secure, businesses must have strong measures in place to protect against unauthorized access, encryption, and regular backups of data.
Furthermore, companies must train their staff on the proper use of the system. It helps staff to know how to protect confidential information from being accessed or misused by unauthorized personnel.
Businesses may also need an experienced IT team to monitor and maintain the system to keep up with any changes or updates for optimal performance.
Accounting automation has come a long way in the past few decades. It is likely to continue to advance in the future. As technology continues to evolve, more businesses will likely begin taking advantage of automation in their accounting processes. So, businesses should be aware of the potential challenges and prepare to stay competitive.
How banks can help customers during the cost of living crisis
Source: Finance Derivative
Lavanya Kaul Head of BFSI, UK & Ireland, LTI Mindtree
Surging energy and food prices are significantly driving up household expenditure, which means living standards in the UK will fall to 2.2% this year, according to the Office for Budget Responsibility. This is the biggest drop in any single financial year since the records began in 1956-57.
It’s a tough situation for many consumers who are still struggling with financial hardship following redundancies and pay freezes from the pandemic. According to TSB’s Money Confidence Barometer, 82% of people have experienced an increase in the day-to-day cost of living. This resulted in almost a quarter of them using their savings, while one in five changed their usual spending habits and behaviours.
As the financial situation worsens, consumers are increasingly relying on their banks for help and support. But, while banks can’t control inflation, energy or food prices, they can play a more supportive role by adapting their services to offer stronger customer service, better tools for financial management and be more flexible with loan repayments.
Strengthen customer service with intuitive AI solutions
Since the pandemic, consumers have changed the way they bank, using more mobile apps for primary banking rather than going into physical branches. This provided an opportunity for banks to accelerate their investment in digital services including automation and offer customers more support during the cost of living crisis.
Effective tools include AI-powered chatbots which respond intelligently to customer enquiries to quickly help troubleshoot problems and provide useful advice. But to be successful, you need to ensure you strike the right balance between an efficient and convenient process and creating a personalised experience. Customers need to feel like you understand and care about their problems and are here to help, rather than just fobbing them off with a monosyllabic bot. To avoid this, banks need to embrace intuitive AI solutions to ensure that empathy comes across in all automated interactions with customers. While doing that, messaging is key. In times of stress, we don’t function as well and financial struggles are a huge stressor. The clearer the message and the simpler the instructions, the better.
Financial education, when combined with technology solutions such as open banking, can offer more long-term solutions for people to navigate their finances. This can help put more information into the hands of the consumer to help them grasp their financial situation better. Some banks have cracked this with innovative solutions like HSBC’s Financial fitness score tool that can analyse your money habits and signpost you towards ways to improve your financial health. This may include joining one of the financial education webinars run by the bank or having a ‘financial health check’ with a member of staff.
Launch money management features & apps
Introducing money management features and apps to increase the visibility of a customer’s financial situation, empowers them with the information they need to make smarter choices.
TSB offers Spend & Save and Spend & Save Plus current accounts which include a savings pot that enables customers to put extra money aside when they can and an auto-balancer feature that automatically transfers money from the savings pot into their current account if their balance falls below a certain level. This allows them to start building up savings and protects them from unnecessary overdraft charges.
Personal financial management (PFM) apps also help customers get a better understanding of their finances. These connect with a customer’s bank account and enable them to keep a close eye on their spending habits and track upcoming bill payments. An example is Prism, a PFM app which allows customers to manage bill payments by sending them reminders about due dates. It also provides a summary of their income, account balance and monthly expenses at a glance, therefore consolidating all their financial information in one place and saving time on bill payments.
Lloyd’s Banking Group and HSBC launched a subscription management tool for all customers on mobile, allowing them to see and cancel recurring card payments for things like TV subscription services. HSBC says that during the first quarter of the year, it led to customers dumping around 200,000 subscriptions.
Introduce payment holidays
While improved customer service and financial management tools are important support tactics, they might not be enough for more vulnerable customers. For example, those who are about to default on mortgage payments or loans due to redundancy or periods of ill health need banks to do more, like offering payment holidays. Banks relaxed the rules for payment holidays during the pandemic, so they should consider doing it again to help more vulnerable customers through the crisis. Customers need to understand that they are not alone when experiencing financial difficulties and that help is available
Ride out the crisis together
As inflation reaches a 30-year high, customers are now more reliant than ever on banks for guidance and support. But to provide the right level of service, they need to move away from their traditional ways and behave more like technology companies by embracing automated solutions to create the right products and services for customers. Then layer on top of that the need for more personalised and empathetic customer interactions, as well as consider additional support for more vulnerable customers.
While we don’t know how long the cost of living crisis will last, what we do know is that the pressure on household finances is likely to get worse before it gets better. Therefore, banks need to step up, be the supportive partner and do whatever they can to help customers. After all, the only way we can ride out the crisis is by supporting each other and working together.