AI Governance in Financial Services: A Board-Level Imperative

Artificial intelligence (AI) is rapidly transforming the financial services industry, offering unprecedented opportunities to streamline operations, enhance customer experiences, and unlock competitive advantages. At the same time, this evolution introduces complex challenges related to compliance, ethics, risk management, and maintaining stakeholder trust. As executives embrace AI’s potential, boards of directors must assume a pivotal role in governing these technologies responsibly and ethically.

The Expanding Role of AI in Financial Services

AI is no longer futuristic—its impact is already tangible across the financial services sector. AI-driven algorithms are employed to:

Automate tasks: Streamline loan applications, fraud detection, and customer service (Liquidity Group).

Personalize experiences: Tailor financial advice, product recommendations, and marketing campaigns to individual customer needs (Softensity).

Manage risk: Analyze vast datasets to identify and mitigate credit risk, market risk, and cybersecurity threats (BizTech Magazine).

Enhance decision-making: Provide data-driven insights to inform investment strategies, regulatory compliance, and strategic planning (Artsyl).

The Need for Robust AI Governance

As AI grows more sophisticated and pervasive in financial services, establishing robust governance frameworks becomes essential. AI governance refers to the policies, processes, and controls that ensure responsible, ethical, and effective AI use (NayaOne).

Key reasons why AI governance is critical:

Compliance with regulations: The regulatory landscape for AI is evolving. Strong governance frameworks help institutions stay aligned with emerging rules, minimizing the risk of penalties or reputational harm (NayaOne).

Risk management: AI introduces unique risks, including model risk, data quality issues, bias, and cybersecurity threats. Proper governance helps identify, assess, and mitigate these risks effectively (Holistic AI).

Building trust: Transparent and accountable AI fosters trust among customers, investors, and regulators. Good governance ensures AI is fair and unbiased, bolstering confidence in these systems (Holistic AI).

Ethical considerations: AI raises ethical questions around privacy, fairness, and workforce impacts. Well-defined governance frameworks help align AI use with societal values (ISACA).

The Board’s Role in AI Governance

Boards of directors have a fiduciary duty to oversee organizational management, including AI adoption and oversight. Ensuring that AI is deployed responsibly, ethically, and with long-term value in mind is now a board-level imperative. Although the evolving nature of AI can present challenges—in terms of regulatory complexity, nuanced ethical concerns, or operational adjustments—these issues also represent opportunities for boards to demonstrate proactive leadership and strengthen their institution’s governance structures.

Understand the Technology:

Develop AI literacy: Board members should cultivate a foundational understanding of AI’s capabilities, limitations, and various techniques (e.g., machine learning, generative AI). This helps them provide informed guidance as AI shapes the enterprise.

Map AI applications internally: Boards need visibility into where and how AI is employed, including data sources used for training, and the potential impacts on different business functions.

Establish Clear Governance Frameworks:

Create an AI governance framework: Define principles, policies, and procedures guiding ethical AI use, addressing data privacy, bias mitigation, transparency, and accountability (NayaOne).

Clarify roles and responsibilities: Assign clear oversight responsibilities for AI initiatives, ensuring accountability for AI-related decisions and risk management strategies.

Oversee AI risk management: Ensure comprehensive risk management frameworks are in place to handle model risk, data integrity, and cybersecurity. While these challenges can appear daunting, they also encourage the adoption of more resilient and future-proof risk management practices.

Promote Ethical AI Practices:

Address bias and fairness: Use diverse, representative datasets and fairness-aware machine learning to prevent biases. Proactively managing these issues not only reduces risks but can also enhance brand reputation and stakeholder trust (ISACA).

Ensure transparency and explainability: Employ explainable AI techniques so decisions can be understood and justified to stakeholders. This clarity fosters confidence and can serve as a differentiator in a competitive marketplace.

Foster a Culture of Responsible AI:

Promote AI literacy: Encourage continuous learning about AI’s implications among board members, executives, and staff. Workshops, reports, and expert consultations can keep everyone informed.

Facilitate ethical discussions: Establish forums to discuss the ethical implications of AI and align its use with organizational values.

Stay informed on regulations: Keep pace with evolving AI regulations and compliance requirements, adapting strategies as needed (Forbes).

Monitor and Evaluate AI Performance:

Establish performance metrics: Define KPIs to measure AI effectiveness, focusing on efficiency, accuracy, and customer satisfaction (RSM US).

Regular audits: Conduct routine audits to ensure AI systems perform as intended and meet ethical and regulatory standards (Skadden).

External validation: Consider third-party validators to assess fairness, compliance, and security. Independent assessments can transform perceived vulnerabilities into opportunities for improvement (Center for American Progress).

Adapting to the AI-Driven Future

The escalating adoption of AI in financial services compels boards to refine their oversight practices and hone new skills. Although the AI revolution can present hurdles—such as complex regulatory landscapes, potential data quality issues, or challenges like infrastructure constraints and ensuring ethical data sourcing—these can be viewed as catalysts for positive change. Overcoming these challenges can lead to stronger governance mechanisms, more resilient systems, and enhanced stakeholder confidence.

Boards should:

Enhance technological expertise: Consider adding members with AI, data science, or cybersecurity expertise to guide decision-making and provide insights into strategic AI opportunities (Nearform).

Embrace continuous learning: Stay informed about the latest AI advancements and best practices, ensuring governance frameworks evolve along with the technology.

Cultivate innovation and resilience: Encourage a culture where innovation thrives, while upholding ethical standards and robust governance. Viewing infrastructural limitations, geopolitical considerations, or industry inefficiencies as opportunities for infrastructure improvement, better compliance strategies, and stronger international collaboration can ultimately enhance overall industry stability and efficiency.

Conclusion

AI is reshaping financial services, making board-level oversight of AI governance a critical imperative. By gaining a solid understanding of AI, establishing clear frameworks, promoting ethical and responsible practices, and adapting to ongoing changes, boards can ensure that AI drives sustainable innovation and long-term value. Although complexities like regulatory uncertainty or bias may arise, these challenges can inspire more comprehensive solutions, reinforcing trust and elevating the industry’s standards.

Through proactive engagement, thoughtful strategy, and informed leadership, boards of directors can guide their organizations to harness AI’s full potential, strengthening market position, enhancing customer experiences, and ensuring a resilient, future-ready operation.


Banks and Work-Life Balance: A Step in the Right Direction

How BNY Mellon’s Recharge Period Sets a New Benchmark for Employee Well-Being

The finance industry and work-life balance have long been uneasy bedfellows. Despite periodic efforts by banks to improve working conditions, many employees remain sceptical, often dismissing these initiatives as mere lip service. JPMorgan’s much-publicised 80-hour week cap, for instance, has drawn its share of critics. Yet one institution, BNY Mellon, is proving that meaningful change is possible by taking concrete steps to support its employees.

[caption id="attachment_27439" align="aligncenter" width="900"] CEO: Robin Vince[/caption]

A Recharge Period to Reset

Under the leadership of CEO Robin Vince, BNY Mellon has reinstated a two-week “recharge period” for employees. Running from December 23 to January 3, this initiative encourages staff to step back from non-essential work and focus solely on core business activities and client needs. By pausing internal meetings, holding off on non-urgent emails, and promoting remote work, the bank sends a clear message: the holiday season is a time to prioritise personal well-being.

Vince himself has led by example. In a candid LinkedIn post, he acknowledged the trade-off of missing out on perks like free Starbucks at the company’s global headquarters but highlighted the greater value of spending more time with family. Such transparency and leadership have resonated with employees and industry observers alike.

Beyond a Holiday Break: A Broader Commitment

BNY Mellon’s recharge period is more than just a well-timed initiative; it reflects a broader strategy to enhance employee well-being. Recognising the mental health challenges inherent in the banking industry, the firm has partnered with Spring Health to expand mental health services for employees and their families. This partnership offers a range of resources, from counselling to tailored wellness programmes, underscoring the bank’s commitment to holistic support.

Additionally, BNY Mellon plans to raise its minimum hourly wage in 2025, a move that aligns with its broader efforts to improve employee satisfaction and retention. By addressing both the emotional and financial well-being of its workforce, the bank is setting a new benchmark for the industry.

Leading by Example in a Challenging Year

BNY Mellon’s initiatives come at a pivotal moment for Wall Street, where discussions on mental health have gained renewed urgency. In 2024, the tragic deaths of two young Bank of America associates cast a harsh spotlight on the industry’s culture of long hours and relentless pressure. Against this backdrop, BNY Mellon’s decision to create space for employees to recharge is particularly significant.

This effort also reflects broader trends in workplace management, where companies are increasingly recognising the value of employee well-being. Studies consistently show that a healthier, more balanced workforce leads to greater productivity and reduced turnover—a win-win for both employees and employers.

The Takeaway: A Call for Industry-Wide Change

BNY Mellon’s recharge period is a refreshing example of a financial institution taking tangible steps to prioritise its employees’ needs. By encouraging its workforce to view the holiday season as a true winter break, the bank is not only fostering a healthier culture but also setting a powerful precedent for the industry.

It remains to be seen whether other banks will follow suit. In a sector where grueling hours are often viewed as a badge of honour, initiatives like these challenge entrenched norms. For now, BNY Mellon’s approach stands out as a thoughtful, forward-looking model—one that could inspire broader changes in an industry long overdue for reform.


Russian Gas Transit to Europe Discontinued Following Lapse of Ukrainian Agreement

Ukraine has terminated a longstanding transit arrangement that, even amid an active conflict with Moscow since 2022, allowed Russian oil and gas to continue flowing to European markets. By choosing not to renew the deal, Kyiv has cut off a major route for Russian gas exports that dates back around 60 years.

The decision took effect Wednesday, when the contract enabling Russian gas transit through Ukraine expired. In a statement posted to Telegram, Russian energy company Gazprom announced the formal suspension:

“Due to the repeated and explicit refusal of the Ukrainian side to extend these agreements, Gazprom was deprived of the technical and legal ability to supply gas for transit through the territory of Ukraine from January 1, 2025. Since 8:00 Moscow time, Russian gas has not been supplied for its transportation through the territory of Ukraine.”

Despite Russia’s invasion, which has inflicted extensive damage across Ukraine, both countries had continued to benefit financially from transit fees—until now. Ukrainian Energy Minister German Galushchenko confirmed the development, stating Wednesday on Telegram:

“This is a historic event. Russia is losing its markets; it will suffer financial losses. Europe has already made the decision to abandon Russian gas.”

Ukrainian President Volodymyr Zelensky, posting on X, labeled this disruption:

“one of Moscow’s biggest defeats.”

EU leaders maintain that the region is sufficiently prepared to function without gas supplies passing through Ukraine. Over the past three years, the bloc has steadily scaled back its reliance on Russian gas, cutting total imports significantly. According to data compiled by Brussels-based think tank Bruegel, just 5 percent of Europe’s gas imports came via Ukraine in the first eight months of 2024.

In anticipation of the shutdown, European energy authorities coordinated with countries most dependent on Russian gas, especially in Central and Eastern Europe. A recent European Commission report described the bloc’s gas infrastructure as “resilient and flexible,” noting that all member states now have the capacity to procure liquefied natural gas (LNG) from alternative global sources. It further stated:

“The European Union is well-prepared to face the end of gas transit via Ukraine. The gas ‘transiting via Ukraine can be fully replaced by LNG and non-Russian pipeline imports via alternative routes.’”

For decades, Ukraine served as a primary corridor for Russian gas bound for Europe. However, the launch of the Nord Stream 1 pipeline in 2011, and the later completion of Nord Stream 2 (whose certification was halted by Germany in early 2022), reduced that role considerably.

Under a 2019 transit deal, Russia was obligated to move a minimum annual volume of 40 billion cubic meters of gas through Ukraine’s pipeline system or compensate Kyiv financially. Even after the full-scale invasion in February 2022, Kyiv had continued to honor that contract, arguing it was important to maintain credibility with European partners.

Nevertheless, Ukrainian officials have consistently urged European allies to eliminate gas imports from Russia, seeing them as a critical source of funding for the Kremlin’s military operations. The Nord Stream pipeline system, in Ukrainian eyes, offered Russia the ability to bypass Ukrainian territory altogether, which would have eroded Kyiv’s geopolitical leverage and revenue from transit fees.

The shutdown has already produced consequences for some of Russia’s nearer customers. On Wednesday, authorities in Transnistria, a breakaway region of Moldova, announced a cessation of heating and hot water, linking the measure to Gazprom’s suspension of gas deliveries via Ukraine. Gazprom had previously warned it would halt these supplies over alleged unpaid debts.

Meanwhile, tensions are high between Ukraine and some of its regional neighbors. In late December, Slovak Prime Minister Robert Fico traveled to Moscow for discussions with President Vladimir Putin regarding potential gas deliveries. Soon after, Zelensky criticised Fico’s position, arguing that prolonging dependence on Russian gas presented a major security risk to Europe. Fico countered by threatening possible reciprocal measures, including curtailing emergency electricity supplies to Ukraine.

Regardless of these diplomatic maneuvers, the flow of Russian gas through Ukraine has now ended. Victoria Voytsitska, a prominent civil society leader and former Ukrainian parliamentarian who advocated for closing the transit route, wrote on Facebook:

“The Russian gas monster is in convulsions. … This gas has been an instrument of the Kremlin’s economic and political influence on Europe for decades. For the past 10 years, it has provided the most liquid channel for financing the Russian military machine.”

With the agreement officially concluded, industry observers will be closely watching how this development reshapes energy markets, impacts regional revenues, and potentially escalates geopolitical tensions in Eastern Europe.


Franchises: The Strategic Sweet Spot for Private Equity

Why private equity firms are betting big on the scalability and resilience of franchise models.

Amid the turbulence of recent global economic events—from interest rate volatility to shifting investor sentiment in equity markets—a quieter yet significant trend has emerged in private equity (PE): a growing affinity for the franchise business model. While its appeal may seem niche compared to headline-grabbing tech or renewable energy investments, franchising offers a compelling mix of scalability, predictability, and resilience that PE firms are finding hard to ignore.

Recent mega-deals underscore this enthusiasm. In late 2024, Blackstone made waves by acquiring Jersey Mike’s Subs for $8 billion, including debt. Earlier in the year, Roark Capital—already an established force in food franchising—finalised its $9.5 billion acquisition of Subway, setting the stage for a competitive battle between buyout-backed sandwich empires. These deals are the latest in a series of high-profile acquisitions targeting franchises, spanning industries from hospitality to fitness.

The European Context: PE’s Franchise Playbook Crosses Borders

The franchise model’s allure is far from limited to the US. In Europe, similar dynamics are at play. For instance, in 2023, EQT Partners acquired Espresso House, a Nordic coffee chain operating under a franchise-like model, citing its scalable structure and strong brand recognition. Meanwhile, the UK’s Pret A Manger has drawn interest from global investors, including JAB Holding, which leverages the chain’s franchising opportunities to fuel international expansion. As EQT Partner’s Thomas von Koch remarked during the deal announcement: “Franchises offer operational leverage and predictable cash flows, especially in fragmented markets like Europe.”

Resilient Revenue Streams in Uncertain Times

The predictable, recurring revenue of franchise operations is a major draw for private equity. Royalties derived from franchisees provide stability, even during economic downturns. This partially explains why hospitality franchising has been a particular focus for PE firms. Blackstone’s investments in Extended Stay America and WoodSpring Suites exemplify how long-term occupancy hotels offer resilience during both economic booms and busts. The firm’s historical success with Hilton Hotels—a $26 billion acquisition in 2007 that yielded a $14 billion profit by 2018—continues to shape its strategic approach.

Jonathan Gray, Blackstone’s president and COO, credited Hilton’s turnaround to aggressive debt management and international expansion, proving the franchise model’s adaptability. “It’s about understanding the brand’s pricing power and its ability to weather economic cycles,” Gray noted in an interview with Forbes.

Warren Buffett’s Franchise Playbook

The franchise model’s strengths—brand loyalty, pricing power, and scalability—align closely with Warren Buffett’s investment philosophy. “If you think a business will be around 20 years from now and can price advantageously, that’s a good business,” Buffett famously said at a 1991 lecture at the University of Notre Dame. His 1997 acquisition of Dairy Queen, among other investments, highlighted the long-term stability and high margins that franchises offer.

In Europe, PE firms are also leveraging franchise models in residential real estate. Berkshire Hathaway HomeServices, for instance, has expanded its operations across key European markets, tapping into the model’s inherent scalability and the region’s growing demand for branded real estate services.

Franchisors, Franchisees, and Private Equity’s Growing Role

Traditionally, private equity has targeted franchisors—the parent companies overseeing franchise systems. However, recent deals show increasing interest in franchisees, or the operators themselves. In 2021, Orangewood Partners acquired Pacific Bells, one of Taco Bell’s largest US franchisees, demonstrating how PE capital can accelerate growth for operators.

In the fitness sector, Brentwood Associates’ acquisition of Orangetheory Fitness franchisee Afterburn Holdings highlights another growing trend. In Europe, similar activity is evident in brands like Fitness First, where PE firms have injected capital to streamline operations and expand market presence. According to FRANdata, multi-unit operators controlled over 50% of franchise units globally as of 2023, underscoring the increasing consolidation within the sector.

Driving Valuations and Transforming Markets

The private equity rush into franchising has not been without consequences. Increased competition among PE firms has driven up valuations. According to PitchBook, median EBITDA multiples in middle-market PE deals expanded from 5.5x in 2010 to 7.8x in 2023. While this has created higher entry barriers, it also signals confidence in the franchise model’s ability to deliver strong returns.

“The infusion of private equity capital has been transformative,” observed the International Franchise Association in its 2024 economic outlook. “While inflation and interest rate hikes have raised initial investment costs, PE backing has helped brands scale faster and adapt more effectively to competitive pressures.”

The Future of Franchising in PE Portfolios

As private equity firms seek resilient, high-margin investments in a volatile global economy, the franchise model’s appeal will likely grow. The alignment of predictable cash flows, operational scalability, and diversified risk makes franchises an increasingly vital component of PE portfolios.

Europe, with its mix of established brands and fragmented markets, offers fertile ground for further expansion. Investors will continue to look for opportunities where strategic capital and operational expertise can unlock long-term value, ensuring that the franchise model remains a cornerstone of private equity strategy across both sides of the Atlantic.


Boutiques Bet Big on 2025: Talent Wars and the Push for Revenue

The investment banking sector is gearing up for what could be a transformative year in 2025. Following a year of buoyant markets and unexpected resilience in dealmaking, Wall Street firms, particularly boutiques, are positioning themselves for a high-stakes rebound. With aggressive hiring sprees, lofty valuations, and heightened investor expectations, 2025 is shaping up as a pivotal moment for boutique investment banks to justify their bold bets.

The Boutique Boom: Strategic Talent Acquisition

Boutique firms such as Evercore, Lazard, Moelis & Company, and Jefferies have been making headlines for their aggressive talent acquisition strategies. They have capitalised on disruptions at larger institutions like JPMorgan and the now-defunct Credit Suisse, luring top-tier talent with lucrative compensation packages. Evercore, for instance, has expanded its managing director count by an impressive 27% since 2021, while Moelis has grown by 26%. Jefferies stands out, with an astonishing 46% growth in managing directors over the same period.

These hires don’t come cheap. Some new managing directors are receiving guarantees exceeding $9 million annually, a significant investment in human capital. While this talent strategy is designed to strengthen deal pipelines, the approach is not without risk. It often takes 12 to 18 months for these high-profile hires to establish client relationships and generate meaningful revenue streams. This lag puts immense pressure on compensation ratios, a metric closely scrutinised by investors.

Rising Compensation Ratios and Investor Concerns

Compensation ratios, the percentage of revenue allocated to employee pay, have risen dramatically across the industry. At Lazard, this metric reached 66% in 2024, well above the firm’s long-term target of 60%. This increase underscores the urgency for 2025 revenues to close the gap and validate these expensive hiring strategies. Similar trends are observed at other boutique firms, creating heightened expectations for a significant uptick in dealmaking activity.

“The talent arms race has always been part of Wall Street’s DNA,” notes a senior equity analyst at Bernstein. “But in this environment, it’s a calculated gamble. The market is rewarding forward-looking investments, but execution is everything.”

Market Context: A Resilient 2024 Sets the Stage

The optimism heading into 2025 is buoyed by a surprisingly strong 2024. Major players in the banking sector, including boutiques and bulge-bracket firms, reported robust performance. Perella Weinberg saw its stock price double, while Goldman Sachs posted gains of over 50%. These results have fuelled confidence in a continued rebound in mergers and acquisitions (M&A) activity, particularly as global economic conditions stabilise.

However, this optimism is tempered by elevated forward price-to-earnings (P/E) ratios for boutique firms, now sitting at 30x to 40x—nearly double the historical average. These valuations reflect high expectations, but they also amplify the risks.

“It’s a limited pie of deals. There’s going to be a reckoning,” warned the CEO of a rival investment bank. His caution underscores a fundamental challenge: boutique firms must not only capture market share but also compete effectively against well-established rivals.

The European Perspective: A Rising Opportunity

While much of the attention has been focused on the US market, European boutiques are also making significant moves. Rothschild & Co., one of Europe’s most venerable boutique firms, has been expanding its advisory capabilities across emerging markets, anticipating a surge in cross-border dealmaking. Alantra, headquartered in Spain, has targeted mid-market transactions in sectors like healthcare and renewable energy, reflecting Europe’s strategic priorities.

These firms are tapping into opportunities driven by Europe’s energy transition, post-Brexit trade adjustments, and renewed focus on industrial policy. According to Philippe Petitcolin, managing director at Lazard Paris, “European markets are ripe for consolidation, particularly in industries where innovation and regulation are reshaping competitive dynamics.”

High Expectations for M&A in 2025

M&A activity, often seen as the lifeblood of boutique investment banks, is projected to make a strong comeback in 2025. Analysts point to several catalysts: improving macroeconomic conditions, stabilising interest rates, and corporate pressures to deploy excess cash reserves. Additionally, sectors like technology, healthcare, and renewable energy are expected to drive deal volumes, with private equity continuing to play a significant role.

Boutique firms are particularly well-positioned to benefit from this rebound due to their focus on high-touch, bespoke advisory services. Unlike bulge-bracket banks that often prioritise scale, boutiques can offer tailored strategies, a key differentiator in competitive markets.

“Clients are increasingly valuing independent advice, particularly in complex transactions,” says John Weinberg, CEO of Evercore. “This trend is accelerating as corporate boards seek unbiased counsel to navigate an uncertain environment.”

Challenges on the Horizon

Despite these favourable conditions, the path to success in 2025 is far from guaranteed. Competition for mandates remains fierce, and the growing dominance of in-house corporate development teams poses a challenge. Additionally, geopolitical uncertainties, such as ongoing trade tensions and regulatory shifts in China and the EU, could dampen cross-border activity.

Furthermore, the talent investments made by boutique firms come with heightened expectations. The clock is ticking for newly hired managing directors to prove their worth. As guaranteed pay packages expire, the pressure to deliver deal flow and justify compensation will intensify. Firms that fail to meet revenue targets risk not only disappointing investors but also destabilising internal morale.

A Broader Strategic Shift

The aggressive hiring and elevated valuations of boutique firms reflect a broader strategic pivot in the industry. The traditional model of large, all-encompassing investment banks is increasingly being challenged by the specialised expertise and agility of boutiques. This shift is reshaping the competitive landscape and forcing even the largest players to adapt.

For example, Morgan Stanley and Goldman Sachs have ramped up their own boutique-style offerings, creating smaller teams within the organisation to provide bespoke advisory services. This hybrid approach aims to capture market share without sacrificing the scale advantages of a bulge-bracket bank.

Conclusion: The Stakes Are High

As 2025 approaches, boutique investment banks find themselves at a crossroads. Their bold bets on talent, combined with a favourable market backdrop, offer significant upside potential. However, these opportunities come with substantial risks. Elevated compensation ratios, lofty valuations, and a finite pool of deals mean that execution will be paramount.

For investors, 2025 will be a critical litmus test. Firms that successfully navigate this high-stakes environment stand to solidify their positions as leaders in the evolving investment banking landscape. For those who fall short, the consequences could be severe.

Ultimately, as one industry veteran put it, “On Wall Street, you’re only as good as your last deal.” In 2025, boutique firms will have ample opportunity to prove their worth. The question is: will they rise to the occasion?


Understanding Body Language: Secret Weapon in Negotiation

Say what you mean and what you stand for — without opening your mouth…

Business professionals are constantly looking for ways to outmanoeuvre their rivals. For closing a deal, securing a promotion, or developing customer connections, you already have a superpower — if you know how to use it.

Many people concentrate on improving their verbal communication skills or learning the technical parts of their field, but understanding and exploiting body language can be more effective.

A complex system of indicators — posture, gestures, facial emotions, and eye contact — is essential for communication. Studies show that over 90 percent of communication is non-verbal. What you say is only a portion of the message you transmit.

The ability to properly read and respond to body language can provide insights into other people's thoughts and feelings, allowing you to modify your approach accordingly.

The Science of Body Language

This universal mode of communication even overcomes language barriers. It is ingrained in our biology and evolved as a survival technique long before humans learned to speak. Our ancestors used bodily cues to communicate intentions, emotions, and threats — as we still do.

Mirror neurones in the brain play an important part in all this. They fire when we execute an activity and when we see another person do so. This “mirroring effect” helps us empathise and connect. Your body language elicits similar emotions and behaviours in others, making it an effective way of influencing and persuading people.

Reading Between the Lines

Posture and Stance

Open posture, such as uncrossed arms and legs, demonstrates confidence and readiness to engage. The reverse may indicate defensiveness, discomfort, or resistance. In a negotiation, detecting a movement from open to closed posture, or vice-versa, can tell you how your point is being received.

Facial Expressions

Micro-expressions are fleeting but convey real feelings. Even though they last only a fraction of a second, they can provide you with real-time feedback. A genuine grin (also known as a Duchenne Smile) conveys warmth and friendliness. A fake smile may indicate insincerity or discomfort.

Gestures

Open-hand motions, particularly with the palms visible, convey honesty and openness. Conversely, pointing or closed fist movements might be seen as overly dominant.

Influence and Persuasion

Perfecting your own body language is essential for gaining a competitive advantage. The way you portray yourself has a huge impact on how people perceive you, helping to persuade or project authority.

Building Trust and Rapport

Subtly copying the other person's body language — known as mirroring — can help you build trust. It makes the other person feel understood and connected to you.

Projecting Confidence

Adopting power poses, like standing with feet shoulder-width apart and hands on hips, or sitting with arms stretched out, can boost your confidence and authority — and make others recognise it.

Practical Uses

Understanding and mastering body language has practical applications in commercial settings. Whether negotiating a transaction, leading a team, or networking, it can improve your performance and outcomes.

Negotiations

Adopting confident and open body language is vital in negotiations. Standing or sitting tall, keeping eye contact, and using authoritative gestures can make you appear less likely to back down.

Team Management

By exuding confidence and transparency, you can instil trust and respect in your team members. Paying attention to your team members' unspoken signs will help you recognise reasons for concern early on.

Sales and Customer Relations

First impressions are especially important in sales. A solid handshake, a sincere smile, and confident posture can establish a positive tone with potential clients.

Cultural Nuances

In certain cultures, direct eye contact may be considered unfriendly — or confrontational. Gestures that are positive in one culture can mean something else entirely in another. Understanding cultural differences is critical in today's globalised business world.

Drive Business Success

Learning to read non-verbal clues will provide you with deeper insights and allow you to respond intelligently. As you hone this talent, you'll discover that it improves your communication skills, allowing you to negotiate the complicated dynamics of the corporate world with comfort and confidence.


Paolo Sironi, IBM: Mind the Gap Between Small-Medium Businesses and Their Banks

Financial services are adapting to better serve SMEs, but a gap remains between what banks offer and what these businesses truly need.

Financial services are particularly susceptible to fluctuations in macroeconomic conditions, as starkly illustrated by the 2008 financial crisis in which interest rates dropped sharply, affecting banks' profitability worldwide. Banks play a vital role in the economy by facilitating the efficient allocation of financial resources. However, when banks encounter difficulties, the consequences ripple throughout local and international ecosystems.

[caption id="attachment_27467" align="aligncenter" width="680"] Author: Paolo Sironi[/caption]

This has significant implications for small and medium-sized enterprises (SMEs), which are particularly vulnerable to economic fluctuations, funding costs, and credit availability. As the backbone of the global economy, SMEs make up 90 percent of all firms globally, employ approximately 70 percent of the world’s workforce, and contribute about 50 percent to global GDP. Despite their pivotal role, these enterprises are often overlooked by banks, which can be discouraged by the substantial costs involved.

The Organisation for Economic Co-operation and Development (OECD) estimates that SMEs pay a significant risk premium relative to larger corporates when borrowing from financial institutions—up to 300 basis points in major advanced economies and 1,000 basis points in emerging markets. This is because of the higher costs required to serve SMEs, including the manual processes needed to collect and aggregate information on SME financials and economic situations. The lack of standard data also makes it harder to calibrate risk management models, forcing banks to charge a higher premium.

Today, banks are uncovering new opportunities to improve their services by leveraging data and AI to compete in SME markets. However, there remains a gap between what bankers perceive as competitive value and what SMEs truly need. Recent research by the IBM Institute for Business Value highlights this discrepancy, based on a global survey of nearly 700 banking executives and more than 1,200 SME owners.

[caption id="attachment_27470" align="aligncenter" width="658"] Figure 1: SMEs prefer banks that demonstrate deeper understanding of their sector and business ecosystems.[/caption]

Banks as Central Actors in SME Ecosystems

The research reveals an interesting disparity between the perspectives of bankers and SMEs when it comes to choosing a bank. SMEs expect bankers to understand their unique business needs, offer tailored solutions, and facilitate networking with business partners and clients. In contrast, bankers tend to focus on the basics, such as easy-to-use apps, dedicated banking managers, and branch proximity. However, these foundational services alone are no longer enough. Banks need to be embedded in the business communities in which SMEs operate.

Geographical nuances also play a role. For example, SMEs in the UK still cite branch proximity as a top priority, even as many bank branches have closed due to digital advancements and industry consolidation. SMEs in India, on the other hand, highly value mobile apps as the government has accelerated digital adoption across society. While a full return to branch expansion is unlikely, a blend of branch services, human relationships, and enhanced digital access is emerging to meet SMEs’ diverse needs.

[caption id="attachment_27469" align="aligncenter" width="657"] Figure 2: Bankers look inward, underestimating the SME need for fast money and expert advice to grow their businesses.[/caption]

Banks as Expert Advisors for Growth

When it comes to the banking services that can facilitate growth, SME owners and managers emphasise the importance of expert support in planning for expansion, backed by market and economic analysis. In the US, key priorities include guidance for credit scoring, flexible funding options, and expert support in planning. SMEs recognise the role of banking stewardship and are looking for trusted advisors to help navigate business complexities. Fast access to funds also ranks high, as SMEs need to minimise bureaucratic hurdles and save time.

Nearly 60 percent of SMEs say they rely on their banker’s support and online searches when making important financial decisions, with only 23 percent relying solely on internal expertise. As new fintech competitors engage digitally, financial institutions can differentiate by empowering both clients and relationship managers through a combination of human and digital advice.

[caption id="attachment_27468" align="aligncenter" width="640"] Figure 3: SMEs recognise the value of integrated ecosystem platforms with banking and non-banking services.[/caption]

Banks as Platforms Beyond Banking

In pursuit of business efficiency, SMEs place a high value on instant payments and digital access to both banking and non-banking services. Comprehensive super apps have broad appeal to SMEs not just in emerging markets but also in EU countries. These centralised platforms offer a range of benefits, including data-driven insights and cash flow forecasts.

By integrating banking and non-banking services into a single platform, banks can help SMEs simplify administrative tasks, enabling them to focus on strategic growth, innovation, and competitiveness. This ecosystem approach fosters long-term relationships, allowing banks to become key enablers of SME success.

Scaling AI across the enterprise requires both strong technical foundations and governance. Effective AI governance guides banks as they innovate and apply use cases responsibly.

The Value of Time

As banks redefine strategies to compete in SME markets, one consistent factor emerges: time. For SMEs, time is money. Banks can use data and AI to help clients save time when accessing financial services and beyond. This added value strengthens client trust and contributes to the global economy's overall growth.

For more insights, explore the IBM Institute for Business Value’s research: Banking for Small and Medium Enterprises – Serving the World Economy with Data and AI. ibm.co/sme-banking

About the Author

Paolo Sironi is the global research leader in banking at IBM, the Institute for Business Value, and he is author of business literature. His latest Banks and Fintech on Platform Economies has been Amazon bestseller in banking books worldwide. relinks.me/1119756979


The Future of Luxury Watches: Trends, Players, and Market Insights for 2025

The luxury watch market, long a symbol of sophistication and craftsmanship, is entering a dynamic phase of growth and transformation. As 2025 approaches, this sector is evolving rapidly, shaped by changing consumer preferences, economic forces, and technological innovation. From the resurgence of vintage designs to the rise of sustainability, the industry offers a fascinating blend of tradition and modernity that is worth exploring.

Luxury Watches: A Symbol of Prestige and Investment

Few items hold the cultural cachet of a luxury watch. Beyond being an accessory, these timepieces have become markers of status and sophistication. For many, a Rolex or Patek Philippe signifies more than impeccable taste; it is a badge of success. This intrinsic value has also positioned luxury watches as a popular alternative investment. Their rarity and the potential for value appreciation have made them particularly appealing, especially in uncertain economic times.

In 2023, the global luxury watch market was valued at approximately $48 billion. Much of this growth can be attributed to the increasing disposable incomes of consumers in emerging economies, alongside a renewed interest in high-quality, enduring goods. Watches, once seen primarily as functional, are now celebrated for their craftsmanship and potential as assets.

The Pre-Owned Market: A Rising Star

The pre-owned luxury watch market is booming, offering consumers access to rare models and discontinued designs that might otherwise be unattainable. This sector is expected to grow at an impressive annual rate of 9.2% through 2030, driven by platforms that make buying and selling easier and more transparent. For younger, tech-savvy buyers, the idea of owning a piece of horological history—often at a more accessible price point—holds particular allure.

Interestingly, the stabilisation of prices in this segment has reduced the speculative frenzy of years past. As a result, collectors and enthusiasts alike find the pre-owned market increasingly appealing, viewing it as a stable and trustworthy avenue for acquiring iconic timepieces.

The Power Players in Luxury Watches

The luxury watch industry is dominated by a few key players, often referred to as the "Big Four": Rolex, Patek Philippe, Audemars Piguet, and Richard Mille. These brands account for nearly 44% of the market, a testament to their enduring appeal and innovative prowess. Rolex, with its iconic Submariner and Daytona models, remains synonymous with precision and durability. Meanwhile, Patek Philippe captivates collectors with its intricate complications and unparalleled craftsmanship.

Audemars Piguet revolutionised the industry with its Royal Oak collection, blending sportiness with luxury in a way that was unheard of before. Richard Mille, the newest disruptor, continues to draw attention with its futuristic designs and innovative materials. Together, these brands set the benchmarks for excellence, ensuring that the luxury watch market remains both aspirational and deeply rooted in tradition.

Emerging Trends for 2025

As the world of luxury watches evolves, several trends are capturing the imagination of buyers and collectors. Vintage-inspired designs are making a strong comeback, with brands delving into their archives to reimagine classics for a contemporary audience. At the same time, sustainability is taking centre stage, with eco-friendly materials and ethical practices becoming non-negotiable for many consumers.

Another intriguing trend is the shift towards gender-neutral designs, which promote inclusivity and appeal to a broader audience. This complements the growing demand for personalisation, with watches featuring bold colours, intricate textures, and unique dial designs that reflect the wearer's individuality. For men, larger watch cases—often between 40mm and 42mm—remain a popular choice, while women’s collections are receiving renewed focus, with brands introducing smaller, elegant pieces tailored to female buyers.

Challenges Ahead

Despite its promising outlook, the luxury watch market faces several challenges. Counterfeiting continues to pose a significant threat, with fake watches eroding brand reputation and consumer trust. Economic fluctuations, particularly during times of uncertainty, can also dampen demand for high-end goods. Moreover, the rise of smartwatches presents competition, especially among younger consumers who prioritise connectivity and functionality.

To address these challenges, brands must innovate without losing sight of their heritage. The integration of cutting-edge technology—while maintaining the essence of traditional watchmaking—could be the key to staying relevant in an increasingly digital world.

A Bright Future

Looking ahead, the luxury watch market is forecasted to reach $73.73 billion by 2030, growing steadily at a compound annual growth rate of 4.5%. This growth will likely be fuelled by emerging markets, advancements in e-commerce, and continued innovation in design and materials.

For collectors and enthusiasts, 2025 promises to be an exciting year, with new releases, anniversary editions, and increasingly extravagant designs capturing the limelight. As brands push the boundaries of what is possible, the luxury watch remains a testament to human ingenuity, artistry, and the enduring appeal of timeless style.


Why Coffee and Chocolate Prices Are Heating Up in 2025

If you're a fan of mocha lattes or indulgent chocolate treats, 2025 might be a challenging year for your wallet. Coffee and cocoa, the commodities behind these beloved staples, have dominated the markets as two of the fastest-rising commodities for the second consecutive year. The tight supply of both crops led to volatile trading in 2024, with cocoa prices almost tripling. As we look ahead, the market forces driving this turbulence show no signs of abating.

The Role of Climate Change in Supply Shocks

One of the primary factors behind the sharp price swings is climate change. Cocoa and coffee thrive in tropical climates, which are increasingly affected by extreme weather events. Prolonged droughts, erratic rainfall, and rising temperatures are all taking their toll on crop yields. According to Bloomberg, companies like Starbucks are investing heavily in research to develop more resilient coffee bean varieties, while major cocoa players like Hershey’s are stockpiling beans to mitigate supply risks.

Analysts from ING predict continued tight markets for both commodities in 2025. There is a glimmer of hope, as cocoa bean supplies are expected to return to surplus after a deficit in 2024. However, the impacts of climate change make forecasting increasingly complex, and the industry is bracing for further disruptions (ING Report).

Geopolitical Factors Adding Pressure

In addition to environmental challenges, geopolitical developments are adding to the uncertainty surrounding coffee and cocoa prices. Two key issues are particularly noteworthy:

EU Anti-Deforestation Law: Starting in late 2025, the European Union’s new anti-deforestation legislation will require companies selling commodities in EU markets to prove their products were not sourced from recently deforested land. This landmark law is expected to increase compliance costs and tighten supply chains. The initial announcement of the law in 2024 caused price surges, and similar market reactions are likely as the implementation date approaches.

US Tariff Policies: With President-elect Donald Trump’s promise of new tariffs, the commodities market is bracing for widespread impacts. Coffee and cocoa, largely imported into the US, are particularly vulnerable. While small-scale farming efforts exist in Hawaii, California, and Florida, they are far from sufficient to meet domestic demand, making these commodities reliant on global trade (The Wall Street Journal).

Challenges for Cocoa Farmers

Despite cocoa’s meteoric rise in the market, farmers in the top-producing countries of Côte d'Ivoire and Ghana are not reaping the benefits. These farmers are paid fixed rates for their crops by their governments, shielding them from market volatility but also preventing them from capitalising on price spikes. Adding to their woes are crop diseases and adverse weather conditions, which have significantly reduced yields. As The Wall Street Journal reports, some farmers are leaving the cocoa industry altogether, further straining global supply.

Outlook for 2025

For consumers and businesses alike, navigating the coffee and chocolate markets in 2025 will require adaptability. Climate change, geopolitical policies, and supply chain disruptions are converging to create a perfect storm. While some companies are investing in long-term solutions like crop research and sustainable practices, others are taking immediate action through strategic stockpiling and diversification.

As we move through the year, keep an eye on developments in the EU’s deforestation law and US tariff policies, as well as updates from major commodity traders and agricultural analysts. These factors will play a pivotal role in shaping the market dynamics for two of the world’s most cherished commodities.

Conclusion

For businesses operating in the coffee and chocolate sectors, 2025 offers both challenges and opportunities. Adapting to the realities of climate change, understanding new regulatory environments, and anticipating geopolitical shifts will be critical to staying competitive. Whether you're a consumer concerned about rising costs or an investor seeking opportunities in the commodities market, staying informed will be key to navigating the months ahead.

Sources: Bloomberg, ING, Reuters, The Wall Street Journal, The Wall Street Journal


Could Elon Musk Revolutionise Social Media by Acquiring TikTok?

The U.S. operations of TikTok face an uncertain future as the Supreme Court prepares to rule on a potential ban by 19 January. The decision could force ByteDance, TikTok's Chinese parent company, to divest its U.S. business. Amid this tumult, a surprising contender has reportedly emerged: Elon Musk.

[caption id="attachment_27482" align="aligncenter" width="958"] Elon Musk. Image generated by Grok[/caption]

According to unnamed sources, Beijing might be exploring the option of selling TikTok’s U.S. operations to Musk’s company, X (formerly Twitter). The rationale? Combining the immense user base of TikTok, which boasts over 170 million U.S. users, with X’s ambitions could create a juggernaut in social media, digital advertising, and artificial intelligence (AI).

Why TikTok and Musk’s X Could Be a Perfect Match

A potential acquisition of TikTok’s U.S. operations by X would mark a seismic shift in the social media landscape. Here’s why:

Advertising Potential: TikTok’s dominance among younger demographics could turbocharge X’s advertising revenue streams, offering brands unparalleled reach and engagement.

AI Synergy: Musk’s AI venture, xAI, would gain access to TikTok’s treasure trove of user data, a potential goldmine for refining algorithms and advancing machine learning capabilities.

Multimedia Expansion: Integrating TikTok’s video-centric platform with X’s existing functionalities could help Musk realise his vision of transforming X into a comprehensive multimedia powerhouse.

ByteDance Denies Rumours, but the Clock is Ticking

ByteDance, however, has categorically dismissed the possibility of a sale, labelling recent reports as “pure fiction.” Meanwhile, the company continues to challenge the potential ban in court, arguing that it infringes upon the free speech rights of millions of U.S. users. Legal experts suggest that the Supreme Court is likely to uphold the government’s stance, citing national security concerns over Chinese ownership of the app. (Source)

Adding another layer of complexity, President-elect Donald Trump, set to take office on 20 January, has proposed a more diplomatic resolution. Trump has hinted at delaying the ban to broker a deal that would allow TikTok to continue its operations in the U.S. (Source)

What’s at Stake?

For Musk, acquiring TikTok represents an opportunity to consolidate his influence in the tech industry. The deal could redefine how social media platforms operate, blending TikTok’s short-form video appeal with X’s broader social and multimedia offerings. From a business perspective, the merger would create an unparalleled ecosystem for advertisers, content creators, and consumers alike.

On the flip side, regulatory hurdles and geopolitical concerns could derail any such deal. A TikTok acquisition by X would likely face intense scrutiny from U.S. authorities, wary of data privacy issues and market monopolisation. Similarly, China’s involvement in approving any sale adds another layer of complexity to an already intricate situation.

Key Takeaways

The prospect of Elon Musk acquiring TikTok’s U.S. operations might seem far-fetched to some, but it underscores the growing convergence of technology, media, and geopolitics. Whether the rumours prove true or remain speculative, the implications are profound:

The merger could reshape the digital advertising landscape, leveraging TikTok’s popularity and X’s innovative strategies.

Data from TikTok could supercharge Musk’s AI ambitions, potentially leading to breakthroughs in personalised content and machine learning.

The collaboration could set a precedent for cross-border tech deals in an era of rising geopolitical tensions.

As the deadline approaches, all eyes will be on Washington, Beijing, and Silicon Valley. A potential deal would not only save TikTok from a U.S. ban but could also herald a new era for social media and digital innovation.

For the latest updates on this story and other business news, keep following our blog. What are your thoughts on this potential game-changer? Share your views in the comments below.


A Bold Shift in the Desert: Saudi Arabia’s $100bn Mining Venture and the Future of Battery Metals

Saudi Arabia is accelerating its economic transformation. In its latest move to reduce reliance on the oil that has long been the backbone of its economy, the Kingdom recently announced a massive mineral exploration project valued at $100 billion. This new venture, revealed by Khalid al-Mudaifer, the Saudi vice minister for mining affairs, seeks to tap into a treasure trove of metals that are critical to the global battery supply chain. Among these metals are lithium, zinc, copper, nickel, and gold—essential ingredients in the world’s shift to electric vehicles (EVs) and renewable power.

This mining announcement underscores Saudi Arabia’s determination to position itself as a key player in the energy transition. By broadening its investment portfolio, the nation is signalling to global markets that it intends to remain relevant and profitable long after oil demand peaks. But there is far more to this development than a mere pivot away from “black gold.” Below, we explore what this massive project entails, how it fits into Saudi Arabia’s broader strategy, and the implications for the global battery industry.

From Black Gold to Real Gold: Rethinking Economic Foundations

Saudi Arabia’s economy has long revolved around its vast oil reserves, which still form the bedrock of its Gross Domestic Product (GDP). But as global conversations around climate change gain traction, and technologies such as electric cars become mainstream, the Kingdom is confronted with an urgent need to diversify. Saudi Arabia’s Public Investment Fund (PIF)—its sovereign wealth fund—has historically turned to Silicon Valley for flashy investment opportunities, pouring significant capital into companies like Uber and Lucid Motors. While these ventures have achieved varied results, a new approach is now emerging: instead of merely investing in global tech darlings, Saudi Arabia is looking inward and refocusing on industries that can power the post-oil world.

The scale of the new mining initiative is indicative of how seriously the Kingdom regards its future beyond oil. Mineral extraction—particularly of battery metals such as lithium and nickel—aligns with a world that is increasingly running on renewable energy and electric vehicles rather than fossil fuels. As demand for these raw materials grows, Saudi Arabia aims to become a leading supplier, capitalising on global trends while stabilising its own economic outlook.

The Race Against Time: Forecasts and Rising Uncertainties

In mid-2023, the International Energy Agency (IEA) released an oil demand forecast that garnered significant attention. While it noted that geopolitical uncertainties—such as potential sanctions on Russia and Iran—could tighten the oil market in the near term, it also slightly lowered its demand outlook for 2025. Around the same time, the Organization of the Petroleum Exporting Countries (OPEC) issued its own forecast, projecting that global oil demand would continue to rise at least into next year. These conflicting reports underline a broader debate over the exact timing of ‘peak oil.’

Whether oil demand peaks soon or in a more distant future, the Kingdom’s leadership is not taking any chances. Saudi Arabia is well aware of the possibility that oil revenues could plateau or even decline in the coming years—a development that could drastically affect national income. By diversifying into mining and other domestic projects, the government is insulating itself against potential downturns in the global oil market. It is a strategy that also leverages the current boon in oil prices to fund new ventures while the coffers are still flush.

Strategic Partnerships: Aramco Steps Beyond Oil

A central part of Wednesday’s announcement is a collaboration between Aramco, the state oil giant, and the national mining company. Historically, Aramco’s expertise and resources have centred on extracting and exporting oil. But now, the corporation is broadening its horizons to include critical minerals essential for the energy transition. The Kingdom is aiming to establish a competitive advantage in the commodities that power electric vehicles, battery storage, and other low-carbon technologies.

For Aramco, this partnership offers a logical entry into an industry with long-term growth prospects. Companies in the battery supply chain are actively seeking new, reliable sources of minerals, especially at a time when electric vehicles are capturing a larger share of the automotive market. By anticipating that need, Saudi Arabia could develop a lucrative new revenue stream capable of offsetting any future decline in oil exports.

Battery Metals on the Global Stage: GM’s Big Bet

Saudi Arabia is not the only major player focusing on supply security for critical minerals. On the same day as the Kingdom’s announcement, General Motors (GM) revealed a partnership with Norwegian company Vianode, a synthetic graphite manufacturer. The agreement will commence in 2027—when Vianode expects to open a factory in North America—and run until 2033. Although the exact figures remain undisclosed, the multi-year deal is valued at “multi-billions,” according to both companies.

Vianode’s unique selling point is that it provides an alternative source of graphite—a key component in lithium-ion batteries—outside of China. China is the world’s largest producer and exporter of graphite, raising concerns about overreliance and potential supply chain vulnerabilities for automakers and battery producers. According to Vianode CEO Burkhard Straube, the deal exemplifies the desire of both GM and Vianode for a “resilient supply chain for North America.”

Why It Matters: Supply Chains and Energy Security

These developments indicate that the world’s biggest automotive and energy players are racing to ensure dependable sources of the metals essential for battery production. As countries push to cut carbon emissions and automakers produce more electric vehicles, demand for lithium, graphite, nickel, and cobalt is set to explode. However, the supply side has not always kept up with this surge in demand, leaving many manufacturers scrambling to lock down future resources.

Saudi Arabia’s move is significant for two reasons. First, by building a robust domestic mining sector, the Kingdom reduces its own economic vulnerability. Second, it positions Saudi Arabia as a leading exporter of the raw materials essential for the energy transition—allowing the country to wield influence in global supply chains even as demand for oil eventually wanes. In a world increasingly run on electric power, these critical minerals could become as strategic as oil is today.

The Broader Vision: Beyond Oil, Beyond Traditional Investments

The $100 billion mining initiative is just one facet of Saudi Arabia’s Vision 2030, a wide-ranging plan designed to modernise the nation’s economy and society. Beyond investing in metals, Saudi Arabia is also making waves in high-tech industries, entertainment, tourism, and even professional sports. Earlier major investments, such as the acquisition of Newcastle United in the English Premier League, signal a drive to build global influence and diversify revenue streams.

Meanwhile, the country’s increasingly proactive foreign policy and economic strategies—from peace negotiations to multi-billion-dollar green energy deals—highlight a desire to be seen not just as an oil powerhouse, but also as an emerging global force in clean energy, technology, and finance. This multi-pronged approach indicates that the Kingdom’s leaders are aware of the immense challenges posed by an evolving global economy.

Challenges Ahead: Sustainability and ESG Concerns

Although the announcement is momentous, Saudi Arabia’s mining ambitions are not without potential pitfalls. Mining operations can have significant environmental impacts, including habitat destruction, water pollution, and carbon emissions from heavy machinery. In today’s world, where Environmental, Social, and Governance (ESG) criteria are becoming increasingly important to investors, Saudi Arabia will need to address these risks head-on. Ensuring transparent oversight, following global best practices, and adopting sustainable technologies will be critical in establishing credibility.

Moreover, competition for battery metals is growing fierce. Nations like Australia, Canada, and Chile already have established mining industries and deep expertise in handling commodities like lithium and copper. For Saudi Arabia to truly stand out, it must offer compelling value—whether that be in the form of infrastructure, regulation, or technology—to attract the big players in the EV and battery sectors.

Looking Ahead

Saudi Arabia’s $100 billion mining gamble represents a pivotal moment in the country’s ongoing efforts to rewrite its economic story. Whether it’s lithium for electric vehicle batteries or copper for renewables infrastructure, the stakes could not be higher for global industries vying for these critical materials. In the short term, oil may continue to fill the Kingdom’s coffers, but the government’s eye is firmly on a post-hydrocarbon horizon. Through massive capital injections, global partnerships, and a strategic push for energy-transition metals, Saudi Arabia is actively shaping a new role for itself in the global economy.

For international investors, automakers, and tech giants, this could open up new avenues for collaboration—and competition. The countries and companies that manage to secure reliable access to these precious resources will gain a powerful edge in the booming EV and clean energy markets. In this sense, Saudi Arabia’s bold foray into mining is not just about shoring up its finances. It’s also about positioning the Kingdom at the centre of the world’s next great industrial revolution.


David Ogilvy, the Original Mad Man: The Man Who Sold Selling

He revolutionised advertising with intelligent, witty campaigns and a deep respect for the consumer.

David Ogilvy, often called the “Father of Advertising”, redefined the industry with a sharp eye for creativity, a respect for the audience, and a talent for building iconic brands. Named "the most sought-after wizard in today’s advertising industry" by Time magazine in 1962, Ogilvy built an empire and, in the process, laid the foundation for modern advertising practices.

An Unconventional Journey

Born in West Horsley, England, in 1911, Ogilvy’s path to advertising was far from conventional. His early years were marked by an insatiable curiosity and a willingness to embrace diverse experiences.

Worked as a chef at the Hotel Majestic in Paris, mastering the art of presentation.

Sold Aga cooking stoves door-to-door, where he honed his persuasion skills.

Worked in intelligence during World War II, analysing behaviour and human psychology.

These varied experiences gave him a deep understanding of human nature—an asset that set him apart in advertising.

A Revolution in Advertising

Unlike many of his Madison Avenue contemporaries, Ogilvy approached advertising with respect for the consumer. He famously declared:

“The consumer isn’t a moron; she is your wife.”

This radical philosophy shaped his campaigns:

Hathaway Shirts: The "Man in the Hathaway Shirt" campaign, featuring a mysterious eye patch, transformed a niche brand into a cultural icon.

Rolls-Royce: The legendary "At 60 miles an hour..." campaign defined understated luxury.

Dove: Pioneered "1/4 cleansing cream" messaging, positioning it as a gentle skincare essential.

Schweppes: Introduced "Schweppervescence", making it synonymous with elegance.

These campaigns didn’t just sell products—they created aspirational brands.

Building a Legacy

Beyond campaigns, Ogilvy shaped the industry with his books:

Confessions of an Advertising Man (1963): A guide to advertising philosophy.

Ogilvy on Advertising (1983): Insights into successful advertising strategies.

He also founded Ogilvy & Mather, fostering a culture of integrity and excellence.

The Enduring Impact

David Ogilvy passed away in 1999, but his influence remains strong. His principles—respect for the consumer, storytelling, and data-driven creativity—continue to shape advertising.

The Father of Modern Advertising

Ogilvy didn’t just sell products; he sold the art of selling itself. His story is a testament to the power of ideas and the enduring relevance of human connection in advertising.


Butcher, Baker, Candlestick Maker: Are the Skilled Trades Safe from AI?

From manufacturing to customer service, artificial intelligence is changing the working world. Are carpentry, plumbing, and electrical work immune?

The artificial intelligence (AI) boom has created an undeniable workplace revolution. With algorithms and machine learning, AI is taking over entire industries, handling operations in manufacturing, finance, and customer service. This transformation has raised concerns about job security across sectors.

AI has even begun to encroach on white-collar professions like law, medicine, and finance. From drafting contracts to analysing medical data and optimising investment portfolios, the reach of AI is vast. Robots on factory floors are old news, but today they can tackle highly specialised tasks. So, as the technological tide rises, are skilled crafts such as carpentry, plumbing, and electrical work safe from automation? Or will robots eventually replace even the most hands-on professions?

The Expanding Reach of AI

To understand whether skilled trades are safe from AI, we must first examine the technology’s current state. AI is increasingly preferred in industries for its speed, accuracy, and efficiency. Self-driving vehicles are transforming logistics, while chatbots handle customer inquiries. Even creative industries such as journalism, music, and art are feeling the impact of AI-generated content.

For employers, the benefits are clear: AI works around the clock, doesn’t tire, and makes fewer mistakes, reducing costs and improving productivity. Businesses that fail to adopt AI risk falling behind in a competitive market.

Why Skilled Trades Are Resilient

Despite AI’s rapid advancements, it struggles in areas requiring physical dexterity, problem-solving, and craftsmanship. Skilled trades like carpentry, plumbing, and electrical work often involve unique challenges that stump AI. These roles require adaptability, on-the-job experience, and a human touch.

For instance, fixing a leaking pipe or wiring a home involves assessing individual systems and environments. A plumber might work in cramped spaces or with outdated materials, tasks that robots lack the dexterity or problem-solving ability to handle effectively.

Robots in Construction

That said, AI is making inroads in construction. Robots can already lay bricks, pour concrete, and paint with greater precision than humans. For large-scale projects, these innovations can lead to significant cost savings.

SAM (Semi-Automated Mason), for instance, can lay thousands of bricks daily. While these systems currently require human supervision, they hint at a future where robots handle repetitive tasks, leaving tradespeople to focus on creativity and oversight.

The Role of AI in Training

AI is also transforming how tradespeople are trained. Virtual reality and AI simulators enable apprentices to practice skills in controlled environments. AI tools can analyse video footage of inspections, helping plumbers or electricians identify issues that might go unnoticed.

However, over-reliance on AI in training could lead to “deskilling,” where workers lose critical thinking and hands-on problem-solving abilities.

Advancements in Robotics

As robotics advance, even dexterous tasks like surgery are within AI’s reach. In 2023, a robot performed its first autonomous surgical operation. Could similar technology wire homes or craft furniture? While it’s possible, AI still lacks the emotional intelligence and creativity that define human craftsmanship.

The Future of Work

Much like industrialisation, AI is more likely to change the nature of jobs than eliminate them entirely. Tradespeople who learn to collaborate with AI and integrate it into their work will remain valuable. As experienced workers become scarcer, their skills may command higher wages, making these professions more attractive to future generations.

Conclusion

The butcher, baker, and candlestick maker may not have to worry about immediate replacement, but they should stay vigilant. By combining their expertise with emerging technologies, tradespeople can secure their roles and elevate their professions. In the face of digital transformation, adaptability remains humanity’s greatest asset.


The Midas Touch: Physical Gold vs Gold Shares

Gold: A Hedge Against Uncertainty

Gold has long been considered a safe haven in times of economic instability. As Forbes reports, gold prices tend to rise during geopolitical tensions, making it a popular hedge against inflation and currency depreciation.

But when it comes to investing, there’s a fundamental decision to be made: should you hold physical gold (bars, coins, or jewellery), or invest in gold-related assets such as stocks, ETFs, and mutual funds? Each option comes with its own benefits and risks.

Investing in Physical Gold

Physical gold is tangible, universally recognised, and not reliant on financial markets. Investors often see it as a wealth preservation tool, especially in times of economic crisis.

Advantages of Physical Gold

Store of Value: Gold has retained its purchasing power for centuries.

Inflation Hedge: Gold often rises in value when paper currencies weaken.

Global Recognition: Gold is easily tradable worldwide.

Challenges of Physical Gold

Storage & Security: Storing gold securely incurs extra costs.

Liquidity Concerns: Selling gold isn’t as seamless as trading stocks.

Premiums & Fees: Dealer markups, storage fees, and insurance costs can add up.

For those looking to buy physical gold, popular options include:

American Eagle Gold Coins

Canadian Maple Leaf

South African Krugerrand

Gold Stocks & ETFs

Instead of holding physical gold, investors can gain exposure through gold stocks, ETFs, and mutual funds. These options allow for easier trading and lower upfront costs.

Gold Mining Stocks

Investing in mining companies such as Barrick Gold and Newmont Corporation offers leverage on gold prices—when gold prices rise, mining profits often increase exponentially.

Gold ETFs

ETFs such as SPDR Gold Shares (GLD) track gold prices without requiring physical ownership, offering liquidity and diversification.

Gold Mutual Funds

These funds, managed by professionals, invest in a mix of mining companies and gold-related assets.

Physical Gold vs. Gold Stocks: A Comparison

Factor
Physical Gold
Gold Stocks & ETFs

Liquidity
Lower, requires physical sale
Higher, can be traded on markets

Storage Costs
Yes (vaults, insurance, etc.)
No storage required

Market Sensitivity
Resistant to stock market swings
Can be volatile like other stocks

Dividends
No dividends
Mining stocks can provide dividends

Final Thoughts: Which Option is Right for You?

Gold can be a valuable addition to an investment portfolio, but choosing between physical gold and gold stocks depends on your goals.

If you’re looking for wealth preservation and a hedge against crisis, physical gold might be the better option.

If you prioritise liquidity and potential growth, gold stocks and ETFs offer an easier, more flexible alternative.

Regardless of your choice, experts recommend allocating 5-10% of your portfolio to gold for diversification.


NJMPF: Empowering Financial Literacy & Exemplary Leadership

The KwaZulu-Natal Joint Municipal Pension / Provident Fund (NJMPF) has solidified its status as a leader in the retirement fund industry, earning recognition as Financial Literacy Champion and Best Fund Leadership by CFI.co. These awards highlight the Fund’s unwavering dedication to its members, showcasing a legacy of financial empowerment and governance excellence.

Championing Financial Literacy

Financial literacy has always been a cornerstone of NJMPF’s mission. Recognising the importance of empowering its members to make informed financial decisions, the Fund has invested heavily in educational programmes that simplify complex financial concepts.

[caption id="attachment_27525" align="aligncenter" width="900"] CEO/Principal Officer Bongi Mkhize addressing children during the NJMPF financial literacy workshop.[/caption]

In an era where understanding retirement planning is crucial, NJMPF bridges the gap between technical jargon and practical knowledge. Seminars like the Road to Retirement and tailored workshops for new members demystify essential topics such as the two-pot retirement system, the value of early saving, and the dangers of over-reliance on borrowing. These initiatives are complemented by financial literacy sessions for children who receive monthly pensions, ensuring that younger generations are also equipped with the tools for a secure financial future.

Innovative outreach is another hallmark of NJMPF’s approach. Through newsletters, digital campaigns, and interactive roadshows, the Fund connects with its members on multiple platforms. A strong online presence via its website and social media channels allows members to access resources, engage with representatives, and stay informed about the latest developments. This multi-channel strategy has fostered trust and ensured NJMPF remains accessible to a diverse membership base.

Leadership in Action

Receiving the Best Fund Leadership award is a testament to NJMPF’s commitment to robust governance and innovation. The leadership team’s ability to navigate the complexities of today’s economic environment has ensured the Fund’s resilience and growth.

Central to this achievement is the team’s forward-thinking approach. For instance, NJMPF’s seamless adoption of the two-pot retirement system exemplifies its proactive stance. Workshops conducted across the province have educated members and employers on the benefits of this legislative reform, ensuring a smooth transition. By prioritising transparency and member engagement, the leadership team has set a high standard in fund governance.

Furthermore, the team’s dedication to inclusivity and strategic oversight continues to position NJMPF as an industry leader. From maintaining financial stability during economic turbulence to driving initiatives that directly benefit members, NJMPF’s leadership remains steadfast in its commitment to excellence.

A Member-Centric Philosophy

At the heart of NJMPF’s operations is its unwavering focus on its members. Every initiative is designed with their needs in mind, from streamlining claims processes to establishing additional satellite offices for easier access to services.

This member-first approach extends beyond the immediate needs of members. NJMPF has forged partnerships with schools and community programmes, introducing financial education to younger audiences. By fostering financial awareness early, the Fund not only prepares individuals for personal financial independence but also contributes to a financially literate future workforce.

The Fund’s commitment to continuous improvement ensures that services remain efficient, accurate, and accessible. Whether it’s through simplifying administrative processes or enhancing communication channels, NJMPF consistently prioritises member satisfaction.

Driving Innovation

NJMPF’s embrace of technology has been pivotal in enhancing its services. By integrating advanced digital tools, the Fund ensures members can access information, track claims, and engage with services seamlessly. This digital transformation is not merely about efficiency but about creating a more engaging and user-friendly experience.

In addition, NJMPF’s focus on sustainable practices underscores its dedication to the long-term well-being of its members and the broader community. Initiatives like green investment strategies and partnerships with environmentally conscious organisations highlight the Fund’s commitment to sustainability.

[caption id="attachment_27526" align="aligncenter" width="900"] Annual Information Meeting attendees[/caption]

Addressing Challenges with Resilience

While NJMPF’s achievements are commendable, its journey has not been without challenges. Economic fluctuations, shifting legislative landscapes, and the diverse needs of its membership have required the Fund to adapt and innovate continually.

However, these challenges have served as catalysts for growth. By addressing regulatory changes with proactive measures and fostering a culture of resilience, NJMPF has turned potential hurdles into opportunities for improvement. This ability to adapt has not only strengthened the Fund but also enhanced its reputation as a reliable and forward-thinking institution.

Looking Ahead: A Legacy of Empowerment

As NJMPF celebrates its recent accolades, its focus remains firmly on the future. The recognition as Financial Literacy Champion and Best Fund Leadership is not just a reflection of past achievements but a motivator to continue setting benchmarks in the retirement fund industry.

The Fund’s roadmap includes expanding its educational programmes, leveraging technology to further enhance member experience, and exploring innovative investment opportunities. By aligning its strategies with evolving member needs and global trends, NJMPF aims to remain at the forefront of the industry.

Forging a Path for Future Generations

NJMPF’s legacy is one of empowerment, innovation, and resilience. Its efforts to equip members with financial knowledge, combined with a dedication to exemplary leadership, ensure that it remains a beacon of trust and excellence in the retirement fund landscape.

As the Fund looks to the future, its vision is clear: to create a financially secure and inclusive environment where all members can thrive. Through strategic initiatives, member-centric policies, and a commitment to sustainability, NJMPF is not just managing retirement funds—it is shaping a brighter financial future for generations to come.


Empowering Traders Globally: The XM Approach to Achieving Comprehensive Trading Excellence

In the competitive world of online trading, XM stands out as a trusted, multi-regulated broker dedicated to innovation, client satisfaction, and education. Since entering the trading scene close to 15 years ago, XM has grown into a global leader with over 15 million clients, offering a robust platform that supports traders of all levels in achieving their financial goals.

In the highly competitive world of online trading, few companies stand out like XM, a trusted, multi-regulated broker that has set the standard for innovation and reliability. Since its inception in 2009, XM has grown from a promising start-up into a global leader, amassing a client base of over 15 million. Built on a foundation of customer-centric values, XM’s approach to trading offers clients worldwide an experience that goes beyond transactions, with each feature designed to empower traders on their journey to success.

XM caters to both beginner and advanced traders with a comprehensive platform that offers over 1,400 trading instruments, covering currencies, commodities, stocks, and indices. Clients can access diverse investment opportunities with some of the most competitive conditions in the industry, including low spreads and advanced, real-time execution for a seamless trading experience.

At the heart of XM’s service is an unwavering commitment to client satisfaction and security. The company’s industry-leading infrastructure ensures that over 99% of trades are executed in under a second, supported by a strict "no re-quotes and no rejections" policy. This reliability allows traders to confidently pursue their strategies, knowing they can count on the speed and accuracy is essential in the fast-paced trading world. XM’s regulatory framework further reinforces its dedication to client safety, with oversight from multiple leading regulatory bodies worldwide.

However, XM’s mission goes far beyond simply providing trading products – it’s about empowering knowledgeable and confident traders. XM’s educational resources are extensive, offering clients free access to webinars, live trading sessions, tutorials, and expert-led workshops, both online and offline. This commitment to continuous learning allows traders at all levels to build their expertise, refine their strategies, and navigate the markets with assurance.

XM’s Customer Experience team is another core element of its client-first approach. With multilingual support available in over 30 languages, XM’s 900-strong team of dedicated professionals is on hand to ensure that every client, regardless of experience level or location, receives top-tier service and guidance. Clients know they can rely on XM not only as a broker but as a trusted partner that prioritises their unique needs.

The XM experience is built on the principles of accessibility, trust, and expertise, making it a preferred broker for millions. As markets evolve and competition intensifies, XM remains committed to refining its offerings and delivering an unmatched trading experience, proving that putting clients first is not just a promise – it’s a defining principle at XM.

For more information on XM’s offerings and the latest updates, visit xm.com and follow XM on various social media platforms.


The AI Economy Demands Leadership: Why Every C-Suite Needs a Chief AI Officer

By 2025, 35% of large organizations will have a Chief AI Officer (CAIO) reporting directly to the CEO or COO (Gartner). Leadership—not technology—will determine the winners and losers in the AI economy. While AI promises unprecedented gains in productivity and economic value, its true potential is unlocked not merely through algorithms or automation, but through a fundamental reimagining of leadership, operational models, and organisational structures. At the forefront of this transformation stands the CAIO—a role that redefines executive leadership and equips organisations to thrive in the AI era.

The CAIO is more than a functional leader; they are the architects of enterprise-wide change. Their mandate is to embed AI into the very fabric of the organisation, transforming decision-making, operations, and culture. Success in the AI economy will depend on how effectively the CAIO enables the entire C-Suite to harness AI’s full potential and align it with long-term business objectives.

The Economic Imperative of AI Transformation

The AI economy presents a vast opportunity, with the potential for significant financial and strategic returns. Organisations that effectively implement AI can unlock revenue growth, reduce costs, enhance customer satisfaction, and mitigate risks. The Total Economic Impact (TEI) framework provides a holistic view of AI’s value, incorporating operational efficiencies, financial benefits, and competitive differentiation.

Estimates from Bain & Company suggest that generative AI alone could drive a 20% EBITDA boost in targeted use cases. McKinsey projects that AI-powered automation could increase workforce productivity by 35–70% in the near future. However, these benefits will only materialise if AI is treated as a strategic transformation rather than a mere technical upgrade. This is where the CAIO’s leadership becomes indispensable—ensuring AI initiatives are enterprise-driven, not siloed experiments, and fostering a culture that embraces AI-driven innovation.

The Chief AI Officer: Rewiring the C-Suite for AI

The CAIO is a transformative force, reshaping not just how organisations operate, but how their leaders think, collaborate, and make decisions. In the AI economy, success requires an AI-enabled C-Suite where every executive integrates AI into their domain to achieve functional excellence and strategic alignment.

The CAIO’s Three Core Mandates

1. Strategic Integration
The CAIO ensures AI initiatives are directly aligned with business strategy, prioritising high-impact use cases over fragmented experimentation. By working across functions, they drive synergy, eliminate inefficiencies, and establish a unified AI vision that maximises enterprise value.

2. Capability Development
To enable widespread AI adoption, the CAIO fosters AI literacy among executives and employees alike. By collaborating with the CHRO and CFO, they drive workforce upskilling initiatives and ensure AI investments translate into measurable ROI.

3. Responsible AI Governance
As AI adoption accelerates, ensuring trust and accountability is paramount. The CAIO establishes governance frameworks that address risks related to data privacy, bias, and algorithmic transparency. Working closely with the Chief Risk Officer, they safeguard AI ethics and regulatory compliance.

Reimagining C-Suite Roles in the AI Economy

AI is not just a tool—it is a transformative force that redefines the scope and responsibilities of every leadership role. The CAIO is central to guiding this shift across the executive team:

CEO: Leads the AI-driven cultural and strategic transformation, ensuring AI is embedded into the organisation's vision and decision-making processes.
CFO: Manages AI-driven financial models, balancing capital investment with operational efficiencies while leveraging AI-powered analytics.
CHRO: Addresses workforce transformation, closes the AI skills gap, and fosters a culture of continuous learning and talent adaptability.
CMO: Uses AI for hyper-personalised marketing strategies, optimising customer engagement and brand differentiation.
COO: Integrates AI into operational processes, building AI-driven knowledge platforms that enhance efficiency and resource allocation.
CIDO/CTO: Develops agile, scalable digital infrastructures that support enterprise-wide AI adoption.
CRO: Implements Responsible AI practices, mitigating risks and ensuring compliance with evolving AI regulations.

Each role evolves to contribute to a cohesive AI-native strategy, with the CAIO acting as the architect of transformation.

The CAIO as the Transformation Office Leader

Leading AI-driven transformation is not a one-time initiative—it is a continuous process requiring strategic direction, financial discipline, and cultural integration. As head of the Transformation Office (TO), the CAIO orchestrates the organisation’s most critical AI initiatives, ensuring alignment, scalability, and accountability.

The CAIO’s Role in the Transformation Office

Strategic Alignment: AI initiatives must support long-term business objectives, ensuring AI is a driver of enterprise-wide value creation.

Capability Development: Establishing the right talent pipeline, infrastructure, and governance frameworks is essential for sustainable AI innovation.

Responsible AI Governance: Embedding ethical AI practices builds trust among stakeholders, mitigating risks related to bias, security, and regulatory compliance.

By integrating AI transformation into the organisation’s core strategic planning, the CAIO ensures AI’s impact extends beyond isolated use cases, driving systemic change.

Leadership in the AI Economy

Thriving in the AI economy demands more than technical expertise—it requires visionary leadership, organisational agility, and a redefined C-Suite. The Chief AI Officer is the catalyst for this transformation, ensuring that AI is not merely adopted but fully harnessed to drive competitive advantage.

By aligning AI initiatives with business strategy, fostering enterprise-wide AI capability, and embedding Responsible AI governance, the CAIO empowers organisations to navigate the complexities of the AI-driven future with confidence. Those who embrace this leadership evolution today will be the market leaders of tomorrow.

By Bashar Kilani Digital Economy Advocate, Managing Partner at Boyden & Founder of AI360 Innovations