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Importance of ethical AI guidelines corresponds with revenue growth - Industry roundup: 11 March

Importance of ethical AI guidelines corresponds with revenue growth

Publishing clear policies and guidelines is the most effective method of communicating AI ethics to the workforce, followed by workshops and trainings, according to a study from Deloitte. The research, published in the report “Preparing the workforce for ethical, responsible, and trustworthy AI: C-suite perspectives,” outlines corporate priorities and actions to harness AI’s benefits while maintaining trust and equitable outcomes.

The survey also shows that C-level executives associate the highest importance of ethical guidelines for emerging tech with revenue growth (55%), followed by brand reputation and marketplace trust (47%).

Among C-level executives surveyed, 86% say their organisations have either implemented ethics policies and guidelines or are about to do so. Almost half of respondents (49%) report their organisations currently have guidelines or policies regarding the ethical use of AI, and another 37% early ready to roll out policies said they are nearly ready to roll policies out.

Boards of directors are involved in creating AI ethics policies as often as ethics officers. Respondents indicated that boards of directors (52%) and chief ethics officers (52%) are always involved in creating policies and guidelines for the ethical use of AI.

Organisations are reskilling and making corporate acquisitions to prepare their labour force for AI. Enterprises are actively training and upskilling their workforces (45%), acquiring organisations with AI capabilities and skills (45%) and hiring for AI (44%) to prepare their employees for the integration of AI — and roughly an additional 40% say they are close to ready to do the same.

Ethics researchers and specialists are sought out more than ethics officers. More executives surveyed said their organisations are currently hiring or planning to hire for positions including AI ethics researchers (53%), compliance specialists (53%), and technology policy analysts (51%) than C-suite roles such as chief ethics officer (38%) or chief trust officer (36%). 

Deloitte’s study surveyed 100 executives and was conducted online by an independent research company between January 17th and 22nd. Respondents represented C-level, president, board member, and partner/owner roles at companies in the US.


Can the Nikkei's record rally continue?

After topping bubble-era highs, Japanese stocks are poised to rise even higher, according to Goldman Sachs Research (GSR). Japan's Nikkei 225 stock index closed above 40,000 on 4 March, setting another record high after climbing last month above levels last seen decades ago. The broader Tokyo Stock Price Index, or TOPIX, has also rallied this year, approaching all-time highs. 

Two important structural changes are playing out in the Japanese stock market: The country is shifting to an inflationary economy after years of deflation, and corporate governance reforms are taking root, strategists Kazunori Tatebe and Bruce Kirk write in the GSR report.

The team’s analysts expect the TOPIX to reach 2,900 over the next 12 months (up from their previous 12-month forecast of 2,650). The outlook for Japanese corporate earnings is improving, Tatebe and Kirk write, after a positive surprise in third-quarter results and as Japanese companies benefit from a strong US economy and weak yen.

GSR strategists forecast cumulative growth in earnings per share of 32% over the next three years. “We see further earnings upside if improvement in the global manufacturing cycle continues,” Tatebe and Kirk write.


February’s US payroll employment increase beats expectations

US non-farm payrolls were much stronger than expected at 275k (consensus: +200k) in February versus a downwardly revised 229k (previously: 353k) in January. The unemployment rate came in at 3.9% (consensus: 3.7%) versus 3.7% in January.

Average hourly earnings rose 0.1% in the month (consensus: +0.3%), against a 0.6% gain in January, with the annual rate slowing by more than the consensus estimated to 4.3% from 4.5% in January.

February’s non-farm payrolls print has moved above the three-month moving average of 265k. Within this, Healthcare was the largest contributor, adding 67k jobs. This was above the sector’s 12-month average of 58k, while government expenditure added 52k. Despite this stronger than expected job growth, the 12-month average continues to trend downwards, albeit very slowly, highlighting the broad gradual slowdown in job creation.

“The household survey gave conflicting messages,” said Nathaniel Casey, Investment Strategist at Evelyn Partners. “Despite job growth remaining strong, February saw a tick up in the unemployment rate to 3.9%. This came on the back of a solid 150k increase in the labour force, which despite not impacting the participation rate, that remained at 62.5%, was enough to push the overall unemployment rate up slightly.”

Job openings have been trending broadly downwards since their cyclical peak in March 2022, highlighting that the demand for labour has been cooling. In previous cycles decreases in job openings have been accompanied by sizeable increases in the unemployment rate, but so far this cycle that relationship has not held up. 

“In balance, although the headline non-farm payroll figure beat estimates coming in at 275k, downward revisions to previous months, a tick up in the unemployment rate and a deceleration in wage growth should in balance be enough to reassure policy setters that restrictive monetary policy is helping to ease the labour market and slow the economy,” added Casey. “This should give them confidence to start cutting interest rates during the summer.”


Wells Fargo to expand its electronic pricing capabilities in Singapore’s eFX hub

Wells Fargo & Company has announced it plans to launch new electronic foreign exchange (eFX) pricing capabilities in Singapore in the second half of 2024. The launch, supported by the Monetary Authority of Singapore (MAS), aims to deliver a lower latency trading environment to clients and promote greater efficiency for the Singapore and wider APAC foreign exchange (FX) markets. 

With the local pricing capability now available via the Singapore SG1 Data Center (SG1), the bank says it will be able to connect with more of its clients in APAC and price and execute eFX transactions faster and more efficiently.

“Wells Fargo can provide the market with differentiated liquidity given our large underlying Corporate, Commercial, and Payments businesses, and we have already seen some great success on this front with our clients across APAC,” commented Mandy Wan, co‑head of APAC, Corporate & Investment Banking (CIB) & head of Markets, APAC, Wells Fargo. “Our FX team, along with the setup of our eFX pricing capabilities on SG1, will position us to be a major full‑fledged FX liquidity provider to the Singapore FX ecosystem and help us better serve our clients.”

“As FX volumes continue to grow in SG1, the entry of Wells Fargo to our ecosystem will enhance the trading experience for market participants and contribute to more efficient price‑discovery activities in Singapore,” added Lim Cheng Khai, executive director, Financial Markets Development Department, MAS.


Swedbank grows sustainable financing volumes

According to the bank’s most recent Sustainable Bond Impact Report, Swedbank continued to grow sustainable financing volumes in 2023 and develop related products and services. The bank’s Sustainable Asset Register - comprised of green and social assets - amounted to SEK74bn by year-end 2023, an increase of 25% compared to the year before. Most notably, Swedbank says it became the first Nordic bank to issue a social bond.  

“Our asset register continues to grow, and we are committed to offering our customers the best sustainable products, services, and solutions,” said Johanna Fager Wettergren, Head of Group Sustainability at Swedbank. “Swedbank has a great opportunity to contribute to the sustainable growth and development of the communities in which we operate, and we are continuing to take concrete steps in that direction.”

The Sustainable Funding Framework, which provides the foundation for the Sustainable Asset Register, is an integral part of Swedbank’s implementation strategy for achieving the net-zero goals. In 2023, assets in two new categories (Energy Efficiency and Affordable Housing) were included in the register. Consistent with previous years, the Green Buildings category accounts for the majority of assets. 


BBVA and Cisco look to accelerate digital transformation and foster innovation

BBVA and Cisco have deepened their strategic alliance and signed a strategic whole portfolio agreement (WPA), providing BBVA faster access to Cisco’s software and customer experience (CX) portfolio. BBVA is the first EMEA-based financial services institution to sign a WPA with Cisco in Europe and Latin America.

The five-year agreement includes solutions in cybersecurity, collaboration, data centres, networking and services. The agreement with BBVA spans operations across multiple countries. It includes proactive services provided by a specialised Cisco team and promotes collaborative innovation. Additionally, the deal simplifies management by consolidating 3,000 individual contracts into a single unified agreement. This streamlines BBVA’s global IT operations, significantly improving efficiency.

“After eight years of strategic partnership working together, BBVA premises and employees worldwide will have access to not only current but future Cisco technological developments,” said José Luis Elechiguerra, Global Head of Engineering at BBVA. 


Savis and Konsentus deliver open banking in Vietnam

Savis and Konsentus have announced they have created an operational structure for open banking in Vietnam. Savis, one of the country’s providers of digital capabilities, and a supplier of technology services to the Vietnamese financial services community, engaged Konsentus, a global provider of open banking advisory services and trust infrastructure, to collaboratively create a legal and operational framework for open banking.  

In support of the country’s vision to develop an advanced and high-quality connected digital society for all individuals by 2030, Savis sought support from Konsentus to create a framework for an innovative and cutting-edge open banking infrastructure to enable further growth and development.

Konsentus has worked collaboratively with Savis to:

  • Draw upon open banking international benchmarks and learnings to set out open banking use cases that should be prioritised for Vietnam.
  • Develop a set of principles by which the Vietnamese open banking ecosystem can operate (e.g. the respective roles and obligations of different actors, and the governance model that will be required).
  • Define requirements and operational processes for technology implementation.
  • Develop technical specifications.

This open banking framework is designed to provide the foundational bedrock for open banking in Vietnam and to help the market to take the next step towards an open data sharing ecosystem.

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