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Industry roundup: 18 December

Global economies will keep growing in 2021

Santander Wealth Management & Insurance (WM&I), which groups together private banking, asset management and insurance, estimates that the recovery of global economies, under way since the third quarter, will continue in 2021. In a report it says GDP is expected to grow 4.2% in the US and 4.6% in the eurozone, while China could grow by 8.4%. 

According to Santander WM&I, economic recovery will require continued monetary and tax incentives, social distancing and, above all, mass vaccination in order to become reality. A major risk it points out is that, once the pandemic no longer poses a threat and business activity stabilises, stimulus programmes will lead to overheating followed by high inflation in the future. “We believe the economy is entering a reflationary phase but we assign a low probability of having a runaway inflation scenario.  […] In short, our main scenario contemplates a moderate and not very worrisome increase in prices," says the report. 

Santander WM&I advises investors to look into alternative solutions with innovative asset management, in light of waning potential returns on traditional low-risk assets and unattractive interest rates. Accordingly, it also recommends positions in equities on both sides of the profit spectrum, with stocks expected to gain from future trends, but moving from industries that have grown considerably in 2020 towards less explored industries and businesses. It also suggests gradually increasing investments in industries hit hard by the pandemic in order to gain the most from their recovery and stabilisation. In this shift, stock markets in Europe and Latin America could see growth after lagging in the early recovery stages on the back of their highly cyclical nature.

Santander WM&I asserts that factoring environmental, social and corporate governance (ESG) criteria into portfolios will also be key for next year. “Sustainable investing (ESG) is not a temporary fad. For more and more investors, these areas are just as important as financial variables when it comes to deciding whether or not to invest their hard-earned money into a company. Higher risk-adjusted returns can also be achieved as ESG factors can influence value, reputation, and regulatory governance of companies and industries,” the report concludes.

 

VTB and MTS deal issues bank guarantee through Russian blockchain platform

VTB Bank says it has become the first in Russia to issue a digital bank guarantee for commercial operation using the Russian blockchain platform Masterchain. A guarantee for the fulfilment of payment obligations in the amount of 392 million rubles (US$5m) was issued in favour of the Russian company for the provision of digital, media and telecommunications services, MTS PJSC.

Masterchain is the first blockchain platform certified in Russia, which uses Russian means of cryptographic protection of information. The platform was developed by the Fintech Association together with the Bank of Russia and financial market participants.

The transaction was carried out in real time, VTB issued a digital guarantee signed with a reinforced qualified signature, MTS accepted the document, sending a corresponding notification to the bank.

The implementation of this transaction is the result of consistent joint work of VTB Bank and the Fintech Association to improve the system’s services, develop documentation and determine the essential conditions for the system’s operation.

 

Quantiq and Bottomline in payments partnership for Microsoft Dynamics 365 users

Microsoft Gold Partner and Inner Circle member, Quantiq, has announced a partnership with Bottomline to give its customers greater choice in selecting Document Management and Payment Processing solutions from Bottomline that are directly integrated with Microsoft Dynamics 365 F&SCM (Finance & Contracts Manager).

“As the only Microsoft Partner in the UK that can sell, implement and support the full Dynamics stack in the Cloud, Hybrid-Cloud and On-Premise solutions, our partnership leverages the natural synergy between Microsoft Dynamics 365 and Bottomline technology to drive business payments and process transformation,” says Paul Jones, Product general manager at Quantiq. “For our customers, this combined experience and expertise will increase the speed of their deployments and reduce the time it takes to realise the benefits of fully integrated solutions.”

The partnership is designed to help automate financial documents and simplify the way their businesses pay and get paid, giving greater visibility and control of their payments, collections and working capital.  

 

Goldman Sachs announces new commitment to support small business

Goldman Sachs has announced that it has funded its 10,000 Small Businesses programme with an additional US$250m, which is designed to ensure the programme can reach another 10,000 entrepreneurs with the training and support they need to realise opportunities for growth.

So far, 10,000 entrepreneurs have graduated from the programme, whose businesses together represent over US$14bn in revenue and employ over 200,000 people. A study on the impact of this programme’s first decade showed:

  • 66% of programme participants increase revenues just six months after graduation; comparable national data estimates that 53% of US small businesses grew revenues.
  • 46% create net new jobs just six months after graduation; comparable national data estimates that 30% of US small businesses added jobs.

This announcement brings Goldman Sachs’ total commitment to small businesses to over US$1bn in 2020, having previously committed US$775m in capital and grants to Community Development Financial Institutions and other mission-driven lenders to create emergency funding options for the most vulnerable and underserved small businesses.

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