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Industry roundup: 9 June

Deutsche Bank Research warns of the impending threat of rising inflation

Deutsche Bank Research has published its first client-focused paper under a new banner called 'What is in the tails?', which examines the potential for higher inflation and a return of boom/bust cycles over the next few years. 

"Our Research team is home to a broad church of views but we coalesce around a House View for our key macro forecasts," said David Folkerts-Landau, Ph.D. chief economist, Global Head of Research at Deutsche Bank. "In the interest of intellectual diversity I have encouraged our research group to leave their comfort zone and carefully consider alternative viewpoints."

The new occasional 'What is in the tails?' series is designed to further stimulate debate with the bank's clients by providing reasonable alternatives to the central forecasts and scenarios. The new paper, entitled 'Inflation: The defining macro story of this decade' notes the very role of government in the economy is undergoing its biggest shift in 40 years manifested in the receding fear of inflation and rising levels of government debt that shaped a generation of policymakers. Replacing it is the perspective that economic policy should now prioritise broader social goals.

At its heart the research report debates whether inflation is transitory or the pursuit of these important social priorities by governments will mean inflation will have longer-term and far reaching implications for the health of the global economy. Either way, higher inflation is coming and policymakers are about to face their toughest battle in 40 years.

 

Assure Hedge raises €5m to fund rapid expansion plans

Irish foreign exchange technology firm Assure Hedge has closed a €5m funding round to support its plans for rapid expansion. The funds will be used to hire new staff, and to invest in new product development and channels to market.

The fundraising places a €30m valuation on the fintech business whose mission is to transform the way businesses manage their foreign exchange exposure through an easy-to-use online platform. Despite the pandemic, Assure Hedge has added 15 new staff and doubled its registered client base in the past year. The company plans to more than double clients again this year, and add at least another 15 employees.

With over US$5 trillion in foreign exchange revenues traded globally each day, Assure Hedge sees a huge untapped opportunity in providing SMEs with the opportunity to manage their currency risk simply and at low cost. Its platform is democratising access to hedging regardless of the size of the sums involved.

Recent research from East & Partners shows that only 50% of SMEs (defined as companies with turnover of €5 to €20m) hedge their foreign exchange risk, with this dropping to 27% for businesses with turnover under €5m. Among the main reasons cited for not hedging risk were complexity, cost, and lack of familiarity.

Assure Hedge’s EZFX Broker product - launched last year - provides FX hedging quotations to SMEs without the need to invest in technology or internal resource for complex treasury management. A new product launch is targeted for July which will enhance accessibility and broaden the range of brokers and financial intermediaries Assure Hedge can work with.

 

Supply chain startup Stemly spins out of ING

Supply chain-focused machine learning firm Stemly has become the first spin-out (independent company) to come out of ING’s Singapore innovation lab. This means that Stemly will operate independently but continue to work closely with ING to commercialise its solutions. The company will also have access to ING’s global network and financial services expertise.

To enable accelerated growth and to pave the way for an independent future for Stemly, ING Ventures, alongside venture capital fund Elev8, the Singapore Economic Development Board New Ventures and other investors, will invest $2.5 million into the firm.

Stemly uses autonomous machine learning technology to forecast customer demands and help supply chain managers make better and faster decisions. If companies build Stemly’s software-as-a-service platform into their supply chain operations, they can capture, analyse and access real-time data. This increases supply chain responsiveness.

"We are helping businesses save 10% to 40% of their cost of inventory and working capital - the equivalent of tens of millions of dollars in some cases - by embedding automatic machine learning in their forecasting and optimisation applications," said Giuseppe Manai, co-founder & co-CEO of Stemly.

 

Digital transformation momentum to continue, say majority of UK businesses

A survey of 750 UK business leaders has revealed how the pandemic has affected long-term digital transformation plans. It found:

  • 56% of firms have successfully adopted one or more new technologies since March 2020
  • 54% say the pandemic has inspired long-term digital transformation projects
    • 45% plan to hire new tech staff in the coming 12 months
    • 53% plan to invest more heavily in digital skills training 
  • Conversely, 27% of UK businesses intend to cut down on IT spend as lockdown rules relax
    • 30% of decision-makers are worried their business will revert to old practices  

The pandemic has inspired long-term digital transformation projects, with UK businesses set to increase IT spending and hiring in the year ahead, the research from Studio Graphene has revealed.

The London-based digital agency commissioned an independent survey of 750 decision-makers within UK businesses. It found that the majority (54%) plan to continue digital innovation projects even once the pandemic subsides, with this number highest among companies with more than 500 employees (60%). 

Since the beginning of the pandemic, 56% of companies have successfully adopted one or more new technologies. Only 14% said their business’ digital transformation strategy was unaffected by Covid-19. Almost half (45%) of businesses plan to hire new IT staff in the coming 12 months. Meanwhile, 53% plan to invest more heavily in digital skills training for existing staff. 

Conversely, over a quarter of UK business leaders plan to reverse their company’s technology priorities in the coming year: 27% of respondents said their company plans to cut back the amount it spends on technology post-pandemic, with 30% worried that their organisation will revert to old ways of working – this concern was less common (21%) among decision-makers in smaller businesses (under 50 employees).

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