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AI’s Impact on The Corporate Banking Sector to Reach $250.3 Million by 2033!

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Global Trade Daily, Technology

AI’s Impact on The Corporate Banking Sector to Reach $250.3 Million by 2033!

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Introduction

The integration of Artificial Intelligence (AI) into corporate banking is reshaping the financial landscape, offering enhanced efficiency, improved customer experiences, and robust risk management. The Global AI in Corporate Banking Market is projected to grow significantly, reaching an estimated USD 250.3 Million by 2033, up from USD 108.7 Million in 2023. This represents a strong compound annual growth rate (CAGR) of 8.7% during the forecast period from 2024 to 2033. The expansion of AI technology in the corporate banking sector is driven by the increasing demand for automation, enhanced data analytics, and improved customer experience. As banks adopt AI solutions to streamline operations, optimize financial decision-making, and reduce risks, the market is poised for substantial growth in the coming years.

Read also: Open Banking Market Set to Expand with 22% CAGR Through 2032

North America holds a dominant 31% market share in the AI in corporate banking market, with a valuation of USD 33.69 million. This strong market position is primarily driven by the region’s advanced financial infrastructure and a high concentration of technological innovation. The presence of leading financial institutions, coupled with a robust ecosystem for AI development and adoption, has positioned North America as a key player in this sector. The region’s embrace of cutting-edge technologies to enhance operational efficiency, improve decision-making, and offer personalized banking solutions contributes significantly to its leadership in the market.

AI is becoming a cornerstone of innovation in corporate banking, driving efficiency, enhancing customer service, and enabling data-driven decision-making. With its ability to analyze vast amounts of data, automate processes, detect fraud, and provide insights into business operations, AI is revolutionizing the industry and offering new ways to serve corporate clients.

AI in Corporate Banking Statistics

  • Data obtained from netguru mentions, AI is expected to add between $200 billion and $340 billion annually to the global banking sector, representing about 9% to 15% of banks’ operating profits if fully implemented. This potential economic contribution highlights the urgency for banks to adopt AI solutions comprehensively.
  • Anticipated to drive productivity and profits, the adoption of AI technologies in corporate banking is expected to result in significant cost savings. These savings will enable banks to offer more competitive rates, helping them attract a larger pool of business clients.
  • Deloitte reports that the integration of virtual assistants in banking has significantly streamlined customer service, resulting in a 27% decrease in call center inquiries. By leveraging AI-driven solutions, banks are now able to handle routine customer queries more efficiently, allowing human agents to focus on more complex issues. 
  • Zendesk reports that AI has cut average response times in customer service by 41%. This technological advancement enables businesses to resolve customer queries faster, improving efficiency and customer satisfaction. 
  • According to Accenture, AI-based risk assessment tools have enhanced fund performance by 12%. By leveraging advanced algorithms to analyze and predict market risks more accurately, these tools help optimize investment strategies.

Emerging Trends

  • Enhanced Customer Service: Banks are deploying AI-powered chatbots and virtual assistants to provide 24/7 customer support, resulting in reduced wait times and increased customer satisfaction. For instance, Commonwealth Bank’s AI systems have reduced call center wait times by 40%.
  • Risk Management and Fraud Detection: AI algorithms are instrumental in identifying unusual transaction patterns, thereby preventing fraud and ensuring compliance with regulatory standards. Financial institutions are increasingly relying on AI for anti-money laundering efforts and real-time transaction monitoring.
  • Operational Efficiency: AI is automating routine tasks such as data entry and processing, allowing bank employees to focus on strategic initiatives. This automation leads to cost savings and streamlined operations.
  • Personalized Financial Services: Through AI-driven analytics, banks can offer customized solutions tailored to individual client needs, enhancing client relationships and satisfaction. AI enables the analysis of large datasets to understand customer behavior and preferences.

Top Opportunities

  • Investment in AI Technologies: Financial institutions are encouraged to invest in AI to stay competitive, improve operational performance, and deliver innovative services to corporate clients. 
  • Collaboration with Fintech Startups: Partnering with fintech companies can drive innovation and accelerate the adoption of AI solutions in corporate banking. Such collaborations can lead to the development of new AI-driven financial products and services.
  • Focus on Data Security and Privacy: As AI adoption increases, ensuring robust data security measures and compliance with privacy regulations becomes paramount. Addressing these concerns is essential for maintaining customer trust and meeting regulatory requirements.
  • Talent Development: Investing in training programs to upskill employees in AI and data science is crucial for the successful implementation of AI strategies. A skilled workforce can effectively leverage AI tools to drive business growth. 

Leading Financial Institutions Embrace AI

Major global financial institutions have already implemented AI-driven solutions, reporting significant improvements in operational efficiency, customer engagement, and risk mitigation. These advancements have enabled them to scale services while reducing operational costs.

  • JPMorgan Chase & Co.: JPMorgan leverages AI for fraud detection, risk management, and personalized financial services. Its AI-powered contract review tool, COiN (Contract Intelligence), processes legal documents faster and more accurately.
  • Goldman Sachs: Goldman Sachs uses AI for trading algorithms, market analysis, and investment decision-making. Its AI-powered platform, Marcus, provides consumer lending and savings services through personalized recommendations.
  • Bank of America: Bank of America integrates AI through its virtual financial assistant, Erica. This AI-powered chatbot helps customers manage their finances, track spending, and access financial insights.
  • Wells Fargo: Wells Fargo employs AI in areas such as personalized banking, fraud prevention, and customer service. Its AI-driven chatbot assists customers with account management and financial guidance.
  • Citigroup (Citi): Citigroup utilizes AI for credit risk assessment, compliance monitoring, and trading analytics. AI-powered tools help the bank optimize investment strategies and streamline regulatory compliance processes.

Challenges and Future Prospects

The integration of AI in corporate banking comes with several challenges. Data quality and availability remain critical obstacles, as banks rely on vast amounts of accurate data for AI models to function effectively. Data silos and legacy systems further complicate seamless data integration. Regulatory compliance and data privacy laws pose significant challenges, requiring banks to balance innovation with strict adherence to evolving legal frameworks. Additionally, the complexity of corporate banking transactions often necessitates tailored AI solutions, increasing implementation costs. 

Despite these challenges, the future of AI in corporate banking appears promising. Advanced analytics and machine learning models will enable more accurate financial forecasting and strategic decision-making. The adoption of AI-driven chatbots and virtual assistants will enhance client engagement through real-time support. Moreover, as blockchain and AI technologies converge, they could streamline complex trade finance operations. With continuous advancements and increased regulatory clarity, AI is poised to reshape corporate banking, driving efficiency, reducing costs, and unlocking new revenue streams.

Conclusion

The AI in the corporate banking market is poised for significant growth, driven by the need for improved efficiency and enhanced customer service capabilities. As banks continue to adopt AI technologies, they are able to streamline operations, reduce costs, and provide more personalized service offerings. The integration of AI facilitates better risk management and fraud detection, further bolstering the security and reliability of banking operations. Moreover, AI’s ability to analyze large volumes of data enables more informed decision-making and strategic planning. Overall, the future of corporate banking appears increasingly intertwined with AI advancements, promising transformative impacts across the sector.

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Global Trade Daily

The Silent War: Banks vs. Fraudsters in the Era of Instant Payments and Opportunities

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Banks should see securing instant payments not just as an obligation – but as the key to a whole new range of product and customer service opportunities.

Read also: Why You Should Optimize Your Payments Stack for a Successful Cross-Border Expansion

The demand for instant payments – both from businesses and consumers – continues to gain traction and with that traction has come a broader expectation for immediacy and a seamless user experience. Just as digital services like video streaming or content downloads deliver near-instant access, users now expect payments to match this speed and ease. There is a global push for real-time payments as it transforms industries by enabling faster fund transfers, reducing reliance on cash, and improving business’ cash flow. With advancements in digital security, there’s an added emphasis on ensuring these speedy transactions remain just as secure as they are fast. This couldn’t be more important since instant payments are projected to grow at more than 35% Compound Annual Growth Rate (CAGR) globally over the next six years, accounting for more than one in three payments by 2030. Unfortunately, this surge in instant payments also presents increased challenges in safeguarding financial security and necessitates the implementation of enhanced anti-fraud solutions.

McKinsey’s State of consumer digital payments in 2024 highlights a steady rise in digital payment adoption in both the U.S. and Europe. This year’s survey is the first to assess both regions, showing that consumers are not only using various digital payment methods more frequently but are also increasingly starting their buying journeys with these options. Platforms like buy now, pay later (BNPL) and offer marketplaces are examples where digital payments are the starting point of consumer decision-making, rather than merely a checkout tool.

Instant Payments Present Challenges for Limiting Fraud Risk 

Along with consumer adoption of the digital payment trend comes an increasing need to manage fraud risk.  The rise of unregulated payment channels, such as cryptocurrency exchanges and peer-to-peer platforms, yields new opportunities for fraudsters to target. Instant payments present unique challenges in managing authentication and fraud risk due to their rapid settlement requirements, often occurring within less than a second.

This tight timeframe limits the opportunity for banks and financial institutions to conduct in-depth verification and confirmation of both the payee and transaction details, leaving limited room for fraud detection before the payment is finalized. The rapid pace of these transactions can increase exposure to fraud if real-time protections are not implemented effectively, making instant payments a high-stakes area for risk management.

The ambiguity around liability for losses in instant payments also creates a complex risk landscape for financial institutions. In jurisdictions without clear guidelines, determining responsibility for covering fraud-related losses can be challenging. This can expose banks to financial risks and potentially damage their reputations if customers bear the brunt of fraudulent transactions. This lack of clarity underscores the urgent need for regulatory frameworks and industry-wide standards to define accountability and create consistent consumer and institution protections.

The U.S. and the EU are Relying on Regulatory Standards for Fraud Identification 

FedNow, launched in July 2023, is a service from the U.S. Federal Reserve that allows banks and credit unions to offer instant payment services to their customers. Of the approximately 10,000 financial institutions in the U.S., more than 1,000 have already joined the platform, which allows members to offer instant payment services. While FedNow relies on banks to be the first line of defense in fraud detection, it does offer some risk mitigation services. However, it relies on the institutions themselves to monitor and report fraud activity to be shared among member organizations. New regulations in the EU, taking effect in December 2024, will require banks to offer significant fraud protection services. 

Revolutionizing Banking: The Power of Instant Payments

While the shift toward instant payments may present certain complexities, it offers banks a unique opportunity to elevate customer service, significantly boost satisfaction and retention, and introduce innovative services like Authorized Push Payments and Request to Pay.

The European Commission has mandated that all EU banks must be equipped to receive instant payments compliant with the SEPA SCT-Inst standard within nine months of the December 2024 deadline. Moreover, they must be capable of sending SCT-Inst payments eighteen months after this deadline.

To ensure the security of these transactions, banks are obligated to implement robust measures to protect customers from fraud and liability. In response, EBA Clearing, the European Banking Association’s independent payment services organization, has introduced FPAD (Fraud Pattern and Anomaly Detection), a cutting-edge fraud detection and prevention service designed to safeguard both banks and their customers in this new era of instant payments.

Launched in March 2024, this game-changing service draws on the billions of transactions processed by EBA Clearing annually, providing banks with a comprehensive understanding of payment and beneficiary account behaviors. The added value of the FPAD service goes beyond individual institutions’ efforts in fraud prevention. By utilizing a network view, the FPAD service offers banks or PSPs an enhanced view of risks, allowing for more precise risk management. Enhancing in-house fraud prevention systems with FPAD’s analytics and detection capabilities can significantly reduce the number of false positives, streamlining operations and improving overall efficiency. Additionally, the EU has announced the introduction of Verification of Payee (VoP) services from March 2024, with banks facing the obligation to introduce VoP for customer accounts no later than October 2025. 

VoP services enable clients to check that their money is going to the right account – an important security measure for instant payments, where transaction and settlement should take place within 10 seconds.

A Catalyst for Innovation and Customer Centricity
The rise of instant payments and immediate settlement of funds between accounts, reveals a cornucopia of opportunities for banks to innovate and enhance customer service. Industry experts within the financial crime fighting community envision a spectrum of product possibilities that cater to diverse customer needs. In order to mitigate the risk of fraud, payments experts need to be thinking ahead and partnering with their banking customers.

For example, instant payments streamlining Business-to-Business (B2B) transactions should bring progress in supply chain finance. By enabling near-instantaneous payments between businesses, banks can expedite the flow of funds and reduce payment cycle times. This translates to improved cash flow management and increased efficiency for businesses of all sizes. 

The reach of instant payments extends beyond domestic borders as well. Banks will be able to facilitate quicker international transactions with reduced fees. This opens doors for greater global commerce and enhanced accessibility for individuals and businesses alike. For fraud experts, it is important for them to have experience in cross-border fraud where stronger authentication measures are employed and closer collaboration between financial institutions and law enforcement agencies across different jurisdictions can share information and coordinate efforts to combat this type of fraud.

Beyond traditional payment processing, instant payments pave the way for innovative financial products. Banks will be able to introduce real-time loan and credit solutions, offering instant credit decisions and disbursals to qualified customers. This will eliminate the lengthy application processes associated with traditional lending, providing a more efficient and user-friendly experience. For the fraud expert protecting the bank, it will be key that they apply sophisticated KYC (know your customer) anti-fraud measures.

The world of micropayments, often used for digital goods and services, can also benefit from instant payments. Banks will be able to enable seamless and secure transactions for small, frequent payments, fostering a more convenient ecosystem for both consumers and businesses. For the anti-fraud expert, AI can efficiently identify patterns and anomalies. Additionally, subscription payments will be automated with greater flexibility and accuracy, ensuring timely payments and eliminating the risk of service disruptions.

Given these opportunities to offer enhanced products and services, banks are wise to invest in robust anti-fraud measures to help with their business growth. Real-time transaction monitoring that employs advanced AI and machine learning to identify suspicious activity patterns will be key. Using fraud prevention software to analyze transactions and flag potential risks should be integral while employing enhanced multi-factor authentication (MFA) to add layers of security. Still, it is equally important for financial institutions to provide clear guidelines to their customers on how to recognize and prevent fraud and to encourage them to report suspicious activity promptly.

Navigating the Challenges: Security and Compliance

While instant payments offer a plethora of opportunities, it’s crucial to acknowledge the associated challenges. Robust security measures are paramount. Banks need to implement strong authentication and fraud prevention technologies to safeguard customer information and financial assets. Real-time monitoring of transactions for suspicious activity and swift responses to potential threats are essential to maintaining a secure environment. Additionally, educating customers about best practices for online security empowers them to be active participants in protecting their personal information and financial well-being.

Regulatory compliance remains a crucial aspect of navigating the instant payments landscape. Banks must stay up to date with evolving regulations and industry standards. Developing effective compliance programs ensures adherence to regulatory requirements and mitigates potential risks.

Customer Education: Building Trust and Confidence

Customer education plays a vital role in the successful adoption of instant payments. Banks should provide clear and comprehensive information about this technology, highlighting its benefits, security measures, and potential risks. Addressing customer concerns about security and privacy builds trust and encourages them to confidently utilize these innovative payment solutions.

Offering training and support empowers customers to navigate the instant payments ecosystem more safely and effectively, ensuring they can fully leverage the convenience and benefits offered by this technology.

Conclusion: A Promising Future

By embracing instant payments and addressing the associated challenges, banks can position themselves as leaders in the digital age. This technology unlocks a world of possibilities for product innovation, customer service excellence, and increased customer engagement. By leveraging instant payments effectively, banks can drive financial inclusion, streamline business operations, and ultimately, deliver exceptional customer experiences. Nevertheless, they shouldn’t do it without first investing in an AI-powered anti-fraud solutions. 

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Global Logistics, Global Trade Daily, Software

Regulate AML Software for Banks to Maximize Compliance Measures

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Explore the complete guide on AML software for banks and investigate how it assists in maximizing regulatory measures in an advanced way. 

Read also: The Integration of Pay Card Readers with Online Banking Platforms

Anti-money laundering (AML) software for banks has become a literal solution to detect and prevent financial crimes. The global AML software market has seen significant growth, with revenue increasing from previous years. In 2016 and 2017, the market expanded steadily, and by 2023, it is projected to reach approximately $1.77 billion in revenue worldwide. This surge reflects the increasing regulatory demands and the need for advanced solutions to combat money laundering activities in the banking sector.

What is AML Compliance Software? 

AML Compliance software is an enhanced approach to assist businesses and enterprises in identifying the financial fraud happening in their institutions. It involves entities that are recognized by governmental institutions, such as insurance institutes and financial services. It is used to reveal illegalities that are linked to illegitimate acts, such as terror funding and laundering of money. 

In the US, firms demand AML compliance from the BSA (Bank Secrecy Act). The Act confirmed an AML compliance program that involves financial institutions that meet the major defined policies to identify illegalities and inform the authorized departments through the submission of SAR reports. Basically, the USA Patriot Act extended the definition of an entity to execute suspicious activity reporting. 

AML Software for Banks: Explore the 4 Best Features to Look Out for 

Financial institutions, including banks, most established businesses, and even SMEs (small to medium enterprises) require the best AML software for maintaining regulatory measures. For this purpose, before getting any type of services from the AML Software companies, the following features should be looked out for, which are given below: 

  • Data Consistency

The detailed scrutinization of the associated vendors’ AML credentials is a major requirement to have. Regulatory bodies should directly ask vendors for the exact source of the submitted data to know how they look out for updates and type of enhancement controls are required. 

  • Utilization of Artificial Intelligence 

Most of the merchants discuss artificial intelligence in the marketing domain but the authorized officers should keep digging out for some particular cases and the advantages that are faced by the present users or the potential customers. 

  • Enhanced Approach to Combat Fraud

An integrated strategic approach to AML is the optimal solution for fragmented teams. It assists in enhancing the overall efficiency of detecting illegalities and behaviors that may otherwise be overlooked. 

  • Aligning with Regulatory Developments

Real-time payments and new fraud methods are constantly changing. Customers’ needs and security challenges also shift often. Older providers may take longer to adjust. This can slow down the release of new products. In the worst case, it may put customers at risk of financial crime due to slow responses.

Strategies to Measure Success Through AML Compliance Software

AML software for banks is helpful in enhancing the overall productivity of the financial departments. AML software for banks brings objectives and challenges that involve the following access metrics:

  • Save businesses and their customer’s reputations. Most effective AML software makes sure that it stays ahead of the latest major pitfalls and threats. 
  • AML software for banks brings an excellent customer experience. A well-integrated AML piled and aligned with the bank’s protocols. It should not hide behind the conveying of the products and assistance to the potential consumers. 
  • AML compliance software is approved as an effective internal process. It takes measures to streamline workflows and should allow compliance measures to mandate resources and rank resources. 
  • Continuous improvement and efficiency look like a success, and financial institutions evolve as major changes after following regulatory measures. Compliance heads should coordinate with their merchants to comprehend what other financial institutions are concentrating on and if they are more accurate in attaining their financial compliance intentions. 

Concluding Remarks

To stay ahead of financial fraud, an adjustable and associated contextual technique must be used that intensifies the comprehension of the consumers and their threats by placing the entities at the heart of all the AML risk management protocols. It is an optimal solution with infused artificial intelligence technology and machine learning. It maximizes accuracy and also provides assurance of full AML compliance coverage and accountability. 

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Banking, Global Trade Daily, Technology

10 Ways Conversational AI Enhances Efficiency and Cuts Costs in Banking

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Conversational AI has transformed the banking experience, making it efficient even during peak times. Instead of navigating lengthy procedures, customers now interact with AI chatbots for instant assistance, resolving queries in seconds. As time becomes increasingly valuable and customer expectations rise, banks are adopting conversational AI to streamline operations and enhance customer service amidst intense competition, growing demands, and evolving economic challenges.

Read also: Unlocking Financial Prosperity: Managing Banking and E-Commerce in the Future

Why Banks Need Conversational AI for Streamlined Operations

Conversational AI technologies, such as voice bots and chatbots, are revolutionizing communication and engagement in banks. By implementing these AI tools in crucial business and customer service operations, banks can significantly increase efficiency, alleviate bottlenecks, and reduce staff pressure. Here are 11 advantages of using conversational AI in banking:

1. Enhancing Contact Center Efficiency

Voice bots replace traditional IVR systems, reducing call waiting times and frustration. Virtual assistants handle routine questions, boosting agent availability by 50% and cutting operational costs by up to 75%.

2. Boosting Data Security

Chatbots enhance data security by authenticating customer identities, monitoring for fraudulent activities, and automating security processes, reducing human error and ensuring encrypted communications.

3. Revolutionizing Payment and Claims Processes

Payment bots and RPA cut back-office and operational expenses by up to 80%, expedite processing speeds, and seamlessly integrate with existing CRM systems, enhancing efficiency.

4. Personalizing Customer Experiences

By analyzing customer data, conversational AI agents provide customized solutions, improving response accuracy, speed, and overall customer satisfaction. This also reduces the workload on human staff and operational costs.

5. Preparing for a Future of Innovation

As operational costs decrease, banks can redirect savings towards innovation. Routine tasks become automated, allowing employees to focus on higher-value tasks, fostering a tech-savvy environment.

6. Streamlining Document Management

Chatbots assist customers in submitting documents correctly and securely, reducing administrative burdens and enhancing operational efficiency by eliminating physical document exchanges.

7. Enhancing Efficiency in Routine Customer Queries

AI handles repetitive yet essential customer inquiries, providing instant responses and freeing up staff to focus on more complex issues, thus boosting a bank’s reliability.

8. Optimizing Banker Training with AI

AI platforms like Second Nature train an unlimited number of banking agents efficiently, allowing banks to scale without increasing human training resources, supporting higher volumes of employees.

9. Reducing Errors and Enhancing Compliance in Customer Service

AI validates and verifies customer information and documents in real-time, ensuring compliance with regulatory standards and minimizing errors in customer communications.

10. Expanding Capabilities with Multi-Language Support

Conversational AI offers multi-language support, enabling customers to interact in their preferred language, enhancing inclusiveness, satisfaction, and expanding the bank’s global customer base.

Exploring the Future of Conversational AI in Banking

Conversational AI is reshaping customer interactions and streamlining operations in the banking sector. Future advancements suggest even broader applications for conversational AI. Balancing automated solutions with human expertise remains crucial for addressing complex or sensitive customer needs.

Conclusion

Technologies like Capacity, an AI-driven support automation platform, are becoming increasingly significant. Capacity integrates seamlessly with existing infrastructures, automating routine tasks and enhancing operational efficiency, positioning banks to excel in the digital landscape. Adopting advanced AI solutions like Capacity enables banks to meet current demands and adapt quickly to future changes.

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Banking, Global Trade Daily, Software, Technology

Capturing the Power of Efficiency through Cloud ERP Investments

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Enterprises are standing at the threshold of a revolutionary era, poised to harness the transformative potential of cloud-based Enterprise Resource Planning (ERP) solutions. This isn’t just a technological shift; it’s a journey towards unlocking unparalleled efficiency. Join us as we embark on a voyage into the realm of Cloud ERP investments, where innovation converges with practicality to redefine the landscape of operational excellence.

Read also: Revolutionizing Fintech: The Integration of AI in ERP Systems

The Enterprise Resource Planning industry is undergoing a seismic shift from traditional on-premise setups to dynamic cloud implementations, driven by a myriad of compelling advantages. These include a reduction in total cost of ownership, streamlined implementation costs, and accelerated delivery of initial scope. Moreover, the transition promises expedited time-to-value, adoption of industry best practices, seamless upgrades ensuring business continuity, scalability, and a constant stream of innovation. Cloud ERP solutions, adorned with artificial intelligence, machine learning, robotic process automation, and analytics, are reshaping operational paradigms and propelling businesses towards unprecedented heights.

However, navigating the complexities of cloud ERP implementations demands a meticulously structured approach to ensure success, return on investment (ROI), and desired business outcomes. These implementations unfold across various phases: preparation, exploration, realization, deployment, and operation. Given the protracted nature of these endeavors, which span multiple years contingent upon factors like company size, data volume, and business segments, certain phases may overlap.

In the preparatory phase, dubbed Phase 0, an exhaustive evaluation of ERP options is undertaken, aligning with the company’s unique business processes and software capabilities. This entails a meticulous inventory of legacy systems and applications, alongside an assessment of ERP integration capabilities. Depending on program size, select tasks may be outsourced to business integrators and system integrators, while internal teams, equipped with deep business process expertise, are forged to shepherd the cloud ERP implementation journey.

Strategy diversifies depending on company scale, whether operating within a single country with a global customer base or spanning multiple nations with diverse operational facets like factories, distribution centers, and outsourced manufacturing units. Here, product integrators, endowed with ERP system mastery, assume the mantle of design authority, ensuring seamless integration and operational excellence.

The exploration phase delves into existing business processes through fit-standard workshops, engaging stakeholders across diverse business realms such as plan-to-fulfill, source-to-procure, lead-to-cash, and beyond. The aim is twofold: discerning processes amenable to standardization while identifying gaps necessitating configuration, customization, or enhancement.

As the journey progresses into the realization phase, detailed functional and technical specifications crystallize into tangible custom solutions, meticulously coded to meet defined parameters. Deployment unfolds through iterative cycles of system integration testing, data migration, and comprehensive training programs, accompanied by robust change management initiatives to prepare personnel for the transformative shift.

The pinnacle of the deployment phase culminates in the transition from legacy systems to modernized cloud ERP platforms during the much-anticipated Go-Live event. Subsequently, meticulous hyper care attention ensures system stability, addressing any lingering issues, paving the way for the operational run phase, characterized by ongoing production support.

These delineated strategies serve as a compass to unlock the true potential of productivity and efficiency through judicious technological investments.

About S V Prasad Gandhikota

Prasad Gandhikota is a Senior Business Consultant at SAP America. As part of his role, he assists some of the best-known Fortune 500 companies across North America in their digital and business transformation programs as a trusted advisor. Prasad has held various leadership roles in supply chain manufacturing functional consulting, project management, and program delivery management. He has consistently demonstrated his capability to make sound operational decisions by delivering excellence throughout the customer transformation journey, impacting the entire company.

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Global Trade Daily

How Masterworks Is Leading the Evolution of Finance for Blue Chip Art Transactions

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Art has long been used as an investment as well as a source of delight and contemplation. As an asset that can outperform inflation and is not correlated with other assets, art — particularly blue chip art — serves as an excellent hedge against economic turbulence. 

This has made it particularly attractive over the past few years of extreme uncertainty and turmoil, and will likely continue to do so for the next few years too. Records show that over the past quarter-century, contemporary art has driven average returns of 12.1% annually, 1.9x that of the S&P 500 over the same time period and with only negligible correlation to that index. 

Yet blue chip art was also long out of reach for many people. Finance served as a near-impenetrable barrier in a number of ways. Ordinary investors struggled to access the funds needed to buy blue chip artwork, were deterred by the difficulties liquidating those funds when necessary, and lacked the networks to help them to find buyers. Additionally, even art lovers weren’t confident that they could select paintings likely to appreciate over time.

A startup called Masterworks, and the investment platform that bears its name, were established some five years ago to change the way finance works for blue chip art, bringing down those barriers and removing obstacles that impeded cash flow around the art market. Since that time, it has gained momentum from the growing trend of democratizing finance, alongside approaches such as P2P lending, crowdfunding channels, and decentralized tokens, currencies, and finance platforms in general. 

The success of Masterworks is clear. Five years down the road, the platform has close to 400 individual painting investments totaling $1 billion in value under management, over 880,000 members, and no less noteworthy, it’s brought a breath of fresh air to finance pathways for blue chip art. Here’s a closer look at the ways that Masterworks has altered finance for art investments.

Lowering barriers to entry

Masterworks has successfully applied the fractionalized investment model to art. 

Each artwork that it offers is securitized with the SEC, which turns it into an LLC that is then divided into a number of shares. Those shares are offered for sale for as little as $20, making it far easier for investors to find the funds to invest in artwork. 

Typical art investors enjoy their art in their homes, but that’s not an option for fractionalized investors. Masterworks’s new gallery, Level & Co, lowers these barriers too, by exhibiting its art on an appointment basis for those who own or are interested in the artworks. This allows investors to view and interact with their art up close, unlike typical fractionalized purchases. 

Improved liquidity

As mentioned above, liquidity is a key concern for retail investors thinking about buying art. 

Masterworks has addressed this by setting up a secondary market where people can trade their shares in artworks whenever they like. This enables far faster access to liquidity than selling or auctioning your artwork. 

It can take months or years to find a private buyer, and auctions take time and effort to set up. Sellers need to arrange a meeting, agree on a reserve price, and may have to wait until the auction house has more items to present in a single event. You’d also need to pay for shipping, storage, evaluation costs, and more. 

Smoother paths to purchase

The art world typically functions like an exclusive club, with buyers and sellers finding each other through long-established and sometimes complex networks of relationships. This too serves to bar entry to retail investors. 

Masterworks opens up pathways to connect buyers and sellers, to ease the journey for art sales.

Level & Co plays a role here too. People who are not part of the traditional art world can visit the gallery to view the art, and meet art aficionados and financiers at the same time to expand their networks and forge those relationships. By exhibiting fractionally owned art, Masterworks also creates opportunities for high net-worth investors to view artworks and make an offer to buy, which is less likely to happen when the art is in a warehouse on the outskirts of town.

Support for purchase choices

Trends in demand for art styles and artists change frequently, so it is difficult even for an art lover to determine which pieces are most likely to increase in value and would therefore be suitable for investment. While there is data from auctions and public sales, it is not standardized or centralized, making it very difficult to assimilate into a solid prediction. Additionally, private sales data is kept private, so there’s no way to know the prices that many items changed hands for. 

Masterworks gathers data from auctions and auction catalogs, together with “repeat sales data,” namely the price paid for the same artwork at different times. It then analyzes the data to produce a price index that indicates which pieces are predicted to appreciate in value. The company also does the legwork in verifying the artwork’s provenance. Investors may not have the time or knowledge to do this, but it’s vital to prevent nasty surprises that could lower resale value.

It’s worth noting that this data-based approach has driven significant performance success to date. 2022 saw Masterworks pay returns totalling $25 million to its investors, and eight of the last nine sales it held resulted in 14% average annualized returns. Even the company’s worst-performing piece, by Andy Warhol, delivered 4.1% annual gains, and the highest-performing artworks are driving well over 100%, with a piece by Cecily Brown showing annualized net returns of 788.1%. 

Blue chip art finance models are receiving a facelift

Masterworks is spearheading a refreshing and more open approach to art investments that presents a disruptive model for fine art finance. While the traditional model of private sales, exclusive networks, and exclusive auctions is likely to continue for some time, it’s no longer the only option on the table. 

About Autor

Virginia Andrus is an independent Digital Marketing Consultant with 6+ years of marketing experience. Virginia is a chef by heart. In her free time, she is either writing marketing copies for brands and agencies or experimenting with new recipes at her home.

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Archives, Banking, eCommerce, Global Trade Daily

Unlocking Financial Prosperity: Managing Banking and E-Commerce in the Future

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In the rapidly changing digital landscape, e-commerce, banking, and finance are leading the way in transformation. Knowing the ins and outs of this financial growth is crucial as technology is changing the way we handle our finances and make transactions. This essay explores the intriguing opportunities and difficulties of the future and provides guidance on how to successfully navigate the shifting financial, banking, and e-commerce landscapes in order to achieve financial prosperity.

The Digital Financial Revolution

The days of just being able to conduct financial transactions at physical banks are long gone. A new era of finance has been brought about by the digital age, allowing us to invest, access our accounts, and make payments from the comfort of our homes. Mobile banking apps, online payment gateways, digital wallets for banks, and cryptocurrency are just a few examples of the digital financial revolution. As the technology continues to advance, we can anticipate even more innovations that simplify and enhance our financial lives.

E-Commerce: Changing the Way We Shop

E-commerce has become an integral part of our daily lives. The convenience of online shopping, the wide array of choices, and the ability to compare prices with a click of a button have revolutionized the retail industry. As consumers, it’s important to stay informed about emerging trends in e-commerce, such as augmented reality shopping experiences and the rise of sustainable and ethical consumerism. Navigating the e-commerce landscape involves making informed choices and ensuring the security of your online transactions.

The Intersection of Banking and E-Commerce

One of the most exciting developments in the financial world is the intersection of banking and e-commerce. Traditional banks are adapting to meet the changing needs of customers, offering seamless integration with e-commerce platforms and enabling online businesses to manage their finances more efficiently. As a business owner or consumer, understanding this convergence is essential for staying competitive and safeguarding your financial interests.

Financial Security in the Digital Age

With the benefits of digital finance and e-commerce come new challenges, particularly in the realm of security. Cybersecurity threats, data breaches, and online fraud pose risks to both businesses and individuals. Exploring strategies to protect your financial assets and personal information is a crucial aspect of navigating the future of finance, banking, and e-commerce.

Adapting to the Future

As the financial and e-commerce landscapes continue to evolve, adaptability and knowledge will be your greatest assets. Keeping up with industry trends, staying informed about regulatory changes, and making informed decisions will help you unlock financial prosperity in this dynamic environment.

In conclusion, the future of finance, banking, and e-commerce holds immense potential for individuals and businesses alike. To harness this potential and unlock financial prosperity, it’s vital to stay informed, embrace innovation, and remain vigilant in the face of emerging challenges. By doing so, you can navigate the exciting future of finance and e-commerce with confidence and success.