Has digitization put the bank branch and cash on the extinction list? Not while consumers still demand them. To prosper today and in the future, banks will need to snatch the opportunities digital transformation offers them. Digitization is not a threat but a promise for better customer service that meets consumers where they are.
Digital payments promise greater convenience and efficiency with lower cost but also carry substantial potential risk to the economy at large. The long-term success of this innovation will depend on the development of a top-down, holistic regulatory framework to securely govern digital payments, maximizing benefits while minimizing risks.
The COVID-19 crisis proved how nimbly governments could step up to the plate to support the private sector. But have they done too good a job, becoming the source of all things to eagerly waiting firms, including banks, at the expense of self-reliance? What type of capitalism do we have if governments are omnipresent? As debts levels continue to grow, is equity the solution for “sunflower capitalism”?
Nonperforming loans are unfortunate consequences of an economic crisis, but their severity varies depending on the nature of the crisis and remedial responses. In Europe, as recovery kicks in, speculation abounds regarding the intensity of the inevitable NPL aftershock. Will it be a tsunami or a wave? What can be done to lessen its force?
Yemen, the victim of a conflict that has torn it apart from within since the Houthi rebels’ 2014 uprising, is teetering on the economic cliff. As the value of its currency plummets, this nation, heavily dependent on food exports, faces a combination of catastrophic circumstances, with more foreign aid possibly the only viable solution.
The recent riots in South Africa sparked by the imprisonment of the country’s former president, Jacob Zuma, left a path of property damage and lost lives. The root causes go much deeper than the ex-president’s arrest, and fixing the country’s underlying economic problems will be a complicated but essential process for the government.
One pleasant surprise of the pandemic has been the shortage of business bankruptcies, despite recurrent lockdowns that have drained their incomes. But is this rosy picture a cruel illusion to be removed as governments stop propping up small companies? Banks will soon find out if government life support has simply delayed the inevitable.
Emerging markets appeal to investors because of their unrealized potential. As a group, they have performed well, even during crises. The pandemic has influenced this investment opportunity by rendering some EM countries more promising than others. Careful examination and cautious selection of the likely best performers are recommended.