MEMBERSHIP

TODAY, MOST EVERY COMPANY NEEDS TO BE A technology company – meaning they must be tech-savvy and innovation-minded if they wish to stay competitive and remain relevant. And, if oil was the resource that fueled industrialization for many generations, then data is surely the new, must-have asset of our information economy. Sound, scrubbed and standardized data has become the cost of entry for doing business across most sectors, as well as serving as an important means of differentiation and competitive advantage.


Machine learning and generative Artificial Intelligence (AI) is turbo-charging what data can do. While an AI-powered future might feel some distance away, its transformative potential is top-of-mind across industries, with a new analysis from the McKinsey Global Institute estimating that generative AI could add the equivalent of $2.6–$4.4 trillion annually. By enabling large-scale data capture, mining and manipulation at speed, generative AI has introduced the potential to fundamentally reshape knowledge industries.

State Street’s position in the financial services industry places us at the convergence of technology and innovation, products and operations. As a highly regulated institution, State Street is able to leverage its 231-year history along with its size, scale and history of stewardship to bring early tech innovations such as blockchain and tokenization of financial assets to clients and the financial services industry writ large. Our role as a GSIB (global, systemically important bank) provides a unique vantage point from which to witness our current moment and the technology-led transformation of the global investment landscape that is currently underway. So, what are we observing at this critical moment in tech innovation? Given that data is the fuel for all AI activity, the opportunity AI presents today for the financial services industry points to the importance of companies first having in place a rigorous and trusted data transformation program. And research shows that firms that have a holistic data strategy in place are already enjoying meaningful benefits across various performance metrics.

A recently published State Street report, “ Capturing the Data Opportunity: Institutional Investors in the Age of AI,” examines the data opportunity in the age of AI for institutional investors worldwide. The first comprehensive study to quantify the data opportunity in economic terms, the report presents research based on a survey of more than 500 asset owners, asset managers, wealth managers, official institutions and insurers from around the world. It provides deep insights into where firms stand in their data transformation, the challenges they face and the tools they have at their disposal.

The survey results found that more than 80% of financial institutions surveyed rated the opportunity that comes from improved data management and usage as “medium,” “large,” or “transformational.” That said, the survey revealed a very surprising finding: while surveyed firms with a data strategy reported on average a 24% increase in customer satisfaction, a 21% increase in customer retention, a 19% increase in new client acquisition and a 19% increase in revenue growth, fully two-thirds of participating firms reported a lack of an overall data strategy, with asset owners lagging by financial institution categories surveyed. Our survey also pointed to where institutional investors expected AI to provide the most value in the next two to five years, namely:

It’s worth noting here that although it might feel like AI technology was born last year, given all the attention paid to ChatGPT and other popular chatbots, many AI applications have been around since the late 1950s. Commonplace examples familiar to everyone include face ID and image recognition, chatbots that mimic people in customer service text or recorded messages, and expert systems like self-driving vehicles and chess-playing computers.

State Street has been developing AI functionality for over five years and is home to hundreds of AI practitioners. Leveraging the promise of AI has contributed to our transformation efforts and has driven greater service quality, accuracy and speed. We have used machine learning to enhance or automate existing processes to reduce manual work and increase efficiencies in ways that unlock capacity for our employees to advance more strategic and higher impact work.

As a technology-led company, we are looking to AI as a means of accelerating our innovation agenda. We are considering carefully how AI can help enhance efficiency across the business, improve client experience, empower our employees with greater opportunities and drive a more streamlined and productive organization to benefit all our stakeholders. Among potential uses we are currently pursuing are ways to incorporate AI into expenses reporting (to auto-populate scanned submissions and flag outlier submissions), RFP process enhancement (to automate responses and generate tailored, segment-specific marketing material), inquiry management (to reduce manual effort) and document intelligence (to expedite extraction of key information and data).

As AI adoption continues to grow, how to implement this technology in a mindful manner has become as important as what to do with it. At State Street, our approach to responsible AI rests on the following four focus areas:

  1. ETHICS
    Ensuring fairness and avoiding bias through balanced representative samples for each target class and leveraging of diverse data labeling
  2. PRIVACY AND SECURITY
    Protecting data against security risks unique to AI use
  3. TRANSPARENCY, EXPLAINABILITY, MONITORING
    How AI systems are designed, what data they are trained on and how they are deployed and monitored. Also being transparent regarding the limitations of the technology and for what use-cases it is appropriate
  4. ACCOUNTABILITY
    Establishing clear lines of accountability, governance and controls.

An integral part of responsible AI is responsibility to our people. While it’s true that our industry is on the verge of a major shift, it is vital to remember that AI is still just a tool. Like the calculator, the computer or the internet before it, AI is an innovation that will only be as smart and capable as the people and teams that are putting the technology to work.

Large, publicly traded, global financial institutions have an obligation to serve shareholders and other stakeholders, including clients, employees, partners, vendors and the communities in which they live and work. Part of that responsibility takes the form of introducing new technology and innovations to investors in ways that help familiarize them to what these advances can do, and to thoughtfully integrate new technology into the broader financial services ecosystem.


Great interest exists across our industry today to use AI’s revolutionary technology to transform operating models and help investors make better-informed investment decisions. While we use AI to modernize and “future-proof” our own operating models, clients and other stakeholders are looking to us to thoughtfully integrate new technology into the financial services ecosystem and connect it to the broader institutional investor community. We do this work knowing that human expertise and insight, high-touch client engagement and personal relationships, and the kind of decision-making that comes with depth of experience remain irreplaceable.

In the rapidly evolving landscape of environmental stewardship within the tourism sector, we are seeing how technology and artificial intelligence are reshaping the industry’s approach to sustainable practices. It’s not just a trend; it’s a seismic shift in thinking to put safeguarding the natural world around us at the core of the industry’s DNA.

At the forefront of this transformation is Red Sea Global’s commitment to regenerative development through our tourism projects along the Red Sea – celebrated for its thriving coral reefs and abundant marine life. We have taken on the responsibility to be pioneers in regenerating the marine and terrestrial ecosystems in our care. 

We understand that effective, forward-thinking decisions about sustainable practices demand comprehensive data utilization. By harnessing the power of data, the industry gains insight into environmental impact, optimizes resource allocation, and cultivates sustainable practices. This approach fosters agility, responsiveness, and resilience in the face of dynamic environmental shifts.

Red Sea Global’s initiative to install 25,000 IoT devices and sensors across The Red Sea for environmental monitoring, and using AI technology to process all that data into actionable insights, is one example of how we’re integrating technology with the environment to help us enhance it over time. Another example is our passion about marine ecosystems, which lead us to launching the first-even seagrass transplanation program in the Red Sea to restore a variety of species at our Red Sea and Amaala destinations.

This integration of data and technology is fundamental to paving the way for a sustainable and responsible future. The commitment to environmental enhancement through technology and data-driven decision-making is paramount in shaping the industry’s trajectory. The tourism industry can’t settle for only maintaining the status quo, we must do more to give back and improve our destinations for future generations to enjoy.

Generational attitudes towards investing are evolving, influenced by diverse experiences. While Baby Boomers benefited from a traditional model of wealth accumulation through stable careers and benign markets, subsequent generations (Gen X, Millennials, Gen Z) have experienced a series of global upheavals that have shaped their investment perspectives.
From record levels of student debt to turbulent job markets, younger generations face obstacles in securing financial stability. Moreover, there is scepticism among younger investors that traditional assets will provide the returns required for the lifestyles they want.

Enter neo-brokers, heralding a digital revolution in investing. These platforms offer personalized and inclusive investment experiences that resonate with younger investors. From low-friction onboarding to fractional exposure to private assets, neo-brokers leverage digital alternatives like cryptocurrencies and thematic ETFs to cater to the preferences of younger investors.

The rise of digital frontier assets, facilitated by advancements in blockchain technology, also present new opportunities for asset creation and portfolio diversification. The tokenization of assets, characterized by programmability and flexibility, blurs the lines between traditional and digital investments, offering unprecedented levels of customization and the ability to control assets from a digital wallet.

As we increasingly move to a digitised world, we believe the future of investing lies in personalized portfolios that align with individuals’ values, interests, and daily lives. Portfolios become more than just vehicles for future financial accumulation—they become integral to daily living, offering forms of utility and personal relevance.
We call this “better living through investing”, where digital alternatives and tailored investment strategies meet the diverse needs of different generations. As the financial landscape continues to evolve, the portfolio of the future holds the promise of personalized, impactful, and technologically driven investment experiences that appeal to all ages.

Saudi Arabia is investing heavily in its tourism industry, shifting its focus beyond the pilgrimage sites of Mecca and Medina to its diverse natural landscapes, vibrant cities and growing list of UNESCO World Heritage Sites.

The government aims to create 1.6 million jobs in the industry and grow tourism’s share of GDP to 10 percent by 2030. When Vision 2030 was announced in 2016, the sector represented just 3 percent of GDP, and has already grown to 7 percent, which is promising.

As tourism continues to grow, both in Saudi Arabia and around the world, so too does its energy consumption, driven by a need to fuel hotels, resorts, experiences and mobility. In fact, Green House Gas impact of tourism is approximately 8-11%, of which aviation contributes some 17%. Additionally, there is a tendency for visitors to use and consume more resources than local people, especially in poorer areas of the world.

It is vital, therefore, that tourism accelerates its transition to renewable energy. By embracing solar and other clean energy sources, the industry could significantly reduce the world’s carbon footprint and help to combat climate change.

It could also attract even more tourists. The Expedia Sustainable Travel Survey showed that 90% of consumers now look for sustainable travel options and are willing to pay an average of 38% more to ensure their experiences do not negatively impact the planet. Consumer surveys in other areas tell a similar story and are powerful incentives to drive the transition.

Putting renewable energy at the heart of tourism strategies is essential, but it is often complex to deliver. Our experience at Red Sea Global has produced several learnings that provide value for any executive tasked with driving a green energy transformation and show that it is always possible to build a future driven by clean power.

A COMPELLING INVESTMENT OPPORTUNITY

Delivering renewable energy requires significant investment in technology, but even high upfront costs pale in comparison to the financial and environmental rewards to be reaped in the long term.

Across the world, the signs are positive. In the US alone, private investment in renewables hit USD 10 billion in 2022, according to Deloitte. A willingness to invest in technological infrastructure should be embedded at the very beginning of any development process and can help to attract partners and investors.

We saw firsthand the positive effect of this with a consortium led by ACWA Power bringing Foreign Direct Investment from the UK’s Standard Chartered Bank and China’s Silk Road Fund for the Utilities PPP agreement set to power The Red Sea destination with sunlight.

A similar partnership was concluded in September this year, when a multi-utilities concession agreement was signed for Amaala with EDF (Électricité de France) and Masdar, which will deliver new eco infrastructure facility will save nearly half a million tons of CO2 emissions every year.

Moreover, our historic Financial Close on the first ever Riyal-dominated Green Financing for the development of Phase One of our destination, The Red Sea. This financing arrangement was valued at SAR 14.12 billion (USD 3.76 billion).

Attracting these partnerships and support early on, ensured that from the very start clean energy would fuel both our vision and our flagship destinations, The Red Sea and Amaala, with the former set to become the world’s largest off-grid tourism destination powered by renewable energy.

Across our destinations, everything will be powered by clean energy, even the electric vehicles within our smart mobility network covering land and sea, with ambitions to power our seaplanes with electricity too. At The Red Sea, our battery storage facility – the world’s largest – will store up to 1,200MWh of power and enable us to operate fully off-grid, powered by sunlight day and night.

Our journey is just starting, but we are proud of having built renewable power into our development from the ground up. That doesn’t mean that other businesses must start from scratch. What matters isn’t necessarily the size of the investment, but the ambition, creativity, and plan behind it. Drawing on the natural attributes of a business’ location represents a huge step towards sustainability.

For a destination spread across the sun-soaked dunes and coastline of Saudi Arabia, that means investing in solar power. We have installed 760,000 photovoltaic panels across five solar farms to power The Red Sea renewably.

CROSS-INDUSTRY PARTNERSHIPS

Finding the right solution for every unique development could also involve working with expert partners. This is true of developments across all industries, but again the tourism sector shows one way forward.

For example, travel associations across Africa have partnered with a range of international universities, including the University of Brighton in the UK and the University of Ghana, as well as Africa Tourism Partners in South Africa, to encourage youth involvement in sustainable tourism initiatives. This has led to the launch of a new app in South Africa that takes users on digital tours and only displays ‘green’ businesses: encouraging knowledge-sharing, innovation, and entrepreneurship on renewable energy specifically.

Sharing best practices and requiring green standards from partners and suppliers is also vital. At Red Sea Global, cross-industry collaboration is fundamental to our vision of sustainable and responsible development. We select partners with like-minded values and the brands we have brought on board share our ambition to do better by people and planet.

RENEWING TO REGENERATE

A commitment to renewable energy should be at the heart of any business strategy and its operations. Building the infrastructure from the start is ideal, but the next best thing is starting from where you are, and making steady, incremental changes.

By investing in technology and partnering with like-minded organizations, companies can maximize their business potential without harming the planet. They can also use their position to catalyze and inspire their customers to widen the impact even more.

This, in turn, will help revive the fortunes of the natural and human ecosystems in these areas, maintaining and even improving them for future generations to enjoy.

INTRODUCTION / ABSTRACT:

Given the scale of the net zero challenge, banks and financial institutions, in particular, are in a position to play a critical role in accelerating Acheter cialis en ligne france the transition to a low carbon economy by financing activities aligned with the Paris Agreement. In addition, the financial sector has a vital role to play, especially in catalysing and mobilising capital to where it matters most, whether by creating new customised financing solutions that help with achieving environmental objectives or through thought leadership.

ISSUE AT STAKE:

It is no longer surprising that climate change is humanity’s greatest threat, especially in emerging and developing markets facing some of the most significant risks. If we are to deliver on the Paris Agreement and limit global warming to below 1.5°C by 2050 – the world must act now.

We have seen how the COVID-19 crisis was a wake-up call on the threats triggered by humanity’s impact on nature and the necessity to integrate these threats into business risk management processes. This is why, today, governments and industry movers are paying increased attention to the risks of inaction on climate change.

In Africa and the Middle East, climate change is especially critical as the region is amongst the most vulnerable regions to global warming, and most in need of funding to reduce its reliance on fossil fuels. We must ensure that the rapid ongoing economic development of our region can continue by tapping sources of clean energy such gas and solar, which the region has in abundance. This is why sustainable finance is crucial to delivering a green transition and supporting adaptation to protect against the effects of climate change that are already being felt.

SOLUTIONS:

A significant investment gap must be closed to accelerate the pace of transition in these markets. Emerging markets (of which Africa represents a large proportion) need to invest an additional USD94.8 trillion – a sum higher than annual global GDP – to transition to net zero to meet long-term global warming targets. As a matter of fact Standard Chartered’s recently issued report, the Adaptation Economy, investigates the need for climate adaptation investment in 10 markets – including five markets in Africa and the Middle East. It reveals that without investing a minimum of USD30 billion in adaptation by 2030, these markets could face projected damages and lost GDP growth of USD377 billion: over 12 times that amount. If the countries were to fund it themselves, it could reduce household consumption by an estimated 5% p.a.

This would be an especially unfair burden, given the region’s relatively low contribution to global emissions. On the other hand, if funded by public and private capital from developed countries, GDP could be higher by 3.1% in emerging markets and 2% worldwide. A dollar invested can have a significantly different impact depending on where and how it is deployed. It is with clients in emerging and developing markets that sustainable investment can have the most significant impact.

Additionally, the financial sector can be instrumental in financing developing countries’ ability to deploy sustainable solutions. Innovative financing models, such as blended finance, which can be utilised as crucial vehicles to incentivise and catalyse the private sector contribution needed to bridge this funding gap. Blended finance allows private sector capital to be funnelled towards projects of societal benefit. It also offers a valuable opportunity to attract philanthropic funds to participate in these structures. Short-term financing, although necessary, will not suffice entirely. Banks and Financial Institutions must also integrate sustainability considerations into their financing strategies and play a hands-on role in facilitating financing for sustainable projects.

At Standard Chartered, we are committed to supporting the growth of the sustainable finance market. We have announced ambitious new targets to reach net zero carbon emissions from our financing activities by 2050, including committing to interim 2030 targets for the most carbon intensive sectors. The Group’s approach is based on the best available data and aligns with the International Energy Agency’s Net Zero Emissions by 2050 scenario (NZE).

CONCLUSION / CALL TO ACTION:

To mitigate the climate crisis and minimise its threats to the world, we must be just, leaving no nation, region or community behind and, despite the hurdles, action needs to be swift. To meet the 2050 goal, we must act now and work together: companies, consumers, governments, regulators and the finance industry must collaborate to develop sustainable solutions and provide financing to speed up the adaptation of these solutions.

Membership
chevron-down