With just six months until GDPR hits Europe hard, Finance Monthly has heard from Nigel Edwards, SVP of Insurance Europe & Head of UK at EXL Service, on the threat GDPR poses to emerging technologies, fintech, regtech and so forth.
For insurers, the General Data Protection Regulation (GDPR) promises to be a difficult hurdle to overcome without the right strategic approach and expertise. Businesses in the insurance industry are some of the most vulnerable to being caught wrong-footed by the incoming GDPR rules because of the data rich environment they naturally operate in. The widespread use of third party administrators means that data flows can be difficult to control in a way that keeps firms compliant with the new regulation. Another question that is high up on the agenda for industry decision-makers is the effect that GDPR will have on future technology adoption.
In recent years, the insurance sector has undergone an unparalleled degree of technological disruption. Telematics technology, for example, has dramatically changed how insurers price policies by gathering data on individuals’ driving habits and behaviour. The use of social media analytics is making the claims process more straight forward and the use of technologies such as geo-location is creating better conditions for underwriters to evaluate pools of risk. One thing that these technologies have in common is their reliance on large amounts of collected customer data to function effectively. Will these techniques be hamstrung by the demands placed on companies under the GDPR regime?
Assessing the data ecosystem
For the most part, GDPR will not force insurers to curtail technology adoption, so long as precautionary steps are taken to better manage the data inputs and outputs on which new technologies rely. All of the existing InsurTech solutions that are on the market or close to arriving will remain options for brokers and underwriters to incorporate into their strategic spend - but only if the underlying infrastructure is in place to enable the rigorous management of client data.
Perhaps one of the most onerous demands placed on businesses due to GDPR is the so-called ‘right to be forgotten,’ which will grant EU residents the right in some places to request a full removal of their personal details from any company’s systems. For many insurance firms, of which a large proportion will have been trading since the start of the age of digitisation, large caches of over 30 years’ worth of client data have been accumulated. This is data which may not be in a single standardised format and spread across siloes in multiple locations – posing a considerable challenge when it comes to compliance to right to be forgotten guidelines.
Aligning with a long-term strategy
For new technologies to remain viable, steps must be taken to ensure that the core infrastructure upon which data is stored and transferred is responsive to frequent requests for deletion or transfer. This may result in the overhaul of legacy IT systems which are not fit for purpose and a more selective retention of customer information, as opposed to a policy which swallows up large pools of data indiscriminately.
Whilst this may entail some capital outlay, the decision to update legacy systems should be taken in the context of a new stance towards regulatory compliance. The GDPR is just one regulatory hurdle that must be overcome by insurers next year, but it can serve as a starting block for a more agile approach to data handling – especially for firms who have historically neglected the task. In the long term, laying the foundations for new technology adoption will not only facilitate better business agility but also a more intuitive approach when interacting with clients and their data.
While Apple reportedly struggles to get the iPhone X off its feet and into the market, stumbling on obstacles it knew would come about, such as developing proper facial recognition and delivering on its aggressive production schedule, global stock markets are fluctuating on the back of several factors, from the disastrous hurricanes to bad European weather and Brexit talk. Black Friday, Cyber Monday and Christmas are still ahead of us however.
Here Lee Wild, Head of Equity Strategy at Interactive Investor, provides an overview of the current global stock economy, as US markets and Japan’s Nikkei put London into perspective:
“The mood on many global stock markets might well be described as exuberant, but not irrational. Yes, it took less than six weeks for the Dow Jones to add the last 1,000 points to top 23,000, but latest US company quarterly earnings are beating expectations - look at IBM's fightback overnight - and president Trump's tax plans could still deliver a boost to the bottom line.
“Japan's Nikkei has just hit a two-decade high, but exports there have risen for a tenth straight month amid demand for Japanese technology.
“That puts what's happening in London into perspective. Investors are right to be concerned about a recent spate of high-profile profit warnings, and Brexit presents its own set of special circumstances, but many companies are delivering strong results and valuations are not excessive.
“Of course, the market will correct at some point. Chatter has picked up in recent weeks following profit warnings from blue-chips GKN, Mondi, ConvaTec and Merlin, but this bunch are not a fair indicator of the market as a whole.
“Unilever's highly-rated shares have come off the boil as bad weather affected sales of its Magnum and Ben & Jerry's ice creams in Europe during the third-quarter, while hurricanes in Florida and Texas held back the Americas. However, underlying sales in emerging markets still grew 6.3% and volumes were up. With just a few months of the financial year left, annual group underlying sales are still expected to grow 3-5% and profit margins improve.
“Don't be surprised to see a pullback between now and Christmas in some markets which have raced ahead this year, but it's unlikely to be the crash everyone is predicting. While inflation is currently outstripping wages growth, the UK unemployment rate is at its lowest since 1975 and any small rise in interest rates will not pull the rug from under this market.”
Following Monarch Airlines’ recent closure 110,000 passengers were left overseas according to reports. The overall cost of returning these passengers was reported last week at £60 million. In addition, nearly 1,900 jobs were lost as a consequence of Monarch ceasing trade, and the collapse of this 50-year-old airline is the largest ever for a UK airline.
So why did Monarch drop to administration? Terror attacks in Tunisia and Egypt, increased competition and the weak pound have all been reasons pinned to the airline’s demise.
This week Finance Monthly asked experts in the aviation industry and market analysts about their thoughts on the reasons behind the collapse, and the overall impact this ruin will have on markets, customers, travel and other airlines.
Mike Smith, Company Debt:
The collapse of Monarch airlines to someone born in the fifties will be a sad day as it was a very popular carrier in the 70’s and 80’s. If you went to Lanzarote you probably used Monarch at some point. With the advance of low cost airlines, the pressure was always on and with paper thin profit margins any business error is punished severely.
As far as customers are concerned if they booked the holiday themselves and paid by credit card they will be covered under section 75 of the Consumer Credit Act. In effect the ‘card’ company is as liable as Monarch provided the flight cost more than £100. If a holiday was booked online through an ATOL registered travel agent they will be protected there too. Typically, you are covered for flight, car hire and hotel accommodation.
So, in the main the bulk of travellers will be compensated. A question I would pose is, what does it say about us as a society when a company such as Ryan Air apparently thrives, whilst Monarch bites the dust. I’m sure there are some who will say that it was a failing airline and an ‘accident waiting to happen’ and there is some truth in that. Personally, I will be sad to say it disappear from the radar.
Richard Morris, Partner, Whistlejacket:
£60 million for 110,000 rescue flights is a considerable sum of money, and it raises a few questions. At an average cost of £550 per repatriation flight, they are budgeting for an awful lot of complimentary peanuts. I’d guess a lot of free champagne will be served in the boardrooms of the other airlines who have been asked to step into the breach and bring everyone home.
However, there’s a great brand opportunity here for all the ‘rescue’ airlines. A grand gesture at this point, reducing some or even all of the cost, would buy them a lot of brownie points, with passengers, government and the wider tax paying public, and it won’t cost them anything like £60m to do it.
Before the Government (or the airlines) start shelling out, the insurance companies and credit card companies will be asked to bear much of the cost. Plus, that £60m is the gross cost to the government, therefore net costs to airlines will presumably be considerably cheaper.
Social content opportunities will abound as the ‘rescue flights’ bring folk home and grateful passengers give their thanks. It’s hardly airlifting people from a war zone, but being trapped abroad with no ticket home is still an unsettling experience. My guess is, passengers will be putting their names up in lights as a result.
It will take speed, creative thinking and agility, but making a big gesture now on the costs of this operation will pay dividends to the brands that offer to underwrite the rescue. In a UK airline industry beset by British Airways IT crashes and strikes, Ryanair flight cancellations and now Monarch falling into receivership, there’s a gaping good news void begging for a right-thinking brand to fill it.
Quick someone. Put your hand up first.
Alex Avery, MD, Pragma’s Airports, Travel and Commercial Spaces:
Causes for Monarch’s collapse
Looking at the causes of Monarch’s collapse, there’s a few factors going, not least a change in the markets it serves. The political instability in many of its key markets, such as Egypt and Tunisia, has mean it had to scale back flights to these destinations and compete more directly with short-haul European carriers, which is a very competitive market.
The exchange rate is another factor that’s impacted airlines. For Monarch, the majority of revenue is generated in pounds whilst the cost of fuel and aircraft leasing is paid out in dollars. The pound depreciating has impacted Monarch substantially.
Given the pressures in the market, it’s possible other airlines will follow Monarch’s collapse. This means we’ll be left with a few of the large legacy players, like BA and Lufthansa - who are subsidised by long-haul – and the dominant low-cost leaders, dominating what is a more and more challenging market to operate in.
Impact on market
There’s a lot of movement in low-cost at the moment - mergers and a move towards strategic partnerships. Traditional low-cost players like Norwegian, are growing very fast adding long-haul and transatlantic into the mix, and developing partnerships with other low-cost carriers. The easyJet and West Jet venture has proved successful, enabling travellers to buy a single ticket that connects a partner carrier to their long-haul flight. Low-cost players are now breaking into the hub and spoke model which has previously been the domain of the bigger players.
How businesses can manage this
Airlines have had to contend with the decline in consumer loyalty; as the division between traditional players and new entrants closes, so the polarisation of customers has narrowed. With less distinction between propositions, it’s trickier to retain customers, who in turn opt for convenience and cost and are pretty much agnostic to airlines. The onus is now on carriers to build loyalty through enhanced propositions, and expanding revenue growth through add-ons, such as car parking and hotel and transport bookings.
It’s understandable that the fall-out of the Monarch crisis will have made some businesses jittery about how their people travel. We’d expect to see a short-term uptick in legacy carriers, as companies opt for trusted, dependable options. We have short memories, though, and pretty quickly, cost will drive people back to low-cost.
We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!
Immediate market reaction to the illegal separatist referendum in Catalonia is likely to be muted – but what happens on the aftermath will be crucial, affirms the boss of one of the world’s largest independent financial services organisations.
Nigel Green, the founder and CEO of deVere Group, comments as Spanish police in riot gear moved in to prevent the ballot called by Catalonia’s regional government, but which Spain’s Constitutional Court banned from taking place.
Mr Green observes: “What is striking is how this chaos in Catalonia has been largely ignored to date by global investors, who last week appeared more preoccupied with Trump's proposed tax cuts and Angela Merkel's reduced political strength in the Reichstag.
“When global markets open Monday immediate reaction is likely to be muted too. The Spanish stock market is relatively small. The country represents just 5 per cent of the MSCI Europe index, compared to 28 per cent for the UK, 15 per cent for France and 14 per cent for Germany.
“Whilst it is a huge existential crisis for Spain and is a big geopolitical event, regional tensions such as these, rarely have the necessary might to considerably affect global trading. International commerce is stronger than all the sabre-rattling.
“It is unlikely that there will be immediate major portfolio rebalancing as a direct response to the events in Catalonia.”
He continues: “However, what happens next will be crucial for global investors. Neither Barcelona nor Madrid will back down on this issue. And now the genie of illegality is out of the bottle, there is little incentive for those supporting independence to put it back. Particularly if they can claim a majority of voters back their cause.
“Should the Catalans take further illegal action after the vote, and perhaps encourage civil disobedience, the uncertainty would create significant volatility and the outlook for the EU region's economy would darken and for Spain also. “The Catalan separatists’ ongoing campaign would also likely trigger a major destabilising effect as it would encourage other areas to vote for independence from the EU. Of course, against this backdrop, we could then expect the Euro would come under considerable pressure.”
Mr Green concludes: “Despite global financial markets largely shrugging off the events in Catalonia so far, it is important that investors keep their eyes on all major political events, including this one as how it plays out in the aftermath will be what matters.
“Investors must remain fully diversified across asset classes, sectors and regions, in order to safeguard and maximise their portfolios and to ensure they remain on track to achieve their long-term financial objectives.”
(Source: deVere Group)
Card fraud has increased 19% year on year, according to The Nilson Report, accounting for losses of around $16.3 billion, in 2015. France has seen an 8.9% increase in card fraud and the US, which has the largest fraud/loss ratio, currently accounts for 47.3% of the world’s payment card fraud losses.
The threat to banking is at least in part due to the explosion of data, according to Sopra Banking. It is expected that by 2020 we will be creating more than 44 times the data we created in 2009 - and that fraud will have resulted in losses of $35,4 billion. The storage and transmission of so much offers opportunities for fraud and cybercrime as well as being part of the problem.
The Evolution of Fraud Management
Ensuring that customer protection is paramount, whilst also preventing normal transactions from being interrupted is a fine balancing act for banks. The evolution in handling fraud management can be conducted in a more intelligent manner using big data - or ‘dataprints’.
Alike fingerprints, dataprints give us unique information about a given person, action, place and point in time. Analysing these accurate identifications (transactions, devices, usual patterns) through Artificial Intelligence, provides a warning sign of fraud for banks and customers.
Analyst firm McKinsey in their look at disruptive technologies, predict that neural networks will utilize big data to enable “knowledge work automation”. Learning and applying new and more refined algorithms improves the process’s sophistication and capabilities, making it easier to make data-driven decisions to detect fraud.
It’s all very well to say that data and technology can help prevent fraud - but what does this look like in practice, and how can banks achieve this?
It is necessary to devise ways of collecting and storing big data in a manner that allows you to take full advantage of it when you need it - but also keep it secure.
Normally, data is created and held in silos, in a division/department/business area/type manner and because of this delocalization, it ends up being difficult to collate, distribute and utilize in any sort of global way. Centralizing the collection and management of data means that you can more easily access the data and cross-reference it.
A July 2014 survey of bank respondents by The Economist, found that half had applied centralized analytics to big data management through artificial intelligence software. In turn, these banks had the most holistic approach to risk mitigation and fraud prevention and enhanced their security as a result. It is something the industry needs in order to fight fraud in 2017 and onwards.
The centralization of data and in turn creation of intelligent big data will enable banks to not only mitigate fraud, but service their audience better. The implementation of big data centralization is as much a process as a system and requires synthesis of legal and regulatory compliance, a security and privacy focus, strong management and the best technology.
Big data means information from multiple and often highly disparate sources. One of the new challenges for data collection have arrived in the form of social media platforms like Facebook and LinkedIn. However, external data tracking, can be an extremely useful tool in the fight against fraud.
Analyst firm, McKinsey has shown that the use of external data, such as social media activities, can have up to 35% improvement in areas such as risk mitigation, as well as allowing the development of better insights into customer behaviour and ultimately in fraud behaviour analysis. One of the reasons for lack of uptake in this area is the difficulty of retrieval of such data. Although this is certainly achievable in terms of technology through the use of social graph APIs. However, the consent and release of this data is often a legal minefield and customer privacy worries and media scares themselves can be a hurdle to jump.
Going forward into an era of instant payments, external data tracking that is conducted in a privacy enhanced manner will become even more important. The ability to keep track of these payments, whilst ensuring personal data is obfuscated, all in real-time is a challenging but ultimately empowering new tool for the industry.
Big data is revolutionizing the process of ‘Know Your Customer’ or KYC. As KYC becomes KYCd, or Know Your Customer’s data, a more accurate and in-depth approach to consumer understanding can be rewarded by more impactful anti-money laundering (AML) and other types of fraud detection.
Being able to model patterns of behaviour by using predictions based on internal, external and social big data is transforming banking. It not only gives you insight into normal behaviour, but that baseline then allows comparison and identication of patterns, similarities and differences - and fraud. Technologies such as geolocation, can be added to the arsenal, so those incidents when a customer is interrupted from making a legitimate purchase are greatly reduced, whilst real crime is detected.
However, it can also offer challenges in terms of security and privacy. Customers are now more informed about privacy considerations and have become less happy about sharing their personal data with any company, not just a bank. Sopra Banking Software report found that 80% of customers would be willing to share their personal data, as long as they did so using a consented, ‘opt-in’, approach and in doing so they were incentivized by better rates and so on.
New EU privacy and data protection laws, which are an adaptation of the Data Protection EU Directive 95/46/EC, are due to be finalized this year. The new data privacy laws will be more restrictive and will have focus on, for example, data stored in the Cloud. This requires a Privacy by Design (PbD) approach when creating Cloud based systems, especially those that store, transmit and transact data. Handling these more extensive regulations needs a more rethink in the approach to security and privacy.
Conclusion
Although the collection of data, how to centralize and manage it, how to make it safe and how best to analyse and make predictions from it are all challenges, they also offer huge potential. The digital revolution that has brought us big data can also bring us big banking.
(Source: Sopra Banking)
Total, the French supermajor, has now acquired Maersk Oil, a Danish oil and gas firm, becoming the second biggest North Sea operator.
The $7.45 billion (£6 billion) deal is the biggest North sea deal in the last ten years, and stands out given most oil and gas firms are currently retreating from UK waters.
According to the Telegraph, Patrick Pouyanne, Total’s chief executive and chairman, described the takeover as an “exceptional opportunity” for Total to gain high quality assets that fit with the group’s core regions.
Rebecca O'Keeffe, Head of Investment at Interactive Investor comments for Finance Monthly: “The deal announced this morning between Total and Maersk Oil and completion of the Rosneft and Essar Oil deal confirm how Big Oil is having to look to consolidation to achieve access to additional capacity outside the US, having failed to invest in new production over the past few years.
"The collapse in oil prices from over $100 per barrel in May 2014 to under $30 in January 2016 forced oil companies to cut their spending to the bone and these decisions dramatically reduced future production. However, with a moderate recovery in oil prices and a significant improvement in cash flows, oil majors are on the prowl, looking to buy assets to improve production levels and deliver excess returns and profits.”
Analytic software firm FICO recently released an interactive map of European card fraud, which shows that card fraud losses for 19 European countries hit approximately €1.8 billion, a new high. The UK saw the highest losses at £618 million, a 9% rise over 2015, topping the previous peak in card fraud, set in 2008 after the introduction of chip and PIN.
Card not present (CNP) fraud has gone from 50% of gross fraud losses in 2008 to 70% in 2016. Ten countries saw an increase in fraud losses, while eight saw a decrease. The map is based on data from Euromonitor International, with additional information from the UK Cards Association.
“The growth in online spending and CNP fraud brings new challenges for banks and retailers, as criminals thwarted by chip & PIN have moved to a less risky channel,” said Martin Warwick, senior consultant for fraud at FICO. “Hiding amongst the growth in online purchases is great from a criminal point of view, but finding and stopping fraudulent transactions just gets tougher. Spotting the ‘needle in a haystack’ requires new behavioural analytics and artificial intelligence, combined with enhanced information from outside the traditional data contained within a purchase.”
In 2015 the UK’s card fraud rise was the highest in Europe, but in 2016 two countries saw higher rises — Poland (+10%) and Sweden (+18%). The UK’s rise from 2015 to 2016 was just half of that from 2014 to 2015.
France had the highest basis points at 8.9 (ratio of fraud losses to sales) among the 19 European countries, compared to 7 basis points for the UK. However, French card spending is half that in UK, making UK losses much greater. Together, the UK and France account for 73% of the total loses among the 19 countries in 2016, followed by Germany, Spain, Russia, Italy and Sweden.
Fighting Back with AI
FICO is working with banks to advance the use of machine learning and artificial intelligence to identify fraud faster. The key, Warwick says, is to spot anomalies without putting friction into the transaction.
“It’s no longer just about identifying patterns that are unusual for the customer — we’re also looking at anomalies at the mobile device, IP address and merchant level,” said Scott Zoldi, FICO chief analytics officer. “All of these have ‘behaviors’ just as individuals do, and we’re using our 25 years of experience in artificial intelligence to identify those.”
Mobile analytics is an important area here, said Zoldi, who developed or co-developed half of the company’s 70 patents in artificial intelligence and machine learning. “FICO has developed archetype analytics that taps into the rich source of mobile context such as advanced geolocation, allowing us to use that information in FICO Falcon Fraud manager to make real-time decisions during a transaction,” Zoldi said. “These analytics draw on our patented work with customer behaviour archetypes.”
Banks and card issuers are also beginning to step up their use of real-time customer communication. “Contacting consumers early using automated two-way SMS is a key solution to making sure the transactions are valid,” Warwick said. “If this is fully automated and tied into the fraud solution — as it is with FICO Customer Communication Services and the FICO Falcon Platform — then cases can be closed without human intervention and consumers can be allowed to continue to spend when and where they want.”
(Source: FICO)
Christopher Schorling, a partner in Bain's Technology practice, shares why Europe's focus on quality and security in a complex regulatory environment may be an advantage in the future.
The Ethos Group, a leading provider of Unified Communications in the UK and Europe, is launching a brand new mobile phone service. Matt Hill, Managing Director of the Voice and Data division at Ethos, speaks to Finance Monthly about this brand new product, how it fits in with Ethos’ current product and solution portfolio and why your business should invest in it.
We’ve all been there, on the phone to a customer whilst driving on the open road or sat speeding past the English countryside on a train when suddenly you lose signal, and your connection to the customer.
Mobile phone network coverage in the UK is a patchwork of different operators, running their networks on different masts. The result is that in often less populated areas one mobile running on one network may have a good signal, while another mobile on a different network may have none.
Over a fifth of the UK has partial or non-existent mobile coverage, where one or more of the carrier networks can’t deliver adequate connectivity. These areas are called “not-spots” and they cost the UK economy dearly.
But what does poor and patchy coverage mean for financial organisations? In 2015, the FCA set rules and regulations obliging financial firms to retain records of specific telephone conversations for at least six months. When you consider that two-thirds of businesses now use remote workers, losing signal whilst travelling through these “not-spots” make it increasingly difficult for these financial firms to comply with these regulations on their mobile devices whilst remotely working. The loss to UK plc is in the tens of millions and as businesses become ever more dependent on mobile data and communications, the loss escalates.
Thankfully, there is a solution. Multi-Net offers businesses the ability to unlock their mobile fleet by allowing a business mobile to roam carrier networks by switching the device between each network as the signal strength varies. This gives businesses the best possible network coverage across the UK and helps them to avoid the financial, and compliance, liability that not-spots represent.
In addition, Multi-Net will converge with fixed-line telephony systems and in the converged future of telephony, all the feature functionality of a fixed-line handset will be on a mobile device – and vice versa. This means that features that are traditionally aligned with fixed-line systems, such as call recording, will be available to mobile devices giving businesses greater control of their entire telephony network, regardless of the device.
With this, you will be able to record inbound or outbound calls for compliance, customer service or audit purposes. This feature allows secure online access to file storage and retrieval of call details. This means that financial organisations can comply with FCA’s regulations, no matter where your employees are.
It is hugely important that businesses partner with providers, like Ethos, to get ahead of the competition. Indeed, there are powerful developments in mobile already coming to the market that can deliver huge benefits to financial organisations. Multi-Net and Converged mobile telephony will build on these capabilities and drive businesses into the future. Companies that engage with the providers, like Ethos, looking to offer these solutions will be best placed to reap the rewards of game-changing technological advancement.
Want to find out more? Join Ethos at St. George’s Park, Burton-upon-Trent on Thursday 11th May, 10am-4pm.
Email marketing@ethos.co.uk to register.
JLL has launched ‘More than the last mile’, a research report which examines how smarter logistics will help shape cities in the future. Commenting on JLL’s report, Andy Harding, lead director of JLL’s Industrial & Logistics Group, said: “Spurred by the growth of e-commerce and demand for last-mile fulfilment facilities, there has been increasing interest in urban logistics among property developers and investors. However, this is only a part of the story, as the issues associated with logistics in cities are much wider than servicing e-commerce growth. Cities present many challenges but also significant opportunities for real estate in the future. We believe that environmental and efficiency challenges will transform logistics operations in Europe’s major cities.”
Key JLL research highlights include:
Jon Sleeman, JLL’s head of EMEA Industrial & Logistics Research, added: “From a property market perspective, city or urban logistics buildings are often considered a separate market segment, distinct from ‘big box’ logistics properties, that are mainly clustered at Europe’s major gateways (seaports and airports), along its strategic transport corridors and around its major cities. This segmentation may be valid from a property market viewpoint, but these different types of property are often part of the same supply chains. This being the case, to understand potential opportunities for change in city logistics, we need to take a wider supply chain perspective.”
(Source: JLL)
Eventbrite, the world's leading ticketing and event technology platform which powers more than two million events each year, has acquired Ticketscript, one of Europe's largest self-service ticketing providers. The acquisition positions Eventbrite as Europe's third largest ticketing platform, and greatly expands the company's global prominence as a leading live music event technology partner, especially in clubs and live show venues.
In 2016 alone, Ticketscript and Eventbrite's combined European operations processed more than 35 million tickets worth over EUR500 million for nearly a million events.
Following the acquisition, around a quarter (23%) of Eventbrite's global employees will work in Europe.
Ticketscript, founded in 2006, is headquartered in Amsterdam and is active in five European countries: the UK, Germany, the Netherlands, Spain and Belgium.
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Frans Jonker, CEO of Ticketscript, who will join Eventbrite as GM for continental Europe, said: "We have been building significant market presence in Europe for ten years, with a focus on self-service ticketing for music events. We share Eventbrite's passion for allowing event organisers to control their event marketing and ticketing, whilst retaining their end customer data. Joining forces with Eventbrite, the global innovation leader in event technology, will no doubt help further accelerate the digital transformation of the European live experience industry."
Eventbrite processed 150 million tickets for more than 600,000 event organisers in 180 countries last year. Founded in San Francisco in 2006, Eventbrite opened its first international presence in London in 2011, and maintains offices in eight countries on four continents. The company's other European operations are in Ireland, Germany, and most recently the Netherlands.
Julia Hartz, CEO of Eventbrite, said: "This acquisition supercharges Eventbrite's footprint in Europe and brings ten additional years of traction in the music space and experience in European markets to our business. It perfectly aligns with our strategic vision to become the world's leading marketplace for live experiences, and adds significant assets and technical power to our platform. We are looking forward to this new partnership combining the best solutions from both companies, and bringing them to our customers around the world."
(Source: Eventbrite)
2016 has been quite a year for global property markets. China’s slowdown, the impeachment of Brazil’s president, the Brexit referendum in the UK and the US presidential election have all contributed to a rather tumultuous year. Will property markets fare any better in 2017? And where precisely are the hotspots that bear watching as the new year unfolds? Ray Withers, CEO of Property Frontiers reveals all…
UK – era of the staycation
In 2009, during the height of the recession, UK residents made 15.5% fewer overseas trips and 17% more domestic trips. Since then British holidays are still gaining in popularity: the number of domestic trips in 2015 was up by 11% on the previous year. The Brexit referendum’s repercussions may well change how we experience summers to come. This is the new era of the staycation.
While residential rental yields are likely to remain strong (outside of London), with so many unknowns house price changes remain tricky to forecast. For UK property investing in 2017, we believe that holiday homes, coastal cottages, and hotels will be popular with investors looking for a favourable stamp duty environment, high yields and insulation from market uncertainty. To maximise returns, look for regions with natural or cultural appeal, unflagging visitor numbers, and an undersupply on the hospitality market.
UK – the hangman loosens the noose on landlords
Philip Hammond’s 1994 election material slipped in a humdinger: ‘hanging for premeditated murder.’ The question is: when it comes to fiscal policy impacting landlords, will the new Chancellor play the hangman or the handyman?
With rock bottom mortgage rates and rent increases of 19% forecast for the next five years, it is still a good time to be a landlord. The lack of supply on the market could well spell a good opportunity for investors. University towns like Bristol and Cambridge and secondary cities like Liverpool, Manchester and Sheffield should remain on the radar for strong yields next year.
Europe – secondary cities withstand shaky politics
Europe’s fractious politics will have a big year in 2017. For an early indication of how those decisions might affect property markets, look to Italy and Austria in the aftermath of their December 2016 votes. The defeat of Renzi’s constitutional referendum in Italy, for example, could cause problems for struggling banks and infect the wider economy, including impacting mortgage lending.
The victory of the liberal over the far-right candidate in Austria’s presidential election, however, favoured stability and European integration. Given that Vienna is unlikely to end its seven-year streak atop Mercer’s global quality of living ranking and its housing market is just 20% owner occupied, the result may well safeguard the city’s growing reputation as a buy-to-let hotspot.
Other cities we think merit attention for high yields in 2017 include Lisbon (thanks to tech clusters and the historic centre), Utrecht (enjoying the Netherlands’ continent-beating 6.57% yields but without Amsterdam’s bubbly prices), and Barcelona (still down on its peak, with growing business appeal).
Europe – Brexit’s beneficiaries?
When (if?) Britain triggers Article 50 in 2017, will we see bankers transfer en masse from London to Amsterdam and startups relocate from Manchester to Hamburg? While large scale migrations are unlikely, the pressure will be on for British cities to reassert their global appeal if the property market is to bounce along at 8% growth again in 2017.
European cities will be putting up a strong fight, and battling to skim off what talent they can. Frankfurt and Paris will make particularly aggressive bids, but they will need to need to drastically improve their supply of office space if they are to become truly viable alternatives.
We may see a new trend for Brits doubling up their holiday or retirement homes as tickets to visa-free travel. Spain and Portugal could see a steep upswing in applications for their ‘golden visas.’
North America – punching above its weight?
The US rocketed past the UK as the stage for the biggest political upset of 2016 with the election of Donald Trump. The S&P Case-Shiller home price index ends the year at a new record peak and such punchy growth will likely continue into 2017. Even if the market proves to be overheated, more responsible lending means a sub-prime-scale implosion is a very distant possibility.
The other theme of US house price growth, its patchy distribution, may also become more pronounced. New York home values appear comatose in comparison to Portland and Seattle, where prices grew by 12% and 11% respectively in the year to September. Yet lunatic price hikes across the border in Canada, make even those numbers look comparatively demure; Toronto closes out 2016 leading the Teranet and National Bank of Canada index with an insane growth rate of 34.6%.
Further afield
South America may become a less daunting investment prospect in 2017, with Brazil and Argentina poised to shake off the political deadlock of last year and Colombia coming closer to peace. Our pick for an enticing investment target is Peru, where a new business-friendly government could revive the property boom and Lima’s hotel market should benefit from fast-growing visitor numbers, a generous tourist spend, and limited supply coming on to the market.
In Africa and the Middle East, the price of oil has played havoc with economies. Property markets could well see a boost if the price of oil rallies in 2017. This could benefit countries like Ghana and Uganda, where the economies are sufficiently diversified to avoid the pitfalls that accompany surprise discoveries of oil. Land development is already rife in their respective capitals of Accra and Kampala.
Investors have been glued to Iran’s gradual unfurling onto the global stage and will continue to look on in 2017, though caution is advised until President Trump’s official stance makes itself clear.
In Asia, Indonesia and Vietnam are making encouraging moves to attract foreign investors, and boast the economic growth to back it up. 2017 will be crucial for testing how well these new rules work in practice, and early birds who plan appropriately could catch the juiciest worms.
China might decide to employ state intervention for the forces of good to re-jig its land imbalance and loosen the notoriously prohibitive hukou residency permit system. This would allow demand and supply to better align and let some steam out of the Chinese property market’s swelling paper lantern.
Finally, our client database reveals a growing share of Indian investors contending with their Chinese counterparts as the dominant group of family buyers casting a wider net for safe havens overseas. Though the UK has not lost its appeal, we might expect to see them target regions closer to home as traditional Western markets start to feel more volatile.
(For more information please visit Property Frontier)
