Debunqed

Category: Finance

  • Vocations of the Future

    Vocations of the Future

    There is a lot of banter, which is backed up by well-research papers on how Automation and Robotics (powered by AI) will replace manufacturing jobs.

    Blue-collar jobs are not the only ones however, that face imminent and progressive extinction.

    A recent survey report conducted by the World Economic Forum predicts futuristic trends affecting certain jobs in the modern workplace.

    Robert Solow predicted decades ago, in his Solow-Swan model, a massive driving force of global growth: technology.

    And the evidence is prevalent with the likes of Apple, Google, and Amazon championing stock markets with Billion-dollar market capitalizations. They also create an abundance of jobs globally.

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    Disruptive technological advances such as AI (Artificial Intelligence); the ubiquitous high-speed mobile Internet (5G); widespread adoption of big data analytics; cloud technology; and the recent Blockchain technology will be the drivers of this job evolution.

    Based on the report, by 2022, this job evolution will be firmly in place as it has already.

    In a matter of just 4 years, we could have a situation where jobs such as postal service clerks, data entry clerks, and bean-counters (accountants and auditors) would be made redundant.

    Impact on services

    Software like Microsoft’s Dynamics 365, aims to remove ‘silos’ within customer relationship management (CRM) and enterprise resource planning (ERP) processes.

    The latter takes over (fully automates) back-office operations such as stock-taking and supply chain management.

    Such tasks will be performed via software, reducing the need for more human supervision. Consequently, the focus would be more on managerial roles.

    In the sales and customer service realm, technologies like Microsoft’s AI will provide automated insights to guide employees on improving customer experiences.

    Furthermore, it may lower support costs by using virtual agents or Chatbots to eliminate in-house AI experts and those writing code. This will  result in more redundancies!

    World's jobs

    On a positive note, newer and more exciting jobs such as data analysts, machine learning and AI specialists, digital transformation experts and in general information system services will be on the rise – up to 135 million globally, according to the Report.

    The fields to benefit directly from new technologies would be information technology; information security; innovation; customer services and risk management (financial services).

    Impact on finance

    Another group of professionals whose nature of work will be affected due to the advent of ‘disruptive technology‘ is financial middlemen. Likewise, smaller banks and money transfer institutions.

    Decentralized systems were primarily put in place to eradicate exorbitant fees associated with transferring money across borders.

    Cutting them out completely undoubtedly renders them redundant. It is therefore pertinent for them to innovate their products in order to open up sufficient job position.

    Read more about the effect of Cryptocurrencies on the banking sector here

    Recently, Malta’s finance minister whilst in a private interview during a Blockchain Conference, echoed this. He said that the advent of cryptocurrency has changed financial middlemen into traditional “photo developers”.

    “I can see this, just like in photography when you could tell that […] those who process the photos will lose their jobs; a lot of financial intermediaries will be facing the chop in the not too distant future,” says Edward Scicluna.

    The good news for governments will be that the trend shows that the jobs created will surpass those lost.

    Be proactive and skill yourself accordingly or get the right personnel who can quickly adopt some of the mentioned skills so that you do not fall behind!

  • Bitcoin – the new (digital) Gold?

    Bitcoin – the new (digital) Gold?

    Bitcoin (Crypto in general) is here to stay and every day, financial institutions, celebrities, and artists are endorsing it. It also has intrinsic value otherwise companies (incl. Microsoft) accepting it as payment for goods and services are either ballsy or just plain stupid!

    Read more via Food for thought…

  • Modern-day Profit Hunters

    Modern-day Profit Hunters

    Dealing with Cryptocurrency has its interesting dynamics. There are, however, many hidden facets making it still a mystery to the masses. Not knowing about it makes you prone to, get rich-schemes or outright scams.

    We are all by now aware of the mania caused by the soaring prices and then, the subsequent decline that followed early this year.

    What we don’t pay attention to, however, is just how complex it is to physically “acquire” and store these Cryptocurrencies.

    Mining coins can be described very basically as the process where users “or miners” become part of a Cryptocurrency network. This by making hardware (processors & graphics cards) available to support that specific network’s operations.

    As a miner, you contribute towards the working of the Blockchain. The technology requires millions of calculations to validate transactions into what are known as public ledgers.

    Click here for more about how the Blockchain works.

    There are three main ways to mine these coins but we will not be highlighting them in this post. The matter to be covered here, however, is the business aspect: how the Blockchain has created a new line of commercial entities and ‘profit-takers’.

    These modern tech “enterprises” offer you a specific or cluster of altcoins and tokens as a reward for helping them maintain their Blockchain.

    Sounds like a win-win situation right?  Or is it?

    Mining is hard

    If you have actually looked into the methods of mining, you will discover that only those with high-end hardware are able to produce enough energy to power the Blockchain. This is called “hash power” or “hash rate”. This is kind of like horsepower for cars, but for PC processing.

    There are sites that illustrate how to calculate potential profits such as one conveniently called ‘what to mine’.

    The opportunity cost of operating the customized computer systems (known as Mining Rigs), will have to be offset with the cost of acquiring hardware such as the Antminer S9i. Then there are energy costs associated with running the rigs for long periods of time.

    Your profit would, therefore, be the balance of the costs versus the revenue involved in mining coins.

    The mining profit = revenue (quantity multiplied by the price of the coin in local fiat currency). Then subtract the cost of the mining devices + annual electricity costs (measured in local currency per KWh).

    The problem with going at it alone is that it is very hard to break even. You are also faced with a conundrum:  the more powerful your hardware is, the more electricity it consumes.


    It also takes a lot longer to acquire the coins which you are awarded by the respective blockchain network after successful hashing is completed.

    To make it worth your while you would hope that the coin you mine’s market value exceeds the costs of the monthly/annual electricity bill.

    Value proposition

    There a now hundreds of these so-called Crypto/Tech companies spurting up by the day. Their modus operandi: to relieve you of the burden of the high electricity and hardware costs. This in exchange a monthly or once-off fee.

    In return, they promise to mine coins and provide you with daily or monthly profits. They can do this because they presumably have more powerful mining setups and therefore, larger economies of scale.

    Some of these establishments use big rooms, whole buildings or even warehouses to run thousands of mining rigs throughout the year.

    The payments you make supposedly help them with maintenance costs and pay for the said electricity bills. They are also usually stationed in countries where the cost of electricity is very low.

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    You are likely to, however, run the risk of dealing with the occasional Ponzi-scheme – setup.  Such companies dive at the opportunity to swindle those not familiar with Blockchain and Cryptocurrencies.

    By dazzling you with the price increases and potential astronomical returns, they take your money and make a run for it!

    You can also ponder, it is incredibly difficult and expensive to mine Bitcoin these days. If these setups are actually just people who have already made their millions from acquiring Cryptocurrency.

    The acquisition naturally, would have been when they were dirt cheap, and are now offering the residue to make more profit off unknowing investors.

     

    A working example

    How it would work is: let’s say you owned 100 Bitcoins mined in 2010 for the opportunity cost of $100 each (cost of electricity).  You then sold half at the height of the Crypto ‘bull-run’ in January 2018 when they were worth $19 000 each.  You would have been $945 000 richer.

    So, with almost a million bucks in the kitty and another 50 units of coins (which would be now worth a lot less); the natural inclination would be to look at ways to make the extra coins ‘work for you’.

    And what better way than to be your own boss and head a Crypto company! You can with your new setup, sell off the residue of Crypto coins in bits for profits in cash.

    This is likely what some of these companies offering you coins for an opportunity to get Bitcoins. This under the false pretence of partaking in a ‘mining operation’. Meanwhile,  in reality, the actual mining probably took place almost a decade ago!

    All in all, do stay alert and do your research before parting with your money to join a mining pool or Crypto investment scheme!

  • A peer-to-peer Crypto marketplace

    A peer-to-peer Crypto marketplace

    250x250You can still tap into the pool of 17-odd million Bitcoins that is now in circulation. You can even purchase them in the fiat currency equivalents.
    But where do you get them then? After all, Cryptocurrency is this dark and mysterious transaction system used only by criminals and drug addicts.
    So you acquiring them would naturally be in a shady place like the dark web – where it is used to acquire illicit things – right?
    Not quite and there are publicly accessible marketplaces where one can securely purchase Bitcoins.
    Find out more via A peer-to-peer Crypto marketplace

  • Banking made easy!

    Banking made easy!

    The sexy looking N26 Metal card is available (for now) in Germany, Austria, France, and Italy!

    Read about what this Fintech / savvy online bank is about and has to offer.
    via Your portable ATM
    N26Card2

  • Criminal mindedness

    Criminal mindedness

    One fundamental and often ignored view within economics is that humans have the propensity to display irrational behaviour in the decision-making processes.

    Based on this notion, one can conclude that we have a fundamental tendency to act corruptly and be generally criminally-inclined except maybe the virtuous few.

    How advanced our economy or society is, depends on what measures or incentives we enforce to deter or punish criminals.
    In most cases, we find that in countries where punishment is severe (e.g. in Central Europe or Nigeria), the criminals end up moving to less strict countries.
    The economics of crime, especially violent crime experienced in countries like South Africa and Brazil, is something that requires adept research if anything is to be done.
    In the US, studies were conducted to access the impact of legalized abortion on the level of crime. This was discussed in detail in a best-selling book by Levitt and Dubner’s called Freakonomics.
    The study found that legalizing abortion (seen by many as legalized killing equivalent to death sentences) reduces the level of drug abuse and subsequently other criminal activity.

    The real problem

    Perhaps there is no relevance here but for instance, abortion is legal in South Africa yet a high crime rate prevails. So, what’s the problem then?
    Part of the problem lies in the fact that the incentives/benefits of committing crime far outweigh the “costs” and chances of being caught and convicted by the judiciary.
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    John Nash through his renowned works (well at least amongst economists), devised what he called “game theory” or “the prisoner’s dilemma”.
    Cheating occurs through degrees of severity from a classroom test or examination all the way to the plotting and execution of murder or indirectly killing individuals by selling users addictive drugs.
    Then you have your white-collar crime such as insider trading, corporate espionage (unlawfully acquiring recipes, formulas, and technologies from rival companies).
    Or simply ‘cooking the books’ or siphoning off profits from a company’s coffers.
    Nash’s rationale for such cheating behaviour boils down to the attitude of: ‘if I don’t, someone else will, and leave me with the short end of the stick – so given the option, I’ll always cheat’.
    His explanation is one ‘formally proven’ reason for human ‘irrational’ behaviour – or rather, could we say it is rational if the outcome is to favour the decision-maker in the short or long term? This is instinct is innate in human behaviour of not such a few.

    Crime and law enforcement

    Back to the subject of crime: higher than usual levels has often been blamed on the poverty caused by poor and exclusionary fiscal, social and monetary policies.
    There are of course more layers and underlying factors unique to the history of political climate and resource allocation.
    Further studies (such as that in the Freakonomics book) need to be carried out such as the potential effects of police presence in deterring crime in the diagram below:
    Police officers per 100,000 population by regions and sub-regions (medians)

    Crime deterrant

    Source: www.unodc.org

    Also, highly recommended if you are a law enforcer, economist, government official, or student, is a book entitled Economics of Crime by Erling Eide, Paul H Rubin & Joanna M Shepherd.
    This book covers the theory of public enforcement including probability and severity, fines and imprisonment, repeat offenders, incentives of enforcers, enforcement costs and enforcement errors.
    It might shed some light as to how criminally-inclined people can be dealt with once and for all. Because as we know – whatever government is doing to fight crime now is clearly not really working!

    “When crimes are left alone long enough to fester, a second economy is borne.”

    The proceeds from a ‘secondary’ economy because of criminal activity never benefit society. Even though people like Pablo Escobar were seen by locals (in his Colombian town) as philanthropists, their assistance came at a price. Such contributions which are naturally tax-free generally are referred to in economics as ‘social ills‘.
    A third market is formed – one comprised of the need to feel secure.

    Dealing with the scourge

    But fighting fire with fire (with more guns & police who are sometimes corrupt themselves) will not alone solve the problem.
    Criminals simply become more aggressive when met with a more confrontational approach as seen in South Africa. The Jeppestown (Johannesburg) shoot-out in 2006 for example, left several police officers and criminals dead.
    It’s time to get ’smarter’ about crime and look to the accuracy and conclusive study of human behaviour and the use of incentives.
    As crimes continue to ravage communities, cities and countries, we can question why government officials have relatives who own or have stakes in security companies.
    It basically places less of an ‘incentive’ for officials to do much about crime.
    So, conceivably, those with such vested interests in the third economy would need to be weeded out of the system for crime to be curbed.

    That would be the first major step in order to bring about some rationality to society.
  • One tool to serve them all

    One tool to serve them all

    When working in retail, finance, and manufacturing (sales) industry, you often come across one unavoidable piece of software.

    A Customer Relationship Management software or what is abbreviated to CRM.

    Now what really is really astonishing is when people ask how a CRM can actually help their business. Often one gets asked what CRM stands for or even means!
    Now granted, it is a technical and industry-specific jargon depicting an online tool. More specifically, it is software used on hardware like PCs, tablets, scanners, point-of-sale devices, and modern cash registers).
    What it does, however, is something many businesses both small and large take for granted – and mostly to their detriment.

    The purpose

    We use CRM solutions a lot more than we think. Take our Smartphones for instance: they are basically miniature customer (data or content) managing tools and though personalized, they serve the same function.
    Now to put this into perspective very quickly and simply: our phones store and manage all our contacts. Our friends, family, businesses, and clients are kept in records primarily to help us access and communicate with them quickly.
    Mobile phones, have also evolved to now enable you to not only manage your contacts to just make calls or send SMS. You can now share all sorts of  content with via the various social media platforms.
    Each of these platforms naturally has its own purpose and account. Android phones, for instance, come with (need to be activated by) a Google account.
    You can then subsequently use it to access many applications (via an app store) and not just your email.
    CRMs manage a company’s accounts in a similar way. They enable you to quickly get a hold of people to either sell directly to, create or follow-up on a sales lead, or nurture the lead until it becomes a sale.
    This is carried out by software that sits on the front-end of a database stored on a local server or on the cloud. The software is normally user-friendly for it to be adopted and used frequently by end users.
    This enhances your productivity and therefore increases  revenue for your business.

    Practical uses of CRM

    They are used more by salespeople and staff of companies that offer a service via their customer support services or front-end teams.
    So, when you call your local phone company because you are behind on a payment or would like to hand in a product for repairs, it is a CRM system that is used to log, track and manage the case till is solved.
    The transcript, along with the call logs and resolutions are kept for a later date or time for if you make a follow-up call, request a new service. These records are stored in a database or what is called an instance.
    Depending on what your company does, it will have several (national or regional) instances to help access data even faster.
    A CRM can help you manage a healthy relationship with your clients to ensure that you are not calling them several times a day to put them off.
    It will stop you from forgetting to follow-up on scheduled calls or emails or worse yet, sending them the wrong product or information about your offerings.

    Salient features

    A good CRM package also comes equipped with a means for you to create and store brochures, create effective and targeted marketing campaigns, generate quotes and invoices (PDFs). It will also come with a solid built-in knowledgebase.
    This is a stored pool of resources containing processes and scenarios to help you quickly resolve a problem, prescribe a product or log a case.
    And nowadays, like a mobile phone, a good CRM software can seamlessly help you integrate with social media platforms to follow, service or attract customers from those digital marketplaces.

    Several CRM tools out there that offer different functionalities and depending on the size of your business, you can get a basic one that just manages your contacts and interactions.
    Then you have ones that handle full-scale operations (back-office processes like warehousing, inventory, accounting, finance, payroll, and HR).
    Those fall under another high-level category of CRMs known as Enterprise Resource Planning tools or ERPs. A topic for another blog perhaps as they are a totally different animal altogether.
    CRMs are however, an component of ERPs and bigger companies would need both to handle large scale operations.
    So you see how useful a CRM is in helping to run your company. They are now being even more automated with the help of Business Intelligence and AI.
    That makes it even easier for you to use them to grow your business to levels where ERPs you would eventually need an ERP.

    Many CRM suppliers offer free trials and even free online software, so take a shop around to see which one fits your needs.
    The current industry leaders in CRM solutions are Dynamics (Microsoft), Salesforce, Oracle, SAP CRM and Zoho.
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