Nowhere was the drop steeper than in South Asia, where a 37% fall to $36 billion was reported. While South and Central Asia registered significant declines, particularly in India and Kazakhstan, the decrease in flows to West Asia was moderate, according to the organization’s latest World Investment Report 2024. Southeast Asia held steady due to robust economic growth and extensive global value chain linkages, according to the report.

The fall in inflows to China—the world’s second-largest FDI recipient—breaks a decade-long growth trend in the country, where investment patterns have “delinked from the rest of the world,” according to the report. FDI inflows fell for most reporting economies—around two thirds of developed economies saw declines, as did around half of developing countries.

Falling M&A sales, which usually constitute 10%–15% of FDI in developing Asia, led to a drop of some $30 billion in 2023 to $57 billion—representing about half of the total drop in FDI inflows to the region.

At the same time, UNCTAD’s report shows that only developing Asia attracted “above-average” Sustainable Development Goals investment among all the world’s developing countries in 2023. These economies saw a 44% uptick in the overall value and a 22% rise in the overall number of greenfield investment announcements. Southeast Asia led the pack, with a 42% increase in announcements, driven by electronics and vehicle production.

Asia also continued to attract mega-projects. Six of the 10 largest projects worldwide are in developing Asia, including four in Southeast Asia. Indonesia led in greenfield projects by value. Notable projects included upstream investments by Chinese glass and solar manufacturer Xinyi Group totaling $11 billion; and a $9 billion battery supply chain for electric vehicles being developed by a consortium of European and Indonesian companies.

Meanwhile, the number of international project finance deals in developing Asia fell by 25%, with West Asia being the only exception—total deals there increased to 94 in 2023 from 50 in 2022, with values growing by 32% to $57 billion. Saudi Arabia, Turkey and the United Arab Emirates all saw growth in deal numbers.

The decline in FDI in the Asia region contributed to an overall dip of 7% in FDI across all developing countries of the world to $867 billion, according to UNCTAD’s report. Flows fell by 3% in Africa and by 1% in Latin America and the Caribbean.

As recent history has consistently demonstrated, there is nothing more certain than uncertainty. A pandemic, geopolitical tensions, trade frictions and even armed conflict have complicated the landscape for global foreign direct investment, leaving business leaders with no clear signals as they set priorities and make critical investment decisions outside their borders.

Adding urgency to the matter, there are now signs of a revival in FDI after a couple of years of decline. But the picture that is beginning to sort itself out is distinctly different from the past. Manufacturing shows promising signs of recovery while nearshoring and friendshoring in new markets are becoming stronger trends.

At an estimated $1.37 trillion, global FDI flows grew by a modest 3% year-on-year in 2023, according to preliminary figures from the United Nations Conference on Trade and Development (UNCTAD). But the top-line numbers obfuscate an enormously mixed picture beneath the surface.

Most strikingly, once a few European conduit economies are removed from the equation, global flows declined by some 18%. In the European Union, for instance, FDI jumped from negative $150 billion in 2022 to positive $141 billion in 2023, according to UNCTAD, but largely on the back of significant swings in Luxembourg and the Netherlands. Excluding these two countries, inflows to the rest of the EU fell 23%. North America saw zero growth, while other countries saw declines. Flows fell by 9% in developing countries to $841 billion.

A number of global, or at least large-scale, events have weighed on FDI in recent years, among them supply chain issues emanating from isolated yet significant incidents such as the 2021 grounding of the cargo ship Ever Given in the Suez Canal and the global semiconductor shortage, both of which had prolonged and costly impacts for multiple industries.

Geopolitical risks, trade wars and armed conflict have also played a part in creating friction for foreign investment. There is some evidence that a growing move toward protectionism since the pandemic is beginning to impact investment in some markets, as well. Together, these factors explain the somewhat muted year for FDI flows overall. But, as UNCTAD’s figures show, there are some shards of light.

The agency recorded a decline in international investment project announcements, particularly in project finance (21%) and mergers and acquisitions (16%). Greenfield project announcements dipped 6% in number but grew by 6% in value, driven in part by more encouraging numbers in the manufacturing sector.

The disruptive events of the past few years—Covid-19, conflict in Eastern Europe and the Middle East—have contributed to a profound shift in emphasis in FDI targeting. Before the pandemic-related disruption, a wider structural move toward services and knowledge-intensive FDI had contributed to a long-term decline in manufacturing investment. This exacerbated a trend that was emerging by the early 2010s, became amplified by the 2008 financial crisis, and was further aggravated by trade barriers put in place in the following decade.

That pattern appears to be reversing itself, with China trade tensions the catalyst.

“Although it is not yet back up to previous levels, the recovery in manufacturing FDI during 2023 is an encouraging sign,” says Richard Bolwijn, director of investment at UNCTAD, “particularly when you take into account the more recent tendency toward a decoupling and derisking of investment and trade between the US and China, as well as between other developed countries and China.”

According to the Stanford University Center on China’s Economy and Institutions, 50% of the overall decline in China’s imports from the US can be attributed to unofficial, non-tariff barriers, including administrative hurdles, inspections and quotas.

“As of 2022, it appears that while China was pulling back investment in the US, the US was actually increasing investment in China,” says Brett Ryan, senior US economist and director at Deutsche Bank Securities. “And while Chinese holdings of US Treasuries have declined notably since the pandemic, China’s holdings of agency securities and US corporate equities have picked up of late, though some of this is simply down to valuation increase.”

Tensions between the US and China rank as the second-greatest driver of nearshoring and friendshoring, according to the 2024 Foreign Direct Investment Confidence Index produced by management consultant Kearney’s Global Business Policy Council. Some of that investment is now flowing into lower-cost neighboring countries including Vietnam, Indonesia, Malaysia and Cambodia, as the nearshoring trend gathers momentum in Southeast Asia and other countries with easy access to the largest developed markets. South Korea’s Samsung, for example, has moved its Chinese manufacturing to Vietnam; Apple has begun to do the same, and Walmart is shifting some of its production from China to Mexico.

Mexico saw an increase in FDI intake last year of some 21%, according to UNCTAD, and a further increase in new greenfield project announcements, solidifying its position among the top global recipients and helping to hold flows steady in Latin America in 2023.

“We are seeing an increased number of projects in Morocco, which has easy access to European markets, and in Mexico, for its ease of access to the US,” Bolwijn notes.

With little sign of a resolution to ongoing geopolitical conflicts in many corners of the world, Kearney found some 85% of investors agreeing that an increase in geopolitical tensions will impact their investment decisions, with 36% saying that the impact will be “significant,” pushing them to nearshore or friendshore in reaction. A staggering 96% of CEOs are either considering, have decided to, or have already reshored, the consultancy found.

UNCTAD has observed a similar trend.

“When trade tensions first emerged, we saw companies reallocating production among existing factories and balancing capacity between those as needed,” Bolwijn says. “But now we’re starting to see completely new investment projects coming through, as enough time has passed to factor now-emerged risk aggregations into investment decisions. “

These shifts do not indicate a “mass exodus” from China, however.

“There’s an enormous amount of capital investment in assets in countries perceived currently to be at higher risk,” Bolwijn adds, “and it takes time to sell those and to build replacement capacity without incurring enormous losses.”

Might there be catalysts aside from China? Deutsche Bank’s Ryan sees the uptick in trade in Latin America as less a case of nearshoring than a detour to avoid costly tariffs.

“While US imports from China have declined sharply since first quarter 2022, Mexico imports from China have picked up noticeably over the past several years,” he notes.

UNCTAD has observed increased screening and regulation of inward investment becoming a trend in recent years, particularly in developed countries and especially in M&A and greenfield investments. Now, for the first time, outward investment is displaying a similar pattern.

“The key concern is knowledge-intensive companies with large amounts of intellectual property establishing themselves overseas,” Bolwijn observes. “But this is gradually happening in manufacturing, too, due to the desire to keep more manufacturing capacity at home. The laissez-faire approach to outsourcing and offshoring of manufacturing is really in the past.”

UNCTAD sees a gradual shift away from ownership to third-party outsourcing. And while this may not de-risk the supply chain, it does de-risk ownership links. “These third-party supplier arrangements increasingly have highly complex contracts and intellectual property procedures behind them due to the specific knowledge-transfer mechanisms involved, so they take time to set up,” Bolwijn notes.

National security and geopolitical trade agendas, too, are increasingly relevant to FDI, with the ever-greater potential to affect flows, says Aline Doussin, a London-based partner in Hogan Lovells’ Global Regulatory practice.

“Regimes that apply to national security filings in the context of FDI are something that clients are acutely aware of, and are giving due consideration to, when making investment decisions,” she notes. Additional regulatory filings are now required when investment is being contemplated or completed in specific jurisdictions. Example: the EU Foreign Subsidies Regulation (FSR) regime. Designed to address “distortions caused by foreign subsidies,” the rules went into effect last year.

“We are also seeing quite a lot of policy discussion on potential outbound investment regimes, looking at how governments might regulate domestic investors in foreign jurisdictions,” Doussin adds. “These would apply on top of export control and regulatory regimes, or any export authorization that specific trade flows may be subject to.”

Not all regulatory changes handicap FDI. White & Case notes that several Latin American countries have implemented investment and tax treaties that make the establishment of industrial plants in the region easier and more attractive. But the impact of regulation was high on the list of considerations among the respondents to Kearney’s FDICI.

While flagging risks related to geopolitical tensions and restrictive regulatory environments, the report, which appeared last month, also revealed signs of greater investor optimism over the next three years. Eighty-eight percent of respondents planned to increase their FDI commitments, and 89% called FDI “more important to their corporate profitability and competitiveness” over that period.

Much of the good feeling relates to artificial intelligence, which is anticipated to yield efficiency gains while enabling managers to make better investment decisions and detect new investment possibilities. Some 72% of Kearney’s respondents say they are making “significant or moderate” use of AI in their business operations, and anticipate using the new tools for customer service and chatbots, automation of manual processes and supply chain enhancement. Research and development capabilities emerged as a priority as AI captures interest and capital around the globe in what Kearney calls the “race for technological primacy.”

Once again, the influence of regulation on decision-making is evident, with investors overwhelmingly agreeing (82%) that AI policies and regulations will impact investment. FDICI respondent companies were global firms with annual revenue of at least $500 million, of which service-sector firms accounted for 46%, industrial firms 45%, and IT firms 9%. 

Overall, Kearney detected a preference among investors for developed markets, which accounted for 17 out of 25 of the economies included in the FDICI. The strength of the G7’s fastest-growing economy, along with rebounding consumer sentiment, ensured that the US took the top ranking for the 12th consecutive year, while China jumped from seventh to third place thanks to its loosening of capital controls for foreign investors in September.

In emerging markets, Brazil, Mexico and Argentina were among the top seven, with Thailand, Malaysia, Indonesia and the Philippines appearing in the top 15.

Optimism regarding the global economy, not surprisingly, is fueling the overall positive outlook for global FDI in 2024. While optimism levels among Kearney’s respondents rose only one point to 64%, net pessimism decreased from 35% to 29%.

Bolwijn predicts a modest increase in flows in 2024.

“Against a backdrop of rising interest rates, global financial markets performed surprisingly well in 2023, with stock markets and profitability of multinationals at record highs,” he notes. “Those factors usually show up in the FDI data because a significant part of FDI is reinvested earnings.”

UNCTAD is still concerned about downward pressure on greenfield projects and on international project finance and M&A based on the sensitivity of debt to interest rates, but “as rates begin to stabilize, we may see this ease off.”

The International Monetary Fund expects global growth to stay at 3.1% in 2024 as central banks continue to fight inflation and fiscal support tapers off to bring down high debt loads. Downside risks persist, including escalating conflict in the Middle East, stubborn inflation, trade fragmentation and more frequent natural catastrophes. Faced with this array of challenges, investors are looking for regimes with greater regulatory efficiency and ease of moving capital as they make their global investment decisions.

A stable political environment, too, is important when it comes to attracting FDI, but this remains in short supply in both emerging and developed economies. That means governments will have to work together to establish and maintain trade conditions that facilitate investment moving forward—whatever geographic and sectoral direction it takes.

In an unprecedented move, the company filed the suit against North Carolina-based Arjuna Capital and Amsterdam-based activist investor group in January. The suit alleges that the request in the resolution is part of an “extreme agenda” aimed at diminishing the company’s existing business and is an abuse of SEC rules. It is seeking a legal precedent that would stop activist groups from strong-arming the shareholder petitions process.

The two groups want Exxon to set Scope 3 targets to reduce emissions produced by its oil and gas users. While Exxon has net zero targets for 2050 for Scope 1 and Scope 2 emissions (covering the pollution from its production processes and energy consumed), it does not have Scope 3 targets (covering indirectly generated carbon emissions)—unlike the four other oil majors. According to Follow This, Shell, BP, Chevron and TotalEnergies adopted Scope 3 targets after their shareholders voted for similar resolutions.

Shareholder activism is not a new phenomenon; but corporate boards and management teams are urged to be vigilant, according to the authors of Lazard’s latest Annual Review of Shareholder Activism. Global campaign activity reached an all-time high in 2023. With 252 new campaigns (up 7% year-over-year), activity topped the record set in 2018, with Europe and Asia-Pacific seeing the most activism. The January 2024 report notes the total board seats won by activists increased for the third consecutive year, with a record 31% of board seats won through proxy contests last year, well above the historical average of 17%.

Exxon has long been one of the world’s largest, most successful and resilient publicly traded companies. In December 2023, it said it was on track to more than double its earnings potential from 2019 to 2027, with 18% compound annual earnings growth.

Sezgin Lüle: Our mobile application İşCep delivers a high-level customer experience through a fully customizable UI and a rich set of over 650 functions, including an AI assistant chatbot. İşCep is not just about money transfers—it’s a set of unique functions that facilitate the way customers interact in their daily lives, conveniently and personally.

To give you an idea of the level of customer engagement we are seeing with the app, we have some 14.7 million active customers, more than five million of whom are using the app daily—and logging in over 18 million times.

The tool recently underwent a paradigm shift to achieve “super app” status, and now offers customers the functionality to manage their lives, cars, homes, families, to purchase home appliances, and even manage travel itineraries and TV subscriptions—all through one platform. This functionality goes beyond banking to a wider, seamlessly embedded ecosystem.

All that interplay within the ecosystem provides us with an extra depth of engagement and is why last year customers spent 25% more time in the app. This is how we distinguish ourselves from our peers.

GF: What will have the greatest impact on the consumer banking ecosystem in the coming year?

Lüle: Customer experience will be a major topic in 2024. At Isbank, we will be focused on providing a seamless customer experience, continually improving it by reducing friction and listening to customers to drive engagement.

We are also about to upgrade our AI-assisted chatbot using large language models [LLMs]. As part of this, our AI team has been developing a Turkish LLM to take our conversational banking tool to a totally different level.

More widely, embedded finance will take on a completely different strategic direction in 2024. Today, individual customers are using multiple digital platforms on their smartphones. And we respect that some customers may wish to conduct financial services activities not in our app only, as they engage with nonbank digital platforms for other services. That’s why we are investing in one of Turkey’s biggest digital platforms to offer them banking-as-a-service in 2024. This opening of “financial services shops” in other digital platforms will be another key strategic driver in consumer finance throughout the year.

GF: In a short-termist world, how do you engage staff and customers in your long-term vision?

Lüle: Banking is ultimately about providing services. There’s no factory or goods being produced, so what defines a good customer experience and service is totally dependent on technology. At İşbank we understand that if you’re going to provide a superior customer experience, you need to be sophisticated technologically.

To achieve this, you cannot treat or define technology or IT as a separate, siloed function. Our enterprisewide agile transformation, which we began in 2018, was inspired by the Spotify and ING models and set out to make sure that we transform formerly siloed organizations into cross-functional teams, or “tribes.” Today, we have 25 tribes and more than 1,500 people working in an agile way, where we have cross-functional team members sitting together on the same desk—or in virtual teams if they are working remotely.

In his latest book, The Geek Way, research scientist and author Andrew McAfee describes a cultural paradigm shift toward a new operating model in which agile practices are driven by customer needs, minimum viable planning and development of minimum viable products in an interactive way to make sure that innovation is sustainable in an organization.

In the same way, Isbank’s cross-functional approach has for the past five years provided us with an edge—a new culture where we communicate directly and where decisions are made at the team level, where the information is already being processed—without the need to escalate to senior managers or the C-suite managers. That gives us speed of decision-making and delivery.

When it comes to customer engagement, we periodically consult our client committees before designing. Our young-segment client committee, for instance, helps us talk the same language as our Generation Z customers. We ask them how they value finance, and how they see their lives being impacted by finance—listening to them from the outset. The agile way is about testing and experimentation, and we value feedback from customers so we can ensure a product is perfect before it goes to market. There has been a real cultural shift in how we engage with employees internally and with customers externally, and it is a matter of maturity as levels of efficiency increase over time.           

Global Finance: What is driving the latest wave of excitement around artificial intelligence?

Scott Zoldi: A good number of AI applications have been in place for up to three decades, such as those addressing fraud—where we use machine learning routinely. More recently, though, generative AI has really captured the public’s attention, and it’s no longer the preserve of academics or specialists. The power of these technologies has gradually been made available to everyone.

The ability of large language models to converse with us, and to impress us, has opened new opportunities for people to access new information and insight. I think this current ‘hype cycle’ is down to the fact that these tools are genuinely impressive, and interesting to play with.

The popularity of generative AI has also sparked concerns around regulation, which has started to produce an interesting amount of dialogue—whether you’re a fan of generative AI, and you’re trying to find an application that is responsible; or whether you are concerned about the potential negative impacts.

Ultimately, though, the accessibility of the technology—where even our kids can use it—is the main driver here.

GF: With the raft of regulatory activities and approaches being developed around the globe, do you foresee a danger that the resultant landscape may become over complex and burdensome?

Zoldi: There’s an ongoing debate in the US about whether regulation reduces innovation and growth and could potentially reduce the good that could come from AI. Members of the technology community, including myself, propose that innovation and regulation can coexist, however; that regulation and guidance can spawn new innovations in ways that can solve problems in a responsible AI fashion. But the debate in the US is still structured on those two forces being opposed.

That said, the Biden Administration has talked about the fact that AI, if not used properly, can create bias and systemic discrimination or bias, so we are looking very carefully at what happens in the European Union with its new AI Act.

Companies that operate globally, including FICO, must look at the totality of these regulations. I think they will all come to a common ground eventually.

One of the challenges within the regulatory sphere is that there is not a lot of specificity on how you meet explain-ability or fairness. And this is one of the things that I’ve spent a lot of my energy on recently—focusing on how organizations can demonstrate that they have met the many principles of a regulation or a guidance, or a set of best principles, because there are a lot of these and you have to choose which ones you are going to follow.

I’ve been advocating for governance standards in model development that are defined at the corporate level, to demonstrate how organizations approach, and enforce them. I think that’s one of the ways organizations can respond to developments and guidance in this ever-evolving regulatory environment.

GF: What is your view on the issues raised recently by the Center of AI Safety and some of the Big Techs about the potential societal risks of AI, as they relate to its application across financial services?

Zoldi: This is a topic that must be discussed at a global level, so I’m glad that it’s being tackled. In my view, organizations need to understand and take responsibility for the fact that they are [deploying] human-in-the-loop (HITL) machine learning development processes that are interpretable. We cannot hide behind the black box; we need to make sure that we are using transparent technologies so that we can demonstrate concretely that these models are not causing a disparate impact or discrimination towards one group versus another.

At FICO, we believe that we must demonstrate concretely that we are not creating bias with respect to the development of these models. So, I think that the current dialogue is powerful and that the outcome could be a set of acceptable machine learning technologies.

The first step is to recognize that if a machine learning model is put into production with a challenge from a bias perspective, it can propagate that bias. There are methods, such as interpretable machine learning and other technologies, that will expose that bias, and companies that follow responsible AI principles and practices will recognize that and remediate that in their analytics.

GF: How confident can businesses and consumers be of an ethical future for AI in the financial ecosystem?

Zoldi: Consumers need to be educated about the fact that AI makes mistakes. As I often say to our clients and industry colleagues: all models are wrong and some are useful. So, the first step here is an acknowledgement that all models make mistakes, and better models make less mistakes—and if we can use these better models and develop business models around that, then that’s important.

I think the other aspect of this is about getting out of the hype cycle, such as the current one around generative AI, such that we stop believing that machine learning models are always right. And I do perceive the temperature to be coming down on that now.

The next step is around transparency. So, in a similar way to how consumers provide consent to share their data for specific purpose, they should also have some knowledge of what different AI techniques a financial institution is using. Part of that is about meeting regulation, but the other part lies in acknowledging where certain algorithms are not acceptable, and that other algorithms are better.

All this will take some time but the more we have these conversations about transparent machine learning technologies, and organizations can start to demonstrate that they meet the necessary governance principles, customer confidence will improve. What is fundamental to this is ensuring that models are being built properly and safely. This is what will start to establish trust.

This is a complicated science, though, and not every organization is best equipped. Our recent survey with Corinium showed us that just 8% of organizations have even codified AI development standards, for instance. Insisting on understanding how organizations define model development standards will be amongst the things that consumers will need to know or ask—in the same way that they currently have expectations around how their data is being used and protected.

GF: Does AI pose a genuine systemic cyber threat?

Zoldi: From a cyber perspective, there’s always a risk. Adversarial AI is one such risk—where information can be injected into datasets inadvertently, and models built with that information. This is where the concepts of interpretable machine learning and looking at what that machine learning is coming up with and its relationship with what it’s learning—and then having a human being establish whether it is acceptable or palatable—is fundamentally important.

I generally say that all data is biased, dangerous, and a liability—and that’s from a model development perspective. So, when we build models, it is best to assume that the data is already dirty and dangerous. When we build the model, we must make sure that we understand what it has learned, whether we think it is a valid tool, and then apply that.

It is so important that we don’t just create a machine learning model based on a set of data that we either try to clean or don’t clean, and then just deploy it, because no one’s going to be able to clean all the issues in our data—whether it be societal bias, or a sampling bias, or all biases that we would get from a data collection perspective—let alone criminal activity—but we all have an opportunity to seek to understand what’s in the machine learning model, and choose to use technologies that are transparent.

If you think about machine learning as a tool, versus a magic box, then you have a very different mentality, which is based on needing to understand how the tool works. I think that’s how we circumvent a lot of these major risks. But for sure, cyber and data security is a big concern, because models learn from data and we cannot rely on that data being safe to use.

Corporate separation activity is growing at an outsized pace, with more than 30 separations announced globally in 2022 alone, representing about 17% of announced separations in the past decade. This is among the findings of research published in May by EY and Goldman Sachs. The authors of Strategies for Successful Corporate Separations attribute the rise in separations to financial market uncertainty, challenging operating conditions, competition and the end of a decade of low-cost capital.

According to the research, separations—when executed well—can lead to an excess blended return of roughly 6% over the respective sector indexes for two years after the transaction closes. Companies may separate through a spinoff or a subsidiary’s initial public offering (IPO), or “carve-out” followed by a back-end exit. As a result, “The separated business operates as a standalone public entity with its own equity currency and access to capital markets,” the report states. “In the US, these corporate separations are generally structured as tax-efficient spin-offs. Outside the US, they tend to be structured as demergers.”

While these separation transactions are typically agnostic with respect to size, industry and geography, the industrials and health care industries represented  about 50% of globally announced separations in 2022. Corporate separations also got larger, with almost half of the transactions that closed between 2018 and 2022 valued at more than $5 billion, compared with just a third at that value between 2012 and 2017.

The study of 160 transactions indicates that non-US transactions outperform, with an excess total shareholder return of approximately 3%. Given the recent popularity of non-US separations, the report’s authors forecast continued increases in transaction volume outside the US. A separate EY CEO Outlook Survey supports this. The authors state that “48% of global CEOs expect to actively pursue a divestment, spin or IPO” over the next year.

The philosophy that “bigger is better” was embraced by companies after the global financial crisis and drove nearly a decade of megamerger activity and portfolio diversification, making today’s corporate portfolios as complex as ever. Today, about two-thirds of S&P 500 companies have three or more business segments with over $500 million in revenue.  

Small and midsize enterprises (SMEs) play a critical in most economies, representing about 90% of businesses and more than 50% of employment worldwide according to the World Bank. But they operate at a disadvantage to their larger competitors, relying disproportionately on external sources of finance for operational and investment funding even as they are less likely than large businesses to obtain bank loans.

Figures from the International Finance Corporation suggest that some 65 million firms, or 40% of formal micro, small, and midsize enterprises in developing countries, have an unmet financing need of $5.2 trillion a year. East Asia and Pacific accounts for the largest share (46%) of the total global finance gap, the data shows, followed by Latin America and the Caribbean (23%) and Europe and Central Asia (15%).

The challenges SMEs faced during the pandemic have since been exacerbated by an increasingly pessimistic global economic outlook. In the UK, the Federation of Small Businesses warned in its December report, “Credit Where Credit’s Due,” that the financial markets may soon begin squeezing lending to small businesses—“reminiscent of the period following the 2008 financial crash.”

Further complicating the picture, SMEs’ priorities, concerns, and resources have changed in the 15 years since the financial crisis, and their conversations with their banking partners have changed focus accordingly. Despite the divison caused by the pandemic and political turmoil in many countries, SMEs seeking opportunities to reinvent themselves and pursue new opportunities with customers, says Augusto Paz-López, head of the SME segment of BBVA in Peru.

That in turn has changed SMEs’ demands on their banks. “After the pandemic, SMEs entered a digitalization stage,” says Paz-López. At BBVA, “the bank’s commitment is aimed at providing products and services aligned to optimize delivery times in both physical and digital channels, without generating extra associated costs.” However, “most countries have room for improvement when it comes to serving SMEs,” says Dennis Khoo, author of Driving Digital Transformation and The allDigitalFuture Playbook, who worked with Singapore-based United Overseas Bank to create TMRW, the first digital bank in the ASEAN region. “Especially in large parts of Asia-Pacific, the SME credit bureaus are not that strong on risk-ranking companies that banks should and should not lend to. But fixing this problem isn’t easy, as the data required is fragmented, disparate and not easy to obtain and verify for authenticity and integrity.”

This may also represent an opportunity, both for SMEs and financial innovators, says Khoo. For neo or challenger banks to “make a big bet on the coming-together of accounting and business banking” could represent a breakthrough, he argues, “in a similar way to the coming together of phones and computers over the past 20 years to yield smartphones.”

With economic pressures rising globally and Covid-era lending tapering off, banks are feeling the pressure to get credit decisions right, especially since many SMEs have lost market share over the last three years. Bringing accounting and banking closer could make this easier.“Japan has numerous fintech and crypto startups, but I don’t see newcomers in the banking market trying to solve problems at the smaller end of the corporate world,” says Tomohiko Shinohara, manager at FinCity Tokyo, an organization that promotes Tokyo as a financial hub. “Generally, SMEs are served by regional banks or other lending cooperatives. Where major banks fail to deliver sufficient funding, major companies can provide funding through a traditional structure called a keiretsu,” Japan’s networks of interlocking companies.

Shinohara anticipates greater utilization by SMEs of crowdfunding, an unregulated area that has become a source of development finance for nonprofit projects including ocean clean-up. “There are also a number of B2B and B2C direct trading businesses that may be able to help small businesses go national or global,” he adds. Makers of sake, which is growing in popularity outside Japan, could be among the beneficiaries. “Most of these breweries are very small SMEs and fit the model for this new kind of support.”

New sources of finance like these could loom larger as a weaker global economy further challenges SMEs, warns Hidekazu Ishida, EMP special advisor at FinCity Tokyo. “There are more and more bankruptcies on the horizon. I envisage buyout funds being called in to modernize some of these businesses, where possible,” he says. “Some consultants, including Japan M&A Center, operate a little like an investment bank, mainly executing smaller succession M&A. Buyout funds also sponsor such M&A activities, often in joint ventures with regional banks. J WILL Partners is the most active player in setting up local buyouts, a trend that has spread across the regional banking sector in the last 10 to 20 years.”

Separately, several smaller accounting fintechs are beginning to compete with the larger banks serving the SME segment in Japan. “Money Forward is one such example, and while it has not reached the scale of what you might call a neobank, [fintechs] are one of the most powerful infrastructures for accounting data,” says Ishida.

Breakthrough Innovations

Data from accounting systems could be used to power new credit algorithms, says Khoo, and by combining account and banking systems, “reduce or even eliminate reconciliation by using unique account numbers for each invoice to pay into. This also has the benefit of eliminating double entries in separate accounting and payment systems.”

Khoo envisages SMEs carrying out all their banking on an accounting system rather than a business banking app. “This would be truly embedded financing for SMEs,” he says. “On the experiential side of things, most SME business banking apps are rudimentary and hard to use. If there isn’t a breakthrough in use of data for alternative credit assessment and underwriting, there isn’t a strong business case to improve transactional banking for SMEs.”

Banks tend to leverage either retail or wholesale banking systems for small-business banking, neither of which are ideal, Khoo notes. Thus, working on a much better transactional banking app for SME banking would be in this quadrant. If you combine the customer experience and the operational gain, then you could have something truly transformational.

How close would this be to open banking? And would SMEs balk at putting all their eggs in one digital basket?

Reassuring clients about their privacy concerns will be the key to making a success of information sharing, says Paz-López. “Although open banking generates a series of opportunities based on the synergies that can occur through sharing information, communication and transparency toward customers will be the key words for the opportunities to become tangible benefits” without leaving clients feeling their privacy could be violated.

The UK is taking slow but steady steps toward open banking. Britain’s Federation of Small Businesses argues that while its members are often innovators, a framework that would make open banking appeal to them is not yet there.

“It is often small businesses that are early adopters of new technology,” FSB chair Martin McTague says. “We expect open banking will be explored by more small firms over time. The pace of change in technology means small firms’ relationships with banks, finance providers, and new entrants to the market are changing all the time, and we are keen to see regulation keep up with these developments, so that open banking works for businesses of all sizes.”

The FSB’s research has found that it is increasingly difficult for small businesses to apply for finance, with interest rates rising and acceptance rates at worryingly low levels. This is where open banking can play a role, McTague argues. “Codat’s [an Ireland-based API solution provider] proposal of an SME Funding Passport should be explored,” he says. “It represents an opportunity to support SME borrowing while minimizing the administrative burden for the businesses looking to borrow funds.” An SME Funding Passport would comprise a digital file containing company financial data necessary for underwriting. The file would be consented, standardized and easily shareable with lenders in real time.

Technology is not the whole game for SMEs, however. According to the FSB, they remain keen for cash to remain a viable option and for banking facilities to be available as widely as possible on high streets around the UK.

The need for continuing traditional support is a theme for businesses in Japan, too, where an older population is struggling to keep pace with digitalization.

“In Japan’s aging society, many SMEs have older management that arguably need to find successors,” says FinCity Tokyo’s Shinohara. “The challenge for these firms is that they are doing their books in analog, denying them access to fintechs and to funding from local banks. Some local institutions have tried to help them adapt to new technologies, but many still struggle. This is more the case in local prefectures and less so in urban conurbations such as Tokyo, where younger generations tend to flock.”

Finding Synergies

The future in financial services for SMEs, nevertheless, is all about the data, Khoo argues.

“The issue for SME business banking is finding the data that is necessary for underwriting, including being able to trace where loans have gone and what the customer has done with the funds,” he says. “Banks currently lend by securing the loan against an invoice for an order the SME is supplying, or a fixed unsecured loan based on the SME’s bank balances.”

Accounting systems hold information on SMEs’ accounts receivable and payable. If banks would extract this information and create algorithms to determine the integrity of a transaction, this data could be used to underwrite SME loans, Khoo suggests. The velocity of accounts receivable and payable is also an indication of the health of the business, and other accounting information could allow traceability of the funds loaned.

“This pool of data can help to ascertain whether a bank can underwrite a loan,” says Khoo, “but it also allows banks to throttle credit, so that when the business is doing well, they automatically lend more, and when they’re not doing so well, the bank can cut back.” Khoo finds a potential disruptive development in the coming together of these two trends, yielding benefits to both the customer and the bank. “It’s not a great leap to imagine that a provider that does this very well could threaten other existing banks,” he says.

One feasibility bottleneck is the pervasiveness of software-as-a-service (SaaS) accounting systems, which greatly simplify integration to banking systems. Another is the adoption of accounting systems by smaller SMEs that need working capital.

On the other hand, in addition to having more underwriting data, access to a growing customer base through supply chain information presents a compelling argument for adoption.

“If there was a strong enough proposition to convince a large local corporate to integrate their SaaS accounting systems in the breakthrough and synergies sections, the many suppliers of these large corporates could be persuaded to join, allowing for faster scale up,” Khoo argues. “The focus thus far has been on leveraging B2B portals in a similar fashion, but B2B portals tend to be more fragmented and difficult to implement than B2C portals. So, this could be an alternative way of building supply chain information. This could be one of the things that early SaaS banking adopters could achieve. This could be a breakthrough in the making.”

To benefit from these possibilities, SMEs will need banking partners that understand the advantages and are keen to pursue them. While there is nothing to stop larger banks from doing so, Khoo detects greater inertia in this group. SMEs need to look carefully at the capabilities of neo and challenger banks as well, Khoo adds. “Are their banking apps integrated to SaaS accounting software? How are they building their partnerships? Are they simply giving accounting software to SMEs as a lead generation activity, or do they plan to use this information to grant a loan? That would tell you whether they’re just skimming the surface, or if it’s the beginning of something very strategic.”

Technology is doubtless a major enabler for today’s financial institutions as they seek to streamline operations, flex Big Data, gain competitive advantages and improve customer journeys—and there’s a growing appetite for the efficiencies that all parties can gain in the process. Adopting and integrating technology is paramount for modern banks and financial institutions. But to what degree is this the case for more traditional areas of the banking world, where personal connections have always been so key? Private banking is one such area.

According to the latest Altrata Billionaire Census, published in June 2022, the global billionaire population rose by 3.3% to 3,311 individuals in 2021, with total wealth surging by 17.8% to a record $11.8 trillion. At 1,035 billionaires, North America tops the ranks, with China, Germany, India and the UK rounding out the top five regions for billionaire wealth. Expanding by almost 20%, India notably jumped four places in the number of billionaires over the period.

Wealth management and financial services are all about trust, says Mumbai-based Anupam Guha, head of Private Wealth Management at ICICI Securities. But trust can only be built through positive client experiences.

“Private banking requires an omnichannel experience through the touchpoints of mobile, web and the relationship team,” he explains. “We are a large organization with a depth of data. And with the usage of smart analytics, we realized that we could leverage all that to really drive bespoke engagement and truly relevant product ideas for our clients.”

Maintaining pace when it comes to innovation is central to being able to provide this “high-tech” experience, but with a personal touch at the heart of these interactions.

Significant growth has also been seen across the markets served by Santander Private Banking (SPB), which is present in 11 countries with a focus on Europe and Latin America. As part of the bank’s Wealth Management & Insurance Division (WM&I), the team’s main focus is on Europe and Latin America, telling Global Finance that personal connections are key to their interactions and business.

“In this context, we envision technology to deliver tailored advice and services, enhancing our customer experience within the context of the personal experience. In private banking, we are continuously working on the evolution of our digital fronts for clients and for bankers.”

The team sees a “story of two tales” in its footprint. “While the English-speaking countries have always been more mature digitally and more reliant on digital tools, emerging markets still need a more personal touch. But both worlds need a combination of technology and people. There are some exceptions to this, like Brazil, which is extremely digital.”

New Markets, New Tools

It may come as no surprise that the greatest concentration of private banking customers hail from metropolitan cities. But, as Guha points out, ICICI also has a sizable client base from the more remote areas of the country, just with different needs. “Wealth is being created in various pockets of India. Therefore, it is important for us to be present in these tier-two and tier-three cities with bespoke propositions,” he says. “A hyper-personalized digital platform becomes an important tool to deliver the proposition to various segments of clients and build scale.”

In addition to these geographical nuances, generational distinctions can be observed in the way technology is being taken up in the private banking arena. Among HNW digital natives, Gen X clients show a greater acceptance of online platforms and mobile apps to access financial information and to transact. Gen Z clients, meanwhile, are also more likely to use social media and other online sources to conduct investment research, according to Guha. “Providing quality learning material digitally becomes important to engage this segment,” he says.

The majority of ICICI’s private banking customers are millennials and Gen Xers, for whom omnichannel engagement works well. “These customers are comfortable with technology and are looking for exclusive product ideas,” he adds. “Retirement planning also becomes an important part of our engagements.”

Baby boomers are, understandably, still more comfortable with the traditional methods of investing, and still want to work with a relationship manager as they explore ways to embark on retirement or make plans to transfer wealth.

It stands to reason that the younger the customer, the more they rely on digital tools. But improved access to research and solutions  has broadened the reach of private banking solutions across the board.

“The use of technology has led to the development of new financial products and services, such as one-click-execution baskets and robo-advisories—which are becoming increasingly popular with investors of all generations,” Guha enthuses. “Overall, technology has greatly increased the efficiency and accessibility of research, thereby democratizing private banking solutions to investors from all generations.

“As private bankers, it’s our job to make our clients understand the risks associated with various investment options and guide them to achieve the best risk-adjusted return, regardless of their age or level of familiarity with technology.”

Geographical and generational nuances aside, what else is at play in the way private banking clients engage with technology and the private banks behind it?

In the view of Ana Maria Beznoska, head of Erste Private Banking Romania, emotion is the main factor influencing customer behavior—playing an even greater role than motivation.

“There is scientific proof which confirms that emotions and feelings will always be precognitively formed before any information processing takes place,” she says. “In order to build strong relationships between consumer and brand, it must incorporate emotionally high-level content, creating strong emotional ties. We use technology, but we cannot use it well without people, because robots can read and understand data, but only humans can read and understand attitudes and emotions.”

It is the strength of this emotional bond that she believes drives customer loyalty.

“In terms of customers’ expectations, at Erste Private Banking, the use of technology became an everyday occurrence and [the bank’s mobile app] George became the customer’s bank in their pocket,” she explains.

The George “ecosystem” is subject to continuous improvement, promising a completely different experience to that offered by the so-called Gang of Four—the tech giants playing in the banking space: Google, Apple, Facebook and Amazon, or GAFA.

Through its multi-banking functionality, George provides a single point of access to a consolidated overview on all the accounts a customer holds across multiple banks and other financial institutions.

“The adoption of George was a success throughout all the segments in the bank, changing usage behavior, with in-branch transactions representing nowadays just 4% out of the total number of transactions,” Beznoska explains.

This mirrors a growing recognition among private banks of how better use of data and novel, emerging technologies can improve the customer journey without sacrificing highly valued human-to-human customer service.

“Technology will remain part of our business strategy for the coming years, but it will be an optimal mixture between AI and human touch. Our commitment is to maintain an equilibrium and to pursue the happiness of our employees, while at the same time targeting a state-of-the-art digital experience for our clients,” she adds.

SPB, meanwhile, is also planning to roll out AI to better serve its client base, part of an overall strategy of expanding its digital capabilities—offering instant information while ensuring that its bankers are close to clients to provide the human experience.

“Within private banking, we are continuously improving our digital fronts for both clients and bankers to offer the best user experience and maximize the efficiency of our operations,” the Santander team explains. “On top of this, we are highly focused on improving digital investment platforms in all the countries we operate in. We are also working on identifying AI tools that can complement our client servicing.”

Since the Paris Agreement entered into force in November 2016, momentum in energy-transition financing has been slow. Despite numerous net-zero commitments and the ongoing growth of the sustainable-investment industry, energy-transition investments remain less than 1% of the $130 trillion available for sustainable financing, according to Citibank research.

The need to mobilize capital for this transition was in stark focus at the 27th Conference of the Parties to the UN Framework Convention on Climate Change (COP27) in Egypt. Among the delegates was Karen Fang, managing director and global head of Sustainable Finance at Bank of America (BofA), whose key takeaway was the high engagement level of the private sector.

“I think the extent of that commitment had previously been underestimated,” she says. “The private sector is certainly a willing and vital participant at the table.”

A passionate climate advocate, Fang says the question is how the private sector can engage to scale capital to what was calculated in 2021 by the World Resources Institute, a US-based think tank, to be a $3 trillion to $5 trillion annual bill for funding climate change measures—with $1 trillion per year needed in emerging markets alone.

Reflecting on some of the climate commitments made to date as part of the wider COP agenda, Sasha Cook, head of Investment Banking for the Western Cape and sustainable finance executive at Standard Bank in South Africa, believes those commitments should really be considered the bare minimum.

“What came out of COP27 was the need for action and innovation, and for different thinking when looking at how the energy transition is going to be financed—whether that’s blended finance, including debt for environment swaps, or scaling up very early-stage initiatives,” Cook says.

Standard Bank’s climate policy includes a commitment to mobilize 250 to 300 billion South African rand (about $14.4 to $17.3 billion) in sustainable finance by the end of 2026, with a specific commitment of 50 billion rand in climate financing over the next three years, and to underwrite an additional 15 billion for renewable-energy power plant financing by the end of 2024.

Standard’s recent funding of the Scatec project in South Africa’s is one such example. With a project cost of 18 billion rand, this sizeable solar project brings an additional 540 megawatts of clean energy to the grid in South Africa. Separately, SOLA Group’s two solar photovoltaic projects will supply electricity to five facilities of African mining company Tronox Mineral Sands in the Western Cape and KwaZulu-Natal. And in November, the bank financed a wind-powered renewable-energy plant for EDF Renewables.

In addition to direct project-financing support, the bank is now engaging daily with corporate clients’ sustainability plans—a key focus of which is emissions reduction. “We have put in place sustainability linked facilities with several clients across a spectrum of sectors, whereby we embed certain sustainability KPIs—and in this instance there is a real focus on renewable energy or carbon emissions reduction—into the loan or the bond itself,” Cook explains. “The client obtains a margin or a pricing benefit because we set targets for those specific KPIs over the tenor of the facility.”

For small and midsize enterprises (SMEs) looking to engage in the energy transition, the bank’s new PowerPulse digital platform enables clients to engage with suppliers that can support them with sustainable energy solutions. “[This] enables clients to engage with accredited energy-solution providers and ultimately ensures they obtain the lowest-cost sustainable-energy solution,” says Cook.

The role of banks in absorbing risk among SMEs is a key focus area for HSBC, whose global head of Commercial Banking Sustainability, Natalie Blyth, says that while much of the dialogue on energy transition focuses on the actions of large firms and policymakers, the role that smaller enterprises have to play is vital to achieving net-zero targets. “SMEs make up 90% of global supply chains, which themselves account for nearly 80% of total carbon emissions,” Blyth explains. “Bank support is critical to help SMEs on their transition journey, including dedicated SME funds that are available to use for green activities.”

Carbon credits are another area generating excitement, with Standard in the early stages of setting up a carbon trading desk. Rabobank, for example, a world leader in agricultural finance, goes beyond financing emissions reductions with a carbon credit program that supports farmers in actually removing carbon from the atmosphere via regenerative practices. 

A New Strategy

An effective strategy for the transition should focus on three main areas, according to BofA’s Fang: expanding use of mature technologies (such as wind and solar); accelerating development  of emerging technologies (such as carbon capture and sequestration, electric vehicles, green hydrogen, long-duration energy storage and biofuels) by reducing the “green premium”; and delivering for emerging markets in collaboration with governments, multilateral development banks and development finance institutions (DFIs) by leveraging blended-finance solutions.

Historically BofA’s investments have contributed to the development of approximately 16% of total installed renewable wind and solar energy capacity in the US. In Africa, the bank has supported CrossBoundary Energy (CBE), a specialist in commercial and industrial renewable-energy projects, in its plans to rapidly scale investment for such businesses across the region. CBE is currently delivering a $230 million portfolio of projects across 14 African countries for more than 30 corporate customers, including Unilever, Diageo, Rio Tinto, Heineken and AB InBev.

Regional Challenges

In Africa, the need for development combined with a significant wave of oil and gas discoveries create a counterpoint to sustainable energy efforts. 

“It’s important to have an Africa lens when we look at some of the Paris Agreement goals—or the goals that have been established by the developed world,” Standard Bank’s Cook explains. “Improving living conditions and facilitating economic growth in some of these developing nations, and investment in long-term sustainable infrastructure, are as important as climate.”

Further, given the fiscal stress being felt by a number of African countries, a reliance on foreign exchange, or dollar-based financing, presents further challenges to building up infrastructure. Given a lack of appetite for additional debt, support from developed nations, DFIs and the blended-finance concept are really required to meet these goals. “Given the challenges many African countries face in terms of fiscal debt,” she says, “there is a need for some of this funding to be more heavily weighted towards the donor or the grant side of the financing spectrum.”

Emerging Markets

Another example of how the public and private sectors in developed countries are collaborating to deliver more climate finance capital in emerging markets can be found in Indonesia, where the government is pursuing a national effort under a Just Energy Transition Partnership (JETP) to accelerate the phasing out of fossil-fueled power plants and the ramping up of renewable energy, alongside investment in transition-aligned jobs and industries of the future. Contributions to the Indonesia JETP to be mobilized over the next three to five years include $10 billion in public sector pledges and $10 billion in private investment from an initial set of private financial institutions, including BofA, Deutsche Bank, HSBC, Macquarie, MUFG, and Standard Chartered.

Elsewhere, in the Caribbean and in Central and South America, BofA has worked alongside a multilateral development bank to support InterEnergy Group via a green loan to help develop renewable energy and clean transportation infrastructure projects. It is in emerging technologies such as green hydrogen, carbon capture and sequestration, long-duration energy storage and biofuels like sustainable aviation fuel, that Fang sees a “huge leapfrogging opportunity” for emerging markets.

“Governments will need to continue to play a key catalyzing role,” she says, “through grants, concessionary capital and incentives in order to make the projects bankable by the private sector, driving down cost and speeding up the supply-demand flywheel.” The US and developed markets have to take the lead, she adds, as in the US, where the Inflation Reduction Act of 2022  offers up $370 billion worth of incentives for sustainability technologies.

“We’re all aligned on this to help drive down the green premium on these technologies such that they are on a par with fossil fuel technology,” Fang explains. “Once that equation is reached, I believe penetration of these new technologies will become more prolific. I think we can divide and conquer here.”

Global Finance: Societe Generale swept up several country accolades in the 2022 Global Finance Best Bank Awards. What were the critical factors in the bank’s success across Africa in 2021?

Laurent Goutard: Societe Generale benefits from a unique position on the African continent, offering the expertise and know-how of an international bank, with the proximity of a local bank. The group spans 19 geographies—17 retail subsidiaries and two representative offices—serving nearly 4.1 million customers.

Societe Generale also constructed a robust platform to secure operations processing and establish decision-making centers as close as possible to customers. All these assets, combined with the creation of a pool of international executives we have built up over the years, allow us to live up to our commitment to being a leading responsible bank on the continent.

GF: Africa rebounded well from Covid-19’s challenges in 2021. What is your assessment of the immediate priorities?

Goutard: Countries on the African continent will have to address major infrastructure challenges in the years to come, of which energy emerges among the most urgent—first, as the continent looks to achieve universal access to affordable, reliable, sustainable and modern energy services by 2030; and second, in the need to harness the power of renewable energies available on the continent. Renewable energy has become a technologically viable and economically attractive alternative to fossil fuels, reducing commercial dependence on them.

GF: Can you expand on Societe Generale’s plans for infrastructure financing in the region?

Goutard: The strength of our approach to infrastructure finance is various interlocking levels of expertise to drive the execution of deal flows. Local teams in our subsidiaries possess deep client knowledge through regular contact, backed by the group’s experts on the one hand, and by regional specialists on the other. We position this combined expertise in structured finance platforms in Abidjan, Casablanca and Algiers—as close as possible to the needs of our clients.

We have extensive experience in multisource financing, combining a foreign currency loan and a local currency tranche, at competitive interest rates and with an extended tenor. These solutions are attractive for clients because they help reduce currency risk and offer advantageous repayment deferrals that reduce their cash flow needs. In addition, we ensure that all the projects we finance integrate environmental, social and climate-change criteria.

We also contribute to strengthening the technical capacity of public actors to structure public-private partnerships. Our collaboration with the Africa Infrastructure Fellowship Program allows us to secure significant roles in important transactions, such as our recent participation in the renovation of the Eastern Road [the main east-west transport corridor in West Africa] and the construction of four bridges in Côte d’Ivoire. As you know, access to clean energy is key to infrastructure finance plans in Africa. In general, the share of financing devoted to infrastructure development in Africa increases significantly annually.

Societe Generale works with major partners, including AFD Proparco, to amplify its impact in both the private and public sectors. In 2020, for instance, the group participated in the €16 million [about $16 million] financing of the largest solar power plant in Madagascar for GreenYellow and Axian, alongside GuarantCo and the African Guarantee Fund. This project is set to expand access to renewable energy in Madagascar and provide a stable energy supply. In mid-2021, the group also participated in the very first sustainable bond in Africa, issued by the Republic of Benin. This first-of-a-kind obligation in Africa was aimed at financing impact projects, including access to clean energy.

GF: What strategic developments will ensure the bank’s continued regional success?

Goutard: The group intends to continue the transformation of its banking model, strengthen the expertise of its subsidiaries and platforms in Africa and intensify synergies in the corporate market with other business units. In a rapidly changing world that demands accountability and responsibility, we are driven to place corporate social responsibility at the heart of our operations and leverage our collective expertise to support the entire continent in its shift toward clean energies and sustainable development.

Our ambitious initiative, Grow with Africa, demonstrates our continued commitment to positive transformation on the continent. Launched in 2018, the initiative is structured around four pillars: support for African SMEs, innovative financing [agribusiness and renewable energy], infrastructure financing and financial inclusio