23 million adults apply or consider applying for financial services products every year

New research from Freedom Finance, one of the UK’s leading digital lending marketplaces, reveals the scale of demand for financial services products as more than two in five (43%) of UK adults – or around 23 million people – either considered or applied for at least one financial services product in the past year.

  • 43% of adults have considered or applied for a financial services product in the past year, equal to around 23 million people
  • One in two of every worker – equal to nearly 15 million – has also considered or applied for a product
  • Credit availability set to tighten into 2023 according to BoE figures, highlighting the need for consumers to shop around for loans

25–34-year-olds were most likely to have hunted for financial services, as they begin to lead increasingly complex financial lives as insurance and mortgages become more important – nearly three in five (57%) applied or considered at least one product.

Research highlights the challenges facing all borrowers as the availability of secured and unsecured credit hit the lowest levels since the start of the COVID-19 pandemic, according to January’s Bank of England Credit Conditions2. With fewer lenders and products available, many consumers will benefit from using digital tools that allow them to compare a wide range of loans available to them rather than just going to their usual lenders.

David Hendry, Chief Marketing Officer at Freedom Finance said that high demand for financial services could be driven by the spectre of rising interest rates and increasing cost of living pressures.

“The fact that half of all workers in the UK looked for new financial services products in the past twelve months indicates the fundamental role the industry plays in our society, but also the opportunity for it to innovate and develop better products for customers.

“Almost all adults already have at least one credit product, but borrowers are still looking for products that suit their circumstances – whether that is to extend the borrowing or consolidate existing debt.

“The lending market is rapidly changing at the moment and improved use of data means people are able to find better-suited products more easily and securely. In a tightening credit market, incoming Consumer Duty legislation is likely to drive more lenders to adopt soft search technology into their digital real estate so that their customers can explore finance options while being sure not to harm their credit scores.”

Listen, Act, Repeat – how professional services businesses will survive and thrive

Rather than feedback coming patchily from a handful of partners, it was now also being provided by salespeople and business development teams who were asking different questions and offering fresh perspectives.

After lockdown ended and the tide had retreated, people across these different departments went back to what they were doing before, but partners missed the flow of information and, in particular its immediacy, which had helped them to make more agile, and better informed, decisions.

Since then, some firms have reverted to pre-pandemic methods of employing external agencies to tell them what their clients think of them. Typically, this will involve consultants conducting official interviews and sending out survey questionnaires, before writing-up their findings in PowerPoint reports to be presented to boards.

This process can take several weeks, or months, by which time, much of the information might already be out-of-date, and the next opportunity to collect feedback will be next year, when the process is repeated.

However, with other firms, strategies are changing. As providers of client intelligence, we have noticed a large increase in the number of Requests for Proposal (RFPs) being sent out by legal and other professional services firms in the past 12 months.

In most cases, they refer to the need for automation in their client feedback analysis operations, and crucially, the need for scale.

There also appears to be a newfound recognition that useful sources of customer feedback are often informal – in telephone conversations and emails – as well as through survey questionnaires and official interviews.

These firms recognise that the quality of customer feedback is unlikely to improve simply by asking different survey questions or interviewing more people.

Rather, they are starting to rethink how to engage with their clients, so that they get more frequent and more accurate information, to facilitate more agile decision-making.

Rather than commissioning a customer feedback report every year or two, the more progressive firms acknowledge that it should be a continuous process.

In the modern, digital world, they need to know immediately when to review existing products and services, recruit new talent, and alter pricing strategies.

A recent report by Thomson Reuters showed that, last year, profit-per-partner in US law firms – the gold standard measurement of success – dropped for the first time since 2009.  With prices continuing to rise, there is now a cost for doing nothing.

Whereas, previously, investing in IT and automation was seen as an expense, now it’s regarded as a necessary investment.

In addition, partners are making greater use of their staff as a source of market intelligence. The lessons of the pandemic have taught them that, when their firm is experiencing pain, friction and frustration, their staff are best placed to explain why and to offer solutions.

The most common conversations currently taking place in boardrooms, are around service delivery – what products and services firms are offering; do they need to evolve and change; and how can they improve the processes behind their clients’ journeys?

Only by having answers to these questions – backed by reliable evidence – can partners make properly informed investment decisions.

The most forward-looking firms are looking to ensure than offering a better client experience is how they differentiate themselves from their competitors. Everyone expects a reputable firm to have expertise, networks and offices around the country, and only those that offer a higher level of customer experience will stand out from the crowd.

In an effort to demonstrate transparency and quality, some firms are publishing customer feedback because, they say, they’re confident in what they are delivering.

Solicitors are held to account by online customer reviews on platforms such as ReviewSolicitors. The Solicitors Regulation Authority (SRA) ran a pilot with several review sites, to test whether greater transparency led to better experiences for customers. They are now seeking to mandate all firms to collect online reviews, although they haven’t made a final decision yet.

Of course, firms will demand that they have control over the process, so that a customer who has had a bad experience, may not be asked for a review. It may be useful as a marketing tool but it’s unlikely to provide an accurate guide to what customers really think, because the results may be skewed toward only those who have had a positive experience.

By December, the full effects of this challenging year will be known. The casualties – and we hope there will not be many – will be licking their wounds, and those who emerge with least damage are likely to  have listened to what their customers have told them and made properly informed decisions.

By Paul Roberts, CEO, MyCustomerLens

As You Sow Files Resolutions With 5 Largest U.S. Banks Seeking Transition Planning to Meet Net-Zero Targets

Berkleley, CA – Shareholder representative As You Sow filed resolutions asking five of the largest U.S. banks — Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo— to disclose climate transition plans for achieving their 2030 net zero-aligned greenhouse gas emission reduction goals.

The banking sector has a critical role to play in addressing the climate crisis and aligning financing activities with the Paris Agreement’s net zero by 2050 goal. By operationalizing and translating net-zero commitments into clearly disclosed and actionable strategies, each bank can assure investors and the public that they have a path forward to meet their 2030 goals.

These resolutions follow 2019 and 2020 resolutions, filed by As You Sow and a host of other shareholders, asking these same banks and Citicorp to measure, disclose, and set net-zero targets for their financed emissions. In response, each bank has shown leadership in determining how to measure their financed greenhouse gas emissions, beginning to disclose those emissions, and setting 2030 net zero-aligned greenhouse gas reduction targets for certain of their highest emitting sectors.

“It is critical that U.S. banks be clear with investors about how they intend to meet their 2030 goals,” said Danielle Fugere, president of As You Sow. “While public policy, technology, green funding, and client progress all have a role to play in accomplishing these goals, banks must affirmatively acknowledge that every decision they make has climate implications. Owning that space and disclosing how they are working to deliver on their net-zero goals creates accountability and clarity on the path to net zero.”

All six banks As You Sow has filed resolutions with — three of which are the largest global lenders and underwriters of fossil fuels — have set 2030 intensity reduction targets for their highest-emitting portfolio sectors, including auto-manufacturing, energy, and power. Citibank and Wells Fargo have set absolute 2030 targets, while JPMorgan Chase, Goldman Sachs, and Morgan Stanley have set intensity targets. Each of these six banks are members of the Net-Zero Banking Alliance, whose signatories have committed to aligning lending and investment portfolios with the Paris Agreement’s net zero by 2050 goal. Membership signals a clear willingness to meet global climate commitments.

“As assertations of greenwashing become more commonplace, it is increasingly important that banks articulate to investors how they will make good on their net-zero commitments,” said Fugere.

An effective transition plan creates bank accountability by describing the affirmative strategies, indicators, milestones, metrics, and timelines necessary to deliver on its decarbonization targets and ensure investors that the bank is fully accountable for the risks associated with its financing of high-carbon activities.

As You Sow has also sought action from the U.S. insurance industry, including The Hartford, Berkshire Hathaway, Chubb Limited, and Travelers Companies asking each to measure, disclose, and set net-zero targets for their underwriting and investing activities, in alignment with the Paris Agreement’s 1.5-degree goal. While catastrophic climate change losses are increasing for insurance companies, only The Hartford has taken responsibility for its contribution to climate change and set a net-zero goal.

There is a heightened interest from clients, investors, and concerned members of the public who want to see climate action from the financial sector and alignment of current actions with climate goals. Retail investor platform Tulipshare, Trillium Asset Management, Boston Common Asset Management, Harrington Investments, Green Century Capital Management, Sierra Club Foundation, and other organizations have filed resolutions seeking action from banks or insurance companies to reduce greenhouse gas emissions.

As You Sow will continue to act as a resource for shareholders seeking change from the banking sector and look forward to continued progress from the institutions whose actions are inextricably tied to global net-zero targets and future climate action.

Six lessons the UK can learn from Denmark’s path to digitisation

Denmark began paving the way to becoming one of the top digitised governments back in the 1970s, following an economic crisis that saw the country nearly default on its debts. This aligned the whole country to a reformist agenda, with a level of focus and commitment across parties that enabled a remarkable transformation. This eventually led to Denmark becoming #1 in the UN e-government index in 2018, and it has sustained a top position since.

Given Denmark’s track record, what can the UK learn from their journey?

Lesson one: Lead digitisation projects with clarity, alignment and trust

Denmark mostly operates under a minority coalition government, so delivering anything requires in-depth discussion and negotiation to get majority support for a proposed change. This may sound cumbersome, but it means decision-makers have absolute clarity on the goal, outcomes, risks and delivery method before projects begin. This level of cross-party alignment provides a stable strategy for execution.

Additionally, voter trust in government service delivery is key. Quality is high, and change is delivered on time and within budget. Plans are realistic, conditions are set for successful delivery, the realisation of cost reduction benefits are baked into finances and consequences are real if delivery fails.

Lesson two: Use a single citizen identifier

In Denmark, the basis of trust allows them to use a single identifier called MitID, an account for all citizens built with user experience in mind. Government processes are almost entirely automated and outcomes are reliable and efficient. For example, around 80% of benefits and payments require no handling from a case worker.

This enables the linking of data across services, making it easier to assess the long-term impact of policies across a broad set of outcomes and provides anonymised data-driven insights for new policymaking. Ultimately it reduces the effort required for operational staff and policymakers, whilst delivering a greater impact to society.

Lesson three: Centralise technology to support knowledge sharing

In 2009, Denmark created Kombit, a central organisation providing unified technology solutions across the country’s 98 municipalities (the Danish equivalent to local councils). Operating as a public-private partnership with €200m capital pooled from the municipalities, they can invest in higher quality products at a fraction of the previous IT spend.

This unified approach leads to valuable knowledge sharing between municipalities. Performance dashboards allow municipalities to compare their case handling times with others of similar size and demographic make-up to identify where they can improve their local operations. The investment also helped create a school communication platform for effective communication between stakeholders.

Lesson four: Commit to going paperless

20 years ago, Denmark committed to a paperless government, which has now been mostly achieved. The Digital Post and mit.dk services are central to this, allowing all government services (as well as private banking and insurance services) to securely send official correspondence by email.

This has led to eliminating 1 billion letters per year, saving over £20 million in staff costs, £1 billion in postage costs and 25 kilotonnes of CO2. The service gives citizens confidence that the source is verified and allows the government to prove correspondence is received.

The impact on citizen experience has been the most transformative. By providing two-way instant communication, they have reduced the time it takes for citizens to get the outcome they need from months to days, even in complex edge-case situations.

Lesson five: Make use of cross-government decision making

When creating Denmark’s first digital strategy in 2002, the country brought together leaders from across the government into a single team in the Finance Ministry, which allowed better focus on cost reductions and kept the strategy at the heart of government. Much like the CDDO in the UK, this ensured understanding of issues and opportunities and buy-in to the priorities.

The Agency for Digitisation has also mapped out services across life events (which is also part of the UK GDS strategy). These are used to assess the impact of proposed change across government departments, which is factored into the business case.

Lesson six: Where possible, keep it simple

Throughout Denmark’s digitisation journey, vital lessons were learned that to truly reap the benefits of digital technology, policy and legislation, the underpinning services must be simplified. While this may be a given, it is challenging to align ministers, policy and operations.

Denmark has set a clear directive that every new law must reduce complexity. This not only makes it easier to digitise and automate, but it makes citizen services easier to access, understand and navigate.

Can Denmark learn lessons from the UK?

The UK is more advanced in certain areas of government digital transformation. For example, cloud hosting is now the default across UK government services, while much of Denmark’s cloud journey is still to come.

Also, Denmark has not prioritised building internal digital delivery capability as much as the UK, with about 70% of delivery outsourced. Danish officials believe this approach increases delivery accountability since delivery reports highlight failing programmes and allow the media to scrutinise.

Suppliers are therefore strongly incentivised to take delivery commitments seriously. But this can result in the government having less ownership of technical decision-making.

Start small to catalyse change

Implementing many of these lessons would require big, complex societal changes that could take decades. And some (for example, the single identifier) may never be palatable to the UK’s libertarian-leaning society.

But not all hope is lost. Programme leaders can determine which data is critical to link up and deliver key insights. More focus can be placed on sharing platforms across organisations to accelerate delivery and make policy a priority. Legislation can be simplified and a commitment to going paperless is achievable. With this changes, the promised land might be within our grasp.

By Helen Mott, Principal at Netcompany

Channel Capital appoints Bhoomika Kesaria as Head of Investor Relations

Channel Capital Advisors LLP (Channel) has appointed Bhoomika Kesaria as its new head of investor relations.

Channel is an FCA-regulated alternative investment fund manager (AIFM) specialising in fintech, working capital and trade finance investments. Since 2014, the London-headquartered company has deployed more than $9 billion of assets across fintech lending and working capital financing, including trade receivables, inventory, and supply chain finance.

Bhoomika will be responsible for Channel’s fundraising efforts across all products as well as nurturing the company’s relationships with investors and stakeholders. She will drive growth in Channel’s $300 million Fintech Lending Strategy, which delivers capital to leading fintech lenders to fund their loans to SMEs.

Bhoomika joins Channel from Lendable, an investor in fintech lending platforms in emerging markets. She has over 13 years’ industry experience across capital introductions, investor relationship management, private debt, and structured finance. She has worked with institutional investors across Asia Pacific, EMEA, and the Americas, including firms such as Goldman Sachs, Northern Arc Capital and IBM.

Bhoomika will report into Paul Wilson, Channel’s chief investment officer.

Paul said: “We’re delighted to welcome Bhoomika to the team. She brings a wealth of industry knowledge and experience in investor relations, fundraising and structured finance – she will be integral to our efforts to broaden the reach and strength of our relationships with investors.

“Bhoomika joins at a very exciting time for the company. With Channel having recently closed the first tranche of our specialist Fintech Lending strategy, she will play a key role in overseeing the firm’s capital raising efforts and furthering Channel’s ambitions to help digital platforms provide much-needed finance to SMEs.”

Bhoomika added: “I’m excited to join the very talented team at Channel. I resonate with the company’s passion for supporting the sustainable growth of finance across the SME space, enabled by data-driven underwriting and structuring. I look forward to enhancing the firm’s investor relations efforts.”

Beyond COP15: Securing business accountability on biodiversity

Amsterdam – The adoption of the Kunming-Montréal Global Biodiversity Framework, signed at the UN Biodiversity Conference (COP15) last month, is without doubt a major milestone, committing the world to halting and reversing biodiversity loss by 2030. This encouraging outcome is the result of a hard-won journey, after a two-year delay due to the Covid pandemic.

The stakes were (and remain) high, as the biodiversity collapse the word is experiencing is now clearly evidenced. The IPBES Global Assessment Report from 2019 highlighted unprecedented decline in biodiversity resulting from human activities: in just a few decades, over 85% of wetlands and about half of coral reefs have been lost; a third of fish stocks are overexploited; and 32 million hectares of forest in highly biodiverse regions – an area almost twice the size of France – has been destroyed. As UN Secretary-General António Guterres bluntly put it at the start of COP15, “humanity has become a weapon of mass extinction with a million species at risk of disappearing forever.”

Planting the seeds for restoration

The Framework, signed by 196 parties including the EU, sets ambitious goals and targets to start addressing the underlying political, economic and societal causes of biodiversity loss. If implemented successfully, it aims to achieve:

  • 30% of the world’s land and sea protected, and 30% of degraded ecosystems restored, by 2030;
  • $200 billion per year mobilized by 2030 (including $30 billion from developed to developing countries);
  • Halting human-induced species extinctions, and sustainably managing biodiversity, including the harvest and trade of wild species;
  • Action to address the drivers of biodiversity loss – such as invasive species, pollution and climate change;
  • Indigenous People’s rights respected and protected.

Growing business accountability

Targets on ‘tools and solutions for implementation and mainstreaming’ of biodiversity focus on the role of governments, the private sector and consumers. Target 15 specifically calls out businesses and financial institutions to ‘regularly monitor, assess, and transparently disclose their risks, dependencies and impacts on biodiversity’.

Over half of global GDP has a moderate to high dependency on biodiversity. Yet while economic activities greatly impact biodiversity, corporate transparency is low. The recent KPMG Survey of Sustainability Reporting revealed only 40% of 5,800 leading companies around the world currently report on biodiversity.  Research from CDP and the World Benchmarking Alliance show similar trends.

The Global Biodiversity Framework makes it very clear that accountability and transparency by companies is crucial. The strong presence of business and finance institutions at COP15, and their willingness to be part of the solution, is a positive sign it can be achieved.

A developing ecosystem to support corporate disclosure

As was the case for many involved, participation in COP15 was a first for GRI. Joining the conference was a valuable opportunity to engage all relevant partners, including business associations, NGOs, regulators and standard setters. In Montréal, we collaborated extensively with other organizations to emphasize the importance of corporate accountability.

Biodiversity is one of the most pressing, yet most complex, challenges that the global society faces. Several budding initiatives have emerged to set norms for determining and disclosing business impacts and dependencies. Behind an initial perception of complexity, given the number of approaches, it is important to understand their specificities and how they align with one another to avoid duplication.

Several frameworks and initiatives – in particular, the Taskforce for Nature Related Financial Disclosures, the Science-Based Target Network, the Partnership for Biodiversity Accounting Financials and Align – are defining the global practice for companies and institutions to assess and measure their impacts, set targets and identify information that should be publicly disclosed.

These approaches underpin the development of overarching reporting standards. GRI, which delivers the global baseline for impact reporting, is currently undertaking a major revision of GRI 304: Biodiversity, with the exposure draft for the proposed Standard published ahead of COP15. The IFRS Sustainability Disclosures Standards, which will incorporate nature into their climate disclosures, aim to set a global baseline for sustainability-related financial reporting. Together, these standards will offer a complete and robust suite of biodiversity disclosures to assess corporate performance. In the EU, the disclosure system will include the European Sustainability Reporting Standards (namely ‘E4: Biodiversity and Ecosystems’), under the incoming Corporate Sustainability Reporting Directive.

Information disclosed by companies can then be used to make informed decision on their performance. CDP’s questionnaire and the WBA’s Nature Benchmark assess companies’ efforts to manage their impacts on biodiversity.

GRI is working closely with all of these organizations, to align to the greatest extent possible and create that flow of biodiversity-related information – from gathering data to disclosing it publicly in a consistent way that can effectively enable performance assessment by companies, investors and civil society.

Collaboration to reach next-level biodiversity transparency

For 25 years, GRI has provided the world’s leading and most comprehensive sustainability reporting standards, driving transparency and accountability on impacts. Already back in 2000, the first GRI Guidelines included disclosure on land use and biodiversity, which evolved to become the GRI Biodiversity Standard, in 2016. The update to GRI 304 will reflect the new Global Biodiversity Framework and emerging best practice.

As with all GRI Standards, we are applying a robust multi-stakeholder approach, ensuring participation and expertise of diverse stakeholders and bringing together the perspectives of business, investors, civil society, academics other standard setters.

The revised Biodiversity Standard will pave the way for the next level of corporate sustainability, including:

  • Impacts in the supply chain – given the most significant impacts on biodiversity for many organizations are found beyond their direct operations;
  • Location-specific information, essential to understand the impacts on how to manage them;
  • Reporting on the drivers of biodiversity loss and changes to ecosystems and species;
  • Providing information on the impacts on people, as a result of the organizations’ biodiversity impacts;
  • Information on how those impacts are managed and mitigated.

The draft Standard is now out for public comment, with webinars available to find out more about what the changes mean. We urge everyone with an interest in biodiversity to provide their feedback. This is the chance to shape global best practice on biodiversity impacts transparency for years to come.

Deepening action to achieve results

For those businesses not yet taking steps to disclose biodiversity related information, the Framework adopted at COP15 sends a strong signal that they need to respond to growing demands that they take action now. That process starts with reporting and transparency on their biodiversity impacts.

The ambitions set at COP15 will whither away without collective endeavor from all parties, and that includes business. The good news is that a thriving ecosystem of tools, frameworks and standards will guide companies in their journey to assess, measure, disclose and improve their biodiversity performance. Ultimately this is about this about helping business, society and the natural world to flourish.

Lender involvement is vital for Net Zero

Commenting on the publication of the Net Zero Review, Stephen Haddrill, Director General of the Finance & Leasing Association (FLA), said: “We have said repeatedly that lender involvement is necessary if the UK is to achieve Net Zero. Homes and businesses need finance to invest in renewables, but pricing that finance at affordable levels requires consistency of approach from Government and a willingness to share some of the inherent risks of financing new technology.

“While Chris Skidmore’s Review recognises those points, what we need to see now is action from Government.”

UK Economy may narrowly avoid recession in 2022 as growth beats expectations

GDP growth of 0.1% in November. This follows GDP growth of 0.5% in October. World Cup gives a boost to consumer spending. A strong services sector has helped the economy avoid an expected decline for November. Services up 0.2%.

Jonathan Moyes, Head of Investment Research, Wealth Club said: “A modest 0.1% growth in GDP flies in the face of a sustained decline in business confidence surveys through the second half of 2022. Many will be taken by surprise by today’s announcement.

“We have seen retailers report stronger than expected earnings reports for Q4 over the past week, and it appears a stronger than expected consumer services and services more broadly have helped the UK economy defy gloomy expectations.

“It may be too soon to mark the beginning of a turn in sentiment for the UK, but a quiet consensus appears to be forming. Energy prices are falling sharply, China is reopening and interest rate expectations have eased significantly.”

Got the January Blues? Here are 5 expert tips to remotivate yourself in your career

Going back to work in the new year can be met with a certain level of expectation, with the career goals refreshed and everyone firmly in the new year, new me mindset, it is easy to feel demotivated with all the pressure and expectations that the new year might bring.

And so, ahead of Blue Monday, Ed Johnson, CEO and Founder of PushFar, the leading online mentoring and career progression platform, offers his top five tips on how you can combat and demotivation and re-boot your motivation levels.

So, whether you’re a student, a working professional, someone on the job-hunt, an entrepreneur or even if you are finding motivation difficult in your personal life, these tips should help bust the January Blues once and for all!

Get Up and Do Something

This is the single most effective way to re-ignite your flame, get the spark back, psych yourself up and all those other cliched terms for drive, ambition and motivation. It may sound obvious, but it is true. Get up and do something you haven’t done before, haven’t done recently or something that gives you enjoyment. Doing something will help you to feel productive and deserving of reward.

Don’t Compare Yourself

Perfection is almost always a myth and it’s been fuelled by the advent of social media. Don’t believe that anybody’s life is perfect – it’s a lie.

We can easily become demotivated when we see competitors succeeding, old classmates climbing the career ladder and friends relaxing on a beach in a seemingly perfect world, but don’t let it get to you. Don’t compare yourself to situations and successes of others, instead, focus on what you have and the successes in your own life.

Push Through the Struggles

There are times in our lives when we simply must push through the struggles and keep moving forward. Even if you can’t see the point or don’t understand why, don’t give up. This is perhaps one of the hardest things to do because, by its very nature, it’s demotivating. When we can’t see the point, we have a tendency to give up. But by not giving up you are succeeding. Remind yourself why you started something. Results are often not instantaneous.

Be Open About Demotivation

Not talking about demotivation is actually a bad thing! It’s amazing how many people feel demotivated and in speaking about how you are feeling, you will realise you are not alone. And in realising this, it can actually help you to feel motivated again.

Remember, you are not alone and you might not be the only one feeling demotivated. Speak up. Whether it’s talking to a friend, a colleague, your manager or a mentor – speaking about it will help.

Rediscover Inspiration

How did you first become inspired to do what you are doing? Why are you doing what you are doing? Remind yourself why you are doing what you are doing and rediscover the things that have initially inspired you. It’s easy to lose sight of the end goal when you are in the midst of a demotivating slump, and that’s why it is so important to go back to the start and rediscover that inspiration which lead you to where you are.

Alibaba Unveils Top Technology Trend Forecasting for 2023

Alibaba DAMO Academy (“DAMO”), the global research initiative by Alibaba Group, has shared its annual forecasting of the leading technology trends that could shape many industries in the years ahead.

Among the leading technology trends, Generative AI, which has already gained considerable traction, is expected to make further strides with its growing applications set to transform how digital content is produced. Aided by future technological advancements and cost reductions, Generative AI will become an inclusive technology that can significantly enhance the variety, creativity and efficiency of content creation, according to DAMO.

Another important emerging technology is dual-engine decision intelligence. Supported by both operations optimisation and machine learning, the dual-engine decision intelligence system enables the dynamic, comprehensive and real-time resource allocation, such as real-time electricity dispatching, optimisation of port throughput, assignment of airport stands and improvements in manufacturing processes. As such, the technology can also help businesses enhance operational efficiency.

Cloud computing and security is predicted to continue playing a key role in businesses’ digital transformation. As security technologies and cloud computing are becoming more integrated than ever before, security services have embraced the shift to become more cloud native, platform-oriented and intelligent.

Other rising trends in DAMO’s forecast include pre-trained multimodal foundation models, chiplets, processing in memory, hardware-software integrated cloud computing architecture, predictable fabric based on edge-cloud synergy, computational imaging, as well as large-scale urban digital twins.

By analysing public papers and patent filings over the past three years and conducting interviews with almost 100 scientists, entrepreneurs and engineers worldwide, DAMO presents the top technology trends in 2023 that are expected to achieve accelerated breakthroughs and impact positively across core industries economically and socially.

“Looking towards 2023, the advancement of various technologies will drive software/hardware co-design and the integration of computing and communications technologies. The wide application of technologies will facilitate the rollout of AI and other digital technologies in vertical markets and promote the collaboration of public and private sectors and individuals in security technology and security management. The innovation driven by the advancement of technologies and their industry-specific application has become an irreversible trend,” said Jeff Zhang, Head of Alibaba DAMO Academy.

In 2023, DAMO expects to see technology progress and the surge of related applications across fields:

Trend 1: Generative AI

Generative AI generates new content based on a given set of text, images, or audio files. Currently, Generative AI is mainly used to produce prototypes and drafts and is applied in scenarios like gaming, advertising, and graphic design. Along with future technological advancement and cost reduction, Generative AI will become an inclusive technology that can significantly enhance the variety, creativity and efficiency of content creation.

In the next three years, we will see business models emerging and ecosystems maturing as Generative AI becomes widely marketized. Generative AI models will be more interactive, secure, and intelligent assisting human beings to complete various creative work.

Trend 2: Dual-engine Decision Intelligence

In the past, traditional decision-making method is based on Operations Research. Due to its limitations in handling problems with great uncertainty and its slow response to large-scale problems, academia and industry began to include machine learning into decision optimisation. The two engines are perfect complements to each other, and when used in tandem, can improve the speed and quality of decision making. In the future, this technology is expected to be widely used in a variety of scenarios to support dynamic, comprehensive and real-time resource allocation, such as real-time electricity dispatching, optimisation of port throughput, assignment of airport stands and improvements in manufacturing processes.

In the future, dual-engine decision intelligence will be applied in more scenarios. It will serve to increase the number of entities and expand the scale in regional resource allocation scenarios, and eventually achieve dynamic, comprehensive and real-time resource allocation.

Trend 3: Cloud-native Security

Cloud-native security is implemented to not only deliver security capabilities that are native to cloud infrastructure, but also improve security services by leveraging cloud-native technologies. Security technologies and cloud computing are becoming more integrated than ever before. We have witnessed applied technologies evolve from containerized deployment to microservices and then to the serverless model, and security services embraced the shift to become native, fine-grained, platform-oriented and intelligent.

In the next three to five years, cloud-native security will become more versatile and can adapt more easily to multi-cloud architectures. It will also become more conducive to building security systems that are dynamic, end-to-end, precise and applicable to hybrid environments.

Trend 4: Pre-trained Multimodal Foundation Models

Pre-trained multimodal foundation models have become a new paradigm and infrastructure for building artificial intelligence (AI) systems. These models can acquire knowledge from different modalities and present the knowledge based on a unified representation learning framework. In the future, foundation models are set to serve as the basic infrastructure of AI systems across tasks of images, text and audio, empowering AI systems with cognitive intelligence capabilities to reason, answer questions, summarise and create.

Trend 5: Hardware-Software Integrated Cloud Computing Architecture

Cloud computing is evolving towards a new architecture centered around Cloud Infrastructure Processor (CIPU). This software-defined, hardware-accelerated architecture helps accelerate cloud applications while maintaining high elasticity and agility for cloud application development. CIPU will become the de facto standard of next-generation cloud computing and bring new development opportunities for core software R&D and dedicated chip design.

Trend 6: Predictable Fabric based on Edge-Cloud Synergy

Predictable fabric, a host-network co-design networking system driven by advances in cloud computing, aims to offer high-performance network services. It is also an inevitable trend as today’s computing and networking capabilities gradually converge on each other. Through the full-stack innovation of cloud-defined protocols, software, chips, hardware, architecture, and platforms, predictable fabric is expected to subvert the traditional TCP-based network architecture and becomes part of the core network in next-generation data centres. Advances in this area are also driving the adoption of predictable fabric from data centre networks to wide-area cloud backbone networks.

Trend 7: Computational Imaging

Computational imaging is an emerging interdisciplinary technology. In contrast with traditional imaging techniques, computational imaging makes use of mathematical models and signal processing capabilities, and can thus perform unprecedented in-depth analysis on light field information. This technology is already used on a large scale in mobile phone photography, health care, and autonomous driving. In the future, computational imaging will continue to revolutionise traditional imaging technologies, and give rise to innovative and imaginative applications such as lenseless imaging, and Non-line-of-sight (NLOS) imaging.

Trend 8: Chiplet

Chiplet-based design allows manufacturers to break down a system on a chip (SoC) into multiple chiplets, manufacture the chiplets separately by using different processes and finally integrate them into an SoC through interconnects and packaging. The interconnect standards of chiplets are being unified into a single standard, accelerating the industrialisation process of chiplets. Powered by advanced packaging technologies, chiplets may bring in a new wave of change to the R&D process of integrated circuits and reshape the landscape of the chip industry.

Trend 9: PIM

Processing in Memory (PIM) technology is the integration of a CPU and memory on a single chip, which allows data to be directly processed in memory. In the future, compute-in-memory chips are projected to be used in more powerful applications such as cloud-based inference. This will shift the traditional computing-centric architecture towards the data-centric architecture, which will have a positive impact on industries such as cloud computing, AI, and Internet of Things (IoT).

Trend 10: Large-scale Urban Digital Twins

The concept of urban digital twins has become a new approach to refined city governance. So far, large-scale urban digital twins have made major progress in scenarios such as traffic governance, natural disaster prevention and management, carbon peaking and neutrality. In the future, large-scale urban digital twins will become more autonomous and multidimensional.