Twilight Capital https://twilightcapital.ca Capital Market and M&A Advisory Fri, 09 Apr 2021 11:53:05 +0000 en-US hourly 1 https://wordpress.org/?v=5.2.10 https://twilightcapital.ca/wp-content/uploads/2019/09/cropped-twilightcapital-logo-1-32x32.png Twilight Capital https://twilightcapital.ca 32 32 The Invasion of Technology in Finance https://twilightcapital.ca/ai-technology-in-finance-industry/ https://twilightcapital.ca/ai-technology-in-finance-industry/#respond Fri, 09 Apr 2021 11:43:06 +0000 https://twilightcapital.ca/?p=1100 The invasion of technology in finance has changed the ways of financial firms when they embraced the need for adaptation. Indeed, the finance industry is becoming more dependent on automation every day. Financial firms use machine learning to assist with everything from process automation to algorithmic trading, enabling them to reduce operational costs, increase revenue, better compliance, and reinforce security. In fact, 35% of America’s stock market funds are run by computers that follow rules set by humans. Those same funds also account for 60% of institutional equity assets and 60% of trading activity.

How Finance Has Used Technology

Let’s take a step back and examine how finance has used technology to improve over the years. An early example can be found in the transatlantic cable, the first completed in 1866. Prior to the telegraph cable being established, cotton prices were relayed via steamships between New York and Liverpool. The introduction of the telegraph cable reduced travel times for information, allowing Americans to get updates on Britain much faster and ultimately helping them determine how much cotton to export, making prices much more consistent.

Fast forward to the 1980s, when Wall Street analysts became early adopters of spreadsheet software.

  • Beginning in 1979 with VisiCalc, early spreadsheet software made budgeting, bookkeeping, making lists, and tracking financial projections much easier.
  • A few years later, in 1983, Lotus 1-2-3 was introduced for IBM PCs. This new, faster software had all of the major features of VisiCalc. It also allowed analysts to import their VisiCalc files with new features such as variable column widths, a macro language to allow simple programming in cells, and the ability to create charts and graphics.
  • Eventually, Windows became mainstream, and Excel was introduced. Excel was easier to use, with most people being able to pick it up on their own as opposed to having to read a book to understand Lotus.

AI Technology in Finance in Control

Computers have continued to take over the financial industry in different ways since the days of the original spreadsheets. One of the first big ways computers affected the finance industry was by eliminating the need to execute buy and sell orders in trading. Modern-day trading floors are filled with servers that have taken the place of human traders.

In the past 10 years, computers have begun running portfolios, with ETFs and mutual funds tracking indices of shares and bonds automatically. This past September, machines had $4.3 trillion invested in American equities, which for the first time ever exceeded the sums actively run by humans.

Beyond this, computers are becoming smarter every day, many to the point of gaining autonomy. Many programs that use AI (Artificial Intelligence) now create their own strategies without the need for human input. Is technology in finance beneficial for the industry in the long run?  As these machines become stronger and smarter, they gain the ability to do more. The practically infinite supply of new data combined with advances in processing power has created new ways to assess investments, such as funds using satellites to track retailers’ car parks and scrape inflation data from e-commerce sites.

Invasion of Technology in Finance

Advances are Going to Continue

Modern-day trading floors are filled with servers that have taken the place of human traders., particularly by cutting costs. ETFs typically charge .1% a year, where an active fund would charge 1%. ETFs are even purchasable over the phone. Of course, the automation of finance has raised a few concerns such as financial stability, the concentration of wealth, and corporate governance. These are all valid, as many innovations have led to crises before landing on their feet. Regardless, these advances are going to continue, and human investors may be in for a rude awakening if they don’t adapt. The full invasion of technology in finance is advancing more than ever and it is here to stay.

 

About the Author:

Nikolas Perrault, CFO

Earlier in his career, Mr. Perrault served as an investment executive with some of Canada’s largest institutions, including National Bank, Merrill-Lynch, CIBC and Scotia Capital.

Mr. Perrault graduated from Concordia University with a Bachelor of Commerce in Finance in 1991. He received his Chartered Financial Analyst designation in 1997. He has extensive experience in securities trading, human resources management, and financial analysis. Nikolas Perrault is also currently acting as a Special Advisor Capital Market to QuantGate Systems, a fintech company that is working towards making trading a safer experience for everyone through their diversified team of leaders and innovators as well as being on the advisory board for Petro Viking Energy Inc, a Canadian private reporting issuer poised to become a 21st Century Integrated Energy Company that works on energy projects in Canada and internationally. Nikolas Perrault is also now Managing Director at Regent Capital Partners.

On this blog, Nikolas Perrault will share news and insights into various emerging trends in the areas of technology, including but not limited to alternative energy, artificial intelligence, cryptocurrencies, and blockchain as well as healthcare. For more from Mr. Perrault, visit his natural resources blog, where he will share updates and analyses of natural resources, precious metals, and oil and gas.

Source:

Nikolas Perrault Technology Blog

A History of Technology in Finance

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Microfinance – Is It a Better Solution? https://twilightcapital.ca/microfinance-solution-work-reduce-poverty/ https://twilightcapital.ca/microfinance-solution-work-reduce-poverty/#respond Mon, 22 Feb 2021 16:05:48 +0000 https://twilightcapital.ca/?p=1081 Microfinance or microcredit is considered the best solution to help alleviate poverty among those low-income families or help small business owners to thrive and survive.  But the question is- does microfinance actually work and serve as a sustainable solution? Let’s have a brief look at it.

For many, escaping poverty requires more resources than they have access to. This also applies on a countrywide level, with developing countries lacking the means of creating the infrastructure that would reduce the cost of self-sufficiency. The wealth divide has only grown greater, with 1.4 billion citizens of developing countries trapped in extreme poverty. The widespread prevalence of poverty has led to governments and other organizations proposing their own solutions.

Microfinance Defined

One such solution is microcredit, introduced between the 1980s and the turn of the century in an attempt to combat poverty in developing countries. Also known as microfinancing, the process works by loaning a small amount of money to someone living in a poor country in order to help them expand a small business and ultimately help their family escape poverty. When the loan is paid back, that money can then be cycled to more borrowers and help get more families out of poverty.

How Did it Start?

Let’s take a step back and look at how microfinance came to be. Back in the late 70s and early 80s, an economist by the name of Muhammad Yunus met a woman in Bangladesh who made stools out of bamboo and only earned two cents a day doing so. The rest of the money she made went to her bamboo supplier. Yunus believed that if this woman had a dependable source of credit, she’d be able to get herself out of her financial rut. This led to Yunus creating Grameen Bank in 1983.

When Grameen was founded, it included several core operational elements, the first being that repayment started right after the bank granted a loan. These payments would be made regularly and frequently over the course of about a year. Other elements included group loans, which allowed a small group of borrowers from different households to receive loans together, as well as cutting overhead costs by having loan officers hold weekly meetings in villages to collect and give out payments, eliminating the need for a physical bank.

The Impact of Microfinance Around the Globe

Yunus and Grameen Bank played a large role in microfinance taking off, with some even calling it a revolution. Many organizations around the world chose to follow in Grameen’s footsteps, with over 3000 existing as of 2015. Groups such as Accion in Latin America as well as BRAC in Bangladesh were early precursors to Grameen’s vision, though none of them were ever able to reach that point of combining high repayment rates, manageable cost, and scalability to millions of people. Yunus was also able to promote his vision for microcredit in a way that ended up being extremely influential. Many believed it was unwise to lend to those living on only a dollar or two per day, but Yunus was able to help transform perceptions of microcredit through his vision.

microfinance solution

 

When Microfinance is Not an Appropriate Tool

Of course, every advancement has its issues. When the 2000s came around, skepticism began to arise over microcredit, with concerns over the possibility that some microcredit institutions were harming people as well as determining if an institution’s level of interest is acceptable or exploitative. People such as Yunus argued that having interest rates over a certain level would mean the firms are turning into predatory loan sharks. The narrative surrounding microcredit was also questioned for a time, with many researchers asking if it actually got people out of poverty. Many studies have been done over the years to provide evidence that it works, albeit not always to the extent they projected.

Is Microcredit a Better Solution?

Choosing to donate through microcredit can be a difficult decision. Is it better to give via microcredit as a way to help those living in extreme poverty, or should you look into other methods of helping, such as simply donating cash? You can find evidence pointing in both directions, with groups such as GiveWell not recommending microfinance and other researchers arguing that microfinance can still stand on its own next to other programs. While it might not always work to the extent that it was intended, microcredit has proven that it can still be successful when it comes to making a difference in poverty-stricken communities.

 

Source:

A Brief Look  at Microfinance

Nikolas Perrault Blog

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Financial Data Needs to be Decision-Ready https://twilightcapital.ca/financial-data-need-to-be-decision-ready/ https://twilightcapital.ca/financial-data-need-to-be-decision-ready/#respond Sat, 13 Feb 2021 18:40:55 +0000 https://twilightcapital.ca/?p=1068 Delivering Financial Data

The one-size-fits-all centralized data governance model has run its course in the financial industry. There is a need for a more efficient and that serves business better. Governance should be allowed to be distributed to data owners where appropriate, which would help the finance function optimize data to make decisions. Decision-readiness is much better than accuracy and precision because it is a much more consistent and complete process.

What if Financial Data were Made Decision-Ready?

  • If financial data were made decision-ready, financial governance principles would be adapted for non-financial performance data. Decision-ready financial data would bolster trust in internal reports because it would incorporate more intuitive data as well as highly-governed data. This would also define the relationship between financial and operational data.

 

  • If financial data were decision-ready, then it could potentially provide areas that have the most economic benefit with more opportunity to focus on data quality improvements.

Financial data

Today, organizations are creating and utilizing a large and growing amount of transactional, operational, and other enterprise data. Often times, finance will opt for a “single source of truth”, but that’s not enough anymore. While it can be useful at times, especially to organizations that require precision, but it’s not really that useful for decision making. When the data is provided without context or shared with a business in a way that it can’t easily absorb, then it becomes useless.

What Makes it Decision Ready?

According to research, finance needs more pragmatism and flexibility. Finance should deliver comprehensive data faster in order to make decisions, however, this could also take a toll on data accuracy. Instead of a “single source of truth,” finance should opt for a “sufficient version of the truth”, which is oftentimes enough. By making informed trade-offs between the cost of bad data and the effort needed for additional data governance, finance is able to provide a “sufficient version of the truth”, which benefits the business when done correctly and gives them a better outcome.

Data needs to be prepared differently for decision-readiness to be improved. To have a better decision-ready strategy, finance must support distributed data owners with guidelines on which data to govern and the extent of governance as well as effectively store and protect data.

The Framework to Exist

 

A framework is a good way to drive informed decisions about the trade-offs. Use it to gauge which data quality issues are most critical and assess the cost of poor data in terms of business factors, such as lost time and income, expenses and reputational damage.

Smarter with Gartner

A framework is needed for data quality, drives informed decisions about the trade-offs, and helps to make data governance more scalable. Even if the data isn’t perfect, mutually agreed data quality frameworks will create a shared trust that multiple versions of the truth are good enough to make well- informed financial decisions.

 

Financial  Data-Driven Decision

Giving importance to financial data will lead to business decisions that can make companies succeed or fail. Its importance is apparent in terms of consistency and growth stability of the business. The creation of new business opportunities, revenue generation,  future trend predictions, current operational effort optimization, and production of actional insights. … Data driven business decisions make or break companies.

Other Sources:

Smarter with Gartner

Interpreting Financial Insights In Your Business’s Management Reports

About the Author- Nikolas Perrault

Nikolas Perrault is a Chartered Financial Analyst with significant experience in the financial, technology, and natural resources industries. As founder and CEO of M&A and Capital Market Advisory consulting firm Twilight Capital, Mr. Perrault provides strategic advice to select clients on a global scale. Twilight’s primary focus is natural resource companies. Additional areas of interest include AI, healthcare, and Fintech.

 

Capital Market Advisory

 

 

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The Paradigm Shift of Marketing Trends in the Advent of COVID-19 Pandemic https://twilightcapital.ca/paradigm-shift-marketing-trends-covid-19/ https://twilightcapital.ca/paradigm-shift-marketing-trends-covid-19/#respond Wed, 20 Jan 2021 17:04:53 +0000 https://twilightcapital.ca/?p=1042

The Intersection of Marketing Trends and COVID-19

The creation of accessible tools to segment and reach out to audiences has made the marketing industry more competitive than ever before. With consumer behavior thoroughly mapped and quantified, marketers have an easier time determining their messaging and ensuring their budget doesn’t go to waste.

However, even the most advanced metrics can fail to account for consumer behavior or fundamental changes in the market. Even before the advent of the COVID-19 pandemic, skilled marketing teams were rewarded for changing their strategy and being flexible with their adoption of new technology. Now, marketers are faced with the dual struggle of figuring out how to empathize with a population struggling with a myriad of financial, health, and lifestyle concerns while still expanding their toolsets.

Marekting Trends and COVID -19

It’s hard to discuss technological trends without mentioning artificial intelligence (AI), which is on-trend to impact just about every industry. AI is projected to increase global GDP by up to 14% by 2030 and cannot be ignored for the potential competitive advantage it can create. For marketers, AI has the potential to offer unparalleled insight into consumer habits and provide automated customer solutions.

With the current pandemic shaping buying habits, AI can help companies get a handle on this shift in trends to help marketers learn how to best provide products and services to customers in a manner that fits their needs. Additionally, for oversold industries trying to manage an influx of customers, automation can help both field requests and oversee the production of additional stock.

Make Way for the Conversational Marketing Trends

Conversely, many customers want to feel like they’re being listened to and receive an immediate response when they reach out with questions. And, in uncertain times, they also want empathy from whoever they’re reaching out to. Ideally, this means an actual person, but when that’s not possible, conversational marketing is a potential solution.

This covers AI-enabled chatbots capable of providing more thorough answers based on what the customer is looking for as well as voice assistants that can help customers conduct searches or carry out tasks on their behalf. In fact, voice search has become another marketing platform to be accounted for, especially when considering SEO rankings for relevant websites.

To that end, customers also want communications to be personalized to them. It stands to reason that the absolute deluge of marketing correspondence forces people to tune most of it out, so finding any way of standing out in the crowd is important. This also coincides with the ongoing trend of marketers sending COVID-specific communication to customers, informing them of their business’s precautionary measures and potential charitable work. It can be easy to get lost in industry lingo, even when writing B2C. However, it’s up to marketers to find ways to reach customers that are simple and empathetic—even if they’re not trying to sell anything.

Why Such Paradigm Shift

Every company has been forced to adapt to the COVID-19 pandemic, and that often means a serious reevaluation of marketing efforts to better communicate with customers. While sales are down in most industries, new marketing technologies can also play a part in appealing to audiences and fulfilling needs without being overt and pushy.

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Efficient Virtual Power Plants Explained https://twilightcapital.ca/virtual-power-plants-benefits/ https://twilightcapital.ca/virtual-power-plants-benefits/#respond Tue, 19 Jan 2021 16:26:39 +0000 https://twilightcapital.ca/?p=1036  Virtual Power Plants (VPP) Explained

An increasingly networked world has given rise to more decentralized power infrastructure. These virtual power plants (VPPs)  are made up of remotely-managed smaller units, many of which make use of renewable energy. Virtual power plants provide a degree of flexibility unheard of in traditional plants, allowing for easier management not tied to a large and unseemly facility. It also lays the groundwork for a transition to sustainable energy sources that can compensate for the variability of factors such as sun and wind.

A VPP consists of a network of smaller-scale power producers, storage units, or conversion plants linked to a centralized control system. Any decentralized unit can be integrated into a VPP, allowing smaller assets to enter markets they would not have the resources to do on their own. Control systems can adjust for changes in the network, balancing for reserves and updating in real time to grid conditions.

Virtual Power Plant Image Cover

With VPP, A Variety of Energy  Types Can Now Be Managed

VPPs are similar to microgrids, which also make use of a variety of energy types to adjust to demand. However, VPPs are on-grid, whereas microgrids are often isolated or restricted to a particular location. VPP control systems also aggregate those of the individual units, whereas microgrid assets tend to be less virtual and more reliant on hardware for control. To that end, VPPs also sidestep the hefty expenses involved in upgrading existing infrastructure.

The need for powerful VPP software has seen numerous companies scramble to gain an early foothold in this field. Given the variance in VPP networks, trailblazers in the field have built and marketed platforms catering to different markets, each providing monitoring and control systems for associated assets. Many larger power companies have taken notice, snapping up the providers of VPP tools in recent years. The exchange of data facilitated by this software also grants real-time insights into the functioning of the grid and can create further efficiencies.

The flexibility that virtual power plants provide gives smaller units a foothold in the market. Due to high barriers to entry regarding availability and reliability for production, these services can work together under the umbrella of a VPP to shore up each other’s weaknesses in the event of an unforeseen outage.

Virtual Power Plants for Renewable Energy (Windmill)

The Transition to Virtual Power Plants as Larger Shift to Renewable Energy

The concept of virtual power plants has been around since the end of the twentieth century, but technological limitations prevented them from being anything more than a theory. Exponential advancements in computing made VPPs more feasible, affording more sophisticated and reliable control systems. Germany’s exit from nuclear power and the modification of their renewable energy act has laid the foundation for the country’s transition to VPPs as part of a larger shift toward renewable energy.

The digitalization of the energy sector can improve the way that providers distribute energy and give smaller companies a foothold, particularly with renewable assets that might not be as consistent. Virtual power plants represent an unprecedented level of agility unmatched by traditional power plants and should be considered for its variety of benefits in cost and decentralization.

 

About the Author:

Nikolas Perrault, CFO

Earlier in his career, Mr. Perrault served as an investment executive with some of Canada’s largest institutions, including National Bank, Merrill-Lynch, CIBC and Scotia Capital.

Mr. Perrault graduated from Concordia University with a Bachelor of Commerce in Finance in 1991. He received his Chartered Financial Analyst designation in 1997. He has extensive experience in securities trading, human resources management, and financial analysis. Nikolas Perrault is also currently acting as a Special Advisor Capital Market to QuantGate Systems, a fintech company that is working towards making trading a safer experience for everyone through their diversified team of leaders and innovators as well as being on the advisory board for Petro Viking Energy Inc, a Canadian private reporting issuer poised to become a 21st Century Integrated Energy Company that works on energy projects in Canada and internationally. Nikolas Perrault is also now Managing Director at Regent Capital Partners.

On this blog, Nikolas Perrault will share news and insights into various emerging trends in the areas of technology, including but not limited to alternative energy, artificial intelligence, cryptocurrencies, and blockchain as well as healthcare. For more from Mr. Perrault, visit his natural resources blog, where he will share updates and analyses of natural resources, precious metals, and oil and gas.

Source:

Nikolas Perrault Technology Blog

Virtual Power Plants Explained

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