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How to Unlock $700B by Treating Women the Same as Men in Financial Services

“There is at least a $700 billion revenue opportunity from better serving women as customers,” in the financial services industry, according to Women in Financial Services 2020, a new report by Oliver Wyman.

If financial institutions grant business loans and approve credit for women at the same rate they do for men, if they offer insurance at the same proportion of women’s incomes as they do for men’s, and if they compete for business from women’s corporations, Oliver Wyman estimates that these firms would see a combined revenue lift of $700 billion, with gains over $500 billion in the insurance sector alone. 

“While many factors lead to greater client centricity, gender is an important element,” the report finds. “We believe there is significant revenue uplift for those institutions that listen to and understand their customers.”

China Complicates Debt Payment Deferral Plans in Sub-Saharan Africa

Source: Natixis

Actual relief for low-income countries impacted by coronavirus will be lower than originally expected, according to a report by Natixis. Countries in sub-Saharan Africa have steadily accrued debt to China over the last decade, but now, a lack of clarity around China’s involvement as a creditor is complicating efforts to address relief plans. 

The Debt Service Suspension Initiative (DSSI), recently proposed by G-20 finance heads, defers low-income countries’ debt service payments — 38 of the 73 eligible countries are from sub-Saharan Africa. But confusion around which Chinese creditors are participating in the DSSI and “the evolving nature of the private sector in cross-border credit” are both cited by Natixis as issues with China’s role as a creditor. 

As coronavirus cases are still escalating in sub-Saharan Africa, the economy will likely continue to deteriorate, potentially increasing the need from countries in this region to seek credit. The report warns that the EU should continue to deliver liquidity relief to eligible countries at the rate that was originally promised.

The Oil Industry Is Impacting COVID Relief for the Middle East and Central Asia

Source: International Monetary Fund

Countries on x-axis as follows: Bahrain, Kyrgyzstan, Iran, Azerbaijan, Georgia, Morocco, Mauritania, Tajikistan, Uzbekistan, Djibouti, Saudi Arabia, Pakistan, Kazakhstan, Afghanistan, United Arab Emirates, Egypt, Tunisia, Armenia, Kuwait, Sudan, West Bank, Algeria, Jordan, Iraq, Qatar, Lebanon, Oman, Turkmenistan, Yemen

Countries in the Middle East and Central Asia have received the smallest COVID-19 economic relief packages compared to other regions across the world. Average fiscal support in the region is above 2% of GDP and has prioritized health care and vulnerable households and businesses, according to a July 2020 report from the International Monetary Fund. 

The relatively lower level of support — the global average hovers around 4% of GDP — is due to “constrained policy space among oil importers and existing sizable government support in the economy among most oil exporters.”

Many countries in the region were impacted by severe oil price fluctuations earlier this year, and although the deal made by OPEC+ helped stabilize the industry, prices are still extremely low. The region’s GDP is now projected to be -4.7% for 2020, the report says, making continued direct fiscal support an essential element of recovery.

Chinese M&A Activity Plummets During COVID-19

Source: Rhodium Group

China’s outbound M&A activity contracted by two-thirds between January and May, 2020, according to a report from Rhodium Group, compared to the average monthly count between 2016 and 2018. For the first time in 10 years, foreign investment deals into Chinese firms are outpacing those coming out of China. 

Companies have braced for investment activity from China amid the economic recession, but “there are no signs of a Chinese outbound investment boom, like the one seen after the global financial crisis a decade ago,” the report notes. “Instead, takeovers are headed in the other direction: into China.” Foreign investors are pursuing Chinese assets as the country’s consumption has risen along with its middle class. Policies that previously limited foreign investment in the country have also been lifted, and Chinese firms are seeing increasing maturation. 

Although China is the second-largest economy in the world, its fate as a global investor is not certain. Moving forward, China will need to succeed in certain domestic policy reforms and gain the trust of foreign investors, the report says — neither of which is guaranteed.

US Adults Are On the Move Due to COVID-19

Source: Pew Research Center

As a result of the coronavirus pandemic, 22% of adults in the U.S. have either moved, had someone join their residence or become aware of someone whose living situation has changed, according to Pew Research Center

Young adults ages 18 to 29 were the most likely to have moved or known someone who moved at 9%, followed by 30- to 45-year-olds at 3%. Earlier this year, Pew found that one-quarter of young adults lost their jobs from the virus, making them one of the most economically affected groups. 

Those who moved did so mainly to reduce their risk of contracting COVID-19. Six-in-10 adults moved back into a family member’s house, says Pew, while 18% moved for financial reasons, including job losses. 

The pandemic could lead to longer-term population shifts, as companies grapple with when to open their offices and whether to offer permanent remote working options.

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