We keep our ear to the ground for the interesting stats, insights and discussion points you need to feel in the know.
1. Instability in the Red Sea – how has it impacted business?
The Suez Canal in Egypt – which connects the Mediterranean Sea to the Red Sea – typically handles approximately 30% of global container shipments, plus 12% of global trade. Since November 2023, the Yemen-based Houthi rebel group has conducted at least 30 attacks against ships passing through this waterway. As a result trade volumes through the canal have dropped by 40%, as ships divert around southern Africa. Importing companies – primarily in Europe, as exports from East Asia to Europe account for a significant share of Suez Canal container traffic – are subsequently facing delivery delays and higher costs. Major sectors affected include energy, consumer products and retail. Business leaders should prepare for inflation to persist and should consider diversifying their supply chains, potentially through air freight but also via alternate maritime or land routes.
Geostrategic Analysis: February 2024 edition
2. Crystal ball or risk matrix?
There is almost no end to the questions Chief Risk Officers (CROs) must ask to get ahead of emerging risks. What geopolitical developments could unravel and impact our business? What will cyber attacks look like when quantum computing goes mainstream? Is our transformation agenda bold enough for future customers? The list goes on. But playing ‘fortune teller’ is just one part of the increasingly multi-faceted CRO role. According to EY teams, there are in fact seven roles CROs must play to identify, manage and report on risks effectively. As well as being fortune tellers, CROs must also be firewatchers and monitor vigilantly to prevent emergencies; cyber tops the list of immediate-term CRO and board concerns by a large margin. CROs must also be data gurus and geopolitical experts…
Why today’s banking CRO must be master of many trades
3. Sick and tired of hearing about our clean energy future?
Consumers will ultimately determine the success or failure of our clean energy future, but they are growing tired of the journey to get there. New EY data backs this up; 65% of energy consumers know how to start making sustainable energy choices, but 70% say they will not spend more time or money doing so. Businesses have been left to shoulder the burden of a changing energy system, navigating new technologies and deciphering complex tariffs, all while absorbing rising bills. And consumers are struggling to see the payoff for their efforts so far, with many saying the energy system just isn’t delivering on three fundamentals: affordability, access and appeal. 67% of consumers say they can’t absorb a bill increase of 10%. Only 33% are confident they can access clean energy options. And 70% of consumers would like subscription-based energy bill options. But the good news is that consumer fatigue hasn’t extinguished all hope for the future…
Three ways to move energy consumers from interest to action
4. Meet the GenAI tools transforming tax at EY
Tax functions, the “data epicenters” of most organizations, are leading the way in demonstrating how AI can transform business operations. Take payroll as an example; the one function in a business that touches every employee. In the past, businesses have struggled to answer payroll-related questions quickly and accurately. Traditional call centers, basic chatbots, local language lines and employee information portals have often failed to delight employees, improve their experiences and they are equally costly, inefficient, and generally ineffective. The award-winning EY Payroll Chatbot has changed that practically overnight. We built a large language model and GenAI chatbot that incorporated regulatory compliance elements with company policies. To date, our payroll Azure Open AI GPT chatbot has improved the employee experience by more than 25%, increased the accuracy of answers by more than 30%, and reduced the business cost of answering employee questions by more than 80%. But it’s not just about more powerful or smarter chatbots. There’s more…
Three ways GenAI is already transforming tax and five more impacts it may have soon
5. Getting everyone home safe, every day
Network Rail is responsible for running a safe, reliable and efficient railway across Great Britain. Safety is at the heart of everything it does, not least for its employees and contractors. But unfortunately, it is not always possible to close entire sections of the line whilst repairs or essential maintenance are carried out, leaving workers vulnerable to the risks of a live railway. Tragically, 33 employees and contractors have been killed on Network Rail infrastructure since 2008. Despite significant investment from Network Rail, two previous attempts to invigorate its track worker safety programmes failed, leaving employees feeling skeptical that the organization could ever get railway safety right. The organization’s historic reliance on paper-based information was also causing several problems for staff, including inaccurate paper trails that led to unnecessary work being carried out by frontline workers, creating potentially dangerous situations. EY were called on for help…