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Trade Finance Essentials

by with No Comment Technology

This content provides a detailed examination of essential trade finance instruments crucial for facilitating international transactions. The focus is on instruments such as Letters of Credit, Documentary Collections, Trade Credit Insurance, Bank Guarantees, Forfaiting, and Bills of Exchange. Real-world examples illustrate their functions and applications, showcasing how businesses strategically leverage these tools to ensure secure and efficient cross-border trade. The exploration emphasises the role of these instruments in mitigating risks, fostering trust, and enhancing transparency in the dynamic landscape of global commerce. The content concludes with a recognition of the indispensable nature of trade finance instruments for businesses seeking success in international markets.

Key instruments:

LC (Letter of Credit):

A financial document issued by a bank that guarantees payment to the seller upon presentation of required documentation. In foreign transactions, LCs reduce the risk of nonpayment and provide assurance to both buyers and sellers.

Example: An American exporter is looking to sell machinery to a German importer, setting the stage for an international business transaction. In order to facilitate a secure and structured payment process, the German importing company initiates a request for a Letter of Credit (LC) from its bank. This financial instrument serves as a formal guarantee from the bank, assuring the American exporting company that payment will be made upon the successful presentation of specified documents.

Following the initiation of the Letter of Credit, the German company proceeds with the purchase of machinery. Upon completion of the transaction, the American exporter submits the required documents to the German company’s bank for verification. Upon thorough examination and confirmation that all conditions stipulated in the Letter of Credit have been met, the issuing bank promptly releases the agreed-upon payment to the American exporter. This meticulous process ensures a reliable and trustworthy financial transaction between the two entities, fostering confidence and security in their international trade relations.

Documentary Collection:

A process where the exporter’s bank collects payment from the importer through the presentation of shipping documents. Documentary collections offer a less complex alternative to letters of credit, facilitating payment while ensuring that the buyer receives the necessary documents to claim the goods.

Example: A Chinese exporting firm engages in the sale of textiles to a Brazilian importing company, setting the stage for an international trade transaction. The Chinese exporter opts for a Documentary Collection method to facilitate the transaction. Under this arrangement, the exporter’s bank takes charge of sending the shipping documents to the bank representing the Brazilian importer. The crux of this mechanism lies in tying the payment to the release of these crucial shipping documents.

Subsequent to the dispatch of the textiles, the Chinese company submits the pertinent shipping documents to its bank, initiating the Documentary Collection process. These documents are then forwarded to the Brazilian company’s bank. Upon receipt, the Brazilian importer settles the payment for the textiles, thereby completing the transaction.

Critical to note is that the release of the shipping documents to the Brazilian company is contingent upon the successful payment. Once the payment is received and verified, the Brazilian company gains possession of the essential shipping documents, thus securing the rightful claim to the imported goods. This method ensures a structured and secure pathway for both parties, fostering a reliable and transparent international trade relationship.

Trade Credit Insurance:

Insurance that protects exporters against the risk of non-payment by the importer due to insolvency or other specified reasons. Trade credit insurance provides financial security to exporters, encouraging them to engage in international trade by mitigating the risk of non-payment.

Example: Amy runs a small toy manufacturing company, and she supplies toys to various retailers. One of her biggest clients is a chain of toy stores. Amy is excited about a large order from this chain, but she’s also a bit concerned because the stores have a payment term of 90 days, meaning they will pay for the toys three months after receiving them.

To protect herself from the risk of not being paid if the toy stores face financial troubles, Amy decides to get Trade Credit Insurance. This is like buying an insurance policy for the money she’s expecting from the toy stores. Several months pass, and unfortunately, the toy stores face financial difficulties. They struggle to pay their bills, including the one owed to Amy. In this situation, Amy’s Trade Credit Insurance comes into play. She files a claim with the insurance company, providing proof of the sale and the financial difficulties faced by the toy stores.

The insurance company, after verifying the claim, steps in to cover the outstanding payment that Amy was supposed to receive from the toy stores. This helps Amy to mitigate the financial impact of not getting paid on time and allows her to continue running her toy manufacturing business without significant losses.

In simple terms, Trade Credit Insurance acts like a safety net for businesses, protecting them from the risk of not getting paid due to the financial difficulties of their customers. It provides a layer of security, allowing businesses to confidently engage in trade and extend credit terms to their customers.

Bank Guarantees:

A commitment issued by a bank to fulfil a financial obligation if the party taking on the obligation fails to do so. Bank guarantees in trade finance can take various forms, such as bid bonds, performance guarantees, and advance payment guarantees, providing additional security in transactions.

Sarah owns a construction company, and she’s bidding for a big project that requires a performance guarantee. The client wants assurance that if Sarah’s company fails to complete the project as per the agreed terms, they will be compensated.

To secure the project, Sarah approaches her bank for a Bank Guarantee. The bank reviews Sarah’s financial stability and the details of the project. Once satisfied, the bank issues a document stating that they will cover a specified amount to the client if Sarah’s company doesn’t fulfil its contractual obligations.

Sarah submits this Bank Guarantee to the client along with her bid. The client, now assured that they have financial protection in case of non-performance, awards the project to Sarah’s construction company.

As Sarah successfully completes the project, the Bank Guarantee remains unused. However, its presence provided confidence to the client, enabling Sarah to secure the contract. If there had been any issues, the client could have invoked the Bank Guarantee, and the bank would have compensated them up to the guaranteed amount.

In simpler terms, a Bank Guarantee acts as a promise from a bank to cover financial losses on behalf of a business if it fails to meet its contractual obligations. It adds a layer of security, fostering trust in business transactions, especially in projects where performance and completion are critical factors.

Forfaiting:

The sale of trade receivables, usually at a discount, to a forfaiter (financial institution). Forfaiting allows exporters to receive immediate cash by selling their future receivables, shifting the risk of non-payment to the forfaiter.

Mark, an international trader, has just closed a deal to export a large shipment of machinery to a company in another country. The buyer, however, wishes to defer the payment for a considerable period, say three years, due to their cash flow constraints.

Mark doesn’t want to wait for three years to receive his payment, as he has immediate financial needs. To address this, he decides to utilize Forfaiting. Mark contacts a Forfaiter, a financial institution specializing in this service, and presents the details of the trade transaction.

The Forfaiter reviews the terms of the deal and agrees to purchase Mark’s future receivables at a discounted rate. Essentially, the Forfaiter pays Mark a lump sum upfront, taking over the responsibility of collecting the payment from the buyer when it matures in three years. The Forfaiter assumes the risk of any non-payment by the buyer.

Now, Mark has immediate cash on hand, enabling him to cover his costs, invest in new opportunities, or address any financial needs. The Forfaiter, in turn, earns a profit by collecting the full payment from the buyer in the future.

In simple terms, Forfaiting allows a seller to receive upfront cash for future receivables from a buyer, transferring the collection risk to a financial institution. It’s a way for traders to secure immediate liquidity instead of waiting for extended payment periods.

Bill of Exchange (or Draft):

A written order by the exporter instructing the importer to pay a specified amount within a certain timeframe. Bills of exchange provide a credit period to the importer, allowing them time to sell the goods before making the payment.

Alex, a furniture manufacturer, supplies a large shipment of handcrafted furniture to a retail store in another city. The store owner, Sarah, agrees to pay for the furniture but prefers a bit more time before making the payment.

To formalize the agreement and provide a secure payment method, Alex decides to use a Bill of Exchange. He drafts a document that includes details such as the amount owed, the due date for payment, and the terms of the agreement. This document serves as a written promise from Sarah to pay Alex the agreed-upon amount on the specified future date.

Alex presents the Bill of Exchange to Sarah along with the furniture shipment. Sarah, in acknowledgment of the debt, accepts the Bill of Exchange. This document now acts as a legally binding agreement, a kind of “IOU,” stating that Sarah will make the payment on the agreed-upon date.

On the due date, Sarah fulfils her commitment by paying the agreed-upon amount to Alex or Alex’s bank. In the meantime, Alex has the option to hold onto the Bill of Exchange until the due date or, if he needs immediate cash, to negotiate or “discount” the bill with a bank. The bank pays Alex the amount of the bill, minus a discount or fee, and assumes the responsibility of collecting the full payment from Sarah when it matures.

In simple terms, a Bill of Exchange is like a written promise to pay for goods or services at a later date, providing a formal structure to credit transactions in trade while also offering flexibility in managing cash flow for both the buyer and the seller.

Conclusion:

The landscape of international trade is a multifaceted terrain, and the deployment of key trade finance instruments serves as a vital compass for businesses navigating its complexities. From the protective mechanisms of Letters of Credit to the flexible dynamics of Bills of Exchange, each instrument plays a strategic role in mitigating risks, ensuring timely payments, and fostering confidence in cross-border transactions. The real-world examples provided underscore the practical applications of these instruments, highlighting their indispensable nature in promoting secure and transparent global commerce. As businesses continue to engage in the interconnected world of international trade, a nuanced understanding and effective utilization of these trade finance instruments emerge as imperative elements for sustained success and growth.

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Bridging the Gap: How Trade Finance Fuels International Trade

by with No Comment Technology

Envision a global landscape where business transcends geographical boundaries, fostering connections between small enterprises in various nations. Picture artisans in one corner of the world seamlessly engaging with customers on the opposite side. This interconnected trade reality isn’t just a dream; it’s a tangible achievement powered by a crucial factor: Trade Finance.

 

What exactly is trade finance?

Imagine it as a financial bridge seamlessly connecting buyers and sellers across international borders. Comprising a suite of tools and services meticulously crafted to alleviate the inherent risks in global transactions, it ensures the smooth flow of goods, services, and, most importantly, financial transactions.

Trade finance encompasses a spectrum of financial instruments, products, and services strategically designed to facilitate international trade. Its primary objective is to provide funding and mitigate the risks associated with the exchange of goods and services across borders. This multifaceted domain includes various financial mechanisms such as letters of credit, trade credit insurance, documentary collections, and export financing.

At its core, trade finance is dedicated to supporting businesses engaged in import and export activities. It achieves this by ensuring the uninterrupted flow of funds, reducing payment risks, and furnishing financial instruments that establish trust and security between trading partners. The overarching goal of trade finance is to promote and enable international trade transactions by effectively addressing the challenges and complexities inherent in cross-border commerce.

 

Why is trade finance so crucial?

International trade involves a delicate dance of trust and uncertainty. An exporter in Malaysia may worry about receiving payment for goods shipped to Germany, while an importer in Japan may fear receiving defective products or encountering delays. Trade finance alleviates these concerns by offering:

§ Payment guarantees: Importers can secure financing from banks, providing exporters assurance of payment even in the event of an importer default.

§ Letters of credit: Banks act as trusted intermediaries, verifying documents and releasing payments only when specific conditions are met.

§ Trade credit insurance: Businesses are protected from financial losses due to unforeseen events such as political instability or insolvency.

 

The impact of trade finance extends beyond individual transactions; it serves as a catalyst for the entire global economy by:

§ Empowering small businesses: Making international markets accessible allows smaller players to compete on a larger stage.

§ Generating employment: Facilitating trade leads to increased production, employment opportunities, and overall economic growth.

§ Fostering development: Assisting developing countries in accessing essential goods and services promotes economic diversification and progress.

 

Let’s witness it in action: Meet Maria, a batik textile producer in Malaysia who secures a trade finance facility from her bank. Utilising this, she ships her exquisite batik scarves to a boutique in Berlin. The bank issues a letter of credit to the boutique, ensuring Maria’s payment upon delivery. As the boutique receives and confirms the quality of the scarves, the bank releases the payment to Maria.

In this seamless transaction, Maria expands her market reach, the boutique gains unique products, and the global economy receives a boost. Trade finance acts as an invisible hand, lubricating the gears of international commerce.

Looking ahead, the future of trade finance is undergoing a transformative phase with the advent of digital technologies. Blockchain-based solutions promise increased transparency and efficiency, while fintech companies develop innovative products tailored to the needs of small and medium enterprises.

As the world becomes more interconnected, the role of trade finance will only intensify. By bridging the gap between buyers and sellers, it will continue to propel the engine of international trade, fostering economic growth and prosperity for all. So, the next time you admire a beautiful batik scarf or savour coffee from a distant land, recognise the invisible threads of trade finance woven into their journey—a testament to the power of collaboration, trust, and innovation that shapes our world into a truly interconnected marketplace.

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The Future of IT Operations: Predictions and Trends for AIOps

by with No Comment Technology

In the world of IT, things are changing rapidly. As we approach 2023 and beyond, it’s important to take a look at the future of IT operations and the role that AIOps will play in shaping it. AIOps is the practice of using artificial intelligence (AI) and machine learning (ML) to enhance and automate IT operations. In this blog, we’ll explore some of the predictions and trends for AIOps in the coming years.

Increased Adoption of AIOps

One of the most significant predictions for AIOps is that there will be increased adoption of this technology in the coming years. According to a report by Markets and Markets, the AIOps platform market size is expected to grow from $2.55 billion in 2018 to $11.02 billion by 2023, at a CAGR of 34.0% during the forecast period. This growth can be attributed to the increasing demand for real-time and proactive IT operations management, which is made possible through AIOps. AIOps is also becoming more accessible to businesses of all sizes, with cloud-based AIOps platforms now available from major cloud providers.

AIOps for Security

Another prediction for AIOps is that it will increasingly be used for security. As cyberattacks become more sophisticated, it’s becoming harder for human operators to keep up with them. However, AI and ML can be used to detect and respond to threats in real-time, without the need for human intervention. In the coming years, we can expect to see AIOps being used for security purposes, including threat detection and response, anomaly detection, and compliance monitoring. By using AIOps for security, businesses can reduce their risk of cyberattacks and ensure their operations remain secure.

Increased Automation of IT Operations

As AIOps continues to mature, we can expect to see an increase in the automation of IT operations. AIOps can be used to automate many routine tasks, such as monitoring, alerting, and incident response. This will allow IT teams to focus on more strategic initiatives, while AIOps takes care of the day-to-day operations. Automation can also help to reduce human error, which is a common cause of downtime and other IT issues. By using AIOps to automate IT operations, businesses can improve their overall efficiency and productivity.

AIOps for DevOps

DevOps is an approach to software development that emphasises collaboration and communication between development and operations teams. AIOps can be used to enhance DevOps practices by providing real-time insights into the performance of applications and infrastructure. In the coming years, we can expect to see more businesses adopting AIOps to improve their DevOps processes. This will help to reduce the time it takes to identify and fix issues, which will ultimately lead to faster time-to-market for new applications and features.

AIOps for Predictive Maintenance

Predictive maintenance is the practice of using data analytics to predict when maintenance is required on equipment or systems. AIOps can be used to enhance predictive maintenance by analysing data from various sources, including IoT sensors, to identify potential issues before they occur. In the coming years, we can expect to see more businesses adopting AIOps for predictive maintenance. This will help to reduce downtime and improve overall equipment reliability, which will ultimately lead to increased efficiency and productivity.

AIOps is positioned to take on a more significant function in the IT operations landscape of the future. AIOps will give the tools and insights that are essential to accomplish these objectives for organisations as they work towards increasing their efficiency and production. Even if the use of AI in operations is becoming more widespread, there are still a few problems that need to be solved. The shortage of qualified employees who are able to manage and maintain AI operations platforms is one of the most significant issues. There is presently a dearth of IT workers that possess the requisite skills and expertise to properly handle AIOps since it is a relatively new technology. This indicates that companies may need to make investments in the training of existing workers or the recruitment of new people in order to effectively manage their AI operations platforms.

Integration of AIOps with preexisting information technology systems and infrastructure is another obstacle to overcome. AIOps platforms need to be able to interact with a diverse selection of information technology (IT) systems, such as monitoring tools, data sources, and analytics platforms. Especially for companies that are still using older forms of information technology, this may be a difficult and time-consuming procedure.

In spite of these obstacles, it is easy to see how AIOps might be beneficial. Businesses may increase their productivity, decrease the amount of downtime they encounter, and improve the overall customer experience all by using AI and ML to enhance and automate their IT processes. AIOps is also a vital tool for enterprises that operate in complex and dynamic settings, such as cloud-based environments and IoT systems. These environments may be challenging to manage and monitor effectively.

When we take a look into the horizon of what the future holds for AIOps, we may anticipate the emergence of a few distinct tendencies. The use of AIOps for the purpose of continuous improvement is one trend. AIOps systems may be used to gather data on IT operations over time, which can then be utilised to determine areas in which there is room for improvement. Businesses may achieve better levels of efficiency and effectiveness in their IT operations by regularly analysing data and discovering possibilities for improvement.

A further development in this area is the use of AIOps to predictive analytics. When organisations use AI and ML to analyse data from a variety of sources, including machine logs and IoT sensors, they are able to determine the likelihood that certain pieces of equipment or systems will fail. This makes it possible to do preventative maintenance, which may assist to cut down on equipment downtime and increase equipment dependability overall.

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Introduction To Intelligent Automation

by with No Comment Technology

Automation of end-to-end business processes may be accomplished rapidly and digital transformation can be sped up with the help of automation tools like RPA and AI to streamline business processes (AI). A combination of these two types of technology is known as intelligent automation (IA). When fully implemented, Intelligent Automation will increase the reach of BPA by a factor of ten. To do this, it integrates RPA’s skill at task execution with the automated identification and evaluation of processes provided by procedure analytics and the machine learning and analytical capacities of cognitive technologies like computer vision, Natural Language Processing, and fuzzy logic. Because of this, the automation of corporate processes will be able to achieve substantially higher levels of efficiency.

The term “intelligent automation” refers to a process that incorporates all aspects of the automation procedure, such as discovery, automation, and optimization. This makes it possible to automate any front- or back-office business process, as well as to orchestrate work across human and bot teams working together.

Components of Intelligent Automation

In order to offer insight across the whole of the decisions, a robust Intelligent Automation (IA) solution is essential and will incorporate a variety of technologies:

  • Artificial Intelligence (AI)
  • Business Process Management (BPM)
  • Robotic Process Automation (RPA)

Your organization’s capacity for digital transformation is accelerated as a result of these capabilities working together. Now, let’s give a quick overview of these three different parts:

Artificial Intelligence

Smart Digitization fueled by statistics that conceals learnings about the larger business procedure and is driven by this data. For the purpose of proactively identifying abnormalities, AI systems examine enormous amounts of both structured and unstructured data. Data streams are utilized in order to:

  • Constantly evaluate the present status of company activities
  • Anticipate potential outcomes

The present condition of the business operations is only one of several changing elements that should affect an automated technology’s choice on whether or not to perform a job, are taken into account by AI algorithms as well.

Business Process Management

The computerised frameworks that are utilised to automate the processes of business processes. The discipline known as Business Process Management (BPM) involves the modeling, analysis, and improvement of business processes through the application of various technologies and methods. In business process management (BPM), the behaviour to provide outcomes that complement corporate strategy via the seamless integration of systems and users.

 

Due to the fact that BPM systems are heavily dependent on data, it is an ideal candidate for the integration of Skills in artificial intelligence capable of creating reliable models of complicated systems.

Robotic Process Automation

It’s a link in the business process management chain that links to the back-end technologies through a graphical user interface and performs certain tasks along the BPM workflow. This component may be accessed via the GUI (GUI). Conventionally, the automation and backend interface would call for hand-scripted manuals and specialised application programming interfaces (APIs).

The majority of the time, RPA functions as a rule-based automation system that can be used with both APIs and graphical user interfaces to focus on certain tasks. These individual jobs may be significantly interwoven with a number of other business processes in the event that the business process pipeline is very complicated. In this scenario, the isolated automation of highly dependent processes gives modest increases in productivity and often slows down the organization’s BPM capabilities.

 

How to implement Intelligent Automation

The following structure will assist you in integrating incorporating cognitive talents into your operational procedures and speeding up your ability to digitally change.

1. Determined Aim: Rising Digital Standards

Value speed: In the modern digital environment, people are looking for proactive value producers. The removal of performance bottlenecks and the identification of potential for productivity improvements should be the primary focus of investments in IA. The automation technologies cannot simply be lifted and moved in order to be sufficient. Integrate information architecture systems into the support system in order to facilitate problem brainstorming and the delivery of value to end-users.

2. Prepare for a disruptive journey

  • You will need to revise both your organisational structure and culture in order to get ready for the value-driven user engagement business operations that will be based on IA.
  • Recruit subject matter experts from within the organisation to help maximise the value potential of IA capabilities.
  • Especially for information technology service management (ITSM) platforms that facilitate user engagement directly (through tools like ticketing systems), it is important to develop IA systems that emulate human intelligence and behavior.

3. Roadmap for RPA innovation

  • Get started with a demonstration of an idea.
  • Establish reasonable goals.
  • Put your energy where it will do the best, towards creating effective alternatives. The actual robot systems configuration only takes about 30% of the time.
  • Acquire wholehearted support from key players and the backing of top management.
  • Create a set of resources that may be used to improve RPA deployment.
  • Instead of automating massive RPA pipelines from start to finish, try automating smaller, more manageable groups of jobs.
  • Keep a close eye on the outcomes.
  • Business and IT departments should work together more closely on RPA initiatives for optimal strategy alignment.
  • Create long-term fixes

4. Collaborate with the operations department to maximize value

As your organisation moves further along the Intelligent Automation maturity curve, the back office of your IT should be driving business value. Raise the level of the back office and transform it so that it can interact with the end customers and provide significance to the business consumers.

5. Carry out, enhance, and restate

  • Improve yourself in a way that allows you to be prepared for the future.
  • Conduct experiments, keep track of the progress being made, solicit feedback from users, and iterate.
  • Emphasis should be placed on adaptability to transformation and enhancement in light of evolving business needs.

Getting off to a good start with initiatives involving intelligent automation can be facilitated with the assistance of the following guidelines: extreme concentration on the creation of business value, the promotion of positive end-user engagement, and the prevention of wasteful processes.

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What is the relationship between Web 3.0 and the Metaverse?

by with No Comment Technology

With the internet continuously evolving, all of us have to grapple with new terms such as the Web 3 and the Metaverse. Although Web 3 and Metaverse are similar in some ways and share various attributes, they are two different concepts. In this article we will familiarize with the fundamentals of these two technologies and find out the key differences between the two as well as identify how they complement each other perfectly.

Before we figure out how exactly Web 3 works, let us first go back to its predecessors Web 1 and Web 2. The Web 1.0 era spans the period between approximately 1991 and 2004. Static websites or web pages were more common here which weren’t interactive nor could you update them regularly. Like traditional media these websites provided information that was one-sided and meant to be consumed in a passive way. Content creators were less in numbers and mostly dwarfed by people who consumed it. Internet rolled out on a global scale and was more decentralised and characterised by open-source protocols. Just like ads in newspapers, websites that wanted to occupy the top ranks in search results were charged. Then came the Web 2 version, which was dominated by user created content. Instead of passive consumption, the Web became a place of active participation. It was more interactive with the emergence of social media websites like Facebook, Orkut, Twitter, Quora, Youtube, and many others. Anyone could add content in the form of blogs, images, social media posts, videos or even something as simple as comments. But Web 2 was ridden with a host of problems such as censorship and privacy issues. The big tech giants like Google, Facebook, and Twitter controlled the online hubs and openly squashed any discourse that didn’t fit their narrative.

Finally we have the Web 3.0 which is the next generation concept of the internet and combines the open protocols of Web 1 and the users’ creation of Web 2. It is all about decentralization in which users will own their data and will be able to exchange digital asset tokens. It will be based on the blockchain technology and there will be an ecosystem which will see an evolution of how users manage and own their online content, identities, and digital assets. There will be a high usage of artificial intelligence and machine learning where users can interact with data.

Instead of giving personal data for logging into websites or creating content where companies can use our personal details for customised advertising, Web 3 users will be able to own their content and earn tokens for their data directly from other users. Mega tech giants like Facebook and Google that owned and monetised the data and content we created will no longer be able to monopolise it. Rather users will have control over the social networks, search engines, and other apps that use blockchains and owe them.

Metaverse is a three-dimensional immersive environment that is formed by a global 3D network of virtual reality worlds. A simulated digital environment is generated that mimics the aspects of the physical world and is facilitated by technologies such as virtual reality (VR), augmented reality (AR), AI, social media, and digital currency.

In other words the metaverse is a technological outcome of the Web 3 environment that includes the virtual worlds and assets built on decentralized protocols, like the blockchain.

It will be characterised by various elements like virtual real estate, virtual events, avatars, in-platform NFT collectibles, VR chat rooms, online games, online activity centres, and so on. Instead of talking to their colleagues through a video conferencing service, such as Google Meet, people will use avatars to represent themselves, communicate, and virtually expand the community in the metaverse through hardware such as VR headsets, AR Glasses, VR Gloves, Wrist-Based Bands and so on. It will have its own native currency and purchases whether it’s about buying land, shopping, gaming, setting up digital stores, and so on will happen using metaverse tokens.

Key differences between Metaverse and Web 3

1. The Metaverse is a virtual reality computer domain where you may interact with 3D objects and other users with the help of VR goggles. On the other hand Web 3 concerns all about storing and managing digital assets and online services. Users will have full control over how they create, own, and monetize their content.

2. The Metaverse highlights various critical technologies that power the whole ecosystem such as interfaces, experiences, connection, decentralization, experiences, and supporting technology. On the other hand, Web 3 aims to build a decentralized network based solely on blockchain technology and secured by cryptography. Powered by a decentralized network of computers, users can engage with online services using blockchain.  Furthermore, Web 3.0 can take advantage of public blockchain functionality that processes information that is permissionless and completely censorship-resistant. There is peer to peer sharing of data and transactions occur using a project’s native cryptocurrency.

3. Metaverse concentrates on the development of apps that will power the 3D world and this combines movies, entertainment, video games, education, simulation-based training, and social networks. Web 3.0 is as a matter of fact the evolution of the next version of internet. It is mostly defined by the set of rules that everyone needs to follow while using the internet. It in fact applies to the entire web rather than being limited to specialized apps.

4. Web 3.0 is a virtual location that allows online activities to be carried out on it. While Metaverse describes a hybrid of virtual and actual worlds, the advancement of which will eventually enable humans to enter the digital domain with the help of computer-assisted technology, though more in a futuristic period.

5. At the present moment, the development of the metaverse is powered by the collaborative efforts from a few companies. On the other hand the Web 3.0 developers work entirely on decentralised platforms using open-source codebase.  Of course, as the Metaverse advances and the tools are standardised, the platform is expected to become open-sourced and censorship-resistant.

Finally, the similarities between Web 3 and Metaverse are that both of them are based on the blockchain technology. Any advancement in blockchain technology is integrated with the Web 3.0 engine that in turns powers Metaverse applications.

They are invariably connected to each other as a decentralized ecosystem and open to the general public.

They are both evolving technologies that will make use of artificial intelligence and a sophisticated user interface.

Both are focused on the way people will share content online and will assist users in traversing the 3D virtual networks with decentralized solutions.

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What is the role of NFT in the Metaverse?

by with No Comment Technology

For many people, the word NFT means image files of digital artworks or collectibles that they can buy and flip for a huge profit. But there is more to this as the current trend surrounding digital art and collectibles reflect a heap of new possibilities with NFTs in the Metaverse beyond images and arts. NFTs are unique cryptographic tokens that exist on a blockchain and it is a huge portion of the metaverse. Both are related to real-world items like artwork and real estate. They are invariably linked to each other as NFTs allow the representation of individuals’ identities, property rights, and more across the metaverse. In other words, NFTs have a vital role to play as digital assets in the metaverse. Hence, let us take a deeper look at the role of NFTs within the metaverse and how they correlate with each other as well as their future and influences.

What Are Non-fungible Tokens (NFTs) And Metaverse?

NFTs or non-fungible tokens are a new category of digital assets that exists on the blockchain to record proof of ownership for the person holding it. They represent the tokenized version of physical world assets such as real estate or paintings. Each token on the blockchain represent certificates of ownership as it is completely unique, inseparable, and inflexible. This certificate of ownership is characterised by its own unique metadata that can never be replicated or replaced for another and is in turn generated by cryptographic processes. Because of its uniqueness, they are useless as a currency but greatly useful for other purposes, such as crypto art. NFT can be developed by anyone in many of the NFT marketplaces but to get a good price for it a person must have a good name and reputation either through a huge fan base or a powerful social media presence. NFTs can be of different types such as collectibles, trading cards, artwork, event tickets, music, gaming, memes, virtual fashion, real-world assets, and domain names.

The Metaverse is a three-dimensional virtual world moving on the blockchain, where people can play games, work, collaborate, or participate in live events. Using technologies such as VR and AR that function as visual component providers you can virtually do everything in this digital space just as you would in the physical world without the limitations of the real world. Using a virtual reality headset you enter a parallel universe that mimics our physical world and you can interact with other users, do work, play games and basically perform most of the activities that you do in everyday life. It greatly reduces our need to travel and usage of physical resources as you can use an avatar instead. In the virtual world that you can customise your avatar and use it play games, do activities you like or travel a hundred places. The Metaverse envisions new pathways to open up to endless immersive experiences whether we have social interactions, professional meetings, relax, and shop.

Emerging technologies such as blockchain, virtual and augmented realities, 5G, artificial intelligence, and the internet of things provide the backbone of the Metaverse giving it a decentralised nature with ample business opportunities and variable social interactions. Characterised by a versatile, scalable, and interoperable digital environment the Metaverse integrates inventive technologies with models of interchange between contributors from individual and enterprise opinions.

Role of NFT in the Metaverse

Let us explore the role that NFT plays in Metaverse’s 3D Virtual world and how they integrate.

1. Transparent and Fair Economy: The fact that the blockchain-based metaverse is decentralised is what makes it a fair and a transparent digital ecosystem. It makes the sale of any digital asset ownable, sellable, and transferable within the metaverse without any control or permission from a centralised authority or entities. This is where NFT’s function in the metaverse will grow more significant as it will aid in rendering actual ownership of digital goods leading to seamless transactions in the metaverse. Availability of NFTs will be based on the rule of supply and demand and this will not allow any channels to increase its price artificially. There will be scope for new crypto-economic models like play-to-earn games where there will be more opportunities for players to enjoy an impartial and equitable game play experience through ownership and control of assets.

2. Virtual Real Estate: NFT plays a crucial role for the metaverse in terms of virtual land ownership. The metaverse constitutes digital pieces of real estate known as virtual lands. Here NFTs can be made use of to buy and sell lands in the metaverse. Digital structures can be rented out for online shops or events and owners can earn income passively. The Sandbox and Decentraland metaverses are virtual platforms where you can buy or sell lands/plots as NFTs.

3. Trading: Trade and exchange activities of digital products such as images, videos, tweets, game assets, photography, and music are all done with the use of NFTs in the Metaverse.

4. Transfer of Ownership: NFTs greatly aid in business operations such as transfer of ownership. Companies can now launch their products in the Metaverse and can easily transfer ownership of products to their customers in return for NFTs.

5. NFT Avatars: You are very well aware that an avatar is a digital representation of yourself with which you can enter the metaverse. Although it isn’t a necessary requirement that your avatar is unique but in case you wish to do so, you will be able to own it. In fact in the near future, the top profile picture (PFP) NFT projects like CloneX NFTS are working on converting the profile pictures of NFT art owners into their 3D avatars.

6. Community and Social Experiences: NFT plays a pivotal role in enhancing users’ social and community experiences in the metaverse. NFT avatars help users envisage what their fellow community members look like. In fact, NFTs can be perceived as an extension of users’ real-life identities and reflect their preferences or choices in real life. Using NFT avatars one can get virtual membership to several real-world and metaverse experiences such as startup launches. Project communities with mutual goals can form a community by buying some form of NFT assets. This strengthens the relationship and ties between community members.

7. Marketing: Realising the great potential of NFTs in the Metaverse, businesses have optimised their marketing efforts by advertising or selling digital products even before the physical ones are available for sale. This strengthens brand presence and reaches a wider target audience especially the younger generation.

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The Concept of Metaverse

by with No Comment Technology

The term Metaverse was coined by science fiction author Neal Stephenson in his 1992 science fiction novel – Snow Crash. In his novel, he created human avatars and software agents who met in realistic 3D buildings and other virtual reality environments. His characters used digital avatars to explore an online, virtual world and escape their dystopian reality. In his novel, Stephenson describes a virtual-reality world and depicts futuristic technologies amazingly similar to mobile computing, virtual reality, wireless Internet, digital currency, smartphones, and augmented-reality headsets.

There have been significant changes in the field of AR, VR, and gaming since the 1990s though. And now with Mark Zuckerberg rebranding his company from Facebook to Meta in late 2021, the Metaverse has gained tremendous momentum. Though Zuckerberg’s main objective behind the name change was to position his company at the forefront of a new digital frontier called the Metaverse, it has currently become a major buzzword in the field of emerging technologies, business, and finance. Ambitious brands and businesses aspire to leverage the features of the metaverse that will come with rich, real-time, globally-interconnected virtual- and augmented-reality environments to connect with their prospective audience. This will enable billions of people to work, play, collaborate, and socialize in entirely new ways and provide them with the best user experience.

So what exactly is the Metaverse? Metaverse is a collection of virtual worlds, created by the merging of virtually enhanced physical and digital reality. Here users can connect, chat, meet, buy products, and participate in games. It combines multiple technologies such as augmented reality (AR), virtual reality (VR), cryptocurrencies, social media, and online gaming. To put simply, the metaverse is a network of 3D virtual worlds that runs parallel to our physical life and uses concepts of social media to create social connections. It can be described as a simulated digital environment that uses head-mounted displays (HMDs), an AR cloud, the Internet of Things (IoT), 5G, artificial intelligence (AI), and spatial technologies to create virtual spaces for rich user interaction mimicking the real world. The user interactions in these online spaces that we coexist in are more multidimensional and free from the restraints of our human suits. Instead of merely viewing digital content it will allow an immersive, persistent, and three-dimensional digital experience where users will be able to immerse themselves in a space where the digital and physical worlds merge. Besides consuming content users can themselves become part of the content as metaverse uses augmented reality spaces which is a technology that overlays visual elements, sound, and other sensory input onto real-world settings. Here objects from the virtual world are projected into the real world via our screens to enhance the user experience. On the other hand, virtual reality will allow people to use their 3D avatars to interact socially and professionally.   Any individual can connect, work, play, build communities, buy, sell, invest in currency, take classes, work, travel in 3-D virtual reality, or enjoy immersed content. Mark Zuckerberg while explaining the metaverse, demonstrated how one can be tossed into a virtual video call at any moment using VR technology. That was quite staggering and at the same time fascinating to see how virtual reality can enhance virtual experiences as well as fictional realities.

The growing attention on the potential of metaverse has led to powering up the top metaverse projects by huge tech companies such as Facebook, Microsoft, and NVidia. These big participants aim to work on their own metaverse solutions to create a diversity of experiences for their users. Brands are looking for opportunities to join businesses that offer the possibility to position themselves on metaverse platforms. Hence they sign up on these metaverse platforms or invest in metaverse-based projects. The following is a list of the most popular metaverse platforms each with its own unique features and functionalities.

1. Decentraland: Decentraland is a 3D virtual world powered by the Ethereum blockchain where users can create, trade, monetize, and explore a virtual world. Here users can purchase plots of virtual land using it’s native token, build 3D scenes, and create games with which other users can interact. Users can trade NFTs, vote on governance proposals and have complete control over their environment. In other words users have complete control over their experiences and applications they create and deploy on their lands. It can be called a virtual social world where users can host conferences, play games, and trade virtual products in marketplaces. Top global events hosted by Decentraland include the Buffalo Metaverse Tour, Australian Open Metaverse, Drop, and many others.

2. Sandbox: The Sandbox is a blockchain-based platform that manages real estate projects for 2022. Similar to Decentraland, it sells virtual lands. It is a rich 3D world where you can set up virtual businesses, build virtual mansions, host parties, and exhibitions . It is hosted on the Ethereum blockchain where players can use Sandbox for creating, selling, purchasing, and monetizing virtual reality NFTs.

3. Roblox: Another popular platform is Roblox, an online game platform designed for kids and adults. It is famous amongst gamers with 24 million active users globally though not hosted on the blockchain. The platform is free to use where users can come together and play games made by developers and other players. The developers can monetize the games using its native currency called the Robux.

4. Axie Infinity: Axie Infinity is a blockchain-based game that features flying robots, magical creatures, mutants, and flying beasts. The environment looks more like any other online multiplayer game where players breed digital pets called Axies and develop, expand, or defend their universe during battles and wars. It leverages the blockchain technology to create a complex economy for its players within the game’s universe, which in turn helped its popularity skyrocket as one of the best metaverse platforms with gaming applications.

5. Bloktopia: Bloktopia is a 3D metaverse designed as a virtual skyscraper with 21 levels. It features virtual real estate blocks where users can purchase designated spaces from the floor plan using BLOK as its native currency. Powered by the Polygon Network, the Bloktopia platform offers a wide range of opportunities for revenue generation with new virtual experiences. Revenues can be earned in multiple ways such as games, advertising revenues, real estate ownership, etc. Users can create artwork, games, participate in social activities, learn about cryptocurrency, buy real estate and even attend promoted events in its virtual auditorium.

The Metaverse is a network of simulated digital environments that focuses on social interaction. It creates online spaces for interaction by utilising persistent virtual worlds, blockchain, and augmented reality. This is facilitated by mobile internet as well as augmented and virtual reality headsets

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What is the role of Blockchain and Crypto in the Metaverse

by with No Comment Technology

The year 2021 has brought epoch making changes in the digital world with the Metaverse in the forefront captivating the public’s imagination and aiming to integrate our real-world social lives, work, and immersive technology. At the same time crypto, although still evolving, is already playing a key role in the metaverse while promising immense social and financial potential.

Many experts are enthusiastic that the metaverse world based on the blockchain technology will open up to an amazing virtual world that will also facilitate virtual monetary transactions via the crypto economy. With the 3D virtual world being able to spend virtual money it will enable virtual items exchangeable for real economic value beyond the confines of the metaverse.

Tapping into the wider crypto economy and incorporating immersive environments of virtual reality (VR), video games, and social interactions will align the metaverse to become a central element in this fast-growing world while assisting individuals in enhancing their connections, discovering communities, and growing their businesses.

This article further explores how the concepts of blockchain, crypto, and metaverse work in synergy with each other and have the potential to transform the digital world and the Internet. 

An overview of the Metaverse, Crypto and Blockchain technology

Metaverse is one of the highest trending terms in the present digital era after Mark Zuckerberg formally renamed Facebook to Meta. Zuckerberg intended to refocus his company around the metaverse allowing people to be online from anywhere, and enabling a more maximalist version of Facebook, spanning social presence, office work, and entertainment.

The concept of the metaverse is quite old however and grew with the evolution of the gaming world. It has been increasingly gaining more recognition in recent times with more and more companies, besides Facebook, recognizing its immense potential and hopping on board the metaverse bandwagon.

To be more precise, Metaverse is a collective network of 3D virtual worlds created by the convergence of virtually enhanced physical and digital reality. Instead of simply browsing the internet with online browsers we can have an immersive experience in the metaverse.  Users can wander into the metaverse that mimics the aspects of the physical world using virtual reality headsets, voice commands, eye movements, and feedback controllers. Technologies such as virtual reality (VR), augmented reality (AR), social media, Internet of Things (IoT), 5G, artificial intelligence (AI), spatial computing, and digital currency enhance an immersive experience for different activities such as gaming,  job training, education programs, social interactions, remote work, travel, entertainment, and doctor’s appointments. Additionally, the Metaverse also monetizes the immersive experience through crypto trading, NFTs, shopping, and virtual estate transactions.

Blockchain is a technology where information is recorded in a manner that makes it difficult to cheat, hack or manipulate the system. You can call it a distributed ledger technology (DLT) that facilitates the process of recording transactions and tracking assets in a business network. Anyone can view and verify the list of transactions. Blockchain is ideal for delivering information and members can see all details of a transaction end to end such as tracking orders, payments, accounts, production, and much more. The use of a decentralized network and cryptographic hashing makes digital assets such as houses, cars, cash, land, intellectual property, patents, copyrights, or branding unalterable and transparent.  Anything can be tracked and traded on a blockchain network as every transaction in this ledger is authorized by the digital signature of the owner. This provision to authenticate the transaction keeps the information on the digital ledger highly secure and safeguards it from tampering.

Today blockchain technology is being used to provide transparency in various sectors such as healthcare records, food supply chains, innovating gaming, and medical research.

Cryptocurrency or crypto is typically decentralized digital money that is based on blockchain technology and secured by cryptography. Being built on blockchain technology, which as discussed is a distributed ledger, it makes crypto transactions between users transparent, immediate, and immutable. Immutable means that any record on the blockchain is there for good and cannot be modified or tampered with, thus making it nearly impossible to counterfeit or double-spend.

Unlike physical money that is carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries and are stored in digital wallets. The transactions of cryptocurrency data between wallets to public ledgers are secured by encryption. Advanced coding and encryption techniques based on blockchain technology make crypto payments safe and secure.

Decentralization in cryptocurrency means there is no central authority that issues them, making them potentially immune to government intervention or manipulation. Hence it is a peer-to-peer system that doesn’t rely on banks to verify transactions. Anyone can send and receive payments securely without the need for a middleman like a bank or payment processor allowing the value to transfer globally 24/7. Bitcoin was the first cryptocurrency launched in 2008. Some of the other well-known cryptocurrencies are Ethereum, Tezos, EOS, ZCash, and Litecoin

It is obvious that Blockchain is an indispensable technology in the Metaverse world and can aid in the development of a secure digital economy with the help of decentralized cryptocurrency transactions. Let us have a look at some of the benefits blockchain and crypto can offer to the Metaverse world:

Security: Blockchain technology is of great relevance in the Metaverse as it provides secure and safe data storage. Users have direct control over their personal data and there is no fear of being cheated or manipulated by hackers or fraudsters.

Decentralization: A decentralized ecosystem based on blockchain technology will lead to more equitable engagement opportunities for participants in the Metaverse. As thousands of separate nodes will synchronize, ownership will be shared and all participants will be able to access the virtual world.

Smart Contracts: Individuals in the Metaverse can utilize blockchain smart contracts to effectively regulate economic, legal, and social relations between ecosystem participants. Smart contracts automate operations and ensure that operations such as trading and transactions follow a set of predetermined rules. It allows NFT generation and exchange between users easier.

Money Relations: The Metaverse facilitates real-world activities such as socializing, entertaining, and trading in the virtual world environment through the use of crypto assets. Cryptocurrency which is an integral part of blockchain technology functions as a common currency allowing users to command real-world value for their investments as well as perform various kinds of mutual settlements.

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Innovative ways of customer engagement

by with No Comment Technology

Customer needs and expectations keep constantly changing. The way your customers continue to engage with your brand can be a major catalyst to differentiate your business from the rest. Offering new and unique ways for customers to interact with you by consistently maintaining their interest is something that will keep you ahead of your competitors. Understanding the deep-seated aspirations of your customers, getting them excited about your brand, and ensuring that they feel appreciated will help you develop meaningful connections with them. To put it simply, building an emotional connection with your customers is where you will gain a competitive advantage against your rivals.

Increasing customer delight by providing unique solutions and adding values in diverse ways will help your customers have a positive customer experience. Positive customer experience is all about helping people find ways to make parts of their lives more memorable and fulfilling. These positive experiences accumulated by your customers will help foster a long lasting relationship with them.  Nurturing a positive relationship with them will bring in many benefits to your business, including higher conversions, lower churn rates, and more referrals. Improving customer experience is what will enable companies to get big returns on their investment.

In other words, customer engagement is at the heart of an outstanding customer service as greater customer engagement rate leads to a happier and more loyal customer base. A customer engagement strategy is the foremost game changer and it is all about boosting customer satisfaction by driving positive interactions. Your strategy will involve a collection of processes, tools, and resources to reach out and connect with customers through their channel of choice. The goal of the strategy should be to focus on value creation rather than revenue generation.

Let us explore some of the innovative ways to improve customer experiences.

  • Online Presence: A powerful way to engage with your customers and stay connected is to have an online presence in the form of a website, blog, or ecommerce store. This will enable new customers to discover your business and existing customers to have a continuous relation with you through their queries, testimonials, feedback or complaints. You can also blog about your business through personal stories that tells about your business journey, your successes or failures or even simply inform them about new updates, discounts or offers. Recent research showed that customers continued to remain loyal to their favourite brands through online stores despite the restrictions brought about by Covid 19 pandemic.
  • Omnichannel Support: Besides a website or a blog, most companies today offer multichannel customer support where customers can interact with a brand through various channels such as social pages, phone, email, web forms, mobile apps, and retail stores. But your customer engagement strategy gets more innovative when you can continue to support your customers even when they transition from one channel to another. Many a time, it happens that a customer has started an inquiry through, say, Faceboook Messenger and then wants to switch to phone, email, or webchat to explain their problem better. This is where an Omnichannel approach comes in where you can streamline customer interactions across multiple communication channels under one platform. This is a great customer engagement model as different customer circles prefer different modes of communication and when a customer transitions from one channel to another, you will not be losing out on a huge aggregate of customers and leads.

    Keeping a complete 360-degree view of every interaction you’ve ever had with your customers will help you provide a consistent shopping solution to your customers across all touch points while delivering a satisfying customer experience journey. Some of the top omnichannel ecommerce softwares like Contalog, SAP Hybris, Netsuite, and Intershop help you put all of your customer’s communication channels in one place while providing customers with a seamless shopping experience.
  • Customer Reviews: Listening and responding to customer reviews are an essential part of engaging with your customers. It is the first step you can take towards customer-driven innovation. Customer input can be the primary inspiration for improving your services or a product. Unhappy customers or those who cannot engage with your brand can provide you with the most valuable feedback and suggestions. Addressing customer concerns and responding to negative feedback can go a long way towards building trust and excitement for your brand as it will make your customers feel empowered and ‘in charge.’ Analyzing the feedback and customer data may actually change things around as you can leverage that knowledge to change your business plans and accomplish your objectives on time. Your business will gain some interesting insights into what really works and in turn provide you with greater opportunities for your business growth. Additionally, monitoring third-party sites for mentions and new listings, and responding to them positively while posting screenshots of their feedback on your site or tagging the customers for their positive comments will influence others to do the same. Adding a community forum or creating a dedicated page for your customers to share their ideas are some of the innovative ways to boost customer engagement with creativity, subtlety, and finesse.
  • Adding Chatbots: Lots of companies are implementing chatbots to their website to communicate with their customers, share product recommendations, and solve pre-purchase queries. Whether a company uses a pop-up on their website or a dedicated chat service for customer support, it is undoubtedly an innovative way to enhance customer experience. Chatbots automate support functions, handle basic service inquiries, and connect customers to the right representatives as per customer requirements. It can even personalize its messaging to support and encourage users based on their location, the page they are browsing, and new or returning visitors. Chatbots can give users advice based on their budget and create a balanced support system by responding to both hurried customers as well as those looking for detailed responses. They help you to be proactive with your customer base and resolve their queries at the earliest. This is one of the best customer engagement innovations that provides convenience and immediate gratification over more traditional support methods like email and phone. Nurturing excellent customer experiences will go a long way in strengthening relationships with your customers.
  • Mobile Apps: Extensive increase in smartphones has led people to spend almost three and a half hours on their phones every single day. Over and above users spend 90% of their smartphone time on mobile apps. Companies have a huge opportunity to retain and engage with their customers through mobile apps. Focusing their marketing efforts towards this source can leverage this widespread app use to their advantage. Moreover, mobile apps prevent consumers to shop for products from rival brands as they are not exposed to any other ads from competitors. Instead you get a chance to display some of your other products or services that they aren’t even looking for. As a result, they are less inclined to shop around and compare with other brands whilst they are using your company’s app. Increased focus on your company’s mobile app thus garners interest for your product against your competitor’s. There are also chances of promoting offline sales since a stronger connection has been nurtured between the consumer and your products. Once a user downloads an app they tend to invest time on it and develop an attachment towards it, thereby becoming loyal customers of your brand.

Additionally, providing multiple options to your mobile app such as rewards, information, gamification, and mobile pay will enhance the customer’s shopping experience, create top-of-mind awareness, and boost sales.

  • Reward Engagement: Rewarding your customers with discounts, referral bonus, gift cards, prizes or loyalty cards is a smart way to gain customer engagement.

  • SMS: Using SMS reminders keeps you connected with your customers and help you ensure that their shopping experience is an enjoyable one.
  • In-product Messaging: Implementing in-product messaging where you place messages directly on the product helps new customers get acquainted with your product or nudge them to complete an already started action. In-product messaging can be used for sending personalised offers and discounts as well as encouraging free-trial prospects to use premium features. It will go a long way in improving customer engagement and encouraging them to use your product more.
  • Creative Product Packaging: Designing beautifully printed packaging for your customers will build an outstanding as well as an emotional unboxing experience for them. This will lead to extraordinary customer experiences from the instant the customer receives their package.

We’re living in a customer-centric world and putting one’s loyal buyers first is vital for any brand today. Creating an enjoyable customer experience will help you quickly gain a competitive edge by generating more sales and making people come back for more.

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How can technology revolutionise the future of technology

by with No Comment Technology

Immense scientific progress in the last half century at an unforeseen accelerated rate has had a significant impact on business and society. The current global trends show beyond doubt that technology is improving at a rapid rate with not only the maturing of advanced technologies such as Web3 and Quantum but also the emergence of an increasing list of new technologies every day. Innovations are happening every second as companies around the world invest time and money to develop sophisticated technologies that has brought about immense technological improvements right out of the R&D departments and into our everyday lives. Technology has the power to do many things and we’re privileged to be living in a time where science and technology can ease our lives as well as transform existing businesses and personal lives.   

Recognising the profound impact the future technology can have on our society, the World Economic Forum has launched its Technology Pioneer community in the year 2000. The community that consists of early-to growth-stage companies from around the world aims to solve global issues and explore future trends. They are committed to the design, development, and deployment of new technologies and innovations in the key priority areas of society which encompasses well-being of the human race and economic growth. By recognising technology pioneers every year through initiatives, activities, and events, the Forum is geared to have a significant impact on business and society.

Let us explore some of the emerging technologies that have the highest potential for near-term business impact while bringing about a substantial outcome on the workforce in the coming years.

  • Artificial Intelligence: Artificial intelligence, or AI, refers to the ability of machines to act intelligently and make decisions. They are in fact smart machines that replicate the capabilities of the human mind and accomplish tasks that typically require human intelligence. They solve problems and even predict future outcomes by processing what they learn from data. With more and more tech companies across various industries investing heavily in artificially intelligent technologies, AI is going to revolutionize almost every facet of modern life. Indeed, AI has become a growing part of everyday life and will advance in the coming years to increase productivity while eliminating routine jobs and repetitive tasks. This will in turn enhance the quality of our lives. Some of the AI driven powers systems like SPAM filters, Google Maps, Alexa, Siri, Amazon’s product recommendations, Spotify’s personalized recommendations, dating apps, and fitness trackers are projected to diversify even further. With a great growth potential in applications like Chatbots, logistics, self-driving cars, virtual nursing assistants, personalized textbooks and tutors, and even artificial creativity, there will be extensive versatility in the job market as new jobs will arise to replace displaced jobs. In the field of education too AI will make great strides to understand children’s interests better and connect them with the right experts. At the same time, they will be able to provide insights to parents and teachers in making them better mentors and improving the quality of education.
  • 5G technology: 5G is the fifth generation of cellular networks after 1G, 2G, 3G, and 4G networks. It is a new global wireless standard and is up to 100 times faster than 4G. 5G is designed to connect virtually everyone and everything together right from home appliances to cars and gadgets we’ve yet to even invent. This will open a wealth of possibilities for “connected devices” that can deliver higher multi-Gbps peak data speeds, ultra low latency, greater reliability, massive network capacity, increased availability, and a more enhanced day-to-day experiences for users without overcrowding. With 5G, data can travel at multi-gigabit speeds, with potential peak speeds as high as 20 gigabits per second (Gbps). This will aid far reaching improvements in services such as e-health, connected vehicles, and traffic systems leading to a smarter, safer, and sustainable future. Higher performance and improved efficiency will enhance the performance of digital experiences such as online gaming, videoconferencing, and self-driving cars. 5G networks are virtualized and software-driven that will take connectivity to the next level by capitalising on cloud technologies.
  • Web3 Technologies: As of now, the world is gradually moving faster towards Web3 over the existing Web2 landscape. Although Web2 is considerably dynamic with user-generated content and a certain level of interactivity, the platform was mostly provided by third parties and owned by tech giants like Meta, Twitter, and Microsoft. On the other hand Web3 technologies will provide users an open ground for creating content alongside control, ownership, and monetization privileges. Web3 technologies which has Blockchain, cryptocurrencies, and NFTs as its prime drivers, will operate through peer-to-peer networks which are basically decentralized networks of computers rather than a traditional management structure or a set of centralized servers belonging to a specific entity. Powerful features of Web3 such as decentralization, transparency, and immutability will easily remove the need for intermediaries where users can interact with different online services while having complete ownership of their data and enjoy the privilege of peer-to-peer, and permissionless transactions. Web3 will prioritise on user privacy and anonymity. Hence users will no longer have to worry that their data is being used for advertising or sold to other companies and this will in turn enhance better social boundaries. The usage of decentralised applications will boost innovation and entrepreneurship. The primary reason behind this will be the elimination of bureaucratic hurdles and monopoly of tech giants thus paving the way for creating companies faster. This will again empower collective ownership by shareholders that will be at the same time completely transparent and autonomous in nature.
  • Extended Reality (XR): Extended reality, or XR is an emerging umbrella term inclusive to immersive learning technologies that we have today. It includes virtual reality (VR), augmented reality (AR), mixed reality (MR) as well as additional immersive digital experiences to be created in the future. XR is expected to become an $80 billion market by 2025 as predicted by Goldman Sachs. No wonder, with lowering hardware costs and increasing processing power, XR technology is already finding wide scale application in the real world. The way we interact with technology is likely to dramatically change as these technologies combine to create virtual shared spaces that business teams can use to hold meetings or work on projects. With new world problems such as the Covid pandemic challenging our traditional work models, Microsoft Mesh and its competitors are working towards capitalising on our new remote-work era.

As a greater number of companies, including big players like Google and Facebook, are getting into the bandwagon of using both augmented reality and virtual reality devices in the workplace, this technology will become more common, affordable, and comfortable to use.  This will increase the chance of its widespread use and an ecosystem of apps will form for consumers and enterprises alike. XR being a primary point of entry into the Metaverse, it is set to transform the digital world of gaming, meeting up, going to events, and the concept of virtual universe where we can be whoever or whatever we want. It will revolutionize the customer experience in retail as customers will have an experience of trying out products before buying. For example, they will be able to try out dresses on a virtual avatar or sit in their amphitheater seats before making a purchase. This will in turn boost brand engagement. With widespread acceptance of augmented reality apps, workplace learning will become more effective. In the coming years XR will find far-reaching application worldwide in multiple areas such as visual representations of blueprints, virtual scale models of products in development or even for simple things like virtual team meetings.

  • Robotics: With the surge of robotic gadgets such as robot vacuum cleaners and smart home appliances, robots now represent a viable alternative to labour. Personal robots such as the uArm Swift have become popular in offices – a cool desktop robot that completes menial tasks such as completing 3D prints and laser engraving or even doing something as ordinary as passing a cup of coffee. As we speak, more and more innovations occur for the purpose of building, operating and maintaining advanced robots in the coming years. Most likely we will soon find ourselves surrounded by a motley of useful robots be it industrial robots, agricultural robots or those helping around the home as butlers or chefs.

    Rudimentary tasks such as cleaning and delivery will soon widen the robotics’ workforce representation as the current trends reveal that people are increasingly moving into soft-skilled and human-focused jobs. Reduction in physical labour will make the transition for the human race a beneficial one as it will undoubtedly promote health and wellness while still maintaining the place of humans as the centerpiece of a competitive business. Amazon is working towards designing robots that can perform the tasks of selecting items and moving them around the warehouse so as to reduce their workforce of 50,000 in warehouses. Same is the case for the restaurant industry where firms are looking to implement robotics in labour intensive areas like food delivery. Other areas where the application of robotics is expected to rise in huge magnitude in the near future will be libraries, automotive industry, aeronautical industry, agriculture, food, pharmaceuticals as well as the mental health and wellness sector.