The Seoul High Court quashed a lower court’s ruling on Lee, who had been sentenced to five years and handed down two years and six months imprisonment suspended for four years. Prosecutors had maintained a 12-year prison term for Lee.

The 50-year-old scion of the biggest conglomerate in South Korea was convicted of bribery, of giving 8.8 billion ($8.2 million) to former President Park Geun-hye and her confidante Choi Soon-sil, in return for government backing for the merger of two key Samsung units, which the prosecution viewed as critical for his leadership succession of the corporation from his ailing father, Lee Kun-hee.

Over the lower court’s verdict, both Lee and the prosecution had appealed the ruling.

Lee had faced five charges, including embezzlement and hiding assets overseas. But the upper court did not acknowledge that Lee had provided the illegal funds as an implicit solicitation for special favors nor acknowledge that Lee deliberately hid the assets. The court also denied Lee’s charges on perjury for falsely testifying before the National Assembly at a hearing last year.

The court, on the other hand, viewed the former President Park and her confidante Choi as joint principal offenders to the bribery case. Monday’s ruling is likely to influence Park and Choi’s trials, that is directly linked to the massive corruption scandal which led to Park’s ouster in March last year.

Park has reportedly submitted a petition asking for favorable handling of Lee last month, saying she did not take any illegal solicitation from him and that she also did not know Samsung had given financial support to her friend’s daughter, Chung Yoo-ra.

Park, who was arrested on March 31 and indicted on April 17, has since been detained at a correction facility just outside Seoul. She will continue to stand trial while under detention until the first verdict, expected in early February, is reached.

As for four of the top Samsung executives who were put on trial for charges linked to Lee, the upper court lowered the charges, and gave suspended terms to all, including Choi Gee-sung, former head of Samsung‘s now-disbanded control tower Future Strategy Office, and his former deputy, Chang Choong-ki, who had been sentenced to 10 years in prison by the lower court.

Lee had previously denied all charges, saying that he had only been passively taking in the strong requests from the former president. He also insisted he did not need the help from the government as claimed, since he was “confident” to prove his leadership to executives and investors after he inherited his position.

The envelopes are decorated with images of auspicious magpies, which signify good fortune. In traditional Chinese belief, hearing a magpie singing meant that good luck was on the way.

The envelopes also carry the Chinese character “fu”, representing “happiness” and “luck”, and the Mandarin phrase “Gong he xin xi”, meaning “Best wishes for New Year”.

Suspended are Siriwan Sukata and Suparat Nissapha.

According to a report from KBank and the SEC’s further inspection, Siriwan was found to have signed on a unit subscription order for a client without contacting or giving advice to the client. She admitted having done so without providing details on the fund to the client. The SEC therefore imposed a 40-day suspension on Siriwan, effective from November 1, 2017.

Suparat committed similar acts by signing on the subscription order of a client without contacting or giving advice to the client. Instead, another KBank employee, who was not an approved investment consultant, gave advice to the client in such a way that it caused the client to misunderstand that the investment was a deposit transaction because the return rate and the investment term were written on the cover of the client’s fund book.

The SEC has therefore suspended approval for Suparat as a securities investment consultant for a period of two years, starting from February 1, 2018. In addition, since Suparat is also a bank branch manager, she is prohibited from functioning as a branch manager responsible for capital market business of any bank or intermediary during the same suspension period.

The SEC said KBank cooperated with the inspection of these cases. Since the incidents, KBank has specified that only approved investment consultants are allowed to contact and give investment advice to clients.

The SEC has emphasised to all intermediaries to strictly instruct their investment consultants to obtain and compile sufficient information for client due diligence before giving advice on suitable funds for their investment, along with supporting reasons. Required information includes client’s investment objectives, personal conditions and risk tolerance.

In addition, clients should be given more than one choice of fund, and intermediaries should follow up on clients’ investments on a regular basis and keep clients informed of changes for the benefit of clients.

The rating action concludes the review for downgrade initiated in December 2017 following the company’s announced acquisition of a 53.59 per cent stake in Saigon Beer Alcohol Beverage Corp, the market leader in Vietnam’s beer sector with an around 41 per cent market share based on volume.

The rating outlook is negative.

The Fed order restricts the bank from growing any larger “until it sufficiently improves its governance and controls,” and comes as the company struggles to recover from the two-year-old scandal in which it uncovered millions of phony accounts created without consent of customers.

“We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again,” outgoing Fed Chair Janet Yellen said in a statement.

“The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers,” she said in what was perhaps her last official act as Fed chair.

The statement said Wells Fargo had prioritized growth over ensuring effective risk management.

Wells Fargo became engulfed in scandal in 2016 after admitting its employees had opened 3.5 million phony deposit accounts and lines of credit without the knowledge of its clients as part of high-pressure retail sales tactics the bank touted to investors but has since repudiated.

This led to damaged credit scores and millions in unjustified fees for customers.

Wells Fargo has paid $185 million in fines and offered redress to harmed customers. In October, CEO John Stumpf stepped down in the wake of the scandal, which cost it the top ranking as the world’s largest bank by market capitalization.

The Fed specifically cited the need to strengthen oversight by the bank’s board of directors, and sent letters outlining the failures to Stumpf and another former director.

Concurrently with the Fed action, Wells Fargo will replace three current board members by April and a fourth by the end of the year.

Sumalee, 57, is a government official in Sung Noen district, Nakhon Ratchasima province and is responsible for organising the annual Isan-style “Khan Tok” dinner, known as “Kin Kao Kham”, held in Sung Noen district, Nakhon Ratchasima. There is always a mountain of leftover plates for her staff to deal with after the event. The clean-up problem inspired Sumalee to think of a creative solution.

“I was considering how to reduce the amount of waste from the event. I asked my husband, who is a military technician, whether we could transform the leaves of the areca nut palm into plates, or not. He said he will try to do it.”

And he did, spending their Bt30,000 budget to create a machine that can process the palm leaves into plates. That was back in the year 1995.

With that problem solved, Sumalee started making the plats for the Kin Kao Kham festivity. But the plates got unexpected attention as most visitors who joined the event asked whether they could purchase the plates for use at their own hometown events.

Their requests inspired Sumalee to begin producing the palm-leaf plates for sale starting in 2004. She established Phinyovanich Co Ltd with registered capital of Bt300,000 to develop the machine to make an average 500 plates daily. It worked, with average sales of Bt1.2 million yearly.

Sumalee said her branded Veerasa plates gradually achieved nationwide success, and Tops Supermarket picked them up for sales display. Most bakery restaurants in Bangkok also ordered her products.

“When we first produced the products, we found limited demand in the market, but now we’re seeing strong demand growth,” said Sumalee. “People concerned about the environment want to use eco-friendly products to replace plastic. This drives my business to strong growth.”

With strong demand in the market, the company decided to expand its investment by Bt900,000 last year to increase production capacity from 500 plates a day to 3,000 plates a day through 2018.

This will support its overseas export, filling an order the company received to export to Dubai. Meanwhile, Sumalee is waiting for a letter of credit for an order from a German customer interested in importing her products. This will drive her business to double its growth double this year compared with last year, Sumalee said.

“Our keys to success are our quality products and also matching the trend of customers who are concerned about the environment,” she said.

Adisak Limprungpatanakit, CEO of Adap Creation, said the 77kaoded.com website and its related digital formats allow indigenous reporters in each of the provinces to focus on super-local content making the platform unique when compared to existing national news websites.

Each of the provinces’ local webpage administrators, who are professional journalists in their respective geographical areas, has freedom in choosing contents for the platform which is run in a way similar to Uber and the like.

“Uber has no taxies but it has a powerful global platform that allows users to hail rides conveniently. We’re similar in a way since we have no reporters but we have a platform that groups together the indigenous sources of hyper-local content from all 77 provinces in Thailand.”

“In terms of the business model, we share advertising and other revenues with all these 77 local web-page administrators, who are free to choose the most interesting and suitable contents in text, photos or videos, for the platform based on our broad guidelines.

“Based on Google Analytic, 77kaoded.com which debut on Dec -ember 26, 2017, had 335,902 unique IPs as of January 23, 2018, and the numbers are growing. About 90 per cent of these users access our platform via their smart phones,” he said.

Adap Creation recently got a Bt5 million loan from SME Development Bank whose managing director Mongkol Leelatham said both 77kaoded.com and related Money2Know.com fit the government’s Thailand 4.0 initiative so the firm was approved for the digital transformation loan.

SME Development Bank previously granted similar loans to several start-ups for digital contents as part of the state-owned bank’s policy to lend up to Bt15 billion at a relatively low interest rate to the SME sector.

Adisak said 77kaoded.com is a platform that empowers local journalists who will have more bargaining power as business partners of the platform.

These local webpage administrators are also encouraged to build up communities of followers which are digitally linked with the rest of country via the platform.

“We hope they will have a new mindset beyond just being local or community reporters.

We hope they are like multi-media conductors representing each of the 77 provinces.

“They should not focus on dramatic news contents. In fact, our rules bar violent and gross photos such as dead bodies in crime scenes. We don’t want these images on the platform.

“Instead, we’ve encouraged our partners to create quality contents relevant to local tourist attractions, indigenous cultures and lifestyles, food and drinks, seasonal festivals etc.

“At present, the revenue-sharing ratio is 70 per cent for local partners and 30 per cent for the 77kaoded.com. We also help them to take advantage of social media analytics on Facebook pages, Tweeter etc while putting on link, location and other features on their contents,” he said.

This was the conclusion of my opening remarks at the CIMB Annual Management Summit in November 2017. Our T18, short for Target 2018, transformation programme has been very well-executed over the past three years and the results are showing. However, during that same time, the future seems to have accelerated towards us. The world suddenly stands at the cusp of the Fourth Industrial Revolution, with technological advancement in the digital, physical and biological worlds bringing change at unprecedented speed and disrupting everything – business, politics and society at large. I did not want any of our senior managers in the room that day to be in any doubt about the magnitude of the strategic challenge that is now before us.

The internet and digital technology, during what is now described as the last few years of the Third Industrial Revolution, had debilitating effects on many industries – music, photography, video and television, print media and retail. Over the next few years, banking, alongside others, such as healthcare, automotive, education and telecommunication, will be facing the same fate. Incumbents in these industries must recognise the existential threat and respond, or risk marginalisation and even failure, the way of Kodak, HMV and Blockbuster.

Bill Gates’ comment, way back in 1994, that “banking is necessary, banks are not” seems more prescient than ever. His point was that banking utilities, such as payment, safekeeping, financing and advisory, do not have to be sourced from banks. Customers are increasingly agnostic about who provides these products and services, as long as they are conveniently online.

The technological threat to banks is not just coming from the digital customer interface.

It is certainly early days, but there is a fierce race – in Silicon Valley, Wall Street, Huangzhou, Beijing, Bangalore, London and elsewhere – to profit from optimising technology in banking. Even if we cannot visualise the end-state, we know that banking will be barely recognisable in just a few years’ time. In Malaysia, say, by 2025, I think society will be almost cashless so automated teller machines will seem as retro as phone booths are today. Bank branches will have become quite a rare sight. Robotics and artificial intelligence will have displaced a large percentage of asset managers and credit analysts, and maybe even investment bankers. Peer-to-peer interactions between customers themselves will have disintermediated banks in more and more ways.

Similarly, blockchain and its automated ledger functions, as well as cryptocurrencies, will have proliferated new methods of trade finance and money transfers that bypass banks altogether. These are some predictions based on technologies we already know about; there will definitely be others with equally profound consequences on banking as we know it.

The biggest threats to banks are coming from giant platform companies. Digital technology has brought the marginal cost of new customers for Apple, Google and the likes to zero. China’s two largest platforms, Alibaba and Tencent, have taken the lead with payments, and then built on their customer base and data to challenge in other areas of banking. They have both set up licensed banks to provide consumer loans with near-instant credit decision-making by analysing the massive accumulated customer behavioural data in their possession.

With astounding results: Alipay has over 520 million users while WeChat is closing in on the one-billion users mark. In terms of loans, disbursements amounted to US$117 billion in four years for Alibaba’s Ant Financial and more than US$15 billion in 27 months up to August 2017 for WeBank. With Alibaba and Tencent both having market capitalisations of around US$500 billion and trading at price-to-earnings multiples of around 50x, their funding economics are vastly superior to those of incumbent banks.

Beyond platform companies, ecosystem players and fintechs are not to be taken for granted. Grab, AirAsia and almost every telco company are strong brands with large proprietary customer bases that are moving into payments and will want to venture into other financial products.

Fintechs, on the other hand, are entrepreneurial companies sprouting everyday all over the world, trying to find the next banking product or service that can be made cheaper or more efficient. Lest we forget, Alipay was a little fintech not long ago at all.

It is game on and banks must respond. It is already late, but better late than too late.

In the face of these fierce threats, it is somewhat ironic that banking institutions have become more tightly controlled than ever. Every strategic move is heavily scrutinised by regulators. Indeed, some bankers are even conditioned to take offence if they are described as “creative” or ‘innovative”. Since the Global Financial Crisis, banks have been constantly battling re-regulation – new rules and much stricter demands on compliance to all rules. Capital requirements have been raised significantly and banking activities have been restricted by regulatory limitations or punitive capital charges.

Regulators wanted banks to become safer and boring, and we did fall asleep while technology companies barged into our playground and played with our toys. The other handicap for incumbent banks is the burden of legacy assets, such as branches and operating systems, and the people manning them. There has been hardly any talk on banking mergers these days because even the thought of combining banks quickly brings to surface the ugly sight of how much excesses there are to be written down or off.

So incumbent banks have lost a lot of ground and are up against it. Can the “empires” strike back? Yes, because banks still have significant competitive advantages.

However, it will be tough and not many will succeed. By 2025, I think that quite a number of today’s bank ing brands in Malaysia and Aseanwill be barely visible. The most important historical lesson from past industrial revolutions is that businesses that do not respond to the disruptive challenges, or get the answers horribly wrong, can die.

For the highly leveraged business of banking, the first rule to survival, in my book, is that banks must not find themselves exposed to large borrowers that will not survive the onslaught of the Fourth Industrial Revolution. There will be many, and few of today’s credit officers are equipped to spot them. The first strategic challenge for banks is to look into the future and identify which parts of banking are defensible and which are not. Corporate advisory and bespoke banking are

more defensible; stockbroking and similarly low-value intermediation are not.

However, exiting low-margin businesses may not be the right answer; undercutting margins to fend off new players and retain customers is an option too. The core regulated savings and lending functions will remain with banks, partly because it is a low-margin, high-risk, heavy-compliance activity. It is not surprising that WeBank tends to sell chunks of loan assets to big banks, of course at bare-bone prices.

McKinsey recently estimated that the traditional balance-sheet deposits and lending risk-taking generate only 6 per cent returns on capital while the capital-light distribution business, which is typically fee-focused, generates over 20 per cent returns – this is where non-banks have been focusing on and where banks now need to both defend and attack.

Banks that will thrive are those that are able to hang on to their customers. It is not easy, and it starts with a better understanding of banks’ value proposition vis-a-vis customers’ needs today and tomorrow. Banks have enormous reservoirs of customer data, but they have been slow to use it. Banks remain more trusted than technology companies, at least for now, but they have been slow to build on it. To deliver more products, banks have to get into smart partnerships with other companies yet they have been slow to do so. Similarly, to be more efficient and innovative, banks need to partner fintechs, bring their domain knowledge and capital yet banks have been slow in embracing fintechs. Banks have also been slow to respond in the war for talent – the best and brightest are turning to more exciting work environments at platform and technology companies and venture capitalists. Banks must make banking fun again.

Being slow and conservative is a natural state for banks, more so when the regulatory hurdles to do anything different is so high. However, in the Fourth Industrial Revolution, banks need to get very paranoid to survive. They need to be able to transform institutional mindsets to become fast and agile, experimental and iterative, inclusive and open because that is what the challengers are doing. Of course, banks will need to convince regulators to be part of the solution. To quote one of Asia’s greatest finance thinkers and a former regulator, Andrew Sheng: “Those who ask incumbent financial institutions to play in regulatory sandboxes need to ask whether Asians are still kindergarten kids or adults facing the real world?” Regulators can do a lot to enable incumbents, not least by delivering on Asean integration so that we can invest and experiment at scale. They also need to act on the new systemic risks posed by juggernaut platform companies dominating global finance and unregulated fintech activities.

If China houses the largest threats to incumbent Asean banks, it also houses the most inspiring incumbent financial institutions that have transformed and thrived. Ping An, the old insurance company, has transformed itself, leveraging on technology and data, and creating powerful vertical ecosystems with smart partnerships. It reaches out to more than 430 million online users. In 2016, about 56 per cent of its profits came from insurance, a sharp decline from more than 80 per cent a decade ago. The rest was derived from banking (20.6 per cent), asset management (15.5 per cent) and Internet finance (8.3 per cent).

Its market capitalisation soared from US$34 billion in 2006 to US$190 billion today. One empire has struck back successfully.

Boring and slow is a state of mind; it is time for Asean banks to get moving. In our region, banks still have most data, and customers still trust us more with their money, and regulators are still wary of non-banks. These favourable conditions will not last for long unless we deliver.

Back to the CIMB Annual Management Summit. In my closing remarks, I confessed that when we were building up CIMB, our definition of innovation was look West, and then copy and customise for Asean. The world of banking is now flat and no one has the answers, which also means that as incumbent banks fight back, the winners could be Western, could be Chinese or could be from Asean. Technology is a threat, but it is also a catapult for those with the right answers. For CIMB, we have the advantage of being good at embracing change and we already have Asean economies of scale so we should be excited about what technology can do for us. Unlike the majority of banks, CIMB is not sleeping, but in the context of the Fourth Industrial Revolution, we need to get out of bed, now.

Surangkana Wayuparb, third from left, executive director of Electronic Transactions Development Agency (Public Organisation) or ETDA, has signed a memorandum of understanding to improve CERT readiness in preparation for sector-based CERT with Sumet Damrongchaitham, president of Dhanarak Asset Development Co Ltd (DAD). ETDA is responsible for coaching DAD in setting up sector-based CERT and building staff capability in cybersecurity and e-document authority.

New Year special

Mark Chen, second from right, senior executive vice president/ strategic business development, Land and Houses Bank Plc (LH Bank) and Jitra Kornantakiet, fourth from right, an China expert, jointly mark the forthcoming Chinese New Year with the launch of a 3-month fixed deposit account “Sap PhoemPhun (Enriching Fortune). ” It comes with a special interest rate of 1.68 per cent per year, valid until March 31 or until the project’s balance has reached Bt2 billion.

New customers can open an account with the auspicious number, starting from Bt88,888. Present customers can also open an account in conjunction with insurance or fund product purchases.

New product and 2018 plan

Lucky Union Foods Co Ltd, led by vice chairman Wantanee SangUthai, centre, Suradej Shinsakulcharoen, right, marketing director, and Kanokporn Pipatthamkul, left, director for quality development, gave an exclusive interview on ‘Kani Family by Lucky Union Foods’, held recently under the concept ‘LUF New Innovation’.

The event was held for the launch of its latest product Kani Family Taraba Red King Crab, as well as announcing the company’s business plan for 2018, with a focus on penetrating the modern trade channel.

The Kilorun 2018 Running Festival promises food, fun, friends, and family a chance to explore the food and sights of Asian cities while getting in a good running race.

The running series will offer people a chance to chow down on gastronomical challenges from some of most beloved local restaurants, coupled with a brisk sprint to sight-see the landmarks of each charming city, including Bangkok, Bali (Indonesia), Osaka (Japan) and Hanoi (Vietnam).

The event is being kicked off officially in Bangkok, while will help boost Thailand’s economy, said organisers.

The traditional approach of running races is being turned on its head, said Kriangkrai Kanjanapokin, co-founder and co-chief executive officer at event organiser Index Creative Village PLC, at a press conference on Wednesday. “The run is a full course of running, eating and travelling.”

He continued: “As running continues to expand across the globe, so too, of course does Thailand. With the overwhelming amount of running nominations in just a matter of a week, we in partnership with AirAsia, the world’s best low-cost airline, introduce fresh motivation to everyone by organizing the Kilorun 2018 The Running Festival of Food, Fun, Friends and Family.”

The series will kick off bright and early in Bangkok on March 24-25 with 2,500 runners expected to take part.