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Cypriots Lead Europe In Card Usage, Says CBC Governor

by THEFUTURE.TEAM

January 16, 2025

Cypriots use payment cards 1.3 times more frequently than their European counterparts, with contactless card payments accounting for over half of all transactions since 2022. This was highlighted by the Governor of the Central Bank of Cyprus (CBC), Christodoulos Patsalides, during his address at the 12th Banking Forum and Fintech Expo in Nicosia.

Prioritizing The Digital Economy

Governor Patsalides outlined key CBC priorities, including advancements in the digital economy, the evolution of digital payments, the potential implementation of a digital euro, and regulatory frameworks that balance innovation with governance and societal needs. He stressed that these initiatives aim to strengthen Cyprus’ role in the European financial landscape.

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A Resilient Economy And Banking Sector

Despite geopolitical challenges, the Cypriot economy has shown resilience, achieving robust growth rates above the EU average and maintaining strong fiscal discipline. This has resulted in consistent budget surpluses and upgrades from international rating agencies.

The banking sector also demonstrated resilience, with the Common Equity Tier 1 (CET1) ratio reaching a record 23.5% in Q3 2024—well above the EU average of 16%. Additionally, the Liquidity Coverage Ratio (LCR) stood at an impressive 336%, far exceeding the regulatory minimum of 100% and the European average of 161.4%. Non-performing loans (NPLs) fell to 6.5%, their lowest level since 2014.

However, Patsalides cautioned against complacency, citing macroeconomic uncertainties, geopolitical risks, and emerging challenges such as cybersecurity and climate change. Banks, he added, must adopt innovative business models to remain competitive.

Embracing Innovation In Financial Services

Technologies such as artificial intelligence, cloud computing, digital wallets, and biometrics are transforming the financial landscape, Patsalides noted. While these technologies are already improving customer service, automating payments, and enhancing security, he identified untapped potential in areas like distributed ledger technology (DLT), smart contracts, and tokenization.

Acknowledging the rising risks of cyberattacks, he said that supervising cybersecurity and data protection remains a CBC priority. To foster domestic innovation, the CBC has established an Innovation Hub, facilitating dialogue with fintech stakeholders.

Cyprus’ Leadership In Digital Payments

Digital payments now account for 96% of cashless transactions in Cyprus, with card usage increasing significantly. E-commerce is also on the rise, with online card purchases doubling over six years to comprise 28% of all card transactions. Notably, mobile phone payments now account for nearly a quarter of online purchases, surpassing the EU average of 16%.

The CBC has also introduced instant payment systems, enabling 24/7 transactions with funds available within 10 seconds. Additionally, electronic money (e-money) payments are gaining traction, with the CBC licensing 27 e-money institutions and 11 payment institutions as of 2024.

Digital Euro On The Horizon

Updating on the digital euro, Patsalides revealed that the Eurosystem is advancing its preparation phase. The European Central Bank (ECB) is engaging with market participants and preparing the platform and infrastructure for the potential issuance of the digital euro.

Focus On ESG And Sustainability

Patsalides also addressed the evolving ESG (Environmental, Social, and Governance) regulatory landscape, emphasizing strong governance, transparency, and ethical standards. Social factors like diversity, labour practices, and human rights are increasingly critical for credit institutions, alongside climate-related considerations.

To support these efforts, the CBC has established a Sustainability Team, aligning with its mandate to maintain price stability, safeguard financial stability, and contribute to net-zero carbon emission goals.

By continuing to innovate and adapt, Cyprus is poised to strengthen its position as a leader in the digital economy and financial services, Patsalides concluded.

The Decline Of Smartwatches: A Turning Point In The Wearable Tech Industry

by THEFUTURE.TEAM

March 13, 2025

For the first time in history, the smartwatch market is facing a significant downturn. Shipments are expected to drop by 7% in 2024, marking a major shift in a segment that has been growing steadily for over a decade. A report by Counterpoint reveals that while Apple still holds the top spot, its dominance is being challenged by a surge from Chinese brands like Huawei, Xiaomi, and BBK. Even as the overall market struggles, some companies are thriving.

The Big Picture: Why Smartwatches Are Slowing Down

Apple’s flagship products have long been the driving force in the smartwatch market, but even the tech giant is feeling the pressure. The company’s shipments are projected to fall by 19% this year, though it will remain the market leader. Meanwhile, brands from China are capitalizing on the shift, with Huawei showing an impressive 35% growth in sales, driven by the booming domestic market and a broad range of offerings, including smartwatches for kids.

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Xiaomi, too, is experiencing remarkable success, with a staggering 135% increase in sales. In contrast, Samsung is seeing more modest growth, up 3%, thanks to its latest Galaxy Watch 7 and Galaxy Watch Ultra series.

While some companies are succeeding, the broader market is facing headwinds. The biggest factor behind the overall decline is the slowdown in India, where consumer demand for smartwatches has stagnated. The segment is suffering from a lack of innovation and fresh updates, leaving many consumers with little incentive to upgrade their devices. Add to that market saturation, and it’s clear why many users are content with their current models. The Chinese market, however, is bucking the trend, showing 6% growth in 2024.

A Glimpse Into The Future

Looking ahead, the smartwatch market may begin to recover in 2025, driven by the increasing integration of AI and advanced health monitoring tools. As these technologies evolve, the industry could see a resurgence in demand.

Huawei’s Remarkable Comeback

Huawei’s impressive performance in the smartwatch space signals a broader recovery for the company, which has been hit hard by US sanctions. Once the world’s largest smartphone maker, Huawei’s business was decimated when it lost access to advanced chips and Google’s Android operating system in 2019. But in China, Huawei has maintained its dominance, with its market share growing to 17% in 2024.

This resurgence was partly driven by the launch of the Mate 60 Pro, a smartphone featuring a 7-nanometer chip developed in China. Despite US sanctions, the device surprised many with its capabilities, a testament to China’s rising investment in domestic semiconductor production.

In February, Huawei also unveiled its Mate XT foldable smartphone, the world’s first device to fold in three directions. Running on HarmonyOS 4.2, Huawei’s proprietary operating system, the phone further demonstrates the company’s resilience and ability to innovate despite international challenges.

Huawei’s smartwatch offerings are also catching attention, particularly the Huawei Watch GT 5 Pro, which launched in September of last year. With a premium titanium alloy design, a high-resolution AMOLED display, and impressive health tracking features, the GT 5 Pro has become a standout in the market, available to both Android and iOS users.

A Brief History Of The Smartwatch Revolution

The smartwatch market has had its fair share of milestones, but the real breakthrough came in 2012 with the Pebble, a Kickstarter-funded project that raised over $10 million. Pebble introduced the world to smartphone integration, app downloads, and long battery life, becoming the first truly mass-market smartwatch.

In 2013, Samsung entered the game with the Galaxy Gear, marking its first attempt at wearable tech. But it was Apple’s entry in 2014 that truly set the industry on fire. The Apple Watch’s sleek design, integration with iOS, and emphasis on health and fitness catapulted it to the top of the market, establishing a standard that many other brands would try to follow.

By 2021, the smartwatch industry had grown to over $30 billion in revenue, with annual growth reaching 20%. Yet now, it finds itself at a crossroads, with innovation stagnating and market saturation taking a toll.