Araxi Limited (AXX) Earnings Call Transcript & Summary

A very good afternoon to you, and welcome to the Capital Appreciation and Synthesis Investor Day. My name is Howard Feldman, and I serve as the head of people and of marketing for this remarkable company. It was about 2 years ago that I was asked by Synthesis Managing Director Michael Shapiro to run a session on ethics in the workplace. I went in to give the session, and I never left. I had spent 15 years running a commodity trading company and had left that world to focus on writing, on being on radio and also in consulting. I had no intention of ever joining a company on a full-time basis at least again. That was until I walked through the door of this remarkable company that I consider quite magical. By now, most of you have a strong sense of Capital Appreciation. You've participated in some of our events in the past. And I'm going to leave it to Brad to give you a quick overview. Today, however, is about Capital Appreciation, one of their subsidiaries called Synthesis. Synthesis is in essence a software development company. We are innovative. We care obsessively for our customers and for each other. We are fierce in our love for technology and highly defensive of our unique culture. At times, we can be a little eccentric. Good order dictates that I refer you to the disclaimer that you're going to find in your presentation booklet, and I ask you to be guided by them. I'm hopeful that the short session that we have together will showcase some of what Synthesis has to offer. I invite you to contact us during the session with questions, or even after the sessions. There is a question button on the left-hand side of your screen, and we invite you to post as many as you would like. We will wait to answer them right at the end so as not to disrupt the proceedings. Should we not get to answer your question during the session today, we will engage with you afterwards. In the interest of time, we have asked each presenter to hand over to the next. And we'll address the questions, as I said, at the end of the session. I hope you enjoy today. We begin with Joint CEO of Capital Appreciation, Bradley Sacks.

Thank you, Howard. And thank you, everybody, for joining. We're obviously very delighted to have all of you with us today. In the past, many of you have asked us to share a little bit about the businesses within Capital Appreciation and what they do. We have elected to start that process with a review of our services segment, which comprises Synthesis. We plan to have another one of these sessions later in the year where we will focus on our payments segment. Today is not about a financial review. It's not a financial review session. It is rather an opportunity for you to meet and hear from directly the leaders of the different business units and commercial initiatives that we have within Synthesis to understand a little bit about the opportunity that we see, to understand what we do, why we do what we do; and importantly, for you to get a sense of what our clients think about the value that we deliver. So over the course of time, we have given you a little bit of a sense of what Capital Appreciation is. We have 2 segments, a payments segment and a services segment. And our raison d'être on at the core of what we do is to deliver compelling, innovative and disruptive solutions that allow our clients to introduce services that delivered value to their stakeholders. So effectively we are an enabler. We do this by allowing them to introduce new products, new services; and also to make their operations more efficient and create value through cost savings. We have been hyper-focused on the financial services sector in the past, and I think that expertise has served us well. Naturally, that has extensions, and the natural extensions go into retail and other areas where we see compelling propositions from the deployment of technology in the use of -- in those businesses and allow us to drive value. And we've expanded from financial services, into retail, and now the -- with a focus and an interest in looking at the health care sector. In the past, we have laid out what our investment case is to the market, and we've done that through presentations. Today, we are going to, hopefully, allow you to conclude that the reasons that we have laid out in words are supported by the evidence and are supported by our results and are supported by the case studies that we lay out. And that really is the purpose of today, allow you to come away from the presentations having a sense of what we do within our services business. As a little bit of context, I want to just lay out the Synthesis financial performance in the past. The financial performance, I think, reflects the growing market opportunity that we see for our services segment. Our model has been to develop solutions that give rise to sustainable revenue, be sufficiently innovative and unique in what we do to sustain good operating margins. And we have traditionally invested ahead of the demand that we see given our view of where we think opportunity lies. We have done that, and we will continue to push to maintain that leadership position in the areas that we choose to operate. Again I just want to reiterate that today's presentation is not about financial performance. Our year-end is March, and we will release our results towards the end of May or early June as we go through the final audit process. However, before I turn it over to Mike, I want to just give you a few key stats that I think pretty much tells the story of Synthesis and our operating activities within the services segment. The business has a long history. It's been in business for over 24 years. It represents about 30% or 1/3 of the group's activities. Over a period of 5 years, the revenue in the segment has increased by more than 4x. And the team is now 157 large. Large is a way that we think about the market opportunity as we think about the areas that we intend to prosecute. Delighted is our view of the measure our clients think about the services that we deliver, and for us, client satisfaction is a very important metric. There is no doubt, and hopefully, you will see that today, that the team is super passionate about what they do. And it is always good when that effort and those endeavors are recognized. And one example of that recognition is from our key partner Amazon, who awarded Synthesis the social impact partner of the year award for some of the work that they did through the COVID crisis. So I think that's a great summary of what our services business does, but I'll let you all judge for yourselves. So with that, I will turn it over to Mike and allow him to give you a sense of Synthesis directly.

Good afternoon. Thank you, Brad and Howard. I'm Michael Shapiro, Managing Director of Synthesis, and I've been with the company since 2003. I have a passion for fintech, and since completing my electrical engineering degree, I've been fascinated by how technology and information security is shaping financial services and other industries. From the time I joined Synthesis 18 years ago, the company experienced year-on-year growth in all key metrics: team size, key customers, revenues and profit. It is my pleasure to take you on a short journey and show you how Synthesis has achieved these amazing results. 2020 was no ordinary year, and now 2021 has started off as a tough and challenging one for all. However, the opportunity for Synthesis remains robust and encouraging, as confirmed by the quote from AWS CEO Andy Jassy regarding cloud, growing cloud adoption; and the desire for digital transformation, as per the McKinsey survey listed here. Our strategy over the past 12 years to focus on digital and then cloud has meant we are well positioned to drive this transformation towards digital adoption at our customers. We have the experience, thought leadership, market -- and market position to further take advantage of these trends. While we believe that there'll be demanding times ahead for the remainder of the calendar year, we are cautiously optimistic about Synthesis' prospects due to the way we have set up the business and the high demand within the areas that we operate. Our 24-year history; and the development of regtech, digital, cloud and now AI and managed services delivered success in the past. We have always targeted both long-term strategic growth while never losing sight of short-term and consistent profitability. This can be seen in 2014, when we achieved 24% CAGR profit for the 10 years prior. The strategic and financial diligence remains at the core of our values. At the same time, our attention was deliberate on the -- on areas of technology that will provide the highest impact for our customers. This was done by tracking international trends; and partnering with global tech providers such as AWS, our partner since 2016, in advance of other players; then rapidly skilling up in these areas and commercializing the relevant product or service offering. We intend to continue this trajectory of strategic growth, and the presentations later today from our team will demonstrate this. Our industry experience is focused and resolute, and we have targeted very specific domains. We have found success in the banking, capital markets, insurance and lending and the retail sectors, with the health care and telco sectors to follow. This success is demonstrated by the long-standing key customers listed here, plus many others we have showcased in prior results presentations. The 2 key factors driving our success are customer obsession and a culture of innovation. This approach has led to a track record of many years of successful project deliveries at blue chip and prestigious enterprises in South Africa, Mauritius and now Hong Kong and the Asia Pacific. We list major banks, retailers and financial service providers as key customers. We'll continue to grow our existing base and look to win business with new customers. As shown in the matrix of our service offering, we provide these customers with a multidimensional and growing portfolio of services which are complementary and relevant to an enterprise demanding a modern technology landscape. We will showcase 4 of these areas today, namely cloud services, digital, intelligent data and our academy. Finally, Tom Wells, our CDO, will present Synthesis Labs, our R&D area which is constantly looking for the next new opportunity for Synthesis and to successfully commercialize it. Note that cloud activities generate approximately 40% of income, digital also approximately 40% regtech 15%. And the others currently make up 5%. We target high-impact technology services which have the opportunity for annuity income and for growing our intellectual property portfolio. Reference our Halo tap-on-phone product, in the payments and crypto division, bottom right of the slide. We are not performing a deep dive into Halo today, as we showcased it in the prior Capital Appreciation results presentation. However, we're progressing this initiative at a rapid clip, and we will keep the market informed of these developments. We strive to provide relevant technology services where the competition is low and the barriers to entry remain high. At the core of the success is the capable and qualified software developers and solutionists, currently totaling 157 professionals. We have a mix of team members with 30 years-plus experience; and others with youthful passion, such as our graduate recruitment intake, 11 of whom started in January. In fact, 1 of the graduates commented to me in the orientation session that he was born in 1997, the year I started my career in software. We recruit individuals who have the virtues of humble, hungry and people smart. And we steer their continued learning and growth, as evidenced by the 200 professional certifications and 195 degrees and diplomas attained and held by the Synthesis team. We're explicit in recognizing, explaining and protecting the culture that has been behind Synthesis' significant growth. We think we can still significantly grow our talent pool while retaining top staff. Our track record of staff turnover is on average less than 12%. This metric is better than the industry norms both locally and internationally. Synthesis is a stable company and is a wholly owned subsidiary of Capital Appreciation. With a healthy balance sheet, it provides our staff comfort and job security. We offer exciting work, a culture of entrepreneurship and diversity of thought, plus we value the contribution of key team members and publicly recognize their achievements. This sets us up for future organic growth. The case for fintech service providers such as Synthesis remains strong. The global expectation for fintech growth is higher. This is highlighted by the 5 trends identified by Forbes research, namely digital-only banks, regtech, banking the unbanked and the adoption of contactless technology. Synthesis is well positioned to capitalize on these areas. We see growing demand for these services locally and we are deliberately targeting international expansion in these areas. A lens on global partnerships for Synthesis will drive this strategy. This includes both our existing partners such as AWS and new ones such as tech heavyweights Salesforce and Cloudflare. We are constantly looking for opportunities in the market to provide exponential growth in the areas mentioned here. New Synthesis offerings such as Halo and our AI services and providing innovative solutions for the unbanked will be areas of focus. As mentioned earlier, international trends in research guides our strategy and service offering. EY identified these 6 trends for fintech. We intend to focus on all of them. However, we're still searching for the commercialization opportunity with the customer for number four, blockchain, over and above the value of a bitcoin portfolio. We continue to drive these opportunities under the astute guidance and leadership of the Capital Appreciation executives. We do this in concert with our payments division portfolio companies Dash Pay and African Resonance. We look to progress both organic and acquisitive opportunities to expand our reach in these areas. The remainder of the Investor Day webcast is a deep dive into 5 areas of our business. I'm sure this will demonstrate how we are driving revenue, growth and strategic thinking for the company. Thank you. I now hand over to my colleague Darryl Govender, who will present the boundless opportunity in cloud solutions. Darryl is Head of Cloud Services for Synthesis. Enjoy.

Thanks, Mike. Hi, everyone. My name is Darryl Govender. I head up the cloud services area for Synthesis, as Mike mentioned. And I'd love to take you through what we've built over the last 5 years as becoming a leading and top-rated AWS partner in South Africa and with ambitions to go into Africa and further abroad. I think the first place to start is really to position what cloud is doing in the market and look a little bit at the trend and a little bit around the forecast. So I'll jump straight in. What we have right here is IDC. We borrowed some information from them, and it speaks to 2 things that I think are significant in importance for you to understand as an investor and for us as well in terms of how we tee up our business. And in later slides, I'll show you exactly how this applies. On the left, we look at the infrastructure as a service market, and we see the trend around public and private client as compared to traditional IT. And what you'll notice and I think what's most interesting is, for 2020, last year, and I think no surprise here, the COVID-19 pandemic and how it's impacted the use of cloud from a global scale perspective, where we actually see a tipping point where private and public cloud actually are starting to overtake the traditional spend on IT infrastructure to provide the services that we all enjoy and love; and the ongoing trend over time, forecast year out to 2024, that speaks to that growing adoption and then fundamentally fuels our interest and expertise or growing expertise and capability in that space to provide those services to our customers. Now just to explain a little bit more on the left: The 64% that we see out on 2024 for the graph, of course, AWS, as we know, is a leader in that space. If we look at other information sources such as Gartner's Magic Quadrant around infrastructure and platform services, they give the same sentiment and have done for the last 8 to 9 years. And I mean that's part of why we strongly follow or we'll pursue an AWS suite primarily, but of course, conceptually the ability for us to move across cloud and provide this capability broader as we see South African companies and around the world actually -- it's really to adopt a multi-cloud approach and posture as well, and that's some of the things that we'll be looking at in the future. Now on the right, what we've got alongside that is to move away from the infrastructure as a service play because that's [ been specifically ] to platform provider value, AWS, Azure, GCP, et cetera. And it starts to bring into focus, and this is where Synthesis plays, the access to a $1 trillion forecast in 2024 pool or opportunity for service providers in professional and managed services. This is including software as a service providers, third-party vendors, et cetera, and again Synthesis included. That's us playing in quite a significant space and, as we can see from a data perspective, quite a significant opportunity in terms of how we can assist customers and again backed by the trend that says cloud [ has gone eating the world at ] the moment. It is really the trends to get behind and to follow. And happy to say that we've built again one of the leading capabilities in South Africa that we're looking to take abroad with us. I wanted to touch just quickly on the Cape Town AWS region. So you will -- I'm sure you know that, last year, we actually [ got in Cape Town ] a region, an AWS region, and capability with a whole host of services, 80 plus at the moment, in Cape Town. And what that's afforded is the opportunity for more customers. And what we're seeing is across multiple industries, across many different tiers, not just the large enterprises, that are starting to take a keen interest in AWS and in general cloud technology. So -- and alongside that, there's the value that it brings to us as the South African economy. As it mentioned here, we've got the creation of 100,000 new jobs within South Africa alone just from the creation of the AWS region; and of course, AWS further entrenching more support capability in terms of head count, in terms of staff that can assist customers and partners like ourselves to deliver those value-added services. And I'll talk through some of that adoption capability and what cloud really is helping to provide and later on talk about how that's helping some of our customers as well. I think an interesting position -- now moving away from just the market trend and what's happening with AWS in the region. I think the key thing to position is why Synthesis. Why do we do this? Like why? What fuels us? What fuels the growth and the interest? It's not tech for the sake of tech. It's not innovation for the sake of innovation. We fundamentally believe that we can create substantial change in consumer lives through the enablement of platforms such as cloud. And you'll see later from my colleagues Archie, Darren, Tjaard, Elmarie, et cetera, where they're talking about how we're using these types of platforms to really help fundamentally the [ guiding street ], so to speak. As an example, if you just think back or think on your current experience or relationship with technology. Customers or our customers or providers, let's call them generally, are expected to have these always-on capabilities. They're expected to add more features and functionality at significant pace. And they're expected to actually pass the cost savings that should come from a technology adoption on to their end consumers. So myself as an example, just using whatever cloud-based service or whatever provider, whether it's FNB from a banking perspective or Netflix from a media perspective, the expectation is that I get access to more of the features and functionality that I love at those lower cost points. And I want it to happen a lot sooner. I mean the expectation is that it's again always on, always available. And these are the things, these are the tenets that really make a platform such as AWS quite important and, again, why we back from a technology perspective the entirety of our growth and capability off the back -- off of cloud. Now to focus a little bit on what we've done as Synthesis. So it's been a long time in the making really. We've been building a lot of momentum over the last 7 years, where we started just by experimenting with our own capability with our needs and requirements. And so very obvious [indiscernible] in the market from a consulting perspective. And since 2017, we've focused very much on our partner journey with AWS. So as an example: We are an advanced consulting partner. We've got a host of competencies that set up proper differentiation in terms of local competition to us as well as actually abroad. We're actually one of the top partners definitely from a sub-Saharan perspective and I think, going forward, with our AWS partnership and our eye on this premium partner which is the top-tier partnership with AWS and again creating significant differentiation for us further as we go. I'll show you a little bit later around how these competencies, as an example, tie back to customer value in the form of co-fund opportunities with AWS and program benefits. And then lastly, to touch on, and I'm quite proud of this, 175-plus AWS certifications across a team size of about 75 unique guys. We've got about 120 plus in the delivery team, but what we'd love is fundamentally to cover 100% with a certification across our team capability. And look, the honest view, and Elmarie will tell you more about it a bit later, is certification is not competent. We back our certification with significant experience in the market, as you can see through our growth time line. And that really is the way that we'd like to build and continue to encourage our customers to invest with us. Now in terms of how customers actually engage. This kind of slide speaks to our business as it stands now. Now conceptually this model applies to any cloud provider. So yes, today, we've built it off of AWS and we've got a significant AWS presence and capability, but this supplies, and it's going to be future proofed, capability and vision for us to exact against Azure or GCP, et cetera, whoever else comes down the line when the timing is correct for us to do so. But what we've done is we've gone through the cloud adoption kind of curve. We've tried to marry how customers actually adopt the cloud in reality and then offer that as slices to actually take them through that as [ a guided tour ]. So just to explain it a little bit more. Typically what we'll see is customers are want to -- they want to dip their toe. They want to test something innovative. They want to test the proof of concept; or just a project, maybe a trial migration, et cetera, for a core system or maybe an internal system. And fundamentally that's that project space, where they're just getting a feel for AWS or cloud and trying to see if it's a good fit. In the 7 years I've worked in the business of cloud, I would say I've never seen a customer not transition to the next phase, which is really to enable. So to create the guide rails for mass consumption of the cloud in their organization; and from that, enablement, setting up things for the actual cloud adoption, security, compliance. Think of those types of frameworks that you would need a guide rail essentially you need in place. The next very obvious step is to actually start migrating applications into that environment. So we do everything from a host of assessment, business cases, et cetera to prove what migration can look like commercially from a DevOps or engineering perspective, et cetera. It's -- it really is a holistic kind of view of this and the actual execution. So advisory-plus-execution type capability to help our customers do that. And we've seen massive growth in that space now. If we just dial in to our South African customers, a lot of them are enabled for consumption in AWS. And they're actually enabling the rest of their territories into Africa to utilize AWS as well, and we're seeing massive growth in terms of that build and migrate. So you'll see again later our data and digital capabilities are -- they're helping those customers consume onto the environments that we're helping to enable. And then lastly, we speak to reinvention. This is the AWS-native view that I think all customers really want to get towards because -- and I spoke earlier about the actual end-consumer view. They really want everything to be available now. They want the features faster. They want it in their hands as soon as possible. They want it to be reliable and they want it to be at low cost. This is speaking to that [ movie ] of, once you're in that cloud-native kind of view, you're kind of riding that wave of really getting the technology to work for you; and again not technology for sake of technology, technology to create business outcome for our customers, which I'll speak to in the next slide as well. Now underpinning a lot of this, the managed cloud center is something I'll speak to briefly, but it's just a new way for us to engage. It focuses on customer experience. It talks about longevity. We're talking about annual recurring revenue and annuity-type incomes through this model, not just project-based implement. And further underpinned by our managed services capability. And just to touch on that briefly. It's to say we are building a next generation or, as the industry would term it, a next-generation managed service capability that's not interested actually in just break-fix support SLA. It's looking at the innovation. It's looking at the optimization. How do we again take those business outcomes that customers, that our customers are looking to create? And how do we marry technology to those business outcomes? And how do we guarantee a certain amount of capability and service level to do those types of things? And then further, what we believe and where we're seeing 1 of the biggest gaps is training from a capability perspective not just in cloud, just probably across the board but definitely in cloud where things change on the daily. As an example, AWS' and their services. Their host of services is well over 200 now. Things change so quickly that we've seen our customers are struggling to keep up. And our model of co-creation, that speaks to partner accelerated. We come and we help customers to actually accelerate their journey in terms of, again, marrying tech to the actual business outcome. We're seeing that they're struggling to actually keep up -- keep their teams afloat, et cetera. And we are trying to find pragmatic ways to marry, again, competence to -- and experience to the actual theory that we see out in the market typically. [ Now it's they ] really do address things at an abstract level at a broad level, and we are really trying to dial it in to what the actual customer is trying to do and specific to their environment as well. I want to speak just briefly about the cloud value framework that we use. Everything that we do at Synthesis from a cloud perspective and broader is around best practice. So one of these things is, the IDC, a few years, about 3 years, ago, they conducted a study at a global scale, 1,500-plus customers, to see what is the real value that customers get out of cloud. And they explained it in a categorized way and what they came up with is 4 distinct categories. One, that's cost savings, and from the study you can see 8%. It's the smallest benefit actually. I mean, if you think about it, it's moving a supply. It's a supply move, whether it's on prem or hosted by another provider, into AWS into the cloud. It's the smallest value that you actually get out of it. It still might be significant in the millions of dollars, sure, but it's the smallest actual benefit that you realize from moving to cloud. The majority, the lion's share, is really in staff productivity. So as an example, AWS and being able to move into a managed service perspective, where there's all the operational burden is moved -- is removed from the actual person deploying a solution. Think about a database as a simple example. That actually frees up a lot of time. That allows a customer to repurpose their staff for higher-value initiatives. The other side of it is and, I suppose, somewhat nebulous, the business agility side of it, but if we just zone quickly back to operational resilience: The fact that cloud providers build resilience into the architecture of their data centers, into their [ AZs ], into their regions, that's -- that actually gets passed back to the customer in terms of trying to implement more complex technical solution but in an easier, far simplified way. And then that leads back to business agility that takes all of this into mind to make sure that you can get those features, get that functionality out faster without worrying about the actual operational precedent, et cetera that follows it. So a lot of what we are talking about here is what we bake into our entire engagement. So we want to expose these metrics to customers and take them through that journey, help them understand the return on investment of working with Synthesis and how we're actually accelerating them and moving their companies forward in the eyes of their actual end customer. I mean I think that's the key thing that we get out of this is the end customer is seeing the benefit of the work that we're doing. I'll speak to it quickly in our customer slide in a little bit. Now in terms of innovation, I think, from a technical perspective, Synthesis is very good. Been here for -- I've been here for about 7 years now, and I would -- I will have to say, perhaps biased, but innovation-wise from a technical perspective, very, very good; very much about bleeding-edge early adoption from a technology perspective. From a commercial perspective and an engagement perspective, what we've seen is there's a keen -- well, there's quite a keen interest and need actually for us to tie back to the customer experience. And what we're working through, as an example, evolving our engagement models, is to say how do we actually get closer to the actual domain that our customer is in, understand the pain points, understand the innovation that they're looking to do, understand the road map a lot more than on a typical project-to-project kind of basis. And how do we then utilize cloud to find a way to unlock that? And what we've done is -- typically, any enterprise actually will establish a client center of excellence. And that's to enable the organization to consume cloud. It's engineering. It's financial. It's training. It's organizational change management, et cetera. How could we actually provide that as a service and again a partner accelerated service? So think joint venture. Think shared capability to help drive the customer forward alongside Synthesis. And what are the mechanisms for us to subsidize that capability and pull them into the ecosystem? So everything is very much focused around how we can continually move them forward, give them a bit more around the metrics that we spoke about earlier, expose a lot of it to them, show them the return on investment for every little -- for every rand literally that they spend with a provider such as Synthesis, et cetera. And how do we gear them over time to the high-value -- a high-value kind of offering for us, as an example, managed services or training or any product-type capabilities that we might have on the shelf? As well as how do we make sure that -- from a Synthesis and an investor perspective, that we're also gearing them towards this lifetime view towards the higher-margin capabilities at the right costs to our customers? So as an example, this is really a model that we're talking about with our customers right now in the cloud space that speaks to us understanding inherently what they're doing and finding the right value-to-cost ratio to actually service that demand. To briefly touch on our partner programs. So this is something that actually creates differentiation for us. A lot of partners in the AWS ecosystem do not have access to this stuff, and from a local perspective, the majority of them don't actually. So as an example, Synthesis have access to what's called the Migration Acceleration Program; windows rapid migration, modernization programs. They're all programs that are co-fund opportunities where AWS comes in. They fund Synthesis on behalf of the customer to help them get this -- get their workloads into AWS. So whether, like I touched on, [ a few that will migration and modernize ]. We're talking about moving things typically from on premise into cloud, but there's also opportunities for us to actually modernize from existing AWS-based further into AWS as well. And AWS comes to the party to help us as a partner by co-funding those opportunities, i.e., offsetting the consulting spend for customers. And [ in some cases, it is ] quite significantly, up to 75% actually. And in other cases, they provide AWS consumption credits to offset the customer spend on AWS. Of course, they're thinking longer term how this is going to help them from a return on investment perspective, but from a Synthesis and a capital perspective and from an investor perspective, it means customers are more willing to actually work with us directly because we're significantly offsetting our costs through our partner status fundamentally. And just on pretty much my last slide, just to talk through some of the customers that we're working with. So cloud, I think, for Synthesis, we started in the financial services space. We started with software dev. Cloud has really unlocked the ability for us to go cross-industry, cross-territory, cross-tier across the board really in terms of how we can engage. And now it's a matter of us picking the right customers -- or the right problems, let's say, that are quite crucial for us to solve and that we can build repeatable capability; and again just manage the ability for us to earn for -- or earn against our customers, I suppose; and build more capability around product plays, [ et cetera that ] can create more high-margin and longer-term relationships with our customers as well. So just to talk through a few of them. We've engaged from start-up to large enterprise. As an example, with InvestSure, we built their product from scratch, pretty much in the same with GovChat. We built it pretty much from scratch, the entirety of the platform, the hosting, the infrastructure, the application itself, getting it to market. We've been through the entirety of the journey, all the way to the larger banks, where we're enabling their regions for consumption, as I mentioned earlier, and helping them to actually migrate and train through that co-creation model, train their employees as well, in terms of how to run in the cloud. And then we're also offering that managed service capability as well, so it's that holistic kind of bag around what we've done. And over the last 7 years, significant exposure in the market, South Africa and especially. And Mike also mentioned an opportunity that we have in the APAC region. And this year, we're actually going to be looking at Africa, well, let's just call it broadly EMEA, as well and really trying to fine-tune the right opportunities to take our experience through and make sure that we're growing our business accordingly. So thank you, guys. I think that's pretty much what I wanted to talk through. I'd like to now hand over to Darren and Archie from our intelligent data division. Thank you. Cheers.

Hello and welcome to Synthesis intelligent data. My name is Darren Bak, and I head up the intelligent data division.

And my name is Archana Arakkal or more commonly known as Archie. I'm one of the practice leads of the intelligent data division.

We are passionate about data and machine learning. We believe in ethical, transparent and accountable use of AI technologies. To make truly data-driven decisions, your platform needs to be built on proper engineering standards, and data quality needs to be at the forefront. We believe that this actually differentiates us as a business. We bring product thinking into data. And we believe that data should be democratized, putting data in the hands of domain experts. By tapping into the why of our customers, seeking a competitive advantage or genuine customer satisfaction or finding out a way to tap into the mountain of data and unlock value, we let insight lead. So there's no compression algorithm for experience, and what differentiates us is that we like to get our hands dirty. Our years and years of experience means we have created these blueprints, and these blueprints allow us to leverage the power of Amazon Web Services with the creativity and innovation of our digital and emerging technology business. This allows us to create a golden value thread across our customer's business. We offer end-to-end solutions across the data journey. And these form -- and these are namely innovation in AI; rapid prototyping using AI technologies; building enterprise-ready data platforms, especially in the financial services arena; and finally, machine learning across that life cycle, from the modeling and the data science aspect to putting the stuff into production. We have an expert team of data engineers and data scientists. And our core expertise focuses on fraud detection, document understanding, e-mail routing and personalization.

A Gartner study has shown that close to 75% of enterprises will operationalize AI by 2024, which essentially means that we will finally have the opportunity to make more data-driven decisions. Having said that, this also means that we need to significantly increase our competency in using AI as well as actually -- using AI in actual solutions. And what does that mean for us? That actually means that we need to ensure that we can do all of this in a short period of time. Now having said that, we have to do all of this in a short period of time, it's -- it begs the question. Why do we actually need to go about [ skilling ] our environment? Why do we need to go about creating new AI use cases? Well, the answer is quite simple. In order to stay relevant and in order to ensure that we still are leveraging off [ leading-edge ] technology, we need to invest more and more in our AI solutions. Along with that, in order to attract the right talent and stay disruptive in a good way, we need to continue to innovate. Our division has realized that, in order to ensure that the scale is still relevant within organizations, we need to ensure that we do scale without actually scaling people. And this is the main reason why we have to do this. It's because this has a direct knock-on effect on the annuity revenue. So what our division has gone forward and done in this process is we've actually invested quite a significant amount of time -- in resources as well as time to ensure that we have R&D products as well as we have established ties within the different research institutes and we've gone above and beyond out of our comfort zone in our financial sector and actually gone and explored further establishments with our health care industry as well as retail spaces. And we believe that in -- by engaging with different areas and engaging with different expertise, we would be able to truly leverage on AI solutions.

So exponential growth of data coupled with exponential growth in cloud computing means that there has been an explosion in experimentation of AI. Cloud allows you to store vast amounts of data economically. Not only that, machine learning services have really been commoditized, making it easier to use some of these premade machine learning services that the cloud providers have created. The Amazon Web Services, for example, creates over 1,000 to 2,000 new services and features every single year. And by jumping onto the cloud service providers, you are able to tap into their innovation. I mean, quite clearly, cloud makes AI just that much easier. And we believe Synthesis is perfectly positioned to take advantage of this mega trend, for 2 reasons. We have a proper data engineering pedigree and our -- and secondly, our long-standing partnership with Amazon Web Services. The companies that can truly harness this negative trend -- mega trend will be the successful ones. We partnered with Nedbank Insurance to solve critical business problem with machine learning. The challenge is how do you make sure that thousands and thousands of e-mails sent to central mailboxes are correctly categorized and routed to the correct team. An example of this, and you guys might have used it before, is [ [email protected] ]. In the past, Nedbank employees would have to spend 8 hours a day in front of their laptops, reading each and every e-mail, categorizing them and then figuring out for themselves which team to route this to. Now a robot does that 24/7. It has helped Nedbank Insurance up their service capabilities. And from a backlog perspective, they can process the e-mails 7.5x faster; and with e-mails with up to 5 attachments, 11x faster.

Our mega trend number two that we're going to be tackling would be -- is going to be the event data is a gold mine. So I'm going to take one step back and just try and understand what event data is, firstly. To put it quite simply, event data is essentially your digital footprint. So why do we care about digital footprints, in the first place? There was a recent stat that has come up from a 2019 study saying that close to 67% of the world is currently sitting on a digital device, which means we actually can keep track of 67% of the world's population. And what this means for us now from a data science perspective and from a machine learning perspective is we can truly understand what consumers really want with their products. So trying to get a little bit into how we went about solving a similar problem before. We had the opportunity of working on a project in 1 of the top 5 big -- top 5 banks around, and it was specifically around personalization. Typically, what we had to do was prevent this bank from sending mass communications to everyone and anyone that is on their database. What they wanted to do was channel that communication to specific customer groups that actually require the communication. So the 3 main targeting points that we were looking for was the right channel, the right time and the right product. It doesn't necessarily have to be a product. [ It could have been a ] communication. So what we went about doing was taking the event data coming from digital devices, profiling specific customers to understand what their true needs are as well as which channels they actually respond on and targets only those specific customers with the relevant [ chat or ] communication that they require. This significantly improved the costing perspective. From a costing perspective, from a customer experience perspective, it was all positivity all around. And that's one of the ways in which we're able to use event data.

So unlike typical legacy data processes which are slow and batched, fast data allows you to process data in real time, allowing you to make business decisions as and when they happen and not when the data is available to you. Nothing is more important in real-time data than fraud detection and prevention. At a big 5 bank, we needed to get data outside -- from their core banking platforms which were on the mainframe, typical legacy, slow, batched, delayed data processes. Often on a mainframe, through a batch process overnight, you're only actually able to get data the very next day. Now in fraud terms, the fraud has already been perpetrated, and the alerts and the action to trigger on that alert is long gone. We are now able to stream and analyze that data in real time and prevent the fraud as and when it happens and not after the fact like it currently is. Now this is legacy enablement at its best. I would like to thank you for listening and spending some time hearing about our division. Now I'd like to hand over to Tjaard Du Plessis, Head of Digital and Emerging Technologies. You're not going to want to miss this one. Think of him as a perfect mix of David Attenborough; and Professor X aka Peter Stewart (sic) [ Patrick Stewart ]. Over to you, Tjaard.

Thanks, Darren, and Archie. So my name is Tjaard Du Plessis, and I head up a division at Synthesis that we call digital and emerging technology. So changing the landscape. There's really only 2 ways that landscape changes. It changes due to external factors, things that you can't control. Sometimes, it's sudden and violent like a storm, but most often it's a gradual decline into disorder, to entropy. But either way, it's usually a destructive force to the landscape. The second way that the landscape changes is very different. It moves into the complete opposite direction, strangely, against the flow. It creates order and it pushes forward, and that's called life. Everything else -- and how strange yet that everything else moves to equilibrium, except for life. Life is a constructive force. It creates and it builds and adapts. So on the one hand, you have this destructive force, and the on other side, we have the surviving force. So both of these changes the landscape. Change is inevitable and change is at the heart of what we do. And you can let this flow, control the change in the landscape, or you can choose to build. And we are builders. We measure our success by the value that we create. We've been asked to consult. We've been asked to advise. We've even been asked to be quiet and simply build what we are told. To both, we shamelessly refuse. We live in this impossible middle where we challenge the status quo. We challenge. We ask questions. We ask why. We ask, how will this bring value to the user? Yes, we do advise and we do consult, but it's not in isolation. We have a bias for action. We co-create with our customers. We build things, and man, can we build. So I'd like to share with you a few things, a few customer stories of where we've built. The first one was with Standard Bank. And they said, "I want to present personalized offers at the right time, at the right place and in the right channel." Standard Bank knew how to predict behavior. They're starting to master the art of artificial intelligence in their training, prediction models on behavior. And they can help you, the clients, to match exactly the product that you need, but there was a problem. The data required for these models are massive, and they also come from very different sources and very different systems. Data isn't always clean. There's duplicates. And sometimes, it's hard to access that data in a secure way. And sometimes, the data isn't even with your system. It might be on Twitter, where someone is interacting with you or complaining or putting in a request. So the problem was how do you turn this massive mountain of data into real-time insights. Their problem was time. So the technology that we introduced is revolutionary in the sense on how it looks at data. It turns a database inside out. You see, you can see data as a static storm. My current address is, for example, 10 Aucklands Avenue. That's the current stat, but really there's much more to my story of my current address. It's about how I moved, right? So I moved, from my bachelor flat, with my wife to our first rent. That's an event. And then I moved to the first house that we bought together. That's another event. So it's much more about the current stat. And databases store the current stat, but the technology that we introduced was let's see it as a series of events. And as soon as you turn that database inside out, you are able to provide personalized structures at the right time and on the right channel. And that's what we did with Standard Bank. We presented this at the AWS summit. And this was the second time that our builders presented something at the AWS summit in Cape Town. The second story I want to share with you is at AFGRI. So they're the largest agricultural in South Africa, and they said, "I want to digitally transform my business." So clients of AFGRI do loads, a variety of things. They do lending. They do retail. They even do insurance, grain storage, grain marketing, trading, equipment. The list goes on, but to a client, this seems as one company, but we agree -- everyone knows that at the back office you need to run these as separate businesses or separate systems. And that creates the issue, right? How do you build one single experience for customers? A customer might want to sell his grain but store it in a silo at the right price, and then he needs to instruct the silo to move that grain. And he also wants to use the money that it gets to pay off his loan. For him, it's one flow. It's one action, but in the back office there's loads, loads of effort spent, so our challenge was how do you draw all of this together so that you as the customer almost just clicks a button but it feels like one single step. And we manage all of these systems at the back end. So what we did is we built one single web platform. And using our integration expertise that we've obtained from 20 years working with banks, with legacy systems and very difficult integrations, we were able to combine 17 [ store ] systems into one online platform. And that is managing all the mess that you can sometimes create by duplicating data. This site was very small with only 2 of our builders, and 7 years later, we have 9 builders working on multiple projects. A complete digital transformation. The third story that I have for you today is Cim Finance. They're largest consumer finance business in Mauritius. And they said, "I want to enable merchants to accept some financing loans digitally," and actually they didn't even say that. They just knew one thing. They knew that they need to modernize their business. What they didn't know is where do you start. Do you start with back-end systems? Do you start monetizing those legacy systems? Will that even have an impact on customer experience? Or do you start with the core finance business, or do you go to one of the secondary businesses that's lower risk? Can you reinvent your business completely without disrupting your business too much? These are all the unknowns that were [ underlying ], and our teams led a lot of workshops together with them in Mauritius. And we challenged them to focus on the customer journey. Don't get stuck in analysis, and just start building. They also challenged us by explaining the intricacies of their business and how it's different in the unique Mauritius landscape. And I think, in the end, the co-created result was genius. It's called dual transformation. And I don't think -- none of us even knew that, that was the name back then. And it happens a lot in my experience with Synthesis where we do something and then later it receives a name and a process. Dual transformation is really about beginning small, high-value digital transformation in your current business, so in Mauritius, while in parallel you try and reinvent your business in a completely new country. And that's what we did for them. In Mauritius, we built a tablet merchant app which enabled merchants to accept loans digitally. And it changed from people having to go to a merchant, filling papers and waiting for days. They even had scooters driving around the island to collect these papers. And we were able to change that to digital and minutes, but in parallel we also worked in their new identified country. And we said, let's act as a start-up and let's reinvent this business model from scratch. What would consumer finance look like if it wasn't paper-driven [ and through merchants ]? And we said, why not build a consumer app that they can download on their phone? And we can use machine learning and we can use data scraping to be able to work out a risk model for this client rather than you having to fill out a lot of forms. And that's what we did in their new country. And this was only 4 -- only 1 of the 4 clients that we are working with in Mauritius. So zooming out on our business. We usually do about 15 strategic projects a year, and that number is growing every year. We work with blue chip financials. And we have over -- 20-plus years of building fintech software. We've built 3 online banking systems for our customers in Investec Mauritius, in AFGRI and AfrAsia. And we have about 40 builders. And they're all deeply technical and passionate, entrepreneurial kind of builders. The kind of innovation that we get into. We [ verified ] that it's you just because your phone is nearby. We are cutting-edge browser technology, Bluetooth-enabled browser technology. We eliminated the tedious OTP SMS. We have taken the Internet of things to a new level. You've heard of these small edge devices and cameras, but we said can we take a giant silo and turn that into an Internet of Things? And we are able to push notifications to farmers as soon as their trucks delivered grain to the silo. We're able to [ connect rainfall ]. We're able to map farms. We've turned call center recordings into graphs. We've taken these recordings, transcribed it into text, aggregate all of them. And we were able to put a graph on top of it and show the organization what is the most common reason that their customers can't pay off loans. We are currently doing this in South Africa. We're doing it in Mauritius and we're doing it in Kenya, mostly in the finance industry, but we've used that as a segue into retail [ and ] into agriculture. And I want to show you a video of one of our customers quickly.

Good morning, folks. My name is Nicolas Hardy. I'm a born and bred Mauritian. So my relationship with Synthesis goes back a long time, 2008. And today, I'm obviously driving a project at AfrAsia Bank, where I'm the COO of the bank. And we've started that journey a year ago. And to sum it up all: I think what I've been enjoying with Synthesis was the quality of people and the delivery and the consistency across all these years. So well done to team, and we look forward for more in the future together. All the best. Thank you. Good day all.

[indiscernible] these experiences. So we use about 50. 40 of them are [ permanently ]. Then we share a few of them with the other divisions. We also bring in some contractors sometimes. And we have a support structure. That's a matter of sales; principals, which is the more senior techies; operational. We have HR and everything we do share with the different divisions in Synthesis. And I have been privileged to work with these people for almost a decade, and I really think it's the smartest people in the business. They're deeply technical. They're insanely passionate. And I can lay out the technical skills for you and it will be impressive, but what makes us different is our love for the craft. We're builders. We don't build what you want. We build what you need. We are misfits. We're rebels, round pegs in square holes. We have no respect for the status quo. We change things. We're even crazy enough to think that we can change the world. So here's to the crazy ones. Our focus has always been emerging technology. For Synthesis Labs, run by Tom Wells, we are visiting the future a lot. And we take pictures. And we try and ask ourselves, how will this influence our customers? And we're always ahead of the game and we build skills before an emerging technology becomes mainstream. And usually this is not in isolation, but [ we will innovate for the customer. We'll push the industry forward with these technologies. We will try and enable the industry until it stabilizes. [ The next spring ], we're usually out and on to the next thing. We have a good track record. This isn't just words. We've been able to predict cloud. Cloud: Over a decade ago, we didn't have any servers at Synthesis and we were fully adopting the cloud. And now there's still a scarcity in skills, but cloud is starting to become mainstream. And the demand for that is massive. Kafka, that's a streaming data technology or fast data as Darren calls it, is something we identified [ from the '80 ]. And this year alone, we have 5 customers for it. We sell our builders [ in a rate card ]. It is just smart people at a good rate, and this is the core of our business. And this is part of our business we called franchise. And if you look at the growth or plan for our growth, we plan to build on this foundation which is our franchise. And we're always looking at expanding, but our philosophy to growth in our business is the same as what we're evangelizing to our customers: Landscape is always changing and the only way that you will survive is to build. So we'll build new offerings. We've already created our very popular [ ignition ], which is a short but powerful innovation kick-start invested in by us and by a customer. We build in new countries. We've built for clients in Kenya and in Mauritius. We're going to build new industries. We have built for fintech. Now we're in retail and agriculture. And we'll build with new partners. Our AWS partnership has been very successful, and there are others. And there are even more that we're exploring as we sit here today. And we plan on investing in what we call [ dual ships ]. And that is investing in our own skills, using this unmatched skill set and experience that we've built up in the industry and trying to build products for ourselves. To survive, we'll build in different colors. We'll build in different shapes. We'll build skyscrapers. We'll build bunkers. We'll build rooftop gardens and underground [indiscernible]. We'll lay fiber, and we'll fly drones over the sea. Even though we can't predict it, we're not afraid of change. We embrace it. Thanks. I'll now hand over to Elmarie, who will tell you all about Synthesis Academy. Thank you.

Thank you so much for the introduction, Tjaard. Good afternoon, everyone. My name is Elmarie, and I head up the Synthesis Academy. The demand skills in South Africa and in particular skills in emerging technologies is constantly growing. We've been alluding to this pretty much all through this presentation. In 2018, Synthesis decided to take a more deliberate and focused approach to continuing our own skill sets within the organization, and that is how Synthesis Academy was born to be the critical skills factory. We were tasked with building knowledge in the fastest, most efficient way, especially in technologies that are new, scarce or not well understood in the marketplace, so pretty much all the technology that we work with. Very quickly, we realized that our customers faced very similar challenges. And we decided, in the spirit of co-creation, to extend our course offerings to them also; and so the commercial arm of the Synthesis Academy was born. Initially, we set out to create an ecosystem of learning interventions that draw on best-of-breed training from existing training providers, both online and face to face, and by creating our own training programs that build real-world practical ability. We wanted to be clear on what our approach and our underlying philosophy was. You've already seen our very impressive array of certifications and qualifications. They serve as a universally recognized measurement of our abilities, but as Darryl has already mentioned, practical competence is equally important to us. Competence is defined as the ability to do something successfully and efficiently. It's not just about knowing and understanding the theory but being able to apply that knowledge in a variety of different situations and being able to synthesize it with existing knowledge and eventually create new frameworks and points of reference. That's called innovation. So to build competence in the fastest, most efficient way possible, we've steeped our programs in adult learning methodology. In practical terms, that means our courses have to be immersive, experiential and story-based. Our JetPack series, for instance, is based on real-life use cases. And where we present this to our customers, it is deeply steeped in their technology stacks in their specific environment. We gamify our programs, scoreboards and badges, but we also find engaging online platforms rather than just through traditional Teams or Zoom delivery that has become very popular. Our programs are built by actual builders, all the people Tjaard has just spoken about. We don't just want to give our participants theory, but we want to draw on the extensive experience and the real-world new of the foremost experts in our industry and then overlay all of this amazing quality information with good learning methodology so that this completely overwhelming tech becomes accessible, easy to understand and ultimately useful. So what does our philosophy mean for our customers? Well, for them, it means that they can implement faster and more efficient tech journeys. The IDC study that Darryll spoke to earlier on also conducted a separate study that showed, for instance, that cloud adoption was 80% faster where customers had comprehensive training plans. Where teams have trained in the real-world application of their tools, they're almost 5x more productive and less likely to make mistakes. This obviously reduces time fixing errors but, more importantly, minimize risk, especially in areas such as high availability, security and data protection. It's really important for a customer's technology team to understand the technology they want to implement. When they do, they're able to apply the correct technology to the correct problem or at least have a fluent conversation with their service provider. We know from our experience that informed conversations lead to far more robust, innovative business solutions for our customers. One of our best-selling academy programs is called cloud economics For executives, where we invite senior leadership from across the customer's business and most specifically from nontechnology teams to become fluent in the vocabulary, the objectives and the risks of implementing cloud technology. By understanding their role in the cloud world and how it will impact their operations, business teams actually create buy-in and then efficiency into the cloud technology journeys that are ultimately driven by the IT partners. Training is a really great way for Synthesis to position ourselves as the subject matter experts in these emerging technologies. That opens the door to more consulting work and a far closer relationship as a trusted adviser to our customers, but obviously we don't just focus on our customers. We're also deeply committed to ensuring our own employees are absolutely at the forefront of this new technology. We provide meaningful, challenging learning paths that are based on both the individual's role in the company as well as the technology that they are exposed to. This means we can develop our teams with broad and appropriate skill sets that allow them to cross-function but also be mobile between different projects or clients. Our developers are more than just coders, who very often have to be customer relationship managers, conflict resolution specialists, expectation management experts; and sometimes even lead teams, so we make sure we equip them with a range of leadership skills, including things like communication skills, how to decode the corporate political environment at a client, how to deal with difficult conversations and even entrepreneurial thinking. These human skills, more than just our technical ability, is what makes our customers want to work with us. Of course, better-skilled team members need to be faster, more customer-focused delivery and the ability to see opportunities and capitalize on it. This in turn means closer customer relationships for us and more interesting and more profitable projects. And a meaningful, interesting and exciting project is a great way to develop, retain and deeply engage our best assets, our people, but what makes the academy special? How are we different? Well, we believe that our practical role-based approach build skill faster and far more efficiently and relevantly than any generic training course could. We don't want to compete with online providers because we believe that our facilitators and their experience are part of what accelerates learning in our classrooms, whether those classrooms are face to face or virtual. We don't offer public courses but rather present to [ specific or teams ] in the organizations where we are already working on projects so that we can customize our content to their worlds, to their technology and to their specific challenges. Our content is obviously based on real-life expertise steeped in best practice by people who have learned from many mistakes, and we have a real passion for developing others. I've already mentioned that we underpin our content with proper adult learning expertise. I am one of the few nontechnical experts in Synthesis, but my background is in really understanding people development, learning methodology and leadership development. That means that, when we say we [ entrench ] our learning, we really do it using the best learning thought leadership and proven people [ tools ]. Synthesis already has a strong reputation in the market for both our products and our services. We believe that we can now add our academy learning offerings to that reputation. We're not just saying this. Quick example is that we recently had one of our digital programs around cloud economics that was part of a compulsory learning module for all cloud team members at a leading bank. We've already seen a list of our qualifications, but I just wanted to give you a quick reminder that these technology certifications are not the only ones that we support at Synthesis because we believe that we are more than just tech. We actually offer consulting services, and we want to be a whole lot more. We encourage and offer a range of other programs as well, things like testing methodologies; things like project management; things like good, old-fashioned coding languages. We offer all of those and support our employees to work through those as part of their individualized learning plans. I'm sure you've been waiting for this slide, exactly what our course offering is. This is a quick snapshot overview of what our clients can see. In addition to our self-designed programs which I've already spoken about a little bit, we are also accredited to resell some of our partners' classroom-based training. In our ecosystem of learning, we don't want to reinvent the wheel, but we want to use things that already exist and work and use that to build on top of it. One of our most exciting opportunities [ still align the ] area of learning paths and consulting on this to our customers. When we design a technology journey, like Darryl has already spoken about, we don't just want to leave it at that. We actually want to build a customized learning path with that, that supports the technology journey and equips the customer's team with the right skills at the right level at the right time. Working closely with not just the tech team but sometimes also with our customers' learning and development teams or HR teams means we can actually embed these learning journeys in their performance appraisal systems, which creates long-term value, longevity and sustainability in the way that they look at these new technologies for themselves. The Synthesis Academy may be small, but we think we've done some pretty big things, so far. You can see our history on this slide, and you'll see that the global pandemic has obviously had a profound effect on learning in the workplace not just here but really globally. We've seen shifts away from the longer, more traditional 1-, 2- or 3-day classroom-based trainings to short and sharp virtual learning interventions. In particular, we've seen a very big uptake in e-learning, as organizations have been protecting their learning budgets while people have been working from home, but we are seeing a shift back to this idea of instructor-led training, which is far more interactive and has far better learning outcomes necessarily of an online training than e-learning. Having to reshift or refocus some of our learning methodology has really allowed us to explore new delivery platforms, interesting collaboration tool kits, new practical activities and new ways to entrench learning. And obviously, where we have done it for ourselves, we have also rolled it out to our customers, but like with other organizations, we have also had a far better focus on ourselves in this last year. And so you can see that, in addition to the host of new certifications that we can show for the last year, we've also placed a real emphasis on upskilling our teams internally through the things we know we do well: sharing our knowledge, building skill sets within the culture that we have that is a really, really special thing and that we are very deliberate about. And so you can see the training hours here do not represent any of the training hours put towards formal certifications but rather only the training hours that were aimed at business and the so-called soft skills that we have prioritized. And we think that it's a great way for us to keep our employees engaged while working for home while continuing to embed a very special workplace culture that we have here at Synthesis. So what's next? Well, we will continue to sell our rapid-emerging technology training to our clients using our existing services, projects and expertise to sell that and to support them so that they can become the creators of their own journeys. We continue to include and market our partners' training programs so that we can build not just skill but also build relationships between us and our partners and our partners and our customers. Our learning paths ensure advancement, growth and meaningful work for our own employees, which in turn we know leads to innovative thinking and entrepreneurship. A big focus for us this year is our leadership development program and developing leadership across all levels of our organization, deepening our people skill sets and promoting excellence in our relationships with our customers. The World Economic Forum's report on the future of jobs has confirmed that it's not only our technology skills that will drive us forward but also our ability to show leadership, to collaborate, to communicate effectively and distinct creatively. The academy is here to answer exactly that call. Thank you very much for joining me in this quick walk-through of the Synthesis Academy. We've talked a lot about innovation and entrepreneurial thinking, and I think that this approach is embodied in the title Chief Disruption Officer. I'd like to introduce you to our Chief Disruption Officer, Tom Wells. Tom heads up the Synthesis Labs, and he's going to give you a little glimpse into a very tantalizing future.

Thanks, Elmarie. And hello, everyone. My name is Tom Wells, and I'm Chief Disruption Officer at Synthesis. I look after an area called Synthesis Labs, which is really the mechanism -- wait a minute. I haven't turned on my video. Here we go. Sorry. I look after an area called Synthesis Labs, which is really the mechanism in which we can break out of the mold of our business as usual and focus on building exponential ideas with our customers. As you've seen through all the previous presentations, Synthesis has a really strong value proposition which has up until today been really successful. We're super proud of what we have achieved, and we're even more proud of our leadership teams and operating divisions as they continue to push boundaries and grow into the future, but what is the mechanism which Synthesis uses to ensure that it stays ahead of the constant pace of change of technologies? Well, that's where Synthesis Labs comes in. It's really a small and targeted area of concern within the business whose responsibility it -- is to look forward into the future and bring some of these ideas back and apply them to the challenges of today. It's hard to define the particular concrete thing that we focus on in our labs area because it's really an investment into future innovative or disruptive ideas, which are by their very nature hard to define, and so our focus is more on capability of our team and our organizational ability to adapt to change. For me, this is as simple as an investment in core foundational technologies and processes that we know will be a necessary part of our future. Some of these are obvious, such as cloud technology, digital user experience and machine learning, tip of the iceberg. And our task as part of the labs area is to dig deeper below the surface and look at the next layer that is slowly starting to emerge. These are what we would call the next-generation differentiators. Some of them are abstract and hard to imagine. Others are very obvious. Either way, they were just ideas, and only time will tell whether they are good or not. So I've got a laundry list of things I could talk to you about, ranging from real-time data streaming platforms, hyperscale computing architectures of the future, to blockchain, the rise of pure-functional programming, extended reality and even our view on how quantum computing will impact everything, but unfortunately I only have a few minutes, so I'm going to focus on 3 ideas which I think are pretty interesting, coming up shortly. When working in the unknown, an open mindset is the most useful characteristic to have, but of course, it's also very useful to have access to a large toolbox of tools, processes and people which can be easily accessed. These are really handy to use as foundation or accelerators allowing our team to get to the core challenge as soon as possible. We call this time to value. We are very fortunate at Synthesis to have recognized this area -- this idea very early on in our journey. And so we have a long history of investment in R&D over the years, which when looking back in retrospect has been absolutely key to shaping what the [ organization is ] like today. So what does the Synthesis organization of the future look like? I really don't know exactly, but one thing I'm sure of is that we are a constantly evolving organism which -- with all of the right characteristics, as Mike defined it earlier in his presentation. He defined it as hungry, humble and smart. However, structurally we are not easily defined. We are ambitious and we are seldom satisfied with what we have achieved to date, and so our structure really embodies this desire to explore and discover new opportunities. As a summary. Synthesis Labs really represents the investments into the capability of our teams to be able to build innovative and disruptive platforms in the unknown domain. This investment has 3 pillars: number one, hiring and training the right people. We value EQ, creativity, the entrepreneurial spirit. We foster individual's ability to tell stories, and we work hard on developing individual technical skill. Secondly, process. We live by the agile software development process. We focus on highest business value first, and we build in the ability to pivot in all of our endeavors. The third one, technology. All of our projects have an element of R&D built into them. We have a dedicated focus on emerging technologies and experimentation, including a dedicated labs environment which provides the space for deep research. So we don't have a lot of time to dive into details, but I wanted to talk through 3 topics of the many that we have that I see as good fundamental ideas for where Synthesis may evolve or [ find opportunities next ]. So here's the first one, the reimagining of personalization in banking. And this one is so obvious because we all experience it every day. Or rather, I should say we all experience the lack of it every day. One of the big gaps we see in the market is the reality that typical banking applications are very far behind the standards that consumers have become accustomed to and have come to expect from their platforms in everyday life. For example, anyone who has ever been updated by Google on a delayed flight; anyone who has ever received a traffic update from Google, telling you that your trip to work will be delayed or 5 minutes longer than usual based on your usual schedule; or anyone who has ever been recommended a number of experiences you should consider when Airbnb detects that you are planning a visit to a new city; or Facebook suggesting a friend to you based on your recent interaction on another platform, which seems a bit scary; or being recommended a new album on Spotify, or title, based on your listening preferences. Although these sound pretty obvious, they have had enormous impacts on our society. Generally people don't miss flights. Roads are better utilized. Time spent in traffic is minimized. People are more connected via Facebook, and discussing music to get recommendations from other people doesn't exist anymore. These inefficient parts of our society have been optimized by technology platforms. And the promise is that we can spend more quality time doing what we really want to do, but now pivot this personalization idea to banking. How core is your bank to your day-to-day life? Does your bank remind you on the last day of the month to pay your [ City of Johannesburg bill ] so that you don't get cut off? Does your bank provide you with savings recommendations for the few months leading into your annual holiday and begin by offering you the best-priced flights to your favorite destination? Does your bank recommend a petrol station to use which will maximize your loyalty points based upon the fact that it can see when you last filled up your car? Does your bank maximize your interest by moving excess funds into higher-interest-bearing accounts but making sure that you still have enough float in your current account to buy groceries, based on your previous spending behavior? I don't want to bash any specific banks, but mine certainly doesn't do any of these things, and these are just the super obvious ones. There are so many quality-of-life services that can be simply predicted by my transactional and spending habits, so what's the problem? We're not entirely sure, but one of the key issues to me is that banks have not yet pivoted to become customer centric. They are still very much product centric. They are still asking themselves, "What is the best way to sell this product to my customer?" rather than, "What is the best thing I could do to serve my customer?" The personal and behavioral data that the bank has got access to is an absolute treasure trove and, we believe, hugely predictive of your behavior on a day-to-day, week-to-week and month-to-month basis. Why [ do the ] banks don't seem to be capitalizing on this? We think it's because it's really hard to do. The technology is nascent and difficult to work with, but it's also dependent on that paradigm shift from product centricity to customer centricity, first, so we're excited about this. It's coming. Banks are slowly shifting and the technology is slowly maturing, and we're ready to help drive this. The next idea is less focused on the customer and more on the agility of the organization, which I often refer to as system 1 decision-making. The human brain is this amazing device that can switch between 2 modes of decision-making. This concept was made popular by the Nobel prize-winning Daniel Kahneman in his book called Thinking, Fast And Slow. These 2 modes of the brain are often referred to as system 1 and system 2. System 1 is responsible for what we might call the automatic functions such as breathing, your ability to walk, being able to talk, keeping balance while riding a bicycle, kicking a soccer ball, et cetera. All of these require very little active thinking at all. The brain knows what to do and can take control of the situation following a predetermined playbook for the action at hand but nuanced in that it can be taught to allow for certain adjustment based on a sort of intuition learned from previous experiences. On the other hand, system 1 is -- sorry. On the other hand, system 2 is responsible for accomplishing more analytical or unpracticed tasks such as multiplying 2 numbers together, planning your next chess move, learning to play the guitar or building a LEGO set while following instructions. These are functions which are slower, more methodical; and require more reason and analysis. The really interesting part is that, as you practice a task over and over, you get better at it. And why that is, is because what is happening is that your brain is slowly moving those functions from system 2 to system 1, and this is where you start to find mastery. I'd like to think about the "system 1 and system 2" idea into thinking about organizations because I think there are some similarities. Most organizations today make decisions primarily using system 2 type mechanisms, committees, policies and procedures, paperwork, analyses, e-mails, often heavily reliant on chains of individuals along the various business pathways within the organization. The benefit is often huge amounts of flexibility because processes can be changed on the fly to deal with different scenarios as they arise, but this agility comes at the cost of speed as we multiply the cost of each human step along a business process. And so often, the solution is to try to automate and remove the human bottleneck along the path by replacing them with systems and things like robotic process automation or RPA for short. These certainly do work for the repetitive tasks and can often reduce processing time from weeks to days or even to hours, but usually, getting faster than that is incredibly difficult. And it never really feels like we come close to system 1 type decision-making within an organizational context. We believe the fundamental issue to be that businesses are still very much built upon the concept of batch processing. Batches of data are processed and then moved on to the next step as a complete batch. This is a good idea when humans are involved because humans have a very high start-up cost. The cost to switch from one processing mode to another is generally much higher than a computer doing the same switch, and so when we automate these processes, we tend to carry that batch processing idea forward into the automated process too. So for me, the big challenge of cracking system 1 decision-making within an organization is to shift fundamentally from a batch processing mode to what we call a real-time processing mode. Real-time processing means that a single item can be processed from beginning to end without ever having to form part of a batch. Although it sounds quite simple, this small idea has huge impact on architecture and systems because, when you take it to its extreme and logical conclusion, it means that systems must be designed without any dependencies on each other. Data relating to the processing of a new item must already be present in the system, in that system, so that processing can occur with exactly 0 waiting time. It's almost the idea of encoding a type of intuition within each processing step. So this sounds like a silver bullet, and maybe it is. And maybe we can't reasonably expect that every single future business process take exactly 0 seconds to execute, but what I believe is that the future of financial services is absolutely real time. Whether this becomes a key differentiator is yet to be seen. So my first idea was that organizations will become more customer centric, more personalized. The second idea was around organizations needing to build a sort of intuition within their processes in order to make really fast decisions. This last idea is focused on organizations making the right decisions. So [indiscernible] that machine learning is the new utility just like grid-based electricity and the printing press were the disruptive utilities of the modern age. So one of the easiest structures used by machine learning to understand, or certainly for me, is the neural network. It can sound quite -- it can sound like quite a scary structure initially, but it's actually not and it's really easy to understand. It's simply an interconnected grid of nodes starting from what is called an input layer connected through a series of hidden layers to the eventual output layer. The nodes in the input layer represent the inputs to the network, which could be things like date of birth, gender, country of residence, your monthly salary, et cetera, obviously depending on what the situation is. The nodes of the output layer will be what you intend to predict such as a yes-no type output indicating whether this individual might take up a particular product or a right-left-straight type output if this was hooked up to the steering wheel of a self-driving car. So that's really easy to understand. Given these inputs, I want to predict these outputs. Now the interesting bit is the network in-between, and that's where the magic of machine learning comes in. The fundamental concept is that, by teaching the machine repeatedly which inputs produce which outputs over and over and over, the machine can figure out the correct configuration of the hidden layers in-between. Now this completely relies on there being good data available to perform this training, data that really connects previous inputs to previous outputs. As well as needing this large amount of data, our newly trained model is really only good at predicting this one thing. Give me these inputs, and I can predict only these outputs. It really doesn't take into account any external factors nor any interdependencies that might be going on outside of the model, obviously. This makes machine learning predictions pretty difficult to work with and inflexible because it's fundamentally backwards looking. What I'm looking for is something that can allow us to look forward into the future and allow us to make the best decisions based on the factors we can see today. This is where I'd like to draw a distinction between what is prediction and what we call simulation. Instead of trying to predict the future based on the past, why not simply model all the internal and external forces, interactions and dependencies of our business and then use that model to run scenarios against in a sort of simulation mode? This would mean that we could simply set up our parameters of how we look today, load up a particular decision we think we would like to make and then instantly fast-forward into the future to see what that outcome is. If we don't like that outcome, just do it again with a different decision, over and over and over until we find the best decision. Of course, this would be the perfect solution, and we wouldn't require any predictive modeling at all. However, on the downside, this would require absolutely huge amounts of computation to achieve with perfect accuracy, but maybe we're not really looking for perfect accuracy. We're just looking for something that is better than a prediction based on the past. We really want something which can be used to predict the outcome of a new idea or an opportunity which hasn't yet generated any real-world data sets to train upon. This, I think, is far more useful. So it sounds like this idea of simulation might be somehow opposed to machine learning, but really it isn't. And machine learning models might make up many pieces of their total simulation. Computation might be a problem, but we have access to huge amounts of CPU through cloud and special-purpose GPU hardware. And hopefully, soon we will have -- we will start to see more access to quantum computing, of which the simulation idea could be a killer application, so it's best to start thinking about this sooner rather than later. So those are 3 interesting ideas. Put your customer in the middle of your world. Develop a certain intuition inside your business processes so that you can do business at the speed of light, and then simulate every scenario so that you can make the right strategic investment decision every time. So in summary, this slide depicts our magical formula: opportunity plus technology, plus process, equals future proof. We stumble upon many opportunities as we operate the business today. We invest heavily in emerging technology. And then we have a bulletproof end-to-end process with automatic feedback loops, providing flexibility and agility. Thank you so much for your time today. I hope it was interesting, and I would really welcome any questions you have. So for now I'm handing back to Howard, who will wrap up and then jump into the questions-and-answer section. Thank you very much.

Thanks, Tom, absolutely fascinating. Thanks to all the presenters. If I can just have all of the presenters back, then we can start looking at some of the questions. I do really appreciate the number of questions that you've sent in. It's very clear to me that we're not going to be able to get to all of them, but we are going to try. And what I've done is kind of group them to see if we can try and give you as [ many answers as ] possible. Just for the first, a little bit of housekeeping. The presentation is available on the Capital Appreciation website, so you can go there. Have a look at it. You'll also be able to re-watch some of these presentations. So it will be available to you. We will also -- we also are available if you want to e-mail us afterwards and send us any further questions that you might have.

All right, so taking a look at some of the questions. And in fact, Brad, I want to start with you because there were a number of questions around payments. And where some of them don't pertain exactly to Synthesis, I thought maybe you could give us your thoughts around that and address the payments issues.

Thanks, Howard. I think, before I start, I just want to thank everybody that was part of today's presentation for the enormous amount of effort that they put in, both those who presented and all of those who made the presenters look great. There was a large amount of time committed to it and it's really appreciated. And I hope that you as shareholders learned something out of today's exercise. So Howard, there were a number of questions regarding payments, which I'll address quickly. Today is not about payments. Today was really a showcase on Synthesis, but as Michael indicated at the outset, we didn't spend very much time talking about Halo because, although Halo was a payments related -- a Synthesis-developed technology, it is now being managed very closely with our payments division, but all of the technology and capabilities that you see within the Synthesis team [ caught ] very well into the payments sector. And there is great cross-pollination between the development teams at Synthesis and our operating and development teams within our payments business. And so the ability to use cloud to process payments, to extract data from transaction activity, to extract data from the efficiency of the infrastructure and use that as measures to enhance the productivity and the operational efficiency of the estate is stuff that we are employing. There is a project currently underway using the cloud team and the intelligent data team at Synthesis to augment the capabilities that we have within our payments infrastructure. So there were questions around that. The Halo product, which was highlighted in our investor presentation, and we'll share more about that in our upcoming investor release, will show again the use of cloud technologies both on consumer and merchant onboarding and then also payments processing for payment acceptance. And I think you will recognize what the golden thread is between our respective units. There is a hyper degree of focus on the areas in which we have domain knowledge and expertise, and the capabilities that we have in one business translate very nicely into learnings and efficiencies in our other businesses. And so I will stop there as it relates to payments, but we will do a similar session to showcase the payments activities later in the year. And you will get to meet the management from our payments teams and hear some of the -- about some of the innovating stuff that they do. As a parting comment, I just want to let everybody know that I taught Tom everything that he knows. And so if you have any questions about stuff that Tom spoke about, just send them to me, and I'll be happy to answer.

Well, that's very, very reassuring. Thanks, Brad. All right, well, Mike, can I just start with you? A number of questions around Synthesis verticals and areas of focus. I don't know if you want to expand on that a little bit.

Yes. So we were asked, are we looking at other industry verticals outside of the aforementioned today such as health care or energy? Are we looking at progressing those opportunities? So in answer to that, I just would like to preface my statements by saying our focus is on delivering significant business value to customers. And we find that we have to have a very deep understanding of their industry before we can add that significant value. To add surface value, we can look at multiple industries, and that isn't the strategy that we've employed. So through our at least 18 to 20 years of experience in financial services, we now have deep understanding of banking, capital markets, insurance and lending. And we bring that to bear when our consultants and software developers are deployed on projects. We are building up that competence in the retail sector. We're also busy building that up in the health care sector and we have initiatives that are well underway. I think another interesting dimension, Tjaard spoke about it earlier, is the segue of these industries. So financial services is moving into retail. We see Nedbank [ have a ] very wide and deep e-commerce offering, and we've helped that team commercialize that offering. In the reverse direction, we see retailers moving into financial services. There is the joint venture between Woolworths and Absa to provide Woolworths financial service product to Woolworths customers. And again that is a customer of ours. And we see Shoprite offering their money market offering, [ in store ] to do money remittances and other digital-based financial services. Again we've been involved with the system of those types of organizations. So yes, we are deliberately moving into these other industry segments. The focus ones, as we've mentioned, are retail. That includes some work that we're doing with Pick n Pay currently in their cloud and digital endeavors as a retail customer. Another attendee asked a question about mining and manufacturing, where there's a lot of data and a lot of process. It isn't an area that we're commercializing just yet. Possibly our cloud services teams or our managed services team could do the very basic infrastructure management on their behalf. And those may be opportunities, in time, that we exploit, but as we look at the opportunities for in-depth cloud services, digital, intelligent data type of offerings, we'd like to stick to the industries that we know, understand and can really arrive with some capability and competence to deliver the solutions that they require. Another interesting one for us, and we're making some advancements there, is in the telco industry, which has a very interesting dimension, especially with the advent of 5G.

Right. Michael, in fact, before I let you go, somebody is saying, "Thanks for the great insight into your business. Appreciate the time and effort, very excited about your business potential," but asking a question around how does the team work in terms of management, client relationships, role of directors in these relationships. So I thought, before we got into some of the specifics of the areas, you could perhaps give us a bit of a -- your thoughts on that.

Yes. So we have a very high-touch structure. So someone like Tjaard is very involved. He has practice leads that are running projects, but he drives out a lot of innovation. As you saw from the presentation from Darryl, he has very deep technical knowledge and a very good and wide understanding of the cloud space and works well with the teams. So that structure provides the culture that we have around people that are deeply passionate and come from strong technical backgrounds and then have real commercial acumen that help drive our business forward.

And in fact somebody asking, how will you maintain your unique culture when scaling the business? I can even answer that from a people perspective: That culture is absolutely fundamental to every aspect of our business, from the type of employee, the type of person who joins the team, to every aspect of our world. As Mike said earlier, we look for people that are hungry, humble and people smart; and that is very much part of our culture. Darryl, if I can just move on to you. What is the sophistication of South African clients? Also what type of services are they using in terms of multi cloud? Perhaps you can address that for us.

Got it. And I think it's a good question, significantly so, I think, in terms of sophistication. And I think we've all realized from last year COVID has really been a strong catalyst for digital innovation and acceleration in terms of cloud utilization across the board. So it kind of pervades all types of industries and tiers as well. So as a simple example around the question as well: We've seen a lot of our customers that went through a significant enablement journey for cloud, and last year, it really did get kicked into high gear in terms of how they could utilize. In fact, we saw that tipping point that said net new kind of innovations would be built cloud first straight off the bat, where they'd still continue on the strategic point to just move the rest of the business along those lines. So we've seen that sophistication kind of tee up quite nicely and getting towards that tipping point or even past the tipping point where things are becoming AWS native. And to the second part of the question, Howard, could you repeat?

Yes. "I also wanted to know about are they using multi -- is it multi cloud?" What type of services are they using?

Okay. I think what we've seen from the industry is typically it is a multi-cloud strategy that customers adopt. And what they typically do is they take a quite a strong posture on one of the cloud providers to say this is going to be used as a strategic customer-facing vehicle, and the other one being maybe for productivity apps or internal use case. As an example, AWS being used to deliver the high-end innovation, that's going to be customer facing versus Office 365 and et cetera in terms of the use cases on Azure, et cetera.

Right. And perhaps, Tom, I can ask you this question. Are there opportunities in cybersecurity? It's not an area that we [ have ever ] focused on, but there are some questions [indiscernible].

Yes, yes, okay. No, I mean, it's in our history we certainly have had an information security area within one of our pillars at Synthesis. And that might have been maybe more than 10 years ago. What I think we've realized and the way we see it today is we've collapsed information security into the competencies of all of our operating divisions. So within our cloud area, of course, security is one of the major pillars. Security is one of the major pillars within digital as well, so when we are building Internet banking platforms, security is almost like requirement #1 from our customers. And so our preference -- I mean I'm sure you've realized through Tjaard's presentation that our preference is on building and on creating things. Often we find security can be at odds with that, so what we've tried to do is instilled and woven security into all of our build and engineering process. So from a skills capability, we actually have people that are CISSP certified. We have AWS cloud security competencies. We have internal CISO type of roles, et cetera. And of course, we do a lot of internal sort of IT compliance which we're required to do by our customers. And so security is absolutely a very core piece of what we do. It's just not a direct customer offering as a stand-alone piece.

All right. And Elmarie, perhaps I can come to you a question for you around the academy. Can learning courses be rolled out more broadly to IT professionals. Do you think it can be a stand-alone business?

So I think, when we set out to start out the academy, we decided we wanted to focus on things we knew. One was these emerging technologies, and the other was -- one was our customers. And so that created the space where we were doing competence-based training in emerging technologies but very much focused and customized for our customer environment. And that's always been our sweet spot, and I think that will continue to be our sweet spot. If we're talking about wanting to walk a journey with our customers, then creating learning journeys and learning opportunities that support those journeys really is ultimately what we want to do. I think there's an opportunity perhaps around thinking more broadly and thinking around this being more stand-alone type of opportunity, but one will then be competing with some of the larger training providers. We are relatively small. And I think there's also been a very big uptake, especially during the global pandemic, around e-learning. And those platforms tend to be quite cost effective, easy to roll out. They're self managed. And so there's a lot of opportunities for organizations to engage in those where we wouldn't play. I think where our sweet spot really would be, if we were to build something stand alone, would be this idea of competence and that we don't just want to get to the certificates, but I think sometimes, some of the other providers, they give you the course so that you can write the exam in parts rather than to make it really competent. And so for us, it will be in that space of competence but also then in the space around critical skill. We don't want to do what other people can do. Tom loves to say we want to do the things nobody else can do. And I think that goes for our training as well, where we want to actually upskill people where there is nothing else, where we really have the skill that we can share and build the community that way. So I think, for us, likely that's a question we haven't had to answer yet, but it is potentially something that we will look at.

Right. And Mike, if I can ask you this question: Do you generally -- does Synthesis generally own its own software IP, or is it owned by the client?

Yes, great question from the panelist. So where it is strategic and where it has the opportunity for license resale, we own that intellectual property. An example of that is the Halo development as well as other components. Our regtech software, all of that is Synthesis developed and owned intellectual property where we license it to the end customer. Where it -- where we perform a digital project, sometimes that -- it makes use of intellectual property or software licenses from third-party providers, and there we don't need to reinvent the wheel. So we utilize those components. We pool that together with Synthesis-developed components such as an identity managed -- identity management solution that we have running at multiple customers because, as Tom spoke about earlier, security, information security and protecting digital assets is a key part of our offering. We own that IP, and that's licensed and embedded as part of the technology solution. Some of our customers do want to own a particular piece of intellectual property that's developed for them. And we negotiate with that customer if that's a very specific need for a very proprietary or narrow piece of functionality that adds value to their business, but our strategy is to build up intellectual property assets and to commercialize them and leverage them for other customers. And that is a standard model used by software developers globally. And we believe we've got a very good mix of consulting, services and the development of intellectual property that resides inside of our business.

All right. If I can just ask Archie and Darren 2 questions on intelligent data. How should an organization start with AI? And is South Africa ready to be a data-driven, B2B data-driven, and use AI? Big questions.

Thanks, Howard. I'll start with the first one just to address and reiterate Mike's point on IP, but while we are very much a project-focused division and we call most of the banks our partners, we do focus a lot of our time on R&D. And we see artificial intelligence ML really at its infancy in terms of [ products and product like making ] these products production ready. In particular, document understanding, where the technology is at a point where we can very easily identify the type of documents there, understand the category and the type of document and automatically process some of this information, something that every single business needs and wants. So that's from a product perspective. And we're -- and also in particular, our developers and across Synthesis really want to be building products too. They don't just want to be building products for their customers. They want to be building products for Synthesis too. And we find a happy marriage between the two of them and a happy tension between the two of them, good and healthy for our business. In terms of your question around companies being ready and all of that...

Yes. Maybe Archie -- Darren, if I can ask maybe Archie to answer that...

Yes, [ okay ]. Go ahead, Archie.

Sure. I'll actually package both that into your second question as well. So essentially, in terms if the company is actually ready for AI, we have to be. We have to be ready. There is no other option around this because the entire world is going down the data-driven route. We have to get to a point where we actually do secure our data in the necessary places we need to secure it. We need to keep [ our data rating ]. It needs to be [ clean ]. So we need to be ready. We have to be ready. And just from a South Africa perspective, there's -- there are pockets that are ready and there are pockets that aren't ready, but I think something that we're learning, engaging more and more with our clients, is often what's stopping people from going to the next level is the fear. So you may find that a lot of the technology is ready and we may find that there are actually services out there ready to be utilized, but there is that fear element. So it's more about getting out of that mindset and breaking out of that and then getting into the technology side of things. So it starts off with data. It starts off with the mindset. And then everything from there, it's Tom's philosophy: We just keep going and break into new barriers from there.

All right. And one of the things that I -- that always occurred to me, there's this beautiful poem, which I don't have in front of me and I'm certainly not going to recite. But it's about just start: Start with your hands quivering. Start with nervousness. Start with your voice shaking. Just start. And it's always reminded me very, very much of where -- of a philosophy at Synthesis because it's just -- it's a culture of starting of just doing it. Tjaard, just there's a question for you on risks around digital. What are the risks in -- potential risks in the space?

Thanks, Howard. I think one of the biggest risks is skills, yes, because we're working and we're building high-high-demand skills. And especially in South Africa, it's not always to retain -- always easy to retain [ those skills ], but as you saw from my slides, it's something we have been able to do for a very long time. And we do it. We are creating a culture of emerging technologies. It excites the builders that we have. And I think we understand and we know what builders need. And this culture, we hope, tech sessions that everyone loves and everyone shares, technologies -- if you come to our office, you'll find a little bit of a lab there, all sorts of interesting technology that we play with. We hold [ hacker funds ]. So this culture, I think, is really core at mitigating the skills risks for us, and that is what I think is the highest on our priority list. Also, the remote-working opportunity is something that we're very excited about. We'd want to expand our skilled base and bring in all sorts of skills across even Africa or internationally. So that's definitely something that we'd like exploring in the future.

All right, Tjaard. We're almost out of time. Michael, I've got one final question, which I'm going to turn into 2 just because everybody likes a good deal. Mike, the -- a question around annuity income: Is this part of the Synthesis approach? And then the bonus question for no extra marks is how do you foresee the year ahead in terms of growth.

Great. Thanks, Howard. I think, yes, we'll close after this. We've just gone overtime. So in terms of annuity revenue streams, our existing regtech business, really a cash cow of the business, is all annuity income. And that generates income. It's growing at a steady pace as we expand into other customers, but I do want to touch on our managed services area. This is an area which we've made some strategic appointments. We've grown the team significantly and we've grown our customer base. Our strategy here is our cloud implementations will lead into managed services customers. So as we roll out cloud services, the need then becomes for a customer to have an expert to operate that environment. Some customers can do it internally, but because these are emerging technologies and quite sophisticated and high-risk areas, they look to managed service providers. So that is annuity-based income, typically long-term contracts. And I'm sure that in future presentations we will expand more about our managed services offering. The other one is our Halo product, which is license-based annuity income. And we'll look at commercializing that not only in South Africa but abroad. We're looking at places like Europe and other countries where contactless and credit card payments are higher into the rest of Africa as well. And then finally, a partnership with Salesforce which was announced at the end of last year will also drive our annuity income because, as a consulting implementation partner, we do share in annuity revenue based on the licenses that customers pay. There is also the opportunity in the future to provide Salesforce applications. They have something called the AppExchange, where we will be able to provide Synthesis software, available to all Salesforce users globally. In terms of the future growth, as mentioned, we're cautiously optimistic about this year. It has been a challenging year in 2020. And 2021, January didn't start to be too much different, but the global trends are in our favor. We're definitely looking at growing organically. And plus, under the Capital Appreciation banner, we are looking at strategic acquisitions. These might be acquisitions that Synthesis makes or acquisitions that Capital Appreciation makes that are complementary and that add to the portfolio in the services division of Capital Appreciation. So both of those opportunities are open to us. The market demand is strong. We have a strong customer reputation. And we're quite optimistic about those prospects, but we are doing it deliberately. And we're being quite cautious around the types of acquisitions that we are looking at and that we ultimately will make together with the Capital Appreciation team.

Excellent. Thank you. Just like that, we are out of time. In fact, we're in negative time. If we didn't address any of your questions, please don't hesitate to contact us. You can always e-mail me, [email protected]. You can pop over to our website. You can speak to Alex. He's our Synthesis bot. He's still learning, but he seems to be getting the hang of it, so go ahead and to do that. On behalf of both Capital Appreciation and Synthesis, I thank you for joining us today. I wish you a wonderful, blessed and healthy week ahead. Thank you to our panelists. Thanks to all the presenters. And thanks for taking the time. Be well.