Latest / What the Flux / CommBank's AI-gents | Microsoft's got too much cash | Goodbye Tupperware parties

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CommBank's AI-gents | Microsoft's got too much cash | Goodbye Tupperware parties · What the Flux

• 0:05
  Speaker 1: This is what the flux.
• 0:06
  Speaker 2: I'm justin and I'm harsh deep and it's Wednesday, the
• 0:09
  Speaker 2: eighteenth of September HD.
• 0:11
  Speaker 1: New research from Ilion, the credit bureau is just in
• 0:14
  Speaker 1: and it ain't looking good because younger people are experiencing
• 0:16
  Speaker 1: financial hardship at faster rates than any other co op.
• 0:20
  Speaker 1: Get this, There's been a forty two percent increase in
• 0:22
  Speaker 1: the number of gen Z accounts that are behind on
• 0:25
  Speaker 1: loan repayments. Can be down people twenty twenty two. Not
• 0:27
  Speaker 1: the best news flux spam.
• 0:29
  Speaker 2: One of the reasons why investors love ETFs is because
• 0:32
  Speaker 2: they are a simple way to get a little bit
• 0:34
  Speaker 2: of everything with one move. But what about dividend ETFs.
• 0:37
  Speaker 2: They're the ones that actually pay you cash alongside the
• 0:40
  Speaker 2: potential capital growth. In the Flux app, we take a
• 0:43
  Speaker 2: closer look at the five best performing dividend ETFs and
• 0:46
  Speaker 2: what you need to look out for when investing in them.
• 0:49
  Speaker 2: So make sure to download the Flux app and check
• 0:51
  Speaker 2: it out.
• 0:51
  Speaker 1: Three cash producing stories today, let's get into it. For
• 0:56
  Speaker 1: our first combank is exploring the possibility of replacing thousands
• 1:00
  Speaker 1: of local call center staff with an AI customer service center.
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  Speaker 2: And by customer service center You mean AI data center?
• 1:08
  Speaker 2: Tell me more.
• 1:08
  Speaker 1: So we all know Combank, the big yellow bank with
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  Speaker 1: seventeen million customers in Australia.
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  Speaker 2: Value at a what being two hundred and forty billion
• 1:15
  Speaker 2: dollars at last check.
• 1:17
  Speaker 1: That is more than the annual GDP of Greece. Wow.
• 1:20
  Speaker 2: Now, jazz Combank has always prided themselves on being the
• 1:23
  Speaker 2: most innovative of the big four banks.
• 1:25
  Speaker 1: And now it's going one step further by trying to
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  Speaker 1: automate the customer service experience.
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  Speaker 2: Because who needs empathy when you've got algorithms right exactly?
• 1:33
  Speaker 2: You see, jazz Combank has two four hundred people in
• 1:36
  Speaker 2: its Australian call centers who respond to customer calls, emails
• 1:40
  Speaker 2: and live.
• 1:40
  Speaker 1: Chat, but now it's looking to replace the local call
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  Speaker 1: center staff with AI.
• 1:44
  Speaker 2: Currently, Combank is testing the AI platform called hey Combank
• 1:48
  Speaker 2: with its employees, who are also customers of the.
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  Speaker 1: Bank, and if successful, it could replace Combank's whole call
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  Speaker 1: center and change the way the customers interact with their banks.
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  Speaker 2: So tell me what's the key learning here?
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  Speaker 1: Cause once speculation about AI taking jobs is now unfolding
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  Speaker 1: in real time.
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  Speaker 2: Especially in industries where there are a lot of repetitive
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  Speaker 2: tasks and technical duties.
• 2:09
  Speaker 1: I get this HD. According to consulting giant McKinsey, AI
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  Speaker 1: might force one point three million Australian workers to transition
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  Speaker 1: out of their current jobs by twenty thirty, and.
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  Speaker 2: The occupations expected to be hit the hardest are office support,
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  Speaker 2: customer service in sales, and food services.
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  Speaker 1: Actually, it's believe the roughly ten percent of Combank's costs
• 2:27
  Speaker 1: are on call centers alone, so if.
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  Speaker 2: The AI can have that cost it could become a
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  Speaker 2: six hundred million dollar cost saving.
• 2:33
  Speaker 1: But before you at two excited HG, there is still
• 2:35
  Speaker 1: an enormous risk with AI chatbots being the ones that
• 2:38
  Speaker 1: interact with their customers.
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  Speaker 2: What if the bot hallucinates and tell someone their credit
• 2:42
  Speaker 2: card has been.
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  Speaker 1: Had, or what if the AI model makes racist or
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  Speaker 1: sexist comments to a customer.
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  Speaker 2: So while there's still an enormous risk involved, Combank is
• 2:49
  Speaker 2: hoping it can roll out this AI model and save
• 2:52
  Speaker 2: big bucks while hopefully providing better service. For our second story.
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  Speaker 2: Microsoft has announced a sixty billion dollar share buy back
• 3:00
  Speaker 2: as well as a ten percent increase to its quarterly
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  Speaker 2: dividends as a little present to its investors.
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  Speaker 1: Microsoft must be in its Oprah era giving away all
• 3:07
  Speaker 1: that cash. You get some cash, You get some cash.
• 3:09
  Speaker 1: What's the story here.
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  Speaker 2: Well, Microsoft is one of the biggest software companies globally
• 3:13
  Speaker 2: that created the office suite, thing, word, Excel, PowerPoint, and.
• 3:17
  Speaker 1: Of course paint. You can't forget paint, which we spent
• 3:19
  Speaker 1: hours on during our childhood.
• 3:21
  Speaker 2: Ah yes, the og photoshop.
• 3:23
  Speaker 1: Well now, ahgal, Microsoft has got so much cash it
• 3:25
  Speaker 1: kind of doesn't really know what to do with it.
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  Speaker 2: So it's announced a share buyback of sixty billion USD
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  Speaker 2: for its shareholders.
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  Speaker 1: And not just that, Microsoft also said it'll be boosting
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  Speaker 1: it's quarterly diffidend by ten percent.
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  Speaker 2: And no surprises here, Microsoft shares rose point seven percent
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  Speaker 2: off the back of this announcement.
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  Speaker 1: It looks like Microsoft is trying to find ways to
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  Speaker 1: get rid of excess cash.
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  Speaker 2: So what's the key learning here?
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  Speaker 1: Sometimes there can be such a thing as too much cash.
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  Speaker 2: Companies are obliged to act in the best interest of shareholders,
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  Speaker 2: and holding bucket loads of cash isn't usually the way
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  Speaker 2: to do that.
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  Speaker 1: So when a company's got more cash than any there
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  Speaker 1: are a few main levers it can pull.
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  Speaker 2: It can invest that money into new initiatives.
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  Speaker 1: Which Microsoft is clearly doing with its mega investments into
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  Speaker 1: AI and chat ChiPT.
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  Speaker 2: It can start to offer or increase the size of
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  Speaker 2: its divident distributions.
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  Speaker 1: Which Microsoft is done by increasing dividend payouts by ten percent.
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  Speaker 2: Or it can choose to buy back some of its
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  Speaker 2: shares from the public market.
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  Speaker 1: Which Microsoft has done as well, so they have gone
• 4:21
  Speaker 1: for the triple wami here. NHG Microsoft are the only
• 4:24
  Speaker 1: major tech company excess cash to deploy yeap.
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  Speaker 2: Earlier this year, Apple announced its largest share buyback to
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  Speaker 2: date of one hundred and ten billion US dollars.
• 4:33
  Speaker 1: And don't forget Nvidia will also announced a fifty billion
• 4:36
  Speaker 1: US dollar buy back this year as well. Sounds like
• 4:38
  Speaker 1: it is buyduck season all across the tech sector.
• 4:40
  Speaker 2: For our third and final story, toup Aware Brands, the
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  Speaker 2: brand behind the kitchen staples, is preparing to file for
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  Speaker 2: bankruptcy this week after its struggled to manage more than
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  Speaker 2: seven hundred million US dollars in debt.
• 4:52
  Speaker 1: Not Tuppleware, my entire kitchen God, what is the story here?
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  Speaker 2: Well, Jazz, we of course all all of Tupperware as
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  Speaker 2: the kitchen staple in pretty much every household.
• 5:01
  Speaker 1: Taboy's been around since nineteen forty and it revolutionized the
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  Speaker 1: kitchen storage game when it patented the air tight ceiling containers.
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  Speaker 2: Love those containers, but lately things haven't been that tight
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  Speaker 2: for them.
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  Speaker 1: No, no, no, Tabwoy Brands has warned it for the
• 5:14
  Speaker 1: past few years, it's been struggling to repay more than
• 5:17
  Speaker 1: seven hundred million US dollars in debts.
• 5:19
  Speaker 2: And to turn the business around. It made plans to
• 5:21
  Speaker 2: shut down its only US factory.
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  Speaker 1: It laid off almost one hundred and fifty employees and
• 5:26
  Speaker 1: also replaced its CEO and several board members.
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  Speaker 2: But just sadly it was a little too late, because
• 5:31
  Speaker 2: now Tapowoy Brands is preparing to file for bankruptcy as
• 5:34
  Speaker 2: soon as this week.
• 5:35
  Speaker 1: Can't say I'm too surprised, HD Taplewoy brand's been struggling
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  Speaker 1: to stay relevant and maintain their market share against competition.
• 5:41
  Speaker 2: Yeah, they've been trying to reinvent themselves to get their
• 5:43
  Speaker 2: products into the hands of younger customers.
• 5:45
  Speaker 1: But so far hasn't really been working because door to
• 5:48
  Speaker 1: door sales doesn't quite work the way it used to.
• 5:51
  Speaker 2: So what's the key learning?
• 5:52
  Speaker 1: If you build a brand that sells itself, you'll never
• 5:54
  Speaker 1: need a salesforce ever again.
• 5:56
  Speaker 2: When Tapoway started out, it had a unique marketing strategy
• 5:59
  Speaker 2: because it didn't sell its products through supermarkets or big retailers.
• 6:03
  Speaker 1: No, they had a pretty unique approach known as tuperware parties.
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  Speaker 2: The party model meant that people, mainly women, would host
• 6:10
  Speaker 2: parties at their homes and the guests would get a
• 6:12
  Speaker 2: look at top boy products up close and personal and jazz.
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  Speaker 2: This model has continued into this decade.
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  Speaker 1: In fact, Tapeway brands still had more than three hundred
• 6:20
  Speaker 1: thousand independent salespeople as of twenty twenty two.
• 6:23
  Speaker 2: But as times and values have changed, Tapooy hasn't been
• 6:26
  Speaker 2: able to keep up the hype around its brand.
• 6:28
  Speaker 1: And sadly, the unique edge just isn't standing out to
• 6:31
  Speaker 1: competition anymore. Plus out there are techatfs. There is asx
• 6:34
  Speaker 1: two hundred ETFs, there's Nazdek one hundred ETFs, and there's
• 6:37
  Speaker 1: dividend paying atfs. These are the ones where you can
• 6:40
  Speaker 1: receive cash as well as the potential for capital gains.
• 6:43
  Speaker 1: In the Flux app, we take a closer look at
• 6:44
  Speaker 1: the five best performing dividend ETFs. To make sure to
• 6:47
  Speaker 1: download the flux out to check it out.
• 6:49
  Speaker 2: Thanks for listening, and we'll see you on Friday.