For banks, a race to remain relevant is on. In the past few weeks, Lloyds Banking Group has announced its intention to double-down on digital banking, closing branches and cutting costs. In the US, BBVA Compass announced that its agreement with startup Dwolla to offer real-time payment facilities to customers makes it the first mainstream bank to open its technology platform to digital developers like Dwolla
The replacement of business processes based on paper documents with the exchange of information in electronic form is a highly beneficial global trend, and the competitiveness of Europe’s economic activity will benefit from this migration.
The volume, speed and power of technology has transformed the Financial Services industry into one the most sophisticated data driven sectors in the global economy, allowing for the execution of complex global transactions at the push of a button. From high frequency trading to eCommerce to mobile banking, the financial sector is generating a huge amounts of data – in fact, almost too much data. Like individuals, institutions are facing an information overload that is limiting the promise and opportunity of technology.
Barclays has launched a new video banking service on smartphone, tablet and computer, which it says will allow customers to have face to face conversations with the bank anytime, anywhere, without having to visit a branch.
Monitise plans to raise £49.2 million through extensions of its relationships with Santander, Telefónica and MasterCard. The money raised will be used to ‘support the development and accelerated roll-out of its global platform capabilities’.
Market participants are worried about data and are deeply concerned about their ability to monitor transactions following a string of major fines to global financial institutions, according to a new report by NICE Actimize.
It has been a busy week for the banking industry. The first big news was the publication of a comprehensive health check of 130 large European banks by the European Central Bank, which was commissioned in response to the sovereign debt crisis in the Eurozone. Brussels lauded the latest investigation as the most intense scrutiny that European banks have ever been put through.
As Bob Dylan, famously sang, The Times, They Are A-Changin’. Once, the tools required to carry out a bank raid usually comprised a shotgun, old stockings and a bag labelled “swag”. Today, it’s a laptop, computer programming skills and patience. And the nature of the crime is changing too – previously, the goal was often to get away with a few thousand pounds, before lying low for a while. Now, the “prize” sought may be the theft of millions or the personal details of thousands, to be then sold on.
JP Rangaswami has been appointed as chief data officer at Deutsche Bank, a newly-created role in which he will “play a key role in standardising the bank’s processes, tools and governance around information and in supporting its digital strategy”.
The Financial Stability Board is proposing a new minimum standard for total loss-absorbing capacity, which is designed to provide confidence that systemically important global banks can absorb losses without upsetting financial stability and the wider economy.
Standard Chartered and Clearstream have implemented a new service to help customers in Singapore make more efficient use of collateral, as tough new financial regulations drive investor fears of an impending collateral shortfall.
The challenger banks are coming of age. Aldermore, the UK’s fastest growing bank, is rumoured to be preparing for its IPO, just like OneSavings Bank, which was the first bank to list on the stock exchange since Bradford & Bingley in 2000.
RBS has confirmed that it has hired Marion King, formerly president of UK and Ireland at MasterCard, in the newly created role of director of payments in the New Year.
While a great deal of attention has been given to Lloyds Banking Group’s retail operations as its various elements are split up, less has been given to its activities in transaction banking, where it is “one year into a three-year journey” to transform itself and its customer offerings to create“the best global transaction bank in this region”.
It is essential for banks to ensure they have the right strategies and technology in place now, if they are to retain their position as market-leading payment providers in the future, writes Saket Sharma,chief information officer, treasury services, BNY Mellon.
Banks and brokers in Europe are bracing themselves for ‘double witching day’ on Wednesday, in which two days’ worth of trades are expected to settle on a single day, as 25 European nations move to T+2 settlement for the first time.
Increased sanctions, tighter anti-money laundering (AML) and know your customer (KYC) controls, plus client demands for a quicker, better all-round service in the cloud and the move to shared service platforms present client onboarding challenges to banks. But there are also opportunities, said Karen Braithwaite, BNY Mellon’s global head of client service, treasury services.
While banks want to root out fraudulent activity as much as governments do they “need to take the temperature down”, said Bob Werner, global head of financial crime compliance and group general manager at HSBC. Speaking at a panel session on trends in financial crime compliance, Werner said: “Every time something goes wrong we don’t need the scalp of a regulator or the scalp of a banker.”
Rising political tensions and the increasing use of sanctions are making companies think twice about relying on long global supply chains, said John Calverley, head of economic research at Standard Chartered. Firms may decide that rather than hedging their bets with production, they will keep it closer to home, he said during a roundtable session yesterday.
The consumerisation of technology is driving the development of new services in wholesale banking as much as it is in retail, as customers demand real-time access through mobile channels.
The growth of peer to peer lending demonstrates that there is an alternative to the traditional lending model of banks. But can crowd funders ever replace the incumbents and do they enjoy long-run advantages or face being co-opted?
Growth is returning to the payments industry and new market entrants are poised to take a share of that growth away from banks, according to a clutch of payments-focused white papers released at Sibos today.
BNP Paribas Securities Services has launched Liquidity Access, a solution designed to help banks and broker dealers manage and monitor their liquid assets. The launch comes as various regulations, including Basel III and Dodd Frank, require market participants to hold more liquid assets, closely monitor their liquidity ratios and anticipate the evolution of their liquidity positions. Intraday liquidity management and reporting is likely to be a hot topic this week as the January 2015 deadline for Basel intraday liquidity reporting looms.
Farid Akhundov, chairman of the executive board of PASHA Bank, discusses how the bank is working to achieve its ambitions in corporate banking in the Caucasus region
Reporting on the management of intraday liquidity risk will start on a monthly basis from 1 January 2015 to coincide with the implementation of the liquidity coverage ratio reporting requirements. Christian Goerlach, global head of FI balance sheet & liquidity, Deutsche Bank, takes a closer look at some of the issues facing global banks.
The face of retail banking in the UK is changing. In July 2010, the sector witnessed something not seen in over 100 years – the launch of a new high street bank. And where Metro Bank led the way, new and non-financial consumer brands are following suit.
The Securities and Exchange Commission has stepped up its drive to monitor and enforce the financial markets by implementing new surveillance tools to examine and inspect reconciliations. The deal comes as the US regulator charges Barclays with failing to build adequate compliance systems and the bank suffers a fine in the UK.
Citi has launched a global mobile challenge that it says will help to inspire technology developers to reimagine mobile banking and payments. The bank plans to host a series of events in Miami, New York and Silicon Valley in November, after which finalists will get the chance to bring their product to market with help from Citi.
BNP Paribas and SIX Payment Services are planning to target merchants in Belgium with a new payments partnership, which they say will offer competition on payment terminals and acquiring services for the first time.
Citi has launched an equity trading app called Total Touch, which it says will help make it easier for investors to execute block trades in the European market.
Despite the significant challenges faced by the UK’s banking sector over the last decade, there has been a dramatic evolution in the customer experience following the introduction of online, telephone and mobile banking. While the branch remains an important channel, especially for older customers, mobile technology is rapidly redefining how customers interact with their banks.
Apple may have lined up the chief executives of Bank of America and JP Morgan Chase to laud the launch of Apple Pay, but reaction from the wider industry was more muted – disappointed, even.
Just over one million UK consumers have switched their current accounts using the UK Payments Council’s seven-day switching service during its first year of life, according to new figures released this week – but some observers believe more change is needed.
London and Singapore are fast closing the gap on Hong Kong in the race to become centres for offshore renminbi business and capitalise on Beijing’s ambition to make the RMB a global currency.
Regulatory mandates call for the financial services industry to collaborate and rethink its data supply chain to tackle systemic risk and improve transparency. Looking at how the retail industry manages its supply chain could hold the key.
Michael Harte, chief operations and technology officer at Barclays, says the growth of Chinese online e-commerce business Alibaba is the threat that keeps him awake at night – and that major banks could be in danger of losing touch with their own customers.
Barclays plans to offer corporate banking users a new security services based on Hitachi’s Finger Vein Authentication Technology from early next year and is considering introducing it to branches for consumers.
The increased globalisation of business has opened up new challenges – and opportunities – for companies and the banks that serve them. Corporate treasurers and finance professionals face complexities in the payments arena that range from inconsistencies in local payment processing to new regulations, emerging payment clearing systems and the need to manage geopolitical risk in an ever-expanding array of countries. To address these challenges for their clients, and for themselves, global banks need to invest and innovate to make sure they have the solutions to meet business needs today and in the future.
The bailout of Espirito Santo Bank brings back unwelcome memories of the events of the last financial crisis and raises the spectre of moral hazard returning to the financial services industry both in the UK and abroad. But how far have we really come since those dark days of 2008 and the collapse of Lehman Brothers and how far do we still have to go? A quick look at recent events gives us a good indication.
Europe now represents 10% of total Renminbi payments in value worldwide and is leading adoption beyond Asian countries, with four European countries in the top 10, excluding China and Hong Kong, according to Swift. Overall, the RMB strengthened its position as the seventh most used global payments currency and accounted for 1.57% of global payments.
