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Absa CIB becomes Contour’s first African bank - Industry roundup: 14 August

Absa CIB becomes first African bank on Contour’s production network

Digital trade finance network Contour has announced that the Pan-African Absa Corporate and Investment Bank (CIB) is the first African bank to join its production network.

Many of Africa’s trade transactions are manual and paper-based, slowing trade growth and creating another layer of complexity and costs. Absa CIB’s clients will now have access to Contour’s digital letter of credit (LC), which aims to reduce the process of presenting documents from an average of 5-10 days to under 24 hours.

Digital developments are a big part of addressing challenges and creating access to new markets. In Africa, digitisation is critical to the success of the African Continental Free Trade Area (AfCFTA), a flagship project that aims to boost intra-Africa trade by 52.3% and expand the size of the continent’s economy to US$29 trillion by 2050.

With a presence in 15 countries from Botswana to Zambia, the Johannesburg-based diversified financial services group is banking on innovation to drive sustainable growth. Digital developments can reduce barriers to accessing trade finance, and collectively, fintechs and financial institutions can work together to help trade and trade finance grow sustainably.


66% of financial services leaders would walk if required to work in the office full time

Workplace flexibility and the ability to work remotely continue to be highly valued in financial services, so much so that most leaders in the US say they would rather leave their job than go into the office full time, according to a new report from Deloitte and Workplace Intelligence. This suggests that financial services institutions with strict return-to-office mandates could face losing their pipeline of leaders.

The report, ‘Cultivating employee engagement in financial services’, explores the powerful link between flexible and remote work arrangements and engagement, retention, and other vital outcomes. It also considers how US financial services institutions can develop more thoughtful return-to-office policies that support long-term employee engagement. Among leaders surveyed who work remotely at least part of the time, 66% say they’d likely leave their current job if their company required them to return to the office five days a week. The report also found that return-to-office mandates are more likely to affect caregivers. Leaders with caregiving responsibilities surveyed were 1.3 times more likely than non-caregivers to say they’d leave their organisation if their company eliminated their ability to work remotely.

Leaders surveyed prefer flexible work arrangements over prescribed workplace models. Some financial services institutions now require their workforce to go into the office three to four days a week. However, only 18% of respondents say this would be their ideal arrangement. While remote working has improved engagement and well-being, most surveyed leaders believe it will put them at a disadvantage. Among leaders with hybrid work arrangements, 62% of respondents say they prefer to work remotely more often but feel it would be bad for their career.

Financial services institutions may also face a shrinking pipeline of future female leaders in the future. Almost half (45%) of women respondents in senior leadership roles report being likely to leave their current employer over the next year.


EBA finds supervisory cooperation in the fight against financial crime is improving 

The European Banking Authority (EBA) has published its third report on the functioning of anti-money laundering and countering the financing of terrorism (AML/CFT) colleges. The report finds that competent authorities have taken significant steps to improve the functioning of AML/CFT colleges. Nevertheless, many colleges have not reached full maturity. The Report highlights good practices that will be useful for competent authorities to improve further the effectiveness of AML/CFT colleges and supervisory outcomes.

AML/CFT colleges are permanent structures that enhance cooperation between different supervisors involved in supervising cross-border institutions. As of 31 December 2022, competent authorities had reported 229 fully operating colleges to the EBA. An additional 54 colleges had yet to hold their first meeting.

This report suggests that college members have taken significant steps to improve the effectiveness of AML/CFT colleges. More specifically, members were approaching the organisation of AML/CFT colleges in a more structured manner, which contributed to the exchange of more substantive and actionable information than was the case in the previous years.

Prudential supervisors and financial intelligence units (FIUs) participated in a greater number of colleges. As a result, supervisors had access to more relevant information that could timely inform their approach to the supervision of institutions operating on a cross-border basis. In some colleges, members have taken steps to identify and address common issues in a coordinated manner.

Despite these notable achievements, AML/CFT colleges had not fully matured. Competent authorities reported that approximately 50 colleges had not yet held their first meeting. In some colleges, the sharing of relevant information remained insufficient. Lastly, onboarding third-country authorities was still a challenge, and only a few could participate in college meetings.


Treasure Financial launches embedded treasury management API following funding

Treasury management technology firm Treasure Financial has announced an investment of US$7.5m in funding, led by venture capital firm Ventura Capital. The funding round also saw participation from Peter Thiel as well as other existing investors.

Alongside the funding announcement, the company has launched the Treasure API. This product aims to enable companies to embed Treasure’s treasury management technology into their products. With the Treasure API, any firm can now offer their customers an expanded suite of cash management options across government-backed securities, money market funds, and fixed-income products, all powered by intelligent algorithms.

As we’ve seen this year, safe and sound cash management is paramount for the health of a business, but the expertise and time needed to mitigate risk and achieve optimal returns is often out of reach for most businesses,” said Sam Strasser, Founder and CEO of Treasure Financial. “The Treasure API meets the increasing demand for secure yield solutions, enabling integration across any product or platform. This is paving the way for customers to have unprecedented access to some of the most profitable and secure cash management vehicles on the market.”

CNBC names the world’s top 200 fintech companies 

CNBC has named the top fintech companies from across the globe following months of research and analysis. The list of 200 companies was developed in collaboration with Statista and includes some of the biggest companies in the sector — Ant Group, Tencent, PayPal, Stripe, Klarna and Revolut — as well as several up-and-coming startups seeking to mould the future of financial services. 

Statista reviewed a selection of more than 1,500 companies for the research, using over 10,000 data points sourced from annual reports, company websites, news articles and an open online application form. For the analysis, the fintech market was segmented into nine categories - neo banking, digital payments, digital assets, digital financial planning, digital wealth management, alternate financing, alternate lending, digital banking solutions, and digital business solutions – and relevant key performance indicators were defined to assess the performance of these businesses.  

Of the nine categories, digital payments topped the list, with 40 of the 200 ranked companies enabling online purchases, point-of-sale transactions, or digital money transfers. Neo banking came in second, with 30 companies classified as financial institutions operating exclusively digitally without physical branches.  

65 of the top 200 fintech companies are based in the US, highlighting America’s influence and impact on the global fintech industry. Sixteen top fintech companies hail from the UK, suggesting that the UK remains a significant player in the field, while ten are based in Germany, 8 in France, and the Netherlands, Australia and India tie with 7. 


Aussie regulator launches greenwashing case against Active Super

The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings in the Federal Court against LGSS Pty Limited (Active Super), alleging misleading conduct and misrepresentations to the market relating to claims it was an ethical and responsible superannuation fund.

Active Super represented on its website that they eliminated investments that posed too significant a risk to the environment and the community, including tobacco manufacturing, oil tar sands and gambling. Active Super also stated that they had added Russia to their list of excluded countries following the invasion of Ukraine. ASIC alleges Active Super exposed its members to investments it claimed to restrict or eliminate.  

“There is much competition among super funds for new members, and we know that funds seek to attract members with promises their investments will not be exposed to certain industries,” said Sarah Court, Deputy Chair of ASIC. “When making these claims, super funds must have evidence to back their claims and ensure they are not promising exclusions that they cannot guarantee.”

From 1 February 2021 to 30 June 2023, ASIC alleges that Active Super held 28 holdings, directly or indirectly, which exposed members to securities it claimed to restrict. ASIC also alleges that following the commencement of the war in Ukraine in February 2022, Active Super made representations from May 2022 that it would stop investments in Russian companies even though Active Super had holdings in Russian securities, which remained in place as of 30 June 2023. ASIC alleges ESG misrepresentations were made on Active Super’s website, disclosure documents, and Facebook, Instagram, and LinkedIn. 

This is ASIC’s third greenwashing civil penalty proceeding after ASIC recently took action against Mercer Super and Vanguard Investments Australia. 


UK supports climate finance for the Pacific

The British High Commission in Suva, Fiji, has announced a package of partnership support to improve Pacific Island countries' access to and absorption of climate finance and delivery of resulting projects. This support will be for two years, with a possibility of a subsequent second phase. The investment managed through the Global Green Growth Institute (GGGI) is supported by the UK’s Small Island Developing States Capacity and Resilience Programme (SIDAR).

The partnership aims to support Pacific resilience and adaptive capacity to climate change and pursue a low carbon future in line with National Adaptation Plans and NDC commitments through enhanced capacity to access and deliver the climate finance needed by embedding long-term technical advisors into government institutions to strengthen the institutional capability to access, absorb and deliver impactful climate finance. It will also complete strategic feasibility studies to strengthen climate finance implementation and knowledge sharing.

“This collaborative programme builds on GGGIs experience in the region, supporting Pacific Member States in accessing climate finance as partners embedded within government institutions,” commented Katerina Syngellakis, Pacific Regional Director, GGGI.

“The UK has nothing to teach the Pacific about resilience, but we have experience of working with large-scale global finance and have heard from Pacific partners that support and advice to access climate funding, absorb and implement it, is critical to progress in this area,” said Dr Brian Jones, British High Commissioner. 


ANZ implementing mule account detection capabilities to fight against scams

ANZ has announced it is investing in a security capability designed to detect mule accounts used to receive funds from scam victims and other criminal activities. Using AI and machine learning, the mule detection capability recognises money mules and mule accounts and is an extension of the bank’s behavioural biometric technologies.

Following a successful pilot in April 2023, which identified nearly 1,400 high-risk accounts, the mule detection technology will be implemented across ANZ’s security systems by September 2023. It will be supported by a new and dedicated mule detection team working alongside ANZ’s 440 customer protection specialists.

“Stopping mule accounts is a critical component of scam prevention and disrupting sophisticated criminal enterprises,” commented Shaq Johnson, Head of Customer Protection, ANZ. “In identifying and blocking mule accounts, we effectively starve criminals of the resources they need to carry out the activity. By disrupting the infrastructure that supports scams, it becomes more difficult for these online criminals to operate and impact innocent individuals.”

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