Asia’s growth prospects still positive, says ADB – Industry roundup: 29 April
by Graham Buck
ADB still positive on growth outlook for Asia
The Asian Development Bank (ADB) holds its annual meeting in Tbilisi, Georgia, later this week, when discussions on climate change and the world’s ageing population will be high on the agenda.
The multilateral development bank pledged a record US $9.8 billion of climate finance in 2023, supporting developing countries to cut greenhouse emissions and adapt to extreme conditions as global warming continues.
The four-day summitbegins on Thursday 2 May and marks the first time that the bank’s 68 members have gathered for a meeting in Georgia, which joined ADB in 2007.
“Georgia sits at the crossroads of Europe and Asia,” said Shalini Mittal, a principal economist for Asia at the Economist Intelligence Unit. “This meeting signifies ADB’s agenda of bridges to the future where technology and expertise from the West can be used to enhance structural reforms in Asia.”
Ahead of the meeting, the bank issued its Asian Development Outlook 2024 report, which states that the growth rate of developing Asia this year is expected to remain positive, despite uncertain external conditions.
The positive outlook reflects the end of interest rate hikes in most economies, as well as a steady recovery in global commodity prices, which are supporting the region’s positive outlook, it said.
India is predicted to emerge as a major economic engine in Asia, driven by investment-driven growth, it added.
The report recommends that Asia’s policymakers in the region should monitor a number of risks. These include escalating conflicts and geopolitical tensions, which could disrupt supply chains and amplify commodity price volatility. Other concerns include uncertainty about the future of the US monetary policy, property market stress in China, and the effects of adverse weather.
To address these risks, policymakers are urged to enhance trade, cross-border investment, and commodity supply networks.
The report also addresses the digital divide in the region. It notes that while the region has made significant progress in terms of internet access and mobile phone ownership, there is still a significant gap in terms of access to high-speed broadband and other digital services. This gap is particularly pronounced in rural areas and among low-income households.
To address this issue, the report recommends that policymakers invest in infrastructure and digital literacy programmes. It also suggests that governments should work with the private sector to develop affordable and accessible digital services. By doing so, policymakers can help to ensure that everyone in the region has the opportunity to benefit from the digital economy.
US regulators sell Republic First to Fulton Bank
US regulators seized Republic First Bancorp, a struggling Philadelphia-based lender, late last week in the first US bank failure this year.
Republic First Bancorp, known as Republic Bank, had about US$4 billion in deposits at the end of January and assets worth US $6 billion, the Federal Deposit Insurance Corporation (FDIC) said in a statement.i
“Substantially all” of its deposits will be assumed by Fulton Bank of Lancaster, Pa., the FDIC said, with Republic First’s 32 branches in Pennsylvania, New Jersey and New York reopening today as Fulton Bank branches.
Founded in 1988, Republic First was smaller than the midsize banks that collapsed in March 2023 — including First Republic Bank and Silicon Valley Bank, whose assets each topped US$200 billion. The FDIC expects the cost to the Deposit Insurance Fund to be US$667 million.
The failure comes amid continuing concern over the health of US regional banks. In a presentation to investors last July, Republic First revealed that deposits were declining and that the bank’s mortgage lending business had become less valuable as interest rates increased.
It had planned to exit the mortgage business and refocus on consumer deposits. Republic First was delisted by Nasdaq in August, after it failed to file its annual report with the Securities and Exchange Commission (SEC), and an expected US$35 million investment in the bank was thwarted.
The sale comes almost a year after the similarly titled First Republic, a San Francisco-based regional bank, was rescued by JPMorgan Chase.
National Supply Chain Day marked
April 29 has been designated National Supply Chain Day which, writing in Forbes magazine SAP’s Oyku Ilgar and Zoryana Zagorodnya describe as ”a day to celebrate this intricate web that represents the culmination of a complex process involving design, manufacturing, and logistics that bringing you your favourite sauce, your morning pick me up, and that customised coffee mug from a friend.”
”Since the term ”supply chain management” hit the scene in 1982, it’s been the glue holding the global market together during tough times and unexpected hiccups,” they add. “Whether it's a bridge collapsing or a shipmentg oing sideways in a canal, each crisis reminds us how important it is to have a supply chain that foresees or adapts to unexpected situations.”
The day will be marked by the supplychainnow.com website at 12 Noon ET today by a special edition livestream hosted by Scott W. Luton and National Supply Chain Day founder, Mary Kate Love, to commemorate National Supply Chain Day, sponsored in part by Vector Global Logistics.
The history of today’s event is charted by nationaltoday.com, which observes: ”The rampant globalisation and technological revolution of the 1990s charted global supply chain management as an indispensable industry with millions of stakeholders. In the last 30 years, the supply chain has evolved from being an amalgam of various sub-specialties to a distinctive and globally valued industry. Today, you can major in supply chain management and build your career in the field. The scattered links of the industry are finally coming together under an umbrella, intending to develop devoted talent from the start. The emergence of machine learning and artificial intelligence has also brought forward a tremendous change in the way operations unfold in the industry.
”National Supply Chain Day emphasises our dependence on this industry. The central tagline of the observation is “Every link in the supply chain matters,” which conveys the importance of multiple channels and workers at all levels of the supply chain who keep the goods moving. The word ‘link’ also signifies the underlying importance of our interconnected and interlinked world. A missing link in a supply chain can hamper the entire operation and jeopardize businesses across the world, which later impacts all of us.”
Visa launches open banking with Tink in the US
Visa has launched open banking in the US, using technology from recently acquired Swedish vendor Tink.
Visa completed the €1.8 billion (US$1.93 billion)acquisition of Tink in March 2022 and has now made it available for US users to connect accounts and provide trusted parties with access to their financial data.
In Europe, the Visa/Tink duopoly has already won deals with Adyen and Revolut. For the US launch, Visa has signed data access agreements with banks and fintechs on the merchant side, including Capital One, Fiserv, Jack Henry, Dwolla and Max rewards.
Available via a single console, user can currently access financial data to confirm bank account data, run real-time balance checks and fetch transaction data from thousands of banks across the US.
Visa CEO Ryan McInerny commented: ”Just about two years ago we acquired Tink as we saw opportunity in open banking. Over those two years, we have been expanding our presence in Europe, winning deals with Adyen and Revolut. We’re now expanding open banking solutions through Tink into the United States.”
A recent survey conducted by Visa found that 87% of US consumers already use some form of open banking to link their financial accounts to third parties. But with only 34% of consumers aware that open banking enables these services, Visa is embarking on a consumer education campaign to highlight the benefits.
Digital euro will arrive before 2030, predicts German central bank's chief
While a future of central bank digital currencies (CBDCs) looks likely, most countries still have several years to prepare for such a development, at least in the European Union, according to Dr. Joachim Nagel, president of the Deutsche Bundesbank, Germany’s central bank,
He told attendees at the recent DZ Bank Capital Market Conference 2024 that “It may take another four or five years before [a digital euro] is actually implemented.”
“Today, banknotes and coins are still the preferred means of payment at the point of sale. But the share of cash payments in retail turnover has roughly halved,” Nagel said. “In return, cashless payment methods have become increasingly important – a trend that is likely to continue.”
He said the digital transformation has “radically changed the payment landscape,” with new players in the realms of “FinTech start-ups and BigTechs” successfully entering and establishing prominent positions in the payments market.
“By offering innovative and convenient means of payment, they have challenged incumbent payment solution providers, even though they lack the same level of trust,” he said. “Trust is an important keyword when it comes to payments. Trust is the soul of money. And in times of change, as we are currently experiencing, trust is particularly important.”
Nagel noted that while digital payments are rising, “cash is being used less and less,” and since it cannot be used in digital payments, “it is also being used less at stores.”
“In such an environment, the question arises as to the central bank’s future role,” he said. “Cash is currently the only form of central bank money available to non-banks, including the general public. It is public money. All other means of payment for euro area citizens are provided by commercial issuers.”
Nagel also believes that only cash “offers a level of privacy comparable to the digital euro,” and assured that physical cash “won’t be going anywhere. The digital euro would be a complement to cash, not a substitute.”
For merchants, a digital euro would eliminate the fees charged by payment intermediaries as “The Eurosystem would bear its own costs as it does with cash today, and not charge merchants.”
“Today, retailers often feel obliged to offer their customers a variety of payment solutions, some of which are quite expensive,” he said. “The digital euro would increase competition in the payments market. Merchants could negotiate lower transaction fees with private payment service providers.”
Cost of employee theft hits £3.3 billion for UK retailers
The cost of staff theft to UK retailers has risen to £3.3 billion (US$4.17 billion) per year, compared with £4.7 billion for shoplifting and accounts for 40% of all retail theft, reports The Sunday Times of London.
The paper’s investigation found that British retailers are being hit by an epidemic of thefts by their own staff, with analysis of court records and research from the major names shows that supermarkets, department stores and warehouses have been routinely raided by employees taking thousands of pounds of goods at a time.
Companies have been public about shoplifting hitting record levels, according to the Office for National Statistics (ONS). Attacks on staff have also doubled, with stores having to invest heavily in security and technology to deter thefts. But they have been more reluctant to talk about a hidden rise in crime by their own workers.
Colin Evans, chief executive of security technology provider Thruvision, told the paper that internal theft from retailers’ distribution centres had risen “significantly over the last few years”. He said: “We have seen a rise in organised crime, attracted by ease of access to large volumes of high value items and a relatively low risk of being caught. Gang members typically join as temporary staff.”
David McKelvey, a former Metropolitan Police officer who now runs security firm My Local Bobby,, said: “With the increase in online shopping, employee theft at distribution centres has risen dramatically. There are issues with retailers failing to carry out suitable vetting of staff and as a result organised crime have been able to infiltrate the supply chain.”
According to Emmeline Taylor, a professor of criminology at City, University of London and the host of the Retail Crime Uncovered podcast, Taylor retailers do not want to damage their reputation by talking about employee theft.
“At a time when the recruitment and retention of retail staff is challenging, and some studies have shown it to be one of the unhappiest jobs to be in currently, it is little wonder that businesses haven’t wanted to point the finger at their employees,” she said.
Despite retail sales of £477 billion in the financial year to March 2022, the British Retail Consortium (BRC) estimated that losses from employee theft were just £39 million. One retail source said one brand had recently uncovered more than £10 million in losses in a single inside job, suggesting the BRC figures significantly underestimate the problem.
The BRC estimates that between 2017 and 2022 the cost of employee theft rose by 125%, while shoplifting rose by 90%. This year, the BRC stopped publishing a breakdown for employee theft and declined to disclose the figure to The Sunday Times., while many individual retailers refused to comment on thefts by staff.
According to a Home Office survey of businesses, 28% of UK retailers and wholesalers experienced theft by customers in 2022, compared with 1% for theft by employees. It does not collect the value of losses, which are typically far higher per incident for theft by an employee.
Mastercard deploys AI technology for global scam-detection
Mastercard will rely on advanced artificial intelligence (AI)-powered identity tools and open banking technology to help its bank customers spot suspicious activity within the customer lists of other financial institutions as part of a new bundle of fraud-detection tools being deployed by the card network.
Scam Protect, which Mastercard rolled out to banks in the UK and US, targets escalating risks around instant-payments fraud, where criminals trick bank customers into sending funds instantly for bogus purchases, or to counter alleged account hacks, said Chris Reid, Mastercard’s executive vice president of identity solutions.
In the UK, fraudsters steal users’ funds around once every 12 seconds, according to Mastercard’s data. From October, UK banking authorities plan to begin requirring banks to reimburrse victims of scams
As fraudsters become more sophisticated, stolen funds are difficult to track and recover, ”because criminals create exit ramps for the money to leave the ecosystem where it's split, sent to different global geographies, and cashed out or sent into a crypto trading platform,” Reid said.
By combining identity verification, device identity and behavioural biometrics with AI and open banking capabilities in a single product suite, Mastercard hopes to provide banks with more tools to score risky transactions and block them before losses occur, he said.
One component of Scam Protect is a new product called Consumer Fraud Risk, which is used in conjunction with account-validation tools to confirm account ownership in real time by pulling from consumer-permissioned account data via Mastercard Open Banking, according to Reid. Consumer Fraud Risk is currently in use with 10 UK banks including NatWest
Scam Protect also draws on Mastercard's existing identity verification and behavioural biometrics tools — developed with help from the Seattle-based AI-powered digital start-up Ekata that Mastercard purchased in 2021 for US$850 million — in conjunction with South Africa-based financial authentication firm Entersekt, to verify the biometrics of those sending payments and to provide banks with a fraud risk score for transactions.
Veritran partners on payments with Swift
Argentina-based global fintech Veritran is partnering with Swift ”to optimise the user experience and increase the overall transparency in cross-border payments.”
A release stated that Veritran and Swift will focus on enabling financial institutions and companies to provide optimised and secure cross-border payments to their customers and collaborators.
In addition, both companies will prioritise the process of meeting the needs, preferences, and demands of users and partners in an ever-evolving market, while also focusing on remaining compliant with the regulatory requirements and laws of the industry.
The partnership will see Veritran join the Swift Partner Programme in order to allow its collaborators to be able to provide their end users access to several Swift solutions that will increase transparency, security, and efficiency in cross-border transactions. For example, the Swift Global Payment Innovation (GPI) Tracker will be available in order to optimise transparency in cross-border payments by allowing customers to check the transaction’s status in real time and ensure the process is going smoothly.
In addition, the Payment pre-validation solution is expected to increase security by validating beneficiary data before the payment is sent, while SwiftRef, the company’s transactions reference data solution, will optimise the manner in which payment operations are streamlined. In addition, the service will also give users the opportunity to find all the needed data sets in one place, while also being enabled to benefit from full visibility of a payment cost, including the FX rate.
At the same time, the initiative will provide an end-to-end solution that is expected to minimise friction and optimise the customer experience. This process is set to take place by ensuring quicker and more transparent transactions around the world. Furthermore, the collaboration will also simplify the overall payments experience, while also boosting the operational efficiency of financial institutions.
The collaboration will focus on optimising user loyalty by expanding digital access, as well as improving the overall efficiency of banking operations. In addition, the proposal for financial institutions is expected to grant access to funds globally, while also optimising transparency and control over every transaction from the beginning of the process until the end of it.
The agreement was designed to align with the overall changing market demands and prioritise the need for flexibility through the use of a more transparent and consistent pricing structure for users, SMEs, large corporates, and the overall retail sector.
Funding Societies partnership promotes embedded finance for Singapore
Funding Societies, the unified digital finance platform for Southeast Asia’s smaller businesses, has entered a strategic partnership with Singapore E-Business (SGeBIZ), a digital procurement, payment and sourcing platform provider, to bring business-to-business (B2B) embedded finance solutions to businesses in Singapore.
Following the partnership, over 2,000 Singapore-based businesses currently using the SGeBIZ procurement solution, ‘EzyProcure’ platform, will be able to receive a customised financing solution, supported and underwritten by Funding Societies, to help businesses manage their cash flow.
Launched in 2016, EzyProcure is a cloud-based platform that automates the B2B ordering, invoice reconciliation and payment processes for food and beverage businesses with their suppliers. In doing so, businesses replace many tedious manual processes and with access to liquidity, SMEs can allocate more time for growth.
Simon Xie, Singapore country head at Funding Societies, commented: “We’re honoured to partner with SGeBIZ in taking a more holistic approach in serving SMEs to aid their cash flow management needs. One such way is recognising how we are embedding our digital financing capabilities and best practices in serving Singaporean SMEs over the past nine years to support the buy now, pay later (BNPL) offering via EzyProcure. This will synergise both companies’ value propositions to reach more underserved SMEs in Singapore.”
Since its inception in 2015, Funding Societies has disbursed over S$5billion (US$3.67billion) in business financing through five million transactions, positively impacting over 100,000 SMEs across its five markets in Southeast Asia: Singapore, Indonesia, Malaysia, Thailand and Vietnam.
The Asia Pacific region shows the most promise of embedded finance solutions flourishing, forecasting US$306 billion market revenue potential – more than half that of the global market potential of US$606 billion.
Monzo fundraising aims for nearly £500 million
Monzo, the fintech which has become one of the UK’s biggest digital banking groups, is putting the finishing touches to an expanded fundraising involving one of the world's best-known technology investors, according to weekend reports.
Sky News said that Monzo has agreed terms with Hedosophia, an early backer of Airbnb and Uber, for it to become a shareholder in the bank.
Accirding to City sources Monzo could announce as soon as this week that Hedosophia and Singapore’s Government Investment Corporation (GIC) were participating in an overall fundraising worth close to £500 million (US$625 million).
The larger-than-expected round makes it one of the largest ever achieved by a UK tech company.
One insider said that GIC was investing over £50 million, with Hedosophia also committing tens of millions of pounds.
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