Basel Committee reports on 2023 banking turmoil

The Basel Committee on Banking Supervision met on 4–5 October in Basel to take stock of recent market developments and risks to the global banking system, and to discuss a range of policy and supervisory initiatives.

The report states that the March 2023 banking turmoil was the most significant system-wide banking stress since the global financial crisis in terms of its scale and scope. In response, the Committee is has assessed the causes of the turmoil, the regulatory and supervisory responses, and the initial lessons learnt.

As a result, the Committee is pursuing a series of follow-up initiatives, which includes prioritising work to strengthen supervisory effectiveness and identify issues that could merit additional guidance at a global level. It is also pursuing additional follow-up analytical work based on empirical evidence to assess whether specific features of the Basel Framework performed as intended during the turmoil, such as liquidity risk and interest rate risk in the banking book, and assessing the need to explore policy options over the medium term.

The Committee stated that this follow-up work is entirely in line with the imperative of implementing the Basel III standards thoroughly and consistently and as soon as possible, as recently reaffirmed by the Group of Governors and Heads of Supervision, the Committee’s oversight body.

The Committee approved the results of the annual assessment exercise for globally systemically important banks (G-SIBs). The results will be submitted to the Financial Stability Board before it publishes the 2023 list of G-SIBs. Regarding climate-related financial risks, the Committee agreed to consult on a Pillar 3 disclosure framework for bank exposures to climate-related financial risks. It will publish a consultation paper on the proposed framework by November.

Elsewhere, the Committee agreed to consult on disclosure requirements related to banks’ crypto asset exposures. These disclosures would complement the prudential standard for such exposures published in December 2022. The consultation paper will be published soon.

It was also acknowledged that advances in digitalisation and financial technology continue to affect the financial system, including the provision of banking services. Members exchanged views about several trends in this area, including the provision of banking services through non-bank intermediaries (Banking as a Service). By the middle of next year, the Committee will publish a report on developments in the digitalisation of finance and their implications for banks and supervisors. 

 

NAB partners with Trovata on corporate cash management solution 

NAB has partnered with Trovata to launch an AI-enabled cash management, analytics and forecasting platform, NAB Liquidity+. Trovata is an NAB Ventures portfolio company following an investment in 2022.

The platform is geared towards large-scale corporate and institutional NAB clients with sophisticated cash, liquidity and working capital needs. NAB Liquidity+ is designed to let corporate customers bring together their critical banking data, providing comprehensive and real-time visibility of their cash positions and delivering cash insights and precision forecasting.

Trovata’s AI-based technology helps eliminate manual tasks and aims to enable treasury teams to create and distribute accurate, real-time financial information to company stakeholders. The platform’s integration features allow customers to securely access both NAB and third-party bank accounts to consolidate cash flow data at a group level, improving visibility and control.

“Many of our corporate clients’ treasury and finance teams were grappling with large volumes of fragmented data to manually reconcile and compile cash flow analysis in spreadsheets, and we were determined to deliver a better solution,” commented Jonathan Adams, Executive, Transaction Banking Product, NAB.

 

NatWest launches transaction categorisation service

NatWest has launched a transaction categorisation service called Enriched Transactions. It is available to businesses, such as account information service providers (AISPs) and lending providers, to integrate with their apps and digital platforms.

By making the API-enabled service available to businesses, NatWest says it is the first UK bank to offer transaction categorisation as an extension to Open Banking APIs. With customers’ consent, businesses can use Enriched Transactions data to give customers personalised insights – for example, tips on how to manage their budget or reduce their carbon footprint – helping customers gain more control over their finances.

The new service can also support businesses with affordability checks – for example, when checking customers’ loan or mortgage eligibility. This could reduce the need for customers to upload payslips, helping them save time and reducing the risk of manual error.

The service works by automatically linking customer transactions to categories aligned to Financial Conduct Authority (FCA) standards, plus includes details on whether spending is ’discretionary’ or ’committed’. The service can also provide businesses with a three-level breakdown of those categories and deductions at the source and the carbon score for each transaction.

NatWest’s analysis of customer transactions has shown that the service can categorise up to 89% of transaction types, with up to 98% of transactions being categorised accurately. This makes the service one of the most accurate categorisation tools in the market.

 

Modern Treasury joins J.P. Morgan payments network

Modern Treasury has joined J.P. Morgan’s Payments Partner Network. This ecosystem of end-to-end payment solutions is designed to meet business needs at any scale. As part of the network, Modern Treasury aims to make it easier for companies to find, integrate, and scale solutions that work seamlessly with the J.P. Morgan Payments Platform. 

Enterprises can use Modern Treasury’s software to integrate directly with J.P. Morgan’s treasury solutions, embed payments that support revenue, modernise existing payment infrastructure, and manage fund flows securely and at scale.

Modern Treasury’s participation in the Payments Partner Network is the next step in four years of collaboration, beginning with an initial integration launched in 2019. J.P. Morgan was Modern Treasury’s first partner in rolling out real-time payments capabilities. Beyond instant payments, Modern Treasury is already integrated with and supports clients’ access to J.P. Morgan’s core banking and treasury offerings including domestic and cross-border payments (ACH, global ACH, wires, cheques), virtual accounts, and enhanced balance and transactions reporting.

 

Wise adds expense management feature for businesses 

Wise Business has launched ’Groups’, a tool aimed at giving businesses better control and flexibility over expense management. The Groups feature enables companies to segregate funds and assign set balances for card spending on specific projects, teams or business needs from within the Wise Business account.

Groups also allows balances to be held in multiple currencies, allowing for a more tailored approach to managing international payments. Additionally, business owners will be able to add team members to specific Groups, who will then have access to their own digital cards, which come with customisable spending limits and permissions. 

The tool is designed to simplify financial operations and streamline expense management, ensuring greater transparency and control over company card expenditures.

 

KPMG in Canada expands cybersecurity footprint

KPMG in Canada is expanding its Identity and Access Management service offering by acquiring Calgary-based IMagosoft, an identity management solution provider.

Identity and access management (IAM) is fast becoming an imperative for Canadian organisations. Cybercriminals seek ways to steal user identities and credentials to access networks, systems, and data. The financial and reputational risks can be significant. The challenge for most organisations is finding the right balance between security, operational efficiency, and user experience.

“With the hybrid workforce being a focused target of cybercriminals, we are seeing an unprecedented adoption of identity solutions to defend against those threats,” commented Thomas Davies, Partner, Cybersecurity, and KPMG’s National Leader, Risk Consulting Managed Services. “Organisations are increasingly asking for our support to defend against these attacks, while improving their employee and customer experiences, and reducing adoption friction.”

IMagosoft co-founders Scott Piercey and Farren Malo and their team officially joined KPMG on September 26, 2023. Following decade-long careers specializing in IAM, they co-founded the firm in 2016 and have a track record helping their clients in Canada and the US with services ranging from program design, software implementation, product customisation and upgrades, and cloud computing solutions to mapping IAM functions to compliance requirements and identity governance and administration.

 

Fiserv joins Swift Partner Programme

Fiserv has expanded its relationship with Swift by joining its Partner Programme as a Platform Partner. In this capacity, Fiserv will enable connectivity to Swift APIs and enhance support for Swift GPI for its client financial institutions. 

Swift API connectivity enhances end-to-end transparency for cross-border payments in real-time and enables complete visibility on the status of those payments for Fiserv client banks. The combination of the reach and security of Swift with the footprint of Fiserv should offer an opportunity for more financial institutions to access modern cross-border payments capabilities.

Fiserv says that multiple financial institution clients have already committed to taking advantage of the new API connectivity. 

 

American Express updates a US business card

American Express has introduced what it describes as the “refreshed” US American Express Business Gold Card. The offering includes the ability to earn four times the membership rewards points in top business spending categories, enrol in benefits to earn statement credits, and other business-focused benefits. 

According to a recent survey from American Express, 86% of small businesses say that either value, flexibility, convenience, or a breadth of benefits are most important when looking for a card to help run their business. The firm says the updated card provides all those features and the backing of American Express to help small businesses run and grow their business.

“The refreshed Business Gold Card helps our card members spend more time on what’s important: running their business,” said Anna Marrs, Group President of Global Commercial Services and Credit & Fraud Risk at American Express. “Whether they’re making purchases for business needs like advertising, wireless bills, technology expenses, or on office supplies, booking travel, or dining with clients, the refreshed Business Gold Card will help small businesses unlock value.”