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Bottomline Technologies survey finds CFOs have positive views of cash and liquidity – Industry roundup: 2 December

Cuba Ransomware attacks on US entities more than double, exceeding US $60 million

A recent collaboration between the FBI and the Cybersecurity and Infrastructure Security Agency reported that the Cuba Ransomware group has affected at least 65 US entities across a wide range of key strategic industries, pilfering more than US $60 million in ransom payments through August 2022. (Note that there is no evidence that this group is affiliated with the Republic of Cuba.)

Per an FBI warning notification system, this represents an increase from the 49 US victims and $43 million in ransom payments detailed in December 2021. Additionally, several of the companies targeted directly by the group are classified as critical infrastructure, with the financial services, government, healthcare, manufacturing and information technology sectors highlighted as major targets. During the same time period, Cuba Ransomware has also reportedly compromised 36 organizations outside of the US at a minimum.

Ransomware attacks on governments, particularly state and local governments in the US, have reportedly become a consistent source of revenue for the criminals. Brett Callow, analyst, Emsisoft, stated that ransomware has affected at least 99 local governments in the US this year. Reports indicate that while criminal organizations have typically refrained from attacking national governments, the trend is changing as ransomware organizations are becoming less concerned about the consequences. Not all the examples of this are of successful attempts, however: this week, a Treasury Inspector General report made public how the IRS thwarted a failed ransomware attack in May 2022 by identifying a computer that displayed "website traffic patterns consistent with ransomware" prior to removing the computer from the network, said reports.

Temenos extends partnership with Mbanq to boost BaaS in the United States

Temenos has extended its partnership Mbanq, a major US Banking-as-a-Service (BaaS) provider, to expedite BaaS deployment in the US. Following the launch of a joint Credit-Union-as-a-Service offering last year, the arrangement is expected to strengthen the companies' collaborative efforts. Additionally, Temenos has also made a small investment in Mbanq to gain access to the rapidly expanding BaaS market, which is expected to reach a market capitalization of US $7 trillion by 2030 as a result of embedded finance.

BaaS reportedly provides any brand or fintech with a front- and back-end technology package that would facilitate the integration of pertinent financial services into their customer experiences. Mbanq aims at brands in a variety of industries, including Ivy League universities, top sports teams and celebrities, and plans to provide them with a comprehensive 'as-a-service' package that includes branded deposit programs, debit cards, credit cards, lending and payments, said reports.

The Temenos composable financial services framework, in conjunction with Mbanq's technologies, such as a multi-currency, multi-asset patented digital wallet, will reportedly draw to market a differentiated BaaS proposition for fintechs and brands, as well as the added compliant banking and payments capabilities to regulated partner financial institutions.

The collaboration between the two companies is expected to provide an end-to-end BaaS infrastructure, including regulatory support, in order to assist fintechs in launching quickly and affordably. This alliance reportedly also offers the opportunity to reach mid-sized US banks, empowering them to provide a safe and sustainable digital transformation technology stack with incremental core banking modifications, in addition to introducing BaaS services like deposits, credit cards or Buy Now Pay Later services.

CFOs remain optimistic about cash and liquidity per Bottomline survey results

Bottomline Technologies, a financial technology provider that aims to simplify and secure business payments, partnered with Industry Dive and recently publicized the findings of a survey, Data, Vision, and Technology: CFOs Discover a Success Recipe. The survey polled more than 200 CFOs who work for companies with annual revenue of more than US $100 million.

The report found that CFOs are mostly satisfied with their cash and liquidity views, but they are eager for improvement as they seek for partnerships and new technologies that can help them address complex problem areas.

The results of the survey highlight four common pillars among the CFOs polled:

• Cash flow visibility is crucial: 90% of CFOs rate their companies' current cash flow visibility as excellent or good. According to four out of five CFOs, their companies' cash processes are very integrated.

• CFOs identified two primary functional requirements they believe will shape their needs in 2022 and in the future: ongoing enhancement of the current business integrations and better real-time analytics, insights and payment data access.

• Bridging the gap: More than half of CFOs plan to increase visibility in AP (74%), AR (68%) and treasury (51%). CFOs concur that collaborating with a cohesive financial workplace has many benefits over operating with compartmentalized departments.

• Cloud-based initiatives: Finance executive almost unanimously agree (51% strongly agree and 45% agree) that technology such as SaaS and cloud-based options play a significant role in improving the overall cash position transparency at their organizations.

Ukraine's central bank investigates CBDC as a vital component in raising capital and purchasing goods

The National Bank of Ukraine (NBU) is reportedly planning to develop a digital version of the hryvnia, the legal currency of Ukraine, with bank representatives, non-banking financial organizations, and the crypto market. The NBU intends to develop a digital hryvnia that can be used for a range of functions, such as the issuance and exchange of virtual assets.

The President of Ukraine reportedly signed legislation in July 2021 allowing the central bank to issue CBDCs that can be classified as cash or electronic funds. Tascombank has since revealed plans to test a digital hryvnia based on the Stellar network.

As stated by the NBU, the e-hryvnia has the potential to be a crucial component for the development of a high-quality infrastructure for the Ukrainian market for virtual assets. Similar to central banks around the world, NBU plans to exercise caution and consider any potential effects on the nation's financial system when deciding whether to issue its own digital currency.

MUFG Bank joins CLSNet to strengthen its risk management in FX trading processes

MUFG is reportedly the first Japanese bank to collaborate with CLS, a market infrastructure group that provides settlement, processing and data solutions. The bank plans to use CLSNet, CLS’s system that calculates the net value of bilateral payments in over 120 different currencies. Eight of the top ten global banks are reportedly members of the CLSNet community of international and regional banks.

The average daily notional of net calculations in Q3 2022 increased by 495% year over year, reflecting the significant growth in CLSNet adoption over the past year, said reports. Post-trade matching and netting procedures are reportedly standardized and automated across a full range of global currencies by the central platform. With market participants still concerned about the risks related to post-trade processing and settlement in currencies, CLSNet aims to provide standardization and automation through a single platform that minimizes risk, lowers operating costs and improves liquidity for currency flows.

The use of CLSNet encourages market participants to follow FX Global Code principles 35 and 50, said reports. The company states that each and every trade instruction submitted to the platform is automatically verified and compared to the pre-set cut-off times between counterparties for each currency. This reportedly creates a single centralized record of the net payment obligations and ensures that only matched trade instructions are included in the automated net calculation.

A global payments survey reveals that 85% of businesses are prepared for real-time payments

AutoRek, a fintech that specializes in reconciliation and finance automation, has released the results of its global payments survey. The participants in the survey, more than 500 mid-level employees from payments companies in the UK and the US working in IT, finance and operations, answered questions related to the current issues confronting payments firms today, emerging trends, as well as views on rules, compliance and payments reconciliation.

The survey revealed that 63% of payment companies anticipate an increase in their regulatory compliance costs within the next two years. Nearly half (47%) of US respondents reportedly acknowledged that compliance expenditure will rise. However, only 29% of UK businesses anticipate increased spending, despite its expenditures being reported as significantly higher ($325,000 on average) than US businesses ($304,101 on average) in efforts to enforce compliance.

While most international payment companies expect to become prepared for real-time payments within the next year, the survey indicated that there are still significant gaps between the UK and the US in terms of readiness. Only 50% of payment companies in the UK reportedly state they are ready for real-time payments, compared to 70% of US payment companies.

Although the payments sector has reportedly embraced technology faster than their banking counterparts, 65% still use spreadsheets for financial control functions. Compared to only 50% of UK respondents, two-thirds (67%) of US survey respondents said they relied too much on spreadsheets. Meanwhile, 29% of US businesses noted that their back-office costs rise in direct proportion to growth in payment volumes, suggesting that the manual processes may have led to inefficiencies and higher costs. In contrast, UK businesses reported that increased back-office automation adoption causes their costs to rise more slowly.

Other findings from the study include:

• 42% of respondents in the UK expect their number of cross-border payments to decline, compared to 28% of US firms.

• 14% of payments firms in the UK are unprofitable, with 33% breaking even. US businesses are reportedly more likely to be profitable than those abroad.

Indonesian central bank unveils plans for its digital currency based on blockchain technology

The central bank of Indonesia has revealed plans for a blockchain-based digital rupiah currency in light of the country's rapid adoption of digital transactions. The decision is reportedly in line with central banks around the globe that are creating CBDCs, either in the form of retail tokens for use by consumers directly or wholesale tokens for use by banks in the financial system.

Indonesia currently prohibits the use of cryptocurrencies as a means of payment, but permits digital asset transactions in the commodity futures market for investment purposes. Perry Warjiyo, Governor, Indonesia, commented that the introduction of the digital rupiah will take place in phases, beginning with wholesale CBDC for issuance, elimination and transfer between banks. The next phase will reportedly involve creating a business framework for the digital rupiah's financial operations and money market as well as the creation of a retail CBDC for everyday use.

According to BI data, digital banking transactions in Indonesia have increased by double digits in recent years, with transactions expected to increase by 30% to 53,144 trillion rupiah (US $3.38 trillion) in 2022.

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