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ECB to stress test banks’ bouncebackability from cyberattacks - Industry roundup: 8 January

ECB to stress test banks’ bouncebackability from cyberattacks

The European Central Bank (ECB) will conduct a cyber resilience stress test on 109 directly supervised banks in 2024. The exercise will assess how banks respond to and recover from a cyberattack rather than their ability to prevent it.

Under the stress test scenario, the cyberattack succeeds in disrupting the bank’s daily business operations. Banks will then test their response and recovery measures, including activating emergency procedures and contingency plans and restoring normal operations. Supervisors will subsequently assess how banks can cope under such a scenario.

As part of the exercise, 28 banks will undergo an enhanced assessment for which they will submit additional information on how they coped with the cyberattack. This sample covers different business models and geographies to provide a meaningful reflection of the euro area banking system and ensure efficient coordination with other supervisory activities.

This predominantly qualitative exercise will not impact capital through the Pillar 2 guidance, a bank-specific capital recommendation on top of the binding requirements. Instead, the insights gained will be used for the wider supervisory assessment in 2024. Supervisors will discuss the findings and lessons learned with each bank in the 2024 Supervisory Review and Evaluation Process, which assesses a bank’s risk profile. The exercise’s main findings will be communicated in the summer of 2024.


73% of banks to embrace ESG propositions by 2028

An Economist Impact report for Temenos highlights a significant shift in the banking sector towards ESG propositions. The survey, encompassing 300 banking executives globally, projects that 73% of banks will intensify their focus on sustainable banking options within the next five years. This change is driven by consumer demand and the growing importance of ethical banking practices.

The report underscores the influence of Generation Z, who favour long-term investments aligned with ethical and sustainable values. In the UK, 61% of banking customers desire their banks to impact social and environmental issues positively.

The banking sector’s response has been multifaceted. About 37% of banks are channelling investments into low-carbon technologies and decarbonisation start-ups. Moreover, 31% are implementing sustainability strategies encompassing their supply chains and internal operations. The commitment to environmental concerns is also evident in the banking industry’s investment strategy, with 74% planning to fund eco-friendly projects in the next five years. Simultaneously, there’s a trend of diverting capital from carbon-intensive industries, as indicated by 64% of the banks surveyed.

Additionally, the report highlights a technological shift, with over half of the banks (51%) predicting an end to private data centres, favouring public cloud operations to reduce their carbon footprint.

“Evolving consumer preferences are putting immense pressure on banks to operate according to a clear set of values, and are actively moulding banks’ agendas and strategies,” said Kalliopi Chioti, Chief Marketing and ESG Officer at Temenos. “Whether it’s by using artificial intelligence to align investment strategies with clients’ values, or reducing their carbon footprint through economies of scale on cloud solutions, technology can be a powerful ally for banks on this journey.”


Decline in UK recruitment activity softens

Recruitment intentions remained subdued as 2023 drew to a close, according to the latest KPMG and REC UK Report on Jobs survey, compiled by S&P Global. Permanent placements and temp billings declined again in December, albeit at softer rates than in November, as employers maintained a cautious stance regarding hiring amid the weaker economic climate. At the same time, overall vacancies fell slightly for the third time in the past four months.

Meanwhile, the supply of candidates continued to rise sharply, despite the rate of expansion easing from November's nearly three-year record. Recruiters often mentioned that redundancies and lower levels of hiring activity had increased the pool of available candidates for both permanent and temporary roles. Nevertheless, competition for suitably skilled workers remained a key factor pushing up starting pay rates again in December.

Although recruitment consultancies reported a further decline in hiring activity at the end of 2023, permanent placements and temp billings fell at softer rates than in November. Panel members often mentioned that muted demand for staff and recruitment freeze amid the weak economic climate had weighed on hiring decisions. Permanent staff appointments continued to decline at a notably faster pace than that seen for temp billings.

The latest survey data indicated that the rate of starting salary inflation picked up from November and was sharp overall. That said, the increase was the second-slowest recorded since March 2021 and below the historical trend. Temp pay growth likewise quickened, climbing to a four-month high but remained below the long-run average. Recruiters commented that while competition for suitably qualified staff had contributed to further increases in pay, there were indications that employers' budgets were under more significant pressure.

Candidate availability continued to rise at the end of the year, with panel members frequently mentioning that redundancies and a slowdown in hiring had pushed up labour supply. Although easing from the near three-year records seen in November, expansion rates for permanent and temporary candidate numbers remained rapid.

Total vacancies fell for the third time in the past four months during December. That said, the rate of decline changed little from November and was only marginal. This reflected a slight reduction in permanent staff demand for the fourth successive month, while growth in temp vacancies eased to a 37-month low.


LPBank to deploy Finastra treasury solution 

Lien Viet Post Joint Stock Commercial Bank (LPBank) has chosen Finastra and NGS Equipment and Communication Joint Stock Company (NGS) to modernise its treasury capabilities. 

As part of a digital transformation strategy by LPBank, Finastra’s front-to-back treasury solution should help make the bank more competitive with increased operational efficiency and improved governance. The project will bring LPBank closer to its goal of digitalising all capital activities and help it to meet business and risk management requirements from across the bank. 

“Finastra’s Kondor treasury solution will enable us to increase trading volume, improve transaction quality, shorten transaction operation time, and support the development of diversified demand for trading derivatives and more complex structured transactions,” commented Ho Nam Tien, Vice Chairman cum General Director of LPBank. opens South Korea to US payment corridor

B2B payment platform has announced an initiative to enable South Korean entrepreneurs and freelancers to conduct payments to the US, promoting worldwide business expansion without being limited by geographic barriers. The platform is designed to make it easier for South Korean businesses to pay US vendors, affiliates, employees, and other partners regardless of location.

The cloud banking platform ensures affordable cross-border transactions, enabling South Korean entrepreneurs to conduct business cost-effectively. This feature simplifies global transactions, removing the requirement for a physical presence and offering convenience to South Korean entrepreneurs in the US. aims to simplify the creation of multiple business accounts for different purposes. It enables money transfers via ACH, mailed cheques, and wire transfers. The platform provides virtual cards, international payments, bulk payments, and a “get paid early” option.


Surfboard Payments and Worldline partner on seamless business payments

Surfboard Payments and Worldline have joined forces to offer payment solutions to businesses across the Nordics. This collaboration will combine Surfboard Payments’ payment terminals, SoftPOS solutions, hardware logistics and loyalty platform with Worldline’s expertise in acquiring, processing, and fraud prevention.

Under this partnership, Worldline will integrate Surfboard Payments’ payment solutions into its offerings, catering to a diverse clientele ranging from small and medium-sized businesses to large corporations, partners, and other organisations. With Surfboard Payments assuming the role of the payment service provider (PSP) and Worldline acting as the acquirer, the pair say that businesses can anticipate a streamlined and secure payment experience.

Initially targeting Sweden, Norway, Denmark and Finland, the partnership holds the potential to grow with customers across other markets.


Magnati and Oxinus Holdings partner on UAE food and beverage sector payments

Magnati, a payment solutions company in the Middle East, and Oxinus Holdings, an Abu Dhabi-based technology group, have announced a strategic collaboration to transform the payment landscape within the food and beverage (F&B) sector. This collaboration integrates Oxinus's POS solution, Spotlight, with Magnati’s seamless payment processing to offer a unified and enhanced experience for F&B businesses.  

A statement released by the pair says that this integration will create a notable product experience for F&B businesses by reducing manual, time-consuming tasks for staff, ensuring higher customer satisfaction, cost efficiency and faster payment processing.

“This platform will empower businesses and revolutionise the way payment transactions are managed,” said Ramana Kumar, Chief Executive Officer of Magnati. “Together, we aim to set new standards in efficiency, security, and customer experience and provide a unified experience to businesses.”

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