EIB backs digital payment innovation in Europe with €220m Nexi loan

The European Investment Bank (EIB) is providing €220m in financing to paytech Nexi Group to support innovation in the digital payments sector. Nexi will use the EIB funds to develop and manage projects aimed at modernising digital payments in Europe and to finance specific initiatives that leverage the expertise of Nexi Digital, a European technological innovation hub created in collaboration with Reply, an Italian digital transformation company.

The identified projects are fully aligned with Nexi Group’s environmental, social, and governance (ESG) objectives, which have already been communicated to the market. These include promoting digital payment innovation across Europe, creating jobs for young people and in disadvantaged areas, and enhancing environmental sustainability by optimising data centres and developing cloud-based activities.

This is the first EIB loan granted to a publicly listed company in the digital payments sector.

“This operation represents a major step forward in the development of Europe-wide digital payment solutions, helping to reduce the use of cash and prevent fraud and tax evasion,” commented Gelsomina Vigliotti, Vice-President, EIB. “This operation highlights the EIB’s commitment to promoting digitalisation and innovation in businesses and public sector organisations, which are key elements of the National Recovery and Resilience Plan.”

 

Bank of England consortium to review AI use in financial services

The Bank of England is establishing an Artificial Intelligence Consortium. Its purpose is to provide a platform for public-private engagement to gather input from stakeholders on the capabilities, development, deployment and use of AI in UK financial services. 

The consortium aims to identify how AI is or could be used in financial services, for example, by considering new capabilities, deployments and use cases as well as technical developments where relevant.

It will also be a forum to discuss the benefits, risks and challenges arising from the use of AI. Such benefits, risks and challenges may be with respect to financial services firms or with respect to the wider financial system.

The consortium will also inform the Bank of England’s approach to addressing risks and challenges and promoting the safe adoption of AI.

Applications for the AI Consortium are open. The deadline is Friday 8 November 2024, and more information is available on the Bank of England’s website.

“Work is … ongoing within the Bank’s policy committees and internationally on how best to address the potential risks to safety and soundness and to financial stability from financial firms’ use of AI and so to enable its safe adoption,” said James Benford, Chief Data Officer at the Bank of England in a speech this week at the Central Bank AI Conference. “Our internal use of AI, and the strategy we are building to guide it, can both inform and be informed by this policy work.”

 

HSBC launches sustainability improvement loan in Hong Kong

HSBC Hong Kong has launched a Sustainability Improvement Loan. The solution is designed for mid-market and smaller businesses to link the cost of financing to their sustainability performance. This move will broaden the sustainable finance options available in Hong Kong, supporting the city’s development into an international hub for sustainable finance.

The interest margin for the loan is linked to changes in borrowers’ sustainability assessments and ratings from EcoVadis, a provider of business sustainability intelligence and ratings. EcoVadis evaluates companies’ performance across four areas: Environment, Labour and Human Rights, Ethics and Sustainable Procurement.

The bank says that borrowers of Sustainability Improvement Loans are required to complete an annual sustainability assessment throughout the duration of the facility. Those whose scores improve may benefit from a reduced interest rate. Similarly, the interest rates may increase if the borrowers’ scores decline.

HSBC has recently closed its inaugural Sustainability Improvement Loan transaction in Asia Pacific with Opal Cosmetics, a global supply chain partner of personal care and beauty products headquartered in Hong Kong. The proceeds from the facility will support the company’s general working capital needs and ongoing research and development activities.

The new financing option is available to eligible HSBC customers seeking a new facility or looking to refinance or convert an existing facility. It encompasses a variety of business loans, including revolving credit facilities, term loans and selected trade finance products.

“Businesses in the early stages of their sustainability journeys often find conventional Sustainability-Linked Loans beyond their reach, primarily due to limited resources for measuring and reporting their ESG performance,” said Alice Suen, Managing Director, Head of Sustainable Finance and Investments, Hong Kong, HSBC. “We are pleased to introduce Sustainability Improvement Loan in Hong Kong, a new solution that improves businesses’ access to sustainable finance.” 

 

New York Fed launches Reference Rate Use Committee

The Federal Reserve Bank of New York has launched the Reference Rate Use Committee (RRUC), a sponsored group which will convene private market participants to support integrity, efficiency, and resiliency in the use of interest rate benchmarks (reference rates) across financial markets, including those produced and administered by the New York Fed.

The RRUC will focus on key issues regarding reference rates, including how their use is evolving and how the markets underpinning them may be changing, too. It will promote best practices related to the use of reference rates, including the recommendations set out by the Alternative Reference Rates Committee (ARRC) amid the transition away from LIBOR.

The RRUC builds on the work of the ARRC, which facilitated an orderly transition away from US dollar (USD) LIBOR in preparation for the end of the USD LIBOR panel in 2023. Reflecting on lessons learned from LIBOR - including the benefit of having a strong global private and public sector partnership - the RRUC is being launched to continue fostering engagement with industry on important issues related to the use of reference rates in the post-LIBOR world.

Patrick J. Howard, Deputy Chief Risk Officer of Morgan Stanley, has been designated to serve as the RRUC’s inaugural chair. The RRUC will typically meet a few times per year, with its first meeting to take place on 9 October this year.

“The RRUC will serve as an essential partnership that builds upon the work and accomplishments of the ARRC, by helping to preserve a robust system of reference rates,” said John C. Williams, president and chief executive officer of the New York Fed. “This work will complement international efforts at the Bank for International Settlements and the Financial Stability Board to monitor developments in the use of interest rate benchmarks and ensure that we never have to face a problem like LIBOR again.”

 

Fides completes transition to UBS Switzerland AG

Fides Treasury Services AG, the global provider of multibank connectivity, payments, and transaction communications, is now an independent subsidiary wholly owned by UBS following the legal merger between UBS Switzerland AG and Credit Suisse (Switzerland) AG. To lead the team under the new ownership, François Schnyder will take over the position of Chief Executive Officer at Fides as of 1 October 2024.

“We are very pleased to bring Fides into the UBS family,” said Mark Gerber, Chairman of the Board of Directors of Fides and Managing Director at UBS. “Thanks to our unique expertise in the field of multibanking, we see strong cooperation opportunities from which our corporate clients will benefit. Together, we are strategically positioned to drive growth and innovation and deliver value to our customers.”

With the integration of Fides, UBS is expanding its cash and liquidity management solutions and providing a suite of financial services that enable companies to streamline their treasury workflows, accelerate daily operations and scale efficiently.

CEO François Schnyder joins Fides from Credit Suisse/UBS, where he spent 30 years in various leadership roles. Schnyder has an extensive background in the banking sector, including senior positions in private banking, corporate banking, risk management and strategic restructuring. At Credit Suisse, he was most recently Regional Head Valais and Managing Director responsible for all of the bank's activities within the Swiss canton. Schnyder is currently also President of the Valais Banking Association (AVB-WBV).

 

SEB implements Broadridge’s international post-trade processing solution

Broadridge Financial Solutions has announced that Skandinaviska Enskilda Banken AB (SEB) is leveraging its international post-trade processing solution to simplify and streamline its securities business across international and domestic markets.

SEB is a long-standing user of Broadridge’s front and middle office solutions for order management, trade execution and allocation, and has now extended for post-trade processing. As a result, the bank now has a strategic front-to-back-office infrastructure that is designed to simplify and optimise trading workflows and operations across international markets with straight-through solutions that aim to deliver efficiency, scale and resilience at every stage of the securities trade lifecycle.

“In today’s markets, investing in post-trade efficiency is of paramount importance, and leading firms such as SEB are now in a stronger position to tackle the combined challenges of shrinking settlement periods, regulatory change and client service differentiation, while optimising cost/income ratios and reducing risk,” said said Danny Green, Head of International Post-Trade Solutions, Broadridge.