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Goldman Sachs to commence significant furloughs – Industry roundup: 14 September

EU-wide digital ID pilot program gains support from banks and technology partners

A proposal to deliver a large-scale, cross-border payments pilot has been solidified by a new multi-country alliance of European identity professionals. The taskforce is headed by “Nobid”, which consists of six nations: Germany, Iceland, Italy, Latvia and Norway (Nordic-Baltic eID Project). The group, with the support of digital government agencies, banks, businesses and technology providers, is expected to work together to demonstrate how payments and ID can integrate across borders and in different currencies.

One of the EU’s key focus use case scenarios for a digital ID wallet is payments, which is said to be the main priority of the consortium's proposal. Its application will reportedly make use of existing payment infrastructure to enable payment issuance, instant payments, account-to-account transfers, and in-store and online payment acceptance. Additionally, it is also intended to supplement larger EU initiatives aimed at strengthening member states and streamlining cross-border payments, such as the European Payments Initiative (EPI) and the Digital Euro.

Reports indicate that the project has garnered endorsement from banking and payments industry leaders such as DSGV in Germany, DNB and BankID in Norway, Nets in Denmark, Intesa Sanpaolo, PagoPA and ABILab in Italy, and Greisluveitan in Iceland. Additionally, Thales, iProov, Signicat, RB, Aukenni, IPZS, Poste Italiane, Intesi Group, InfoCert, FBK, and the Latvian State Radio and Television Centre are among the technology partners. Merchants such as Elkjp in Norway and REWE-group in Germany are expected to test the payment solution.

Tor Alvik, the consortium's project manager, stated that “for the EU digital ID wallet to thrive, it needs a reference implementation that sets the bar high.” The new alliance anticipates a successful project as it includes multi-nation participation, comprehensive digital identity experience, persuasive use case, and support from major banking and payments organizations.

Goldman Sachs to commence significant furloughs

Goldman Sachs plans to eliminate several hundred positions this month, making it the first significant Wall Street company to take action to cut costs in the wake of a decline in transaction volume. According to reports, the bank is resuming its annual practice of removing 1% to 5% of the lowest performers from positions across the company. The bank had 47,000 employees halfway through 2022.

Reports indicate that Goldman Sachs will not be the only bank to lay off employees. Prior to the pandemic, Wall Street firms reportedly laid off their low-performing employees in the months following Labor Day and before bonus payments were made. During the last few years, the practice was temporarily halted due to a hiring upsurge. Downward trends in investment banking activities, particularly IPOs and junk debt issuance, are said to have paved the way for the first significant layoffs on Wall Street since the pandemic began in 2020.

Ramp launches a lending network for small and medium-sized businesses

Ramp, a fintech provider of spend management and corporate cards, has introduced a lending partner network (which includes Stifel, Capchase, Live Oak Bank, SmartBiz Loans, Lighter Capital and Founderpath) to assist clients in finding more efficient long-term financing options. This collaboration evolved as a result of the recent launch of Ramp Flex, which enables businesses to pay bills on flexible terms.

Due to the complex nature of the lending environment, with exorbitant fees and strict capital limits, small and midsize businesses are reportedly still struggling to obtain long-term debt.

Investing in long-term growth initiatives such as purchasing property, increasing workforce, entering new markets or initiating acquisitions is pivotal for businesses. However, many find it unattainable, restricting their ability to grow. In efforts to mitigate this issue, Ramp’s partnership with a variety of lenders is said to provide businesses with the capital they require to expand by collaborating across three financing options: revenue-based financing, Small Business Administration (SBA) loans and venture debt.

Ramp expanded the reach of its platform last month to enable businesses to finance all of their bills in one location. Additionally, businesses can expect to initiate payments on flexible terms using Bill Pay’s new Flex solution, an accounts payable automation product. Ramp also stated that its solution will work with all significant accounting software providers and support businesses with multiple entities.

Payhawk to expand its spend management platform operations into the US

Payhawk, a spend management platform founded in Bulgaria and headquartered in London, is reportedly joining the US market following a record-breaking year of growth in which revenue and workforce increased by over 500% and 250%, respectively. The company, which combines company cards, reimbursable expenses and accounts payable into a single product, serves fast-growing customers as well as established multinational corporations in thirty-two countries. Reports indicate that the company raised an additional US $100 million in March 2022, bringing its Series B round to $215 million, making it the first Bulgarian company to reach unicorn status.

The company has reportedly set up a waitlist in the US for scale-ups, with the first customers expected to go live in October. The credit card offers credit limits of up to $250,000 and customisable spend policies, while the Payhawk spend management platform integrates with multiple ERP systems for real-time reconciliation and enables businesses to manage multiple international entities from a single dashboard.

New payment solution launched by Payload driven by J.P. Morgan

Payload, a fintech startup, aims to advance its robust integration-first inbound and outbound payment capabilities through a new partnership with J.P. Morgan. The company expects to use its new payment facilitator status to deliver a cutting-edge, unified, API-driven fintech platform through J.P Morgan's support. The partnership addresses complex payment workflows in sectors like real estate, insurance and legal payments, sectors that traditional fintechs have found difficult to support. Payload is becoming one of a reportedly select group of fintech companies that will offer ACH, Card Network and Real Time Payments (RTP) via a single API platform.

Ryan Rybolt, CEO, Payload, commented that the new solution powered by J.P. Morgan will enable them to deliver disruptive payment capabilities to the real estate industry and other industries stricken by stringent and manual payment workflows.

Axefinance introduces KMS solutions to its network of partners in Vietnam

Axefinance, a global software provider focused on loan origination for financial institutions, has partnered with KMS solutions, a technology consulting firm, in order to broaden its footprint in Vietnam and provide companies more opportunities to digitize lending services and foster the expansion of the lending market in the APAC region.

KMS Solutions provides a range of options in line with demands for digital banking platforms, including mobile banking, online banking, electronic know-your-customer (eKYC), business intelligence and quality testing tailored for the banking, financial services and insurance (BFSI) industry.

The company has over eighteen years of experience in the core business of lending digitalization and has developed Axe Credit Portal (ACP), an end-to-end loan management software, to assist banks in digitalizing their lending. Additionally, ACP, an AI-based credit risk automation software, is said to provide lenders with the scalability and flexibility needed to improve credit risk assessment, increase customer satisfaction, and provide a seamless omnichannel financing journey while maximizing operational efficiency and adapting to constantly changing regulations.

DS Smith combats emissions and rising energy costs with a new plant in Italy

DS Smith, a London-based cardboard manufacturer that provides packaging, paper and recycling, recently established a plant in northern Italy and expects that it will meet its full-year production objectives, reduce emissions and mitigate the impact of rising energy prices. Miles Roberts, Chief Executive Officer, described the new facility in Castelfranco Emilia, near Modena, as a "long-term asset" that is expected to aid in navigating the complex short-term economic situation.

Reports indicate that DS Smith is making preparations for the possibility of energy scarcity over the upcoming winter due to the Ukraine conflict's impact on Russian supplies. Furthermore, the company stated that it had invested a total of 100 million pounds ($117 million) at the Italian location as well as in a similar facility that is expected to open in Belchatow, a city located in Poland.

Roberts further stated that there are other options to cut gas consumption without negatively impacting volumes or quality of output. For example, shifts can be extended and factories can operate extended periods of time but at reduced intensity. Smurfit Kappa, the largest manufacturer of paper packaging in Europe according to reports, stated that they anticipated a shortage of paper on the continent if gas rationing impacts production in the months ahead.

Roberts stated that hedging programs with financial institutions had helped to cover 90% of the costs associated with natural gas for 2022, 80% for 2023, and 50% to 60% for 2024. Additionally, the Italian plant reportedly has a total capacity of 300 million cardboard boxes per year and expects to help its customers, such as Amazon and Nestle, reach its goal of achieving a minimum of 2% growth in corrugated box volumes this year.

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