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Industry roundup: 02 March

Securing bank data information through the power of quantum key innovations

According to reports, a breakthrough in the development of digital communication and the fight against cyber criminals was demonstrated by researchers from DTU (Technical University of Denmark) in collaboration with KPMG’s consultants. The researchers used quantum communications to successfully and securely transmit data between two computers at Danske Bank, a Denmark-based bank, simulating its data centres.

The demo event marks the first data security transfer secured by quantum keys on a network (outside a lab) in the Nordics, reported the press release. Lance McGrath, Chief Security Officer, Danske Bank, commented that they were delighted to be able to help researchers reach this milestone while experiencing quantum-safe data transmission first-hand. Additionally, this development should have significant implications for the future security of digital communications.

According to DTU, the technology they developed and used was a continuous variable quantum key distribution (CV-QKD). The creation and sharing of secure encryption keys with the support of standard telecom fibre optics should enable banks to use it in their networks and potentially in other critical infrastructures requiring security measures. DTU used a unique method leveraging the fundamental unpredictability and randomness of quantum mechanics as a source of certainty, making data transmissions impossible to hack unless the laws of physics are violated.

According to the press release, KPMG contributed financing and technological assistance to the quantum-safe data transfer experiment at Danske Bank. Bent Dalager, Partner New Tech Department, KPMG, commented that the power of quantum computers and continuous research projects like this are the first steps towards securing data from hacks that continue into the future.

Australia’s global BNPL provider, Zip, to acquire US-based Sezzle to expand its BNPL footprint

Zip Company Ltd, a global BNPL provider in digital retail finance and payments based in 14 regions, entered into an agreement to acquire Sezzle Inc., a US-based BNPL corporation that supports SMBs with their omni-channel solutions. The press release reported that Sezzle shares in the proposed transaction agreement represent an implied value of Sezzle at approximately A$491 million (based on the trading price of Zip ordinary shares on the ASX) as of the close 25 February 2022. Zip currently provides innovative solutions and client-centric products connecting customers with its wide global network of merchants. According to the press release, Sezzle’s payments platform enhances the purchasing power of millions of consumers by offering interest-free instalment plans in online stores and in-store. Additionally, Sezzle’s long-term instalment payment capability leverages it proprietary technology, Sezzle Up, enabling users to buy now, pay later while improving their credit score.

According to the proposed transaction agreement, Zip shareholders will “own approximately 78% of the combined group and Sezzle stockholders will own approximately the remaining 22%.” The proposed transaction is expected to close by the end of the third quarter of CY2022. Additionally, the announcement stated that the combination of Zip and Sezzle is expected to have an estimated 8.8 million customers and 60.5k merchants in the United States.

The press release stated that the proposed transaction should enable both companies to meet their strategic objectives in becoming global and US leaders in the BNPL industry, bringing merchants and customers together and potentially generating profit growth.

Pacific-based ANZ combines its digital and retail divisions to stay current

ANZ, a New Zealand-based bank of 186 years, announced that it will integrate its digital division, including ANZx, with its Australian retail business and split its Australian commercial business into a new division to prepare for growth opportunities in the future. Shayne Elliott, Chief Executive Officer, ANZ, commented that utilizing innovative digital technology to deliver fast, customer-centric solutions is critical in the evolving retail banking world.

Built as part of the ANZx program, ANZ Plus should be an important foundation for digital transformation according to ANZ, as it aims to enhance the services it provides to Australian retail customers, focusing on customers’ financial well-being. The ANZ Plus banking app, which includes a suite of financial management tools, is expected to go live in the upcoming months.

Open banking widely accepted in Brazil, while security and privacy concern other countries

According to a global consumer survey report, 84% of consumers agree that they should have control of their financial information, and that banks must not prevent them from the transfer of funds between other financial services. A survey conducted by Axway, an API management service, revealed that Brazilians embrace open banking most positively (79%), while US Americans are split, with 51% indicating open banking is an optimistic development and the remaining respondents concerned about security and data privacy. Other countries view open banking as a negative development: French (60%), Germans (57%), and British (54%).

According to the report, researchers found a growing awareness and desire for more personalized and convenient services when it comes to finance and open banking. While security concerns continue to be relevant to people, reports show that there is an increasing acceptance of the rights to personal data and the principles of data disclosure. Markets like Latin America, the Middle East and other parts of the world view the potential for open banking as a way to democratize finance. Eyal Sivan, Head of Open Banking, Axway, stated that enterprises are acting swiftly to seize business opportunities with open banking, such as the recent open banking solution piloted in Brazil during the past year.

Although Europe was an early adopter of open banking regulations surrounding data ownership, survey respondents in Europe had somewhat negative responses to the open banking movement as they claimed concerns on security and data privacy, similar to the sentiments of US American respondents.

BofA aims to boost digital engagement via all-in-one app at year-end 2022

According to American Banker, Bank of America (BofA) plans to consolidate all of its product lines (retail banking, investing and mortgage services) into one app, enabling users the ability to access all of their financial needs in a single location. The app is expected to become available in December 2022.

According to BofA, the new app is driven by the desire to improve customer service, increase digital engagement and maintain a lead over challenger banks (neobanks) in securing primary banking relationships with clients. In addition, BofA aims to attract customers to its wealth management products through the app. Per Deloitte, 1 in 5 US individuals invested in stocks or mutual funds between October and December 2021, a 25% increase from the three months ending June 30. BofA believes having retail banking and investing services in one easy-to-use app will reduce pain points for customers and capture increasingly digitally savvy investors.

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