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Industry roundup: 28 August 2020

Compliance weaknesses drive spending on trade surveillance technology

A Greenwich Associates report has found that spending on trade surveillance technology has been increasing at an impressive rate and could exceed previous growth expectations as firms address weaknesses in compliance infrastructure exposed during the COVID-19 pandemic.

Over the past decade, the trade surveillance technology market grew at a rate of 13% to 14% per year. At the start of 2020, Greenwich Associates projected that the market would reach US$1.2bn this year, but that annual expansion rates would likely decrease in velocity as the market moves into a more mature phase of growth.

“Then COVID-19 hit and financial service firms suddenly encountered a perfect storm of compliance challenges,” says Danielle Tierney, senior advisor for Greenwich Associates Market Structure and Technology. “Some firms were simply unable to maintain compliance and surveillance monitoring while continuing operations during at onset of the crisis.”

Among the many challenges were difficulties obtaining monitored and secure system access, alert backlogs at firms with insufficient surveillance resources to manage soaring market volumes and volatility, and the struggle to adjust monitoring capabilities and holistic surveillance integration as communication channel usage transformed overnight.

Based on the industry’s pressing need to overcome these challenges and institute sustained surveillance infrastructure upgrades, Greenwich Associates has revised its projection to a growth rate of 23% in 2021, and an increase in spending to approximately US$1.5bn.


Finastra migrates VPBank to new treasury system

Finastra has helped VPBank separate its treasury operations from its legacy core banking system with Finastra’s Fusion Kondor and Fusion Risk solutions. Delivered through Finastra’s Fusion Adopt implementation programme, the move is designed to enable the bank to grow its financial markets division by developing new complex products and improving operational efficiency through automation.

“As an innovation leader in Vietnam’s banking sector, the digitisation and modernisation of our business is a key priority,” said Pham Phu Khoi, head of Financial Markets Division at VPBank. “We also have ambitious plans for growth which our legacy core banking system could not support. Finastra’s modern, front-to-back treasury system has given us significant efficiency gains because we no longer need to manually execute treasury transactions, whilst we also benefit from greatly improved risk management capabilities. When we initially went live we managed to run our close of business operations without any exceptions for the very first time.”

Fusion Kondor supports banks with treasury trade volumes, along with more complex derivatives, options, and structured trades. The solution can be integrated with existing systems and applications. Fusion Risk provides an automated, end-to-end IFRS9/CECL solution. Integrated out of the box with Finastra’s core banking, lending and trading solutions, it delivers impairment and credit risk modelling.


CBA speeds up business lending processes

Australian bank CBA says that existing eligible customers with a turnover of less than or equal to A$50m million can apply for loans of up to A$50,000 for a three year period in as little as 20 minutes, with BizExpress Online - the bank’s lending system which is now available through Netbank and the CommBank app.

This digital transformation of CBA’s BizExpress product has been fast-tracked to help small businesses get immediate access to funding to support and grow their operations as the country looks to recover from the worst effects of the coronavirus pandemic. To-date, BizExpress has been used by CBA’s business bankers to support customers, meaning the functionality was used internally. With BizExpress Online, customers can now log on and submit the application directly themselves.

BizExpress Online will initially offer new business loans under the Government’s SME Guarantee Scheme and helps CBA’s existing business customers who are in most need of support during this challenging period. Repayments will be deferred for the first six months and all fees waived for the life of the loan.

Over the coming months, the bank says that the solution will be extended to offer the same service outside of the Australian government’s Coronavirus SME Guarantee Scheme and for a broader set of products.

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