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Industry roundup: 29 April 2020

Global headwinds cost companies nearly US$9bn in FX losses

A Kyriba Report looking back at the last quarter of 2019 has found that firms lost almost US$9bn in FX. The firm has warned CFOs and treasurers to better prepare for the coming increase in FX impacts and fraud risk.

“Companies have many challenges under normal circumstances,” said Wolfgang Koester, chief evangelist for Kyriba. “Nine Billion in losses is simply too much for a quarter with reduced currency volatility. Factor in the surging dollar at the end of the quarter, and the impending currency war due to economic stimulus plans and we can expect deeper problems in the coming quarter. At a time when every dollar is precious to multinational corporations, CFOs who have previously dismissed currency impact as an unsolvable nuisance will be costing their shareholders and need to reconsider their strategy.”

According to Koester, boards will be closely watching FX losses of an indicator of corporate governance. He warns of increased payments fraud risk adding to the challenge of corporate governance.

The average earnings per share (EPS) impact reported by North American companies in Q4 2019 was US$0.03 - three times greater than the industry standard of less than US$0.01 EPS impact, according to the report. For the twelfth consecutive quarter, North American companies indicated the Euro as the most impactful currency, with 42% of companies mentioning it during their Q4 earnings calls. Publicly traded European companies that qualified to be monitored in the Q4 2019 report indicated a collective currency loss of US$910m, the second consecutive quarter of sub-$1 billion impacts.


Celonis leverages AI for accounts payable and supply chain management

Celonis has launched the next generation of its platform, enabling customers and partners to develop purpose-built Operational Applications. The first two applications launched for the platform cover accounts payable and materials management in supply chain.

Celonis Operational Applications combine the firm’s process mining engine with business context, AI, and automation to sense friction in processes and take intelligent action to optimise business operations for the desired outcome. The role-based applications embed AI into each step of a business operation. Executives set business priorities by KPI and the Celonis Process AI Engine automates tasks in systems, prescribes guidance to employees, and prioritises workflows to achieve the desired outcome.

The Operational Applications are supported by real-time Data Connectivity, which Celonis also unveiled as generally available. Real-time Data Connectivity enables Celonis to extract and analyse data from traditional source-systems including SAP, Salesforce, and ServiceNow in real time to sense friction and provide in-process, in-context real time actions for operational users.


SIA launches blockchain infrastructure for Spunta Banca DLT

SIA has launched the blockchain infrastructure to enable the Spunta Banca DLT application, an initiative promoted by ABI (the Italian Banking Association) and coordinated by ABI Lab, which allows the reconciliation of reciprocal accounts among Italian banks through the use of distributed ledger technology.

The project has seen the technical tests of over 7 million transactions on real data successfully completed. To date, a first group of 32 banks have already digitised - thanks to the blockchain - the entire process of reconciliation of the flows of transactions that generate accounting entries in the reciprocal accounts in Italy and of management of pending transactions. Another 23 banks will start operating next month, with a third migration wave scheduled for October 2020.

Spunta Banca DLT is based on SIAchain, the private technology infrastructure created by SIA that enables financial institutions, corporates and public sector bodies to develop and implement blockchain-based applications. In addition to SIA, the project by ABI and ABI Lab was made possible thanks to technical partners NTT DATA and the R3 Corda Enterprise platform.


FIS Ventures launches with US$150m investment budget

FIS has announced that FIS Ventures, its newly created corporate venture investment division, has launched an effort to invest a target of US$150m in fintech startups over the next three years.

FIS Ventures will invest globally in early to growth-stage fintech startups with a focus on emerging technologies such as artificial intelligence and machine learning, digital enablement and automation, data and analytics, security and privacy, distributed ledger technology, and financial inclusion. In addition to capital investments, FIS Ventures will actively partner with these companies, providing proprietary access as appropriate to FIS’ global reach and scale, operating expertise, diverse customers and channel partners to help fulfil their long-term growth ambition.

The recently announced funding in the Nigeria-based fintech startup Flutterwave was the first investment made by FIS Ventures. The launch of FIS Ventures further advances FIS’ broad-based strategy to nurture a growing ecosystem of innovators within and outside the company. This will complement other key initiatives such as the annual FIS FinTech Accelerator program, the annual FIS Innovatein48 research and development competition, and FIS innovation labs around the world.


BCR encourages applicants for grants returned by Metro Bank and Nationwide

Banking Competition Remedies (BCR), the UK independent body established to implement the £775m Royal Bank of Scotland (RBS) State Aid Alternative Remedies Package (ARP), has invited potential applicants to participate in its consultation on Capability and Innovation Fund Pool E £100m grant funding. This funding round is for the £100m returned to BCR by Metro Bank and Nationwide after their own internal strategic reviews indicated a change in direction. The processes embedded within the APR, enable BCR and the awardees to take account of such changes and, as in this case, return some or all of the funds for redeployment.

BCR is now consulting widely on the optimal individual grant sizes within the £100m before finalising its decisions on these and then opening for Pool E applications. The Pool E consultation letter details the consultation and the aspect on which BCR is requesting feedback. The letter also includes clarification on the aspects of Pool E that are pre-determined by the ARP and not subject to change, including the eligibility to apply and assessment criteria.

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