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Industry roundup: 29 October 2020

J.P. Morgan adds features to blockchain-based interbank network

J.P. Morgan has unveiled Liink, a new brand name for the firm’s blockchain-based Interbank Information Network (IIN) and introduced new applications available to Liink participants.

Liink introduced two new applications, Confirm and Format, which were developed from direct feedback of network participants regarding their needs and challenges. Confirm allows for the validation of account information prior to initiating a payment to reduce operating costs related to payment instruction errors and potentially help reduce fraud. Format enables payment instruction validation to check whether a payment message accurately conforms to key country and currency-specific information requirements.

Liink is an ecosystem and network that enables collaboration, access to new capabilities, and commercialisation opportunities for its participants - financial institutions, corporates and fintechs. Originally launched as a pilot in 2017, more than 400 financial institutions and corporations have signed up to become a Liink participant, including 27 of the world’s top 50 banks, representing 78 countries.

Liink is part of Onyx by J.P. Morgan, a business unit dedicated to building next-generation payment capabilities. As part of Onyx, Liink will continue to leverage the global scale, capital, and expertise of J.P. Morgan, the bank says.

"Onyx is at the forefront of a major shift in the financial services industry," commented Jamie Dimon, chairman and CEO of JPMorgan Chase. "This new business unit reflects J.P. Morgan's commitment to innovation as we continue to build cutting-edge technology that delivers a better, faster and more inclusive financial system.”


Singapore SMEs look to digital banks for enhanced services

Some 88% of small and medium-sized enterprises (SMEs) in Singapore would consider switching some services to digital banks, according to a 2020 Visa Study on Digital Banking and SMEs in Singapore. These findings come as the Monetary Authority of Singapore (MAS) looks to digital banks to help support the underserved SME segment with the expectation of three wholesale banking licences to be issued in the second half of this year.

Existing banking challenges expressed by SMEs include unsatisfactory terms on corporate products and a lack of control over their banking experiences. When asked what they’d like improved, they expressed a desire for greater convenience, value, and the ability to track payments and manage cash flow.

This untapped segment presents a viable opportunity for digital banks, with the majority of SMEs showing a positive attitude towards digital banks. More than half the respondents believe that digital banks will provide an overall lower cost of banking (55%), increased convenience (54%), greater ease in paying bills online (53%), and save time and effort when performing banking transactions (52%). Respondents are lured by the 24/7 availability of digital banks (58%), ease of making digital payments and transfers (56%), and efficiency of money transfers when receiving payments for goods and services (55%).

The study showed that SMEs have started using digital solutions for services such as accounting (49%), payroll (48%), invoicing (47%) and claims processing (46%). In addition, they have increased digital payments usage for subscriptions to third-party services (51%), paying for utilities (50%), travel expenses (49%) and paying salaries and bonuses to their employees (49%).  

Looking ahead, most SMEs are likely to use a mix of services from traditional and digital banks, particularly for loan applications (60%) and business insurance applications (58%). However, SMEs are most likely to switch to digital banks for services such as transferring money to another international account (39%) and foreign exchange services (35%). Additional services that SMEs would like to see from digital banks include reduced or no rates for services (72%), alerts to relevant grants from the government, support and guidance to direct them to relevant government agencies (72%) and a consolidated dashboard to manage their expenses (70%).


OpenPayd launches real-time FX offering

OpenPayd, an API-led banking-as-a-service provider, has announced the launch of InstantFX, its FX-as-a-Service product that provides clients with real-time trading, which it says puts an end to the need for batch processing.

The solution gives customers the ability to offer automated mid-market spot rates in 18 currencies delivered either through a web front end or an API for full integration. Clients are able to hold funds in a currency wallet and pay out these currencies through a number of payment networks, including FPS, CHAPS, SEPA and SEPA INSTANT. In an update scheduled to roll out before the end of the year, InstantFX will also add real-time settlement, plus the ability to pay out USD via SWIFT, ACH, and Wire.

“Covid is killing cash and accelerating the rise of digital payments," said Iana Dimitrova, OpenPayd's CEO. "This is creating opportunity for firms that can offer real-time, frictionless and intuitive payment experiences. Seamless foreign exchange is a big but complex part of that for which many firms still rely on batch processing. Not only is this a huge capital outlay, it does not provide the speed of settlement and competitive rates that these businesses need to grow in these volatile times."

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