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Industry roundup: 4 December

CoCoNet supports PostFinance's digital treasury management offering

Swiss financial institution PostFinance provides integrated solutions with financial and finance-related services in the areas of payment transactions, working capital management (WCM) and financing. In order to meet the demands of providing corporate customers with the best offers and an outstanding digital customer experience, the firm has partnered with CoCoNet on a joint project to introduce a cash management solution for corporates.

The solution aims to offer corporate customers - from medium-sized companies to international corporations - a user-friendly overview of all accounts and transactions, wherever they are.The bank says it wants to support its customers in the secure planning of financial flows, in particular with forward-looking liquidity management that also takes into account account information from third-party banks. The solution is technically based on MULTIVERSA IFP, CoCoNet’s payment transactions and cash management portal.

The definition of the requirements for the new portal were based on a corporate customer survey. During the partner selection process, further customers were invited to pre-test the CoCoNet solution. The range of functions – in particular the multi-bank capability and the handy liquidity presentation – were popular with corporates that tested the new solution, which is scheduled to go live in autumn 2021.

 

BIS, Swiss National Bank and SIX announce successful CBDC experiment

The Bank for International Settlements' Innovation Hub (BISIH) Swiss Centre, the Swiss National Bank (SNB) and the financial infrastructure operator SIX have announced the successful completion of a joint proof-of-concept experiment that integrates tokenised digital assets and central bank money.

Project Helvetia explored the technological and legal feasibility of transferring digital assets through:

  • Issuing a wholesale CBDC onto a distributed digital asset platform.
  • Linking the digital asset platform to the existing wholesale payment system.

The initiative demonstrated the feasibility and legal robustness of both alternatives in a near-live setup. However, the participants say that comparing them reveals benefits and challenges. A wholesale CBDC has potential advantages when settling digital assets. Yet it would raise major policy and governance hurdles. Linking existing systems to new DLT platforms would avoid many of these problems, but would forgo the potential benefits of full integration. Project Helvetia explored a wholesale CBDC, restricted to banks and other financial institutions. A retail or general purpose CBDC would address different use cases and have very different policy implications.

The proofs of concept are experiments conducted at the BISIH and should not be interpreted as an indication that the SNB is to issue wholesale CBDCs onto SIX Digital Exchange's (SDX) platform or to allow settlement of SDX transactions in the Swiss Interbank Clearing system. Further work is needed; the next steps are to gain a better understanding of the practical complexities and policy implications of wholesale CBDC. Different design choices that allow for trade-offs between risks and benefits need to be explored.

Project Helvetia was the first wholesale CBDC experiment by the SNB and complements the planned launch of SDX. The project partners say it is an example of how open collaboration can improve the common understanding of the impact of digital innovation on the future of the financial system.

 

Citi and Amadeus help airlines take control of currency conversion

For many travel companies, currency conversion is handled by third parties in the payment chain. To help them assume greater control over e-commerce currency conversion, Amadeus has developed a new currency conversion module, the first of their solutions from a suite of new foreign exchange (FX) services called ‘FX Box’. Citi has become the launch partner for the platform.

By re-engineering the way payments are presented and managed from authorisation to settlement, FX Box aims to help empower travel suppliers to internalise the proceeds of a cross-currency payment. The potential for savings can be significant and could represent incremental revenue of up to several percentage points on multi-currency transactions. FX Box provides travel firms with real-time access to best-in-class FX rates for more than 170 currencies. 

Amadeus is currently working to add more FX providers so that travel companies can select their preferred partner, with Citi being the first available on the platform. FX Box is integrated into Amadeus’ Xchange Payment Platform which brings together FX and travel data into one platform. This single data view has the potential to improve efficiency for travel companies as it simplifies revenue accounting, reconciliation and reporting activities. 

 

Barclays issues scams warning to businesses ahead of the end of the Brexit transition

Data from Barclays collected between January and October 2020 reveals that there has been a 20% surge in business scams in the past five months, with thousands of SMEs across the UK falling victim to highly sophisticated and targeted scam tactics.

Barclays is issuing a warning to businesses across the UK to remain vigilant as the end of the Brexit transition period approaches, with criminals looking to capitalise on the changes and trick businesses out of money. The bank has seen an uptick in the number and cost of scams to small businesses, as fraudsters have already taken advantage of the uncertainty presented by coronavirus this year.

Of the tactics employed by criminals since January, impersonation scams were the most common this year (42%), with an increase of more than half over the past five months (79%). Impersonation scams involve con artists pretending to be genuine organisations or authorities, in order to gain personal or banking information from unsuspecting victims. For example, a fraudster may pretend to be a telephone or internet provider to try and gain access to a victim’s computer, or even act as a bank manager, convincing their targets to divulge sensitive information.

The second most common type of scams were purchase scams (25%), in which scammers trick victims into purchasing non-existent products through a website that they believe is genuine, such as PPE or office supplies. While invoice and mandate scams (18%) were the third most common type of scam, they drove the second highest total value of losses, with an average loss of £7,300. These scams happen when criminals send emails impersonating known suppliers with requests to ‘update’ their bank details, sometimes intercepting genuine email conversations. The business is then conned into transferring often large sums of money into a scammer’s bank account.

The bank is urging SMEs to stay alert, and is running a series of online Brexit clinics throughout December to help businesses deal with the new rules that will come into effect from 1st January 2021. The clinics are designed to help SMEs prepare as the end of the period fast approaches, offering guidance on a number of areas such as fraud prevention, managing cash flow, exporting goods abroad, and managing supply chains.

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