Industry roundup: 8 October 2020
by Ben Poole
Societe Generale launches virtual accounts offering for European treasurers
Societe Generale has launched a virtual accounts offer for large European corporates. The solution aims to make treasury management easier through the improved identification and monitoring of payments. The offer provides the bank's European corporate clients with an unlimited amount of virtual account numbers (vIBAN), all related to the same real bank account that holds the company’s liquidity. Coupled with a reporting system, it allows real time reporting on the liquidity, both aggregated and analytical.
Through the customisable allocation of vIBANs among their own clients and providers (such as individual, grouped, and geographical), corporates can have a comprehensive overview of every incoming and outgoing payment, suited to their own monitoring needs. The solution allows for automated reconciliation of incoming payments and invoices, as well as account structure rationalisation to reduce the constraints of administering numerous real bank accounts.
EDF was Societe Generale’s first corporate client to implement the virtual accounts solution, customised to meet the specific needs of the organisation. Jérémy Roublique, head of Payment Solutions for EDF said: “When the project was launched, we had not fully anticipated the offer would give us this degree of possibility to optimise our internal processes. The solution, built collaboratively with Societe Generale, enables the implementation of dedicated reports on operations that require reinforced daily monitoring. This service is fully in line with the process undertaken within the EDF Group of industrialising our cash flow processes and reducing the number of real bank accounts.”
Report asks if this is the end of cash payments
Payment firms are being pushed rapidly into transformation, even as they handle larger transaction volumes, face increased competition and heightened risk factors amplified by COVID-19, according to the World Payments Report 2020 published by Capgemini. Before the pandemic started, payment volumes reached new heights, which are predicted to continue but at a pace reflecting both the increased reliance on non-cash transactions and the effect of a dampened global economy. The report predicts that a compound annual growth rate (CAGR) of 12% is expected for global non-cash transactions for 2019-2023. Global non-cash transactions surged nearly 14% from 2018-2019 to reach 708.5 billion transactions, the highest growth rate recorded in the past decade. Asia-Pacific surpassed Europe and North America to become the 2019 non-cash transactions volume leader at 243.6 billion. The increase was driven by increasing smartphone usage, booming e-commerce, digital wallet adoption and mobile/QR-code payments innovations, led by China, India and other SE Asian markets (31.1% growth).
As the market continues to be disrupted, and more payment options become available, payments firms must grapple with increased risk across business, regulation and operations. Payments executives say businesses are exposed to risks such as cybersecurity (42%), regulatory (37%), operational (35%), and business (30%). 87% of executives feel they face a high likelihood of cyber vulnerabilities, as criminals are exploiting exposures opened by the COVID-19 lockdown, which increase the risk of cyberattacks, money laundering and terrorist financing. Payments firms are actively turning to technology to help alleviate the exposure to new risks.
For corporate treasurers faced with business-to-business challenges and inefficiencies, the pandemic has required them to look to digital as the solution to address counterparty risk, connectivity solutions, payments automation and cybersecurity. The report says corporate treasurers now are looking for their bank and payments firms to provide enhanced API integration, risk management, and real-time payments and tracking.
While bank executives ranked client-visible innovation (79%) and digital transformation (75%) as the top drivers of their strategic initiatives for 2020 and beyond, payments transformation appears inevitable. Collaboration as part of this transformation can help with pandemic-driven uncertainty as regulators focus on addressing risks, especially with non-cash payments. Banks are actively pursuing two different ways to achieve a leaner and more agile backend that can keep pace with a digital front-end, by either developing in-house capabilities or by working with digitally agile new players. In addition to developing in-house capabilities, 60% of bank executives believe that working with third parties throughout the value chain will help them augment ecosystem-based propositions.
HSBC participates in quantum computing research
HSBC is taking part in a research project to examine how quantum computing could improve banking. Quantum computers promise to deliver a step-change in computational power. They have the potential to tackle highly complex tasks far beyond the capabilities of today’s machines. The project from the European NEASQC (Next Applications of Quantum Computing) aims to assess the kinds of tasks those might be and how they might benefit different industries.
The project involves a consortium of 12 European companies and research laboratories who will work together to develop possible use cases in fields ranging from drug discovery and breast cancer detection to carbon capture and energy infrastructure risk assessments.
“Due to their vastly greater power, quantum computers could deliver extraordinary developments for banking in areas like risk analytics, machine learning and cybersecurity," said Gustavo Ordonez-Sanz, head of Economic Capital Analytics and Global Risk Innovation Lead at HSBC. “Most experts believe we are at least 10 years away from commercially viable quantum computers for general purposes, although recent advances hint at potential breakthroughs sooner. We need to embrace this technology, in line with the bank’s innovation agenda, keeping up with the latest developments and growing our internal knowledge to increase our readiness for the post-quantum world.”
HSBC is the only financial services organisation involved in the NEASQC project, and will join a workstream looking at applications for quantum computing within the banking industry. The four-year project has a budget of €4.7m (US$5.5m), which has been fully funded from the European Union’s Horizon 2020 research and innovation programme. It brings together experts in quantum computing with commercial end-users including Atos (IT), Total and EDF (energy) and AstraZeneca (pharmaceutical), as well as HSBC.
BNP Paribas Securities Services and Curv complete proof of concept for the secure transfer of digital assets
BNP Paribas Securities Services, in partnership with Curv, a cloud-based digital asset security infrastructure for financial institutions, has announced the successful completion of a proof of concept to transfer security tokens securely between market participants.
As part of this engagement, BNP Paribas Securities Services and Curv transferred a security token using Curv’s multi-party computation solution to ensure the security of the private keys. Curv’s solution enables transactions to be signed securely in a mathematically-proven and distributed way.
This proof of concept helped to demonstrate that tokenised securities can be transferred quickly, safely and transparently on the blockchain. To carry out this transaction, BNP Paribas Securities Services and Curv used the ERC1400 token standard.
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