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Investors still expect a US recession - Industry roundup: 17 July

Investors still expect a US recession

Investor sentiment is stubbornly bearish, according to the Goldman Sachs July Marquee QuickPoll, which surveyed close to 900 institutional investors. Market sentiment is still stuck in “deeply bearish” levels, with the latest survey indicating that 59% of respondents view themselves as bearish compared with 25% who say they are bullish.

According to the survey, about two-thirds of participants expect the US to fall into a recession in the next 12 months and, as a result, favour holding developed market bonds for returns and betting against developed market equities. Overall, investors view US equity market valuations as expensive, with 57% expecting the S&P 500 to fall below 4,400 by year-end. Only 21% expect the S&P 500 to end the year above 4,600.

“The biggest surprise is that investors have actually not bought into the soft-landing narrative but have merely pushed back their recession expectations by a few quarters,” said Oscar Ostlund, global head of Content Strategy, Market Analytics and Data Science for Marquee in Global Banking & Markets at Goldman Sachs.


UniCredit and Trustpair form IBAN Check partnership

UniCredit and Trustpair have announced a partnership that will see the latter enrich its digital platform by offering IBAN Check, a UniCredit solution related to open banking developed in conjunction with CBI S.c.p.a..

IBAN Check will enable Trustpair's clients to check the correct association between the IBAN and Fiscal / VAT Code of Italian beneficiaries in real-time. This level of control should add security and efficiency to onboarding and payment operations, ensuring that valid information is always supplied in a workable format with company processes - thereby minimising inefficient manual interventions and the risk of fraud.

IBAN Check is one of the first in an ecosystem of value-added services based on API technology which UniCredit is pivoting towards the context of its Group digitalisation strategy.

“One of the strands of our digital strategy is to improve the client experience through simplification and a laser focus on customer needs,” commented Raphael Barisaac, Global Head of Payments & Cash Management at UniCredit. “Payment solutions will be paramount for us moving forward, with API connectivity and open banking […] key areas where we will continue to invest.”

EBA publishes fourth opinion on EU money laundering and terrorist financing risks 

The European Banking Authority (EBA) has published its fourth biennial Opinion on the risks of money laundering and terrorist financing (ML/TF) affecting the European Union’s financial sector.  It also sets out what competent authorities and EU co-legislators can do to mitigate those risks.

The EBA issues this Opinion against the background of a changed risk landscape, which impacts institutions’ anti-money laundering and countering the financing of terrorism (AML/CFT) compliance and competent authorities’ approaches to supervision. Examples include geopolitical events like Russia’s invasion of Ukraine and legislative developments, such as the publication of a comprehensive ‘AML Package’ and the Markets in Crypto-Assets Regulation (MiCAR). They also include emerging risks such as corruption and laundering proceeds from environmental crime and cybercrime.

Some of the ML/TF risks identified in this Opinion, such as those associated with crypto assets, innovative financial services, the identification of beneficial owners and terrorist financing, had already been identified in previous Opinions on ML/TF risks and continue to be relevant today. Other risks highlighted in 2021, including those associated with Covid-19 and de-risking, are starting to decrease.

Awareness of ML/TF risks is increasing across all sectors under the EBA’s AML/CFT remit, with minor but tangible improvements in credit institutions and investment firms.  At the same time, the AML/CFT systems and controls institutions have put in place are not always effective, with significant challenges in institutions’ approaches to transaction monitoring and reporting of suspicious transactions in particular.

AML/CFT supervision is improving overall, with more AML/CFT supervisors carrying out formal ML/TF risk assessments in line with EBA guidelines. The frequency and intensity of supervisory engagement are increasing, with a small but tangible impact on inherent and residual risk levels. Nevertheless, as highlighted in the EBA’s reports on ML/TF risk in payment institutions and competent authorities’ approaches to banks' AML/CFT supervision, AML/CFT supervision is not always proportional to perceived levels of ML/TF risk or effective overall.


NatWest enables iPhone payment acceptance for UK businesses

NatWest has enabled Tap to Pay on iPhone to all eligible businesses across the UK. Apple’s contactless payment acceptance technology is now available to UK businesses via the NatWest Tap to Pay iOS app.

Tap to Pay on iPhone provides businesses with a solution to seamlessly and securely accept contactless payments using an iPhone and NatWest’s Tap to Pay app, with no additional hardware or card readers required.

Tap to Pay on iPhone accepts contactless payments, including Apple Pay, contactless credit and debit cards and other digital wallets. When merchants use the NatWest Tap to Pay app on their iPhones, they ask customers to hold their preferred contactless payment near the merchant’s iPhone, and the payment will be made.

Apple’s technology uses the built-in features of the iPhone to keep businesses’ and customers’ data private and secure. When a payment is processed, Apple doesn’t store card numbers on the device or its servers.

“Customers now expect the convenience and wider choice of using contactless credit or debit cards, as well as digital wallets such as Apple Pay, to make seamless and secure purchases wherever they shop,” commented Mark Brant, Chief Payments Officer, NatWest. “Equally, entrepreneurs and businesses are always looking for ways to streamline their operations, boost sales and connect with their customers regardless of location, all while benefiting from tech to make their own sales experience seamless. And for aspiring entrepreneurs, you just need a good business idea and an iPhone to start getting paid – enabling a whole new wave of opportunities.”


BNP Paribas completes Kantox acquisition

BNP Paribas has announced that it has received all regulatory approvals for the completion of the acquisition of Kantox, a fintech providing automation to currency risk management.

The bank says that the acquisition of Kantox is in line with its Growth Technology Sustainability 2025 plan, which sets out to accelerate the development of technological innovations, to enhance customer experience from SME and mid-cap clients to large corporates. It is supported by the Global Markets business of BNP Paribas’ CIB division and the business centres of the Commercial, Personal and Banking Services (CPBS) division. 


Standard Chartered agrees sale of African subsidiaries to Access Bank

Standard Chartered and Access Bank have entered into agreements to sell Standard Chartered’s shareholding in its subsidiaries in Angola, Cameroon, The Gambia, and Sierra Leone and its Consumer, Private & Business Banking (CPBB) business in Tanzania. Each transaction remains subject to the approval of the respective local regulators and the banking regulator in Nigeria.

StanChart says that the agreement with Access for the sale of the bank’s business in Sub-Saharan Africa aligns with its global strategy to achieve operational efficiencies, reduce complexity, and drive scale. In April 2022, the bank strategically decided to divest from several markets, namely Lebanon, Angola, Cameroon, Gambia, Sierra Leone, Zimbabwe and Jordan, and to exit the CPBB business in Côte d’Ivoire and Tanzania. It announced the sale of its business in Zimbabwe in June and in Jordan in March. This latest announcement means Standard Chartered has substantially completed the divestment process from the markets announced in April 2022, except for Côte d’Ivoire, where it remains actively engaged in discussions with potential buyers to sell its CPBB business in the country.

Access Bank will provide a full range of banking services and continuity for key stakeholders, including employees and clients of Standard Chartered’s businesses across the five aforementioned countries. Access Bank and Standard Chartered will work closely together in the coming months to ensure a seamless transition, with the transaction expected to be completed over the next 12 months.


US largely compliant with Basel requirements

The implementation of the Net Stable Funding Ratio (NSFR) standard and large exposures (LEX) framework by the US are largely compliant with the global standards set by the Basel Committee on Banking Supervision. The Basel Committee's assessment reports on the NSFR and LEX form part of its RCAP, a series of reports on the implementation of Basel standards by member jurisdictions of the Basel Committee.

The Basel Committee has completed its review of the implementation of the initial risk-based capital standards and Liquidity Coverage Ratio (LCR) for all members and of the framework for global and domestic systemically important banks (G-SIBs and D-SIBs) for all member jurisdictions that were home to G-SIBs in 2016.

Jurisdictional assessments of the implementation of the Basel Committee's NSFR and LEX global standards started in 2018. They were suspended in March 2020 following the outbreak of Covid-19 and resumed in late 2021.

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