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Morgan Stanley’s investment group unveils a US $1 billion climate-focused private equity plan – Industry roundup: 23 November

DBS Bank of Singapore finalizes an intraday repo transaction on J.P. Morgan's Onyx platform

DBS Bank, Singapore's largest lender in Southeast Asia, has announced that it is the first bank in Asia to complete an intraday repurchase transaction on a blockchain-based network. The transaction was reportedly completed on J.P. Morgan's intraday repurchase application, Onyx Digital Assets, which enables immediate settlements and transaction maturity within hours rather than the existing industry standard of one to two business days. J.P. Morgan reportedly served as both the triparty agent and the collateral token agent for the live transaction on Onyx.

Andrew Ng, Head of Treasury and Markets, DBS, commented that repurchase agreements, or repos, are a well-known and traditional method of raising capital, but due to infrastructure and technical inefficiencies, the minimum term has typically been one day. Previously, banks all over the world had to seek for different ways to meet intraday financing needs.

Reports indicate that the bank is able to raise USD financing in a shorter amount of time by utilizing the efficiency of a blockchain-based solution, helping with liquidity requirements. DBS is reportedly at the forefront of initiatives spearheaded by Singapore's central bank, the Monetary Authority of Singapore, to investigate digital technologies centred on blockchain.

DBS announced earlier this month that it was one of the first financial institutions to evaluate foreign exchange and government securities trading on a public blockchain using permissioned decentralized finance liquidity pools. In addition, the trades, which were reportedly a part of the city-state's Project Guardian to investigate and test financial technology developments, included the purchase and sale of tokenized Singapore government securities, the Singapore dollar, Japanese government bonds and Japanese yen.

Conduent partners with BNY Mellon to unveil a brand-new digital gateway

Conduent Inc., an international provider of technology-driven business process solutions, has announced a collaboration with BNY Mellon to launch a new Digital Integrated Payments Hub. The platform is expected to give companies and government organizations access to safe, quick and inexpensive methods of transmitting and receiving payments. Additionally, the hub reportedly accelerates refunds, rebates and overpayment remediations from up to ten days to minutes by integrating the payment capabilities of BNY Mellon's infrastructure.

Conduent claims to be the first outsourcing provider to offer a centralized platform that consolidates various payment systems and processes, including cutting-edge solutions like Real Time Payments from The Clearing House and Zelle, which reportedly lowers the cost of paper checks and improves the overall experience for customers.

The Digital Integrated Payments Hub, which reportedly has a straightforward API connecting clients through a single connection, enables fast and secure payment instructions or data access for payment reconciliation. Conduent's existing payment solutions, such as automated clearing house (ACH) transfers, pre-funded debit cards and PayPal, have reportedly helped develop the hub.

As reports have suggested, digital payments can help businesses, governments and consumers minimize their environmental impact. BNY Mellon projections indicate that paper from 2.3 billion checks and discarded envelopes total approximately 455,000 trees each year.

Financial powerhouse, JPMorgan Chase, obtains approval for its crypto wallet trademark

JPMorgan Chase has reportedly registered and patented the “J.P. Morgan Wallet” under the United States Patent and Trademark Office (USPTO) after more than two years in application status, enabling the bank to offer crypto and Bitcoin services to its existing customer base.

With the approval, the bank can now offer services like blockchain-based cryptocurrency transfers, cryptocurrency exchange services, cryptocurrency payment processing services (including the processing of cryptocurrency payments initiated with credit and debit cards), cross-border payment processing, and services involving the setup and administration of virtual checking accounts, stated reports. The trademark is also expected to include additional financial services such as e-check processing and virtual checking accounts. In addition, the bank is reportedly maintaining its crypto-related product lines, including Onyx, its blockchain network and JPM Coin, its private stablecoin. Furthermore, the company completed its first DeFi trade earlier this month, which was facilitated by the Monetary Authority of Singapore.

Featurespace secures funding from the UK and US to create a money laundering AI prototype

Featurespace, a global provider in machine learning fraud and financial crime prevention technology, has reportedly received funding from the governments of the United Kingdom and the United States to develop a new type of artificial intelligence system to assist banks and payments service providers (PSPs) in detecting financial crime while protecting data privacy.

Reports indicate that the funding derived from the Privacy Enhancing Technologies (PETs) Challenge Prize, a project launched in July 2022 by Innovate UK and the National Science Foundation in the US, with additional backing from SWIFT.

Featurespace plans to create a prototype AI model trained on sensitive private payments data without requiring organizations to reveal, share or combine their raw data. The company expects to use federated deep learning with techniques like k-anonymity and local differential privacy to combat financial crime, said reports. Additionally, the solution is reportedly designed to assist PSPs and banks in combating financial crimes such as cross-border money laundering, application fraud and APP fraud.

The UK Finance trade organization predicts a substantial increase in fraud crime due to increases in authorised push payment fraud, which reportedly cost £580 million in 2021 and increased by 40% year over year. Moreover, according to the United Nations, money laundering is expected to cost up to US $2 trillion annually.

The deadline for Featurespace to complete its AI prototype is currently set for 24 January. The second Summit for Democracy in the US will feature the application if it is successful.

Finxact and KPMG collaborate to accelerate embedded finance and banking core advancements

Finxact, a Fiserv company and next-generation core banking platform provider for the regional and super-regional banking sectors in the US, has joined forces with KPMG to advise and assist clients in digitally transforming on the Finxact platform. Scott Huie, Financial Services Advisory Principal, KPMG, commented that modern technology is essential for global financial institutions, transaction-focused banks and fintechs to handle the specific challenges faced in today’s financial landscape.

The KPMG Pulse of Fintech H1'22 report states that banks are implementing next-generation core technology in order to meet the growing demand for innovative and distinctive digital experiences in order to retain and attract customers. The alliance is expected to help provide unique customer experiences, accelerate product launch times, reduce costs and help banks to rethink their operating models, enabling them to compete quickly and reach new markets.

Finxact, which is reportedly a real-time banking platform built on an API-first extensible financial services model, aims to enable banks and fintechs to develop, test and launch products at the speed required to meet customer expectations in today's market by using its open APIs and extensible components.

Worldline partners with Neonomics to deploy Nordic payments services

Worldline, a French-based payments firm, has partnered with Neonomics, an Oslo-based open banking provider, to expand its open banking offerings in Europe.

Through the collaboration, Worldline expects to expand its account-to-account payments and data aggregation coverage to the Nordics, including Norway, Sweden, Denmark and Finland, extending its open banking data and payments infrastructure to Nordic financial institutions. Neonomics plans to leverage the payment company's position in the European open banking network. Prior to integration, Neonomics was reportedly expanding its coverage to several additional core European markets in order to address existing customer needs and obtain regulatory approval.

Both companies will become the first pan-European PSD2 API providers, serving merchants, banks and acquirers, said reports. They aim to reach approximately 3,500 banks in 22 European countries.

Reports indicate that third-party providers can create valuable service offerings for their customers by leveraging Worldline's credit knowledge, account-based payments and green banking solutions. In addition, the payments company plans to provide merchants, banks and acquirers access to aggregated financial data and account-to-account payments. Neonomics' API is expected to broaden the company's European footprint, as well as speed up the process to market its products and solutions.

Morgan Stanley’s investment group unveils a US $1 billion climate-focused private equity plan

Morgan Stanley Investment Management (MSIM) has announced a new US $1 billion (€970 million) private equity strategy to invest in companies that will reportedly eliminate or prevent 1 gigatonne (1GT) of carbon dioxide emissions from the atmosphere by 2050. According to MSIM, the investments aim to focus on mobility, power, sustainable food and agriculture, and the circular economy, with expectations to provide both economic gains as well as a favourable impact on the environment.

In order to meet the Paris Agreement's goal of limiting global warming, businesses require trillions of dollars in investment to reduce carbon emissions and develop new low-carbon technologies, stated reports. MSIM plans to invest in private companies in North America and Europe through the 1GT strategy, with the joint goal of preventing or removing 1GT of emissions. In addition, MSIM stated that a portion of the 1GT investment group's compensation would reportedly be linked to the emissions performance of underlying investments.

Since 2015, MSIM claims to have invested more than $600 million (€584.6 million) in businesses attempting to reduce carbon emissions, supplementing this with the additional $1 billion. As of 30 September 2022, $1.3 trillion in assets are reportedly managed or supervised by MSIM and its investment advisory affiliates, which jointly consist of over 1,200 investment professionals worldwide.

ACI Worldwide and NTT DATA join forces to grow e-commerce in Europe and Latin America

ACI Worldwide, a US-based real-time payments enabler, collaborates with NTT DATA to strengthen e-commerce growth in Europe and Latin America, with a primary focus on Italy. NTT DATA plans to incorporate ACI Secure eCommerce into its technology solutions platform, providing merchants with access to local and cross-border acquirers as well as new card, digital and mobile payment methods.

The ACI Secure eCommerce solution reportedly enables merchants to accept new payment methods, prevent fraud and optimize payments for maximum conversion at the lowest possible cost. Additionally, the platform consists of the ACI Mobile Commerce SDK, which enables businesses to offer mobile checkout experiences, the ACI Smart Engage mobile engagement platform, and the BNPL offering ACI PayAfter.

The following services are included in the ACI Secure eCommerce for merchants:

  • Payment and fraud management services to boost conversion and revenue.
  • Immediate access to local and cross-border acquirers, card, mobile and digital payment methods.
  • Real-time multilayered fraud risk management functionalities.
  • Accessibility to all accumulated payment information in a centralized platform.

Germany’s financial authority grants crypto license to Bitpanda

Bitpanda, an Austrian fintech unicorn, has obtained a license to offer trading and crypto custody in Germany, noted as the first regional European retail investment platform to secure authorization. Bitpanda is reportedly one of only two retail platforms in Germany with a crypto custody and proprietary trading license granted by Germany’s Federal Financial Supervisory Authority (BaFin).

With BaFin's approval, Bitpanda can expect to offer crypto custody and trading, in addition to maintaining its own trade volume and market directly to retail investors.

In light of the continuous disruption caused by FTX's bankruptcy and customer loss of funds, Eric Demuth, CEO and co-founder, Bitpanda, commented that the company intends to provide clients with a secure and simple method for investing, ensuring that regulations and a strict separation of client and company assets are in place.

JPMorgan declines to invest in a fintech company, Yapily

JPMorgan has reportedly decided not to invest in fintech start-up Yapily, effectively ending the start-up’s fundraising efforts. Yapily creates APIs to assist merchants in accepting payments without the use of traditional credit card companies. Sapphire Ventures, which also invested in Square and Wise, has already backed the start-up business. JPMorgan was reportedly planning to invest up to US $25 million in the company, but according to reports, the investment bank has decided not to proceed. However, according to one source, the bank's investment may have been contingent on additional funding from other parties, implying that the deal could still go through if Yapily is able to raise additional funds from other sources.

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