New fund launched to support rollout of impact bonds across the EU

Three years after launching the first social impact bonds fund in France and the EU, BNP Paribas is launching a second fund. BNP Paribas European Impact Bonds Fund 2, with a target size of €70m, aims to intensify the development of the impact bond market in the EU. 

Three strategic investors have joined forces to create the fund: Banque des Territoires, part of Groupe Caisse des Dépôts, the European Investment Fund (EIF) and BNP Paribas Cardif, the Group’s insurance subsidiary.

Managed by BNP Paribas Asset Management, the fund will finance projects that positively impact society or the environment, promoting innovation in public policy while generating savings in government budget.

Ten projects structured by BNP Paribas have already been chosen to be financed by this new fund. These include efforts to help more than 1,500 refugees, vulnerable youth, and people with disabilities find lasting employment or take a training course leading to a qualification, to avoid more than 16,000 tonnes of CO2 emissions, and to reuse more than 5,000 tonnes of waste.

 

Finance heavyweights partner so UK merchants can accept instalment payments

FIS has partnered with Visa to enable eligible Worldpay from FIS UK merchants to accept payments using the Visa Instalments checkout functionality for the first time. Worldpay is the first merchant acquirer to offer Visa Instalments as an option at checkout in the UK, while HSBC UK has become the first card issuer in the UK to offer the service to its credit card customers.

The Visa functionality enables participating card issuers to offer flexible and transparent instalment payment options to their eligible cardholders at the merchant’s checkout. According to the Worldpay from FIS 2023 Global Payments Report, buy now pay later (BNPL) accounted for 8% of total e-commerce spend in 2022, up from 6% of total e-commerce spend in 2021, cementing its popularity among UK consumers.

With demand for BNPL and instalment payments growing, Visa Instalments provide a way for UK merchants of Worldpay from FIS to accept and receive payments online. This solution gives consumers more choice in how they pay online by enabling a participating card issuer to provide a participating cardholder easy access to instalment payment options with clear repayment schedules shown at checkout – so the cardholder knows what they need to pay and when.

 

Education needed to propel AI payments into the mainstream

With artificial intelligence (AI) being one of the most talked about technologies of 2023, consumers are gradually growing their understanding of its role in the payments process. Research of over 14,000 people commissioned by global payments platform Paysafe highlights the extent of the potential for the technology in payments if the current lack of consumer awareness and comfort is addressed.

At present, just 14% of consumers globally say they are using AI-driven payment technology, with the remaining 86% expressing reservations about using AI. While 10% expressed willingness to use AI-driven payments in the next two years if they became more established, 17% are uncomfortable using AI-driven payments technology. Meanwhile, a quarter (24%) cite a lack of knowledge around what safeguards are in place to reassure them that data isn’t being misused, and over a third (35%) said they don’t know enough about AI-driven payments technology to feel comfortable using it yet.

Some consumers were able to identify their use of real-life examples like AI-powered checkouts (58%), smart wallets (52%), or payment chatbots (50%). When asked how aware they were about the use of AI by merchants, approximately one-third of consumers indicated that they know a fair amount or a lot about applications like fraud detection (35%), customer risk scoring (33%), consumer trends (36%) and personalising the payment experience (36%).

Elsewhere, the research found that when it comes to mixed reality - augmented reality (AR) and virtual reality (VR) payments - while uptake is still low at just 3%, the initial challenge around comfort has been largely overcome. Concern about the technology's security was minimal, with only 12% of consumers saying they wouldn't use AR or VR to purchase goods because they don't seem safe.

Many consumers seem open to embracing the technology: 27% said they see themselves using VR, and 28% said they see themselves using AR if these become more widely available and they learn more about them. Similarly, just over a quarter of respondents (26%) felt the same about paying for something in the Metaverse.

 

Google Cloud launches AI-powered AML product for financial institutions

Google Cloud has announced the launch of Anti Money Laundering AI (AML AI), an artificial intelligence (AI)-powered product designed to help global financial institutions more effectively and efficiently detect money laundering.

Google Cloud's AML AI provides a consolidated machine learning (ML)-generated customer risk score as an alternative to rules-based transaction alerting. The risk score is based on the bank's data, including transactional patterns, network behaviour, and Know Your Customer (KYC) data to identify instances and groups of high-risk retail and commercial customers. The product can adapt to changes in underlying data, delivering more accurate results, which increases overall program effectiveness and improves operational efficiency. 

The solution uses proprietary ML technology and Google Cloud technologies like Vertex AI and BigQuery. The product handles the complexities of running ML at scale while providing enriched explanations of the outputs to enable financial institutions to expedite the investigation workflow and improve the customer experience. To date, the solution has been put in production across several geographical regulatory jurisdictions.

 

Danske Bank enters strategic partnership with Infosys

As part of its recently launched Forward ’28 strategy, Danske Bank has announced it will enter a strategic partnership with Infosys. As part of the partnership, the bank will sell Danske IT, a fully-owned subsidiary of Danske Bank, headquartered in Bengaluru, India, to Infosys. Danske IT covers IT development and operations for Danske Bank. The deal is subject to customary authority approval, expected in the second half of 2023. 

As part of the sale, starting expectedly 1 September 2023, the 1,400 staff in Danske IT will transfer to Infosys, which employs more than 300,000 people globally. The sale of Danske IT does not include plans for redundancies, and the bank says that Danske IT staff will continue to play a crucial role in the digital transformation of Danske Bank.

“We have conducted a thorough process to find a partner that can help us meet our ambition,” said Frans Woelders, COO of Danske Bank. “Infosys have the tools, experience, and expertise to support us in accelerating our transformation using cloud and AI technologies. Given Infosys’s global presence and scale, the partnership will also give us access to wider talent pools and capabilities.” 

 

Finastra scores FedNow Service certification

Finastra has completed testing and certification for the FedNow Service in the US, becoming one of the first vendors in the industry to complete the process. The Federal Reserve’s new instant payments service, launching in July 2023, will be integrated into Finastra’s Payments To Go and later added to its Global PAYplus solution, providing financial institutions across the US with instant payment capabilities on the cloud.

Finastra’s cloud-based payments processing solution Payments To Go, together with its Total Messaging gateway, provides the connectivity, availability, agility, and scale needed for banks to deliver instant payment services around the clock. The certified connection to the FedNow Service means financial institutions can offer instant payments. Delivered via an open API, business customers can access the FedNow Service through a portal, enabling them to seamlessly initiate payments and submit payment requests.

Finastra says its participation in the FedNow pilot programme, which supports the service's development, testing and adoption, allows its customers to be among the first financial institutions to go live quickly and efficiently as soon as the service launches this summer.