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RBC collaborates with SWIFT and JP Morgan to offer cross-border payments – Industry roundup: 21 November

FTX pursues court intervention, owing approximately US $3.1 billion to its top 50 creditors

FTX has reportedly begun a critical evaluation of its global assets, with plans to sell or restructure some of its businesses. Additionally, FTX and approximately 101 affiliated firms also pursued court intervention to enable the implementation of a new global cash management system and reimbursement to key suppliers.

As one of the most publicized crypto implosions, the exchange and its affiliates filed for bankruptcy in Delaware on 11 November, resulting in approximately one million customers and investors with billions of dollars in total losses. FTX has stated that it owes nearly US $3.1 billion to its 50 largest creditors and approximately $1.45 billion to its top ten creditors, according to a court filing on Saturday.

FTX plans to investigate revenues, recapitalizations or other corporate strategy transactions for a portion of its units, according to the company's new CEO, John Ray. Furthermore, FTX requested permission to pay prepetition claims to critical vendors close to US $9.3 million after an interim order and up to $17.5 million after the final ruling, as stated in a court filing on Saturday. The exchange stated that its businesses will suffer "immediate and irreparable harm" if the requested court relief was not granted.

Ray stated that many of FTX’s regulated or licensed subsidiaries, both within and outside of the US, have maintained strong balance sheets and accountable management teams. As of 16 November, FTX claims there were 216 debtor bank accounts with positive balances; however, as of now, the company has reportedly been able to confirm the balances in 144 of those accounts. Subject to court approval, FTX has reportedly selected Perella Weinberg Partners LP as its lead investment bank to assist with the sales process.

Visa reveals its cutting-edge payment technology at Qatar’s FIFA World Cup

Visa, FIFA’s official payment technology partner since 2007, utilized its FIFA World Cup sponsorship to highlight a number of payment technologies, such as contactless payments, facial recognition and digital card issuance. In addition to enabling contactless payments by card or smartphone in taxis in Doha, Qatar, the host nation's capital, Visa installed 5,300 contactless-enabled payment terminals at official FIFA venues. Additionally, Visa’s facial recognition technology was reportedly used for cardholder authentication. However, to use this feature, cardholders must be enrolled in the pilot program.

A digital solution for issuing prepaid cards was also tested by Visa at the event, where supporters can scan a QR code with their smartphone to obtain a digital card that can be downloaded to their phone's digital wallet. In an effort to demonstrate to customers how their cards can be personalized, the cards included an animated artwork of La'eeb, the official World Cup mascot. The initiative was aimed at complementing Visa's Masters of Movement exhibition, which reportedly combines technology, art and soccer, noting NFTs as a brand-new type of e-commerce that can have a significant impact on the future of social media, retail, entertainment and sports. At the FIFA Fan Festival in Doha, Visa Masters of Movement enabled soccer fans to create digital art and turn it into their own non-fungible token in collaboration with Crypto.com.

Coinbase introduces open banking payments, operated by TrueLayer, enabling UK users to invest directly from their bank accounts

TrueLayer, an open banking platform, has partnered with Coinbase to offer 'Easy Bank Transfer' for customers in the UK. With the addition of the 'Easy Bank Transfer' open banking feature, Coinbase will become the first major cryptocurrency platform to offer its users open banking-powered payments.

Users can expect to initiate quick deposits by linking their bank accounts directly to Coinbase, eliminating the need to manually input bank account information. The collaboration is intended to reduce the risk of errors and failed payments, which are common when manually entering information. The offering would streamline services and help users save time. Additionally, UK users can expect to independently verify payment via their mobile banking app by selecting the 'Easy Bank Transfer' option when contributing funds to their Coinbase account. Coinbase stated that funds will be available in accounts immediately from verification.

Daniel Seifert, Regional Managing Director, Coinbase EMEA, stated that the new functionality is aimed at enabling customers to interact and participate in the crypto economic system in a simple, secure and accelerated manner, minimizing the divergences of today's legacy banking system.

Over the next few weeks, the 'Easy Bank Transfer' feature is expected to become available to all UK users. Reports also indicate that Coinbase and BlackRock recently collaborated to provide institutional users of BlackRock’s investment management platform with direct access to cryptocurrencies, a move reportedly resulting from the cryptocurrency market struggles after FTX's demise.

Synovus collaborates with Finzly and BaaS to unveil Synovus Accelerate FX, in efforts to broaden global finance

Synovus has launched Synovus Accelerate FX, an end-to-end, advanced FX solution designed to accelerate the growth of global banking services. Synovus Accelerate FX offers foreign exchange payments and trading services through the Synovus Gateway commercial banking portal, making it easy to access and manage. Finzly, a fintech provider of modern banking applications for payments, foreign exchange, trade finance and BaaS, is reportedly supporting Synovus Accelerate FX. Finzly is reportedly also a payments processing innovator, able to provide a payments hub that can easily connect to all domestic and global payment networks.

With Synovus Accelerate FX, a cloud-native, API-first platform, clients can expect to manage their global banking requirements as well as their exposure to foreign currencies. Additionally, users will reportedly be able to securely run their foreign exchange transactions through a self-service web portal quickly, easily and affordably without bank personnel intervention. The platform offers users the ability to buy foreign currencies in bulk through its multicurrency accounts feature, simplifying the process of sending and receiving payments internationally on a regular basis. Clients can also expect to leverage from other features like payment initiation, internal user self-administration, permissions and limits.

The FX solution reportedly streamlines pricing, trading, risk management, settlement processing, confirmations, matching, accounting, compliance, reporting and nostro reconciliation. The platform can reportedly communicate with Synovus Bank's core system and third-party systems such as AML, OFAC and market data. Additionally, the solution makes use of configurable workflows, distributed computing, faster in-memory data grids, drag-and-drop reporting and real-time monitoring.

Booshan Rengachari, founder and CEO of Finzly, commented that the platform integrates technical expertise and cloud-native tools in order to provide a scalable and cost-effective solution, enabling financial institutions to manage post-trade processing of confirmations, compliance, payments, settlements, ledger postings and reporting.

Plaid launches “Signal” to enable instant ACH transactions and combat return risk

Plaid Inc, a financial service technology firm, has launched Signal, a machine-learning risk platform, in an effort to accelerate payments through the automated clearing house while minimizing risk. The company has reportedly been testing Signal with a small number of customers who generate high ACH volumes for over a year. According to reports, Plaid currently collaborates with a network of nearly 50 payment partners to assist businesses in providing ACH-based account funding and transfers.

The platform, Signal, is reportedly able to analyse over 1,000 distinct risk factors and over sixty features in order to accelerate and secure ACH transactions. Plaid stated that the pilot analysed the risk on approximately US $1.5 billion in transactions each month from the participants. Signal, which is based on Plaid's open-banking platform, tracks two types of risk: customer-initiated return risk, which pertains to unauthorized ACH returns initiated by customers, and bank-initiated return risk, which refers to ACH returns initiated by financial institutions (such as administrative returns and transactions rejected for lack of sufficient funds). Additionally, a predictive score between one and ninety-nine corresponds to every transaction, and a risk tier, such as low, medium or high, to each category, based on the likelihood that the transaction will occur.

The risk scores, tiers and more than sixty attributes for scoring transactions are intended to provide businesses with predictive data. Reports indicate that the attributes include Plaid network connection history, account usage, previous ACH events and identity, which includes changes to phone numbers, email addresses and physical addresses.

Furthermore, Plaid claims that financial institutions can increase conversion rates by providing faster, or even immediate, funds accessibility while reducing risk and improving user experience.

CDSL, India's securities depository, claims malware infiltrated its network

India’s largest central securities depository, Central Depository Services Limited (CDSL), claims that malware has infected its systems. The securities depository reported that it had discovered malware affecting some of its internal machines. CDSL, which was founded in 1999, is reportedly India's only publicly traded depository and the country's second-largest after the National Depository Services Limited (NDSL), the country's oldest securities depository. CDSL enables the electronic holding of securities and their transactions, as well as the settlement of trades on stock exchanges.

Reports indicate that the company disconnected itself from other participants in the capital market immediately as well as isolating the machines. CSDL stated that it is still investigating the incident and claims that no confidential information or investor data has been impacted as a result.

CDSL, based in Mumbai, claims to manage and service nearly 75 million trader accounts, also known as demat accounts in India. The Bombay Stock Exchange, Standard Chartered Bank and Life Insurance Corporation are also reportedly significant shareholders in the company.

According to the company's stock exchange filing, the CDSL team has reported the incident to the appropriate authorities and is collaborating with its cyber security advisors to assess the impact.

ECB starts massive cash clean-up as banks pay back loans totalling 296 billion euros

The European Central Bank (ECB) stated that eurozone banks are expected to repay nearly 300 billion euros (US $310 billion) in loans to the ECB this week, marking the largest cash withdrawal from the eurozone's financial system in the currency's 22-year history, said reports. The ECB claims that raising the cost of credit will reportedly help combat the eurozone's record-high inflation and reduce its multi-trillion-euro bond portfolio in 2023.

Lenders plan to repay 296 billion euros of the 2.1 trillion-euro multi-year credit they took out through its Targeted Longer-Term Refinancing Operations (TLTRO), expected to take place on 23 Nov., stated the ECB.

Following the ECB's announcement, yields on Italy's two-year government bonds reportedly decreased, along with the one-week ESTR rate, which measures the cost of borrowing for banks after the repayment is completed. Additionally, when deciding how quickly to reverse the ECB's 3.3 trillion-euro Asset Purchase Program, which is expected to be discussed on 15 December, policymakers aim to examine how the market responds to this unexpected decrease in cash.

Analysts had reportedly warned that because this is the first voluntary repayment window, some bank treasurers may decide to hold off until 21 December in order to have a better understanding of the state of their balance sheet prior to year-end results. Although the early TLTRO reimbursement is reportedly optional, the ECB has encouraged banks to pay off those loans by removing a rate subsidy last month.

The ECB's other point of importance is said to be the money markets, in which banks lend to one another for a short period of time. Reports indicate that the ECB's policy has been a hindrance to those markets for many years, as banks were unable to locate high-quality bonds to use as collateral for borrowing, or lacked an incentive to do so given that they could simply access TLTRO for loans that were subsidized. According to Antoine Bouvet, Strategist, ING, if banks become pressured, the ECB may need to establish a new long-term funding facility for them, although under somewhat less favourable terms.

RBC collaborates with SWIFT and JP Morgan to offer cross-border payments

RBC is reportedly the first Canadian bank to introduce SWIFT Go, which was launched by SWIFT in 2021 to enable companies to send low-value cross-border payments in near real-time anywhere in the world directly from their bank accounts. RBC has recently joined forces with SWIFT and JP Morgan to enable Canadian businesses to send cross-border payments of up to US $10,000 in foreign currencies in a secure, efficient and predictable manner.

In addition to competitive and straightforward pricing, the bank claims that the service provides open and clear visibility into the amount, time, fees and foreign exchange rates of payments, along with reduced processing costs in comparison to traditional wire services.

The launch of SWIFT Go will reportedly make it simpler for Canadian businesses to plan their cash flow, forecast their liquidity position and conduct business internationally, commented Lisa Lansdowne-Higgins, SVP, Business Transformation and Deposits, RBC.

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