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Revolutionizing cross-border money transfers in Asia with smartphones – Industry roundup: 19 October

Revolutionizing cross-border money transfers in Asia with smartphones

Southeast Asian countries, ranging from Singapore and Malaysia to Thailand, Indonesia and the Philippines, desire a multilateral payment network by 2025, according to reports. Their customers already have access to mobile phone apps for real-time claim settlement, but these are limited to the local market. A payment network upgrade is in the plans to connect the countries called the Nexus Scheme, which was reportedly envisioned by the Bank for International Settlements (BIS) as a global payment network, a set of rules that any economy can use to establish a gateway. Once the platform is operational, foreign banks can expect to offer competitive currency conversion services through the system. The customer can also expect to have the same experience whether they are paying someone near or far.

According to the World Bank, the average cost of cross-border remittances remains as high as 6%. However, transfers via the SWIFT messaging system, which take minutes on the fastest routes, can take more than two days on some of the slowest said reports. Access to SWIFT is also at the discretion of United States and Europe, which could be curtailed as it was earlier this year for Russia. In addition, much of international trade is conducted in dollars, and the US currency is currently expensive.

Reports indicate that international transfers through Nexus are not expected to be completely free, and currencies must still be exchanged. However, Nexus has the potential to reduce the average cost of doing business in another country to 1% or less, helping to eliminate any corridor where costs exceed 3%, as the network group of 20 aims to do by the end of 2027.

India creates 75 digital banking units across the country to promote financial inclusion

The government of India has reportedly established seventy-five digital banking units (DBUs) across the country in efforts to increase the rate of financial inclusion as well as enhance the banking experience for citizens in India. The framework aims to make financial services more accessible to the country's 1.3 billion population.

The DBUs are primarily physical locations with internet access and tablet devices that citizens can use to conduct basic banking transactions, said reports.  The user functions include opening a current or savings account, transferring funds, paying a bill or tax, or enrolling in government programs. Small businesses will reportedly be able to apply for loans, credit cards and insurance, while benefiting from cost-effectiveness, ease of accessibility to banking products and services, and improved digital solutions year-round.

Reports stated that DBUs are expected to promote digital financial literacy, with a focus on client education on cyber security, with protection measures included. The venture will include eleven public sector banks, twelve private sector banks, and one small finance bank. Narendra Modi, the Prime Minister of India, stated that the government's objective is to create a secure banking system configuration digitally without paper documentation, ultimately delivering “maximum services with minimal infrastructure.” Additionally, Modi expects that the new DBU initiative will be a trailblazer in the transition away from banking that is entirely reliant on phone-to-phone conversations, reducing financial fraud and scams.

Trulioo enhances Latin American digital identity verification

Trulioo, a global identity verification company, has expanded its Latin American coverage, introducing access to the Dominican Republic and Uruguay as well as substantially bolstering sources of data in Colombia and Mexico. These inclusions strengthen Trulioo's capacity to assist clients who are revamping operations in Latin America or attempting to enter the region.

Organizations will reportedly be able to authenticate attributes such as age and identity, in addition to complying with Know Your Customer, Know Your Business, and Anti-Money Laundering regulations due to the expanded Latin American coverage. The Trulioo eIDV service is reportedly able to standardize address information to increase match rates substantially.

Reports state that the region is experiencing a fintech boom, which has increased demand for dependable, user-friendly identity verification solutions. Between 2017 and 2021, the Dominican Republic's fintech industry grew by 129% annually, and in 2021, Uruguay's fintech industry ranked among the top 20 globally. Additionally, Mexico and Colombia are the second and third largest fintech hubs in Latin America respectively, trailing Brazil.

Businesses using Trulioo can expect to perform identity verification for clients by gaining access to more than 450 global data sources in a secure platform. The Latin American expansions and enhancements include 100% of the population data in the Dominican Republic and Colombia, 90% in Uruguay, and significant improvements in Mexico, resulting in notable verification rate increases. This is in addition to the extensive existing coverage in Brazil, Chile, Costa Rica, Ecuador, El Salvador, Peru and Venezuela, reports added.

Treasury Prime partners with First Internet Bank on banking-as-a-service

Treasury Prime, a banking-as-a-service (BaaS) provider, has partnered with First Internet Bank (US $4.1 billion in assets) to expand the availability of its embedded finance offerings to more fintechs and small businesses, which now include fifteen financial institutions nationwide.

Clients can expect to enhance their product offerings and connect with more customers with Treasury Prime's API integrations and BaaS tools, as well as through First Internet Bank's robust infrastructure and compliance programs. Treasury Prime also reportedly collaborates with neobanks Challenger and Zeta. According to Jeff Nowicki, Vice President of Banking, Treasury Prime, market demand for new strategies to increase deposits in a cost-effective and streamlined manner has assisted in Treasury Prime’s strong growth in its bank network.

The collaboration between First Internet Bank and Treasury Prime will assist fintechs and enterprises in providing innovative accounts with debit cards and payment capabilities, stated David Becker, Chairman and CEO, First Internet Bank.

The news comes just days after Treasury Prime announced similar partnerships with Bangor Savings Bank, FB Financial Corp, and Third Coast Bank. In the coming weeks, the company expects to make additional announcements regarding its bank network.

Global Processing Services and Featurespace partner to introduce an Issuer Payments Fraud Detection Platform

Global Processing Services (GPS), a global payments technology platform, has collaborated with Featurespace, a provider of adaptive behavioural analytics for fraud detection and risk management (ARICTM), to develop an advanced issuer processing fraud mitigation solution.

Reports indicate that GPS plans to include Featurespace’s ARIC Risk Hub into its fraud and risk management product offerings worldwide. The ARIC Risk Hub reportedly improves GPS' fraud detection rates by more than 70%, reduces false positives by 80%, and addresses fraudulent transactions in real time.

The expansion of GPS' Fraud Prevention Team is expected to improve its GPS Fraud Advantage, operated by Featurespace, enabling its users to completely monitor and manage fraud alerts throughout the entire payment transaction process. GPS Fraud Advantage is expected to be operational by mid-2023, with the first phase of roll-out beginning in early 2023. Payment fraud reduction and prioritization in the security of cardholders' accounts are noted as key strategic priorities for GPS and global customers.

GPS stated that many of the top card and payment companies in the world have chosen Featurespace's ARIC Risk Hub to help them combat against evolving fraud challenges and increase approval rates while minimizing false positive alerts. The ARIC Risk Hub reportedly learns from each cardholder's historical transactions in order to generate risk scores, alerts and actions on potentially fraudulent transactions, combining machine learning and artificial intelligence tools.

Sardine introduces 'Insights' to help financial institutions, fintechs and cryptocurrency companies manage risk

Sardine, a provider of fraud, compliance and instant payment solutions, has launched a new product that reportedly provides a complete, real-time overview of an entity's risk based on its past transactions with cryptocurrencies, digital assets and traditional bank products and services. The new service, dubbed Insights, aims to narrow the information gaps between financial institutions, fintechs and crypto companies in order to improve risk management and expand access to all segments of financial services.

While more consumers, businesses and other institutions use blockchain-based services, reports show that there is an increasing need to transfer funds between traditional finance (TradFi) and decentralized finance (DeFI). However, reports state that the two networks continue to be compartmentalized, with minimal risk-related data exchange, allowing fraudsters to take advantage of considerable visibility gaps.

In fact, losses from cryptocurrency fraud reportedly reached US $680 million in 2021, a 520% increase from 2020, prompting financial institutions to limit connectivity to crypto and fintech companies. However, according to Ravi Loganathan, Head of Financial Institution Services, Sardine, "providing visibility into an entity's financial actions and history across both systems would allow all involved in a transaction to better protect shared customers.” The confidential information produced by Insight’s risk models are reportedly available to any business with authorizations, enabling them to more accurately evaluate counterparty risk when initiating funds transfers.

Users can expect to use Insights to call an API and get a real-time response with risk scores, reputation levels and device and behavioural intelligence for any acceptable entity.

Sardine plans to adhere to the frameworks of applicable privacy laws and regulations. Customer growth and funding news helped launch this new product release, including a $51.5 million Series B funding round led by Andreessen Horowitz in September, with strategic investments from Visa, Cross River Bank, Experian and other financial institutions.

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