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SAP plans to liquidate its Qualtrics shares and reduce its workforce – Industry roundup: 27 January

SAP plans to liquidate its Qualtrics shares and reduce its workforce, shifting its focus

SAP SE, a German-based multinational software company, is reportedly seeking to sell its remaining shares of Qualtrics International Inc., an experience management (XM) technology platform acquired four years ago. In addition, the firm intends to lay off approximately 3,000 employees (which accounts for 2.5% of its entire workforce) this year in an effort to increase revenues.

The company projects that adjusted operating profit will increase to between €8.8 billion (US $9.6 billion) and €9.1 billion with constant currencies in 2023. Christian Klein, CEO, SAP, stated that the cutbacks were a strategic decision unrelated to the company's current growth. Reports indicate that the stock has decreased by about 12% during the past twelve months, with the shares down by 3.3% to €102.48.

The main goal of SAP’s reorganization and the driving force behind the sale of Qualtrics was reportedly to refocus on its largest businesses and cloud services. Last year, SAP's cloud business reportedly surpassed all other revenue sources, with Moody’s upgrading SAP’s outlook to positive this month due to the company's transition, said reports. SAP's cloud revenue reportedly increased by 22% in constant currencies to €3.39 billion in the fourth quarter of 2022 compared to the same period in 2021.

Challenger, Gray & Christmas Inc., a consulting company, reported that the tech sector officially confirmed that 97,171 job cuts in 2022, an increase of 649% from 2021.

SAP is expected to spend between €250 million and €300 million on the restructuring plan, with the majority of that cost to be incurred in the first quarter of 2023. The plan aims to save between €300 million and €350 million in annual costs in 2024, with anticipated moderate cost benefits for the entire year, said reports.

China’s president pursues greater ties with Latin and Caribbean nations

During the seventh summit of the Community of Latin American and Caribbean States (CELAC) in Buenos Aires, the president of China, Xi Jinping, reportedly urged countries in Latin America and the Caribbean to embark on a new collaboration as part of a revitalization attempt to strengthen Beijing's business strategy presence in the region outside the United States.

President Xi has stated that China is prepared to continue working with countries in Latin America and the Caribbean to assist and advance collectively while promoting “peace, development, equity, justice, democracy, and freedom”. Furthermore, President Xi commented that obstacles can be overcome by fostering cooperation, specifically during these times of upheaval and transformation. Currently, twenty nations in the area are reportedly involved in China's Belt and Road initiative, a global infrastructure development strategy, including Brazil, Argentina and Nicaragua. Reports indicate that China sent medical expert teams and donated medical equipment and supplies to 30 Latin American nations, supporting the region during the pandemic of 2020.

Over US $450 billion (£360 billion) in trade was reportedly conducted in 2021 between China and Latin America and the Caribbean, with China being an essential export market for the region. The trade volume between China and the region is forecasted to surpass those between the US and the Latin American and Caribbean area, according to the World Economic Forum. President Xi further commented “we highly value our relations with CELAC, and take CELAC as our key partner in enhancing solidarity among developing countries and furthering south-south co-operation.”

As reported by Industry Roundup: 16 January Celac summit leaders call for more international funding, Latin American and Caribbean countries have requested additional global funding for the region in the aftermath of economic and climate crises.

Hawk AI, a bank-focused AML and fraud prevention platform, raises US $17 million

Hawk AI, a German-based business that creates fraud prevention and anti-money laundering (AML) intelligence for financial companies, has reportedly raised US $17 million in a Series B round of funding, in addition to previously raising $10 million, led by Sands Capital along with contributions from Picus Capital, DN Capital, Coalition and BlackFin Capital Partners.

With the new funding, the company plans to strengthen its product development and international expansion plans. Reports show that an estimated 5% of the world's GDP, or up to $2 trillion in illicit profits, are laundered annually, with only 1% of these illicit profits being recovered.

Hawk AI was established in Munich in 2018 with the goal of enhancing how banks and payment companies monitor their compliance risks. The firm’s cloud-native, modular AML surveillance system reportedly offers maximum “explainability” within an AI-powered platform, which is particularly useful for audits and regulatory investigations.

Customers can reportedly create their own risk-rating model by combining static data, such as product or geographic data, with dynamic data (such as suspicious activity reports) using Hawk AI's products, which include payments screening, customer screening, transaction monitoring, transaction fraud and customer risk rating.

In contrast to the cumbersome on-premises implementations from many traditional financial entities, Hawk AI boasts its cloud-native credentials and SaaS business model as one of the major differentiators. However, the business aims to focus on the "black box" environment that incorporates AI and machine learning algorithms, noting why an algorithm made a particular decision, as well as why a customer was identified as a potential criminal, said reports.

Tobias Schweiger, Cofounder and CEO, Hawk AI, commented that explainability for Hawk AI is divided into two parts: 1) what justifies an AI-driven, independent decision and 2) how the AI-contributing algorithms were created, both of which should be clear and straightforward for compliance officers. Schweiger further added that “financial institutions and regulators need to be able to understand and trust AI-driven decisions.”

Bitpanda introduces a cryptocurrency "investment-as-a-service" product

Bitpanda, a European digital asset platform that currently offers white-label API to more than twenty million users, has introduced an investment-as-a-service cryptocurrency offering that will reportedly enable banks and fintech firms to incorporate trading services into their apps. Through its Bitpanda Technology Solutions (BTS), the company aims to expand its range of services by including new features, asset classes and regulatory licenses.

The platform will reportedly enable trading, investment and custody services for stocks, ETFs, cryptocurrencies, precious metals and commodities to be provided by fintechs, conventional banks and online platforms. Through a single API connection, partners will reportedly be able to create their own user interfaces and select from features including savings plans, asset-to-asset swaps, cryptocurrency staking, fractionalized stocks and full blockchain.

Lukas Enzersdorfer-Konrad, CEO, BTS, stated that in order for financial institutions to meet the rising demands for advanced investing solutions, they must look to ready-to-market solutions with high compliance standards, eliminating high start-up costs and out-of-date products.

Government of Bataan, Philippines, and blockchain nChain sign an MOU for digital transformation

The Province of Bataan, which is located in Central Luzon in the Philippines, has reportedly announced a Memorandum of Understanding (MOU) between the Provincial Government of Bataan (PGB) and blockchain company nChain, aiming to establish the groundwork for the region to create a digital platform that will reportedly streamline the systems and practices used for providing government services.

Since its founding in 2015, nChain has reportedly expanded its presence to include London, Switzerland, Slovenia, Stockholm, Sweden and the Philippines. The company focuses on maximizing the potential of blockchain technology through ongoing research and development of inventions, including the upkeep of a strong patent portfolio, and by providing software, IP licensing and consulting services across a range of industries, including iGaming, supply chain and finance, said reports.

Reports indicate that nChain intends to collaborate with governments all over the world to transform their economies by offering professional advice and blockchain-based solutions for the digitization of state services, goods and processes.

The Citco Group of Companies and Fenergo partner to enhance platform for onboarding and KYC

The Citco Group has reportedly collaborated with Fenergo, a digital transformation company, aiming to streamline Know Your Customer (KYC) and client onboarding procedures and to integrate Fenergo’s client lifecycle management (CLM) platform throughout the Citco organization.

Citco, which is reportedly one of the largest asset servicing providers worldwide with US $1.8 trillion in assets under administration (AUA), offers a wide range of financial services to hedge funds, private equity firms and real estate funds. The company reportedly chose Fenergo's CLM SaaS platform to provide a streamlined end-to-end client experience through front-to-back-office integrations with anti-money laundering screening and centralized document management.

The CLM SaaS platform from Fenergo reportedly automates ongoing KYC, customer due diligence and risk profiling in compliance with regulatory rules in over 120 jurisdictions. Additionally, in order to ensure regulatory certainty, reports indicate that the platform offers compliance teams the ability to visualize complex entity data structures, identify politically exposed individuals, as well as determine ultimate beneficial owners.

Stripe explores IPO listing or private sale, setting a one-year timeline

Stripe, a digital payments firm, has reportedly given itself a year to decide whether to go public or allow employees to sell stock. The business has hired Goldman Sachs and JPMorgan to provide advice on a deal that would either allow it to list directly on a stock exchange or permit employees to sell shares in a secondary market, said reports. For the third time since last summer, Stripe has reportedly reduced its internal valuation, decreasing it by 11% to US $63 billion, from $95 billion at a March 2021 funding round. Additionally, the company has reduced its work staff.

Stripe has reportedly been one of the most anticipated US tech listings, but the collapse in the stock market has left a long void in US IPOs. According to Refinitiv data, the amount of money received from these transactions in 2022 was $8 billion, a 95% decrease from the previous year. Although the possibility of a public listing is being investigated, some analysts forecast that Stripe is still more likely to remain private.

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