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SAP to embed IBM Watson AI into solutions - Industry roundup: 12 May

StoneX and TIS Partner partner on FX payment services for treasurers

StoneX Global Payments and TIS have formally announced an official partnership agreement to combine their experience in cross-border payments and cloud-native payment solutions to improve service and coverage for corporate treasury and finance teams.

The partnership, which leverages both companies’ industry knowledge and software solutions, aims to enable corporate clients to simplify the complexity of cross-border and foreign exchange payments. The pair say they will deliver total visibility over FX transactions and full transparency on FX rates before transfers are initiated and executed. 

The service provides a gateway into global markets across more than 140 currencies and over 180 countries, allowing clients to choose the right payment option in each scenario with a guaranteed payment delivery of 48 hours or less.

The connectivity between TIS and their customers’ back-office systems and banks, following a multi-channel banking approach across any preferred network, makes payment processes streamlined, secure, and efficient. Both TIS and StoneX Global Payments have strong SWIFT partnerships and are fully compatible with ISO 20022 and the full scope of other messaging standards in use today. This means they can offer fully integrated and automated end-to-end processes regardless of the unique requirements presented by specific clients.

“This enables our customers not only to leverage efficiency and automation potentials but also to benefit from cost savings in the local currency business,” said Marc Joppeck, Head of Sales & StoneX Payments Division Germany & Corporate Payments Europe.

Since October 2022, TIS clients, including the non-profit organisation International Fund for Animal Welfare (IFAW), are leveraging the FX payment solution to achieve substantial cost-savings over their previous setup. 


Barclays and TransferMate to provide international receivables payments solution for UK firms

TransferMate and Barclays have announced a collaboration that is designed to bring an international receivables solution to the market to help UK businesses reduce transaction costs and save time.

Barclays’ UK banking clients operating in GBP can now invoice in their customers’ local currency in over 60 currencies and 67 countries - receiving the payment back into their GBP account at the amount requested. Manual reconciliation is eliminated as all payments are automatically matched to the invoiced amount.

The solution uses TransferMate’s proprietary global payments infrastructure. It allows cross-border payments to travel through a single integrated network and transfers to be processed like a domestic payment. This solution should mean that receivables are more accurate and cost-effective for everyone on the payment chain, mainly benefiting the bank’s clients that operate internationally in GBP.

The solution has already been successfully piloted with Barclays higher education clients, allowing institutions to invoice international students in GBP and international students to pay the institution in their local currency.

“From manufacturing and leisure to education and healthcare, our partnership with TransferMate will enable clients from numerous industries to offer a new payment method to their customers whilst achieving reconciliation benefits and reduced banking fees for their businesses” said Martin Runow, Global Head of Payments, FX and Digital at Barclays Transaction Banking. “This solution is a significant step forward for any business that trades internationally and invoices in GBP - particularly in the consumer to business space.”


SAP to embed IBM Watson AI into solutions

SAP SE and IBM have announced that IBM Watson technology will be embedded into SAP solutions to provide AI-driven insights and automation to help accelerate innovation and create more efficient and effective user experiences across the SAP application portfolio.

SAP will use IBM Watson capabilities to power its digital assistant in SAP Start, which provides a unified entry point for cloud solutions from the firm. With SAP Start, users can search for, launch, and interactively engage with apps provided in cloud solutions from SAP and SAP S/4HANA Cloud. AI capabilities in SAP Start will be designed to help users boost productivity with both natural language capabilities and predictive insights using IBM Watson AI solutions built on IBM’s trust and transparency and data privacy principles.

New digital assistant capabilities in SAP Start will be extended across SAP solutions to help answer diverse questions for managers and employees. By automating and speeding up everyday tasks, the capabilities are designed to help unlock employee productivity to focus on more strategic work. SAP Start aims to allow customers to benefit from intelligence at the point of decision-making with the ability to use AI and machine learning to extract information from various data sources and answer user questions across lines of business. 

In addition to natively embedding IBM Watson AI capabilities into SAP solutions, the pair are collaborating on generative AI and large language models to deliver consistent, continuous learning and automation based on SAP’s mission-critical application suite.

“This milestone collaboration with IBM aims to provide SAP customers a better user experience, faster decision-making and greater insights to help transform their business processes,” said Christian Klein, CEO and Member of the Executive Board of SAP SE. “Working together to incorporate additional AI, machine learning and other intelligent technologies into SAP solutions can lead to better business outcomes for our joint customers.”

“IBM and SAP are joining forces to give businesses new and exciting ways to harness the transformative power of AI and use it as a source of competitive advantage,” added Arvind Krishna, IBM Chairman and Chief Executive Officer. “With this announcement, we are infusing IBM Watson’s powerful, enterprise-grade AI capabilities into SAP’s leading ERP platform to help businesses reimagine customer experiences, boost productivity and fuel growth.”


Nearly 80% of APP fraud cases in the UK start online

Over £1.2 billion was stolen through fraud in 2022, a reduction of eight per cent on 2021, according to UK Finance’s Annual Fraud Report. The number of fraud cases across the UK was down 4% to almost three million cases.

Within the total figure, unauthorised fraud losses across payment cards, remote banking and cheques reached £726.9m in 2022, a decrease of less than 1% compared to 2021.  

Remote purchase fraud, where a criminal uses stolen card details to buy something online, over the phone or through mail order, remains the biggest category of losses at £395.7m - although this figure was again down on the previous year. Fraud on lost and stolen cards increased by 30% to £100.2m and card ID theft, where a criminal opens or takes over a card account in someone else’s name, almost doubled to £51.7m. Victims of unauthorised fraud cases such as these are legally protected against losses. 

Authorised push payment (APP) fraud losses reached £485.2m, down 17% compared to 2021. Within this, 57% of all reported cases related to purchase fraud, with case volumes breaking 100,000 for the first time. Investment fraud remained one of the most significant proportions of APP losses (24%), although there was a 34% reduction compared with 2021. Overall, APP fraud losses reimbursed increased by 5% in 2022 compared to the previous year.

The banking and finance industry spends billions of pounds each year fighting fraud and economic crime. However, the majority of fraud originates outside the banking sector and UK Finance has conducted analysis on over 59,000 APP fraud cases to show the sources of fraud. The analysis showed that 78% of APP fraud cases originated online - these tend to include lower-value fraud such as purchase fraud and therefore account for 36% of losses. Social media platforms account for the greatest number of online fraud cases - around three-quarters of online fraud starts on social media. 

Meanwhile, 18% of fraud cases originate via telecommunications - these are usually higher-value cases, such as impersonation fraud, and account for 44% of losses. Given so much fraud is initiated from criminal activity taking place through online platforms and telecommunications, UK Finance and its members have long called for far greater cross-sector action to tackle the problem at source. 

“Fraud has a devastating impact on victims and over £1.2bn was stolen by criminals last year,” commented David Postings, Chief Executive at UK Finance. “The banking and finance sector is at the forefront of efforts to tackle this criminal activity. The sector spends billions on detection and prevention and also refunds people who have fallen victim, even if the fraud originated outside the banking system. Our data also makes clear just how much fraud emanates from online platforms and through telecommunications. The government’s new fraud strategy rightly says we need to focus on stopping it at source and that these other sectors need to do far more to tackle the problem they are facilitating.”


BR-DGE and American Express look to enhance merchant open banking capabilities

Payment orchestration provider BR-DGE has partnered with American Express to enhance the open banking capabilities for merchants. BR-DGE’s Partnership Program brings together over 300 payment providers and technology solutions to enable merchants to optimise their payments stack, access the latest payment innovations, and benefit from payment orchestration. This latest collaboration with American Express will enhance the merchant and consumer experience of payments by offering a secure and frictionless Open Banking payment solution.

Complementing BR-DGE’s work in travel and retail, American Express enables real-time open banking payments for leading brands via its first-to-market payment solution, Pay with Bank Transfer. Pay with Bank transfer offers a simple and secure way for customers to pay online. As payments are made instantly from the customer’s account, merchants can reduce transaction costs, drive conversion, and decrease fraudulent activity. The solution is trusted to process payments by Trailfinders, Qatar Airways, and Richer Sounds, which benefit from American Express’ years of experience working with merchants, consumers and acquirers.

Leveraging BR-DGE’s independent payment orchestration platform and network of payment innovators enables its partners to acquire new merchants, retain customer relations, accelerate merchant onboarding, and access a wealth of marketing and sales resources. The partnership will support American Express as it seeks to accelerate Pay with Bank Transfer adoption and offer merchants access to payment orchestration products through BR-DGE.

“With the acceleration of open banking, collaboration within the payments ecosystem is vital in order to provide customers with the best possible experience,” commented Charlotte Wise, Director, International open banking payments at American Express. 


BIS Innovation Hub publishes guide on offline CBDC use

As part of Project Polaris, the BIS Innovation Hub Nordic Centre has published a handbook exploring key aspects of how central bank digital currencies (CBDCs) could work for offline payments.

The ability to make payments offline means being able to use a CBDC without being connected to the internet, either temporarily or because of coverage limitations. Central banks considering the potential implementation of CBDCs with offline functionality must take into account a complex matrix of issues including security, privacy, likely risks, the types of solution, their maturity and applicability, and operational factors.

The handbook, compiled in partnership with Consult Hyperion, addresses these issues as well as objectives for resilience, inclusion, cash resemblance, accessibility and other desired attributes.

The degree to which CBDCs will be provided or used offline will vary significantly by country, region, demographics and specific contexts, which will also influence the solutions chosen.

“CBDC systems, like all digital payment systems, must work for everyone in society, whenever and wherever individuals and businesses need them,” said Beju Shah, Head of the BIS Innovation Hub Nordic Centre. “The ability to pay when offline could ensure this is achieved by providing a layer of resilience, as well as supporting inclusion, accessibility and privacy objectives. Implementing offline payment capabilities will require a deeper understanding of the technologies, security threats, risks and mitigating measures, as well as design criteria for privacy, inclusion and resilience. This handbook is intended as a guide to central banks starting this work.”

Over several workstreams, Project Polaris aims to provide central banks with the essential information needed to inform decision-making, architecture, design, implementation planning and investments. It will also address long-term change and operational considerations.


SEC Charges HSBC and Scotia Capital with widespread record-keeping failures

The Securities and Exchange Commission (SEC) has charged HSBC Securities (USA) Inc. and Scotia Capital (USA) Inc. for widespread and longstanding failures by both firms and their employees to maintain and preserve electronic communications. To settle the charges, HSBC and Scotia acknowledged that their conduct violated record-keeping provisions of the federal securities laws and agreed to pay penalties of US$15m and US$7.5m, respectively.

The SEC’s investigation of HSBC Securities and Scotia Capital, both registered broker dealers, uncovered pervasive and longstanding use of off-channel communications at both firms. As the SEC’s orders described, the firms admitted that their employees often communicated “off-channel” about securities business matters on their personal devices, using messaging platforms, such as WhatsApp. Neither firm maintained or preserved the substantial majority of these communications, in violation of the federal securities laws. The failings involved employees at multiple levels of authority, including supervisors and senior executives. Both HSBC Securities and Scotia Capital cooperated with the SEC’s investigation by, among other things, self-reporting the record-keeping failures after gathering communications from the personal devices of a sample of the firms’ personnel.

“Today’s actions should not only remind firms of the importance of following SEC record-keeping requirements, but also the value of disclosing violations when they do occur,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Both HSBC and Scotia Capital self-reported and self-remediated their record-keeping violations, and the reduced penalties in these cases reflect their efforts and cooperation. As we continue our efforts to ensure compliance with the Commission’s essential record-keeping requirements, we encourage other firms to take note and likewise self-report.”

Both firms were charged with violating certain record-keeping provisions of the Securities Exchange Act of 1934 and with failing to reasonably supervise with a view to preventing and detecting those violations. In addition to the financial penalties, each firm was ordered to cease and desist from committing violations of the relevant record-keeping provisions and was censured. The firms also agreed to retain compliance consultants to, among other things, conduct comprehensive reviews of their policies and procedures relating to the retention of electronic communications found on personal devices and their respective frameworks for addressing non-compliance by their employees with those policies and procedures.


Deutsche Bank named market maker for China’s Northbound Swap Connect programme

Deutsche Bank has announced that it has been named a market maker for Northbound Swap Connect, which officially launches on May 15, 2023. The initiative will be the first stage of mutual access between Hong Kong and China interest rate swap markets.

The launch of Swap Connect will signify the opening of China’s financial derivatives market. It will provide overseas investors with access to an important hedging tool for investing in the China Interbank Bond Market (CIBM) and reducing risk related to interest rates.

Swap Connect will also mark an important step in the renminbi's internationalisation. As further progress to Bond Connect, the initiative reinforces the role that Hong Kong plays in connecting China with international investors.

“Early on, we received many enquiries and have seen strong interest in participating in Swap Connect,” said Lillian Tao, Head of Macro & GEM Sales for China at Deutsche Bank. “This has been despite its complex fusion of China, Hong Kong and Western financial infrastructure. This indicates an increased sophistication and openness amongst international investors, and we are observing an appetite for further deregulation in areas including domestic repurchasing, futures and options.


Venerable appoints treasurer

Venerable has announced the appointment of Ross Boudiab as treasurer. In this role, Boudiab will report to David Wiland, Chief Financial Officer, and oversee treasury strategy and processes for the business, including cash management, liquidity, short-term investments, debt management, and bank and creditor relations.

Boudiab is a senior leader with over 20 years of global treasury experience, most recently with Corebridge Financial, Inc. where he held the role of assistant treasurer. Boudiab was responsible for cash management, forecasting, and funding activities, optimising cash investments, managing bank relationships, developing payment strategies, and was heavily involved in the AIG separation activities. During his years with AIG, Boudiab held various roles in treasury and previously spent time at Barclays Bank PLC, JPMorgan Chase, and Citibank.

Boudiab holds a Master of Business Administration from Rice University and a Master of Finance and Banking and Bachelor of Business Administration from American University of Beirut.

“Ross’s highly collaborative nature and ability to advance business goals will contribute to Venerable's culture in a very positive manner,” said Wiland. “He brings significant experience to a critical function and I look forward to seeing the impact he will make.”

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