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These three banks jointly invest US $105M in digital asset infrastructure – Industry roundup: 13 May

Citi, BNY Mellon, Wells Fargo to jointly invest US $105M in digital asset infrastructure Talos amid volatility

Regardless of the bearish retail market, Citi, BNY Mellon and Wells Fargo announced their investment in crypto trading firm Talos, a provider of institutional digital asset trading technology valued at US $1.25 billion, in a US $105 million funding round led by global growth equity firm General Atlantic. According to GlobalRock reports, this may be an indication that established trad-fi institutions are entering the crypto space amid ongoing fears in the market, signalling a long-term path despite short-term volatility.

Aaron Goldman, Managing Director and Co-Head of Financial Services, General Atlantic, commented that Talos provides enterprise grade order management, liquidity aggregation, algorithmic execution, reporting and compliance to market participants, resulting in efficient operations and execution, while lowering total cost of ownership. Furthermore, Goldman added that the crypto market is continuously evolving and “Talos’ vision to build a comprehensive toolkit for market participants across CeFi and DeFi positions the company as a competitive disruptor.”

According to reports, Talos powers the entire trade life cycle, including transactions and settlements, through a single access point. Its customer base consists of the entire digital asset ecosystem, from buy-side institutions to financial services providers, including broker-dealers, prime brokers, hedge funds, banks, OTC desks, custodians, exchanges and lenders.

Talos reportedly plans to leverage the capital to scale and diversify its industry-leading institution-grade digital asset platform that powers both buy-side and sell-side companies, in addition to expansion into APAC, Europe and across the globe. The company also expects to expand its product line to support its entire end-to-end trading lifecycle and enhance its powerful pre- and post-transaction tools.

Working capital solution to simplify and accelerate supply chain financing via US Bank and LiquidX alliance

US Bank, a Minneapolis-based company with approximately US $600B in assets as of March 2022, has signed a collaboration agreement with Liquid X, a trade-finance fintech, to speed up and simplify supply chain transactions between suppliers and buyers. With the current unprecedented global supply chain pressures, it was said that this collaboration will combine US Bank’s solid balance sheet with LiquidX's optimized platform technology to aid in supply chain finance and cash flow challenges faced by many companies.

The report indicated that both suppliers and buyers will be able to connect their supply chain systems directly to US Bank and transact on LiquidX's easy-to-use platform. Additionally, US Bank financing should enable suppliers to receive payments almost instantly and buyers to obtain extended terms of payment.

The alliance between US Bank and LiquidX will reportedly enhance existing supply chain finance solutions currently serving US Banks’ clients. The Accounts Receivable Purchase Program is said to enable sellers to convert credit sales into immediate cash flow, and decrease days sales outstanding, extending buyers' payment terms. Additionally, the Approved Payables Financing Program should help buyers pay suppliers early, reduce payment processing costs, and provide suppliers with faster and more predictable access to cash.

Dan Son, Global trade and Supply-Chain Finance Head, US Bank, commented that the need for innovative supply chain finance solutions is critical for companies to strengthen supplier-customer relationships, reduce costs and diversify working capital sources. In addition, supply chain finance solutions can help them advance in other key business priorities including environmental, social and governance (ESG) initiatives by providing financial incentives to various suppliers and improving access to working capital.

Italian-based digital bank reaches 700,000 accounts with Temenos banking cloud solutions

Banco Mediolanum's Italian-based digital bank, Flowe, has reached a major milestone with 700,000 accounts in the first 18 months of its launch with Temenos, a cloud banking platform. Flowe is reportedly growing twice as fast as its closest competitors with the addition of Temenos' open platform for composable banking. Reports indicate that 150,000 new registrations were received in just one week, with peaks of 30,000 new customers per day.

Flowe aims to provide massive digital services, paving the way for its future profitability and bringing sustainable banking to more than 60 million Italians. Powered by Temenos cloud technology, Flowe is the first bank in Italy to be B-Corp certified and carbon neutral. Ivan Mazzoleni, Chief Executive Officer, Flowe, commented that they have been able to bring new products to market quickly in line with their sustainable mission. Mazzoleni is expected to speak about ESG at the Temenos Community Forum in London scheduled for 17-19 May 2022.

Flowe's mobile banking app capabilities expects to combine their fully automated onboarding service with eco-friendly banking services. The target market consists of a young population looking to manage their money effectively, such as paying rent and other bills, through the use of innovative and ethical service providers.

Through a fully remote implementation using Temenos, Flowe went live in June 2020, in a record time of five months. The process was said to have been significantly accelerated through Temenos' pre-composed banking services and easy customization through its open APIs.

Banks are poised to break away from the traditional core banking systems that has hindered innovation as new digital entrants emerge. Since the pandemic, cloud adoption has grown significantly. According to a recent report from the Economist Intelligence Unit backed by Temenos, more than 7 of the 10 bank respondents surveyed say they can achieve business priorities by integrating the cloud into their organization's products and services. In particular, challenger banks look for agile, scalable, and easy-to-configure banking services that can bring together best-in-class providers in an open ecosystem.

Powering Worldline’s open banking platform with fintech Algoan’s global credit scoring API solution

Worldline, a global payment service provider, announced a collaboration with Algoan, a credit scoring provider, to develop the next level of credit valuation solutions helping lenders and service providers make informed credit decisions using APIs and machine learning tools with open banking transaction data. Worldline, one of the largest open banking providers in Europe, currently providing access to more than 3500 banks in 19 countries throughout Europe, makes this new credit assessment tool timely for lenders.

Financial institutions, borrowers and merchants reportedly can all take advantage of a faster, more equitable, data-driven credit valuation approach that provides clear benefits to all parties within PSD2's secure, user-consent driven framework. Both Worldline and Algoan stated they are committed to making these readily accessible to the market.

Traditional credit assessment practices across Europe involve a substantial amount of manual processes and valuations subject to human error, where both lenders and borrowers spend a considerable amount of time processing loan applications. The task of assessing potential borrowers is becoming increasingly difficult as traditional assessment methods no longer meet consumer expectations or keep up with digital transformation and regulatory changes. According to reports, the credit and risk assessment process can benefit from PSD2 opportunities as open banking and open finance continue to provide efficient and faster services to consumers and institutions.

The partnership is expected to combine Worldline’s pan-European open banking reach and digital banking expertise with Argoan's credit score system that uses the latest machine learning algorithms, ultimately leading to a new open banking-based credit assessment tool. Additionally, the new solution is said to enable banks, lenders and service providers with more accurate scoring, better data access and efficient processing. This innovation is also expected to be useful in many other cases, including personal finance and consumer finance, automotive finance and leasing, retail finance and BNPL (deferred payment), insurance and utility providers.

Global cross-border B2B payment service via OwlPay and Nium partnership

OwlTing Group, a Taiwan-based global blockchain services company founded in 2010, joined forces with Nium, a global platform for modern money transfer, to enhance OwlTing's new real-time cross-border payment service, OwlPay, for Southeast Asian e-commerce and travel platforms. According to the press release, OwlPay provides a one-stop financial services integration for global B2B transactions. Additionally, OwlPay services are said to include automatic reconciliation, online currency swaps, and cross-border payment services, to streamline traditional payment processes and improve the efficiency of business operations.

With the use of developer-friendly APIs, OwlPay is expected to connect to the company's internal control system and provide one-stop services for the administration of orders and vendors, financial reconciliation, online audit verification, and automation of the payment process. In addition, reports note that Nium's competitive exchange rates, extensive payment network, and support for over 100 currencies through online currency exchange provide unique benefits for businesses to perform real-time international transfers via a web interface.

Una Peng, Senior Manager, OwlPay, commented that their partnership with Nium brings a new B2B payment experience for customers, where businesses can integrate their cash information flow without the need to build an internal infrastructure that costs extra time and effort. Moreover, OwlPay estimated that treasury teams can save up to 50% on labour costs. The average cross-border remittance fee currently ranges between US $25 to $30 per transaction, while OwlPay charges less than $10 with same-day settlement. Additionally, OwlPay is expected to support six currencies for deposit, enabling funds to be exchanged to local currency for payouts.

OwlTing is reportedly targeting Southeast Asia initially, where the digital economy is growing rapidly.

From there, OwlPay's services are expected to expand from Asia to North and South America and Europe. Additionally, OwlPay is expected to introduce stablecoins and many settlement networks to explore the infinite possibilities of financial innovation and digital payment development.

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