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US business leaders optimistic on economic environment - Industry roundup: 25 August

US business leaders optimistic regarding economic environment, business risks

After three years of navigating economic uncertainty and complex challenges, business leaders are increasingly optimistic about the economic and business environment and their companies’ ability to mitigate risk, according to the latest PwC Pulse survey: Focused on reinvention. Only 17% of business leaders strongly agree there will be a recession in the next six months. And while executives are still concerned about cyberattacks, talent and the US regulatory environment, they view these as less of a risk today than a year ago.

Regarding which issues are still on executives’ radar, frequent and/or broader cyber attacks is the top-cited risk, with 74% saying it is a serious or moderate risk. In addition, while business leaders appear hopeful about a soft landing, the economy's future is still in question. Over a quarter (28%) of executives cite margin pressure affecting earnings as a serious risk.

As businesses see external risks ease, they focus inward to transform and reinvent their companies for the future. Executives are strategically channelling their investments into technology and transformation, with over one in two leaders saying they will invest in new technologies (59%) and 46% saying they will invest in generative AI (GenAI) specifically in the next 12 to 18 months. Given AI has been predicted to contribute a notable amount to the global economy in the near future, there is an opportunity here for even more executives to opt in now and invest in the technology or risk falling behind.

In the next three to five years, embedding new technologies into their business model is the top-ranked strategic priority - but it also creates the most challenges. Business leaders’ top challenges to their companies’ ability to transform primarily centre around tech, including achieving measurable value from new tech (88%), the cost of adoption (85%) and training talent (84%).

As executives focus on business transformation and growth, they’re shifting their attention toward developing and retaining current talent following past hiring cycles and subsequent layoffs. Many are prioritising upskilling initiatives and improving benefits, with more than six in 10 executives saying they have implemented or plan to expand mental health benefits (64%), train employees on new technology (64%) or increase compensation for existing employees (60%). 

Regarding sustainability and climate impact, executives are split: 50% of executives cite climate change as a risk to their business. While most (69%) leaders agree they're prepared to comply with upcoming sustainability reporting requirements, only 23% are actively contingency planning for climate-related disruptions in the next 12 to 18 months - an opportunity for companies to invest in more significant resilience measures.


Australian CBDC research project concludes on a positive note

The Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) have released a report on the findings from a joint research project involving industry that explored potential use cases for a central bank digital currency (CBDC) in Australia.

The project involved the RBA issuing a limited-scale ‘pilot’ CBDC that was a real legal claim on the RBA. The pilot CBDC was used by selected industry participants to demonstrate how a CBDC could provide innovative payment and settlement services to Australian businesses and households. The various use cases explored in the project highlighted a range of areas where a CBDC could enhance the functioning of the payments system. At the same time, the project raised several legal, regulatory, technical and operational issues associated with a CBDC that warrant further consideration in future research.

“The project yielded valuable insights into how a CBDC, alongside other innovations in digital money, could potentially unlock benefits for the Australian financial system and the wider economy,” commented Brad Jones, Assistant Governor (Financial System) at the RBA. “It also highlighted the benefits of close engagement between industry and policymakers in exploring the opportunities and challenges associated with innovations in digital money. The key findings from the project will help to shape the next phase of the RBA’s research program into the future of money in Australia. Alongside our ongoing work on cross border payments, this will include deepening our understanding of the role that tokenised asset markets and programmable payments could have in the Australian economy.”

“The report underscores that innovation in finance is a continuous journey,” added Dr Andreas Furche, CEO of the DFCRC. “The strong industry engagement in this project speaks to the importance of collaboration between central banks as ultimate issuers of national currency, and industry experts driving its potential use cases. As we move forward, our research on CBDC could look to target use cases where CBDC has the best potential to provide an infrastructure layer for further innovation in financial products and services.”


Siemens Healthineers goes live with ION Treasury’s ITS software 

Siemens Healthineers AG has gone live with key capabilities of ION Treasury’s ITS solution for its new treasury management system (TMS). Siemens Healthineers is a medical technology company with over 125 years of experience. Its portfolio, spanning in-vitro and in-vivo diagnostics, image-guided therapy and innovative cancer care, is critical for clinical decision-making and treatment.

ION Treasury and Siemens Healthineers first partnered in 2020 to support the healthcare organisation’s ‘Treasury for Future’ initiative. The collaboration has most recently led to the development of new, highly flexible FX exposure management capabilities.

This global implementation will automate Siemens Healthineers treasury and FX exposure management workflows, feeding data between ITS and other applications in Siemens Healthineers infrastructure. ITS will also share payment data enriched with netting information for account reconciliation and transfer accounting information for daily bank postings and monthly valuations.

“To implement our new TMS, we needed a partner to support us in a flexible way and with a hands-on mentality,” said Brigitta Kocherhans, Head of Treasury at Siemens Healthineers. “That’s what we found in the ION team, whose combination of local and cross-functional support underpinned this crucial project in our treasury department. We look forward to achieving further milestones in this project, supported by our partnership with ION.”


Significant increase in cybersecurity attacks fuelled by generative AI

Three-quarters (75%) of security professionals witnessed an increase in cyber attacks over the past 12 months, with 85% attributing this rise to bad actors using generative AI. This is according to the fourth edition of Deep Instinct’s Voice of SecOps Report. The research - “Generative AI and Cybersecurity: Bright Future or Business Battleground?” - was conducted by Sapio Research and surveyed over 650 senior security operations professionals in the US, including CISOs and CIOs.

According to the study, 69% of respondents have already adopted generative AI tools within their organisation, with the highest adoption (80%) within the finance sector. Nearly three-quarters (70%) of security professionals say generative AI positively impacts employee productivity and collaboration, with 63% stating the technology has also improved employee morale.

However, senior security professionals also view generative AI as a disruptive cybersecurity threat, with nearly half (46%) of respondents believing generative AI will increase their organisation’s vulnerability to attacks. The top three generative AI threat issues include growing privacy concerns (39%), undetectable phishing attacks (37%), and an increase in the volume and velocity of attacks (33%).

The technology has already been repurposed by bad actors, as evidenced by WormGPT, a new generative AI tool advertised on underground forums as a way for adversaries to launch sophisticated phishing and business email compromise attacks.


Citi invests in Peruvian FX fintech

Citi has made a strategic investment in Rextie, a Peru-based fintech for FX services. The investment makes Rextie Latin America’s first FX fintech to receive an investment from one of the largest banks in the world. Citi’s FX technology will also be integrated into Rextie’s currency exchange services.

Through CitiFX Pulse and Instant Payments, Rextie’s clients should see greater automation, real-time payments, liquidity, and competitive rates. A statement released by Citi says that the deal demonstrates how fintechs and banks can collaborate to reinvent and innovate financial services in the region. 

By the end of 2024, Rextie expects to surpass US$7bn exchanged in the platform since the start of its operations in Peru. The investment was made by Citi’s Institutional Strategic Investments (ISI) arm, which invests in innovative fintech companies globally that are strategically aligned to Citi’s institutional businesses.


RMB stable as fifth most active global payments currency

Swift’s RMB Tracker has shown that in July 2023, the RMB retained its position as the fifth most active currency for global payments by value, with a share of 3.06%. Overall, RMB payments value decreased by 6.13% compared to June 2023, while in general, all payments currencies decreased by 14.91%. Regarding international payments, excluding payments within the Eurozone, the RMB ranked sixth with a share of 2.23% in July.

The tracker uses data from live and delivered MT 103 and MT 202  - customer-initiated and institutional payments - and ISO equivalent messages exchanged on Swift. RMB’s fifth place out of all international currencies in May saw it behind the US dollar (46.46% of all global payments value), the euro (24.42%), the British pound (7.63%) and the Japanese yen (3.51%).

As a global currency in the trade finance market, based on live and delivered MT 400 and MT 700 messages exchanged on SWIFT, RMB ranked third based on value, accounting for 4.57% of July’s trade finance transactions. This field was dominated by the US dollar (83.94%), while the euro also placed higher (6.23%).

Regarding FX spot transactions, RMB was July’s fifth most used currency for FX confirmations. The US dollar was the most used, followed by the euro, pound, and yen. In terms of the top economies carrying out FX spot transactions in RMB, the UK came out on top in July (38.18%), followed by the US (14.26%), Hong Kong (10.10%), France (7.84%) and China (7.36%).


TreasurUp and Salt Edge to bring open banking solutions to commercial banks

TreasurUp, a fintech company specialising in commercial banking services, has partnered with Salt Edge on account aggregation and open banking compliance for financial institutions in the UK and EU.

Financial institutions are actively attempting to embrace new trends and maintain competitiveness in this rapidly evolving environment amid quick advancements and changing consumer preferences. This is where technology companies like TreasurUp and Salt Edge come into play. TreasurUp’s Cash Visibility solution offers a view of currently available cash levels held at multiple banks. Through Salt Edge’s open banking connectivity with over 5,000 financial institutions, the partner enables banks to help their clients manage their financials more easily. Now, businesses can add bank accounts from other banks and receive graphical and numerical insights into current and historical account balances - powered by open banking.

The partnership supports banks in achieving PSD2 compliance within strict open banking regulations with minimal resources and fortifies end-user security through Salt Edge’s Mobile SCA solution. Moreover, with connectivity to thousands of financial institutions in 50 countries, banks can facilitate their customers' instant access to account data and add a secure payment method to enable businesses to make informed decisions and digitalise their processes.


Deutsche Börse gets final regulatory approval for SimCorp takeover

Following the feedback from the European Commission on 23 August 2023, Deutsche Börse has announced that it has received the last regulatory approval for its public takeover of the Danish SimCorp A/S.

As a result, Deutsche Börse affirms that the offer period for the cash offer expires on 19 September 2023 at 23:59 (CEST) but remains subject to a minimum acceptance level of 50% plus one share of all SimCorp shares. 

SimCorp shareholders who have not yet accepted the offer but wish to do so are encouraged to take action well before 19 September 2023. Certain institutions may have earlier deadlines for submission of the acceptance form. The offer is expected to be settled and thus completed on 29 September 2023 at the latest.

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