Banking Monitor - Edition 2. July Overview

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1 Banking Monitor - Edition 2 July 2017 Overview

2 Contents 01 Blockchain 02 Payments 03 Cognitive Technology The section talks about introduction of digital currencies such as bitcoin by financial institutions, and its underlying technology. Also reports on the use of block chain use cases for cross border payment and artificial intelligence in recent times. Reports several significant investments made by various financial institutions in different types of faster payment tools and real-time payments, including new security solutions and payment infrastructure to expand access to real-time payment solutions. The section reports on our observation of how firms have used artificial intelligence in creating products like computer vision, machine learning, natural language processing, speech recognition, and robotics which is aiding them towards automation. 04 Wealth Management 05 Fintech 06 Banking Services The section focuses on how a number of financial institutions have released digital tools that help investors connect to wealth advisers. The section reports our observation of how banks have created Fintech committees or hubs to help firms improve the financial and technological innovation management mechanism. The section reports our observation of financial institutions efforts to deliver mobile-oriented banking solutions to consumers. From integrating Android Pay to offering social impact insights to banking customers to allowing users access to ATMs around the world.

3 In this edition Blockchain Payments Cognitive Technology Wealth Management Fintech Citi Bank invested in a Blockchain startup firm Axoni Goldman Sachs patents cryptocurrency-based securities settlement system Commonwealth Bank and Queensland Treasury Corporation create world s first blockchain-based government bond More global banks leverage blockchain Four Australian banks sign up for Swift s global payments innovation Launch of first ever electronic agreement facility in South Africa Bank of America signs for Oracle ERP Citigroup is staffing up for the robotic revolution Nedbank overhauls commercial lending with Misys tech Westpac backs AI for digital banking HSBC becomes first banks send FIXML messages over Swift for clearing Westpac takes first steps in cloud core system plan Bank of America simplifies money management with third-party apps CIBC partners with NAB to launch feature that provides financial advice while travelling HSBC to debut robo-advice investment service Scotiabank opens new fintech-focused development centre Absa targets African millennials with Hello Soda partnership Banking Services Standard Bank next to zero-rate data charges on its banking app Standard Chartered shakes things up with mobile gamification Goldman Sachs is working on an iphone app for the masses

4 Blockchain Citi Bank invested in a Blockchain startup firm Axoni Axomi did not disclose the amount Citi has invested in it, but it now sizes its Series A round at more than 20 million USD. Although Citi is new to the company as an investor, the two companies have collaborated on a number of successful projects which include the optimization of post-trade data management for creditdefault and equity swaps and the management of reference data. Citi is also actively engaged in Axoni s work in the replatforming of the Depository Trust & Clearing Corp. s trade information warehouse. American Banker Goldman Sachs patents cryptocurrency-based securities settlement system The US Patent and Trademark Office (USPTO) confirmed Goldman Sachs patent for its SETLcoin cryptocurrency-based securities settlement system. Goldman is now the exclusive operator of such a mechanism, the firm had originally applied for the patent at the end of October The technology concerns one or more methods, systems, apparatuses and mediums storing processor-executable process steps to substantively instantly settle securities, based on cryptographic currency technology, without the risks associated with traditional settlement technologies. Coin Telegraph Commonwealth Bank and Queensland Treasury Corporation create world s first blockchain-based government bond This is the first trial of Commonwealth Bank of Australia s private, permissioned blockchain platform for the end-to-end issuance of bonds. Queensland Treasury Corporation (QTC) used the blockchain to generate a bond tender, view investor bids in real-time, finalise investment allocation and settle instantly with investors. QTC acted in both the issuer and investor role to test the end-to-end process for the issuance. The bond was created in digital form using smart contract technology, and has the ability to automatically pay coupons to the current holder when due. Banking Tech More global banks leverage blockchain SWIFT announced inclusion of 22 additional global banks to its blockchain proof of concept (PoC), designed to validate whether the technology can help banks reconcile their international nostro accounts in real time. These banks along with a group of six founding banks that launched the PoC earlier 2017, will test and validate the PoC s blockchain application. Working independently of the founding banks, the 22 institutions will act as a validation group to further test the application and evaluate how the technology scales and performs. ITnewsafrica Payments

5 Four Australian banks sign up for Swift s global payments innovation Four Australian banks, Australia and New Zealand Banking Group (ANZ), Commonwealth Bank, National Australia Bank (NAB) and Westpac who represent over 80% of cross-border payments flow for Australia are now live or planning to implement Swift s Global Payments Innovation (GPI) initiative. GPI promises to deliver greater speed, transparency and end to end tracking in international payments. Banking Tech Launch of first ever electronic agreement facility in South Africa Fintech start-up Direct Debit launched E-Mandate, a valid electronic agreement facility, a first of its kind in South Africa that allows customers to sign and authorise debit orders and recurring-payment transactions online from any web-enabled device. E-Mandate is being sponsored by Mercentile Bank and the company has also received approval from the Payments Association of South Africa (Pasa). The service is expected to resonate well with businesses offering insurance products such as funeral cover and life insurance, nonprofit organisations wanting to automate online and face-to-face donations and information technology companies. IOL Cognitive Technology Bank of America signs for Oracle ERP Bank of America is rolling out Oracle s cloud-based ERP system and financial applications for its international general ledger and broker-dealer systems. The development is part of BOA s goal to deliver 80% of its technology workloads through the cloud in the next few years. Banking Tech Citigroup is staffing up for the robotic revolution The Smart Automation Centre for which the company has advertised on various online job boards will be responsible for partnering with different functions across Citi to ensure rapid deployment of robotics and other related technologies. The firm is looking for at least two senior program managers to serve as a robotic "catalyst" who will partner with divisions across the bank to identify new technologies and lead their development from the use-case stage to full scale production. Business Insider Nedbank overhauls commercial lending with Misys tech Nedbank is implementing a new syndicated lending system, Fusionbanking Loan IQ, supplied by Misys. The new solution is set to modernise commercial loan servicing at Nedbank, front-to-back office, both in South Africa and internationally. The contract is estimated to have been signed in H Nedbank is also gearing up for a major core banking software overhaul for its domestic operations, to replace a host of legacy in-house and third party solutions, including CSC s Hogan. Bankingtech

6 Westpac backs AI for digital banking Westpac is planning to trial the use of artificial intelligence in its digital banking systems in order to automate responses to simple customers queries. The bank is currently working on a proof of concept of a system that would provide answers to consumer questions about the best deposit rates available. The bank is also testing biometric systems such as fingerprint scanning that allow customers to ring a call centre from their smartphone without having to enter a password. Banking Tech HSBC becomes first banks send FIXML messages over Swift for clearing HSBC successfully went live with FIXML and ISO traffic on SWIFT for domestic clearing and settlement on SGX. SWIFT will enable the bank to improve straight-through-processing (STP) and efficiency as the bank will be moving from batch processing into messaging. Using SWIFT as a single channel for all cross-border and domestic communications will provide HSBC with a single view on all their messages and a cost-effective infrastructure. Finextra Westpac takes first steps in cloud core system plan Westpac has gone live with the first stages of moving its core processes from its own premises to the cloud. It has already moved two core banking processes to the cloud since the end of March, and intends to have moved around 20 more within the next eight months. It is estimated that over the next 10 years Westpac would move 70% of its business applications to cloud environments. Banking Tech Wealth Management Bank of America simplifies money management with third-party apps The bank is testing the capability with two financial data aggregators to enable customers to securely connect data from their bank accounts to third-party money management apps. Following improvements to the bank s security centre and its mobile and online banking features, customers will be able to monitor which companies have permission to view their information. The service is a key part of the bank s API strategy to enable it to serve its customers in an expanding financial ecosystem. Banking Tech CIBC partners with NAB to launch feature that provides financial advice while travelling Co-developed with Visa and National Australia Bank (NAB), the feature takes advantage of a smartphone s GPS to display, in real-time, the local exchange rate as well as any applicable fees users can expect to pay when completing a transaction with their Visa while travelling. In addition, the feature provides advice should users find themselves in a situation where a merchant accepts more than one form of foreign currency. Beta Kit HSBC to debut robo-advice investment service HSBC is entering the robo-advice market with the launch of a new online service for wealth management advice. It is expected to be available by the end of the year. HSBC customers with a small amount to invest will be eligible to use its online investment advice, by logging on via a desktop, laptop or smartphone.

7 The service will use data and algorithms and make personal recommendations based on an individual s financial circumstances and goals. Banking Tech Fintech Scotiabank opens new fintech-focused development centre The development center is designed to be an innovation hub and incubator and will be one among five centres in a network of such fintech-focused innovation centres. Mexico, Peru, Chile and Colombia will be home to the other four digital factories. The centre is expected to employ 350 digital, design, engineering, and other specialists. The Toronto centre features a customer usability lab and scrum-ready workspaces, and is protected with contactless biometric security solutions. Scotiabank has roped in several prominent academic and industry partners such as the Rotman School of Management, Ivey Business School, and Kabbage, the new-age SME loan provider. Banking Tech Absa targets African millennials with Hello Soda partnership Absa Bank, a subsidiary of Barclays Africa, has partnered with multilingual text analytics and big data firm, Hello Soda, to tap into the millennial market by analyzing unstructured social data. Hello Soda is expected to provide Absa with innovative ways to verify customer identity prior to offering credit. This includes analyzing millennial customers, who may not be able to provide utility bills or paper bank statements when applying for a loan. The two partnering companies are also undergoing a proof of concept to boost financial inclusion with consumers in Africa. Bankingtech Banking Services Online Banking and ATM access Standard Bank next to zero-rate data charges on its banking app Standard Bank will remove data charges on its smartphone banking app starting from July. The bank has reached an agreement with all major network operators in South Africa to zero-rate data used to access the Standard Bank app. Some of the key features of the bank s app allows customers to access and manage accounts, make payments, check balances, and purchase products. Businesstech Other innovative services

8 Standard Chartered shakes things up with mobile gamification Standard Chartered Bank has introduced mobile gamification that instantly rewards clients when they shop. As the first retail bank in Malaysia to introduce mobile gamification, the new channel allows the bank to engage with its clients digitally and recognise their loyalty. The sun daily Goldman Sachs is working on an iphone app for the masses The bank is recruiting mobile developers to work in its Consumer Finance Technology division and build a platform that is would host services to cater to retail banking clients. The app is expected to host the company s personal loan platform Marcus, high-yield savings accounts, and a forthcoming robo-advisor platform. Although the company has an existing mobile apps for its high-net worth wealth management customers, as well as for employee recruitment and monitoring markets, but it hasn't previously released an app for retail banking consumers. Business Insider

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