Chirag Shah, CEO, Nucleus Commercial Finance comments:

“SMEs across the country were hoping to reopen on 21st June and had naturally planned for this financially. This delay combined with winding down of government support is undoubtedly a big blow for those businesses who have started making repayments on existing facilities. Our own research found that only a quarter of SMEs were anticipating a delay to reopening, meaning the majority of businesses were caught off guard.

“As we enter the next stage of the lockdown exit strategy, SMEs will need more support than ever and this is where the government has a vital role to play. What businesses need is a clear road map and better communication around delays to restrictions, which will allow them to plan for the future and ultimately their success.”

Business Email Compromise (BEC) and cyber attacks are on the increase worldwide. Conveyancing firms, their clients, and other organisations effecting many large non-recurring type transactions are particularly vulnerable to BEC fraud. Ryan Mer, Managing Director, eftsure Africa, a Know Your Payee™ (KYP) platform provider says gaps in organisations’ payment systems not only pose massive financial and reputational risks, but can have serious legal implications as well.

According to a global survey conducted by Mimecast Cyber Security Services in 2020, six out of ten companies globally were infected with ransomware and there was a 64% increase in email threats. An Accenture report from May 2020 confirms South Africa had the third most cybercrime victims globally, resulting in losses topping R2.2 billion.

All too aware of large deposits made to and from conveyancing firms, criminals target and intercept email accounts and scam victims into making payments into the incorrect account. While legislation like the Financial Intelligence Centre Act (FICA) and Protection of Personal Information Act legally requires attorneys and estate agents to responsibly gather and scrutinise an individual’s information, Business Email Compromise remains a threat to any organisation and its clients. In South Africa there is case precedence for firms being held liable for payments that did not reach the intended recipient; a situation that demands email correspondence containing bank details and personal information be handled with caution.

In circumstances where organisations are unable to meet their financial obligations as a result of a BEC attack, third parties may seek compensation for disrupted business operations and other losses, particularly where a firm is found to be in breach of its duty to take adequate measures to mitigate the risks of BEC attacks. It’s critical that attorneys and clients should take additional care in verifying account details before making payments and should be made immediately aware of sudden changes in email addresses and bank details. 

Most threats can be avoided with the correct financial controls as well as server, IT and email monitoring processes together with the following measures:

• Be Informed, keep up to date with the latest scams and ensure your employees, colleagues and trading partners are aware of how they work in practice.
• Review your company practices in relation to password and security controls.  Never share passwords across multiple sites or permit weak password. 
• Acknowledge the fact that employee email accounts are gateways to sensitive information and attacks and enforce policies restricting what information can be kept in email inboxes prior to secure archiving. eftsure’s secure, digitised payee onboarding platform can assist with the collection and management of payee information.
• Re-evaluate your financial procedures for approving payment release. A platform like eftsure can help limit the risks of BEC attacks by cross-referencing the payments an organisation is about to release with a database of verified bank account details. eftsure’s fully integrated platform will clearly alert to any suspect payments, at point of payment, allowing an organisation to deal with it before making payment i.e.: before the flow of funds have occurred.

A new study by Juniper Research has found that the global value of virtual card transactions will reach $6.8 trillion in 2026, from $1.9 trillion in 2021. Virtual cards, secure digital cards with randomly generated details, will show strong growth as they are increasingly used for B2B payments. The research identified that businesses will value the simplicity of virtual cards, compared to the expensive and slow methods still being used, such as cheque payments, which remain popular in the US.

The new research, Virtual Cards: B2B and B2C Applications, Competitive Analysis & Market Forecasts 2021-2026 Market Research, predicts that outside of the dynamic B2B market, the added security from virtual cards will also appeal to the consumer market. To capitalise on virtual card opportunities, vendors must identify which segment they are targeting and emphasise the most important value-added features, such as ERP integrations or consumer brand partnerships.

For more insights, download the free whitepaper: Virtual Cards ~ The Future B2B Solution Whitepaper

B2B Payments Dominating Transaction Value
The report found that B2B payments will continue to account for the majority of virtual cards transaction value; amounting to 71% of the total value in 2026. While B2B sales occur less frequently, yielding under 1% of transaction volume in 2026, average transaction values are much higher in the B2B segment. This means that vendors must ensure that security features and automation are emphasised to facilitate large payments as efficiently as possible.

Indian Subcontinent Seeing Strongest Growth

The research forecasts that the Indian Subcontinent will be the fastest-growing region over the next five years, with transaction volumes increasing more than tenfold. India, in particular, will present enormous potential for vendors.

This growth will be underpinned by the presence of major vendors in the region, such as SBI and Oxigen Wallet. The high adoption of virtual cards in the buoyant mobile wallets sector will drive eCommerce usage. Additionally, the report identified the requirement by the RBI from October 2020 for users to have control over card use to prevent fraud as a major growth driver.

Whitepaper Download: https://www.juniperresearch.com/whitepapers/virtual-cards-future-b2b-solution

Virtual Cards Market Research: https://www.juniperresearch.com/researchstore/fintech-payments/virtual-cards-market-research-report

David Jones, Chief Market Strategist at European investment trading platform,Capital com, said: “It has been a calmer week in markets following the interest rate-inspired fireworks we had at the end of last week. In fact, it has been business as usual for many major assets."

"Crude oil pushed higher again, trading briefly above $74 to set its best levels since October 2018. Both the US and NASDAQ stock market indices hit fresh all-time highs, shrugging off the volatility seen last Thursday and Friday where the threat of rates rising sooner rather than later sent investors heading for the exit."

"Perhaps oil is the maket to watch in the weeks ahead and will give us a hint as to whether investors' nerves are starting to crack. Markets are speculating that crude will hit $100 per barrel, which, let's not forget, famously traded negative in April 2020. When even the pessimists are starting to join the bulls, that's precisely the time to start wondering if perhaps the incredible recovery we've seen across many asset classes has gone far enough."

"It is at times like this of course that markets could be thought to be the most vulnerable - and investors become over-complacent, as riskier assets bounce back from various mini-panics. But traders so far seem happy to step in and buy the dip."

"The spectre of inflation is still out there, with the Bank of England (BoE) adding its voice to the chorus of central bankers aware of the risk of rising prices, but the BoE does not look overly concerned. UK inflation is at a 2 year high but, like its American counterpart, the BoE expects any move higher to be just temporary. It remains to be seen whether this central bank sang-froid comes back to bite these venerable institutions later in the year."

"Meanwhile, the crypto faithful felt more pain this week as Bitcoin dipped briefly below $30,000 - but even that was seen as something of an early summer sale and, so far at least, it has managed to bounce-back by more than 10% in a matter of days.”

Pollinate, the global fintech that partners with banks to help business customers succeed and grow, is launching “Ingenious,” a filmmaker competition spotlighting small businesses, in collaboration with Mastercard. “Ingenious” will celebrate the ingenuity of small business owners around the globe through stories of how small businesses have used technology to drive forward during the pandemic. Ahead of ‘Micro-, Small and Medium-sized Enterprises (MSME) Day’, an annual day of observance on 27 June initiated by the United Nations (UN), “Ingenious” will launch today in 31 countries, including Australia, Canada, France, Italy, the United Kingdom, the United States and others.  

The past 18 months have been especially challenging for small businesses – the waves of COVID disruption, economic slowdown and community crises have disproportionately impacted them. But many have responded with great agility, transforming from a local shop to a local delivery service or making masks, not mugs, or sanitiser, not sangria. They’ve connected with the needs of their community in new ways – as local businesses are built to do. This competition, sponsored by Pollinate, will showcase how reinvention, reimagination, reconnection and entrepreneurship have enabled small businesses to succeed.

To support the small businesses featured in these films, Mastercard will provide free access to tools, education and insights to each of the businesses to empower them to thrive even beyond the pandemic. Filmmakers that enter also have the chance to win one of six global prizes for the best films, ranging from $1,000 to $10,000 USD, and four $3,000 USD prizes for the films that best showcase the themes of Get Paid, Get Capital, Get Digital and Loyal to Local.*

“We’re extremely passionate about SMEs and honoured to work with global banks and partners that feel the same way,” says Alastair Lukies CBE, CEO and Founder, Pollinate. “Small businesses are the beating heart of the economy, and it’s been incredible to watch them quickly switch course and continue to thrive despite being some of the worst-hit businesses by the pandemic. The entrepreneurial spirit is so central to SMEs around the world and we continue to see it transformed and reimagined every day. Our partnership with Mastercard has created a powerful alliance that is committed to empowering every small business, and we’re excited to be working on this campaign together to celebrate both that partnership, and the amazing small businesses that fuel their local communities.”

“Small business owners have been role models throughout the pandemic, showing us what it looks like to get knocked down, to struggle, to pivot and to persevere – and for some, they are emerging  stronger than before,” says Andrea Gilman, Global SME Segment Lead, Mastercard. “We are thrilled to continue demonstrating our commitment to this vital community and partner with Pollinate to empower small businesses everywhere to learn from and be inspired by each other’s stories of resilience.”

Though many small businesses have been forced to shutter their doors or adapt business models to sell online during the pandemic, entrepreneurs and business owners still see opportunities every day to reimagine, refresh and reinvent. This campaign celebrates those who take risks and chase their dreams, and it is only the beginning of this shared journey to shine a light on the ingenuity of entrepreneurs around the world.

Pollinate will be hosting the “Ingenious” competition from 25 June – 6 August, 2021 during which filmmakers have an opportunity to capture inspiring small business stories in their communities.

To learn more about the competition and where filmmakers can submit their short films, visit https://news.mstr.cd/2RIOU7z.

Joshua Scigala, CEO of the TheStandard.io, a new DeFi lending protocol and Founder of the bitcoin/gold exchange, Vaultoro said,

 “Right now, the vast majority of money laundering is done in fiat currency, because it's anonymous. Cryptocurrency like bitcoin will be used more for financial crime in the future, but detection of those crimes will come back to good old fashioned police work rather than simply following the money. Why? Because blockchains are becoming more and more private to a point where following it will be impossible. This is actually a positive thing, because it's dangerous that strangers can tell how much money you have; having no financial privacy leads to kidnappings and business competitors knowing someone's sources and markups. This is why financial transactions need to stay private. In the future, police forces will have to devote more resources to chasing these kind of crimes as tracing funds will become harder.”

Kirill Suslov, CEO of trading app, TabTrader, said,

“Bitcoin has one of the most sophisticated forensics services among all other crypto, making it ideal for tracking an illicit usage. National risk assessment of money laundering and terrorist financing performed by the Home Office showed that cash is a high risk for money laundering and terrorist financing, while cryptoassets are low-to-medium. So cash seizures should really make the headlines, not cryptocurrencies.”

Nivaura, a London and Italy based Fintech, has delivered the technology underpinning Singapore-based DBS Bank’s groundbreaking bond issuance platform. This is the world's first end-to-end workflow platform that spans across a bank’s entire supply chain from all internal functions and systems to external clients.

The new DBS platform enables its origination, syndicate, legal, operations and sales desks to easily communicate and share complex transactional information to manage the end-to-end flow of transaction data and documentation.  It also powers key external facing interfaces and digital tools that enable issuers, investors and service providers (such as listing and paying agents) to have machine-to-human or machine-to-machine interactions. One of the exciting new services, which is a direct consequence of the end-to-end automation enabled by this platform, is the “1-click drawdown” feature that enables fast and easy direct issuance.

Nivaura configured and deployed its core workflow digitisation and automation technology, Aurora, to meet DBS’s specific needs. Nivaura’s technology also underpins London Stock Exchange Group’s Flow, a multi-dealer EMTN SaaS marketplace that went live earlier this year and was leveraged in the LSEG MTN multi-tranche, multi-currency, syndicated $7bn eq. issuance.

This DBS platform has been deployed on-premises, which enables DBS as a regulated entity to fully manage complex compliance requirements, as well as to ensure the platform can be used for high volume transaction flow and seamless interaction with internal services. 

The DBS deployment also enables complete transaction life-cycle management for direct issuance to the bank’s own clients; and the data can be fed into tokenization services to enable registration and settlement on a blockchain, as is the case for DBS's digital token exchange.

The DBS platform utilises General-purpose Legal Mark-up Language (GLML), a human-readable mark-up language pioneered by Nivaura in conjunction with a number of global law firms and infrastructure service providers. GLML is designed to be used by lawyers or other professionals with zero software programming experience to set up documents for digitisation and automation.

Clifford Lee, Global Head of Fixed Income, DBS, said: “The time is ripe for traditional ways of bond origination to make way for a more digital approach, to do what has been aspired for so long – by taking the first step towards the creation of an independent platform that allows bond issuers efficient and effective direct access to the market place and bond investors. The FIX Marketplace marks the first step in this ambitious journey to democratise the capital markets for better transparency and broader financial inclusion. This can only be done effectively in consultation and collaboration with market players and participants, including arrangers, issuers, investors, lawyers, auditors and clearing houses. Through this collective effort, we can enhance the capabilities and features of the FIX Marketplace to best transform the market for the better.”

The DBS platform has already been endorsed by issuers such as Keppel Corp, which cited the ability to respond swiftly to market opportunities with self-executable offerings as a real differentiator. It has also been welcomed by DBS’s investor clients, with Phillip Securities suggesting that easier and faster access to commercial paper allows investors to realise higher returns over short-term funding.

Dr. Avtar Singh Sehra, Founder and Chief Executive Officer of Nivaura commented: “Nivaura is honoured to have worked closely with DBS in bringing this groundbreaking digital bond issuance platform to life. We believe this world’s first will accelerate interest in the digitalisation and automation paradigm for capital markets.  Issuers want to cut complexity, time and cost out of primary market transactions - and dealers realise they need to lead on this. In addition, dealers don’t want to be locked into centralised marketplace platforms for all their transaction needs. Dealers are keen to directly interact with their clients and provide the range of capital markets services they can offer through a single digital “shop front” which they control.”

Over the last five years Nivaura has taken a leading role in bringing efficiency to the primary markets, and through its active dialogue with regulators and capital markets participants, it has driven key innovations in digitalisation and automation. Nivaura is continuing to work with the industry to refine its fully flexible technology, which is an easily adaptable whitelabel solution for capital markets participants to configure seamless digital journeys for their clients. This also enables a bank’s clients to try innovations in a controlled environment in parallel with modes of operating that they are accustomed to - for example issuing traditional and tokenised securities through a single and seamless digital platform. 

The inaugural meeting of The Senior Leaders ESG Forum brought together a group of leading wealth management firms to discuss the opportunities and challenges associated with ESG investing. 

The forum was chaired by Compeer, the benchmarking and research firm, and hosted in conjunction with Objectway, a leading digital wealth & asset management software provider. 

Participating firms were a broad and diverse representation of the wealth management industry including Quintet, Punter Southall Wealth, Quilter Cheviot, Goodbody and Killik. Presentations made by Compeer, Objectway and Macfarlanes, a leading law firm, provided insights and helped guide a wide-reaching discussion.

Key points arising from the discussion included:

• Aligning ESG philosophy, investment strategy and data is crucial if firms are to avoid greenwashing.
• Regulation is expected to drive and ultimately define the delivery of ESG to clients.
• Client reporting is a complex challenge due to lack of standardisation of ESG-related data.

The forum discussion centred on the state of ESG readiness in wealth management as well as the following:

• What are the key business objectives to consider when forming an ESG strategy?
• How have client expectations around ESG evolved during the pandemic?
• What could the ESG regulatory journey look like?

The question of how to avoid greenwashing will become more prevalent as firms develop their ESG proposition.  Beyond best intentions, they should look to safeguard themselves through portfolio transparency and utilise suitability reviews to gain a clear and meaningful understanding of client ESG preferences.

Considerations around client preferences and data quality are imperative as firms adapt their client reporting function to uphold the requirements of upcoming ESG regulations.  They acknowledge technology has an important role to play in dealing with the complexities in a consistent and cost effective manner.

Based on the discussions there is a clear need for definitions and rules on ESG from the regulator. 

All eyes are on the FCA to see whether they will follow in the footsteps of the EU or carve a different regulatory path. Recent changes to MiFID II and SFDR have not made it clear what is expected from wealth managers and advisers in the UK. The consensus among wealth managers is that while client demand is bringing attention to ESG, ultimately, regulation is what will drive and shape their ESG offering. The input of the FCA and dialogue with firms would be greatly valued and will be consequently sought at future meetings of the forum. 

The useful insights emerged during this inaugural meeting have been collected in a short research paper available for download HERE.

The Senior Leaders ESG Forum will continue to serve as a platform for wealth management firms to exchange ideas, shape thought leadership and help define industry best practise. 

Compeer and Objectway will host quarterly meetings with a research led focus covering ESG and other emerging relevant topics in further detail. 

For further information and comment, please contact:

• Compeer: Bhaven Patel (bhaven.patel@compeer.co.uk)
• Objectway: Tariq Khan (tariq.khan@objectway.com)
• Macfarlanes: Shailen Patel (shailen.patel@macfarlanes.com)

ACI’s incremental learning technology—part of its award-winning merchant fraud management solution—recognized as “Artificial Intelligence Project of the Year”

ACI Worldwide, a leading global provider of real-time electronic payment and banking solutions, has been recognized by Retail Systems Awards 2021 for its innovative approach to using machine learning to detect and prevent fraud. In the category “Artificial Intelligence Project of the Year,” ACI was honored for how it enhances machine learning models with incremental learning.

Incremental learning technology represents a considerable advancement over the traditional approach to using machine learning in merchant fraud prevention, where models need to be “re-trained” as fraud patterns change. Models using incremental learning make small adjustments on an ongoing basis to ensure they remain relevant; especially important as fraudsters become more sophisticated, but also as genuine consumer behavior changes over time. The use of incremental learning also allows the model to change itself in production when new behaviors are observed, meaning that fraud prevention strategies can be self-evolving.

Since launching in early 2020, ACI has carried out extensive testing and analysis of the performance of incremental learning in a live production setting, and has seen higher performance in fraud detection and improved ability to detect new threats. The technology underpinning incremental learning is currently in the final stages of patent approval.

“Fraud is evolving more rapidly than ever, so the tools used to detect and prevent it need to be highly adaptable and responsive to emerging threats,” said Debbie Guerra, executive vice president – merchant solutions, ACI Worldwide. “It’s an honor for our talented fraud and data science teams to receive this recognition from Retail Systems, and proof that our approach – combining modern and market-oriented machine learning with a multi-tiered fraud strategy – is helping payment providers and merchants to gain the upper hand in the fight against fraud.”

This latest recognition reinforces ACI Worldwide’s global leadership position in real-time fraud management for merchants. Its offering is available as a standalone solution, or integrated alongside ACI Secure eCommerce and ACI Omni-Commerce.