Latest global banking news

May 25, 2022 11:04 AM

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In global news this week, U.K. regulators safeguard cash, Mastercard's CEO weighs in on SWIFT, Deutsche Bank debuts real-time B2B payments, and more.

Here's what's happening around the world.

U.K. regulators get more power to protect cash

The U.K.'s government has granted the Financial Conduct Authority additional power to ensure access to withdrawal and deposit locations in an attempt to ensure cash-dependent residents can access the financial system. The new rules follow a call for more cash protection at the start of Parliament earlier this spring. The FCA will set standards, such as a minimum reasonable distance consumers can be expected to travel to reach an ATM or other cash-dispensing location. Access to cash is a major political issue in the U.K., with the banking industry and regulators at odds over how to maintain paper bills in an economy that's increasingly reliant on digital payments. The FCA in 2020 set guidance for banks and credit unions that tied access to cash to branch networks. —John Adams

Deutsche Bank debuts real-time B2B payments

As real-time transaction processing takes hold as a way to improve supply chain finance, Deutsche Bank is collaborating with fintech FinLync to use application programming interfaces and SAP treasury tools to connect corporate treasury departments for real-time payments. The companies also hope to reduce the time and IT work required to connect payments with enterprise resource planning systems in real time to ensure cash position data is up to date. The product also includes real-time payment tracking, beneficiary account prevalidation and accelerated automated reconciliation. —John Adams

Krisztian Bocsi/Bloomberg

Mastercard CEO predicts SWIFT's future…

SWIFT won't exist in five years, according to Mastercard CEO Michael Miebach, who attributed his prediction to improvements in payment data technology (Mastercard later clarified that Miebach was speaking of SWIFT evolving into a new form). Answering a question during a panel connected to the World Economic Forum in Davos, Miebach said a payment with "all the data attached that you need as a company" would save costs and boost productivity, which is the "real goal," reported Coindesk. Miebach was speaking on a panel hosted by the Global Blockchain Business Council that was designed to discuss the future of cross-border payments and central bank digital currencies. SWIFT, the international payment messaging system, has added technology in recent years to accommodate the rise in international digital payments. —John Adams

Swift is running pilots to ensure interoperability for cross-border real-time payments.

…while SWIFT works on a CBDC gateway

Meanwhile, SWIFT began work with Capgemini to find ways to link central bank digital currency gateways to support cross-border transactions. While dozens of nations are working on CBDC projects, there are concerns that the different digital currencies will not be interoperable between nations. In 2021, SWIFT found its network would execute a cross-border transaction between a distributed ledger [most CBDCs run on blockchains] and a real-time settlement system, which it said would successfully support cross-border CBDC payments. The experiments with Capgemini are designed to find ways for SWIFT to interlink different CBDC platforms with legacy payment rails in different nations. —John Adams

Commonwealth Bank of Australia office in Sydney

Brent Lewin/Bloomberg

CBA postpones crypto project due to market slide

Commonwealth Bank of Australia has delayed a plan to offer cryptocurrency through its banking app due to the severe selloff in crypto assets in recent weeks. The bank partnered with crypto exchange Gemini and blockchain technology firm Chianalysis to support access to 10 cryptocurrencies, including Bitcoin and Ethereum. The bank, which did not give a timeline for the suspension, referred to cryptocurrency as a "very volatile sector," though one that retains an enormous amount of interest. CBA, which announced the cryptocurrency initiative in November 2021, has also face regulatory hurdles in getting the product off the ground. —John Adams

BBVA adds digital receipts in Turkey

Garanti BBVA, the Spanish bank's Turkish division, has added a feature to its mobile app that allows users to track and access debit and credit card transaction details without accessing printed slips. Digital receipts are available for payments under about $35, and the bank is positioning the deployment as an environmental move that's part of the institution's border sustainability and climate action strategy. "The usage of mobile and contactless payments keeps growing, the digitalization of paper slips is a valuable innovation for the sector in digitalization as well," said Murat Cagri Suzer, Garanti BBVA Payment Systems general manager, in a press release. "With the increase in merchant integrations the usage of digital slip will increase as well." —John Adams

Sweden advances on real-time payments

Sveriges Riksbank, Sweden's central bank, has finished the first phase of a migration to TARGET Instant Payment Settlement (TIPS), the Eurozone's instant settlement rail, by establishing a connection between TIPS and the country's domestic real-time rail, RIX. The connection allows funding and removing funds from accounts for future Swedish parties that adopt TIPS. The next phase will include a test of TIPS within the Swedish banking and payments markets ahead of a final migration during the first quarter of 2023. The addition of Sweden adds the krona as the first non-euro currency to join the TIPS rail, which is designed to accommodate different currencies. —John Adams

China's Tencent pushes deeper into U.K. fintech

Chinese e-commerce firm has led an $18 million funding round in Previse, a London-based firm that uses machine learning to determine terms for cash advances for small businesses and other clients. Tencent in April took a stake in Previse and has also invested $100 million in London challenger bank Monzo, about $150 million in London corporate card firm Jeeves and backed Bristol-based technology startup Ultraleap, according to CityAM. Previse, which also offers digital invoicing and payment processing, has attracted other backers including Mastercard, fintech investor Augmentum Fintech and Hambro Perks. —John Adams

JPMorgan's U.K. digital bank nears £8 billion in deposits

JPMorgan Chase’s new U.K. digital lender has attracted more than 500,000 customers and gathered about $10 billion in deposits since launching in September. Chase UK, its British digital-only bank, is “off to a strong start,” JPMorgan said in an investor presentation Monday. But such growth hasn’t come cheap with losses at the US lender’s overseas digital banks likely to exceed $1 billion over the next five years. The New York-based financial group said it would lose about $450 million in 2022 on such projects and expected further losses in the coming years with the digital lenders forecast to breakeven five to six years from now. —Harry Wilson, Bloomberg News