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Consorzio CBI and Nexi launch PSD2 compliance platform CBI GLOBE

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Consorzio CBI and Nexi launch PSD2 compliance platform CBI GLOBE

Developed to facilitate digital interactions between banks and third parties, and improve consumer protection, the solution will allow the Italian banking sector to save up to €185 million

The Italian payment innovation think tank Consorzio CBI and payment technology firm Nexi announce the development of a new solution which will enable participants across Europe to simplify the fulfilment of their PSD2 obligations regarding the telematic connections for the exchange of information and payments with third parties, while also enhancing the level of protection for consumers.

The platform – called CBI GLOBE (Global Open Banking Ecosystem)  will considerably expand the level of integration and efficiency of Italy’s payments market.

In particular, it is estimated that the solution will allow Italy’s banking sector to save up to 185 million Euros, equal to roughly 40% of the total investment that it would otherwise have to bear to upgrade its systems.

“It is admirable that CBI Globe, the new service launched by Consorzio CBI, can also emerge at a pan-European level as a tangible collaboration project among banks to update to the new European directive on payments, the so-called PSD2”, commented Giovanni Sabatini, General Manager of the Italian Banking Association (ABI), promoter of Consorzio CBI. “CBI Globe will guarantee that each adhering bank can build its offer that will compete on the international payments market, without precluding any future developments”.

The efforts of Consorzio CBI and Nexi to develop the platform based on the latest technological innovations and international API standards will enable all payment service providers (PSPs) to cooperate in offering their clients advanced payment solutions, in line with current international market standards, also thanks to the centralisation of several services – including the identification of “third parties” (TPPs), the management of disputes and risk analyses, the monitoring of activities, the help desk, the technical upgrades of the solution and documentation.

“Thanks to CBI GLOBE”, commented Liliana Fratini Passi, General Manager of Consorzio CBI, “all adhering intermediaries – both banks and fintechs operating in the payments sector – will be able to provide their clients with easier and more efficient solutions to manage their current accounts, by offering both information and payment services, thus exploiting the business opportunities opened up by the PSD2, that until now has required considerable investments for technical upgrades and caused a significant organisational impact. Consorzio CBI has chosen Nexi as its partner for this initiative, owing to the company’s native propensity for innovation in the payments market”.

 “The development of this new strategic system solution, the first in Europe, is perfectly in line with our PayTech mission for the Italian banks: spearheading the country’s modernisation and digitalisation, by providing banks with straightforward and secure solutions capable of favouring the diffusion of digital payments”, commented Paolo Bertoluzzo, Managing Director of Nexi. “The agreement with CBI marks an important step in this direction. On the one hand, it will enable operators to join forces to seize the opportunities deriving from the introduction of the PSD2 in an efficient and secure way while, on the other hand, it will provide citizens and companies with high value-added services”.

“The creation of a strategic infrastructure of this extent – commented Stefano Favale, Head of the Global Transaction Banking Management Team of the Intesa Sanpaolo Group – is one of the most effective reactions coming from the Italian banking system to the challenge posed by the PSD2 and, more generally, by open banking, which compels banks to upgrade their technologies at an ever-faster rate to keep them up-to-date with respect to the new solutions available on the market. This solution, therefore, will put us in the best possible position to attain new important objectives: thanks to CBI GLOBE, we will implement new functions enabling us to sensibly improve the quality of the services offered and better serve our clients, also at a pan-European level”.

Consorzio CBI and NEXI are actively working with dedicated resources to be ready for the PSD2 deadline in March 2019.

Banking

Bank of England adapts bank stress test for pandemic era

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Bank of England adapts bank stress test for pandemic era 1

By Huw Jones

LONDON (Reuters) – The Bank of England’s health check on banks this year will seek to ensure that Britain’s big lenders, including HSBC, and Barclays, can continue supporting the economy during the pandemic and will also look at how banks can return to more normal dividend levels.

Last year, the British central bank cancelled its annual stress test of banks so they could focus on keeping credit flowing to an economy hit by its worst downturn in 300 years due to COVID-19 lockdowns.

The test usually focuses on banks’ ability to face big theoretical shocks, but the focus has changed given that the economy is facing real stresses from the pandemic, the BoE said.

“At this point stress tests are used to assess whether the buffers of capital that banks have built up are large enough to deal with how the prevailing stress could unfold,” the BoE said in a statement.

Banks that will be tested this year also include Lloyds, NatWest, Standard Chartered, and Nationwide Building Society. Virgin Money UK will take part for the first time.

The BoE said this year’s test of the leading banks will be conducted in a “staggered” way, with banks submitting their initial projections earlier in April on coping with a range of market shocks without going below bespoke minimum capital levels.

The stress test scenario includes a second dip in economic growth in 2021-2025 on top of the one seen last year, with UK residential property prices crashing by a third and unemployment surging to just under 12%.

The scenario also includes simultaneous economic slowdowns globally, with protectionist tendencies in world trade becoming entrenched, the BoE said.

The test will also check if a big change in consumer spending patterns seen during the pandemic, such as sharp falls in spending on travel, entertainment and hotels, poses a risk to banks if these trends persist long term.

The BoE will publish aggregate results in the summer, with the usual bank-by-bank outcomes made public in the fourth quarter.

After the economy went into its first lockdown in March last year, the BoE told banks to suspend dividend payments to preserve capital. In December, the central bank set out “guardrails” for relaxing its curbs on bank dividends.

“As noted in the December 2020 Financial Stability Report, the results of the 2021 test will also be used as an input into the Prudential Regulation Authority’s transition back to its standard approach to capital-setting and shareholder distributions through 2021.”

To help banks with the different timetable this year, the BoE said their “ring fenced” retail banking units would not form part of the test, but will be included in the 2022 test.

(Reporting by Huw Jones, editing by Louise Heavens and Jane Merriman)

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Banking

‘Act big’ now to save economy, worry about debt later, Yellen says in Treasury testimony

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'Act big' now to save economy, worry about debt later, Yellen says in Treasury testimony 2

By David Lawder and Andrea Shalal

WASHINGTON (Reuters) – Janet Yellen, U.S. President-elect Joe Biden’s nominee for Treasury Secretary, urged lawmakers on Tuesday to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden.

In more than three hours of confirmation hearing testimony, the former Federal Reserve chair laid out a vision of a more muscular Treasury that would act aggressively to reduce economic inequality, fight climate change and counter China’s unfair trade and subsidy practices.

Taxes on corporations and the wealthy will eventually need to rise to help finance Biden’s ambitious plans for investing in infrastructure, research and development, and for worker training to improve the U.S. economy’s competitiveness, she told members of the Senate Finance Committee.

But that would only come after reining in the coronavirus pandemic, which has killed over 400,000 in the United States, and the economic devastation it brought.

Yellen, who spoke by video link, said her task as Treasury chief will be to help Americans endure the final months of the pandemic as the population is vaccinated, and rebuild the economy to make it more competitive and create more prosperity and more jobs.

“Without further action we risk a longer, more painful recession now and longer-term scarring of the economy later,” she said.

Yellen said pandemic relief would take priority over tax increases, but corporations and the wealthy, which both benefited from 2017 Republican tax cuts “need to pay their fair share.”

She raised eyebrows of some senators and Wall Street when she said that Treasury would consider the possibility of taxing unrealized capital gains – through a “mark-to-market” mechanism – as well as other approaches to boost revenues.

DEBT BURDEN

She also that the value of the dollar should be determined by markets, a break from departing President Donald Trump’s desire for a weaker U.S. currency.

“The United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so,” she said.

Wall Street stocks rose on Tuesday in reaction to Yellen’s call for a hefty stimulus package, as well as to positive bank earnings updates. Oil prices also rose, while Treasury yields fell slightly on her comments that parts of the 2017 tax reform should be repealed.

Biden, who will be sworn into office on Wednesday, outlined a $1.9 trillion stimulus package proposal last week, saying bold investment was needed to jump-start the economy and accelerate the distribution of vaccines to bring the virus under control.

Asked what outlays would provide the biggest “bang for the buck,” Yellen said spending on public health and widespread vaccinations was the first step. Extended unemployment and nutrition aid, better known as food stamps, should be next, she said.

“Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” Yellen said.

She said even though the amount of debt relative to the economy has risen, the interest burden – the amount the Treasury pays to service its debt – has not, due to lower interest rates. She said she will watch that metric closely as the economy recovers.

NEW CLIMATE POST AT TREASURY

Yellen also called climate change an “existential threat” to the U.S. economy and said she would appoint a senior official at Treasury to oversee the issue and assess systemic risks it poses to the financial system.

She added investment in clean technologies and electric vehicles was needed to cut carbon emissions, keep the U.S. economy competitive and provide good jobs for American workers.

Yellen said China was the most important strategic competitor of the United States and underscored the determination of the Biden administration to crack down on what she called China’s “abusive, unfair and illegal practices.”

Asked whether China had committed “genocide” in its treatment of Muslim Uighurs as the Trump administration declared in a last-minute proclamation, Yellen said China is “guilty of horrendous human rights abuses, yes.”

Biden’s transition team urged the Senate to move swiftly to confirm Yellen. Democratic Senator Ron Wyden, who will lead the Finance Committee after Biden’s inauguration on Wednesday, said he would push for a confirmation vote on Thursday. Republican Senator Mike Crapo said he would work towards an “expeditious” confirmation for Yellen.

She also received the endorsement of all former Treasury secretaries, from George Schultz to Jack Lew, who urged senators in a letter to swiftly confirm Yellen’s nomination to avoid “setting back recovery efforts.” A spokeswoman for Treasury Secretary Steven Mnuchin, who steps down on Wednesday, did not respond to a request for comment.

(Reporting by David Lawder, Andrea Shalal, Ann Saphir and David Shepardson; Additional reporting by Trevor Hunnicutt; Editing by Heather Timmons, Andrea Ricci and Kim Coghill)

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Banking

Open Banking: the perfect pandemic tool – Equifax comments

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How the application network unlocks open banking’s future

With COVID-19 related financial fallout set to dominate the credit landscape in 2021, Dan Weaver, Open Banking Expert at Equifax UK, believes Open Banking solutions can provide lenders clarity in a sea of uncertainty: 

“With lockdown once again in place across the UK, it’s clear 2021 will be a year of extreme financial flux. While the vaccine roll-out programme will provide an economic boost and eventual easing of restrictions, forbearance measures, such as mortgage holidays and the government furlough scheme, will be wound down. This will lead to income shocks for many, and the potential for a nationwide surge in personal debt.

“With the third anniversary of its implementation today (13 January), Open Banking is entering a new mature phase of its development. The initiative’s credentials are now widely established, offering creditors the perfect pandemic tool to assess the most accurate picture of an individual’s finances.

“Consider someone who has just returned to the workforce after being made redundant or placed on furlough. Traditional credit bureau or legacy data alone would not always provide potential lenders with the most up-to-date information on their current financial circumstances and ability to repay credit at the point of application. Open Banking platforms, through customer consent, pull live data directly from the user’s bank account, allowing creditors to make an informed, responsible and fair decision about their current affordability on the most recent data available – a game-changing factor amid such widespread financial upheaval and rapid change in people’s circumstances.

“Open Banking is a tool for our times and it’s vital more credit providers, not just big banks and finance but utilities, insurance, auto and telcos companies, accelerate its adoption. Throughout our society and economy in the past year, we’ve witnessed feats of great innovation, executed at rapid speed. In 2021, we need to apply this transformational energy to the Open Banking landscape, slashing the time it takes for creditors to test protocol and fully set up their solutions.

“Three years after its arrival, we’re seeing Open Banking platforms improve digital, real-time income verification rates by more than 25% * – which is no mean feat. If an industry-wide, mass acceleration strategy was successfully achieved in 2021, it would prove extremely valuable and timely, and lead to better customer and creditor outcomes throughout the credit space.”

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