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By Peter Hazou, Senior Market Manager – EMEA, Treasury Services, BNY Mellon

Innovation is key to growth. And it has become all the more important during this period of evolution in the payments industry in which banks are expected to provide the required tools to meet the developing needs of clients(such as the growing demand for real-time visibility and the facilitation of cross-border payments).

Yet the introduction of a multitude of new regulations in the wake of the financial crisis has resulted in extensive compliance requirements that are stretching bank resources and demanding significant industry focus. And this increased absorption of costs and talent has left many questioning whether compliance demands are compromising banks’ ability to innovate.

While it’s true that regulatory requirements have “stepped up” as policy makers make it their priority to restore confidence in the security of the banking industry, it is important to remember that banks are no strangers to regulation and have always dedicated a great deal of focus and energy adhering to applicable regulations.

Of course, an initial period of adjustment during which business models must adapt to the new requirements and implement the right building blocks is necessary. Yet this should only affect innovation in the short-term. After all, achieving the right balance between compliance and innovation is something in which banks should be well-versed.

Technology: the real influencer of innovation

Peter Hazou

Peter Hazou

Parallel to the belief that regulation could be restricting banks’ ability to innovate is the contradicting notion that regulation could in fact be driving innovation. Ultimately, however, regulation is primarily concerned with prudence and is not a real stimulator of innovation, despite there being some policy objectives that have encouraged particular behaviours – for example, Basel III’s intra day liquidity requirements (introduced as a method of reducing systemic risk)are helping to fuel demand for real time data visibility.

Innovation, instead, is borne of ingenuity and the desire to address client needs. And there is another trend at play that is having a far greater impact on innovation than regulation: technology.

Indeed, the march of disruptive technology and the subsequent influx of new, nimble alternative payments providers into the banking sector – from online payments providers and virtual marketplaces, to large technology and social media companies – is fundamentally reshaping our industry, making innovation a necessity. These new payments market entrants are vying to offer solutions centred upon client needs and expectations; with convenience, speed, visibility and a greater choice of access channels the order of the day.

Not only is this altering the payments space as we know it, the impact is set to be long-lasting, with the belief that in the not too distant future the payments landscape will have undergone a complete transformation.

Innovation strategies

Indeed, the speed and extent to which non-banks have asserted their presence and driven changes in the payments space has been astonishing, and they have gained a reputation for being the quickest to explore and implement new channels, such as mobile and electronic payments.

This level of innovation is largely due to two key factors. Firstly (unlike banks), non-banks don’t have existing legacy banking platforms in place. Secondly, they currently aren’t subject to the same standards of regulations as banks. Subsequently, non-banks can afford to “try and try again” until they succeed, whereas the ability for banks to “experiment” in pursuit of innovation with such a trial and error approach is belied by their long-established fiduciary position in the management of other people’s money. There is therefore a disparity between the way in which banks and non-banks innovate.

Yet if banks are to thrive in the new payments space, they must meet the challenge of competing with these new technology-hungry, entrepreneurial market entrants.

Now, as much as ever, banks are focused on serving clients with innovation– an area in which they have a very good track-record. A consequence of the rapid ascent of new technology capabilities, however, has been the broadening of options available to clients – with respect to the choice of products and solutions, as well as the number of service providers, available, which has led to a degree of fragmentation.

As a result of this altered landscape, banks in turn have altered the way in which they approach innovation. Certainly, it is impractical and unrealistic to attempt to be all things to all clients, and therefore, banks must prioritise. This requires banks to determine the most effective ways in which they can serve their clients within their value chain, identify strategically-appropriate opportunities, and invest in that area accordingly. So contrary to some opinions, banks are innovating, but they are being more targeted in their approach.

Enhancing clients’ banking experience through innovation remains a priority – indeed, regulation and innovation are not mutually exclusive. And in this evolving landscape, fuelled by technology and non-bank newcomers, banks are very clear about where innovation investment is needed to best serve clients and where the most valuable opportunities lie. The dedicated focus of banks should be to serve its clients, and the disruptive factors of regulation and technology-driven non-banks should not alter this philosophy.

The views expressed herein are those of the author only and may not reflect the views of BNY Mellon. This does not constitute treasury services advice, or any other business or legal advice, and it should not be relied upon as such.

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Duo glide around world’s largest fountain in Dubai



Duo glide around world's largest fountain in Dubai 1

Paragliders Llorens and Goberna take magical flight above the Palm Fountain.

Horacio Llorens and Rafael Goberna defied gravity to perform The Breaking Pointe flight around the world’s biggest fountain at The Pointe, Palm Jumeirah in Dubai. Here is all you need to know:

– Spaniard Llorens is a five-time world champion and Infinity Tumbling Guinness World Record holder, who has performed a series of spectacular projects during the last five years including paragliding with a flock of starlings and with the beautiful Aurora Borealis as a backdrop.

– Brazilian Goberna was a Guinness Book of World Records winner at only 12-years-old and, in December 2016, he took to the skies above one of the seven wonders of the natural world when paragliding at Iguazu Falls.

– This time around, the duo teamed up in Dubai to showcase The Palm Fountain at the Pointe, Palm Jumeirah. They overcame a tricky preparation period to expertly glide between the fountain’s powerful jets of water.

– Spanning across the boulevard, the Palm Fountain features two giant floating platforms covering 14,000 square metres of sea water. Reaching an impressive 105 metres high and lighting up the Dubai sky with 3,000 LED lights, the fountain “dances” to hit songs from sunset until midnight.

– They undertook training first at Paramotor Desert Adventure on January 12 to test out their brakes and motors with technician Ramon Lopez finally arriving after being held up by the heavy snow in Madrid.

– Training was crucial for the challenge of flying during the night with low visibility as safety director Alan Gayton ensured they had a reserve parachute in case of a technical issue with the main parachute. Llorens and Goberna also had to study the movement of the water with great precision in order not to get caught up in the jets of water

– Flying over water, it was also mandatory to have a lifejacket with rescue boats, jet skis and divers on hand which came handy when Goberna suffered a technical malfunction on the first January 14 practice run.

– After repairs long into the night, they returned to Paramotor Desert Adventure to test out the motors again before completing the stunning flight on January 15 with Llorens and Goberna performing in harmony.

– Llorens, 38, revealed: “As soon as we got the opportunity, we wanted to fly there. We needed to know the area really well beforehand and we needed to know how to ‘play’ with the fountain – this was new for us. Such strong streams of water shooting 100 metres up is a lot, so we had to be really prepared.”

– Goberna, 26, explained: “The motor wasn’t flying so good because, prior to arriving in Dubai, it was last used in Europe at high altitude. I needed to adjust the carburettor in the air inside the motor. In the first practice flight over the water, I broke one propeller. I really couldn’t understand what was happening and then another one broke. Eventually, a backup motor was required. After a long journey, the final result was beautiful! The team worked incredibly hard to make it.”

– Llorens added: “The highlight for me was playing between the super shooters with Rafael, because it’s something we’ve never done before; it felt really new and really powerful.”

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EU sets itself jobs, training and equality targets for 2030



EU sets itself jobs, training and equality targets for 2030 2

By Jan Strupczewski

BRUSSELS (Reuters) – The European Commission on Thursday announced goals for the 27-nation bloc to reduce poverty, inequality and boost training and jobs by 2030 as part of a post-pandemic economic overhaul financed by jointly borrowed funds.

The EU executive arm said the European Union should boost employment to 78% in 2030 from 73% in 2019, halve the gap between the number of employed women and men and cut the number of young people neither working nor studying to 9% from 12.6%

“With unemployment and inequalities expected to increase as a fallout of the pandemic, focusing our policy efforts on quality job creation, up- and reskilling and reducing poverty and exclusion is therefore essential to channel our resources where they are most needed,” the commission said.

The goals, which will have to be endorsed by EU leaders, also include an increase in the number of adults getting training every year to adapt to the EU’s transition to a greener and more digitalised economy to 60% from 40% now.

Finally, over the next 10 years, the EU should reduce the number of people at risk of poverty or social exclusion by 15 million from 91 million in 2019.

“These three 2030 headline targets are deemed ambitious and realistic at the same time,” the commission said.

The goals are part of the EU’s set of 20 social rights, agreed on in 2017, to make the EU more appealing to voters and counter eurosceptic sentiment across the bloc.

They say everybody has the right to quality education throughout their lives and that men and women must have equal opportunities in all areas and be paid the same for work of equal value.

The unemployed have the right to “personalised, continuous and consistent support”, while workers have the right “to fair wages that provide for a decent standard of living”.

(Reporting by Jan Strupczewski; Editing by Nick Macfie)

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UK aero-engineer Meggitt eyes return to growth after pandemic slump



UK aero-engineer Meggitt eyes return to growth after pandemic slump 3

LONDON (Reuters) – British engineer Meggitt said that it could return to profit growth in 2021 provided there are no further lockdowns, despite a weakening in the struggling aviation market at the end of 2020 and early this year.

Pandemic restrictions halted much flying globally last year and forced plane makers Boeing and Airbus to cut production rates, dragging down suppliers like Meggitt, which makes and services parts for such aircraft.

Meggitt’s underlying operating profit plunged by 53% to 191 million pounds ($267 million) in 2020, it said on Thursday, despite continued growth in its defence business which makes parts for military jets and accounts for about 45% of the business.

Meggitt, however, said it expected air traffic to recover in the second half of the year which would help it return to profit growth over the year, although its guidance for flat revenue disappointed analysts who had expected growth of 6%.

Meggitt’s Chief Executive Tony Wood said in November that he had expected flying to start to recover by Easter, but new variants have led to more restrictions and delayed the recovery.

“It has gone back a couple of months… it’s now very much in the summer,” Wood said of the recovery in an interview on Thursday.

Further in the future, Meggitt is positioning itself for the move to lower emissions flying, and its sensors and electric motors will be used on electric urban air mobility platforms, such as flying taxis, and in hybrid aeroplanes being developed.

But Meggitt said new tax breaks announced in Britain’s annual budget on Wednesday aimed at encouraging investment would not change its plans.

“Yes, it will be a benefit. Are we looking at any acceleration as a result specifically of that? Not really,” Woods said.

Shares in Meggitt were down 1% to 427 pence at 0943 GMT. The stock has risen by 50% since news of a COVID-19 vaccine last November, but is still down 23% on where it was pre-pandemic.

($1 = 0.7165 pounds)

(Reporting by Sarah Young; Editing by Alistair Smout and Susan Fenton)

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