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Why is cashless inclusion so difficult?

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Why is cashless inclusion so difficult?

By Andrew Mitchell, Vice President, Development and Infrastructure Support, JCB International (Europe)

Early humans used bartering in lieu of money to buy goods, be it cattle or sheep, vegetables and grain. But today, one might be hard-pressed to use physical currency at all. Economists estimate that only eight per cent of the world’s money exists in the form of tangible coins and notes. The rest is floating in the digital ether.

India removed all large denomination notes from circulation last year and is exploring the idea of fiat digital currency.

The European Central Bank also ended production and issuance of €500 banknotes a year prior.

We are witnessing a transition away from physical currency in favour of cashless solutions such as contactless cards and mobile payments. The benefits are certainly palpable: improved security for consumers; less physical cash to handle and fewer security measures for commerce and banks; superior tax transparency for governments.

The direction of travel is certainly the right one. But we risk sleepwalking into this cashless world at detriment to the world’s two billion unbanked adults — those without access to the services of a bank or similar financial organisation. And furthermore, are we really developing economies to drive the value of cashless transactions via smaller businesses that stand to benefit the most from not having to deal with cash?

As with most problems, necessity is the mother of invention, and technological strides are being taken to improve the lives of the unbanked. A great example of this is a new social innovation project called Greater Change, which enables donations by scanning a QR code, like the kind issued for online tickets. Passersby without change who wish to give money can scan the code using a smartphone and make an online payment to the person. It’s simple innovation like this that will ensure that, when the time comes, and cash is redundant, unbanked individuals will have access to useful and affordable financial products and services that meet their needs.

In an increasingly cashless society, we need to ensure there are such adequate financial services for all demographics, both consumers and retailers alike. But the way in which this varies nation-to-nation is remarkable. One might consider a country like Germany where 98 per cent of adults have a bank account, to be a trailblazer for financial inclusion.

But a whopping 82 per cent of transactions are made in cash in Germany. Likewise, in the Netherlands, which is considered 100 per cent banked, some 52 per cent of transactions use physical currency. Travel 700-odd miles north east to Sweden, and according to Riksbank, the country’s central bank, cash transactions will make up barely half a per cent of the value of all payments made in the country by 2020.

Sweden is a tour de force for cashless payments. It’s hardly surprising that PayPal recently acquired Swedish mobile payments company iZettle. It’s a great example of the payments company strengthening its presence in offline retail payments and justifies how fintech partnerships can help small businesses grow and drive financial inclusion for retailers by providing affordably simple, frictionless ways for consumers to pay.

But why is Sweden so far ahead in cashless payments, whilst Germany lags? Many say cultural nuances or socio-economic are factors for the uneven distribution of technology and whilst there may be more than a grain of truth to the stereotype that Germany’s curiously low cashless rate is embedded in a deep-seated public mistrust of sharing personal data; at its core, governments and central banks have the largest responsibility for propagating behavioural change.

To facilitate the development of a cashless economies, at JCB we realise the importance of a consistent dialogue with government institutions to reciprocally build our expertise about cashless networks. It’s been very satisfying for us to work with government institutions on the building blocks of domestic card schemes such as those we’ve worked on in Myanmar and Sri Lanka quite recently. Seeing the commitment of those countries to create low fee-model retailer markets and adaptable due diligence methods which enable mobile phone users to gain access to ad-valorem account services shows just how flexible we really can be in delivering cashless services and driving adoption rates.

So regardless of high “banked” ratios, sleepwalking into a cashless world could have the counter-effect of propping up cash-economies unless corporates encourage progress with all relevant parties. Whilst ensuring governmental buy-in, and encouragement of fintech enterprises as well as high levels of consumer and retailer interest are the critical milestones of a successful strategy – technological progress should ultimately only ever be measured by efficiency and benefit to the consumer.

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England soccer star Rashford nets younger buyers for Burberry

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England soccer star Rashford nets younger buyers for Burberry 1

By Sarah Young

LONDON (Reuters) – Burberry stuck to its full-year goals on Wednesday after a media campaign fronted by high-profile English soccer star and social justice advocate Marcus Rashford drew a younger clientele to the British luxury brand.

Higher full-price sales would boost annual margins and Asian demand remained strong, Burberry said, while warning that it could suffer more sales disruption from COVID-19 lockdowns.

Manchester United striker Rashford, 23, has won plaudits for his campaign to help ensure that poorer children do not go hungry with schools closed during the pandemic.

A first coronavirus wave last year cut Burberry’s sales by as much as 45% before a bounce back on strong demand in mainland China and South Korea, which continued in the last few months.

Shares in Burberry were up 5% to 1,825 pence at 0905 GMT, with Citi analysts saying that improved sales quality from fewer markdowns would drive full-year consensus upgrades.

Burberry’s 9% sales decline in its third quarter was worse than the 6% fall in the second, and the company said that 15% of stores were currently closed and 36% operating with restrictions as a result of measures to curb COVID-19’s spread.

“We expect trading will remain susceptible to regional disruptions as we close the financial year,” Burberry said, adding that it was confident of rebounding when the pandemic eases given the brand’s resonance with customers.

In the third quarter, comparable store sales in Europe, the Middle East, India and Africa declined 37%, hit by shops shut in lockdowns and a lack of tourists visiting Europe, but in the same period, it posted sales growth of 11% in Asia Pacific.

Burberry said that Britain’s new relationship with the European Union would cause headwinds, warning of a modest increase in costs to comply with new rules and also the impact of an end to a scheme for VAT refunds for non-EU tourists.

This would make Britain a less attractive destination for luxury shopping when tourism returns after the pandemic, Burberry said, adding that it would try to mitigate the effect.

(Reporting by Sarah Young; Editing by Kate Holton, James Davey and Alexander Smith)

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Alibaba’s Jack Ma makes first live appearance in three months in online meet

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Alibaba's Jack Ma makes first live appearance in three months in online meet 2

SHANGHAI (Reuters) – Alibaba Group founder Jack Ma met 100 rural teachers in China via a live video meeting on Wednesday morning, in the businessman’s first appearance since October, triggering a sharp jump in the Hong Kong listed shares of the e-commerce giant.

Social media speculation over the whereabouts of China’s highest-profile entrepreneur swirled this month after news reports that he missed the final episode of a TV show featuring him as a judge, amid a regulatory clampdown by Beijing on his sprawling business empire.

Ma had not appeared in public since Oct. 24, where he blasted China’s regulatory system in a speech at a Shanghai forum that set him on a collision course with officials, leading to suspension of a $37-billion IPO of Alibaba’s financial affiliate Ant Group.

Tianmu News, a news portal under Zhejiang Online, which is backed by the provincial Zhejiang government, first reported that Ma had met with the teachers via a live video conference on Wednesday.

The Jack Ma Foundation said that Ma participated in the online ceremony of the annual Rural Teacher Initiative event on Wednesday. Alibaba Group also confirmed that Jack Ma attended the online event.

Alibaba’s Hong Kong-listed shares jumped more than 6% after the reports of his reappearance, compared with a 0.64% rise in the Hang Seng index.

Ma’s public appearance comes as Alibaba plans to raise at least $5 billion through the sale of a U.S. dollar-denominated bond this month. Reuters reported the bond proceeds could reach $8 billion, which the e-commerce leader was likely to use for general corporate expenditure.

Alibaba is also the target of an antitrust investigation launched last month by Chinese authorities, who have in recent months accelerated a crackdown on anticompetitive behaviour in China’s booming internet space.

In the 50-second video, Ma, dressed in a navy pullover, spoke directly to the camera from a room with grey marble walls and a striped carpet. It was not clear from the video or the Tianmu News article where he was speaking from.

He addressed teachers receiving the Jack Ma Rural Teachers Award, who in previous years would have attended a ceremony organised by the Jack Ma Foundation in the Chinese seaside city of Sanya.

“We cannot meet in Sanya due to the epidemic,” he said in the speech, which did not discuss his whereabouts. “When the epidemic is over, we must find time to make up for everyone’s trip to Sanya, and then we will meet again!”

Xie Pu, founder of Chinese tech website Techie Crab, said the media and public had over-interpreted Ma’s move to lay low and that his step away from the public spotlight should not have been seen as a problem for Alibaba.

“We shouldn’t over-interpret his reappearance into public view this time, said Xie Pu, founder of Chinese tech website Techie Crab. “Alibaba still has a good governance structure — there are partners and a board of directors.”

(Reporting by Brenda Goh in Shanghai, Kane Wu and Sumeet Chatterjee in Hong Kong, Yingzhi Yang in Beijing; Editing by Tom Hogue and Gerry Doyle)

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ComplyAdvantage Releases State Of Financial Crime Report For 2021

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ComplyAdvantage Releases State Of Financial Crime Report For 2021 3

Designed as an must-have strategic roadmap for compliance teams, the comprehensive report covers financial crime insights related to fraud, cyber, and money laundering, the rise of crypto,

and the ever-changing sanctions landscape

ComplyAdvantage, a global data technology company transforming financial crime detection, today announced the availability of the firm’s much anticipated report The State Of Financial Crime 2021 Designed as a strategic guide for global compliance teams, the report lays out the many emerging threats that governments and financial institutions will face in 2021, along with prescriptive recommendations for implementing best compliance practices for combating financial crimes.

The research on which The State Of Financial Crime 2021 report is based was administered in November and December 2020. Interviews were conducted with 600 C-suite and senior compliance decision makers across North America, Europe, and Asia Pacific. The respondents represented enterprise banking, investments, crypto, insurance organizations, and fintechs.

One of the biggest challenges that compliance teams face is keeping current on the rapidly evolving regulations, and the advances of criminal behavior while balancing their organizations’ risk appetite.   Risk indicators are also becoming harder to spot as the amount of information available grows exponentially and the speed of change gathers pace.  This is why ComplyAdvantage has dedicated the company’s resources and  anti-money laundering (AML) expertise in order to help compliance executives mitigate regulatory risks related to the most extreme AML financial crimes.

The State Of Financial Crime 2021 delves into the most important financial crime trends that Compliance Officers are most concerned with in the coming year.  Specifically, these trends include increased fraud related to COVID-19 relief; risk vulnerabilities related to inconsistencies in global AML and counter financing of terrorism (CFT) system; the growth in sophistication of computer and mobile-enabled cybercrimes via payment systems; the continued use of sanctions as a tool of first resort and more.

A sample of key insights from the report include:

  • SARs filing was on the rise with 74% of respondents saying they filed more SARS in 2020 than the previous year
  • 93% of respondents stated that real-time AML risk data would improve their compliance operations
  • Cybersecurity and third party risk management were noted as organizations’ biggest compliance-related pain points in 2020. With 54% of respondents ranking cybersecurity as a top pain point.
  • 62% of respondents plan on upgrading their legacy systems in 2021.
  • 54% of respondents plan on replacing or upgrading their transaction monitoring system in 2021.

“Due to the massive economic, political and social disruption brought about by COVID-19, international crime syndicates, rogue nations, global terrorists and cyber-criminals have become increasingly more aggressive, “said Charles Delingpolefounder and CEO of ComplyAdvantage.  “Therefore, we felt it was imperative to prepare Compliance Officers and their teams for the potential onslaught of financial crimes driven by nefarious organizations.

Already the preferred choice of some of the world’s largest banks, enterprises and           high-growth fintechs, ComplyAdvantage uses machine learning and natural language processing to help regulated organizations manage their risk obligations and prevent financial crime. The company’s proprietary database is derived from millions of data points that provide dynamic, real-time insights across sanctions, watchlists, politically exposed persons, and negative news. This reduces dependence on manual review processes and legacy databases by up to 80% and improves how companies screen and monitor clients and transactions.

ComplyAdvantage releases The State Of Financial Crime 2021 a comprehensive report covering financial crime trends related to fraud, cyber, and money laundering.  #compliance #financialcrime #AML #antimoneylaundering #cybercrime

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