Arab Tunisian Bank Goes Digital With Temenos

The Arab Tunisian Bank (ATB) has selected Temenos, the Geneva-based banking software company for its digital transformation program. ATB will transform its bank with Temenos Infinity, the breakthrough digital front office product, and Temenos T24 Transact, the next generation core banking software. These two banking software products combined with Temenos Payments Hub, Advanced Analytics and Financial Crime Mitigation (FCM) will enable ATB to benefit from an end-to-end digital banking platform, which will bring business agility and innovation.

ATB has a goal to increase revenues by 40% by 2020 and double the number of deposits with new products. It selected Temenos for its packaged model bank functionality and advanced cloud technology to meet those objectives, ATB also selected Information Technologies Solutions & Services (ITSS) as its implementation partner. ITSS was named Temenos Regional Partner of the Year 2019.

With more than 130 branches and 1,300 employees, ATB has grown to be one of Tunisia’s top five banks since its establishment in 1982. In 2017, the bank was also awarded the “Best Commercial Bank in Tunisia” by Global Banking & Finance.

“Tunisia is quickly embracing the new digital world, and banking is no exception,” said Mohamed Ferid Ben Tanfous, CEO, ATB. “With state-of-the-art banking software and 25 years of expertise, Temenos was the clear strategic technology partner of choice for us at Arab Tunisian Bank. Temenos’ end-to-end digital banking platform will enable us to offer enhanced, personalized digital experiences for our customers and become a global business partner for customers by developing new lines of business – a key priority at ATB. This digital transformation will help us achieve our ambitious growth objectives and fulfill our mission to contribute to the economic and financial development of Tunisia.”

Temenos’ pre-integrated, packaged banking software will provide ATB with faster time-to-market and dramatically reduce operational complexity and costs. With Temenos Infinity and Temenos T24 Transact, ATB will have the agility to create innovative products and services tailored to its customer needs.

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EDI Challenges Reference Data’s Big Four

A relative newcomer to the reference data business, Exchange Data International, is challenging the incumbents for what it terms anti-competitive practices. Specifically, EDI contends that the termination clauses in reference data contracts, which typically require users to return or delete their reference data, make it difficult for users to change providers because they would have to re-create their reference data libraries, which can be prohibitively expensive.

Burton-Taylor International Consulting, the leading authority on the market data business, estimates the global market for reference data is $2 billion to $3 billion.

EDI says that most data users are unaware that they are in effect only renting their data from major data vendors.

“It always comes as a shock to financial data consumers when they find out that they have only been ‘renting’ their data, and are effectively locked into their contracts. This has significant implications for all users of historical data, including quant analysts who rely on it for their algo strategies, and compliance teams which are required by legislation to maintain accurate data history. EDI’s strategy is to sell rather than rent data, and to offer hard-to-match cost-savings.”

EDI has obtained a mildly supportive legal opinion from a leading London law firm which said “Our assessment is that the Termination Practice could pique European antitrust authorities’ interest. There are cases which suggest that there are plausible arguments to be made that the Termination Practice infringes EU competition law.”

The termination practice could qualify as abuse of dominance, the firm said, noting that the concept of abuse of dominance is evolving.

Andy Nybo, a director at Burton-Taylor, said there are a variety of unique licensing agreements for reference data, and termination clauses can be justified.

“On the surface it makes sense because the aggregation, cleansing and normalizing all come at a cost,” he said. “Reference data is not static. There is constant cleaning and refreshing of historical reference data because new information or corrections are made, names change. All those thing impact the quality of the data.”

If the users don’t own a perpetual license for the data, they’re leasing it and when they change vendors they lose access to the data, he added.

EDI is the only sizable data vendor which believes that clients should own what they pay for, the company says.

“The onerous termination clauses are an effective barrier to entry for new potential data providers and may even be anti-competitive under EU law and local/national laws,” said Jonathan Bloch, founder and CEO of EDI. “This is damaging to data users, who are locked into an expensive and inflexible relationship with the ‘big four’ data vendors; it also makes it difficult for would-be entrants to the industry.”

While some financial firms only focus on the last ten years of data, most quant traders will be working with a twenty-year data set and the loss of even several years’ data could force them to remain in an expensive and inflexible relationship, he added.

“Based on our legal advice we believe that a financial data consumer based in Europe and challenging this termination clause has a fair chance of getting it held to be in violation of European anti-competition law and therefore unenforceable,” Bloch said. “But this route is not available to U.S. users.”

EDI, which was established in 1994, is headquartered in London with offices in New York, India and Morocco. It was named Best Corporate Actions Initiative of the Year in the IMD/IRD Awards 2018.

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Russia’s Yandex.Money’s E-Wallet Goes Multi-Currency

Yandex.Money, the largest online payments services in Russia, has introduced a new service for multi-currency accounts and cards. In addition to rubles, the service allows users to keep money and pay in 10 foreign currencies: US dollars, euros, British pounds, Japanese yen, Chinese yuan, Swiss francs, Czech korunas, Polish zloty, Belarusian rubles, and Kazakhstani tenges. Users won’t have to switch currencies in order to pay for a purchase abroad with the card, as the service will independently determine which one to use for the payment, allowing for convenient and favorable payments in different countries with one Yandex.Money card, the company said in its announcement.

At first, the new service will be available to a limited number of users: those who would like to be a part of the test group will need to submit an application

“We expect the Yandex.Money multi-currency cards to be popular with a wide variety of users,” said Alla Savchenko, director of products at Yandex.Money.. “People residing or vacationing abroad will feel comfortable in any country, saving on currency conversion and not wasting time on switching between accounts. Users who want to save money can earn cashback for paying for purchases from the account of any currencies available from the service. Further on, freelancers will be able to receive earnings in foreign currency from foreign clients in the usual manner, to e-wallets,” she added.

Yandex.Money serves 46 million registered wallets and around 800,000 thousand physical cards and 17 million virtual cards on the Mastercard payment system. Physical Yandex.Money cards can be used for online and offline payments, including Apple Pay, Samsung Pay, Google Pay, and Garmin Pay support, as well as for cash withdrawal both in Russia and abroad. Identified users can withdraw money without a commission at any ATMs around the world within the limit set by the service.

Yandex.Money elected to leverage Moven Enterprise’s APIs and embed them into their existing platform to deliver a highly personalized smart banking experience to their customers.

Yandex.Money said the partnership provides its 46 million users with a real-time personalized financial experience (PFE) service in their e-wallet mobile app.

The company is the joint venture of the search engine Yandex and Sberbank. It said that “Yandex.Money’s service provides users with contextual personalized advice as part of the e-wallet mobile app experience. Analyzing the expenses on a daily basis, the service allows users to track their spending in real time, while reducing spending and increasing savings—all to drive financial wellness and good financial habits.”

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SETL Clarification – Re-Org, Not Bankruptcy

From the esteemed Julia Streets:

SETL announces start of corporate reorganisation further to successful completion and approval of the regulated CSD development 

Roadmap to position business for strong financial future.

London 07 March 2019, In line with its 2018 strategic and operational plan, SETL the London based institutional payment and settlement infrastructure provider using blockchain technology, has focussed its resources on successfully developing and funding the establishment of the ID2S and IZNES platforms in Paris.  Of particular note, SETL made significant capital contributions to ID2S, the regulated CSD. In October 2018, the platform successfully completed its T2S connection testing and was fully approved under CSDR.

Now that the CSD is operational, the organisation can move forward with the next phase of its corporate development plan.  Having made an early investment in the development of ID2S, SETL Development Ltd recognises that as an early stage technology firm it is not sufficiently placed to contribute the capital required.  As such it is now now seeking to place its ID2S holding with a larger financial services firm, one better placed to provide the capital required to support the growth trajectory.

In recognition of the structural complexity and the need for a neutral party to represent the interests of all the current creditors and stakeholders, the board of SETL Development Limited has today appointed Quantuma LLP as an independent administrator.  Quantuma’s role will be to help shape the future structure, enable the company to balance its strategic infrastructure holdings and continue its software development activities on a business as usual basis.

Sir David Walker, the company’s chairman added “Separating the software development business from the investments portfolio is a highly complex process, requiring expert, experienced and neutral management of the interests of all the creditors and stakeholders.  The directors are all fully engaged and aligned in this approach.”

Anthony Culligan, the co-founder and largest shareholder added, “I am absolutely satisfied that this is the most positive step for the company and will form the basis of a strong future”.

Andrew Andronikou, joint administrator and Quantuma partner added, ‘This marks a significant moment for SETL and we are honoured to have been entrusted to work on behalf of the business and its investors.  We are highly experienced in navigating these milestones to ensure that businesses are fit for the future and look forward to helping SETL in its quest for growth.’

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OpenFin Wins Award At Trading Tech Summit In London

OpenFin won the Fintech Innovation Award at the TradingTech Summit in London on the 27th February.

This award complements OpenFin’s recent accolades, including: winning Best open source initiative at the HFM Technology European Technology Awards 2018; being named FinTech of the Year at The TRADE’s Leaders in Trading Awards 2018; winning Best use of the Agile methodology by a technology vendor at the Buy-Side Technology Awards 2018; and being included in the The Financial Technologist’s list of The Most Influential FinTechs of 2019, published earlier this month, for a second year running.

OpenFin OS provides a common platform on which banks, buyside and the FinTech community can collaborate, build and deliver innovative workflow enhancements for end users. As a result, innovative solutions can be brought to market faster, enabling end-users to benefit from new features and functionality at an accelerated rate.

Adam Toms, CEO of OpenFin Europe, said that more than 1,000 applications have now been built and deployed on OpenFin OS providing solutions to over 1,500 major banks and buy-side firms.

OpenFin enables rapid and secure deployment, native experience and desktop interoperability by building on HTML5. See my Forbes story last month. Used by the largest industry players through to the newest of FinTech innovators, OpenFin deploys more than 1,000 desktop applications to more than 1500 buy-side and sell-side firms.

 

 

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Why The Fed Will Create Its Own Real-Time Payments System

Prediction — The Federal Reserve will announce before Labor Day that it will build a real-time payment system to offer an alternative to the system that has been started by TCH and Mastercard using the Vocalink technology it acquired when it bought the company.

The UK implemented a faster payments system 10 years ago. Admittedly the country has a far simpler banking system with just a handful of major banks. It also has a regulator that takes a far more active role in promoting consumer interests vs. banks than the Fed does.

Major U.S. banks have blocked real-time payments for years, mostly obviously in 2011 when they voted against making the ACH system real-time. See Kevin Wack’s article in The American Banker

The reasons aren’t clear because the banks haven’t tried to justify their anti-consumer stance. However, among the reasons usually discussed are that they don’t want to reduce their income from wires, they make a lot of money from overdraft charges, moving to real-time is an obvious expense with no obvious increase in revenue, and they would cut into their earnings from financing payday lenders.

Why change now? Sheer embarrassment that banking systems around the world — from Australia to Mexico —have achieved real-time payments? Maybe, if you thought that bankers whose behaviors have led to billions in fines and compensation payments were truly capable of embarrassment.

More likely they are aware that the Fed, which has pursued a strategy of consultation and cajoling for years, may eventually run out of patience.

And they’re not exactly leaping to real-time. TCH says that about half the accounts in the country are already connected to real-time payments, but that is more a commentary on the degree of concentration in banking than evidence of a drive to real-time. Fewer that half the TCH members have implemented some level of real-time payments and they have no deadline.

How long will the Fed let this continue?

In response to the Fed’s request for comments, the Congressional Black Caucus wrote that “Delay is costing Americans billions of dollars they do not have and contributing to the growing income inequality that the Fed rightfully agrees is harming our nation. Specifically, research conducted by the Brookings Institution, Pew Charitable Trust, Center for Financial Services Innovation and others has illustrated the prohibitively high costs of our nation’s slow payment system and the sizable benefits for communities of color that would begin to accrue savings from adoption of real time payments. The increased prevalence of overdraft fees, high cost small dollar credit, and check cashing has cost our constituencies tens of billions of dollars that a real time payments system would help ameliorate.”

Estimates of those costs run to about $10 billion a year, or as Brookings noted, the delay has cost Americans $100 billion in fees since the UK went to faster payments more than 10 years ago.

Other than TCH, just about everyone else involved in commerce and payments, from convenience store associations to the NRF to Walmart and Amazon and community banks, wants the Fed to set up a Real Time Gross Settlement System RTGS so they won’t have to depend on a system run by the big banks. NACHA would prefer a bigger role for itself and BAFT thinks it would be fine for the Fed to wait a few years and see how the TCH solution works.

TransferWise noted that in many respects “banks are subsidized by governments and protected from competition and they enjoy exclusive access to the payments system. When firms face excessive barriers to entering a market competition stagnates, prices remain high and innovation remains low.”

And it specifically said access to an RTGS should not be limited only to banks, a position also endorsed, not surprising, by Amazon.

Consumer Reports said that “the payment options available to most Americans are dated and inefficient, due to complexities and lack of competition at a systemic level…non-bank providers like PayPal were early to build a system that met consumers’ need for a way to transact person-to-person over the internet. Only after consumers flocked to these services were traditional providers like major banks motivated to develop similar services. “

One big change over the five years the Fed has been studying (dawdling) is that the House of Representatives now has a Democratic majority and Rep. Maxine Waters is chair of the banking committee. Lower costs for banking services as a campaign platform? Socialist subsidies for big banks? Privatizing the profits, socializing the losses? Edit to see if it fits on a bumper sticker.

The three former Fed payments experts who comments made several arguments for the Fed to develop a RTGS. One is that in a crisis, the Fed is the financial resource the country depends on. If the TCH system freezes and the Fed doesn’t have an alternative, as it has with Fedwire and the Fed ACH, what could it do, and how long would it take to get authorization?

Another, as Bruce Summers noted in a detailed commentary, is that payments are moving to real-time and digital, pushed by the growing use of smartphones for banking. If the Fed doesn’t develop its own RTGS it could be left with check processing and its ACH, not exactly the cutting edge in payments.

““If the Federal Reserve banks don’t develop and take an operational role in faster payments then their competency will further deteriorate. They are at a tipping point…If the Fed doesn’t participate in this it will be really left behind, and then it will be too late for society to rely on the Fed going forward over time…if the big banks had complete control over the digital payment system and we have another crisis we will be in double jeopardy.”

And besides being trusted by community banks, which provide small business and agricultural loans and are core assets in their communities, the Fed is already connected to banks across the country, while TCH is not.

The Fed can do it — it has the technical skills and the connections and trust of banks of all sizes.

Thomas Hoenig, former president of the Federal Reserve Bank of Kansas City and a member of the Federal Reserve Banks’ Technology and Financial Service Policy Committees, said the U.S. needs to upgrade its payment system, starting now.

“We should stop talking about it and start moving forward on it…the Fed with a nearly 100 year history in payments has the infrastructure, knowledge, technical capability and is the more transparent in price, as we learned in check and in ACH.”

The links below go to the Fed comments page, and to the six articles I have written on this, which provide a fairly quick overview of the issues.

The Fed comment pages

Google And Amazon Favor Fed Role In Real Time Payments

The Benefits to consumers

What retired Fed payments experts have to say

How community banks don’t trust TCH and want the Fed to provide RTGS

Merchants of varied sizes want a Fed RTGS

The TCH argument

And take a look at “How the Other Half Banks” by Mehrsa Baradaran, a very impressive book that looks in depth at how many people are left out of banking. She proposes postal banking, which I think is a look backwards — smartphone banking would be a useful alternative. It is a great book, and as perhaps only a university press could, provides pages of detailed footnotes that will be a boon to anyone looking into these issues.

See also Mayra Rodriguez Valladares in her detailed coverage of these banking topics.

Great article about Mehrsa and her sister, Shima, who is also a law professor and leaving Iran at 6 and 8. And if this interests you at all in Iranian culture and learning, at least take a look a “Reading Lolita in Tehran” by Azar Nafisi.

 

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Payments Are Moving To Real-Time Around The World, The U.S. Plays Catch-Up

Payment systems are moving to real-time around the globe, according to a the fifth annual “Flavors of Fast” report from FIS, the financial technology powerhouse. The annual report was begun by Clear2Pay, which FIS acquired in 2014.

FIS found 40 active real-time payment programs around the world, up from 25 in 2017 and nearly three times as many as the company’s inaugural 2014 study. In addition it identified five payments programs under development, plus another 16 expected to be live in the next 12-18 months.

The report rated the faster payments systems around the world, rating India 5, the highest rating, Australia 4+ and Singapore 4+. Somewhat improbably, the United States got a 4 rating even though its system isn’t operational at scale. It launched some small segments at the end of last year but lags well behind other countries, including the UK which celebrated the 10th anniversary of its faster payments system this year.

“We rated the countries at a point in time,” explained Elena Whisler, head of global product management, open payments at FIS, “meaning that we rated the country as is regardless if they were just launched. The main reasons US is currently a 4 is because it hasn’t got ubiquity yet,” she added in a bit of understatement.

The main reason for slower adoption in the U.S. is the lack of a mandate, said Whisler. The Fed when it started work on faster payments, focused on what faster payments would need but it did not require financial institutions to participate. TCH and other closed networks have stepped up to provide infrastructure, she added.

“Now banks have the question, when something isn’t mandated and doesn’t go through a compliance budget cycle, banks need a business case, which is difficult to do with real-time payments. It’s difficult to have a business case when we don’t know where value will come from.”

At a Federal Reserve meeting on faster payments in Chicago last week, the Federal Reserve Board invited public comment on actions the Federal could take to support faster payments in the United States.

In its official announcement, the Fed said:

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