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EQUIDUCT LAUNCHES TRADING IN EXCHANGE TRADED FUNDS FOR RETAIL INVESTORS IN EUROPE

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Equiduct will offer 436 ETFs and ETPs for trading through Apex

 

Equiduct, the pan-European retail exchange, announced today that it has launched Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) trading on Apex – Equiduct’s on-exchange Best Execution service with zero trading fees for retail brokers. This is a major step in enabling access to ETFs for European retail investors.

In Europe ETFs have been less accessible to retail than in the US market – 40% US retail investors invest in ETFs, compared to only 15-20% in Europe[1]. ETFs in Europe are still predominantly traded by institutional investors either via request for quote (RFQ) or over-the-counter (OTC), avoiding the challenges of Best Execution with liquidity fragmented across multiple markets, a key barrier to retail access.

Equiduct, already known for its focus on innovative equity trading solutions for retail investors, now brings 436 ETFs and ETPs under the umbrella of its unique Best Execution service, Apex. These products span multiple asset classes and geographies, as well as thematic ETFs and leveraged ETPs from 13 different issuers, such as Lyxor ETF and VanEck. The project will be delivered in two phases: phase one is now live with over 321 ETFs; phase two completing in early 2022 with an extra 215 ETFs.

This latest launch means that more than four million retail investors across Europe can now access, on-exchange, pre-trade transparent Best Execution in these ETFs via Equiduct’s zero-commission Apex service.

Wail Azizi, Managing Director & Global Head of Growth at Equiduct said: “This is a thrilling launch for Equiduct as we continue to expand while democratising trading for retail investors who will now have access the hottest ETFs on the market. ETFs can provide easy and cost-effective investment opportunities to the millions of retail investors accessing the market through Equiduct. Challenging the status quo by breaking barriers and bringing unparalleled commission-free Best Execution to the retail community across the world is part of our DNA and we will continue to do so.”

This launch is fully supported by Virtu, a leading global market maker and liquidity provider. David Furlong, CEO and Head of Trading at Virtu Financial said: “Virtu is proud to be working with Equiduct to provide reliable liquidity across such a wide range of ETFs. ETFs are a growing trading instrument for the retail industry and we’re excited to be a part of enhancing the whole market ecosystem for retail investors. We are passionate about delivering best-in-class execution with every trade, making this a natural extension of our global liquidity offerings.”

Marcello Chelli, European Head of Distribution and Retail at Lyxor ETF commented “We are pleased to see that a significant number of Lyxor ETFs on several asset classes have been selected by Equiduct for this initiative aiming at improving the access of retail investors to ETFs across Europe. Lyxor has made the ability to provide cutting-edge, innovative and cost-effective solutions for retail, intermediaries and IFAs a priority in its product strategy. “

Martijn Rozemuller, CEO of VanEck Europe said “Our groundbreaking thematic ETFs, which are already so popular via primary markets, now have a new access point via Equiduct. This is an important step in the maturing of ETFs for retail investors. Now, key retail brokers in Europe will be able to offer unique ETFs for investing, such as our video gaming and eSports ETF as quickly as they could play a game online.”

 

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Why Anti-Money Laundering is no longer just a tick box exercise

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Tremors following Russia’s invasion of Ukraine have been felt around the world. At a time when customers are already demanding more from companies, the additional pressure being felt — especially by banks and financial services — to prioritize compliance and risk management is stronger than ever before. This has been further compounded by the realization across Western democracies of the extent of the Kremlin’s financial links within their jurisdictions, adding yet more pressure on governments to implement regulatory change. The need to investigate unexplained wealth orders and provide stronger reporting measures to tackle illicit transactions is more necessary now than ever before, while simultaneously ensuring sanctions do not impact the security of ordinary citizens’ bank accounts.

Anti-Money Laundering (AML) was once merely a tick box exercise. However, those in compliance now see financial crime and any link to bad actors as a legitimate risk to the reputation and the future success of financial organizations. As the industry moves in this direction, the entire ecosystem — law enforcement, regulators, and financial institutions — must move with it. Investment in banking technology is increasingly being focused on the development of more sophisticated solutions in the AML and anti-financial crime space. Clearly, there is more to be done in establishing the openness, reliability and safety needed to ensure customers’ assets remain secure. While some of the more traditional organizations still use fairly basic tools, there is a desire to innovate quickly and effectively, with a focus on implementing high-risk–reducing activities that can provide AML alerts in real-time across both traditional finance and the growing presence of digital assets.

However, the banking sector is also on the precipice of great change and dynamism, and AML has a fundamental role in achieving this success, especially for the emerging economies market. A report by PwC highlighted that Brazil, Indonesia, Mexico, and Turkey will develop banking sectors of comparable scale to major European economies such as the UK, France, and Italy before 2040. Meanwhile, EY’s report in 2019 showed that financial inclusion can help boost GDP by up to 14% in large developing economies such as India, and up to 30% in frontier markets across Africa. These predictions are being aided by the continued rise of digital assets, growing exponentially, and projected to reach $4.94 billion by 2030, growing at a CAGR of 12.8% from 2021 to 2030, providing capital access to customers worldwide through instant decentralized transactions.

This makes the need for frictionless financial activity imperative, ensuring businesses have constant access to capital to invest alongside the security of working with banking providers with industry-leading AML services in place.

At Zenus Bank, we have approached this challenge by offering a US bank account that allows clients in over 150 countries to deposit, hold and make payments through US banking infrastructure. This form of international movement makes secure worldwide AML services an imperative.

As demand for our services has grown rapidly this year across Asia, Europe, and South America, we knew to scale at speed we needed to have a secure AML system that would allow us to grow our operations remotely without compromise. Adopting systems such as Identity Onboarding Authentication (IOA) has been key to achieving this. The technology streamlines the onboarding process for all our new customers using facial and voice recognition combined with artificial intelligence, all but eliminating the risk of individuals or businesses setting up fake accounts. IOA also validates thousands of identification documents in seconds, comparing the customer’s ID when submitting transactions to their facial recognition to provide financial security for us and our customers against money laundering. This type of full cycle integration of customer biometric validation and frictionless connectivity with multiple vendors is essential for financial irregularities and fraud prevention, eliminating old protection systems such as the need for passwords, personal questions, or other weak links in the security chain.

And so, the future of AML is two-fold: helping to fight the rising risks of financial crime that come with the increase of embedded financial services, and to ensure the ever more complex forms of payment can be completed at speed while monitoring the legality of each transaction in real-time.  AML is no longer just a tick box exercise — it is key to the future success of the financial industry.

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Making better decisions with people data and analytics at Standard Bank

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By Ian McVey, SVP & GM EMEA at Visier

 

Talent attraction, development and retainment remains a key challenge facing the financial services sector, one which has intensified due to the impact of the COVID-19 pandemic and how it has transformed working environments.

Even before the pandemic arrived, financial services was ranked the second most stressful industry to work in, second only to health and social care on a list of 12 of the UK’s most prominent sectors.

Today, financial services employers are having to keep pace with the growing need for new digital skills in the workforce, as well as placing a greater wellbeing focus on their most important asset – people.

Indeed, the landscape continues to shift at speed. According to a survey of financial services workers undertaken by UK Finance, three in 10 said they needed more digital and tech expertise, with 28% saying they needed a better understanding of the mental and physical health of their staff and customers.

Industry leaders are wary of the talent crunch as well. Around seven in 10 banking and capital markets CEOs and insurance bosses view the limited availability of key skills as a threat to growth.

This makes people-based decision-making paramount to achieving the best possible business outcomes. Reams of research support this, with several studies showing that more diverse workforces outperform others, and that happy workers are markedly more productive in their day-to-day roles. The upshot is that the firms which rank best to work at perform better on stock markets.

Ian McVey

Putting people first at Standard Bank

Standard Bank is a pioneering example of how financial services organisations can leverage workforce data and insights to make better employee and business decisions.

It is a huge business. As the largest African banking group by assets, the company has around 55,000 employees operating in 28 countries around the world.

Digitisation and modernisation have been central to the business’s strategy, both in how it provides services to customers and operates internally.

Prior to the pandemic, the company already had a solid reporting structure and process in place, but there was a crucial problem – access to reports was limited to a small number of people and they were often out of date by the time of use.

Standard Bank needed clear, real-time insight that connected their workforce decisions to business value. It was faced with two options – leaning on analytical tools already in the business which provided monthly reports, or deploy a pre-built people analytics solution that could provide instantaneous insights.

The company chose Visier to implement the latter. Here, the adoption of on demand people data analytics has been scaled across the business, empowering line managers who make important daily decisions that shape the employee experience. So far, more than 6,000 line managers are using these insights to make informed people and business decisions.

Indeed, through the pandemic, the outcome-focussed insights offered by Visier’s people analytics solution have shaped the work-life balance and hybrid working policies for the company. It underpinned a key support system for employees, from tracking sick leave to issuing gentle reminders to take all important annual leave.

Progress continues in 2022. Having a holistic view of the workforce has been influential in enabling Standard Bank to develop its digital landscape – it has highlighted where skills are needed and what processes need transforming to facilitate the journey to becoming a truly digital bank.

Proving the power of people analytics in financial services

What Standard Bank’s experience shows is that it is possible to create an agile banking investment workforce that can pivot on demand with accurate, real-time people analytics capabilities at your fingertips.

Developing an industry-leading financial services workforce is no easy undertaking. However, gaining insight into what employees are feeling and how to keep them engaged has never been easier.

By leveraging a pre-built people analytics platform, managers can create plans based on projected growth, skills, and expected turnover, and share them securely across the business with role-based permissions.

And with all employee data stored in a single system, managers can view the entire workforce picture without having to wade through spreadsheets, enabling them to make decisions with greater confidence using the information to back them up.

Across our customer base, we see a 50% greater return on equity in comparison to other solutions (23.6% compared to 15.4%), as well as a 17% lower manager turnover which collectively saves millions on recruitment processes.

That said, recruitment processes can be transformed by people analytics, too. It enables organisations to identify the traits driving turnover and discover where their best candidates are coming from – and, crucially, how to keep them engaged through the hiring process.

From obtaining talent to keeping staff engaged and on-board, a data-driven people strategy is central to all stages of building the best financial services team possible.

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