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Live session brings together key players in finance to discuss the future of Open Finance in Brazil

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Sponsored by Mastercard, Open Banking Excellence’s Campfire will look at the Open Banking journey so far in the country, with a spotlight on Payments Initiation; speakers include representatives of Brazil’s Central Bank, Itaú Unibanco and more.

Over the last year, Brazil has moved at an astonishing pace toward building a world-class Open Banking ecosystem. Today, on top of introducing a new resolution that aims to officially launch an Open Finance project in the country, the wide Brazilian Fintech sector is working to follow the rules introduced around Payment Initiation.

Earlier this year, Mercado Pago became the first financial institution to offer Payment Initiation in the country and on the 26th of April Open Banking Excellence (OBE), the global centre of community and knowledge, driving change in Open Finance, will gather key players in the finance industry around a virtual Campfire to celebrate the milestone and discuss what’s ahead.

Covering the current status of implementation in Brazil with a specific view of the challenges and opportunities the Payment Initiation brings, this live session will be split into two panels. The first, in Portuguese, will discuss the adoption of Payments Initiation in Brazil. The second, in English, will focus on the lessons Brazil can learn from the UK.

The Campfire will kick off with a conversation with Thomas Camargo, Vice-President of Open Finance at Mastercard Brazil, about how the future of Open Finance is being shaped in Brazil.

“Brazil has come a long way since it started its journey in Open Banking. With the move now towards Open Finance, the country is set to become a world reference and everyone should be extremely proud of the progress secured so far,” said Helen Child, Founder of OBE.

 

Thomas Camargo, Vice-President of Open Finance at Mastercard Brazil, said: “The possibilities that Open Finance brings to the market are accompanied by several opportunities for institutions. Therefore, we have been working to be an important partner at this time, based on our experience in Europe, Asia and the United States.”

 

Ana Paula Nunes Cerchiari Almeida, Superintendent of Digital Cash Management & Open Banking at Itaú Unibanco, said: “Brazilian customers are looking for simplicity in their banking operations. We believe Payment Initiation is a new element in the process of improving people’s digital experience, and Itaú will be one of the first to offer new related solutions, ambitioning to have the best experience in the market.”

 

Leandro Pupe Nóbrega, Product Operations Leader at Belvo, said: “Open Finance in Brazil has increased a lot the number of institutions exposing APIs and also the number of requests to that, on the other hand, people still don’t see the impact of it because the companies are preparing themselves to transform all of this data into information and create the experiences expected by the population. In parallel, we have some other agendas taking place about Open Insurance, Open Investments and also about new features of PIX that will help to increase the value of the functionalities through Open Banking. As you can see, we still have a lot of work to do in 2022 but inside a market that has shown a great potential of engagement by the financial institutions, fintechs and the citizens.”

 

Janaina Attie, Analyst at Banco Central do Brasil’s (Central Bank of Brazil) Regulation Department, in charge of the payment initiation process in the Open Banking initiative, said: “The payment initiation in Open Finance further expands the opportunities created by Pix for retail, especially e-commerce, financial and payment institutions and, above all, for the customers of these institutions. The first steps were taken with the development of technical standards adopted throughout the market. Going forward, these standards will follow a process of continuous improvement, based on best practices and learning from the current implementation process. Relevant institutions have already completed their approval process and are in the testing phase to scale the payment solutions developed for their entire customer base. For the next few months, we expect these solutions to be launched and also for new initiators to enter the market, as several institutions are already finalizing their onboarding. For the near future, improvements are being planned to make the process of payment initiators onboarding more fluid, improving standardisation in order to make this process more ‘plug and play’. In addition, we are also studying some UX improvements to optimise and make the end-user journey even simpler.”

 

Huw Davies, Chief Commercial Officer at Ozone API, said: “It’s been really impressive to see the pace at which Open Finance is being delivered in Brazil. The conditions are being created to be the global benchmark. It has been really exciting to be part of the journey, helping banks to deliver Open Banking APIs and we look forward to doing the same for insurance companies as Open Insurance approaches.”

 

Ralph Bragg, Founder and CTO of Raidiam, said: “I would challenge any assumption that Brazil still has technical lessons to learn from the UK as they’ve learnt them already thanks to all the groundwork done. Raidiam has supported both initiatives and thanks to our involvement they are pushing the boundaries of what was achieved in the UK and doing it more quickly. As well as our technology, which has removed barriers for Fintechs, we drafted Brazil’s initial security and authorisation processes and standards. These Open Standards are key enablers towards Open Insurance, Open Health and beyond.”

 

Gavin Littlejohn, Executive Chairman at FDATA said: “As Executive Chairman of FDATA Global, I was fortunate to be involved from the very start of the Brazilian journey, having hosted the Banco Central Do Brasil during the initial investigation on opportunity and methodology in 2018. I am delighted to see the adherence to the technology standardisation process is paying dividends. Our Region Director for LATAM, Bruno Diniz, remains concerned about how interoperability will be achieved going forward, as Open Banking intersects with Open Insurance. We remain hopeful that the creation of a fully transparent and neutral performance dashboard will help the Banco Central Do Brasil, and the wider ecosystem, to better understand relative performance and adequacy, enabling intervention to drive improvement. On the plus side, we are happy that Open Finance in Brazil is accelerating fast with a broad scope and a good governance system, crucial aspects for a solid advance in this field. The strong demand for this new possibility within the Fintech ecosystem – and consequentially demand for innovative Fintech services built using Open Finance amongst the wider public – are providing early success signals to policymakers.”

 

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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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