Raul Morales Resendiz’s Post

European Central Bank and European Banking Authority (EBA) Step Up Efforts to Make Banking Industry Data Reporting More Efficient “A harmonised, proportionate and fit-for-purpose reporting system is a priority for the EBA,” said EBA Chairperson José Manuel Campa. “I am glad that today we are setting up this committee to ensure a smooth and sound governance underpinning an integrated and efficient reporting process to the benefit of all stakeholders.” https://lnkd.in/eQZw_bau #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews

✴ Central Banking at Crossroads 📕 (Keynote Address by Shri Shaktikanta Das, Governor, Reserve Bank of India At the RBI@90 High-Level Conference organised by the Reserve Bank of India, October 14, 2024 at New Delhi) A very thought provoking speech by the Governor covering impact of COVID-19, debt-GDP factors and role of New Techs. Tried to collate points related to the impact of New Tech here below. 🔷Digitalization's Two Sides The shift toward digital financial services, especially in how we make payments, has brought significant improvements in efficiency. However, central banks must also address the unique challenges that come with this digitalization. One major concern is the rapid spread of misinformation and rumors through social media and online banking platforms. The speed at which money can be transferred and information (or misinformation) can spread means central banks need to be vigilant in monitoring and responding to potential threats to financial stability. 🔷Smoother Cross-Border Payments India's real-time gross settlement (RTGS) system, which operates 24/7, is an example of the kind of infrastructure that can facilitate these transactions. Expanding RTGS to handle major trade currencies like the US dollar, euro, and pound is one potential avenue for improvement. Initiatives like Project Nexus, which aims to link domestic instant payment systems across countries, also hold promise for faster and cheaper cross-border payments. This is particularly important for emerging and developing economies that rely heavily on remittances. Central bank digital currencies (CBDCs) are discussed as a potential tool for streamlining cross-border payments. India's experience in launching both wholesale and retail CBDCs provides valuable insights into the potential benefits and challenges associated with these digital currencies. 🔷India's Digital Public Infrastructure as a Model India's success in developing a robust digital public infrastructure (DPI) is presented as a potential model for other countries. This infrastructure has supported the creation of innovative and high-quality digital financial products, which can also play a role in improving cross-border payments. 🔷AI and ML: Balancing Opportunities and Risks 🔻 Concentration Risk: Over-reliance on a small number of tech providers could amplify systemic risks. 🔻Cybersecurity Threats: Increased use of AI can make systems more vulnerable to cyberattacks and data breaches. 🔻Lack of Transparency: The "black box" nature of AI algorithms can make it difficult to understand how decisions are made, potentially leading to unpredictable market consequences. Central banks and financial institutions need to implement robust risk mitigation measures to address these challenges while still harnessing the benefits of AI and ML. #CentralBanking #FinancialStability #NewTechnologies #CBDC #Digitalization #Innovation

A good paper to read, produced by the Basel Committee, that will get you thinking more about the new risks created by increased digitalisation of banks and their immediate competitors.

New white paper from RS2 highlights challenges faced by banks as instant payments become more prevalent. Now is the time to review systems. #payments #instantpayments

In a landmark move towards enhancing efficiency and reducing costs in the banking industry, the European Central Bank (ECB) and the European Banking Authority (EBA) have jointly established the Joint Bank Reporting Committee (JBRC). This strategic initiative aims to streamline and integrate data reporting processes, spanning statistical, supervisory, and resolution domains, heralding a new era of harmonization and standardization. Read more: https://lnkd.in/grG6mEBQ  José Manuel Campa | Isabel Schnabel #ECB #EBA #BankingIndustry #DataReporting #Efficiency #Harmonization #Standardization #RegulatoryCompliance #FinancialStability #StakeholderCollaboration #DigitalTransformation

Yesterday, the Central Bank published the speech made by Mary-Elizabeth McMunn regarding the perspective and priorities for payment and e-money institutions. The four focuses outlined by Ms McMunn should not be a particular surprise to those that remember the Dear CEO letter from January 2023. 1. Safeguarding; 2. Operational Resilience and Outsourcing; 3. Governance, Risk Management, and Anti-Money Laundering and Countering the Financing of Terrorism; and 4. Business Model and Financial Resilience.  Safeguarding and financial resilience (including wind-down plans) continues to generate attention from the Central Bank due to their direct affect on customer funds. The loss of customer funds, or an insolvent wind-down resulting in customers being unable to claim their funds in a timely manner, can materially affect societies trust in the financial system as a whole. It is always appreciated when a regulator outlines their key focus areas and concerns! It is especially appreciated that Ms McMunn provides five good practices that the Central Bank has seen from supervisory perspective to help direct payment and e-money institutions. If you would like to discuss safeguarding, or any other area outlined, please feel free to reach out to myself, or any other fscom specialist.  Alison Donnelly, Heather O., David Norton, Matthew Law. More information on the speech it can be viewed at the following link.

Stablecoins are a regulatory hack. I mean this in the best possible way. The banking system is ossified. The problem w/ our existing system is: - Payment rails are controlled by the banks (NACHA, FedWire, etc) - Banking regulators exist to promote bank safety (not consumer choice) - Maturity transformation taking is fundamentally risky and subject to banking runs among other things. Stablecoins: - A payment rail (and store of value) not controlled by banks - not governed by same banking regulators - often 100% backed by US treasuries (much safer than maturity transformation, see SVB, etc). I expect to see issues as Stablecoins scale and that will make some ppl want to say "Oh, I told you this would never work". To which I would reply. See "Wikipedia: List of Banking Crises" https://lnkd.in/gxD4YiqV Stablecoins are starting from the fundamentally correct place. A tech layer on top of Narrow Banking (aka the Chicago Plan). narrow banking means instead of taking short term deposits to fund long term debt, you take short term money and park it in treasuries. That is quite safe. Also quite simple. CRITICISM: Also, and this is very important. a lot of the criticism levied at Stablecoins will be written by ppl in america. America is INCREDIBLY lucky. We get to use the US dollar, the world's best currency. Americans do not understand to extent to which many people around the world have an adverse relationship w/ their currency. To paraphrase John Collison from recent MoneyStuff Podcast: "You don't need to look at Zimbabwe to see how this is true (hyperinflation)...you can look at Turkey with the Lira". So American observers are largely correct today "Stablecoins are worthless for me", but entirely wrong that they are useless for everyone. The nice thing is that since they are useful for many people around the world, the rest of the world will innovate on making the system better and more useful. One day, we might just find stable coins are more useful than our crisis prone system of fractional reserve banking that is, for historical reasons, tightly coupled to our payment system.

Traditional gateways have hindered banks' modernization efforts in the fast-evolving payment landscape. The demand for real-time payment capabilities requires urgent dismantling of outdated procedures. However, many financial institutions need to prepare. https://lnkd.in/eJSvxs6e

Russian banks to give opportunity to conduct transactions with digital ruble by July 2025 The Central Bank also plans to set deadlines for the mandatory acceptance of payments in digital rubles by trade and service companies, the press service said MOSCOW, September 12/ Major Russian banks will have to give their clients an opportunity to conduct transactions with digital rubles, including the opening of digital ruble accounts and depositing cash thereto, making funds transfers, as well as receiving digital rubles via relevant infrastructure, by July 1, 2025, the press service of the Bank of Russia said in a statement. "The regulator plans to launch a large-scale use of the digital national currency from that moment on. It is important that the digital ruble is available to both individuals and businesses and that they are able to use it freely, just like other ruble forms (physical money or bank deposits)," the statement reads. Other banks with a universal license have been given more time to adjust their systems until July 1, 2026, while other credit institutions have to make sure they comply with the requirement by July 1, 2027, the regulator added. The Central Bank also plans to set deadlines for the mandatory acceptance of payments in digital rubles by trade and service companies (TSCs), the press service said. This requirement is to be fulfilled by July 1, 2025 by companies with annual earnings of over 30 mln rubles, by July 1, 2026 by those with annual earnings of over 20 mln rubles, and by July 1, 2027 by all other companies. Following the large-scale launch of digital rubles, both banks and TSCs will be able to start accepting them as their relevant infrastructure is ready, including ahead of the deadlines proposed in the document, the regulator noted. Payments for purchases with digital rubles will be conducted using a universal QR code based on the National Payment Card System, which will help banks and TSCs avoid additional costs. Since August 15, 2023, the Bank of Russia has been conducting a pilot project with real digital rubles. The first stage of testing was held with the participation of about 600 individuals from among employees of 12 banks. They tested the opening and closing of digital wallets, their replenishment, transfers between individuals, and automatic payments. Starting September 1, 2024, the pilot has been expanded. The total number of participants increased several-fold as the new stage started. #business #finance #financialservices