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EBA makes recommendations for reducing supervisory reporting costs

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As part of its drive for more proportionate regulatory and supervisory framework, the European Banking Authority (EBA) has finalised its comprehensive study of the cost of compliance of European Economic Area (EEA) banks with the supervisory reporting requirements.

In the summary report published today, the EBA has identified numerous recommendations collectively leading to a potential reduction of the banks’ reporting costs by up to 15-24%. Most of the recommendations will be implemented by the EBA as part of its ongoing policy work on developing and enhancing the common EU supervisory reporting framework.

The cost of compliance study focuses on three main aspects. First, it tries to understand the actual reporting costs incurred by the EEA banks in relation to supervisory reporting, and in particular in relation to the EBA implementing technical standards (ITS) on Supervisory Reporting. Second, it assesses the effects of a reduction of some specific reporting requirements on reporting costs and supervisory effectiveness. Third, it assesses whether the reporting costs were proportionate with regard to the benefits delivered. In the report the EBA also looked at the classification of the EEA banks into various proportionality categories introduced in the Capital Requirements Regulation (CRR).

In the report the EBA identifies 25 recommendations aimed at reducing the costs of compliance with supervisory reporting requirements focusing primarily on small and non-complex institutions. However, the recommendations will improve reporting requirements and processes for all institutions whilst retaining the end-user benefits of the single supervisory framework. The recommendations address four broad areas:

changes to the development process for the EBA reporting framework;
changes to the design of EBA supervisory reporting requirements and reporting content;
coordination and integration of data requests and reporting requirements;
changes to the reporting process, including the wider use of technology.

The study also identified the need to remove barrier to the wider adoption by institutions of FinTech and RegTech solutions as well as to promote better digitalisation of the institutions’ internal documents and contracts. This is particularly relevant for small and non-complex institutions.

The EBA will incorporate the recommendations into its work programme and implement them as part of the ongoing work, according to the availability of internal resources. Certain recommendations would lead to specific policy products that will follow the usual policy development process, which includes seeking industry and other stakeholders’ views through the public consultation process.

The EBA will also continue its work on making the reporting process more efficient for all stakeholder through its work on the feasibility study of integrated reporting (more information available here).
Legal basis and background

The EBA is mandated by Article 430(8) of the CRR to measure the costs institutions incur when complying with the reporting requirements set out in the EBA’s ITS on supervisory reporting. Such reporting costs should be assessed since the introduction of the common supervisory reporting in the EU in 2013. The EBA is also asked to assess whether these reporting costs are proportionate with regard to the benefits delivered for the purposes of prudential supervision and make recommendations on how to reduce the reporting cost at least for small and non-complex institutions.

The analysis draws on significant input from and interaction with the industry. The EBA sent voluntary quantitative and qualitative questionnaires to all EEA credit institutions. The EBA interviewed various industry trade bodies and small and non-complex institutions across several Member States. The EBA also received voluntary case studies from various stakeholders that have been used in the analysis. Users of supervisory reporting, in particular supervisory authorities, also provided information to inform the analysis.

As part of the recommendations, the EBA also considered streamlining liquidity reporting (additional liquidity monitoring metrics) and exempting small and non-complex institutions from reporting certain templates, introducing changes to reporting large exposures, leverage ratio and net stable funding ratio, improving and further simplifying the reporting on asset encumbrance, better signposting of the regulatory and reporting requirements, introducing better articulation, explanation and providing examples in the ITS on supervisory reporting, and seeking greater coordination between the authorities in their ad hoc information requests.

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Source: https://www.finextra.com/pressarticle/87962/eba-makes-recommendations-for-reducing-supervisory-reporting-costs?utm_medium=rssfinextra&utm_source=finextrafeed

Crowdfunding

Mexico based Digital Payments and Commerce Fintech Clip Secures $250M from SoftBank Latin America Fund, Others

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Mexico-based Clip, a digital payments and commerce Fintech, revealed on Tuesday (June 15, 2021) that it has acquired $250 million in capital via a round led by the SoftBank Latin America Fund and Viking Global Investors LP.

Clip‘s latest investment round is the largest ever for a payments firm in Mexico. The company has become the first payments Unicorn in the world’s 12th biggest economy. Clip is valued at around $2 billion.

The Fintech firm says it pioneered simple and convenient access to virtual payments and the democratization of financial services in Mexico. The company claims it’s super focused on providing the best customer experiences and service.

Clip says it empowers businesses to easily access various financial and commerce-enabling services via its proprietary tech platform, diverse ecosystem of distribution partners, and a convenient engagement model that’s accessible to all users looking to participate in the digital economy.

Adolfo Babatz, CEO and Founder of Clip, stated:

“We are very proud to partner with two world-class investors such as SoftBank and Viking and achieve such an important milestone for a Mexican company. Looking ahead, the resources will enable us to continue to grow aggressively and continue building Mexico’s operating platform for commerce, fulfilling our vision to have Clip in every business in Mexico.”

Marcelo Claure, CEO at SoftBank Group International and COO of SoftBank Group Corp., remarked:

“Clip is the exact type of disruptive company SoftBank looks to invest in. Led by an amazing management team, Clip is using technology and AI to disrupt the financial services industry by providing essential digital solutions to merchants and small business owners in Mexico, an economy that stands to benefit greatly from digital payments. We are proud to have Clip in the SoftBank ecosystem.”

Clip’s list of investors reportedly includes General Atlantic, Ribbit Capital, Goldman Sachs, Dalus Capital, Banorte, Amex Ventures, among several others.

The firm launched operations back in 2012 with only five workers. But it has grown to around 600 employees across Mexico, the US and Argentina.

Shu Nyatta, Managing Partner of SoftBank Latin America Fund, added:

“Clip was the SoftBank Latin America Fund’s first investment, and we have been growing together in the region since then. We remain aligned on our optimism about the potential of technology and entrepreneurship, and equally excited for the opportunity to deepen our partnership.”

The transaction is currently awaiting customary approvals

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.crowdfundinsider.com/2021/06/176618-mexico-based-digital-payments-and-commerce-fintech-clip-secures-250m-from-softbank-latin-america-fund-others/

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Payments

Bitcoin fans had a dream about Institutional money that turned out to be a nightmare

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Many Bitcoin fans dreamt that Legacy Finance Institutions would lead the way to mainstream adoption of Bitcoin.

This dream was the narrative that drove the last Bitcoin bull market. Now that we maybe in a Bitcoin bear market, that dream has turned out to be a nightmare.

Daily Fintech subscribers were told HOW this crypto-in a-suit bull market would end. If I could have told you precisely WHEN it would end Daily Fintech would be charging subscribers $143 per second not per day. In hindsight it is obvious that the day Coinbase went public and joined the Fintech 50 Index would mark the end of the bull market (to kaching sounds as Institutions sold COIN and BTC to retail investors).

I think there will be another Bitcoin bull market – I am a long term bull. I do NOT know when it will start. I do know that the narrative of the next Bitcoin bull market will be opposite of the previous bull market:

Bull market 1 in 2013. Cypherpunks, Anarchists & Libertarians (more interested in “sticking it to the man”than making money) created the early traction that got Bitcoin from an obscure message board to the possibility of game-changing innovation. The dramatic price rises brought in Retail Speculators hoping for a quick buck to recover from the 2008 depression)

Bull market 2 in 2017. Retail Speculators. Sticking  it to the man was not high on the agenda. This brought in new capital and excited the Legacy Finance Institutions who drove the next bull market.

Bull market 3 in late 2020/early 2021. Institutions & Governments aka “the man”. This was when the Cyperpunks, Anarchists & Libertarians were thrown into the dustbin of history and the speculators are told to grow up and trust in the products sold by Legacy Finance.

The crypto-in a-suit bull market ended because Legacy Finance Institutions exist at the pleasure of Governments, so when regulators take action against Bitcoin the Institutions are vulnerable to pressure. A few whales could trigger a bear market, knowing that Governments acting would deepen the price decline.

The narrative of the next bull market will be the opposite of the recently ended crypto-in a-suit bull market. The Cypherpunks, Anarchists & Libertarians from 2013 will cheer from the sidelines but the Bull Market 4 narrative will be “First the Rest then the West” about billions of people interested in Bitcoin to help them “put food on the table”.

Daily Fintech articulated this “First the Rest then the West” Path To Mainstream Adoption 2 years ago. We are seeing signs of this in countries such as Venezuela and El Salvador.

This use case, with billions of people in countries with failing Fiat currencies, will build Bitcoin’s second leg – a currency for everyday spending.

These billions of users at the Bottom of the Pyramid constitutes an unserved market excluded from the modern consumer economy of  about $5 trillion in Purchasing Power Parity terms.

The advent of fast, low cost micropayments via offchain technology such Lightning Network also make it much easier to profitably serve the Bottom of the Pyramid. Credit Cards obviously don’t work in that market and physical cash has hidden costs (theft, time, handling etc).

Nightmares (and bear markets) do end. This too shall pass.

Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://dailyfintech.com/2021/06/16/bitcoin-fans-had-a-dream-about-institutional-money-that-turned-out-to-be-a-nightmare/

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Crowdfunding

Paris based Fintech Upflow, which Addresses Late Payments, Secures $15M from 9yards Capital, Others

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Paris-based Upflow, a startup that assists B2B firms with getting paid, has secured $15 million in capital via a Series A round which included contributions from 9yards Capital, eFounders, and angels N26 co-founder Maximilian Tayenthal and Uber exec Pierre-Dimitri Gore-Coty.

Companies or businesses usually try using a combination of manual processes and outdated payment methods to get paid, which often leads to delayed payments.

Upflow says it will address this issue with its SaaS platform that allows companies to take control of their cash flow cycles. The company notes that it plans to help get rid of the late payments problem.

Upflow’s technology integrates with various finance tools like QuickBooks, Xero, Netsuite, and Chargebee. Upflow has also teamed up with major payment gateways such as Stripe and GoCardless, in order to offer business teams with a central hub so they can effectively manage communication with their clients while settling payments.

Currently handling over $200 million in invoices every month, for 1.5 million+ transacting firms, Upflow intends to use the funds raised to support ongoing product development, while establishing a business office in New York. The office should help with enhancing distribution in the US markets, and also with expanding the company’s team in the coming year.

Alexandre Louisy, CEO at Upflow, stated:

“We are on a mission to revolutionize the way that companies get paid. At Upflow, we provide a solution that adds connectivity and clarity to a company’s payment and invoicing stack. Where systems were previously closed and disconnected, Upflow’s platform enables smooth and clear processes.”

Louisy added:

“By enabling a company to take control of its entire cash cycle, we want to help eradicate late payments. There is a common misconception that ‘late payments’ are only a symptom of big companies holding smaller vendors to long payment cycles. Upflow sees it differently: late payments are a tech problem, as B2B payments haven’t changed for decades.”

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.crowdfundinsider.com/2021/06/176630-paris-based-fintech-upflow-which-addresses-late-payments-secures-15m-from-9yards-capital-others/

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Crowdfunding

New Zealand BNPL Fintech Laybuy Introduces All-Digital Buy Now Pay Later Card in the UK

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New Zealand based Buy Now, Pay Later Fintech firm Laybuy is introducing its all-digital BNPL card in the United Kingdom, allowing clients to carry out in-store purchases with just a tap of their smartphones.

Clients will be able to load the payment card into their mobile phone’s wallet via the Laybuy app and can then make purchases at checkout with only a tap. They can then pay for the purchase through six weekly instalments, without having to pay interest.

At first, the BNPL service will be offered to merchants that have an existing relationship with Laybuy, however, the long-term plan is to allow clients to use the option everywhere “in the near future.”

Gary Rohloff, Managing Director at Laybuy, stated:

“The vast majority of our customers don’t like using credit cards and have been asking us how they can get the benefits of Laybuy, but on the High Street. In fact, 86% percent of our customers looking to return to stores have explicitly requested the option of using Laybuy in-store, too. Today, we’re making that a reality.”

In May 2021, Laybuy had gotten into trouble with the Advertising Standards Authority for running advertisements that claimed the company’s credit checks did not impact a client’s credit score.

The investigation was initiated by a customer who believed their credit score was actually downgraded after Laybuy had performed a credit check.

As covered, Laybuy acquired AUD 35 million in capital (last month) in order to expand its business operations into the UK markets. Laybuy‘s latest investment round came as part of a private placement and will be used to make additional investments into enhancing its technology stack, marketing efforts and HR.

Laybuy MD Gary Rohloff stated:

“The opportunity in the UK market should not be underestimated. The UK has a retail market approximately 2.2 times larger than the Australian market in terms of overall spending. It is also a market where a higher proportion of retail spending is online, and where BNPL is still in early stages of adoption.”

Rohloff added that UK consumers spent over £151 million via Laybuy during the last year, which represents an increase of 504% compared to the previous year.

Laybuy’s latest investment round was finalized as the company secured key merchant partnerships with Rakuten, AWIN and Sovrn, which should give customers access to more than 5,000 UK merchants (reportedly includes major brands such as Asos, Nike, Marks & Spencer, Amazon and eBay).

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.crowdfundinsider.com/2021/06/176631-new-zealand-bnpl-fintech-laybuy-introduces-all-digital-buy-now-pay-later-card-in-the-uk/

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