Daily Dash: Saudi Arabia Launches Open Banking Lab

January 6, 2023
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Saudi Arabia has launched its Open Banking Lab following last year’s framework announcement, and Denmark has recorded its first year without a bank robbery.

Saudi Central Bank Establishes Open Banking Lab

The Saudi Central Bank (SAMA) has launched an "open banking lab", in line with its Open Banking Framework that was issued in November last year. 

SAMA’s open banking lab aims to foster innovation and accelerate the development of open banking services across Saudi Arabia. 

The lab aims to provide a technical testing environment to enable the development and testing of open banking services. 

The tests will also look to ensure compatibility with SAMA‘s open banking framework.

The country’s Open Banking Framework comprises legislation, regulatory guidelines and technical standards that are based on international best practices to enable banks and fintechs to provide open banking services in the country.

The first set of standards focuses on account information services, while the second set looks at payment initiation services, mirroring a similar framework to the EU and UK.

Denmark Records Year With No Bank Robberies

2022 became the first year in which not a single bank robbery was committed, Denmark’s banking trade union, Finansforbundet, has said

This follows a decrease in recent years, with less than ten recorded on average per year since 2017. This is stark when compared with the 221 bank robberies that took place in 2000. 

“It is nothing short of fantastic. Because the burden on the staff, every time it happens, is extreme. You can't even begin to understand the emotional toll it takes if you haven't tried it yourself," said Steen Lund Olsen, the vice president of the trade union. 

The drop is recorded at the same time as many banks have moved away from having cash holdings. 

Danske Bank, for instance, only has one cash vault in Copenhagen and one in Aarhus.

Maltese Bank Fined For Money Laundering Failures

ECCM, a bank headquartered in the Maltese coastal town of Sliema, has become the latest in a slew of financial institutions on the Mediterranean island to be fined.

The Maltese Financial Intelligence Analysis Unit (FIAU) slapped the bank with a fine of €310,000 for faults in its anti-money laundering controls. 

The FIAU argued in its public notice that the bank lacks adequate customer business and risk assessments. 

The fine stems from an on-site inspection of the institution that took place in 2020. 

Two other public notices published within days of one another show another bank was fined €27,531 after a 2019 on-site inspection, while gaming operator Nesh Limited was fined €198,126 following a 2020 inspection.

UPI Outage Caused Havoc On New Year’s Eve, Say Indian Consumers

An outage of the Unified Payments Interface (UPI) on one of the busiest days of the year led to a deluge of complaints for the National Payments Corporation of India (NPCI), operator of UPI.

Throughout the day on New Year’s Eve, UPI users took to Twitter and other social media platforms to complain that transactions either were not going through or were being debited from the payer but not credited to the payee.

The outage affected all the major payment apps with UPI functionality, including Google Pay, PhonePe and Paytm. One user also claimed that a UPI payment sent via QR code had landed in the wrong person’s account.

The technical issues faced by UPI on New Year’s Eve took away from the strong performance of the instant payments network in December overall, during which it reached a new one-month high of ₹12.8trn ($820m) in the value of transactions. Meanwhile, the total number of transactions for the month reached 7.8bn.

SWIFT Executive Switches To The Clearing House After Veteran CEO Retires

The Clearing House (TCH), a US-based clearing and settlements network, has announced that president and CEO Jim Aramanda will retire in early 2023.

In place of Aramanda, who has spent 15 years at TCH, SWIFT chief product officer David Watson will take over as CEO, effective as of February 1.

Brian Moynihan, chair and CEO of Bank of America and chair of the TCH Supervisory Board, praised Aramanda for his modernisation of TCH, including through the launch of RTP, a real-time payments network, in 2017.

Moynihan also welcomed Watson, who prior to joining SWIFT in 2019 spent 17 years at Deutsche Bank. “David brings extensive payments experience, in-depth expertise in the field, and a strong track record of innovation,” said Moynihan. 

“David will continue TCH’s important work of driving adoption of real-time payments capabilities and focusing on the safety, security, reliability, and efficiency of bank-owned payment systems which are critical to the financial system."

Digital Euro Is A ‘Flawed Concept Doomed To Flop’, Says German Economist

A top German economist has urged the European Central Bank (ECB) to reconsider its digital euro project, calling it unnecessary and potentially damaging to Europe’s payment system.

In an article for Social Europe, Peter Bofinger argued that a digital euro is not necessary either as a central-bank deposit mechanism or as a “cheap” way to make digital payments, of which there are already many options for European consumers.

“All in all, the digital-euro project is wrongly conceived,” said Bofinger, a professor at Würzburg University and former member of the German Council of Economic Experts.

“If the ECB does not fundamentally rethink the concept, it runs the risk that the digital euro will be a flop. This would do considerable damage to the bank’s reputation.”

Instead, Bofinger suggested that the ECB would do better to focus on building a payment system like Brazil’s Pix, an instant settlement system for retail payments that can be used with a wide variety of payment instruments.

GoCardless Becomes First International Provider To Support Australia’s PayTo

GoCardless, a payment firm that offers regular payment solutions for businesses, organisations and charities, has become the first international brand to go live with PayTo, the national account-to-account payment network set to replace Direct Debit in Australia.

PayTo allows merchants and businesses to initiate instant, verified payments from their customer’s bank accounts, and allows customers to authorise payments from within their mobile app or online banking account.

Once authorised, the customer is able to see their agreement with the merchant (if any) within the app, giving PayTo the potential to reduce hidden fees, merchant costs, fraud and failed payments.

In a statement, GoCardless said that being “PayTo-ready” will allow it to provide a range of additional functionality to merchants, including refunds and international payments, all with the option to sit side by side with its traditional Direct Debit offering.

Binance Adds Apple Pay And Google Pay

Binance has announced that users can now purchase crypto directly using Apple Pay or Google Pay.

The move opens up the exchange to “faster” crypto purchases from almost 43m users of Apple Pay and 25m users of Google Pay. However, for customers of Binance US, only Apple Pay is currently available.

The news comes as Binance continues to face doubts over its balance sheet health and its exposure to the collapse of FTX, formally its closest rival, as detailed by VIXIO last month.

Venezuela Close To Adopting Russia's Mir Card Payment System, Says Deputy PM

Alexander Novak, Russia’s deputy prime minister, has said that talks are underway that may lead to Venezuela adopting Russia’s Mir card payment system.

Speaking at a bilateral commission on trade and economic cooperation between the two nations, Novak said that Russia is already assisting Venezuela’s central bank with the “technical integration” of the Mir card system.

The news of Venezuela’s interest in Mir comes as many former users of the Russian payment system seek to distance themselves from it, under the threat of secondary sanctions from the US.

As reported by VIXIO, banks in Turkey, Uzbekistan and Kazakhstan have already announced that they suspended their use of Mir towards the end of 2022.

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