Basel Committee Cracks Down on Banks Window-Dressing Ahead of G-SIB Scores

The Basel Committee on Banking Supervision met last week to take stock of recent market developments and risks to the global banking system and discuss policy and supervisory initiatives. One issue on the agenda was global systemically important banks (G-SIBs) and window dressing. Building on discussion at its previous meeting, the committee looked at empirical analyses that highlight window-dressing behaviour by some banks in the context of the framework for G-SIBs. Such regulatory arbitrage seeks to temporarily reduce banks perceived systemic footprint around the reference dates used for the reporting and public disclosure of G-SIB scores.

As noted previously by the committee, window-dressing by banks undermines the intended policy objectives of the committee’s standards and risks disrupting the operations of financial markets. To that end, the committee agreed to consult on potential measures aimed at reducing window dressing. The consultation paper, and an accompanying working paper summarising the empirical analyses, will be published next month.

Fusion Risk Management Adds Generative AI Powered Resilience Copilot

Fusion Risk Management, a provider of cloud-based operational resilience, business continuity, and risk management solutions, has announced general availability of its generative AI-powered assistant, Fusion Resilience Copilot, following a successful global beta program. The Copilot is pre-configured to answer questions at the click of a button and enables practitioners to automate manual and time-consuming activities, unlock deeper insights into incidents, and quickly respond to disruptions. Users can also reduce the time and effort required to fully understand the scope and status of an incident and quickly communicate critical insights to stakeholders through
AI-generated summaries.

“Today’s risk teams need a better way to leverage generative AI and automation to streamline manual processes and minimise the response time between impact and action when an incident occurs,” says Eric Jackson, chief product officer at Fusion Risk Management. “Resilience Copilot gives Fusion customers a resilience power-up by placing actionable insights and guidance at their fingertips. Customers can extend their continuity and resilience teams without hiring additional staff and free up critical resources to focus on other value-added activities.”

SIX Adds to ESG Products With SME Assessment Tool

Swiss financial giant SIX has launched a tool that will enable banking clients to make assessments on the sustainability performance of small- and medium-sized enterprises on their loan books.

The service is backed by Greenomy, an ESG assessment and reporting company that the Swiss company acquired late last year. With Greenomy’s software-as-a-service platform, the solution will help banks comply with regulations such as the EU’s new Banking Book Taxonomy Alignment Ratio (EU BTAR).

Further, banking clients will be able to gauge their debtors’ sustainability risk trajectories.

“The importance of gaining a clearer insight into the climate credentials of small and medium-sized enterprises cannot be overstated,” said SIX head of financial information Marion Leslie. “After all, SMEs represent 90 per cent of businesses worldwide, not to mention 99 per cent of the EU’s economy.”

The SME Sustainability Assessment Solution is the latest tool to be released by SIX this year. The Zurich-based operator of the stock exchanges of Switzerland and Spain unveiled a climate-specific data tool last month. That was the first in a programme of product releases that SIX head of ESG product strategy Martina McPherson said would create a one-stop-shop of sustainability data services.

Napier Extends Availability of Continuum AML Compliance Solution

Napier, a London-based financial crime compliance RegTech, has extended the availability of its Anti Money Laundering (AML) platform, Napier Continuum, through two new service offerings: Napier Continuum Live and Napier Continuum Flow.

Napier Continuum Live is a plug-and-play hosted offering that brings the benefits of the platform’s client screening and transaction monitoring to organisations looking to go live and achieve regulatory compliance as quickly as possible.

Napier Continuum Flow is a headless API service designed for organisations looking to leverage AI-powered financial crime compliance intelligence into their existing infrastructure. Using this solution, organisations can route alerts from Napier’s AI-driven screening and monitoring engines into their existing workflow for case management.

EU Approves Proposal to Regulate ESG Ratings Providers

European Union leaders have agreed on a proposal to regulate ESG ratings providers, requiring them to be registered and monitored by financial authorities.
Under the planned framework jointly backed by the EU’s executive, the European Council, and its parliament, ESG ratings providers must abide by transparency rules that will oblige them to publish the data and methodologies behind their calculations.

The European Securities and Markets Authority (ESMA) will keep check of the companies.

The regulation is hoped to bring harmony to the fragmented ESG ratings sector, which has been frequently blamed for paving the way for greenwashing. The EU also expects that eventually there will be providers of separate E, S and G ratings.

When the proposal is passed, the EU is be the first major financial authority to bring ESG ratings firms within the orbit of regulators, a move that is also being considered in the UK and US.

Themis Hosts Financial Crime Risk Management Cloud Service in Saudi Arabia

Themis, a financial crime technology company, has extended the reach of its financial crime risk management cloud service by hosting it in Saudi Arabia. The Themis service, situated in Jeddah, is purpose-built to meet the unique demands of the region and ensure it meets regulatory obligations around data sovereignty that require customer data to be held and processed within the region.

Further to availability in Saudi Arabia, Themis says its technology is built in such a way that data can be hosted anywhere in the world and adhere to local jurisdictional regulatory requirements. Additional services are due to be announced during the first quarter.

Azentio Partners Regula to Automate Identity Proofing In Digital Onboarding Solutions

Azentio Software, a Singapore-based technology firm, has made a strategic partnership with Regula, a global developer of forensic devices and identity verification solutions, to improve its digital onboarding solutions. Two Regula solutions, Regula Document Reader SDK and Regula Face SDK, will be integrated with Azentio ONEBanking and Azentio ONECapitalMarkets platforms. Regula Document Reader SDK ensures automated and secure identity proofing, while Regula Face SDK performs biometric verification.

Ihar Kliashchou, chief technology officer at Regula, comments: “We are glad to join forces with Azentio to bolster identity verification in remote onboarding and KYC processes for banks and financial institutions across continents. Financial services are among the most vulnerable industries when it comes to identity fraud.”

Quantexa Partners Anti-Human Trafficking Intelligence Initiative

Quantexa, a provider of decision intelligence solutions, has announced corporate sponsorship and advisory council membership of the Anti-Human Trafficking Intelligence Initiative (ATII). The ATII is a US-based non-profit organisation with a mission to fight human trafficking and child exploitation by providing data to advance the prevention, detection, investigation, and reporting mechanisms required to identify potential traffickers and criminal organisations.

Quantexa will provide decision intelligence technology and AI-driven financial crime prevention and detection through training and joint industry engagement, making global human trafficking risk data available to more organisations. Quantexa’s decision intelligence platform enables organisations to automate data ingestion and matching at scale and apply graph analytics to visually identify often hard-to-detect activity related to financial crime. Providing access to a wider set of data points specific to human trafficking will enable investigators to take a more robust approach to anti-human trafficking measures.

Broadridge and Boring Money Collaborate on Consumer Duty Solution for Asset Managers

Boring Money, a financial data and insights business, and Broadridge Financial Solutions have collaborated to help asset managers address the requirements of the UK’s Consumer Duty regulation. The duty applies to all new financial services products, and to all products and services currently available to retail customers. Among others, consumer duty affects regulated firms, and policy makers and regulatory bodies, adding to the burden of firms proposing and selling financial products, and to the information they need to gather, manage and make demonstrable to ensure compliance.

The collaboration brings together Broadridge’s value reporting, fee and performance data, and consulting services with Boring Money’s end investor demographic and perception data, which enables asset managers to better understand and service the retail investors that purchase their funds through intermediaries. The resulting solution gives asset managers and fund boards a holistic view that correlates quantitative and qualitative information regarding fund distribution and regulatory compliance in the UK.

Refinitiv Releases Sub-Saharan Africa Financial Crime Report

Refinitiv, a London Stock Exchange Group business, has released the results of its second financial crime report for Sub-Saharan Africa. This year, the survey highlights trends including low awareness of third-party exposure, high demand for advanced compliance technology, emerging supply chain risks, and lack of digital identity solutions in Know Your Customer protocols.

According to the report, only 28% of respondents have an ultimate beneficial ownership programme, more than 39% lack anti-bribery and corruption controls, and 55% of respondents do not have a cybercrime programme. The report also noted that only 3% of respondents view Environmental, Social, and Governance as a significant theme despite growing regulatory focus on the topic.

Nadim Najjar, managing director, data and analytics, Middle East and Africa, LSEG, comments: “Organisations in Sub-Saharan Africa still lack sound compliance programmes, although the report highlights a strong desire for compliance technology that offers improved data management and analytical capabilities.” The report surveyed risk and compliance professionals and business leaders across 47 countries in Sub-Saharan Africa.