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Omnichannel: The new consumer security tool

The future of banking looks bright evolving rapidly alongside the shift in customer expectations. Banks that do not adapt to themselves to the changing sector risks falling behind and finding the right balance between great customer experience and security is now a new challenge. Firstly, the generation that born between 1995 to 2002 are now in the working populace and they are looking at a future that is socially, globally and technologically connected. Secondly, they expect the data that is shared by them on these platforms remain secured.

Tech giants Google, Twitter, Amazon and Facebook have elevated machine learning and algorithms to such a degree that they can now tailor experiences and services to the needs and preferences of everyone. Millennials have grown accustomed to personalized experiences and frictionless exchanges; they are the digital natives.

The current pandemic situation has made the Millennials choose contactless payment methods over cash and coins. But with increased online transactions comes increased threat to one’s financial security. For banks, providing a delightful customer experience hinges on providing that choice. If customers want to begin a transaction online and finish it on the app or speak to the call center about opening a new account and complete the process in the branch, they should be able to—and without having to repeat information or start the process again.

As we all know, communication is key in any relationship, so how can banks open up trusted dialogues with their customers that allow each party to trust that the other is who they say they are? Apps provide a familiar and secure platform from which financial institutions can engage in two-way communication through digitally signed, end-to-end-encrypted direct messages. Formulated into yes or no questions, customers can confirm the legitimacy of any interaction with a single touch. No passwords. No challenge questions. No hardware tokens. It’s that simple.

This low level of “friendly friction” is something research shows consumers appreciate. They feel empowered because they can see the security in action when it really matters. Providing multiple, familiar-looking channels, where the step-up authentication process is the same and expected, creates a trusted environment in which banks and their customers can develop more meaningful interactions. All parties feel more secure, which is, after all, what everyone wants.

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LexisNexis risk solutions study reveals sharp rise of financial crime compliance costs

Decision makers inside banks, investment firms, asset managers and insurance firms identify the drivers impacting financial crime compliance. LexisNexis® Risk Solutions revealed that the results of its annual True Cost of Financial Crime Compliance Study for the U.S. and Canada. The total projected cost of financial crime compliance for the region is approximately $49.9 billion. The survey illustrates the sharp increase in financial crime compliance costs.

The study projects the average annual cost of financial crime compliance for U.S. financial institutions with $10 billion. Pandemic Continues to Spur Growth. The pandemic continues to negatively impact compliance operations. Sixty eight percent of U.S. respondents report longer times required to complete due diligence. Fifty five percent of U.S. respondents report reduced productivity compared.

More U.S. financial institutions now rank real estate and hospitality as top money laundering risk segments. Crime involving digital payments, trade-based money laundering and money mule schemes are on the rise. Digital currency is a growing problem for Canadian firms. Crimes involving digital payments have the greatest impact on compliance costs. Cryptocurrency crimes have the greatest impact on compliance costs for Canadian firms. The survey results demonstrate that financial institutions are battling a broader set of issues.

Survey respondents indicate that a lack of current and extensive data tops the list of Know Your Customer (KYC). Leslie Bailey, vice president of financial crime compliance strategy for LexisNexis Risk Solutions stated that the study shows clear linkages between the pandemic, digital crime and increasing regulations. Hence, financial institutions need to prepare for expanded compliance obligations and risks from emerging financial crime. Bailey added that digital transformation is a game-changer for financial crime compliance operations.

This will require a sophisticated approach that incorporates insight into digital behaviors. This study surveyed 145 decision-makers in the U.S. and Canada. Responses were collected in June 2019, August 2020 and June 2021. Organizations such as banks, investment firms, asset management firms and insurance firms. The total annual cost of compliance across firms was calculated using survey data. The spend amount was generated by multiplying the average percent allocated to financial crime costs.

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COP26 delegates agree on need to deliver on $100 BLN climate finance pledge

Delegates heading to the COP26 U.N. climate summit in Glasgow. These delegates agreed that they must deliver on the $100 billion per year pledge. COP26 president Alok Sharma said that, it is to help most vulnerable nations for tackling the climate change.

After many days of meetings at the pre-COP26 climate event, which happened in Italy, Sharma said that there was a consensus to do more. Which is to keep the 1.5 degrees Celsius target within reach, adding more needed to be done collectively in terms of national climate plans.

The COP26 conference in Glasgow aims to secure more ambitious climate action. This is from nearly 200 countries, those all that have signed the 2015 Paris Agreement for limiting the global warming, well below 2.0 degrees Celsius. And to 1.5 degrees, above pre-industrial levels.

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City’s exposure to Evergrande is very minimal-Hong Kong finance Chief

Hong Kong’s exposure to debt-laden developer China Evergrande Group is very minimal at 0.05%. This is of banking assets, South China Morning Post reported, citing the city’s finance minister. Financial Secretary Paul Chan told the newspaper that it is very minimal and won’t cause them any systemic risks. He added that he had arrived at the conclusion after a recent audit of the local banking sector’s exposure to the company.

Chan also said that the Hong Kong’s stock market was inevitably subject to some volatility. This is amidst a recent mainland crackdown on some industries. But still he believed any setback would be temporary. With liabilities of $305 billion, Evergrande has sparked concerns its cash crunch could spread through China’s financial system. This may reverberate globally and that is a worry that has eased with the Chinese central bank’s vow, to protect homebuyers’ interests. Evergrande has missed two bond interest payments. Bondholders have said this and its offshore debt, amounting to about $20 billion, trades at distressed levels.

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