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Return to work: What will trading floor look like?

There has been a tremendous amount of change in the way in which we work in the last 18 months.  The financial services industry is no different. There is now a sense of hope that life could soon return to normal. Financial services organizations could achieve by creation of distributed hub-and-spoke offices. In addition to this, installing the appropriate infrastructure for employees to work remotely on a long-term basis also is on the list.

In order for this to come to fruition, the financial services community must overcome the obstacles of guaranteeing resilience, reliability and security. Despite restrictions lifting in several countries, and companies, the outlook is not necessarily supported by the entire industry, with the financial services industry not observing a mass return to the workplace since the restrictions on working in the office were lifted.

Nevertheless, finding a balance between flexibility, reliability, scalability and security is far from easy. It is important for firms to consider if there should be a split between working from the office and working remotely. Financial institutions should think about individual employee preferences when it comes to working remotely on a permanent basis. The industry over a decade, has observed paradigm shifts in how technology services are provided, as well as in technology itself. The benefits of this are felt by companies of all sizes, ensuring all firms, whether they be large or small, incumbents or newcomers. For trading firms, being able to trade anytime, anywhere, from any device in a compliant manner is a tremendous competitive advantage in an environment. The company want a system that provides them with a feature of futureproofing, allowing them to adapt and maintain their advantage over competitors. In a post-pandemic world, only thing that is certain is change. Irrespective of whether companies decide to go back to pre-pandemic ways of working or not, the reality is that nearly every industry has learned a lot of important lessons based on the events of this lockdown. By utilizing the right technologies, adopting a cloud-native environment, and leveraging the subscription model, financial services companies can ensure they are prepared to embrace the new working world that emerges in the wake of the pandemic, in whatever form it takes.

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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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