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Transformation of SMEs in Asia Pacific regions

In order to help small and medium enterprises ( SMEs ) recover from the pandemic and prepare for the future. MasterCard has launched the Digital Acceleration for the small Business microsite across Asia Pacific. As the Covid pandemic hits, there is massive shift to e-commerce and contactless payments. This feature guides on digital transformation, e-learning courses, information about MasterCard products and services for SMEs, cyber security insights and tools to reduce vulnerabilities and access to discounts on business software solutions, e-commerce platforms and digital marketing services.

“SMEs have taken a particularly hard hit from the pandemic, so it’s vital for them to get the knowledge, skills and resources they need to offer an Omni channel shopping and payment experience that drives business and builds customer loyalty in the physical and digital worlds,” said Sandeep Malhotra, Executive Vice President, Products & Innovation, Asia Pacific and MasterCard.

“With consumer buying habits and expectations evolving so quickly, this initiative is just one of the ways that MasterCard is fostering financial inclusion and helping small businesses to go digital across their operations to reduce costs, increase efficiency and improve cash flow management – all while staying safe and protected from cyber risks and fraud.”  The Digital Acceleration for Small Businesses center is available across Mastercard’s English-language websites for Singapore, Malaysia, the Philippines, Thailand, Hong Kong, India and Southeast Asia. But in the future it is said to be rolling out on Non English sites too.

“As the world shifts beyond short-term survival, SMEs need to plan for long-term success in a new world of online shopping. At Wix, we’ve seen first-hand how the past year challenged businesses in so many ways but also how it brought out their resilience, grit and adaptability .We will draw on the collective learning of the Wix team who built our e-commerce platform and the merchants who run their businesses on it to help SMEs plan and strategize for 2021,” said Liat Karpel Gurwicz, Head of e-Commerce Marketing at Wix.com.  MasterCard joined forces with popular website builder Wix and with Zoho, the cloud solutions provider which has more than 60 million users, to enhance the resources for the SMEs. They are sponsoring online guides and articles on several topics like creating online store, choosing the right domains, mitigating to an online expense management and accounting platform etc.

“Even as organizations are trying to reimagine their business models, dwelling in rich content helps unlock ideas. We are excited to participate in this initiative by Mastercard, a company that is committed to empower businesses to innovate and implement superior solutions for business transformation .This initiative will further enhance and deepen digital awareness and know-how, allowing business owners and top management to make informed decisions when selecting solutions that best support evolving business needs,” said Gibu Mathew, Vice President and GM, Asia Pacific, Zoho Corp.

The goal was to bring 500 million users to financial system and they achieved it. Later MasterCard strengthened its commitment to include more by pledging to help a total of 1 billion people to get access to the digital economy by 2025. This included 50 million small businesses and 25 million women entrepreneurs. Beyond supporting businesses, the benefits of going digital are far-reaching. Digitalization of SMEs could add US$2.6 trillion to US$3.1 trillion to Asia Pacific’s GDP by 2024, a recent study by International Data Corporation showed. Due to the impact of COVID-19, it said, nearly 70% of SMEs in Asia Pacific are accelerating digitization and 86% believe this will help build resilience against future events. Reflecting the huge shift to a “digital first” mindset, contactless payments via the MasterCard network were 41% of in-person transactions in the third quarter of 2020 – up from 37% in the second quarter and 30% a year earlier.

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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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