Fintech weekly deals and partnerships roundup

BNY Mellon and AcadiaSoft team up for non-cleared margin outsourcing

Buy-side derivatives market participants are now able to fully outsource their entire non-cleared margin workflow, via the market’s first end-to-end collateral solution developed by BNY Mellon. Clients can access AcadiaSoft’s Initial Margin (IM) Risk Suite of low-touch tools for margin calculation, reconciliation and messaging as part of BNY Mellon’s collateral service offering.

This collaboration, in conjunction with BNY Mellon’s existing bilateral margin capabilities from post-trade and settlement through to collateral segregation and ongoing position monitoring, enables clients to meet their obligations under Phases 4 and 5 of the non-cleared margin rules.

Under the rules, counterparties are required to calculate IM on non-cleared derivatives trades. Depending on the portfolio in question, these calculations may be numerous and complex, and they are required to be computed daily. AcadiaSoft acts as a central repository for calculating IM, enabling market participants to use the utility as a single point of contact through which to conduct their messaging and calculations.

“Our aim is to streamline the collateral workflow for clients, making it easier for them to meet their regulatory requirements. Adding the AcadiaSoft functionality means they’ll only need to share their derivatives portfolio with us once daily: thereafter, we’ll calculate their IM and instruct the movement of the collateral required accordingly,” said Jonathan Spirgel, global head of Liquidity and Segregation Services at BNY Mellon, in a statement.

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QEDIT announces partnerships with VMware, Ant Financial, and RGAX for blockchain privacy protocol

QEDIT,​ an enterprise solution for preserving data privacy using Zero-Knowledge Proofs, announced it is working with ​VMware​, ​Ant Financial​, and ​RGAX (subsidiary of RGA – Reinsurance Group of America) to explore applications of its privacy solution in their respective industries.

The announcement follows the closure of ​QEDIT’s Series A investment round, raising $10 million led by ​MizMaa Ventures​, with participation from ​Ant Financial​, ​RGAX​, ​Meron Capital​, ​Collider Ventures​.

Jonathan Rouach, CEO and co-founder of QEDIT​, said, “Today marks a major step in fulfilling our vision to enable secure collaboration between companies using sensitive data. Working with VMware, Ant Financial and RGAX will help us showcase the value that Zero-Knowledge Proof cryptography can offer on an enterprise level, across different industry verticals.”

The Tel Aviv-headquartered startup helps banks have confidentiality when transferring assets on decentralized networks, and helps companies set up supply chain management systems with their whole ecosystem while preserving confidentiality. QEDIT financial partners use its technology to calculate an accurate credit scoring based on private data, without accessing the private data.

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PIMCO selects Algomi ALFA for liquidity sourcing in bond market

Algomi announced that PIMCO is using its ALFA service inside the investment management firm’s trading and data infrastructure, which will give access to bond price information from all major electronic venues, messaging platforms and dealer inventory feeds combined into a single consolidated landscape. PIMCO will integrate Algomi ALFA into its 100-strong bond trading desk based in California along with its domestic and international offices.

Unlike the equity markets, fixed income inventory includes corporate investment grade, high yield, emerging markets, municipal, structured credit and government debt. This is scattered across many electronic venues globally along with the thousands of securities typically traded through voice trading.

Dirk Manelski, CTO of PIMCO said in a statement: “Fixed income asset managers need to quickly integrate and analyze data to stay competitive and Algomi ALFA’s strategic fixed income technology will capture, normalize and create a centralized repository of information that will help PIMCO optimize efficiencies and cut costs.”

Richard Colucci, head of Algomi Americas added: “Companies are beginning to make technology investments that can truly exploit data science and automation to grow and evolve with the market. These efforts are fueled by a robust and normalized dataset. Algomi ALFA is AWS cloud-enabled, compatible with API integration and built on top of OpenFin open-source technology, giving our customers the flexibility they need for tomorrow.”

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Deutsche Börse and Microsoft move forward on cloud adoption

Deutsche Börse and Microsoft have announced a step-by-step migration of regulated workloads to the Microsoft Cloud Platform and a strategic partnership to set contract standards in the EU financial services industry.

Regulated workload includes services that are typically provided by financial institutions themselves and is considered essential for the respective core business. Operating these workloads in a cloud environment requires adherence to national and EU regulation. The contract closed by Deutsche Börse and Microsoft addresses these regulatory requirements.

EU financial institutions are required to ensure unrestricted audit rights and capability to perform audits in case they outsource material workloads to cloud service providers. As a result, Deutsche Börse initiated a collaborative cloud audit group (CCAG) in 2017 in order to comply with these regulatory requirements.

The collaborative audit group performs such audits in a collective manner, significantly reducing the effort for both financial institutions and cloud service providers. This industry-wide initiative includes large EU financial institutions and insurance companies. The CCAG’s first successful pooled audit on Microsoft Azure was completed in 2018. The CCAG and Microsoft will perform regular pooled audits on an annual basis.

In a first step, Deutsche Börse will accelerate the cloud migration of workload in 2019. This includes services such as the development and testing of business applications and parts of the Deutsche Börse SAP environment. First material regulated workload, such as core services to disseminate data will follow subsequently in close alignment with the relevant regulatory authorities.

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Scotiabank, TD among institutions using ID system built on IBM’s blockchain platform

SecureKey Technologies, a provider of federated identity and authentication solutions, announced that its digital identity network, Verified.Me, is now available for consumers of CIBC, Desjardins, RBC, Scotiabank and TD across Canada. Canadian customers and members of these financial institutions will be able to use Verified.Me to help verify their identities online with the services they need in a privacy-enhanced and secure way, with BMO Bank of Montreal and National Bank of Canada to launch soon. Also, Sun Life Financial has signed on as an early adopter and the first North American insurer on the service.

This approach to digital identity brings together the best capabilities of numerous parties including financial services, telecommunications and insurance providers, to create a holistic approach to digital identity that will protect the interests of consumers and businesses as they participate in today’s digital economy. Verified.Me is a digital identity and attribute sharing network, built on top of blockchain technology, that simplifies the sharing of personal information to help with identity verification in a safe way, allowing consumers to quickly and securely share information with participating service providers, while enabling businesses to achieve more streamlined, effective and cost-efficient client services and onboarding.

Katie Greenberg, VP of Digital Products and Retail Payments at Scotiabank, said in a statement: “We are entering a new era in which Canadians can clearly and confidently assert when, why and with whom their digital identity assets are shared. We are eager to offer this solution to our customers and look forward to setting the gold standard of digital identity worldwide.”

Along with Canada’s major financial institutions, a number of key digital identity network participants and innovation partners have helped to bring Verified.Me to market, including the Digital ID and Authentication Council of Canada (DIACC), the US Department of Homeland Security Science and Technology Directorate (DHS S&T), Global Privacy and Security by Design, EnStream, Equifax, IBM and Prodigy Labs. Verified.Me is built on top of the IBM Blockchain Platform which is based on Linux Foundation’s open source Hyperledger Fabric v1.2, and will be interoperable with Hyperledger Indy projects.

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J.P. Morgan and Microsoft partner on enterprise blockchain

J.P. Morgan and Microsoft announced they have signed a strategic partnership MoU to accelerate the adoption of enterprise blockchain. Through this partnership, Quorum, developed by J.P. Morgan, will become the first distributed ledger platform available through Azure Blockchain Service, enabling J.P. Morgan and Microsoft customers to build and scale blockchain networks in the cloud.

“We are incredibly proud of the success Quorum has had over the last four years, as organizations around the world use Quorum to solve complex business and societal problems via blockchain solutions,” said Umar Farooq, global head of Blockchain, J.P. Morgan, in a statement.

In addition to providing a platform for Quorum customers to build blockchain networks and applications, Quorum will continue to power J.P. Morgan and Microsoft blockchain programs and first-party apps, such as the Interbank Information Network, JPM Coin and Microsoft’s Xbox royalty payment process, among others.

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SGX signs on for Amazon Managed Blockchain

AWS announced the general availability of Amazon Managed Blockchain, a fully managed service that makes it easy to create and manage scalable blockchain networks. Customers who want to allow multiple parties to execute transactions and maintain a cryptographically verifiable record of them without the need for a trusted, central authority can quickly setup a blockchain network spanning multiple AWS accounts.

Amazon Managed Blockchain scales to support thousands of applications and millions of transactions using popular open source frameworks like Hyperledger Fabric and Ethereum. For customers in businesses like finance, which need to perform transactions quickly across multiple entities, blockchain gives them the ability to execute contracts and share data, with an immutable record of the transactions, but without the need for a trusted, central authority.

Singapore Exchange (SGX) in Asia operates equity, fixed income and derivatives markets. “Ever since overcoming the physical limitations of open-outcry trading pits, technology has been fundamental to the transformation of critical financial-market infrastructures,” said Andrew Koay, head of Blockchain Technology at SGX, in a statement.

“SGX sees blockchain technology as a way to bring innovation to our distributed financial marketplace, and we have developed Delivery-versus-Payment (DvP) capabilities for the settlement of tokenized assets across different blockchain platforms. We are working with AWS to move our existing investments in Hyperledger Fabric to Amazon Managed Blockchain. Amazon Managed Blockchain offers businesses the opportunity to eliminate the heavy-lifting typically required in infrastructure setup. This allows us to focus on adding business value and not worry about managing or scaling the underlying platform,” he added.

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Broadridge acquires securities lending and collateral management tech firm Rockall

Broadridge Financial Solutions announced that it has acquired Rockall, a provider of securities-based lending (SBL) and collateral management solutions for wealth management firms and commercial banks. The acquisition expands Broadridge’s core front-to-back office wealth capabilities, providing SBL and collateral management technology solutions to help firms manage risk and optimize clients’ securities lending and financing needs. Terms of the deal were not disclosed.

Rockall currently enables the management of more than $3 trillion worth of collateral daily for some of the world’s top banks, and 10 of the top 30 US banks use Rockall’s technology to streamline collateral management, safeguard against credit risk and enhance lending. Two key offerings Rockall provides include: a cloud-based wealth lending solution, FASTNET, which automates the evaluation, monitoring and management of SBL; and an enterprise banking collateral management solution, COLLATE, which supports strategies and change levers that drive enhanced credit risk management, regulatory reporting, process simplification, and capital efficiency.

Michael Alexander, head of North American Wealth and Capital Markets Solutions for Broadridge, said in a statement: “Securities-based lending and collateral management are key industry areas in need of innovation, and we look forward to leveraging next-generation technology to provide proven solutions to clients while mutualizing key front-, middle- and back-office functions.”

Securities-based lending has grown in the past several years to become viewed as an essential offering for wealth management firms to improve revenues and enhance retention of both advisors and investors. An issue facing many wealth management firms around SBL is cumbersome infrastructure and internal systems dependent on manual processes that slow down the lending decision process and hinder risk management. An increasing number of investors are recognizing the value of securities-based lines of credit and the need for financial services firms to automate, scale and optimize their SBL business operations.

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IBM and Thomson Reuters teamup for bank AI regtech

IBM and Thomson Reuters announced a joint collaboration to help banks address ever-growing regulatory requirements through the powerful combination of artificial intelligence (AI) and real-time regulatory insights. IBM works with 97% of the world’s largest banks and over the past two years has built end-to-end regtech software capabilities for the financial services industry.

Financial institutions are faced with hundreds of regulatory alerts daily with an estimated 300 million new pages of regulations on the way by 2020. It is a manual, time-consuming process for risk and compliance professionals to read through information and prioritize alerts based on applicability and impact, forcing banks to use disparate data and AI systems to meet requirements. Now, IBM and Thomson Reuters are providing banks with a way to digitize manual governance, risk, and compliance processes, helping organizations to integrate all their risk data using global coverage of more than 900 regulatory bodies and 2,500 collections of regulatory and legislative materials.

The product, Regulatory Intelligence, offers financial institutions access to a regtech solution delivered from the IBM Cloud that features real-time financial services data from thousands of content sources. Backed by the power of AI and domain knowledge of Promontory Financial Group, the collaboration will enable risk and compliance professionals to keep pace with regulatory changes, manage risk and reduce the overall cost of compliance.

“Combining worldwide regulatory-specific content, AI and advanced analytics, IBM OpenPages with Watson provides visibility into pending regulatory changes to take the guesswork out for compliance professionals. It also helps project what business impact those changes will likely have on the organization,” said Alistair Rennie, general manager for Watson Financial Services at IBM, in a statement.

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