Here are the latest headlines from the world of treasury this week:
Mobile wallets pick up steam, but the UK lags behind
As third anniversary of the launch of Apple Pay approaches, it appears that mobile wallet adoption is on the rise globally. Spain had the most active mobile wallet users in Europe and the UK lags behind with only 14% active users.
The research by ACI Worldwide shows that 17% of US consumers now regularly use their smartphone to pay, up from 6% in 2014 when the survey was last conducted. In Europe, Spanish consumers are the most active users of mobile wallets, with 25% using them regularly, followed by Italy (24%), Sweden (23%) and the UK (14%).
ACI’s data also found that despite lower adoption, consumer confidence regarding mobile wallet security remains high, with 37% of UK respondents saying they trust their bank to protect their personal information when paying via smartphone.
The dollar faces volatility, sterling hits $1.30 and the euro’s strength reigns
Escalating geopolitical tensions over North Korea’s latest nuclear missile test and a gloomy US employment outlook report caused the US dollar to fall during a relatively quiet trading session on Monday.
The pound rose 0.1% against the dollar on Wednesday at $1.30460, mainly because of the dollar’s weakness. It follows comments from the market and US Federal Reserve suggesting there will be no further interest rate rises before 2018.
The strong euro led European shares to reach its lowest in the past half a year on Wednesday. “As a reaction to occurrences such as tensions between the US and North Korea, a recent terror attack in Spain and Hurricane Harvey, “investors increasingly bought into safe haven assets such as gold. This in combination with recovering commodity prices led the basic resources sector to flourish in August,” comments Jan-Carl Plagge, head of applied research, STOXX Ltd.
The European Central Banks’ monetary policy decision is due to be announced on Thursday.
SWIFT’s FIN East Africa traffic growth outperforms SWIFT’s global growth
SWIFT’s financial information (FIN) traffic growth in East Africa has outperformed the total growth of SWIFT globally, data shows. In 2017 so far, message traffic volumes grew by 20.1% versus 8.2% growth for SWIFT worldwide.
SWIFT traffic growth in the East African Community is significantly higher than the rest of the continent, which also saw major growth. Total message traffic volumes in Africa have increased by 15.4% this year. This is still greater than in EMEA overall at 9.4%, the Americas at 7.8% and Asia Pacific at 5.4%.
This growth in intra-regional FIN payments may reflect the success of the East African Payment System, which was established by the East African Community in 2013. The multi-currency system, operating on SWIFT, links the domestic payments systems in Kenya, Tanzania, Uganda and Rwanda. It makes cross-border fund transfers much easier within the Community, supporting the free movement of goods, labour and services. The system aims to cut transaction time and lower the cost of doing business regionally.
SWIFT FIN is a message type that transmits financial information from one financial institution to another.
Russian cyber attacks against the West could lead to civilian casualties
Secret Russian cyber attacks against Western countries could kill civilians and potentially lead to real-world military confrontation, Latvia’s foreign minister has warned this week.
Edgars Rinkevics told the Telegraph that Russia may use massive war games in September to probe Nato’s resilience to full-spectrum “hybrid” warfare. This would reportedly include propaganda and cyber attacks that Russia has previously used against Ukraine.
Deniable cyber attacks such as targeting power grid infrastructure could start a dangerous cycle of retaliation. This would also cause fatalities if a hospital was hit, for example.
“What I am rather worried about is that this hidden cyber warfare can escalate to a level of cyber warfare where we are not going to talk about bank attacks or ransom payments”, he told the Telegraph.
This follows ‘Petya’ sabotage software disguised as ransomware shut down businesses, government departments, and even airports in Ukraine before spreading around the world in June this year.
The pound has been, and will continue to be, particularly sensitive to Brexit-related developments.While recent progress in negotiation talks has reduced the chance of a disorderly Brexit, it remains a key risk for GBP, capable of triggering significant volatility.
Far and away, the largest financial market on the planet is the foreign exchange currencies market, where on average individuals and organisations trade more than $5 trillion daily. In the FX world, the ability to master the market isn't considered a luxury for treasury officers–it's a necessity.
APIs may be a solution to MT940 challenges, says Karen Fagan, treasury operation manager, for British television company, ITV.
After months of debate, the EBA has just released a new and probably final version of the Regulatory Technical Standards. The next steps are now the adoption – or rejection – of the RTS by the European Parliament and Council within the next three months.