Category Archives: ANZ

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JP Morgan Adds 75 More Cogs to Its Blockchain Machine

America’s largest bank, JP Morgan, has revealed that it has signed up 75 banks to its live blockchain service.

The New York global banking giant is flexing its blockchain muscle to speed up global payments with its Interbank Information Network (IIN) launched in 2017. The Quorum-based blockchain has attracted the Union Bank of the Philippines as its first signing. Among other banks on the network will be Australia’s ANZ, one of the country’s big four, and Japan’s second-largest bank by assets, Sumitomo Mitsui Banking Corp.

The move records the largest number of banks to join a live application of blockchain technology. It is unsurprising that JP Morgan is taking the blockchain route with such a big step, given comments earlier this year by the bank’s crypto-skeptic CEO Jamie Dimon, who argued:

“I probably shouldn’t say any more about cryptocurrency. But it’s not the same as gold or fiat currencies. Those are supported by law, police, courts. They’re not replicable, and there are strictures on them. Blockchain, on the other hand, is real. We’re testing it and will use it for a whole lot of things.”

Emma Loftus, JP Morgan’s head of global payments and receivables explains the thinking behind the multiple bank signings commenting, “We saw tremendous interest among correspondent banks after the pilot launched in 2017, asking if they could join.” She asserts that the IIN will make cross-border payments a far more speedy and efficient service, improving efficiency as more banks join the system.

When it comes to cryptocurrency, JP Morgan appears to vacillate between rejection, tolerance or possible adoption, depending on the spokesperson at any given time, many of whom have now moved on, some to launch their own startups, such as Amber Baldet, the original face of the Quorum project. Of the bank’s future, Takis Georgakopoulos, global head of treasury services, maintains that blockchain is a tool for the future:

“We’ve been actively exploring how emerging technologies such as blockchain, AI (artificial intelligence), and an enhanced digital experience can be deployed in our treasury services business to better serve our clients’ ever-changing needs.”

 

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Hong Kong on the Lookout for Blockchain Professionals

Hong Kong is ramping up its blockchain profile and, as a result, has announced that it will be needing more industry professionals to support its DLT focus in the years to come through a new employment program.

A “talent list” has been issued by The Government of the Hong Kong Special Administrative Region in which it states that it needs “quality people from around the world in a more effective and focused manner to support Hong Kong’s development as a high value-added and diversified economy”. Among the 11 professions on the new list are those with DLT skills.

This isn’t really surprising given the new focus on innovation and technology China’s Administrative Region, given a recent push that’s seen the promotion of blockchain in the public arena through generous grants to its local universities of USD 20 million for blockchain and fintech research.

Education is not the only area to benefit from this heightened interest in new financial tech in Hong Kong, as a government-led cross-bank cooperation project was announced recently, thought to be the largest of its kind globally. It will include UK banking giant HSBC and Standard Chartered PLC. Other banks involved are said to be one of Australia’s big four, ANZ, and four Asian banks, BOC Hong Kong Holdings, Hang Seng Bank, Bank of East Asia Ltd and Singapore’s DBS Holdings Ltd.

The new scheme designed to build on these recent developments. The Quality Migrant Admission Scheme (QMAS) will have an annual quota of 1,000 applicants, although it is unclear exactly what percentage of these will be connected to fintech. Applicants will have the advantage under the scheme of settling in Hong Kong without a specific job offer, enabling them to come to Hong Kong, then seek employment in their specialized sector.

The Chief Secretary for Administration and Chairman of the Human Resources Planning Commission, Matthew Cheung Kin-chung, wants to target internationally bred skills and talent. He commented:

“Hong Kong welcomes talents from all over the world with valuable skills, knowledge and experience to work here, bringing their talent into full play and further developing their careers… stimulating the development of local talents and propelling Hong Kong forward.”

The fact that DLT know-how has been listed as a required skill is a positive outcome for the industry in the region given China’s continued prohibitive stance regarding cryptocurrency-related activities.

 

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7 Banks to Form Trade Finance Blockchain Platform in Hong Kong

Seven banks including Hong Kong’s banking regulator are to launch a trade finance platform this September using blockchain.

The platform is reported to be one of the largest government-led cross-bank cooperation globally. It will include UK banking giant HSBC and Standard Chartered PLC. HSBC is the seventh largest bank globally by assets and the largest in Europe; Standard Chartered is a London-based bank with businesses across Asia.

Other banks involved are said to be one of Australia’s big four, ANZ, and four Asian banks, BOC Hong Kong Holdings, Hang Seng Bank, Bank of East Asia Ltd and Singapore’s DBS Holdings Ltd.

The financial sector has been increasingly under the microscope both by private companies and government bodies, who are beginning to regard blockchain technology as a way of modernizing record keeping and speeding up payments, in what is often described as an overly paper-driven industry, particularly given the technologies available in 2018.

The cross-bank project has been proposed to alleviate exactly some of these institutional operating issues, as Howard Lee deputy chief executive of the Hong Kong Monetary Authority (HKMA) explained. The main focus will be the digitalization of documentation and automating processes. Lee added that the group will want to “link up with other trade platforms in other jurisdictions to further facilitate cross-border trades”.

It appears that banks, at one time shunning blockchain due to in part to its connection with Bitcoin and Ethereum, are coming around to seeing the advantages of integrating the technology into upgrading financial systems.

The multi-bank platform will not be the first official blockchain encounter for HSBC. Along with Dutch giant ING, the two banks are reported to have made the world’s first trade finance transaction using blockchain earlier in May.

In China, The Shanghai Stock Exchange (SSE) published a research paper on Tuesday, which analyzed the use of DLT in various stages of a security transaction. The SSE is one of the two stock exchanges operating independently in the People’s Republic of China and is the world’s third-largest stock market by market capitalization.

 

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Embarrassment for Aussie Bank with $530M AML Fine After Positive Blockchain Spin

The Commonwealth Bank of Australia (CBA) is to pay settlements of USD 530 million for breaching anti-money laundering (AML) and counter-terrorism financing laws, writes the BBC.

The Commonwealth Bank is one of Australia’s big four banks along with Australia and New Zealand Banking Group (ANZ), National Australia Bank and Westpac Banking Corp.

The settlements are being paid to the Australian Transaction Reports and Analysis Centre (AUSTRAC) for failing to report 53,506 bank transactions, improperly monitoring 778,370 accounts for money laundering red flags, and filing 149 suspicious matter reports over a period of three years.

The CBA argues that a single coding error had led to the failure to report the 53,506 transactions and that it wasn’t aware that the bank had violated AML laws, although it did admit to lack of due diligence.

“Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologize to the community for letting them down,” said CBA current chief executive, Matt Comyn.

Given bank demands for tougher regulation on cryptocurrencies because of digital currency’s perceived susceptibility to being used for money laundering, this news comes as somewhat of an embarrassment for those banks calling for tougher AML legislation on crypt assets. Endless media reports have suggested that Bitcoin is used for criminal activity.

A recent panel held by the US Senate Judiciary on modernizing anti-money laundering laws discovered that only a small percentage of such activity involves cryptocurrency. Columbia University’s economics professor Edgar Feige cited last month that 50% of the world’s fiat currencies contribute towards illegal activity such as drug and arms trafficking, writes Bitcoinist.

A further embarrassment to the CBA is the fact that two years ago, the now-ousted CBA executive, Ian Narev was extolling the “transformational” potential of blockchain for the bank’s customers:

“Our intention is to be right in the middle of the early stage R&D, because it has the potential to be that transformational for the business – both for customer benefits and for processes and costs,” adding that DLT tech could be, “…more significant than anyone even thought they were. That is something we would expect to pan out over the next couple of years [for distributed ledger technology].”

A CBA ledger built on the blockchain would’ve made it much more difficult to conceal 53,506 transactions, saving AUSTRAC a lot of time and money investigating the breach.

If a court approves the fine, it will be the largest civil penalty in Australian corporate history. The bank, Australia’s largest lender, said it would also cover AUD 2.5 million in legal fees accrued by investigators, according to the BBC.

 

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