Patent trolls - Barclays acts

Barclays has become the first major European bank to join the LOT Network and Open Invention Network Community to oppose the abuse of intellectual property rights by patent trolls.

Patent trolls are organizations that derive revenue primarily by threatening to sue unless companies pay to license their patents. The are also known as Patent Assertion Entities.

More often than not the most flimsy claims are usually settled because of the excess time, resources and expenses that are required for a successful litigation.

By joining the non-profit LOT Network and open-source-based OIN Community, Barclays is adding its portfolio of patents to the millions of patents that are already hosted.

LOT Network financial members from outside of the EU include JPMorgan Chase, Alibaba, Citi, Vanguard, Visa, American Express, Wells Fargo, Union Pay, and Fidelity

In a statement Barclays, said: “Spurious claims from Patent Assertion Entities divert resources and investment away from true innovation and collaboration. We also recognize that a modern approach to technology development and innovation requires a level playing field around use of open source software. With membership of LOT and OIN, we are pleased to contribute to and extend the growing global community working together to reduce the PAE threat and lower barriers to use of open source technologies.”

 

How Will Payments Acceleration Affect The Payments Industry

A recorded Webinar from the Payments Journal; "How digital acceleration will affect the payments industry?" The Webinar includes guest speakers from Mercator, Capgemini and HPS

Central banks and BIS have published their first central bank digital currency (CBDC) report laying out key requirements

Seven central banks and the BIS have release a report assessing the feasibility of publicly available central bank digital currency (CBDC). The aim is to help central banks deliver their public policy objectives.

The report outlines base principles and core features of a CBDC, but does not give an opinion on whether to issue digital currencies. Central banks will continue investigating CBDC feasibility without committing to issuance.

The report, Central bank digital currencies: foundational principles and core features, was compiled by the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, Sveriges Riksbank, the Swiss National Bank and the BIS, and highlights three key principles for a CBDC:

• Coexistence with cash and other types of money in a flexible and innovative payment system.
• Any introduction should support wider policy objectives and do no harm to monetary and financial stability.
• Features should promote innovation and efficiency.
  

The group of central banks will continue to work together on CBDCs, without prejudging any decision on whether or not to introduce CBDCs in their jurisdictions.

Based on these principles, the group has identified the core features of any future CBDC system, which must be:

• Resilient and secure to maintain operational integrity.
• Convenient and available at very low or no cost to end users.
• Underpinned by appropriate standards and a clear legal framework.
• Have an appropriate role for the private sector, as well as promoting competition and innovation.
  

Further development of CBDCs requires a commitment to practical policy analysis and applied technical experimentation. While this has already started, the speed of innovation in payments and money-related technologies requires the prioritisation of collaborative experimentation.

Future activities will include exploring other open questions around CBDCs and the challenges of cross-border payments, as well as continuing outreach domestically and with other central banks to foster informed dialogue on key issues. Work by the BIS Innovation Hub, which serves the broader central banking community, will contribute to this objective.

Operational Risk and Operational Resilience - BIS releases consultative document

The Basel Committee of the BIS released a new consultative document on the principles for operational risk and operational resilience on 6 August 2020.

The consultative document has a three-part focus;

• It proposes operational resilience principles that are aimed at increasing the capacity of banks to withstand disruptions due to potentially severe events.

• Proposes updated principles on operational risk focus on change management and information and communication technologies (ICT).

• Acknowledges that Covid-19 has raised the importance of operational resilience and of mitigating operational risk.

In recent years, the growth of technology-related threats has increased the importance of banks' operational resilience. The Covid-19 pandemic has made the need to address these threats even more pressing. Given the critical role played by banks in the global financial system, increasing banks' resilience to absorb shocks from operational risks, such as those arising from pandemics, cyber incidents, technology failures or natural disasters, will provide additional safeguards to the financial system as a whole.

Recognizing that a concerted operational resilience effort may not prevent a significant shock resulting from a specific hazard, the Committee is looking for comment on proposed Principles for operational resilience that aim to mitigate the impact of potentially severe adverse events by enhancing banks' ability to withstand, adapt to and recover from them.

The Committee is of the view that operational resilience is also an outcome of effective operational risk management. Activities such as risk identification and assessment, risk mitigation (including the implementation of controls), and ongoing monitoring work together to minimize operational disruptions and their effects when they materialize. Given this natural relationship between operational resilience and operational risk, the Committee is proposing updates to its Principles for the sound management of operational risk (PSMOR).


Specifically, the Committee is proposing a limited number of updates to:

1. align the PSMOR with the recently finalised Basel III operational risk framework; 
2. update the guidance where needed in the areas of change management and ICT, and 
3. enhance the overall clarity of the principles document.

The proposed principles for operational resilience set forth in this consultative document not only build upon the proposed updates to the PSMOR, they are largely derived and adapted from existing guidance on outsourcing, business continuity, and risk management-related guidance issued by the Committee or national supervisors over a number of years.

By building upon existing guidance and current practices, the Committee is seeking to develop a coherent framework and avoid duplication. The proposed operational resilience principles focus on governance; operational risk management; business continuity planning and testing; mapping interconnections and interdependencies; third-party dependency management; incident management; and resilient cybersecurity and ICT.

Comments to the CDs should be submitted to the BIS (for link Click here ) by Friday 6 November 2020. All comments may be published on the BIS website unless a respondent specifically requests confidential treatment.

The Basel Committee is the primary global standard setter for the prudential regulation of banks and provides a forum for cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. The Committee reports to the Group of Central Bank Governors and Heads of Supervision and seeks its endorsement for major decisions. The Committee does not possess any formal supranational authority, and its decisions do not have legal force. Rather, the Committee relies on its members' commitments to achieve its mandate. The Basel Committee is chaired by Pablo Hernández de Cos, Governor of the Bank of Spain. More information about the Basel Committee is available here.

Fintech's World

The fintech industry welcomed multi-billion dollar investments in 2019. Where is the most growth, and how are incumbents dealing with digital disruption?

Since the introduction of the first credit card with a magnetic stripe in 1966, financial technology has come a long way. Silicon Valley may not have birthed the term “fintech”, but it has certainly helped catapult its applications into the mainstream.

Leveraging everything from basic apps to the blockchain, the changing dynamics of fintech are creating new investment opportunities every day, growing its appetite with every new megadeal.

Check out the graphic which highlights the global growth of the fintech industry, the services with the most staying power, and major M&A developments of the past year as traditional institutions scramble to deal with this digital disruption.

Read more HERE

The 2008 Financial Crisis - Causes and Effects

Want to understand the 2008 financial crisis? Here is a really informative and useful video on the causes and the effects of the 2008 financial crisis by Jonathan Jarvis.

How Banks Create Money and the Money Multiplier

Money does not grow on trees, but it does grow in banks. Watch Jacob Clifford explain how banks create money and how to use the money multiplier. You can visit his website at www.ACDCecon.com or watch the unit playlist videos.

Handling Today’s Top Risk Challenges

From Bank Director

Sai Huda of FIS identifies how boards can stay on top of cybersecurity and compliance risks, based on the 2017 Risk Practices Survey.