Banking Sector

Deutsche Bank and SC Ventures by Standard Chartered Bank Complete First Digital Currency Transfer and Swap on the Universal Digital Payments Network

Published

6 months ago

October 23, 2023

Today, two major international financial institutions, Standard Chartered Bank via its innovation, fintech and ventures arm SC Ventures in Singapore, and Deutsche Bank in Germany have completed the first Universal Digital Payments Network (UDPN) proof-of-concept (PoC), executing real-time on-chain transfer and swap test transactions between USDC and EURS stablecoins on the UDPN infrastructure.

As part of this first PoC, SC Ventures set up a development environment and leveraged UDPN SDKs and APIs to create decentralized identities and linked digital currency wallets. Upon completing the onboarding process, SC Ventures initiated multiple transfers and swaps of synthetic USDC and EURS to digital currency wallets of Deutsche Bank. These transactions were signed with SC Ventures’ private key, completed in real time and visible on public EtherScan (etherscan.io). In parallel, Deutsche Bank initiated multiple transfers and swaps to SC Ventures’ digital currency accounts via a graphical user interface (UI) integrated within their dedicated UDPN environment. Both financial institutions relied on UDPN business nodes to connect to the UDPN permissioned DLT consensus network. The payment messages were executed via two transaction nodes, one supporting USDC transactions and the second transaction node supporting EURS transactions. These real-time transactions demonstrate how UDPN can execute cross-border transactions in minutes instead of days, based on a highly scalable architecture and removing the challenges of interoperability between different technologies within the digital currency environment.

The first in the series of 12 PoCs, the Digital Currency Transfer and Swap PoC was executed over a period of several weeks to display how UDPN solves the challenge of interoperability in cross-border payments. Learnings around Central Bank Digital Currency (CBDC), digital assets, key custody, compliance, and other related subjects were discussed and documented over the course of the PoC. The PoC plays a vital role in shaping the success of the UDPN and fosters greater understanding and collaboration among stakeholders. The knowledge sharing and contribution from financial institutions and technology participants will contribute to ensuring seamless functionality and performance upon the commercialization in late 2023.

Future of money

Announced in Davos during the World Economic Forum week in January, UDPN is a distributed ledger technology (DLT) underpinned messaging backbone that provides interoperability between the fast-growing number of regulated stablecoins and CBDCs to enable seamless connectivity between any business IT system and regulated digital currencies. The network was developed with contributions from global IT engineering and solutions provider GFT, decentralised cloud infrastructure company Red Date Technology, and tier 1 financial service providers. The UDPN Alliance is currently running a series of 12 PoCs with multiple global banks, technology companies, and payment service providers that allow participants to explore different use cases and scenarios.

The UDPN Alliance believes that the future of money is digital, sovereign, and regulated – but it is widely recognised that much of today’s payments infrastructure is analogue, fragmented, and expensive. Digital money will make cross-border transactions simpler, cheaper, and faster – and it is expected to become increasingly integrated with the regulated financial system as its use grows in consumer and wholesale payments. UDPN is a gateway for businesses and financial institutions to use regulated digital currencies in cross-border transactions, across a wide spectrum of use cases.

After over one year of prototype development, the UDPN sandbox environment was launched in July 2022 for participants to explore use cases around stablecoins, tokenisation, compliance, payment gateways, CBDC circulation and universal wallet integrations within a commercial and regulated environment. Today, Standard Chartered and Deutsche Bank completed PoC Use Case #1: Digital Currency Transfer and Swap on the UDPN. The series of 12 UDPN PoCs involve basic functions, such as those demonstrated in PoC Use Case #1, and more complex scenarios, such as multi-lateral CBDC transfers between different types of CBDC currency systems, showcased in POC#10: Central Bank Currency Issuing and Circulation.

Thorsten Neumann, CTO of SC Ventures.

“We are pleased to partake in the first industry pilot on the UDPN platform. This initiative brings the industry together to identify opportunities to unlock economic value in newly emerging digital currencies. Tokenized forms of currency will inevitably become a part of the new financial landscape. Financial service providers and fintechs are well-positioned to experiment with stablecoins and CBDC use-cases that benefit from the finality of on-chain transactions.”

Rafael Otero, CTO & CPO of Deutsche’s Corporate Bank division.

“For Deutsche Bank, the industry pilot on the UDPN platform is an opportunity to investigate and research how we can enable our clients to actively participate in the decentralised future global economy and benefit from applications that are built on top of the network. This is the next logical step in the development of financial transactions.”

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Banking Sector

UBA, Access Holdings, and FBN Holdings Lead Nigerian Banks in Electronic Banking Revenue

Published

4 days ago

April 24, 2024

Samed Olukoya

United Bank for Africa (UBA) Plc, Access Holdings Plc, and FBN Holdings Plc have emerged as frontrunners in electronic banking revenue among the country’s top financial institutions.

Data revealed that these banks led the pack in income from electronic banking services throughout the 2023 fiscal year.

UBA reported the highest electronic banking income of N125.5 billion in 2023, up from N78.9 billion recorded in the previous year.

Similarly, Access Holdings grew electronic banking revenue from N59.6 billion in the previous year to N101.6 billion in the year under review.

FBN Holdings also experienced an increase in electronic banking revenue from N55 billion in 2022 to N66 billion.

The rise in electronic banking revenue underscores the pivotal role played by these banks in facilitating digital financial transactions across Nigeria.

As the nation embraces digitalization and transitions towards cashless transactions, these banks have capitalized on the growing demand for electronic banking services.

Tesleemah Lateef, a bank analyst at Cordros Securities Limited, attributed the increase in electronic banking income to the surge in online transactions driven by the cashless policy implemented in the first quarter of 2023.

The policy incentivized individuals and businesses to conduct more transactions through digital channels, resulting in a substantial uptick in electronic banking revenue.

Furthermore, the combined revenue from electronic banking among the top 10 Nigerian banks surged to N427 billion from N309 billion, reflecting the industry’s robust growth trajectory in digital financial services.

The impressive performance of UBA, Access Holdings, and FBN Holdings underscores their strategic focus on leveraging technology to enhance customer experience and drive financial inclusion.

By investing in digital payment infrastructure and promoting digital payments among their customers, these banks have cemented their position as industry leaders in the rapidly evolving landscape of electronic banking in Nigeria.

As the Central Bank of Nigeria continues to promote digital payments and reduce the country’s dependence on cash, banks are poised to further capitalize on the opportunities presented by the digital economy.

Banking Sector

FMBN Set for Commercialization to Improve Affordable Mortgage Financing

Published

6 days ago

April 22, 2024

Samed Olukoya

In a bid to bolster housing delivery efficiency and enhance affordable mortgage financing for Nigerians, the Federal Mortgage Bank of Nigeria (FMBN) is gearing up for commercialization.

This move comes as part of the Nigerian government’s efforts to address the housing deficit and ensure adequate shelter for its citizens.

The Managing Director of FMBN, Shehu Osidi, made this announcement during a courtesy visit by the Federal Housing Delivery Reforms Task Team at the bank’s headquarters in Abuja.

Led by Mr. Adedeji Adesemoye and Brig. Gen. Tunde Reis, the task team discussed strategies to revitalize the housing sector, with a focus on FMBN’s pivotal role in providing affordable mortgage financing.

Osidi explained the bank’s commitment to supporting the government’s agenda of reforming and improving the housing sector, which is vital for sustainable development and enhancing citizens’ quality of life.

He underscored FMBN’s significant journey in the history of mortgage and housing finance in Nigeria and expressed optimism about the forthcoming commercialization process.

The commercialization plan involves repositioning and recapitalization efforts, following extensive engagements with the Bureau of Public Enterprise (BPE).

Osidi stressed the importance of aligning the bank’s operations with its mandate of affordable mortgage financing, ensuring that it remains a reliable partner in the quest for accessible housing solutions.

As part of its strategic blueprint, FMBN has prioritized various initiatives to enhance service delivery and operational efficiency.

Of note is the ICT project aimed at upgrading core banking applications that is almost complete and promised to revolutionize customers’ experience.

Also, amendments to the FMBN and NFH Acts are underway in the National Assembly, addressing key areas to facilitate the bank’s transformation.

Despite challenges, including performance issues with estate development loans, FMBN is determined to overcome obstacles and achieve its objectives.

The commercialization plan aligns with broader efforts to deepen reforms and foster a remarkable turnaround in the housing sector.

By focusing on process automation, cost efficiency, credit quality enhancement, and strategic partnerships, FMBN aims to catalyze sustainable growth and address the nation’s housing needs effectively.

Chairman of the Federal Housing Reforms Task Team, Adedeji Adesomoye, reiterated the committee’s mandate to review the operations and governance structures of key housing institutions.

With ambitious targets set by the government, including the construction of 20,000 housing units in 2024 and 50,000 units in subsequent years, the commercialization of FMBN marks a pivotal step towards realizing Nigeria’s housing aspirations.

As the commercialization process unfolds, FMBN stands poised to play a central role in facilitating access to affordable mortgage financing, thereby contributing to the realization of homeownership dreams for millions of Nigerians.

Banking Sector

Adesola Adeduntan’s Early Departure Prompts First Bank Holdings to Scrap Capital Raise Plans

Published

1 week ago

April 20, 2024

Samed Olukoya

First Bank Holdings Plc has decided to scrap its plans for capital raise following the early departure of its Managing Director, Adesola Adeduntan.

The decision to cancel the extraordinary general meeting (EGM), which was planned to discuss the proposed N300 billion capital raise, comes amidst Adeduntan’s resignation from his role, eight months before the scheduled expiration of his tenure.

The bank formally announced the cancellation of the EGM in a filing seen by Investors King on Friday.

The meeting, which was initially scheduled to be held virtually on April 30, 2024, aimed to seek authorization from the company’s members for the capital raise and address other related matters.

Adeduntan’s resignation, announced on the same day as the cancellation of the EGM, comes as a result of the Central Bank of Nigeria’s tenure requirements affecting bank executives.

In his retirement letter addressed to the Chairman of First Bank, Adeduntan expressed gratitude for the support received during his stewardship and highlighted the strides made by the bank during his tenure.

He stated, “During this period, the bank and its subsidiaries have undergone significant changes and broken new grounds. We have repositioned the institution as an enviable financial giant in Africa.”

Adeduntan further mentioned his decision to pursue other interests, prompting his early retirement effective April 20, 2024.

The cancellation of the capital raise plans shows the impact of Adeduntan’s departure on the bank’s strategic initiatives.

It reflects a shift in priorities for First Bank Holdings as it navigates leadership changes and seeks to chart a new course for its future direction.