Two US banks and a Singapore government body have successfully trialled a distributed ledger system as a replacement for paper-based letters of credit. Bank of America Merrill Lynch, HSBC and the Infocomm Development Authority of Singapore used the Linux Foundation's open source software, according to Finextra. It now looks likely that, despite the initial revolutionary hype of bitcoin and blockchain, many applications of what is now increasingly being referred to as "distributed ledger technology" will be in replacing much of the back office of banks and financial companies, with some analysts predicting that the technology could replace 90 percent of back office staff. IBM has been providing technical assistance to the project.
Maybe it hopes to score with the hyperledger where it can't score elsewhere. IBM is fruitlessly trying to get big banks to sign up for a taste of Watson's powers, reports Reuters. Watson — IBM's super-powerful computing software — offers myriad services to banks, but the banks are resisting any long-term investment despite all the hoopla about adopting new technology. "A lot of the U.S. banks acknowledge that the technology is real and it works, but they have so many things on their plate competing for investments," IBM's VP Ed Harbour told Reuters. "They want to get an immediate return and they see that coming more from ways to take costs out, rather than growing the top line." It's not all gloom however: Banco Bradesco in Brazil and Mexico's Banorte have signed on to use Watson, according to IBM.
The risk posed by the weaker parts of Italian banking is obscuring a greater risk — the Autumn referendum promised by Italian prime minister Matteo Renzi, writes Sarah Gordon in the Financial Times. The referendum, which would enable the Italian government to push through a new electoral system, may be an opportunity for the electorate to give the government a bloody nose over the perceived corruption of local-level banking and politics. UK voters have already used the EU in-or-out vote to express their anger at the broader malaise in Europe. Will the Italians be next?
Apple continues its battle with Australian banks. Four banks — Commonwealth Bank, National Australia Bank, Westpac and Bendingo — have applied for permission to negotiate with Apple to open up access to its NFC antenna. The banks want to put their own apps on iPhones so their customers can use the tap-and-pay feature, but Apple has refused to engage. Apple would like the banks to sign on to Apple Pay, noting that the four banks control 66 percent of the credit card market and would be essential to making Apple Pay work in Australia. However Apple dresses up the story on a nation-by-nation basis, Australia is not the only country where Apple is doing battle with banks.
The Nigerian central bank intervened to support the naira on the forex market after it hit an all time low of 350 to the dollar in thin volumes, according to CNBC Africa. This follows a recent decision to shut down several remittances services, with the remainder ordered to "pay dollar proceeds from customer transfers into local commercial banks in naira, while selling the dollars themselves to bureaux de change (BDC) outlets."
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