Who is Faster?
Volume 10, Number 10
October 28, 2020
Advocacy News You Can Use
I recently had a discussion with a consultant on emerging issues and regulatory trends surrounding changes in the payments’ frameworks and technology. The changes in this area are coming rapidly—particularly with a younger generation growing up on digital-only platforms and the internet. The Gen Z group alone represents 40% of global consumers. So, it is no accident that regulators are actively engaged in numerous efforts, from faster payments, to revising regulatory frameworks to allow the technology to provide new and innovative solutions, and to provide for consumer protection. It is difficult to read the “tea leaves” on how all of this change will transform our industry.
The first article below, shows the Financial Stability Board delivering roadmaps to the G20 on cross-border payments. The European Union is working on its Digital Finance Strategy that includes measures on innovative and competitive payments markets and efficient international payments. We are likely to see greater direction in this area come out of the G20 meeting in November under the Saudi Arabia Presidency. Staying on top of all these changes will be critical over the next several years.
For credit unions, the challenge is figuring out who are going to be the winners and losers in all of these changes, and where a credit union should best place its resources to remain competitive in these new and emerging markets, and regulatory environments. If we as an industry are too slow to change or keep up with the times, it is possible that we will be left behind or fall prey to some disruptive force.
That brings me to the question that I asked the consultant about who would be the winner in the faster payments’ reforms that are forthcoming. His answer: “Whoever is faster.”
FSB Delivers Roadmap on Cross-Border Payments
The Financial Stability Board (FSB) published a roadmap to enhance cross-border payments. The roadmap has been delivered to G20 Finance Ministers and Central Bank Governors for their consideration.
The G20 has made enhancing cross-border payments a priority during the Saudi Arabian Presidency. Faster, cheaper, more transparent and more inclusive cross-border payment services, including remittances, while maintaining their safety and security, would have widespread benefits for citizens and economies worldwide in supporting economic growth, international trade, global development and financial inclusion.
The report sets out actions and timelines in the following five focus areas:
- Committing to a joint public and private sector vision to enhance cross-border payments;
- Coordinating on regulatory, supervisory and oversight frameworks;
- Improving existing payment infrastructures and arrangements to support the requirements of the cross-border payments market;
- Increasing data quality and straight-through processing by enhancing data and market practices; and
- Exploring the potential role of new payment infrastructures and arrangements.
A copy of the roadmap can be viewed here.
Why this matters to your credit union: Reforms in the payments’ space are occurring at a rapid pace. A credit union will need to adjust its operations and procedures to keep up with changing technology and regulations.
IFRS Consults on Sustainability Reporting Standards
The Trustees of the IFRS Foundation (IFRS) have published a Consultation Paper to assess demand for global sustainability standards and, if demand is strong, assess whether and to what extent the Foundation might contribute to the development of such standards.
Amid heightened focus on environmental, social and governance (ESG) matters, developments in sustainability reporting and increased calls for standardization of such reporting, the IFRS is now seeking stakeholder input on the need for global sustainability standards.
The Consultation Paper sets out possible ways the IFRS might contribute to the development of global sustainability standards by broadening its current remit beyond the development of financial reporting standards, and using its experience in international standard-setting, its well-established and supported standard-setting processes, and its governance structure.
A copy of the consultation can be viewed here.
Why this matters to your credit union: Reforms surrounding requirements to address climate change and sustainability standards continue to emerge. This proposal will address how these measures will be addressed through accounting standards. This will likely result in changes to current accounting practices and the presentation of financial reports in a credit union.
ENCU Congratulates McGuinness on Appointment as Commissioner
The European Network of Credit Unions (ENCU) and its members extended congratulations to Mairead McGuinness on her appointment as a Commissioner in charge of Financial Services, Financial Stability and Capital Markets.
The ENCU further welcomed the Commissioner's agenda for the future of the European financial sector noting its commitment to ensuring access to credit for ordinary Europeans and adequate protections for struggling borrowers amid the crisis. Credit unions make an important contribution to the European social economy by supporting thousands of communities and more than seven million European households with affordable financial services.
The ENCU currently represents approximately 1,000 credit unions in the European Union (EU) with more than EUR 20 billion in total assets through its member countries of Croatia, Estonia, Ireland, Republic of North Macedonia, Moldova, Netherlands, Poland, Romania and Ukraine,
A copy of the letter can be viewed here.
Why this matters to your credit union: It is important to support those policy makers whose agenda is closely aligned to the mission of credit unions and their role in contributing to their respective communities.
Andrew T. Price, Esq.