2022 ESG Financing Summit

2022 ESG Financing Summit | ESG financing
A real momentum and uptake

About the event

We are proud to invite you to the WSBI ESG Finance Summit 2022.
Our aim is to bring together leading policy makers and executives from the financial sector to discuss the prevailing market and regulatory trends in sustainable finance.
As an association that brings together leading financial institutions from around the world, we are confident that the ESG Finance Summit 2022 will be an important platform for the financial industry to address ESG finance.

What to expect on 26th of September:

starts at 4:00 PM CET with supported languages: English & Spanish

Panel “Tools and practices for responsible finance. A Global Overview from the financial industry”

What to expect on 27th of September:
starts at 8:00 AM CET with supported languages: English, Chinese & Arabic

Panel 1 “Regulatory approaches to ESG finance”

The need to finance the global transition to sustainable development is constantly growing. Financial industry is required to gain a deeper understanding of the relevant context and regulatory requirements, for which they need to build their own expertise.
What determines the state of the market today and how should it be regulated?
What changes at the micro- and macroeconomic levels can the widespread use of sustainable finance lead to?

Panel 2 “Integration of ESG factors into the risk assessment system”

How are ESG principles integrated into the financial products? How do ESG factors integrate into the risk assessment system? What do analysts rely on in this process? Parameters and case study.

Panel 3 “Tools and practices for responsible finance. Overview from financial industry”

The speed and quality of the development of the responsible finance market depends not only on regulators, but also on the financial industry themselves, or rather, the degree of their clients’ interest in the relevant products and services. What do clients need to support sustainability initiatives?
What products are financial institutions ready to offer to their customers?
What are their differences and what do they depend on?

Which of the parties – the financial institutions or the client – should act as a motivator in the creation and offer of ESG products?

How and what products of responsible financing can support not only the “green” but also the social agenda?

Co-organizers

WSBI-ESBG

Driven by the three “R’s”​.With roots in 1924, WSBI-ESBG members enjoy a long history of socially responsible banking around the world. Although organizational structures vary from country to country, they each share certain values in their business models, embedded within the three “R”s.

The Union of Arab Banks

The UAB is financially, administratively, and an organizationally autonomous entity and serves as a comprehensive organization representing the Arab banking and financial community. giving key support to Arab Banks, financial institutions, economic organizations, and banking institutions with mutual support and connections to the Arab world. Member of ECOSOC United Nations – New York, accredited at the United Nations Office at Geneva (UNOG), supporting Member of United Nations Environmental Program-Finance initiatives (UNEP-FI) – Geneva

The Union of Arab Banks Website

Asian Financial Cooperation Association

AFCA shall be a regional non-government and non-profit international organization registered with China’s Ministry of Civil Affairs, mainly composed of financial institutions, associations of the financial industry, government related agencies, and relevant professional service agencies as well as individuals in financial field from Asian countries and regions on a voluntary basis.

Asian Financial Cooperation Association WEBSITE

Reducing the scope of the EBA NPLs data templates

On 5 September 2022, ESBG responded to the EBA consultation on the draft non-performing loans (NPL) transaction data templates, which seek to improve the functioning of secondary markets for NPLs.

The number of data fields in the proposed templates (especially those marked as “mandatory”) is significantly higher than what has historically been proven necessary to close voluntary NPL deals from a market standards perspective and it should therefore be reduced. Such a high number of data fields would in fact bring a significant costs increase for sellers and may jeopardise the development of NPL secondary markets.

In addition to the fact that most of the required information is too detailed and not relevant for the purposes of loan valuations, the data is also not always available within the banking system. This could lead to a counter-productive effect where sellers could renounce to sales they could execute due to constraining mandatory fields.

Another main impediment for this template to be useful is the issue of data consistency. The template would mainly be populated with management data and internal methodologies that can use different calculations and logics leading to incomparable information among portfolios.

Furthermore, it makes no sense to have common templates for single names or reduced portfolios of single names and massive portfolios of NPLs. Exposures to one single debtor or to a reduced number of corporates or SMEs have historically needed a different set of information, as their potential purchasers perform a deeper financial and legal analysis of the exposures rather than a statistical analysis, which is more adequate for massive portfolios.

Overall, the remaining fields compared to the original templates from 2017 still contain significantly more information than market standards require. For a well-functioning secondary market it is currently possible to sell NPLs by providing mainly 20 data fields.

Against this background, we request that the EBA further streamlines the templates, aiming at simpler, more balanced and effective design in order to achieve a broader application and increase transparency in the NPL market, without having a detrimental impact on EU NPL deals.

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Singapore Fintech Festival 2022

Singapore welcomes you to the 7th edition of the Singapore FinTech Festival

SFF will bring together the global FinTech community to engage, connect, and collaborate on issues relating to the development of financial services, public policy, and technology. As the world’s largest FinTech festival, last year’s edition brought together over 60,000 participants from 160 countries.
SFF is organized by the Monetary Authority of Singapore, Elevandi, and Constellar and in collaboration with The Association of Banks in Singapore.

Why attend SFF

1. Learn from 300+ expert teachers in formats ranging from plenary addresses to intimate, curated summits.
2. Network with participants from 7500+ organisations through our dedicated meeting lounges and event app, the official industry party, and 50+ side events across the week.
3. Meet with 300+ exhibitors spanning from web3 technologies to sustainable finance solutions and from growth stage startups to leading FinTech companies.
4. Contribute to the advancement of the industry by interacting with policymakers and regulators spanning 50+ jurisdictions.

SFF 2022 Theme

Building Resilient Business Models amid Volatility and Change

With the global economy experiencing a surge in inflation and facing risks of a significant slowdown in growth, many FinTech firms are striving to stay resilient and viable. Key stakeholders comprising government leaders, regulators, financial services leaders, entrepreneurs, investors, and technology leaders will take stock of the drivers of change and examine three key questions at SFF 2022:

Viable: How are organizations building and redefining business models that can be more resilient to volatile market conditions?

Responsible: How are organizations balancing corporate responsibility and profitability in order to achieve greater stakeholder satisfaction and engagement?

Inclusive: How are organizations designing inclusive business models that cater to the needs of the unbanked and underbanked?


FATF revision of Recommendation 25

The Financial Action Task Force (FATF) aims to better meet its objective of preventing the misuse of legal arrangements for money laundering and terrorist financing (ML/TF) and therefore conducts a review of its Recommendation 25 (R.25) and the Interpretive Note on their transparency and beneficial ownership (BO).

WSBI-ESBG response to the public consultation
General position
• The fragmented regulatory landscape is an issue for obtaining information from other jurisdictions.
• Guidance for implementing R.25 rules would improve the timely availability and accuracy of BO information.
• Resourcing and funding of the implementation of the R.25 requirements pose potential challenges.
Scope of legal arrangements, risk assessment and foreign trusts
• Regarding the potential limitation of the scope of risk assessment and mitigation obligation to such legal arrangements that have sufficient links with the countries, a sectoral risk assessment for legal persons and arrangements should be considered as a “sufficient link”.
• The new suggested risk assessment allows for the application of enhanced due diligence measures and also provides for how best to mitigate risks associated with different products and services.
Obligations of trustees under R.25
• When extending the requirement to obtain and hold information on beneficiaries or classes of beneficiaries to objects of powers of discretionary trusts, who may derive a benefit form a trust in the future, it should be referred to professional service providers such as lawyers, notaries, accountants, etc.
• Regarding the nexus of such obligations based on residence of trustees or location where the trusts are administered, it would be difficult to verify or authenticate information provided by trustees from other jurisdictions. Some trustees may reside from high-risk jurisdictions.
Definition of beneficial owners
• A standalone definition for BO in the context of legal arrangements might create a clear distinction between a BO for legal arrangements and for legal persons, but could lead to confusion. For a harmonised definition, the interpretive note should provide clarifications on, e.g., the element of “control” in a trust.
• Information regarding beneficiaries should be publicly available to promote transparency.
Obstacles to transparency
• Trusts that are owned or controlled by a company with various directors or nominee shareholders in different jurisdictions could be used to obscure ownership in legal arrangements.
• Flee/flight clauses are used as a protective mechanism for members and the interest of the trust. The enforceability of such clauses might be challenging.
• Key obstacles to transparency of trusts and other legal arrangements are the lack of uniform know-your-customer (KYC) standards as well as the use of professional intermediaries. Furthermore, the identification of BO of nominee shareholders, directors or various stocks can be difficult.
Approach in collecting beneficial ownership information
• Incomplete mandatory KYC information collected by other agents or service providers incl. trust and company service providers are observed to be an issue, as well as a fragmented regulatory landscape.
• A multi-pronged approach should be followed for accessing BO information of legal arrangements.
Adequate, accurate and up-to-date information
• The notion of “independently sourced/obtained documents, data or information” in the definition of accurate information poses an issue for the private sector as it is difficult to obtain adequate information

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State Aid rules for banks in difficulty

The European Savings and Retail Banking Group (ESBG) welcomes the initiative of the European Commission to launch a targeted consultation aiming at reviewing the State Aid rules for banks in difficulty.

The potential revision will assess the fitness of the current rules regarding burden-sharing, market discipline, financial stability, and the protection of taxpayers among other things. The modernized framework should ensure that the State Aid rules are applied proportionally, are adapted to the crisis management and deposit insurance (CMDI) legislation and are specifically targeted at different kinds of bank crises.

ESBG argues that all DGS measures available under the CMDI framework applied in accordance with the rules established by the DGSD and the BRRD/SRMR, regardless of national specificities in the design, the governance, and the functioning of DGSs, should be exempted from the application of the regular State Aid control rules. It should be made clear that when DGS funds are used for support measures, State Aid rules should not be applicable and no notification to the Commission be required. Exempting the application of the State Aid rules on actions under the CMDI framework will allow the effective and undisturbed use of measures foreseen under DGSD/BRRD/SRMR.
Furthermore, and until such improvements are effectively achieved, ESBG finds it important to avoid any increase in contributions to the national DGS and to the Single Resolution Fund (SRF).

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International Sustainability Standards Board consultation on Sustainability Disclosures

The International Sustainability Standards Board (ISSB) has been established at COP26 with the purpose of developing a comprehensive global baseline of sustainability disclosures for the capital markets. The purpose of the consultation is to develop a comprehensive global baseline of sustainability disclosures designed to meet the information needs of investors in assessing enterprise value.

To this end, the consultation includes proposed standards on general sustainability-related disclosure requirements as well as on climate-related disclosure requirements |Position – Executive summary | August 2022 |

CONSISTENCY BETWEEN ISSB STANDARDS AND EFRAG ESRSs
WSBI-ESBG believe that it is crucial to achieve consistency of sustainability reporting at global level and especially a full alignment of reporting requirements between ISSB standards and EFRAG European Sustainability Reporting Standards (ESRSs) to ensure a global playing field in terms of sustainability reporting. This convergence between both standards will address the risk of additional disclosures.

DOUBLE MATERIALITY
WSBI-ESBG highlight that the IFRS sustainability standards are based on an ‘enterprise value creation’ or financial materiality approach, in which sustainability impacts are measured in terms of impacts on the financial position and prospects of the company itself. On the other hand, the EFRAG ESRSs are being developed based on the ‘double materiality’ principle, where disclosure is required both from the point of view of financial impact on the company and on the impact of the company on society and the environment.

TRANSITION PLANS
WSBI-ESBG notes that the EFRAG ESRSs make a clearer reference to alignment with limiting global warming to 1.5°C in line with the Paris Agreement. On the other hand, IFRS sustainability standards allow the entity to choose its own target. By way of consequence, WSBI – ESBG requests that the ISSB takes into consideration including a clear reference to the 1.5°C target of the Paris Agreement in order to ensure comparability between the two standards.

BOUNDARIES AND VALUE CHAIN
Although, WSBI – ESBG considers it essential that sustainability reporting should capture the entire value chain, we ask for clearer and more defined boundaries as it is considered difficult and complicated to obtain information from companies that are not under the control of a financial institution, especially regarding scope 3 GHG emissions.

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For a single market for data to push growth and innovation

ESBG submitted its response to the European Commission (EC) targeted consultation on an Open Finance Framework and data sharing in the financial sector on 15 July.

ESBG and its members highlighted that they share the objectives of the EC’s data strategy and the commitment to create a single market for data that will constitute a potential source of growth and innovation.

A European approach to data is essential to ensure competitiveness, avoid fragmentation, benefit from an effect of scale and guard against windfall effects from which certain non-European players could benefit. A flourishing data-driven market should be based on principles of mutual benefits and right incentives for all market participants. Therefore, a fair share of value and risk is a fundamental prerequisite for the success of data sharing.

In an open finance framework, the principle “same activity/data, same risks, same rules” shall apply to all actors, including third party providers, ESBG said in its response. To ensure customer’s trust, every third party accessing customer data shall ensure privacy rights and data protection in compliance with all applicable rules. As such, we suggest third party within the financial sector be subject to the same licensing requirements and to supervision by competent authorities.

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PSD2 review must seek fair distribution of value and risk among all market participants

ESBG submitted its response to the European Commission (EC)’s targeted consultation on the review of the revised payment services Directive (PSD2) on 15 July. In it, ESBG and its members stated that the core principle of PSD2 – access to data free of charge – did not foster the best outcome and that the PSD2 implementation has been a highly complicated and costly process for the whole market.

For banks, in particular, the investments required for the implementation of PSD2 have been unproportionally high without a chance of a return. More in general, the significant investment levels do not match the limited economic benefits for the market and the end-consumer.

Therefore, the review of the PSD2 should seek a more balanced approach, with a fair distribution of value and risk among all market participants.

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Number of unbanked adult EU citizens more than halved in the last four years

Nevertheless, more than 13 million adults, or 4% of the adult population, face financial exclusion, according to an ESBG analysis of the Global Findex Database 2021, recently released by the World Bank.

 

 

BRUSSELS, 14 July 2022 – The number of unbanked citizens more than halved over the past four years, but more than 13 million adult EU citizens still lack access to formal financial services, with room for Europe’s savings and retail banks to continue contributing to financial inclusion.

The European Savings and Retail Banking Group (ESBG) conducted an analysis of the Global Findex Database 2021 recently released by the World Bank, and was pleased to find that the number of banked adults in the EU has climbed.

This significant improvement can be attributed to increased efforts from the banking industry, including notably the ESBG membership serving 162 million Europeans, as well as to an increased move towards digitalisation spurred by the pandemic.

“Financial inclusion is at the core of our members’ vocation and they put great efforts on serving individuals, families and SMEs, with a focus on leaving no one behind, which has surely contributed to the improvement of financial inclusion in the block”, said ESBG Managing Director, Peter Simon.

According to the World Bank Findex (which has no data for Luxembourg over 2021), 3,6 % of Europe’s population remain financially excluded, an improvement from the 8,2% reported in 2017. This percentage translates to some 13 million adult citizens being unbanked in 2021, down from close to 31 million in 2017.

Part of the remaining unbanked are probably less-digital savvy people and banks need to continue cater for that segment. Without any doubt, all the unbanked rely on cash to participate in the economy and therefore banks must play a responsible role regarding cash provision.

Looking at some European countries in detail, Romania suffers the highest no-account rate at 30,9%, while neighbour Bulgaria faces the second highest financial exclusion rate at 16%. Following them are Hungary (11,8%), Croatia (8,2%) and Portugal (7,4%). Compared to the 2017 data, Bulgaria showed nearly an 11 percentage points improvement from 2017 when they reported 27,8% of the population remained unbanked. The Czech Republic and Lithuania significantly improved their unbanked rates over the reported period, dropping out of the top 5 list of EU countries with the highest no-account rates, as Croatia and Portugal replaced the pair.

Best-in-class countries include Denmark, with hardly any unbanked people reported, followed by Germany (0,02% unbanked) and Austria (0,05%). These are followed by the Netherlands (0,3%) and Sweden (0,3%). Austria is the newcomer in this top 5, replacing Belgium. Nevertheless, Belgium, together with 10 other countries have more than 99% of their population participating in banking services.

Table: Financial inclusion in EU Member States, unbanked adults

(Sources and notes: Global Findex – 2021 data on Luxembourg is missing in Global Findex so has been omitted, analysis by WSBI-ESBG)

  2017 2021
Country Unbanked adults 15+ Relative share Unbanked adults 15+ Relative share
Austria 137.700 1,84% 3.761 0,05%
Belgium 128.041 1,36% 95.329 0,99%
Bulgaria 1.697.604 27,80% 947.642 16,03%
Croatia 494.946 13,86% 283.466 8,20%
Cyprus 109.767 11,28% 69.197 6,87%
Czech Republic 1.703.016 19,01% 456.366 5,06%
Denmark 3.947 0,08% 0 0,00%
Estonia 22.137 2,01% 6.929 0,62%
Finland 9.866 0,21% 21.861 0,47%
France 3.270.789 6,00% 419.374 0,76%
Germany 613.053 0,86% 16.765 0,02%
Greece 1.341.302 14,53% 473.335 5,12%
Hungary 2.105.537 25,06% 983.136 11,78%
Ireland 173.372 4,66% 13.310 0,34%
Italy 3.255.366 6,21% 1.401.949 2,71%
Latvia 112.583 6,78% 53.731 3,38%
Lithuania 419.049 17,12% 152.777 6,47%
Malta 10.302 2,64% 15.982 3,55%
Netherlands 51.485 0,36% 39.231 0,27%
Poland 4.292.591 13,27% 1.377.061 4,28%
Portugal 681.086 7,66% 658.625 7,35%
Romania 7.039.982 42,25% 5.031.950 30,88%
Slovak Republic 727.964 15,82% 201.923 4,38%
Slovenia 43.408 2,47% 16.937 0,95%
Spain 2.474.022 6,24% 689.696 1,70%
Sweden 21.133 0,26% 26.545 0,31%
Totals 30.940.048 8,20% 13.456.879 3,54%

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26th edition of SPOTLIGHT : Hello, itsme® you're looking for ?

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Hello, itsme® you're looking for ?

About this event

Belgian Mobile ID is a consortium of Belgium’s leading banks, mobile network operators and Federal Holding and Investment Company who have joined together to create itsme®, the European reference for mobile identification, authentication and digital signature.
Itsme® was granted accreditation by the Belgian government as an official form of digital identity in January 2018 and on a European level in December 2019 (LOA high eIDAS). The itsme® app is used extensively in the financial sector among others because it complies with PSD2, FATF and GDPR guidelines. It has also been awarded ISO27001 certification. Since April 2021, itsme® is also available for Dutch citizens.

Guest Speaker:
Sylvie Vandevelde
Chief Marketing Officer at itsme

 

 

 

 

 

From taking care of customer experience in real life to Design thinking and UX in a digital world, for Sylvie Vandevelde, CMO at Belgian Mobile ID, the customer-user-citizen needs to be at the heart of every solution. Thanks to technology and innovation, we have the opportunity today to be in the driving seat of our digital us. An inclusive society needs a trusted ID that is easy to use and compliant.