Latest news with #Finextra
Finextra
3 days ago
- General
- Finextra
Thought Leadership at Hedera
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Finextra
16-07-2025
- Business
- Finextra
Can reducing fossil fuel subsidies advance global climate goals?
0 This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Research from ZEW Manheim found that worldwide climate targets can be met by reducing subsidies for fossil fuels. The Paris Agreement aims to limit global warming to below 2°C to 1.5°C above pre-industrial levels. Targets range from achieving net zero by 2035 to 2070 depending on the country, with most settling in the middle at 2050. The UK is aiming to become net zero by 2045 and pledged to reduce emissions by 69% by 2030. What are fossil fuel subsidies? Many governments have direct and indirect subsidies in fossil fuels – the former being direct payments, and the latter allowing significant tax breaks to allocated businesses and institutions. In 2022, fossil fuels received $7 trillion in subsidies. Countries with the largest subsidies in fossil fuels are producers of oil, such as Saudi Arabia, Libya, Kazakhstan, Iran, and Algeria. Countries such as Venezuela, Finland, Australia, and Ireland also have large subsidies in fossil fuel industries, according to 2021 research from Our World in Data. Governments fund subsidies as a privileged form of financial aid, to support sectors of a nation's economy with the ultimate goal of maximising profit and protecting domestic jobs. Other forms of government subsidies are individual subsidies, like student loans and unemployment benefits. In the US, subsidies have historically supported the agricultural, financial, oil, and utility industries – the motivations behind this can be political and economic. Some socioeconomic theories suggest certain industries require protection from global competition to ensure profitability. There have been arguments against government subsidies that inspire a free economy vs. mixed economy debate; defenders of the free market argue that the free economy cannot exist with government intervention, whereas those who are pro-subsidies state that protecting certain industries allows people to thrive and jobs to remain intact. 'Many governments still help to keep fossil fuels cheap for consumers. For example, explicit subsidies are used to cover part of the supply cost, or external health costs associated with the use of fossil fuels are not included in prices because of implicit subsidies,' stated Professor Sebastian Rausch, head of the ZEW Research Unit 'Environmental and Climate Economics'. How can reducing fossil fuel subsidies lead to achieving climate goals? US subsidies in fossil fuels amounted to $757 billion in 2022, $3 billion in explicit subsidies, and $754 billion in implicit subsidies. Subsidies exceeded the federal government's tax revenues from natural gas and petroleum by $2.1 billion in 2022. Under former President Joe Biden, the US pledged to phase out from fossil fuel investments abroad by 2040. However, since then, the new US administration has pulled out of the Paris Climate Agreement and instated anti-ESG laws, allowing climate-killing fossil fuels to continue to thrive. According to the IMF, reducing fossil fuel subsidies can promote economic growth by limiting uneven division of resources, reduce pollution and climate change, and encourage better social spending by reductions in taxes. The research from ZEW revealed that a third of all countries could meet their climate goals by reducing subsidies in coal, oil, and natural gas – which could lower carbon emissions enough to meet climate targets without additional policies. The argument against fossil fuel subsidies is not a new one; discussions at 2021 and 2022 UN climate change conferences have been pushed for policies to retract tax privileges from oil and gas industries. A report from the University of Cambridge published in May outlined that to reach the goals of the Paris Agreement, three climate actions are essential. Reducing emissions by moving energy production away from fossil fuels that generate greenhouse gas emissions; Reduction of energy use in sectors to ensure greenhouse gas removal; and Optimising land management through solar radiation modification. The removal of both implicit and explicit fossil fuel subsidies is essential. The report states: 'many countries continue to heavily subsidise fossil fuels, both explicitly (by undercharging supply costs) and implicitly (by failing to account for the non-market costs associated with local externalities of fossil fuel use).' The figure below outlines the differences between explicit and implicit subsidies based on 2022 data from the IMF, and what approaches are being taken to reduce them. Source: Our World in Data Reducing all direct fossil fuel subsidies would not successfully tamp down on global emissions, however identifying hidden costs of fossil fuels in energy prices could cut down global emissions by 32%, whilst improving welfare in nations. Tim Kalmey, researcher at ZEW and also co-author of the ZEW study, commented: 'Phasing out explicit subsidies, such as tax exemptions on kerosene or gas price ceilings, would only have a limited effect on CO2 emissions. It is crucial that also the local externalities of fossil fuels, i.e. the harmful effects on health caused by local air pollution, are factored in. We estimate that this would reduce global CO2 emissions by 32%.' Only reducing explicit fossil fuels will not fulfil the climate goals outlined by the Paris Agreement, but eliminating implicit fossil fuel subsidies will allow one-third of countries to overachieve their climate targets. With effective energy pricing, the cost of achieving climate goals can be lowered for all countries, and adding effective energy pricing on top of carbon pricing to meet the Paris Agreement goals will increase welfare by 120%. By retracting government intervention in gas and oil industries, not only will it protect the planet, but the welfare of individual nations that will take part. This new data is key for policymakers, who can use it to make real progress towards mitigating climate change.
Finextra
15-07-2025
- Business
- Finextra
Solving modern KYC challenges
0 This content has been created by the Finextra editorial team with inputs from subject matter experts at the funding sponsor. In today's digital age, banking is expected to be seamless, frictionless, and to make it plain and simple: easy. However, with a constantly shifting regulatory landscape, increased demand for hyper-personalisation and desire to be digital – financial institutions have obstacles to overcome to keep up with consumer demand. A pain point in the digital-first agenda is the know your customer (KYC) process, which frequently requires manual, in-person visits to the bank that can complicate and frustrate the onboarding experience. Two out of three consumers today expect a fully digital onboarding experience. Recent research finds that 67% of banks have lost clients due to slow and inefficient client onboarding and KYC, and the annual cost of performing KYC reviews can range between $60 million and $175 million, depending on the type of bank. Arsalan Minhas, AVP of solution consulting organisation at Hyland for EMEA and APAC regions, spoke with Finextra on how to find solutions for modern KYC challenges, and where AI can be implemented in the onboarding process to improve overall customer experience and retention. What are the challenges in onboarding and KYC? Minhas outlined three key challenges that traditional financial institutions are facing when managing customer expectations in the current digital era of banking: Lengthy and ambiguous processes Poor functioning technology Regulatory complexity due to evolving KYC regulations Going into further detail, Minhas cited that 68% of modern-day consumers expect a 100% digital onboarding process, which traditional banks are struggling to meet. Additionally, issues with biometric ID verification or document uploads — especially on mobile devices — are common pain points. Minhas stated that neobanks are quickly filling in the gaps where traditional banks are falling short, stating that 'tech-first companies are leveraging advanced analytics to deliver hyper-personalised experiences' such as timely real-time notifications on transactions, tailored financial advice, and automated savings tools. 'If you look at these neobanks, they are providing frictionless onboarding and instant access. Opening an account can be completed in minutes, entirely online, with minimal documentation, which is in stark contrast to lending, paper-heavy processes still common in the traditional banking world,' Minhas said. The mobile-first and fully digital experiences offered by neobanks align with the needs of younger generations. Minhas noted that another area where neobanks surpass their traditional predecessors is in serving the underserved, the populations overlooked by traditional banks that are often in remote or lower-income communities. 'Finding the right balance between security and experience is an important thing,' Minhas said. 'While robust KYC is essential to prevent financial crime, the need to collect and verify extensive personal information can feel intrusive to a lot of customers. If you combine that with the regulations like GDPR and others, it becomes even more complex.' He added that 53% of consumers expect their providers to use their data to personalise their customer journey, and traditional banks must ensure that they are utilising data to its greatest potential. How can KYC processes be refined to enhance the customer onboarding journey? The digitisation of KYC processes though electronic KYC (eKYC) and perpetual KYC have modernised the onboarding experience. Perpetual KYC ensures that customer identities do not become outdated by regularly monitoring and updating customer data. In enabling onboarding through online platforms or banking apps, eKYC increases customer satisfaction and maintains trust without sacrificing convenience for the customer. Minhas stated that automated KYC can cut onboarding times by up to 80%, and effective onboarding can increase customer retention by 50%. 'By integrating and automating data collection through onboarding and KYC, banks and financial services institutes can prepopulate customer profiles, reducing redundant requests and friction. This enables a single view of the customer and allows hyper-personalised product recommendations, timely communication, and tailored support throughout the customer life cycle,' Minhas said. In order to refine their KYC processes, Minhas emphasised that banks must leverage technology and evaluate their current systems to identify problem areas. Advocating for a phased approach as opposed to the 'rip and replace' model, Minhas stated that incumbents should outline key problem areas that need to be addressed and zero in on improving those to avoid disrupting existing operations. '[Banks] have to evaluate their legacy systems to really understand if they are fit for the modern-day world. They need to identify the inefficiencies, risk and the data silos, and then set clear goals. What would they like to prioritise? Is it speed in terms of onboarding and servicing a customer, or is it about reducing the cost? In commercial banking still, onboarding costs around USD $30,000 per customer, which is something neobanks are able to reduce significantly.' How can FIs balance compliance with customer experience? Minhas highlighted that automating compliance is essential to keep up with regulatory guidelines. Building compliance into daily processes by aligning it with the requirements of GDPR and AML, for example, can make compliance easier and more efficient. Minhas said applying AI on both structured and unstructured data will be key to the future of KYC: 'According to the research, 80-90% of financial services data is unstructured, yet only 18% of the banks or institutes are effectively using it. That tells you that there's a huge demand for improvement and to get better.' Touching on the emergence of 'zero-trust architecture' Minhas said data access must have the highest level of security to minimise the risk of a breach, and enhanced due diligence (EDD) can be automated using AI to ensure security for higher-risk customers. Giving an example, Minhas said that in Spain, 'BBVA is using AI to trigger additional checks only when the anomalies arise. When it is a normal case where you don't expect an anomaly, it is completely automated, and when it meets some specific conditions or criteria about suspicion or a fraud, then AI is used to conduct an automatic investigation.' He concluded that financial institutions need to 'adopt a strategic blend of technology, process redesign and customer-centric innovation' to keep up with the pace of the industry. Looking forward, there is no one right way to innovate, but innovation is essential. To learn more about improving the customer journey, read the Finextra impact study in association with Hyland here.
Finextra
14-07-2025
- Business
- Finextra
Top 7 Mobile Banking Features That Make Life Easier: By Viacheslav Kostin
Mobile banking has become a cornerstone of modern financial management, offering tools that make handling money faster, safer, and more intuitive. For banks, fintech startups, and individual users, these apps deliver efficiency and flexibility, reshaping how we interact with our finances. This article highlights seven standout features that are redefining banking, tailored for Finextra's audience of financial professionals, innovators, and tech enthusiasts. The Power of Mobile Banking Mobile banking apps empower users by simplifying complex financial tasks. From instant payments to investment tracking, these platforms combine cutting-edge technology with user-friendly designs to meet the needs of businesses and individuals alike. Let's explore the features driving this transformation. 1. Streamlined Loan Applications Applying for a loan no longer requires a trip to the bank. Modern apps let users submit applications from their phones by uploading a photo ID and recording a short verification video. Technologies like facial recognition and blockchain ensure secure, tamper-proof processing, with approvals often granted in minutes. This efficiency saves time and enhances trust in digital banking. 2. Instant Digital Card Creation Need a card for online purchases? Mobile banking apps generate digital cards instantly, ready for use with digital wallets like Apple Pay or Google Wallet. Users can also request physical cards with delivery tracking built into the app, offering flexibility for both online and in-person transactions. 3. Effortless Money Transfers Sending money is as simple as selecting a contact from your phonebook. By using a phone number, apps eliminate the need for manual entry of card details, reducing errors and speeding up transactions. Users can also top up accounts seamlessly using external bank cards or digital payment platforms, ensuring quick access to funds. 4. Smart Location-Based Services Finding the nearest ATM or bank branch is effortless with geolocation-powered features. Apps display real-time maps with filters for specific services, such as high-value cash withdrawals or foreign currency availability. This precision saves users time and makes banking services more accessible. 5. Proactive Payment Notifications Stay on top of your finances with timely push notifications. Whether it's a reminder for an upcoming bill, a traffic fine, or an offer for a credit limit increase, these alerts help users manage their obligations without manual tracking, adding convenience and peace of mind. 6. Advanced Account Management Mobile apps offer robust tools for account control: Temporary Card Suspension: Lost your card? A soft lock feature lets you pause it temporarily, avoiding cancellation if it's later found. Remote Account Closure: Close accounts or transfer funds without visiting a branch, ideal for those with busy schedules. Payroll Card Support: Businesses can issue payroll cards for employees, simplifying payments for remote or distributed teams. 7. Interactive Financial Tools Some apps integrate features that go beyond transactions to engage users: Built-In Messaging: Request or send funds through an in-app chat, making payments feel personal and intuitive. Investment Management: Track stocks, buy shares, or monitor market quotes in real time, all within the app, eliminating the need for separate brokerage platforms. Benefits for Financial Institutions and Users These features deliver value across the board: For Banks and Fintechs: Streamlined processes boost operational efficiency and customer satisfaction, strengthening loyalty. For Businesses: Tools like payroll cards and instant transfers simplify cash flow management and vendor payments. For Individuals: Intuitive interfaces and secure technologies make banking accessible, fast, and tailored to daily life. Here's a summary of their impact: Loan Applications: Quick, secure approvals enhance user trust. Digital Cards: Immediate access for online and in-store purchases. Money Transfers: Fast, error-free payments via phone contacts. Location Services: Time-saving access to ATMs and branches. Notifications: Proactive alerts for better financial planning. Account Tools: Flexible management for accounts and cards. Interactive Features: Engaging tools for payments and investments. Why These Features Matter Mobile banking features are more than conveniences - they're reshaping financial services. By leveraging technologies like biometrics, blockchain, and real-time data, these apps ensure security and reliability. For financial institutions, they drive innovation and competitiveness. For users, they offer control, flexibility, and a banking experience that fits seamlessly into modern life.
Finextra
11-07-2025
- Business
- Finextra
Oxygen Conservation and Burges Salmon announce £1 million partnership for 8,000 UK-based carbon cred
Leading natural capital asset manager Oxygen Conservation and independent UK law firm Burges Salmon have announced the signing of a landmark partnership valued at up to £1 million. As part of the agreement, Burges Salmon will be the exclusive buyer of up to 8,000 premium-quality, UK-based carbon credits which will be provided at £125 per tonne. 0 This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author. Funding one of the UK's most ambitious nature restoration projects on the beautiful Leighon Estate in Dartmoor, Devon, the partnership demonstrates an important shift in how the voluntary carbon market operates - moving from transactional offsets to transformative investments that deliver measurable environmental and social benefits. Importantly, the credits generated by this project go far beyond simply sequestering carbon, they are designed to deliver deep, lasting ecological value, connecting with a Biodiversity Net Gain (BNG) scheme to form larger, more resilient ecosystems. Rich Stockdale, CEO of Oxygen Conservation, comments: 'Selling our first carbon credits to Burges Salmon marks not just a milestone for Oxygen Conservation, but a defining moment for natural capital markets. Burges Salmon has an established reputation in sustainability and their commitment to environmental integrity, their extensive due diligence, and their deep alignment with our values make them the perfect partner. In a space too often clouded by criticism, this deal is a clear signal; when carbon credits are underpinned by quality, transparency, and genuine impact, the market responds with conviction. This isn't just a transaction - it's proof that natural capital is no longer an emerging opportunity. It's an investable, valuable, and scalable asset class whose time has come.' Ross Fairley, Burges Salmon's new Senior Partner and a long-time leader in environmental and clean energy law, adds: 'This partnership is about helping to set a new standard for how organisations like ourselves engage with nature and lead with purpose. We have a long heritage of demonstrating that you can be a top law firm as well as a responsible business. We know clients and our people increasing value this approach. We're proud to be working with Oxygen Conservation to build a model that others can learn from, replicate, and be inspired by.' Setting the standard for premium quality credits, financing real climate and nature solutions With credits registered under the UK Woodland Carbon Code and independently validated by the Soil Association, Oxygen Conservation uses innovative drone-based monitoring systems to ensure high transparency and buyer assurance. The credits purchased by Burges Salmon will be generated through large-scale nature restoration and native woodland creation on the Leighon Estate. This 861-acre estate is owned by The Dixon Foundation, a UK registered charity, and managed by Oxygen Conservation. In furtherance of the charity's objectives the project forms part of a long-term effort to restore the ancient Atlantic rainforest, regenerating one of the UK's most precious and biodiverse ecosystems through a blend of natural regeneration and targeted tree planting. With an absolute carbon reduction target in place, approved by the Science-Based Targets Initiative, Burges Salmon recognises that carbon reduction is its number one priority. However, as the firm transitions to Net Zero it wants to address its residual emissions through a meaningful carbon partnership that will deliver significant benefit to environment and nature. How the carbon partnership works Together, Burges Salmon and Oxygen Conservation are demonstrating what meaningful, values-led collaboration can achieve, setting a new standard for integrity, transparency, and lasting environmental impact in the carbon market. This includes:
