Any RBC acquisition causes the writer to sit up straight and pay close attention.
The 2015 RBC acquisition of City National, for example – its biggest to date – was by normal M&A metrics expensive, but is already shaping to look like a shrewd piece of business.
And now City National has acquired Exactuals payments, a Los Angeles-based provider of innovative SaaS solutions for complex payments in the entertainment industry.
Exactuals payments is a unique provider, leveraging artificial intelligence tools to provide innovative payment solutions to clients of all sizes. Exactuals’ innovative payment system, PaymentHub, allows studios, unions, guilds, payroll companies, music publishers, record labels, distributors and marketplaces to provide direct deposit payments. It also covers tax document management and online reporting to rights holders, performers, managers, service providers and independent contractors across the globe.
In many cases, this automated system has replaced an outdated payment process, reducing or eliminating the need for costly paper checks and reporting. Exactuals’ system provides payments and reporting functions with greater security, accuracy, transparency and speed. Firms can process global payments through operating accounts at City National.
In addition to PaymentHub, Exactuals recently launched RAI, a sophisticated artificial intelligence tool used by record labels and publishers to optimise ownership metadata for the calculation and payment of royalties.
At the time of the City National deal, RBC retained City National’s leadership team. That is also the position at Exactuals, with the business’s senior management staying on and being rewarded with multi-year deals.
Exactuals will now modernise the residuals and royalty payment process for the entertainment industry and, interestingly, will expand to serve other businesses as a wholly owned subsidiary of City National Bank. The acquisition builds on City National’s history of serving the entertainment industry.
It also enables RBC to continue to build out its payments franchise, defend and grow value for its entertainment clients, and create a source of lower-cost, lower-beta deposits in the future. Exactuals was founded at the Stanford Graduate School of Business in 2011 with the goal of modernising the entertainment payments space. It is by no means the biggest bank fintech acquisition of the year, but is potentially one of the most interesting.
Switch launched 30 years ago
It is 30 years since the first Switch transaction, following the launch of Switch debit cards by Midland, RBS and NatWest.
By 1994, one-half of all UK adults held a debit card. In 2001, debit expenditure exceeded credit card spending for the first time. Switch was to run for 14 years until merging with Mastercard’s Maestro brand.
Switch’s 30th anniversary is much more agreeable to celebrate than the plethora of 10-year gloom-and-doom pieces marking the Lehman collapse.
Another anniversary is on the horizon, with the prepaid card in the UK set to become a teenager. Prepaid cards in the UK rolled out 13 years ago next month in October 2005.
Open Banking deadline fast approaching
The EBA is taking a firm line on PSD2 Open Banking regulations, stating that “ignorance of them can, of course, not be used to justify non-compliance,” and that “non-compliance amounts to a breach of law, with the resultant consequences for the legal entity.”
With less than six months now until the deadline, there are seven key elements that a financial institution needs to deliver to meet the PSD2 Open Banking regulations:
- API Interface – live for six months prior to going live externally
- Exemption certificate from NCA or fallback option
- SCA solution
- TPP regulatory checking
- eIDAS Seal certificate checking if operating in Europe
- Access token issuance
- Management of consents by PSU
One wonders just how many prepaid and debit programme managers at smaller institutions, e-money issuers and credit institutions are going to be fully compliant and on target to meet the 14 March 2019 Open Banking deadline.