New York Community (NYCB) Coins Digital Marker for Figure ATS
New York Community's (NYCB) digital marker aiding Figure Technologies' shares' secondary trading on its alternative trading system is an important mil...
New York Community Bancorp, Inc.’s NYCB subsidiary, New York Community Bank, has built a cutting-edge digital payment process via the development of a blockchain-induced digital marker — USD Forward (USDF) — which is the first to be used by a bank on the Provenance Blockchain.
This will aid Figure Technologies, Inc. to operate the real-time secondary trading in digital shares of its stock by using its alternative trading system (“ATS”). The ATS runs on the Provenance Blockchain and is also registered with the U.S. Securities and Exchange Commission (SEC).
Essentially functioning as a financial intermediary between the buyers and sellers of Figure Technologies digital shares, New York Community will expedite the payment process through its USDF. The initial set of transactions by the bank substantiates the performance of the USDF as an important Provenance Blockchain decentralized finance (DeFi) tool. Through the strategic relationship with Figure Technologies, the bank will be able to advance on its plans by bolstering the entire DeFi ecosystem and moving ahead with more digital marker transactions.
Figure Technologies’ ATS use of New York Community Bank’s digital marker marked the first transaction on the platform. The ATS facilitates trading in real-time viz-a-viz T+2 or longer on traditional exchanges. It also accommodates trading without any requirement for traditional intermediaries.
Along with the bank programmatically creating the USDF digital marker for customers’ use, the secondary trading on the Figure Technologies ATS and the use of USDF necessitates integrating all counterparties through the bank’s upgraded AML/KYC compliance procedure. All trading transactions conducted on the Figure Technologies ATS are in conformity with the applicable SEC rules and regulations.
The CEO of Figure Technologies, Mike Cagney, noted, "New York Community Bank's digital marker and Figure ATS together demonstrate the remarkable possibilities for private company stock trading and settlement in real-time without counterparty or settlement risk, and is a harbinger of the significant disruption blockchain is bringing to global exchanges, including public equity markets."
New York Community’s endeavor in creating the digital payment process is a huge step forward to its recently-announced collaboration with Figure Technologies on a series of blockchain projects. In line with this, the bank had made a direct equity investment in Figure Technologies in August.
Both companies have collaborated to invest in the JAM FINTOP Blockchain fund, which aims to invest in, and develop blockchain infrastructure and businesses. It has now been announced that the JAM FINTOP and the Provenance Foundation have instituted the USDF Consortium to enable other banks as well to create digital markers for use in a wide array of DeFi transactions. The bank is working with the Consortium organizers to warrant that its compliance standards meet applicable regulatory requirements.
Since Figure Technologies has developed numerous blockchain-based solutions in lending and payments, New York Community’s move to pursue innovative blockchain solutions in the banking field will help it benefit from the former.
Markedly, New York Community has been leaning on technology to drive operational efficiency and growth. It has been expanding into the Banking-as-a-Service (BaaS) space on the back of partnerships with fintech companies, and growing deposits through numerous strategies, including strengthening its presence in the existing borrower base. Such efforts will boost New York Community’s revenue prospects.
Currently, New York Community carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock has gained 7.6% over the past three months against the industry’s decline of 7.5%.
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Similar Steps by Other Banks
A growing number of financial services organizations, including banks, are resorting to convenient, frictionless digital services for their customers and clients.
Wells Fargo & Company WFC has unveiled a new accounts receivable service, Integrated Receivables, in a bid save the time of firms and resources on manually-applied payments. The service uses artificial intelligence, machine learning, and robotic processing to assist in streamline payments and remittance data capture, re-association, and invoice matching.
In July, Northern Trust NTRS automated its document capture function in its alternative asset servicing business by rolling out a machine learning-powered capability. This underpins the company’s efforts to digitize alternative asset servicing and enhance asset owner clients’ experience through a multi-year investment.
In the same month, Sterling Bancorp STL announced its investment in the parent company of BrightFi, Verdigris Holdings, Inc., to expand its digital offerings, and facilitate innovation in the banking and financial industry. Sterling also announced a BaaS partnership with BrightFi this April.
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