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Friday, May 10, 2024

TikTok and other items that caught our eye this week

TikTok isn't going away quietly. The company filed a lawsuit against the United States on May 7, 2024, in response to a bill passed by the House of Representatives that could lead to a nationwide TikTok ban over national security and data privacy concerns linked to its Chinese connections. The bill aims to force major tech platforms to remove TikTok unless TikTok's parent company, ByteDance, sells the app to an American entity by July.

TikTok believes this legislation violates its First Amendment rights. TikTok's influence is notable with 170 million U.S. users and a $24.2 billion contribution to the U.S. GDP last year. Derek Chew, CEO of Fullmoon Digital, stated, "The TikTok ban would disrupt the growing community of creators, small businesses, and major brands" and prompt a shift in digital consumption to other platforms. He advises brands to diversify their marketing strategies and prepare for potential losses.

Durbin's at it again

In a May 9, 2024 speech on the Senate floor, U.S. Senate Majority Whip Dick Durbin, D-Ill., Chair of the Senate Judiciary Committee, called out the airline industry for alleged unfair and deceptive practices in their frequent flyer and loyalty programs. Durbin also objected to Wall Street bank and the airline company statements criticizing the Credit Card Competition Act. Durbin feels that the legislation would enhance competition and choice in the credit card network market. The Merchants Payments Coalition endorsed Senator Durbin's views. Payments industry experts disagree. We'll post a full news story on this next week.

Cargo theft on the rise

In 2023, small and midsize retail businesses faced a significant challenge with 1,183 incidents of cargo theft, totaling $694 million in losses, according to a new report released by cargo risk management company Overhaul Risk Advisory Services LLC. The report indicated that the average loss per incident increased by 67 percent from 2022 and is expected to rise by another 35 percent in 2024. Fraudsters, researchers pointed out, often use stolen identities to misdirect freight, impacting small retailers and causing operational disruptions for brokers and warehouses, which results in higher consumer prices as companies attempt to recoup losses.

Frank Matarazzo, CEO of Fusion Transport, emphasized the importance of securing supply chains, stating, "We must prioritize the security of our supply chains and take proactive measures to safeguard against theft." He recommends rigorous vetting of cargo carriers, on-the-ground inspections and real-time GPS tracking to mitigate risks.

Guidance from FTNI

Financial Transmission Network Inc. published a new resource on straight through processing. "At the forefront of modern accounts receivable (A/R) optimization lies the concept of straight through processing (STP)—a streamlined approach that aims to automate and accelerate the entire A/R lifecycle from payment initiation and acceptance, to deposit/settlement, and ultimately cash application—all with minimal (or no) manual intervention or touch points," FTNI stated. The new guide, How-to Guide: Achieving True Straight Through Processing, will help businesses incorporate STP into their receivables mix to deliver enhanced efficiency, reduce days sales outstanding (DSO) and improve cash flow, FTNI added. Download the document here: bit.ly/3US0w5V

AI moving too fast, according to recent survey

i2c recently examined how banking is preparing for the AI revolution and found, among other things, that 73 percent of banking professionals are now utilizing generative AI, but 61 percent feel AI is progressing too rapidly. This, i2c said, highlights the industry's cautious stance. The report, Preparing for banking's AI revolution, is available to American Banker premium members at www.americanbanker.com/research-report/preparing-for-bankings-ai-revolution. end of article

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