• To newly establish a LiDAR business organization directly under the CEO recently
• To strengthen Vehicle Camera Module business capability via equity investment, product enhancement, and factory expansion.
• To become a ‘Vehicle Sensing Total Solution Provider’…providing differentiated customer values 

SEOUL, South Korea, July 3, 2024 /PRNewswire/ — LG Innotek (CEO Moon Hyuksoo) is poised to accelerate growth in the vehicle sensing solution business by leveraging its leading-edge optical technology to drive innovation in the future mobility sector.

At a press conference held in March, LG Innotek CEO Moon, Hyuksoo outlined his plans, stating, “We will identify a new business opportunity where we can leverage our company’s distinctive ‘No. 1 know-how’ in the mobile camera module industry to establish a robust business portfolio.”

The sensing solution business for AD (Autonomous Driving) & ADAS (Advanced Driver Assistance System) is one of the most promising areas where the CEO’s management strategy can be implemented with the greatest impact.

The paramount concern in the autonomous driving market, which is emerging as a key area for future vehicles, is the safety of both drivers and pedestrians. If a vehicle cannot accurately detect obstacles that hamper driving, it may lead to a serious accident. This is the reason why car makers are investing in advanced vehicle sensing solutions.

• To newly establish a LiDAR business organization directly under the CEO recently

LG Innotek has identified ‘High Performance LiDAR’ as a key pillar of its Vehicle Sensing Solution business and is pursuing a targeted approach to the LiDAR market.

In particular, LG Innotek has recently established a dedicated business division for LiDAR, reporting directly to the CEO. The development and business of LiDAR, previously dispersed across the existing optical solution business division and CTO, have been consolidated under the LiDAR business division. This organisational restructuring was driven by the CEO’s strong desire to oversee the LiDAR business directly and to enhance capabilities and operational efficiency.

LG Innotek has been consistently strengthening its core capacity to engage in the LiDAR business since 2015. Last year, LG Innotek acquired 77 US patents related to LiDAR from a US autonomous driving startup company. The company currently holds over 300 patents related to LiDAR.

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• To strengthen Vehicle Camera Module business capability via equity investment, product enhancement, and factory expansion.

Another product line that LG Innotek has identified as a key pillar is high-value added vehicle camera modules.

The majority of camera modules mounted on vehicles that have been commercialised to date tend to fulfil only the basic function of filming and have low added value as products. However, as we enter the era of autonomous driving, the vehicle camera modules must take on the role of the eyes of a driver. It is therefore vital that vehicle camera modules are equipped with enhanced sensing capabilities.

In line with such trends, LG Innotek has entered into a contract for equity investment with AOE Optronics (hereinafter referred to as ‘AOE’) to enhance its capabilities in the vehicle camera module business.

Recently, there has been a notable increase in demand for ‘Aspherical Glass Lenses’, a key component for high-resolution cameras in the autonomous driving vehicle industry. AOE has considerable expertise in manufacturing technologies for this specific area. By working closely with AOE, LG Innotek is able to accelerate the development of high-value camera modules.

Furthermore, in February 2024, LG Innotek launched a ‘High-Performance Heating Camera Module’, designed to rapidly defrost vehicle camera lenses in cold weather conditions. This module maintains its original size while adding a heating function to offer customers enhanced value.

LG Innotek is currently developing a high heat-generating material that can accelerate heating even faster than the current product. The company intends to conduct performance verification on the ultra-high-speed heating camera modules incorporating this material.

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Moreover, LG Innotek is developing camera modules with a washing function to remove foreign substances like dust from the lens while driving. These will enable the company to expand its high-value-added vehicle camera module portfolio.

The company is also investing in facilities to occupy the vehicle camera module market.

In addition, LG Innotek purchased approximately 99,173 square meters of land near its manufacturing subsidiary in San Juan de Rio, Mexico, with the intention of expanding its factory last year. The newly expanded factory is scheduled to commence mass production of vehicle camera modules in the second half of next year.

An official from LG Innotek commented, “The decision to locate the vehicle camera module production hub in Mexico was driven by our strategy to enhance our ability to serve customers in the North American region, where major car makers are concentrated, by making good use of the geographical proximity.”

• To become a ‘Vehicle Sensing Total Solution Provider’…providing differentiated customer values

LG Innotek aims to become a market leader in AD/ADAS sensing solutions by offering differentiated customer value as a ‘Vehicle Sensing Total Solution Provider’ that encompasses vehicle interior and exterior solutions.

It is well-known that global car manufacturers developing autonomous driving vehicles have established various strategies for adopting different sensing components.

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LG Innotek intends to continue improving the performance of vehicle camera modules in response to customers who are interested in adopting only vehicle camera modules.

Furthermore, the company is actively seeking to attract customers by implementing ‘Sensor Fusion’, which combines vehicle camera modules and LiDAR through software.

This will enable the company to offer customers a wider range of sensing parts for installation on a vehicle’s exterior and a ‘In-Cabin Vehicle Camera Module’ that can be employed for various purposes inside a vehicle, such as teleconferencing, entertainment, and infant monitoring.

The CEO stated that, based on the formula for becoming No. 1 learned from the mobile camera module business, the vehicle sensing solution business will be fostered into a business with annual sales of 1.4 billion USD by 2030 and developed as another top-ranking business.

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[Reference 1] Outlook on size of global autonomous driving vehicle market
According to the global market research firm, ‘Precedence Research,’ the global autonomous driving vehicle market is forecasted to grow by an annual average of 35% from 158.3 billion USD in 2023 to approximately 2.35 trillion USD in 2032.

[Reference 2] Outlook on size of global autonomous driving LiDAR market
The global autonomous driving vehicle market is forecast to grow by an annual average of 35% from 158.3 billion USD in 2023 to approximately 2.35 trillion USD in 2032, according to the global market research firm, ‘Precedence Research’.

[Reference 3] Outlook on size of global vehicle camera module market
The market research firm S&P Global and LG Innotek’s internal analysis indicates that the global vehicle camera module market will grow at an annual average of 7% from 6.44 billion USD in 2023 to 10.03 billion USD by 2030 due to the advancement of autonomous driving technology.

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Latest Compliance News: Regulatory Developments, Sanctions, Guidance, Permissions, and New Product and Service Offerings

ABC Projektai, CJEU, Lithuania

The Court of Justice of the European Union (CJEU) has ruled that ABC Projektai, an online payments firm based in Lithuania, can regain its banking license, which was previously revoked by the Bank of Lithuania.

Previously known as Bruc Bond UAB, ABC Projektai had its banking license revoked in April 2020 due to allegations of holding customer funds longer than necessary for online transactions.

The Supreme Administrative Court of Lithuania (SACL) accepted the company’s appeal. The ruling recognized ABC Projektai’s compliance efforts and adherence to regulations, according to a statement from the company last week.

Starting 1 July 2024, the fintech firm will be able to operate under a full banking license once again.

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This case highlights the rare instance where a regulatory decision to ban a financial entity is later overturned by a higher legal authority.

“The court, in agreement with the Court of Justice of the European Union (CJEU), found that the primary allegation against ABC Projektai—exceeding the limits of its payment institution license—was unfounded,” the firm stated.

“This complete vindication is a significant relief as it validates our operational practices and unwavering commitment to regulatory compliance,” a spokesperson for ABC Projektai commented.

The court deemed the initial penalty of permanent revocation excessively harsh and disproportionate under the given circumstances. It also confirmed that there was no evidence of intentional wrongdoing by ABC Projektai.

ABC Projektai noted that it received support from other EU member states, including Germany, Poland, and the Czech Republic, as well as the European Commission.

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Source: wealthbriefingasia.com

The post Compliance Corner: Court Reverses Licence Ban On Lithuanian Fintech appeared first on HIPTHER Alerts.

2024: The Summer of Consent Orders for Smaller Banks

The summer of 2024 is seeing a surge in consent orders for smaller banks. On June 28, Tennessee-based Thread Bancorp became the latest financial institution to come under the Federal Deposit Insurance Corporation’s (FDIC) scrutiny. This highlights the growing importance of managing operational, compliance, and strategic risks associated with third-party partnerships for banks and their FinTech collaborators.

Typically, the FDIC announces enforcement actions on the last Friday of each month. The recent order for Thread, a popular partner bank for numerous FinTechs, is notable for explicitly addressing the bank’s Banking-as-a-Service (BaaS) and Loan-as-a-Service (LaaS) programs.

Dated May 21, the order mandates Thread Bank to implement several corrective measures without admitting or denying any unsafe or unsound banking practices. These measures include establishing a comprehensive third-party risk management program and enhancing due diligence, monitoring, and exit planning for Thread’s FinTech partners. This requirement underscores the regulator’s increasing focus on banks’ relationships with technology firms.

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“Within 120 days of the effective date of this ORDER, the Bank’s BaaS and LaaS program policies and procedures must be thoroughly documented, covering, at a minimum, third-party partner and customer approval requirements, due diligence processes, growth and stress modeling, ongoing AML/CFT compliance monitoring, and steps to unwind third-party business lines, including FinTech partners,” the FDIC stated.

Thread’s FinTech and BaaS partners include Unit, which provides services for Relay, Toolbox, Sequin, Currence, Arpari, and several other platforms.

“When vetting potential fintech clients, both Thread and Unit prioritize maintaining a strong focus on compliance and oversight,” Unit wrote in a 2023 blog post.

“We remain steadfastly committed to collaborating with regulators at the state and federal levels because we believe the regulatory framework is necessary and can help create a strong banking system for consumers and small businesses,” Chris Black, CEO of Thread Bancorp, Inc. and Thread Bank, said in a statement to PYMNTS.

Black added, “We are dedicated to meeting all obligations and have made substantial investments to improve our policies, processes, procedures, and controls over the past three years in collaboration with the FDIC and the Tennessee Department of Financial Institutions (TDFI). We will continue to invest in our teams and services to ensure we meet the needs of, and provide strong protection for, our customers and partners as we move forward.”

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FinTech Risk in Financial Supply Chains

Navigating the complex web of financial regulations is a daunting task, especially for FinTech startups with limited resources. Partnering with established banks allows FinTech companies to leverage their partners’ robust regulatory frameworks, reducing the compliance burden.

The BaaS model aimed to create a shared compliance environment where FinTechs could operate within regulatory bounds while focusing on innovation and growth. However, the reality has been more challenging.

A year ago, on June 6, 2023, the FDIC, the Board of Governors of the Federal Reserve System (FRB), and the Office of the Comptroller of the Currency (OCC) issued final guidance on managing risks associated with third-party relationships.

Since then, the collapse of Synapse’s bankruptcy has tested the interconnected BaaS and FinTech landscape. Adding to the turmoil, Synapse’s primary banking partner, Evolve, suffered a significant cyberattack on June 26, putting its risk controls under scrutiny.

“The regulators are now awake,” Thredd CEO Jim McCarthy told PYMNTS. “Too many people focus on the ‘as a service’ part but neglect the banking part. If you fail at banking, the service piece doesn’t matter.”

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The Middle Falls out of Middleware

A PYMNTS Intelligence report found that 65% of banks and credit unions have formed at least one FinTech partnership in the past three years, with 76% viewing these partnerships as essential to meeting customer expectations. Additionally, 95% of banks aim to use partnerships to enhance their digital product offerings.

Thread Bancorp, previously known as Civis, has a history of regulatory actions. Its recent FinTech partnerships have driven rapid growth, from less than $100 million to over $720 million between the end of 2020 and Q1 2024, according to FDIC call reports.

“With complex ecosystems, you have more partners than ever before,” Larson McNeil, co-head of marketplaces and digital ecosystems at J.P. Morgan Payments, told PYMNTS. This creates new challenges for managing partners and counterparty risk.

The Thread Bank case may indicate how regulators approach the intersection of traditional banking and financial technology. As the financial landscape evolves, the key to leveraging the BaaS model lies in fostering strong, transparent, and mutually beneficial relationships between banks and FinTech firms. By doing so, they can collectively drive the future of banking toward greater inclusivity, efficiency, and innovation.

Source: pymnts.com

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