Own CBA shares? Here’s the tech stock the banking giant just invested in

Commonwealth Bank of Australia (ASX: CBA) shares are having a good start to the week.

At the time of writing, the banking giant’s shares are up almost 1% to $118.43.

This has been driven largely by a positive start to the week for the banking sector.

In addition, there has been a little bit of news out of Australia’s largest bank that may have caught the eye of investors.

What did CBA announce?

This morning, CBA announced that it has expanded its support for innovative sanctions compliance technology by investing in Global Screening Services (GSS).

It is a UK-based RegTech company that specialises in payments screening.

The amount invested has not been revealed. However, CBA advised that it has taken a minority shareholding as part of GSS’s US$47 million Series A2 capital raising.

The release notes that CBA is the RegTech company’s first and only significant Australian investor to date.

What is GSS?

GSS provides sanctions compliance and transaction screening solutions for financial institutions which are designed to reduce process duplication and error rates in the screening process.

It was founded in London in 2021 with the aim of improving effectiveness and efficiency in international payments and creating less friction in payment flows to benefit bank customers.

Commenting on the investment, CBA’s chief risk officer, Nigel Williams, said:

The investment in GSS is part of the bank’s ongoing commitment to innovation to deliver better customer experiences. Following this investment, we are assessing the system for application in international payment flows.

As part of the bank’s investment in GSS, it has been able to appoint an observer to the company’s main board. CBA advised that the bank will be represented by its executive general manager of financial crime compliance, John Fogarty.

Fogarty spoke about how GSS’ technology could improve outcomes for the bank. He commented:

Banks play a critical role in combating financial crime and protecting their customers, the community and integrity of the financial system. We’re excited about the potential of GSS with its global reach and look forward to seeing how CBA can potentially utilise this technology to continue to prevent sanctioned parties from accessing and moving money into or out of Australia, whilst also speeding up the millions of international payments for our customers.

CBA shares deliver market-beating returns

Following today’s gain, CBA shares are now up 24% since this time last year.

Much to the delight of its shareholders, this is approximately double the market return over the same period.

This leaves the bank’s shares trading within sight of their record high.

The post Own CBA shares? Here’s the tech stock the banking giant just invested in appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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