76% of corporates experience losses from unhedged FX risk

According to the latest Corporate Hedging Monitor from MillTechFX, over three-quarters (76%) of corporates experienced losses due to unhedged FX risk in 2024. Amid heightened market volatility, companies in both the US and the UK are re‐evaluating their hedging strategies. The survey reveals that many are opting to buy more FX options, extend hedge lengths, and even change banking providers to manage uncertainty better.

In Q4 2024, both UK and US corporates saw notable shifts in their risk management practices. The overall average hedge length contracted from 6.86 months in Q3 to 6.47 months in Q4, while hedge ratios increased from 47% to 52%. UK firms, in particular, raised their hedge ratios from 48% to nearly 57%, indicating a stronger drive to cover a larger portion of their exposure.

Eric Huttman, CEO of MillTechFX, reflected: “Trump’s election saw the US Dollar Index (DXY) strengthen by roughly 10%, climbing from just above 100 to as high as over 110. All this resulted in boosted levels of volatility in Q4, as the volatility index (VIX) climbed steadily from around 8 points to 8.75 points, hinting at more troubled waters to come in the year ahead.”

Huttman also highlighted the impact on the British pound. He explained that the pound had previously neared its highest level in over two years against both the dollar and the euro, only to drop sharply early in Q4 - an outcome attributed to faltering business confidence following the Chancellor’s budget, compounded by inflated borrowing costs and the threat of US tariffs.

Reflecting on the broader influences on hedging decisions, Huttman stated, “The most important factor influencing hedging decisions overall was credit availability, pointing to an intensification of the credit crunch we’ve witnessed throughout 2024.”

Looking ahead to 2025, Huttman warned, “As we head further into 2025, those hoping for respite from currency volatility are likely to be disappointed. FX volatility looks likely to continue as President Trump embarks upon his first round of tariffs, despite Canada and Mexico narrowly avoiding them for now.”

For CFOs and corporate treasurers, the survey’s findings underscore the urgent need to review and adapt FX risk management strategies in an environment marked by ongoing market turbulence and a tightening credit landscape.

 

Investor loyalty wanes as churn rates surge across investment funds

Global funds network Calastone has revealed a dramatic shift in investor behaviour, signalling a new era of engagement and dynamism in the investment landscape. Investors are becoming significantly more proactive, trading with increased frequency and drastically reducing average holding periods across key asset classes. For example, the average holding period for equity funds has dropped from seven years in 2016 to just four years in 2024 - a sharp decline of over 40%.

The increased frequency of trading by investors has led to a nearly 80% rise in volumes on Calastone’s network between 2018 and 2024. This combination of shorter holding periods and increased trading activity highlights a growing trend of investors closely monitoring their portfolios and making more frequent adjustments to their investment strategies.

In equity funds, holding periods have fallen by over 40%, from seven years in 2016 to four years in 2024, reflecting a shift toward proactive management and regular rebalancing. For bond funds, the average holding period has halved from eight years to four years as investors respond to interest rate changes and other macroeconomic factors. And even traditionally long-term holdings, such as global equity funds, have seen holding periods cut in half, from eight years to four years, as investors adopt a more hands-on approach.

This shift in investor behaviour poses both challenges and opportunities for the asset management industry. Investors now demand greater control, transparency, and flexibility in managing their portfolios, driving an industry-wide need for innovation. Traditional models, reliant on static, long-term holdings, are giving way to a more dynamic, personalised and responsive approach to investment.

Fund managers must now cater to a more engaged investor base by delivering tailored investment products, actionable insights, and seamless experiences that empower investors to make the best decisions. Achieving this requires leveraging digital solutions that enhance accessibility, transparency, and efficiency, ensuring that investors can access the right products at the right price to maximise returns and drive alpha in a competitive marketplace.

Tokenisation, while still in its early stages, has the potential to transform the asset management industry by addressing many of the inefficiencies that frustrate today’s investors. By streamlining processes such as fund creation, administration, and distribution, tokenisation can deliver benefits such as lower costs, reduced friction, and improved liquidity. It also enables greater transparency and customisation, empowering fund managers to offer more flexible and responsive products across new markets and asset classes.

“Today’s investors want a more proactive role in their portfolios, and they expect seamless, efficient interactions with an increasing range of investment options,” said Edward Glyn, Managing Director and Head of Global Markets at Calastone. “The challenge for the industry is to meet these expectations without adding complexity or cost. Innovative solutions, such as tokenisation, offer a powerful means of achieving this balance by making the investment journey more engaging, faster, more transparent, and more accessible.”

 

Eurosystem expands initiative to settle DLT-based transactions in central bank money

The Governing Council of the European Central Bank (ECB) decided to expand its initiative to settle transactions recorded on distributed ledger technology (DLT) in central bank money. 

The initiative will follow a two-track approach. First, as soon as feasible, the Eurosystem will develop and implement a safe and efficient platform for such settlements in central bank money through an interoperability link with TARGET Services. A concrete time plan will be announced in due course. Second, the Eurosystem will look into a more integrated, long-term solution for settling DLT-based transactions in central bank money. This will also include international operations, such as foreign exchange settlement.

The Eurosystem says it wants to support the use of innovative solutions in its market infrastructures while maintaining the safety and efficiency of TARGET Services. It will continue to further analyse new technologies and engage actively with public and private stakeholders.

The initiative will contribute to establishing an integrated European market for digital assets, in line with the Governing Council’s call for promoting a digital capital markets union in its statement of 7 March 2024. It will build on the Eurosystem’s exploratory work on new technologies for wholesale central bank money settlement, conducted between May and November 2024. This work gave 64 participants – comprising central banks, financial market participants and DLT platform operators – the opportunity to conduct over 50 trials and experiments. Trials included actual settlement in central bank money, while experiments were tests with mock settlement.

 

Faster payments increasingly a ‘must have’

Faster payments are increasingly essential to banking and business life, according to the 2025 Faster Payments Barometer from the U.S. Faster Payments Council (FPC), in collaboration with Volante Technologies. The study, conducted in the autumn of 2024 and gathering insights from over 400 organisations including financial institutions, businesses, associations and technology providers, found that 80% of respondents identified faster payments as a ‘must have,’ with financial institutions showing even higher conviction at 84%.

“Eighty per cent of respondents identified faster payments as a ‘must have,’ with financial institutions leading the charge at 84%,” said FPC Executive Director Reed Luhtanen. “The results reflect growing adoption of the FedNow Service and RTP Network and an expanding array of use cases in both consumer and business contexts. However, challenges such as interoperability and fraud must be addressed to fully unlock the potential of faster payments.”

The study found that 58% of financial institutions using instant payments have adopted a multi‐rail strategy by deploying both the FedNow and RTP networks. A detailed breakdown revealed that businesses are most interested in leveraging faster payments for eCommerce, point‐of‐sale transactions and invoicing or supplier payments, with interest rates of 54%, 51% and 41%, respectively. Financial institutions, meanwhile, are prioritising person-to-person payments, bill pay and payroll services at 51%, 38% and 38%, respectively.

However, progress remains uneven. Only 41% of large financial institutions and 28% of businesses believe that the United States is making satisfactory progress towards faster payments adoption. Key barriers include rising fraud concerns, reported by 34% of respondents, high implementation costs affecting 60% of financial institutions and issues with ubiquity and interoperability for 60% of business users.

Addressing these challenges, the Barometer points to opportunities such as value-added services like multifactor authentication and request for payment. With 84% of financial institutions prioritising multifactor authentication and 80% of non-FI respondents endorsing request for payment, these measures could help mitigate fraud risks and drive further adoption. Collaboration across the payments ecosystem is seen as crucial to overcoming interoperability challenges, with projected growth rates for FedNow reaching 193%, RTP 117% and Push-to-Card 103% over the next five years.

“This year’s Barometer demonstrates the industry’s growing embrace of faster payments, and their transformative potential for both consumers and businesses,” said Deepak Gupta, SVP, Global Head of Payments-as-a-Service at Volante. “Overcoming cost and interoperability hurdles through innovative solutions will be key to sustaining this momentum and delivering on the promise of faster payments.”

 

Deloitte and Basware aim to drive digital finance transformation and compliance at scale

Deloitte and Basware have expanded their partnership by creating a practice-based Center of Excellence (COE) to support enterprises in accelerating digital finance transformation. This expansion comes in response to increasing demand driven by large-scale SAP S/4HANA migrations, heightened global e-invoicing compliance mandates, and the need for cost optimisation through accounts payable (AP) automation.

By combining Deloitte’s deep finance and compliance expertise with Basware’s Invoice Lifecycle Management platform, the pair hopes the alliance will deliver scalable, automated solutions for organisations in EMEA that enhance compliance, reduce costs, and drive operational efficiencies.

Governments across EMEA are implementing stricter e-invoicing and tax compliance regulations, requiring companies to adapt quickly or risk penalties, operational disruptions, and increased costs.

At the start of 2025, Germany introduced a mandate for companies to be able to receive e-invoices, with larger companies mandated to issue e-invoices by 1 January 2027. France will follow a phased roll-out from 1 September 2026, requiring the mandatory reception of e-invoices for all companies.

Through this expanded partnership, the COE is designed to provide enterprises with a seamless, fully automated AP solution. This will ensure compliance while unlocking certain financial benefits and operational efficiencies – chosen by hundreds of companies for AP as they migrate to S/4HANA, Oracle Fusion, and other platforms.

Carglass France, a prominent automotive glass repair and replacement company, successfully implemented Basware’s digital invoicing solution with Deloitte’s expertise – achieving full deployment in just seven months. By integrating automation alongside its Oracle ERP migration, Carglass improved invoice-to-PO matching rates to 83%, accelerated supplier payments by 55% and ensures seamless compliance with France’s upcoming e-invoicing mandates.

 

Lloyd’s adds two enhanced yield liquidity funds to investment platform

Lloyd’s has announced the expansion of its Enhanced Liquidity Fund range for Strategic Cash Management on the Lloyd’s Investment Platform. The two new EUR and GBP Enhanced Yield Liquidity funds have been specifically designed to hold long-term strategic cash at Lloyd’s. They target higher return opportunities, coupled with high liquidity and low Solvency II capital charge efficiencies.

Complimenting the existing USD Enhanced Yield Liquidity Fund, the Lloyd’s Investment Platform now provides access to an expanded suite covering the key market currencies to support treasury and investment teams within the managing agent community. Insight Investment has been selected to manage the new funds, following an extensive due diligence and approval process.

The Lloyd’s Investment Platform offers the Lloyd’s market broader access to investment opportunities and operational efficiencies through investing collectively. The platform consists of a series of third-party managed bespoke fund solutions with growing adoption by managing agents, to support their investment needs.

“Over the past two years, we have built a platform that provides the market participants with access to a wide range of bespoke investment opportunities, including private assets,” said Eleanor Bucks, Chief Investment Officer at Lloyd’s. “These two new funds underpin our steadfast commitment to enhancing capital return potential within the Lloyd’s market through innovative solutions.” 

 

Nium expands real-time payouts into Australia

Nium has announced the expansion of its real-time payout capabilities into Australia. With this expansion, businesses connecting to Nium’s platform can now make real-time cross-border payments to bank accounts in Australia, significantly reducing transaction times and costs while enhancing transparency and reliability. 

By accessing Australia’s New Payments Platform (NPP), Nium ensures instant payment processing domestically and across borders, delivering funds to recipients within seconds. 

The addition of real-time cross-border payouts to Australia strengthens Nium’s extensive instant payments network, which already includes key markets across Asia, Europe, and the Americas. Businesses and financial institutions gain access to Nium’s infrastructure via a single API for global real-time payouts, ensuring seamless scalability and regulatory compliance across multiple jurisdictions. Nium is one of the only companies that offer real-time payouts to both bank accounts and proxies, such as PayID.  

“Real-time payments are becoming the global standard, and with our access to NPP, businesses can now make instant payouts into Australia from anywhere in the world to Australian accounts and Payment IDs (PayIDs),” said Alexandra Johnson, Chief Payments Officer at Nium. “This is yet another step toward our goal of creating a truly global real-time network.” 

 

Invest Bank taps Veefin to digitise SCF operations

UAE’s Invest Bank has onboarded Veefin Solutions to digitise its supply chain finance (SCF) offerings fully. This collaboration will replace the bank’s existing manual processes with a digital platform, enabling faster, more efficient, and seamless financing for businesses across the UAE.

Through this partnership, Invest Bank will leverage Veefin’s advanced SCF Loan Management System platform allowing them to streamline financing, eliminating time-consuming manual workflows and significantly improving operational efficiency.

By embracing full-scale digital transformation, Invest Bank aims to provide businesses with instant access to working capital, reduced paperwork and manual intervention, and improved turnaround times.

 

NIB launches ISK8.5bn environmental bond

On 20 February, NIB launched a seven-year, 8.5 billion Icelandic krona inflation-linked NIB Environmental Bond. This issuance is the bank’s first issuance in the ISK bond market after an absence of over 16 years, with its last issuance in 2007.

As a member country of NIB, Iceland benefits from a strong lending relationship, and this bond allows NIB to better serve customers in Iceland seeking ISK financing for their investments.

In accordance with NIB’s Environmental Bond Framework, the use of proceeds from this NEB transaction will be used for financing selected loan projects, which are considered to benefit the environment, a core element in the mission of NIB.

“This has been a joint effort between NIB’s Treasury, Lending, and all supporting functions, together with the Icelandic investors and customers, Landsbankinn, Nasdaq and other stakeholders,” said Kim Skov Jensen, Chief Financial Officer at NIB. “We are pleased with the outcome, and NIB is now issuing bonds denominated in the domestic currencies of all its member countries, further strengthening its commitment to the region.”

 

RMB was fourth most active global payments currency in January

Swift’s RMB Tracker has shown that in January, the RMB remained the fourth most active currency for global payments by value, with a share of 3.79%. Overall, RMB payment value increased by 2.1% compared to December, while all payment currencies increased by 1.1%. Regarding international payments, excluding payments within the Eurozone, the RMB ranked sixth with a share of 2.7% in January.

The tracker uses data from live and delivered MT 103 and MT 202 - customer-initiated and institutional payments - and ISO equivalent messages exchanged on Swift. RMB’s fourth place out of all international currencies in January saw it behind the US dollar (50.17% of all global payments value), the euro (21.98%), and the British pound (6.91%).

As a global currency in the trade finance market, based on live and delivered inter-group only MT 400 and MT 700 messages exchanged on SWIFT, RMB took second place based on value, accounting for 6.14% of January’s trade finance transactions. This field remains dominated by the US dollar (83.49%), with the euro taking the third highest share (5.16%).

Regarding FX spot transactions, RMB was January’s fifth most used currency for FX confirmations. The US dollar again claimed the top spot here, followed by the euro, pound and yen. In terms of the top economies carrying out FX spot transactions in RMB, the UK came out on top in January (42.44%), followed by the US (15.82%), Hong Kong (10.54%), France (9.09%), and China (5.82%).