Business leaders back globalisation despite supply chain disruptions 

Despite concerns over globalisation, 88% of business leaders agree it is succeeding across five underlying pillars of trade, capital, technology, talent and sustainability. This is according to research by Standard Chartered, in partnership with Bloomberg Media Studios, published in the white paper ‘Resetting Globalisation: Catalysts for Change’.

The research surveyed business leaders across 20 markets in Africa, Asia, Europe, the Middle East, and North America to understand the drivers of globalisation and assess overall sentiment. It aimed to identify catalysts for change to enable a new model for globalisation based on more inclusivity for smaller businesses and developing markets, a higher level of transparency and more sustainable development.

The role of trade in driving economic growth saw the most support – 86% of leaders said global trade allows for more sustainable development, and 83% believe globalisation helps make supply chains more resilient. Leaders also called for a more collaborative and transparent approach to international trade agreements, coupled with complementary domestic policies.

On sustainability, there was widespread recognition among business leaders of the need for both local and global solutions. Although 70% of leaders were optimistic about the effectiveness of global governance mechanisms, only 56% believe solutions for climate change require global efforts. Respondents identified trade as a way of accelerating the adoption of low-carbon technologies and the transfer of skills and knowledge. Leaders also recognise the need to accelerate the transition to a net-zero future.

Respondents emphasised the importance of three critical aspects of capital – almost all respondents (95%) believed that capital should be able to flow freely across the world, and leaders agreed on the benefits financial markets bring to developed and developing markets, and the need for governments to get behind foreign investment.

Technology emerged as a strong theme, with 75% of leaders stating the free flow of data globally has had a positive outcome. Leaders also called for ensuring the digital future of finance is safe and secure for everyone. When addressing talent and culture, 74% of business leaders agree it’s good for businesses to be able to hire talent from anywhere in the world.

Compared to those in other markets, business leaders in China were the most positive on the role of digital assets in solving challenges around moving money. Business leaders in India were more positive about the role of trade than the other pillars and most likely to say that global trade allows for more sustainable development. UK business leaders were the most likely to say that globalised services have created significant opportunities where they reside.

 

ICC launches expanded recommendations for trade documents

The ICC Digital Standards Initiative (DSI) has unveiled its expanded digital standards recommendations under DSI’s Key Trade Documents and Data Elements (KTDDE) practice. The launch marks a significant step forward in DSI’s mission to bridge the gap between standards and adoption within industry. 

Launching the baseline analysis for 14 key trade documents – covering transport and logistics, finance and payment processes and documents of title – adds to the existing set of seven documents launched in March 2023.  The enhancement includes a new trade data glossary and data sharing map across the 21 documents developed by the KTDDE working group over the last six months.   

The work builds upon foundational standards work by standards development organisations such as the World Customs Organization (WCO) and United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) and industry organisations such as The International Trade and Forfaiting Association (ITFA), the Global Legal Entity Identifier Foundation (GLEIF) and GS1, among others. The expanded package serves as a foundational resource for promoting alignment and interoperability across networks and supply chains. 

 

UK GDP remains lethargic

Monthly real gross domestic product (GDP) in the UK is estimated to have grown by 0.2% in September 2023, following growth of 0.1% in August 2023, revised down from 0.2% in the previous Office for National Statistics publication. Output in the services sector rose by 0.2% in September 2023 and was the most prominent positive contributing sector to the growth in monthly GDP. Production output showed no growth, and construction output grew by 0.4%.

Looking at the broader picture, GDP showed no growth in the three months to September 2023 compared to the three months to June 2023, consistent with the output section in our GDP first quarterly estimate, UK: July to September 2023 bulletin. Services output fell by 0.1%, production output showed no growth, and construction grew by 0.1%.

Monthly GDP grew by 1.3% in September 2023 compared with the same month last year. For comparison, monthly GDP grew by 0.5% between August 2022 and August 2023. In September 2022, there was an additional bank holiday for the State Funeral of Her Majesty Queen Elizabeth II, and many businesses closed or operated differently on this day. This should be considered when interpreting seasonally adjusted movements involving September 2022.

“Today’s GDP data signals a continued lethargy in the UK economy,” said John Glencross, CEO and Co-Founder of Calculus. “Though this challenging economic environment appears stubborn, we are encouraged by the recent and significant revision of historical growth which changes the picture of the immediate post-pandemic recovery, notably compared to our European neighbours. There are also signs of long-term and credible support for UK business, and it will be interesting to see how this develops.”

Commenting on the outlook for SMEs as GDP is unchanged, Douglas Grant, Group CEO of Manx Financial Group PLC, said: “Latest GDP figures show that UK economic progress remains increasingly bleak, heightening the challenges faced by SMEs as the country narrowly avoids a recession. SMEs must take this as a reminder to review their existing lending structures and ensure they are prepared to navigate further economic turbulence.”

 

European Council and Parliament reach provisional agreement on instant payments

The European Council and the European Parliament have reached a political agreement on the instant payments proposal, which will improve the availability of instant payment options in euro to businesses and consumers in the EU and EEA countries.

The new rules aim to improve the strategic autonomy of the European economic and financial sector as they will help reduce any excessive reliance on third-country financial institutions and infrastructures. Improving the possibilities to mobilise cash flows will benefit citizens and companies and allow for innovative added-value services.

Instant payments allow people to transfer money within ten seconds at any time of the day, including outside business hours, not only within the same country but also to another EU member state. The provisional agreement takes into consideration the particularities of non-euro area entities. Under the provisionally agreed rules, payment service providers such as banks, which provide standard credit transfers in euro, will also be required to offer the service of sending and receiving instant payments in euro. The charges that apply (if any) must not be higher than those that apply for standard credit transfers.

The Council and Parliament agreed that the new rules will come into force after a transition period that will be faster in the euro area and longer in the non-euro area, who need more time to adjust. The co-legislators agreed to grant access for payment and e-money institutions (PIEMIs) to payment systems by changing the settlement finality Directive (SFD). As a result, these entities will be covered by the obligation to offer the service of sending and receiving instant credit transfers after a transitional period. The co-legislators added appropriate safeguards to ensure that the access of PIEMIs to payment systems doesn’t carry additional risk to the system.

Under the new rules, instant payment providers will need to verify that the beneficiary’s IBAN and name match to alert the payer to possible mistakes or fraud before a transaction is made. This requirement will apply to regular transfers too. The Council and Parliament included a review clause requiring the Commission to present a report containing an evaluation of the development of credit charges.

 

Zetrix launches cross-border supply chain financing pilot 

Public blockchain platform Zetrix has announced the commencement of a pilot project to offer supply chain financing products in conjunction with Chinese banks for international importers and exporters.

Starting with the Bank of China as the first financial institution to be onboarded under the project, the end-to-end solution offers a soft landing for trading firms with fully digital onboarding, including registration of a Chinese legal entity, bank account opening and credit assessments. Approved clients will enjoy low-cost financing and quicker release of drawdowns as the service leverages on-chain events recorded and verified on Zetrix.

China has undergone rapid digital transformation in recent years, with most services, including financial services, now being delivered online and capitalising on the advantages of blockchain technology. China is a world leader in blockchain adoption, and the government is actively supporting the development of the blockchain industry.

Zetrix is a public blockchain network that also hosts the international supernode of China’s national blockchain, Xinghuo Blockchain Infrastructure and Facilities (BIF). It is focused on enabling global trade through its connection to Xinghuo BIF. Zetrix provides users with access to a blockchain platform that is endorsed by the Chinese government.

The pilot will look to provide more efficient and convenient cross-border financial services for trading enterprises, introduce lower-cost overseas RMB funds, help enterprises obtain lower-cost financing, and increase cross-border trade transaction volume.

 

High-level consensus found across corporate transition finance frameworks

The Climate Bonds Initiative has released a mapping of corporate transition frameworks to demystify the landscape of transition finance frameworks. This is the first step in a wider collaborative effort from Climate Bonds Initiative, Climate Arc, Institutional Investor Group on Climate Change (IIGCC) and Sustainable Markets Initiative, with methodological feedback from Glasgow Financial Alliance for Net Zero (GFANZ) and representatives from the investment world.

This collaborative effort aims to navigate the myriad transition frameworks, drawing out and building on the commonality in those frameworks. At present, the proliferation of those frameworks is confusing the market. The project addresses the pressing challenge of navigating through various corporate transition frameworks that have increased. The goal is to create a navigator tool that enables financial institutions to orientate their corporate portfolios in a way that is consistent with those frameworks. The intention is to release that tool in January 2024. 

The published mapping provides guidance on credible corporate transition plans and categories. It identifies common ground among various transition frameworks. Among the key findings is a consensus on the core principles for setting authentic targets, devising actionable strategies, and ensuring robust accountability. However, some differences exist in how those principles are interpreted across the frameworks. Corporate transition planning and implementation can be broadly classified into five or six categories. These can assess which corporates can be credibly included in a transition portfolio.

The mapping also notes that all corporates must move rapidly through these transition categories guided by their transition plan. Financial institutions may choose to prioritise the transition of corporates in hard-to-abate sectors in the near term.

This project will also assist in creating a common language for financial institutions facilitating the decarbonisation of high-emission assets through proactive engagement while safeguarding against greenwashing and the pitfalls of divestment.

 

HSBC launches digital assets custody service

HSBC plans to launch a new digital assets custody service for institutional clients who invest in tokenised securities. Once live in 2024, HSBC’s new digital assets custody service will complement HSBC Orion, the bank’s platform for issuing digital assets, and HSBC’s recently launched offering for tokenised physical gold. Together, these form HSBC’s complete digital asset offering for institutional clients.

HSBC is working with Swiss enterprise tech firm Metaco to use its institutional platform, Harmonize, as part of HSBC’s new custody service for digital assets. Metaco’s Harmonize solution helps unify the security and management of digital asset operations.

“We’re seeing increasing demand for custody and fund administration of digital assets from asset managers and asset owners, as this market continues to evolve,” said Zhu Kuang Lee, Chief Digital, Data and Innovation Officer, Securities Services, HSBC. “Through key partnerships, HSBC is delivering the next-generation custody infrastructure that will be scalable and secure. For asset servicers, there has never been a more important time to innovate, to collaborate and to create change.”

 

WTW launches APAC Climate Risk Centre in Singapore

Global advisory, broking, and solutions company WTW has launched an Asia Pacific Climate Risk Centre (ACRC) in Singapore. Using WTW’s expertise in risk management and financing, the Centre will support corporates, financial institutions, insurers and governments in understanding, quantifying and building resilience against climate risks. 

The Centre focuses on physical and transition climate risk assessment and quantification through top-down and bottom-up methods and proprietary models. The opening of the Centre highlights that APAC is a crucial priority for WTW’s Climate Practice and a consolidation of decades of investment in climate risk capabilities.

“I welcome the launch of the WTW APAC Climate Risk Center in Singapore,” commented Lawrence Wong, Deputy Prime Minister and Minister for Finance of Singapore, and Chairman of the Monetary Authority of Singapore. “This Centre will develop risk advisory, analytics and risk financing solutions to support transition efforts of firms in hard-to-abate industrial sectors key for Asia’s growth.”

 

Visa tool to streamline payment experiences launches in Asia Pacific 

Visa has announced the expansion of Real Time Visa Account Updater (VAU) to selected markets in Asia Pacific. The tool is designed to streamline the payment experience for merchants and customers by providing cardholders with a single credential for life. With the introduction of the service in Asia Pacific, consumers and merchants in the region will have access to Real Time VAU across subscription services such as ride-hailing, food delivery and monthly utility payments, among others.

Backed by Visa's technology, Real Time VAU aims to help merchants solve the issue of declined payments from customers with expired or replaced debit and credit cards by allowing businesses to update customers’ stored card details in real-time. When a merchant submits a payment, Real Time VAU instantly checks for the latest card details. It will transact the payment request with the updated card details, lowering the rates of authorisation declines, lost sales and severed cardholder relationships. Real Time VAU was first launched by Visa in North America in 2017 and in Europe in 2022.

In Asia Pacific, Visa is partnering with four global payment gateways and acquirers – Adyen, Checkout.com, Stripe and Worldpay – to launch VAU. Cybersource, a Visa solution, also offers VAU to businesses across the region.

“While card expiration and replacement are necessary as part of fraud protection and card security enhancements, we recognise that consumers often face the unnecessary inconvenience of updating numerous automatic payment arrangements every few years when issued a new card,” said T.R. Ramachandran, Head of Products & Solutions, Asia Pacific, Visa. “The launch of Real Time VAU, in collaboration with our partners in Asia Pacific, will streamline this process while continuing to uphold the highest level of security. By providing merchants with the technology, we are empowering them to increase revenue and card authorisation rates, while delivering a seamless payment experience that aligns with what consumers have come to expect today.”

 

Volante Technologies raises US$66m in strategic investment round 

Cloud payments firm Volante Technologies has secured US$66m in debt and equity financing in an investment round led by Sixth Street Growth, the technology growth investing arm of Sixth Street, with participation from Wavecrest Growth Partners and Wells Fargo Strategic Capital.

This latest round included repeat participation from Wavecrest and Wells Fargo Strategic Capital and investment from BNY Mellon, Citi, Poste Italiane, and Visa Ventures, bringing the total outside investment in the company to US$116m.

“With financial institutions increasingly prioritising both investment in payments modernisation and partnerships with fintech companies, this is an ideal time to expand Volante’s reach,” said Nari Ansari, Managing Director at Sixth Street Growth. “We are investing in Volante because we are confident they have a clear advantage over legacy providers and challengers and are best positioned to capitalise on the growth opportunity and further outpace their competitors.”