Lloyds Bank launches business payment transfer service

Lloyds Bank has launched a service that allows businesses to make one-off payments, where the beneficiary’s bank details are not known, meaning payees could receive the funds within minutes.

Through Lloyds Bank PayMe, developed in partnership with Bottomline Technologies, businesses do not have to gather or manage account information or register one-off suppliers. Once the payment is approved, companies can send a secure link to the beneficiary – via a range of ways including email, SMS or QR code – who then inputs their account information. After being reviewed and verified, the payment is sent directly to the beneficiary.

Businesses can use the service for one-time vendor payments, goodwill gestures, compensation payouts, refunds, hardship payments, volunteer expenses, and grants. Using the service means payees no longer have to wait up to three working days to receive the funds. In addition to improved customer service, there are many benefits for businesses including reducing their cheque issuance and manual processes, and associated costs.

Lloyds Bank hopes that more businesses and organisations will also opt for the paperless service to reduce travel emissions and their carbon footprint.

“We’ve developed this service to support our clients in driving efficiencies in their business while further enhancing the customer experience they’re providing,” said Stephen Everett, Managing Director of Cash Management & Payments at Lloyds Bank. “Payment solutions in the market today generally use Bacs for a three-day settlement or the need to send a physical cheque. Through Lloyds Bank PayMe, companies can send funds to customers, clients, or suppliers easily and within minutes, and no need to capture and store account details for one-off payments.”

Scottish Water is adopting Lloyds Bank PayMe to assist in their service standard payments. The company estimates this will allow customers to receive payments within the same business day, compared to the current process, which can often take seven to 10 days to complete.

“Our customers are at the heart of what we do, and we want to ensure every engagement with us is excellent,” commented Brian Lironi, Director of Corporate Affairs at Scottish Water. “We believe that PayMe will provide a huge benefit to our customers in terms of payment times and data handling. In circumstances where service standard payments are required, customers will now be able to receive them far faster and in a more convenient manner.”

Modern Treasury’s Reconciliation Engine promises greater efficiency and financial transparency for corporates

Modern Treasury has announced its expanded Reconciliation Engine, which automates end-to-end cash reconciliation for businesses. This offering aims to enable businesses to track and confirm their transactions as they happen.

Today, many businesses struggle with financial reconciliation, which involves mapping a business’s intended payments against corresponding cash movement at banks and processors to track and confirm payment statuses. Businesses often manually reconcile transactions, which is error-prone and difficult to scale. Alternatively, some businesses build homegrown, internal tools that can be insufficient and unreliable.

These options increase financial exposure because businesses lack real-time and complete insight into their finances at any given moment and introduce operational costs and bottlenecks.

Modern Treasury’s Reconciliation Engine is aimed at businesses with high volume, complex funds flows, such as lenders, insurance companies, payroll providers, software companies, healthcare and HSA providers, investment platforms, and marketplaces. The firm outlines the solution’s capabilities as follows:

• Financial institution and processor integrations. Modern Treasury has expanded integrations by adding support for third-party payment processors, starting with Stripe and soon to include WorldPay, Authorize.net, Adyen, Braintree, Wise, and more. With these integrations, alongside a growing network of over 20 bank partners, Modern Treasury says it cleanses and enriches payments data across any processing partner and payment method, including cards, ACH, wire, check, RTP, the upcoming FedNow payment rail, and more.
• Automated reconciliation. The Reconciliation Engine programmatically accesses payments data via partner integrations with banks and processors. Modern Treasury also accepts client business data via pre-built data ingestion tools, including receivables, invoices, and payables. With both data sources, the Reconciliation Engine uses proprietary machine learning and AI models to enrich the data, normalise it, and reconcile it to automate financial processes.
• Cash and reconciliation dashboard. The solution incorporates new dashboard capabilities, including case management, exception handling, and cash monitoring, to help finance teams manage operations with a single, real-time source of truth for all money movement.

 

Citi India completes first blockchain-enabled LC transaction on Contour

Citi India has completed its first blockchain-enabled letter of credit (LC) transaction on Contour for its client Cummins India Limited (Cummins), a diversified industrials manufacturing company. The transaction is a first for both Cummins and Citi India on Contour, as Citi continues to advance its trade digitisation efforts and further enhance client experience.

Contour is a global digital trade finance network using blockchain technology that lets multiple parties - banks, corporates, and logistic partners - collaborate seamlessly and securely in real-time on a single platform. Citi is a founding member bank of Contour.

Contour’s decentralised global trade finance network has proven that LC processing time can fall by as much as 90%. Under the LC, document presentation usually takes 5-10 days, while for Cummins it was completed in three hours. This also marked the first domestic end-to-end blockchain enabled LC transaction completed on Contour in India.

“We are a technology-driven company, and our key priority is to digitise our processes,” commented Ajay Patil, VP and CFO at Cummins. “We are happy that Contour and Citi worked with us to launch the first blockchain-enabled LC transaction in India. We believe that by digitising our processes we are able to drive efficiency across the value chain and is a win-win solution for stakeholders.”

Through its Treasury and Trade Solutions (TTS) business in India, Citi served as both LC Advising and Issuing Bank. The bank’s digital solutions under its TTS business were able to offer a safer, faster, and paperless solution for the LC transaction between Cummins and its customer, which are corporate and commercial banking clients of Citi, respectively.

“A top priority for our trade business globally, and in India, is to simplify trade processes and reduce transaction time, as well as provide clients access to trade financing and working capital solutions, through digital platforms,” said Mridula Iyer, head of Treasury and Trade Solutions at Citi South Asia. “Platforms such as Contour bring together multiple partners involved in a trade transaction while eliminating the need for paper-heavy documentation and is a critical enabler of trade digitisation.”

 

Standard Chartered and IFC renew global trade commitment 

Standard Chartered and the IFC have announced the signing of a US$700m investment in IFC’s Global Trade Liquidity Programme (GTLP) to support global trade finance. Since the launch of the initial facility in 2009, the Standard Chartered GTLP facilities have shown strong reach and impact in supporting trade in the emerging markets, particularly those supported by the International Development Association (IDA), as well as low/lower middle-income countries, given the bank’s established network and correspondent banking relationships. When combined, the bank says these facilities have supported over US$20.5bn in global trade through over 150 emerging market issuing banks (EMIBs) in 37 countries across 17,746 transactions, without any defaults.

This renewed facility is expected to support up to US$6.4bn in trade over three years across Asia, the Middle East, Africa and Latin America by supporting about 850 importers and exporters involved in critical commodities, basic goods and other essential materials to meet market demand. The GTLP programme continues to evolve to reflect changing market dynamics and now features a significant climate component and seeks greater activity in the areas of IDA markets and food security.

“We have a crucial role to play in enhancing the accessibility to the capital and liquidity needed to facilitate global trade, and to do so in a sustainable manner,” commented Sunil Kaushal, Regional Chief Executive Officer for Africa & Middle East at Standard Chartered. “Particularly in today’s challenging post-pandemic macro environment, such partnerships can help continue to provide the much-needed liquidity to boost trade flows and drive economic growth.”

The GLTP facility has proven to be a highly effective means to channel financing to support emerging market trade flows, and represents a unique and coordinated global initiative that brings together governments, international development and financial institutions, and private sector banks. By providing liquidity or guarantees, the programme helps banks grow their credit limits, manage risk and support trade across developing markets which are often under-served.

 

Same Day ACH bolsters payment network’s Q1 growth

The US ACH Network began 2023 with solid growth in the first quarter, particularly in Same Day ACH where payment dollar values nearly doubled from a year earlier, Nacha has reported. A total of 7.7 billion payments valued at US$19.7 trillion were handled by the ACH Network, each representing an increase of 6.4% over the first quarter of 2022. Of those payments, 186.2 million were made by Same Day ACH, up 20.7%. The value of those same-day payments jumped 94.7% to US$565.3bn. 

The growth of B2B payments continued in the first quarter of this year, with nearly 1.6 billion B2B payments made, an increase of 11.4%. Claim payments to healthcare providers increased 5.1% to more than 2.1 billion payments. Nacha has made healthcare claim payments one of its focal points, with particular outreach to dental practices, which lag behind their medical counterparts in receiving claim payments by ACH. 

Direct Deposit also showed strong growth in the first quarter, retrenching after a decline a year earlier with the end of federal economic impact payments. The Direct Deposit volume of 2.1 billion payments is an increase of 5.1%.

“Same Day ACH is a key component of how the modern ACH Network is helping meet the demand for faster payments,” said Jane Larimer, Nacha President and CEO. “These results clearly show the payments community’s embrace of Same Day ACH. Nacha, along with other ACH Network participants, will continue work to enhance it.”

 

Call to remove payments from scope of Europe’s Digital Identity Regulation

The European Banking Federation, the European Association of Co-operative Banks, and the European Savings and Retail Banking Group, jointly known as the European Credit Sector Associations (ECSAs), have issued a statement that welcomes the ambitions presented in the European Commission’s proposal for a European Digital Identity (eIDAS 2.0).

The proposal will incentivise Member States to be more expedient in developing e-ID solutions with a wide scope of usage. Moreover, the European Digital Identity Wallet (EUDIW) will foster quicker onboarding processes and a better user experience. It will also contribute to the further adoption of digital banking services.

However, the statement notes that Recital 31 and Art. 12b.2 as adopted by the European Parliament and corresponding Art. 6db.2 of the Council’s General Approach are currently open to interpretation. The current wording seems to imply that the full payment sphere is included in eIDAS 2.0 on a mandatory basis. The ECSAs have urged the European Parliament and the Council to re-consider their proposed wording during the trilogue negotiations.

If widely used cards and payment specifications were included in the new EUDIW Infrastructure, huge investments would be required not only in the financial sector, but also for the overall acceptance network. This could result in disproportionate costs for merchants and service industries that accept card payments under the second Payment Services Directive (PSD2).

In addition, deleting payments from the scope would also solve the general issue of liability banks would face. The proposal in its current form does not sufficiently address the question of liability, which impedes applying its provisions to payments. This is why the ECSAs are calling upon legislators to keep payments out of the scope of the Digital Identity Regulation.

To avoid the mandatory nature of the acceptance of the EUDIW in terms of strong customer authentication (SCA) on payments, the ECSAs recommend limiting such mandatory acceptance to the verification of the user’s identity only.

 

Enabling climate risk analysis with Project Gaia from BIS

The Bank for International Settlements (BIS) has released further details on Project Gaia, which seeks to help analysts search corporate climate-related disclosures quickly and efficiently. Together with its Eurosystem project partners, the Bank of Spain, the Deutsche Bundesbank and the European Central Bank, the project will establish an open, web-based tool to facilitate climate and environmental risk assessments based on a large corpus of publicly available corporate reports.

Various technologies will be assessed to help analysts extract relevant information from non-standardised PDF reports. Besides classical machine learning approaches, Project Gaia will explore how large language models (such as GPT) might be integrated into a reliable workflow for fact-finding.

Central banks and financial regulators increasingly need to consider the financial stability risks posed by climate change. Climate change can affect banks' portfolios – for example, through collateral values – or via other financial institutions' exposures. It can thus affect overall financial stability.

High-quality data on the exposure of financial intermediaries to the financial risks posed by climate change are essential if the importance of climate-related risk is to be correctly assessed. At present, however, climate-related data are scattered across a great variety of documents, including integrated, annual and ESG reports, and financial statements. Furthermore, companies disclose this information in multiple formats, for example by including sustainability data in advertising, or within images, tables or graphs in regulatory documents.

International standard-setting bodies and policymakers have highlighted the need to standardise climate-related disclosures and to close existing climate data gaps. Until such standards are agreed, however, existing and potentially useful climate-risk information will remain unstructured. Accessing this data will require extensive web-based research and browsing through lengthy documents. For this reason, publicly available company reports on sustainability-related disclosures remain a largely underused source of information.

Project Gaia will explore the possibilities of standardising different globally recognised ESG disclosures. It will use publicly available company reports as its core sources of information. The prototype will consist of a data-agnostic model that meets the needs of the central banking community. It will feature the required flexibility, open access to the data, and underlying algorithms.

On the technical front, Gaia will explore the potential of using natural language processing, including large language models, to extract and structure climate-related data. These state-of-the-art tools will make unstructured data more usable, facilitating climate risk assessments. The project will test and compare different approaches to extracting the data and achieving the best possible model performance.

The first project output will be a repository of textual corporate reports coupled with a full-text and semantic search engine to identify specific sustainability-related disclosures. The project will build a graphical user interface (GUI) to access the company-level climate-related database in its second stage. The GUI will include data visualisation tools for climate and environmental risk assessments. The final output will be a report summarising the project findings and lessons learnt.