Corporates tighten capital allocation despite stronger balance sheets

Global corporates are entering 2026 with stronger balance sheets and improved liquidity, but many are deploying capital more selectively as policy support fades and uncertainty lingers, according to new research from Standard Chartered. The bank’s Capital Structure & Rating Advisory Annual Insights 2026 analyses 1,080 listed companies across 19 sectors and finds leverage has improved marginally over the past year, giving corporates an average 8% increase in debt headroom. Liquidity buffers have also risen by 6%, leaving companies with greater financial flexibility heading into the year.

Despite that improved capacity to invest, capital allocation decisions are becoming more targeted. Many sectors have yet to return to pre-pandemic capital expenditure levels as companies apply higher return thresholds and prioritise shareholder distributions, particularly share buybacks. The report suggests corporates are balancing growth ambitions with a renewed emphasis on financial discipline and resilience.

The macroeconomic backdrop is described as broadly supportive, with stable global growth expectations and improved country risk as policy settings become more predictable. However, as fiscal and monetary support gradually eases, companies are focusing on preserving balance sheet strength and maintaining optionality around future investment.

Working capital optimisation remains a central theme. The report estimates that around US$2.6 trillion remains tied up in working capital globally, representing a significant potential source of internal funding. For treasury teams, the cash conversion cycle is highlighted as an underused lever for unlocking liquidity and supporting investment without taking on additional debt.

Investment needs are also shifting. The rapid adoption of AI and the build-out of supporting infrastructure such as data centres are creating new financing requirements and opportunities. At the same time, these trends are increasing pressure on power and grid infrastructure, adding another dimension to capital planning for corporates.

Geographically, China-based corporates with international operations are seeing improved profitability, with overseas exposure contributing positively across nine sectors. This suggests cross-border expansion remains a driver of performance for firms able to navigate geopolitical and structural challenges.

Shoaib Yaqub, managing director and global head of Capital Structure & Rating Advisory at Standard Chartered, said: “Despite starting 2026 with stronger balance sheets and greater financial flexibility, corporates are likely to remain disciplined around capital deployment. While the capacity to invest exists, decision-making is increasingly selective, with a clear focus on maintaining balance-sheet resilience, preserving or even increasing shareholder returns, and financial optionality alongside growth objectives.”

Overall, the findings point to a year in which corporates retain the financial strength to invest but continue to prioritise disciplined capital allocation. As policy support recedes and risk dynamics evolve, balancing growth investment with liquidity, leverage and shareholder expectations is likely to remain a defining challenge for finance and treasury teams in 2026.

 

Cost control and AI top finance agendas for 2026

Finance leaders are entering 2026 with a renewed focus on efficiency, cost control and automation, as rising costs and economic uncertainty push teams to do more with fewer resources, according to new survey findings from AccessPay. The company’s Finance Trends 2026 report, based on responses from 130 finance leaders across financial services and corporate sectors, highlights a growing emphasis on operational efficiency alongside increased interest in AI adoption. Nearly half of respondents cited efficiency and cost control as a priority this year, including 47% of corporates and 46% of financial services firms.

At the same time, appetite for AI is rising. Around 47% of corporates and 43% of financial services firms say they plan to prioritise AI adoption within the next 18 months, reflecting a broader shift towards automation and digitalisation across finance and treasury functions.

The findings point to a widening gap between sectors. Financial services firms appear to be further ahead in their transformation efforts, with 45% describing their finance function as advanced and largely automated. Among corporates, 41% say transformation is under way but still involves partial automation and manual processes. Only 24% of corporates report a high degree of automation and integration across back-office systems, compared with 29% of financial services firms.

Investment in AI shows a similar divide. Some 46% of financial services firms report having implemented AI enhancements to a high degree, compared with 28% of corporates. While both sectors cite barriers such as limited internal expertise and cultural resistance, corporates are more likely to point to budget constraints. About 31% of corporate respondents identify insufficient funding as a key obstacle to AI adoption, versus 17% of financial services firms.

The report suggests that as finance teams face pressure to control costs while maintaining performance, automation and connectivity will play a larger role in closing efficiency gaps. Tasks linked to payments, bank connectivity and reconciliation remain areas where manual processes persist, particularly in non-financial corporates, leaving scope for further gains from technology adoption.

Anish Kapoor, chief executive of AccessPay, said the divergence in technology investment between sectors could become more significant over time. “The disparities between the financial and non-financial sectors in terms of their attitudes towards technology investment are striking. Longer-term, the underinvestment in general corporates could backfire. In the current macroeconomic environment, finance teams will need to stress-test plans to ensure they can operate at the low end of their scenarios. This is why we predict 2026 will be a key year for automation in payment and treasury operations. If finance departments are to operate with reduced headcount or scale without increasing staff, leaders also need to consider how to make up that shortfall with technology.”

The survey results point to a year in which finance leaders balance cost discipline with targeted technology investment. For treasury and finance teams, the ability to improve automation, strengthen bank connectivity and deploy AI tools effectively is likely to shape how well organisations manage costs and maintain operational resilience in 2026.

 

Fed likely to hold rates as policy outlook shifts

The Federal Reserve is expected to keep interest rates on hold through 2026 despite shifting leadership at the central bank and a still-resilient US labour market, according to analysis from J.P. Morgan. At its January meeting, the Fed maintained the federal funds rate at 3.5-3.75%. Recent labour market data, including a decline in unemployment to 4.4%, has eased concerns about a sharp slowdown and led economists to reassess expectations for rate cuts this year. J.P. Morgan Global Research now expects no reductions in 2026, with the policy rate forecast to remain unchanged for the remainder of the year.

“Over the second half of 2025, the economy seems to have settled into an equilibrium of slower labour supply growth met by slower labour demand growth, though with few signs of further deterioration,” said Michael Feroli, chief US economist at J.P. Morgan. “We see the Fed holding the target range for the funds rate steady at 3.5-3.75% for the rest of the year.”

The bank’s baseline scenario points to a 25 bps rate increase in the third quarter of 2027, taking the upper end of the policy range back to 4%. Feroli noted that while the Fed could still ease if the labour market weakens or inflation falls more quickly than expected, current conditions suggest a gradual disinflation path and a labour market that may tighten again later this year.

“The proposition that rates are restrictive looks increasingly untenable given economic and financial developments,” he said. “If the labour market weakens again in the coming months, or if inflation falls materially, the Fed could still ease later this year. However, we expect the labour market to tighten by the second quarter and the disinflation process to be quite gradual.”

Attention is also turning to the nomination of Kevin Warsh as the next Fed chair, with his term expected to begin in May 2026. Warsh, a former Fed governor, has previously been associated with a preference for higher rates, though recent commentary suggests a more accommodative stance.

“Our best guess is that this year Warsh will make the case for rate cuts,” Feroli said. “We’d also suspect that as time goes on, his leanings will be more open to revision and perhaps reversion back to a more hawkish view.”

Even so, the Fed’s committee structure means the chair’s influence has limits. “While committee members are always open to better arguments, special deference to the chair only goes so far,” Feroli said.

Debate over the Fed’s balance sheet could become another focal point for policy. Warsh has argued that a smaller balance sheet could support lower rates, but Feroli is sceptical. “A smaller balance sheet should exert some moderate upward pressure on longer-term interest rates. This would be at odds with the administration’s apparent desire to lower mortgage rates,” he said.

 

Inflation fears push Australia to raise rates

Australia’s central bank has moved against the broader easing trend, lifting the cash rate target by 25 basis points to 3.85% as it flags renewed concern about inflation persistence and domestic capacity constraints. In its post-meeting statement, the Reserve Bank of Australia (RBA) says inflation, while well below its 2022 peak, “picked up materially” in the second half of 2025. The Board links part of that rebound to stronger-than-expected private demand, a firmer housing market and labour market conditions that “remain a little tight”, concluding inflation is “likely to remain above target for some time”.

Governor Michele Bullock used the press conference to underline the change in readout. “The recent run of data gives the Board a clear enough view that the underlying pulse of inflation is too strong,” she said, adding that policymakers “concluded that the cash rate was no longer at the right level to get inflation back to target in a reasonable timeframe”.

Bullock also leaned into the political sensitivity of the move, while arguing the alternative is worse. “I know this is not the news that Australians with mortgages want to hear but it is the right thing for the economy,” she said. “We cannot allow inflation to get away from us again.”

A key theme in both the statement and Q&A was uncertainty over how restrictive policy really is. The RBA notes credit remains readily available and says the effects of earlier cuts are “yet to flow through fully”. Bullock was blunter on the signals officials are watching: “The fact that credit is growing quite strongly, the housing market has recovered very strongly, there’s lots of credit available for businesses and households.”

The move comes as other major central banks opt to hold rather than tighten. The Fed kept its benchmark range at 3.5%-3.75% at its January meeting, with activity still expanding at a solid pace but inflation described as somewhat elevated. Notably, two policymakers dissented in favour of a cut, highlighting that debate in the US is already shifting towards the timing of easing rather than further hikes. The Bank of England also left its Bank Rate unchanged at 3.75% in February, in a closely split vote, as it assesses moderating wage pressures and expectations that inflation will move back towards target in coming months. In contrast, Australia is facing a renewed pick-up in domestic demand, tighter capacity and firmer price pressures, prompting policymakers to move in the opposite direction and raise rates. 

For finance and treasury teams with exposure to Australia, the immediate implication is a higher domestic funding floor and more focus on scenario planning around demand-led inflation risk, particularly where housing activity, wages and credit conditions continue to surprise on the upside.

 

Greenland tensions trigger equity fund outflows

European and UK equity funds saw renewed selling pressure in January as geopolitical tensions linked to Greenland unsettled investor sentiment and prompted a shift towards defensive assets. Data from Calastone shows net outflows of £697m from equity funds over the month, extending the current run of withdrawals to an eighth consecutive month and marking a subdued start to 2026 for regional equities.

Flows were relatively balanced through the first half of January, but sentiment deteriorated sharply from 19 January as markets reacted to the prospect of US tariffs tied to military activity around Greenland. From that point, equity outflows accelerated and continued through the remainder of the month, with regional funds bearing the brunt of the selling.

European equity funds recorded their worst month since January 2025, with £237m withdrawn, while UK-focused funds ended the month with £694m of net outflows. Earlier in January, UK funds had been on track for their smallest monthly withdrawals since May 2025, highlighting the extent to which the late-month escalation shifted investor behaviour.

Other regions proved more resilient. Global, North American and emerging market funds all attracted net inflows during January, while selling from Asia-focused funds remained consistent with recent months rather than intensifying. Japanese equity funds also saw smaller outflows than in late 2025, with no clear change in trend following the mid-month geopolitical developments.

Edward Glyn, head of global markets at Calastone, said the scale of January’s withdrawals suggested the Greenland tensions were viewed more as a tail risk than a central scenario for investors. “This indicates that the risk of conflict over Greenland was more of a tail risk in investors’ minds rather than a clear and present danger,” he said, adding that “it doesn’t take much to fracture fragile sentiment, especially when stock prices are riding this high.”

Away from equities, fixed income and diversified funds offered relative stability. Bond funds recorded net inflows of £459m, largely driven by corporate debt strategies, while mixed-asset funds attracted £1.05bn, broadly in line with long-term monthly averages and reflecting continued contributions from regular savings plans. Money market funds experienced modest outflows for the first time since April 2024, though January is typically a weaker month for cash allocations.

The data suggests investors remain sensitive to geopolitical developments, particularly where they intersect with trade policy and regional risk, even as broader market conditions remain supportive.

 

Clearwater and TreasurySpring link cash platforms

Clearwater Analytics and TreasurySpring have integrated their respective platforms to give institutional investors direct access to fixed-term cash investment products within an investment accounting and reporting environment. The integration connects Clearwater’s investment management system with more than 1,000 fixed-term cash instruments available through TreasurySpring. These include short-dated deposits, government-backed products and repo-based structures across multiple currencies, aimed at organisations seeking defined maturities and predictable returns for surplus cash.

Institutional clients using both platforms will be able to allocate excess liquidity to fixed-term investments while viewing positions and exposures alongside existing portfolios. The connection is designed to automate settlement workflows and consolidate reporting across currencies, counterparties and maturity profiles, allowing treasury and investment teams to track cash deployment and upcoming maturities in a single interface.

TreasurySpring provides access to counterparties including banks, sovereign issuers and corporates, with the aim of allowing investors to diversify credit exposure and match investment tenors more closely to expected cash needs. The integration also gives users access to repo-based investments that may otherwise be harder for non-bank investors to access directly.

Henry Adams, US CEO and global head of capital markets at TreasurySpring, said the link would allow shared clients to “match liabilities with fixed maturities” while keeping investments within existing operational workflows.

The move reflects a broader trend among corporates and asset owners towards more active management of surplus cash, particularly in an environment where higher interest rates have increased the opportunity cost of holding idle balances. Many treasury teams are seeking tools that allow them to move between overnight liquidity and fixed-term investments without creating additional operational complexity.

By embedding fixed-term cash products within a portfolio management and accounting framework, the integration is intended to support more granular cash allocation decisions while maintaining oversight of liquidity, counterparty risk and maturity schedules.

 

Truist rolls out AI receivables platform

Truist has introduced an integrated receivables platform designed to help corporate and commercial clients automate cash application, improve reconciliation and strengthen visibility over incoming payments. The platform uses AI and machine learning to match payments to invoices across cheque and electronic channels, bringing together payment and remittance data within a single workflow. By centralising receivables processes and automating posting and exception handling, the bank says the system is intended to reduce manual intervention and accelerate the time taken to apply cash.

The launch reflects ongoing friction in corporate receivables operations. Research cited by Truist from the Association for Financial Professionals’ 2024 Payments Fraud and Control Survey shows 45% of chief financial officers say invoice errors cause significant payment disruption and cash flow uncertainty. Separate research from PYMNTS indicates 70% of corporate treasurers face delays in receivables collection and reconciliation, while Capgemini’s World Payments Report 2023 suggests remittance processing can consume an average of 6.3% of the total amount paid, underlining the cost of manual handling and fragmented data.

The new platform integrates with enterprise resource planning and accounting systems to support straight-through processing. It is designed to capture remittance information from emails and payment files, apply business rules to match payments to outstanding invoices and flag exceptions for review. Centralised reporting tools aim to provide real-time insight into key performance indicators such as match rates, outstanding balances and days sales outstanding.

Security and access controls are also embedded, with user entitlement features intended to reduce fraud risk and improve oversight of receivables workflows. By combining automation with integrated reporting, the platform is positioned to support finance teams seeking to shorten posting cycles and improve working capital management.

 

BBVA joins euro stablecoin project

BBVA has joined a consortium of European banks working to launch a shared euro-pegged stablecoin, marking a further step in industry efforts to develop regulated digital settlement infrastructure within the region. The initiative centres on a joint venture called Qivalis, which brings together a group of major lenders including BNP Paribas, ING, UniCredit and SEB. The project aims to create a stablecoin backed by euros that can be used for faster payments and the settlement of tokenised assets within a regulated banking framework. A commercial launch is targeted for the second half of 2026, subject to regulatory and technical approvals.

The Amsterdam-based entity is seeking authorisation from the Dutch central bank as an electronic money institution and is intended to operate under the European Union’s Markets in Crypto-Assets (MiCA) regime. The framework is designed to set standards for governance, consumer protection and operational resilience across crypto-asset activities in the bloc.

The proposed stablecoin would be issued jointly by participating banks and integrated into their existing payment services. The consortium says this approach could support cross-border payments within Europe and enable settlement of digital securities or other tokenised instruments on distributed ledger infrastructure. The model also reflects broader efforts among European lenders to develop common standards for digital payments and asset tokenisation.

The platform is intended to provide a bank-backed digital payment rail denominated in euros that can be used across participating institutions. Potential use cases include cross-border supplier payments, liquidity transfers between banks and the settlement of tokenised financial instruments.

The addition of BBVA expands the consortium to twelve participating banks and reflects growing collaboration across the European banking sector on digital currency initiatives. Several members have previously explored blockchain-based payments and tokenisation projects individually or through industry partnerships.

The project comes as European policymakers and banks continue to assess the role of stablecoins and tokenised deposits in future financial market infrastructure. While private-sector initiatives are advancing, authorities have emphasised the importance of regulatory clarity and operational safeguards to mitigate risks to financial stability and consumer protection.

The Qivalis initiative represents one of several attempts by banks to develop shared digital settlement infrastructure aligned with emerging European rules. Its progress will depend on regulatory approvals and the willingness of participating institutions to integrate the system into their existing payments and treasury operations.

 

Account validation networks link up to widen coverage

An integration between Phixius by Nacha and Kinexys Liink, part of Kinexys by J.P. Morgan, has gone live, extending the reach of account validation services for organisations making ACH payments. The connection links Phixius, a U.S.-focused peer-to-peer payment information network, with Kinexys Liink, a blockchain-based data sharing network used by financial institutions to exchange payment-related information. The combined set-up enables a multi-responder model for validating bank account details, allowing data requesters to receive confirmation from several trusted sources across the Phixius network.

Under the arrangement, Phixius acts as a responder for Kinexys Liink participants seeking to verify US domestic account data. This is designed to support near real-time validation of account ownership and status, helping payment originators confirm details before initiating transfers. The approach is intended to reduce errors, limit misdirected payments and strengthen controls around fraud and operational risk.

By widening the number of institutions able to respond to validation requests, the integration aims to increase data coverage and reliability. This may be particularly relevant for cross-border payments that ultimately settle through U.S. accounts or for organisations handling high volumes of ACH transactions.

Kinexys Liink operates as a rail-agnostic information exchange network, enabling participants to share payment-related data without moving funds on the same platform. Its Confirm application supports verification of account information and transaction status across multiple jurisdictions. Linking the network to Phixius extends its access to U.S. payment account data through an established industry utility.

The development reflects broader efforts within the payments ecosystem to improve account verification processes and reduce friction in payment flows. As payment volumes increase and fraud risks evolve, banks and payment providers are placing greater emphasis on data-sharing frameworks that can validate information quickly and securely before funds are sent.

 

360T and Bitpanda link platforms to widen institutional crypto access

Deutsche Börse Group’s 360T has partnered with digital asset firm Bitpanda to expand institutional access to crypto trading and related services, as financial institutions continue to explore regulated routes into the sector. The collaboration connects Bitpanda’s digital asset infrastructure with 3DX, 360T’s crypto-asset trading venue operating under the EU’s Markets in Crypto-Assets (MiCA) framework. The two firms say the integration is intended to support banks and other institutional clients looking to offer digital asset capabilities while maintaining established trading and liquidity management workflows.

Under the arrangement, 3DX will continue to operate as the regulated trading venue within the 360T environment, while Bitpanda will provide infrastructure and services aimed at supporting client-facing digital asset offerings. The modular structure is designed to allow institutions to build digital asset services for end users without needing to develop their own underlying infrastructure. Each firm will remain responsible for its respective regulated activities.

The partnership reflects a broader shift among financial market infrastructure providers towards building compliant, scalable digital asset capabilities. As European regulation around crypto-assets takes shape, institutions are assessing how to integrate trading, custody and client services within existing systems while meeting new supervisory requirements.

Both firms indicate they are exploring additional areas of cooperation, including connectivity, workflow integration and further infrastructure development. The aim is to create a framework that can support a wider range of digital asset use cases for institutional clients, including trading and potential client distribution models.

 

Visa launches US platform to support small business growth

Visa has introduced a new platform aimed at supporting small businesses across the US with access to financing, customer engagement tools and operational support, as smaller firms continue to face funding and technology gaps. The initiative brings together services across Visa’s network and partner ecosystem to address common barriers to growth, including access to capital, digital adoption and visibility. Small businesses account for a significant share of economic activity in the US but often face greater challenges than larger firms in securing funding and adopting new technologies.

As part of the launch, Visa is establishing a US$100m working capital facility in partnership with lender Lendistry. The fund is intended to expand access to financing for smaller firms, particularly those that may struggle to secure traditional credit. According to data from the Federal Reserve’s Small Business Credit Survey cited in the announcement, 43% of small businesses report ongoing financing challenges.

The platform also aims to help small firms reach customers more effectively through marketing support and practical resources tied to major events. With the FIFA World Cup 2026 set to take place across North America, the initiative will provide tools and guidance to help businesses capture increased footfall and demand during large sporting and cultural events. Visa has already begun running local programmes and activations in selected US cities to support participation by small businesses.

In addition, the platform will offer tools and training designed to support digital adoption. Smaller firms typically lag larger businesses in the use of advanced technologies, including cloud-based systems and specialised software, according to data from the US Census Bureau’s Annual Business Survey referenced in the announcement. The platform will provide access to digital payment acceptance tools, expense management capabilities, fraud mitigation resources and educational support.