Eurozone economy fades but UK and US show July growth

The flash Purchasing Managers’ Index (PMI), the first measure of economic activity for July, suggests that Eurozone growth is stagnating, but there are positive signs in the US and UK. The seasonally adjusted HCOB Flash Eurozone Composite PMI Output Index compiled by S&P Global fell to 50.1 in July from 50.9 in June, posting only fractionally above the no-change mark and thus pointing to a near-stagnation of private sector activity. Output has now risen in each of the past five months, but the latest expansion was the softest in this sequence and thus represents a weak start to the third quarter of the year.

Any recorded growth was generally linked to services business activity, which increased for the sixth month running in July. However, the modest expansion was the slowest in four months. Meanwhile, manufacturing output continued to decline at the start of the third quarter, extending the current sequence of contraction to 16 months. Moreover, the pace of reduction was marked, having accelerated to the fastest in 2024 so far.

The near-stagnation of business activity reflected further signs of weakness in demand. New orders decreased for the second month running in July. The pace of reduction quickened slightly from that seen in June, but it remained modest nonetheless. As was the case with output, growth in services new business contrasted with a fall in manufacturing new business, but here, the modest expansion in services was insufficient to offset the steepest fall in manufacturing new orders since December.

In the UK, the headline seasonally adjusted S&P Global Flash UK PMI Composite Output Index rose to 52.7 in July from 52.3 in June, signalling a solid upturn in private sector activity. Expansions have now been recorded in each of the past nine months, with the index having averaged 53.0 in 2024 so far.

Once again, the manufacturing sector posted the sharper increase in activity, as production levels rose for the third month running following a lengthy downturn. Companies mainly increased output due to stronger order book volumes, whilst also maintaining efforts to reduce outstanding workloads.

Activity growth among services firms quickened slightly in July, supported by a much faster increase in new work compared to June. That said, the pace of activity expansion was still among the softest recorded in 2024 to date.

The headline S&P Global Flash US PMI Composite Output Index rose to 55.0 in July from 54.8 in June, its highest since April 2022. Output has now risen continually over the past one-and-a-half-years, with the pace of expansion improving markedly in recent months after slowing in April.

The service sector (56.0) outperformed manufacturing (49.5) for a fourth straight month, with the sectoral divergence widening to the greatest since June last year. While the service sector expanded in July at the strongest rate since March 2022, manufacturing output declined for the first time since January.

Sector variances were also marked in terms of order book growth. Measured overall, inflows of new work rose at a slightly reduced rate, caused by a renewed fall in new orders at manufacturers. However, the overall rise was the second largest seen over the past 13 months thanks to faster inflows of new business placed at service providers, which rose at the sharpest rate for just over a year.

 

Over one-third of UK FIs penalised in past 12 months for regulatory compliance failures

A study by professional services firm Davies among more than 500 senior decision-makers within UK financial services businesses has found that 36% of financial services businesses in the UK say they have been penalised at least once in the past 12 months for failing to meet regulatory compliance demands.

The research also found that 62% say the challenge of keeping up with regulatory compliance requirements has become more acute over the past five years, while 63% said the introduction of the FCA’s Consumer Duty in July 2023 has changed how they serve customers.

When given a list of challenges their businesses currently face, regulatory compliance was the second most commonly selected option (43% cited it as a challenge), just behind economic turbulence (44%).

“The regulatory compliance landscape is constantly evolving, and our research shows just how many businesses in the UK’s financial services industry are struggling to keep pace with the changes taking place,” commented Silvia Amoros, co-lead of Banking & Markets EMEA, Davies. “Failure to do so is not only likely to incur significant penalties, but can also bring huge damage to a company’s reputation.”

 

BofA’s CashPro App tops US$500bn in payment approvals

Bank of America (BofA) has seen the adoption and use of its CashPro App for corporate payment approvals accelerate significantly over the last couple of years. Corporate payment approvals completed via the CashPro App surpassed a record US$500bn as of the middle of this year – up nearly 40% annually – and are on pace to reach a trillion dollars by the end of 2024.

CashPro is Bank of America’s digital banking platform accessed by 550,000 users at 40,000 companies worldwide to manage and monitor their payments, deposits, loans, and trade finance transactions. Corporate payments can be initiated across any of the CashPro platform's four channels: Online, App, API and Connect (file-based). For added security, these payments may require additional levels of approval before being released.

The bank’s clients play an active role in the design of the platform's four channels. They help prioritise various functionality and enhancements and participate in design sessions through CashPro Advisory Boards.

One advisory board member, Flavia Salvaterra, director of treasury at Kroll, said: “I’ve used the CashPro App everywhere – from meetings to airport lounges. Having the mobile app means that you’re no longer restricted to your desktop to approve payments. It makes life a lot easier.” 

 

U.S. Bank introduces automated supplier accounts receivable platform

U.S. Bank has introduced an accounts receivable (AR) platform that is designed to help suppliers accelerate cash flow, cut costs through automation and deliver better payment experiences.

Created in partnership with Billtrust, U.S. Bank Advanced Receivables combines the bank’s payment and risk management capabilities with Billtrust’s AR technology to improve the intricate business-to-business (B2B) receivables process.

The platform consists of five core elements to modernise the receivables process:

• Invoicing: Provides treasury teams and their buyers with flexible and automated invoice delivery options that increase digital payments.
• Payments: After establishing a company’s terms, buyers are offered flexible and secure payment options, including payments via virtual credit cards and ACH.
• Cash application: Suppliers may achieve higher match rates and easier exception handling with a seamless remittance process.
• Collections: Customised outreach approaches, automation of repetitive tasks and better cash forecasting aim to optimise collections.
• Credit: The platform is designed to extend credit to buyers more efficiently. A customised, secure credit application process should eliminate the slow manual exchange of information and improve risk management.

 

HSBC and SBF to support Singapore businesses’ overseas expansion

HSBC and Singapore Business Federation (SBF) have signed a Memorandum of Understanding (MoU) to help Singapore businesses seize new growth opportunities in key trade corridors – Greater Bay Area (GBA), India and the Middle East. In addition, HSBC will leverage its global expertise and range of solutions to help Singapore businesses deepen their knowledge in sustainability and support their net-zero transition needs.

HSBC is the first global bank in Singapore to sign a MoU with SBF, focusing on support for local businesses’ overseas expansion and transition needs. To mark the occasion, HSBC has launched the Business Guide to ASEAN and Beyond (HSBC Business Guide) which provides insights on six major markets within ASEAN and its key trade corridors – GBA, India and the Middle East. 

The MoU aims to promote three key pillars. One of these is internationalism, by encouraging and facilitating the internationalisation of Singapore-based businesses in the emerging markets of GBA, India, and the Middle East, by bringing together SBF’s local network and HSBC’s global connections, with a focus on tapping into trade and business opportunities.

Knowledge sharing is another pillar. The partnership should provide Singapore-based business leaders with access to HSBC in-market knowledge on overseas business expansion and knowledge on sustainable finance, to support their expansion and net-zero transition needs.

Finally, the goal is also to promote ‘Local-Global’ connectivity, widening the reach of local businesses through SBF’s community to better support their international growth and transition ambitions. HSBC and SBF say they will organise a series of seminars on doing business in key trade corridor markets and mission trips to India and the Middle East.

 

XTransfer and Ebanx to facilitate B2B trade payments in Latin America

XTransfer and Ebanx have announced a strategic partnership aimed at streamlining B2B trade payments in Latin America. This collaboration aims to empower XTransfer's clients – small and medium-sized enterprises (SMEs) worldwide working with imports and exports – to navigate LatAm's digital economy with greater ease and efficiency.

While consumer payments are fairly digitised and easy to use, most companies and entrepreneurs in rising markets rely on complex, time-consuming, and non-digital payments. Typical B2B payments take up to 14 days to be confirmed and involve up to six intermediaries, often with low visibility and high fees, according to Ebanx’s annual study, Beyond Borders 2024.

Through this partnership, Ebanx will process payments for XTransfer in five Latin American markets: Brazil, Chile, Colombia, Mexico, and Peru. It will focus on alternative payment methods (APMs) like electronic transfers and bank transfers, e-wallets, cash-based vouchers, and the Brazilian instant payment Pix. 

The offer is aligned with the preferences in Latin America, according to internal data from Ebanx. This shows that over 75% of B2B transactions in the Ebanx platform are paid with alternative payments (other than cards). This collaboration leverages Ebanx’s expertise in local payment methods to provide XTransfer’s clients who sell to Latin America with efficient payment solutions. The pair say that this should enable businesses worldwide to engage in cross-border trade with confidence in Latin America.