Culture in financial services still needs to improve to better serve women

Recent changes in culture within financial services firms still need to become fully embedded in order to better attract female talent and female investors, Sheree Howard, executive director, risk and compliance oversight at the UK’s Financial Conduct Authority (FCA) told delegates at PIMFA’s inaugural Women’s Symposium.

Howard said the wealth management and financial advice industry still needed a “different and better mix of advisers and advice” to ensure women received the help they needed.

While much had changed in the thirty years since she began working in financial services, Howard said she feared the industry was in danger of “going backwards.” The rate of appointment of women to wealth management and financial advice boardrooms is continuing to fall and has fallen 28 percentage points in the last year, she said. Meanwhile, in the previous year, a third of all board appointments were female directors, down from 61% the previous year.

There had also been a decline in the share of women employed in the industry overall, from 51% to 43%, despite the sector continuing to expand. While this was partly attributed to the removal of lower skilled roles in which women were more highly represented and advances in technology, she said more needs to be done to attract women into the industry.

Financial services firms need to pivot towards “attracting women into more rewarding mid-level and senior roles” Howard said, adding that the way to do that was to ensure the right culture existed, so that the right female talent were attracted to the industry at the start of their career. They could then be promoted on their merit and hard work and continue to be retained within the sector “whatever their life choices may be”.

One of the main deterrents to women entering financial services were the large instances of non-financial misconduct, which often took the form of sexual harassment and this misconduct could destroy a firm’s reputation, as well as contributing to toxic group think, she added.

Howard called on firms to tackle individuals that did “not meet their [professional] standards by risking their firm’s reputation, their clients’ money and their colleagues’ wellbeing.” She called it “striking” that 74% of respondents were supportive of recent FCA proposals to tackle non-financial misconduct. 

She also reminded delegates of the FCA’s whistleblowing hotline. She raised concerns about sexism in the City and what she called “the pernicious use of non-disclosure agreements to try to suppress whistleblowing.”

“It is worth reminding ourselves collectively that nothing in an NDA can prevent an individual from reporting an incident to the FCA, and I mean nothing,” Howard stated. “Treating colleagues well, protecting against group think and delivering for a diverse range of customers should not be controversial or antagonistic. It’s the right thing to do.” 

 

Lloyds Bank completes its first WaveBL electronic bill of lading transaction

Lloyds Bank has completed its first transaction using an electronic bill of lading (eBL) on the WaveBL trade documentation platform. The cross-border deal featured entirely digital documentation exchanges.

The deal involved Somerset, UK-based building material supplier Paull’s Matting importing matting from an Indian Coir Exporter, headquartered in Kerala, India. The bill of lading for the transaction was issued by Mediterranean Shipping Company (MSC) as an eBL through WaveBL, and passed through the exporter’s bank – Federal Bank – to Lloyds Bank, serving Paull’s. The two banks are working jointly to explore opportunities to digitise further transactions between their customers.

The use of the eBL reduced the transaction completion time, cost to complete and the risk of key papers being lost. It also removed the administrative burden of creating, handling and despatching paper documentation for all parties. While a previous trade between Paull’s and the exporter took 15 days and involved couriering physical documentation six times between India and the UK, this transaction was completed in just over 24 hours, with no need for any physical documentation to change hands.

Along with the eBL, the deal also used a digital promissory note (dPN) issued by Paull’s Matting through Lloyds Bank on Enigio’s trace:original blockchain solution. The technology allowed Paull’s to digitally accept its payment obligation, removing the requirement for it to create and courier a physical promissory note to Lloyds Bank. This enabled Lloyds Bank to release the eBL faster to Paull’s.

“This is a great example of digital trade in action,” commented Rogier van Lammeren, head of trade and working capital products at Lloyds Bank. “Together, the eBL and the dPN have eradicated the need for any physical paper to change hands. This has meant a faster transaction, which helps shorten parties’ working capital cycles, with less risk, at lower cost and with significantly less admin for the businesses involved.”

 

Surecomp and Cleareye.ai look to enhance AI-powered trade finance automation

Surecomp has announced a strategic partnership with Cleareye.ai Inc., a provider of digital trade finance solutions providing automation of trade compliance and operations. Both firms are acutely aware of the challenges faced by their customers engaged in complex and time-consuming cross-border trade. This is confounded by increasingly complex regulatory requirements such as the monitoring of trade-based money laundering (TBML), which is putting a strain on operational capacity and rising costs.

Offering solutions to financial institutions worldwide, Surecomp and Cleareye's collaboration will specifically address the need for more streamlined and readily accessible data within trade documents.

By automating the classification of trade documents and extracting and validating their data, banks can enhance trade productivity and speed. This process helps reduce risks and ensures compliance through automated checks for TBML and other relevant red flags. Ultimately, it could increase the banks’ ability to scale and manage growing trade volumes efficiently.

“Banks continuously need to stay ahead of the ever-changing patterns in illegal trade behaviour,” said Enno-Burghard Weitzel, Chief Solutions Officer, Surecomp. “Embedding AI-based compliance checks into the trade finance transaction is a prime use case for bringing artificial intelligence to banks’ day-to-day operations.”

 

UK Finance announces Regulated Liability Network experimentation phase

UK Finance has announced work on a new UK Regulated Liability Network (RLN) experimentation phase with eleven of its members. The UK RLN is envisaged as a common ‘platform for innovation’ across multiple forms of money, including existing commercial bank deposits and a shared ledger for tokenised commercial bank deposits. 

Through a collaboration of several stakeholders within the financial services industry, the UK RLN explores the options for users to make payments, transact and settle liabilities in the increasingly digital marketplaces of the future. The firms currently involved in this work are Barclays, Citi, HSBC, Lloyds Banking Group, Mastercard, NatWest, Nationwide, Santander, Standard Chartered, Virgin Money and Visa. EY and Linklaters and a technology team of R3, Quant, DXC and Coadjute are supporting them. 

Some of the potential benefits to customers, businesses and the wider UK economy include giving users more options to manage their payments, enhanced fraud mitigations, and improved settlement capabilities. 

The UK RLN experimentation phase will focus on the following use cases: 

• Payment-upon-delivery for a physical product, aimed at reducing fraud in online marketplaces.  
• The process of buying a home, improving customer transparency, and mitigating conveyancing fraud.   
• A digital bond settlement, to connect digital customer money to digital assets. 

These use cases will examine how the UK RLN can facilitate different forms of money, including existing and tokenised deposits. The experimentation phase will run until summer 2024 and will cover the following areas: 

• Customer and business benefits: Exploration of foundational capabilities (aligning with the BIS and Bank of England’s Project Rosalind experiments for an application programming interface for a possible digital pound). 
• Technical feasibility: Proof of concept via a technology sandbox to gauge the functional and non-functional requirements of the UK RLN design, including simulated connections and transactions. 
• Legal framework: Analysis of how existing (and potential future) laws and regulations apply to the operation of a shared ledger settlement system, including tokenised deposits.

The results of the experimentation phase will be published after the summer. UK Finance will host a number of engagements and events to provide all stakeholders, including innovators, technology companies and FinTechs with an opportunity to explore how they can engage with the project.

 

Finastra integrates AI ESG scoring into trade and SCF offering 

Finastra has integrated AI-powered environmental, social and governance (ESG) scoring capabilities into its working capital solution, Trade Innovation. The integration with CoriolisESG by TradeSun aims to enable users to book and manage trade and supply chain finance with the added benefit of automated insights into ESG scoring. This results in a greater understanding of the sustainability of trade and helps organisations to monitor and manage their impact better.   

The solution enhances enterprise intelligence and resilience by measuring key entity data against globally-recognised frameworks, such as the UN Sustainable Development Goals and the EU Taxonomy. Captured information provides insight into international business activity, risk assessment, regulation compliance, geopolitical risk, due diligence, and supply chain analysis.

The partnership between Finastra and TradeSun encompasses the full TradeSun Intelligence platform, including OCR, document checking, real-time compliance and global markets analytics. The trade digitisation product has ESG assessment built-in, offered in line with the ICC Principles for Sustainable Trade, Wave 2, Pilot Program.

“Sustainability is a growing imperative in the world of trade and with the continued emergence and development of regulations in this space, organisations must ensure they can measure their impact to help meet the worldwide ESG mandates and understand where risk can be better managed,” said Iain MacLennan, Head of Trade and Supply Chain Finance at Finastra. “That vision is now possible for users of our Trade Innovation technology.”

 

ICISA and Aman Union collaborate to advance credit insurance initiatives

The International Credit Insurance & Surety Association (ICISA) and the forum assembling Commercial and Non-commercial Risks Insurers and Reinsurers in Member Countries of the Organization of Islamic Cooperation (OIC) and of the Arab Investment and Export Credit Guarantee Corporation “Dhaman”, commonly known as Aman Union, have announced a Joint Strategic Collaboration aimed at fostering mutual cooperation and knowledge sharing in the realm of trade and investment insurance.

The MoU, symbolising a step towards industry synergy and international cooperation, heralds a new era of collaborative endeavours aimed at fortifying trade and investment insurance frameworks globally.

ICISA, as a trade association representing trade credit insurance and surety companies internationally, serves as a platform for collaboration and the development of best practices. Meanwhile, Aman Union is dedicated to promoting and developing the commercial and non-commercial risks insurance industry in OIC member states, as well as strengthening mutual relationships among its members.

The collaboration underscores a shared commitment to advancing the trade and investment insurance landscape, particularly within OIC member states. By sharing their respective expertise and networks, the parties aim to facilitate enhanced knowledge exchanges and initiatives that contribute to the sustainable development of OIC member states.

The collaboration will include facilitating knowledge exchanges on trade and investment insurance initiatives, enhancing collaboration and development of best practices in the industry, and strengthening mutual relationships among members of both associations.