Half of firms adjust hurdle rates as market risks rise

Around half of organisations are adjusting their investment hurdle rates in response to market volatility, geopolitical tensions and regulatory change. That’s the main finding from a survey conducted by the Association for Financial Professionals (AFP). The research, published in the 2026 AFP Cost of Capital Survey Report, highlights how companies are increasingly adapting traditional valuation frameworks to reflect a more uncertain economic environment.

The survey shows that approximately 50% of organisations now adjust their hurdle rates when market conditions change, signalling a shift toward more dynamic investment decision-making. Hurdle rates are commonly used by companies as a benchmark to determine whether potential projects or investments generate sufficient returns relative to their cost of capital.

At the same time, organisations are incorporating more advanced analytical tools into their financial modelling. The report finds that more than half of respondents now use real-time data analytics when estimating their cost of capital, while 18% have begun using machine learning models as part of the process.

The weighted average cost of capital (WACC) remains central to corporate investment analysis. Sixty-two percent of organisations use their calculated cost of capital as the standard hurdle rate when evaluating projects. However, 38% set hurdle rates above their cost of capital, a practice that is more common among smaller or privately held firms seeking additional margin for risk.

Treasury and corporate finance functions are typically responsible for calculating WACC. The survey shows treasury teams lead the process at 34% of organisations, closely followed by corporate finance at 32%, while financial planning and analysis teams account for 19%.

The report also highlights the continued dominance of established financial models. The capital asset pricing model (CAPM) is used by 83% of organisations to estimate the cost of equity, while discounted cash flow (DCF) analysis is used by 83% to evaluate investment opportunities.

When assessing individual projects, the most widely used financial metrics remain internal rate of return (IRR), net present value (NPV) and return on investment (ROI), each cited by more than 80% of respondents as important factors in decision-making.

Organisations are also seeking external validation for their cost of capital estimates. The survey finds that around 40% of firms verify their calculations with outside advisers, most commonly investment banks (41%) and consulting firms (40%).

Given the competitive sensitivity of cost of capital assumptions, the information is often tightly controlled within companies. Seventy-eight percent of organisations say cost of capital data is shared internally on a need-to-know basis.

“The survey findings underscore how cost of capital has evolved into a dynamic strategic lever. By integrating real-time data and external validation, treasury and corporate finance leaders ensure their hurdle rates reflect the true risk-adjusted reality of their investments,” said Tom Hunt, CTP, Director of Treasury Practice, AFP.

 

Suppliers prioritise liquidity as payment delays worsen

Two-thirds of businesses are now willing to sacrifice margin in exchange for faster payment as companies prioritise liquidity in an increasingly volatile trading environment, according to research from SAP Taulia. Data from the firm’s latest supplier survey shows 66% of businesses would accept a discount on their invoices in order to receive payment sooner, highlighting the growing importance of cash flow management as payment delays worsen and economic pressures mount.

The findings come as on-time payments continue to deteriorate. The survey indicates that only 37% of invoices are currently paid on time, down from 42% in 2024 and significantly below the 54% recorded in 2019. Delays are also lengthening, with 18% of suppliers now waiting between one and 15 days past the due date, compared with 17% a year earlier.

The results are based on 10,854 responses collected through SAP Taulia’s supplier network and reflect a broader shift in corporate working capital strategies as companies navigate supply chain disruption, tariffs and rising financing costs.

The willingness to accept lower invoice values in exchange for faster payment suggests businesses are placing a higher priority on liquidity than profitability in the current environment. External economic pressures are contributing to that shift. The survey shows that 25% of businesses say rising tariffs are directly squeezing their profit margins, increasing the importance of predictable cash inflows to maintain operations and manage working capital.

At the same time, the data highlights a gap in how companies manage their financing options. One in five firms (20%) say they do not use external sources of finance, suggesting some businesses may not be fully utilising available tools to support short-term liquidity needs.

Peddy Hashemi, global head of customer success at SAP Taulia, says the findings reflect a growing focus on cash flow resilience across supply chains: “Across our network, we are seeing that in today’s volatile environment, cash flow is increasingly prioritised over price,” she says. “Suppliers are reassessing every available lever, from early payment programs to alternative financing, to maintain operations and protect supply chain stability.”

Hashemi adds that the continued decline in on-time payments is making predictable cash conversion more important for suppliers. “Our research indicates that the decline in on-time payments is continuing, which makes the need for reliable and predictable cash conversion more critical than ever.”

Among companies that do use external financing, the survey suggests businesses are increasingly diversifying their sources of liquidity. Virtual or credit cards are used by 22% of respondents, making them one of the most common tools for bridging short-term cash gaps. Early payment programmes and traditional lines of credit are each used by 16% of firms.

Despite the growing demand for faster access to cash, the share of suppliers currently receiving early payments from buyers has remained unchanged year-on-year at 3%, indicating a mismatch between supplier demand and the availability of early payment options. Hashemi notes that buyers able to offer more reliable payment terms may gain a strategic advantage in supplier relationships. “In this context, buyers that can consistently offer on-time or early payment will be recognised not just as customers, but as true strategic partners.”

The findings suggest that as payment delays persist and macroeconomic uncertainty continues, access to fast and predictable liquidity is becoming an increasingly important factor in supply chain resilience.

 

85% of corporates plan to use non-bank lenders

A growing share of corporate clients plan to work with non-bank financial institutions over the next year as traditional corporate and investment banks struggle to meet rising expectations for speed, technology integration and data-driven services, according to the World Corporate and Investment Banking Report 2026 from Capgemini. The report finds that 85% of corporate clients expect to engage with a non-bank financial institution within the next 12 months, reflecting intensifying competition from private capital providers and other alternative lenders.

The shift highlights mounting pressure on banks to modernise their technology platforms and service models as corporate clients increasingly demand real-time capabilities and deeper integration with their financial systems.

Some 58% of corporate clients now expect real-time responsiveness, according to the report, while 49% want more personalised engagement and 40% are seeking more innovative financial solutions. Yet fewer than a quarter of respondents, just 23%, say their corporate and investment bank currently meets those expectations.

Corporate clients also cite significant operational shortcomings. According to the survey, 92% say banks offer limited integration with enterprise resource planning and treasury systems, forcing companies to rely on manual workarounds. Meanwhile, 89% point to a lack of flexibility and personalisation, and 68% say banks lack advanced analytics and forecasting capabilities. These gaps are emerging at a time when competition from non-bank institutions is intensifying across lending, capital markets and structured financing.

Capgemini’s analysis suggests corporate and investment banks are also struggling to translate innovation spending into measurable results. Eighty-two percent of bank executives say their innovation programmes have not generated additional revenue through new products, while 51% report that these initiatives have not delivered the expected cost savings.

Technology constraints appear to be a key factor. Bank executives say 43% of IT budgets are still devoted to maintaining legacy systems, while only 29% is allocated to transformative technologies. At the same time, regulatory pressures are placing additional strain on operating models. Sixty-one percent of executives say compliance costs limit their ability to respond to changing client expectations.

The challenges come as revenue growth in the sector begins to slow. Capgemini forecasts that corporate and investment banking revenues will grow at a compound annual rate of 5.4% over the next five years, compared with 6.5% between 2022 and 2024. Banks are responding by expanding their product offerings and exploring new technologies. According to the survey, 77% of corporate and investment bank executives are prioritising real-time treasury capabilities for cross-border payment flows, while 65% are focusing on AI-driven trading and market intelligence tools. More than half of respondents, 51%, say their organisations are exploring tokenised products to create new revenue opportunities through digital custody services and token issuance.

Catherine Chedru-Refeuil, global head of corporate and investment banking at Capgemini, says the competitive landscape is shifting rapidly as non-bank providers expand their capabilities. “Non-banks are closing the competitive gap with established corporate and investment banks,” she says, adding that many institutions have struggled to move beyond pilot projects despite heavy investment in AI. Chedru-Refeuil notes that governance structures are often a barrier to progress, with only 26% of banks operating with centralised AI oversight, making teams reluctant to automate critical business processes.

Beyond technology challenges, the report also highlights organisational barriers to transformation. Thirty-nine percent of respondents say conservative corporate cultures slow experimentation with new technologies, while 40% of banks are looking to hire external specialists to strengthen their AI capabilities. Only 23% say they are investing in internal reskilling programmes.

At the same time, client trust remains a critical factor in adopting new technologies. Eighty-nine percent of corporate clients say they question the reliability of AI-generated outputs in banking services, underlining the need for greater transparency as financial institutions integrate AI into their operations.

The findings are based on surveys of 750 senior executives across corporate and investment banks, large corporations and non-bank financial institutions with annual revenues of at least US$1bn.

 

Corporate treasurers eye growing role for renminbi

Global corporates are increasingly incorporating the renminbi (RMB) into their operations as trade flows and supply chains deepen across Asia, but many treasury and financing frameworks have yet to fully reflect this shift, Standard Chartered research suggests.

The bank’s latest report, Renminbi in Motion for Corporates, finds that while many companies already have meaningful exposure to the Chinese currency through commercial activity, adoption within treasury and funding strategies is still lagging behind.

The study, based on a survey of nearly 300 global corporates across 19 sectors, highlights the growing economic weight of China in global trade. The country now accounts for more than 15% of global trade and is the largest trading partner for over 120 economies. Yet the renminbi remains underrepresented in global finance, accounting for just 3.1% of global payments and 1.9% of global foreign exchange reserves.

Among companies surveyed, 23% of revenues and 25% of costs are linked to RMB exposure, largely through trade and supply chain activity. However, only 14% of corporate debt is denominated in RMB, indicating a gap between operating exposure and financing currency. This imbalance suggests corporate treasury frameworks have yet to fully align balance sheet structures with underlying currency risks.

Karen Ng, head of China opening and RMB internationalisation at Standard Chartered, says many companies already have significant exposure to the currency through their day-to-day operations. “Many corporates already have meaningful RMB exposure through trade, procurement and supply chains,” she says. “As market infrastructure deepens and liquidity expands, adoption is increasingly being driven by operational needs - including trade settlement and balance sheet alignment.”

The report suggests that corporate use of RMB is increasingly being driven by practical operational considerations rather than speculative currency positioning. Companies are using the currency to support trade settlement, supply chain financing and balance sheet alignment, as well as to manage foreign exchange and interest rate risks associated with China-linked business.

Infrastructure supporting cross-border RMB use has expanded significantly in recent years. China’s Cross-Border Interbank Payment System (CIPS) now connects more than 1,500 financial institutions across 124 countries, with transaction volumes growing by approximately 43% year-on-year.

Liquidity in offshore RMB markets has also deepened. Deposits in Hong Kong have reached around RMB1tn, while issuance of dim sum bonds (offshore RMB-denominated bonds) has grown to approximately RMB850bn. Onshore panda bond issuance has reached RMB195bn, further broadening funding options for corporates. These developments, alongside narrowing spreads between onshore and offshore RMB markets, are helping position the currency as a more viable funding and treasury management tool.

Standard Chartered’s analysis suggests integrating RMB into treasury frameworks could also deliver operational benefits. Companies with significant China exposure may improve payments resilience, diversify funding sources and better align balance sheets with cash flows. In some cases, the report estimates that more integrated RMB treasury strategies could generate annual savings of up to 2%.

Adoption patterns differ across regions. In Greater China and North Asia, corporates are increasingly using RMB for funding and liquidity management in addition to trade settlement. In Southeast Asia, adoption is primarily linked to supply chain activity. Meanwhile, in parts of the Middle East and Africa, RMB usage is concentrated in energy and infrastructure trade corridors, while European and American corporates are exploring the currency through capital markets issuance and selective funding diversification.

The findings suggest the renminbi’s internationalisation is entering a more structural phase as corporates begin integrating the currency alongside other major currencies in multi-currency treasury frameworks.

 

UK to launch online crime centre in April to tackle fraud

The UK government will launch a new national unit in April aimed at disrupting organised fraud networks, as part of a broader strategy to strengthen the country’s response to online scams. The new Online Crime Centre will bring together specialists from government, police, intelligence agencies, banks, mobile networks and technology firms to coordinate action against fraud. Authorities say the centre will focus on identifying and shutting down the infrastructure used by organised crime groups, including bank accounts, websites and phone numbers linked to scams.

Backed by more than £30m in funding, the unit will seek to disrupt fraud operations by blocking scam messages, freezing criminal accounts and removing fraudulent online content. It will also target organised groups responsible for directing large-scale international scams.

The centre forms part of a broader Fraud Strategy covering 2026 to 2029, supported by £250m of government investment over the next three years. The strategy aims to improve coordination between government, law enforcement, regulators and private sector organisations in tackling fraud.

The move comes as fraud continues to represent one of the most widespread crimes affecting individuals and businesses in the UK. Government figures show that around one in 14 adults and one in four businesses have experienced fraud, with losses estimated at more than £14bn annually.

A key component of the strategy involves improving intelligence sharing between organisations that hold information on scams. The Online Crime Centre will enable banks, telecom providers, technology firms and law enforcement agencies to share data more quickly in order to build a clearer picture of fraud networks targeting the UK.

The government also plans to deploy new technologies to identify and prevent fraud. Proposed measures include the use of artificial intelligence tools to detect emerging scam patterns, flag suspicious bank transfers more rapidly and gather intelligence on criminal activity.

The strategy reflects growing concern about the international nature of fraud. Officials estimate that more than two-thirds of scams targeting UK victims originate overseas, often from organised criminal groups operating in regions including Southeast Asia, West Africa, Eastern Europe, India and China.

Alongside enforcement measures, the strategy outlines plans to strengthen support for victims. A national fraud victims charter will establish minimum standards for how victims are treated, including response times and guidance on reimbursement and recovery.

The Online Crime Centre will eventually operate alongside the National Police Service as it takes on greater responsibility for coordinating the UK’s national response to fraud.

 

LSEG launches ESG scoring framework for global markets

London Stock Exchange Group (LSEG) has launched a suite of ESG scores and sustainability analytics aimed at improving transparency and comparability in sustainable finance across global markets. The framework is designed to help financial institutions integrate environmental, social and governance data into investment, lending and advisory processes while meeting growing regulatory requirements around sustainability disclosures and greenwashing risks.

Unlike traditional ESG ratings, the new scores are based on a rules-based methodology that excludes analyst judgement, relying instead on transparent data inputs and standardised scoring criteria. The approach is intended to provide greater consistency for institutions incorporating ESG considerations into automated and AI-driven workflows.

The scoring model draws on 220 standardised indicators and uses a sustainability-focused materiality matrix that combines a redesigned industry classification system with a double materiality approach applied at the business segment level.

Companies are evaluated on a scale from 0 to 5, ranging from organisations that demonstrate limited awareness of ESG risks to those considered leaders in sustainability practices. The scores assess how effectively companies manage ESG risks and opportunities across 12 themes, which are aggregated into three pillars and an overall ESG score.

The framework also introduces threshold-based scoring levels and performance analytics designed to recognise companies that implement measurable sustainability strategies. LSEG says the system includes caps on certain metrics to improve comparability between companies and sectors.

In addition to the core scoring framework, the dataset includes a supplementary analytics layer designed to extend sustainability analysis without altering the primary ESG scores. This layer incorporates information on corporate controversies, sovereign ESG risks and positive environmental indicators such as green revenues and sustainable financing activities.

The ESG scores and analytics are available across several LSEG platforms, including LSEG Workspace, the company’s integrated financial data and analytics environment used by market participants. LSEG’s broader sustainability dataset now includes more than 2,000 ESG data points covering approximately 16,000 companies, which together account for over one million fixed-income instruments. The coverage represents more than 90% of global market capitalisation and 99% of the FTSE All World index, according to the company.

 

BII and Deutsche Bank launch $150m Africa trade finance programme

British International Investment (BII) and Deutsche Bank have launched a US$150m risk-sharing programme aimed at expanding trade finance capacity across frontier markets in Africa. The initiative marks the first partnership between the UK’s development finance institution and the German bank and is designed to increase the flow of capital into some of the continent’s most underserved economies.

Trade finance remains heavily constrained across Africa, with an estimated US$100bn annual funding gap, according to the African Export-Import Bank. The shortage is particularly acute in frontier markets, where available liquidity tends to concentrate in larger and lower-risk economies, leaving smaller countries with limited access to financing.

The programme will operate under a Master Risk Participation Agreement (MRPA) and will provide short-term, revolving capital to support trade finance transactions through local financial institutions. By sharing risk on trade finance exposures, the structure is intended to enable Deutsche Bank to extend greater financing capacity to banks operating in frontier economies. These institutions will then be able to provide trade financing to local businesses importing key goods.

The facility will support the financing of commodities and productive inputs such as machinery, helping businesses maintain supply chains and support economic activity in participating markets. The programme will primarily focus on least developed countries in Africa, as defined by the United Nations, including Zambia, Ethiopia and Rwanda. Deutsche Bank will deliver the programme through its network of domestic financial institution relationships spanning 42 countries, enabling the initiative to channel funding through local banking systems.

Ndaba Mpofu, Managing Director and Head of Financial Services Debt and Trade Finance at BII, said: “Strengthening trade finance is vital for facilitating the movement of essential goods and commodities in our markets and supporting sustainable growth. Expanding access will help build a more resilient ecosystem and unlock economic opportunities across Africa.”

 

Mizuho selects FIS platform for IFRS 9 reporting changes

Mizuho Financial Group has selected a balance sheet management platform from FIS to support compliance with forthcoming regulatory reporting changes in Japan. The system will be used to help the bank adapt to revisions to domestic accounting standards being introduced by the Accounting Standards Board of Japan, which are intended to align more closely with international accounting rules, including International Financial Reporting Standard 9 (IFRS 9).

The updated framework introduces a forward-looking approach to measuring credit losses on financial assets through an expected credit loss (ECL) model. Under the new rules, banks are required to assess potential credit losses across their loan portfolios using forward-looking scenarios rather than relying solely on historical loss data. The regulatory shift increases the complexity of credit risk assessment and reporting, as institutions must process large datasets and conduct scenario analysis on a regular basis to estimate potential losses.

Mizuho will use FIS’s Balance Sheet Manager platform to support asset liability management processes and to assist with reporting requirements under the revised standards. The system is designed to automate elements of the ECL calculation workflow and related accounting processes. Automating these processes is intended to help financial institutions manage the increased data and modelling requirements associated with the new accounting framework while reducing operational complexity in regulatory reporting.

Japan’s move to bring domestic accounting rules closer in line with global standards reflects a broader trend among regulators seeking to harmonise financial reporting frameworks across jurisdictions. The adoption of IFRS 9-style requirements is intended to improve transparency around credit risk by requiring banks to incorporate macroeconomic forecasts and forward-looking indicators into their loss calculations.

The transition also places greater emphasis on risk modelling and data management capabilities within banks, as institutions must demonstrate that their credit loss estimates reflect a range of potential economic scenarios. Mizuho is expected to use the platform to manage regulatory reporting processes while supporting broader balance sheet and risk management activities as the updated accounting rules are implemented.

 

Santander and Visa test AI-driven payments pilot in Latin America

Banco Santander and Visa have completed a pilot programme testing AI-driven payments across several Latin American markets, marking one of the region’s first demonstrations of so-called agentic commerce in a controlled banking environment. The pilot was conducted across Argentina, Brazil, Chile, Mexico and Uruguay, where artificial intelligence agents were used to initiate and complete purchases on behalf of consumers under predefined consent and security conditions.

The tests were powered by Visa Intelligent Commerce, a technology framework designed to allow AI systems to initiate transactions while maintaining existing payment network security and compliance standards. The initiative aims to explore how consumers could delegate routine shopping tasks to AI agents that can search for products, select items and complete payments automatically. During the pilot, AI agents successfully carried out purchases across the participating markets. The transactions included book purchases in Argentina, Chile, Mexico and Uruguay, while the Brazilian trial involved the purchase of chocolates.

The pilot focused on validating key components required for AI-driven payments, including customer consent management, secure handling of payment credentials and interoperability between merchants, banks and payment networks. Both companies said the experiment was conducted within their existing regulated payments frameworks and under current supervisory requirements.

The project forms part of broader industry efforts to explore how artificial intelligence could reshape digital commerce by allowing consumers to automate purchasing decisions through trusted systems. Visa data suggests consumer behaviour in the region is already shifting in that direction. According to the company’s research, more than 70% of Latin American consumers have incorporated AI tools into their shopping journeys, indicating growing familiarity with AI-enabled commerce.

 

Mastercard launches AI “virtual C-suite” for small businesses

Mastercard has introduced an AI capability aimed at helping small businesses analyse performance, manage risk and make operational decisions using automated insights. The system, called Virtual C-Suite, forms part of Mastercard’s broader agentic AI strategy and is designed to provide small and medium-sized enterprises with decision-making tools typically associated with executive leadership roles.

The platform uses AI agents that act as digital counterparts to business executives, assisting with responsibilities across areas such as finance, security and marketing. The agents are designed to analyse financial data, identify trends and recommend actions to help business owners manage operations and working capital.

Virtual C-Suite draws on transaction insights from Mastercard’s payments network, which processed 175 billion transactions in 2025, alongside a business’s own financial activity. The system is intended to provide recommendations related to payments, cash flow and broader financial management.

The technology is designed to integrate with existing business software environments, including accounting systems, banking applications and other operational tools already used by small businesses. Once connected, the platform continuously analyses business performance, identifies potential risks and opportunities and provides suggested actions aimed at improving financial outcomes. Users will be able to interact with the system through dashboards and conversational interfaces, allowing them to query financial trends or request recommendations on operational decisions.

Mastercard says the Virtual CFO function will be the first component introduced, with deployment planned during the course of the year through partnerships with financial institutions, accounting platforms and business software providers. Additional modules covering other executive-level functions are expected to follow over time.

 

Finastra integrates AI fraud detection into messaging platform

Finastra has partnered with financial crime technology firm FraudAverse to introduce an artificial intelligence-based fraud detection capability for banks using its Financial Messaging platform. The collaboration will see FraudAverse’s fraud monitoring system pre-integrated into Finastra’s messaging infrastructure, enabling financial institutions to identify and respond to suspicious payment activity in real time.

The system is designed to monitor payment messages and detect potentially fraudulent transactions as they occur, helping banks respond more quickly to emerging threats. According to the companies, the technology is intended to support both traditional payment flows and newer instant payment systems, where transaction speeds leave little time for manual review.

FraudAverse’s platform uses machine learning models to identify patterns associated with fraudulent activity, including both known threats and previously unseen attack methods. The technology is designed to operate with low latency, allowing banks to assess transactions without slowing payment processing.

The integration aims to reduce the operational burden associated with fraud monitoring by automating parts of the investigation process. By embedding the system directly into the messaging platform, the companies say banks can deploy the capability with minimal additional IT resources. The platform is also designed to support multiple financial messaging formats, allowing banks to apply the same fraud monitoring framework across different payment systems.

 

Crown Agents Bank partners with Hana Bank for KRW payments

Crown Agents Bank has entered into a partnership with South Korea’s KEB Hana Bank aimed at expanding cross-border payment capabilities in Korean won. The agreement will allow Crown Agents Bank clients to settle transactions directly in Korean won (KRW), removing the need to route payments through intermediary currencies such as US dollars, euros or pounds.

Direct settlement in local currency is expected to reduce transaction times and lower costs associated with multi-step foreign exchange conversions. The structure is also intended to improve transparency for institutions conducting trade or financial transactions involving South Korea.

The partnership reflects a broader strategy by Crown Agents Bank to expand its network of in-market banking relationships in order to facilitate cross-border payments and foreign exchange services across multiple jurisdictions.

The development comes as South Korea’s financial regulatory environment has gradually become more open in recent years, enabling greater access to financial products and services linked to the Korean market. By connecting to Hana Bank’s domestic clearing capabilities, Crown Agents Bank will be able to offer its clients more direct access to the Korean payments system.

The arrangement is designed to support international financial institutions and corporates with exposure to South Korea by providing an additional settlement option in the local currency as cross-border demand linked to Korean markets continues to grow.