IBM wins AFP 2024 Pinnacle Awards

IBM Corporation was named the winner of the AFP 2024 Pinnacle Awards Grand Prize for excellence in treasury and finance. The Pinnacle Awards Grand Prize, sponsored by Truist, was presented during AFP 2024 in Nashville, Tennessee. The Grand Prize was chosen through a vote by treasury and finance professionals.

IBM Corporation’s submission focused on linking its treasury cash management efforts to its overall enterprise performance management framework and investor reporting goals for free cash flow. In a collaborative effort, the team took a manual, complex and fractured process and standardised it into the Treasury Technology Platform.

The solution designed by the company provides real-time visibility, actionable insights and increased speed to action. IBM achieved over 90% error-free data, decommissioned 8+ tools, freed up thousands of personnel hours and contributed to a $1bn increase in free cash flow, with ongoing enhancements expected to drive further growth.

“IBM Corporation’s unique solution is an example of how digitisation and standardisation can deliver significant time, labour and cost savings,” commented Jim Kaitz, President & CEO of AFP.

 

Mastercard targets commercial cross-border payments for banks

Mastercard Move Commercial Payments has been launched, which is designed to enable banks to facilitate near real-time, predictable and transparent commercial cross-border payments. The solution, revealed in Beijing at Sibos 2024, aims to simplify operations, optimise liquidity, reduce counterparty risk and provide end-to-end visibility for banks and their customers. 

Cross-border payments have been growing at double-digit rates, according to data from McKinsey, as businesses expand their supply chains and operations internationally. Despite this, banks still grapple with several pain points which are passed on to their business customers in the shape of slow and unpredictable cross-border payments that lack pricing transparency. Mastercard Move Commercial Payments aims to address existing challenges and capitalise on opportunities in commercial cross-border payments in an innovative way. 

Features include near real-time payments, 24 hours a day, 365 days a year, to help banks transform corporate trade payments and intra- and inter-company treasury flows where working capital efficiency is crucial. Settlement options to give banks more flexibility to optimise liquidity efficiencies, which the card company says has no impact on FX and deposit-related bank revenue.  

A multilateral arrangement is embedded to reduce counterparty risk and provide outcome certainty on end-to-end transaction clearing in near real-time. The solution leverages banks’ existing investments in Swift messaging infrastructure with a single technical connection that allows corridors and currencies to be added with minimal cost and resources.

Mastercard says that the solution is fully compatible with existing correspondent banking arrangements between respondents and correspondents. Large clearing banks can extend the service to their institutional customers with minimal changes to their current processes. It also offers value-added services tailored to a bank’s unique needs, including risk control services and fraud analytics. 

 

BofA extends guaranteed FX rates up to 1-year

Bank of America (BofA) says it is simplifying the management of foreign exchange (FX) risk associated with cross-currency payments and receipts with the introduction of guaranteed FX rates of up to 1-year, the longest tenor available in the industry today.  Using this strategic solution can help companies mitigate exposure to currency fluctuations and simplify treasury management processes such as forecasting and reconciliation.

“When FX risk is managed appropriately and efficiently, it can bring enormous value to companies that process large volumes of cross-border payments,” said Bhupen Velani, head of Transactional FX Trading in Global Markets at BofA. “As our clients’ business models have evolved, these volumes have increased, and so too has the appeal to lock in FX rates with longer tenors.”

In recent years, the volume and value of cross-border payments has continued to dramatically increase with much of the volume generated by businesses in the e-commerce, services, manufacturing and “gig” industries (companies and individuals engaging in short-term, project-based work). The growth is also being spurred on by innovations in technology.

BofA’s guaranteed FX rates now support over 200 currency pairings across multiple tenors. The 1-year tenor is available in 37 currency pairs. Those with the most notable volumes include USDMXN, EURUSD, USDCAD, GBPUSD, EURCZK, AUDUSD. The bank says its clients can access guaranteed FX rates through the CashPro platform and via Swift with no additional technology changes required.

“For corporate treasurers, volatile FX markets exacerbate the challenge of cash flow forecasting,” said Daniel Stanton, head of Transactional FX in Global Payments Solutions at BofA. “Securing guaranteed FX rates of longer tenors can help them improve forecasting, which will lead to better informed decision-making.”

 

BNY and Mizuho Bank to collaborate for trade services

The Bank of New York Mellon Corporation (BNY) and Mizuho Bank, the banking arm of Mizuho Financial Group, have jointly announced an agreement for correspondent bank network connectivity for international trade. 

In this increasingly complex global environment, banks are experiencing rising costs and complexity due to increasing regulatory demands of know-your-customer (KYC) and compliance requirements. With banks operating a limited trade relationship network, cross-border trade opportunities with new counter-party banks are restricted.

This agreement offers expanded connectivity for clients leveraging both institutions’ expanded trade network. Through the agreement, both banks aim to enhance their services to clients through frictionless access to each other’s trade networks. Powered by BNY’s Trade Network Access Service, the correspondent banks’ end clients can expect streamlined trade services and simplified compliance processes. The non-competing alliance between BNY and Mizuho Bank offers enhanced solutions to corporate clients in Asia without significant investments by either institution in trade infrastructure.

“Cross-border trade is essential to economic growth, and trade finance solutions provided by banks have proven to be vital in helping companies do business and manage risks,” said Jennifer Barker, Global Head of Treasury Services and Depositary Receipts at BNY. “With connectivity to over 4000 bank branches globally to facilitate cross-border trade, we are proud to work with Mizuho Bank to enhance international trade network access offering, supporting our clients to scale their businesses.”   

 

OCP Group joins Komgo to digitalise trade finance processes

OCP Group, a producer and exporter of phosphate-based products, has successfully integrated Komgo’s platform and Swift MT798 messages to receive letters of credit (LCs). This underscores OCP’s commitment to digitalising trade finance.

The integration of Swift MT798, a communication standard for trade finance, is one of the multiple channels available through Komgo’s platform, alongside Konsole APIs. This setup, which integrates several communication channels, allows OCP Group to connect with all its banking partners at any time, from anywhere. By offering this level of flexibility and connectivity, Komgo ensures that its clients have access to the most advanced trade finance business applications, enabling more efficient, secure, and scalable trade finance operations.

‍OCP Group’s digital transformation journey was made possible through close collaboration with key banking partners, notably Banque Centrale Populaire (BCP), which played a significant role in this initiative. By working together, OCP says it is not only enhancing its own processes but also setting a benchmark for digital trade finance in Africa. The integration of Komgo aligns with OCP’s commitment to sustainability and innovation by reducing paper-based processes and streamlining trade activities.

“We are proud to be one of the largest African companies to embrace Komgo and leverage MT798 for our letter of credit transactions,” said Farah Lahbib, Director in charge of Trade Finance and Credit, at OCP Group. “OCP Group is committed to adopting cutting-edge digital solutions that enhance the efficiency and security of our trade finance processes.”