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Industry roundup: 16 July

CBA software update prepares for significant SWIFT trade finance changes

Commercial Banking Applications (CBA) has announced that it has shipped the latest annual release of its IBAS GBF - Global Banking Factory software to all customers over three months ahead of schedule, allowing additional time for testing in advance of the upcoming cutover to SWIFT Release 2021 in November this year.

The SWIFT changes are part of an industry-wide initiative to support the digitalisation of trade finance - moving away from unstructured messages to more complex and structured message types that allow for increased automation and straight-through processing. SWIFT Release 2021 upgrades the functionality and format of messages for Guarantees and Standby Letters of Credit, building on the updates to Documentary Credit messages completed as part of SWIFT Release 2018.

To prepare for the November 2021 switchover, banks need to ensure all back-office applications, front-end systems, APIs and other interfaces are ready for the transition. By involving all user banks in workshops early on in the process and allowing them to test a pre-release version, CBA says it is allowing them ample time to interface with other systems, optimise the customer front end and establish new operational routines to ensure a smooth changeover.

To simplify the process for corporates, the changes to CBA’s IBAS GBF front-end solution have been made based on a flexible user interface which is user-friendly for corporates not familiar with SWIFT’s message structure and crucially still in compliance with the new SWIFT standards. Capturing all data in a structured format reduces errors and will allow banks to increase automation, improve straight-through processing and accelerate turnaround times for trade finance documentation.

"Whilst the removal of Standby LCs from key Documentary Credit SWIFT messages might appear like a small change, the consequences for banks and their downstream operations is significant," said Rolf Hauge, CEO and founder of CBA. "This has made it essential for banks and vendors to start preparations in good time. We have optimised the business logic associated with handling the new requirements for Standby LCs, which must now always be issued using the same message type as Guarantees, to make the process as straightforward as possible for user banks. This includes the roll-out of brand-new applications for handling Standby LCs which are not only SWIFT compliant but also tailor-made in line with Standby LC market practice."


Citi Latin America announces rollout of the bank's digital account

Citi Treasury and Trade Solutions (TTS) Latin America has announced the launch of the bank's Digital Account. The account leverages digital capabilities using CitiDirect BE Digital Onboarding, Electronic Signatures, and Digital Product Activations.

The Citi Digital Account allows institutional clients the ability to completely digitise their banking experience, no longer requiring the need for wet-signed signature cards, chequebooks or manual transactions. Clients will also have access to a suite of digital self-service capabilities and biometrics authentication. The account also offers complete integration with Citi's Digital Bank Platforms, which should simplify account management while optimising the information clients use to make decisions.

Citi Digital Account is now offered in Brazil, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, and Puerto Rico, with additional countries to follow in 2022. Expanding upon the CitiDirect BE Digital Onboarding platform launched in Brazil in 2019, the Citi Digital Account is the latest step in Citi’s digital transformation in the region.

"Citi’s Latin America business has successfully developed one of the most comprehensive platform value propositions as a part of its Digital First strategy," said Steve Donovan, Latin America Treasury and Trade Solutions head at Citi. "Our digital value proposition has evolved from enabling clients’ treasury digitisation objectives, such as efficiency and transparency, to helping them compete in the digital economy."


Demand for unsecured finance from SMEs is on the rise

The quarterly SME Expert Index of UK brokers from iwoca has revealed that demand for unsecured finance from SMEs is on the rise. The index, which covers a four-week period in May, found that over a third (38%) of brokers had submitted more lending applications for unsecured finance compared to the four weeks prior to that, suggesting that SMEs are increasingly using credit to support their growth and recovery. Almost one in five brokers (19%) saw demand increase significantly - submitting 50% or more applications compared to the previous four weeks. This has risen from 14% of brokers citing the same in the Q1 index.

The Q2 SME Expert Index is based on insight from UK brokers who collectively submitted over 1250 applications for unsecured finance on behalf of their SME clients in May. Over half of respondents (55%) reported that the most commonly requested unsecured loan amount they’d applied for on behalf of their clients was under £50,000. Nearly one in five (17%) were most likely to request loans under £25,000 - this is below the threshold of the government-backed Recovery Loan Scheme. 

Cash flow remains the key driver for small businesses applying for finance. Nearly a third (32%) of brokers said the most requested reason for loan applications in May was managing 'day to day cash flows'. Growth comes next, with 23% of brokers stating the top reason their SME clients requested finance was to 'grow their business'. The findings also show that - as social distancing restrictions ease - one in five (21%) SMEs are seeking finance to recover from lockdown or closure. 

For SME clients who requested finance through the government-backed Recovery Loan Scheme in May, a third of brokers said they waited - or are still waiting - for non-bank lenders to be accredited to the scheme.


Gulf Bank launches TMS with Murex

Gulf Bank has launched the MX.3 integrating platform in collaboration with Murex. The platform implementation is a transformative step for Gulf Bank as it develops and automates its treasury and capital markets systems.

The MX.3 platform provides a technological infrastructure that meets evolving capital markets and regulatory requirements. The platform enables a seamless workflow across front-to-back-to-risk management and processing.

"At Gulf Bank, we seek to make the most of our digital transformation journey, transforming the institution into a fully integrated digital bank that will not only live up to, but exceed, the aspirations of customers, now and in the future," said Sami Mahfouz, general manager of Treasury at Gulf Bank. "To achieve this, Gulf Bank is creating a sophisticated, modern treasury platform that caters to customers’ needs for a full treasury trade cycle, in addition to seizing the extraordinary opportunities available to diversify and expand the bank’s operations. Throughout the process of working on the launch of the new platform, we were so proud to have witnessed such a great embodiment of the culture of teamwork that characterises Gulf Bank."

The integrating platform will enable Gulf Bank’s treasury department to benefit from synergies in connected functions, organisation modelling, trade repository, workflow dashboards, in-depth reporting, automated triggers, and real-time monitoring of positions and risks. This Gulf Bank initiative is the latest stage of its journey to meet the challenges of the future and provide only the best banking solutions.

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