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Industry roundup: 21 September

BOC, DBS and HSBC join GSBN to form trade finance advisory group 

The Global Shipping Business Network (GSBN), an independent, not-for-profit technology consortium to build a blockchain-enabled operating system for global trade, has welcomed the Bank of China (BOC), DBS Bank, and HSBC to form the consortium’s Trade Finance Advisory Group. 

According to the International Chamber of Commerce (ICC), there is an estimated trade finance gap of US$1.5 trillion projected to grow to US$2.5 trillion by 2025. The mandate of the Trade Finance Advisory Group is to help bridge this financing gap by helping partner institutions improve their existing processes, by leveraging trusted digital data from supply chains. In turn, this will help enhance financing support for small and medium enterprise businesses, many of which have been deeply impacted by the COVID-19 crisis. The announcement builds upon the recent growth of GSBN, following the rollout of its Cargo Release application across Asia and partnerships with eight port groups in China.

The advisory group will explore the technical, legal and regulatory frameworks needed to break the silos between the global supply chain and financial institutions. Furthermore, the group will also work together to test digital solutions such as electronic bill of lading and other supply chain data to improve the financing process for banks. 

As part of GSBN’s growing ecosystem of members that includes the likes of COSCO, Hapag-Lloyd, Hutchison Ports, OOCL and PSA, the Trade Finance Advisory Group will also benefit from collaboration and co-creation opportunities with various market participants. 

 

Singapore and India's real-time payments systems to link in 2022

The Monetary Authority of Singapore (MAS) and the Reserve Bank of India have announced plans to link Singapore’s PayNow and India’s Unified Payments Interface (UPI) real-time payment systems by July 2022.

The PayNow-UPI linkage will enable users to make instant, low cost fund transfers directly from one bank account to another between Singapore and India. When implemented, fund transfers can be made from India to Singapore using mobile phone numbers, and from Singapore to India using UPI virtual payment addresses (VPA). The experience of making a PayNow transfer to a UPI VPA will be similar to that of a domestic transfer to a PayNow VPA. Non-bank Financial Institutions (NFIs) that are connected directly to PayNow and FAST rely on VPAs to send and receive real-time payments from other users of e-wallets or mobile banking applications of PayNow and FAST participants. 

The linkage will provision for increased volumes of remittance traffic, multi-entity participation, automation of capital control rules, and enriched message formats to accommodate future innovation by linkage participants. These enhancements constitute a significant upgrade to the design of cross-border payment systems today.

The connectivity between PayNow and UPI is a milestone in the development of next-generation infrastructure for cross-border payments between Singapore and India, and is closely aligned with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments. The PayNow-UPI linkage builds upon the earlier efforts of NETS and NPCI International Payments Limited (NIPL) to foster cross-border interoperability of card and QR payments - since 2018, NETS and NIPL have collaborated to enable (i) the use of India’s Bharat Interface for Money QR to make QR payments at selected NETS merchants, via NETS’ QR code; and (ii) cross-border interoperability between both countries’ payment card schemes (NETS and RuPay) at selected merchants. The new announcement should also further anchor the substantial trade, travel and remittance flows between the two countries. 

 

RBC Capital Markets launches Singapore-based e-FX server and pricing engine

RBC Capital Markets, the corporate and investment banking arm of RBC, has announced that it is launching a Singapore-based electronic foreign exchange (e-FX) server and pricing engine to serve its clients across Asia-Pacific and around the globe.

Developed with support from the Monetary Authority of Singapore (MAS), RBC’s e-FX server and pricing engine will rely on new sales and trading infrastructure in the city state. With the launch to global clients scheduled for December 2021, the platform will provide those who currently rely on pricing engines based in London with speedier execution, access to greater liquidity and enhanced price discovery across both G10 and emerging markets currencies in the Asian trading hours. 

"Singapore has emerged as the largest FX trading centre in Asia and third-largest globally, and it continues to strengthen its e-FX trading capabilities and market infrastructure," said Rod Ireland, head of Global Markets APAC at RBC Capital Markets. "Our investment demonstrates our commitment to the region and participating in the growth of the broader FX market."

 

Temenos and IBM collaborate to accelerate hybrid cloud adoption in financial services 

Temenos has announced the availability of Temenos Transact next-generation core banking with Red Hat OpenShift on IBM Cloud, to accelerate hybrid cloud adoption within the financial services industry. Temenos Transact is designed to provide a clear modernisation path for banks to adopt a cloud strategy for their core banking systems and take advantage of advanced technologies. The cloud-native banking platform uses explainable artificial intelligence (AI) and machine learning to offer corporate and retail banking, wealth management, and treasury functionality to financial services institutions across the retail, corporate, treasury, wealth, and payments sectors while helping to lower operating costs.

As banks balance the need to drive innovation by delivering high-value services and the industry's strict security and compliance requirements, hybrid cloud environments have become increasingly important. By onboarding to IBM Cloud, Temenos will use IBM’s security capabilities, including confidential computing technology and 'Keep Your Own Key' encryption. Delivered via IBM Hyper Protect Services, these capabilities ensure that financial institutions retain control of their data.

Additionally, Temenos intends to join a growing ecosystem of partners supporting the IBM Cloud for Financial Services and will onboard its offerings to the platform. IBM Cloud for Financial Services is designed to help financial services institutions address the industry’s stringent compliance, security and resiliency requirements while supporting business transformation and innovation. The ecosystem aims to help financial institutions transact with technology vendors that have met the platform's stringent requirements.

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