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Industry roundup: 28 July

Fiserv and Goldman Sachs partnership aims to simplify cross-border supplier payments

Fiserv and Goldman Sachs Transaction Banking have announced a new relationship that is designed to streamline supplier payments made via B2B accounts payable solutions offered by Fiserv. The pair say this is the first initiative in a growing strategic relationship.

The first phase of this partnership aims to remove the friction inherent in B2B payments related to high transaction costs and settlement speeds. Fiserv clients will have access to Goldman Sachs Transaction Banking’s centralised, cloud-based payments suite that enables domestic and foreign currency payments and promotes visibility, operational efficiencies and cost savings to support clients’ global growth. These clients will be able to execute cross-border payments natively within their existing accounts receivable and accounts payable solutions from Fiserv, such as SnapPay. A multichannel payments automation solution, SnapPay integrates with leading enterprise resource planning (ERP) solutions to enable the movement of money and information between buyers and suppliers digitally and securely.

Goldman Sachs will manage foreign exchange (FX) and domestic payment delivery for Fiserv clients to suppliers in more than 125 different currencies. The solution will also enable real-time payment tracking that reduces payment-related supplier inquiries and streamlines reconciliation of payments to corresponding invoices.

"Efficiently managing the delivery of cross-border payments across an extensive network of international suppliers is a pain point for our clients with a large global presence," said David Ades, head of Global Enterprise Solutions at Fiserv. "Pairing our B2B accounts payable technology with an industry leader in transaction banking offers these clients a secure solution that brings new levels of automation, efficiency, and cost savings to accounts payable."

 

FIS adds commercial onboarding and digital lending components to platform

FIS has announced new components for its cloud-native core banking platform. The new components, which include retail lending and commercial onboarding as well as a growing ecosystem of third-party solutions, add to the advanced digital banking capabilities that are being deployed by a dozen banks including Fifth Third Bank and BMO Harris.

Since its introduction in early 2020, FIS Modern Banking Platform has expanded its available functions. The platform now provides more than 60 advanced components from FIS and a growing ecosystem of fintech partners - all enabled through the system’s open, API-based architecture that provides ease of integration to FIS’ Code Connect application gateway.

New components available on FIS Modern Banking Platform include:

  • Commercial Express: This digital commercial customer onboarding and account servicing solution enables financial institutions' corporate customers to self-serve their accounts through a new digital user experience. The solution includes advanced workflow, document management, and data and document repositories for commercial banking clients, enhancing their banking experience.
  • Retail Lending: Financial institutions using the platform can now offer a full range of secured and unsecured term loan products to their retail customers whether in a branch, via a mobile wallet, or at point-of-sale. These lending services are all delivered through an intuitive, end-to-end digital user experience. The new lending components leverage advanced technology from both FIS and key partners including Amount for origination and Telrock for collections.

"The digital transformation of the global economy is enabling technology providers like FIS to not only improve the efficiency of the world’s financial infrastructure, but also bring new features and functionality to market faster than ever before possible," said Stephen Greer, senior analyst at Celent. "Features like digital lending could revolutionise the way lenders, businesses and consumers alike think about financing because it can be more specifically deployed through intuitive user experiences such as through a mobile device. FIS Modern Banking Platform provides financial institutions and their commercial clients powerful digital tools that help them manage portfolios, create and deliver new products and continue to be competitive in a rapidly evolving market."

 

CDC Group agrees US$50m trade finance risk sharing facility with HBL Bank UK 

CDC Group, the UK’s development finance institution and impact investor, has announced a US$50m risk-sharing facility with HBL UK, the majority-owned subsidiary of HBL, Pakistan’s largest private sector bank operating in 14 countries around the world. The facility is designed to increase HBL UK’s capacity to support trade with local banks and trade supply chains across South Asia and Africa.

As COVID-19 continues to disrupt trade in goods and commodities, CDC and HBL UK’s facility will provide critical credit support to ensure consumers have access to essential goods and services. It will boost the import of food and agricultural commodities, metals, machinery and other essential resources. The risk-sharing facility will increase economic opportunities across a wide socio-economic strata and support businesses despite the impact of COVID-19 on economic activity, particularly in markets where HBL has a strong regional presence such as Pakistan, Bangladesh and Sri Lanka.

This latest commitment from CDC builds on an existing partnership with HBL that spans over five years. It is aligned with the common goal of both organisations of extending financial inclusion across South Asia. The facility will also help HBL UK broaden its reach across Africa, allowing it to provide liquidity to local banks and keep economic activities flowing – much needed support at a time when local banks and businesses struggle to access foreign exchange.

"CDC is committed to focusing its capital toward helping to mitigate the impact of the pandemic throughout Asia and Africa’s markets, even as Covid-19 exacerbates existing pressures on trade finance," said Admir Imami, director, head of Trade & Supply Chain Finance at CDC. "We are pleased that our partnership with HBL UK will help address the financing gap to local businesses, sustain supply chain and trade flows, and ensure communities and businesses can recover and grow."

 

Portfolio trading gains traction in US fixed income

Portfolio trading volume in US fixed-income markets jumped 159% over the past two years as both buyers and sellers began taking advantage of the potential for efficiency gains, price improvement and other benefits, according to a new report from Coalition Greenwich.

"Currently, portfolio trading accounts for about 3-5% of overall U.S. fixed-income trading volume," says Kevin McPartland, head of Research in the Coalition Greenwich Market Structure and Technology group and author of 'Making the Case for Portfolio Trading'. "However, given the rapid improvement in technology, tools and access, we believe portfolio trading could grow to 8-10% of the market over time, depending on market volatility and other macro conditions."

Investors appreciate portfolio trading for its efficiency and ability to provide price improvement. Coalition Greenwich research shows that 72% of portfolio trades in 2020 achieved price improvement over the prevailing evaluated mid-price. In the near-term, compliance concerns represent one of the biggest speedbumps for portfolio trades as the marketplace works out how to assess and prove best execution in fixed-income portfolio trades. However, given continuous improvements in trade cost analysis (TCA) and data analytics, and other technology innovations, it should not take too long for markets to address these compliance issues.

"The more important limit on portfolio trading growth is that portfolio trades are not the best fit for every organisation and every trade," added McPartland. "Instead, it will become another tool in the toolbox, and market infrastructure providers will offer solutions that make it more obtainable for the masses."

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