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Industry roundup: 7 October 2020

DBS and Standard Chartered in trade finance registry pilot 

To enhance lending practices and improve transparency in commodity trade, DBS and Standard Chartered have jointly led a workgroup of 12 other banks to create and conduct a digital Trade Finance Registry (TFR) proof of concept (POC).

Supported by Enterprise Singapore (ESG) and endorsed by The Association Banks of Singapore (ABS), the TFR POC aims to be an industry utility by serving as a secure central database for the banking industry to access records of trade transactions financed across banks in Singapore. This mitigates against duplicate financing from different bank lenders for the same trade inventory, which should lead to greater trust and confidence among banks and traders alike.

Developed on a blockchain network supported by technology provider dltledgers, DBS and Standard Chartered scoped and developed the POC in the span of three months, with the support of 12 other banks: ABN AMRO, ANZ, CIMB, Deutsche Bank, ICICI, Lloyds, Maybank, Natixis, OCBC, Rabobank, SMBC and UOB.

Currently, banks are able to conduct such validations only within a single customer entity or across their individual banking network, with no view of what other banks have financed or undertaken payment obligation against. This information asymmetry is a gap that can only be addressed with a TFR that facilitates collaboration across industry players and government agencies.

Following the completion of the POC, DBS and Standard Chartered will work with ABS to implement the TFR as an industry utility to enhance trade financing practices within Singapore, before expanding it globally to cover major trade corridors at a later stage. Going forward, ABS will manage the TFR, supported by a Standing Committee represented by the ABS Council member banks. Three Working Groups of banks will be set up to jointly lead the governance, technical development and business scope of the project. ABS will be inviting all banks to join the TFR as members.


Wells Fargo launches global payments tracker 

Wells Fargo has announced the launch of Payment Tracker, a single status, secure, web-based solution for tracking global payments. It is a free tool that leverages Wells Fargo’s membership in the SWIFT gpi initiative. It is designed to allow customers to:

  • Reduce the time spent resolving payment issues with an easy and global way to monitor and track cross-border payments through Wells Fargo in near real-time status.
  • Access the tool from any device.
  • Track the status of international wires in more than 20 currencies, up to the final beneficiary.
  • Offer open access direct searches to clients, branches, originators, and beneficiaries.
  • Monitor the date, currency, and amount credited to the beneficiary and gpi payment duration.

“Wells Fargo’s Payment Tracker is the new foundation for transparency in global payments,” said Judd Holroyde, head of Global Product Management at Wells Fargo. “Transparent, simple to use, and easy to understand, Payment Tracker will help our clients reduce their own service costs by sharing with customers the ability to track their payment status from any digital device.”


UK business confidence rises for fourth consecutive month, remains below long-term average

Overall business confidence in the UK improved for the fourth consecutive month in September, increasing three percentage points to -11%, according to the Lloyds Bank Commercial Banking Business Barometer. The increase takes the balance to the highest level seen since lockdown was introduced in March, though the level continues to remain well below the long-term average of 29.

The results, which surveyed businesses between September 1 and September 15, showed the smallest increase in confidence since June, as local lockdown measures were introduced in some regions. The Barometer showed improvements in both trading prospects and economic optimism, although the net balances remain negative at -12 and -10% respectively. Overall business confidence is calculated by averaging the views of 1,200 companies on their business prospects and optimism about the UK economy. The impact of the coronavirus and local lockdown restrictions remained significant, with nearly two-thirds (62%) of businesses reporting there has been a negative impact on demand.

Firms’ evaluation of their own hiring intentions saw a modest improvement by four percentage points to -16%. One fifth (21%) of the businesses expected to increase employment over the coming year, a two-point increase on August, while 37% of businesses are anticipating a reduction, down two  points on last month. Of the businesses surveyed, 38% reported having no furloughed employees, an increase of five percentage points, indicating that more companies have been bringing staff back from the furlough scheme. However, one-third (30%) of businesses anticipate a pay freeze. Although this is down three percentage points from July, it remains above the 14% recorded at the start of the year. 

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