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Majority of CFOs and CEOs still rate inflation as main threat to business - Industry roundup: 26 July

Majority of CFOs and CEOs still rate inflation as a top damaging factor to business

Growth remains the top strategic business priority for both CFOs and CEOs, according to a survey by Gartner. Some 45% of CEOs surveyed ranked growth in their top three strategic priorities, down from 53% in 2022, while 62% of CFOs put it in their top three, up from 59% in 2022.

While CFOs and CEOs agree on growth as their top priority, their emphasis on this and other priorities differ, according to the Gartner survey of 422 actively employed CEOs, CFOs, and other senior executive business leaders conducted through December 2022. For instance, CFOs’ second top priority is corporate action, such as M&A and restructuring (41%), which ranks fourth for CEOs (27%).

When asked which new technology will most significantly impact their industry over the next three years, CFOs and CEOs named AI their top pick. For CFOs, this is especially notable because they likely do not have much direct experience with AI yet, given that 80% of finance functions using AI just started in the past two years.

As CFOs and CEOs face concerns about the effects of inflation and a potential recession, they're pursuing options beyond the typical approach of raising prices, with CFOs joining CEOs in demonstrating a new open-mindedness towards other tactics.

A large proportion of CFOs (84%) and CEOs (68%) rank inflation as one of their top three most damaging factors impacting the outlook of their business. Raising prices has been a go-to tactic, but many CFOs realise they need to expand that playbook. There was an 11-percentage point drop relative to last year in the share of CFOs who cited that increasing prices was one of their top two actions to respond to inflation, driven at least in part by signs that customers are tiring from consistent price rises.


Mastercard introduces solution for businesses to accept virtual card payments

Mastercard has announced the launch of Receivables Manager, an automated solution streamlining how businesses accept and process virtual card payments. The innovation complements Mastercard’s virtual card platform as the company provides payment choices to players across the ecosystem and accelerates the digitisation of B2B transactions across buyers and suppliers.

More businesses are looking to replace cumbersome paper-based payment processes in an increasingly digital-first world. Virtual cards are rapidly gaining momentum in B2B payments, with over 90% of suppliers reporting that they prefer receiving a digital payment – and the related invoice information - over cheques. However, this shift towards emerging tech has also left accounts receivable teams struggling to keep pace with increased virtual card payment processing, underscoring the critical need for an automated solution.

Mastercard Receivables Manager was developed to make the process of virtual card transactions more efficient, secure, and cost-effective. Suppliers will no longer need to manually capture and enter virtual card details to reconcile the vast number of digital payments received. Instead, the new product consolidates these card payments from all issuers so the remittance data can automatically be matched to open invoices and formatted and delivered for their ERP systems - making it easier for suppliers to reconcile invoices efficiently and accurately. This also gives suppliers new advantages, including the ability to drive early payments and improve the overall visibility of their cash flow.

Mastercard has partnered with Billtrust, a B2B order-to-cash software and digital payments market company, to deliver its latest commercial solution. Requiring minimal implementation effort, Mastercard Receivables Manager enables acquirers to get to market quickly and lets suppliers receive virtual card payments, optimising acceptance at scale and increasing card spend opportunities for businesses. Mastercard Receivables Manager is currently available for US-based customers, with availability expanding to several other markets beginning later this year.


Corpay launches tool to streamline and automate internal invoice settlement

Corpay, a Fleetcor brand, has launched Netting Manager, a solution that streamlines and automates the settlement process of internal invoices for corporations with global subsidiaries. The solution aims to simplify the process of intercompany netting - a financial practice used by multinational corporations to consolidate transactions in various currencies. It involves offsetting mutual obligations between subsidiaries and centralising payment flows. This reduces the need for multiple payments and simplifies the reconciliation process, resulting in both cost and time savings for businesses. Furthermore, it can help create visibility into consolidated foreign exchange exposures, making it easier and less costly to reduce foreign exchange exposure from the parent level.

Netting Manager aims to make intercompany netting accessible to more companies by providing access to a low-cost, intuitive solution that can integrate with many core accounting systems. The firm says that the solution's benefits include a reduction in payment costs due to fewer payments and a reduction in the number of banks used, leading to a reduction in float. FX is centralised and aggregated, creating larger transactions with lower transaction costs, while simplified payment procedures allow for structure and greater visibility into intercompany settlements across the organisation.

The solution offers access to several reports, including funding reports, participant reports, settlement reports and estimated saving reports. There is no cost to Corpay customers to use the solution or generate reports, and the solution can be leveraged in all countries that allow netting.


American Express launches suite of B2B APIs for fintechs

American Express has launched its Sync Commercial Partner Program to give fintechs and software providers a seamless way to embed American Express virtual cards into their spend management, procurement, and other business software solutions. Additional business-to-business (B2B) payment and data capabilities, including the ability for fintechs to integrate virtual cards that can be added to several mobile wallets, will be introduced over the coming months.

Industry-wide, the transaction value for embedded B2B payments reached US$700bn in the US in 2021 and is expected to nearly quadruple in size to US$2.6 trillion by 2026. Sync opens up American Express APIs so fintechs can offer their business customers digital-first B2B solutions within the platforms they already use.

American Express Sync offers APIs, developer tools, and a streamlined onboarding experience. Partners get support from a dedicated American Express contact, along with the scalable capabilities, backing and membership base of American Express. The Sync program is designed for technology organisations serving US businesses. Ideal partners offer a range of solutions, such as accounts payable automation, expense management, spend management, and procurement.

“American Express Sync will put more B2B capabilities in the hands of fintechs and ultimately enable their customers to get more value from the platforms they use to run their businesses,” said Todd Manning, Vice President of the Global Commercial Services team at American Express. “Today’s announcement means that our broad base of American Express US business and corporate customers will have more ways to pay their suppliers digitally.”


Remember me? RTP network surpasses half a billion instant payments

Among all the fuss surrounding the recent launch of the Federal Reserve’s FedNow real-time payments service, it is worth remembering that it isn’t the first instant payment channel in the US. The Clearing House’s RTP network, which has been providing instant payments to millions of consumers and businesses for more than five years, has announced that it surpassed the 500 million payment milestone on 22 July.

The RTP network, available to all insured banks and credit unions in the US, is seeing steadily increasing volume. Transactions on the RTP network in Q2 2023 totalled 58 million for US$29bn, up from 41 million transactions for US$18bn in Q2 2022. Today, over 350 RTP Network Participating Financial Institutions are providing real-time payments on the network to their customers and members.

The increasing volume on the RTP network can be attributed to other areas of network growth, including national access, as all banks and credit unions in the US have streamlined access to the network through more than 20 technology solution providers. Some 150,000 businesses are sending payments over the RTP network, a 50% increase since December 2022, while over 3 million consumers each month are sending A2A payments and Zelle payments that clear and settle over the RTP network.


Surecomp and ICE Digital Trade to drive electronic trade document exchange

Surecomp has announced a strategic partnership with ICE Digital Trade, formerly essDOCS, to drive expanded digital trade finance capabilities for corporates, banks and other financial institutions.

The technical integration between the two companies allows customers using Surecomp's collaborative trade finance hub RIVO to access, consume and exchange original electronic trade and shipping documents such as negotiable bills of lading and certificates of origin. This will further enable a streamlined digital trade finance experience.

“Combining ICE Digital Trade and Surecomp’s capabilities enables banks and corporates to access all data and documents under any trade financing instrument in a single, secure platform, improving user experience and making digital trade more efficient and more secure for all parties,” said Alexander Goulandris, Co-Head, ICE Digital Trade.


Algorithmic trading comes to the European corporate bond market

Europe’s corporate bond markets are the most electronic corporate bond markets in the world. According to new research from Coalition Greenwich, 62% of European investment-grade corporate bond trading volume was executed electronically in 2022, as was nearly half (49%) of notional high-yield volume. By comparison, 40% of US investment-grade corporate bond trading volume and 31% of high-yield volume were traded electronically last year.

On the innovation front, two-thirds of investors plan to adopt auto-execution functionality, trading algorithms that send trades to dealers via trading venues depending on the characteristics of the order. Over one-half of investors also plan to route more orders into all-to-all networks, continuing a trend that began its growth trajectory nearly a decade ago.

Regulators are also making the European market more conducive to electronic trading with new proposed rules that will increase trade reporting and require additional trading-venue registration, both of which would help to create a more standardised framework for e-trading across the region.

Developing a more standardised e-trading environment will also help facilitate the flow of data - another key factor in investors’ decision to shift trading volume to electronic platforms.

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