Although there has been a move to other currencies in the past 10 years, much of the Asia-Pacific's trade, including intra-regional flows, is still invoiced, and settled in USD. And some are settled in EUR. Several years ago, clearing infrastructures and cash management providers in the US recognized the need to improve the alignment of their services with Asian clients and expanded their operating hours for a greater overlap with the Asian business day.

While the extension of USD clearing hours and early-morning settlement solutions in EUR created the opportunity for earlier settlement for Asian flows, the preferential treatment of Asia's payments during night-time processing was never adopted by the industry. As a result, night-time liquidity is partially absorbed by flows to regions, which are not operational and therefore, unable to recycle it to the system.

Deutsche Bank's Asia Accelerator
Deutsche Bank's Asia Accelerator takes advantage of the expanded USD clearing hours and their night-time processing solution, but unlike standard industry processing, applies sophisticated logic to expedite Asian flows. The Asia Accelerator for USD and EUR begins processing as early as 9:00 PM NY time (9:00 AM HK time) thereby achieving an almost complete overlap with most of the Asian business day.

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The algorithms embedded in Deutsche Bank's systems automatically detect intra-Asia payments and prioritise those flows over transactions to destinations that are non-operative during the Asia business day. No manual intervention or special processing instructions on individual transactions are required by their Asian clients.

The Asia Accelerator STP processes the vast majority of payments within minutes. To support this auto-processing, a dedicated operational support team in the region manages any residual manual interventions needed to finalize payments during Asian business hours, including management and risk escalations in the rare instances where those might be required.

Asia Accelerator can be used regardless of where the receiving bank settles their USD. Early EUR flows are settled on Deutsche Bank's books. To avoid settlement delays potentially caused by passing a payment through another clearing agent, the solution connects to Deutsche Bank's Direct Customer Transfer (DCT) service. With DCT, Deutsche Bank initiates payment confirmation directly to the beneficiary bank via an MT103 issued within seconds of payment completion.

Virtual Regional Clearing
With Asia Accelerator, Deutsche Bank has in effect created a virtual regional clearing, building upon and enhancing the effect of the extended US and EUR processing hours while avoiding the liquidity fragmentation risk inherent to off-shore clearing systems. The solution is fully transparent for clients who can continue to use their existing Deutsche Bank account in New York, and also they are not required to implement any systematic or operational changes to use the Accelerator.

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This is another example of how the real revolution in payment systems is occurring outside of the existing payment and clearing systems. The brand new solutions combine the existing payment systems and clearings with new facilities, e.g. here Deutsche Bank provide early EUR flows settlement on their books. Making and collecting payments in the Asia-Pacific region is becoming easier.