Standards rise but doubts linger in UK sustainability loan market 

The UK’s Financial Conduct Authority (FCA) has warned that, while the sustainability-linked loan (SLL) market is showing signs of maturity, concerns remain about incentives, governance and the ability to scale. In a follow-up letter to banks published in the past week, the regulator noted progress since its 2023 review, when it highlighted weaknesses around market integrity and credibility. At that time, it identified poorly designed key performance indicators (KPIs), low-ambition targets and conflicts of interest as threats to the credibility of the market.

Two years on, the FCA says product structures have strengthened and scrutiny of targets has improved. Many banks are now focusing on two or three core sustainability performance targets (SPTs) that are strategically significant, rather than multiple loosely defined measures. The regulator also pointed to the use of multiple sustainability coordinators on syndicated loans, which has led to more robust debate at the structuring stage and helped borrowers set more stretching targets.

Banks are also showing greater willingness to declassify loans that fall short of criteria, a step the FCA interprets as evidence of higher standards. The Loan Market Association’s updated Sustainability-Linked Loan Principles, published in March 2025, and industry work by the Financial Markets Standards Board, have further raised baseline expectations.

Despite these developments, challenges remain. The FCA notes inconsistency in how banks count SLLs towards their sustainable financing targets. Some include them by default, while others apply eligibility criteria or sector-based exclusions. A small number of banks exclude SLLs entirely from their financing goals, preferring narrower climate-related definitions. According to the regulator, this variation risks undermining market trust unless banks clearly explain how SLLs are classified and reported.

Conflicts of interest continue to be a concern. The FCA found that while banks are increasingly assessing whether clients are suitable for SLLs based on their sustainability profile, relationship pressures within syndicated lending can still distort decision-making. It also reported that pricing incentives remain limited, with marginal interest rate adjustments often insufficient to outweigh the costs of reporting frameworks, external assurance and disclosure requirements.

Borrowers, particularly in high-emitting sectors, remain cautious. Some have sought to retain SLL structures despite missing their SPTs, a trend that the FCA views as a sign of market maturity provided targets are ambitious. Others, especially small and medium-sized enterprises, continue to be deterred by high compliance costs and large loan sizes, preventing wider uptake.

Looking ahead, the FCA says it will continue to monitor the market as part of its broader transition finance agenda and work with the Transition Finance Council to support the UK’s position as a hub for sustainable finance. The regulator added that raising standards should help establish SLLs as a credible tool for supporting borrowers’ sustainability objectives, even if tighter criteria reduce volumes in the short term.

 

Asda launches sustainable supply chain finance for UK suppliers

Asda has introduced a supply chain finance programme with Lloyds Bank that links suppliers’ financing rates to their sustainability performance. The scheme provides preferential terms on a tiered basis, with the strongest performers against environmental, social and governance (ESG) metrics receiving the most competitive financing.

The retailer will use assessments from EcoVadis, a global sustainability ratings provider, to evaluate suppliers. Those that demonstrate progress and share their data will be eligible for lower financing costs, while those that do not engage will continue on standard terms. Suppliers can begin accessing the programme from October, with no operational changes required for those already enrolled in existing supply chain finance facilities.

This marks Asda’s second sustainability-linked supply chain finance initiative in as many years, following an earlier scheme launched in 2024 with another banking partner. Both programmes are intended to embed sustainability practices across the company’s supply base, particularly in areas such as decarbonisation and social responsibility.

By introducing multiple schemes, Asda is broadening access to finance that rewards suppliers for meeting ESG goals. The move aligns with the retailer’s wider strategy of supporting suppliers in transitioning towards more sustainable operations, while strengthening resilience across its value chain.

Asda already requires its largest suppliers, which account for roughly 80% of its product-related carbon emissions, to provide sustainability data through EcoVadis. The new initiative extends financial incentives to a broader pool of suppliers, creating an additional lever to encourage transparency and progress on ESG targets.

The programme reflects growing momentum among retailers to use financing tools as a means of influencing supplier behaviour and accelerating sustainability improvements across global supply chains.

 

Pakistan unveils PRISM+ to boost digital payments

The State Bank of Pakistan (SBP) has launched its new Real-Time Interbank Settlement Mechanism Plus (PRISM+), a major upgrade to the country’s financial market infrastructure. The rollout marks Pakistan as one of the few jurisdictions to adopt the ISO 20022 global messaging standard across both retail and large-value payment systems.

PRISM+ builds on the central bank’s Vision 2028 agenda to modernise digital financial services. The system introduces structured financial messaging and enhanced interoperability, alongside new capabilities such as real-time liquidity management tools, transaction queuing and prioritisation, and future-dated payments. It also integrates directly with the Central Securities Depository, supporting auctions, repos and monetary operations.

Large-value payment systems remain central to financial market stability. According to the SBP, the original PRISM system processed more than PKR 1,043tn worth of transactions in FY24, a figure equivalent to ten times Pakistan’s GDP. The upgrade is designed to expand capacity and efficiency to meet growing demand from banks, non-bank financial institutions and market participants.

The SBP linked the launch to broader trends in Pakistan’s digitalisation. The number of bank and digital wallet accounts has surpassed 225 million, with 96 million unique users. App-based banking continues to gain ground, with 28 million registered mobile app users, 71 million branchless banking users and 17 million internet banking customers.

Security and resilience remain a priority. The SBP said PRISM+ is supported by strict cybersecurity, anti-money laundering and fraud management frameworks aimed at safeguarding confidence in digital payments. The project benefited from technical and financial support provided by the World Bank under its Financial Inclusion and Infrastructure Project, as well as collaboration with commercial banks, consultants and technology partners.

The central bank described PRISM+ as a strategic asset for Pakistan’s financial sector, enabling more efficient settlement, supporting innovation and strengthening market stability. It added that the system is expected to play a key role in building a digitally empowered and inclusive economy.

 

US Treasury seeks feedback on stablecoin oversight under GENIUS Act

The US Department of the Treasury has opened a public consultation on how best to regulate stablecoins, inviting feedback on tools and techniques that financial institutions use to combat illicit finance risks in digital assets. The consultation is required under the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which establishes a regulatory framework for stablecoin issuers. Together with Executive Order 14178 on digital financial technology, the legislation is intended to support the growth of digital assets while reinforcing U.S. leadership and safeguarding national security.

Treasury is seeking views on a range of technologies that could help institutions detect and deter illegal activity linked to digital assets. These include application programming interfaces, artificial intelligence, blockchain monitoring tools, and advanced digital identity verification systems. Officials noted that such innovations are critical to tackling financial crime in a fast-evolving sector, but acknowledged that they can also increase operational demands on firms.

Responses will help Treasury evaluate the effectiveness, costs, privacy implications and cybersecurity risks associated with these technologies. The findings will feed into broader research required by the GENIUS Act, aimed at ensuring regulation keeps pace with market innovation.

Members of the public, industry participants and other stakeholders have 60 days to respond, with submissions due by 17 October. Treasury said the feedback will be instrumental in shaping policy choices as the US works to balance innovation in payments with safeguards for the financial system.

 

Algeria joins Pan-African payments network

The Bank of Algeria has joined the Pan-African Payment and Settlement System (PAPSS), becoming the 18th country to participate in the initiative designed to streamline cross-border payments across the continent. PAPSS was launched by the African Export-Import Bank in partnership with the African Union Commission and the African Continental Free Trade Area Secretariat. The system aims to cut the costs and delays associated with intra-African transactions by enabling instant settlement in local currencies. Its expansion to North Africa marks a further step in the continent’s push towards greater financial integration under the AfCFTA.

Algeria’s entry comes just weeks before the country hosts the Intra-African Trade Fair in September, an event expected to attract more than 35,000 participants from over 140 countries. Organisers view the fair as a key platform for advancing trade and investment under the free trade area, making the timing of Algeria’s PAPSS membership particularly significant.

Since going live in West Africa in 2022, PAPSS has grown rapidly. The system now links 18 countries across four regions, with more than 150 commercial banks and 14 national switches connected. Its backers say this scale is beginning to transform the economics of cross-border trade by reducing transaction costs, increasing speed, and supporting digital integration across banking channels.

By joining PAPSS, Algeria strengthens the system’s North African presence, adding to existing members Egypt, Morocco and Tunisia. The move is expected to facilitate more efficient trade flows within the continent and bolster Algeria’s role in Africa’s financial ecosystem.

 

FIS targets back-office inefficiencies with reconciliation service

Financial technology provider FIS has introduced an Optimized Reconciliation Service, a managed platform designed to automate reconciliation processes for banks, corporations and other financial institutions. The service aims to address the rising complexity of reconciliation as data volumes expand and regulatory demands intensify. By targeting automation rates of around 98% and offering financial service-level agreements, the platform is intended to speed up discrepancy resolution, cut operational risk and reduce the workload on back-office teams.

The launch comes against the backdrop of mounting costs from operational inefficiencies. Research commissioned by FIS, based on a survey of more than 1,000 executives, estimated that the average business loses nearly US$100m annually through shortcomings in recordkeeping and reporting.

Designed to adapt to a wide range of institutional requirements, the service includes tools to support compliance and integrate with existing workflows. FIS positioned the platform as part of broader efforts to modernise operational processes in capital markets, where growing data volumes and tighter regulation are putting pressure on traditional infrastructures.

 

Ripple and SBI plan RLUSD stablecoin rollout in Japan

Ripple has signed a memorandum of understanding with SBI Holdings and its crypto subsidiary SBI VC Trade to distribute Ripple USD (RLUSD) in Japan. The deal marks a further move by Ripple into the stablecoin market and builds on its long-standing partnership with the Japanese financial group.

SBI VC Trade is licensed in Japan as an Electronic Payment Instruments Exchange Service Provider, giving it the ability to handle stablecoins under the country’s regulatory framework. The companies said they intend to begin distribution of RLUSD during the first quarter of 2026.

The global stablecoin market, currently valued at close to US$300bn, is expected to expand significantly in the coming years as institutions increase adoption and stablecoins are used more widely in financial infrastructure. Ripple positions RLUSD as an enterprise-focused instrument, backed by U.S. dollar deposits, short-term government bonds and other cash equivalents. The reserves are subject to monthly attestations by an external accounting firm.

For Japan, the introduction of RLUSD would expand the range of regulated stablecoins available in the domestic market. Authorities have taken steps in recent years to establish rules for issuance and distribution, requiring providers to hold specific licences.

The partnership reflects broader interest in Japan’s role as an early adopter of digital assets within Asia. If approved and launched on schedule, RLUSD would join a small but growing number of stablecoins available under Japan’s licensing regime, aimed at supporting both institutional use cases and retail adoption.

 

Fifth Third acquires DTS Connex to expand cash management business

Fifth Third has acquired DTS Connex, a cash management software provider serving multi-location businesses including retailers, restaurants and healthcare groups. The deal adds technology and scale to the bank’s Commercial Payments business, strengthening its position in cash logistics and risk management. Financial terms were not disclosed.

DTS Connex specialises in deposit tracking and other digital tools that aim to increase efficiency and oversight in cash operations. The company will continue to operate as a standalone subsidiary while contributing to Fifth Third’s broader payments platform.

The acquisition builds on Fifth Third’s existing presence in cash processing. The bank ranks among the top U.S. providers by revenue, processing US$17tn in payments volume in 2024. It holds leading positions in several categories, including second in coin and currency revenue and retail lockbox remittances, and third in wholesale lockbox remittances.

Fifth Third has been active in payments-focused acquisitions in recent years. In 2023 it purchased Big Data Healthcare, a healthcare payments and remittance technology provider, and Rize Money, an embedded payments platform. The bank subsequently launched Newline, its embedded finance offering, which has since been adopted by companies including Trustly and Stripe.

The DTS Connex deal extends this strategy into cash logistics, an area where Fifth Third has collaborated with the firm in the past. The bank said the acquisition would help accelerate innovation in cash management services while maintaining DTS Connex’s independent operations and existing client commitments.

 

DBS expands blockchain tokenisation to structured notes

DBS will begin tokenising structured notes on the Ethereum public blockchain, making the instruments available to accredited and institutional investors through third-party digital investment platforms. ADDX, DigiFT and HydraX are the first distributors to join the initiative.

Structured notes are typically tailored to individual investors and usually require a minimum subscription of US$100,000, limiting access to larger clients. DBS said tokenisation reduces the entry point to US$1,000 by breaking each instrument into fungible tokens. This is expected to improve liquidity and allow investors to trade more flexibly, particularly in volatile markets.

The move comes amid strong growth in Singapore’s wealth management sector. The number of single family offices in the city-state exceeded 2,000 in 2024, up 43% from the previous year, highlighting increased demand for sophisticated portfolio tools.

The bank’s first tokenised issue will be a cash-settled, cryptocurrency-linked participation note. It offers a payout if digital asset prices rise, while limiting losses if they fall, providing investors with exposure to the asset class without the operational burden of holding cryptocurrency directly. DBS said its clients executed over US$1bn of trades in such instruments in the first half of 2025, with volumes rising nearly 60% between the first and second quarters.

Future tokenisation will extend to equity- and credit-linked notes, broadening the range of assets investors can access digitally. The offering builds on DBS’s earlier cryptocurrency-linked products launched in 2024 and its wider digital asset ecosystem.

 

BofA’s Erica tops 3 billion interactions as corporate AI use expands

Bank of America (BofA)’s AI-driven virtual assistant, Erica, has passed 3bn client interactions since launch in 2018, with usage now averaging more than 58m engagements per month. The service, initially targeted at retail customers, is increasingly embedded across the bank’s wider business, including corporate and treasury platforms.

Erica is fully integrated into CashPro, BofA’s platform for commercial and corporate clients. CashPro Chat, the embedded virtual service advisor, is now used by around 65% of clients, with Erica handling more than 40% of their interactions. Common functions include quickly accessing transaction details, retrieving account information and resolving standard queries without human intervention.

The bank said these capabilities are reducing call volumes and freeing specialists to focus on more complex client needs. For treasury teams, the ability to access near real-time information through conversational AI is intended to support liquidity management and cash visibility.

BofA has also expanded the use of Erica for employees, with over 90% adoption across the group. The assistant has cut IT service desk calls by half and is being developed further to respond to queries on banking products and services, a step the bank says enhances overall service delivery.

Beyond corporate banking, Erica continues to serve nearly 50m retail and wealth management users. BofA has committed to further updates over the next year, expanding personalised insights and broadening its application across investment, retirement and enterprise functions.

 

Club Brugge signs FX deal with Neo

Belgian Pro League football team Club Brugge KV has signed a five-year agreement with fintech Neo, appointing it as the club’s official foreign currency exchange partner until 2030. Under the partnership, Neo will manage the club’s foreign exchange and multi-currency transfer payments, with the aim of lowering costs on international transactions. Competing regularly in European competitions such as the UEFA Champions League, Brugge faces frequent cross-border requirements, from player transfers and staff salaries to travel and sponsorship arrangements.

Neo provides businesses with international bank account numbers and the ability to hold, organise and exchange funds in more than 25 currencies. Its FX platform seeks to deliver transparent pricing on trades, while its wallet-based architecture is designed to simplify treasury management and speed up payments.

For Brugge, the deal is intended to offer a more streamlined approach to its international finances, ensuring that back-office operations keep pace with the club’s ambitions on the pitch. In football terms, it is the equivalent of tightening up the defence before pushing for goals at the other end: effective currency management can reduce costs and free up resources for investment elsewhere.

 

Fundwell acquires EveryStreet to expand payments and cash flow tools

Fundwell has acquired EveryStreet, a payments and receivables platform, in a deal aimed at broadening its services beyond financing into cash flow and treasury management. EveryStreet’s technology is designed to streamline invoicing, payments and reconciliation, combining accounts receivable and payable management with an embedded checkout solution. The platform integrates with enterprise resource planning and financial systems, allowing businesses to shorten receivables cycles, improve cash flow visibility and support payment flexibility.

For Fundwell, the acquisition represents a shift from a funding marketplace model to a more comprehensive platform. By adding EveryStreet’s tools, the company aims to give businesses not only access to credit but also greater control over the timing and flow of money in and out of their operations. Integration of the two platforms is already underway, with an initial rollout planned for later this year.

The deal also adds senior leadership and technical expertise to Fundwell. EveryStreet co-founders Logan Shedd, Scott Priddy and Kevin Park will join the combined organisation, bringing backgrounds in lending, payments, embedded finance and large-scale product engineering. Their team, based in the US and Europe, will contribute to ongoing product development and scaling.

The acquisition closed on 11 August 2025. With the move, Fundwell is positioning itself to address business needs that extend beyond single funding transactions, offering year-round tools for cash management and financial planning.