Tariffs hit North American supply chains as Asian output holds firm

Global supply chains showed their greatest level of spare capacity since 2020 in March, according to the latest GEP Global Supply Chain Volatility Index, with procurement activity in North America falling sharply and manufacturing caution mounting across multiple regions. The index, which tracks real-time conditions such as demand, shortages, transport costs and inventories based on a monthly survey of 27,000 businesses, dropped for a third consecutive month to -0.51 in March. This is its lowest reading in nearly five years and suggests global supply chains have significant room to absorb demand without strain.

The pullback was most pronounced in North America, where the index fell steeply to -0.63 from -0.18. The data indicates a sharp rise in spare capacity across US, Canadian and Mexican supply chains, with demand for factory inputs weakening in response to ongoing tariff pressures. GEP reports that manufacturers across the region retrenched significantly during the month, adding to signs of industrial slowdown.

In contrast, Asia’s supply chains are running close to full capacity. The regional index dipped slightly to -0.12 in March from a neutral reading in February. Activity in China and India continued to support a modest pick-up in procurement, with input demand in the region broadly stable. Europe also showed signs of improvement despite overall underutilisation remaining high. The index for the region rose to -0.63 from -0.72, marking the softest decline in input demand in nearly three years. Although spare capacity remains, the data suggests a tentative recovery may be underway as manufacturers respond to gradually stabilising conditions.

In the UK, the picture was markedly weaker. The index dropped to -1.23 from -0.85, nearing a five-year low. Factories reported sharp cutbacks in procurement and inventory levels, with GEP analysts suggesting that the sector is preparing for a broader economic downturn. Spare supplier capacity has now risen for four consecutive months and has only been higher during the pandemic or the global financial crisis.

One of the clearest signals of caution came from inventory behaviour. Manufacturers' reports of stockpiling activity fell to their lowest level since 2016 as procurement managers adopted a more defensive approach to inventory management. This drop in safety stockpiling points to ongoing concerns around global trade and a wider “wait-and-see” stance among buyers.

Shortages of raw materials and components remained minimal. GEP’s global item shortages indicator remains below its long-term average, implying vendors currently have sufficient stock to meet orders. Reports of labour shortages also stayed low, with companies generally able to manage workloads without staff constraints.

Transport costs fell to their lowest levels of the year to date, though remained close to the long-term average. The overall data points to a supply chain environment with ample capacity and relatively few bottlenecks, though regional divergences remain sharp.

 

Banks boost trade finance tech spending to drive efficiency and growth

More than half of global banks plan to increase their investment in trade finance technology over the next year as financial institutions push to modernise platforms and improve service delivery, according to the 2025 FIS Supply Chain Finance Benchmark Report, which surveyed 200 banks worldwide. The research found that 55% of respondents expect to raise spending on their trade finance platforms in the next 12 months. The report is the fourth annual edition and tracks trends across trade finance and supply chain finance, including the impact of geopolitical events and shifts in product demand.

The top priorities for banks investing in trade finance technology are improving operational efficiency and enhancing customer experience, each cited by 28% of respondents. A further 15% are focused on upgrading existing product functionality. The emphasis on digital transformation comes at a time when many banks are still operating on legacy infrastructure, with 18% stating their trade finance technology is more than 10 years old.

In parallel with this investment drive, banks are taking differing approaches to development. While 52% are building in-house solutions, 48% are working with third-party partners. Among those opting for external solutions, 19% of banks have now consolidated trade finance transactions onto a single third-party platform. Innovation is also taking hold at the product and process level. The use of artificial intelligence and machine learning in live client transactions has grown sharply, up from 32% in 2024 to 45% in 2025. This 50% year-on-year increase signals growing confidence in the ability of automation to improve accuracy, speed and scalability in trade finance workflows.

The report also indicates a shift in demand across product categories. Payables finance has overtaken receivables discounting as the fastest-growing supply chain finance product. This suggests that corporates are placing greater value on extending payment terms and managing liabilities, rather than accelerating receivables, in current market conditions.

Growth expectations across the sector remain strong. According to the survey, 80% of banks anticipate growth in asset size over the next 12 months, reinforcing trade finance’s strategic importance within global banking portfolios.

Matt Wreford, CEO, FIS Supply Chain Finance (formerly Demica), at FIS said: “From this research it’s clear that inflexible and inefficient systems are no longer meeting clients’ needs. With geopolitical risk and interest rates having significant impacts on the market, alongside cost efficiency and security concerns influencing decision-making, investment in trade finance technology is now more crucial than ever to help banks transform the customer experience and drive growth.”

 

UK investors bought the dip in US equities but nerves are clearly visible

UK investors added a net £1.38bn to equity funds in March, making it the strongest month of the year so far for the asset class, according to the latest data from Calastone. The figures suggest that recent market volatility has not dampened the overall appetite for equities, though investors remain selective in their allocations. US equities were the clear favourite. Despite ongoing declines on Wall Street during the first quarter of 2025, UK investors added £1.77bn to North American equity funds, with the majority going into funds focused on US markets. This marked the highest monthly inflow to the sector since March 2024 and was the third-largest on record. Index funds attracted the lion’s share of capital, accounting for £8 in every £10 of inflows to North American strategies.

The total volume of transactions in North American equity funds also reached a record high. Buy and sell orders amounted to £7.8bn in March, which was 47% above the average monthly volume of the past year. This suggests heightened activity levels as investors sought exposure to a market undergoing sharp movements.

Global equity funds, many of which are heavily weighted towards US stocks, attracted £580m in net inflows. European equities also saw their strongest performance since July 2024, gaining £217m. Emerging market funds added just under half that amount. In contrast, Asia-Pacific and UK-focused equity funds recorded net outflows.

UK equity funds continued to perform poorly in terms of investor sentiment despite relative strength in the underlying market. The UK index has outperformed the global benchmark so far in 2025, but investors withdrew £1.19bn in March alone. Year-to-date outflows from UK-focused funds have now reached £3.48bn, making it the worst calendar quarter on record for the sector and the second-worst of any three-month period. The divergence between market performance and fund flows suggests persistent caution about the UK economy or scepticism over its long-term outlook. Despite signs of recovery in other regions, domestic equity funds continue to face sustained headwinds.

Away from equities, fixed income funds saw the sharpest reversal of the month. Net outflows totalled £700m, the worst figure since September 2024. Most bond markets came under pressure in March amid renewed concerns about inflation. One exception was the US treasury market, where recession fears led to falling yields and rising prices.

Demand for money-market funds remained robust. These vehicles attracted £513m in new capital in March, bringing the total for the first quarter to £1.45bn. This was the strongest calendar quarter on record for the sector and the third-highest three-month total overall.

 

Goldman Sachs flags caution as bear markets test investor outlook

Global equities have recently slipped in and out of bear market territory, defined as a 20% fall from recent peaks, but the conditions for a sustained rebound may not yet be in place, according to Goldman Sachs Research. The latest report from Peter Oppenheimer, chief global equity strategist at Goldman Sachs Research, suggests that valuations still need to adjust further before markets can transition into the next cycle. He describes the early rebound stage, often called the “hope” phase, as typically marking the start of a new bull market.

Oppenheimer’s team categorises bear markets into three types: event-driven, cyclical and structural. Event-driven downturns are linked to discrete shocks, while cyclical declines occur as part of the broader economic cycle. Structural bear markets are the most severe, often triggered by economic imbalances or asset bubbles. The most recent downturn has been classed as event-driven, prompted by the sharp rise in US tariffs. However, Goldman Sachs warns that the situation could evolve into a cyclical bear market as recession risks mount.

Historically, both event-driven and cyclical bear markets have seen average equity losses of around 30%, but event-driven declines tend to be shorter and recover faster. According to the report, any recovery this time will depend on four factors: lower valuations, extreme investor positioning, policy support, and an improvement in the rate of change of growth.

In the current environment, Goldman Sachs points to stretched US equity valuations, elevated inflation and weakening corporate profitability as headwinds. These conditions may limit the scope for immediate recovery and, according to the report, could increase the case for greater international diversification.

 

OCBC commits £10bn to boost sustainable investment in the UK

Singapore’s OCBC has signed a strategic partnership with the UK government’s Office for Investment to support £10bn of sustainable foreign direct investment into the UK over the next six years. The funding, equivalent to S$17bn, will target sectors identified as national priorities, including energy, transport, infrastructure, data centres and real estate. According to the UK’s Office for Investment, the agreement marks the largest inward investment commitment it has signed with an Asian bank and the first of its kind involving a Singapore-based institution.

OCBC says the partnership will focus on advancing the UK’s position as a hub for sustainable finance and energy transition technologies. Drawing on the bank’s expertise in green lending, the investment is intended to promote climate-aligned growth across both established and emerging industries.

The deal also includes support for UK firms seeking to expand into Singapore and Southeast Asia, with both parties highlighting opportunities linked to the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The trade agreement gives British businesses broader access to the Asia-Pacific region, potentially increasing cross-border investment and trade. As part of the partnership, OCBC and the Office for Investment will cooperate on knowledge-sharing initiatives and facilitate connections between the bank and UK-based businesses, institutions and government agencies.

OCBC, which has operated in the UK since 1969, says its London branch has seen significant expansion in recent years, with annual revenue growth of around 20% over the past five years. The branch is now the largest in OCBC’s international network, with business activities focused on real estate, renewables, digital infrastructure and energy transition.

Among its UK clients is VIRTUS Data Centres, the UK’s largest operator in the sector and a subsidiary of Singapore-based ST Telemedia Global Data Centres. VIRTUS currently operates 17 sites across Greater London and has plans to expand further in the UK and into continental Europe.

“Our UK business has grown significantly over the years, driven by developments in sectors such as real estate, renewables, energy transition, as well as digital and core physical infrastructure,” noted Elaine Lam, Head of Global Corporate Banking, OCBC. “These align with the priority sectors outlined in the UK’s industrial strategy, and we will double down on our efforts to drive further growth in these areas. We are also committed to supporting UK companies that are keen to establish or expand operations in Singapore and Southeast Asia.”

 

ITFA publishes template for short-term Swift trade loans

The International Trade and Forfaiting Association (ITFA) has launched a standardised template designed to help banks document short-term trade finance loans executed via Swift messaging. Short-term trade loans issued using Swift’s MT799 free-format message type have long been a feature of cross-border interbank lending, particularly for transactions supporting corporate clients in emerging markets. While widely used, these facilities have until now lacked consistent documentation standards across jurisdictions.

In response, ITFA has developed a standalone template that can be used to structure one-off trade loans that are documented solely via Swift. The initiative aims to offer a starting point for borrowing and lending banks entering new relationships, particularly where no bilateral documentation is already in place. The template is not intended to replace more comprehensive frameworks such as the BAFT Master Trade Loan Agreement, which governs ongoing lending relationships under a formal master agreement. Instead, it is designed to support standalone loans, providing a standardised but flexible approach to documenting the core commercial terms of a Swift-executed trade finance deal.

The working group that produced the template focused on simplicity and practicality, keeping the language concise while including guidance on commonly encountered variations. These include options for floating-rate loans, interest rate resets and governing law preferences. Suggested alternatives are offered for different scenarios without attempting to account for all possible permutations.

ITFA describes the template as a reference point for “what good looks like,” acknowledging that it will not be suitable for every deal or legal environment, but may serve to increase efficiency and consistency for banks operating in diverse markets. The drafting process was led by Geoff Wynne of law firm Sullivan, with support from a working group of ITFA members. FCMB Bank (UK) provided its own trade loan format as a starting point for discussions. ITFA says the template reflects a collaborative effort to promote best practice in short-term trade finance and streamline documentation for Swift-based lending.

 

Nomentia launches AI-powered cash flow forecasting tool

Nomentia has introduced a new AI-driven upgrade to its cash flow forecasting solution, designed to provide treasurers with more accurate, real-time insights and improved operational efficiency. The enhancement adds advanced predictive analytics to Nomentia’s existing treasury management platform. By using AI to detect anomalies, account for seasonal trends, and synchronise data across systems in real-time, the tool aims to help finance teams move from reactive to proactive financial planning.

The company says the technology addresses long-standing challenges associated with traditional forecasting methods, which often struggle to adapt during periods of volatility. The AI model continuously refines its outputs based on new inputs, helping to improve the accuracy of forecasts and reduce the risk of outdated or siloed data influencing key decisions.

With the upgrade, users can also benefit from streamlined implementation, allowing them to adopt the forecasting tools more quickly. According to Nomentia, the latest version reflects years of work with corporate clients to refine the system and ensure it fits the requirements of modern treasury teams.

By enabling more dynamic forecasting, the company believes the tool will support improved liquidity planning, faster decision-making, and stronger financial resilience in a changing market environment. It is also positioned as a means of gaining strategic advantage by enabling treasury functions to respond more confidently to shifting conditions.

 

Finastra and TIM Corp partner on cloud-based treasury solutions in the Philippines

Finastra has entered a strategic partnership with Total Information Management Corporation (TIM Corp) to support the digital transformation of treasury operations at banks across the Philippines. The agreement will see Finastra’s Opics core treasury system delivered as a cloud-based solution in combination with TIM Corp’s managed services and infrastructure support. The aim is to reduce total cost of ownership for financial institutions while improving operational flexibility and scalability.

The partnership brings together Finastra’s global experience in treasury and capital markets technology with TIM Corp’s local infrastructure expertise. By integrating core treasury functions with cloud deployment and outsourced support, the companies intend to help banks simplify their IT environments, reduce resource burdens and modernise their treasury functions.

Finastra says the collaboration is designed to help institutions manage growing complexity in treasury operations, while also addressing cost and compliance pressures. Banks will have access to a fully managed platform that offers automation, integration and support for key functions including risk, compliance, and back-office processing.

 

Bank of America expands AI use across global operations

Bank of America has highlighted how artificial intelligence is being used across its global workforce to increase productivity, enhance employee support and improve client service. The bank first introduced AI into its client services in 2018 with the launch of its virtual assistant, Erica. Since then, clients have used Erica more than 2.5 billion times, with 20 million currently engaging with the tool. In 2020, an internal version, Erica for Employees, was rolled out to support staff with technology issues and HR queries. The tool is now used by over 90% of employees and has reduced calls to the IT service desk by more than half.

Bank of America has since expanded its AI capabilities to cover a wider range of internal and client-facing tasks. AI-driven tools such as ask MERRILL and ask Private Banking help relationship managers curate information and access expert guidance, with more than 23 million interactions recorded in 2024. In contact centres, generative AI is used to summarise call recordings and extract client feedback. The bank says this has improved efficiency and consistency, with plans to expand the system across additional communication channels. Developers are also using AI to assist with code writing, reporting efficiency gains of more than 20%.

Other applications include automated meeting preparation for business and commercial banking teams, guided assistance for contact centre staff, and a GenAI platform to help Global Markets teams summarise and search research content. AI also plays a role in training. Through the bank’s Academy programme, employees completed over one million coaching simulations last year, helping to improve their handling of client conversations.

Bank of America holds more than 1,200 AI-related patents, around 17% of its total patent portfolio. More than half have already been granted. The company invests $13bn in technology annually, with approximately $4bn earmarked for new initiatives in 2025. The bank says all AI deployments are designed with human oversight, transparency and accountability, supporting long-term operational efficiency and improved service across its global operations.

 

Bank of Ireland launches information hub to support business customers

Bank of Ireland has introduced an online information hub aimed at supporting business and corporate customers as they navigate recent changes in international trade conditions. The hub will serve as a central resource for customers seeking economic and sector-specific insights, including analysis from the bank’s Economic Research Unit and from Davy. It will also feature commentary from the bank’s sector specialists across industries such as agriculture, hospitality, healthcare, retail, and manufacturing.

Bank of Ireland says the platform is intended to help firms stay informed as conditions evolve. The hub will be updated regularly with new content, including contact details, upcoming events, and reports relevant to business decision-making. It is expected to expand over time in response to further developments in the trading environment.

The bank is also offering direct support for businesses looking to diversify operations or explore new markets, including access to sector-specific expertise. Its internal sectors team brings experience from within the industries they cover and aims to provide guidance tailored to the risks and opportunities facing different types of businesses.

 

Citizens launches digital platform for business disbursements

Citizens has introduced a digital platform to simplify disbursements for its Commercial and Business Banking clients by offering recipients greater control over how they receive payments. The service, Citizens Payee Select, allows individuals or businesses to choose their preferred payment method through a client-branded portal, eliminating the need for companies to collect or store sensitive account information. Current options include Real-Time Payments, ACH transfers and paper cheques, with additional methods in development.

The platform incorporates Citizens Account Validation technology to verify the status and ownership of recipient accounts, aiming to improve payment security and reduce fraud risk. This validation service is also available as a standalone feature through the bank’s online banking portal for Commercial Banking clients. According to Citizens, the platform is intended to reduce the operational burden of managing payee preferences while improving the overall payment experience. By enabling recipients to input their own account details securely, businesses can streamline their disbursement processes and increase efficiency.

Citizens has developed the platform in partnership with Verituity, a cloud-based provider of verified payout and digital payment solutions. In addition to the collaboration, Citizens has announced an equity investment in the firm. The partnership reflects the bank’s broader strategy of working with technology providers to enhance its payments offering.