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UK headline inflation sees surprise rise - Industry roundup: 17 January

UK headline inflation sees surprise rise

The UK Consumer Prices Index (CPI) rose by 4.0% in the 12 months to December 2023, up from 3.9% in November. This is the first time the UK’s annual headline inflation rate has increased since February 2023. On a monthly basis, CPI rose by 0.4% in December 2023, the same rate as in December 2022.

Core CPI (excluding more volatile categories such as energy, food, alcohol and tobacco) rose by 5.1% in the 12 months to December 2023, the same as in November. Elsewhere, the CPI goods annual rate slowed from 2.0% to 1.9%, while the CPI services annual rate increased from 6.3% to 6.4%.

The most significant upward contribution to the monthly change in the annual CPI rate came from alcohol and tobacco. In contrast, the largest downward contribution came from food and non-alcoholic beverages. 

Commenting on the rise in UK CPI, Douglas Grant, Group CEO of Manx Financial Group, said: “Today’s unexpected rise in inflation signals that the business sector is not out of the woods yet and small and medium-sized enterprises (SMEs) should take this as a reminder to reevaluate their current lending arrangements and strengthen their positions amidst and in preparation for political and economic uncertainties.”


Electronic platforms capture growing share of US equity trading volume

Equity investors increased the share of trading volumes executed electronically last year, continuing the evolution of the US stock trading business into an increasingly complex, fast-moving, technologically driven market structure. New data from Coalition Greenwich shows that electronic trading platforms captured 44% of buy-side US equities order flow in 2023, up from 42% in 2022. Approximately 37% of the overall 2023 volume was executed through algorithms and/or smart order routers (an increase from 35%), while 7% was directly routed to crossing networks, flat year over year.

Electronic trading makes up an even more significant share of the business for the highest commission-paying institutions in the marketplace. Among these active institutions, 59% of flow by notional value is channelled through algorithms and 7% via crossing networks. While electronic trading continues to gain traction, it still plays a secondary role to high-touch sales trading - at least for now.

“Managers anticipate a continued upward trend, projecting algorithmic trading to reach 40% and crossing networks to increase to 8% within the next three years,” said Jesse Forster, Senior Analyst at Coalition Greenwich Market Structure & Technology and author of ‘U.S. Equity Markets 2024: Trends and Opportunities’.

As buy-side firms shift to more electronic execution, they are also cutting back on the number of brokers they use to trade US equities overall. Buy-side desks have modestly reduced their equity trading counterparty lists to an average of 31 brokers, down from 31.5 in 2022.

“Sourcing natural liquidity remains the buy-side’s primary determinant in allocating a diminishing commission wallet, and desks are reducing their broker lists while concentrating flow to their top providers,” Forster added. “There is one important exception: higher commission payers are expanding their lists to an average of 44.1, indicating a unique trend among top-tier institutions.”

Last year, buy side managers used 55% of their equity commission spend to pay for research and advisory services, signalling a marginal increase from the past two years. Hedge funds, trading more electronically at lower commission rates, led this move. Conversely, allocation to sales trading and agency execution services experienced a three-point decline.


Worldline and Google to enhance digital payments with cloud-based innovation

Worldline and Google have announced a strategic partnership to leverage cloud-based technologies from Google Cloud to take Worldline's digital transformation further. As part of the partnership, Google will also work with Worldline to facilitate seamless online payments for Google’s customers in Europe. In addition, both partners will jointly address go-to-market opportunities and provide new and enhanced digital customer experiences for merchants and financial institutions.

Since 2022, Worldline has initiated a “Move to Cloud” programme that includes using the cloud to accelerate its digital transformation. Accelerating its trajectory, the payments firm now plans to use Google Cloud’s infrastructure to enhance operational efficiency, optimise costs, and improve its strategic positioning.

Worldline will also tap into Google Cloud’s data analytics and AI capabilities to benefit from its own data and consequently develop new payment products and services. The choice of Google Cloud also results from Worldline’s long-lasting focus on corporate social responsibility (CSR) and the low-carbon options Google Cloud offers.

As part of the expanded partnership, Worldline will also serve as one of Google's key payment providers in Europe and across various countries. Worldline aims to provide Google customers with more advanced payment options, support for more payment networks, improved cross-border conversion, and a more streamlined customer experience.


Finqware launches corporate payment automation service in CEE

Finqware, a Romanian fintech company with European operations, has announced the launch of FinqPayments, which it describes as the first corporate payment service in Central and Eastern Europe (CEE) based exclusively on API banking interfaces. 

FinqPayments integrates into the FinqTreasury treasury automation platform, which has already been adopted by major Romanian companies, including Nepi Rockcastle, One United Properties, Fan Courier, Electrica Furnizare, and Regina Maria.

The new payments module enables the initiation of individual payments to various beneficiaries, supplier payments, or salaries based on a loaded list, frequent payments saved for recurrent execution, and the export of payment proofs in PDF format for transmission to beneficiaries.


Yes Bank deploys Veefin’s SmartFin supply chain finance solution

Yes Bank has launched of SmartFin, an end-to-end digital supply chain finance (SCF) platform supported by Veefin Solutions. The platform facilitates digital SCF loans for dealers and suppliers of corporate clients, enabling them to achieve their strategic business objectives, that includes working capital efficiency, market expansion, sales acceleration, and strengthening supply chain partnership.

SmartFin is integrated with India’s digital infrastructure, including India Stack and other third-party data sources, and also offers ERP integrations. The bank says this synergy enriches credit underwriting, making it more reliable and efficient. The platform’s rule-based algorithms and omni-channel capabilities ensure that MSMEs can easily access credit.

“We strongly felt the need to invest in a robust platform like ‘SmartFin’ to help augment our digital offerings in this space,” commented Ajay Rajan, Country Head- Government, Multinational & International Business, Transaction Banking & Knowledge Units, Yes Bank. “The SmartFin platform through its end-to-end digital offerings, will help us drive required operational and financial efficiencies for all the stakeholders.”


Danske Bank selects Broadridge’s principal risk trading and market making solution

Danske Bank has selected Broadridge Financial Solutions’ multi-asset trading and market making solution, Tbricks, to support multi-asset trading, pricing and position management across Danske Bank locations. 

Tbricks offers a modular trading platform with a flexible user interface, powerful built-in functionality and a high degree of customisability. The solution will integrate with existing systems at Danske. It should allow the bank to scale and streamline operations, creating the capacity to focus on strategic initiatives rather than technology management and providing long-term cost predictability.

“Implementing a managed solution of Broadridge’s Tbricks for multi-asset trading and market making presents us with the latest in trading technology, as well as a long-term partner which over time can expand our offerings within the equities and derivatives trading space,” said Claus Harder, Global Head of Markets & Transaction Banking at Danske Bank. “After a thorough review of other Fintech and capital markets solution providers, we are excited to expand our longstanding relationship with Broadridge.”


Automated invoicing platform for SMEs launched

B2B payments fintech ipaymy has announced the launch of Fetch, an invoicing platform designed to enable SMEs to get paid faster and on-time in Singapore, Hong Kong, Malaysia and Australia.

Grappling with timely invoice payments poses a challenge for SMEs across Asia. Nearly 50% of invoices are paid late, resulting in a days sales outstanding (DSO) now averaging 100 days, according to a report by Atradius. This prolonged payment cycle significantly hampers cash flow operations, which can be detrimental in a global economy where rising interest rates and limited access to capital compound the issue.

To help SMEs overcome these hurdles and improve cash flow, Fetch reimagines the entire accounts receivable function by simplifying and automating the process from end to end. The solution’s technology profiles customers to propose a selection of payment tactics via an incentive toolbox, increasing the probability of on-time payments.

With 61% of SMEs seeking global suppliers according to Mastercard, there is a need to accommodate international payment preferences. Fetch lets SMEs extend to diverse payment options such as cards and cryptocurrency without additional infrastructure investment. Users can create, send, and track invoices to unlimited clients, complete with automated payment reminders and late fee notifications.


Finastra taps Databricks for product development and AI

Finastra is working with Databricks, a data and AI company, to provide global value-added solutions and services to its customers and partners. The collaboration is designed to enable Finastra to unlock access to its data further and deliver additional value with AI, including generative AI (Gen AI) capabilities. It also aims to enhance the quality, performance and security of its product development at a reduced time-to-market.

Using Databricks, Finastra has rolled out a data platform for its developers, Secure Zone. The platform is designed for production-grade data ingestion and engineering and to discover large batch and real-time data. Teams can experiment with and develop prototype AI solutions and production models – both traditional and Gen AI – with full monitoring capabilities and employ language models for tasks such as content generation, summarisation, semantic search and code translation. Finastra’s customers can also access Secure Zone, enabling them to build data products and data science models using tools, datasets and pre-trained models while benefiting from Finastra’s technological expertise.

“We believe that data and AI are key drivers of innovation, and we are committed to delivering best-in-class solutions to our customers with this in mind,” said Alexander Borsuk, Lead Data Engineer at Finastra. “Our work with Databricks enables us to develop enhanced data-driven products more effectively across all our business units. Our customers can also quickly access our datasets via Databricks’ Delta Sharing capability to build their own products.”


Plooto launches payment automation solution for scaling businesses

Plooto, a payment automation solution for small-to-midsized businesses (SMBs), has launched a payment orchestration offering designed to support the complex workflows and security requirements of rapidly scaling businesses in Canada.

As businesses' size and operational complexity increase, the risk of fraud and human error grows. This leads businesses to implement more rigorous security and control policies to keep the cash flow management secure and reliable, placing additional burdens on finance teams, including time, effort, and resources spent upgrading or building in-house solutions.

Similar challenges extend to accounting and bookkeeping firms, as their robust compliance processes and corresponding reputation are critical growth drivers. Firms’ ability to retain and expand client accounts hinges not only on strong relationships but also on their adherence to rigorous compliance standards, especially regarding financial data protection.

Coupling end-to-end payment automation with security controls and seamless connection to enterprise resource planning (ERP) solutions, Plooto says it is now capable of helping even more businesses scale efficiently within their ecosystem. Building upon Plooto’s core offering of simplified, all-in-one payables and receivables automation, new capabilities include dual controls to limit human error and protect against fraud, single sign-on to enable security personnel to manage both user access to sensitive data and removal from a centralised hub as teams scale and integration with Oracle Netsuite.

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