Microsoft And Finastra Partner To Make Finance More Digital
#Microsoft and #Finastra, a London-based #fintech have announced a multi-year cloud agreement to facilitate the digitalization of financial services.
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Microsoft And Finastra Partner To Make Finance More Digital
Microsoft and Finastra, a London-based fintech have announced a multi-year cloud agreement to facilitate the digitalization of financial services.
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Fintech — The Personal Stories Of The Money Hackers Who Have Changed Finance
Dan Simon has written a book about the people who created the #technology firms that have been changing #finance, such as Venmo and Braintree, Credit Karma, Lending Club, Kabbage, Yodlee, Clarity #Money and Betterment.
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In The Face Of Growing Fraud Threats, Finance Firms Should Look At Managed Security
#Security #threats continue to expand in financial services and #banks, insurance companies and securities #firms #should #look at #managed security for better protection, says Accenture.
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Gates Foundation’s Mojaloop Finance Code Gains in Africa And Asia
Two years after its launch by the Bill and Melinda #Gates Foundation, the #Mojaloop #code to make financial apps and companies interoperate better, it is progressing in #Africa and #Asia.
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Z/Yen Finance Center List Grows To 100 And Shows Asia Rising
The number of financial centers ranked by #Z/Yen in London has grown to 100, and Asian cities are #rising.
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Digital Transformation Creates New Risks In Finance
For risk managers, going #digital means rethinking how they operate and the new #risks to the firm in how it operates.
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The need for change in trade finance
The role of the bank in the #trade #finance industry has historically been to satisfy four main areas:
- facilitation of secure payment execution
- provision of finance
- management of data and information
- mitigation of risk
In today’s market all these services are available through non-bank service providers, posing a threat to the trade finance establishment.
The over-reliance on paper and manual checks means that the current processing of transactions is fraught with inefficiencies and risk, which ultimately leads to higher costs. #Banks often seek to protect their margins in traditional trade finance by passing these costs on to the corporate client, driving such clients towards open account trade that is riskier but cheaper.
This is a unique moment in our industry, when changing regulation, increased availability of emerging #technology and changing expectations from corporate clients are pushing banks to #change their business models beyond the simple digitization of current processes.
In a sector particularly vulnerable to fraud, letters of credit, standby-letters-of-credit and other trade finance instruments are used to ensure exporters are paid on time by importers. Meanwhile, banks guarantee that importers receive goods that match the terms of the letter of credit. Bank-intermediated trade provides confidence and fosters trade around the world while providing banks with a low-risk source of revenue that is capital efficient under Basel III.
However, this business is undergoing deep changes:
- Globalization of the economy has increased knowledge of international trade, helping corporates to better understand cultural and local market requirements in emerging markets. The ability of corporate clients to be self-sufficient in mitigating some of their transaction risk has fueled the shift to open account financing. Although this type of financing does not guarantee payment in the same way a letter of credit does, it is faster, cheaper and relatively frictionless in comparison to a LOC. The emergence of multiple solutions for clients is now calling for a client-centric approach.
- Digitalization tends to change corporates’ expectations. Corporate treasurers are younger than ever before, and their experiences in shopping and conducting other personal business lead them to expect the same kind of experience in their professional endeavors. They are increasingly looking for an end-to-end digital experience, encompassing communication and documents, advanced reporting and tailored product and service offers. In parallel to client experience, digitalization is a great way to improve employee experience and strengthen the bank’s compliance and risk monitoring.
- Particularly in emerging markets, there is a shortage of financing available for small to medium enterprises (SMEs); this is due to the retreat by global banks from these countries and a lack of liquidity and correspondent banking relationships for local banks. Over 60 percent of SMEs in emerging markets are rejected for financing and nearly 30 percent do not reapply according to the ICC. In the volatile and rapidly changing world of trade policy the #need to build shorter, more agile supply chains is even more pressing and the creation/participation in “marketplaces” becoming a real opportunity, in particular for SMEs.
Out of this mix of social, technological and regulatory change, next-generation trade platforms and processes are emerging. Distributed business models, which no longer rely on banks being central to the financial supply chain, mean that those institutions are looking at ways to retain their relevance to corporate clients. Traditional competitors are collaborating through consortia of ecosystem players, working for the benefit of the entire industry instead of being self-serving in their approach.
In the second part of this series, we will look at how #blockchain and other technologies are helping banks rethink and redesign their approach to trade finance.
Join me at Sibos 2018, as I moderate the “Delivering the trade environment of the future” roundtable. Register here.
The post The need for change in trade finance appeared first on Accenture Banking Blog.
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Digital Check Solution Checkbook.io Makes Headway in Auto Finance
Baxter Credit Union, based in N.J., has found a new #solution to an old, and costly problem. David Brydun, vice president of consumer lending, exclusively told Bank Innovation that the financial institution has partnered with #Checkbook.io on a #digital #check issuance solution that utilizes #blockchain. “A lot of what goes on in digital lending is […]
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Software Is Eating The World, Starting With Finance
Internal proprietary #software to meet regulatory requirements is #eating up bank IT budgets.
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