Although the ongoing pandemic brought significant disruption, it is also having the positive effect of bringing the digitalization agenda to the fore. And as flows of funds between Latin America and the rest of the world are returning to normal levels, the pandemic has precipitated a permanent change by speeding up the adoption of digital payment services, says Dino Sani, Head of Treasury Services for Latin America at BNY Mellon.
“BNY Mellon was already in this journey toward digitalization but COVID-19 accelerated the process,” Sani said. “And there’s a dramatic impact on our business.”
Latin American banks have been quick to embrace Swift’s Global Payment Initiative (GPI), a collaborative project in which participating banks build on an open platform (API) to add speed and transparency to international payments, according to Sani. And although Latin America’s economies to face a difficult year in 2021 as they open slowly, Sani expects an economic recovery to get underway. “We are seeing some light at the end of the tunnel,” he said.
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Peer-to-peer payments have made consumer transactions cheap and efficient, but the business payment landscape lags, with 47% of B2B payments in 2019 made through cheques.
In recent years, BNY Mellon has been working to embed additional communication, reporting and security measures within B2B payments, ensuring payments are quick, secure and allow for documentation to be exchanged alongside the transactions.
“From a payments perspective, we’re ultimately saying, ‘What can make a payment move safer, more predictable, faster, and provide more transparency to the parties involved?'” Carl Slabicki, Head of Strategic Payment Solutions at BNY Mellon Treasury Services said. “Whether it’s a distributed ledger technology that can do that, or whether it’s a digital currency that can do that, we’re openly exploring all of these.”
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Published in 2010, SWIFT’s guidebook ‘ISO 20022 for Dummies’ presents a useful tool to gauge the changes in thinking toward ISO 20022 over the last decade. In an article with Finextra, Isabel Schmidt, Global Head of Direct Clearing and Asset Account Services, BNY Mellon Treasury Services, explores how assertions and predictions made about the migration have played out over the last decade.
Schmidt explains that while a lot of industry discussions currently focus on payment messages and core cash management messages, “overall thinking has also evolved to embrace the concept that a more robust payment message also provides the basis for major efficiency potential in the pre- and post-payment exception and investigations space.”
Schmidt explores how SWIFT’s first attempts to help banks improve this space dates back over 10 years when the E&I initiative was launched and that unfortunately the initiative lacked a sufficiently robust standard to really enable comprehensive automation of exception workflows.
“This space is now being revisited, based on more structured and more robust payment data which the ISO 20022 standard will provide. This is a considerable incremental efficiency opportunity for banks and a further step towards a much-enhanced client experience end-to-end.”
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While global trade volumes have been down significantly in 2020, Joon Kim, the Global Head of Trade Finance Product and Portfolio Management at BNY Mellon, sees “a cautious sense of optimism and recovery” by the latter part of the fourth quarter of this year and the beginning of next, at the macro-level.
Arnon Goldstein, Head of Treasury Services for Asia Pacific at BNY Mellon, observed overall decline in payment volumes, underlining weakness in clients’ demand, but an increase in liquidity, especially in local currency and dollar liquidity as lending demand has been depressed. However, any rebound in volume will be uneven as some economies continue to grapple with the COVID-19 pandemic.
The disruption to traditional supply chains and logistics has precipitated the need to strengthen business continuity planning to increase institutions operational resiliency and ability to operate remotely. Processes have to be streamlined and enhanced to incorporate alternative digital solutions, such as e-signature and biometric-enabled authentication and authorisation, to replace traditional manual ones. The bank is pivoting to digital alternatives, such as web-based meeting, and digitising more of its internal as well as clients’ processes in order to facilitate client transactions and increase efficiency.
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Though environmental concerns from retailers and consumers continue to mount, almost 75% of seafood sold today is not certified or rated as “sustainable”. While sea-to-plate traceability would go a long way to bridge this gap, it is not yet widely implemented. Is this because traceability is not feasible?
In an interview with The Economist World Ocean Initiative, Matthew McLuckie, Director of Investor Relations, Planet Tracker, explains that this argument does not hold.
According to McLuckie, the maturation of technology, including radio-frequency identification, remote electronic monitoring, blockchain and artificial intelligence, makes it easier for buyers to trace seafood products. Meanwhile, controversies related to high antibiotic use and illegal, unreported and unregulated fishing increase their desire to do so.
If retailers start making demands on suppliers to prove traceability and provenance of seafood products, then blockchain could play a role, he explains.
The full article is available here.
Commerzbank has launched the latest edition of FI.News, the bank’s newsletter for financial institutions. This issue of the biannual newsletter evaluates how the banking sector is building resilience in the face of changing circumstances following the outbreak of the COVID-19 pandemic.
Through interviews and deep-dive articles, Commerzbank’s experts share their latest region- and product-related insights into how the current environment may lead to future innovation and opportunity. The edition contains articles on FIs are accelerating their digital programmes, the importance of ISO 20022 migration, as well as updates on how the COVID-19 crisis has shaped the banking sectors in Latin America and Eastern Europe.
Moorgate-Finn has produced FI.News since 2013. The latest edition can be found here.
Speaking to GTR, Oswald Kuyler, newly appointed Managing Director of the ICC Digital Standards Initiative, explains why he decided to take up the job, the importance of the DSI and the challenges it faces, and what is happening in Asia specifically when it comes to the scaling up of digitalisation efforts in trade.
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