Inclusion in focus: A look at Women in Trade, Treasury & Payments 2024

NehaNoronha

TFGEDITORIALTEAM

DeepeshPatel

BrianCanup

CarterHoffman

DuyguKarakuzu

KirtanaMahendran

LAYOUTDESIGN

NigelTeoh

PHOTOGRAPHSAND ILLUSTRATIONS

FreepikCompanyS.L. Canva Unsplash

JohannaHill DeputyDirectorGeneral WorldTradeOrganization(WTO)

MichelleKnowles HeadofTradeandWorking CapitalProducts Absa

DeepaSinha VPPayments&FinancialCrimes BAFT

Empoweringchange:Womentransformingtheworldoftrade, treasury&payments

LloydsBanktradeinsights:Theneweraofworkingcapitalmanagement, atreasurer’sview

Understandingrulesoforigin:Gettingthedetailsright

InternationalStandbyPractices(ISP98):25yearslater

A2024guidetocustomscomplianceandcross-bordertrade

FCI’sNealHarmonkickingoffinclusivegrowthinthefactoringindustry

WomeninTrade,Treasury&Payments2024–Fromclassroomtoboardroom: Educatingforgenderequityintrade,treasury,andpayments

Africafocus:Afreximbankonempoweringwomenintrade,treasury,andpayments

Progressionthrougheffortandrisktaking:Absa’sMichelleKnowles discussesbeingawomanintheworkplace

DDGHill:Empoweringwomenthroughglobaltrade

Empowermentthroughinclusion:ADB’smissionforequitabletrade

InternationalWomen’sDay2024:Breathinginclusion

Keepingpacewithpayments:Lessonslearnedfromadynamiclandscape

ThefutureprospectsoftheRTP®network,easingtheISO20022transition

EU’sLatePaymentRegulation:Exposingtheneedforbetterpublicdiscourse

Thegreatbalancingact:Makingtradeandpaymentsfaster,cheaper, andeasierin2024

FederalReserve:Monetarypolicyupdate,makingpayments

FOREWORD

DeepeshPatel EditorialDirector TradeFinanceGlobal(TFG)

Empoweringchange: Womentransformingthe worldoftrade,treasury& payments

AswecelebrateInternationalWomen’sDayand thenumerousachievementsofwomenintrade financeallyear,beyond8March,wemustalso lookforwardtothefuture.

BrianCanup AssistantEditor TradeFinanceGlobal(TFG)

AttherecentIFCGlobalTrade PartnersMeetinginBarcelona, TFGmoderatedaroundtable onWomeninTrade.

Weaskedtheparticipants afewpollquestions,butone responsetoaquestion specificallystoodout.“Does yourcurrentclientbase compriseofmorethan50% ofwomen?”

Onepersonraisedtheirhand.

Whileitistruethatthetrade, treasury&paymentsindustries havemadeimpressivestrides ingenderinclusion,moments liketheseshowthatwehave alongwaytogo.

Butthisiswhyroundtable eventslikethisareimportant, andwhyTFGhostedourannual WomeninTrade,Treasury& PaymentseventinLondon,at thehistoricLansdowneClub inLondon.

Ifyoulookaround,thereare remarkablestoriestobetold aboutinclusion,perseverance, andsuccess.Wejustneedto tellthem.

Itwasaman’sworld, butnotanymore: Theroleofwomen intradefinance

Tradefinancehastraditionally beenamale-dominatedfield, infact,accordingtotheWEF GlobalGenderGapreport,it willtake131yearstoreachfull genderparity.

Butthisnarrativeischanging, slowlybutsurely.

Womenarenowleadingkey initiatives,drivinginnovation, andbringingdiverse perspectivestothetable. Theirparticipationiscrucial forfosteringaninclusive environmentthatpromotes sustainablegrowthand equitableopportunities.

LeaderslikeGwenMwaba, Afreximbank,JohannaHill,WTO, MichelleKnowles,Absa,Neha Noronha,ADBandDeepaSinha, BAFT,arenotableexamplesof howtheindustryischanging. Additionally,newinitiativeslike BAFT’sWomeninTransaction BankingandIFC’sWomen’s Tradenetworkareexamples ofhowtheindustrycancreate spacestocollaborateand sharebestpracticestofurther theadvancementofwomenin theTTPindustry.

Asmorewomenare empoweredwithinthe industryandworktheirway toleadershippositions,itcan helpchangethenarrative.

Byelevatingmorewomento C-Suitepositions,theycan helpsolvesomeofthelongstandingissuesfacedby womenwhotrade.

Butitisnotjustabouthelping promotewomentoexecutive jobs,it’sabouthelpingwomen onaday-to-daybasis.Asof 2021,therewereapproximately 740millionwomenwholack accesstobanking.

AccordingtoIFC’snewest whitepaper,“Bankingon WomenWhoTradeAcross Borders”,inAfrica,90%of tradefinanceapplicationsfor femalesarerejectedbecause ofalackofcollateral.

Aswediscussinthisissue,there aremanydifferentreasonsfor thesestats,andthereareno easy,one-size-fits-allsolutions.

However,therearenew programmes,policiesand initiativesthatarestartingto addressthesechallenges.One personwon’tsolveallthese

problems,butasanindustry, thecollectiveelevationof femaleleadersisagreatplace tostart.

Digitaltransformation andaccesstofinance

Thedigitalrevolutionisa powerfulcatalystforgender inclusionintrade.Digital platformsandtechnologies offerunprecedented opportunitiesforwomento accessglobalmarkets,secure financing,andenhancetheir businessoperations.

InitiativesliketheAfricaTrade Gateway(ATG)byAfreximbank providewomenentrepreneurs withaccesstocriticaltrade information,helpingthemmake informeddecisionsandexpand theirbusinesses.

Moreover,digitaltradehas proventobeparticularly beneficialforwomen.Itbreaks downtraditionalbarrierssuch asgeographicallimitationsand

providesflexibleworking conditions,whichareessential forbalancingprofessionaland personalresponsibilities.

Aswecontinuetoembrace digitalisation,itisimperative thatweensurethese advancementsareaccessible toall,fosteringanenvironment wherewomencanthrive.

Whocanyoulookupto?

Rolemodelscanmakea difference

Mentorshipplaysavitalrole inempoweringthenext generationoffemaleleaders. Bysharingtheirexperiences andknowledge,established womenprofessionalscanguide andinspireyoungerwomento pursuecareersintradefinance.

Programmesfocusedon mentorshipandrolemodelling areessentialforbuilding confidenceandprovidingthe supportneededforwomen toexcelintheircareers.

Theconceptofreverse mentoring,whereyoungeror lessexperiencedindividuals mentorseniorleaders,isalso gainingtraction.Thisapproach canfosteracultureof inclusivityandcontinuous learning,allowingorganisations tobenefitfromdifferent perspectivesandinnovative ideas.

Despitetheprogressmade, significantchallengesremainin achievinggenderparityintrade finance.Societalpressures,lack ofrolemodels,and organisationalbiasesoften hinderwomen'scareer advancement.

Toaddresstheseissues,a multifacetedapproachis required,encompassingpolicy reforms,corporateinitiatives, andculturalshifts.

Policiespromotinggender equalityandfinancialinclusion arecrucialfordismantling barriersthatwomenface. Companiesmustalsotake proactivestepstocreate

inclusiveworkenvironments wherewomencanadvance basedontheirskillsandmerits.

Thisinvolvesimplementing flexibleworkarrangements, providingequalopportunities forcareerdevelopment,and activelycombatinggender biaseswithintheorganisation.

TheTimesTheyAre A-Changin'

Thestoriesofsuccessful womenintradefinancearenot justinspiringbutalsoserveas powerfulexamplesofwhatcan

beachievedwith determinationandsupport.

AttheIFCevent,weasked afewmorequestions.

“Whenyoufirststartedyour jobsoryourcareersintrade, pleaseputyourhandsupifyou thoughtyouhadfemalefigures inseniorpositionsinyour organisationsthatyoufeltthat youcouldlookupto.”

Only10%oftheroomraised theirhand.Butwewantedto knowabouttheenvironment now.

“Putyourhandsuporkeepyour handsupifyoufeelthatthis haschanged.Sotoday,looking atyourorganisation,doyoufeel thatyouhaveafemalesenior orfemalerolemodelthatyou canpickupto?”

Over2/3rdsofthe roomraisedtheirhand.

Andover90%oftheroomsaid theyarementoringayounger femaleintheindustry.

Theseareimportantchanges tohighlight.Itremindsusthat beyondthenegatives,things arechangingforthebetter. Thepoliciesandinitiatives, whilenotperfect,areworking, andweneedtocontinueto moveaheadwiththem.

OverthefiveyearsthatTFG hasrunourWomeninTrade, Treasury&Payments campaign,wehavecelebrated 57femalesin132organisations across72countries.Thisis incredible,butweknowthere areendlesssuccessstories thatweallcouldhighlight. Butit’sastart.

What’snextfor WomeninTrade?

AswecelebrateInternational Women’sDayandthe numerousachievementsof womenintradefinanceallyear, beyond8March,wemustalso lookforwardtothefuture.

Thejourneytowardsgender parityisongoing,anditrequires thecollectiveeffortsof individuals,organisations, andpolicymakers.

Byfosteringaninclusiveand supportiveenvironment,wecan ensurethatwomencontinueto driveprogressandinnovation intradefinance.

Wehopethatthiseditionof TradeFinanceTalksservesasa talkingpointforyou,tothinkof howyouandyourorganisation cancontinuetoelevatewomen acrosstrade,treasury& payments.

Inothernews

Thepaymentsindustry hasexperiencedsignificant transformationsin2024 drivenbytechnological advancements,regulatory changes,andevolving consumerpreferences.Key technologieslikeISO20022,

cloudsolutions,instant payments,andAPIsare redefiningbankingsystems andenhancingtheefficiency, transparency,andspeedof financialtransactionsglobally.

Real-timepayments(RTP)are becomingcrucial,drivenby thedemandforimmediate transactionsacrossvarious sectors,includingfinancial services,fintechwallets,thegig economy,insurance,andonline betting.Thisshifttowardsfaster paymentsisessentialfor competitivenecessity, reflectingthemarket's emphasisonspeedand operationalefficiency.

Thismightjustbeoneedition, butTFGwillcontinueourwork indiversityandinclusion throughouttheyear.Keep aneyeoutformorenews!

Asalways,thankyoutoour sponsorsandpartners,andall ofourcontributorsacrossthe globe!

CarterHoffman ResearchAssociate TradeFinanceGlobal(TFG)

LloydsBanktradeinsights: Theneweraofworking capitalmanagement, atreasurer’sview

TheLloydsBankTradeInsightreportfocuseson thesechangingeconomicconditionsandtheir implicationsonworkingcapitalfromatreasury perspective.

Businessestodayarefacing alandscapedefinedby uncertainty.

Thefactthatmorethanhalf oftheglobalpopulationis settogotothepollsin2024, addsadegreeoflegislative uncertaintytothealready starkgeopoliticaltensions andenvironmentalchanges thatourworldisfacing.

Geopoliticaltensionscan disrupttraditionaltraderoutes asweareseeingwiththe eventsintheRedSea,while

electionsinkeymarketsmay resultinpolicyshiftsthat promptrapidadjustments ininternationaloperations.

Climatechangefurther compoundsthesechallenges. WatershortagesinCentral Americaareimpactingthe PanamaCanal’soperational capacitycausingsome shippersintheregionto turnmoretowardsrail transportationtogetgoods totheirfinaldestination.

Inresponsetothesechallenges, aparadigmshiftisoccurring inhowbusinessesapproach theiroperations.Itisnolonger feasibleforbusinessesto operateunderthesame assumptionsandmental modelsthattheydideven fiveyearsago.

Inthisdecade,resilienceiskey.

On8April,LloydsBankreleased itslatestreportexploringsupply chainresiliencyacrossthe globalmarket.

Theshiftinsupplychains –JustinTime

Inlightoftheseconditions,the LloydsBankBusinessBarometer anchorsconfidenceatnear recenthighs(Figure1),even thoughsupplychainscontinue tofacechange.

Thisapproach,whileprudent, requiredfirmstoholdadditional inventory,tyingupfundsthat couldotherwisebedeployed towardsgrowthorinnovation. Thisintroducescomplexitiesin managingworkingcapitalfor smallandlargefirmsalike.

Businessesmustlearnhowto balancetheneedforadditional

inventorywiththeneedfor workingcapital,ensuringthey havesufficientstocktoweather supplychaindisruptions withoutcompromisingtheir financialhealth.

Alongsidethesechanging supplychainconditionsand driveforresiliencecomes

changingdemandsforworking capitalmanagement,atask thathasrisentotheforefrontof corporatestrategydiscussions. Thisiswherethework oftreasuryprofessionals becomescritical.

Butnotjustanytreasury professional.

Figure1:LloydsBankBusinessBarometer 10(March2024),BVABDRC

alsoprovinginstrumental instrengtheningsupplier relationships,mitigatingrisks, andenhancingliquidity.

Thesetoolsnotonlyfacilitate smootheroperationsbutalso fosteramorecollaborative ecosystembetween businessesandtheirsuppliers.

Forexample,underasupply chainfinancescheme,a smallersuppliercanleverage thestrongerfinancialstanding ofitslargerbuyertosecure financingatamorefavourable ratethanitwouldbeabletoon itsown.

Thishasthepowerto enhancetheoverallstability

andresilienceofthesupply chain,providingabuffer againsttheshocksof unforeseenevents.

Aninsideperspective: LloydsBankTradeInsight

TheLloydsBankTrade Insightreportfocusesonthese changingeconomicconditions andtheirimplicationson workingcapitalfroma treasuryperspective.

Thereportsharesinsights onmanagingworkingcapital fromAbelMartins-Alexandre, managingdirectorandhead ofinfrastructure,energy,and industrialsatLloydsBank.

Itisessentialforthe treasurertobepartof strategicconversations withallareasofabusiness sothatworkingcapitalis optimised,processesare improved,sustainability objectivesareaddressed, andsupplychainresilience isbuilt.

Thereportalsoincludes anoverviewofLloydsBank’s tradeandsupplychainfinance offeringsthatcanbusinesses andtreasurerstacklethe challengestheyfaceamidthe uncertaineconomiclandscape.

Forthoseinterestedinlearning more,thefullreportisavailable here

AshishKohli ExecutiveDirector,Supply ChainFinance,GlobalProduct StandardCharteredBank

Navigatingthenew“new” intheSupplyChainFinance industry 2.2

Uncoverthevulnerabilitiesofglobalsupply chainsandthecrucialroleoffinancein ensuringcontinuousproductionforSME suppliers.

Supplychainshave becomeglobalandincreasing complexitieshavemadethem brittleanddependent,rather thanrobustandresilient; Covid-19isaprimeexample ofthis.

OneblowintheJITinventory approachmaydisrupt distributioneasily.

ForSMEsuppliers,having accesstofinancetoprepare forthenextorderandmaintain continuousproductionis crucial.

Theimpactofdisruptions causedduetoCOVID,geopoliticaltensions,highinterest andinflationrateshasfurther exposedtheresiliencegapsin thealreadycomplexandglobal supplychains.

TheSupplyChainFinance(SCF) industryhasevolvedoverthe lasttwodecadesontheback ofevolvingglobalsupplychains andtechnologyimprovements withfintechsdisruptingthe industry.

However,theindustryis currentlyexperiencinga“first”. Inapreviousera,thelanded costofborrowingtosuppliers underSCFprogrammeswas lessthan2%,whilethecurrent rateisatleast5%.

Smallsuppliersmustdecide betweendiscountingtheir receivablesearlytofundtheir nextproductioncycleor slowingdownsalestowait forthefundstocomein.

Shiftingsupplychains createnewchallenges

Multi-shoringandnear-shoring forWesterncorporatesare donewiththehopeofmore resilience,butultimatelywill comewithhighercosts.

ShiftingfromChinatoChina+1 isevident,butthetransitionwill begradualandslow.Ittook Chinaovertwodecadesto becomethe“World’sfactory” andthemoveoutwardwilltake timetoo.

Thespeedatwhichmarkets likeIndia,ThailandandVietnam developtherightskillsetsto makemanufacturingeasierwill haveakeyroletoplayaswell.

TheSCFIndustrywillalsoevolve withthisgradualshift.Foreign banks,localbanksandfintechs willfighttoothandnailtograb thisnewsupplierbase.

Supportingsupplierswiththeir regulatorycompliances, providinglocalcurrency

funding(includingpreshipmentfinance)andefficient supplieronboardingwouldbe akeyaspecttoconsider.

Regulatorsareplaying abalancingactbetween corporatebuyers, investorsandsuppliers

Theintroductionofstricter disclosuremandatesand paymentregulationsincertain marketswillleadtohighercosts ofcomplianceandincreased purchasingcostsforbuyers.

Thediscussionisn’tfocusedon thepurposeoftheregulations butratherontheirpotential shortandmedium-termeffects ontheSCFindustry.Banksand financialinstitutionswillhave tocollaboratewithbuyersto adjusttheirsupplychain programmestomeetthese newstandards,whichmight necessitateadditional investmentsfrombothbanks andbuyers.

Technologywillcontinueto democratisetheproposition Leveragingtechnologyfor supplieronboardingandlegal documentationisessentialfor theindustry’sexpansionand playsacrucialroleinoffering financingtountappedsuppliers inemergingmarkets.

willplayakeyroleinthisarea, howeverabalancebetween regulatoryrequirementsand easeofonboardingsuppliers iscritical.

Anyregulatoryorlegal arbitragemaycreate additionalriskintheindustry

Further,whiletheeffortsare ontobringin“digitalmoney/ tokens”tosupportdeeptier financing,theregulatoryand legallandscapeneedtoevolve furthertomakethisareality onacross-borderbasis.

ToconcludewhiletheSCF industryiscontributingto closingthefinancinggap forsmallandmedium-sized suppliers,itissimultaneously navigatingmacroeconomic challenges,shiftsinsupply chains,theentryofnew participants,andregulatory adjustmentsforthefirsttime.

Howtheindustryrespondsto thisneedstobeseen,butall theseeffortsarewellinthe directionofachievingthe objectiveofprovidingaccess tofinancetotheoneswhoneed itthemost!

*Theviewsexpressedbytheauthor inthearticlearepersonal

LucindaO’Reilly Founder

TheInternationalTrade Consultancy

Understandingrules oforigin: Gettingthedetailsright 2.3

RulesofOriginaretherulesthatdetermine whereagoodwasobtainedormanufactured (itseconomicnationality).

FollowingtheUK’sexitfromthe EU,therewasconcernamongst internationaltradeexpertsthat UKexportersweren’taware thatfrom1stJanuary2022, theywouldberequiredto demonstratecompliancewith theUK-EUrulesoforiginlaidout intheTradeandCooperation Agreement(TCA).

Thisconcernwasrealisedinthe followingyears,asnumerous manufacturershavecontinued todeclarepreferentialorigin ontheirexportcommercial invoiceswithoutchecking whethertheirproducts actuallycomply.

Whilsttheissuewashighlighted byBrexit,RulesofOriginare animportantelementof internationaltradethatall importersandexportersneed tounderstandregardlessof thecustomsterritorytheyare dealingwith.

Tohelpclarifythistopic,Iwill giveanoverviewofwhatrules oforiginare,whytheymatter, thedifferencebetween preferentialandnonpreferentialrulesandabrief explanationofeachrule.

Forsimplicity’ssake,thisarticle iswritteninthecontextofthe UK/EUTradeandCooperation Agreement,althoughthebroad principlesapplytoalltrade.

Whatarerulesoforigin?

Theoriginofgoodsisan importantconcept,asitis centraltodeterminingthe customsdutiesandtaxes relatedtoaspecificgood. Italsoisimportanttosome traderestrictionssuchas quotasorlabelling.

RulesofOriginaretherulesthat determinewhereagoodwas obtainedormanufactured (itseconomicnationality).

Whydotheymatter?

Productsthatmeettherules oforigincanbesoldtariff-free betweentheUKandEUunder thetermsoftheTCA,meaning thatanygoodsthatfailtomeet thecriteriawillcostmorethan similaritemsthatdocomply.

Duringtheone-yeargrace periodgrantedin2021,itwas clearthatmanycompanies werestatingthattheirproducts compliedwiththerulesoforigin withoutchecking.

Afrequentinstanceinvolves goodsimportedfromChina, repackaged,andthenexported totheEUasUK-originproducts. Repackagingdoesnotalterthe originofthegoods,meaning theEUcustomershouldpay importdutyasthoughthe goodsweredirectlyimported fromChina.

Non-Preferentialor Preferential?

Non-preferentialrulesoforigin arethosewhichapplyinthe absenceofanytrade preference—thatis,when tradeisconductedonaWTO ormost-favoured-nationbasis. Notallcountriesapplyspecific legislationrelatedtononpreferentialrulesoforigin.

However,sometradepolicy measuressuchasquotas, anti-dumpingdutiesor “madein”labelsmayrequire adeterminationoforiginand, therefore,theapplicationof non-preferentialrules.Inthis eraofsanctionsandescalating tradetensionsbetweentheUS andChina,andChinaandthe EU,non-preferentialrulesof originwillbeofincreasing importance.Thenonpreferentialrulesoforigin areWhollyObtainedandLast SubstantialTransformation.

ThepurposeofPreferential Originistoprovideduty benefitsthroughFreeTrade Agreements.Rulesoforigin ensurethatthebenefitsof anagreementareonlygiven tothoseproductswhich “originate”inoneofthe partiestotheagreement. Thepreferentialrulesoforigin aretheTariffShiftRule,the ValuePercentageRuleand theSpecificProcessRule.

Non-Preferential: WhollyObtained

Whollyobtainedisfairly straightforward,itcovers thecasesinwhichagoodis entirelyobtained,extracted ormanufacturedinasingle countrywithoutusingparts importedfromothercountries, forexample,naturalproducts extracted,harvested,hunted orcaughtinacountryorany goodproducedinacountry exclusivelyfromotherwholly obtainedgoodsfromthat country.

BeermadeintheUKcouldbe anexampleofthisasallofthe ingredientscanbegrownor obtainedintheUK.

Non-Preferential: LastSubstantial Transformation

Substantiallytransformed goodsarethosewhichare producedfromorwithimported materials,orthosewhich requireprocessingindifferent countries.

Attributingtheoriginofagood toasinglecountrycanbea complexexerciseinthesecases becauseseveralmaterials, parts,processesoralarge numberofcountriesmaybe involved.

Thepurposeoftheruleoforigin thereforeistoclearlyidentify whenexactlyatransformation occurs,thatis,whenthefinal productresultingfroma processissufficientlydifferent

fromtheinputsused tomanufactureit.

Substantiallytransformed goodsarethosewhichare producedfromorwithimported materials,orthosewhich requireprocessingindifferent countries.

Attributingtheoriginofagood toasinglecountrycanbea complexexerciseinthesecases becauseseveralmaterials, parts,processesoralarge numberofcountriesmaybe involved.

Thepurposeoftheruleoforigin thereforeistoclearlyidentify whenexactlyatransformation occurs,thatis,whenthefinal productresultingfroma processissufficientlydifferent fromtheinputsusedto manufactureit.

Ingeneral,thecriteriaofthelast substantialtransformationare expressedinthreeways:

Byarulerequiring achangeoftariff subheadinginthe HarmonisedSystem nomenclature;

Byavalue-addedrule, wheretheincreaseof valueduetoassembly operationsand incorporationoforiginating materialsrepresents aspecifiedlevelofthe ex-workspriceofthe product.

Byalistofmanufacturing orprocessingoperations whichmeettheoriginrules forthegoods;

Preferential: Tariffshiftrule

Thetariffshiftruleisfairly straightforward.Theexact termswillvaryfromtrade agreementtotradeagreement.

Still,anexamplewouldbethat allmaterial(inputs)usedto manufacturesomethingmust beclassifiedinatariffheading (thefirst4digitsoftheHScode) differentfromthefinalproduct.

Leather(4104)+ eg. Buckle(8308)+ Zip(9607)= Handbag(4202)

Preferential:Value percentagerule

Thevaluepercentagerule specifieswhatpercentagein valuetherawmaterialscostis allowedtobeofthefinalselling

priceofaproduct.Itwillvary foreachcommoditycode andtradeagreement,so it’simportanttorefertothe termsoftheFTArelevanttothe correspondingtradingcountry.

Anexamplemightbechemical fertilisers,whicharelargely madeof3elements: ammoniumnitrate,potassium chlorideandammonium phosphate.AUKmanufacturer mightimporttherawmaterials andexportthefinalproduct totheEU.

Preferential:

SpecificProcessRule

EachFTAwillhaveanannex wherethespecificprocesses thatchangetheoriginofan importedproduct(asidentified bytheHScode)arelisted. Again,thesewillvaryfrom agreementtoagreementand willbeinfluencedbythemost highlyprizedindustrial

processesineachterritory. Therewillalsobealist ofoperationsthatarenot consideredsufficientto changeorigine.g.repackaging.

AstheUKseekstoreach£1 trillionofexportsby2030,an understandingoftherelevant rulesoforigincanprovide significantbenefitsinreduced tariffsorexploitationofquotas.

However,theconstantly evolvinglandscapeof sanctions,anti-dumpingand countervailingdutiesimposed bythemajoreconomieson eachother’sgoodsmeans non-compliancewithrules oforigincanentailserious financialpenaltiesoreven jailtime.

Therehasneverbeenamore importanttimetounderstand rulesoforigin.

PavelAndrle TradeFinanceTrainer andConsultant TradeFinanceConsulting

InternationalStandby Practices(ISP98):25years later 2.4

Thisarticlewasoriginallypublishedin DocumentaryCreditWorld(DCW),published bytheInstituteofInternationalBanking Law&Practice.

Thisyearrepresentsa remarkablemilestoneinthe lifetimeoftheinternational rulesforstandbylettersof credit:ISP98.AlthoughIcome fromEasternEurope,aregion wheretheuseofstandby lettersofcredit(SBLC)islimited, Idealwithrelevantissues relatedtostandbyrulesand practicesveryoftenasan internationaltradefinance trainerandconsultant.

Iseeexpandingtheuseof standbysnowadaysandalso increasingrelianceonISP98 asthesetofgoverningrules forSBLCsissuedoutsideits maindomain,theUS.

Useofstandby lettersofcredit

Itisawell-knownfactthat standbylettersofcredit instrumentoriginatedintheUS whereitisusedverywidelyin situationswhereweEuropeans wouldutiliseademand guarantee.

Thereisalsoauniquetypeof standby,called“directpay”(i.e., payablewhentheunderlying paymentobligationisdue withoutregardtoadefault) whichdoesnothavean equivalentindemand guaranteepractice.

Ingeneral,intheUS,usershave achoicetomakestandbys governedbyISP98orUCP600 Demandguaranteesarerarely usedintheUS;iftheyare,itis mostlyinthecontextof internationaltransactions.

Inmyregion,wemaychoose betweenademandguarantee andanSBLC.Understandably, thefirstchoicewouldbea demandguarantee,often subjecttoURDG758,orsilentas togoverningrulesandsubject toapplicablelawalone.

AnSBLCcouldbeusedif sorequestedbytheclient. Standbysareoftenusedto securethepaymentobligation ofabuyerinrelationtoits overseasopenaccounttradeor similarpaymentobligations. Suchrelativelysimplestandbys arefrequentlymadesubjectto UCP600.

BanksinCentralandEastern Europealsoissueandreceive other,morecomplicated standbys,directandcounterstandbys.Thisisusuallythe casewhentheunderlying transactionrelatestothe Americas.Mostofthese standbyswouldbesubjectto ISP98.

Asaninternationaltrainer activeinmanyregionsof Europe,Asia,andAfrica,Isee increasinginterestinISP98, aboveallintheMiddleEastover thepastfiveyears.Userswant toknowaboutthedifferences amongtheavailablerules,what practicalimpactthechosen ruleshave(ormighthave)on therelevantinstrumentand howitisprocessed.

Consequently,manyofmy coursesfocusondifferences amongURDG758,UCP600,

andISP98andprovidedetailed practicalanalysisand comparison.Inthisarticle,Ionly intendtodiscussthemain aspectstoconsiderwhen choosinggoverningrulesand someobservationsaboutISP98.

Useofstandby lettersofcredit

UCP600istheleastsuitableset ofrulesforasecurityinstrument suchasademandguarantee orstandbyletterofcredit. Firstly,theUCPrulesarenot designedtodealwithanyof therelevantissuessuchas indirectschemes(issuance ofalocalundertakingbacked byanincomingcounterundertaking),extendorpay demands,extensions,or reductions.

Inmanyothercases,the UCPrulescoversituations inadequately,suchastransfers. Nevertheless,somestilloptfor UCP600forstandbys!Itismost commonlyforaquitesimple commercialstandby(Also referredtoasa“payment standby“asitsecuresa paymentobligationofthe buyertopayfordelivered goodsorservices).

Forsuchstandbys,whichare usuallyissuedforshortperiods oftimeandonlycallfora demandwithastatementof paymentdefault(andpossibly acopyofanunpaidinvoice, sometimesalsoacopyof atransportdocument),the deficienciesofUCP600are wellknownandcanbeeasily remediedinthewordingof thestandby.

Itistruethatthereareseveral ICCOfficialOpinionswhichdeal withUCP500andUCP600 mattersinrelationtotheiruse withstandbys,somanyofthe problemsareknownandcan beavoided.

However,formorecomplex securityundertakingsand counter-undertakings,theuse ofUCP600presentsproblems andshouldbecompletelyruled out.

Consequently,thechoiceis betweenademandguarantee subjecttoURDG758ora standbyletterofcreditsubject toISP98.Whatarethemain concernsforuserswhen consideringthesegoverning rules?

Anotherthingtoconsideristhe culturalandhistoricalaspects, whichcouldbereasonsto chooseoneinstrumentandrule type.Settingthisaside,letus focusonmoretechnical features.

Theoverallbackingofthe rulesisveryimportantand playsasignificantroleinthe perceivedsuitabilityofthe rules.Itisessentialfortherules themselvestobeclearand easytounderstand.

However,whatifthereisa dispute,whowillprovidethe answer?

Whowillguideusersandwhere cantheylearnabouttherules sotheycanbecome comfortableusingthem?

UDRG758arerulescreatedby theICCandthusaresupported bythemwithitsvast infrastructureofpublications suchasISDGP,andvarious expertbooks,inadditiontothe

ICCOfficialOpinionsand DOCDEXcases.

TheICCnationalcommittees providemanytrainingson URDG758;andmanybooks, articles,andstudiesprovide informationabouttherules. Educationisakeytothe successofanyrule.

DoesISP98enjoy suchasupportive infrastructure?

Iseethatthereisconfusion abouttheISP98.Theywere createdbytheInstituteof InternationalBankingLaw& Practice,Inc.(IIBLP)whichholds thecopyrighttoISP98,however, theywerealsoapprovedbythe ICCBankingCommissionand publishedasICCPublication No.590.

ButtheyarenotICCrules. Consequently,ICCisnot mandatedtopublishany ICCOpinionsonISP98-related issues,however,IIBLPis.

IIBLPproduced“TheOfficial CommentaryonISP98”and otherverydetailedpublications dealingwithstandbysand otherundertakingssuchas demandguarantees.

Additionally,thestandby industrybenefittedgreatlyfrom theexcellentpracticaltoolwith explanatoryendnotes–the freelyavailablecollectionof ISP98ModelForms.

Theyprovideanyuserwith comprehensiveknow-how relatedtothemostcommon typesofstandbysandclauses.

BankersAssociationfor FinanceandTrade(BAFT) hasitsownStandbyLettersof Credit/GuaranteesCommittee whichservesasanother valuableresource.

ICC’sDOCDEXsystemisalso availabletostandbyletters ofcreditsubjecttoISP98 (oranyothertradefinance transaction)ifsochosenby partiesforsettlingdisputes. Leadingqualificationson documentarycredits(CDCS), demandguarantees(CDGS), andstandbyLCs(CSGP) includequestionsonISP98 andtrainingmaterial.

Asitdoesforotherpractice rulesets,ICCAcademyhasa courseonISP98.Manylocal andinternationalinstitutions (includingmanyICCnational committees)conducttraining

onstandbysanddemand guaranteeswhichinclude sessionsonISP98,

Therefore,inmyview,thereis astrongbasesupportingISP98 andanyonewhowantstolearn abouttherulescandoso.

ISP98:Presentday andthefuture

1

IsISP98up-to-date?

Interestingly,peoplerecently seemtobeconcernedwhether ISP98isstillamodernsetof rulessuitablefortoday´s practice.Itistruethattherules werecreatedin1998andthere hasbeennorevisionofthem.

Atthattime,UCP500andURDG 458wereinplaceandbothUCP andURDGsubsequentlywent throughsignificantoverhaul. Sothequestioniscertainly relevanttoaskbut,itseems thatISP98hasnotbeenrevised astherewasnoneedtodoso.

Thereareonlyafewcourt caseswhichwouldrelatetothe ISP98rulesthemselves.When IaskmyUScolleaguesabout courtcasesorissuesrelatedto

SBLCs,theyalwaysleadmeto UCPcasesorwhenthestandby wasnotissuedsubjecttoany setofpracticerules.Itseems therearenonoticeableissues withISP98.

Nevertheless,Ithinkthata profoundlookattherulesmight bestillbeneficial.WhileIalso donotthinkthereareany provisionswhichneedtobe fixed,ISP98doesusesome phrasesandconceptswhich havebeenre-addressedin UCPandURDG.

Therefore,nowadays,whenwe makeacomparisonbetween therulesthismightcausesome degreeofconfusion.

Forinstance,ISP98Rule5.01 (TimelyNoticeofDishonour) refersto“unreasonable”time. ThisreflectsUCP500Article13 “areasonabletimenotto exceedsevenbankingdays” andURDG458Article10(a) “reasonabletimewithinwhich toexamineademand”.

BothUCP600andURDG758 abandonedthe“reasonable time”conceptandfixedthe periodtobeinanycaseupto “fivebanking(business)days.

replaceditwith“noconflict”. UnderbothUCP600andURDG 758“inconsistency”indatais allowed;only“conflict”isnot.

ISP98Rule4.03states: “Anissuerornominated personisrequiredtoexamine documentsforinconsistency witheachotheronlytothe extentprovidedinthestandby.” Consequently,inmyview, inthecontextofISP98, theword“inconsistency”is interchangeablewith“conflict”.

Sotheruleeffectivelysays: “Anissuerornominated personisrequiredtoexamine documentsforinconsistency (orconflict)witheachother onlytotheextentprovidedin thestandby”.(addedbythe author).

IsISP98widely recognisedbyjudges toensureaccurate judgements?

Ihaveheardconcernsabout theproperinterpretationof ISP98bycourtsinjurisdictions otherthantheUS.Evidently, outsidetheUS,itispresumed thereisalowerknowledge baseaboutISP98.Inany event,incaseofadispute, itisincumbentontheparties involvedtobringrelevant interpretativeauthorities tothetable.

Mostcertainly,aknowledgeable courtwitness,anexpertonthe matter,wouldbeemployed. Courtsregularlydecideon

andsanctionswheretherules themselvesplayaminorrole, ifany.

Ifthereisadisputeabouta technicalaspectofanSBLCor ademandguaranteeitisoften duetobadissuance,wrong orambiguouswordingofthe instrument,soagain,therules themselvesarenottheroot cause.

Whatarethemain challengesforISP98 users? 3

Incountriesoutsidethe Americas,wheretheSBLCis widespread,thepreeminent challengeisthelackof knowledgeandpractice.

financeproduct.Inthepast, standbylettersofcreditwere processedbydocumentary creditpersonnelinmanybanks.

However,withtherecent changesinrelevantSwift messages,namely,the remakeofMT760tocover bothstandbysanddemand guarantees,manybanks shiftedstandbystotheir guaranteedepartments.

Iseethatmanyofthese guaranteepersonnelstruggle withsomewell-established SBLCconcepts.Forinstance, theconceptof“confirmation”, “nomination”andtheroleof the“nominatedbank”, “automaticevergreenextension clauses”,reimbursing nominated(confirming)bank, placeofpresentationbeing

withthenominatedbanknot necessarilyonlyatmycounters, etc.

Consequently,onemustfirst fullygrasptheseLCaspects ofstandbys,whicharestrange eventoaguarantee practitioner.Thoseimpacted needtoplungethemselves deeperintotherules.

DeepknowledgeofURDG758 (andUCP600)iscertainly anadvantage.

Somedifferencesbetween therulesarewellknown(e.g. differenttreatmentof“force majeure”or“noconflict indata”);othersareless evident(e.g.ISP98Rule3.06(b) allowspresentationviaSWIFT (ie.electronicforminthis format)ifonlyademandis presentedandthebeneficiary isaSWIFTparticipantorabank. InthecaseofaURDG758 guarantee,suchapresentation wouldhavetobeexpressly allowed.

TherearesomeSBLCpractices whichmightcauseproblems, ifnotproperlythoughtthrough andthendrafted.Irecallsome intensivediscussionsabout confirmation,evergreen extensionclausesincaseofa confirmedstandby,extension clausesincasesofacounterstandbyandthelocalstandby. Requeststoissueademand guaranteeagainstacounterstandbyortheotherway aroundareparticularly challenging.

Oneshouldalsorealisethat ISP98treatsacounter-standby andalocalstandby(orany otherundertakingissuedas instructed)ascompletely separateandindependent fromeachother.

UDRG758setsthesamerule initsArticle5butthenmodifies therulebyArticle21(Currency ofpayment)andArticle26 (Forcemajeure)(Seealsothe provisionofISDGPParagraph 108).

Inmyview,thebiggest challengeisthelackofpractice, experience,andtheresulting lackofconfidence.Thisis understandableandtruewith allotherinstrumentsandrules whichwedonotdealwithon adailybasis.

Mygeneraladvicewouldbe:

Centraliseyourdemand guarantee/standbyletterof creditoperations;

Findaninternalchampion (orchampions)foreach product,rules,etc.toaccrue therelevantexpertiseand shareitwithothers;

Collectyourcases,create internaltools,andbuildup yourknow-howbase;

Useyourcorrespondent banknetworkwisely;

Spendoneducationwith practicalfocus.

ThemoreIlearnaboutISP98, themoreIadmirethemand themastermindbehindthem, ProfessorJamesE.Byrne.They areindeedamasterpieceof rulemakingandremainfully relevantafter25yearssince theircreation.Iwishthemthe verybestinthecoming25 years!

Thisarticlewasoriginallypublished inDocumentaryCreditWorld(DCW), publishedbytheInstituteof InternationalBankingLaw&Practice.

HollyPiggott

Director AlineaCustoms

A2024guidetocustoms complianceandcrossbordertrade

Customscomplianceobligationshavetobe metwhenimportingandexportinggoodsto ensurethatthedocumentationrelatedtothe accompanyinggoodsisgeneratedin adherencewiththelegislationoftheimporting

obligationshavetobe metwhenimportingand exportinggoodstoensurethat thedocumentationrelatedto theaccompanyinggoodsis generatedinadherencewith thelegislationoftheimporting andexportingcountries.

TheWorldTradeOrganisation and164membernations, andtheWorldCustoms Organisationwith184member

multilateraltreaties,suchas TheGeneralAgreementfor TariffsandTrade,andthe RevisedKyotoConvention, governingareasincluding customsvaluation,customs classification,andrulesof origin.

Thisensuresthatcustoms obligationsformerchantsare forthemostpartharmonised.

Customsclassification

Theharmonisedschedule(HS) determinesthefirst6digits ofacommoditycode,thisis knownastosub-headinglevel. Dependingontheimporting territory,digitsfollowingtheHS codemayvaryonaregional basis.

andincertaincases, exciseduty,anti-dumping duty,safeguardingduty, countervailingduty,and quotaswillbemandated.

TheEuropeanUnionandthe UnitedKingdomclassify goodstoanational10-digit nomenclatureforimports,and onthebasisof:classification, thecountryofeconomic originofthegoods, andexportingcountry, compliancemeasures relatedtoprohibitions andrestrictions, licensingandcertification, sanctions,andthe applicationofcustomsduty, andincertaincases,excise duty,anti-dumpingduty, safeguardingduty, countervailingduty,and quotaswillbemandated.

Traderswhoareimporting orexportinggoodsfromthe UnitedKingdomcanreview theirobligationsusingHMRC’s CheckHowtoImportand ExportGoodstool.TheUnited Kingdom’s(CDS)removal ofthe999Lwaivercodefor importssince31January2024 hasobligatedincreased scrutinyofthecomposition ofimportedgoods.

Rulesoforigin

Rulesoforigingoverntrade agreements,enablingaccess topreferentialtariffs.The criteriawillbeassessedon whetherthegoodsarewholly sourced,sufficientlyprocessed orcumulatedtoapermitted percentage,asdeterminedby theaccompanyingfreetrade agreement’sproduct-specific rules.

Inordertobenefitfromthe enhancedmarketaccess, exportersmayhavetoapply theappropriatelywordedtext ofthestatementoforiginonan accompanyingdocumentsuch asthecommercialinvoiceand mayalsohavetoapplyto theirnationalauthoritiesfor approved/registeredexporter (REX)statusifthevalueof thegoodsisabove£5,500. Alternatively,theymaychoose topresentacertificateoforigin, EUR-1orEUR-MedCertificate, wherepermitted.

InadditiontoFTAs,thereare 65countriesinthedeveloping countriestradingscheme (DCTS)thatcanbenefitfrom preferentialtariffsforexports. Incircumstanceswherethe goodstradeddonotmeetthe rulesoforigincriteriaorare exportedfromacountrywhich doesnothaveatradedealin placewiththeimportingnation, goodswillbetradedundera “mostfavourednation”(MFN) basis,ensuringequivalentduty rates.

‘GateofTears’twenty-mile straitsadjacenttoYemen, andthroughtheSuezCanal, whereitconnectstothe MediterraneanSea.

USDper40ftcontainer.The delayedarrivalofgoodshas particularlyaffected‘just-intime’manufacturers,whomay beassessingtheirpositionin on19October2023.Atthetime ofwriting,themajorityof shipmentswhichwerein progresspriortothecrisiswill havetakenplace.

highlightingtocarriersthat theRedSeacrisiscannotbe consideredaforcemajeure incident,whichcanonlybe declaredwhenacontractual provisionisimpossibleto

bydelay,eventhoughthedelay becausedbyariskinsured against”andat6.1doesnot “warcivilwarrevolution rebellioninsurrection,orcivil strifearisingtherefrom,orany hostileactbyoragainsta belligerentpower.”

Whethertheunderlyingsale agreementisgovernedby Englishlaw,andtheSaleof GoodsAct1979,theUnited NationsConventionforthe InternationalSaleofGoods (CISG)ortheUniform CommercialCode(UCC) mayalsohaveanyimpacton theassessmentofdamages causedbythelatearrival ofgoods,ifatall,andany obligationstomitigatethe circumstances.

NealHarm

SecretaryGeneral FCI

DeepeshPatel

FCI’sNealHarmonkicking offinclusivegrowthinthe factoringindustry

Tobetterunderstandtheprinciplesoffinancial inclusion,equitableregulation,andsustainable growthinthefactoringindustry,TradeFinance Global’s(TFG)DeepeshPatelspokewithnew FCISecretaryGeneral,NealHarm.

EditorialDirector TradeFinanceGlobal(TFG)

InApril2021,theworldof footballwasrockedbythe announcementoftheEuropean SuperLeague(ESL),aproposed elitecompetitionthatsought topermanentlyplaceEurope’s topfootballclubsinaclosed league.

Theplan–metwithwidespread criticism–wasseenasamove thatprioritisedfinancialgain oversportingmerit,threatening theinclusivenatureofthesport bypotentiallyleavingsmaller clubsandtheirfansbehind.

Thisincidentservesasa parallelintheworldoffinance, particularlywithinthefactoring industry,raisingpertinent questionsaboutensuring growth,resilience,and inclusivity.Asthefactoring sectorcontinuestoexpand, significantlyimpactingglobal tradeandeconomic development,itfacesthe challengeofevolvingwithout creatingdisparitiesreminiscent oftheESLdebacle.

Tobetterunderstandthe principlesoffinancialinclusion, equitableregulation,and sustainablegrowthinthe factoringindustry,Trade FinanceGlobal’s(TFG) DeepeshPatelspokewithnew FCISecretaryGeneral,Neal Harm.

Understandingfactoring: Acatalystforglobaltrade

Factoringisafinancialservice thatprofoundlyimpactsglobal tradeandeconomic development.

newopportunitieswithout beingconstrainedbycash flowissues.

Secondly,factoringis particularlybeneficialin financingopenaccount tradereceivables,acommon practiceininternationaltrade wheregoodsareshippedand deliveredbeforepaymentis due.

Thisalignswithglobaltrade needs,whereextended paymenttermsarestandard andcanposesignificantrisks andliquiditychallengesfor exporters.

Thefactoringindustrycan tapthesebenefitsforglobal marketsbyincreasing awarenessandunderstanding offactoringandbyfostering partnershipswithfinancial institutionsandregulators.

Harmsaid,“What’sinteresting–andit’shistoryrepeatingitself –ishowwe’reenteringthose emergingmarketstoday.It’s nodifferentthan56yearsago. It’slearningaboutthemarket, advocatingfortheproduct, andeducatingthemembers onwhatthisproductisand whatitisn’t.Thenit’swatching itgrow.”

Byfollowingthisproven approach,theindustrycan openupnewmarketsand supporttradefinanceinregions whereaccesstotraditional bankingandfinancialservices islimited,helpingtoliftnations outofpovertyandfacilitating theirintegrationintotheglobal economy.

Expandinghorizons: Factoring’sgrowthin emergingmarkets

Factoringhassignificantgrowth andpotentialinemerging markets,underliningitsvital roleinenhancingeconomic developmentandfacilitating trade.

Harmsaid,“Ifyouthink abouttheAfricanregion theSouthernAsianregion, particularly opportunityforgrowthasthey maturewithopenaccount finance.”

Thisopportunitylendsitself totheevolvingunderstanding andadoptionoffactoringas acrucialfinancialservice thatsupportsbusinessesin managingcashflowand accessingworkingcapital efficiently.

Akeyaspectistheexponential growthpotentialoffactoring inthesemarkets,propelled byincreasingtradevolumes andtheneedforalternative financingsolutionsthat complementtraditional bankingservices.

Thegrowthoffactoringin developingregionsisnotjust afunctionoftheexpanding globaltradebutalsoaresult ofdeliberateeffortstowards education,advocacy,andthe establishmentofsupportive regulatoryframeworksthat recogniseinvoicesas investableassets.

Harmsaid,“It’scomplexandit requirescoordinationbetween banks,financialinstitutions,and regulatoryagencies.Withallof thosegroupsworkingtogether, wecanfigureoutthebestway tomakeaninvoiceintoan investableasset–the regulationsweneedtoput aroundit,howwesecureit, andhowwebringliquidity intothemarkettosupportit.”

Moreover,thestrategic partnershipsbetweenglobal institutionslikeFCIandother localstakeholderscanhelpto fosteradeeperunderstanding offactoringandarecrucialin

creatinganecosystem whereitcanthrivebyaligning businesses,financiers,and policymakers.

Visionandchallenges ahead:InsightfromFCI’s newsecretarygeneral

TheFCI’smissionistoensure theresilient,sustainable inclusivegrowthoffactoring onaglobalscale.Centraltothis objectiveistherecognitionof factoringasafinancialtooland avitalcomponentoftheglobal tradeecosystemthatcandrive economicdevelopmentand alleviatepoverty.

Harmsaid,“Itcomesdownto awareness,advocacy,and education.That’swhatFCIis therefor.Forustobeawareof what’sgoingoninthe market,advocatingaswesee somethinghappening,and theneducatingasfastaswe can,tobringpeopleupto speed.”

Recognisingthechallengesand opportunitiesofregulatory changesandeconomictrends, FCIpositionsitselfasavoicefor thefactoring,openaccount andtradefinanceindustries, engagingwithpolicymakers andstakeholderstoadvocate forregulationsandpoliciesthat supportthegrowthofthese markets.

Throughtheseefforts,the organisationaimstoaddress potentialchallengeshead-on, suchasthosearisingfrom Europeanlatepayment regulations,bypromoting awarenessandeducation, whichcanleadtomore informedandconstructive policy-making.

AttheheartofFCI’svisionisthe desiretoseefactoringand openaccountreceivables recognisedasacriticalelement oftheglobaltradefinance landscape,capableofdriving significanteconomicbenefits.

Harmsaid,“IwantFCItobe threelettersthatcome immediatelytopofmindwhen someoneisthinkingaboutopen account.Ifwe’retalkingabouta receivable,thetransaction,the financing,whetheryou’rea bank,whetheryou’rea regulator,we’repartofthat conversation.”

Thisvisionisnotonlyabout fosteringgrowthinthevolume offactoredreceivablesbutalso aboutensuringthatthe benefitsoffactoringarewidely andequitablydistributed, supportingbusinessesin developedandemerging marketsalike.

Justasthefootballworldunited againsttheexclusivityofthe ESL,thefactoringindustrymust embraceinclusivity,ensuring nosmallplayerisleftbehindin thepursuitofglobaleconomic progress.

Puttingtheideaintopractice, FCIishostingtheir56thAnnual MeetinginSeoul,SouthKorea from9-13June,bringing togetherallglobalprofessionals tofurtherthediscussioninto factoringandreceivables finance.

ForHarm,thiseventoffersthe opportunitytogrowthe industry.Hesaid,“Abigpartof theeventofawareness, advocacy,andeducation…It’s tohavetimewitheachother, learnhowtodobusinessand howtomakemoneytogether. Andagain,totakethatfriction outofthetransactionasitgoes cross-border.”

DeepeshPatel EditorialDirector TradeFinanceGlobal(TFG)

WomeninTrade,Treasury &Payments2024–Policy topractice:Addressing genderdisparityin financialaccess

BrianCanup AssistantEditor TradeFinanceGlobal(TFG)

TradeFinanceGlobalhostedanin-person roundtabletocelebrateWomeninTrade, Treasury&Payments2024.Learnmoreabout theevent!

TocommemorateInternational Women’sDayandcelebrate themanyremarkablewomen acrosstheindustry,Trade FinanceGlobal(TFG)held itsannualWomeninTrade, Treasury,&Paymentseventat theLansdowneClubinLondon.

Roundtablediscussionsat theevent,heldunderChatham Houserules,haveilluminated thestaggeringnumberof womenworldwidewhoremain unbankedandlackequal economicrights.

Thiscomplexissue, exacerbatedbycultural influencesandlongstanding traditions,callsfortargeted interventionstoimprove financialeducationandaccess, highlightingthenecessityof aconcertedeffortacrossall sectorsofsocietytoaddress thesedisparitieseffectively.

Addressingcultural andsocietalinfluences onwomen’sfinancial literacyandaccess

Thegenderdisparityinfinancial accessisacomplexissue deeplyrootedinsocietalnorms andculturalexpectationsthat caninfluencefinancialliteracy amongwomen.

Still,anextremelylarge numberofwomenaroundthe worldremainunbanked,with approximately740million womengloballylackingaccess tobankingservicesasof2021.

Thisgapinfinancialaccessis furtherexacerbatedbythefact thatwomen,onaverage,enjoy fewereconomicrightsthan men,highlightingasignificant barriertoachievinggender equalityineconomic participation.

Butthesedifferencesarefar fromuniversal.

Culturalandsocietalinfluences playapivotalroleinshaping women’sfinancialliteracyand overalleconomicparticipation, oftenstemmingfrom longstandingnormsand culturalexpectationsthat dictateexpectedgender rolesinacommunity.

Suchculturalnormscandeter womenfromseekingfinancial knowledgeorparticipatingin financialdecisions,further wideningthefinancialliteracy gap.

Breakingdownthesenormsis fareasiersaidthandone,with oneparticipantnotingthat“in somecountries,you’rebreaking centuriesoftraditions.”

Thisunderscorestheneedfor targetedinterventionsto improveaccesstofinancial

educationandchallengethe culturalnormsandsocietal expectationsthathave historicallyplacedwomenat adisadvantageinthefinancial sphere.

Strengtheningpolicyand regulationtoempower femaleentrepreneurs andleaders

Policyandregulationplay crucialrolesinpromoting genderequality,offeringa frameworkwithinwhichbarriers tofemaleentrepreneurship andleadershipcanbe systematicallyaddressed anddismantled.

AreportfromtheWorldBank highlightsthat,globally,on paper,womenenjoyonly aroundtwo-thirdsofmen’s rights.

However,despitetheexistence oflawsaimingtoensure genderequality,the implementationand enforcementoftheselaws remainchallengingandon average,countrieshave establishedlessthan40% ofthesystemsneededto implementthem.

Thegapbetweenpolicyand practiceshowstheimportance ofmorecomprehensiveand enforcedregulationsto equaliserightsonpaperand ineverydayreality.

Thispolicyrealityhas widespreadimpactsonmany areas,notablyfemale entrepreneurship.

Oneofthecriticalbarriersto femaleentrepreneurshipand leadershipisthelackofequal opportunities,whichispartially attributedtoinsufficient regulatoryframeworks.

Forexample,despitedecadesoldlawssuchastheUK’sEqual PayAct(passedinthe1970s), thegenderpaygapspersist, suggestingthatlegislation aloneisinsufficient.Whatis requiredisacombinationof policyinnovationandcultural shift,whereregulationsare supportedbysocietalchange thatvaluesandpractices genderequality.

Fosteringanenvironment encouragingfemaleleadership andentrepreneurshipalso meansaddressingcultural biasesandstereotypeslimiting women’srolesand contributions.

Policiesthatencourage educationandtrainingin leadershipandfinancialliteracy forwomen,aswellasinitiatives

thatshowcasesuccessful femaleleadersasrolemodels, arecrucial.

Suchmeasurescanhelpshift culturalperceptionsandinspire futuregenerationsofwomen toaspiretoleadershiproles.

Theseefforts,however,need tobematchedwithgroundlevelimplementationand enforcementmechanismsthat ensurethepolicieseffectively translateintoreal-world changes.

Policyandregulationare indispensabletoolsin promotinggenderequality, particularlyinfacilitating

femaleentrepreneurshipand leadership,butstepscanalso betakenatthecorporatelevel tofurthercatalysechange.

Strengtheningpolicyand regulationtoempower femaleentrepreneurs andleaders

Corporateinitiatives,such asthoseaimingtodemystify financialterms,create transparenthiringpractices, andensureequal representationonpanelsand leadershiproles,arecrucialto fosteringanenvironmentwhere womencanthriveequally alongsidemen.

Theseinitiativesprovidethe structuralsupportnecessary forwomentoadvanceintheir careersandaddressthe systemicbiasesthatoften hindertheirprogress.For instance,thesecorporate initiativescanhelpcombatthe perceptionthatwomenare

chosenforrolessolelybased ontheirgenderratherthantheir qualificationsandabilities.

Bycreatingmoreinclusive andequitableworkplaces, corporationscanleadby example,showcasingthe benefitsofdiversityand equalitynotjustwithintheir wallsbutacrossthebroader businesscommunity.

Therapidlygrowingdigital economyalsooffersaunique platformforpromotinggender inclusionandequalityby providingaccesstomarkets, finance,andopportunities thatmightotherwisebe inaccessible.

Digitalplatformscanserveas equalisers,allowingwomen entrepreneurstobypass traditionalbarrierstoentry

intothebusinessworld.Therise offintech,forexample,canhelp addressthegapinfinancial accessbyofferingservices tailoredtowomen’sneeds andcircumstances,potentially transformingtheireconomic participationand empowerment.

Newanddigitalbusinessescan bemoremeritocraticandless boundbytraditionalgender rolesandbiases,providing afreshlandscapewhere women’scontributionscanbe valuedbasedontheirskillsand innovations.

Whilecorporateinitiatives canreshapetheworkplace environmentandculturetobe moreinclusiveandequitable, thedigitaleconomyprovides newopportunitiesand platformsforwomen’s economicempowerment andparticipation.

Together,theseforcescan significantlycontributeto breakingdownbarriersto genderequalityandfostering amoreinclusiveandequitable globaleconomy.

Reiteratetheimportanceof amultifacetedapproachto addressinggenderdisparitiesin financialliteracyandeconomic participation.

policyinnovation,andcultural shiftstoachievegender equalityintheeconomy.

Theroundtablediscussionsat TFG’sWomeninTrade,Treasury, andPaymentseventfurther highlightedwomen’s challengesintheglobal economy.However,through conversation,theparticipants proposedsolutions encompassingpolicyreform, corporateinitiatives,andthe burgeoningdigitaleconomy.

Tobridgethegapsoffinancial inclusionandgenderequality, acohesiveeffortbetween legislation,corporate responsibility,and technologicalinnovationis essential.Aswemoveforward, letthesediscussionsinspire actionablechange,fuelling effortsacrosstheglobeto createamoreequitable economiclandscape.

Thejourneytowardsgender parityinfinanceislongand fraughtwithobstacles,yetwith continueddialogue,innovation, andcommitment,it’sajourney thatcanandmustbe undertakentoimprovethe worldforeveryone.

DeepeshPatel EditorialDirector

TradeFinanceGlobal(TFG)

WomeninTrade,Treasury &Payments2024–From classroomtoboardroom: Educatingforgenderequity intrade,treasury,and payments

LearnmoreaboutTradeFinanceGlobal’s WomeninTrade,Treasury&Payments roundtablesandeventheldinLondon!

TradeFinanceGlobal(TFG)held itsannualWomeninTrade, Treasury,andPaymentsevent

Inaseriesofroundtable discussionsattheevent,held underChathamHouserules,

BrianCanup Assistant

Editor

TradeFinanceGlobal(TFG)

trade,treasury,andpayments aninclusiveindustryfor everyone.

Promotinggender equalityintheworkplace startswithearly education

Promotinggenderequality fundamentallybeginswithearly education.Itplaysacriticalrole inshapingperceptionsand breakingdowngender stereotypes.

Onespeakersaid,“Iwasraised inafamilywheretherewasno differenceingender.Myfather alwaystoldmetherewas nothingIcouldnotdoor achievebecauseIwasagirl.” Anotheradded,“Education startswhenyouareveryyoung inyourfamily,withyourparents saying,okay,youareagirl,but youcanspeakup.”

Byincorporatinggender equalityattheseearlieststages

oflife,childrencanbetaught toappreciateandunderstand theimportanceofequality betweenmenandwomen.This willaddressstereotypesand instilconfidenceinyounggirls, empoweringthemtopursue theirinterestsandambitions withouttheconstraintsof traditionalgenderroles.

Thisconfidenceiscrucial fortheircontinuedsuccess andparticipationinareas traditionallydominatedby men,suchasSTEMfieldsor leadershippositions.

Ultimately,asoneparticipant said,“Educationstartsinthe family,thenintheschool,then inuniversity,andtheninthe industry.”

Oneofthepowerfulaspectsof educationintheindustryisthat itcancomefrominfluential mentorsandrolemodels.

Mentorshipandrole modeling

Mentorshipandrolemodelling canhaveatransformative impactinshapingthenext generationoffemaleleaders. Mentorshipiscrucialfor knowledgesharing,skill development,andconfidence buildingamongwomen navigatingtheircareersin thesesectors.

However,it’snotjustmentoring inthetraditionalsensethat canplayaroleinpromoting equalityintheindustry;there isalsoaconceptofreverse mentoringthatsome organisationsareexploring.

Reversementoringinvolvesa processwherethetraditional mentoringrolesareinverted, meaningthatyoungerorless experiencedindividualsmentor

staff.Forinstance,younger employeesmightshareinsights aboutnewtechnologies,social media,orcurrenttrendswith theirmoreexperienced counterparts.

Reversementoringcanalso taketheformofjunior membersfromhistorically marginalisedgroupsmentoring seniorleadersabouttheir experiencesandwaysof working.Thismethodcanfoster aninclusiveculturethatvalues differentperspectivesandskills, regardlessofthetraditional seniority-basedmentoring paradigms.

Whetherconductedinthe traditionalsenseorunderan invertedapproach,mentoring intheworkplacecanbea powerfultooltopromote equalityinthetrade,treasury, andpaymentsspace.

Inclusiveleadership anddecision-making

Closelyrelatedtomentoring, ensuringanorganisationhas aninclusiveleadershipteam canhelpinspireemerging leaders,regardlessoftheir demographicbackground.

Seeingwomeninleadership positionsnotonlychallenges theprevailingstereotypes andbiasesaboutgenderroles withintheindustrybutalso demonstratesthepossibilities forcareerprogressionand success.Whenwomensee themselvesreflectedin leadershippositions,itfosters asenseofpossibilityand belongingthatcancatalyse ambitionanddrive.

However,leadershiprolesand decision-makingprocesses remainheavilymaledominatedinmanyindustries.

companyis43%women,but notattheleadershiplevel.IfI lookatthecompanystats,it’s good,butit’snotgoodenough formebecauseI’mtheonly womanintheboardroom. Everysingletime,I’mtheonly oneintheboardroom.”

Itistimetodobetter.

Byactivelyinvolvingwomenin strategicdiscussionsandpolicy formulations,organisations canensureamorebalanced representationthatreflectsthe diversityoftheirworkforceand customerbase.

Theemphasisoninclusive leadershipisgroundedinthe understandingthatdiverse teams,ledbyindividualswho valuedifferentviewpointsand experiences,arebetteradept atnavigatingthecomplexities oftheglobalmarket.

Consequently,thecommitment toinclusiveleadershipand decision-makingstrengthens anorganisation’scompetitive edgebyharnessinghuman creativityandintelligence.

Anotherwaytomaximise employeepotentialisby buildingacorporateculture thatembracesandencourages flexibleworkingarrangements.

Flexiblework arrangements

Ensuringflexiblework arrangementsisastrategyfor promotinggenderequalityin theworkplace,astheyallowfor amoreinclusiveenvironment thataccommodatesthe diverseneedsofevery employee,notjustparents.

Oneparticipantsaid,“The benefitofflexibleworkoptions isthatwhenyougivethemto women,yougivethemto everyone.Itdoesn’thavetobe thatsinceI’mamum,Ineed thatflexibility.Someonemay needtheflexibilitytolookafter ageingparents,andifthat’s somethingoffered institutionally,itcanbenefit everyone.”

Byofferingoptionssuchas remotework,flexiblehours,and part-timepositions,employers cansupportwomenandmenin achievingahealthywork-life balance,enablingeveryoneto thriveprofessionallyand personally.

Thisapproachhelpsretain talentedfemaleprofessionals andensurestheydonothave

tochoosebetweencareer advancementandtheirroles outsideofwork.

TradeFinanceGlobalwants tothankallofourpartnersfor helpingmakethisWomenin Trade,Treasury&Payments campaignpossible.

Additionally,wewanttothank alloftheroundtable,evening eventanddigitalcampaign participantsforhighlightingthe amazingworkthatallwomen aredoinginthetrade,treasury &paymentsindustry.

Wewanttoensurethatthe lessonswealltookawayfrom thiseveningarenotforgotten, andwecontinuetobuildonthis knowledgeeveryday.From acknowledgingdifferent culturesandhowtheydealwith genderissuestoeducatingthe nextgeneration,thereare endlesswaysthatwecan continuethismomentumand makeourindustrymore inclusive.

Wewanttochallengeyou, whatcanyoudotohelp inspireinclusion?

BeonthelookoutforTFGto continuetofeatureallofthe amazingwomenintrade, treasury&payments throughouttheyear!

GwenMwaba Director&GlobalHead ofTradeFinance Afreximbank

Africafocus:Afreximbank onempoweringwomenin trade,treasury,and payments

Tolearnmoreaboutthechallengesthatwomen faceinthetrade,treasury,andpaymentsspace acrosstheAfricancontinent,andsomeof theprogrammesinplacetohelpbalancethe scales,TFGspokewithGwenMwaba,Director andGlobalHeadofTradeFinanceat Afreximbank.

DeepeshPatel EditorialDirector TradeFinanceGlobal(TFG)

TradeFinanceGlobal’s(TFG) annualWomeninTrade, Treasury,andPayments campaignin2024focusedon InspiringInclusionaroundthe globe.Differentregionsface differentchallengeswhenit comestogenderinclusion, anditisvitaltounderstand perspectivesfromacrossthe globe.

Tolearnmoreaboutthe challengesthatwomenface inthetrade,treasury,and paymentsspaceacrossthe Africancontinent,andsome oftheprogrammesinplace tohelpbalancethescales, TFGspokewithGwenMwaba, DirectorandGlobalHeadof TradeFinanceatAfreximbank.

Afreximbank’srolein addressinggender equality

WomeninAfricaaimingto acceleratetheircareersin trade,treasury,andpayments faceseveralsignificant challenges,includingsocietal pressures,whichsometimes dictatewomen’srolesand affecttheircareeropportunities.

Additionally,womencan encounterobstaclesincareer advancementduetoperiods ofmaternityleave,whichcan putthembehindtheirmale counterparts.Manywomenalso lacksufficientrolemodelsin leadershippositionswithintheir fields.

Mwabasaid,“Therealityisthat tradeisnotgenderbalanced, particularlyacrossdeveloping andemergingmarkets.”

Thisissomethingthat Afreximbankfocusseson addressinginordertosupport, include,andempowerwomen acrossthecontinent.

Thebankhasimplemented variousinitiativestoprovide mentorshipandtraining programmestoupskillfemale employeesandattractmore womenintotheindustry.These effortsarepartofabroader strategytobuildcapacityand offersupportsystemsthat enablewomentonavigate theircareersmoreeffectively, includingovercoming organisationalchallenges.

Beyondinternalinitiatives, Afreximbankextendsits supporttoAfricanfemale entrepreneurs,offeringtargeted

programmestofacilitate theirinvolvementintradeand accesstoessentialinformation andfinancialresources.

Throughthesecomprehensive measures,thebankis makingsignificantstridesin empoweringwomeninAfrica, helpingtoovercomethe generationsofembedded challenges.

Impactof Afreximbank’swork

Afreximbank’sTrade InformationPortalisone initiativethathashelpedto democratiseaccesstotrade informationandishelpingto leveltheplayingfieldfor womenintrade.

TheTradeInformationportal, whichisavailableunder theAfreximbank’sdigital ecosystemtheAfricaTrade Gateway(ATG),offersa subscription-basedservice

whereentrepreneurs,atno initialcostforthefreelimited accessversion,canaccess informationaboutmarket needsandopportunitiesin neighbouringcountries. Thisinformationiscrucialfor womenlookingtoexportgoods andservices,empoweringthem tomakeinformeddecisions andidentifyviablemarkets fortheirproducts.

Thebank’sroleinpromoting successfulfemale-led enterprisesfurtherhighlights itsimpact.

Mwabasaid,“Wehaveavery successfulclientinthecocoa industryinGhana.Shestarted asacocoabeantrader,but weencouragedhertosetup amanufacturingplant,which Afreximbankfinanced.Now,the companyissemi-processing cocoabeansintococoacake, cocoaliquor,andcocoabutter forexporttomanufacturersof finishedproductsoutsideof Africa.

“Whatisexcitingaboutthis businessisthatitisownedbya womanwhoisalsotheCEO,her CFOisawoman,herentire seniormanagementteamare women,andthepeopleonthe shopfloorarewomen.

“That’sjustoneexampleof Afreximbank’sinitiativesto supportwomenentrepreneurs.”

However,supporting entrepreneursintoday’s technology-driveneconomy alsorequiresadedicated digitalapproach.

Howcandigital educationhelpwomen?

Afreximbankisstrategically positionedtoenhanceand promotedigitaleducation amongAfricanfemale entrepreneurs,enablingthem toparticipatemorefullyin digitaltrade.

Thebank’sapproachtodigital education–whichisnolonger justanadvantagebuta necessityforstaying competitiveintheglobal market–involvesproviding digitalsolutionsandtrainingto ensureuserscanfullyleverage thesetechnologies.

Onedigitalinitiativewhichcan alsobeaccessedonATGisthe MansaDigitalPlatform,aKYC repositorythatsimplifiesthe verificationprocessfor corporatesandbanks.This platformisinstrumentalin helpingentrepreneursgain quickeraccesstofinancial servicesbystreamliningthe duediligenceprocessfor potentiallenders.

bankstoprovideyouwith solutions.Withinthat ecosystem(ATG),wehavealso developedadigitalsolution calledtheAfricaTrade Exchange(ATEX),whichisa digitalexchangeforbuyingand sellingallmannerof commodities.”

TofurthersupportATEX, Afreximbankisthepayment bankandwilllinkATEXto thepaymentplatform,the PanAfricanPaymentand SettlementSystem(PAPSS) whichfacilitatestransactionsin localcurrencies.

receiveKenyanshillingsfor goodsthattheyselltoabuyer inRwanda,whopaysin RwandanFrancs.Thissystem significantlyreducesthe relianceonforeigncurrencies, makingtrademoreaccessible andcost-effectiveforAfrican entrepreneurs.

ForAfreximbank,however,the digitaljourneyisaboutmore thanjustprovidingaccessto thesetechnologyplatforms. Itisalsoabouttrainingand education.

comprehensivetraining, empoweringthemwiththeskills neededtonavigateand maximisethebenefitsthe digitalsolutionsprovide.

Mwabasaid,“ThroughourHR departmentweoffer Afreximbankacademy AFRACAD,whichhasanumber ofdigitalandnon-digital coursesaccessibletopeople whowanttoupskillthemselves inanythingtodowithbanking andtrade.”

Thiseffortenableswomento trademoreeffectivelyinthe digitalrealmandcontributes

tradesector.Afreximbankplans tocontinuethismomentumby rollingoutnewinitiativesinthe yearstocome.

Lookingtoan inclusivefuture

Oneoftheinitiativesthebank isdrivingistheestablishment ofExportTradingCompanies (ETCs),whichseekto overcomeoneofthe significantchallengesfemale entrepreneursface:theinability toexportduetothesmall sizeoftheiroperations.

Mwabasaid,“Thismodelentails aggregatinggoodsfrom differentmarketstocreate scale.Forexample,youhave manysesameseedproducers who,ontheirown,aretoosmall tobeabletoexport.

“ThisETCinitiativewould aggregatesesameseedsinto onelocationwiththehighest comparativeadvantage, packageandbrandthem underonelabeland,usingthat volume,exportthemoutside Africa.”

Additionally,Afreximbankis spearheadingthedevelopment ofindustrialparksfocusedon lightmanufacturingacross Africa.Theseindustrialparks wouldprovideaconducive environmentforentrepreneurs whoengageinlight manufacturing,suchas producingsmallelectrical componentsorgarments,and arewellsuitedtowomendueto theirscalabilityandpotential forjobcreation.

Throughtheseandother programmes,thebank continuestopavetheway foramoreequitableand prosperousfutureforwomen intradeacrossthecontinent. Afuturethatwillinspire inclusionforall.Mwabasaid, “Tome,InspireInclusionmeans youcan’tbeallthingstoall people.Justbethebest versionofyourselfcanbe.”

MichelleKnowles HeadofTradeandWorking CapitalProducts

Progressionthrough effortandrisktaking: Absa’sMichelleKnowles discussesbeingawoman intheworkplace

TokickoffTFG’sWomeninTrade,Treasury& Payments2024campaign,TFGspoketoAbsa’s MichelleKnowlesaboutherexperiencesinthe industry.

BrianCanup AssistantEditor TradeFinanceGlobal(TFG)

InternationalWomen’sDay on8March,2024israpidly approaching,andTrade FinanceGlobalispreparingto hostourownWomeninTrade, Treasury&Payments campaign.WhileTFG’s campaignisdesignedto highlighttheworkthatall womenaredoingintheTTP industry,wethinkit’simportant tohearfromsomeofthe leadersoftheindustry.

Personalstoriesandjourneys areanimportantpartof pushingtheindustryinthe rightdirection.Withthisinmind, TradeFinanceGlobal’sBrian Canup(BC)spokewithMichelle Knowles(MK),HeadofTrade andWorkingCapitalProducts atAbsa.

BC:Lookingatyourcareer journey,howdoyoufeel likeyouwereinspired and/orincludedbyothers inyourindustry?

MK:AsIcontemplatemycareer journey,Irealisehowfortunate Ihavebeentohavethesupport andinfluenceofseveralrole models.Eachoneofthem playedaroleinmyjourney, someformallyandothers informally.

Asaself-motivatedindividual, Ithriveonnewanddiverse experiences.Fortunately, IfoundacareerthatIfind engaging,particularlythe complexityanddiversitythat comeswithinternationaltrade.

Absa

communityisveryfulfilling forme.

Mypurposeinlifeistomake adifference,andmycareer alignswiththispurposegiven thevitalrolethattradeplays ineconomicgrowthand development.Workingin anemergingmarket,where issueslikeunemploymentare constantlyinfocus,Ifindit meaningfultobepartof developinganddelivering solutionsthatfacilitateand enablegrowth.Iamequally highlymotivatedbynew challenges,andIenjoymeeting andengagingwithnewpeople andcultures,aswellasbeing motivatedbynew opportunities.

Ialsobelieveinproviding supporttoemergingleaders anddrivingchangewithinthe organisation.Iamalways curiousandenjoytakingon newchallenges.Earlyinmy career,Igotinvolvedinindustry initiativesthattookmeoutof mycomfortzone,allowingme togrowandinfluence.

someindustrygiants,from whomIlearnedalot.Although manyofthemhaveretired ormovedontodifferent industries,Iamstillincontact withmany.Thisprocessopened otheropportunitiesthatfurther expandedmyhorizons, includingbeingappointed tosomeindustrypositions.

Iamgratefultothemany leaderswhohaveinfluenced andsupportedmethroughout myjourney.Theyencouraged metotakeonnew opportunities,pushedmeout ofmycomfortzoneconstantly, andguidedme.Althoughmy journeyhasnotbeen straightforward,thechallenges Ifacedhavemademethe personIamtoday,andeach partofmyjourneyhastaught menewskills.Thishasgivenme agilityandresilience,andIlook forwardtothenextpartofmy journey.

Toallthosecontemplating thenextstepsintheirjourneys, Iencourageyoutotake ownershipofyourcareerand

Mostimportantly,surround yourselfwithpeoplewhowill supportandguideyou.

2 BC:HowisAbsaactively inspiringinclusionfor others?

MK:Creatingadiverseand inclusiveworkplaceiscrucialfor acompany’slongevity,notjust intermsofattractingtalent, butalsoforbusinessefficiency, success,andprofitability. However,achievingadiverse andinclusiveorganisation canbechallenging,andsome initiativesaimedatpromoting diversitycanendupexcluding certainindividuals,causing negativereactionsandfear. Therefore,everyoneshould beapartofthejourney.

Absa,likemostcompanies, hasbeenfocusingoncreating aninclusiveanddiverse environmentoverthepast fewyears.Severalinitiatives areunderway,andmany peoplearesteppingupto supportthem.

Theorganisationhasspecific workinggroupsacrossthe groupthataimtocreate adiverseandinclusive environmentandensurethat thevoicesofallcolleagues areheard.

Asaleader,Ihavebeen involvedinmanyinitiativesover thepastfewyears,especially asIhaveprogressedinmy career.

Ibelieveinthesayingby BonangMohale“liftasyourise,” whichmeansthatweshould activelysupportyoungleaders intheirjourneysandnot“kick theladderdown”oncewehave achievedcertainmilestonesin ourcareers.

Imentorseveralyoung leadersacrossdifferent countries,providingasounding boardforthemandsharing myjourneyandhowIapproach certaindecisionsandstagesin mycareer.Ihavelearnedalot fromthoseImentor,andI encourageallleaderstoget involvedinmentoringprograms bothwithinandbeyondtheir organisations.

Ihavealsobeenactively involvedinforumswithin theorganisation,suchasthe CorporateandInvestmentBank BankingonWomeninitiative, wherewefocusontopics suchasthegenderpaygap, representation,andbuilding anetworkforwomenwithin thebusiness.

Iwaspartofinitiatingthe CorporateTransactional BankingPanAfricawomen’s forumlastyearwiththehelpof someamazingleadersinthe business.

Althoughthisisawomen’s forum,weareactively engagingmenacrossthe organisationtogettheirviews andinputintotheprocessand ensuretheyfeelpartofthe changewearelookingto achieve.Alliesareanimportant partofprogress.

Considerableprogresshas beenmadearoundthegender paygap,increasing representation,gender-based violence,andaddressingthe unconsciousbiasweallhave. However,thereisstillalotof worktobedone,andweneed morepeopletogetinvolved.

3 BC:Weallliketostrive forinclusivityinour companiesandindustries, butwhatmakesitso difficulttobetruly inclusive?Howdowe accountforthedifferent obstaclesandbarriers thatmanyindividuals face?

MK:Theindustryismaking satisfactoryprogressbutthere isstillawaytogotoachieve diversity,particularlyatsenior levels.Whilewomenmakeup morethanhalfoftheworkforce, theyaretypicallyconcentrated injuniorandmiddle management.

Representationatexecutive levelsremainslowandmany organisationsarenotdoing enoughtounderstandthedata aroundthedevelopmentand progressionoffemale leadership.Thismeansthat manycompaniesarestillnot creatingenvironments conducivetodevelopingand retainingstrongfemaleleaders.

Researchindicatesthatwithout specificinitiativestoaddress thedisparityinorganisations, thetrendisunlikelytoimprove. Acceleratinggenderparity initiativestoensurethebanking industrycanrealiseitsoptimum businessbenefitswillrequire decisiveactionatan organisationallevel. Furthermore,strong commitmentandongoing sponsorshipandsupportby executiveleadershipare imperative.

Withdiversityandinclusion growinginpopularity,itismore importantthanevertothink abouthowrecognitionsystems canbeutilisedtooptimisethe benefitsthatcomefroma diverseandinclusive workplace.Morecompaniesare focusingondiversityand inclusionwhenitcomesto ethnicity,genderidentity,sexual orientation,andothersocial factorstomaximisesuccess.

4 5 BC:AsweapproachIWD, isthereastorythatyou wouldliketosharewith theindustryabout successesyouhave experiencedduringyour journey?

MK:Ibelievethateveryone’s journeyisunique,andwhathas beenencouragingduringmy ownjourneyistheincreasing diversitywithintheindustry. Lookingback10or15yearsago, itlookedquitedifferentfrom whatIseetoday.Thereisnow greaterrepresentationof diverseindividualsinsenior roles,forums,conferences,and someexcellentinitiativesto supportleadersontheirjourney andcreatetherightlevelsof networks.

However,weneedtoensure thatthereiscontinuedfocus onthis.Throughoutmycareer, Ihavebeenluckyenoughtobe surroundedbybothmaleand femaleleaderswhohave supportedme.Itisimportantto rememberthatweshouldnot justrelyonfemaleleadersto addressissuesarounddiversity andinclusion.

Therearealsomanygreat maleleaderswhoareactively makingadifferenceandbring valuableperspectivesand insightstotheconversation.

BC:Wastherealesson youtookawayfromyour journeythatyouthinkwill helpothers?

MK:Advancinginyourcareer requiresmorethanhardwork andtechnicalcompetency. Toachievecareergrowth,you needtobebold,takecontrol ofyourcareermoves,and demonstrateyourabilityby takingonnewchallenges. Donothesitatetoraiseyour handforstretchprojects oropportunities.

Evenifthingsdonotwork outasplanned,learnfromyour experiences,andmoveforward withapositiveattitude.While takingrisksisessential,itisalso importanttoremainauthentic andunderstandhowthe organisationworks.Building networksandpresenting yourselfwell,bothin appearanceandconduct,can helpyouclimbtheladderof success.

Itisnaturaltofeelscaredwhen takingonanewroleorproject. However,growthrequires experiencingnewsituations, learningnewskills,andmaking newcontacts.Toovercome self-limitingbeliefs,youmust firstrecogniseandunderstand them.

Bychallengingandre-framing yourbeliefs,youcanchange yourmindsetpositively.Overall, advancinginyourcareertakes effortandawillingnesstotake risks.Butwiththerightmindset andapproach,youcanachieve yourgoalsandreachnew heights.

JohannaHill DeputyDirectorGeneral WorldTradeOrganization(WTO)

DDGHill:Empowering womenthroughglobal trade

TradeFinanceGlobalhadthehonourtohost DeputyDirectorGeneralJohannaHill,whogave akeynoteaddressattheeveningevent.

TradeFinanceGlobalhostedourannualWomeninTrade, Treasury&PaymentseventattheLansdowneClubinLondon. Over60femaleleadersintheindustrycametogethertocelebrate theachievementsofallwomenacrossthetheindustryandworld.

Attheevent,TradeFinanceGlobalhadthehonourtohostDeputy DirectorGeneralJohannaHill,whogaveakeynoteaddressatthe eveningevent.

Goodevening,ladies andgentlemen,dearfriends.

Letmestartbythanking TradeFinanceGlobal,as wellasitspartners,theAsian DevelopmentBankandthe InternationalFinance Corporation,fororganising thisevent.Theeventthat highlightsthevalueofwomen intheglobaleconomyand theimportanceofeconomic inclusionforwomen.Itisan honourtobeherewithyou tonight,especiallyhaving heardduringtheroundtables yourinspiringstoriesand contributions.

GivenmyroleattheWTO,it shouldnotcomeasasurprise thattradewilltakecentrestage inmyremarks.Also,tradeisa

valuabletoolthatcanpromote socialandeconomicinclusion ofwomen.

Firmsthattradeemploymore women.Accordingtoajoint studybytheWTOandthe WorldBank,womencomprise 33%oftheworkforceofexport firms.Thisismorecompared with24%ofnon-exportingfirms.

Tradefirmsalsoofferbetter remunerationtowomen. Thoseworkinginexportorientedcompaniescollect a10-20%wagepremiumover theaveragewageinWestern Europe.

InSub-SaharanAfrica,this figureisashighas34%.Trade firmsarealsomorelikelyto employwomenformally,

providingeconomicstabilityfor theirfamiliesandcommunities.

Asyoucansee,tradehelps boosttheeconomicinclusion ofwomen.However,the internationaltradingsystem isundergoingsignificant changes.Soweneedtoensure thatitsfutureholdsthepromise ofabetterlife,inparticularfor women.

AttheWTO,webelievethatthe futureoftrade,inadditionto beinggreen,isinclusiveand digital.Ipersonallythinkthat itwillalsobeservicestrade. Iwouldlikethistobethefocus ofmymessagetoyoutoday. Iwouldliketoshowyouthat digitaltradeandtrade-in servicesareparticularly powerfultoolsofinclusion forwomen.

Letmestartwiththeformer andtakeyouonajourneyto thetropicalislandofBali.This famousislandthatmanyknow fromEat,PrayandLove,isalso wellknownforitscocoaand coffee.

Cocoaandcoffeefarmersare strugglingfinanciallydespite thehighpricesofthefinal product.Accordingtothe FairtradeFoundation,cocoa farmersearnonaveragejust 6%ofthefinalvalueofa chocolatebar.

Buttoday,thanksto blockchain-basedtechnology, femalefarmersinBalican connecttonewmarketsand directlyaccessfinancial services.Theycanalsotrade directlywithexportersand producers,ensuringafairprice fortheirproduct.

Theirstoryisnotanisolated case.AccordingtoEtsy,eight intensellersontheplatform arewomen.ForShopify,this numberisjustabove50%. Sowhiletheexactfiguresdiffer dependingontheplatform, theseandotherexamples suggestthatwomen entrepreneursarerelatively morepresentonlinethan offline.

Whyisitso?Areweparticularly skilledine-commerce?

Theanswerismuchsimpler. Digitaltradecanprovide womenwithincreasedaccess toglobalmarketsandflexible workopportunities.Itcan removetraditionalmarket entrybarriers,includingthose relatedtotimeandmobility constraints.Inotherwords, digitaltradeisparticularly

helpfulinovercoming limitationsassociated withgenderbias.

Digitaltradecanalsomake availabletowomenfinance mechanismsthatbypassthe traditionalbarrierstocapital. Technology-enableddigital lending,workingcapitaland crowdfundingplatformsare examplesofhowdigital trade-inservicescanofferan alternativemeanstoaddress women’sfinancialconstraints.

Thisbringsmetomysecond point,whichistrade-inservices. Accordingtoarecent donebytheWTOandtheWorld Bank,theglobalservicessector accountsfortwo-thirdsofthe worldwideoutputandhalfof employment.Thisismorethan industryandagriculture combined.

In2021,threeinfivewomen wereemployedinservices. Women-ledfirmshavealso moresuccessintheservices sector,especiallythose deliveredremotelyorover digitalplatforms.Thissuggests thatsomegender-specific barrierstofemale entrepreneurshipmayprove lessonerousthaninindustry.

Butwhiletradeinservices canprovidemoreandbetter economicopportunitiesfor women,itisnotbias-free. ArecentWTOreportshowsthat tradecostsarehigherinmore femalelabour-intensive services.

Thisincludescostsrelatedto regulatoryandtradepolicies. Thissuggeststhatimproving theregulatoryclimatefortrade inservicescanhelpreducethe femalewagegap.

Itcouldbeparticularlyhelpfulin providingalternativemeansof addressingthefinancial constraintsoffemale entrepreneurs.

Sincewetoucheduponspecific projectssupportingwomen’s economicinclusion,letmesay afewwordsaboutothersuch initiativesattheWTO.

Still,onthesubjectofaccess tofinance,theWTOandthe InternationalTradeCentre launchedjointlyatMC13a$50 millionfundtosupportwomen exporters.TheWomenExporters intheDigitalEconomy(WEIDE) willprovidewomen-led businessesindeveloping economiesandLDCswiththe resourcesneededtoadopt digitaltechnologies.

Anothereventheldduring theMinisterialConference showcasedthepotentialof digitaltradeforgrowing economiesandimproving livelihoodsinAfrica.Thejoint projectoftheWTOandthe WorldBankaimsatanalysing thegapsindigitaltrade frameworksandaddressing themthroughcapacitybuilding andinfrastructuresupport.

Digitaltradecouldprove particularlybeneficialfor MSMEs,especiallythoserun bywomen.

AccordingtotheWTOandthe WorldBank,threeineveryfour firmstradingexclusively throughe-commercein Africaareownedbywomen.

Since2020,theInformal WorkingGrouponTradeand Genderhassoughttointensify effortstoincreasewomen’s participationinglobaltrade.

TheWTOSecretariatactively supportsMembersinthiswork throughanumberofinitiatives.

WelaunchedaGender ResearchHubtoinform discussionsacrossWTObodies withresearchfindings.Last year,theWTOpublisheda reportonMakingTradeWorkfor Women.Itsetsoutthekey conclusionsofthefirstWorld TradeCongressonGender,held in2022.

TheWTOalsooffers governmentalofficialstraining ontradeandgenderissues.All ofthisistohelpMembers integrategenderintotheirtrade policies.

Ifwewanttoclose,oratleast narrowthegendergapintrade weneedtointensifyefforts acrosstheboard.Butifwewant tobeeffective,wemustfocus onimprovingtheregulatory frameworkfordigitaltradeand tradeinservices.Becauseof this,thefutureoftradeandthe futureofwomenintrade.

CarmenRamirez

RelationshipManager, TradeandSupplyChain

FinanceProgram

AsianDevelopmentBank(ADB)

Empowermentthrough inclusion:ADB’smission forequitabletrade

HearfromNehaNoronhaandCarmenMaria RamirezOrtizontheAsianDevelopmentBank’s worktomaketradeamoreinclusiveindustry!

UnitHead,SouthAsia, TradeandSupplyChain FinanceProgram

AsianDevelopmentBank(ADB)

AtTradeFinanceGlobal’s annualWomeninTrade, Treasury,andPayments (WITPP)eventinLondon,Neha Noronha(NN),UnitHead,South AsiaspokewithCarmenMaria RamirezOrtiz(CR),Relationship Manager,bothfromtheTrade andSupplyChainFinance ProgramattheAsian DevelopmentBank(ADB),to discusshowtoinspireinclusion andmaketradeanequitable placetoworkforeveryone.

Mentorshipand rolemodeling

NN:Canyougiveusaquick introductionastowhatyou doattheADB?

CR:I’mresponsibleforscaling thesupplychainfinance(SCF) businessinAsiaandthePacific. ThismeansIworkondeploying risk-sharingarrangementsand developingnewsupplychain financeproductstoaddressthe tradefinancegap.

Financialinnovationiscrucial foraddressingthetrade financegap,especiallyfor small-andmedium-sized enterprises(SMEs).

SMEsarethebackboneofmost economies,butunfortunately, theyarealsothemostaffected bythetradefinancegap.

Toaddressthischallenge,

NehaNoronha

weareseekingtodevelopa frameworkfordeep-tiersupply chainfinance.Thisproductwill beaninnovativesolutionto supportthoseSMEsthatare deeperdownintheglobal supplychain.

Weareveryexcitedaboutthis spacebecausewebelieveit willhavegreatpotentialtodrive liquiditytothoseunderserved segmentsoftheeconomyand enhancetransparency.

Ifyouareinterestedinlearning moreaboutthis,theADBwillbe publishinganindustryguideline veryshortly,sostaytuned.

Tradedigitalisationat themultilaterallevel

CR:Thedigitalisationofglobal tradewillbetransformative, butitwillneverhappenunless governmentsstepforward andadoptlegislationthat

aselectronicbillsoflading (eBL).Wehavealreadyseen somecountries–suchasthe UnitedKingdomandSingapore –taketheleadonthisand

weactivelypromotethistype oflegislation–theUNCITRAL ModelLawonElectronic TransferableRecords(MLETR) –throughcapacitybuilding andtechnicalassistance.

Ourobjectiveistoensure thatdevelopingAsiaisnot leftbehind.

Wearetryingtogatheran arrayofstakeholders–from multilateraldevelopment bankstootherregional organisations–tojoinefforts andincentivisetheprivate sectorandgovernments tomoveforwardwiththis agenda.

Inspiringthenext generationoftrade financeprofessionals

NN:Asayoungprofessional comingintothespace,what advicewouldyougivetonew peoplejoiningtradefinance toinspirethemtojointrade finance?

CR:Tradefinanceistheengine behindtheglobaleconomy. Itiswhatfuelsgrowth, prosperity,andjobcreation.

Weneedtohighlighta developmentalangle,which isnaturalfromtrade,tofoster moreyoungprofessionalsto jointheindustry.

Reflectingonmyprevious workintreasuryandseeingthe impactinday-to-daybusiness, I’mveryhappytobeonthis sideofthecoinbecausetrade financeisaboutsupporting businessestocrossborders toempowerthemselves.

It’sbeautifulthattradefinance notonlyprovidesacareer prospectbutalsogivesyou anopportunitytomakean impactinyourday-to-dayjob. Itisagreatdeal.

Inspireinclusion

NN:Inspireinclusionisthis year’sInternationalWomen’s Daytheme.Whatdoesthat meanforyou?

CR:Tome,inspireinclusion meansempowerment. It’saboutgrantingyourselfand othersthefreedomtogrow,to learn,tostumble,andtomake mistakeswithoutthefearthat youwillbejudged,irrespective ofyourgender,yourorigin,or evenyourprofessional background.

Tome,itentailsthepowerand theconfidencethatwhenyou thinkabouttransitioningnot onlyprofessionalcareersbut alsomaybecountriesor

personalchoice,youwillbe receivedwithanopenmind.

That’sthemostpowerfulgift anyonecangivetoyou,oryou cangivetoothers:thefact thatyouwillbeunbiasedin welcomingthatperson.

MarilynBlattner-Hoyle

InternationalWomen’sDay 2024:Breathinginclusion

Themagicofbreathingrightwithfunctional exerciseempowersmetostayincludedinthe workforcethroughpregnancyandparenthood.

It’sInternationalWomen’sDay 2024.The“#InspireInclusion” themeremindsusthat“when womenthemselvesareinspired tobeincluded,there’sasense ofbelonging,relevanceand empowerment”.

Thisgotmethinking–what inspiresmetobeincluded?

WhileIwasinthefinalstages ofmysecondpregnancy,one ofmyteammembersasked “Howdoyoukeepupthe energy?”asiftherewassome

magictomyresilienceasmy bellygrewwithmylittleboy. Isaid,“Well…Igotobedreally early.AndIexercise15minutes aday”.

Butthereismoretothat story.Noneofuscantackle everythingalone,weneed asupportsystem.Byhaving asupportsystem,wecanmake ourselves,andeveryoneelse aroundusbetteraswell.

MeetCoachJoanie.Sheismy magictricktoinclusion.

Marilyn:WelcomeCoach Joanie,girl-bossownerof specialistonlineexercise company‘Transformation Nation’.SoCoachJoanie, howdoyoudescribeyourjob?

CoachJoanie:Iamanexpert pre-andpostnatalcoach. Manypeopleassumewhen theybecomepregnantor parentstheyhavetosacrifice theirbodyhealthandlifestyle freedomforthebaby.Iliketo saybackpainisnot‘partof thejourney’.

Mylifelongmissionistoguide clientstomovetheirbodies tohelpwiththeirparenthood journeys.Weworktogetherto reducetheimpactofbackpain, pelvicfloordysfunction,lossof bladdercontrol,pelvicgirdle pain,sciatica,diastasisrecti, strengthlossandmore.

Marilyn:CoachJoanie,you inspiremetostayincludedin theworkforcewithenergy. Didyourealisethatyour workimpactsinclusionin theworkforceaswell?

CoachJoanie:Welldeskjobrelatedpainandworkplace stresscanoftenleadustofeel lessincluded.Aniceexampleof thisisinversebreathing,which iscommoninofficeworkers andcanbearealenergy drainer.

YouwillrememberMarilyn,that bothyouandyourhusband wereinversebreathingwhenI metyou.Bybreathinginamore empoweringway,weenergise andgetthebodyworkingwell. Thisallowswomenandmento stayempoweredevenwhileat theirdesks.

Marilyn:CoachJoanie,can youtakeusthroughatypical coachingexperienceoninverse breathing?

CoachJoanie:Readers,take amomenttobreathewithout thinkingtoomuchaboutit. Considerwherethebreathis landinginyourbody.Then considerwhatishappening withyourbellywhenyou breatheinandbreatheout…

First,weliketoseethebreath movingthebelly.Yourbreath especiallywhenatadesk,may beuphigherlikeinyourchest.

Soweworkonthatinmy coachingsessions.

Then,ontheinhale,weliketo feelthebellyreleaseandriseso thatthebreathegoeslowinto thebellyandthecoremuscles relax.

Ontheexhale,wethenliketo seethebellyclosingdowninto thecore.

Ifyourbreathpatternisthe oppositeofthis,itiscalled inversebreathing.Tryswitching totheabove,andseehowyou feel.Itcanbereallytoughto switchatfirst.

Marilyn:Thiswasgamechangingforme.

CoachJoanie:Oncewehave thecorrectbreathing technique,exercisecanbe quickyeteffective,andusually dailytasksthemselvesbecome anexercise,likepickingupa baby.Oraboxofdocuments. Orjustsittingatadesk.

Marilyn:Isthisonlyforwomen? Andonlyforparenthood?

CoachJoanie:Mostofmy clientsarewomen,butmen oftenneedthissupporttoo.If youhavebackpainwithouta notableinjury,itmaybeyour breathing,combinedwiththe noveltyofmovementswithkids orsittingforlongperiodsata desk.Reallyanyonecanbenefit. Thesetricksaremeantto inspireinclusionforeveryone.

Marilyn:Ihadasessionon effectivepublicspeaking notlongafteroneofourfirst sessions.Itwasinteresting,as again,theprepforgenerating thecalmandgravitasforpublic speakingwasbellybreathing.

Marilyn:Sinceyourcoaching canbesoempoweringfor workplaceinclusion,doany companiessofarofferthese typesofcoachingopportunities aspartoftheirdiversityand inclusionprograms?

CoachJoanie:Yessome companiesdo,butitcouldbe morecommon.Companies shouldconsideritasacosteffectivewaytoinspire parentsandnon-parentsto stayenergisedandhealthy intheirlifeandworkjourneys.

Marilyn:Doyouhaveanylast recommendationsforinspiring inclusion?

CoachJoanie:Youcanhave ahealthyactivelifestyle throughpregnancyand parenthood.Andwhileworking atadesk.Youdon’thaveto assumebackpainisinevitable orthatyouwillhavetostop exercisingduringpregnancy.

Breathingrightandexercising justfor15minuteseveryday makesmefeelreadyforaction atworkandbeyond.

CoachJoanieismymagictrick toinclusion.Whatisyours?

BarryTooker Principal TranscationBanker.com

AkhilRao ManagingDirector NthException

TheimpactsofISO20022on transactionbanking 4.1

Toaddressthesechallengesandmeetthe needsofourclients,amodern,structured, openandpervasivepaymentslanguage isnowrequired.

Thepaymentsecosystem continuestorapidlychange andevolve.Thisisbeingdriven byincreasingpressurefrom regulators,intensecompetition fromnewentrantsand customerswhonowexpect paymentstobeinstant, frictionlessandaccount-toaccount.Toaddressthese challengesandmeetthe needsofourclients,a modern,structured,openand pervasivepaymentslanguage isnowrequired.

WhatIsISO20022?

Forover40yearstheMT standardhasenabledindustry automation,reducingthe costandriskofcross-border business,andenabling thedevelopmentofthe correspondentbankingsystem onwhichworldtradedepends.

Today,around28millionMT messagesareexchangedon theSwiftnetworkeveryday. Butafter40years,MTis beginningtoshowitsage.

MTwasdesignedatatime whenstorageandbandwidth costmorethantheydotoday, emphasisingbrevityoverthe completenessorreadability ofdata.

ISO20022wasintroducedby theInternationalOrganization forStandardizationin2004.Itis anopenandgeneral-purpose globalfinancialelectronic communicationsstandard.The ISO20022messagestandard isadatalibraryofbusiness componentsfromwhich messagescanbedefined.

TheISO20022message standardprovidesflexibility aspaymentmessagescanbe adaptedovertimetoevolving requirements.Itsupports structured,well-definedand data-richpaymentmessaging. Thisimprovesthequality ofpaymentinformation containedinthemessage.

Adoptionfactors

ThesuccessofISO20022 amongstmarket infrastructureshasled toincreasingcommunity demandforISO20022for cross-borderbusiness. Thereareseveralreasons forthis,particularlyfor internationalpayments:

ISO20022

AdoptionFactors

KeyBenefitsofISO20022

TheISO20022message standarddeliversbenefitstoall usersthroughoutthepayments chain.IntheHVPS,thebenefits arerealisedbythefinancial institutionsandtheircorporate clientswhosendandreceive thesemessages.

Overtime,customersare expectedtobenefitfromdatarichpayments,moreefficient andlower-costpayment processing,andenhanced customerservicessuchas improvedremittanceservices. Amongthebenefitsfinancial institutionsmaygainfrom themigrationtotheISO20022 messagestandardareshown beside.

KeyConsiderations

ISO20022ismorethan atechnologyinvestment. Itprovidesmoreremittance informationtoimprove reconciliationforclients;makes paymentprocessingfasterwith consistentandstructureddata acrosstheend-to-end paymentchain;andimproves theefficacyofcompliance controlswithallpaymentactors identifiedwithgranulardetails.

Datatruncationduring coexistenceofoldand newmessagestandards

Duringthecoexistenceperiod, financialinstitutionswill translatepaymentmessages betweenSwiftMTandISO20022 standards.Truncationmay occurwhentranslatingtoMT, potentiallyaffecting compliancescreening.

Institutionsmustensurefull messagedataisusedfor monitoringandscreening. FromMarch2023,HVPS intermediariesreceivingISO 20022messagesforcrossborderpaymentsmustpass onthecompleteISO20022 messageforprocessing.

TranslationtoMTforHVPS processingrisksdatatruncation duetoISO20022’sricher content.Thesemessageswere tobetranslatedintoanMT messageforprocessing throughHVPS.

Scale,timingand competingpriorities

Themigrationinvolves significantworkforfinancial institutionsandpotentiallytheir corporatecustomersoveran extendedperiod.

Thenewdatastructureandrich paymentinformationimpact arangeofprocesses,including monitoring,screeningand analysisofpayments,with flow-oneffectsforarange ofsupportingsystems.

Thesesystemsmayneedto bemodifiedtoprocessISO 20022transactions,and enhancedtobeabletofully reapthebenefitsofferedby thenewmessagestandard.

Witharangeofotherindustry projectsandinternational initiativescurrentlyunderway itisimportantthatdomestic migrationisappropriately managedtoensurethatit doesnotplaceunduepressure onparticipants,whichcould giverisetoadditionalrisks.

Alignmentand Harmonisation

Thestraight-through processingofSWIFTcrossborderpaymentsreliesonthe alignmentofHVPSmessages withthosethatwillbeusedfor SWIFTcross-borderpayments. Domesticalignmentbetween thepaymentsystemsshould beconsidered,particularlywith thelonger-termobjectiveof creatingresiliencebetween thesystems.

Adoptinginternational standardsforpublic infrastructure

Centralbanksareadopting ISO20022asthemessaging standardfornewsystems, aninternationallyaccepted standardthatenables participantsinthepayments ecosystemtosendricher informationontransactions thaninthepast.

Further,centralbanks shouldcollaboratecloselywith industrygroupsalreadyworking oninternationalstandards harmonisation,suchasthe PaymentsMarketPractice Group,whichisleadingefforts todefineusageguidelinesfor consistentuseofISO20022in cross-borderpayments.

TheadoptionofISO20022could reducecross-borderpayment frictionintwoimportantways.

1

Centralbankssharing acommonmessaging standardwillbeableto makemoretransactions andpassalongricher informationimportantfor clearingtransactions(e.g. KYCinformation,AML/CFT reporting,etc.).

2

socentralbanksshouldexpect multipleinternationalstandards toruninparallelinthenear term.

Costsmaybeasignificant impedimentsonewfinancial infrastructureandbroader modernisationprojectsshould beevaluatedinparallelwith otherprioritiesgiveninitial implementationcosts. Byadoptingan internationalstandard forimportantfinancial infrastructure,payment providerswishingto connectwiththis infrastructurehavean economicincentiveto modernisetheirmessaging systemsandadoptnew standards.

Thisinturncould havemultipliereffects throughoutthebroader ecosystem,inwhich playersusecommon standardstosend messagestoeachother andwithintheirown paymentnetworks,either throughareal-time paymentsystemor throughotheropen, interoperablenetworks. Finally,adoptingthe samestandardasother paymentsystemsreduces thecostsassociatedwith integratingwiththeother systems.

Modernisationwillbe costlyforCentralBank participants,especiallyfor largerfinancialinstitutions,

International Developments

Overthepastdecade,there hasbeenaninternational pushtomigratetoISO20022 messagingfromanumberof keyFMIs.Swiftestimatesthatby 2025,87%ofthevalueand79% ofthevolumeofhigh-value domesticpaymentsmessaging worldwidewilluseISO20022.

Anumberofthemigration projectsarebeingcompleted aspartofalargerinfrastructure refresh.

SWIFTISO20022 migrationforcrossborderpayments

SwiftandSwiftCBPR+listed vendorsfacilitatethe coexistenceofISO20022and MTmessagestandardsuntil 2025.Post-transition,onlyISO 20022willbesupported,with internaltranslationscontinuing duringsystemupgrades.

T2(EUR)

EURO1(EUR)

CHAPS(GBP)

SAMOS(ZAR)

CHIPS(USD)

FEDWIRE(USD)

FEDNOW(USD)

LYNX(CAD)

RTR(CAD)

CHATS(HKD)

MEPS+(SGD)

BAHTNET(THB)

HVCS(AUD)

Swiftwillceasesupportfor MTCategories1,2,and9.ISO 20022’sadoptionhasenhanced paymentsystemslikeFedNow, TCHRTP,NPP,FAST,andSwish, enablingefficient,data-rich processing.Notably,itallows forupto240charactersof remittanceinformation,a significantimprovementfrom previouslimits,enhancing paymentflexibilityand efficiency.

ISO20022hastransformative impactsontransaction banking,driving standardisation,automation, interoperability,innovation, andefficiencyacrosspayment andtradeprocesses,cash managementactivities, andclientservices.

Transactionbanksneedto embraceISO20022structured datatocapitaliseonthe benefitsandopportunities itoffersforenhancingtheir operations,services,and competitivenessinthe transactionbanking landscape.

Keepingpacewith payments:Lessonslearned fromadynamiclandscape 4.2

DeepaSinha VPPayments&FinancialCrimes BAFT

HearfromDeepaSinha,VPPayments& FinancialCrimesatBAFTonthetransforming paymentsindustryandthekeytopics tolookfor.

Thepaymentsindustry isundergoingaprofound transformation,fueledby technologicaladvancements, shiftingconsumerexpectations, andregulatorydevelopments. ISOimplementations,instant andreal-timePayments, digitalcurrencies,regulatory compliance,andfinancial crimeconcernsareallonthe topoftheagendathisyear andforthenearfuture.

Aswenavigatethiscomplex ecosystem,it’sessentialto reflectonthelessonslearned, anticipatefuturechallenges, andembraceopportunities forinnovation.Inthisthought leadershiparticle,welookat keyinitiativesandinsights shapingthepayments landscape,drawingfrom recentpublicationsbyBAFT (BankersAssociationfor FinanceandTrade).

ISO20022Migrations: LessonsLearned

InJanuary2024,BAFTreleased awhitepaperhighlighting lessonslearnedfromISO20022 migrations.TheadoptionofISO 20022,aglobalmessaging

standardforfinancial transactions,represents asignificantmilestonein modernisingpaymentsystems worldwide.

However,themigration processcomeswithitsshareof challenges,includingtechnical complexities,datamapping issues,andcoordination amongstakeholders.

Thepaper’stargetaudience arethosebankswhohavenot yetstartedtheirISOmigration journey,orthosewhoareinthe middleofit.Thepaperisthe collaborativeworkofseveral banks’experiencestoguide othersthroughthese challenges.

Akeyinsightfromthewhite paperhighlightsthe significanceofrobustproject managementandtheneedfor

Effectivecommunicationand coordinationhelpmitigaterisks andensureasmoothtransition toISO20022standards. Additionally,investingin trainingandeducationforstaff membersisvitaltoenhance awarenessandproficiencyin handlingthenewmessaging format.

Unevenregulationsin thepaymentsindustry

Despitetheprogressmade instandardisation,regulatory frameworksgoverningthe paymentsindustryremain fragmentedanduneven. BAFTisactivelyengagedin addressingtheseregulatory disparitiestofosteramore cohesiveandtransparent environmentforpayments players,includingbanksand non-bankfinancialinstitutions.

Byadvocatingforharmonised andevenregulationsacross jurisdictions,andamong banksandnon-bankfinancial institutions,BAFTaimsto facilitatecollaborationand promotefinancialinclusion onanevenplayingfieldforall.

Thepaymentsroadmap andG20initiatives

BAFT’sPaymentsRoadmap alignswiththepriorities outlinedbytheG20toenhance theefficiency,resilience,and securityofpaymentsystems globally.

Thisstrategicinitiative encompassesarangeof objectives,includingpromoting interoperability,leveraging emergingtechnologies,and enhancingcybersecurity measures.

ByaligningwithG20initiatives, BAFTseekstodriveconsensus andcollaborationamong policymakers,regulators, andindustrystakeholders. Itisalsothefirstofitskindas acollaborativeeffortamong bankstooutlinetheirpayments initiativesinplacenow,and whattheyhaveplannedinthe nearfuture.

Digitalcurrenciesand financialcrimeconcerns

Theproliferationofdigital currenciespresentsboth opportunitiesandchallenges forthepaymentsindustry. BAFTisactivelyresearching theimplicationsofdigital currenciesonfinancialcrime preventionandcompliance measures.Asdigitalpayment methodsgaintraction, concernsaboutmoney laundering,terroristfinancing, andfraudhavebecomemore pronounced.

BAFT’swhitepaperonDigital CurrenciesandFinancial Crimes,whichwillbepublished bysummer2024,willaimto provideinsightsintomitigating risksassociatedwiththe adoptionofdigitalcurrencies. Byleveragingadvanced analytics,artificialintelligence, andblockchaintechnology, financialinstitutionscan enhancetheirabilitytodetect

andpreventillicitactivities. Moreover,collaboration betweenthepublicandprivate sectorsisessentialtodevelop robustregulatoryframeworks thatbalanceinnovationwith security.

ISO20022Migrations: Guidanceandbest practices

Asasequeltothelessons learnedpaper,BAFTis developingaguidanceand bestpracticeswhitepaper, whichwillincludeusecases,for ISO20022migrationstosupport financialinstitutionsthroughout thetransitionprocess.

Thiscomprehensiveresource willofferpracticalinsights intodatamapping,testing procedures,andchange managementstrategies.

Byleveragingthecollective expertiseofindustry stakeholders,BAFTaimsto provideaguidetofacilitate aseamlessmigrationtoISO 20022standards.

Sanctions: Lessonslearned

Initsongoingcommitment tofosteringbestpractices andenhancingcompliance standardswithinthefinancial

Frommitigatingrisks associatedwithsanctions violationstoimplementing robustcomplianceframeworks, thiswhitepaperwilloffer guidanceforindustry professionalsstrivingtouphold thehighestintegrityand regulatorycompliance

Keydriversforshaping thefutureofpayments

Thepaymentsindustryis undergoingaperiodof unprecedentedchange,driven bytechnologicalinnovation, regulatoryreform,andevolving customerpreferences.

Aswenavigatethisdynamic landscape,collaboration, innovation,andadaptability areessentialtodrivingprogress andensuringtheresilienceof paymentsystems.

Byharnessinginsightsfrom thesevariouswhitepapers, andfosteringcollaboration andcooperation,financial institutionscannavigate challenges,capitaliseon opportunities,andshapethe futureofpayments.

Together,wecanbuildamore inclusive,efficient,andsecure paymentsecosystemthat meetstheneedsofarapidly evolvingdigitaleconomy.

Melton SeniorVicePresident

TheClearingHouse

Thefutureprospectsofthe RTP®network,easingthe ISO20022transition 4.3

Learnaboutthefutureofcross-border paymentsandthetransformativeimpactofthe RTP®network.Stayupdatedonrecent regulatorychanges.

DeepeshPatel EditorialDirector TradeFinanceGlobal(TFG)

AtBAFT’s2024International TradeandPayments ConferenceinWashington,D.C., TFG’sDeepeshPatelsatdown withKeithMelton,SeniorVice PresidentandRTP®Strategic ProgrammeManager,The ClearingHouse(TCH),to discussthetransformative impactandprospectsofthe RTP®network,recentregulatory updates,andthefutureof cross-borderpayments.

WhatisTheClearing House?

TheClearingHousehas operatedwithintheUnited Statesprivatesectorforalong time,over171years.Infact,the UnitedStatesonlyhad31states whenTCHfirstbegan operations.

Nowin2024,TCHfunctions asaprivatesectorpayments operator,withnetworksforwire,

Keith

automatedclearinghouse (ACH),real-timepayments,as wellaschequeimageclearing.

Meltonsaid,“We’vebeenin thisbusinessforalongtime, andwe’vebeendriving collaborationandinnovationin thespace…wewereactuallythe FedbeforetherewasaFederal Reserve,andworkingwiththe financialinstitutionsintimes ofcrisis…andfindingmore efficientwaystoclearcheques, and,morerecently,really collaboratingwiththeindustry, thestakeholders,around real-timepayments.”

TheRTPnetworkand industrycollaboration

TheRTPnetworkisaretailrealtimegrosssettlementsystem. TheClearingHouselaunched thisplatformroughlysixyears ago,whichhelpedusherinthe eraofinstantpaymentsinthe US.

Meltonsaid,“It’stransactionby transaction,clearing,settling, andhavingfundsavailable instantly.Itisuniqueinnaturein thatbothsenderandreceiver canseeconfirmationthatthe transactioniscompleteand fundavailabilityinstantly.It’s irrevocableinnature.It’sa creditpushsystem,andIthink it’simportanttonotethatit’s alsobasedonaverydata-rich messagingsetbasedonISO 20022.”

Thecreationandadoptionof theRTPnetworkisasignificant stepforwardforthepayments industry.Itisthiscollaboration thatenablestheRTPtobesuch asuccessfulsystem.

Naturally,TCHcollaborateswith otherplayerswithinthewider paymentsecosystemincluding banks,fintechs,andother vendors.

Inrecentmonths,TheClearing Househasworkedwithfinancial institutionsacrosstheUS.

Meltonsaid,“It’strulya paymentsnetworkavailable toeveryone,bothlarge institutions,smallerinstitutions, creditunions,andcommunity banks.Itisthelargestreal-time paymentsnetworkinthe country,bothfromapayments valueandreachperspective.”

Todate,TheClearingHousehas over500participantsactively involvedintheirnetwork.This accountsforroughly67%of DemandandDepositAccounts (DDA)acrossthecountry,and continuestogroweachmonth. Inthefourthquarterof2023,

TheClearingHouseprocessed 74milliontransactionsonthe RTPnetwork,representing$39 billioninvalue.Meltonsaid, “We’regrowingatabout15% perquarterontheRTPnetwork.”

Thiswasonlypossiblebecause TheClearingHouseworkedwith industrystakeholders,financial institutions,andseveralthirdpartyserviceandtechnology providerstobringthebrandnewpaymentrailtothemarket.

Butthecollaborationdoesn’t stopthere.

Tostayuptodatewiththe newestpaymenttrends,The ClearingHousealsorecently introducedatokenisation solutiontothemarkettobe abletotokeniseDDAforboth theACHnetworkaswellasthe RTPnetwork.

However,itisequallyas importanttonotonlycontinue toinnovate,buttosimply increaseaccessibilityforall institutions.Consideringthis, TCHhasworkedwiththirdpartyproviderstostreamline accesstotheRTPnetworkfor smallinstitutions,banks,and creditunions.

Challengeswith changingregulationsin thepaymentsspace

Theregulatorylandscapeis constantlychanging,anissue repeatedlyreportedatthe BAFTInternationalTradeand PaymentsConferenceasone ofthelargestchallengesfaced bytheindustry.

WithTheClearingHouse processingover$2trillionin transactionsperday,Melton said,“Ourprimaryfocusisreally workingwithourmembers,our owners,ourfinancialinstitutions thatarepartofthosenetworks. Makingsurethey’resecure, they’rereliable,andthey’re resilient,isourprimaryfocus.”

Inthisregard,TheClearing Housewatchesregulation changesveryclosely.

1033oftheDodd-FrankActon ConsumerAccesstoFinancial Records.

Butregulationisn’ttheonly industrydevelopmentthat needsattention.

TheCHIPS®networkisa high-valuepaymentsnetwork offeredbyTheClearingHouse. Itisthelargestprivatesector U.S.dollarclearingand settlementsysteminthe world,providingfastandfinal paymentsandthemost efficientliquiditysavings mechanismavailabletoday.

Meltonsaid,“TheClearing Houseisdrivingthe implementationofISO20022 forCHIPS…workingwithallofour participantsonthenetwork.” Itistargetingtheconversionto goliveinearlyAprilofthisyear.

AccordingtheMelton,the developmenthasprogressed smoothly,andthe implementationisexpected toproceedonschedule.

borderpaymentswasrecently published.Objectivesinclude decreasingcostsandfeesto 1-3%,increasingspeedfor75% oftransactionssothattheyare availablewithinonehour,and for100%ofuserstohaveaccess toatleastoneformofpayment, aswellasincreasing transparency.

Currently,theRTPnetwork isdomesticonly,but alreadymeetsmanyofthe requirementssetoutbythe G20roadmap.TheRTPnetwork pricestransactionsatfourand ahalfcentspertransactionfor sending,withanyinsuredbank orcreditunionreceivingitfor free.Allofthepaymentsare settledwithinseconds,beating theG20Roadmapobjectives.

Tohelpstaycompetitivein cross-bordertransactions, TheClearingHousecompleted aproofofconceptfor USDollar-Eurotransactions.

DanieldeBúrca

HeadofPolicyand RegulatoryAffairs ICISA

EU’sLatePayment Regulation: Exposingtheneedfor betterpublicdiscourse 4.4

TheproposedEULatePaymentsRegulationis agoodexampleofwheregreaterengagement bythetradecreditinsurancesectorcouldhave madeadifferencebeforeproblemsarose.

Theinterconnectedworld oftradefinance,tradecredit insuranceandrelatedservices canbeamysteriousone tooutsiders.Toooften, policymakersandbusinesses areunawareofthearrayof optionsavailabletothem,or thebenefitsthesectorbrings totheeconomy.Thisinturn, can–andoftendoes–lead toproblems.

Recentpolicydevelopments, suchastheproposedLate PaymentRegulationintheEU, revealagrowinggapbetween therealitiesofbusinessand finance,andtheunderstanding ofpolicymakersandthe generalpublic.

Thisgapincludeshow financingandriskprotection mechanismsbenefitbusinesses andthewidereconomy.The resultofthisinformationgapis poorregulationandultimately, lesssupportgettingthroughto thebusinessesthatneedit.

Lowerlevelsofpublic awarenessarenotonlya storyofmissedopportunities, butalsoofnegative perceptions.

Regulatorsandgovernments seektousethetoolsavailable torespondtopotentialmarket gapsastheyseethem,which mightinvolveenhancing competitivenessinspecific

sectorsorpromotinggrowth byestablishingnewtrade channels.

Whoisresponsiblefor educatingthepublic?

Inlightofthis,thetradefinance andcreditinsuranceindustries shouldbemoreactively involvedininformingsuch developmentsratherthan reactingtothem.

Buttoooften,policymakers missthebiggerpicturedespite goodintentions.It’seasyto blamethoseinchargeforthis failure,butwemustdomore asanindustrytoinformpublic discourse.

Notonlydoesthishelpclarify misunderstandings,butit ensuresthatthestrengths ofbanks,insurersandother keyfinancialinstitutionsare leveragedintheinterestofthe widereconomy.Ultimately,this canunlockfundingandrisk

Inspiteofthesechallenges, however,thelevelofeconomic supportbeinggivenbybanks andinsurersisstillenormous.

Forexample,ICISA’sestimate isthatupto15%ofworldtrade in2022wasprotectedinsome formbytradecreditinsurance. Additionally,directsupportfrom banksandfinancinghouseswill besubstantiallyhigherthan this.Despitethis,thereported tradefinancegapcontinues togrow.

AccordingtotheAsian DevelopmentBank,itstoodat nearly$2.5trillionjustlastyear. Sothismeanswefaceatwin challengeawideningtrade financegap,aswellasan insufficientunderstanding oftheworkofoursectorin addressingthis.

Atthesametime, governmentsarealsofocused onaddressingissuessuch aspoorproductivity,lower economiccompetitiveness andslowergrowth.As politicianslookincreasingly closelyattheleversofindustrial andeconomicpolicy,

itisimportantthatthey understandfullyhowtrade financeandinsurancesectors fitin.

LatePayments Regulation:Where industry

engagement couldhavehelped

TheproposedEULatePayments Regulationisagoodexample ofwheregreaterengagement bythetradecreditinsurance sectorcouldhavemadea differencebeforeproblems arose.

TheLatePaymentsRegulation wasdevelopedtoaddress negativepaymentbehaviours intheEU.Paymenttermsare currentlygovernedunder theexistingLatePayments Directive,whichsetscertain principlesuponwhichmemberstaterulesarebased.

Thismeansthateachcountry cantakeasomewhatdifferent approachtothesamequestion.

Inmanycases,thesesystems workrelativelywell,but inothers,latepayment behaviourscanleadto significantproblemsfor businesses.

Whileitimpactsallbusinesses, itisparticularlytrueforSMEs, wherethereistheadded dimensionofpotentialabuse bylargerbusinesses.Equally, thiscanalsoleadtoreliance onon-timepayment,which canlimitflexibilityandincrease frictionandcost.

Asaresult,theCommission hasputforwardaproposalfor aregulationwhichwouldaim torebalancethefieldinfavour ofSMEs,andharmonisethe approachtopaymentsacross theEU.

Theproposalsseemedtomiss themarkinawaywhichwould notonlyharmcommercewithin theEU,butcreatenew difficulties.Theproposedmain changewouldshortenthe maximumpermittedpayment timeframefortransactionsfrom theexisting60daystoonly30 days.

Moreover,undertherules today,businessescan negotiatelongerpayment termswheredoingsoisnot grosslyunfairtoeitherparty, whichwouldnotbepossible underthenewproposals. Thiscontractualfreedomis essentialforcompanieswhere workingcapital,productionand otherkeyoperationalelements don’tfitneatlywithinthe30daywindow.

Thepracticalimplicationsof suchchangeshavebecome clear,buttheimpacton

financingtradeunderthese conditionswaslargelyignored untilrecently.

InternalresearchfromICISA membershasindicatedthat changingpaymenttermsinthe proposedwaywouldgenerate anewfinancingrequirementfor SMEsofaround€2trillion.

Itisunlikelythatbankswould meetthisnewfinancing requirement.Eveniftheywere ableto,thecostofintereston thefinancingwouldhave seriousinflationaryimpactson Europeanmarkets.

WheredoestheLate PaymentsRegulation stand?

Followingthepublicationofthe LatePaymentsRegulationby

theEuropeanParliamentmust developtheirownversions.

Negotiationswillthenfollow betweenallthreebodiesto developafinalview.European electionsandsubsequent changesintheEuropean Commissionduringthe Summerwillcomplicatethe timeline,butthereispressure forprogresstobemadeprior beforethen.

Discussionswithinthe EuropeanParliamenthave beencontentiouswithdivisions emergingevenwithinpolitical groupings.Despitethis,the texthasbeendebatedand progressedthroughthe influentialInternalMarketand ConsumerProtection(IMCO) Committee.

Adraftversionwasultimately

Thisincludesoptionsfor extendingthepaymentperiod to60days,ifagreedbetween parties.Anoptiontoextendto 120daysfor“slowandseasonal goods”wasalsointroduced. ThewiderEuropeanParliament willthenvoteonthisinAprilas oneofthelastopportunities priortotheelections.

TheEuropeanCouncilwillalso developitsownthoughts,but thereisevengreateropposition therewithmemberstates understoodtobeunhappywith manyoftheprovisions.Sowe shallhavetowaitalittlelonger toseetheresultsofthese discussions.

Wehavetowaitalittlelonger toseetheresults,butit’sworth consideringhowwegottothis point.Thissituationhascome about(inpart)becausewell-

Theissueisthatagenerallack ofunderstandingofthese importantsystemshasledto sub-optimalsolutionswhich ignorefundamentalaspects.

Misunderstandingsabout financingandriskprotection arejustoneaspectofthisissue. Evengreaterinvolvementfrom banksandinsurersmightnot havecompletelypreventedthe situation.

However,greatercontinuous engagementbyoursector wouldhavewiderbenefits.This wouldleavepoliticiansand officialswithamuchclearer understandingoftheprocesses thatbusinessesgothroughto accessfinancingandtherisks theyfacedaily.

Abetter-informedpublic discourseonthis,andrelated topics,wouldlimittheneedto pushbackagainstsuch changesaftertheyhave alreadybeenproposed.It wouldalsohighlightthepositive roleourindustrycanplayin society.

There’sarisingtrendin financialregulationwhere banksandinsurersaremore andmoreexpectedto encourageimprovedpractices amongtheirclients.

Whilebusinessesare ultimatelyresponsiblefortheir ownactivities,wecannotignore ourabilitytoinfluenceclients andpolicyholders.

Thisincludesareassuchas improvingpaymentbehaviours, debtmanagementand recovery,andotherelementsof day-to-daybusiness, particularlyforSMEs

Theseeffortscanhavea positiveimpactonbanksand insurersbylimitinglosses,but theyalsoincreaseoverall economicresiliency,giving widerbenefitstothereal economy.

Morebroadly,ourindustrycan playaleadingrolewithinpublic discoursetoexplainthesteps businessescantaketoprotect themselvesandtoavoid scenarioswherelatepayment andothernegativebehaviours starttohaveanimpact.

Thiswouldmaketherelated tradefinanceandtradecredit insurancesectorsmorewidely understoodbythepublic,help regulatorsandpolicymakers graspthecomplexitiesofthe ecosysteminwhichwework, andenableustoenhancethe provisionoffinancingandtrade creditinsurancetothe community.

Inaworldofincreased misinformation,itiseveryone’s responsibilitytoimprove awarenessofthefacts.

DeepeshPatel EditorialDirector TradeFinanceGlobal(TFG)

BrianCanup AssistantEditor TradeFinanceGlobal(TFG)

Thegreatbalancingact: Makingtradeand payments

faster,cheaper, andeasierin

2024 4.5

Thejourneytowardafullydigitaland interconnectedglobaltradeecosystemis complex,particularlygiventhefragmented natureofexistingdigitalplatformsandthe diversecurrentstandards.

Thetradeandpayments industryisatacrossroadsin itsdigitalisationjourney.Recent yearshaveshownaclearshift towardsamoredigitalworld, buttherehasbeenasymmetric adoptionacrosstheindustry, unevenregulation,unintended consequences,winnersand losers.

Whiletheprogressis encouraging,thenextsteps aremarkedbytheneedfor interoperabilityanduniform adoptionofstandardssuch

asthefulladoptionof ISO20022byNovember2025.

BAFT’sinaugural2024

‘InternationalTradeand Payments’conferencecovered manytopics,butdigitalisation andthetransformationoftrade andpaymentsshonebrightly. Bringingtogetherover200 industryparticipants,itwas clearthattheevolutionofthe tradeandpaymentsindustry wasmovingahead,andthe needtotalkaboutboth,in sync,wastantamount.

Duringtheconference,the industryheardfromtradeand paymentsleaders:

AvaneeGokhale,Global HeadforTradeStrategy atSwift,

RenataVilanovaLobo, ManagingDirectorand GlobalClearingHeadof PaymentsatJ.P.Morgan,

GwynneMaster,Managing DirectorandHeadof Lending,TradeandWorking CapitalatLloydsBank,

MarcRecker,GlobalHeadof Product,InstitutionalCash ManagementatDeutsche Bank,

DeepeshPatel,Editorial Director,TradeFinance Global(moderator).

Withrealcollaboration,trade andpaymentscanbecome cheaper,moreefficient,and moreaccessibleworldwide. Theindustrycanseethepath forward,butmuchworkmust bedonebeforeclaiming victory.

Digitalisationand standardisationin tradeandpayments

Thejourneytowardafully digitalandinterconnected globaltradeecosystemis complex,particularlygiven thefragmentednatureof existingdigitalplatformsand thediversecurrentstandards. Inthepasttwoyearsalone, MarcoPolo,we.tradeand Contourhavecollapsed, leavingthedigitaltrade

worldsearchingforlongevity solutions.

Thisfragmentationposes significantchallengesto theseamlessexecutionof internationaltransactions, leadingtoinefficiencies, increasedcosts,and reducedreliability.

Gokhalesaid,“Weenvisionthe ecosystemwillcontinuetobe multi-banked,multi-network, multi-platform,multi-solution. Inordertohaveoperational efficiencies,theremustbe interoperabilitybetween thevariousnetworks.”

AdoptingISO20022iscritical torealisingthisvision,and promisesenhanceddata qualityandoperational efficienciesbystandardising financialmessagesglobally. ISO20022isthenextevolution infinancialmessaging standards,characterisedby

adoptingaunifiedlanguage andcomprehensive, structureddata.Swiftisactively transitioningitspaymentand cashmanagementmessages fromtheexistingMTformat totheISO20022standard.

ISO20022setsanew benchmarkinfinancial communication,offering unparalleleddatarichnessand interoperabilitythatstreamline globaltransactions,potentially reducingcostsandsettlement times.UnifiedbyISO20022, stakeholdersacrossthetrade andpaymentslandscape canachieveseamlessdata exchanges,minimisingerrors anddelaysandfostering innovationthroughenriched, actionableinsights.

Thisdigitalevolutionalso facilitatesamoreinclusive globaltradesystem,where businessesofallsizescan participateonanequalfooting,

drivingeconomicdevelopment andpavingthewayforafuture whereglobaltradeismore integrated,resilient,and accessibletoall.

Theroleofbanksin facilitatingsmoother tradetransactions

Bankshavebeeninstrumental inadoptingnewtechnologies andadvocatingforthe standardisationofpractices thatenhancetheefficiencyand securityofglobaltransactions.

However,asthecomplexityof globaltradeincreases,itis apparentthatthechallenges extendbeyondthecapabilities ofbanksalone;theremustbe acollaborativeeffortinvolving carriers,shippers,platforms, fintechs,andlegislation.

Reckersaid,“Ibelievethe biggestproblemthatwehave incross-borderpayments istheend-to-endcost.Ifwe collaboratewithregulators togetmoreharmonised frameworks,thecreation ofcertainmarketutilitieswill helpustobringthecostbase downaswell.”

Byfosteringcollaboration amongthisarrayof stakeholders,liketheLloyds BankandEnigiopartnership, theindustrycanworktowards creatingamoreunifiedand efficientinfrastructurethat addressestheoperational, regulatory,andcost-related challengesathand.

Furthermore,legislationcan pavethewayforadoptingnew technologiesandpracticesby settingclearguidelinesand

frameworksthatensure security,privacy,andtrust amongallpartiesinvolved.

Trustisbecomingincreasingly importantamidthecurrent widespreadglobaluncertainty.

Opportunitiesand challengesindecoupling supplychains

Theongoinggeopolitical tensionsandmacroeconomic instabilityhavecatalyseda decouplingofsupplychains.

Afterslowlyrecoveringfrom thenearshoringandsupply chainvolatilitythathappened asaresultofCOVID-19,the RussianinvasionofUkraine andtheRedSeaattacks quicklycausedanotherchain ofdisruption.

Thistrendisreshapingthe internationaltradelandscape asthevulnerabilityofthe globalsupplynetworksto political,economic,andsocial upheavalsbecomesmore apparent.

Ascountriesandcompanies grapplewiththesechallenges, thepursuitofresiliencehasled firmstoreevaluatetheir dependencyondistant suppliersandadoptamore localisedanddiversified sourcingstrategy.

Thecomplexitiesintroduced bygeopoliticaltensionsand economicuncertainties demandacoordinated responsefromallstakeholders involvedininternationaltrade

Mastersaid,“Regulatory requirementsscreamoutfor theneedforcollaboration.Ifwe lookathowwe’vehandledKYC, AML,ESG,we’vemissedabeat intermsofcollaboratingasan industrytodeliverbest-in-class outcomes.”

Thisreflectsabroader recognitionthatnavigating thechallengesofdecoupling andbuildingmoreresilient supplychainscannotbe achievedinisolation,it requiresaconcertedeffort frombusinesses,governments, andinternationalbodies.

Inthiscontext,theshifttowards decouplingandthesearchfor alternativesupplychain configurationsareintertwined

withtheneedforenhanced collaborationacrosstheboard.

Attemptingtopushback againstthedecoupling trend,(includingthefactthat amere2.1%ofbillsoflading andwaybillsincontainertrade weredigitalin2022,)Swift, DCSA,BIMCO,FIATA,andICC cametogethertocreate theFITAlliancetosecure acollectivecommitment tospearheaddigital transformation,beginning withtheimplementation ofelectronicBillsofLading.

Enhancementsin cross-borderpayments

Effortstomakecross-border paymentsfaster,cheaper,and saferhavebeenasignificant focusforthefinancialindustry, particularlyinalignmentwith theG20agendatomake tradecheaper,faster,more accessibleandtransparent.

Theseeffortsaredrivenby asharedrecognitionofthe existingshortcomingsinthe internationalpaymentssystem, oftencriticisedforitslack ofspeed,highcosts,and insufficienttransparency.

Lobosaid,“Therehasbeen alotofactionamongbanks exploringhowwecandeliver faster,cheaper,saferpayments withmoretransparency. Althoughtherehasbeenalot goingonbehindthescenes,we haveyettoseemanyconcrete resultstowardsenhancing cross-borderpayments.”

In2023,J.P.Morganpartnered withClearEyetoenhancetheir digitaltradesolutionsfortheir globalclients.ClearEye’s technologytoautomate labour-intensivetaskssuch asKYCandTBMLchecks,and distributingthisamongJ.P. Morgan’sglobalnetworkisan exampleofthebehind-thescenescollaborationthatwill eventuallypaydividendsforthe industry.

Thisreflectsacollective acknowledgementofthegap betweentheaspirationsofthe FSB’sG20roadmapfor enhancingcross-border payments,highlighting

tangibleimprovements. Despitetheslowpaceof visibleprogress,therehas beenconsiderableeffort behindthescenesto addressthesechallenges.

Levellingthe unevenplayingfield

Oneofthekeyinitiatives hasbeenthepushtowards adoptingnewmessaging standardslikeISO20022, whichaimstoreduce thefrictioninpayment processingbyensuringmore structured,harmonised andcomprehensivedata

accompanieseachtransaction. ISO20022facilitatesmore interoperablecross-border payments,reducingdata translationandtruncation issues,andoffersflexibility inusingdifferenttechnical syntaxeslikeXMLandJSON.

Thisstandardisexpectedto minimiseerrors,reducethe needformanualintervention, andenhancetheefficiency ofcross-borderpayments.

Throughstandardisation, automation,andcollaboration, thereisapathforwardto creatingaglobalpayments landscapethatisfaster, cheaper,andsafer.

estimatedthataround80% ofRTGSvolumeswillbe processedviaISO20022, withmajorpaymentmarket infrastructuresworldwide adoptingthestandard.

Butittakestheentire ecosystemtoembracethese changes.Whilelargebanks needtotaketheleadin adoptingISO20022,small banksareequallyimportantin achievingtrueinteroperability.

Amorestandardisedindustry isamoreefficientandequal industry,andthatiswhat digitalisationisultimately aimingfor.

Confrontedwiththedual challengesofadvancing digitalisationandnavigating theintricaciesofincreasingly decoupledsupplychains,the pathforwardrequirescollective action,innovation,and unwaveringcommitment toglobalstandards.

Thecompletetransitionto interoperabilitywillnotbeeasy, giventhecomplexityandreach oftheindustry.However,the expansivenetworkscanbe utilisedtopushtheISO20022 message.

BAFT’sISO20022whitepaper isanimportantstartingpoint fortheindustry.

Sharinglessonslearned, alongwiththeexperiences andchallenges,willonlyfurther theadoptionofmessaging interoperability.

Byembracingtransformative changesandfostering strategicalliances,the sectorcansurmountcurrent challenges,settingthestage forafuturewheretradeand paymentsarenotonlymore efficientandsecurebutalso universallyaccessible.

Thisvision,thoughambitious, iswithinreachthrough collectivedetermination andsharedcommitment toexcellenceandinclusivity.

BAFT,theleadingglobalfinancialservicesassociationforinternational transactionbanking,helpsbridgesolutionsacrossfinancialinstitutions, serviceproviders,andtheregulatorycommunitythatpromotesound financialpracticesenablinginnovation,efficiency,andcommercialgrowth. BAFTengagesinawiderangeoftopicsaffectingtransactionbanking, includingtradefinance,payments,andcompliance

KarrieRodriquez AssistantVicePresident FederalReserveBankofBoston

FederalReserve:Monetary policyupdate,making paymentsinstantand faster,overviewofthe FedNowService®

LearnabouttheFederalReserveBankof Boston’sFedNowServiceaswellasitsimpact onthepaymentsindustryandthewaywedo banking.

DeepeshPatel EditorialDirector TradeFinanceGlobal(TFG)

In2024,wewanteverything tobeinstant.Fromourfood deliveryservicestoourrideshareapps,weexpectspeed andefficiency.Theunderlying aspectofalloftheseservices isthepaymentsindustry.

Butthereisanentire infrastructurethatneedsto bedevelopedandmaintained tocreatetheinstantaneous paymentsthatweallwant.

AttheBAFT2024International TradeandPayments ConferenceinWashington,D.C., TFG’sDeepeshPatelwasjoined byKarrieRodriquez,Assistant VicePresidentattheFederal ReserveBankofBoston,to exploretheevolvinglandscape ofthepaymentsindustryand discusskeymacroeconomic andmonetarypolicyupdates, theFedNowService,andfaster payments.

TheFedNowService: Whatisit?

TheFedNowServiceisan instantpaymentservice launchedbytheFedin July2023.Instantpayment servicesallowconsumers andbusinessestosendand receivefundsinreal-time throughoutthedayandyear, accompaniedbyimmediate availabilityofthefundstothe receiver.

Anyfinancialinstitutionis abletosignupandofferinstant paymentservicestotheir customers.Rodriquezsaid, “There’sawiderangeof benefitswithinstantpayments, especiallyduringemergency situationsandforfamiliesliving paycheck-to-paycheck.”

Todate,607financial institutions,across46states, participateintheFedNow Service,makingitareadily

availableoptionforcustomers acrosstheUnitedStates.

Theroleofindustry collaborationinthe FedNowService

Industrycollaborationinan initiativesuchastheFedNow Servicewaskey,particularlythe roleoffeedbackfromindustry actorsinthedevelopmentof andongoingenhancementsto theservice.

TheFederalReservehad chosentodeveloptheFedNow Serviceinpartbasedonstrong industrydemandforgreater choiceandavailabilityof instantpayments.Rodriquez said,“Earlyon,weformedthe FedNowServicePilotProgram withabout120financial institutionsandorganisations thatprovidedearlyfeedbackto thedevelopmentanddesignof theFedNowService.”

Theseorganisationsalso participatedinearlytesting activitiestohelpfigureoutthe bestpathtomoveforward. Moreover,severalofthese organisationshavebecome earlyadoptersoftheFedNow Service,andmanyarestrong supportersofinstantpayment services.

Ongoingcollaborationand engagementareessentialto ensuretheFedoptimally designsfeaturesand functionalityoftheserviceto continuemeetingindustry demands.

Rodriquezsaid,“Wedohave theEcosystemAccelerator Subgroupthathaspayment processorsandcorebanking serviceprovidersacrossthe instantpaymentecosystem orinstantpaymentsingeneral. Theyprovideinputtothedesign andreleaseprioritiesofthe FedNowService.”

Serviceprovidesawaytomake efficientinstantpayments,and itwillhelpthebroaderpayment

institutionstoestablish thresholdstorejectpayments iftheyexceedcumulative valueorvelocitylevels.”

Anotherfeatureallows correspondentbankstoset limitsfordirectrespondents.

Thisfeatureassists correspondentsinmanaging theiroverallaccountwiththe FederalReserve,aswellas assistinginmanagingcredit exposurestotherespondents.

supportfraudmitigation

space,andtheFedNowService hadaroletoplayinsupporting fraudmitigation.Whilefinancial institutionsserveasthefirstline

FedNowServicelaunchedwith

Instantandfasterpayments willhaveaclearimpacton thebroaderUSfinancial systemandeconomy. Basedonsurveysfromthe FederalReserve,themajority ofconsumersandbusinesses arealreadyusingfaster payments,andtheyhave indicatedthattheyplanto usethemmorefrequentlyin thefuture.

Onthebackofthis, Rodriquezpredictstremendous growthwillbeseeninthis area,complementedby newinnovativewaysfor organisationsandcompanies toofferinstantpayments.

fraudmanagementstrategies.

continuetoenhanceourfraud tools,andoneoftheupcoming

CarterHoffman ResearchAssociate TradeFinanceGlobal(TFG)

Mexicoamendslegislation, enableselectronicfinancial documents

Asapartofthisdigitalshift,theMexican governmenthaslaidoutspecificprovisionsfor creating,issuing,andtransferringdigitalcredit instruments,leveragingtechnologytofortify datasecurityandtransactionalintegrity.

InMexico,lawmakershave approvedabillregarding electronictransactions involvingpromissorynotes, negotiableinstruments,and otherfinancialinstruments.

Thenewlegislation,which

forexecutingandenforcing financialtransactions withinMexico.

Asapartofthisdigitalshift, theMexicangovernmenthas laidoutspecificprovisions forcreating,issuing,and

Analystsexpectthereforms inMexicotopositivelyimpact businessesbyeasingaccess tocredit,reducingfraudulent activities,expeditinglegaland commercialtransactions,and fosteringaninclusiveeconomic environment.Businessesin Mexicowillnowbeableto confidentlyexploredigital transformationasameans ofimprovingprocesses.

Thisinitiativemarksa pivotalsteptowardsdigital transformationinMexico's financialsectorandsets aprecedentforlegaland regulatoryframeworksin thedigitalera.

Digitaldocument legislationaround

theworld

toremaincompetitiveand efficientinthedigitalage.

ThisstrategicmovebyMexico reflectsabroaderglobal trendtowardsdigitalisation ininternationalfinanceand commerce,underscoringthe importanceofadaptingto technologicaladvancements

TheUnitedNationsCommission onInternationalTradeLaw (UNCITRAL)hasdeveloped itsModelLawonElectronic TransferrableRecords(MLETR), whichprovidesasuggested patternforlawmakersto consideradoptingaspart oftheirdomesticlegislation.

AccordingtoUNCITRAL, todate,eightjurisdictions haveadoptedMLETR-based legislation:Bahrain(enacted in2018),Belize(2021),Kiribati (2021),PapuaNewGuinea (2022),Paraguay(2021), Singapore(2021),TimorListe (2024),andAbuDhabiGlobal Market(2021).

IntheUK,theElectronicTrade DocumentsAct(ETDA),officially enactedinJuly2023,isanother digitally-enablingpieceof legislationthatwasinfluenced bythemodellawandthe principlesonwhichitisbased.

Thisincreasingadoption ofelectronicdocument-friendly legislationinjurisdictions worldwideindicatesa significantshifttowards legalrecognitionofdigital tradedocumentsandhelps toprovidethelegalbacking necessaryforthewidespread adoptionofdigitalinstruments intradefinance.

Thisshiftwillcontinue,with morecountrieslikelytoadopt similarlegislationinthecoming years,providingfurthersupport forthegrowthofdigitaltrade andthesmoothandefficient exchangeofdigitaldocuments betweenparties.

Internationaltrade inMexico

Mexicoisasignificantplayerin internationaltrade,leveraging itsgeographiclocationto bridgeNorthandSouth Americaanditsvastnetwork offreetradeagreementsto facilitateaccesstoglobal markets.

Accordingtodatafromthe ObservatoryofEconomic Complexity(OEC) Mexicoexportedatotalof $549B,makingitthe10th largestexporterintheworld. Overthree-quarters($421B) ofitsexportsweretotheUSA.

MexicoisalsotheUSA’ssecond latestexportmarket(behind onlyCanada),asthenation purchased$294Bfromits northernneighbourandfellow USMCAmemberin2022.

Thisextensiveengagement inglobaltradeunderscores Mexico'sroleininternational commerceandhighlights theimportanceofthelatest electronicfinancialdocument legislationfortheglobal economy.

Theselatestlegislative advancementsindigital commercewillsignificantly amendMexico’sfinancial transactionregulations, impactingtradefinance ande-commercewithinthe countryandeventuallyabroad.

aspromissorynotes,checks, andbillsofexchange,Mexico acrossfinancialtransactions. influenceglobalpracticesin leadtobroaderacceptance

BobBlacketer ChiefCommercialOfficer, Americas

Demystifyingpayment modernisation:Separating factfromfiction

Thedigitalpaymentssurge,fueledby technologicaladvancementsandshifting consumerpreferences,underlinesthe pressingneedforinstantpaymentsolutions.

Intherapidlyevolvingdigital age,thepaymentsindustry isundergoingoneofitsmost significanttransformationsin recentyears.Aswediveinto theintricaciesofpayment modernisation,itbecomes evidentthattechnologiessuch asISO20022,cloudsolutions, instantpayments,andAPIsare attheforefrontofredefining bankingsystems.

Thesepivotal,yetoften misunderstoodelements, arecrucialinnavigatingthe challengesandopportunities presentedbythenewpayment railsandevolvingstandards.

Theemergenceofreal-time paymentsisreshapingthe landscapeoffinancial transactions,drivenbyan immediatedemandacross varioussectors.Fromfinancial servicesandfintechwallets tothegigeconomy,andeven areaslikeinsuranceandonline betting,theacceleration towardsfasterpayoutsisnot justamatterofconvenience butacompetitivenecessity.

However,thereremainsa notablevoidintheadoption ofalternativepaymentsystems withinpointofsaleand e-commercesectors,despite thecleareconomicincentives.

Theneedforinstant paymentsolutions ineveryindustry

Thedigitalpaymentssurge, fueledbytechnological advancementsandshifting consumerpreferences, underlinesthepressingneed forinstantpaymentsolutions.

Thisisparticularlycriticalfor gigeconomyworkers,who oftenfindthemselvesrelying oncostlyshort-termloansdue totheabsenceofimmediate paymentoptions.

Moreover,theroleof real-timepaymentsextends tofragmentedsectorssuch asrealestateandsupplier payments,wheretheycan significantlyenhance relationshipsandfoster trustwithinsupplychains.

Fromamerchantacquiring perspective,thetrendtowards seekingimmediatefunding overtraditionalAutomated ClearingHouse(ACH) systemsisevident.

Thisinclinationisalso noticeableinsectorslike transportationandlogistics, wheretheneedforswift reimbursementsisessential foroperationalcontinuity. Theburgeoninginterestinrealtimepaymentsshowcasesthe innovativewaysfintechsare employingpaymentstocater tospecificmarketneedsand differentiatetheirservices.

Real-timepayment lessonslearned

Achievingsuccessinmodern paymentplatformsintheUS hingesonsimplifyingcustomer experiencesandcreating frictionlessonboarding processes.Lessonsfrom countriesthathavetransitioned fromcash-basedtodigital economieshighlightthe importanceofregulatory supportinpromotingdigital paymentadoption.

However,theUSfacesits ownsetofchallenges,withthe presenceofmultiplepayment optionspotentiallydiluting focusandimpedingthe adoptionprocess.Theneed forinteroperabilityandISO harmonisationbecomes paramounttofullyleverage theadvantagesofinstant payments.

Integratingreal-timepayments involvesovercominginitial hurdles,suchaspaymentlimits, andthecriticalityofintelligent

paymentroutingtoprevent businessexceptions.The connectivityoffinancial systemswithclients’existing infrastructures,suchasERP andAPautomationsystems, alongsideefficientdata management,isvitalfor seamlessuserexperiencesand reconciliationprocesses.

Paymentmodernisation strategy:Utilising integrationsand

Dispellingcommon mythsaroundpayment modernisation,suchas thenotionofasingleplatform cateringtoallpaymenttypes, iscrucial.Instead,abalanced approachtowards modernisation,mindfulofthe challengesposedbylegacy systemsandtheshrinking talentpoolcapableof maintainingthem,isadvisable.

APIs Theroadtotransforming payments

Thecomplexityofpayment systems,eachwithits uniquerules,risks,anddata requirements,underscoresthe evolvingregulatorylandscape, especiallyconcerningfraud andscams.Thisenvironment necessitatesadaptableand flexiblepaymentplatforms, capableofstandardising paymentswhilemanaging theintricaciesinvolved.

Oneofthemostsignificant barrierstopayment modernisationisthecomplexity ofintegratingdiversesystems andcreatingstraightforward workflows.Amodularapproach, focusingonsolvingspecific problemsratherthan attemptingacomprehensive overhaul,mayfacilitateeasier adoption.

Thisstrategyemphasises theimportanceofpre-existing integrationsandAPI connectors,enabling businessestoutilisereadymadesolutionsandavoidthe complexitiesofbuildingfrom scratch.

Aswenavigatethroughthe dynamicworldofpayment modernisation,understanding customerneedsanddefining clearscopesforprojects becomeimperative.Educating andguidingclientsthrough theirmodernisationjourneys ensurestheycanadaptto newpaymentrailswithout necessitatingextensive systemoverhauls.

Thejourneytowardsthe widespreadadoptionof modernpaymentsolutions isacomplexyetachievable endeavour.

Itrequiresathoughtful approachthatconsiders userexperience,regulatory environments,andthe complexitiesofexisting financialinfrastructures. Astechnologycontinues toreshapethepayments landscape,stayinginformed andadaptableiskeyto successfullynavigating thefutureofpayments.

EmmanuelPeze Vice-PresidentInsuranceSales MiddleEast&Africa Tinubu

TheESGchallengefor Africancreditinsurers

ToprogresstowardESGintegration, policymakers,regulators,andindustry stakeholdersacrossAfricaneedtocreatean enablingenvironmentthatpromotes sustainablefinance,encouragesresponsible investment,andincentivisesperformance.

Theglobaldialogue surroundingEnvironmental, Social,andGovernance(ESG) criteriaisacceleratingatpace. Acrossallindustries,leaders aretryingtointegrateESG principlesintotheiroperations tomitigaterisks,foster sustainability,andmeettheir stakeholders’expectations.

Insomeregions,the conversationisrelatively straightforward.Butinthe caseofAfrica,thechallenge ofintegratingESGprinciplesis notasimpleone.

Africastandsatanexciting crossroads.Ontheone hand,thecontinenthasbeen experiencingburgeoning economicgrowth, demographicshifts,and attractingincreasingly diversifiedinvestments.

Ontheotherhand,issues suchaspoverty,inequality, inadequateinfrastructure, andpoliticalinstability standfirmlyinitsway.

Howcancreditinsurers integrateESGinAfrica?

IntegratingESGintocredit insurancepracticesrequires aholisticapproach.Insurers needtoevaluatethe environmentalfootprintofthe projectstheyinsure,assess thesocialimpactsonlocal communities,andstrengthen theirgovernancemechanisms toensuretheycancomply withregulatoryrequirements andinternationalstandards.

Acrucialstepforthisis fosteringcloseengagement withstakeholdersthroughout theentirelifecycleofaproject, fromunderwritingthroughto claimmanagement,ensuring ESGprinciplesareintegrated ateverypoint.

Regardingcreditinsurance inAfrica,thesectorfaces inherentchallengesrelatedto infrastructure,governance,and resourceconstraints.However, thesechallengessitalongside immenseopportunitiesfor innovation,collaboration, andinclusivegrowth.

ToprogresstowardESG integration,policymakers, regulators,andindustry stakeholdersacrossAfrica needtocreateanenabling environmentthatpromotes sustainablefinance, encouragesresponsible investment,andincentivises performance.

Thiswillrequirestrong regulatoryframeworks, transparencyanddisclosure, riskmanagementcapacity, andstakeholderpartnerships thatfocusonbestpractices.

Howcancreditinsurers integrateESGinAfrica?

InNovember2023,senior leadersofmajorbanks, corporates,multilateral developmentbanks, developmentfinance institutions,exportcredit agencies,andinsurersfrom throughoutAfricacame togetherinJohannesburg fortheannualExCredAfrica conference.

Amongthemanyconversations attheconference,acommon threadwastheemergenceof ESGasakeyinfluenceontrade financedecisionsinthe continent.

ESGimplicationswere extensivelydeliberated. Whiletheneedtoexplore freshopportunitiesforAfrican climatefinancewaswidely agreedupon,itwasmatched byimportantdiscussions aroundthechallengesthatthe ESGcriteriapose,particularly inthecontextofoilandgas explorationandproduction acrossthecontinent.

Oil-richnationssuchas Mozambique,Tanzania, Uganda,andCôted’Ivoire allfacehurdlesinsecuring financingforrefineriesand infrastructureduetothe environmentalimpact associatedwithoilexploitation.

Forthesecountries,theESG standardsmaybeperceived asunfairobstaclestoeconomic growth,dueinparttothe historicaldisparityin industrialisationbetween Africannationsandtheir Westerncounterparts.

Conversely,countrieslike MauritaniaandSenegal, blessedwithsignificantoffshore gasreserves,findthemselves inamorefavourableposition withinESGframeworks.The prospectofrenewableenergy projectsfurtherenhancestheir appealtoWesternfinanciers,as isevidencedbyarecent€300 millionprojectsupportedbythe ItalianECA,SACE.

ExCreddelegatesalso raisedconcernsaboutthe accessibilityoftradefinance, particularlyforAfrica’ssmall andmedium-sizedenterprises (SMEs).

Despitethepressingneedto addressthetradefinancegap, somedelegatesexpressed apprehensionthatESG standardscouldperpetuate financialexclusionbyfurther hinderingSMEs’accesstocredit –exacerbatingthechallenges theyarealreadyfacing.

Alsodiscussedwastheurgency ofaddressingfundamental issuessuchaselectricity access,sustainablecooking practices,andtheimpositionof additionalcomplianceburdens thatcoulddeepenthetrade financegap.

SparkingtheESGdebate: TheEastAfricanCrudeOil Pipeline

Acurrentexampleofthe interconnectednessofESG factorsinshapingsustainable developmentoutcomesisthe EastAfricanCrudeOilPipeline (EACOP).

Designedtotransportcrudeoil fromlandlockedUgandatothe TanzanianportofTanga,EACOP hassparkeddebate,with concernsaboutitsESG implications.Thisisa particularlycontentiousissue, asthereareimplicationsnot onlyataprojectlevel,butfor AfricaandthefutureofESG morebroadly.

Withtheproposedcrudeoil pipelinesettotraversesensitive

ecosystemssuchasprotected areasandwatersources, concernshavebeenraised overitsnegativeenvironmental impactsincludingdegradation, deforestation,andbiodiversity threats.TheEACOPproject alsocrossespathswith marginalisedcommunities whomaybeatriskofland dispossession,displacement, andsocio-economic disruptions.

StopEACOPavocal environmentaladvocacy movement–hasemerged inoppositiontothisproject.

StopEACOPhasdemanded greatertransparency, consultation,and accountabilityfromthe projectbymobilisinglocal communities,civilsociety organisations,and internationalstakeholders.

InJanuary2024,StopEACOP announcedthatacoalition of28insurersandreinsurers unanimouslyagreednotto offerinsurancefortheproject, duetotheenvironmentaland humanrightsrisks.

However,withUgandaand Tanzaniaforecastingsignificant upliftinlocalemployment, economic,anddirectforeign investmentopportunities,there arefearsStopEACOP’sactivism willpushtheprojecttoinsurers withlittleregardforESG.

EACOPremindsushow importantitisforcreditinsurers operatinginAfricatoadopt aproactiveapproachto integratingESGprinciples.

Withacriticalroletoplay infacilitatingtradeand investmentbymitigatingrisks associatedwithnon-payment, politicalinstability,and economicuncertainty,credit insurersmustnowleaninand respondtotheexpectations ofstakeholders,including investors,regulators,and broadersociety,toaligntheir practiceswithESGprinciples.

SparkingtheESGdebate:

TheEastAfricanCrudeOil Pipeline

TheESGprinciplespresent Africawithauniqueopportunity toadvancesustainability, resilience,andsocialimpact. However,whiletheESG principleshavethepotentialto driveresponsibleinvestment andsustainabledevelopment, theirimplementationmust considertheuniquesocio-

economicchallenges thatAfricancountriesface. Inessence,integratingESG principlesinAfricamust balancetheseidealswith theeconomicreality.

ForAfricatosuccessfully navigatethemanyunique complexitiesofintegratingESG, allstakeholdersmust collaboratetoensurecritical financingmechanismsremain accessible,equitable,and supportiveoftheregion’s broaderdevelopment objectives.

Bysafeguardingagainst emergingrisksandintegrating ESGprinciplesintotheir practices,creditinsurerscan playanoutsizedroleinAfrica’s futureprosperity.Criticaltothis istheirabilitytoembracethe much-neededinnovationand collaborationthatwillultimately unlockAfrica’sfullpotential.

RoxanaPillay ShippingExpert

Newsustainability approachesinshipping: Strategiesfor decarbonisingtheindustry

Themaritimeindustry,oftenseenasamajor contributortopollution,isunderincreasing pressuretoadoptsustainablepractices.

Inanerawhereenvironmental concernsareattheforefront ofglobaldiscussions,the maritimeindustry,oftenseenas amajorcontributortopollution, isunderincreasingpressureto adoptsustainablepractices.

Withapproximately90% ofglobaltraderelyingon maritimetransport,finding waystomitigatethe environmentalimpactof shippinghasbecome imperative.Fortunately, innovativeapproachesare emerging,offeringhopefor amoresustainablefuturein theshippingindustry.

Theshippingindustryisactively steeringtowardsustainability, addressingenvironmental challengesandstrivingfor agreenerfuture.

Decarbonisinginternational shippingisacriticalendeavour todecreasetheindustry’s impactontheenvironment.

Therearevariouschallenges andcoststhatdecarbonising shippingrequires,whicharea shiftintechnologybyadapting lowandzeroGHGfuels, includingoperationalchanges toenhanceefficiencyand investmentsforshipdesign adjustments,alternativefuel production,andgreenonboard technologies.

Thesechangesmayleadto increasedmaritimelogistics costs,shippingrates,and voyagetimes.Therehavebeen globalcollaborationsas shippingoperatorsworkacross

borders,makinguniform enforcementofnewIMOrules crucial.Tobesuccessful, transitioncostsmustbe loweredtosupportvulnerable economies.

Carrierstrategiesfor decarbonisation

Decarbonisationisbecoming astrategicimperativefor companiesacrosstheshipping carriers.Somecompelling reasonswhybusinesses areactivelypursuing decarbonisation:

Reductionofenergy consumption:

Speedreduction:Slowingdown vesselscansignificantlyreduce energyconsumptionand emissions.

Airlubrication:Innovativehull designsthatcreateairbubbles reducefriction,leadingtofuel savings.

Alternativefuels:

Low-carbonfuels:Transitioning fromtraditionalfossilfuelsto cleaneralternativesisakey focusinsustainableshipping. Biofuels,hydrogen,and ammoniaarebeingexploredas viablealternativestoreduce emissions.LNG(liquefied naturalgas)isgainingtraction asatransitionalfuel,offering loweremissionscomparedto conventionalmarinefuels.

Carbon-freefuels:Hydrogen andammoniaarepromising candidatesforazero-emission future.

Carboncapture:

Developingtechnologiesto captureandstorecarbon dioxideemittedduringshipping operations.

Whencombined,these methodscontributetoa moresustainableand environmentallyfriendly shippingindustry.Byembracing thesestrategies,carrierscan playapivotalroleinachieving globaldecarbonisationgoals.

Wind-assisted propulsion

Revivingancientpractices, modernshippingis rediscoveringthebenefits ofwind-assistedpropulsion.

Technologiessuchassails, kitepropulsion,androtorsails harnesswindenergyto supplementenginepower, therebyreducingfuel consumptionandemissions.

Digitalisationandsmart shipping

Digitaltechnologies,including artificialintelligence(AI), blockchain,andIoT(Internetof Things),arerevolutionisingthe maritimesector.Smartshipping solutionsoptimisevessel operations,routeplanning,and cargomanagement,resulting infuelsavings,emissions reductions,andimproved safety.

Thetransitiontowards sustainabilityinshipping isacomplexbutnecessary endeavour.Byembracing technologicalinnovations, regulatoryframeworks,and collaborativeefforts,the maritimeindustrycanmitigate itsenvironmentalimpactwhile continuingtosupportglobal tradeandeconomicgrowth.

However,achievinga trulysustainableshipping sectorrequirescollective commitmentandongoing investmentinresearch, development,and infrastructure.

Withconcertedefforts fromallstakeholders, thevisionofacleaner, greenermaritimefuture canberealised,ensuring ahealthierplanetfor generationstocome.

Sustainabilityandtrade:Howtomakethe

AnirudhaPanse

MD&HeadofGTB

TradeFinanceProduct Innovation(TPI)

FirstAbuDhabiBank(FAB)

DeepeshPatel

SustainabilityinMENA: FirstAbuDhabiBank’s approachtosustainable tradefinance

Theimmenseenvironmentalfootprintofglobal tradestemsfromacomplexandglobal endeavourinvolvingnumerousstakeholders, manywithdifferentregulationsandreporting metrics.

EditorialDirector

TradeFinanceGlobal(TFG)

Sustainabilityisoneofthemost usedtermsinthetradefinance industryin2023.

Whileeveryoneknowswhatit means,andmostknowwhat thechallengesarebehind implementingsustainable actions,thereisaclearissue withimplementingtangible solutions.

Tradefinanceasanindustry hasanimportantroleinthis discussion.Because internationaltradetouches almostallpartsoftheworld, industry-widechangeswould havedeepramifications.

Butthereneedstobeaneffort todiscussandevaluatecase studiesandcreateconcrete sustainabilityplans.

Todothis,TFG’sDeepeshPatel spokewithAnirudhaPanse,MD &HeadofGTBTradeFinance ProductInnovation,Global TransactionBanking,FirstAbu DhabiBank(FAB)todiscuss theirstrategiesandcase studies.

Sustainabilityatlarge: Thetrueimpactontrade finance

Carbonemissionsandthe tradefinanceindustryare inherentlyintertwined.Reports haveshownthat80%ofcarbon emissionsaresourcedfrom globaltradeshippingand transport.

Theimmenseenvironmental footprintofglobaltradestems fromacomplexandglobal endeavourinvolvingnumerous stakeholders,manywith differentregulationsand reportingmetrics.

Becausethereisnosingle standardorgoverningbody, thesustainabilityeffortfor globaltrademoreclosely resemblesajigsawpuzzlethan acohesivepicture.

However,innovationoften stemsfromseemingly unsolvablechallenges. Pansesaid,“Withthese challengesinthebackground, corporates,governments, regulatorsandbanksinthe MENAregionhavemadea significantefforttomaketrade moresustainableinrecent years.”

Sustainabilityandtrade:Howtomakethetwomatch

Oneofthemostvisiblechanges hasbeenthedigitalisationof trade.Theinitialmoveaway frompaper-baseddocuments hasalreadyhelpedto substantiallycutemissions. Someestimatessaythatnearly 3milliontreeswillbesavedper yearwiththepassageofthe ETDA.

WhiletheETDAisacommon lawbill,manycountriesaround theworld,includingBahrain, SingaporeandAbuDhabi GlobalMarketareadoptingthe ModelLawonElectronic TransferableRecords(MLETR), withothersimplementing similarlaws.

Followinginitialstepsto digitalisetrade,further industryactionisneeded.

AccordingtoPanse,whilethere isstillalongwaytogo, internationalorganisationslike theICChavestartedtorelease publicationsontangiblesteps tocreatingamoresustainable globaltradeindustry,suchas theirNovemberreportonthe Wave1Framework

Cautiousstepsforward: FAB’sjourneytowards sustainability

Asmorestandardsare introducedbyorganisations liketheICC,banksand corporatesareableto implementmoresustainable practicesintotheirbusiness.

Withthisdevelopment,Panse said,“FABisworkingtosupport

notjusttheworkingcapital needsofourclientsina conventional,Islamicway, butalsoinasustainableway.”

Bycombiningtheirknowledge ofShariahfinancingand sustainability,FABisensuring thatitsproductsare sustainableandaccessible acrossallmarkets.

FAB’smostcommonproducts areincreasinglyofferedwith asustainabilityfocus.From lettersofcredits guaranteestobasicloans,FAB isensuringtooffersustainable practices.

Pansebelievesthatoneof themostimportantstepsinthis processifthenewsustainable supplychainfinance

AsScope3regulations becomeincreasingly important,ensuring sustainabilitythroughout thesupplychainisatop priorityforFABanditsclients.

Whilethebankismovingahead withtheirsustainablepractices, thereisaninherentconcernto avoidanyperceptionof greenwashing.

FABhasstrictsystemsinplace tomakesuretheyarefully committedtowalkingthewalk, notjusttalkingthetalk.

“Wehaveastrictgovernance processinplaceinternally, alongwithourESGteam,to ensurethatwe’remakingthe rightdecisionswhenitcomes toclassifyingsomethingas asustainabletrade.”

However,partnershipsare notsimplyfocusingonthe“E” ofESGwithinlargebanks, corporates,andSMEsinthe traditionaltradesector.

DuringCOVID-19,FABpartnered withpharmacies,andhospitals toensurequickpaymentusing FAB’ssupplychainprogramme, FABeSCF,allowingthemto continuetoprovidelife-saving

ToPanse,the“SG”isequally asimportantasthe“E”,andare inherentlytiedtogether.

Alooktowards2024

FABhasalongagenda for2024,astheywantto continuetobuildontheir recentmomentum.

ButforPanse,thereisone consistent,andsimpletheme

Continueanindustry-wide

Pansesummarisedthe strategy,“Acallofactionfor moresustainableregulations, acalltoactiontoraise awarenessforthewider bankingindustry,tomove towardsamoredigital,amore circulareconomy,andacall foreverybodytoworktogether andcontinuetocollaborate.”

JaneMarsh Editor-in-Chief Environment.co

Howcantheshipping industryhelpsustainable rentalservicesgrow?

Rentalservicesarebecomingmorecommon throughouttheshippingindustryandamong onlinecustomers.Whatshouldsector professionalsdotosupportthecontinued growthoftheseservices?

Partnerwithservicesthat shortenlast-miledelivery distances

Ase-commercepurchases remainpopular,many decision-makersinthe shippingindustryhaveexplored possibilitiesforreducinglastmiledeliverychallenges. Oneoptiongainingpopularity istohaveparcelsdelivered tolockerspeoplerent.

Intheidealcase,thelockers areinplacespeoplemustvisit anyway,suchastheirofficesor thepublictransitstationsthey usedaily.Then,itiseasyfor customerstogettheirdelivered goodsandshippingspecialists donothavetobringthe packagestoindividualhomes.

Deliveringtoresidencescomes withmanychallenges,including peoplenotbeinghometo accepttheparcels.

Italsobecomestimeconsumingfordeliverydrivers togetinandoutoftheirvans repeatedlytomakedeliveriesin residentialcommunitieswith dozensofhouses.

Ifadeliverydrivercangotoa singlelockerandmakedozens ofdeliveriesonasinglestop, sucharrangementsallow muchbetteruseoftime.

InIndia,anewapptheDelhi Metrooffersallowspeopleto purchaseproductsandget themdeliveredtospecific metrostops.Elsewhere,

Nigeria’sSmartParcelservice placespackagelockersin highlypopulatedlocations, suchashospitals,banks andairports.

Customerscanuseappsto seeavailablelockersand temporarilyusethemasparcel pickupordrop-offpoints.The company’steamsaysthe maximumtransactiontime whenusingthelockersisonly 25seconds,makingthem convenientsolutionsfor customers.

Increasedutilisationwithinthe shippingsectorwillbeessential fortheseservicesandothers likethemtogainmainstream popularity.Whensomeonesees theirpreferredcourierorecommercesiteoffersfree deliverytotheselockers,they willbemoreopentotrying

Beopentonew opportunities

Rentalarrangementsenable peopletotakeadvantageof thelatestofferingswithoutthe upfrontinvestmentsofbuying them.Constructionindustry leaderslearnedthisbyrenting equipmenttosavemoneyand achievesaferoperations duringtheirprojects.

Somerentalservicescatering totheshippingindustryandits customerschallengepeople tobewillingtotrynewthings. ConsiderROXBOX—aUKbasedenterpriseoffering sustainablecontainersfor

storingortransporting fineart.

CompanyfounderAndrew Stramentovsays90%oftheart world’spackagingissingle-use, whichhewantedtochange. Thecurrentsysteminvolves shippersmakingcontainers foreachartshipmentand chargingfortheirdisposal afteruse.

However,ROXBOX’sLoopservice createsacirculareconomyby offeringartworkcontainersto rentincitieswheresuch serviceswouldbemostin demand.London,Parisand NewYorkaresomeofthe currentparticipatinglocations. Thisoptionbecamepossible afterEuropean,Asian,and Americanshippers collaboratedwithROXBOXto storereusablepackagingand containersinwarehouses.

Peoplewhorentthecontainers payfixedamountsaccording totheartwork’ssizeandweight. Numerousinternational galleriesareROXBOXclients, andusetheservicetosend piecestoandfrominternational artfairs.

AndrewStramentovcompares hisbrandtothee-bikeservices thatallowpeopletohopon pedalledvehicleswithminimal friction.

However,heacknowledgesthat everyonemustworktogether toinsistonmorereusable packagingintheartworld. Oncepeopleknowother optionsexistandareopen tousingthem,theirwillingness willgoalongwayinreducing packagingwaste.

Promotereusableecommercepackaging

Itiseasytoseehow consumerismharmsthe environment.Vastassortments ofmerchandiseandspeedy shippingoptionsencourage peopletobuymoreratherthan usewhattheyhaveandbe happywithit.Theconsumerism pushalsocontributestowaste. Evenifpeopledonate unwantedclothesorgivethem torecyclingservices,theitems oftengetshippedtoother countriesanddumped.

However,gettingpeopleto giveuptheirshoppinghabitsis largelyunrealistic.Agood compromiseistofigureout howtomakethecurrent shippinginfrastructuregreener. Somecompaniesare doingthatbyencouraging consumerstoreturntheir e-commercepackaging, resultinginmorereuseand lesswaste.

OneexampleisKIUD,which turnstextilewasteintorigid packagingandoffersarental programfore-commerce companiesinEstonia. Participatingbusinessesmust installplug-insontheironline orderingportals,afterwhich consumerscanchoose

reusablepackagingandpaya modestdepositforit.Shoppers getthatmoneybackoncethey returnthepackage.

ThereisalsoHipli—aFrench brandthatallowse-commerce enterprisestopaymonthly subscriptionstorentachoice offourflexiblemailersandone rigiddesign.Belgianpostal operatorBpostlaunchedapilot ofHipli’smailers,meaning storescouldreusepackaging upto100timesinsteadof relyingonsingle-useoptions.

Oneparticipatinge-commerce companyexpectedtoship about4,000ordersinwatertight,tearproofpackages duringthethree-monthpilot.

Customerswhoreceivethese reusablepackagescanreturn themtodesignatedpoints overseenbyBpostornumerous otherlocationsintheirareas.

Sinceboththisexampleand KIUDwillonlyworkifcustomers returnthepackaging,shipping professionalsshouldexplore howtheycouldlaunch programstosupportthese initiativesandhelppeople developnewhabits.

Rentalservicesgaining momentum

Theseexamplesshowpeople havemoreoptionsoncethey getcuriousaboutreducing wastethroughrentals. Sometimes,therentalsaddress wastedtime—inothers,they eliminatesingle-usepackaging. Nomatterarentalbusiness’s specificapproach,these initiativeswillhavebetter chancesofsucceedingwhen theshippingsectorsupports them.

AdamHearne CEO CarbonChain

Corporateaccountability inawarmingworld: CarbonChain’srolein effectivecarbonreporting

Ecologicalneedsandincreasedpublicattention haveputpressureonregulators,consumers, andfinancialinstitutionstodemandmore transparencyintermsoftheenvironmental impactofglobalsupplychains.

We’veknownitforquitesome timenow-Swedishscientist SvanteArrheniustheorised abouttheimpactofincreased carbonlevelsbackin1896-but onlyinthelastfewyearshas theurgencyofthesituationand theneedforimmediatechange becomemoremainstream.

Everycompanymustnow prepareforregulationwhiplash inthecomingyears,asnew climatewarmingdatareleased

goingbeyond2.5degrees Celsiustopreviousestimates.

AccordingtodatafromNASA, humanactivitieshaveraised theatmosphere’scarbon dioxidecontentby50%since the1800s.Thisexcesscarbon dioxidechangestheclimateof ourplanet-increasingglobal temperatures,causingocean acidification,anddisrupting theplanet'secosystems-and ifleftuncheckedcouldleadto irreversiblechanges.

Theseenvironmentalshiftsalso comewithsignificanteconomic impacts,includingincreased costsinagriculture, infrastructure,andhealthcare, furtheremphasisingtheurgent needforsustainablepractices. AccordingtoaWorldEconomic Forumreport,climatechangeis likelytocauseupto$12.5trillion ineconomiclossesby2050.

Thankfully,governmentsand industriesaroundtheworldare beginningtotakeaction.

Emissionsdisclosures:

Necessary,buta nightmare

Ecologicalneedsandincreased publicattentionhaveput pressureonregulators, consumers,andfinancial institutionstodemandmore transparencyintermsofthe environmentalimpactofglobal supplychains.

Thesestakeholderswant assurancesthatcommodities tradersandfinanciers throughoutthedistribution

networkarecompliantwith currentregulationsand preparedtoadapttofuture standards.

Whilethisisastepintheright directionforthehealthofour planetinthelongterm,ithas ledtoalabyrinthofvaried reportingframeworksthat oftenrequiredifferenttypes ofmandatoryemission information.Layeronthemany voluntarydisclosuresexpected byfinancialinstitutionsand customers,andthereporting burdenonfirmscanseem overwhelming.

Forinstance,theEuropean Union’sCorporateSustainability ReportingDirective(CSRD) demandscomprehensive Scope1-3emissionsdisclosures fromcorporations,whilebanks andtradingpartnersmightalso requirespecificproductcarbon footprintsordetailedtrade portfolioemissions.

Eachoftheseframeworks maydictatedifferentdata types,rangingfromestimated emissionstodetailed supplier-specificdata,further

complicatingthereporting process.

Andthatdoesn’tevenbeginto coverthetechnicalchallenges businessesfacewhen confrontedwithcarbon accounting.Thereisfurther difficultyinaggregatingand analysingemissionsdata acrosscomplexsupplychains, whichrequiressystemsto gatherandnormalisedata fromvariedsourceswhile ensuringinformationremains consistentandcomparable.

Robustcarbonreporting reliesonrobustdata

Needlesstosay,carbon reportingisacomplexprocess.

Togetasemblanceofaccurate information,companiesmust sourcehigh-quality,primary datathatisrobustenoughto withstandscrutinyfromthese variousstakeholderswhile alsoprovidingmeaningful, actionableinsightstohelp thebusinessnavigateits waytonet-zeroemissions.

Ideally,thisdatawould encompassbothabsolute emissionsmetrics(which measurethetotalamountof carbonanentityemitsover aspecificperiod)andcarbon intensitymetrics(which measuretheamountofcarbon emissionsperunitofsome physicaloreconomicactivity suchasproductionoutput, revenue,oremployee).

Acquiringintensitymetricsfrom companiesdirectlyenables asset-orproduct-specific mapping,whichdramatically

enhancestheprecision ofemissionsreporting.

Metricsthisprecisehavebeen difficulttogatherinthepast sincesupplychainscanbelong andcomplexandmanyfirms havelackedvisibilityoftheir upstreamsuppliersand downstreamcustomersbeyond acertaintier.

Astechnologyhasimproved, however,acquiringadegree ofdatagranularitythatcan capturethenuancesofspecific operationsisincreasingly feasible.Today,toolssuchas bigdataorartificialintelligence (AI)canenablecompaniesto quicklyandaccuratelytrack asset-specificemissions metricsacrossthesupply chain.

Thisisparticularlyimportantfor firmsintheenergyandmetals sectorsastheiremissionsare embodiedintheproductsthey trade.Understandingcarbon intensityandwherethe hotspotsliewithintheproduct lifecycleorsupplychaincan providevaluableinsights forthesefirmstomake decarbonisationdecisions.

Carbonintensityreporting, however,willonlybetruly credibleifitcanimpact absoluteglobalemissionsin apositiveway.Thismakesthe waythatintensity-based metricsareusedalongsupply chainsandinterpretedby stakeholdersevenmorecritical.

Forittowork,firmswillneed toengagemorecloselywith supplierstoshareconsistent andcomparableemissions data.Inconsistentornoncomparabledatawillmake

itdifficult-ifnotimpossibletounderstandtheactual impactthatanydecisionswill haveonemissions.

Embracingafuturewhere robustcarbonreporting becomesthenormratherthan theexceptionrequiresashift towardsgreaterdata transparencyand collaboration.

Datatransparency begetsmoredata transparency

Improvingtradedataon productsourceswillprovide asolidinformationbase,butin therealworld,therearegoing tobesomegaps.Whenthis happensitbecomescriticalto activelyengagewithsuppliers tocollectprimarydatatofill thegapsandenhancethe accuracyofthecarbonreports.

Wecantakethisastepfurther byencouragingdatasharing acrossalllevelstoachieve greatertransparencyandfoster accountabilitythroughoutthe supplychain.

Aseachparticipantbegins tosharedataandalign withbroaderenvironmental sustainabilitygoals,moreand

morewillfeelpressured tofollowsuit,creatingan environmentallyvirtuous dominoeffectdownthe supplychain.

Asmoredominosfall,more datawillbecomeavailable. Transformingthatdatainto actionableinsightsrequires adatamanagementsystem equippedwithadvanced automationcapabilitiesthat arefine-tunedtohandle asset-level,activity-based emissionsfactors.

That’swhereCarbonChain comesin.

CarbonChainComply, simplifyingacomplex process

CarbonChainprovides carbonaccountingsoftware formanufacturers,commodity traders,andtheirbanks,with aprimaryfocusonscope3 supplychainemissions.

Unlike‘onesizefitsall’ platforms,CarbonChainis purpose-builtforenergyand metalssupplychainsand buildsupacompletepictureof emissionsfromthetransaction levelusingactivity-based emissionfactors.

Wecreatearecordofcarbonin supplychainssothatreporting andmonitoringareeasy.Other companiesdon’tneedtowaste timeandmoneydoingit themselves.That’swhywe builtCarbonChain,inconcept, andasacompany.

Ourlatestsolution“CarbonChainComply”-acts asasourceoftruthforcarbon dataforcommoditytraders andmanufacturersandallows userstocreatecorporate emissionsreportsthatcomply withtheGreenhouseGas Protocol.

CarbonChainispurpose-built forcomplexglobalsupply chainsandbigcomplexdata setswithanAI-powered platformcapableofhandling data-intensivecalculations, providinganinterfacefor consistencyfordifferentactors acrossthesupplychain.

Howcomplexisthisdata? CarbonChainmodelled thousandsofsupplychainsand usedindependentdatabases ofemissionsfactorswith80%of globalemissionscoverage.We didthistoensureCarbonChain Complyisanaccuratetoolfor companiestousefortheir carbonaccountingneeds.

In2021,CarbonChainhelped GunvorGroupmeetcustomer demandsbyconducting acarbonaccountingpilot.

Ourteamexportedallthe relevantdata,usingour automatedcarbonaccounting softwaretocalculateGunvor’s carbonemissions,and providingaper-cargoanalysis ofeachtrade’semissions, alongwithauditablereports forverificationpurposes.Since then,manymoreofthebiggest commoditytradersandtrade financeprovidershavereliedon CarbonChain’ssoftwaretotake controloftheircarbonreporting

andexplorethedevelopment ofsustainability-linkedloans. Carbonaccountingseemslike anoverwhelmingtask,andit canbeaconfusingprocess butthat’swhywe’vebuilt CarbonChainComply:soit doesn’thavetobedifficult foryou.

Wewanttohelpourcustomers mitigatetheirfutureclimate risksandcommunicateitto theirstakeholders-through anycrediblereportingscheme.

Withoutfollowingnew regulationslikeCBAM, companiesriskbeingsubjected toheavyfines,andpotentially losingtheirlicensetoimport steel,aluminium,iron, electricity,hydrogenor fertiliserproducts.

Attheendoftheday,emissions reportingandtransparency aren’tjustnecessarytoavoid penalties,theyaresimply goodforbusiness!

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