A Message from the Chair – February 2021

February 18, 2021 by Jessica Moore

On February 18 BAFT’s Board Chair, Mark Garfield, published his monthly communication to the wider BAFT membership.

The advance notification for BAFT’s 2021 Virtual Global Payments Conference mentions “the unrelenting pace of change in payments” and “the realities of a continuous 7x24x365 day.” These statements emphasize that payments tomorrow will be substantially different than payments today. It also reminds me how payments today are significantly different from payments yesterday.

I faintly recall the process to send cross-border payments at the beginning of my career. The steps to calculate a series of codes and numbers were complicated and time-consuming. First, one would input the numerical code for the receiving test bank, add the remitting bank’s unique number, and then add digits corresponding to the month, day of the week, currency, amount, and settlement date. The sum of these numbers would then be sent by Telex and confirmed by the receiving bank. If the key was aligned and accepted, the payment went out. The Telex machine itself seems to be an artifact from a previous era. Yet at the time, communicating throughout the world with codes and messages was new and exciting. It reminded me of learning Morse code as a Boy Scout, sending and decoding messages using flags and mirrors from mountain tops to fellow Scouts below. Fun, but not very effective. As usual, the erroneously decoded message meant the scout troop followed bad coordinates and got lost somewhere!

While there may be some romanticism in sending overseas payments this old-fashioned way, I am glad those days are gone. The efficiency, safety, and management of payments are much better today than they were yesterday. And, I certainly don’t miss the rows of file cabinets holding paper documentation, microfiche, microfilm, and signatures lists. No one wants those old metal cabinets back.

Real-time payments, cloud adoption, ISO 20022, digital currencies…so much to discuss and learn. There is a payment revolution and evolution taking place in transaction banking today. Join me next week for BAFT’s Crystal Ball Series: Revolutionary Banking, and BAFT’s 2021 Virtual Global Payment Conference March 2 – 4 for more timely insights. To my banking friends, if we ever have a chance to go on a hike in the mountains together (which I have done with some of you, loads of fun); I promise you that you will not get lost. Why? Technology…a GPS device! But just in case I’ll bring my trusty old scout compass with me.

Happy trails and happy payment rails,

Mark Garfield
BAFT Chair
Head of Global Financial Institutions

January 28, 2021 by Jessica Moore

On January 21 BAFT’s Board Chair, Mark Garfield, published his monthly communication to the wider BAFT membership.

After eating far too many treats and goodies each holiday season, I tend to make a New Year’s resolve to abstain from sweets for a defined amount of time. No ice cream, candy, cookies for one month. Well, I made it until January 5th this year when a neighbor brought over some chocolate-covered macadamia nuts from Hawaii. Who can resist that?

I have to laugh at my many failed attempts to change. What I’ve come to realize, though, is that change inevitably happens, whether I’ve planned for it or not. My first memories of using a bank as a youth are of standing in very long lines in a bank lobby waiting to deposit cash. The teller would use a typewriter to record the transaction in a passbook. I remember sitting in a non-air-conditioned car on a hot summer day waiting in what seemed like a big traffic jam to finally cash a check at the bank drive-through window. Now I shout hurray for the convenience of making a deposit on my mobile phone and I never ever write a check…hurray! Think of all the changes that have happened in the financial services industry in the past year alone, such as the increase of contactless payments and the shift to remote work.

The next two events in the Around the Globe: The Crystal Ball Series will give us key insight into what the future may hold for the financial services industry. During this month’s event, ‘View From The Top‘, on January 26, three banking CEO’s will share their insight from different geographic perspectives: MENA, Europe, and the U.S. In February, the ‘Revolutionary Banking’ event will address topics that may be…revolutionary, such as central banks’ use of cryptocurrency.

I appreciate how BAFT provides us with webinars, conferences, briefings, industry papers and best practices that give a vision of what the future may become. Through BAFT, we glean insight into how banking is evolving in different geographies. Each year, participants in the BAFT Future Leaders Program review and assess current developments and potential opportunities in the transaction banking industry. We then become prepared to not just react to changes but to become agents of change and innovation.

I expect to celebrate all the future transaction banking innovations (paperless bills of lading!) that have yet to be developed…and if I happen to receive your gift of Turkish Delight next January, I’m certain that once again I’ll break my yearly resolution and eat it (yum)……hurray!

Mark Garfield
BAFT Chair
Head of Global Financial Institutions
Zions Bancorporation

January 21, 2021 by Jessica Moore

On January 28, The Global Supply Chain Finance Forum (GSCFF) announced plans to update its Standard Definitions for Techniques of Supply Chain Finance to provide further clarity on the distinctions between the individual techniques.

The Global Supply Chain Finance Forum (GSCFF) – comprising BAFT (Bankers Association for Finance and Trade ), FCI (previously known as Factors Chain International), the International Chamber of Commerce (ICC), the International Trade & Forfaiting Association (ITFA) and the Euro Banking Association (EBA) – today announced plans to update its Standard Definitions for Techniques of Supply Chain Finance (Standard Definitions) to provide further clarity on the distinctions between the individual techniques.

Alongside the existing Receivables Purchase and retitled Loan sub-categories, a newly created Advanced Payable sub-category now includes three techniques: Corporate Payment Undertaking (CPU), Dynamic Discounting (DD) and Bank Payment Undertaking (BPU).

This update highlights and confirms the quality of the original content – first published four years ago – and the need to be agile in a dynamic field such as supply chain finance. Thus, it is intended to reflect an up-to-date view of current market practices within supply chain finance, in particular by establishing greater clarity between the Payables Finance Technique under the Receivables Purchase category and the CPU technique.

CPU is a buyer-led program within which sellers in the buyer’s supply chain can, at their option, access liquidity by requesting a discounted early payment. However, unlike a Payables Finance scenario, the finance provider does not purchase the underlying receivable from the seller, but rather, fully relies on the buyer’s irrevocable payment undertaking.

Christian Hausherr, Chair of the GSCFF, and European Product Head of Payables Finance, Trade Finance & Supply Chain Finance at Deutsche Bank, says: “At the time of publication, the Standard Definitions were deemed to be complete and widespread acceptance of the terminology confirms their benefit for the wider industry. Today, the GSCFF aims to bring further clarity to the techniques, with new description of CPU, DD and BPU. Adapting to current business practices, these updates will continue to encourage greater adoption of the Standard Definitions by market participants.”

The first description document on CPU has also been released today, with subsequent documents on DD and BPU expected over the coming months. Each description document will provide an overview of the technique’s definition, involved parties, distinctive features and variations, relevant risks and benefits, among other technicalities. Once the series has been published, a final updated version of the master Standard Definitions document will be made publicly available.

To access the description document on corporate payment undertaking, visit our Library of Documents under the Industry Definitions and Guidelines section or click here.

About the Global Supply Chain Finance Forum:
The Global Supply Chain Finance Forum was established in 2014 to develop, publish and champion a set of commonly agreed standard market definitions for Supply Chain Finance (SCF). Comprised of trade bodies BAFT (Bankers Association for Finance and Trade), FCI (previously known as Factors Chain International), the International Chamber of Commerce (ICC), the International Trade and Forfaiting Association (ITFA) and the Euro Banking Association (EBA), the industry consortium leverages its collective footprint to aid the target audience of SCF in gaining clarity and consistency on the various terms and techniques used. The main objective of the GSCFF is to support the sustainable growth of supply chain finance by establishing consistency and a standardized understanding of SCF across the industry. Subsequently, the GSCFF strives towards acknowledgement of its definitions and their benefits by its target audience, especially on the regulatory side. The GSCFF monitors and reacts to major market developments in all relevant matters for SCF. It is open to financial institutions, non-FI finance providers, accounting firms, investors, rating agencies, regulators and corporates who have a stake in SCF.

January 19, 2021 by Jessica Moore

Now in its sixth year, BAFT’s Future Leaders program, recognizing upcoming talent in the global transaction banking industry, announces the Class of 2021.

WASHINGTON — BAFT, the leading global financial services association for international transaction banking, announced today its Future Leaders Program Class of 2021. Now in its sixth year, the program recognizes upcoming talent in the global transaction banking industry.

Nominated by their respective institutions, the class of 2021 includes 36 individuals from 21 countries across six continents representing a variety of disciplines within transaction banking. Arguably the most geographically diverse slate in the history of the program, there are nine member institutions participating for the first time and two new countries, Bahrain and Zambia, represented in the Class of 2021.

This year’s group will be divided into five project teams to address current industry issues including transaction banking post COVID-19, commodity trade finance, sustainable finance, faster payments, and diversity, equity and inclusion.

“I have been fortunate enough to participate in some form in the Future Leaders program since its inception,” said Stephanie Wolf, managing director and head of global financial institutions, governments and business banking, global transaction services, Bank of America and a class of 2021 BAFT Future Leader sponsor. “I can think of no better way to improve industry thought leadership than to let more junior members of our teams propose solutions to the industry’s most pressing problems and opportunities.”

The class of 2021 will start their program virtually in January 2021 and will conclude at BAFT’s 2021 Virtual Global Annual Meeting in June 2021. Several future leader council members will support the current class as mentors, joining BAFT board members who will again serve as project sponsors.

“We’re excited to have the largest and most geographically diverse Future Leaders class since the inception of the program,” said Tod Burwell, president and CEO, BAFT. “During this time when everyone is more isolated due to the pandemic, we hope that the virtual engagement on the projects will allow for a fresh level of interaction that is enriching to the participants.”

BAFT congratulates the following individuals who were selected to this year’s program:

Hanan Hassan Moalim Ali, International Islamic Trade Finance Corporation
Yasseen Alsharif, Arab Bank
Hanna G. Atallah, Housing Bank for Trade and Finance
Linda Bader, Wintrust Financial Corporation
Boris Bajic, Danske Bank
Thomas Banks, Lloyds Banking Group
Ahmed Bayoumi, Export Development Bank of Egypt (EBE)
Clement Berthou, Societe Generale
Caroline Brown, Wells Fargo Bank
Bruno Campos, Bank of America
Antonio Crespo, Nordea
Alexia Dackberg, Swedbank
Madlena Demirchian, Commerce Bank
Natalie Harold, NatWest
Christophe Hatt, BNP Paribas
Aaron Jennings, BNY Mellon
Elmira Jubanyshkaliyeva, Barclays
Mukuka Bwalya-Katowa, FNB Zambia
Zakir Khanmammadov, Kapital Bank
Rufus Kin Yan Lam, HSBC
Ryan Lastra, JPMorgan Chase & Co.
Thao Hanh Le, ING Bank
Yvonne Lim, UBS
Aline Perico Lima, StoneX
Sepideh Malekpour, Surecomp
Jocelyn Tong-Palmer, ANZ Banking Group
Pauline Pang, MUFG Bank
Rachel Parks, Derivative Path, Inc.
Abir Paul, BMO Capital Markets
Sara Pianigiani, Standard Chartered
Grzegorz Pojnar, Santander Bank
Joshua Randolph, PNC Bank
Theresa Donnelly-Staerk, Deloitte
Xi-Ping Tan, Deutsche Bank
Ruben Valentino, Banorte
Mouli Vasan, Abu Dhabi Commercial Bank

About BAFT
BAFT is the leading international financial services association whose membership includes large global and regional banks, service providers, and fintech companies headquartered around the world. BAFT provides advocacy, thought leadership, education, and a global forum for its members in transaction banking, including international trade finance and payments. For nearly a century, BAFT has expanded markets, shaped policy, developed business solutions, and preserved the safety and soundness of the global financial system. Learn more at www.baft.org.

BAFT Media Contact:
Blair Bernstein
[email protected]
+ 1 (202) 663-5468

January 12, 2021 by Jessica Moore

BAFT announces the publication of both the Business Best Practices and Technical Best Practices, Version 1.1, for the Distributed Ledger Payment Commitment (DLPC).

WASHINGTON – BAFT, the leading global financial services association for international transaction banking, today announced the publication of both the Business Best Practices and Technical Best Practices, Version 1.1, for the Distributed Ledger Payment Commitment (DLPC). The DLPC is a digital asset and global standard for a payment commitment that can be used on any blockchain network and can operate across networks. First released in August 2020, this latest version of the DLPC Best Practices incorporates industry comments and experience from implementation in live transactions.

Investigating the use of distributed ledger technology to expedite the digitization of trade finance, the BAFT Innovation Council established the DLPC working group in 2016. It was tasked with producing standardized rules for the transformation of a payment commitment, the common core of all negotiable trade instruments, into a digital asset to be used in any trade finance solution sitting on any distributed ledger technology platform. The working group introduced the DLPC Best Practices for trial use in April 2019.

Since then, the DLPC has been implemented in live transactions as a digital asset backed by a traditional trade instrument, such as a guarantee, as a means for enterprises to finance international trade transactions and facilitate the ultimate resulting payments. With the recent guidance from the U.S. Office of the Comptroller of the Currency endorsing bank participation on blockchains and use of stablecoins for payments, the DLPC is in position to make a significant contribution to the new rails of transaction banking.

“In just a little over a year, the DLPC has grown from being a global standard for traditional payment commitments to a new financial asset and payment instrument in its own right,” said Rebecca Liao, co-founder and COO of Skuchain and co-chair of the DLPC working group. “The trade finance community was hungry for an innovation with a solid legal framework that would allow transactions to be digitized, de-risked, negotiable, and interoperable across platforms to promote greater liquidity and market efficiency.”

“The DLPC breaks new ground for financial services firms seeking to leverage the unique characteristics of distributed ledger technology,” said Samantha Pelosi, senior vice president for payments and innovation, BAFT. “Use of the DLPC facilitates the interoperability of disparate blockchain platforms and creates what is currently the only digital negotiable instrument with legal backing. These best practices provide for sound validity under Delaware law, and BAFT continues to advocate for the amendment of laws to grant similar legal status to digital negotiable instruments used in cross-border transactions.”

The DLPC working group consists of 12 representatives from BAFT and the following organizations: Arnold & Porter Kaye Scholer, CGI, Citi, GTBInsights LLC, Morgan, Lewis & Bockius, Queen Mary University of London, R3, Red Chalk Group, Skuchain, Standard Chartered, Surecomp, US Bank, Wells Fargo, and Young Conaway Stargatt & Taylor.

To read the DLPC Best Practices, visit our Library of Documents under the Industry Definitions and Guidelines section.

BAFT Media Contact:
Blair Bernstein
[email protected]
+ 1 (202) 663-5468

December 17, 2020 by Jessica Moore

On December 17 BAFT’s Board Chair, Mark Garfield, published his monthly communication to the wider BAFT membership.

Each year at this time, my wife and I send out seasonal holiday cards to former work colleagues, old high school chums, family, and friends. For some, we’ve had no contact for 40 years other than the giving and receiving of our annual holiday greeting. It’s a joy to receive a card from a long-ago acquaintance with an updated family photo and a simple note. Over time some of my cherished connections were lost. Thus, the address list is of the utmost value. Well, last year, I lost the address list. My wife did not lose it; I did…oops. We tried our best to reconstruct the addresses. But, alas, we lost some connections that we may never recover.

This reminded me of another prized list: my bank’s RMA list. And like my seasonal greeting card, over the years we’ve lost a few RMAs, which also caused some difficulties. The RMA exchange is the lifeblood for a regional bank like mine to connect with the larger global banking community. It is how a Main Street bank assists a Main Street company in moving products or buying products overseas. The RMA challenge is not unique to my bank. Regional banks in MENA, Africa, Latin America, Asia, and the Caribbean have all informed me of this significant challenge.

At BAFT, the RMA issue is a key priority. The association created a working group to identify the challenges and determine possible solutions. Amy Sahm from Fulton Bank, a BAFT Board member and a key leader in this RMA working group, presented some findings from the group at the 2020 Virtual Regional Bank Conference in October. The working group identified current tools that may be useful in our efforts to maintain and grow RMA permissions. There is more to be done and your input or suggestions are welcome as we look at the broader global effect. This winter, BAFT plans to hold an all-member collaborative webinar in partnership with SWIFT to address and assist in this RMA effort.

I believe that with the help of BAFT, our industry can find ways to keep the RMA exchange as complete and vibrant as possible, allowing for all of us to maintain our valued connections. More to come. And if you didn’t get my holiday card this year, I need your address!

May your holiday season be full of joy.

Mark Garfield
BAFT Chair
Head of Global Financial Institutions
Zions Bancorporation

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