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Easing Trade Financing Bottlenecks: The Zenith Bank Approach

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Easing Trade Financing Bottlenecks: The Zenith Bank Approach

International trade, the cross‐border exchange of goods and services, is now widely acknowledged as an important engine for growth in most developing economies such as Ghana and as long as Ghana engages in trade, an increasing number of banks and financiers will be required to fund trade businesses.

In Ghana, almost all commercial banks offer trade financing products and services in one way or the other, however, there is one Bank that keeps defying the odds and standing tall where trade financing is concerned and that is the 14th Ghana Banking Awards winner of the “Best Bank in Trade finance”, Zenith Bank (Ghana) Limited.

Zenith Bank’s commitment to trade financing stood tall above its peers and was affirmed by its numerous customers as well by the volumes of trade transactions effected. According to the Bank that also won the same award in 2012, its rich reputation in trade services is largely in line with its vision “to be the reference point in the provision of prompt, flawless and innovative banking products and services in the Ghanaian banking industry”.

One of the trade financing services offered by the bank is the invisible payments or personal remittances. This service is typically accessed for the payment of non-merchandized goods such as fees, medical bills, and personal remittances to institutions and individuals abroad.

With the pre-payment or advance payment option however, it is meant to offer payment for goods not yet shipped to Ghana. This is so common for importers and small and medium scale enterprises that have imported merchandise or intend to import goods but are required to pay their suppliers before shipment.

According to a Bank of Ghana directive, this pre-payment service to merchants should not be more than US$50, 000 or its equivalent in other currencies.

Quite similar to the advance payment service is the open account payment options. The difference is that, the open account is a form of payment for goods which have already been shipped to the importer and payment expected at a much later date. There is no threshold to this payment type.

Zenith also provides bills for import and export collections. Under this settlement option, the exporter, who is the drawer, ships goods and hands over the shipping documents to a bank, which is referred to as the remitting bank.

The remitting bank in turn forwards documents to the importer’s (drawee’s) bank, which is termed the collecting bank. Here, the two banks involved in this chain are only courier parties and facilitators.

Last but not the least of the trade payment options available at Zenith Bank is the provision of Letters of Credit for companies and individuals engaged in import and export. This is an irrevocable undertaking by the issuing bank, in this case Zenith Bank on behalf of the applicant/importer that it will honour payment if documents covering shipment are made as per the terms and conditions of the Letters of Credit.

The bank also provides same day value for all transactions, guaranteeing that suppliers/beneficiaries/families and friends get instant value for all.  The bank attaches urgency to every single transaction and ensures issues raised are addressed immediately.

It is easy to notice that the trade financing services the bank offers are not different from what is being offered by other banks, however, it is the diligence with which the services are executed that gives the Bank a competitive advantage over its peers and keeps customers coming back for more.

The  award winning bank’s trade services team, undoubtedly, the best in the industry, are always on hand to ensure that it does not only fulfill trade financing needs, but executes them in a prompt and timely manner that adds value to the customers’ business.

Not only does Zenith Bank possess outstanding expertise and attitude to customer service in the daily execution of its duties, they always ensure strict adherence to the Central Bank’s regulatory framework whilst ensuring that all its customers’ trade financing needs are met.

Customer Satisfaction is the Bank’s priority and that drives it into coming up with innovative products and services which cater to the everyday banking needs of its customers.

In case you are still in doubt, you can trust the track record of the multi award winning Bank over the years. Named Bank of the Year Ghana 2014 by The Banker, Zenith Bank has received the following awards:

  • Best Bank in Trade Finance (Ghana Banking Awards, 2014)
  • US Dollar Payments Straight Through Processing Excellence Awards, 2014 by Citi Bank
  • Best Bank in Trade Finance (Ghana Banking Awards, 2012)
  • Trade Finance Deal (Ghana Banking Awards, 2012)
  • 2nd Runner-up, Best Bank in Trade Finance (Ghana Banking Awards, 2011)

With a track record such as this, customers and stakeholders can only be assured of the very best from a Bank that has differentiated itself from competition by satisfying the changing taste and demands of customers through deploying cutting edge ICT, employing the best human capital in the industry and firm commitment to first class service delivery.

Banking

European shares end higher on strong earnings, positive data

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European shares end higher on strong earnings, positive data 1

By Sagarika Jaisinghani and Ambar Warrick

(Reuters) – Euro zone shares rose on Friday, marking a third week of gains, as data showed factory activity in February jumped to a three-year high, while upbeat quarterly earnings boosted confidence in a broader economic recovery.

The euro zone index was up 0.9%, with strong earnings from companies such as Acciona and Hermes brewing some optimism over an eventual economic recovery.

The pan-European STOXX 600 index rose 0.5%, as regional factory activity was seen reaching a three-year high on strong demand for manufactured goods at home and overseas.

Another reading showed the euro zone’s current account surplus widened in December on a rise in trade surplus and a narrower deficit in secondary income.

Still, the STOXX 600 marked small gains for the week, having dropped for the past three sessions as investor concern grew over rising inflation and a rocky COVID-19 vaccine rollout.

But basic resources stocks outpaced their peers this week with a 7% jump, as improving industrial activity across the globe drove up commodity prices.

“This week’s slightly adverse price action has all the hallmarks of a loss of momentum temporarily and not a structural turn,” said Jeffrey Halley, senior market analyst at OANDA.

“There is not a major central bank in the world thinking about taking their foot off the monetary spigot, except perhaps China. (Markets) will remain awash in zero percent central bank money through all of 2021 (and) a lot of that will head to the equity market.”

Minutes of the European Central Bank’s January meeting, released on Thursday, showed policymakers expressed fresh concerns over the euro’s strength but appeared relaxed over the recent rise in government bond yields.

The bank’s relaxed stance was justified by the euro zone economy requiring continued monetary and fiscal support, as evidenced by a contraction in the bloc’s dominant services industry in February.

The STOXX 600 has rebounded more than 50% since crashing to multi-year lows in March 2020, with hopes of a global economic rebound this year sparking demand for sectors such as energy, mining, banks and industrial goods.

London’s FTSE 100 lagged regional bourses on Friday due to a slump in January retail sales and as the pound jumped to its highest against the dollar in nearly three years. [.L] [GBP/]

French carmaker Renault tumbled more than 4% after posting a record annual loss of 8 billion euros ($9.68 billion), while food group Danone and German insurer Allianz rose following upbeat trading forecasts.

(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Sriraj Kalluvila and Shailesh Kuber)

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Banking

ECB plans closer scrutiny of bank boards

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ECB plans closer scrutiny of bank boards 2

FRANKFURT (Reuters) – The European Central Bank plans to increase scrutiny of bank board directors and will take look more closely at diversity within management bodies, ECB supervisor Edouard Fernandez-Bollo said on Friday.

The ECB already examines the suitability of board candidates in a so-called fit and proper assessment, but rules across the 19 euro zone members vary, so the quality of these checks can be inconsistent.

The ECB plans to ask banks to undertake a suitability assessment before making appointments, and they will put greater emphasis on the candidates’ previous positions and the bank’s specific needs, Fernandez-Bollo said in a speech.

The supervisor also plans more detailed rules on how it will reassess board members once new information emerges, particularly in case of breaches related to anti-money laundering and financing of terrorism, Fernandez-Bollo added.

Fernandez-Bollo did not talk about enforcing diversity quotas, but he argued that diversity, including diversity in gender, backgrounds and experiences, improves efficiency and was thus crucial.

“Supervisors will consider furthermore all of the diversity-related aspects that are most relevant to enhancing the individual and collective leadership of boards,” he said.

“Diversity within a management body is therefore crucial … there is a lot of room for improvement in this area in European banks,” he said.

(Reporting by Balazs Koranyi, editing by Larry King)

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Banking

Where are we with Open Banking, and should we be going further?

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Where are we with Open Banking, and should we be going further? 3

By Mitchel Lenson, Non-Executive Chairman, Exizent

Open Banking has the power to revolutionise the way we manage our money, but most (65%) consumers are still not aware of it, while many financial institutions continue to treat it as an obligation rather than an opportunity.

For Open Banking to truly reach its potential, consumers need to have more trust in its benefits. However, this will only happen if banks and other financial institutions start to embrace it, rather than simply accept it.

Covid-19 has proven to banks that digital banking and open finance innovation is not simply a ‘nice to have’. It is vital for their own survival. With so many challenger banks now coming into the market, many of whom have entirely digital models and therefore invest heavily in technology, banks are starting to become aware that if they don’t embrace it, they’ll get left behind.

So, fuelled by a mixture of competition and Covid-19, banks are starting to realise that Open Banking is not about giving away valuable data, but it is about collaborating with third party fintechs to explore the endless opportunities data sharing can bring – to all sides.

By making open finance easier for developers, banks can not only save time and money by improving their own services but help create useful solutions that add real value for their customers.

Open Banking for all?

There is one, yet untapped area of consumer finance that could be immeasurably improved by Open Banking, and that is estate administration.

Mitchel Lenson

Mitchel Lenson

Recent research from Which? found that many executors contend with delays, errors and poor knowledge from their banks during the probate process. Our own research shows that most legal professionals admit the process does not work as it should, and the time it takes to complete probate is unacceptable.

Like the Which? survey, we found that the main issue is the administration involved, with most legal professionals saying that the time it takes for financial institutions to get back to them with the information they need is the main cause of delays.

Given that the system is not working for consumers, something clearly needs to be done. The good news is that the technology and data is already available – we just need to harness it to create a better system.

That is why we are developing the first ever platform to connect executors, legal professionals, and financial institutions to create a better, quicker, and more secure probate experience for everyone.

Our first release of the platform – a bespoke cloud-based solution to enable legal services firms to integrate directly with financial institutions making information gathering and processing more straightforward – was released in 2020. We are now building on that foundation to accelerate our development work with financial institutions to deliver additional value for all sides.

We also see huge potential in working with banks to utilise the digital financial infrastructure, powered by Open Banking, to improve things even further. But there is one, fairly sizeable issue – currently, Open Banking consent ceases at the point of death.

Is it time for legislative change?

Open Banking is not as open as is should be for those who can give consent, so we are certainly some way off from Open Banking for the deceased.  However, the more that banks acknowledge Open Banking and its potential and are prepared to collaborate with third party fintechs to develop better experiences for consumers, the more likely we are to get to a point where we can tap into that potential to improve things for the bereaved.

Many of the problems – highlighted by Which? – that consumers face when managing someone’s estate could be reduced significantly if open finance continued to apply to the deceased.

Open Banking provides a huge opportunity to speed-up and reduce friction for loved ones faced at some of the hardest moments of their lives, and there is a strong argument here for the current position to be reviewed to enable better access to a deceased person’s assets.

With our current platform, we are showing how technology is playing an incredibly significant role in dealing with the complex, tangled process that is probate and the potential of open finance in radically enhancing what we are already doing cannot be understated.

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