Quipu’s work is just one example of the growing importance of AI to financial institutions. According to Statista, the financial sector “exhibit[s] one of the highest adoption rates across industries.” In fact, Statista estimates that in 2024, the financial services industry invested roughly $45 billion in AI technology. Concurrently, NVIDIA found that more than half of the companies represented in its global State of AI in Financial Services: 2025 Trends report view AI as “crucial to their future success.” Of the 600 financial services professionals surveyed, 98% of managers say that their organizations plan to increase AI infrastructure spending this year.

Many banks have already deployed AI to automate internal processes such as customer onboarding, credit scoring, fraud detection, and loan processing. Increasingly, FIs consider AI a pivotal tool for efficiency and cost-effectiveness in meeting evolving anti-money laundering and know-your-customer regulations.

As these innovations become more commonplace, some banks may wonder what’s next for AI? That’s where innovations arising from the world’s best fintech labs come in.

AI capabilities continue to mature. Enhanced AI capabilities will help FIs generate new business value, but only if those institutions follow the advance from AI to generative AI (Gen AI).

The term “artificial intelligence” is used for technologies that can perform tasks previously requiring human brain power. Relying on historical data and rules-based systems, these capabilities recognize patterns, understand language, and detect anomalies—notably, the types of anomalies that can indicate fraud.

Gen AI is a specialized branch of AI that exceeds content analysis to actually produce content. Gen AI can write. It can simulate human conversation. It can code. It can generate images and videos.

The difference between AI and Gen AI can be seen in chatbots. Imagine this: A customer asks a chatbot, “Why was my credit card application denied?” An AI-powered chatbot may return a list of common reasons for the bank to deny credit, followed by a customer-service phone number for the user to call. A Gen AI-powered chatbot may respond with, “Your credit card application was denied because your credit score is too low. Your credit score is too low because a $2,000 write-off appears on your credit report. This write-off seems to be related to an auto loan from ABC Motors. Repaying this debt will help you improve your credit score. You may want to contact ABC Motors to settle this debt. Consider negotiating a ‘pay-for-delete’ arrangement.”

“Loan sharks were these businesses’ only solution. We’re an alternative to that.”

Mercedes Bidart, CEO and Founder, Quipu

Chatbot improvement is just one way Gen AI can improve business for FIs. It can study customer data to more closely tailor marketing strategies and financial services to individual needs. It can improve loan and investment strategies by generating “what if ” scenarios to help banks chart, for example, how changing interest rates affect customers’ willingness to take out new loans, and customers’ ability to repay those loans. And, as the innovations discussed below indicate, AI and Gen AI can help banks and their clients hasten international trade. They can help spot and stop previously unknown threats to bank infrastructures and data. And they can provide a financial lifeline to the underbanked.

Bancolombia Ventures partners with startups, focusing on topics such as fintech, climate-related technology, and cybersecurity. One of those startups, Quipu, has developed a new credit-scoring system tailored to what Bancolombia calls the “informal” nature of business in Latin America.

According to El Pais, a leading Colombian newspaper, close to 95% of all businesses in that country are microenterprises—defined as operations with 10 employees or less. While employing 65% of the Colombian workforce, these organizations tend to suffer from “business dwarfism,” or an inability to grow. Why? They lack access to capital. Traditional credit scoring methods paint them as a bad risk.

This is a problem that Mercedes Bidart, Quipu CEO, is trying to solve. The MIT graduate notes that most microentrepreneurs in the country operate as freelancers. “They have their digital wallet or bank account as a person, not as a business,” Bidart says. “They come in for an SME [small or midsize enterprise] loan at the bank, but they won’t get that. There’s no information about their business behavior.”

The Quipu system finds new ways to detect business value. It looks at business location, social media posts (including videos, pictures, and customer comments) and other nontraditional sources of information to determine business health. Even Google Maps can indicate whether a business is growing—showing, perhaps, the physical expansion of a home-based garage over time.

Quipu uses this information to develop its own credit scores for microbusinesses. Potential new clients are often referred by Bancolombia, from its pool of declined applicants. Quipu has offered many of these microbusinesses loans ranging from $100 to $2,000—for a total of $3.5 million in loans granted over the past 18 months. While these are personal loans, rather than business loans, Bidart believes that these small infusions of cash will help some businesses grow to the point where they eventually qualify for more-traditional SME loans.

“The people we serve—before us the only financial solution they had was the predatory lender. We have loan sharks. They charge abusive interest rates, and they’re violent,” Bidart says. “They operate from Mexico to Argentina. In Colombia, loan sharks were these businesses’ only solution. We’re an alternative to that.”

Let’s take look at innovations arising at other fintech labs around the world.

More recently, the lab launched its “beyondbanking” initiative, an effort to identify nonfinancial markets that OTP Group could penetrate. To enter these nonbanking industries, the beyond-banking arm of the OTP lab creates new subsidiaries, acquires and integrates existing companies, and works with nonbanking partners. The beyond-banking ecosystem now consists of travel services, online real estate platforms, a health care marketplace, and other businesses. Of particular note is Fizz.hu, a curated online marketplace offering built-in financing options.

In Istanbul, the TEB Faktoring Digital Transformation Program was founded in 2022 as part of TEB Faktoring’s commitment to innovation. It operates as an internal innovation hub within TEB Faktoring, which is a subsidiary of Turkish Economy Bank (TEB) and its partner BNP Paribas. The program focuses on financial technologies, process automation, customer-experience enhancement, and operational efficiency within the factoring industry. While the program is an internal effort, TEB does collaborate with fintechs, startups, and other technology partners for specific programs. These startups benefit from aid in refining their business models and strategies. They also receive access to senior TEB executives, regulatory education, and insight into best practices, to help make products both compliant and commercially viable.

The program prides itself on an initiative that integrates AI-powered analytics into internal credit scoring. That capability has automated 80% of decision-making processes, significantly improving operational efficiency. The initiative has also enhanced customer experience by leading to faster approvals. Managing risk efficiently is critical in the factoring industry.

The program’s AI-driven risk-assessment tool offers customer specific financial products, by providing real-time risk evaluation. This ensures that each client receives a factoring solution best suited to its individual financial profile.

In Latin America, labs work to serve the underbanked.

Bancolombia Ventures is the corporate venture capital arm of Grupo Bancolombia. It partners primarily with startups in Series A and Series B rounds of investments—those that have already demonstrated strong market traction and a market fit for their products. In addition to financial investments—offered for stakes ranging from 2%-20% in the companies nurtured—Bancolombia offers mentoring for startups in the fields of business-model refinement, regulatory compliance, marketing strategy, operational efficiency, and scaling. The bank also helps startups open doors with potential partners in key markets.

As discussed previously, significant innovations to arise from the bank include new credit-scoring methodologies for microbusinesses developed by the startup Quipu. Working with the Ozone API open banking company, Bancolombia is building the type of open application programming interface (API) infrastructure essential for secure data sharing. This innovation will empower banks to harness shared financial data for enhanced customer insights and personalized services.

In an effort to help BTG Pactual become a destination for tech companies operating in Latin America, boostLAB Powered by BTG Pactual was founded in 2018. This acceleration-andinvestment program is part of the bank’s early-stage venture capital strategy. It focuses on startups between seed and Series A funding stages—those that have achieved product-market fit, built a customer base, and are ready to scale. The lab has accelerated and/or invested in 86 startups since its inception. The four companies nurtured in the 2024 cohort each received an investment of 1 million Brazilian reais (about $177,500 at today’s rate) from BTG Pactual in exchange for a 3% equity stake. BTG Pactual also retains the option to invest an additional R$1 million in the startups’ next funding round, with a 25% discount on the round’s valuation. Among companies nurtured is Intuitive Care, a software-as-a-service platform that automates manual and repetitive processes in hospitals, clinics, and other centers. In automating and optimizing processes for reconciling payments from different health care plans, Intuitive Care can help improve revenue for health care centers.

Banco Bradesco inovabra was launched in 2013. It offers a physical and digital co-innovation environment housing more than 220 startups—with different lab programs connecting to an additional 1,500. A capital vehicle of Bradesco called FIP Inovabra invests between R$20 million and R$75 million for a minority share in the companies nurtured.

Innovations to arise from the lab include a pilot project for the use of stablecoins in international transactions. A stablecoin is a type of cryptocurrency pegged to a reserve asset such as the euro or US dollar. This is an effort to combine consistent value with the flexibility and speed of digital assets. The pilot program at inovabra, instituted in partnership with the Parafin digital-payment company, will use stablecoins in international transactions, notably for the payment of imports. Also on tap is the bank’s first crypto-asset investment vehicle, a capability offered through a partnership with the Hashdex crypto-asset management firm.

Innovations continue in the Middle East.

Headquartered in Amman, Jordan, Arab Bank now has more than 600 branches in the Middle East, Europe, and Asia. Its AB Xelerate innovation and venture capital arm has, since 2018, completed more than 30 PoCs designed to improve banking operations and the overall experience of Arab Bank customers. In 2024 alone, AB Xelerate nurtured seven successful PoCs. These focused on deploying Gen AI to streamline legal processes, provide virtual financial assistance to customers, and perform other tasks. A co-creation space is offered in the Arab Bank Innovation Hub.

AB Xelerate has also invested in 10 startups. These operate in the fintech, embedded finance, cybersecurity, and banking-as-aservice arenas. Working with the Riyadh-based Intella company, for example, the bank is implementing a program to transcribe all customer calls into Arabic text. This capability makes it easier for Arab Bank to obtain customer insight. Working with a US cybersecurity company, the bank is enhancing its cybersecurity capabilities with zero-day threat detection.

AI Xelerate, an associated bootcamp, extends the bank’s reach to additional startups. In the bootcamp’s latest incarnation, it nurtured eight teams (from more than 100 startups that applied) for mentorship, workshops, networking, and the opportunity to pitch ideas to investors.

An Arab Bank internal innovation center, Acabes for Financial Technology, is dedicated to the continuous upgrading and enhancement of the bank’s digital offerings. Acabes is also focused on building new end-to-end technology platforms to digitalize and optimize Arab Bank’s internal processes and customer-facing experiences.

The Morgan Stanley Inclusive & Sustainable Ventures Lab is an intensive five-month accelerator designed to scale tech startups. It launched in 2017 in the United States and expanded in 2021 to include startup founders in Europe, the Middle East, and Africa. The lab promotes financial inclusion and provides founders with much-needed access to investors—along with the tools, resources, and connections needed to grow. The lab builds on the success of two other Morgan Stanley offerings—the Inclusive Ventures Lab and the Sustainable Solutions Collaborative—that together distributed more than $30 million in capital to more than 100 companies over the course of eight years.

Through the lab, Morgan Stanley offers early-stage, highgrowth companies mentorship, networking opportunities, office space and access to external advisers. Lab curriculum covers topics such as branding, pitch development, value-proposition refinement, and devising effective finance and sales strategies. Capital investment is either $250,000 or £250,000 (about $332,000) in each company nurtured, depending on the region in which it operates: $250,000 in the Americas. In exchange, Morgan Stanley takes a 5% stake.

The lab culminates in a demo day, during which participants pitch their companies to potential investors. These include venture capitalists, angel investors, and private equity firms. Recent companies nurtured include Research Grid, which has produced an automation engine to streamline administration of clinical medical trials; DotLab, which develops AI and machinelearning technologies geared toward improving health outcomes for women, notably in the field of diagnosing endometriosis; and Fluix, whose CoPilot AI software reduces energy costs for facilities by integrating and optimizing systems.

In 2024, Mitsubishi UFJ Morgan Stanley Securities launched the Japan Inclusive Ventures Lab, a startup acceleration program in that country. It graduated its first cohort in February of this year.

Now in its 12th year, TD Lab of TD Bank Group studies market and technology trends to identify potential solutions for TD Bank lines of business. The lab works to build functional prototypes for TD Bank, to grow TD intellectual property, and to influence product-development road maps.

As part of this work, the lab proposes, prioritizes, and builds new solutions to address core customer problems. It also monitors and tests emerging technologies to determine practical use cases for the bank. Working with TD’s External Ecosystems team, TD Lab monitors startups and entrepreneurs for their potential to deliver unique technologies or bring strategic value to TD. Selected startups may pitch directly to TD executives, explaining how the startup’s offerings can help meet bank challenges. Through partnerships with the External Ecosystems team, startups engaged through TD Lab may ultimately receive funding from or partnership with TD Bank.

Other significant External Labs include: Akbank LAB, Alior Bank/RBL_Start, Alios Cooperative, Barclays Eagle Labs, BNY Enterprise Innovation Group, BofA Breakthrough Lab, Citi Innovation Labs, Deutsche Bank Innovation Center, EFG EV Fintech, Elevator Lab Powered by Raiffeisen Bank International, ING Labs, Up2Stars/Intesa Sanpaolo, Visa Global Innovation Center, x15 Ventures/Commonwealth Bank of Australia, and Yapi Kredi FRWRD.

At some FIs, innovation is germinated by staff.

Formally established in 2018, the CTBC Data & AI R&D Center in Taiwan now employs more than 200 people. Process optimization, improved customer service, automated risk management, automated fraud detection, and improved regulatory compliance are all areas of focus.

Most recently, the center has been investing its resources in Gen AI. It believes Gen AI can enhance operations, boost productivity, and redefine the customer experience. The bank plans to first deploy its Gen AI capabilities to optimize business operations and employee training. Eventually, these AI systems will provide bank employees with the type of market insights that can improve customer service. In back-office management, the bank will use AI to strengthen cybersecurity and fraud prevention.

Perhaps most important to CTBC, though, is the use of AI in compliance management. CTBC Bank says its AI technologies enable rapid data analysis, proactive risk detection, and real-time alerts to ensure regulatory compliance. By leveraging machine learning, the bank can now detect anomalous activities, trigger automatic alerts, and reduce manual compliance reviews by 25%.

China Zheshang Bank (CZBank) is a commercial bank based in Hangzhou. CZBank’s Network Security Innovation Laboratory, established in 2014, focuses on technological developments in network defense, data security, and other fields. Network security projects include building upon existing network protections to analyze evolving requirements, determine security-device capabilities, and clarify operational workflows. New projects establish a system for using situational awareness and other techniques to devise rapid warning, response, and threat-disposal capabilities. Data protection is also a concern, which the bank is addressing through the establishment of a holistic data-protection framework that uses a “zerotrust” approach to data access and control. Zero-trust protocols assume that no user or device should ever be automatically granted access to bank data. CZBank’s framework combines this protocol with continuous identity verification and other technological capabilities to provide comprehensive, dynamic, and flexible data protection and management.

Other Internal Labs of note include: ABC Labs/Bank ABC, BBVA AI Factory, Capital One Lab, CIB Innovation Group, Customer Experience LABs/CaixaBank, Fidelity Center for Applied Technology/Fidelity Labs, Goldman Sachs/GS Accelerate, Mastercard Labs as a Service, Moody’s, National Bank of Kuwait Group Digital Office, PayPal Innovation Labs, and SEB Embedded (SEB Group).

Some innovation centers are unaligned with banks, VC firms, or economic development organizations. Among these are Accenture’s Fintech Innovation Labs. This program operates around the globe and helps fintechs scale their businesses in competitive markets. Thus far, the lab has nurtured nearly 400 startups and helped raise more than $6.5 billion in capital. In Boston, Mass Challenge is a 501(c) accelerator. Its program offers early-stage startups mentorship, training, office space, legal advice, and access to funding.

Additional significant Independent Labs include: Beta-I, TechQuartier, and Tenity.

Understanding the monetary value of innovation, many venture capital firms and consultancies host their own fintech labs.

Hosting fintech labs provides VC firms access to promising, early-stage companies before those companies are widely known—providing lab hosts with a competitive investment edge. Accelerator Frankfurt nurtures business-to-business software startups focusing on financial, regulatory, and insurance technology, as well as other topics. Benefits received by these startups include more than 200 hours of mentoring in taxation, user experience, strategic planning, and other fields. Notable VC labs also include Startup Bootcamp. Operating in more than 20 countries, this accelerator has thus far nurtured more than 1,600 startups, helping them to achieve an average funding of about €1.7 million (about $1.9 million). Current programs focus on technology that addresses extraordinarily complex challenges—for example, extraterrestrial mining and gene editing. Additional programs nurture companies operating in the climate change and the health- and life-sciences fields.

Additional notable Venture Capital Labs include: Deloitte Catalyst, Plug and Play, Startup Wise Guys, Synechron, and Y Combinator.

Some fintech innovation labs work to improve economic and social conditions for vulnerable populations.

One example is the Asobancaria Social Innovation Lab. After Colombia’s social unrest of 2021, the Banking and Financial Associations of Colombia (Asobancaria) began to identify ways to better serve the banking needs of diverse populations, groups, and territories. The lab is part of this effort. Its projects target women, the elderly, youth, rural populations, ethnic groups, migrants, disabled persons, LGBTQ+ populations, and particular segments included in the peace-building process. The latter category includes both victims of armed conflict and former perpetrators trying to reintegrate into society.

Recent work has included financial-inclusion studies for LGBTQ+ and migrant populations. The studies examine market segmentation among these populations. The hope is that by using the findings of these studies, FIs can better tailor their products to meet specific needs of different subsets of these communities. The migrant study focused on those immigrating to Colombia from Venezuela. It examined how banks can improve their customer-service strategy for immigrants, reducing the barriers to financial services sometimes faced by this population.

WLab is the digital innovation lab of Colombia’s Banco W microfinance bank. Established in 2023, the lab’s mission is to design and implement digital solutions for microentrepreneurs and the underserved communities to which they cater. Its goals are threefold: to accelerate the bank’s digital transformation, to create an agile environment for experimentation and development of customer-focused capabilities, and to address the growing need for digital financial products meaningful to microentrepreneurs.

According to Juliana Jaramillo, Banco W innovation manager, microentrepreneurs in Colombia include everyone from vendors selling potato chips from street carts to owners of hair salons that may start with one chair but grow over time. The Covid-19 pandemic pushed this segment of the population to adopt digital capabilities, but tailoring bank offerings to meet these businesses’ specific needs can be challenging. “You have to take into consideration these microentrepreneurs’ level of education, the fact that their cell phones may not have the best connectivity, that their screens may be cracked,” Jaramillo says.

Offerings for these and other challenges faced by microentrepreneurs are developed at WLab’s physical workspace on the campus of Universidad Icesi in Cali. WLab is the only fintech innovation lab in Colombia directly connected to a university, and this partnership provides opportunities for collaboration with professors and students to develop solutions. For example, Jaramillo says that the lab worked with university professors to write copy for its digital products that would be understandable to people who find reading difficult.

WLab startups receive access to multidisciplinary expertise and opportunities for real-world testing. The lab’s startups include Truora, a company that simplifies and automates background checks, digital identity verification, and other processes; Powwi, which provides digital payments to enable secure transactions and improved financial management; and Quash, which deploys AI to help optimize business processes.

Innovations currently arising from the lab, or now being tested, include Billetera W, a digital wallet designed to offer microentrepreneurs and their customers secure, user-friendly, and accessible payment methods. To date, it has engaged roughly 78,250 users and has processed more than 2 million transactions.

Gotahorro Digital is another innovation. This microcredit product is designed to digitally provide Colombian microentrepreneurs with responsible financing options. Rather than using traditional research methods to verify business information—typically entailing a visit to the business from a bank representative—WLab now uses AI to scrape the web for information that supports business owners’ claims. This represents an evolution from initial Gotahorro processes. At first, applicants were asked to submit photos or videos of their businesses. However, the lab found that too many microentrepreneurs couldn’t take videos with their cell phone. Hence the move to AI-powered examination of alternative data.

Finally, in addition to WLab’s work with the university, it boasts a robust network of strategic partners and mentors Juliana Jarmillo Valencia, WLab innovation manager. dedicated to fostering innovation and growth among startups in the financial sector. Key partners include Fundacion WWB Colombia and Fundacion Grupo Social.

An initiative of the Brazilian Development Association, the Inter-American Development Bank, and the Brazilian Securities and Exchange Commission, the Brazilian Financial Innovation Lab (LAB) promotes cooperation and publicprivate dialogue between diverse actors to stimulate financial innovation and sustainable finance in Brazil. It also has a fintech working group. Its 1,408 individual and 372 institutional members represent FIs, government ministries, financial-market regulators, insurance and capital markets, public and private companies, fintechs, NGOs, and academic institutions. Most of its work takes place online.

The fintech working group specializes in promoting open innovation projects in fields such as crypto assets. It also studies ways to use data to identify and solve ESG challenges. Additional fields of study include green finance, social impact investment, and fintech innovation.

While acting primarily as a think tank, the lab does produce tangible projects. For example, in 2024 it compiled a pitch book consisting of technological offerings to meet ESG challenges. All offerings were submitted by startups. In 2025, the lab’s fintech working group is planning to advance initiatives related to AI and its use in sustainable-development projects.

Future plans include the establishment of a physical experimental environment to include a testing and learning hub. Development of a regulatory sandbox is also planned. Both initiatives will be coordinated by the Brazilian Securities and Exchange Commission.

The European Investment Bank Group (EIB) is the world’s largest multilateral financial institution. It is owned by the 27 EU member nations. Its mission is to close gaps in innovation goals and skills as identified by EU policymakers. To do so, EIB partners with startups that use technology to cure the world’s ills. The Blue Champions Advisory Programme is a collaboration with the European Commission to support development of innovative technologies to restore oceans and other waters. Seventy companies applied for the program. Twenty were chosen in 2024, offering advanced technologies in fields such as decarbonization, electric vessels, underwater connectivity and transport, tidal energy products, and underwater robotics. Businesses nurtured—hailing from Croatia, Denmark, France, Germany, Greece, Italy, Norway, Portugal, Spain, and Sweden—received training on investment pitches, market-commercialization strategies, and other topics, along with introductions to investors.

Additional Economic and Social Development Labs of note include: Copenhagen Fintech Lab, Cyberport, DIFC Fintech Hive, FinTech Innovation Lab, and Seoul Fintech Lab.

For sustainable finance, 2024 was the best of times and the worst of times.

On the positive side, issuance of impact bonds, sometimes called “GSS+” bonds (green, social, sustainability, and sustainability-linked instruments) totaled $1.1 trillion, according to provisional data published by the Climate Bond Initiative (CBI) in January.

However, on the red side of the ledger, the global coalition to contain climate change seemed to be fracturing by the end of the year. The 2024 US presidential elections brought to power the new Donald Trump administration; and Trump immediately ordered US withdrawal from the Paris Agreement, the world’s main treaty to fight climate change.

Given the need to more than double spending on clean energy supply, storage, and grid infrastructure to $300 billion/year for developing countries and $1.3 trillion/year for developed countries by 2035 “to keep the 1.5 target alive” (to achieve the goal of limiting global warming to an increase of no more than 1.5°C), “2024 failed to live up to what is needed,” says Gregor Vulturius, lead scientist and senior adviser on climate and sustainable finance at SEB.

Many market observers, however, still see the glass half full—especially looking beyond North America. “The outlook for 2025 is growth in sustainable finance,” says Timothy Rahill, a credit strategist at ING (Netherlands). “We ended 2024 with an increase over 2023. Of course, in 2021 and 2022, the levels of sustainable-finance issuance were very high, and outliers in the initial rush to do green issuance.”

According to CBI’s preliminary numbers, green bonds dominated in 2024, accounting for approximately 61% of the $1.1 trillion GSS+ debt accrued that year, compared with social and sustainability bonds (34%) and sustainability-linked bonds (1%).

Rahill explains that the EU’s Green Bond Standard (GBS), which took effect in December, should eventually push green bonds further. The standard aims to boost investor confidence by setting “a clear gold standard for green bonds” in the EU.

Still, “Many other issuers, such as sovereigns, view the rigorous new requirements [of the GBS] as a significant hurdle,” according to a late-January blog post by global investment firm Franklin Templeton. “They will likely adopt a wait-and-see approach to understand all potential implications before committing to issuing a [European green bond].”

According to Moody’s Ratings, overall bond issuance soared 35% in 2024, while sustainable bonds remained flat; and the latter’s share of the overall bond market fell from 15% in 2023 and 2022 to 11% in 2024.

However, Rahill predicts that in 2025, “Issuers will return their focus to green/sustainable finance issuance.” Moody’s mostly agrees, anticipating new green bond volumes rising to about $620 billion, 2% more than in 2024, “but eclipsing the previous record of $617 billion in 2021.”

Globally, “Social bonds will be constrained by a lack of benchmark-sized projects, while transition-labeled bonds and sustainability-linked bonds (SLBs) will remain niche segments as they navigate evolving market sentiment,” the ratings agency posted on its website.

For sustainable bonds, “Market conditions will remain the same as 2024,” says SEB’s Vulturius, who predicts growth of around 10%. According to SEB’s data, 2024 saw approximately $1.2 trillion in new sustainable bonds versus roughly $1.1 trillion in 2021, the previous record year, though SEB’s numbers, like CBI’s, are still preliminary.

What about the new administration in Washington, D.C.?

“I don’t expect the sustainable finance market will see a major headwind with the Trump administration. I still think we will see growth in 2025, even in US dollar debt,” says Rahill, though some corporations may not commit until the second quarter.

The CBI identified several factors that will encourage issuance in 2025, including new taxonomic definitions and increased spending by governments, development banks, and corporations on efforts at climate change impact adaptation and resilience. The CBI also expects increased visibility from insurance companies regarding sustainable finance in 2025.

Institutions focusing on sustainable finance in its various forms will have plenty to keep them busy in 2025. With that in mind, Global Finance presents its fifth annual Sustainable Finance Awards, with winners from seven regions and 53 countries, territories, and districts; and global honorees in 14 categories.

Global and regional awards require submissions detailing hard metrics of ESG activity, such as year-over-year growth in sustainable finance transactions or sustainable financial instruments as a percentage of total portfolio. Softer metrics also required include goal alignment with leading ESG norms or innovative product development. Entries were not required for country awards, which were judged by the editorial team’s independent research. Evaluation criteria includes governance policies and goals, environmental and social sustainability financing achievements, industry leadership, and third-party assessments. This awards program covers activities from January 2024 to December 2024. There was no fee to enter.

DBS is striving to green Asia’s economy by acting as an environmental-transition catalyst for anchor companies, mid-caps, and small and midsize enterprises (SMEs). The bank provides transition-related financing for these organizations at the corporate, project, and asset level. Among these offerings are green, sustainability-linked, and social loans and bonds, along with carbon-market financing and other products.

Standout transactions in 2024 include a loan to LG Energy to construct a plant in Poland for the manufacture of batteries used in electric vehicles. A 3 billion Hong Kong dollar (about $385.7 million) loan to the Hong Kong Housing Society will help create affordable residential projects. A 300 million Singapore dollar (about $224.2 million) bond will help the Singaporean developer CapitaLand build projects in alignment with green finance frameworks. In addition, the bank develops analytical tools to track and analyze climate data. It engages with industries (notably in the power, automotive, steel, shipping, real estate, and automotive sectors) and policy makers to chart paths to a healthier environment.       —Laura Spinale

Seeking to help Taiwan transition to a greener economy, CTBC Bank is working with Ørsted, the world’s largest developer of offshore wind-power projects, for the construction of the 61.3 billion Taiwan dollar (about $1.9 billion) Project Trinity.

This project consists of two offshore wind farms with turbines designed to withstand typhoons, seismic activity, and other ecological vagaries. Slated to be operational by the end of 2026, the farms—named Greater Changhua 2b and Greater Changhua 4—will generate 337 MW and 583 MW of electricity, respectively. This is enough to power roughly a million Taiwanese households.

CTBC Bank acted as mandated lead arranger and bookrunner for this syndicated loan. In that capacity, it identified and recruited potential lenders and other partners. These include Cathay Life Insurance, Taiwan’s largest insurance company. Project Trinity marked Cathay’s debut investment in Taiwan’s offshore wind market. CTBC Bank also recruited Taiwan’s National Credit Guarantee Administration to act as local export credit agency for the loan package.       —LS

Brazilian-headquartered BTG Pactual has been actively expanding its sustainable funding and transactions that have environmental and social benefits. This includes developing and managing new funds with strong sustainability and impact guidelines for financial products available in local markets.

BTG Pactual raised 542 million Brazilian reais (about $95.3 million) in its impact investing fund, which achieves social and environmental benefits with strong financial returns. The fund invests in small and midsize enterprises through private equity, focusing on educational technology for low-income populations, agribusiness software, alternatives to plastic packaging, and sustainable practices within the Brazilian açaí palm chain.

The bank has also focused on reforestation efforts through its Timberland Investment Group (TIG) subsidiary, which launched in 2021 and has raised $500 million toward its $1 billion target. The group wants to restore about 133,000 hectares (about 328,650 acres) of natural forest and establish sustainable commercial tree farms on an additional 133,000 hectares. As of the first quarter of 2024, TIG had $6.9 billion in assets and commitments and nearly 3 million acres under management throughout the US and Latin America.         —Andrea Murad

China Central Depository & Clearing Co. (CCDC) is a state-funded financial institution responsible for the custody, registration, and settlement of fixed-income securities in China. It functions as an important operations platform for the bond market, a supporting platform for the implementation of macroeconomic policies, a benchmark-services platform, and a key gateway for the opening up of China’s bond market. For example, CCDC provides issuance, registration, depository, settlement, valuation, collateral management, and information-disclosure services for green bonds, social responsibility bonds, and other sustainable finance products.

Its services can help issuers improve information-disclosure transparency and assist investors in identifying sustainable financial products. CCDC also promotes sustainable investment philosophy and otherwise contributes to the development of sustainable finance in China. As part of this work, it develops sustainable development-related indices, including China’s first green bond index, and has developed new standards for ESG evaluation.

—LS

The circular economy is about reusing, repairing, and recycling products and materials instead of simply disposing of them. Pulp and paper technologies provider Valmet has embraced circular economic principles in a big way. It’s now upgrading and extending the lifetime of its machines. The company has learned that modular machine design and smart engineering can often enable the same equipment’s use for other purposes. Valmet is also maximizing the use of recycled metals, reusing metals in its foundries.

Finland’s Nordea was the sole sustainability structuring adviser in Valmet’s March 2024 €200 million (about $206 million) green bond offering, making it easier for Valmet’s customers to manufacture sustainable products from renewable resources in the high-emissions pulp and paper industry. All eligible expenditures from the financing are aligned with the EU Taxonomy Regulation section 5.1 under transition to a circular economy.

—Andrew Singer

Raiffeisen Bank International (RBI) has long been considered a pioneer in green bond issuance in its native Austria. In 2018, it rolled out its green bond program aimed at encouraging sustainable lending across the RBI network of 11 Central and Eastern European (CEE) markets. Along with other banks, it participated last June as bookkeeper for Czech power company CEZ’s second green and sustainability-linked bond issue, worth €750 million ($772 million). The 4.25% bonds are due in 2032 and will be listed on the main market of the Luxembourg Stock Exchange. “With a total outstanding volume of [€2 billion] across 21 bonds in five currencies in Austria as of December 2023, RBI is the largest green bond issuer among financial institutions in the country and a regular issuer of green bonds on the international capital markets and in the retail segment in Austria and CEE,” proclaims the bank in its Green Bond Allocation and Impact Report 2024.

RBI has also developed a Sustainability Bond Framework to facilitate the issue of sustainable bonds. The bank works closely with clients in countries across the region to determine their needs and long-term environmental goals and tailor any forthcoming environmental, social, and governance (ESG) loans accordingly. In total, ESG loans to corporates over 2024 grew some 14% to €8 billion after a 16% increase in 2023 to €7 billion.    —Justin Keay

Akbank issued its first social bonds in 2022, and they have since proven to be suitable for its general bond issuance strategy. The bank issued some 770 million Turkish lira ($21.4 million) in domestic social bonds from 2022 to the end of 2023. The bonds incorporate three main pillars—environmental, technological, and social—that are aligned with Akbank’s Sustainable Finance Framework. The social pillar focuses on financing products and services to improve the health and well-being of communities in underdeveloped regions, facilitate equal opportunity, and generate employment, particularly among less-represented groups.

The bank has complemented its program of social bond issuance with a program of social loans. In 2023, in the wake of the devastating Feb. 6 earthquake that hit Turkey, Akbank announced the country’s first syndicated social loan, some $500 million in support of the Turkish economy, with a 367-day maturity. Thirty banks from 16 countries participated in this syndicated social loan, which was a first in Turkey.        —JK

Bank of the Philippine Islands (BPI) in 2024 issued and listed peso-denominated, fixed-rate, sustainable, environmental and equitable development bonds (SEED bonds) totaling nearly 34 billion Philippine pesos (about $587 million). The SEED bonds represent the bank’s largest thematic issuance to date. Proceeds will fund renewable energy, pollution prevention, and sustainable agriculture projects. They will further finance socioeconomic development activities, such as providing access to essential services for poverty-stricken communities.

The bank also served as a joint lead underwriter and bookrunner for Ayala Land’s 6 billion Philippine peso sustainability bond. Ayala Land is one of the largest property developers in the Philippines, and bond proceeds will be used by the company to implement energy and water-saving measures across its real estate portfolio. These measures include energy-efficient cooling systems and water harvesting/recycling systems. These and other activities bolster the bank’s goal of creating a 1 trillion Philippine peso corporate and SME portfolio supporting the UN Sustainable Development Goals. It hopes to reach that milestone by 2026.         —LS

CaixaBank has long been a global leader in microfinance, social bonds, and support for local communities.

The bank’s commitment was tested in October 2024, when record-breaking rainfall and flash floods battered Spain, causing casualties, massive disruptions, and economic losses, especially in the Valencia region. Caixa responded by opening a line of credit worth more than €2.5 billion for companies affected by the catastrophic weather. The bank also allowed commission-free cash withdrawals for customers with cards from other banks, for seven days, at the 785 ATMs it operates in Valencia.

In the first half of 2024, Caixa dedicated €1.08 billion to financing projects that positively impact local communities. This included its Velindre project, helping to fund the design, construction, and operation of an oncological hospital center in Wales. The bank also focused in 2024 on loans to finance projects linked to affordable housing, education, health, social and economic inclusion, and support for small and midsize enterprises in the Madrid area. —AS

Scotiabank’s goals are guided by its motto: “for every future.” This wholesale bank operates in the Americas and focuses on advancing the climate transition and promoting sustainable economic growth.

The bank’s enterprise-wide goals address climate risks by financing solutions for clients in carbon-intensive sectors, advancing net-zero initiatives to reduce emissions, and reducing its own emissions. Scotia’s Climate-Related Finance Framework outlines products and services that meet the bank’s goal of providing 350 billion Canadian dollars (about $246.2 billion) in climate-related finance by 2030.

Scotia’s credit due diligence processes address environmental and climate-related risks across its lending portfolio and are integrated into its credit-risk policies. Scotia Global Asset Management has adopted sustainable investment policies and publishes annual investment transparency reports.

In its Risk Appetite Framework, Scotia uses ESG performance metrics that are also included in its annual industry review process. The climate change risk assessment evaluates physical and transition risks and a client’s awareness of climate risks as a measure of management quality. —AM

Based in Malaysia, and one of the largest lending banks in Southeast Asia, Maybank is committed to serving the emerging markets in the 20 countries in which it operates. Here are some examples: In Indonesia, the bank has embarked on a social financing program to empower disadvantaged women and support growth through its partnership with Permodalan Nasional Madani. This microfinance company, focusing on women in its work with Maybank, strives to enhance the general welfare by supporting small entrepreneurs’ access to capital, mentorship, and capacity-building programs. Understanding that a healthy environment is key to any business’ success, Maybank is working with BenihBaik.com to support the construction of organic waste facilities in three cities in Bali. These waste management facilities will provide a cleaner environment for residents while also engaging in bioconversion processes that use living organisms to transform waste into substances such as methane that can later be used in energy production.           —LS

OTP Bank, formerly owned by the Hungarian state, now operates across 12 CEE countries. It continues to prioritize ESG targets in all its operations and is a leader in transition/sustainability-linked loan issuance. Such loans typically incorporate ESG criteria into the loan terms. Companies that meet or exceed predefined ESG performance targets may benefit from reduced interest rates, incentivizing sustainable practices. Conversely, failing to meet these targets may result in higher interest rates, thus ensuring a strong commitment to sustainability.

Green loans to corporates (including ESG-related loans) rose 38% year on year (YoY) in the third-quarter of 2024 (over Q3 2023), while retail loans rose 17% YoY. Green loans to corporates constitute around 6% of overall loans, to retail around 1.4%. In 2024, ESG financing as a proportion of the total for OTP reached 3.7%, more than double the 1.7% reached in 2023. According to Sustainalytics’ July 2024 report, “€1.26 billion have been allocated in the categories renewable energy, green buildings, and clean transportation, with projects located in Albania, Bulgaria, Croatia, Hungary, Romania, Serbia, and Slovenia.”         —JK

The sustainable infrastructure finance work of Societe Generale (SocGen) includes acting as initial coordinating lead arranger and joint bookrunner for the $8.8 billion SunZia Wind and Transmission project. The project consists of a 3.5 GW wind farm in New Mexico, along with a 550-mile transmission line to deliver this clean energy to Arizona. In Europe, SocGen served as senior mandated lead arranger for €4.2 billion (about $4.4 billion) in financing earmarked for the construction of a large-scale facility to produce green steel. Associated financing will fund the construction of a water treatment plant to supply the demineralized water necessary for green steel manufacturing. Among SocGen’s ESG-related loans are €2.6 billion in financing for the Fècamp 497 MW offshore wind farm in France. SocGen also acted as sole structuring bank for ReNew Power’s 600 MW, 35 billion Japanese yen (about $233.2 million), solar project in India; and as sole mandated lead arranger for nearly 11 billion Japanese yen in funding for Shizen Energy’s Kyushu (Japan) solar power plant.   

Asia wields significant economic influence on the world stage. But poor infrastructure, political instability, and massive income inequality leave a significant portion of the Asian populace living in poverty. Understanding that sustainable development includes improving the lives of the disadvantaged, banks now offer a host of microloans to historically underrepresented business owners—from female entrepreneurs to small-scale farmers.

Banks like to tout their ESG achievements, and these achievements aren’t just puffery. Banks’ significant reporting on their environmental efforts demonstrates their sustainability leadership, engendering confidence in customers and investors.

DBS’ portfolio of sustainable finance products is vast, ranging from green loans and sustainability-linked loans to social loans and green trade finance. The bank’s green financing portfolio in China alone grew 62% from 2023 to 2024. DBS acted as sole green finance adviser for a 500 million Japanese yen (about $3.3 million) loan for Envision Energy, a wind-turbine manufacturer. DBS was selected by the People’s Bank of China for this role. Envision will use these funds for the construction of a 100 MW wind-power project to serve the national grid in Puyang. The project is expected to generate 270 GW of renewable energy and avoid an estimated 212,600 tons of carbon emissions annually.

In Singapore, DBS acted as financial adviser and mandated lead arranger for a loan to renewable-power generator Rexus Bioenergy. This loan will fund a wood-to-energy plant. The plant will help transform Singapore’s significant wood waste into potassium fertilizer, compost, and other agricultural materials. Transition/sustainability-linked loans include a 350 million Hong Kong dollar (about $45 million) deal with Kwoon Chung Bus, for which DBS acted as mandated lead arranger. Kwoon Chung Bus is Hong Kong’s largest bus company. This loan will help it reduce greenhouse gases through the adoption of more environmentally friendly Euro VI diesel commercial vehicles into its fleet.

CTBC Bank called upon its extensive knowledge of the offshore wind sector and CTBC’s relationships with state-owned banks to achieve financing for Ørsted’s Project Trinity (see the Global Winners section of this article). In fact, CTBC Bank was able to bring three state-owned banks into the deal. Through those relationships and other activities, CTBC Bank helped Ørsted implement Trinity to enhance the existing Greater Changhua Offshore Wind complex. Phases 1 and 2 of this project became operational in 2023, providing power to roughly a million homes. Project Trinity, expected to be completed by 2026, will power an additional million households. This clean energy will aid Taiwan in meeting its goal of achieving net-zero carbon emissions by 2050. CTBC Bank acted as mandated lead arranger, financial adviser, and agent for this project.

The State Council of the People’s Republic of China is the nation’s chief administrative authority. In 1996, it funded the China Central Depository & Clearing Co. as a reorganization of the former National Exchange and Trading System. This company acts as a centralized financial enterprise, providing financial market infrastructure services to banks across China. Services focus on the depository and clearing of government bonds and other securities. The company has played a significant role in the development and standardization of China’s bond market—improving the safety of bond issuances, and easing registration, custody, and settlement processes. In addition to work discussed in the Global Winners section of this article, the company develops indices related to sustainable development and has crafted new standards for ESG evaluation.

Societe Generale (SocGen) has done significant work in the construction of battery energy storage systems (BESSs). These systems enable energy from renewables—including solar and wind power—to be stored and released as needed. BESSs funded by SocGen will store energy associated with a 1.5 GW portfolio of eight solar and wind farms being constructed in Australia by Neoen. Also in Australia, SocGen acted as mandated lead arranger for $400 million Australian dollars (about $255 million) in debt financing for construction of the third phase of the Melbourne Renewable Energy Hub. The hub, comprising three BESS storage projects of 200 MW each, will provide 1.6 GW of energy storage—capable of powering up to 200,000 Australian homes. In Indonesia, SocGen acted as mandated lead arranger for the Project IKN 50 MW solar power plant, along with associated BESS systems.

Maybank is committed to transparency in its ESG activities and in working with clients committed to environmentally sound operations. The bank often discusses its goal of achieving net-zero carbon emissions by 2050. To clarify that goal, it recently published a 70-page white paper called Banking on a Better Tomorrow: Our Commitment to Net Zero. The paper provides a detailed report on the bank’s approach to setting net-zero targets for clients operating in hard-to-abate sectors. It specifically outlines goals for the power, agriculture, aluminum, and steel industries. Additional papers are planned for the commercial real estate and automotive sectors. To ensure that Maybank works with clients committed to sustainability, the bank has developed a proprietary Net Zero carbon calculator, helping Maybank integrate sustainability into its financing decisions. The bank also annually updates its sustainable product framework and transition finance framework.

In addition to Maybank’s work in emerging markets discussed under the Global Winners section of this article, in 2024 the bank launched the HERpower loan program to support women-led small and midsize enterprises (SMEs) whose companies focus on sustainability and social impact. The program provides female entrepreneurs with tailored financing solutions along with invitations to special events and workshops. Fees for traditional banking services are waived for program participants.

In the first half of 2024, the Bank of China underwrote 98.4 billion Chinese yuan (about $13.6 billion) in Chinese green bonds, ranking first among Chinese banks. The scale of overseas green bond underwriting that year was $9.2 billion. Among the green bonds issued in 2024 were $940 million for Belt and Road Initiative countries, allocated to promote sustainable development. Projects funded include green and social efforts such as electric-vehicle battery manufacturing in Hungary, renewable-energy transmission in Slovakia, wind power in Uzbekistan, and sustainable fisheries in Chile. Also of note was the September issuance of a $400 billion green bond in Dubai. Proceeds will fund construction of a hybrid solar/photovoltaic power project. A second project in that country will reduce railways’ CO2 emissions by about 334,000 tons annually.

From January through November of 2024, the Industrial Bank of Korea (IBK) issued a total of 8.6 trillion South Korean won (about $6 billion) in social bonds. The bank reports that these bonds account for more than 22% of its own portfolio and more than 70% of all the social bonds issued by South Korean banks. Among these were an $800 million diversity and inclusion social bond to finance micro, small, and midsize enterprises (MSMEs) owned by women, people of color, and other underrepresented groups. This was the bank’s largest-ever foreign currency bond issuance. This issuance builds on a $600 million five-year, gender-equity-themed social bond issued by IBK in 2023. Proceeds from that bond were channeled toward the financing and/or refinancing of new and existing loans for women-led MSMEs.

The Bank of the Philippine Islands (BPI) has done extensive work in the field of sustaining communities. In 2024, the bank’s microfinance arm (BPI BanKo) partnered with agricultural fintech Agrilever to launch the AgriNegosyoKo Loan Program, aiming to help farmers in the Philippines strengthen their agricultural practices and improve their livelihoods. The AgriNegosyoKo Loan Program offers customized loans ranging from 50,000 to 300,000 Philippine pesos (about $863 to $5,180). These loans enable farmers to invest in land and equipment. Financial education is also offered. The bank’s new Green Solutions program marks the first collection of eco-friendly housing and automobile loans in the Philippines. The loans finance individuals’ purchase of solar panels as well as electric and hybrid vehicles. LavLoans (short for “lavender,” a color symbolizing support for those suffering from cancer) is a new program offering multipurpose cash loans to cancer patients and their families in need of immediate access to funds. No collateral is needed.

In addition to BPI’s work in sustainable bonds already noted in the Global Winners section of this article, BPI in 2024 served as sole issue manager, joint lead underwriter, and joint bookrunner for Maynilad water and wastewater service company’s 15 billion Philippine peso blue bond for sustainable water and wastewater management activities. It was the nation’s first SEC-registered blue bond.        —LS

The organizations covered in Global Finance’s first listing would face economic upheavals in the coming decades: among them, the 2008 global financial crisis, the European sovereign debt crisis, the 2015 Chinese stock market crash, and the Covid pandemic. As illustrated by the organizations appearing in Global Finance’s 25th edition of this listing, however, trade finance banking has survived these crises and thrived.

Since our initial awards, trade barriers have fallen worldwide. In 2001, China entered the World Trade Organization while the EU minted multiple free trade agreements. Asia’s Regional Comprehensive Economic Partnership was signed in 2020. The African Continental Free Trade Area was instituted the following year. These and other international agreements typically reduce tariffs and improve global business.

But global trade remains a complex process, further complicated by a host of laws and regulations. These include managing tariffs, quotas, and customs; complying with import and export laws; determining and paying appropriate taxes; and adhering to sanctions and embargoes. Paperwork abounds.

Since 2001, paper-based documentation, including letters of credit and bills of lading, has been digitized. Electronic documents, e-voicing, and trade portals all shorten transaction times and reduce instances of human error. Artificial intelligence and automation streamline document verification, compliance checks, and risk assessment. Distributed ledger technologies help reduce fraud. And the Internet of Things tracks goods in real time, providing vital insight into the supply chain.

Global Finance’s Best Trade Finance Banks award winners have excelled in cross-border financing, notably supply-chain financing, financing in emerging markets, and technology adoption.

The awards program initially focused on banks operating in 30 countries and regions, which Global Finance understood were undergoing a period of technological change. “The amount of international trade being financed online is small but beginning to grow rapidly,” we reported in 2001.

That year, Citigroup took top honors in the US, the Americas, and the world. Global Finance called it the “largest arranger of export finance under US Export-Import Bank [EXIM] programs” and hailed its “expansive global network.” Asia-regional winner DBS was “developing into a regional powerhouse”; it is now one of Asia’s largest banks.

Citigroup took similar awards in 2002 and 2003. In 2004, Global Finance highlighted the work of the bank’s Banamex subsidiary, which had financed Aeroméxico’s purchase of spare parts and maintenance services. This was the first Mexican peso-dominated financing supported by EXIM, we noted. Citi’s support for credit-guarantee facility transactions in local currency attracted widespread recognition in the Mexican business community.

International trade cooperation would only grow. In 2005, Deutsche Bank closed a $100 million syndicated insured receivables purchase facility for Sadia, a leading Brazilian producer of poultry, meats, and processed foods.

“In a display of German financial engineering, Deutsche Bank acted as lead arranger and agent for the complex facility, which brought together 16 European and Latin American banks as buyers of Sadia’s export receivables,” we reported. The deal earned Deutsche Bank the country award for Germany.

By 2006, new supply chains linking mass retailers with overseas suppliers challenged trade finance banks to devise new ways of doing business. Global Finance lauded ABN Amro for confirming a letter of credit from Karachi-based Metropolitan Bank to import canola into Pakistan. In confirming the letter of credit, the Dutch bank obligated itself to pay suppliers once appropriate documents were presented as evidence of the delivery of goods. This was the first transaction completed under the International Finance Corporation’s Global Trade Finance Program.

By the following year, trade bankers were playing an increasingly sophisticated role in keeping global supply chains running smoothly. Most notably, they steadily increased the capital available to suppliers in emerging markets. BNP Paribas, for example, was lauded for providing “a wide range of international guarantees.”

Following the Lehman Brothers collapse in 2008 and the ensuing global credit crisis, international trade declined in 2009 for the first time in 27 years. No longer was credit a commodity available at an affordable price, as needed, as trade banks grew more cautious. Yet, some forward-thinking institutions expanded their business into emerging markets. Standard Chartered acquired banks in Thailand, South Korea, Indonesia, Taiwan, and other countries, earning it a regional award for its work in Asia.

Global trade began to rebound in 2010. Major trade banks worked with export credit agencies and multilateral institutions to develop financial products that lowered risk, restored trust, and accelerated cash flows.

Two years later, Global Finance was examining banks in 78 countries and regions, even as the European sovereign debt crisis sparked fears of a retraction in global trade. Many European banks withdrew credit from Asia, now an important manufacturing region. After Basel III, some institutions, finding it difficult to meet international capital, liquidity requirements, and leverage caps, abandoned trade finance altogether. Those that held on faced increased scrutiny and passed on higher capital costs to their customers.

New regulations such as Basel III spurred a technological revolution as banks saw in new tech tools a way to do better business and satisfy regulators. SWIFT hastened payments by reducing the need for manual processing of trade documents while helping banks meet sanctions screening and AML/KYC requirements.

By 2018, new platforms were enhancing trade capabilities and streamlining back-office processing. Data and analytics looked to be a new source of value, particularly in predictive analytics. CCRManager, an internet platform that manages the distribution of trade finance assets amongst themselves, credit issuers, and fund managers, received our award for Best Trade Finance Infrastructure. With more than 14 million trade transactions annually, BNP Paribas won as Best Bank for Trade Finance.

Digitization was helping to close the trade gap between developed and developing countries. In 2019, Global Finance reported, “The leading trade finance banks are on the verge of transforming their industry … to a more efficient and transparent digitized model. This could help bankers amass the necessary resources to bridge the trade finance gap in emerging markets and, armed with transaction data, customize their trade offerings to better meet each customer’s needs.”

Covid intensified the digital transformation. In 2020 and 2021, corporates and banks struggled with liquidity issues and supply chain disruptions. Legacy platforms and processes created additional obstacles. But technology often furnished solutions.

Banks and other providers embraced digitization strategies and introduced efficiencies into their processes that ultimately lowered costs, helped them manage their balance sheets, and attracted new investors. Consider the overall 2021 winner, Citi. Its trade finance toolkit included applications that improved connectivity between trade finance partners.

Global trade volume increased in 2022 and 2023 despite rising energy prices, inflation, surging interest rates, and the repercussions of the Russia-Ukraine war. The International Chamber of Commerce last year predicted an annual rise in global trade of 3.8% through 2032. Powering that growth are banks in more than 100 countries and regions examined by Global Finance for the 2025 Best Trade Finance Banks awards.

The horizon is not cloudless. Protectionism, including new and higher tariffs, may shut some international doors. Currency risks now require trade finance banks to develop hedging instruments to manage fluctuations in volatile markets.

United Bank for Africa (UBA) is celebrating its 75th anniversary. Among its hallmarks is an unwavering commitment to driving the growth of small and midsize enterprises (SMEs) in Africa.

For UBA—boasting $20 billion in assets, $454.2 million in pretax profits in 2023, and a presence in 20 markets on the continent and four global centers—empowering SMEs means fueling Africa’s economic development.

Its home market of Nigeria is a poster case. With a portfolio of over a million SME clients and a loan book of $90 million, the bank has been instrumental in ensuring that SMEs remain the engine of growth.

Last year, the bank set aside $6 billion to lend to SMEs in partnership with the Africa Continental Free Trade Area secretariat, a program to be implemented over three years. The partnership augments the bank’s defining strength: its ability to support intra-African trade and investments critical for SMEs’ growth.

To enhance convenience for SMEs, UBA has signed up to the Pan-African Payment and Settlement System. The bank also ensures easy transaction processing through its UBA Afritrade and UBA Connect.

UBA has also become a pacesetter in financing women-owned businesses, owing to its strong belief that women should not be left behind in Africa’s socioeconomic development. —John Njiraini

In making this award, the Global Finance team notes DBS’ close focus on the specialized needs of SMEs—from the clarity of the CEO’s mission statement to the detailed structure and effectiveness of the bank’s SME products.

Outgoing DBS Group Chief Executive Piyush Gupta, who will step down in March 2025, has acknowledged that banks worldwide underserve SMEs. Under his guidance, DBS has worked to rectify this failure.

Together with Enterprise Singapore, DBS launched the ESG Ready Programme, an end-to-end program that aims to help local businesses—especially SMEs—become future-ready by building capability and capacity in sustainability. Participating companies can access a panel of sustainability specialists to guide them on their respective sustainability journeys.

“Banks have not thought enough about the battleground of tomorrow,” said Gupta in a 2015 interview with the National University of Singapore’s Business School. “But it is changing—in the last two years, digitization has now become the No. 1 agenda for most banking CEOs.”

Before the pandemic, DBS had relentlessly leveraged emerging technologies to help SMEs, especially micro and small enterprises, streamline services and manage credit risk. Digital payments, online banking, and blockchain technology emerged and became established during Gupta’s tenure, emphasizing SMEs.

The judges noticed that DBS had developed algorithmic models powered by artificial intelligence (AI) and advanced data analytics to alert the bank to signs of potential trouble SME customers might face, substantially reducing insolvency risk.         —Simon Littlewood

In operation for over 80 years, Banreservas offers more than 315 physical service centers in the Dominican Republic—including traditional bank branches, mini branches, and mobile branches—along with roughly 1,900 ATMs. SMEs account for 16% of the bank’s business, or approximately $1.5 billion, giving Banreservas a 28% market share.

Banreservas offers its roughly 130,000 SME clients a broad array of financial services. Fomenta Pymes (“Promotes SMEs”) is a bank program providing small businesses access to financing products, credit cards, management services, payroll services, and other benefits. Special events include monthslong “loan fairs” through which SMEs shop for financing. In its 2024 iteration, the Banreservas loan-fair program disbursed 5,800 loans, totaling about $238.5 million. These were given to SMEs working in multiple sectors: tourism, construction, commerce, education, healthcare, social services, industry, agriculture, and livestock, among others.

Additional bank offerings include Programa Preserva, a workshop-based program that promotes economic security through saving. Programa Coopera, meanwhile, promotes the Dominican Republic’s socioeconomic development through financial support of businesses throughout the country, including those located in economically vulnerable areas.   —Laura Spinale

SMEs contribute 15% to Grupo Financiero Banorte’s loan portfolio. The financial institution works to better serve that market through an SME expansion plan instituted over the past year. As part of this program, Banorte has focused on increasing its SME offerings to include a full suite of tailored financial products and services. These include various loan types, business advisory services, tax advisory services, and strategic alliances with companies offering products and services of value to the SME market.

Credit is a significant part of the SME expansion plan; and the bank has instituted a new pricing structure, providing credit conditions more favorable to clients. SMEs qualify for these rates through an application process that provides a more holistic view of each SME applying. Available SME financing products include working capital loans, equipment financing, expansion loans, and lines of credit. One of these, Mujer PyME, is a credit facility targeted to women-led SMEs.

Additional advancements include the integration of biometric signatures in branches and a time-saver for account openings.          —LS

Located in Moldova, MAIB is this year’s regional winner for Central and Eastern Europe. As the country’s largest commercial bank and lender, MAIB has almost 37,000 active customers, an increase of about 13% year-over-year (YoY); and it captures approximately 43% of all newly registered companies in Moldova. MAIB has continued to consolidate its position within the SME sector—about 6,000 companies, primarily within IT, winemaking, and food industries—earning the bank an approximately 37% market share. Despite challenging economic conditions, various strategic efforts have helped the bank achieve record growth within its SME business unit

The bank leverages a customer-centric approach by using feedback to tailor products and services to SMEs. MAIB also emphasizes data-driven decisions, which have helped the bank maintain a profitable loan portfolio despite a declining demand for loans among SMEs, fluctuating grain prices resulting from regional conflicts and weather conditions, and falling interest rates.

To help attract SME customers, MAIB launched internet and mobile banking solutions. The bank created its Business Banking Customer Care Service, which has a dedicated line for SME support and specialists who can resolve customer issues. MAIB’s products and services include night and weekend payments, remote onboarding, factoring, and digital signatures on credit contracts.

The bank has partnered with over 150 companies that sell their products, such as agricultural machinery, photovoltaic panels, and cars, through loans that MAIB originates. The bank is also the first in Moldova to offer consulting services to its customers in accounting, business, and human resources.        —Andrea Murad

BTG Pactual Empresas’ SME lending portfolio reached 22.1 billion Brazilian reais (approximately $3.9 billion) in the first quarter of 2024, with its SME credit book growing 52% YoY. SME business now accounts for 12% of BTG Pactual’s total portfolio.

The bank attributes its SME growth in part to its digital capabilities. Its digital platform offers a complete, integrated portfolio of SME products and services—providing access to the bank’s credit, guarantees, insurance, investments, foreign exchange, and derivatives products. Associated services accessible via the platform include creation of invoices payable by QR code; online invoicing; instant electronic bank transfers; open banking; payments to suppliers, tax authorities, and utilities; budgeting and categorized spending services; digital receipts; and other capabilities. The platform offers more than 45 integrations, including Telegram and Google Workspace, along with an extensive range of productivity improvement products.

Speed is a crucial platform benefit. According to the bank, the platform enables the bank to disburse 95% of its loan funds in less than 10 minutes, 16 times faster than its competitors.

Agriculture is a big part of the Brazilian economy, and BTG Pactual Empresas offers services tailored to this sector. These include credit lines for agricultural products (fertilizers, pesticides, seeds); equipment financing; and infrastructure financing for the construction of silos, warehouses, and other facilities.

Activities addressing environmental, social, and governance (ESG) issues are also important to BTG Pactual. Of its loans to corporations and SMEs, 72% are subjected to social, environmental, and climate-risk analysis, in line with international best practices. R$8.9 billion of its lending portfolio aligns with the bank’s sustainable financing framework.          —LS

Founded in 1992 by the Bahraini government, Bahrain Development Bank (BDB) is part of that country’s efforts to diversify its economy into non-oil-producing sectors. SMEs are vital to those efforts. BDB strives to support entrepreneurs and SMEs through loans, financing, and advisory and mentorship programs and conferences tailored to the SME market.

The bank offers financial products for various types of SME businesses, including agriculture and fisheries, manufacturing, education, health-care, tourism, and transportation companies. It also provides financial services targeted to women. Over the last several years, the bank has invested in digital transformation. One result of that is tijara, BDB’s digital banking arm. This platform offers SMEs quick access to financing and efficient processing of business transactions, salary transfers, and other payment services.          —LS

In September, the Royal Bank of Canada (RBC) released its annual small-business poll. Results indicate that 51% of Canadians are considering starting a businesses. RBC wants to help them.

The bank operates in more than 30 countries and serves more than 17 million clients worldwide. As of 2023, it had about CA$3.6 trillion (approximately $2.6 trillion) in assets and over 91,000 employees. To improve the customer experience, RBC has invested heavily in digital banking and AI technologies.

RBC strives to support SMEs at every stage. The bank offers various financing and loan options for SMEs, including unsecured and operating lines of credit. It also administers Canada Small Business Financing Loans. Special programs target Black entrepreneurs.

A knowledge base on the bank’s website instructs would-be entrepreneurs at the very earliest business stages. Guides for starting a business, validating ideas, creating business plans, determining startup costs, choosing a business structure, and exploring business financing are available.

Beyond typical banking, RBC also offers several business services, mostly digitized. In the field of payment processing, it offers medical billing software for hospitals and clinics, point-of-service systems, and services enabling merchants to offer buy now, pay later options to their clients. Marketing services help SMEs explore consumer spending patterns, find clients, and embark on global trade. The bank offers a host of payroll and HR solutions. Operations services help entrepreneurs register and incorporate online, protect businesses against cyber threats, automate accounts payable, and perform other tasks.       —LS

Headquartered in Spain and with operations throughout Western Europe, Santander is named as the best bank for SMEs in Western Europe for the third year in a row. The bank has a wide range of targeted products and services to meet the needs of its customers, which include 114,000 SMEs that make up over 91% of corporate customers and over 95% of digital customers in Portugal.

Through its platform, Santander X, the bank has helped over 7,000 SMEs scale their businesses through training, advice, and other resources. The platform’s training enables SMEs to create a digital presence, expand domestically and internationally, and grow and maintain their workforce. Companies can also participate in competitions for cash prizes and other awards. In addition, this platform creates a global networking community for SMEs to connect with other businesses, providing discounted third-party resources and services.

Through various initiatives, Santander supports SMEs looking to expand abroad. Through the Santander Trade platform, SMEs can analyze different international markets, find international business partners, and support shipments overseas; while the Santander Trade Club helps SMEs find new distributors and suppliers. The bank’s “One Europe” strategy helps identify good practices in other countries—practices that can then be implemented domestically.

The bank develops products and services with the customer in mind, through engagement and solicitation of feedback. The result is personalized products across digital channels and enhanced user experiences.  —AM

In Brazil, the Pix payment system lets people, corporations, and governments transfer and accept funds instantly, 24 hours a day—even when banks are closed. Released in late 2020 by the Banco Central Do Brasil, Pix has been lauded for its convenience and the financial services it provides to Brazil’s significant unbanked and underbanked populations. (Statista reports that more than 9% of Brazil’s adult population remains unbanked.)

But since Pix payments are both instant and irreversible, the innovation has enabled theft, fraud, and other crimes. Countering this fraud is just one of the topics tackled over the past year by the world’s best fintech innovation labs, incubators, and accelerators. Other technological innovations from these labs address everything from improving anti-money laundering (AML) compliance and easing underwriting processes to speeding up customer onboarding and improving cash management for small and midsize enterprise (SME) clients.

Victor Tanure, new-business manager for the Data Rudder data intelligence company, is most concerned about Pix fraud.

According to Data Rudder research, one in six Brazilians has been a victim of a Pix scam. Pix-based crimes run the gamut. People have been kidnapped and forced to use their mobile phones to remit irreversible payments to the kidnappers. More common are “social engineering” scams (involving use of false social media profiles, particularly on WhatsApp, to impersonate the victim), the creation of credit card clones, and the theft of mobile devices that give criminals access to the Pix user’s credentials and cash. Although Pix and credit card insurance often reimburse victims, it’s not enough. According to a Data Rudder survey, 46% of victims get no money back. Concurrently, 63% of respondents believe it is the bank’s responsibility to reimburse them for these thefts. It’s not.

To solve this problem, boostLAB, which is powered by BTG Pactual, accelerated Data Rudder.

BTG Pactual created boostLAB in 2018 to help the bank become a destination for tech companies banking in Latin America. This acceleration-and-investment program is part of the bank’s early-stage venture capital (VC) strategy. In 2023, the lab honed its focus to concentrate on startups between seed and Series A funding stages. This move aligns with BTG Pactual’s desire to collaborate with companies that have already validated their products in the market and that possess a scalable business model. The lab, which had previously nurtured 76 startups, invested 500,000 Brazilian reais (approximately $91,000) in each of the six startups accelerated last year. In exchange, BTG Pactual received 3% equity.

In a nod to the fantastic technology of the sci-fi film “Back to the Future,” the Data Rudder artificial intelligence (AI)-powered anti-fraud solution is called DeLorean, after the time-traveling car in the film. It analyzes Pix transactions conducted through Data Rudder’s more than 100 client institutions in Brazil. DeLorean determines the legitimacy of these transactions based on the user’s historical spending patterns, among other factors, and determines—in less than 200 milliseconds—whether the transfer is likely legitimate and should be allowed. Verification processes need to be that quick to detect and halt possibly fraudulent transactions faster than Pix can process them.

Tanure credits boostLAB with helping his company tailor its innovation for a specific, much-needed purpose. “We had automated machine-learning technology. We could have applied the DeLorean to stop churn, to solve KYC [know-your-customer] problems,” he says. Working with boostLAB, Data Rudder chose to focus on preventing Pix fraud.

“We gave Data Rudder a structure of mentorship,” says Gabriela Lima, VC director at BTG Pactual. “Our fraud prevention director at BTG Pactual was having weekly or biweekly meetings with Data Rudder in order to access the platform, do some tests, and connect them with people at Brazilian banking organizations. We helped them with some commercial initiatives and product development. [DeLorean] didn’t start as an anti-fraud solution. Data Rudder was very deep in machine learning, big data, and predictive analytics for several business issues. We helped them focus on Pix as instances of fraud soared.”

Let’s look at what’s brewing at other fintech innovation labs worldwide.

As illustrated by work at Akbank LAB, Arab Bank Innovation Hub, EFG EV Fintech, the National Bank of Kuwait, and Morgan Stanley Inclusive Ventures Lab, the Middle East and North Africa region (MENA) is a hotbed of fintech innovation.

Founded in 2016, Turkey’s Akbank LAB wants to be the technology partner of choice for innovative tech startups worldwide. Its 10-week accelerator program, “Boost the Future,” which is in its fifth year, helps entrepreneurs scale their businesses. Thus far, 64 startups have graduated from the lab. While the lab offers no direct investment, Akbank often becomes a paying customer of these startups. Investment opportunities are sometimes available through the bank’s VC arm.

Akbank’s lab enables it to deliver offerings to customers more quickly. Lab professionals evaluate lab applicants for their offerings’ alignment with the needs of each Akbank business unit. Accelerated processes mean that proof-of-concept (POCs) for new products are usually developed within six months, compared to a typical two-year timeline. Innovations from the lab include products to speed up and automate loan paperwork and a single-dashboard solution for monitoring AML processes—including sanctions screening.

Additional lab components include Akbank+, an internal innovation program for bank employees to develop ideas for potential new technological solutions for use in the bank; and the Case Campus boot camp for students who want to explore entrepreneurship; and hackathons. Disaster tech was the theme of the lab’s most recent hackathon.

Arab Bank Innovation Hub was founded in 2018 to accelerate the development and adoption of disruptive technologies within Reflect Neobank, its fully digital bank. The hub has several locations—including in Aman, Cairo, and Dubai—and several arms. Among those arms is AB iHub, a program that germinates new ideas by facilitating collaboration among Arab Bank employees and startups. Here, fintech startups transform bank employees’ raw ideas into financial services prototypes.

As part of the lab, AB Xelerate (formerly AB Accelerator), the VC arm of Arab Bank, funds the acceleration of emerging technologies for adoption within the financial institution. Its goal is to expand or disrupt financial services for Arab Bank clients. Through this accelerator, AB iHub has tested more than 30 POCs and pilots and entered into a dozen commercial collaborations. Innovations have focused on supply chain financing for SMEs, AI-powered document verification and authentication, digital onboarding, and blockchain and its application to KYC compliance.

Finally, AB iHub hosts the Artificial Intelligence and Advanced Data Analytics Academy. Here, bank employees use AI and data science to create products for anomaly detection, deposit stickiness (predicting clients’ future deposit balances), and lead tech (generating actionable customer leads).

EFG EV Fintech is the brainchild of EFG Finance (a wholly owned subsidiary of EFG Hermes Holding) and Egypt’s government-backed VC fund, Egypt Ventures. The micro-VC accelerator seeks out and supports fintech companies. EFG EV Fintech says it boasts the country’s largest fintech portfolio. Companies nurtured operate in the insurance tech, regulatory tech, agricultural tech, digital banking, and SME-lending sectors. In addition to offering accelerated companies investments ranging between $25,000 and $500,000, EFG EV Fintech provides workspaces, mentorship, legal advice, and other services.

The National Bank of Kuwait (NBK) Group Digital Office, established in 2021, focuses on delivering digital excellence in bank operations in that country, along with its bank operations in Egypt, Saudi Arabia, the United Kingdom, and France. The lab focuses on innovations in digital product design, data analytics, digital marketing, and project management. While primarily an in-house operation, the lab does a small amount of work with outside startups. These startups provide specific components for lab innovations, notably components for personal finance management and identity verification products. Notable work includes deploying analytics to extract actionable bank insights from complex data sets. According to NBK officials, this process helps boost customer acquisition and optimize product cross-selling.

Digital innovations such as the Weyay digital bank and app have arisen from the lab. Weyay is the first digital bank in Kuwait. Its services are geared to young people.

Morgan Stanley Inclusive Ventures Lab is a five-month accelerator designed to scale startups in the seed to Series A funding rounds. It strives to nurture companies led by traditionally underrepresented populations, including women and people of color. Launched in 2017, it has since worked with founders in the Middle East and companies in Africa and Europe. The lab provides these companies access to investors and the tools and resources they need to scale. The lab has thus far nurtured 92 companies, with portfolios exceeding $923 million. Capital investment from Morgan Stanley in each startup is either $250,000 out of the New York–based program or £250,000 (about $322,000) out of the London office, depending on the startup’s location, in exchange for 5% equity in each company. The lab culminates with a demo day during which participants present to a network of investors, potential business partners, and customers.

Asia has seen significant innovation from DBS Asia X (DAX).Hosted by DBS Bank, DAX is one of Singapore’s largest innovation centers. In its 16,000-square-foot coworking space, DBS employees, startups, and the broader fintech community come together to innovate. The lab has three aims: to engage with the startup community, to develop and foster a culture of innovation within the bank, and to serve as a customer-experience hub. The lab concentrates on several technological areas: AI, data science, immersive media, and the Internet of Things.

Among the most significant components of the lab is the Startup Xchange program, matching startups with DBS project teams that focus on emerging technologies. Among innovations from the lab is the Jobs Intelligence Maestro, Southeast Asia’s first virtual bank recruiter. Powered by AI, the solution addresses the time-consuming, repetitive tasks faced by the talent acquisition department at DBS. The innovation automates the short-listing of candidates for bank jobs. Talent acquisition professionals need only to review the short list when choosing candidates for face-to-face interviews. DBS estimates that the platform saves 40 professional work hours each month, allowing recruiters to focus more on candidates most qualified for the jobs advertised.The lab also regularly runs hackathons and workshops to spur innovative ideas.

In Europe, Alior iLab for Fintech (formerly RBL_START) is a startup accelerator for companies in the finance and insurance sectors that have already developed a minimum viable product. Alior Bank’s iLab program focuses on nurturing companies that can help the Polish bank improve its products and services, optimize its processes, increase revenue, reduce costs, and create new business models. The lab offers startup mentoring, access to customers and partners, and the opportunity to test solutions in a banking environment. Over its six years of operation, the lab has nurtured more than 60 startups. Alior’s corporate venture capital arm has directly invested in two of them. Innovations in mobile banking, online and app-based payment, invoice management, and online currency exchange are some of the products that have arisen from the lab.

Online cash management tools have also been the focus of recent innovations in South America. Based in southern Brazil, Ailos Cooperative is a financial network comprising 13 member credit unions representing over 6,000 employees and serving more than 1.6 million members. This network strives to provide innovative financial services to its members and customers. Its innovation lab, founded in 2018, is a distinct area within the network. It explores innovation management, technological innovation, change management, digital transformation, and more. It has thus far nurtured 69 startups in its Blumenau Innovation Center. Sistema Ailos does not offer direct investment in these companies. Instead, startups that offer products matching the network’s needs can become suppliers. One innovation that arose from the lab was Financial Manager Ailos 360°. This digital financial system lets users control their bank accounts and financial planning simply and intuitively. It integrates accounts from various financial institutions into one platform, giving customers a complete view of their finances and assisting them in financial planning and decision-making.

The Banco Bradesco inovabra lab was launched in 2013. It offers a physical and digital co-innovation environment, serving over 200 resident startups and 1,500 that are connected. Its Inovabra Fund invests in startups aligning with bank operations through a 100% owned capital vehicle of Bradesco called FIP Inovabra. The fund’s investments range from 20 million to 75 million Brazilian reais for a minority share in the companies nurtured.

Innovations to arise from this lab include the cash flow management tools for microbusinesses and SMEs from software vendor Asaas, which lets clients manage their cash flow through a single financial dashboard. Clients use the dashboard to view all receivables and receipts, along with their respective status (due, overdue, paid), and obtain several other services. In addition, the bank launched a “credit as a service” solution, allowing e-commerce sites and enterprise resource planning programs used in many businesses to offer working capital and microcredit to their clients directly from the platform.

Additional labs of note include those hosted by Fidelity. Innovations at Fidelity come from two arms. The first is a research unit called the Fidelity Center for Applied Technology. The center has recently started a fellowship program through which it works with selected external startups.

The second arm is the Fidelity Labs incubator for new software businesses and commercial solutions.

Also doing significant work are Barclays Eagle Labs, BNY Mellon Enterprise Innovation Group, BofA Breakthrough Lab, Citi Innovation Labs, Deutsche Bank Innovation Labs, Elevator Lab powered by Raiffeisen Bank International, ING Labs, OTP Bank Innovation Lab, TD Lab and TD Workshop of TD Bank Group, Up2Stars/Intesa Sanpaolo, Visa Global Innovation Center, Wenov by Attijariwafa, and Yapi Kredi FRWRD.

At some financial institutions, innovation is germinated by staff. For example, in Asia, CTBC employees have worked hard to stop mule accounts. These are bank accounts used to facilitate illegal activities such as fraud and money laundering.

Founded in 2018, the CTBC Data and AI R&D Center in Taiwan employs more than 200 people. It strives to leverage technology in transforming financial services to better meet customer needs. Areas of focus include document tech, verification tech, marketing tech, data tech, regulatory tech, and investment tech. Divisions include the Blockchain Laboratory, improving blockchain processes for corporate clients; the UI/UX Laboratory (user interface and user experience), focusing on providing solutions to meet customer demands in retail banking; the Computer Vision Laboratory, dedicated to image-recognition and processing technologies; and the Natural Language Processing Laboratory, which focuses on semantic understanding.

AI is a significant part of these endeavors. “By integrating decision AI and generative AI [GenAI] technologies, CTBC Bank aims to maintain its leading position in the financial technology field, offering customers more intelligent, personalized, and efficient financial services and standing out in a highly competitive market,” says Friedman Wang, a CTBC executive vice president and head of its AI R&D division.

Products to arise from the center include AI Skynet, an innovation that made CTBC the first bank in Taiwan to collaborate with the National Police Agency. This joint effort combats fraud using smart, AI-powered platforms at the bank’s network of more than 7,000 ATMs.

Wang reports that, in the 2023 fiscal year, scam losses among consumers in Taiwan amounted to approximately 89 billion Taiwan new dollars (about $2.8 billion), numbering more than 37,000 scam cases. However, that figure may be much higher: It is believed that only a little more than half of the victims in Taiwan report scams to the police.

Among these scams is the creation and use of mule accounts that place a degree of separation between the criminal organization and illicit funds, making it difficult for law enforcement to track the money.

Enter AI Skynet. “AI Skynet [was] mainly introduced to prevent and detect mule account holders involved in financial scams. The total number of reported mule accounts has grown at a compound annual growth rate of 35% over the past two years in Taiwan, which has resulted in a significant concern in the industry,” Wang says.

The innovative use of AI Skynet has significantly enhanced the bank’s fraud detection capabilities at ATMs. According to Wang, “Massive historical data are used to train the AI to recognize abnormal behaviors and predict the likelihood of a customer being reported as the mule account holder.” AI Skynet has also significantly improved operational efficiency at CTBC, providing a 70-fold increase in the number of suspicious ATM transactions monitored, without any increase in staffing.

Additional innovations arising from the Internal Data and AI R&D Center include AI Cheque Check, which strives to streamline the check-deposit processes by using advanced AI to read traditional Chinese characters for speedier verification (In AI, the recognition of Chinese characters is considered much more difficult than the recognition of Latin scripts).

At Spain’s CaixaBank, the internal Customer Experience LABs and Insights Center are a research hub. Several new projects have recently arisen from the lab. Among them is a digital onboarding capability for corporate legal representatives. This innovation was developed to accommodate foreign companies that wish to do business in Spain. Previously, these companies needed a Spanish legal representative to appear in real life for corporate registration processes. To ease processes for foreign corporations, CaixaBank developed a digital pathway for corporations to register legal representatives without requiring those representatives to appear at a physical branch. This process complies with all registration regulations set by Spain’s financial intelligence agency.

Personal loans are another area of innovation. In January, the bank launched a fully digitalized contracting process for personal loans, providing customers with immediate access to loans upon completing the application.

SEBx is the laboratory arm of the SEB Group, owner of the leading corporate bank in the Nordic countries. In 2023, the bank completely redesigned SEBx to engender lab innovations that reshape the future of finance. Thus far, the lab has built a highly skilled 16-member internal team, formed a broad external collaboration group, and begun spearheading GenAI adoption for SEB Group.

The lab plans to use AI innovations to foresee and prevent financial crimes, including fraud and money laundering; to understand, model, and predict financial systems, enabling more-informed business decisions; to create a hyperpersonalized customer experience; and to make banking a driving force in creating a sustainable and resilient society.

One POC that came out of the lab is the automation of customer authentication. SEBx notes that most existing customer-authentication processes are binary: Customers are either completely authenticated and have access to all available funds, or they are not authenticated and have access to nothing. By combining multiple data points for identification, SEBx has created an application that takes a more nuanced, risk-based approach to identification and authentication. It grants gradual access rights for viewing and acting on accounts based on the customer’s identification score. SEBx believes this solution will better serve customers while improving security.

Bank ABC is based in the Kingdom of Bahrain. It founded ABC Labs in late 2019 to help the bank fulfill its goal of becoming MENA’s leading “digital bank of the future.” Reaching that goal entails deploying strategic initiatives to futureproof the bank’s operations and offerings. As a result of these efforts, ABC has already developed a cloud-based, mobile-only offering called, ila Bank, and its AI-powered digital assistant, Fatema.

More recently, ABC Labs rolled out an enterprise-wide innovation program. This program is designed to enable business growth, increase agility and efficiency, improve skill sets throughout the organization, and strengthen brand equity.

Innovations to emerge from the lab include a solution developed with JPMorgan Chase and the Central Bank of Bahrain to enable institutional clients to remit high-value cross-border payments instantly, 24 hours a day. In addition, a new portal provides a digital, cloud-based gateway for corporate clients to access cash management, trade finance, and supply chain financing services.

Arising from Moody’s banking innovation team is the Automated Credit Memo, a new application combining GenAI with other technology, data, and analytics to help bank underwriters working for Moody’s customers to create comprehensive credit memos more easily. Moody’s officials note that the preparation of credit memos is “a process known for its time-consuming nature. In response, we leveraged [GenAI] to … streamline this process significantly. By enabling the generation of comprehensive credit memos with a simple click, this tool can reduce the time required for their preparation by more than half, offering substantial efficiency gains.” In addition to automating manual processes, the Automated Credit Memo helps create a standard and consistent narrative for all credit memos written in an organization, regardless of author or loan complexity. Its market release is slated for this year.

A second arm of the company, Moody’s Generative Intelligence Group, uses the power of AI and machine learning to build solutions that create internal and external efficiencies. Most recently, the group explored how to apply GenAI to Moody’s extensive propriety data, resulting in Moody’s Research Assistant.

“The inception of Moody’s Research Assistant was driven by the goal of simplifying the process of finding relevant insights for our clients,” the officials add. “Engaging in conversations with [more than] 100 customers, we sought to deeply understand their specific report-creation and analysis needs. This dialogue helped us identify the crucial data and insights required by our customers, ensuring that the Research Assistant was tailored to meet these needs effectively. As a result, this tool can facilitate a more efficient credit analysis, peer comparison, data gathering, and report-building process, potentially saving customers up to 27% of their time.”

The Research Assistant offers a comprehensive view of various risk domains, including credit, climate, cyber, compliance, and supply chain risks. It generates “new insights using Moody’s extensive research, data, and analytics. By rapidly synthesizing large volumes of information, it allows for quick data analysis, development monitoring, entity comparison, insight discovery, and workflow automation. This efficiency transforms research tasks that previously took days into minutes, significantly freeing time for strategic decision-making and in-depth analysis,” the Moody’s officials add. The Research Assistant is available as an add-on to CreditView, Moody’s flagship ratings and research solution.

Additional internal labs of note include Bancolombia Innovation Center, BBVA AI Factory, Capital One Lab, CIB Innovation Group, Goldman Sachs – GS Accelerate, Mastercard – Labs as a Service, and PayPal Innovation Labs.

Venture capitalh firms and consultancies understand the value of fintech innovation. No wonder they host a variety of fintech labs. Among the most notable are Accelerator Frankfurt, Deloitte Catalyst, Plug and Play, Startup Bootcamp, Startup Wise Guys, Synechron, and Y Combinator.

Some fintech innovation labs work to improve economic and social conditions, and some go where no one has gone before.

The European Investment Bank Group (EIB) is the world’s largest multilateral financial institution, owned by the 27 European Union member nations. In 2023, the bank financed €19.8 billion (just under $22 billion) of investment as well as digital and human capital in innovation. Its mission is to close the gaps in innovation goals and skills identified by EU policymakers. To do so, it provides expert advice and customized solutions to public and private sector clients. Advisory work covers the innovation, energy, transportation, digitalization, and social infrastructure sectors. Solutions include designing sustainable infrastructure projects, assisting businesses with financial structuring, and advising on environmental and social impact assessments. In all its work, the EIB strives to ensure that investments align with EU policy objectives, particularly those that promote sustainable development worldwide.

Enter the EIB’s Space Finance Lab. It is the first lab offered by EIB to have a specific thematic focus. It aims to address the need for bank investments that bolster European strategic autonomy in space exploration. The lab provides a safe place for thought leaders and space-technology practitioners to exchange know-how and discuss their needs. Over several years, the Space Finance Lab has brought together representatives of the EIB, the European Commission, the European Space Agency, the EU Agency for Space Programmes, 10 banks, and 50 emerging European space companies. These gatherings create a bridge among these organizations, enabling them to dive more deeply into space technology’s challenges, share knowledge, and develop new financial products for the space industry.

Most significantly, the Space Finance Lab combines the acumen of the investors with the knowledge of the experts, ultimately addressing the financing and growth challenges of companies and disrupting the typical framework in which they raise financing. Sessions have focused on financing in the European space industry, upstream activities (transportation of objects into space, operation of ground stations, and space exploration), and downstream activities (handling data generated by the upstream activities). The sessions resulted in a clear list of objectives and follow-up actions that will be the starting point for the next Space Finance Lab, slated for late 2024.

Meanwhile, back on Earth, the Brazilian Financial Innovation Lab is a think tank that promotes the financing of socially and environmentally sustainable projects. Operating primarily online, it is an initiative of the Brazilian Development Association, the Inter-American Development Bank, and the Brazilian Securities and Exchange Commission. It was created in 2017. Its members include more than 359 public and private entities—including government ministries, financial market regulators, insurance and capital market institutions, public and private companies, and fintechs. Its fintech working group promotes open innovation projects in fields such as crypto assets and solutions for using data to identify and solve environmental, social, and governance challenges.

Similar efforts are taking place in Colombia. After the 2021 social unrest and protests in that country, the Association of Banking and Financial Institutions of Colombia (Asobancaria) began identifying ways to better serve the banking needs of diverse populations, groups, and territories. The Asobancaria Social Innovation Lab is part of this effort. Its goal is to build and maintain communication channels and active collaboration between different segments of society and the banking sector, mainly promoting financial inclusion of vulnerable populations and underserved territories. The lab works with women, seniors, youth, rural populations, ethnic groups, migrants, disabled groups, and the LGBTQ+ community. It strives to provide financial and credit alternatives to these populations.

Important components of the lab are “opportunity fairs.” These fairs target individuals living in moderate-to-extreme poverty who cannot access the formal financial system, introducing citizens to new financial products developed especially for their socioeconomic group. Eight of these fairs took place last year. A second group of fairs, dubbed MiPymeLab, strives to connect small entrepreneurs with financing services.

Other significant social and economic development labs include Copenhagen Fintech Lab, Cyberport, the Dubai International Financial Centre’s DIFC Fintech Hive, FinTech Innovation Lab, and Seoul Fintech Lab.

Meanwhile, some innovation centers are unaligned with banks, VC firms, or economic development organizations. Among these is the Boston-based MassChallenge, a 501(c)(3) accelerator supporting early-stage startups. Its program offers mentorship, training, office space, legal advice, and access to funding. The Lisbon-based Beta-i helps new and established businesses grow by providing innovation services in acceleration, corporate innovation, and education. Frankfurt’s TechQuartier caters to fintechs and other types of startups. It offers a broad partner ecosystem. Additional independent labs of note include Accenture’s Fintech Innovation Labs and Tenity.

Our initial call attracted entries from innovators touting their achievements at the global, regional, and local levels. Global Finance also received nominations for the top innovation labs of the year from correspondents and external sources. The editorial board evaluated entries and nominations and vetted them with independent research. Winners were selected following rigorous debate.

Issuance of “impact” bonds, sometimes referred to as GSS+ bonds—green, social, sustainability and sustainability-linked instruments—totaled $939 billion in 2023, a slight 3% improvement over 2022, according to Bloomberg data. The sector has yet to match the record heights of 2021.

Green bonds have dominated the impact bond category from the beginning, and 2024 is unlikely to be different. Credit Agricole analysts expect green bonds to account for almost two-thirds (64%) of GSS+ issuance this year. Other label types will be much further behind; sustainability bonds, which have attributes of both green and social bonds, are projected to make up 16% percent of the total, and social bonds 12%.

Why does sustainable finance remain so deeply green?

“There’s a sense of purpose about global climate change” that seems to transcend other impact bonds, says Vulturius. “Social bonds have always played second fiddle to green bonds.” Social bonds seized public attention during the Covid-19 pandemic, when so many people required unemployment support and social interventions, but since then interest has waned, he notes.

As for sustainability-linked bonds (SLBs), which seemed poised for a breakout in early 2022, they could now be at a crossroads. SLBs suffered “another setback” last year, “with almost $20 billion less in new issuance compared to 2022,” according to SEB Group. But “the market has now mostly learned its lesson about the importance of integrity, and how to mitigate greenwashing risk.”

That being the case, “SLBs should record a modest progression” this year, predicts Credit Agricole, while Scandinavia’s Nordea Bank, a leader in SLBs, also expects these “transition finance” instruments to gain momentum.

“It’s important to recognize that we are heading into the fifth year of SLBs versus the 15th for green bonds,” notes Petra Mellor, head of Bank Debt at Nordea Bank. “True, we have some structural aspects still to be fine-tuned for SLBs, but the market relevance is more important than ever.”

Among other trends to watch for in 2024, Vulturius cites decarbonization, blended products, and a strong pickup in North American green bond activity, especially as the IRA’s impact begins to kick in. The US presidential election in November could derail progress, but that is more a topic for 2025, he argues.

And the longer term?

It can be difficult to factor big-issue political discussions—like the recent COP28 meeting—into short-term decision-making, Mellor observes, “but one key takeaway [from COP28] was the increased recognition of transition finance” as an important financial category. That isn’t going away, she says.

Which is another reason to expect that institutions focusing on sustainable finance in its various forms will be have plenty to keep them busy in 2024. With that in mind, Global Finance here presents its fourth annual Sustainable Finance Awards, the winners spanning seven regions and 53 countries, territories and districts, as well as global honorees in 13 categories.      —Andrew Singer

Global and regional awards require submissions detailing hard measures of ESG activity, such as year-over-year growth in sustainable finance transactions or sustainable financial instruments as a percent of total portfolio, as well as softer metrics that include goal alignment with leading ESG norms or innovative product development. Entries were not required for country awards, which were judged by the editorial team’s independent research. Evaluation criteria for both cases include governance policies and goals, achievements in environmental and social sustainability financing, industry leadership and third-party assessments. This awards program covers the activities from January 2023 to December 2023. There was no fee to enter.

Societe Generale (SocGen) bolstered its reputation for sustainable finance innovation in November by serving as sole manager for the first digital green bond issued on a public blockchain and by SocGen. The €10 million senior preferred unsecured bond was tokenized and directly registered by SG-Forge on the Ethereum public blockchain. Blockchain, says SocGen, can potentially increase the traceability and transparency of ESG-related bonds for both issuers and investors.

SocGen also stands out for its reach and versatility. Last year, it was active in ESG projects on all six inhabited continents, including many parts of Africa, and it remains one of the few commercial banks that has ever issued green, social and sustainable bonds, according to Natixis.

 In the project finance sphere, the bank was active on many fronts in 2023, including in October as sole debt financial adviser and mandated lead arranger on Automotive Energy Supply Corporation’s €873 million battery storage factory in France’s Battery Valley. Elsewhere, it helped finance offshore wind projects in Poland and South Korea; onshore renewables in Japan, Australia, Egypt, and Vietnam; and critical materials projects in Mongolia and Africa.           —Andrew Singer

Since Scotiabank announced a goal of mobilizing C$350 billion by 2030 to reduce the impact of climate change, it has chalked up a series of groundbreaking transactions in Latin America’s emerging markets. Notably, the bank supported Inversiones CMPC as it brought the first green sustainability-linked bond issue in the Americas to market in June. The C$500 million in bond proceeds are allocated to designated green projects, and the coupon increases if emission targets are not met.

Also in June, Scotiabank assisted Chile on a sequence of US dollar- and euro-denominated debt issues that are helping the country meet its environmental and social objectives. The deal makes Chile the first sovereign to issue a sustainability-linked bond with a social KPI related to gender diversity.

The bank also supported Mexico’s Trust Fund for Rural Development (FIRA) in April when it placed Latin America’s first green resilience bond on the Mexican Stock Exchange. The US$154.89 million offering is intended to improve the resilience of producers and value chains in the agriculture sector. Proceeds are financing projects to reduce the impact of extreme climate events and strengthen systems against climate stress.          —Andrea Murad

The DBS team helps clients access Asian debt capital markets and raises bond financing for environmental, social and governance-related efforts on the continent. In February 2023, DBS Securities China issued a three-year, AAA-rated onshore panda bond for China Power International; funds were to be used for the development of green power projects. In September, DBS acted as joint lead manager and joint bookrunner on a $650 million, five-year social bond for Hong Kong Mortgage Corporation, the proceeds earmarked to help the company alleviate the financial burden on small to midsize local businesses affected by the Covid-19 pandemic. In 2023, the bank served as joint lead underwriter for the Asian Infrastructure Investment Bank’s ¥1.5 billion, five-year Chinese bond issue aimed at funding sustainable economic development, wealth creation, and improved infrastructure connectivity in Asia.           —Laura Spinale

Industrial Bank of Korea is at the forefront of South Korean’s sustainability field, having launched the nation’s first ESG-related loans in 2022. Offerings have included a KR₩200 billion fund for the RE100, a global initiative encouraging businesses to convert to100% renewable energy. The fund is to provide loans to energy providers that, in turn, will supply renewable energy to companies pursuing RE100-compliant strategies. In partnership with DS Asset Management, Industrial Bank of Korea also created an ESG fund totaling KR₩100 billion to support SMEs and other companies engaged in renewable energy production, eco-friendly power generation, and smart farm development. These and other initiatives boosted the bank’s sustainability financing engagement 15% from 2022 to 2023, to KR₩718.3 billion.           —LS

Canada’s CIBC acted as joint bookrunner on several corporate green and sustainable bond issues last year, including Ontario’s $1.5 billion green bond offering in February, earmarked to support clean transportation and energy efficiency. In November, CIBC was selected by the Canadian government as sole structuring adviser for updates to its Green Bond Framework.

The bank was also bookrunner for Canada’s largest corporate sustainable bond to date in 2023: Hydro-One’s inaugural $1.05 billion issue. Hydro-One will use the proceeds to finance both green and social projects, in keeping with the hybrid nature of sustainable bonds.            —AS

Spain’s CaixaBank takes a multipronged approach to supporting local communities. First, it is Europe’s largest bank provider of microcredits and other loans with a social impact; in the first nine months of 2023, it extended €991 billion of microcredits, an increase of 24% year-over-year.

Second, CaixaBank sustains communities as an issuer of social bonds such as its €1 billion issue last May funding loans to families, self-employed workers and SMEs in Spain. The offering that provides vulnerable people with access to education and healthcare was significantly oversubscribed.

Finally, the bank provides conceptional support, helping to expand the definition of sustainable finance to include deals with individuals and companies, and not just contributions to SDGs, as per its 2023 Guide of Identification of Sustainable Financing.      —AS

OTP’s extensive operations in 12 countries across CEE – Romania, Bulgaria, Croatia, Serbia and Montenegro, and, of course, its home market Hungary— and Uzbekistan and Moldova — have given it access to the growing opportunities for sustainable finance. As well as taking up these opportunities, the OTP Group has led the way in sustainability transparency, standardizing business practices, following a tough anti-corruption policy and prioritizing good corporate governance.

In 2022 the Green Loan Framework was rolled out across the OTP Group to ensure consistency and transparency in the way subsidiary banks manage ESG loans and projects.

Last year saw a further improvement in OTP’s overall ESG Risk Score, and today risk is negligible in business ethics and product governance and low in the areas of data privacy and security, ESG Integration, financials and human capital.   —Justin Keay

Financing for the €4.1 billion Baltic Power project, Poland’s first offshore wind farm, came in last September with the Netherlands’ ING acting as sole sustainability coordinator. The project is expected to supply clean electricity to more than 1.5 million Polish households.

ING’s infrastructure focus does not end in Europe, however. Last year, it closed a KR₩440 billion green loan with Digital Edge to support the first phase of the company’s 100-megawatt data center project in Seoul, South Korea. The Singapore-based firm aims to build sustainable, high-speed digital infrastructure throughout Asia. —AS

Sustainability-linked bonds encountered headwinds in 2023 as questions were raised about both their structure and the credibility of their performance targets, but Finland’s Nordea, an SLB pioneer, insists that they will remain “a key tool for the market.”

In August, Nordea issued a €1 billion sustainability-linked loan bond (SLLB) that employs use-of-proceeds bonds to fund a portfolio of sustainability-linked loans. SLLBs are a potential game changer in the view of some because their structure provides an additional layer of accountability and scrutiny for investors.           —AS

At COP28, the World Bank Group set an ambitious goal to devote 45% of its annual financing to climate by 2025, having committed and mobilized a record $14.4 billion in climate finance in 2023.

The International Finance Corporation (IFC) is scaling up financing to clients through its capital and mobilizing external resources with significant already agreed-upon and implemented measures, and more proposed, to leverage existing resources further while maintaining financial sustainability.

New initiatives include blue-themed bonds to support sustainable ocean economies, a $1.5 billion three-year social bond to help low-income communities in emerging markets and a $3.5 billion credit insurance policy with 13 global insurance companies to support economic activity and foster development in emerging markets.     —GW

The green agenda has been a priority for the African continent for some time, particularly for the private sector. Environmental, social and governance (ESG) initiatives can drive growth in GDP, per capita income and jobs, while fostering collaboration between countries, businesses and communities—and banks are an integral part of this process. Yet, a significant funding gap hinders the continent from achieving the United Nations Sustainable Development Goals (SDGs). While there’s rapid growth in ESG debt instruments, including green, social, sustainability and sustainability-linked bonds, according to Sustainable Fitch, the overall scale of sustainable finance in Africa is still small.

Even so, there are numerous success stories of green ventures in Africa, according to the UN Environment Programme (UNEP). For example, the transition to sustainable agriculture contributes about 17% of sub-Saharan Africa’s GDP and increases productivity while minimizing the impact on ecosystems and helping to reduce food insecurity. The blue economy and ecotourism can generate $576 billion and 127 million jobs over the next 40 years. Renewable energy solutions can contribute 6.4% to GDP over the next 30 years, as Africa has abundant solar, wind, geothermal, hydro, biomass and other natural resources that can be used for innovative solutions.

To meet these needs, the banking sector has continued to provide financial and nonfinancial support, funding projects across the continent. They have also continued to develop innovative products and to revitalize debt capital markets in countries across Africa.

Societe Generale (SocGen) continues to lead in Africa’s sustainable finance. The bank’s successful “Grow with Africa” campaign has continued to contribute to Africa’s sustainable development.

The bank’s infrastructure finance teams support projects to develop wind farms, solar farms and sustainable water and wastewater management projects, and to upgrade hospitals and modernize transport systems. SocGen supports the development of African small and midsize enterprises (SMEs) with expertise, advice and training, as well as an awareness of environmental and social issues.

SocGen strengthened its support in the agriculture sector by facilitating value chains, contributing to a virtuous ecosystem of nonfinancial support to help sector players scale, and by focusing on the blue economy and biodiversity with offerings related to monetizing carbon credits for the maritime sector.

The bank remains dedicated to financial inclusion initiatives and provides access to financial services to populations with limited banking services.

Societe Generale Madagasikara has contributed positively to Madagascar’s sustainable development and supported the country’s ecological transition by working with its customers and communities to follow a more sustainable investment strategy. The bank has changed how it conducts business in several ways, including the “one card equals one tree planted” product launch with the CSR consulting service Bondy, which is focused on reforestation and restoration of biodiversity that ultimately creates jobs. The bank remains committed to education and professional integration, providing funds to help build a better future for youths and structuring projects to build schools and transition some schools to solar energy. Also, the bank financed the rehabilitation of damaged public schools and provided computers.

The Pan-African financial services provider Absa embraces its ethos as an active force for good in its strategy and remains committed to driving tangible, meaningful change in its communities. The bank has worked on several sustainable bond issuances this past year.

Most notably, Absa Group served as joint lead transaction adviser on NMB Bank’s first sustainability-bond issuance, which was a first for Tanzania and East Africa and fostered sustainable finance across borders. The issuance was NMB’s inaugural listing on Tanzania’s Dar es Salaam Stock Exchange. The NMB Jamii Bond’s proceeds are to be used for green initiatives that will enrich the regional environment and finance impactful social projects empowering and uplifting Tanzanian communities socially and economically.

Standard Bank is committed to a strategy for driving sustainable and inclusive growth in Africa based on pillars of social, economic and environmental impact. The bank aims to drive positive impact in line with SDGs to ensure effective ESG-risk management and good practices.

The bank issued 45 billion South African rands (about $2.3 billion) in sustainable financing, including green loans that funded renewable energy projects and green buildings; social loans that delivered affordable housing, basic infrastructure, and essential services in health and education sectors across the continent; and the bank’s first transition finance loan in the thermal coal sector. The bank also participated in sustainability-linked funding across multiple industries that embedded material sustainability key performance indicator (KPI) themes addressing carbon emission reductions and renewable energy consumption, water and waste management, diversity and inclusion and micro- and small-business funding and support.

Standard Bank also mobilized 15.5 billion rands in green project finance and 1.2 billion in social project finance funding renewable energy, carbon projects, basic infrastructure and affordable housing in numerous African countries. These projects include assisting African power producer Red Rocket in developing, designing, constructing and operating wind farms with a combined installed capacity of 280 megawatts (MW) in the Western Cape and 84 MW in the Eastern Cape.

Based in Egypt, CIB (Commercial International Bank) drives change within African emerging markets through pioneering initiatives. The bank recently launched “Brain Trust,” an innovative model that addresses the gap in finance for adaptation projects and mobilizes private investments for pipeline projects in Africa’s agriculture, food and water systems.

CIB also expanded its sustainable finance offerings in 12 corporate and SME financing areas. These include energy efficiency, renewable energy, green building, waste and water management, water desalination, energy management systems, pollution prevention and control, and sustainable agriculture and transport. CIB’s expanded climate finance offerings enable the transition toward a low-carbon economy by addressing the environmental challenges carbon-intensive industries face.

Based in South Africa, Nedbank is a pioneer in green finance, being the first bank in the country to embrace many climate-related initiatives. The bank launched its Green Private Power Tier 2 Bond, with a notional value of 2.1 billion rands, in 2023. This on-balance-sheet transaction was used to finance a portfolio of private renewable power-generation projects in South Africa, including photovoltaic solar and wind projects. These projects help advance South Africa’s renewable energy capacity and accelerate the transition to a low-carbon economy. Nedbank also structured, arranged and invested in a 550 million-rand green bond facility for Burstone Group to finance and refinance a portfolio of green buildings.

IFC (International Finance Corporation) has a vision to create a world free of poverty on a livable planet. As such, it has been a leader in social bonds and sustainable finance in Africa. IFC provided an anchor investment in the West African Economic and Monetary Union’s first social bond in the energy sector that supports the Electricity for All Program (PEPT), a government-led program facilitating access to electricity for underserved populations in electrified localities. Bond proceeds help finance the connection of up to 800,000 low-income households to the national grid over the next four years. 

The strategy of Rand Merchant Bank (RMB) embraces the sound management of natural resources, a cornerstone of sustainable social and economic development.

The bank participated in financing the Development Bank of Rwanda’s inaugural sustainability-linked bond (SLB). This SLB was the first globally issued by a national development bank and the first issued in East Africa. The issuance was structured to recognize the systemic change required for a development bank to meet its sustainability performance targets (SPTs) and to revitalize Rwanda’s debt capital markets.

RMB also established a sustainability-linked financing framework (SLFF) with chemical manufacturer AECI, designed to facilitate SLB and sustainability-linked loan (SLL) issuances. When opportunities arise, the SLFF more broadly overlays KPIs and SPTs on other financial instruments and services. AECI successfully used this framework to debut its 1 billion rand SLB with KPIs focused on effluent discharge, carbon emissions, and gender diversity.  —Andrea Murad

There is no denying that Asia has pollution problems. According to UNEP, roughly 6.5 million people die each year from exposure to poor air quality, and 70% of them live in the Asia-Pacific region. Water pollution and industrial waste also plague the region. However, thanks in no small part to the financing efforts of the following banks, there is hope. Funding for sustainable development projects, clean public transportation, offshore wind farms and other renewable energy efforts will help improve the local environment. And social financing geared toward supporting small farmers, microbusinesses and women-owned businesses will forge a brighter financial future for those living in a cleaner world.

With operations in Singapore, China, India, Indonesia and Taiwan—and strong efforts in transparency, support for emerging markets, ESG-related loans and bonds, and transition/sustainability-linked loans in those markets—DBS takes Asia’s regional award for the Best Bank for Sustainable Finance. Consider its operations in China as one example of its strength on the continent. By the end of 2023’s third quarter, the green loan balance in that country had increased 37% from the balance held in January of that year.

DBS touts itself as the bookrunner of choice for bond issues in Asia and a pioneer bank for ESG capital instruments. Notable ESG activities include working with the People’s Bank of China. This relationship enables DBS China to offer low-cost loans to fund sustainable development projects—including clean energy projects and projects geared toward reducing carbon emissions. Notable financing includes a 572.2 million Chinese yuan (about $79.5 million) green loan to Weifang Bohai Bay Photovoltaic Technology and Weifang Tianen Binhai New Energy to support a photovoltaic power plant project. The loan was issued in November.

Reporting on sustainability since 2015, DBS published its first stand-alone sustainability report in 2018. These reports are produced in accordance with Global Reporting Initiative standards. In 2021, the bank became the first bank in Singapore—and among the first 100 banks globally—to become a signatory to the Net-Zero Banking Alliance. In 2022, it outlined its progress toward the alliance’s goals in a report called Our Path to Net Zero: Supporting Asia’s Transition to a Low-Carbon Economy. That report describes in great detail how the bank selected decarbonization activities, and the science behind those decisions. Goals are set for 2050, with interim goals listed for 2030. The bank has also produced green credit guidelines, a sustainable- and transition-finance framework, responsible business-practice pillars, and community impact analyses—all available for public perusal. For all these activities, DBS earned our award as the Best Bank for Sustainability Transparency in Asia-Pacific.

Additionally, the bank has won our award as Best Bank for Sustainable Financing in Emerging Markets in Asia-Pacific, with strong work in China, India, Indonesia, Singapore, and Taiwan. As a leader in Asian emerging and local currency bond markets, it has funded various sustainability-related projects. DBS China completed the drawdown of a $297 million term loan for China Three Gorges’ acquisition of Alcazar Energy Partners’ solar and wind projects located in Jordan and Egypt, with a total capacity of 411 MW. DBS also partners with clients to facilitate Asia’s transition to clean energy as part of its effort to reduce and eventually eliminate coal-fired power. It has developed a climate analytics tool for net-zero banking, examining, at a portfolio level, the bank’s goals for existing and new customers in the power, oil, gas, real estate, steel and aviation sectors. It works with partners to decarbonize Asian supply chains for its clients, and it provides loans to accelerate decarbonization.

By providing sustainable financial solutions tailor-made for microbusinesses, farmers, fishermen and other traditionally unbanked citizens, BPI (Bank of the Philippine Islands) is doing much to help develop sustaining communities in that nation. One example of these solutions is the JFC Agri Loan Financing Program. This financing mechanism is specifically designed for small-scale farmers—particularly farmers who act as suppliers to BPI corporate client Jollibee Foods Corporation. This financing facility gives small farmers (working on average plot sizes of less than 1.5 acres) access to affordable financing in a region known for very high interest rates on microloans. Microfinance solutions are only one arm of BPI’s ESG work. 53% of its total loan portfolio supports the UN SDGs.

The Bank of China (BOC) won as Best Bank for Sustainable Infrastructure Finance in Asia-Pacific for its work on the nation’s first marine-ecology-oriented development project, the Dongtou Bays • Sea Garden project. The goal of this four-year project is to create needed environmental infrastructure. It also seeks to solve ecological maladies, such as the accumulation of sea garbage in the bay. The BOC funded the project via underwriting bonds for it, along with other infrastructure finance in Asia linked to carbon-emissions reduction.

The bank’s second win, as Best Bank for Sustainable Bonds in Asia, is due to its funding of a broad range of sustainable project categories across the globe. Projects funded promote renewable energy and green buildings and strive to prevent pollution.

These bonds are part of the $1.9 billion in green and sustainable bonds the BOC has floated in overseas markets and 30 billion yuan in sustainable and green bonds in China. The bank has also underwritten 286.2 billion yuan in domestic green bonds and sustainable bonds and $24.8 billion in green and sustainable bonds overseas.

Meanwhile, the bank also prides itself on an abundant and diversified portfolio of green products and services marketed under the BOC Green+ global brand. Among the dozens of loans, trade finance products, services, and deposit products offered are bonds linked to transition and sustainability. These cover efforts in clean transportation, renewable energy, green buildings, pollution prevention and control, and sustainable wastewater management. Recent offerings fund efforts to reduce carbon emissions by constructing new wind power facilities. Additional projects funded seek to improve the management of marine environments, earning BOC the Best Bank for Transition/Sustainability-Linked Bonds in Asia-Pacific award.

CTBC acted as the mandated lead arranger and bookrunner for the Hai Long offshore wind project, the largest such project—in terms of capacity and cost—in Taiwan. It will generate an estimated 1,022 MW of clean power. CTBC has also supported other similar projects, providing financing for 605 MW and 300 Mw offshore wind developments. The bank further acted as a structuring bank for a 17 MW waste-to-energy incinerator built by Cleanaway Energy. This incinerator is dedicated to processing solid recovered fuel. Once processed, this high yield recovered fuel will be used for power generation rather than being disposed of in a landfill. For these and other activities, CTBC has been named Asia-Pacific’s Best Bank for Sustainable Project Finance.

In 2023, the Thai ESG-bond market had an estimated value of 44.9 billion Thai baht (about $1.25 billion). Nearly 28.4 billion of that—63% of the total Thai ESG-bond market—was underwritten by Bangkok Bank. Among projects financed by these bonds was the Xayaburi Power Company’s 3.5 billion baht green bond to design, develop, construct and operate a hydroelectric power plant. Bangkok Bank also underwrote a 3.9 billion baht bond for Energy Absolute Public Company to modernize its buses—supplanting the current internal-combustion buses used for public transport in Bangkok with clean-running e-buses. Additional projects funded include biomass facilities, hydropower projects, solar power facilities and offshore wind power projects.

The Industrial Bank of Korea says it was responsible for 81% of the ESG bonds issued in South Korea in 2023, totaling 6.9 trillion South Korean won (about $5.2 billion). The bank continues to promote the acquisition, trading and issuance of ESG and social bonds. Many of its bonds, indirectly guaranteed by the South Korean government, support small and midsize industries. It has been involved in successful social bonds with organizations such as the Korea Credit Guarantee Fund, the Small and Medium Business Corporation, and the Korea Housing Finance Corporation. In late 2023, the bank issued a $600 million five-year gender-equality- themed social bond. Proceeds will be used to finance or refinance new or existing loans to SMEs and projects supporting gender equality. In further ESG efforts, the bank’s insurance arm invests in green bonds and other eco-friendly projects to promote the expansion of ESG finance and to support carbon neutrality.

The bank also launched that nation’s first ESG-related loans. It established a 200 billion won fund to finance renewable energy providers that, in turn, supply renewable energy to companies seeking to be powered entirely by renewable energy. This has earned it our Best Bank for ESG-Related Loans in Asia-Pacific award. (For more information on this and other initiatives, see the Industrial Bank of Korea’s entry in our Global Winners section.)

ING takes the regional award for Transition/Sustainability-Linked Loans for several efforts. These include its position as sole sustainability coordinator on Southeast Asia’s first private equity backed, leveraged SLL. This $790 million deal supports the activities of the Goodpack company. Based in Singapore, Goodpack is the world’s largest provider of reusable pallet-sized metal containers for road, rail and sea shipments. The funds will support Goodpack’s efforts to implement circular supply chains, or supply chains that reuse materials and goods as long as possible. A second, $403.8 million loan issued by ING supports a company called EdgeConneX in its efforts to build more environmentally sensitive data centers. —Laura Spinale

If 2023 was notable for anything, it was the growing awareness of the urgent need to tackle global climate change. This was compounded by the year becoming the hottest ever recorded, with weather events once considered freaky now increasingly commonplace in many countries, including those across Central and Eastern Europe (CEE). The region’s banks have put themselves at the forefront of this new awareness, operating more sustainably but also looking to take advantage of what will be major commercial opportunities going forward.

Last year, our Sustainable Finance Awards reported that CEE’s banks have moved away from greenwashing. This trend has become more pronounced, with institutions demonstrating awareness of the UN’s 17 SDGs and the Paris Agreement climate goals, and how the banks can meaningfully play their part in creating a greener future. Increasingly, banks are not just identifying opportunities but are working with clients to help them shift toward greater sustainability, which will be vital in driving the whole process forward over the long term.

Established 95 years ago and Poland’s second-largest bank, with around $9 billion of Tier 1 capital, Bank Pekao has long been committed to sustainable finance, which forms the cornerstone of its 2021-2024 business strategy: Responsible Bank, Modern Banking. It is dedicated to reducing the financing of energy-intensive projects, has its ESG strategy closely monitored by an ESG council, and has been making steady progress toward its goal—outlined in its business strategy—of financing 30 billion Polish zloty (about $7.6 billion) of sustainable projects by the end of 2024. (As of the third quarter of 2023 it had reached 22 billion zloty.) Green financing now accounts for 6.6% of all projects, actually above the aim of 4%, while some 30 different initiatives are underway to meet the above sustainable finance goal.

Bank Pekao has pursued a dynamic green bond and SLB issuance program. Through 2023, it was involved in leading, coordinating, financing and/or co-financing at least eight major projects, including a 3.9 billion zloty 1.2-gigawatt offshore wind farm, a 3.5 billion zloty green bond issue for a leading CEE media company, a 0.5 billion zloty contribution toward a new public-private financed tram line in Krakow. The bank also co-organized a 180 million zloty green bond issue for an international property group.

In the wake of the devastating earthquake on February 6 last year that struck Antakya and 11 towns in the surrounding region, Isbank secured $915 million from the Turkey: Disaster Response Framework of the European Bank of Reconstruction and Development (EBRD) to target recovery. It has financed and supported female entrepreneurs through numerous projects, including WeLead, which reached 3,500 women last year. It has also worked as part of a consortium to help refinance $574 million in renewable energy power plants. It has provided green loans to two companies to produce electric/hybrid tugboats.

Hungary’s largest bank, with an extensive network of branches across Hungary and 12 other CEE countries, OTP Bank has long put sustainability at the heart of its business model. By the end of 2023, it had reached 230 billion Hungarian forints (about $642.4 million) in green loans (both corporate and retail), laying out its policies clearly through careful internal monitoring and through its ESG Exclusion List, which has been incorporated into its green loan framework to ensure that no investment takes place in any of the prohibited sectors.

The OTP Group has led the industry in sustainable project finance through its network of operations across CEE. In Romania, together with OTP Hungary, OTP Bank Romania participated in numerous syndicated loans to support sustainable real estate developments in Romania. The total exposure for these projects amounted to €115 million (about $124.9 million) by the end of 2022. OTP financed wind and solar energy production projects by more than €55 million, targeting a new generation capacity of over 1,250 MW from renewable sources.

The bank’s unique reach across CEE—in countries such as Romania, Bulgaria, Croatia, Serbia and Montenegro—has given it access to growing opportunities for sustainable finance, with standardization of business practices and products encouraging the growth of sustainable financing in these countries. By the end of the third quarter of 2023, the OTP Group reported 403 billion forints in sustainable financing business across the region.

OTP Bank’s ESG-related loans have been on a rising trend over the past few years. Sustainalytics judges that OTP’s overall ESG risk score improved from 17.8 to 14.6, putting it into the low-risk category, with risk negligible in business ethics and product governance, and low in the areas of data privacy and security, ESG integration, financials and human capital.

One of Turkey’s largest banks, Akbank provided loan support to the Turkish economy of 1.2 trillion Turkish lira (about $38.5 billion) over 2023, with a strong focus on sustainable investment. It has provided 174 billion lira in 2023 to support a sustainable future, reaching 87% of the 2030 target of 200 billion lira in sustainable loan financing.

The bank has been very active in social bonds and transition-linked loans, increasing issue volume by about 100% for the year as of the end of 2023’s third quarter. Social loans over the first three quarters of 2023 increased 34 times over 2022, with a large proportion of this assisting the areas affected by February’s earthquake. Separately, Akbank contributed 650 million lira to help redevelop these areas and a further 10 billion lira in support to its customers in the area. An agreement signed with the EBRD secured a loan agreement of $90 million to be distributed in the region.

Akbank has also launched Turkey’s first sustainable deposit product, aimed at commercial customers, to enable them to contribute actively to projects aligned with the UN’s SDGs. The bank has supported SMEs through its SME Eco Transformation Package in collaboration with IGE (a company facilitating exports through guaranteed practices for companies) and by launching the IGE-Akbank Green Transformation Guarantee Support Package in 2023, explicitly aimed at helping SMEs to reduce their carbon footprint and lower their energy costs.

As the second-largest bank in Austria, Raiffeisen Bank International (RBI) has expanded into 13 CEE markets and had total assets of €198 billion at the end of 2023. Amid a corporate strategy to “make sustainability happen,” RBI plays a leading role in sustainable bonds, for which it was the fourth-largest issuer in CEE in the first three quarters of 2023, according to Bloomberg data. Sustainable bonds come in several formats (linking with ESG ratings or sustainability targets or linking through proof of sustainable use of funds), and RBI included two corporate bonds (ESG volume of €755 million and ESG volume share of 17%) and seven bonds issued by sovereigns or financial institutions (ESG volume of €2.6 billion and an ESG volume share of 7%).

The Development and Investment Bank of Turkey was founded by the Turkish state in 1975 and was committed to environmentalism long before it became widespread. Its share of SDG-related loans has reached over 90% of its portfolio, while the share of climate and energy SDG loans is now 60%. The bank’s loans have had a marked impact on reducing Turkey’s carbon footprint—the bank has financed 388 projects, accounting for over 15% of the country’s installed renewable energy projects, while it has helped fund 156 projects aimed at boosting renewable energy, cleaning wastewater and reducing industrial emissions.   —Justin Keay

Over the past few years, most Latin American countries have updated their nationally determined reductions of greenhouse gases under the Paris Climate Agreement, with some joining the High Ambition Coalition’s 30×30 initiative to protect the world’s terrestrial and marine areas. Achieving net-zero by 2050 will push Latin American spending to about $20 trillion, with annual spending on physical assets increasing by about $700 billion, according to McKinsey & Company. Because of their geographies, natural resources and economies, Brazil and Mexico account for over half the investing needs in this region.

Latin American banks are vital to this transition to a more sustainable economy, as they have been integral in developing and financing innovative sustainable debt. According to Sustainable Fitch, debt financings from this region have diverged from global trends in that they’re more focused on social objectives. The region has also seen an increase in unique financial instruments, like SLBs, that have KPIs linked to gender diversity and are issued by sovereign nations.

There’s a strong focus on developing infrastructure for underserved communities in Latin America. Banks have financed significant deals in the region that provided, for example, sanitation and water services and renewable energy. Sustainable debt instruments also fund forest conservation and initiatives to preserve the environment, as agriculture is a top industry in this part of the world.

Based in Brazil, BTG Pactual incorporates ESG criteria into its decision-making processes to understand the risks and opportunities of each new relationship as it relates to the environment, society and climate. The bank is committed to assisting clients in their transition to a sustainable low-carbon economy. To date, it has exceeded over 74 billion Brazilian reais (about $14.9 billion) in ESG-labeled issuances, reaching its CFO Taskforce goal two years ahead of schedule.

The bank has participated in notable financings to promote its ESG goals. BTG Pactual contributed to sanitation programs in Brazil with sustainable, blue, and sustainability-linked bonds in local and offshore markets. The bank worked with mega-operations of water and sanitation firms Aegea and Iguá, and contributed about 15 billion reais in ESG bonds for sanitation—with over 10.6 billion reais having a blue label. As the bank was one of the first to issue blue bonds, it has consulted with companies to help them develop a blue framework or structure blue bonds, contributing to expanding private company funding and disseminating the blue label in local markets. BTG Pactual also contributed to Aegea’s issuance of a sustainable and sustainability-linked bond with KPIs related to social and environmental issues.

Banco do Brasil’s long-term commitment is to assist its clients in their transition to a more sustainable economy. The bank has provided transparency through its ESG Databook and quarterly Management Discussion and Analysis reports during this process. These detail Banco do Brasil’s activities and finances regarding its sustainable financing activities. The bank has also maintained top ratings from MSCI and Sustainalytics and has had external reviews from consultancies regarding its sustainable credit portfolio and sustainable finance framework. Banco do Brasil recently approved its proposals and corresponding action plan. The bank’s policies covering environmental, social and climate issues are included in business and administrative practices.

Itaú BBA is committed to sustainable development in the countries where it operates, and this commitment is part of its activities and strategy combining environmental, social and climate aspects. The bank worked with sanitation firm Aegea to finance the Águas do Rio 1 and 4 projects to strengthen water and sanitation services. This is the largest infrastructure debenture and ESG-labeled transaction in the Brazilian market, with 5.5 billion reais raised in sustainable and blue debentures. The project will benefit 27 municipalities and 124 neighborhoods in Rio de Janeiro by achieving 99% water coverage by 2032, 90% sewage coverage by 2033, and reducing water losses to 25% by 2033.

Based in Brazil, Bradesco BBI has achieved at least 86% of its goal of mobilizing 250 billion reais in sustainable finance by 2025. The bank also set goals for net-zero first-round commitments for the coal, electricity generation, agriculture and food sectors.

The bank participated in Eletrobras’ largest issuance, a seven billion reais sustainable debenture that funds renewable energies, transmission lines, green hydrogen, access to renewable energy for populations in isolated areas, forest conservation, and access to education for underprivileged populations.

Bradesco BBI helped to finance Cogna Educação’s 500 million reais social bond. A first of its kind in the Brazilian market, bond proceeds provided educational resources to socially vulnerable municipalities.

The bank was also the bookrunner and ESG coordinator of Comerc Energia’s 1 billion reais green debenture, the company’s first green debenture for renewable energy, energy efficiency, efficient lighting and green hydrogen. Bradesco BBI helped define initiatives and environmental benefits derived from this transaction, and these are included in a framework encompassing Comerc Energia’s future issuances.

Bradesco BBI served as bookrunner and ESG coordinator of 5.5 billion reais Águas do Rio 1 and 4 sustainability and blue debentures that fund water and sanitation services provided by Aegea. This issuance is one of the largest in the local market.

BBVA’s strategy is focused on increasing growth through sustainability, achieving neutrality of green gas emissions, and promoting integrity within stakeholder relationships. Green bonds have become a core part of the bank’s strategy as it helps its clients transition toward a sustainable future. According to Bloomberg, BBVA was ranked the most active bookrunner in Mexico in 2023 for sustainable bonds.

The bank served as joint bookrunner for Colombia’s inaugural social bond with a $2.5 billion notional amount. This bond is the country’s first ESG-labeled offering in international capital markets and leverages the republic’s green, social and sustainable sovereign bond framework.

Based in the Americas, Scotiabank has been working to advance climate transition and promote sustainable economic growth. In 2023, the bank underwrote 7.7 billion Canadian dollars (about $5.7 billion) in green loans and CA$4.7 billion in SLLs. Scotiabank was the sustainability structuring agent on Empresa de Telecomunicaciones de Bogotá’s SLL. The structure encourages replacing copper wiring with fiber optics in the metropolitan area of Bogotá and developing equity strategies by training women in issues related to information and communications technologies.          —AM

As a region, the Middle East highlights the tension between financing fossil fuels and achieving genuine sustainability.

The economies of many Middle Eastern nations, including the UAE, heavily rely on fossil fuel revenue. Banks play a crucial role in financing these industries, which directly contradicts the environmental pillar of sustainability.

A complete withdrawal from fossil fuels would be economically and socially disruptive in the Middle East and the global markets where it sells oil and gas, so the region’s banks are establishing a more transitional role, facilitating a gradual and managed transition towards cleaner energy sources, while still supporting current economic realities.

Green financing is increasing, with the region’s biggest banks actively increasing their investments in renewable energy and sustainable projects. In addition to adapting and transitioning their portfolios to keep pace with global and local ESG regulations, they are also taking steps to provide greater transparency and accountability by measuring and publicly disclosing the environmental impact of banks’ investments. Looking forward, banks in the Middle East are well-placed to help finance the global transition trend.

On its third iteration of its Sustainable Finance and Product Framework, QNB Group has developed a clear road map for integrating sustainability into its business practices and offerings. Green finance solutions include dedicated green, social (including SME financing), and sustainability-linked financing. Having issued the first green bond issued by a bank in Qatar in 2020, QNB executed the first interbank green deposit in the local market, completed green deposit placements with a large sovereign wealth fund, and in 2023, issued the first corporate green guarantee for renewable energy.

QNB’s eligible green loan portfolio in the geographies with established sustainable financing targets saw an increase of over 45% between December 2022 and November 2023, while QNB Group’s total sustainable financing portfolio of $8.5 billion is about 4% of the group’s total loan book.

A loan agreement with the EBRD will provide disaster relief in Turkey via QNB’s Turkish subsidiary, QNB Finansbank. A strong partnership with the EBRD since 2015 has resulted in more than $750 million of agreements. In March 2023, Egyptian subsidiary QNB Alahli launched the first green retail-financing program in cooperation with the EBRD to invest in green projects in Egypt.

Arab Bank has established a sustainability department responsible for systematically managing the goals and programs to improve the bank’s economic, social and environmental impacts. At the same time, a formal Sustainable Finance Framework outlines five focus areas: responsible financing, employee empowerment, transparent reporting, system optimization and community cooperation. Arab Bank actively invests in local communities through various programs, supporting education, health care and environmental initiatives.

The bank’s community investments totaled $20 million in 2022, with the Abdul Hameed Shoman Foundation and Arab Bank’s Corporate Social Responsibility program, “Together,” leading the charge. Arab Bank also offers a range of products including green loans, social impact bonds and climate-focused investments—helping clients meet sustainability goals.

Boursa Kuwait has a corporate sustainability strategy outlining its goals and initiatives across ESG’s three pillars: environmental, social and governance. It publishes annual Sustainability Reports detailing progress and performance on ESG metrics. Boursa Kuwait also offers a guide to help market participants integrate ESG reporting into their operations and provides workshops to advocate corporate and capital markets sustainability.

Eco-friendly practices within its office operations to reduce energy and water consumption while minimizing waste culminated in Boursa Kuwait being awarded a LEED (Leadership in Energy and Environmental Design) Gold certification by the Green Building Council in 2023. While admitting it has limited environmental impact as a stock exchange, the complete renovation of its main trading hall to include greener state-of-the-art technologies sends a powerful message to the entire region.

In line with the Kingdom of Saudi Arabia’s Vision 2030 to diversify the economy away from oil, SAB (Saudi Awwal Bank) is committed to achieving sustainable financing and investments of 34 billion Saudi riyals (about $9 billion). To this end, SAB is the lead arranger for the 14 billion riyal financing raised to support the Red Sea Project, which prioritizes renewable energy and regenerative tourism and played a significant role in the inaugural green bond issuance of the kingdom’s Public Investment Fund.

As of December 2023, SAB has allocated around $3 billion toward sustainable finance projects, while SAB doubled its funded assets toward sustainable finance year-on-year. Financed projects include the $8.5 billion NEOM Green Hydrogen Company—the world’s largest green hydrogen production facility—which will play a crucial role in producing clean energy.

First Abu Dhabi Bank (FAB) is the first bank in the Middle East and North Africa to target net-zero emissions by 2050, addressing the bank’s operations to supporting clients’ transitions. Committed to providing $135 billion in sustainable and transition financing by 2030, FAB is on target to achieve this. In 2022, FAB facilitated in excess of $23.6 billion of sustainable finance: $9.5 billion in SLLs and $10.6 billion in green and social loans. FAB’s Green Bond & Private Placement accounted for 17% of all FAB Bond & Private Placement in 2023, and 12% in 2021, with an annual increase of 42%.

FAB issued a $600 million five-year green bond last year and a three-year $353.9 million sukuk to fund green and social projects.

As the principal banking partner of COP28, the NBD Group, including Emirates NBD Capital (EmCap), pledged to mobilize more than 100 billion Emirati dirhams (about $27.2 billion) of sustainable finance by 2030. With EmCap’s support, clients mobilized more than $15 billion of sustainable finance in 2023 (67%) in the debt capital markets and 33% via labeled loans. EmCap successfully closed more than 20 green and sustainability bonds in 2023.

In 2023, EmCap ranked first in the Gulf Cooperation Council countries for bond issuances and was the highest-ranked regional bank in international sukuk. In 2024, EmCap hopes to take a global role in advising on labeled bonds and loans and structuring sustainability-linked tools. EmCap also plans to facilitate debt-for-nature swaps—involving developing debt being restructured, along with a promise that some funding is allocated for nature-related projects.

In late 2023, Abu Dhabi Islamic Bank (ADIB) raised $500 million by issuing Shariah-compliant green bonds, oversubscribed 5.2 times; this was the world’s first green dollar-denominated sukuk. ADIB aims to allocate an amount equal to the net proceeds of this issuance to fund green projects to accelerate climate transition. This may include financing or refinancing green projects, as well as financing customers for eligible green projects.

In launching its ESG strategy for the next three years, ADIB aims to take advantage of the overlap between the principles of Shariah law and ESG integration to maximize positive impacts. Financial instruments issued under ADIB’s sustainability framework include green, social and sustainability sukuk.

The number of green loans provided by the National Bank of Kuwait (NBK) increased by 14% in 2023, resulting in an increase of 10% in the total monetary value of green financing. This is in addition to a twofold increase in the number and monetary value of sustainability-linked facilities extended in 2023.

The total monetary value of social financing increased by 7% in 2023. Green mortgages to SLLs also increased in developed markets, including the US, France and Singapore. NBK has been expanding its retail business to offer consumers innovative financing solutions to adopt sustainable behaviors and lifestyles by providing electric vehicles and eco-friendly home loans.                        —Gilly Wright

According to SEB Group’s green bonds report, green bond issuance is expected to increase by up to 20% globally this year, and “North America and corporations will be the main drivers of growth in 2024.”

Why North America? Under the administration of US President Joe Biden, the Inflation Reduction Act was signed into law in August 2022, “but it came into force only last year,” Gregor Vulturius, SEB’s lead scientist and adviser on climate and sustainable finance, tells Global Finance. That is, the “shiny new factories” will be showing up only this year and next; and of course, they will need financing.

It’s not as if the region underperformed last year, either. North America was up 80% in 2023 green bond issuance, which was in “a suffering bond market,” Vulturius notes.

Canada’s Scotiabank has an ambitious goal: to mobilize $350 billion to reduce the impacts of climate change by 2030. It reached $130 billion by the fiscal end of 2023, up from $96 billion in 2022—not too bad, given a relatively flat year for sustainable finance globally. ESG bonds accounted for 13.6% of the bank’s overall bond volume, a big jump from only 3% in 2022.

Scotia doesn’t confine itself to North America, either. According to Bloomberg, it was Latin America’s second-leading bookrunner for green, social, sustainable and other labeled bonds in 2023, with a 21% market share. In May, Scotia acted as ESG distributor for the United Mexican States’ Sustainable Sovereign Bond issuance, where demand reached approximately $1 billion.

The bank is active with various impact bonds, including SLBs. It was a sustainability structuring agent for Bell Canada, Canada’s largest communications company, when it added sustainability-linked pricing to its securitization program in September 2023. In June, Scotia also advised the Republic of Chile on its dollar and euro SLB offerings.

Elsewhere, Scotia supported Mexico’s Comisión Federal de Electricidad as joint bookrunner in a June 2023 social bond issuance and played a similar role for Canadian real estate firm Ivanhoe Cambridge for that firm’s inaugural sustainability bond. On the loan side of the ledger, Scotia tallied 67 ESG-loan deals between January 1 and October 31, 2023, with a total volume of CA$7.7 billion.

Finally, Scotiabank has committed to clear, open and detailed sustainability reporting—and once again takes North American honors for transparency. It developed and abided by four transparency principles that guide its net-zero strategy, and the bank regularly publishes its numeric progress toward achieving long-term goals.

Canada’s CIBC figured prominently in sustainable and project infrastructure finance in 2023. In June 2023, the bank co-led a syndicate of underwriters for Northland Power’s CA$500 million fixed-to-fixed-rate green subordinated notes issuance. The power company will use the proceeds for green projects, including an offshore wind farm in Poland and an energy storage project in Ontario, Canada.

CIBC was also the lead arranger and administrative agent for the AES Clean Energy Master Indenture Structure warehouse upsizing. The $2.7 billion refinancing project, which happened in May 2023, included 25 banks and was the largest debt financing for a US renewables transaction.

The bank’s prowess for green and sustainable bond underwriting was already described in the global awards above, but the bank was also a standout in SLLs in 2023. It was Canada’s top bookrunner, with a 25% market share according to Bloomberg, and it acted as sole bookrunner, lead arranger and sustainability structuring agent for $700 million FortisBC Energy’s revolver financing—with a performance target for Scope 3 emissions as well as a social target aimed at protecting Canada’s indigenous population.

Additionally, CIBC was a joint bookrunner for Enbridge’s $900 million sustainability-linked notes, OMERS Realty Corporation’s $600 million green debentures, and Sun Life Financial’s $500 million sustainable subordinated debentures offerings over the past year.           —Andrew Singer

Green bonds dominate sustainable finance, and Western Europe dominates green bonds. The world’s top three banks in green bonds and loans in 2023 were Western European—BNP Paribas, Credit Agricole and HSBC, according to Bloomberg data—while year-end green bond issuance in Europe outclassed its closest regional rival, Asia-Pacific, $243.75 billion to $174.2 billion, according to Climate Bonds Initiative data.

Looking ahead, falling EU interest rates and new standards for green bond issuances bode well for 2024 and beyond. On the punitive side, European banks could encounter new fines and higher capital requirements if they delay implementing green transition plans too long. More European banks, too, are imposing internal restrictions on their fossil-fuel sector financing.

For CaixaBank, sustainable finance is about more than reducing greenhouse gas emissions. It also entails a strong social commitment, such as boosting financial inclusion through its microfinance bank, Europe’s largest; or issuing social bonds, a bond type that some other banks abandoned after the Covid-19 crisis.

Indeed, when CaixaBank closed on its fifth social bond, in May 2023, that €1 billion debt instrument focused on education and health care was oversubscribed by €750 million.

CaixaBank is also a leader on ESG-related loans. It ranked third globally, according to Refinitiv, and was first in Europe in the first half of 2023, providing $11.65 billion in financing through 57 transactions.

The bank also brings some resourcefulness to its deals. As sustainability coordinator for Acciona Energía’s €750 million green financing in November 2023, the bank incorporated a local impact indicator in which participating companies committed to planting 26,000 trees per year (collectively) during the financing’s term.

LGT Group, Liechtenstein’s royal family-owned private banking and asset management group, began to embed sustainability-oriented clauses in its investment programs decades ago. It makes a point of publishing the extent to which its investments meet sustainability criteria.

As of June 30, 2023, the group had invested 54.5 billion Swiss francs (about $62 billion) in sustainable investment solutions globally, representing 36% of LGT’s total assets under management. That was up from 34.8% at year-end 2022. Moreover, 80% of LGT’s discretionary mandates in Europe, the Middle East, Africa and Asia now meet the EU’s Article 8 sustainability requirements, which qualify as “light-green” funds that “promote investments or projects with positive environmental or social qualities, or a combination of such characteristics, as long as the investments are made in enterprises that adhere to sound governance practices.”

The Netherlands’ ING was 12th globally among green bond bookrunners in 2023, according to cbonds.com, and many of those issuances were in Western Europe. In June 2023, for instance, ING acted as sole structurer and joint active bookrunner on Anglian Water’s £860 million (about $1.1 billion) dual-tranche green bond issuance to help meet that water and sewerage company’s capital expenditures.

In infrastructure finance, ING played multiple roles, including sole underwriter and mandated lead arranger, in AtlasEdge’s plans to expand sustainable data centers across Europe. The company raised €525 million in committed debt financing and a further €200 million uncommitted accordion facility. The 2023 sustainability-linked financing includes KPIs to ensure the new data centers use renewable energy.

ING is a veteran of sustainable project finance, too. As sustainability coordinator for Baltic Power’s offshore wind farm project and its €4.1 billion multibank credit facility, for instance, ING helped ensure that financing aligned with the Loan Syndications and Trading Association’s Green Loan Principles and the International Capital Market Association’s Green Bond Principles. Baltic Power will be the world’s first to use low-emission steel produced almost entirely from recycled raw material.

Societe Generale (SocGen) SLBs lost momentum in 2023, but SocGen stayed the course, acting as structuring adviser and joint bookrunner for the Republic of Chile’s €750 million SLB issuance in June. SocGen was also the sole structuring adviser in the UK’s Heathrow Airport €650 million SLB, with its separate performance targets for slashing carbon emissions “in the air” and “on the ground.”

As noted in the Global Winners section, according to Natixis, SocGen is one of the only commercial (i.e., nondevelopmental) banks that has ever issued green, social and sustainable bonds. In September 2023, SocGen was the global coordinator for French real estate development and investment company Praemia Healthcare’s €500 million sustainability bond. Proceeds will finance green and social assets—including medical and eldercare facilities.

SocGen has been a perennial supporter of sustainable finance projects in the emerging world, and 2023 was no different. In Central and West Africa, it partnered with Afrigreen, a debt investment fund, to support the decarbonization of local companies, raising €87.5 million. In contrast, in Kazakhstan, the bank supported the development of green mobility as global coordinator and mandated lead arranger for the €627 million financing of 105 electric locomotives to be used in that Central Asian nation, among other projects.

Finland’s Nordea kept its innovative skills sharp in 2023, introducing its second sustainability-linked loan bond, or SLLB, at the end of August. The €1 billion issuance followed the first-ever SLLB (€370 million) launch in late 2022. This hybrid instrument uses standard use-of-proceeds bonds to fund a portfolio of SLLs, though with no coupon adjustment for investors. The bank absorbs any performance shortfall.

Overall, SLLs at Nordea were up 30% in the first three quarters of 2023 compared to 2022, and the bank ranked top in SLLs in the Nordic region, according to Bloomberg.        —AS

Global Finance: When you switched to a digital-only bank, how did you determine which services you wanted to offer to SME [small and midsize enterprise] clients?

Gabriel Motomura: When we launched, we went to the United States. We went to Eastern and Western Europe. We wanted to see what banks were doing globally to help SMEs. We wanted to know the No. 1 bottleneck that prevented SMEs from growing. And we went back home and started asking around. Almost 100% of the SMEs we spoke to said the bottleneck was access to capital.

The leaders of the SMEs we spoke with said, “I can handle getting more customers in, but we have no access to capital. You guys should start with capital.” So, we started this initiative by focusing on lending. We jumped right in.

GF: Giving SMEs access to the funds needed to grow their businesses was vitally important. What other capabilities did you implement to help SMEs grow?

Rogério Stallone: Normally what we see in dealing with someone who’ll become our client, the owner of an SME, say, an engineer. And he’s spending 95% of his time dealing with cash flow, dealing with the bank. He’d like to spend that time talking with his clients or developing new projects. Our mission is to help to facilitate the life he wants: To give him time to focus on his business, not dealing with bank bureaucracy. We offer our clients the time they need to grow their businesses.

GF: How do you help your SME clients save time?

Motomura: Look at a checking account as an example. At many banks, an SME user goes to his checking account, downloads a statement and imports it to Excel or Google Sheets. We developed a connection for business banking accounts that automatically links the account and the spreadsheet application. It’s done instantly.

Then you might have a company with more than one partner or decision-maker, and they want to know everything about money movement through their checking account. Usually, that would require both of them to access their accounts. We developed an integration where all partners are automatically alerted to every transaction. Say I spend 10,000 Brazilian reais (about $2,000) on building materials; my partner is automatically alerted.

The most positive feedback we get is about our integrations and connections.

GF: What are you doing now to improve your services to SMEs?

Stallone: In Brazil, we see banks with strong balance sheets and an appetite to lend money. Then we have SME clients who are doing a decent job. We also have fintechs creating new products for flexibility and agility. We aim to connect the banking and SME world with the fintech world. For example, we connected with ERP [enterprise resource planning] systems, so clients of those ERPs can transact very easily with them. Working with our bank, the client can instantly export and reconcile accounts payable from its ERP system onto our banking system. There’s no friction; they don’t have to log in and out a lot.

Motomura: We are now connected with more than 30 fintech systems in Brazil. We allow them to build solutions on our infrastructure. Fintech payment systems, for example, have been built on bank infrastructure. We do this because we know that fintechs can offer complementary banking services our SMEs need.

GF: You’re a digital-only bank. Do any of your SME clients say they’d like to be able to walk into a bank and have a face-to-face conversation with their banker?

Motomura: We are a fully digital bank with a human touch. We have real people working 24/7. If you have a problem … no problem. You can use chat. You can video conference with us. You can call us for some advice: weekends, Saturdays, Sundays, the middle of the night. Usually, no client wants to walk into a branch just to talk. They’re too busy. Some clients want to walk into a bank to cash a check but cannot, so they use another bank to do that.         

Motomura: We are a fully digital bank with a human touch. We have real people working 24/7. If you have a problem … no problem. You can use chat. You can video conference with us. You can call us for some advice: weekends, Saturdays, Sundays, the middle of the night. Usually, no client wants to walk into a branch just to talk. They’re too busy. Some clients want to walk into a bank to cash a check but cannot, so they use another bank to do that.          —LS

As the global economy continues to limp along, small and midsize enterprises (SMEs) will keep facing an uphill climb in 2024—whatever corner of the world they happen to occupy. The International Monetary Fund forecasts that GDP growth in emerging and developing economies will fall to 4% in 2023 from 4.1% in 2022 and remain at 4% in 2024, while GDP in advanced economies will drop to 1.5% this year from 2022’s 2.6% and to 1.4% in 2024.

SMEs can expect to face stronger headwinds in a sluggish economy than their larger brethren. Large corporations tend to have balance sheets that can weather the knock-on effects of such challenges as the Russia-Ukraine war, the current Middle East conflict, rising energy prices, tighter monetary policies, and governments’ cessation of pandemic support measures. For SMEs, stingier capital markets and the breakdown of open trade in favor of national self-reliance in many economies are making growth even more difficult.

This does not bode well for the global economy. Approximately 99% of businesses worldwide are SMEs, representing 60% of the business value-add, according to the OECD October 2023 SME and Entrepreneurship Outlook Polixy report. Small and midsize businesses are critical “to drive a resilient, inclusive and sustainable recovery,” the report’s authors warn.

One of the most important lessons the pandemic has taught businesses is the necessity of digitalization: from improving online and mobile access for clients to virtualizing their organization’s infrastructure. Social media and cloud computing have become mainstream for most SMEs, the OECD report’s authors note, with use of the latter doubling in the past six years.

Unlocking the value hidden in the data will be critical. A World Economic Forum survey of 111 SMEs in 42 countries and 21 sectors found that “74% struggle to maximize the value of their company’s data investments.” More than half of those polled (55%) experienced difficulty finding data, and slightly fewer (54%) had difficulty maintaining their data.

“The greatest acceleration in digital diffusion in recent years has been in the conduct of big data analysis—albeit from low levels—and the purchase of cloud computing services,” says Sandrine Kergroach, head of SME and Entrepreneurship Performance, Policies and Mainstreaming at the OECD Centre for Entrepreneurship in a 2021 OECD report. “The adoption of business intelligence and supply chain management software have progressed little, especially among the smallest firms.”

Yet, the development of open banking standards, the sharing of application programming interfaces (APIs), and the rise of the sharing economy have begun to increase the value of SMEs’ internal data. That makes selecting the proper banking partner more critical than ever.

Firms need to balance access to the cheapest capital against the value-add of the technologies and other services banks can provide. This year’s World’s Best SME Bank Awards recognize those financial institutions that stand head and shoulders above their competitors in serving their SME client base.      —Robert Daly

The editors of Global Finance, with input from industry analysts, corporate executives and technology experts, selected the winners of the World’s Best SME Banks 2024 based on a mix of objective and subjective factors. Editors consulted entries submitted by the banks and the results of independent research. Entries were not required.

Judges considered performance from April 1, 2022, to March 31, 2023. Global Finance then applied a proprietary algorithm to shorten the list of contenders and arrive at a numerical score of up to 100. The algorithm weights a range of criteria for relative importance, including knowledge of SME markets and their needs, breadth of products and services, market standing and innovation.

Once the judges narrowed the field, they applied the final criteria, including scope of global coverage, size and experience of staff, customer service, risk management, range of products and services, execution skills and use of technology. In the case of a tie, the judges lean toward local providers rather than global institutions. The panel also tends to favor private-sector banks over government-owned institutions. The winners are those banks and providers that best serve the specialized needs of SMEs.

For the second year running, the Brazilian digital bank BTG Pactual Empresas has swept the Best SME Bank awards for Brazil, Latin America, and the world. The bank has eased access to capital for micro, small, and midsize enterprises (MSMEs), representing approximately 90% of Brazilian companies.

Clients get a low-touch digital channel, available 24/7, that nevertheless provides a high-touch experience using open banking standards and Brazil’s PIX instant payment system. For example, BTG Pactual Empresas has shortened the time needed to obtain credit to about 30 minutes for clients participating in rural credit programs, solar-power and green financing, and women-owned businesses. Newly opened SME accounts are operable within an hour.

Once an SME account is open, account owners can export their banking data to standard spreadsheets, Microsoft Excel and Google Sheets, and enterprise resource planning (ERP) applications, instantly reconciling accounts in their ERP systems.

BTG Pactual Empresas provides such additional services as single-sign-on multiuser and multibusiness accounts, online invoicing, collection management, budgeting capabilities, foreign currency exchange and digital receipts, along with payroll, insurance, and tax and investment services. Clients can reach expert support any time via chat, email, WhatsApp and toll-free calling.       —RD