September 21, 2019

Butterfield in Cayman Islands settlement bank role

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By Jonathan Kent From The Royal Gazette

Butterfield Bank has teamed up with five other retail banks in the to create an automated clearing house to ease electronic funds transactions and enable same-day transfers.

A similar system is already in operation in , but Butterfield says the project in Cayman has helped it to identify ways to make the system here more efficient.

A Butterfield spokesman explained that the bank was a joint owner of (Cayman) Ltd, along with five other retail banks — Cayman National Bank, CIBC First Caribbean, , RBC and Scotiabank.

As there is no central bank in the Cayman Islands, Butterfield is acting as the settlement bank for the ACH process there, meaning all funds being transferred between local Cayman banks on behalf of customers are settled through Butterfield.

ACH replaces the process which relied on cheque transfers between the banks and resulted in two to three-day wait times for customers’ local transfers and payments to be completed.

Now, the ACH-enabled secure electronic file transfers between local banks mean that transactions in US or Cayman dollars, including individual-to-individual transfers between customers of different banks, payroll, and bill payments, as well as authorised debit and credit transactions, can now be effected on the same business day.

A spokesperson for Butterfield said: “ACH-type transfer capabilities have existed in Bermuda for some time, with the four local banks directly exchanging files and funds with each other on behalf of customers electronically, enabling same day transfers to be effected.

“However, based on our involvement with the development of ACH in Cayman, Butterfield in Bermuda was able to automate some of the legacy manual processes that were still in use here to improve efficiency, and we’re looking at future updates in both jurisdictions that will enable us to provide additional remittance details to transfer and payment recipients, which should help with account reconciliations and bookkeeping by customers. “Butterfield is pleased to have played a central role in the implementation of fast and secure local funds transfer services for customers in the Cayman Islands.”

Butterfield is based in Bermuda and has operated in Cayman since the 1960s.

For more on this story go to: http://www.royalgazette.com/business/article/20180509/butterfield-in-cayman-settlement-bank-role&template=mobileart

IMAGE: Butterfield Bank logo

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