Correspondent banks are facing economic challenges and increased competition that threaten the profitability of trade finance services. To adapt, banks need to provide competitive pricing, deliver value across the supply chain rather than just risk mitigation, and improve efficiency through measures like right-sizing, business intelligence tools, and centralized operations. Additionally, banks must ensure they can meet growing regulatory burdens like anti-money laundering requirements imposed by rules like the EU directive and Patriot Act, which significantly increase costs. As regulations and capital rules tighten under Basel III, some banks may exit correspondent banking altogether due to the heavy cost of compliance.
Fundtech white paper, e invoicing provides new avenues for creditFriso de Jong
1) Electronic invoicing enables new forms of supply chain financing by providing banks visibility into trade transactions and relationships.
2) E-invoicing automates supply chain financing structures like factoring and invoice discounting, improving processes and risk analysis.
3) Integrating e-invoicing with supply chain financing provides opportunities for new financing products focused on payables and receivables.
Global Corporate and Investment Banking President Gene Taylor presented on the division's strategy for growth between 2006-2011. The goals are to increase revenues by $10 billion and earnings by $3 billion through deepening client relationships, increasing market share internationally, and strategically deploying capital. Global Investment Banking Head Brian Brille then discussed the strategic themes of integrated delivery of Bank of America's capabilities, capturing largest fee pool opportunities including becoming a top 3 investment bank in the US, and growing the international presence including becoming a top 10 investment bank in Europe.
Global payments community consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for- profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results.
The document discusses the Futures & Options Expo 2000 conference which covered regulatory changes in the futures industry, including proposed legislation to modernize regulation. It also discusses the Chicago Mercantile Exchange's new business-to-business initiative and partnerships, as well as issues facing the managed futures sector. The conference showed the ongoing transformation in the futures industry driven by globalization, technology changes, and deregulation.
To grow and prosper in today’s ever-changing world, banks
too must change. They need to move beyond any existing
organizational silos, infrastructure complexities and other
constraints – and toward an operation centered on the client.
In partnership with Earnix, Marketforce surveyed 200 banking executives to better understand how banks' pricing structures will need to evolve in order to compete with new entrants.
Discover the key insights in this report.
This document discusses banking in emerging markets and identifies three key stages of financial maturity for these markets - frontier, transitional, and established. It summarizes the findings of surveys of banks and customers in 11 emerging markets representing these three stages. The main points are:
1) Emerging markets face growth opportunities but also volatility due to political and economic factors. Banks must cope with this volatility to succeed.
2) Banks face challenges including tougher regulation, intensifying competition, and increasing costs. They must address these "headwinds" to profit from emerging market growth.
3) Successful banks will identify lessons from peers in similar markets to adapt strategies locally and maximize profits from their most lucrative customers.
Sanjoy Sen - Emirates 24/7 - Crisis forces Banks back to basics - April 2009Sanjoy Sen
The document discusses how the economic crisis is forcing retail banks to refocus on customer service basics. Several banks in the UAE are not prioritizing customers, focusing more on products. The crisis has also highlighted declining customer satisfaction, especially in call centers. Banks are now sharing best practices for managing the crisis, recognizing the importance of understanding customer needs to avoid defaults. New customer needs are emerging from the crisis centered around more basic spending on items like food and gas, representing opportunities for banks.
Fundtech white paper, e invoicing provides new avenues for creditFriso de Jong
1) Electronic invoicing enables new forms of supply chain financing by providing banks visibility into trade transactions and relationships.
2) E-invoicing automates supply chain financing structures like factoring and invoice discounting, improving processes and risk analysis.
3) Integrating e-invoicing with supply chain financing provides opportunities for new financing products focused on payables and receivables.
Global Corporate and Investment Banking President Gene Taylor presented on the division's strategy for growth between 2006-2011. The goals are to increase revenues by $10 billion and earnings by $3 billion through deepening client relationships, increasing market share internationally, and strategically deploying capital. Global Investment Banking Head Brian Brille then discussed the strategic themes of integrated delivery of Bank of America's capabilities, capturing largest fee pool opportunities including becoming a top 3 investment bank in the US, and growing the international presence including becoming a top 10 investment bank in Europe.
Global payments community consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for- profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results.
The document discusses the Futures & Options Expo 2000 conference which covered regulatory changes in the futures industry, including proposed legislation to modernize regulation. It also discusses the Chicago Mercantile Exchange's new business-to-business initiative and partnerships, as well as issues facing the managed futures sector. The conference showed the ongoing transformation in the futures industry driven by globalization, technology changes, and deregulation.
To grow and prosper in today’s ever-changing world, banks
too must change. They need to move beyond any existing
organizational silos, infrastructure complexities and other
constraints – and toward an operation centered on the client.
In partnership with Earnix, Marketforce surveyed 200 banking executives to better understand how banks' pricing structures will need to evolve in order to compete with new entrants.
Discover the key insights in this report.
This document discusses banking in emerging markets and identifies three key stages of financial maturity for these markets - frontier, transitional, and established. It summarizes the findings of surveys of banks and customers in 11 emerging markets representing these three stages. The main points are:
1) Emerging markets face growth opportunities but also volatility due to political and economic factors. Banks must cope with this volatility to succeed.
2) Banks face challenges including tougher regulation, intensifying competition, and increasing costs. They must address these "headwinds" to profit from emerging market growth.
3) Successful banks will identify lessons from peers in similar markets to adapt strategies locally and maximize profits from their most lucrative customers.
Sanjoy Sen - Emirates 24/7 - Crisis forces Banks back to basics - April 2009Sanjoy Sen
The document discusses how the economic crisis is forcing retail banks to refocus on customer service basics. Several banks in the UAE are not prioritizing customers, focusing more on products. The crisis has also highlighted declining customer satisfaction, especially in call centers. Banks are now sharing best practices for managing the crisis, recognizing the importance of understanding customer needs to avoid defaults. New customer needs are emerging from the crisis centered around more basic spending on items like food and gas, representing opportunities for banks.
Banks have increasingly integrated their cash and trade businesses over the last decade in an effort to reduce risk and increase working capital for corporate clients. While intuitively combining these areas makes sense, some customers remain skeptical. The document discusses how various banks have approached integrating cash management and trade finance both from a sales perspective by training representatives in both areas, and operationally by keeping specialized expertise separate while finding opportunities for collaboration. It also examines challenges in execution and perceptions from corporate treasurers, finding that while the concept is sound, implementation can be difficult and not all clients see the value.
After surviving the financial meltdown in 2008, the banking industry finds itself at a
critical juncture. A slow economy restrains the potential for increasing revenue,
while new complex regulations add high levels of uncertainty to the industry.
The retail banking industry faces opportunities for growth despite challenges from regulations and competition. Key trends include deregulation, rising competition from other financial institutions, the use of new technologies, and globalization. India represents a major opportunity for growth in retail banking due to its rising middle class and consumer purchasing power. However, banks must innovate, reduce costs, pursue mergers and acquisitions, and protect consumer interests to capitalize on the opportunities in retail banking.
1) The equipment ABS market is adjusting to less activity from large players like GE Capital, with smaller independent finance companies accessing the market more frequently through smaller deals.
2) After a slow start in 2016, the second quarter saw increased activity with four ABS deals coming to the market, including a large $787 million deal from MassMutual.
3) While overall issuance volumes are expected to be lower than 2015 due to less activity from large players like GE, ABS continues to provide a viable funding source for equipment loans and leases.
Forum Microcredit Interest Rates and their DeterminantsDr Lendy Spires
This document analyzes microcredit interest rates and their determinants from 2004-2011 using data from the Microfinance Information Exchange. It finds that globally, interest rates declined substantially through 2007 but then leveled off. This is partly due to operating costs, which declined long-term but rose in 2008 and 2011. It also examines the components that determine interest rates: cost of funds, loan losses, operating expenses, profits. It reports that average returns on equity have fallen and profits as a percentage of loan payments have dropped dramatically over this period.
Explaining the determinants of trade credit an empirical study in the case of...Alexander Decker
This document summarizes a research study that investigated the determinants of trade credit for 403 unlisted Saudi Arabian firms from 2000 to 2004. The study found that trade credit accounts for a large portion of liabilities for these firms. Using a panel data estimation technique, the study tested hypotheses related to five determinants of trade credit: availability of financial resources, firm creditworthiness, profitability, liquidity, and growth opportunities. The results showed that trade credit is negatively related to traditional debt sources but positively related to firm size, liquidity measures like current assets, and growth. Trade credit was found to be negatively related to firm age and profitability, consistent with hypotheses.
The Boston Consulting Group's report finds that while the global financial crisis has been painful for corporate banking, it has also created opportunities for those who can adapt. The report identifies several megatrends that will shape the future landscape, such as globalization, technological changes, and new regulations. To succeed, the top banks are building premium client relationships, enhancing risk management, improving transaction banking capabilities, and developing next-generation operating models with end-to-end transparency. Banks that can leverage these dynamics may deepen their competitive advantage over weaker rivals in the coming years.
Global payments 2014_next_level_value_sep_2014_tcm80-171913(1)Rudi Chatab
The payments industry is poised for continued strong growth through 2023. Payments revenues are estimated to reach $2.1 trillion globally, up from $1 trillion in 2013. Retail payments will dominate led by account revenues and credit cards. Wholesale transaction banking revenues will also increase substantially. Digital technologies will disrupt the industry as payments become integrated into broader platforms. Financial institutions must develop long-term growth strategies and pursue multiple innovation initiatives to capture the significant revenue opportunities while fending off new competitors.
The document discusses challenges and opportunities in transaction banking. It covers four topics: 1) Building future-proof business and operating models by balancing flexibility and costs. Banks must innovate while managing complexity. 2) Profiting from growth in Asia and new global trade flows by creating optimal geographic footprints. 3) Leading in mobile payments by establishing security, preserving card attractiveness, and forming a strategy on mobile wallets. 4) Capturing opportunities in rapidly developing economies like Brazil and India by innovating in mobile banking and payments and collaborating with partners.
The document discusses the growth of structured finance obligations (SFOs) in India and their importance for credit rating agencies. It notes that SFOs allow issuers to receive higher credit ratings through mechanisms like credit enhancement from third parties. This allows issuers to issue debt at lower interest rates compared to traditional instruments. The share of SFOs in the debt market is growing and they are increasingly preferred by issuers over traditional debt. As SFOs are expected to grow further, credit rating agencies see them as an important new area for growth and must develop expertise in evaluating the various risks involved in rating them.
The document discusses how Diversified Trust executes municipal bond trades for clients through a competitive bidding process among broker-dealers in order to obtain the most competitive prices. It provides an example of how the process benefited a client through liquidating municipal bonds from their portfolio and obtaining higher prices than if sold individually to broker-dealers. Through competitive bidding across multiple broker-dealers, the client received proceeds that were estimated to be over $154,000 higher than if sold in the retail market without such bidding. The process also reduced the credit and duration risks in the client's portfolio.
The document summarizes the European mezzanine lending market in the first half of 2012. It finds that the number of active mezzanine lenders has decreased from 69 to 54 as the market continues to rationalize. Average maximum loan-to-value ratios have remained stable at 82.4% while required returns have fallen slightly to 15.6%. Mezzanine lending volumes increased over the last 12 months, though transaction activity has been limited by a weak senior debt market. The top three geographic markets for mezzanine lenders are the UK, Germany, and France.
Virtual currency would play a role in disrupting the conventional transaction models and have a potential impact on various sectors. Know more about the trends and the multiple challenges faced by businesses in adopting the virtual currency. Download the Business Research report by Aranca.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
A Framework for Detecting Macroeconomic Changes and Their Effect on a Bank's ...Cognizant
For the banking industry, we describe the relationship between changing business conditions/technologies and variances in business models - including a matrix of internal and external "fit" based on flexibility and product variety.
Accenture Capital Markets- operating with a restricted balance sheet -Top 10 ...Karl Meekings
New banking regulations are restricting balance sheets and increasing costs, reducing revenue opportunities. Banks face challenges including higher capital requirements, liquidity restrictions, leverage limits, and business model changes. They must optimize capital, manage risk-weighted assets, properly allocate capital and compensation, and potentially change business models. Operational challenges include withstanding new capital charges and optimizing collateral to mitigate regulatory impacts on profitability.
Trade and Cash Convergence: The Integrated Transaction Banking PlatformCognizant
The document discusses the drivers influencing transaction banking and the need for an integrated transaction banking platform. It outlines four levels of maturity for an integrated system, with level 5 being the most mature. It emphasizes that banks need to determine the right maturity level based on their target clients and competitive positioning. Factors like existing legacy systems will also impact the implementation strategy for developing an integrated platform.
Building profitable relationships with multichannel consumersPaul McAdam
Building Profitable Relationships with Multi-Channel Consumers is the first in a series of Consumer Insight Briefs based on primary research conducted by FIS™ Enterprise Strategy. The research findings are based on a 42-question, online survey completed by more thanover 4,000 U.S. consumers in early September 2010. The survey was fielded by FIS Enterprise Strategy to a consumer panel maintained by Survey Sampling International. The estimated margin of error rate for this sample is +/-1.6% to 2.3%.
The document proposes an alternative model for transforming the UK banking industry by separating it into three components based on business lifecycle roles: banking business managers, transaction processing factories, and deal origination entities. This would reframe the operating model to increase transparency, competition, and customer choice. It outlines how each component could function and the IT implications, arguing the proposed new construct is feasible given existing industry practices, solutions, and regulatory support.
Regulations are integral to the banking industry, and the extent to which the bank complies with such regulations not just maintains its bottom line in terms of avoiding hefty fines, but also has a big bearing on credibility and integrity. So how do banks comply with all that is required, and save themselves from the ill-effects of non-compliance?
The document discusses challenges that large multinational corporations face when opening bank accounts due to stringent know-your-customer (KYC) regulations. It notes that some corporations, like Chevron Phillips, have struggled for over 12 months to clear KYC processes. While regulations aim to prevent financial crimes, banks tend to overcomply in a way that harms customer experience. New technologies like blockchain show promise in streamlining KYC processes, but banks have been slow to adopt them. Overall, the strict application of KYC rules creates difficulties for both large corporations and small businesses in accessing basic banking services.
Banks have increasingly integrated their cash and trade businesses over the last decade in an effort to reduce risk and increase working capital for corporate clients. While intuitively combining these areas makes sense, some customers remain skeptical. The document discusses how various banks have approached integrating cash management and trade finance both from a sales perspective by training representatives in both areas, and operationally by keeping specialized expertise separate while finding opportunities for collaboration. It also examines challenges in execution and perceptions from corporate treasurers, finding that while the concept is sound, implementation can be difficult and not all clients see the value.
After surviving the financial meltdown in 2008, the banking industry finds itself at a
critical juncture. A slow economy restrains the potential for increasing revenue,
while new complex regulations add high levels of uncertainty to the industry.
The retail banking industry faces opportunities for growth despite challenges from regulations and competition. Key trends include deregulation, rising competition from other financial institutions, the use of new technologies, and globalization. India represents a major opportunity for growth in retail banking due to its rising middle class and consumer purchasing power. However, banks must innovate, reduce costs, pursue mergers and acquisitions, and protect consumer interests to capitalize on the opportunities in retail banking.
1) The equipment ABS market is adjusting to less activity from large players like GE Capital, with smaller independent finance companies accessing the market more frequently through smaller deals.
2) After a slow start in 2016, the second quarter saw increased activity with four ABS deals coming to the market, including a large $787 million deal from MassMutual.
3) While overall issuance volumes are expected to be lower than 2015 due to less activity from large players like GE, ABS continues to provide a viable funding source for equipment loans and leases.
Forum Microcredit Interest Rates and their DeterminantsDr Lendy Spires
This document analyzes microcredit interest rates and their determinants from 2004-2011 using data from the Microfinance Information Exchange. It finds that globally, interest rates declined substantially through 2007 but then leveled off. This is partly due to operating costs, which declined long-term but rose in 2008 and 2011. It also examines the components that determine interest rates: cost of funds, loan losses, operating expenses, profits. It reports that average returns on equity have fallen and profits as a percentage of loan payments have dropped dramatically over this period.
Explaining the determinants of trade credit an empirical study in the case of...Alexander Decker
This document summarizes a research study that investigated the determinants of trade credit for 403 unlisted Saudi Arabian firms from 2000 to 2004. The study found that trade credit accounts for a large portion of liabilities for these firms. Using a panel data estimation technique, the study tested hypotheses related to five determinants of trade credit: availability of financial resources, firm creditworthiness, profitability, liquidity, and growth opportunities. The results showed that trade credit is negatively related to traditional debt sources but positively related to firm size, liquidity measures like current assets, and growth. Trade credit was found to be negatively related to firm age and profitability, consistent with hypotheses.
The Boston Consulting Group's report finds that while the global financial crisis has been painful for corporate banking, it has also created opportunities for those who can adapt. The report identifies several megatrends that will shape the future landscape, such as globalization, technological changes, and new regulations. To succeed, the top banks are building premium client relationships, enhancing risk management, improving transaction banking capabilities, and developing next-generation operating models with end-to-end transparency. Banks that can leverage these dynamics may deepen their competitive advantage over weaker rivals in the coming years.
Global payments 2014_next_level_value_sep_2014_tcm80-171913(1)Rudi Chatab
The payments industry is poised for continued strong growth through 2023. Payments revenues are estimated to reach $2.1 trillion globally, up from $1 trillion in 2013. Retail payments will dominate led by account revenues and credit cards. Wholesale transaction banking revenues will also increase substantially. Digital technologies will disrupt the industry as payments become integrated into broader platforms. Financial institutions must develop long-term growth strategies and pursue multiple innovation initiatives to capture the significant revenue opportunities while fending off new competitors.
The document discusses challenges and opportunities in transaction banking. It covers four topics: 1) Building future-proof business and operating models by balancing flexibility and costs. Banks must innovate while managing complexity. 2) Profiting from growth in Asia and new global trade flows by creating optimal geographic footprints. 3) Leading in mobile payments by establishing security, preserving card attractiveness, and forming a strategy on mobile wallets. 4) Capturing opportunities in rapidly developing economies like Brazil and India by innovating in mobile banking and payments and collaborating with partners.
The document discusses the growth of structured finance obligations (SFOs) in India and their importance for credit rating agencies. It notes that SFOs allow issuers to receive higher credit ratings through mechanisms like credit enhancement from third parties. This allows issuers to issue debt at lower interest rates compared to traditional instruments. The share of SFOs in the debt market is growing and they are increasingly preferred by issuers over traditional debt. As SFOs are expected to grow further, credit rating agencies see them as an important new area for growth and must develop expertise in evaluating the various risks involved in rating them.
The document discusses how Diversified Trust executes municipal bond trades for clients through a competitive bidding process among broker-dealers in order to obtain the most competitive prices. It provides an example of how the process benefited a client through liquidating municipal bonds from their portfolio and obtaining higher prices than if sold individually to broker-dealers. Through competitive bidding across multiple broker-dealers, the client received proceeds that were estimated to be over $154,000 higher than if sold in the retail market without such bidding. The process also reduced the credit and duration risks in the client's portfolio.
The document summarizes the European mezzanine lending market in the first half of 2012. It finds that the number of active mezzanine lenders has decreased from 69 to 54 as the market continues to rationalize. Average maximum loan-to-value ratios have remained stable at 82.4% while required returns have fallen slightly to 15.6%. Mezzanine lending volumes increased over the last 12 months, though transaction activity has been limited by a weak senior debt market. The top three geographic markets for mezzanine lenders are the UK, Germany, and France.
Virtual currency would play a role in disrupting the conventional transaction models and have a potential impact on various sectors. Know more about the trends and the multiple challenges faced by businesses in adopting the virtual currency. Download the Business Research report by Aranca.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
A Framework for Detecting Macroeconomic Changes and Their Effect on a Bank's ...Cognizant
For the banking industry, we describe the relationship between changing business conditions/technologies and variances in business models - including a matrix of internal and external "fit" based on flexibility and product variety.
Accenture Capital Markets- operating with a restricted balance sheet -Top 10 ...Karl Meekings
New banking regulations are restricting balance sheets and increasing costs, reducing revenue opportunities. Banks face challenges including higher capital requirements, liquidity restrictions, leverage limits, and business model changes. They must optimize capital, manage risk-weighted assets, properly allocate capital and compensation, and potentially change business models. Operational challenges include withstanding new capital charges and optimizing collateral to mitigate regulatory impacts on profitability.
Trade and Cash Convergence: The Integrated Transaction Banking PlatformCognizant
The document discusses the drivers influencing transaction banking and the need for an integrated transaction banking platform. It outlines four levels of maturity for an integrated system, with level 5 being the most mature. It emphasizes that banks need to determine the right maturity level based on their target clients and competitive positioning. Factors like existing legacy systems will also impact the implementation strategy for developing an integrated platform.
Building profitable relationships with multichannel consumersPaul McAdam
Building Profitable Relationships with Multi-Channel Consumers is the first in a series of Consumer Insight Briefs based on primary research conducted by FIS™ Enterprise Strategy. The research findings are based on a 42-question, online survey completed by more thanover 4,000 U.S. consumers in early September 2010. The survey was fielded by FIS Enterprise Strategy to a consumer panel maintained by Survey Sampling International. The estimated margin of error rate for this sample is +/-1.6% to 2.3%.
The document proposes an alternative model for transforming the UK banking industry by separating it into three components based on business lifecycle roles: banking business managers, transaction processing factories, and deal origination entities. This would reframe the operating model to increase transparency, competition, and customer choice. It outlines how each component could function and the IT implications, arguing the proposed new construct is feasible given existing industry practices, solutions, and regulatory support.
Regulations are integral to the banking industry, and the extent to which the bank complies with such regulations not just maintains its bottom line in terms of avoiding hefty fines, but also has a big bearing on credibility and integrity. So how do banks comply with all that is required, and save themselves from the ill-effects of non-compliance?
The document discusses challenges that large multinational corporations face when opening bank accounts due to stringent know-your-customer (KYC) regulations. It notes that some corporations, like Chevron Phillips, have struggled for over 12 months to clear KYC processes. While regulations aim to prevent financial crimes, banks tend to overcomply in a way that harms customer experience. New technologies like blockchain show promise in streamlining KYC processes, but banks have been slow to adopt them. Overall, the strict application of KYC rules creates difficulties for both large corporations and small businesses in accessing basic banking services.
The document summarizes key dynamics shaping the banking industry in a post-crisis environment. It discusses five dynamics banks must understand: changing regulatory frameworks and risk cultures, the digital and data revolution, shifting client behaviors, new competitors, and a multispeed world. It then outlines a seven-point tool kit for banks to adapt, including enabling the CEO as an investor, simplifying all dimensions of the bank, reinventing the client experience, ensuring built-in compliance and risk management, embracing data centricity, driving digital transformation, and adapting preemptively.
The document discusses how universal banks can restore profitability and rebuild capital in response to new regulatory requirements from the Independent Commission on Banking. It identifies four key steps banks need to take: 1) Analyze the implications of ring-fencing requirements to determine their new business model, products, and services; 2) Understand their accurate cost of capital to develop a profitable pricing strategy; 3) Focus on efficiency by managing risk-weighted assets and driving operational realignments; 4) Identify growth opportunities by selecting optimal client, product, and market mixes. Taking these steps will help banks optimize their use of capital and positioning for high performance in the future regulated environment.
Fundtech E-invoicing Provides New Adventures for CreditFundtechFSC
With credit availability remaining tight following the financial crisis, banks and corporations alike are more attuned to the financing opportunities available linked to supply chain transactions. With the transparency of trade transactions and the link between funding and trade activities, Supply Chain Finance (SCF) lessens the risk associated with traditional lending. Electronic invoicing, presentment and payment (EIPP) systems can amplify the many benefits of Supply Chain Finance by automating a process that traditionally has been hampered by slow, paper-based manual methods. The Supply Chain Finance market in the UK alone grew from about £100 million 2008 to £1Bn in 2010, with the growth expected to continue through 2011. This paper looks at how the continuing growth of E-Invoicing can enable and facilitate the Supply Chain Finance market - and how financing can be a key driver for adopting E-Invoicing
Banking redefined: disruption, transformation and the next generation bankPauline Mura
To succeed in today’s environment, businesses need to
lead through increased complexity and volatility, drive
operational excellence and enable collaboration across
enterprise functions, develop higher quality leadership and
talent, manage amidst constant change and unlock new
possibilities grounded in data.
Pegasus Software White paper-credit-managementStuart Anderson
This document discusses credit management strategies for small and medium enterprises (SMEs) to improve cash flow. It notes that late payments from customers pose a serious risk to business growth and profitability for SMEs. The UK government has introduced the Prompt Payment Code to encourage timely payments between organizations. However, SMEs still need to take their own actions to expedite payments, such as implementing credit management processes and using software to automate debt collection. Following best practices for credit management can help SMEs strengthen relationships with customers and build a healthier, more scalable business.
When Members of the Criticaleye Community were asked to diagnose the health of the relationship between banks and business, it seems that, while not exactly terminal, some serious rehabilitation is needed. The main themes that emerged include a need for quicker decisions, less box-ticking, greater competition among banks, more time for banks to understand businesses, and better preparation by businesses. Both banks and businesses need to improve communication and work on rebuilding trust in the relationship.
Basel II is an international standard that establishes capital requirements for banks to guard against financial and operational risks. It consists of three pillars: minimum capital requirements to cover credit, market and operational risks; supervisory review to ensure adequate capital to cover all risks; and market discipline through disclosure requirements. While Basel II aims to make capital requirements more risk sensitive, Indian banks face challenges in implementing it due to lack of risk management expertise, need for technology investments, and restructuring of non-performing assets. A gradual implementation process will help ensure a smooth transition to the new framework.
First ever holistic survey of Indian Banks with respect to their perspectives on Payments as a business. 29 private sector and public sector banks were surveyed.
Mercer Capital's Bank Watch | October 2020 | Low Rates and Tighter NIMs Spur ...Mercer Capital
Brought to you by the Financial Institutions Team of Mercer Capital, this monthly newsletter is focused on bank activity in five U.S. regions. Bank Watch highlights various banking metrics, including public market indicators, M&A market indicators, and key indices of the top financial institutions, providing insight into financial institution valuation issues.
Benefits-of-Financial-Technology-for-Banks_RMA Jan 2017Max Zahner
This document summarizes how community banks can use technology to successfully compete in commercial and industrial lending. It discusses that C&I lending can provide higher returns than other types of lending but is difficult for banks to do well due to the complex underwriting and loan administration processes required. It then describes how adopting new technology can streamline these processes, reducing the time and costs to underwrite loans and conduct loan reviews. This allows community banks to profitably lend to smaller businesses and increase their return on equity through expanding their C&I lending business.
Countering the opportunity loss of trillions of cash lying unused with banksRNayak3
This document discusses how banks have large amounts of idle cash due to reduced lending during the economic downturn. It proposes that banks could reduce opportunity costs by re-evaluating lending processes and policies to identify more creditworthy borrowers. However, doing so poses challenges such as locating borrowers that meet bank requirements and criteria. The document outlines initiatives banks could take such as amending credit policies, boosting sales and relationship management functions, and restructuring processes and infrastructure with the help of outsourcing partners.
Countering the opportunity loss of trillions of cash lying unused with banksRNayak3
This document discusses how banks have large amounts of idle cash due to reduced lending during the economic downturn. It proposes that banks could reduce opportunity costs by re-evaluating lending processes and policies to identify more creditworthy borrowers. However, doing so poses challenges such as locating borrowers that meet bank requirements and criteria. The document outlines initiatives banks could take such as amending credit policies, boosting sales and relationship management functions, and restructuring processes and infrastructure with the help of outsourcing partners.
Similar to GTR March April 2012 trade services (20)
The treasury transformation project undertaken by UAE-based conglomerate Al-Futtaim Group was highly successful in simplifying complexity, automating manual processes, and providing increased transparency, analysis capabilities, and efficiencies for the treasury function. Key aspects of the multi-year transformation included developing a target operating model, implementing a new treasury management system, establishing governance policies and structures, and providing treasury training to strengthen capabilities across the organization. The transformation inspired a wider finance transformation at Al-Futtaim and continues to evolve the treasury function.
Faster payments feature for The Treasurer April/May 2018benpoolewriter
This document discusses the rise of domestic instant payment schemes worldwide in the past six months and whether faster payments present more challenges than benefits for corporates. It notes that Australia, Europe, and the US have recently launched real-time payment systems, while the UK system has been operating for 10 years. Lower transaction limits and individual bank limits can hinder the business case for corporates using faster payment schemes. The increased speed also requires enhanced fraud monitoring, cash flow visibility, and liquidity management capabilities to address challenges. Demand exists for cross-border real-time payment tracking and instant payments, but a unified global approach is lacking.
Joanne Bates profile The Treasurer magazine June/July 2018benpoolewriter
1) Joanne Bates is the co-treasurer of Worldpay, a global payments processor formed by the merger of Worldpay and Vantiv.
2) As co-treasurer, she oversees areas such as debt management, capital management, cash forecasting, FX management, and risk management. She is also involved in strategic initiatives and integration projects following the merger.
3) The treasury team faces complexity from regulating cash separately by legal entity and managing bank accounts in over 100 banks across more than 2000 bank accounts worldwide. The team works to design products efficiently and integrate systems and policies following the merger.
Nearly three years after SEPA's launch, its benefits and remaining work are clear. SEPA allows corporates to consolidate operations and banking structures across Europe with just one bank account. However, some challenges remain, including local variations, requirements to maintain local accounts for tax payments, and "IBAN discrimination" in systems. Future developments like PSD2 aim to further standardize payments and open banking APIs to boost innovation.
This document discusses the importance of accurate cash flow forecasting for corporate treasurers. It outlines the challenges of attaining visibility over cash across multiple bank accounts and currencies. It also describes the process of developing both on-the-day and long-term cash flow forecasts, noting the importance of integrating data from accounting systems, business managers, and treasury knowledge of expected cash flows. Developing organizational buy-in for accurate reporting from business units is highlighted as critical for quality long-term forecasting.
The Treasurer Feb 2017 Christoph Nelischer profilebenpoolewriter
Christof Nelischer is the global group treasurer of Willis Towers Watson, overseeing the merger of the legacy treasury teams and functions following the merger of Willis Group and Towers Watson. His main focus is on streamlining the differing treasury platforms, operating models, and accounting practices of the two companies. This includes implementing a single treasury management system, establishing an intercompany netting system, and merging the fragmented bank structures and accounts. Nelischer draws on his experience from previous M&A integrations to approach the merger strategically through rationalization and standardization efforts.
The document summarizes key trade information about several countries in the MENA region. Dubai is highlighted as a major global trade hub, benefiting from its airports, ports, and free zones. Trade in Dubai relies heavily on re-exports and letters of credit are popular instruments. The UAE is investing heavily in infrastructure and exploring alternative power sources like nuclear. Qatar is investing $120 billion in infrastructure for the 2022 World Cup. Saudi Arabia spends heavily on infrastructure and exports large amounts of oil and gas to Asia and Europe. Egypt faces challenges from political turmoil and reduced oil prices/demand from key markets. Lebanon's trade has been impacted by the loss of Syria as a trading partner. [/SUMMARY]
The document discusses the growth of Islamic trade finance. It notes that trade between Organization of Islamic Cooperation (OIC) countries and the rest of the world grew 6.2% from 2011 to 2012, while trade within OIC countries rose 9% over the same period. Islamic trade finance benefits from this increasing trade activity. Popular Islamic trade finance instruments include the Islamic letter of credit and murabaha contracts. However, challenges remain such as improving global connectivity, developing talent, and demonstrating that Islamic products provide value beyond religious compliance.
1) Japanese companies are extending their supply chains throughout Asia to diversify risk by sourcing parts from multiple local suppliers instead of just Japanese ones. This was prompted by natural disasters disrupting supply chains.
2) Japanese companies are also investing more in other Asian countries by establishing local manufacturing plants either on their own or through partnerships with local companies. This allows them to sell locally while transferring technology.
3) To further mitigate supply chain risks, Japanese companies are using financial tools like trade receivables finance and letters of credit to improve cash flow and accelerate payments. They aim to have flexible supply chains that allow quickly switching suppliers or locations.
This document discusses best practices for implementing a treasury management system (TMS). It emphasizes the importance of clearly defining the project scope, timeline, and roles of all parties involved. This includes detailing the treasury processes to be implemented, timeframe for completion, and obligations of the treasury team, vendor, and any external consultants. Defining these elements upfront helps ensure expectations are aligned and the project stays on track and on budget. The document also recommends evaluating vendor implementation methodology and taking a phased approach to allow for early successes and value realization throughout the implementation process.
Correspondent banks are facing economic challenges and increased competition that threaten the profitability of trade finance services. To adapt, banks need to provide competitive pricing, deliver value across the supply chain rather than just risk mitigation, and improve efficiency through measures like right-sizing, business intelligence tools, and centralized operations. Additionally, banks must ensure they can meet growing regulatory burdens like anti-money laundering requirements imposed by regulations like the EU directive and Patriot Act. The future of correspondent banking may involve further consolidation as smaller banks face higher capital requirements, and "experience banking" that integrates services into customers' workflows.
This document discusses how a treasury management system (TMS) can provide enhanced cash visibility and management capabilities for a company. It notes that a TMS can help with cash flow forecasting by aggregating data from different systems and business units. This allows the treasurer to better understand cash positions and flows. A TMS can also streamline accounts payable and receivable processes to further optimize working capital management. Overall, a TMS provides key tools and data that allow a treasurer to gain better insight into cash levels and movements across a company.
BayernLB has repositioned itself since the financial crisis to focus solely on customer business. It aims to be among the top banks for mid-sized and large German corporates. Corporates currently face challenges from volatile markets and low interest rates. Banks are developing new liquidity management products to help corporates. In the next year, corporates will have to prepare for higher costs of bank facilities and credit lines as Basel III is implemented. Banks like BayernLB are taking steps to ensure long-term relationships through economic cycles to support corporate customers.
Deutsche Bank sponsored interview 2011 Treasury Perspectivesbenpoolewriter
The role of the corporate treasurer and treasury department has evolved significantly following the credit crisis. Treasurers now focus on cash flow optimization, supply chain sustainability, and efficiency to maximize working capital with restricted liquidity. This has increased the authority and responsibilities of treasury departments. Technology enhancements and process improvements continue to be priorities to streamline operations and provide customized solutions through integrated platforms. Deutsche Bank focuses on delivering high quality client services and solutions through its technology and customer-centric approach.
1) There are three main types of FX risk that require management: transaction risk, translation risk, and economic risk.
2) Translation risk is often overlooked despite its potential impact on accounting metrics and lending covenants.
3) Treasurers have a variety of internal and external tools to manage FX risk, including hedging strategies, but also need to establish clear risk measurement to ensure hedging is effective.
Explore the world of investments with an in-depth comparison of the stock market and real estate. Understand their fundamentals, risks, returns, and diversification strategies to make informed financial decisions that align with your goals.
KYC Compliance: A Cornerstone of Global Crypto Regulatory FrameworksAny kyc Account
This presentation explores the pivotal role of KYC compliance in shaping and enforcing global regulations within the dynamic landscape of cryptocurrencies. Dive into the intricate connection between KYC practices and the evolving legal frameworks governing the crypto industry.
“Amidst Tempered Optimism” Main economic trends in May 2024 based on the results of the New Monthly Enterprises Survey, #NRES
On 12 June 2024 the Institute for Economic Research and Policy Consulting (IER) held an online event “Economic Trends from a Business Perspective (May 2024)”.
During the event, the results of the 25-th monthly survey of business executives “Ukrainian Business during the war”, which was conducted in May 2024, were presented.
The field stage of the 25-th wave lasted from May 20 to May 31, 2024. In May, 532 companies were surveyed.
The enterprise managers compared the work results in May 2024 with April, assessed the indicators at the time of the survey (May 2024), and gave forecasts for the next two, three, or six months, depending on the question. In certain issues (where indicated), the work results were compared with the pre-war period (before February 24, 2022).
✅ More survey results in the presentation.
✅ Video presentation: https://youtu.be/4ZvsSKd1MzE
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
Budgeting as a Control Tool in Government Accounting in Nigeria
Being a Paper Presented at the Nigerian Maritime Administration and Safety Agency (NIMASA) Budget Office Staff at Sojourner Hotel, GRA, Ikeja Lagos on Saturday 8th June, 2024.
Navigating Your Financial Future: Comprehensive Planning with Mike Baumannmikebaumannfinancial
Learn how financial planner Mike Baumann helps individuals and families articulate their financial aspirations and develop tailored plans. This presentation delves into budgeting, investment strategies, retirement planning, tax optimization, and the importance of ongoing plan adjustments.
The Rise and Fall of Ponzi Schemes in America.pptxDiana Rose
Ponzi schemes, a notorious form of financial fraud, have plagued America’s investment landscape for decades. Named after Charles Ponzi, who orchestrated one of the most infamous schemes in the early 20th century, these fraudulent operations promise high returns with little or no risk, only to collapse and leave investors with significant losses. This article explores the nature of Ponzi schemes, notable cases in American history, their impact on victims, and measures to prevent falling prey to such scams.
Understanding Ponzi Schemes
A Ponzi scheme is an investment scam where returns are paid to earlier investors using the capital from newer investors, rather than from legitimate profit earned. The scheme relies on a constant influx of new investments to continue paying the promised returns. Eventually, when the flow of new money slows down or stops, the scheme collapses, leaving the majority of investors with substantial financial losses.
Historical Context: Charles Ponzi and His Legacy
Charles Ponzi is the namesake of this deceptive practice. In the 1920s, Ponzi promised investors in Boston a 50% return within 45 days or 100% return in 90 days through arbitrage of international reply coupons. Initially, he paid returns as promised, not from profits, but from the investments of new participants. When his scheme unraveled, it resulted in losses exceeding $20 million (equivalent to about $270 million today).
Notable American Ponzi Schemes
1. Bernie Madoff: Perhaps the most notorious Ponzi scheme in recent history, Bernie Madoff’s fraud involved $65 billion. Madoff, a well-respected figure in the financial industry, promised steady, high returns through a secretive investment strategy. His scheme lasted for decades before collapsing in 2008, devastating thousands of investors, including individuals, charities, and institutional clients.
2. Allen Stanford: Through his company, Stanford Financial Group, Allen Stanford orchestrated a $7 billion Ponzi scheme, luring investors with fraudulent certificates of deposit issued by his offshore bank. Stanford promised high returns and lavish lifestyle benefits to his investors, which ultimately led to a 110-year prison sentence for the financier in 2012.
3. Tom Petters: In a scheme that lasted more than a decade, Tom Petters ran a $3.65 billion Ponzi scheme, using his company, Petters Group Worldwide. He claimed to buy and sell consumer electronics, but in reality, he used new investments to pay off old debts and fund his extravagant lifestyle. Petters was convicted in 2009 and sentenced to 50 years in prison.
4. Eric Dalius and Saivian: Eric Dalius, a prominent figure behind Saivian, a cashback program promising high returns, is under scrutiny for allegedly orchestrating a Ponzi scheme. Saivian enticed investors with promises of up to 20% cash back on everyday purchases. However, investigations suggest that the returns were paid using new investments rather than legitimate profits. The collapse of Saivian l
The Rise and Fall of Ponzi Schemes in America.pptx
GTR March April 2012 trade services
1. xxxxxx | xxxxxx & Supply Chain | Correspondent Banking
Trade Services
Adapt to survive
Trade finance services make up a vital part of
the correspondent banking offering for financial
institutions, but to maintain a stake in this market
banks need to continue to adapt. Ben Poole reports.
C
orrespondent banks are not immune Rand Merchant Bank (RMB). banking market at Swift.
to the economic challenges of recent “Alternatively, they will have to package “Banks need to continue to improve
years, and their trade services are structured solutions using a portfolio efficiency of their operations. There are a
feeling the squeeze. Globally, unless banks approach. These two points could well number of ways to achieve this: through
can offer genuine added value, trade finance decide which banks successfully continue right-sizing; through focusing on the business
is becoming less profitable. To combat this, with trade finance and make a success of it, of their correspondents by using business
banks should focus on delivering value and which leave it behind,” says Chaytoo. intelligence tools to see where there
across the spectrum from supply to buy are business opportunities and through
side, rather than just focusing all of their Today’s challenges centralising their correspondent banking
energies on risk mitigation. While correspondent banking is still an operations into global transaction services
“For banks to remain competitive, they will attractive business, financial institutions are – all of which can improve the efficiency of
need to provide competitive pricing,” says under pressure from new regulation and their operations,” he says.
Suresh Chaytoo, senior manager and regional increasing competition. Banks need to ensure With correspondent banking having a
head, banks and development financial that they remain competitive and relevant in core trade element, there is still a strong
institutions, Africa and Latin America at this space, says Wim Raymaekers, head of proposition for the banks in terms of areas
34 | Global Trade Review www.gtreview.com
2. Correspondent Banking | Trade Services & Supply Chain
xxxxxx | xxxxxx
such as open account. However, these are There is also a cost from Basel III to the regulatory challenge that correspondent
still being settled through the traditional associated payments business and liquidity banks are facing, via a number of different
channels. “The interesting thing is how the with correspondent banking. Liquidity has legislations, is the amount of anti-money
payments landscape might change and the a price, and this price has not necessarily laundering (AML), screening, and know your
challenges for correspondent banks around been factored into the correspondent customer (KYC) processing requirements.
the payments arena more generally,” explains banking equation in the past. This has had The EU directive on AML and the USA
Kevin Brown, global head of products, the effect of making banks on all sides of Patriot Act, in particular, are challenging
transaction services at RBS. the correspondent banking spectrum run the activities of correspondent banking
This is not just the case around mobile numbers and simulations, looking to find departments. All banks are looking at the
payments. There is a demand now from the banks that have been ahead of the cost of compliance, not least in ensuring
clients for lower cost, low value cross- game in terms of raising capital for the that they are able to keep up with changing
border payments, not just in the single future to protect business for the next standards and requirements in terms of
euro payments area (SEPA) but a broader few years. filtering and AML checking. Banks are
proposition on a global basis. “I think that And while some banks have prepared eating into a lot of their development costs
there will be continued pressure on the well and increased the capital they hold, just to maintain their current position.
traditional correspondent banking model some other banks will be behind the curve Even as far back as 2009, regulatory
for payments to drive a lower cost, more a little bit in this regard. changes were forcing managers to
economic solution,” says Brown. The costs associated with Basel III and reprioritise their spending plans. This was
other compliance and regulatory initiatives seen in a poll at that year’s North America
The regulatory burden are putting off some banks from further banks conference held by Citi in New York.
There are two main areas of regulation that developing their correspondent banking “In their ideal transaction banking
are proving to be a burden for correspondent business. investment spend, we found that
banking. The first of these is Basel III. With Typically, every bank has had some level management wanted 82% to go on new
its increased capital requirements and the of correspondent banking, but in light of client solutions, with 11% marked out for
focus on trade and non-trade exposure, the cost burdens, will all banks continue to managing core capabilities and 7% on
the way that banks are treating liquidity is participate in classic correspondent banking? improving operational efficiency,” says
under scrutiny. With this regulation, the Jeremy Shaw, head of trade finance Emea Matthew Hodgson, managing director of
Basel committee wants to ensure that at JP Morgan, suggests not. “Personally, Citi’s bank services group.
banks are financially secure, that they are I think this market will consolidate “But when we compared this to actual
adequately covered in the event of a run on into fewer banks actively engaged in spend the picture is very different.
funds and that liquidity that can be moved correspondent banking. There will still be New client solutions were down to just
“There will be continued pressure on
the traditional correspondent banking
model for payments to drive a lower
cost more economic solution.”
Kevin Brown, RBS
very quickly and efficiently. They want to a significant number involved, but we will 10% of the spend; managing core capabilities
ensure that if there is a significant outflow, see consolidation as the normal practice was up to 48%, while operational efficiency
that banks will remain in a strong position to of supporting 3,000-4,000 correspondent was at 23%. In addition, the amount of spend
conduct business. banking relationships faces a heavy burden dedicated to regulatory changes made up
Basel III has a large impact on from the various compliance requirements, 19% of this budget,” he adds.
correspondent banking, as more capital is and this will only increase,” he says. While there are opportunities within
required for the trade business. This will have “If the financial dynamics don’t make correspondent banking to innovate and
the effect of reducing some banks’ appetite sense versus the risks, coupled with the create additional value for customers off the
for correspondent banking and trade increasing need for core capital, then back of the regulatory changes, the main
because they may not want to put aside that some institutions will question whether they driver for the banks is to make sure that they
extra additional capital, or it may increase need to maintain full-scale correspondent are compliant. This will continue to give all
the cost of providing these services, again banking departments.” banks a continued challenge in terms of
because there is more capital required. Beyond Basel III, the second main cost and development.
www.gtreview.com March/April 2012 | 35
3. xxxxxx | xxxxxx & Supply Chain | Correspondent Banking
Trade Services
Organisational structure Most banks have already been new capital requirements following the EBA
Most banks today have consolidated their quite proactive in restructuring their stress test.
correspondent banking arm into their correspondent banking units over the This translates into yet another challenge
global transaction business, as this makes past three to four years with a focus on to trade. “Through a variety of risk mitigating
commercial sense. Take Citi as an example; consolidation and improving efficiency. measures, we are seeing non-banking
the bank self-clears 77 different currencies “That said, there could still be some more organisations such as insurance companies,
as a payment provider to banks and consolidation in Europe as a result of the hedge funds and trade funds getting more
corporations, and makes payments in over reorganisation of banks there – this would and more involved. They are all moving into
130 currencies throughout the branching be a function of mergers and acquisitions this area of trade finance,” says Reinhard
network and its network of third-party (M&A) in the European banking sector,” Furthmayr, head of financial institutions
enabled banks. says RMB’s Chaytoo. products and marketing at Commerzbank.
“Because of the cross-border nature Despite this, opportunities still exist. There
of our client base – top-tier financial Current trends is a lot of opportunity for banks in financing
institutions, public sector, and multinational Today the correspondent banking world payable and receivable assets. Also, there is
corporations – we are connecting directly to is dealing with a number of trends in more of a movement from clean payments
clearing houses, exchanges and depositories addition to the fundamental challenges into more structured trade-related payments.
to allow our clients to get direct access to already mentioned. For example, there Meanwhile, the US dollar liquidity situation
these markets and these systems to be is currently limited US dollar liquidity, creates a demand that will be of interest to
able to support their own clients,” says particularly in Europe. the larger players.
Citi’s Hodgson. “Our correspondent banking Another problem seen in Europe at the While challenges remain, correspondent
business is core to our global transaction moment is the deleveraging of bank balance banking is still an attractive proposition for
services business.” sheets in the wake of the various regulatory those institutions committed to the cause.
Consolidation is not a new thing. measures recently introduced, such as the GTR
The next generation
A
Swift white paper on correspondent an attractive and popular business, but its The paper proposes that correspondent
banking released in January has profits are being squeezed by increased banking should move to a new stage of
called for advancements to be competition and regulation. development called “experience banking”.
made in correspondent banking. The paper stated that correspondent The use of this term implies that banks
It deems the current model as “too banking remains the main channel to deliver need to develop services that fit round their
bank product-centric, based on inherently cross-border banking services. Looking at client’s lifestyle; for example a corporate
inefficient multiple agreements”. Swift cross-border customer payments in treasurer who wants a real-time view of
It noted that the correspondent banking August 2011, those settled bank-to-bank his company’s liquidity across banks and
and payments processing business is still made up 67% of the total volume. different accounts via an ipad.
Where does your bank play?
1.0 2.0 3.0
Correspondent Transaction Experience
banking banking banking
Mid 1970s Late 1990s Mid 2010s
“Automate the telex” “Make it more efficient” “Banking made simple”
Banking community created SWIFT Each bank improved its product Customer triggers banking service
●● Long list correspondence is sign ●● Central product & operations, ●● Integrated with client channel
of importance GTB – managed as a business, and customer service provider
●● Main payments flow: EU-US market + business intelligence ●● Multi-polarity, more in Asia
36 | Global Trade Review www.gtreview.com