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The Changing face of Transaction Banking - The rise of Technology & Digitisation - Regulation and its effect on Corporate clients - The changing face of International Trade

The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

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Page 1: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

The Changing face of Transaction Banking

- The rise of Technology & Digitisation- Regulation and its effect on Corporate clients- The changing face of International Trade

Page 2: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

So what’s changing?

1. The role of the Treasurer in many major Corporates has changed since 2007

2. Banks ability to recognise and respond to those needs is slow – but changing

3. The emergence of a group of non bank specialists in certain parts of the value chain

4. An inclination on behalf of Corporates to adopt bank agnostic multi banking services

What do we hear “the Treasurer” tell ANZ?

1. A wider remit

2. Ensuring adequate cash and optimizing liquidity

3. Managing risk

4. Implementing and optimising technology

5. Understanding and integrating new regulatory requirements

Some context

Page 3: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

How are Banks beginning to react?

Banks have largely identified the following key themes which affect their ability to plan (positively or negatively) for their future –

1. Globalization

2. Right strategy – inside out or outside in

3. Integration with their customers and within other parts of the Bank

4. Regulation

5. Competition and Innovation

6. Optimisation of cash

7. Altered customers needs and buying behaviours

Page 4: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

Why would a Corporate begin to look at electronic Trade solutions

Key challenges

1. Significant investment in technology infrastructure

2. Adoption of all parties in the chain

3. Realignment of operations processes and staff education

4. Changes to legal and process documentation

Key questions to answer when pushing the pace of change

1. Security concerns

2. Does it really improve the cash conversion cycle for traders

3. Can it really give buyers a competitive edge

Page 5: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

The Digitisation of Trade – Bank Payment Obligation

• An irrevocable undertaking given by one bank to another bank that payment will be made on a specified date after a specified event has taken place.

• A ‘match’ report is generated by SWIFT’s Trade Services Utility (TSU) or any equivalent transaction matching application.

• BPOs enable banks to mitigate the risks associated with international trade to the benefit of both buyers and sellers.

• They enable flexible financing propositions across the supply chain, from pre-shipment to post-shipment.

• They provide an assurance of payment to the seller similar to that obtained under a confirmed letter of credit.

Page 6: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

The impact of compliance regimes

Page 7: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

The worst affect group are small and medium sized Corporates

Page 8: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

The changing face of International Trade – the defining theme is a move East

CHINA

AUSTRALIA

JAPAN

INDIA

INDONESIA

ASEAN

COMMODITIES

FOREIGN EXHANGE

INTEREST RATES

URBANISATION

LIQUIDITY

EMERGING MIDDLE CLASSES

Geographic areas

Overriding themes

Page 9: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

The conundrum of commodity prices

Global economic growth

Global commodity prices

Global crude oil forecasts

• The modest recovery in commodity markets is expected to only be a short term reprieve as weaker seasonal demand becomes the next hurdle.

• Iron Ore supply should increase from both Australia and Brazil in th elast quarter of 2015

• Crude oil markets are expecting Iranian sanctions to be lifted triggering a jump in supply.

Page 10: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

Why ASEAN?

Demographics

Comparatively lower wages

Production synergies

Scope for productivity improvement

Geography

Over the next ten years, ASEAN has the potential to become one of the world’s key manufacturing hubs and an emerging source of

consumption for the world.

Page 11: The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International

At the heart of the “Asia opportunity” is the belief that there will be a continued increase in the demand for raw materials driven by the

aspirations of the developing world