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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
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
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
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
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.
The impact of compliance regimes
The worst affect group are small and medium sized Corporates
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
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.
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.
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