Trade finance: special focus
Competition and low rates eroding margins; Business key to broaden banking relationships
Published December 2013 euromoney.com
The renminbi has overtaken the euro to become the second most-used currency in trade finance, according to Swift, the financial messaging service.
From cloud technology to cashless payments, digital currencies to social media, mobile banking to FX robots... financial institutions worldwide are looking to lead technological advances while also trying to keep up with them. And as well as the cost of innovation, many organizations are finding much of their technology budgets focused on dealing with regulatory burdens. Here is the latest coverage from Euromoney.
Transaction banking is entrenching its status as a leading – and profitable in its own right – business in the world of banking, helping to secure lucrative ancillary work for revenue-hungry banks.
The third quarter performance of Deutsche Bank and Standard Chartered’s transaction banking divisions shows how stable revenues and profits can be from the business, but this resilience is being tested by pressure points, not least competition.
With capital hard to come by via traditional loan channels, corporates are having to find new ways to meet their needs. The most successful companies might be those that use capital most efficiently, in terms of convincing banks to lend to them and in getting the most from available resources.
Partnerships can enable global reach; Clients helping to drive this development
Trade finance is renowned for its quaint reliance on paper documentation and relative lack of technological sophistication, but despite the pressure on IT budgets, the business is modernizing, albeit slowly.