TRADE FINANCE | Roxanne Uy, Singapore

Asian banks ramp up investment in key trade corridors

As intra-Asia trade increases, banks are ultimately urged to take different strategies to deliver end-to-end trade services to its clients.

ABF: With almost 60% of intra-Asia trade taking place, how are banks preparing for regional integration across Asia? Will establishing new onshore platforms and new banking relationships with partners be helpful?

Oliver Wymann: Jason Ekberg, Consultant
Banks are asking themselves a different questions depending on where they’re at in their own development. We see increased investment in key trade corridors, e.g., ANZ/JPN, JPN-CN, MY-CN, SEA. Players are also thinking about what role RMB should play - some are making concerted efforts to broaden their RMB offering, e.g., HSBC, SC, Citi. We see some players increasing their onshore build outs in markets like MY, ID and CN (as part of RMB story).

Other banks are trying to understand how they compete especially when they think about the IT investment case. In Asia there are a number of open questions players are grappling with, e.g., rise of local currencies vs importance of USD funding for trade, pace of regional regulatory integration (especially in light of B3 impact), need to protect their corporate franchise as the too internationalize, etc. Depending on the answers banks will ultimately take different strategies.

DBS: Ken Stratton, Global Head of Sales, Global Transaction Services
Banks such as DBS are creating tighter linkage across their branch footprint in Asia to leverage the trade corridors and deliver end-to-end trade services to our clients. This not only provides clients with enhanced service levels, but also alleviates risk for the client and the bank as we bank both parties in the trade flow.

DBS and other banks have enhanced their Internet based electronic banking platforms to provide stronger client solutions, plus also to deliver a broader product offering on a single platform, such as supply chain finance, cash management and foreign exchange.

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