And so the first of the third day’s plenaries has just finished.
This is one chaired by the ever so stately friend of the FSClub Jeremy Wilson, Chairman of the Global Councils for BAFT-IFSA and Vice Chairman of Barclays Bank.
Jeremy was joined on stage by a panel comprising:
- Marco Bolgiani, Head of Global Transaction Banking Division, UniCredit Group
- Peter Connolly, EVP & Group Head Global Transaction Banking Group, Wells Fargo
- Karen Fawcett, Senior Managing Director and Group Head of Transaction Banking, Standard Chartered Bank
- Karen Peetz, Chief Executive Officer, Financial Markets and Treasury Services, BNY Mellon
The conversation took a wide ranging view of transaction banking and trends in this space, with a clear view that global transaction banking is front and centre today. In fact, it is critical to most banks as one of the few reliable sources of revenue.
What really intrigued me is that there was a lot of chat about the new reserve currency of the world: the Chinese Remnimbi (see earlier story today).
According to Peter, Chinese Remnimbi represents 30% of Wells Fargo’s trade flows and Karen from Standard Chartered said that she believes the currency will account for 20% of all global trade flows in the next few years.
I did have a really good and accurate record of the session for the blog but, halfway through, my superb little Windows 7 laptop crashed, adding to my love-hate relationship with Microsoft.
So, instead of my notes, I’ve stolen Andrew Carrier’s (Media Relations for SWIFT) tweets which give you a good flavour of the discussion:
Wilson: "Transaction banking: this is where the rubber meets the road. If the transaction banking industry had not been able to keep going we truly would have had a problem."
Fawcett: "Transaction banking is now front and centre. Flow businesses that we support are the lifeblood of commerce."
Bolgiani: "I agree. TB is one of two strategic areas in which we are investing. Serving clients is even more important."
Peetz: "We're such a reflection on global activity. TB is here to stay"
Fawcett: "The investment banking side needs the liquidity. And the knowledge TB provides is absolutely essential."
Peetz: "Even in this low interest environment, we use a consulting group to maximise what we can do for the client."
Fawcett: "We've been too lazy in Asia and Middle East about collecting fees."
Peetz: "The issue is revenue growth. The developing markets are not large enough to off-set what is happening in developed markets."
Fawcett: "The problems of misjudging capital requirements for trade go back thirty years."
Fawcett: "The change in the risk profile over last few years, working with other institutions, has been very dramatic."
Fawcett: "A huge amount of the details are being left to individual country regulators. The more consistent, the better."
Connolly: "30% of our payments go to China. We're getting better at supporting that process."
Peetz: "We are in countries where we believe the volumes are going to be."
Fawcett: "Your 30% could be in RMB very soon. Asian banks are going to head West."
Connolly: "New competitors – take Google, PayPal or Amazon as examples – should be on the same, or at least similar, regulatory playing field." Conn we need an mba in tx banking.
Fawcett: "The rise of RMB could be much faster than we expect."
Fawcett: "One of the things we've suffered from is over-paying for mediocrity."
Peetz: "On AML / sanctions, are there commonalities that an organisation like SWIFT could help us with?"
Connolly on sanctions / AML: "I'd like just one list of the bad guys – and girls."
Bolgiani: "I'm sceptical that regulators would accept something where responsibility for AML / sanctions is shared."
Bolgiani: "Innovation is very important. We should explore the B2C world even though we will face new competitors there."
Connolly: "Bright lights on TB: it's now core and we're better and more focussed."
Fawcett: "We recognise that we can't do everything ourselves and we're now open to looking at who we should collaborate with."
Fawcett: "We see an enormous amount of collaboration. We are an extremely fragmented industry."
Peetz: "The biggest opportunity is innovation. That's what will help us compete. Breaking silos."
Bolgiani: "True collaboration requires a lot of investment on both sides. I see more competition in Europe. We'll collaborate outside."
Anyways, just had a nice lunch and now off to the Travelex stand as they tell me I might win an Apple Mac if I leave my business card with them … and boy, after that session, do I need to switch to Apple or what?