A focus on individual key strengths, both in terms of products and geographical footprint, is the driving force behind big banks’ global transaction banking business strategies as they search for a unique selling point in an increasingly competitive market.
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As Basel III regulations come into play, banks looking for a quick fix to bulky balance sheets are divesting their trade finance assets, creating a gap in the market that investor groups and other alternative financiers are keen to fill.
The economic changes that have taken place over the past few years have forced banks to fine-tune their business and expansion strategies, not just to stay competitive – or regain their competitive advantage – but to also keep abreast with new technologies and changing demands from clients.
With advanced economies still languishing in the doldrums, trade between Asia and Latin America is driving global economic growth, and it appears that this blossoming relationship is mutually beneficial. However, could protectionist policies in Latin America dampen this ardour?
The effects of the European retreat from trade finance in Asia are now apparent as a number of players are stepping in and new trade patterns are taking shape.
As Europe's banks come to terms with the economic impact of Basel III's rules on capital requirements, their demand for trade finance deals in Latin America through the International Finance Corporation has waned. But this leaves the door open to North American and Asian banks looking to increase their presence in the region.
Singapore’s strategic location in Asia is proving a boon to the city state’s transaction bankers, particularly as they seek to capture banking business from the world’s changing trade flows.
Faced with a mass of regulatory reform and the ill-effects of the sovereign debt crisis, transaction banking is set for more change. And despite the emergence of new competitors, the competitive landscape is contracting thanks to global consolidation. The Banker speaks to some of the world's leading transaction bankers about their strategies for the coming year and beyond.
Industry experts are concerned that impending regulation will obstruct the route to global recovery unless it is modified to make allowances for trade financing. Writer John Beck
International business will become significantly more expensive if the impending Basel III regime does not make allowances for trade finance, bankers fear.
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