Anand Pande, Senior Banking Advisor to iGTB and Founder of the Growth Paradigm Partnership, has written a feature in the 2016 Sibos Special Edition of Trade Finance magazine where he talked about the challenging environment for banks providing trade finance – where macro-economic factors, regulatory pressures and non-bank fintech providers are all contributing to a fractured and complex picture.
In terms of the wider landscape, Pande explained how stagnating revenue lines, the fragile credit environment, plunging commodity prices, subdued oil prices, slowing economies, protectionist government policies and the constant threat of punitive fines for anti-money-laundering- and sanction-related issues are all currently weighing hard on the industry.
On the regulatory side, differing approaches by bodies in various jurisdictions have led to a fragmented regulatory environment and an uneven playing field for banks, Pande noted. And while regulations such as Basel III and the EU Bank Recovery and Resolution Directive Article 55 have had various unintended consequences, the EU Late Payment Directive and the soon-to-be-implemented PSD II are helping move the industry towards a more transparent, fair and competitive landscape, Pande argued.
Pande also discussed how correspondent banking was in need of reinvention, and looked ahead to how non-bank fintech providers might contribute to the industry by driving efficiencies across the supply chain, providing easy access to credit, helping SMEs access capital and removing the inefficiencies and high transaction costs that plague the cross-border payment industry.
To read the full article, please go here to download the issue (subscription required).