In a 60 Second Interview with the October edition of TFR, iGTB’s Head of Strategy Andrew England says he sees the trade finance and cash management landscape broadening out as banks review whether they want to build or buy trade and cash solutions going forwards. Andrew talks about the challenges facing banks, having looked at their infrastructure and their application programming interface technology and now considering how it can be used to link to specialist players in order to bring capabilities and products to clients more quickly.
“Most large banks talk about ‘centrification’,” he says, “and are getting rid of multiple systems, and making significant investments in reengineering the platforms that served them well in a previous life. They are simplifying accounting systems and extracting the key elements of liquidity management and information provision to create core technology assets that will always be used in the business.”
Andrew is clear that banks should not be worried about fintechs, who are niche and are not about to take over banks’ roles. Banks have a history of relationships, knowledge and credibility built up with clients over decades, and a multiplicity of assets and product offerings, such as capital markets, traditional trade finance, long-term and structured lending and providing core accounts, that fintechs are not interested in.
When it comes to potential partnerships, he says that there are currently a lot of conversations around risk appetite, and that partnership activity is currently concentrated around working capital provision.
Challenged on the gloom and doom about trade, and the wide-spread perception that banks are getting out of it, Andrew offers a longer-term and more upbeat perspective: “In Germany, 70% of the economy is services, and I think how we define trade will change – it’s no longer just merchandise. The explosion of data moving across borders is game-changing and, because of this data shift, the way in which we define ‘goods and services’ is being reconstructed before us.”
The article can be read in its entirely (with a subscription) here.