Although the ongoing pandemic brought significant disruption, it is also having the positive effect of bringing the digitalization agenda to the fore. And as flows of funds between Latin America and the rest of the world are returning to normal levels, the pandemic has precipitated a permanent change by speeding up the adoption of digital payment services, says Dino Sani, Head of Treasury Services for Latin America at BNY Mellon.
“BNY Mellon was already in this journey toward digitalization but COVID-19 accelerated the process,” Sani said. “And there’s a dramatic impact on our business.”
Latin American banks have been quick to embrace Swift’s Global Payment Initiative (GPI), a collaborative project in which participating banks build on an open platform (API) to add speed and transparency to international payments, according to Sani. And although Latin America’s economies to face a difficult year in 2021 as they open slowly, Sani expects an economic recovery to get underway. “We are seeing some light at the end of the tunnel,” he said.
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While global trade volumes have been down significantly in 2020, Joon Kim, the Global Head of Trade Finance Product and Portfolio Management at BNY Mellon, sees “a cautious sense of optimism and recovery” by the latter part of the fourth quarter of this year and the beginning of next, at the macro-level.
Arnon Goldstein, Head of Treasury Services for Asia Pacific at BNY Mellon, observed overall decline in payment volumes, underlining weakness in clients’ demand, but an increase in liquidity, especially in local currency and dollar liquidity as lending demand has been depressed. However, any rebound in volume will be uneven as some economies continue to grapple with the COVID-19 pandemic.
The disruption to traditional supply chains and logistics has precipitated the need to strengthen business continuity planning to increase institutions operational resiliency and ability to operate remotely. Processes have to be streamlined and enhanced to incorporate alternative digital solutions, such as e-signature and biometric-enabled authentication and authorisation, to replace traditional manual ones. The bank is pivoting to digital alternatives, such as web-based meeting, and digitising more of its internal as well as clients’ processes in order to facilitate client transactions and increase efficiency.
To watch the interview, please click here.
BNY Mellon has been officially crowned “Best Correspondent Bank” in this year’s Global Trade Review (GTR) “Leaders in Trade” awards. The award marks the second consecutive year that the bank has won the award since the category was introduced in 2017.
Receiving the award on behalf of BNY Mellon at the GTR Awards ceremony last week, Dominic Broom, Global Head of Trade Business Development, commented: “This consecutive win of the Best Correspondent Bank award underscores what we do best: providing operating expertise and exceptional client service on a global scale. We continue to invest in new solutions and enabling technologies to remain the leader in meeting client needs, in an ever-changing landscape.”
To read the full awards results list, please click here.
In an exclusive interview, Koll explains how the initiative stands to revolutionise commerce and offers an update on its progress.
The problem of unfinanced trade is nothing new in Africa. In an article for Euromoney, Duarte Pedreira, Head of Trade Finance at Crown Agents Bank, warns that the “real issue” underlying the African trade finance gap is that “Banks are moving more and more towards financing the same counterparties, which is creating concentration risk. Whilst banks don’t want to lend to African commodity producers or importers, they happily lend to large commodity traders, who then undertake the lending to these entities themselves.”
Yet the outlook for trade is “far from uniformly bleak”. In emerging markets, “niche players are stepping into the void created by de-risking among large banks by supporting due diligence-led financing in countries ranging – in the case of Crown Agents Bank – from Sierra Leone and Gambia to Malawi and Mozambique.”
In a relatively short space of time, Vietnam has emerged from a history of conflict, partition and poverty to become an industrialised, exporting powerhouse. The economy grew by 6.2% last year, and is likely to expand by a further 6.7% in 2017. Following closely in Vietnam’s footsteps is Myanmar. One year on from the election of its first democratic government, the country is leaving behind decades of political isolation and military dictatorship. Engaging in trade with the outside world is expected to help generate GDP growth of above the 7% mark over the next few years.
But with both nations’ trade largely flowing to China – where growth is flattening – a change of course may be required. In an article for Trade & Forfaiting Review, Agnes Vargas, Regional Head of Greater China & ASEAN at Commerzbank, argues that, by diversifying exporting options beyond their tried-and-tested market, Vietnam and Myanmar may better sustain and build on their new-found prosperity.
Read the article, “Trading Friends” here.
Global trade is experiencing significant change, and economic and political uncertainty is impacting key trading relationships in Asia. Despite these turbulent times, recent figures indicate that growth in ASEAN, for instance, has been relatively unfazed by headwinds in 2016. That said, another particularly important trend has emerged that hampers the ability for many local companies to capitalise on the opportunities emerging across the region: the trade finance gap.
Writing for The Asian Banker, BNY Mellon’s Michelle Hui, Head of Trade Business Development, Asia Pacific, Treasury Services, BNY Mellon, considers the role banks have to play in ensuring the continued flow of trade despite challenges. She writes on the importance of collaboration to help close the trade finance gap and reinvigorate the global trade landscape: “through collaboration and innovation, we can capitalise on this new environment, and provide local businesses with the tools to harness the region’s opportunities and drive business growth.”
To read this article, please click here.
Mexico and Turkey are two countries with a number of similarities. Both have economies with great potential, are blessed with strong geo-strategic positions – Turkey as the gateway to Europe and the Middle East, and Mexico as the bridge between North and Latin America – and have seen a substantial rise in their share of world trade in recent years.
In TXF, BNY Mellon Treasury Services’ Margaret Guevara – Head of Sales and Relationship Management for Mexico and Central America – and Cihat Takunyaci – Country Manager for Turkey – consider the mutual benefits for building stronger trade links between Mexico and Turkey. In particular, they discuss how the diversification of trading partners would be a key way of stimulating growth, and importantly, how banks can provide businesses with the support necessary to approach new Turkey-Mexico opportunities with confidence and success.
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BNY Mellon’s Global Head of Trade Business Development for Treasury Services at BNY Mellon has been appointed to the International Chamber of Commerce (ICC) Banking Commission’s executive committee.
Dominic Broom’s appointment is part of a series of nominations by the Banking Commission to further strengthen its regulatory advocacy and rules of arbitration. He joins the committee with over 20 years’ experience in the finance industry that will be used to help promote trade finance around the world.
Broom said of the appointment “I am honored to have been given the opportunity to join this renowned and influential organization. BNY Mellon has an important role to play when it comes to promoting international trade and financial inclusion. It’s vitally important that we support our correspondent banking clients to ensure they have access to financial services across the world and that they’re able to provide cross-border payment services to their customers.”
Following Moorgate’s outreach, the news was covered by: FX-MM, bobsguide, Treasury Today, TMI, TXF, TFR, SCFBriefing and Global Banking & Finance Review
Due to increased compliance checks as part of heightened banking regulations, many banks are shying away from markets that might be regarded as “too expensive”. This has exacerbated an already large trade finance gap, which recent Asian Development Bank (ADB) figures quantify at US$1.6 trillion. In a TFR roundtable discussion which examines factors influencing the trade finance gap and what can be done to reduce it, Dominic Broom, Head of Trade Business Development, Treasury Services, BNY Mellon, considers the stresses on the current banking model, calls on regulators to address the problem, and discusses the importance of correspondent banking.
To read the full discussion, please click here. (Please note this article is behind a paywall)