Most African economies have so far succeeded in navigating a year beset with economic challenges. Writing in TXF, Nabil Frik, Managing Director for Africa and the Middle East at British Arab Commercial Bank, discusses why Francophone Africa has beaten expectations.
Francophone Africa – encompassing 29 countries across the continent – includes some of Africa’s fastest growing economies. As the region works towards a post-pandemic recovery, its relationship with the rest of the world is also undergoing a profound shift, with Francophone Africa replacing its long-standing economic reliance on France with a more multi-polar relationship with other regions.
Read the full article in TXF.
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.
Africa-EU trade relations have long been critical: the EU is Africa’s largest trade partner and this inter-continental trade barrier will be crucial to spur both region’s post-pandemic recovery.
Writing for Financier Worldwide, Jeff Fallon, head of client coverage at BACB, claims that despite likely changes to risk appetite for supporting this trade corridor, it would be short-sighted to let Europe-Africa collaboration fall behind.
Fallon writes: “Maintaining connections between Europe and Africa will be vital to economic recovery, and specialist banking partners that remain committed to Africa are on hand to help navigate the process.”
Read the full article here.
The Latin American banking industry has experienced huge growth over the past two decades. In an interview with The Banker’s Silvia Pavoni, BNY Mellon’s Head of Treasury Services for Latin America, Dino Sani discusses how well-equipped financial systems, expert knowledge on managing volatility and a strong regulatory framework has led to the growth of regional giants.
When speaking on how technology will shape competition in the future, Dino Sani said, “In the short-run, the biggest challenges are not the current economic situation or the Covid-19 and how it affects our countries. For financial institutions, new technology is the main challenge – they need to reinvent themselves to be in the market, otherwise the markets will reorganise and the technology might make it more difficult for the more traditional banks to compete”.
To listen to the full video, click here and scroll to the bottom of the web-page.
As we come to grips with the Covid-19 pandemic, supply chains across the globe are under immense pressure. An unprecedented demand for supplies from supermarkets is offset by a demand slump from restaurants, cafes, hotels and bars that have been forced to shut their doors. This disruption will create new challenges for transaction bankers and may lead to long-term changes in global trade patterns.
“Filling in gaps in the supply chain, however, will come with new risks. Banks will need to weigh up the overall cost of this risk exposure in serving their clients, especially small and medium-sized enterprises”, says Joon Kim, Global Head of Trade Finance Product and Portfolio Management at BNY Mellon.
To read the full article, please click here.
As industries go, trade is not typically known for being nimble. Yet, the unprecedented circumstances of the COVID-19 pandemic are forcing the hand of those in global trade, and banks are swiftly adapting to ensure they can continue playing their fundamental role in enabling the wheels of trade to turn.
Though there are undoubtedly significant hurdles to overcome in the shorter term, once the world settles, we have the opportunity to harness technology to create a new norm – propelling trade finance into a new era of more efficient, streamlined, value-added transactions.
The article can be found here.
In a global supply chain, each supplier, regardless of size, can form a critical link. But as trade tensions escalate and macroeconomic conditions worsen, global supply chains – and the suppliers that underly them – are looking increasingly vulnerable. If a link in the supply chain breaks, production lines can grind to a halt – a particular worry for the large buyers that sit atop this global process.
To foster stability across supply chains, and to help suppliers optimise their working capital, companies are increasingly turning to payables finance, a supply chain finance technique. Through payables finance, large corporate buyers can extend or maintain existing supply payment terms and suppliers can access financing at a rate that reflects the risk of its highly creditworthy buyer.
But as demand for payables finance grows, how is the industry adapting to meet it? Christian Hausherr, Chair, Global Supply Chain Finance Forum and Head of Product Management, Trade Finance and Supply Chain Finance, Deutsche Bank, explores in an article for TXF.
The article can be read here (behind paywall)
In an article for Africa Outlook, Doina Buruiana, Project Manager at the International Chamber of Commerce Banking Commission, explains how digitalisation can help alleviate some of the trade finance sector’s longstanding concerns and help banks in Africa to thrive.
Indeed, results from the Banking Commission’s 10th Global Survey on Trade Finance reveal that digitalisation is set to help improve efficiency, decrease costs and increase market capacity.
To read the full article, on pages 18-19, please click here.
Writing for Banker Middle East, Olivier Paul, Head of Policy at the International Chamber of Commerce Banking Commission, discusses the opportunities for banks in the Middle East to leverage the growing digitalisation of the trade finance sector.
Paul explained that, despite various challenges – including geopolitical concerns – banks in the Middle East are particularly optimistic about digital trade and are embracing the move towards paperless trade finance.
To read the full article, on pages 42-43, please click here.
Featured in Cinco Días, the oldest financial and business newspaper in Spain, Alicia García Herrero, Natixis Chief Economist for Asia Pacific, discussed how the ECB’s delay in raising interest rates represents an opportunity for stock markets and European companies to win in the commercial trade war.
Ultimately, the trade war is strategic, not tactical, says Herrero, with any agreement becoming increasingly unlikely. Donald Trump’s aim is to slow down the technological boom in China and reduce the deficit simultaneously. Sanctions on Europe are only being used to detract attention from these objectives, she says.
While Europe has the power to sway the favour towards whichever player offers the most favourable terms, major obstacles to its success as a balancing actor are those of distrust within the eurozone, not listening to member states’ concerns and refusing to negotiate with them.
The interview was published in the Saturday newspaper and online. Read the full article here.