Navigating complexities of geopolitics, inflation, supply chains and rising rates

A growing number of global geopolitical, social and economic trends, from continuing China-US trade frictions, disruptive technology innovations, to uneven recovery from the COVID-19 pandemic and escalating Russia-Ukraine crisis, have increased market uncertainties and financial risks that will impact transaction and corporate banks across the world. The International Monetary Fund forecasts that global economic growth will slow from 6.1% in 2021 to 3.6% this year. The crisis has also disrupted key global supply chains, increased prices of major commodities, feeding global inflation, all in a rising interest rate environment. As financial institutions (FIs) navigate the shifting macro-environment, the acceleration in digitalisation is helping to future proof their operations. Traditional banks are riding the waves of disruption through emerging technologies to uplift customer experience and tap new business models for new revenue opportunities. While the demand for instant cross-border payments has long existed and remained mostly unmet, the industry may be moving closer to making it more prevalent, as domestic real-time payment systems, especially in Asia get connected. Expediting the underlying shift is also the adoption of ISO 20022 as a payment standard which is expected to drive interoperability across the payment chain. While each institution moves at its own pace according to capacity, the adoption is expected to drive changes to bank products and processes as they align systems to the new format. While still nascent in development, the use cases and impact of central bank digital currencies (CBDCs) for foreign exchange, cross-border payments, liquidity and compliance monitoring are already being discussed, especially from a correspondent banking perspective. CBDCs have significant potential to change banking and current business models, they could also reduce complexity, delays and opaqueness which exist in today’s correspondent banking network. As sustainability awareness picks up in Asia Pacific, investors, stakeholders and consumers are demanding more transparency in the way businesses go about their environmental, social and governance (ESG) agendas. Corporates and their supply chain partners seek to ensure their operations meet the minimum and prescribed sustainability criteria. The onus is on financial service providers to guide their clients in the transition to achieving their ESG goals.. The ‘Global Transaction Finance Reinvented’ conference provides a platform for a dialogue between experts from global banks, alternative players, regulatory organisations and new technology providers to discuss the latest trends and offer best practice solutions to stay ahead of the curve. The event will also discuss how the dynamics of global trade finance, correspondent banking, cross-border payments, as well as liquidity management are all in a state of evolution, as the industry races towards digitalisation.