Standard Chartered navigates digital innovation, sustainability, and resilient transaction finance

The financial services industry is undergoing significant transformation, driven by the forces of digital transformation and new technologies such as artificial intelligence (AI), the increasing importance of sustainability, and an evolving regulatory compliance environment. These shifts are reshaping the future of finance, presenting both challenges and opportunities for institutions like Standard Chartered.

Samuel Mathew, Global Head of Flow & FI Trade; Danielle Sharpe, Global Head of Clearing; and Tan Ying Ying, Global Head of Custody and Funds Products, shared insights into how their respective businesses—trade finance, payments, and custody services—are navigating these challenges and opportunities while positioning the bank for future growth.

Digital transformation

Digital transformation is a cornerstone of Standard Chartered’s strategy, allowing the bank to meet increasing client demands for real-time services and increased transparency, particularly across complex businesses such as trade finance, payments, and custody.

Mathew highlighted the importance of real-time data visibility in trade finance, stating, "Clients today demand immediate access to data to manage their supply chains, and platforms like Trade Track-It are becoming crucial." This shift to real-time services is transforming how the bank interacts with its clients, allowing it to deliver operational efficiency and faster decision-making.

Samuel Mathew, Global Head of Flow & FI Trade at Standard Chartered

A key strategic move is Standard Chartered’s partnership with Linklogis, a Chinese fintech specialising in supply chain finance. This collaboration allows the bank to offer deep-tier financial supply chain solutions, reaching suppliers further down the supply chain. This allows liquidity to flow deep into the supply chain, particularly benefitting smaller suppliers that have traditionally struggled to secure financing.

"With platforms such as Linklogis, we’re able to go deeper tier in the chain e.g. we have in China gone up 11 tiers deep, covering 20 anchor clients and over 2,000 suppliers," he explained. This deep-tier financing ensures supply chain resilience by supporting smaller suppliers who traditionally have limited access to financing.

In payments, Sharpe, highlighted the bank’s adoption of ISO 20022, a global messaging standard designed to enhance the transparency and reconciliation of cross-border payments. However, the global adoption of the standard varies. While some markets and institutions have implemented it, others are further behind due to shifting timelines, and the overhaul of systems required. This inconsistency in adoption creates hurdles in ensuring a seamless experience across borders.

"ISO 20022 is transforming payments by providing richer data and improving compliance. However, the pace of adoption varies across regions, creating some challenges for global alignment," she noted. This standard is key to the bank’s digital strategy of enhancing cross-border payments and ensuring transparency and operational efficiency.

One of the most critical digital innovations is Partior, a blockchain-based payments clearing and settlement network developed in collaboration with DBS and JPMorgan. Sharpe explained, "Partior enables real-time clearing and settlement of cross-border payments across multiple currencies, significantly reducing settlement times from days to mere seconds." This system addresses long-standing inefficiencies in cross-border payments, aligning with client expectations for faster, more reliable transactions.

Tan discussed how Standard Chartered is preparing for the future of digital asset management. "We are working within regulatory sandboxes in Hong Kong and Singapore to build the infrastructure needed for tokenised assets," she explained. However, she emphasised the importance of client education, particularly as many institutional investors remain cautious about fully embracing digital assets.

AI and automation

AI and automation are playing an increasingly central role in Standard Chartered’s efforts to improve operational resilience and risk management across its divisions.

Sharpe explained how AI-driven tools like Silent Eight are streamlining fraud detection and sanctions screening. "AI has enabled us to automate a significant part of compliance work, improving accuracy and speed, especially in AML monitoring and sanctions processes," she explained. This automation allows the bank to reduce the risk of human error in high-risk areas while enabling teams to focus on more complex issues.

Danielle Sharpe, Global Head of Clearing at Standard Chartered

However, Sharpe clarified that while AI can handle large volumes of data, human oversight remains essential, particularly for more complex decisions and regulatory requirements. The balance between automation and human judgment ensures both speed and accuracy in operations. "AI processes data quickly, but human judgment is needed when interpreting regulatory nuances and making critical decisions," she added.

In trade finance, Mathew emphasised the potential value of AI in improving data reconciliation and managing unstructured data. "Automation helps us process large volumes of invoices and trade documentation quickly, allowing us to meet client expectations for faster reconciliation times," he said. However, he stressed that human oversight is still necessary for more complex, high-value transactions to ensure regulatory compliance and accuracy.

Sustainability

As global sustainability initiatives gather pace, Standard Chartered is aligning its strategy with environmental, social, and governance (ESG) principles to meet growing client demands and regulatory expectations.

In trade finance, Mathew noted that sustainability is increasingly a central theme. "Clients are signing up to net zero and therefore aligning their supply chains with ESG standards, and we are supporting them through sustainable financing solutions," he said. The bank’s Sustainable Trade Finance Framework enables clients to integrate ESG metrics into their operations, promoting sustainable practices throughout their supply chains while ensuring compliance with emerging regulatory requirements.

Mathew also pointed to the role of partner platforms such as e.g. Linklogis in enhancing ESG compliance across the supply chain. "Our partnership with Linklogis allows clients to track ESG compliance across multiple tiers, helping to promote sustainability throughout the supply chain," he explained.

Enhancing supply chain resilience

Mathew elaborated on the significant impact that the recent global macroeconomic environment, particularly the rise in interest rates, has had on traditional trade finance. He highlighted how the increase in borrowing costs has reduced global consumption, thereby affecting the demand for trade finance.

"The cost of financing for trade had gone up significantly due to inflation and where the Fed rates were. Consumption had reduced, translating into lower trade in goods. But with recent rate cuts, we expect to see demand for trade finance pick up again as the cost of financing comes down," he explained. This reflects the cyclical nature of trade finance, where demand fluctuates based on economic conditions.

Mathew further discussed the growing prevalence of open account transactions, which have gained traction as businesses become more comfortable dealing directly with trusted counterparties, without the need for traditional guarantees like letters of credit. This shift has altered the role of banks in facilitating these transactions.

"In the open account supply chain space, there’s no real need for a bank to mediate the flow between buyer and seller. The bank’s role is primarily focused on financing, while the actual transaction fulfilment happens directly between the parties involved," he noted.

This shift has necessitated a rethinking of how banks engage with trade finance. In traditional documentary trade, banks played a more central role, managing both the flow of goods and the credit risk. However, in the open account space, their role has evolved to focus on providing liquidity and working capital through supply chain finance rather than mediating the entire transaction.

Mathew emphasised that while open account transactions reduce the need for direct mediation by banks, they still play a crucial role in financial supply chains. he underscored how the bank is addressing both market fragmentation and supply chain resilience through the use of blockchain and tokenisation. "While blockchain and tokenisation have the potential to revolutionise trade finance, widespread adoption remains fragmented. We need broader regulatory support to realise the full potential of these technologies," he explained.

Mathew also discussed the shift from just-in-time to just-in-case supply chains, driven by geopolitical tensions and the impact of COVID-19. "We are helping clients adapt to the new normal by leveraging our network as we are present in most of these markets where the chains are moving to as well as providing supply chain and deep-tier financing solutions that offer liquidity to suppliers further down the chain, ensuring the resilience of their operations," he added.

The shift towards open account models also means businesses are increasingly handling credit risks directly. However, banks still play a crucial role by providing working capital and supply chain financing. Mathew explained, "In an open account setup, banks focus on providing liquidity and risk mitigation rather than mediating the entire title transfer transaction flow. This is where supply chain financing and risk mitigation tools become critical, ensuring that clients can still manage credit risks efficiently."

This evolution has led Standard Chartered to offer a suite of risk management solutions, helping businesses maintain the flow of goods while reducing exposure to potential payment defaults. These tools are essential for clients in high-growth markets or industries facing heightened geopolitical risks, where traditional financing methods are no longer as prevalent.

Mathew also emphasised the role of digital transformation in making global supply chains more resilient. Through platforms like Trade Track-It, Standard Chartered enables businesses to gain real-time visibility into their trade flows, allowing them to react swiftly to disruptions. These digital tools are a key part of the bank’s strategy to help clients build agile supply chains that can withstand geopolitical challenges and other disruptions.

"Digital tools are not just about efficiency; they are about ensuring resilience," Mathew stated. He added that Trade Track-It allows clients to monitor shipments, track risks, and adjust plans in real time, ensuring that supply chains are more responsive to sudden changes in the global market.

Driving real-time payments and cross-border efficiency

In payments, Sharpe highlighted the growing demand for real-time payments, particularly in cross-border transactions. She explained how Standard Chartered’s direct clearing membership in multiple markets supports a wide variety of payment solutions, allowing the bank to meet clients’ demands for instant and flexible transactions". Clients increasingly expect cross-border payments to be as seamless as domestic transactions, but regulatory fragmentation across markets remains a challenge," she said.

“We operate in 37 markets with direct clearing membership, which allows us to offer a variety of payment options, including real-time payments, automated clearing house (ACH) payments, Real Time Gross Settlement (RTGS), book transfers, and cross-border solutions for clients who prefer fast and efficient transaction capabilities,” she said.

Standard Chartered’s involvement in projects like Nexus, which is designed to connect domestic instant payment systems globally, is central to the bank’s strategy for improving cross-border payment efficiency.

"With Nexus, proof of concept, we’re breaking down regional barriers and building a more interconnected payment ecosystem. This will allow us to offer clients seamless cross-border payments, connecting different jurisdictions in real time," Sharpe explained.

The Nexus project is particularly relevant as businesses seek faster and more reliable payment solutions to support global trade flows. However, the complexity of regulatory fragmentation across regions remains a challenge, as different countries adopt payment systems at varying speeds. She emphasised that Standard Chartered continues to navigate these challenges by building infrastructure that enables real-time settlement, no matter where the transaction originates.

Sharpe also underscored the shift in client expectations, with a growing demand for faster and more diverse payment options to meet their increasing priority for speed and flexibility. Each solution caters to a different segment of the market, from banks and large corporates requiring high-value cross-border payments to small and medium sized enterprises (SMEs) needing quick domestic transfers.

"Clients today expect payments to be instant and secure, and we’ve tailored our solutions to meet these evolving needs," Sharpe said. She highlighted that these offerings are designed to provide flexibility, ensuring that clients can choose the best payment option based on their specific business requirements.

This suite of payment options is part of the bank’s broader effort to enhance client experience, ensuring that businesses can manage their finances more efficiently, regardless of the payment complexity or size.

Leading the charge on tokenised asset solutions

In custody services, Tan emphasised the importance of tokenised assets in the future financial ecosystem. She explained that the convergence between traditional and digital assets is inevitable, and banks like Standard Chartered are preparing for this shift by ensuring that digital assets are safeguarded with the same rigour as traditional ones.

“It is not a question of if, but when we will see digital assets, including tokenised assets, becoming more mainstream,” she said. The bank is already investing in digital asset custody solutions, including secure storage methods such as cold wallets. Tan elaborated on the risk framework Standard Chartered has implemented for digital assets, designed to mitigate potential cybersecurity threats and ensure client assets remain secure.

In the world of digital assets, ensuring secure and compliant interactions with third parties is crucial. Tan pointed out that Standard Chartered has implemented a robust third-party risk assessment framework to manage counterparties before any exchange of wallets or tokens. "We ensure that counterparties are thoroughly assessed for compliance and security," she said, highlighting the importance of due diligence in safeguarding digital transactions.

Tan Ying Ying, Global Head of Custody and Funds Products at Standard Chartered

In addition, the bank has made significant strides in staff training to keep up with the evolving landscape of digital assets. Tan mentioned Standard Chartered’s partnership with Oxford University, where over 300 staff members have undergone digital asset certification. This initiative ensures that the bank’s workforce remains up-to-date on the latest developments in digital asset management.

As digital assets gain prominence, the integration of operations and technology is becoming essential to maintain operational resilience. Tan highlighted how the bank is focusing on building a system where both traditional and digital assets can be managed securely and efficiently. “The ability to integrate ops and tech will be key to ensuring future sustainability,” she stated, emphasising the importance of operational infrastructure in supporting the future of digital assets.

The focus on cybersecurity was another key element of Tan’s strategy for protecting client assets in an increasingly digital world. She mentioned that Standard Chartered’s digital asset custody solution includes cold wallet storage to minimise security risks. As more financial institutions deal with cryptocurrencies such as Bitcoin and Ethereum, the need for resilient and secure solutions becomes even more critical.

The conversation around tokenised assets is accelerating, particularly in Asia, with regions like Hong Kong and Singapore leading the way. Tan shared that Standard Chartered is actively involved in projects like Project Guardian in Singapore, which focuses on building a framework for tokenisation and digital assets. She also emphasised the importance of this initiative in positioning Standard Chartered as a leader in digital asset solutions.

"We're seeing rapid progress in the adoption of tokenised assets in Asia," Tan noted, mentioning that the bank has launched a digital asset custody solution for cryptocurrencies such as Bitcoin and Ethereum.

In today’s fast-paced financial environment, client expectations are evolving rapidly. Tan highlighted the growing demand for real-time data from clients, with many seeking to integrate this data into their internal infrastructures. She explained that clients are no longer just interested in data for reporting purposes, but are looking for data as a product, combining insights from both traditional and digital assets.

“Our clients are now asking for real-time data, integrated into their systems, to help them make faster, more informed decisions,” Tan stated. This shift in expectations underscores the growing complexity of managing both traditional and digital assets simultaneously.

Balancing innovation and operational resilience for future growth

As Standard Chartered continues to navigate the complexities of digital transformation, AI integration, and sustainability, its ability to balance innovation with operational resilience will be crucial to its future success. While the bank has made progress with initiatives like real-time payments, supply chain finance, and digital asset custody, there are still significant challenges ahead, particularly in integrating these systems across different jurisdictions and regulatory environments.

The shift towards open account transactions has changed the traditional role of banks in trade finance, pushing Standard Chartered to focus more on liquidity management, risk mitigation, and providing value-added services. Initiatives like Partior and tokenised assets represent a step forward, but their widespread adoption is hindered by fragmented regulatory frameworks and client hesitations.

To remain competitive, the bank must continue to focus on client education, strengthen third-party risk management, and build regional partnerships. The challenge for Standard Chartered will not only be in developing innovative solutions but also in ensuring these technologies remain adaptable to changing market conditions and global compliance standards.

Moving forward, the bank’s strategy of innovation combined with resilience will be tested as geopolitical tensions, regulatory fragmentation, and evolving client demands reshape the financial landscape.