Servicing the trade finance needs of upwardly mobile Australian corporates is shaping to be more than just a matter of bank balance sheets being available, according to research from banking analysts East & Partners.
The firm reports that many Australian banks actively move abroad with their customers, providing on the ground service and support to leverage their growing regional presence and maintain a close core primary relationship.
Other banks seek to partner with local providers in order to deliver home grown talent, insight and pricing competitiveness, arguing diverse trade finance market characteristics do not lend themselves to a ‘one size fits all’ policy.
The contrasting strategic initiatives engaged by both outgoing Australian banks and incoming international banks creates ‘a fascinating market dynamic’.
Chief financial officers (CFOs) and treasurers from 1,859 surveyed enterprises across Australian institutional, corporate and small and medium-sized enterprise (SME) segments in East’s latest trade markets research, report improved satisfaction from the enhanced focus on better terms, emerging product solutions and dedicated service standards.
Market share data over the past 10 years shows rising fortunes for the Australia and New Zealand Banking Group (ANZ) and HSBC, trending steadily higher in 2014 and building upon their ability to bank over 80% of their primary customer’s trade finance wallets – well above the market average of 68.6%.
East says that this is a direct reflection of leading customer satisfaction ratings, particularly for ANZ. International trade offerings from Citi, Bank of America Merrill Lynch and JPMorgan have also made sizeable market share gains in the last year in key segments.
National Australia Bank’s (NAB) strong small business market leadership is also reflected in trade, where the bank holds a market leading market share position in corporate and SME segments but faces stiff competition from ANZ, CBA and Westpac.
Westpac unit St George is increasingly active among SMEs as a primary trade finance provider, improving relationship share and positioning the Westpac group as the main challenger to the NAB trade brand. CBA is gaining ground quickly albeit from a lower primary market share base and is being viewed, interestingly, as a serious “challenger” brand in trade.
“Winning new trade business is becoming increasingly difficult, but it also emphasises the importance of securing existing trade relationships through a dedicated, defined service offering,” said Martin Smith, East & Partners senior markets analyst.
“Secondary wallet share has fallen considerably across all segments, highlighting the ‘sticker’ nature of trade products and heightened competition both at home and abroad.
“The just-approved Japan free trade agreement (FTA) is an excellent example of growing, closer ties in the Asia Pacific region, opening new opportunities for trade and supply chain financing that importantly incorporates small business growth aspirations.”
On the second day of this year's AFP conference Trump's potential tax reform, using synthetic debt and the expected benefits of SWIFT GPI were all hotly discussed topics.
Today CGI and GTNews have announced the launch of the fifth annual Transaction Banking survey report, which offers which offers critical insight into the corporate-to-bank relationship.
On-Demand Treasury Management Solutions continue to gain increased adoption in the US and EMEA regions.
Treasurers are being expected to do more work with fewer resources than ever before, so it is little wonder that the automation of day-to-day operations was highly discussed on the second day of EuroFinance, the annual treasury event held in Barcelona this week.