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Tomorrow’s banking: Creating opportunities for sustainable growth


30 Sep 2022

Home > News > Industries > Financial institutions and investor groups > Tomorrow’s banking: Creating opportunities for sustainable growth
To support the real economy and provide an enabling environment for businesses to grow, it’s time to bring forth the future of banking, harnessing emerging technologies to create new opportunities for sustainable growth.

The disruption, volatility and uncertainty brought about by the global challenges of recent years have injected a new urgency into financial services innovation, propelling the industry into a new tomorrow. To support the real economy and provide an enabling environment for businesses everywhere to grow and prosper, it’s time to bring forth the future of banking, harnessing emerging technologies to create new opportunities for sustainable growth.

Empowering a more inclusive global economy

Although we are living in a more challenging economic landscape than has been experienced in decades, new opportunities for growth are arising.

Global trade is undergoing fundamental change amid a move to ‘just-in-case’ supply chains, as well as changing consumption patterns in developing markets. Amid this rebalancing, intra-regional trade is growing, while emerging markets stand to benefit as companies shift to low-cost markets to diversify production.

As trade corridors shift towards higher growth economies, local suppliers can gain new possibilities to move up the value chain – as long as they can access the finance to do so.

“Improving accessibility for entrepreneurs and SMEs to global and regional supply chains is vital to ensuring globalisation works better for all,” says Michael Spiegel, Global Head of Transaction Banking at Standard Chartered. Financial inclusion is a top priority for the future of trade, and banks must find new ways of getting liquidity to where it is needed.

“Large clients increasingly want to support their suppliers, and want solutions that match their flows,” adds Spiegel. “They want their banks to support them in financing the new-to-market or the deep tiers of their supply chains – suppliers of suppliers and players that need to be included in the new real economy.”

Putting sustainability front and centre

Sustainability considerations are also shaping the future of banking. As environmental, social and governance issues are increasingly integrated into investor decision-making and regulatory requirements across the world, banks are uniquely placed to direct funds towards the companies and projects that are drawing the future of the sustainable real economy, thereby enforcing and rewarding sustainable behaviours and practices in the market.

Standard Chartered’s Sustainable Trade Finance proposition and its Sustainable Account are two solutions which are designed to help companies implement more sustainable practices across their ecosystems and contribute to their organisation’s sustainability goals.

“Sustainability is quickly becoming a ‘license to operate’ for our clients,” says Spiegel. “Here, banks play a critical role. Through the use of data, we are at the centre of clients knowing the intermediaries that are being paid, the logistics companies that are shipping the goods, and ultimately how the customers are buying the product.”

Meanwhile, as governments turn up the pressure on companies to account for their environmental and social impact in a real and substantive way, the visibility that banks have over the entire trade ecosystem can be leveraged to help close the gap between ESG leaders and laggards across different sectors – ensuring that economic growth today benefits not only the current generation but the ones to follow.

Using technology as an enabler of an end-to-end ecosystem

While Microsoft founder Bill Gates said in 1994, “Banking is necessary, banks are not”; the inclusive, sustainable, and transformative future of banking is about marrying the strength, safety, trust, connectivity and reach of banks with technology.

The financial and technological sectors are converging, as the traditionally distinct boundaries which separate the two become blurred. Developments such as digital currencies, blockchain and artificial intelligence can benefit the global economy in supporting financial inclusion and climate resilience, but they also challenge banks to rethink the role they play.

Consumers are seeking simple and seamless digital interactions across the entire financial ecosystem. Corporate clients are similarly expecting the same experience. To meet this demand, banks must invest in cutting-edge technologies – without losing sight of their core proposition as trusted advisors.

“This is a real call to action for banks,” says Spiegel. “Most organisations are moving more decisively forward with their digital transformation, and banks must step up. This means a move away from selling separate products to offering integrated solutions that are fully digitally-enabled – such as seamless one-stop collection solutions for end customers that work both online and offline.”

With their significant footprint, long-standing relationships with governments and regulators, and greater experience managing complex financial products, banks are uniquely placed to create compelling solutions that address the needs of the new economy – but it is in partnership with fast-moving, agile fintech firms that the real value can be unlocked.

“The banks for and of tomorrow act as platform facilitators and curators, building partnerships with technology and financial technology companies for innovative solutions that support digital transformation, and harnessing data to better support their clients,” says Spiegel.

And by putting data and analytics at the centre in a truly secure and privacy-protected environment, banks can get a granular understanding of customer needs and create rich and differentiated propositions, laying the foundations for a truly immersive digital experience.

Creating tomorrow’s bank, today

The world is changing, and banking must change with it. To equip businesses around the world with the resilience they need to thrive in the real economy of tomorrow, banks and financial institutions must focus on three core areas:

Tomorrow’s flows: Corporates are exploring new business models and setting up new supply chains of goods and services, driving the growth and development of new and emerging geographies and trade corridors such as the South-to-South corridor, the intra-Asia regional corridor and the intra-ASEAN corridor.

“With our broad and deep global reach, we are actively playing a part in supporting clients across some of the world’s most vibrant growth markets,” says Spiegel, adding that Standard Chartered recently obtained a full branch license in Saudi Arabia and Egypt, and continues to commit and invest in the largest economies that are driving global economic growth and trade flows, from India to China, Hong Kong, Singapore, and beyond.

Financial institutions in these dynamic markets can harness Standard Chartered’s footprint and strong capabilities to support their clients where the flows of tomorrow will grow, helping them build more resilient businesses that can navigate the opportunities and challenges ahead.

Tomorrow’s places: Business and trade are increasingly digital as corporates create and join platforms and marketplaces. The rise of e-commerce offers brick and mortar companies greater reach, and it is enabling new entrepreneurs to access the global market, lowering the barriers to entry for SMEs around the world, while the emergence of digital currencies and e-wallets promise efficient, low-risk, and near-instant international payments.

To ensure digital flows are affordable for all, frictionless, and visible, financial institutions must have the right solutions and banking relationships in place. As one of the largest providers of trade services for the banking industry, connecting most banks to the flow of goods and services globally, Standard Chartered will continue supporting its financial institution partners in the digital places of tomorrow, as clients carry out their business there in the future.

Tomorrow’s world: Clients are increasingly looking for banking partners that fit with their social and environmental values, principles, and aspirations. They are demanding more transparent payments; they want visibility on how secure their funds are and what they are being used for. They want responsible banking that is making a positive social and environmental impact.

These demands can be met at Standard Chartered. Having publicly stated its vision to be the world’s most sustainable and responsible bank, the organisation is committed to supporting sustainable economic growth, expanding renewables financing, and investing in sustainable infrastructure where it is needed most.

Driven by technological advances, the future of banking is sustainable, inclusive, and meets the needs of the real economy. But evolving banking for tomorrow’s world requires organisational agility, an aspirational vision, and a holistic approach to the entire ecosystem. In co-creation with clients and partners, the banks and financial institutions of today can lead the way in defining what’s to come, driving positive change across the globe.

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