Shift in Cross-border Strategies by Standard Chartered Bank
Standard Chartered, a leading international bank, has announced its Q3 2024 results, showcasing a continued commitment to cross-border payments and transactions. The bank's Corporate & Investment Banking (CIB) segment plays a pivotal role in this, contributing to cross-border payments across three units: Transaction Services, Global Banking, and Global Markets.
To enhance its cross-border capabilities, Standard Chartered is adopting several strategic approaches. One such strategy involves integration with key payment systems. The bank is engaging with global networks like the Cross-Border Interbank Payment System (CIPS) to improve the efficiency and trust in cross-border Renminbi (RMB) transactions. Standardized processes are also being implemented to increase global interoperability and streamline cross-border trade documentation and payments.
Another strategy involves leveraging stablecoin technology for cross-border payments. Standard Chartered's involvement in the Circle Payments Network is a testament to this, facilitating fast, low-cost cross-border transactions. The bank is also collaborating to create real-time settlement capabilities, aiming to rival traditional payment networks by enabling stablecoin-to-fiat transfers.
Investment in digital innovation is another key focus area. Standard Chartered is developing blockchain-based trade finance solutions to improve transparency and efficiency in cross-border transactions. The bank is also offering advanced tools for managing RMB cash flows and hedging exposures to support clients in navigating the complexities of international trade.
To expand its market presence, Standard Chartered is establishing a strong presence in key markets, particularly in regions crucial for intended currencies like the RMB. The bank is also building strong relationships with regulatory bodies to ensure compliance and support future growth strategies.
In a bid to diversify services and assets, Standard Chartered is offering a range of financial services, including wealth management, to complement cross-border payment capabilities and provide holistic solutions to clients. The bank is also developing strategies for digital assets and future RMB-backed stablecoins, aligning with broader economic policies and market trends.
In Q3, the CIB operating income grew by 3% YoY to reach $2.9bn, with Global Banking and Global Markets growing 6% and 17% YoY respectively, while Transaction Services saw a -5% decline. To support these changes, the company is looking to invest in relationship managers for these regions. To fund these investments, Standard Chartered is considering selling a small number of businesses focused on mass retail banking that are no longer fully aligned with its business goals.
Standard Chartered characterizes itself as cross-border focused at a high level. The bank plans to increase the cross-border share of income in CIB from 61% in 2023 to around 70% in the medium term. To achieve this, the bank plans to exit around 3,000 CIB clients who do not align with its cross-border-focused goals.
CEO Bill Winters stated that the company will increasingly focus on larger global clients who rely on its unique cross-border capabilities. These larger global corporate clients need transaction services, financing, risk management, and expertise on Asia, Africa, and the Middle East. The bank is looking to make similar cross-border-focused moves in its Wealth & Retail Banking segment.
[1] Source: Standard Chartered's Q3 2024 results presentation [2] Source: Finextra Research [3] Source: The Block [4] Source: Reuters [5] Source: Standard Chartered's Q3 2024 results presentation
Investing in digital innovation, such as blockchain-based trade finance solutions, is a key focus area for Standard Chartered to improve the transparency and efficiency of cross-border transactions. Leveraging stablecoin technology, the bank is collaborating to create real-time settlement capabilities for fast, low-cost cross-border transactions, aiming to rival traditional payment networks by enabling stablecoin-to-fiat transfers. [business, investing]
In the Wealth & Retail Banking segment, Standard Chartered plans to make similar cross-border-focused moves, aligning with its goals of characterizing itself as cross-border focused at a high level. The bank is looking to increase the cross-border share of income in its Corporate & Investment Banking (CIB) segment from 61% in 2023 to around 70% in the medium term by focusing on larger global clients who rely on its unique cross-border capabilities. [business, finance]
