Commentary

A few months ago during a course that I did for a group of South Korean bankers, there was a moment where the conversation turned round to what kind of special perks and benefits were given to the South Korean bank customer who had more money than the average retail customer.

In the wake of ongoing impact of global financial and economic meltdown, particularly more acutely on advanced economies, sparing for the time being it’s full brunt on Asian economies; It is a compulsion for Asian bankers to be aware of threats and opportunities that are enveloped in The New Great Game, which is being played by the big powers in the heart of Asia.

On 8 February, the People's Bank of China announced that the Industrial and Commercial Bank of China (Singapore) will become the RMB clearing bank in Singapore.

During Chinese New Year, I visited a friend working for the Exim Bank of Taiwan (EBT), the only export credit agency(ECA) in Taiwan set up in 1979, I was advised with joy that business turnover of the Bank has passed TWD90billion (aroundUSD3 billion) in 2012 and will be easily over TWD100billion (around USD3.33 billion)this year. He is so happy because the growth rate is almost ten folds compared to ten years ago . However, knowing that total turnover of Sinosure, EBT's counterpart in China set up in 200, was up 35% from previous year to USD293.6billion in 2012 and the percentage of export coverage for China is more than 10% while EBT's % of coverage is less than 1% during the same period, he has to admit that EBT has plenty room to improve. From study, I found out that the difference between the two institutions is the marketing strategy. EBT is selling policy without financing but Sinosure is selling through banks which are providing trade finance. Similar practice was experienced by Coface in China through its strategic partner, Pin-An Insurance, to support banks' clients to obtain trade finance. Other private credit insurance companies such as Euler-Hermes, Atradius, and Chartis...etc. are also growing and compete seriously with each other since financial crisis in 2008. The product is formally available only for large enterprises but many banks are using it to support supplying chain finance, factoring, and invoice discount..etc. for SMEs clients recently.

With an increasing degree of uncertainty prevailing in the global economy, it becomes imperative that corporates make efficient use of their available cash positions. While the need to be cash rich cannot be under stated, the need to be liquid is the need of the hour. A well-structured Liquidity Management policy can help treasurers achieve the best possible outcome with the available cash resources.

The mentality for investing is extremely different to the mentality for trading. When traditional investors shift to trading, this can become an issue:

With half of online Australians already engaged with video online and a third using video calling, how can financial services institutions use video to better engage customers and workers?

The LIBOR scandal rocked the world of finance last year after reports emerged of gross misconduct by Barclay’s Bank in the submission of LIBOR rates to the British Banker’s Association (BBA). Barclays had been under investigation by authorities for its role in setting the world’s key short term interest rate-the London Interbank Offered Rate (LIBOR) and had to pay total fines of £ 290 million in separate settlement agreements with the Financial Services Authority (FSA), U.S. Department of Justice and Commodity Futures Trading Commission (CTFC).

The growing trend of central banks around the world to stimulate economic growth by instituting quantitative easing is having the effect – either intended or unintended - of rapidly depreciating major currencies such as the Japanese Yen, Chinese Yuan, US Dollar and Euro.

Financial institutions received much of the blame for the global financial crisis in 2008. A wave of regulatory reforms in the financial and banking sector have taken place globally since that time in an attempt to address perceived weaknesses in the system.

Businesses today face a host of unavoidable challenges that need to be tackled in order to achieve core business objectives, including lowering costs, increasing revenue and enhancing competitive advantage. In the financial services sector, these demands are further exacerbated by the unique challenges facing the industry, not the least of which is the inevitability of race-like conditions and the need to capture, analyze, and act on information as soon as it appears.

The banking system was standing on its head, we just put it back on its feet says Mohammad Yunus, founder of Grameen bank, Bangladeshi Economist, Banker and Nobel peace prize winner in his TED talk, talking about the microfinance industry. The subcontinent has now forced the system not just to stand on its feet, but also to start walking. The Indian microfinance industry has come a long way.

Dispersing cash in a country as large as India has traditionally been hugely problematic due to the way the financial services infrastructure has developed in the country. In effect, the inability to service low value customers due to a systemic cost problem with the industry (driven by both regulation and staff unions who have opposed many measures to increase efficiency in the past, including ATMs) has resulted in a very urban-centric distribution coverage by the industry.

For financial institutions and customer-centric executives, it has never been more important to focus on the rapidly developing cards and payments market. Now Asia is set to lead a card acceptance revolution with China’s UnionPay governing the charge.

To stay relevant, banks in Asia are keeping in touch with technological advancements and innovating on their product and service offerings.

It is very clear that Islamic banking is now an established industry with high growth prospects. Asia is and will continue to be a key geographical area for this industry, whether it is South East Asia, South Asia or the Middle East.