The gravitational pull generated by emerging Asian economies on global payments traffic has been starkly illustrated in Latin America, where China has come to prominence as the number one trading partner for major nations such as Brazil, Chile, Peru and Columbia, creating new challenges and opportunities for banks providing payments and FX services to corporate and institutional clients.
Speaking to Finextra TV at Sibos in Toronto, Rita Gonzalez, head of institutional sales for HSBC's GTS unit says that the bank is experiencing increasing demand from institutional clients for Chinese RMB currency accounts and services as the Asian currency wave begins to usurp US dollar traffic in the region.
"We've seen a great demand for RMB and other currencies in Asia and we're starting to see that the dollar is no longer the dominant trading currency for such an important region," she says. "Even after the euro was established, still Latin America as a region continued to trade in US dollars, so this is very new."
Most of the big Tier one banks at Sibos have been heavily promoting services for RMB settlement and foreign exchange, leveraging the strength of their correspondent networks to act as facilitators for international trade flows.
A survey conducted by JPMorgan of more 100 bank executives globally found that payments collaboration continues to be a primary area of focus. Over the course of the next few years, reports the study, nearly three in four institutions expect to collaborate to some degree with partner banks in support of their payments business, with those in the Asia Pacific (83%)and North America (80%) most likely to collaborate.
The research found progress in RMB clearing was mixed, with just 37% of banks currently provide RMB services to their customers. However 52% of those not currently catering to the Chinese currency opportunity plan to do so in the next 6-12 months.
The Finextra TV crew have been busy at our purpose-built production booth on the exhibition floor at the Sibos conference, running a continuous stream of panel session debates and one-on-one interviews with leading banks and vendors. To see all the latest action live and direct from Sibos visit Finextra@Sibos