(25 October 2024 – Global) East & Partners global analyst team share valuable insights into what is moving commercial banking markets.
The following analyst meeting summary provides a unique breakdown of emerging research thematics, strategic drivers and CFO/treasurer thought leadership opportunities for 2025 and beyond.
- Chinese Economic Woes Accelerating “Nearshoring” Impulse
As Chinese corporates lead the charge away from the mainland for supply chain diversification, are major corporates changing their primary bank as part of this process? Or are treasurers actively looking at alternatives due to a lack of funding options provided to them by their bank in their efforts to move their supply chain away from China?
In moving their supply chain away from Mainland China, what has been the biggest issue they have had to overcome or are still trying to solve? And in selecting a “China Plus One” destination, what is the most appealing factor?
All of these complex, difficult to quantify questions are set to be answered in the next round of East on Demand.
Going to field at the end of October, clients are asking CFOs and Treasurers any question, in any market with a rapid turnaround on voice of the customer insights within two weeks. Clients utilise the platform for quickfire thought leadership and marketing campaign proof points and support, product & service development/defining a new business case driving sales pipelines, forecast customer needs and much, much more.
- Tapping Into the Voice of the Customer
What drives corporates’ interaction with their bank at a time of record high customer churn intent?
As the treasury function evolves rapidly to incorporate a greater “tech” component, leading to greater responsibility delegation from the CFO to the treasurer, do corporates have an internal investment team responsible for managing and maximising their “idle” cash? And importantly what does their secondary cash & payments provider need to do to become their primary transaction bank as the level of panel banking intensifies?
Cutting through ubiquitous AI coverage, what specific treasury functions do corporates realistically plan to use AI for? Defined tangible benefits are crucial for digital/innovation investment.
For trade and supply chain finance, businesses are concerned with internal barriers restricting SCF volumes and avoiding pain points associated with “reshoring” new suppliers.
How important is mitigating fraud when looking to digitise trade documentation? What strategies do CFOs have in place to avoid or absorb rising tariff barriers? And importantly what factors prevent them from using/increasing their use of Structured Trade Finance?
According to corporates, what is the biggest risk to growth in the coming 12-18 months? And what proportion of their overall lending/debt is forecast to be derived from private credit in the next year?
As sustainability metrics are more closely integrated into decision making, what importance does climate change play when relocating supply chains? Are corporates purchasing carbon credits for offsetting needs and if so, from who? What factors would increase their use of carbon credits?
With the Australian Big Four domestic banks recently promoting their Net Promoter Scores (NPS), it got us thinking just how important is the NPS metric to a business’s decision on who they bank with? After many tens of thousands of interviews, we have our theories.
- Corporates and Banks Alike Prepare for Uncertain US Election Outcome
Will the USD strengthen or suffer a correction based on a Trump or Harris electoral victory? East & Partners captured currency forecasts from 733 of the Top 100 revenue ranked corporates in eight countries on where they predict the USD will trade in December 2024 following election. US corporates were also asked specifically where they anticipate the USD will trade in the event of a Trump win or a Harris win.
Across a basket of seven currencies including the AUD, BRL, RMB, EUR, JPY, SGD and GBP, how are US CFOs and treasurers specifically preparing against a possible Trump election victory versus a Harris win?
US corporates predict the USD will strengthen considerably more in the event of a Trump election win compared to a Harris win. How much do currency forecasts differ for US corporates compared to their global counterparts? What implications does this have for FX risk management?
The US presidential election race is firmly front of mind with CFOs and treasurers. With polling too close to call in many swing states, markets are pricing in a greater risk of greater fiscal stimulus and trade tariffs in the event of a Trump win. Where do global corporates forecast the USD to trade in December 2024?
More so than usual when Americans go to the polls, event risk is elevated as the tightly contested 2024 election poses an extremely high degree of uncertainty for global corporates, particularly for FX risk management.
Currency forecasts vary wildly between bank economists and currency traders for December 2024. Convera’s US Election Guide is designed to help businesses understand and prepare for potential currency market fluctuations arising from this pivotal moment. It breaks down likely scenarios and identifies key risks to help your business navigate the uncertainty that lies ahead.
“Polling data from key swing states shows Harris and Trump separated by just a few percentage points. Given the importance of these states, even a small shift in voter turnout or sentiment could dramatically alter the electoral map” stated Convera Head of Market Insights, Steven Dooley.
“This divided political landscape creates a scenario where policy direction is unclear and the potential for a Trump win or a Harris victory brings different implications for market movements and currency volatility. Financial markets are already reacting to shifting probabilities, and investor sentiment remains on edge” commented Convera FX & Macro Strategist, Central Europe, Boris Kovacevic.
Powerful variables such as trade policy, in particular protectionism/tariffs, foreign policy in response to heightened geopolitical tensions and economic policy as inflation comes under control and the Federal Reserve targets a ‘soft landing’ that avoids a recession differ markedly between the GOP and Democrats.
- Outlook 2024/25
East & Partners’ Outlook 2024/25 uncovers how corporates, middle market enterprises and small businesses are responding to changes in the global economy, from new technology to emerging trends for business banking. Download now.
- September Analyst Meeting Summary
Last month East’s analysts unpacked the renewed focus on RFP analytics, forecast USD, private credit and East on Demand Platform applications.