E&P global analyst meeting insights
(3 June 2019 - Global) East & Partners Q2 2019 analyst meeting summary, encompassing insights discussed during our fortnightly sessions from the group's global business banking analysts based in Sydney, Singapore and London offices.
With FX markets set to feel the full force of unpredictable macro events in H2 2019 including Brexit, new government elections and trade war fallout, gaining a deeper understanding of corporates plans of how they are protecting multicurrency FX exposures against adverse movements is highly valuable. Of particular interest are six-month currency forecasts aggregating predictions that vary considerably by business size, location, sector vertical and trade profile.
"The behavioural trends we see as part of East's extensive global FX currency forecast analysis is fascinating, especially in terms of the strong level of confidence expressed by corporates forecasts despite their frequent departure from prevailing market predictions, raising questions on how CFOs risk management processes are influenced and evolving in line with new digital FX risk management innovation and cash visibility functionality. Australian corporates largely bearish view on the Aussie Dollar has played out through H1 2019 while Asian, Euro and Pound Sterling forecasts for H2 2019 diverge considerably from first half views" quoted Martin Smith, East & Partners Australia Head of Markets Analysis.
Measures of customer quality are in high demand as banks seek to streamline operations and reduce costs, as outlined in East & Partners latest Research Note
“Competition among banks and financial providers no longer stands as a battle for market share only. What’s now become fundamentally important is the value that providers are extracting from their customers. Through East’s Average Customer Value Indicator light has dawned into a new understanding that higher market share doesn’t directly mean more money. Particularly in the UK, some banking providers with traditionally high market share haven’t been able to extract as much as value from their customers compared to their competitors stated East & Partners Europe Markets Analyst, Pierre Sokoya.
Discussing the importance of mind share (first name brand recall) as a key driver of relationship share with close linkages to customer's preparedness to advocate their bank, it was found that not all countries are equal when it comes to promoting positive and negative customer experiences.
“Customer advocacy is generally not strong in Asia, whether it is within the trade finance market or the wider transaction banking sector. In fact, we see many satisfied corporate clients are not recommending their incumbent providers across their business networks. This is clearly a missed opportunity for the banks to reinforce their existing relationships and support customer acquisition, considering that more than half of the large corporates in the region rely on word of mouth and colleague referrals as their main source of advice. Some trade financiers and transaction banking providers, however, have recognised this opportunity, monitoring their advocacy metrics and managing the corresponding drivers commented East & Partners Asia Business Head, Sangiita Yoong.