Following the Money: External Forces Affecting Global Transaction Flows

by Susan Feinberg, June 6, 2016
Industry Trends
Global

Abstract

Celent has released a new report titled Following the Money: External Forces Affecting Global Transaction Flows. This report is the fourth in a series of reports commissioned by HSBC and was written by Susan Feinberg, senior analyst in Celent’s Banking practice. The report examines the external forces affecting cross-border payments and why establishing short- and long-term strategies for managing payment risk are essential.

In order to effectively manage the critical flow of funds and information across borders, each treasury organisation must acquire, through in-house or external advisors, an understanding of cross-border payment systems, banking and tax regulations in the countries involved, business practices and expectations of trading partners, as well as a keen awareness of the risks involved when transacting in particularly unpredictable geographies.

Five primary external forces currently impact the cross-border payments landscape:

  • Economic instability.
  • Geopolitical conditions.
  • Industry initiatives.
  • Technology.
  • Demographic trends.

“In 2016, we have the potential to experience more change in the cross-border payment landscape than in the previous two decades,” says Feinberg. “We believe that corporate treasurers must continuously engage with internal stakeholders who are involved in supply chain management and global market analysis to manage short-term risks, and seek strategic banking partners who can offer guidance on local and regional regulations, payment practices, and existing and emerging payment methods.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Economic Forces Complicating Cross-Border Flows

3

 

Economic Instability

4

 

Geopolitical Conditions

5

 

Industry Initiatives

7

 

Demographic Trends

10

 

Technology

11

Numbers Help Navigate the Changing Cost of Payments

12

 

Currency Usage Trends

12

 

Trends in Global Trade

14

 

Geopolitical and Economic Impact on Effective Exchange Rate Changes

16

 

Demographic Trends

17

Guidance for Navigating Safely Through the Fog

21

 

Bank Solutions for Managing Short-Term Needs

21

 

Future-Proofing Payments: Offering Longer-Term Guidance

21

The Path Forward

23

Conclusion

24

 

Using Seasoned Professionals

24

 

An Unparalleled Network

24

 

Robust Research Methodology and Independence

24

Related Celent Research

25

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