Late this summer, the ICC released their annual report on the regional and global trends in trade and trade finance. The report is based on expert opinion and the results of a major survey. It provides insight and analysis into issues such as the trade finance gap, access to finance, export finance and supply chain finance – and how digitisation and new technologies like blockchain and FinTech are reshaping the industry.
The 2017 report saw several central themes emerge and others mature. Trends such as a growing emphasis on sustainability in trade and the trade finance gap came into sharp focus, while the move towards digitalisation again grabbed the attention.
On the back of the report, Nordea spoke to several senior ICC figures to get their take on the report’s findings and how they see the major trends developing in the coming years.
AutoFX is a rule-based solution that automates your FX handling. By putting it into autopilot mode, AutoFX will free you from manually monitoring your currency account balances and FX transactions.
AutoFX is a fully automated FX risk and Liquidity Management solution, developed in collaboration with a high-profile Nordea customer in an effort to help modern treasury functions automate their daily routines and risk management.
Using your own custom configuration, AutoFX automatically tops up your balances when negative, or reduces them when positive. So instead of monitoring your bank accounts daily and moving liquidity around, you can put AutoFX into autopilot mode and let it manage your foreign currency exposure according to your requirements and rules. Transactions can be easily viewed in real time when convenient for you.
Global Finance granted AutoFX an Innovators Award for Product Innovation within Transaction Services, recognising the benefits it brings to treasury departments.
For more information
Please contact your Nordea Cash Management Advisor or FX Sales Manager, or go to nordea.com/autofx
Watch the AutoFX video
What do Robert Mueller, former Director of the FBI, John Chambers, former CEO of Cisco, and Misha Glenny, a British cybersecurity journalist, have in common? They all agree that there are two types of companies today: those who have been hacked, and those who will be again. Though it may sound like an innocent platitude, consider that a company need not even realise that its security has been compromised to fit into one of these categories.
Corporate cybersecurity is more important than ever, with 54% of cybersecurity professionals predicting an increase in cyberattacks over the next 12 months.1 Cybercrime is evolving at an unprecedented pace, and many companies are struggling to develop and maintain effective security standards. The greatest security challenge faced by companies is the detection of advanced, unknown or emerging threats. On average, it currently takes a company 40 days to notice that attackers have infiltrated their networks.
As cybercrime advances, corporates of all sizes must take proactive steps to help prevent, detect, and resolve security breaches. “Cybercrime has become more sophisticated as perpetrators have realised that there is profit to be gained,” says Anton Tkachov Chief Security Architect, Financial Systems Cybersecurity, PwC. “In the 1970s, for example, computer viruses were just a prank; today, ransomware is a very lucrative market. Cybercriminals have realised the potential gain and started to operate as mature businesses with large investment and R&D budgets.”
In light of these developments, companies are showing a renewed interest in cybersecurity, and security professionals understand that corporates must take proactive steps to remain ahead of emerging security threats. “It’s a very asymmetric war,” says Alvaro Garrido, Group CIO and head of Group IT at Nordea. “We need to be right 100% of the time, and they need to be right just one time.”
1. Cybersecurity Trends Report, 2017. http://www.cybersecurity-insiders.com/portfolio/cybersecurity-trends-report/
Scandinavia has long been a hive of disruptive technology and has developed a strong innovative startup culture and a history of early consumer adoption. Much in the manner that Skype impacted the telecom industry or Spotify forced the music industry to reassess its modus operandi, we are seeing a similar level of rapid change in the transactions and payments industry.
Metso were tendering for a new contract with Al Tasnim Cement Products in Oman, who were looking for a competitive financing solution for a complete crushing and screening installation for one of their plants. Learn how export financing helped them seal the deal - and how it could work for you.
Read our case study with Metso and gain peer-to-peer understanding of how to use export financing to your benefit and that of your business partners.
China’s Belt and Road initiative (or One Belt, One Road) has recently received a lot of international attention. In this Q&A, we examine this vast project, why many EU countries have been sceptical and how Nordic countries could benefit.
Unlock trapped value
We interview Erik Zingmark, Co-Head of Transaction Banking at Nordea, on the extraordinary pace of change that traditional banking service providers currently face, driven by both technological innovation and regulations. In Europe, PSD2 (the EU's Payments Services Directive) requires banks to open up their accounts infrastructure in 2018 to third parties wishing to offer financial services. This could be both an existential threat and an opportunity for banks, depending on their capabilities, mind-sets and attitudes.
You are Co-Head of the Transaction Banking business area within Nordea. How would you briefly describe your business area today?
EZ: Transaction Banking in Nordea has quite a broad scope and includes all forms of payments, including cards, as well as certain credit products like leasing, factoring and trade finance. These various units are all facing quite different business challenges.
How is digitalisation affecting payments in the economy, with electronic payment solutions gaining ground? How different is the Nordic region from the rest of the world, and why? Would you expect other countries to follow the Nordic trend going forward?
EZ: The Nordic region has been at the forefront technologically in this area for many years, but in the past five to ten years, markets that have lagged far behind have made big leaps forward, entirely skipping one technological development phase so that the Nordic region is a bit behind. Examples of such markets include Spain and the Baltic countries. If you wanted to make a comparison with the telecom sector, you could say these countries started with obsolete analogue fixed telephony, but skipped an interim technology like ADSL and went straight to modern fibre networks. But I would still argue that the Nordic region remains in the top tier globally regarding financial services sector technology, along with countries like the US, the UK, Singapore, Spain and Benelux.
We interview Thomas Ko, Global Head of Samsung Pay, Head of Service Strategy and Vice President at Mobile Communications business, Samsung Electronics, to discuss the rationale for mobile device makers to get involved in mobile payments and other services. We explore Samsung's ambitions in this field, how it could be impacted by new financial services industry regulations, and why Sweden was chosen as an early launch market for Samsung Pay.
While Samsung is the global no. 1 mobile phone maker by volume, it is clear that your ambitions go beyond just supplying the devices. Your annual report specifically highlights aiming for more customer value through targeted growth areas like payment systems (Samsung Pay, which you head), cloud, intelligence and mobile B2B services. What lies behind these ambitions? Will having the biggest hardware volumes not be enough in the future? Or does Samsung have unique competences or scale in R&D to be able to exploit service opportunities related to the devices?
TK: Samsung is an innovation-driven company, and a very customer-centric company – we strive to create the best products and services for our customers. And our ambition includes the total customer experience, not just relating to our devices, but also to the software, apps and services associated with it. To us, these are natural areas to look at, to add to the total customer benefit from our products. We want to combine core systems and apps with our unique product experience, to create differentiated and valued user experiences.
Samsung Pay was launched in 2015, and was developed from the intellectual property of a start-up company you acquired earlier the same year. What are the key features of Samsung Pay – in terms of simplicity, security and merchant coverage – that make it attractive to users, also compared with competing mobile payment services?
TK: Samsung Pay is anchored in the three core principles of simplicity, security and merchant coverage.
To us, any kind of application or service must strive for simplicity. We want the process of grabbing your wallet, taking your card out, and paying to be almost mimicked in your phone, but in a fun and easy way.
As for security, you could say that card payments have not really been that secure. You can use various reactive measures to protect yourself when being skimmed or defrauded, but you cannot really prevent it from happening. We aim to make mobile payments completely secure, through tokenisation, biometric authentication such as iris or fingerprint scanning, etc. And security enablement is through software, so merchants do not need to have any additional hardware for security checking purposes.
Merchant coverage is a critical factor, and we have found that acceptance of a digital payment solution is greatly helped by merchants being able to receive payments in existing, card-based, infrastructure. Our hardware being able to connect with their terminals instead of having to replace them, is a big selling point. We originally invested in LoopPay to develop a strong mobile payment solution, and then acquired it and brought it into what is today Samsung Pay. We have put a huge development effort into making our solution connect wirelessly with card reading terminals. And we are keen to expand our capabilities from pure payment to online, membership, transit, rewards and many other things.
With challenging growth conditions in the Nordics and Europe in general, the number of Nordic corporates exploring the potential for growth in Asia and opportunities arising from the increased intra-Asia flows is increasing.
However, as with any region, Asia has its own unique set of intricacies, local regulation and risks. To explore these in depth, we asked Christopher Emslie, Country Treasurer in Singapore for ABB, Jonas Falk, Managing Director of SKF Treasury Centre Asia & Pacific and Corrado Lillelund Forcellati, General Manager in Nordea’s Asia operations, how they view the current environment in Asia from a corporate perspective.
Circumstances are arguably better than ever for Nordic corporates looking at entering the Asian market. Several factors are driving these new opportunities, notably the internationalisation of the renminbi, improved consumer purchase power with extra focus on sustainability and quality, the Chinese-driven One Belt, One Road initiative and a thriving fintech environment. “We’re experiencing that all the above factors are currently resulting in a number of strategic initiatives from Nordic corporates. These are being triggered by a clear ambition to channel even further resources to Asia in order to exploit the growth potential in the region,” explains Forcellati.
“From the start, any company thinking of entering the Asian market has to be aware that complexity and ambiguity need to be assessed differently in Asia compared to the Nordic countries. This should be reflected in a companies’ risk framework to assess and manage the sustainability of businesses carried out by Nordic companies. This could mean assessing the US impact on Asia trades and local currencies, which can have local regulatory consequences, such as China cross-border rules, Indonesia local currency requirements and Malaysia’s restrictive offshore funding constraints,” he continued.