The Changing face of Transaction Banking -The rise of Technology & Digitisation -Regulation and its effect on Corporate clients -The changing face of International Trade

So what’s changing? 1.The role of the Treasurer in many major Corporates has changed since Banks ability to recognise and respond to those needs is slow – but changing 3.The emergence of a group of non bank specialists in certain parts of the value chain 4.An inclination on behalf of Corporates to adopt bank agnostic multi banking services What do we hear “the Treasurer” tell ANZ? 1.A wider remit 2.Ensuring adequate cash and optimizing liquidity 3.Managing risk 4.Implementing and optimising technology 5.Understanding and integrating new regulatory requirements Some context

How are Banks beginning to react? Banks have largely identified the following key themes which affect their ability to plan (positively or negatively) for their future – 1.Globalization 2.Right strategy – inside out or outside in 3.Integration with their customers and within other parts of the Bank 4.Regulation 5.Competition and Innovation 6.Optimisation of cash 7.Altered customers needs and buying behaviours

Why would a Corporate begin to look at electronic Trade solutions Key challenges 1.Significant investment in technology infrastructure 2.Adoption of all parties in the chain 3.Realignment of operations processes and staff education 4.Changes to legal and process documentation Key questions to answer when pushing the pace of change 1.Security concerns 2.Does it really improve the cash conversion cycle for traders 3.Can it really give buyers a competitive edge

The Digitisation of Trade – Bank Payment Obligation An irrevocable undertaking given by one bank to another bank that payment will be made on a specified date after a specified event has taken place. A ‘match’ report is generated by SWIFT’s Trade Services Utility (TSU) or any equivalent transaction matching application. BPOs enable banks to mitigate the risks associated with international trade to the benefit of both buyers and sellers. They enable flexible financing propositions across the supply chain, from pre-shipment to post-shipment. They provide an assurance of payment to the seller similar to that obtained under a confirmed letter of credit.

The impact of compliance regimes

The worst affect group are small and medium sized Corporates

The changing face of International Trade – the defining theme is a move East CHINA AUSTRALIA JAPAN INDIA INDONESIA ASEAN COMMODITIES FOREIGN EXHANGE INTEREST RATES URBANISATION LIQUIDITY EMERGING MIDDLE CLASSES Geographic areas Overriding themes

The conundrum of commodity prices Global economic growth Global commodity prices Global crude oil forecasts The modest recovery in commodity markets is expected to only be a short term reprieve as weaker seasonal demand becomes the next hurdle. Iron Ore supply should increase from both Australia and Brazil in th elast quarter of 2015 Crude oil markets are expecting Iranian sanctions to be lifted triggering a jump in supply.

Why ASEAN?  Demographics  Comparatively lower wages  Production synergies  Scope for productivity improvement  Geography Over the next ten years, ASEAN has the potential to become one of the world’s key manufacturing hubs and an emerging source of consumption for the world.

At the heart of the “Asia opportunity” is the belief that there will be a continued increase in the demand for raw materials driven by the aspirations of the developing world

Thank you for listening – any questions?