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Leader: Clients Demand Innovation in Difficult Times

While market conditions are certainly improving, times are still tough for many corporates and their banking partners. Providers need to continue innovating to ensure that clients have the best tools available for navigating the downturn, says Marilyn Spearing, Global Head of Trade Finance and Cash Management Corporates at Deutsche Bank.

As always, the third quarter of the year will see a number of important conferences taking place around the world – Sibos in Hong Kong starting on September 14, the AFP Annual Conference in San Francisco in early October and EuroFinance in Copenhagen from October 21-23 being among the most prominent. We are hoping for a quieter season this year – last year’s conference season coincided with some of the most tumultuous market conditions in living memory (including the Lehman Brothers collapse, which came on the eve of Sibos 2008).

Indeed, while it has been a difficult year, the situation is now looking brighter. Markets have stabilised considerably and the financial landscape is beginning to settle down once again, though the effects of the crisis and subsequent downturn are still being felt. Indeed, while transaction banking has been a relatively stable area throughout the crisis, the low interest rate environment in many countries, and a drop in trade volumes in some markets, has certainly had an impact.

Despite the relatively favourable fortunes of transaction banking, many average-sized players will be facing a range of difficulties at this time. Pressure to reduce costs may have led to investment budgets being curtailed and this is likely to have been accompanied by a downward adjustment in credit and risk appetites. And all these factors will be multiplied for those banks that have taken government support in the form of taxpayers’ money.