Shifting Strategy on Trans-border Activities by Standard Chartered Bank
Standard Chartered Shifts Focus to Cross-Border Payments and Trade
Standard Chartered, the international banking group, has announced plans to further its cross-border focus in its Wealth & Retail Banking segment, following the success of its Corporate & Investment Banking (CIB) segment. The bank has published its Q3 2024 results, which show a 3% year-on-year growth in CIB operating income, reaching $2.9bn.
To achieve this expansion, the bank is considering selling a small number of businesses that are no longer fully aligned with its business goals, particularly those focused on mass retail banking. This move will allow Standard Chartered to focus on larger global corporate clients who require more sophisticated cross-border-related tools.
One of the key strategies Standard Chartered is employing to refine its cross-border payments focus is leveraging stablecoin technology and blockchain-based solutions. The bank is part of initiatives like the Circle Payments Network, collaborating with major banks to establish real-time settlement infrastructure using stablecoins. This enables faster, more transparent, and cost-efficient cross-border payments that can integrate with local payment systems like Brazil’s PIX and Mexico’s SPEI.
Standard Chartered is also engaging in Renminbi (RMB) internationalisation and specialized trade finance services. The bank offers streamlined international RMB trade documentation and payment services through platforms such as the Cross-Border Interbank Payment System (CIPS). This enhances trust, interoperability, and speed for clients engaged in China-related trade.
The bank's global footprint, spanning over 50 markets with extensive RMB capabilities, strengthens the consistency, speed, and transparency of cross-border transactions, particularly in emerging and frontier markets. Standard Chartered is investing in innovation and regulatory collaboration to ensure it stays at the forefront of technological advancements while navigating evolving regulatory frameworks.
In order to better serve its cross-border clients, Standard Chartered plans to exit approximately 3,000 clients from its CIB segment, who do not align with its cross-border-focused goals. The bank will focus on investing in relationship managers for regions with a focus on Asia, Africa, and the Middle East. The largest unit, Transaction Services, saw a -5% decline, while Global Banking and Global Markets grew 6% and 17% year-on-year respectively.
The bank characterizes itself as cross-border focused at a high level, aiming to increase the cross-border share of income in CIB from 61% in 2023 to around 70% in the medium term. By adopting stablecoin-based real-time settlement networks, integrating with emerging currency internationalisation platforms like RMB networks, leveraging broad global footprints for market connectivity, and investing in technology and partnerships for innovation and regulatory compliance, Standard Chartered is setting an example for banks looking to refine their cross-border payments focus.
[1] Circle Payments Network: https://www.circle.com/en/products/circle-payments [2] Cross-Border Interbank Payment System (CIPS): https://www.cips.org.cn/en/ [3] First five-year renminbi term loan in Africa: https://www.standardchartered.com/about-us/news-and-media/press-releases/standard-chartered-closes-first-ever-5-year-renminbi-term-loan-in-africa-for-kenya-s-national-treasury [4] Blockchain trade finance solutions: https://www.standardchartered.com/trade-finance/blockchain-trade-finance
Financial restructuring is imminent at Standard Chartered, as the bank plans to sell some businesses that don't align with its cross-border focus, shifting its attention towards larger global corporate clients requiring sophisticated cross-border tools. In the realm of business operations, Standard Chartered is fostering innovation through initiatives like the Circle Payments Network and the Cross-Border Interbank Payment System (CIPS), aiming to offer faster, more transparent, and cost-efficient cross-border payments.
