Shifting Cross-border Strategies Adopted by Standard Chartered

Shifting Cross-border Strategies Adopted by Standard Chartered

Standard Chartered Sharpens Cross-Border Payments Focus

Standard Chartered Bank, a leading player in cross-border payments, is making strategic moves to refine its focus on global clients who rely on its unique cross-border capabilities. This shift is visible in both its Corporate & Investment Banking (CIB) and Wealth & Retail Banking segments.

To achieve this, the bank plans to exit approximately 3,000 clients from its CIB segment who do not align with its cross-border-focused goals. Simultaneously, it aims to invest in relationship managers for regions like Asia, Africa, and the Middle East to support more sophisticated cross-border-related tools.

In the Wealth & Retail Banking segment, the bank's strategy also aims to refine its cross-border payments focus. To fund these changes, Standard Chartered is looking to sell a small number of businesses that are no longer aligned with its business goals, particularly those focused on mass retail banking.

The bank places cross-border payments at the center of its strategy. It is one of the most cross-border payments-focused banks, and this focus is reflected in its Q3 2024 results. The overall CIB operating income for Q3 grew by 3% Year-over-Year (YoY) to reach $2.9bn. The bank reported contributions from Transaction Services, Global Banking, and Global Markets in its CIB segment. The largest unit, Transaction Services, saw a -5% decline, while Global Banking and Global Markets grew 6% and 17% Year-over-Year (YoY) respectively.

To stay ahead in the evolving global payments landscape, Standard Chartered is adopting a hybrid approach that combines stablecoin-driven real-time rails, institutional crypto trading platforms, and collaborative fintech partnerships. This multi-faceted strategy positions the bank at the forefront of the industry.

Key elements of this strategy include stablecoin integration and partnerships, investment in Zodia Markets, bridging crypto and traditional banking, focus on real-time value transfer and conversion, internal education and regulatory engagement, and emphasis on transparency and efficiency.

For instance, Standard Chartered is a founding participant in the Circle Payments Network, which facilitates real-time settlement infrastructure for stablecoin-to-fiat transfers across high-volume corridors like Brazil’s PIX and Mexico’s SPEI systems. The bank also has a majority stake in Zodia Markets, a platform exploring stablecoin applications specifically for cross-border foreign exchange payments.

The bank's collaboration with crypto platforms such as OKX Dubai merges institutional banking capabilities with cryptocurrency liquidity, enabling clients to transact securely, pledge digital assets as collateral, and access diverse asset classes with institutional-grade custody and regulation oversight.

Standard Chartered emphasizes the importance of not only transferring value quickly but also offering seamless conversion from digital assets to usable fiat currency to support treasury activities and employee or supplier payments in various jurisdictions. The bank also engages in extensive internal education on stablecoins and has set up stakeholder groups to address storage, management, and compliance with evolving regulatory frameworks.

In summary, Standard Chartered's strategies for refining its cross-border payments focus involve leveraging stablecoins and digital asset infrastructure to increase speed, transparency, and efficiency in international transactions. The bank actively collaborates with fintech partners and invests in crypto-related ventures to build innovative payment ecosystems that integrate traditional banking with emerging blockchain technologies.

[1] Circle Payments Network: https://www.circle.com/en/products/circle-payments-network [2] Zodia Markets: https://zodiamarkets.com/ [3] OKX Dubai: https://www.okx.com/en-us/exchange/spot/BTC_USDT [4] Standard Chartered's press release on its Q3 2024 results: https://www.standardchartered.com/about/media/press-releases/2024/q3-2024-results

1. In its ongoing endeavor to enhance cross-border payments, Standard Chartered Bank is investing in relationship managers for regions like Asia, Africa, and the Middle East to support more sophisticated cross-border-related tools, strengthening its position in the finance industry.
2. To compete in the evolving global payments landscape, Standard Chartered Bank is adopting a hybrid approach that includes stablecoin-driven real-time rails, institutional crypto trading platforms, and collaborative fintech partnerships, showcasing its business strategy's focus on innovation and efficiency in the finance sector.

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