Shifts in Cross-border Strategies announced by Standard Chartered Bank
Standard Chartered Sharpening Cross-Border Focus with Strategic Moves
Standard Chartered, a global banking giant, is refining its strategy to increase the cross-border share of income in its Corporate and Investment Banking (CIB) segment from 61% in 2023 to around 70% in the medium term. This focus on cross-border payments is central to the bank's strategy.
To achieve this goal, Standard Chartered is adopting a multi-faceted approach that combines advanced technology, expanded network reach, and leveraging emerging financial infrastructures.
One key strategy is deep integration with Renminbi (RMB) internationalisation initiatives. The bank is one of the first foreign banks to participate directly in China’s Cross-Border Interbank Payment System (CIPS) network, enabling seamless international RMB letter of credit services and facilitating cross-border RMB transactions. This enhances trust, standardisation, and interoperability in trade finance, particularly along emerging trade corridors linked to China.
With a presence in 53 key markets, including over 30 with RMB capability, Standard Chartered leverages its global connectivity to support consistent, speedy, and transparent cross-border payments aligned with China’s expanding trade relationships. This geographic and capabilities reach is critical for managing complex international flows.
The bank is also investing in cutting-edge payment technologies and digital assets. It has pioneered blockchain-based trade finance solutions and continues to develop innovative RMB cash management, derivatives, and hedging products. Its involvement with stablecoin infrastructure, such as the Circle Payments Network alongside other major banks, allows it to harness real-time settlement systems, facilitating fiat-to-stablecoin and stablecoin-to-fiat transfers for cross-border payments.
Standard Chartered is offering tailored financing solutions using RMB. For instance, it structured Africa’s first five-year RMB term loan to a Ugandan digital TV provider, enabling cost savings through favourable exchange rates and supporting trade-driven growth in frontier markets. This exemplifies how banks can use currency internationalisation to unlock new business opportunities across regions.
The bank is keeping pace with regulatory and capital market reforms, like Northbound Bond Connect and Qualified Foreign Investor schemes, that enhance global investor access to RMB assets, increasing liquidity and cementing offshore hubs like Hong Kong. Banks that align with these regulatory trends can better facilitate cross-border finance and investment.
In its Wealth & Retail Banking segment, Standard Chartered is seeking to fund its cross-border-focused initiatives by selling small numbers of businesses that are no longer fully aligned with its business goals, particularly those focused on mass retail banking. The bank plans to invest in relationship managers for these regions to serve these clients better.
Standard Chartered is looking to focus on larger global clients in both its CIB and Wealth & Retail Banking segments who rely on its unique cross-border capabilities. These larger global corporate clients require more sophisticated cross-border-related tools, including transaction services, financing, risk management, and expertise on Asia, Africa, and the Middle East.
The bank reported contributions to its CIB segment from Transaction Services, Global Banking, and Global Markets in its Q3 2024 results. The largest unit, Transaction Services, saw a -5% decline, while Global Banking and Global Markets grew 6% and 17% YoY respectively.
By combining a robust network reach, technological innovation (including blockchain and stablecoins), strategically aligned product offerings in RMB, and responsive adaptation to regulatory changes, banks can sharpen their cross-border payments focus as Standard Chartered illustrates. This integrated approach not only supports operational efficiency but also positions banks to capture growth amid the evolving landscape of international trade and currency globalisation.
In line with the bank's strategic moves to amplify cross-border focus, Standard Chartered is not only investing in advanced technology but also expanding its reach to facilitate seamless cross-border RMB transactions and leveraging new financial infrastructures like the Cross-Border Interbank Payment System (CIPS) network. The bank is also developing innovative RMB cash management, derivatives, and hedging products, as well as investing in blockchain-based trade finance solutions and stablecoin infrastructure.
To fund its cross-border-focused initiatives, Standard Chartered is looking to sell small numbers of businesses that are no longer fully aligned with its business goals, particularly those focused on mass retail banking. The bank plans to use the proceeds to invest in relationship managers for these regions to serve these clients better, thereby targeting larger global clients who rely on its unique cross-border capabilities.
