Cross-border centres of Standard Chartered Bank focus on Corporate and Investment Banking activities
In a significant leap forward, Standard Chartered, the multinational banking and financial services company, reported an impressive 15% growth in global banking in 2024, driven primarily by improved pipeline execution. This growth was reflected in the bank's overall revenue, which increased by 14% on a constant currency basis to reach $19.7bn.
A key contributor to this growth was the bank's Corporate and Investment Banking (CIB) division, which saw a 5% year-on-year (YoY) revenue increase to $11.8bn. The division's success was underpinned by a 5% YoY growth in cross-border revenue, accounting for 61% of CIB's total revenue in 2024.
The cross-border revenue, also known as network income, was particularly robust. Inbound revenue into the Association of Southeast Asian Nations (ASEAN) countries accounted for around 20% of CIB's cross-border revenue, while one-third was from intra-Asia flows. Globally, cross-border revenue accounted for 23% of Standard Chartered's total cross-border revenue, with Global Banking contributing 13%.
The bank's Transaction Services division, which accounts for 64% of Standard Chartered's total cross-border revenue, remained flat YoY on a constant currency basis in 2024. Interestingly, nearly three quarters of Transaction Services revenue is cross-border, demonstrating the bank's focus on global transactions.
Standard Chartered aims to further increase the cross-border revenue share of its CIB division to 70% by 2027, which would require cross-border revenue to grow at around 10% a year for the next few years.
To remain competitive in the cross-border payment landscape, banks like Standard Chartered are employing several strategies. These include leveraging the Swift ISO 20022 migration for digital transformation, implementing digital wallet solutions for faster, more transparent payments, emphasizing transparency and real-time tracking, using AI for personalization and optimization, localizing payment processes, and improving currency conversion efficiency.
The bank's focus on cross-border payments is evident in its 2024 results, with the majority of its cross-border income coming from its CIB division. The increased FX volumes, for instance, helped boost Global Markets' flow income in 2024.
In conclusion, Standard Chartered's strategic focus on cross-border payments and its successful execution of these strategies have contributed significantly to its growth in 2024, particularly in its Global Banking and CIB divisions. The bank's continued commitment to these strategies positions it well for future growth in the cross-border payment landscape.
[1] Swift, "ISO 20022 migration: what it means for banks and their customers," Swift, 2021, https://www.swift.com/about-swift/news/is0-20022-migration-what-it-means-banks-and-their-customers [2] The Economist, "The race to digitise cross-border payments," The Economist, 2020, https://www.economist.com/finance-and-economics/2020/09/26/the-race-to-digitise-cross-border-payments [3] PYMNTS, "The Rise of Local Payment Methods: A Global Perspective," PYMNTS, 2021, https://www.pymnts.com/news/payments/2021/the-rise-of-local-payment-methods-a-global-perspective/ [4] Finextra, "Finextra Research: AI in Banking 2021," Finextra, 2021, https://www.finextra.com/research/reports/ai-in-banking-2021
- The bank's growth in 2024, particularly in its Global Banking and Corporate and Investment Banking (CIB) divisions, was significantly boosted by its strategic focus on cross-border payments, including leveraging technology such as the Swift ISO 20022 migration and implementing digital wallet solutions.
- To maintain its competitive edge in the cross-border payment landscape, Standard Chartered is also emphasizing strategies like localizing payment processes, improving currency conversion efficiency, and using AI for personalization and optimization, as illustrated by its aim to increase the cross-border revenue share of its CIB division to 70% by 2027.
