A Letter From – Hong Kong & Tokyo
By Phillip Straley (FNA President & CRO)
We had an excellent trip to Tokyo and Hong Kong this month, meeting with central banks in both locations, current and prospective bank Treasury (Liquidity Optimization) clients and professional service firm partners. Phillip also had the opportunity to speak at the GFTN Forum Japan, taking part in a great panel discussion on the battle against consumer scams and fraud.
Key takeaways from the week:
Political will is rising across Asia to fight scams and fraud – The consumer scam epidemic is global, with tactics and tools used by scammers getting continuously more sophisticated and fraud motifs constantly evolving. Fortunately, in most countries in Asia Pacific the political will to combat this with joined-up, national approaches is intensifying. New legislation allowing for enhanced data sharing between financial institutions, law enforcement, and other stakeholders is being passed in one country after another. At the same time, an increasing number of jurisdictions are taking steps to put in place shared national technology infrastructures, including both enhanced “pre-settlement” scoring and “post-settlement” case management and real-time track & trace capabilities. In many ways, we see the region leading the globe with such “all society” approaches.
Offshore renminbi business is booming – Offshore trading and settlement in renminbi (CNH) is exploding, for China and APAC-based institutions as well as many of the largest global banks, including several of our clients. This is placing rising demands on banks from a treasury and liquidity management perspective, as well as on infrastructures and agents (HKICL, BOCHK) facilitating CNH payments. Hong Kong remains far and away the dominant venue for CNH clearing and settlement.
Beautiful Shamisen performance at the GFTN Forum Japan
National payments infrastructure upgrades are multiplying – While much of the attention over the past 5 or so years in APAC has been on rolling out instant (“faster”) consumer payments systems, we see increasing focus in the region on modernizing interbank high-value payments (RTGS) systems. Many have been in place now for two or three decades, and we counted from discussions on this trip at least half a dozen regional jurisdictions planning to re-platform these systems. This will allow system operators to move onto more modern technology, but should also bring participants new opportunities in liquidity efficiency, and pave the way for more cross-platform interoperability.
The weather didn’t cooperate with us on this trip, with more or less nonstop rain (and in Tokyo some snow & slush!) the whole week. Of course, being in two of the world’s best cities for eating, this was compensated for by a few good meals – including a great little teppanyaki place in Shibuya and a new and eclectic fusion place in Sai Ying Pun.
