8/9/2019 The Demise of Bank Payments Greatly Exaggerated InternationalTreasurer1995 Feb 20 - Payments

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Cross Border Payments

Conference brief ing

End of aBanking Tradition?By Nigel Robe rtsonG loba l Cas h Mana ge ment Ltd.

Banks may no longer be able to profitably continue their traditional role inthe transmission of money. This willhave a tremendous effect on the world'sbanking systems.

Signs of significa nt c hanges in the bankin g land scape a re beginn in g to appea r,few o which a e in the banks' favor.One of the mor e s ignifi ca nt c han ges

conce rn s the cos ts of a tradition a l banking se rvice where banks still have a v irtu a l monopoly : cas h h and li n g a ndmone y tran smi ss ion , includin g the exec ution of domesti c a nd in t ernat io n a lpa yments and operat ing the check c learin g system. Declining profitabi li ty ineac h of these a reas a re digg ing hard intoshare hold er va lue.

Cor-porate treas ur e rs shou lei be awa reof this issue, as it imp acts th e cos t/b e nef it of u s ing b a nk s ve rsu s non-b a nkve ndors to tr a nsn1it and pro cess p ayme nts and co llect ions. More imp ortant,however , are t he lon g-run e ffec ts thatw ill be chang in g the ve ry n at ure offutur e bankin g systems.

A ja nu a ry 23 -25 b a nkin g co nfe re ncein London d ev o te d to De v e lopin gCost -Eiiec tive Strategies for Lon g-Ter mProfitab ility of Mo n ey Tr a nsmission ,indicat ed quit e cl ea rJy how significa ntth is issue is and how ur ge nt (and diffic ult) it w i l l be to f ind solutions.Arr a nged by the In stitute fo r

Inte rn a tional R esea rc h, th e confere n ceprese nte cl expert co ntribution s from UJ