Three quarters of global financial institutions will seek new transactional banking relationships in the next year, with over a quarter potentially seeking to change or add to their existing banking partners, a survey by Barclays Commercial has found.
The poll of top global financial institutions was derived from 160 respondents in a set of symposiums held in London, Frankfurt, Dubai and Singapore. The results demonstrate that a large number of financial institutions are keen to forge new relationships after a period of extreme adversity in late 2008 and early 2009.
The responses also suggest an increasing willingness among banks to move parts of their cash management business to new partners for the diversification of counterparty risk.
The survey’s results further revealed that service and processing standards were the most important consideration for financial institutions when choosing their commercial banking partners, accounting for 43% of votes cast. The general performance of the banking partner was the next-most important consideration at 33%.
Respondents seem to be generally confident that the coming year’s money markets will prove less volatile than the last 12 months. In all, 67% of the participants felt that global foreign exchange rates would be more stable in the coming year. Only 10% felt that volatility would rise.
“These results suggest there is a huge opportunity for those banks that are proactive in their drive to bring in new bank-to-bank business,” said Colin Nutt, head of financial institutions at Barclays Commercial.
But while market conditions may ease slightly in the coming months, the cost of liquidity could well be a factor for banks. Nearly half of the respondents – 49% – believed that charging for intra-day liquidity will become a market practice in the next five years.