Menu
Edit

Key Themes From The Asian Bankers Summit – April 2015, Hong Kong

Share
Share
Share

Share:

Key Themes From The Asian Bankers Summit – April 2015, Hong Kong

Despite a high level of participation, and over 1,000 attendees, the mood was rather sombre. I enjoyed the frank and realistic discussions and tried to attend as many sessions as my limited schedule permitted. I am a Chartered Financial Analyst (CFA) for the last 14 years, and attend their events occasionally. I noticed a marked difference here – a number of CFOs, strategists and business leaders were present. So the discussion was far more holistic, realistic and strategic, rather than just investments and products oriented. My own presentation on the disconnect between the worlds of finance, strategy and supply chain management was well received and prompted serious audience discussion. But, in this post I want to note the key themes that I heard from others and resonated with me:

1. The Cost Of Financial Transactions Is Falling Dramatically:

Some observers noted a figure of upto 1/10,000 times reduction in financial transaction cost due to technological advancement. Banks are struggling to retain their high margin – somewhat like telecommunications companies tried to do when skype and VOIP came out. Yet, the competition is making inroads from many directions. Many of the new entrants were quite prominently visible at the summit.

2. Bitcoin Is Not A ‘Bit Player’ Any More

About 2 years ago I wrote this blog on Bitcoin titled ‘Will BitCoin ever amount to anything more than a bit?’ In this blog I wrote:

While as a store of value, Bitcoin or its clones may or may not be a suitable replacement for money. Wild gyrations in prices tell us that they are neither good investments, nor good store of value. Unknown complex computer algorithms that create new bitcoins somehow do not create the perception of scarcity that deep underground tunnels for gold mining do.

However, as medium of exchange Bitcoin or its clones may be on to something. In a world where most supermarkets, or even book-stores are not complaining when they earn a margin of 2%-5%, it appears ludicrous that credit card companies can command a transaction fee that is equally high. These high fees, and the processes that accompany them were designed in the days of coaches and buggies when none of the efficiencies of modern communication and transportation were available.

Whatever happens to the lawsuit with $7.25 Billion settlement in eight years of antitrust litigation that accuses Visa and MasterCard of conspiring to inflate retailers’ interchange, or swipe, fees on credit card transactions (Reuters) in the long run sophisticated networked shoppers will become aware of the power of crypto-currencies to facilitate cheaper international transactions.

I know I should have taken a picture of the bitcoin ATM at the summit – to show the progress it is making as a crypto-currency. Of course, this is still just a start, and questions about propriety might still be in the air. Yet, it is alive and well.

3. Banks Are Slowly Losing Credibility And Influence, And Will Have To Find New Ways To Regain These:

A remark made by a highly respected colleague (Paul Bradley) resonated with the audience when he said

The last meaningful innovation to come out of merchant banking to boost international traded was a Letter of Credit. And that happened when ships were made of wood.

Lack of innovation is just one of the reasons. Financial engineering solutions are also more likely to be seen as counter-productive and self-serving by the client boards and CEOs. Questions about market transparency and fairness abound in answers are found less than satisfactory in many minds.

4. CFOs Are Looking For New Ways Of Adding Value To Their Companies:

Gone are the days when financial engineering could be relied upon to boost the ROE. In addition to #3 above, the QE and ZIRP have both contributed to creating an environment where cost of capital is temporarily far below its historic levels. CFOs expressed wariness about how long such an environment would last. Hence CFOs are looking for other parts of the famed “Dupont Analysis” –

ROE = Profit Margin (Profit/Sales) * Total Asset Turnover (Sales/Assets) * Equity Multiplier (Assets/Equity)

Source: www.investopedia.com Operational efficiency (profit margins) and asset effectiveness (asset availability and utilisation) have become far more important for CFOs than they were ever in the past. Supply Chains are becoming increasing popular with CFOs as a result – although there is still a lot of confusion about the meaning and use of this discipline.

Source: www.investopedia.com Operational efficiency (profit margins) and asset effectiveness (asset availability and utilisation) have become far more important for CFOs than they were ever in the past. Supply Chains are becoming increasing popular with CFOs as a result – although there is still a lot of confusion about the meaning and use of this discipline.

5. Supply Chain Management Is Seen As The Panacea – Though Most People Do Not Quite Know How To Use It:

This theme was a bit unexpected, and somewhat amusing. For the first time in my life, I heard the words Supply Chain Management from so many bankers and finance professionals. Everyone was sure that the answer was somewhere in there – yet there was not a lot of clarity about exactly where was the answer. I am sure with over 1,000 people in attendance, there would be an equal number of problem. Hence, the solution would be equally diverse. Yet, the lack of clarity was eye-opening. I am hoping that in future summits more clarity will emerge. On the whole, if you are a finance, strategy, technology or operations professional, or a senior executive – I will wholeheartedly recommend that you attend a future summit. The organisers pulled all stops to make this event a huge success. Kudos to them.

Share Generously :

LinkedIn
Twitter
Facebook
WhatsApp

Copyright - These concepts, frameworks and ideas are copyright of GLOBAL SUPPLY CHAIN GROUP from the time of their creation. Do NOT copy these without permission and proper attribution.

Notes:

1. These ideas and concepts will be usually expressed by our thought leaders in multiple forums - conferences, speeches, books, reports, workshops, webinars, videos and training. You may have heard us say the same thing before.

2. The date shown above the article refers to the day when this article was updated. This blog post or article may have been written anytime prior to that date.

3. All anecdotes are based on true stories to highlight the key points of the article - some details are changed to protect identification of the parties involved.

4. You are encouraged to comment below - your real identity and email will not be revealed when your comment is displayed. Insightful comments will be featured, and will win a copy of one of our books. Please keep the comments relevant, decorous and respectful of everyone. All comments represent opinions of the commentators.

Our Quick Notes On Five Flows Of Supply Chain Management

Part of our new “Quick Notes” series – this report answers your most pertinent questions of the topic.

LIMITED TIME
USD 20
FREE

. What are the five flows of SCM?

. Why are they important TO YOU?

. How can you map, track, and optimise these flows to serve YOU?

. What is the importance of difference between "Supply Chain" and "Value Chain"?

. What are the stellar case studies of each of the five flows?

MORE INTERESTING READING

Leave a Comment

Your email address will not be published.

Table of Contents

ABOUT THE PRINCIPAL AUTHOR

Today, Vivek and his partners are among 20-30 people on the planet earth who have this deep understanding of supply chain systems, practices and tools. CEOs, COOs, executives and Boards call them in most challenging situations once they know the full potential of supply chain based transformations. Following are key milestones in Vivek's journey:

  • Started in 1983 as a merchant navy cadet at 18 years age, worked his way to qualify as a Captain – qualified to take command of any merchant ship, worldwide.
  • Earned a top tier MBA from UNSW at the top of his class.
  • Joined highly regarded strategy consulting firm Booz Allen & Hamilton, consulting to the CEOs, Boards and senior management of global corporations within Australia.
  • To learn and specialise in supply chain – against all odds, sought out the co-inventor of supply chain in Germany and convinced him to be a partner in his firm, GLOBAL SUPPLY CHAIN GROUP, launched in January 2000.
  • More than 500 successful blue chip projects with high impact business transformations in large corporations using the full power of SUPPLY CHAIN MANAGEMENT.
  • 4 Seminal and path breaking business books IN SUPPLY CHAIN MANAGEMENT – these are available in bookstores and universities and libraries worldwide.

Limited Time

FREE

This offer expires in

Our Quick Notes On Five Flows Of Supply Chain Management

US$20

USE CODE "FREETODAY"

WHAT OTHERS ARE SAYING

Our Clients say it better than we ever could:

TRENDING POSTS

OUR CLIENTS

Our Clients come from a variety of industries – yet they have a common element. They rarely rest on their laurels, and are always looking to do better.

OUR PROJECTS - EFFECTIVE TRANSFORMATIONS

In the last 20 years we have completed more than 500 projects. Click below to see a sample of our projects.

OUR TESTIMONIALS

RELATED POSTS

Our Books

5.0
5/5

THE 5-STAR BUSINESS NETWORK

If you are deeply passionate about the world of business and supply chain networks as I am, and enjoy digging answers to critical questions that will help build and steer your business with wisdom, then join me. This book is a journey of exploration through the world of business networks that run along the veins of today’s commercial world.

4.3
4.3/5

OUTPERFORM OUTSOURCE OUTPROFIT

The trend of outsourcing continues to grow unabated with the whole gamut of services, from simple to mission-critical tasks. There is not a single company on earth that does not outsource anything. It is not just about cost arbitrage, it is also a finer expression of division of labour at the organisational level. Like all leverage, outsourcing is a double-edged sword too. On one hand, it allows you to do more, faster. On the other hand, if it goes bad, it can easily kill your business. If you do not believe that is possible – you can google the Fox Meyer saga from the 90s and see for yourself.

4.3
4.3/5

UNCHAIN YOUR CORPORATION

Businesses Are Chained By Unseen Chains. If You Are Looking For Ways To “Unchain Your Corporation” A Successful Business Transformation Is Required.

Successful Business Transformations Are Difficult, Yet Rewarding.

Business Transformation Is Fast Becoming A Question Of Survival In The Modern Globalised Era.

Modern Supply Chains Integrate Businesses And Economies Faster By Systematic Information Sharing From Internal And External Sources.

Companies Can Multiply Profits By Progressively Ramping Up Cohesion And Collaboration Of All Moving Parts In B2B Network To Achieve Tighter Integration.

4.3
4.3/5

GREEN SUPPLY CHAIN – AN ACTION MANIFESTO

It is generally accepted that environmental consciousness is now changing to environmental proactiveness as organizations are discovering that it makes good commercial sense.

Boards are asking the management to review their policies related to environmental norms, not only to bolster their corporate social responsibility aims, but also because consumers are asking for greener supply chains

It is also widely agreed that consumers will increasingly prefer to buy more and even pay more for products or services provided in an environmentally sound manner.

FOR SENIOR EXECUTIVES AND DIRECTORS

YOUR HIGHEST VALUE ADDED IN YOUR COMPANY

Scroll to Top