The end of the summer in the Northern Hemisphere coincides this year with heightened expectations related to two major upcoming events. Both have been announced, but their outcome and potential consequences are uncertain: the November elections in the US and the Federal Reserve’s cut in interest rates.

The Fed and chairman Jerome Powell have recently been pretty clear: the cut—or cuts—are coming. The remaining questions are, how much and when?

The winner of the US presidential contest is hard to predict, but both major parties have generated plenty of surprises in the last few months concerning the candidates and their agendas. In a year when many major democracies are running elections and several key central banks have already lowered their interest rates, what happens in the US has consequences worldwide. Recent turbulence in the global financial markets signals precisely the magnitude of what is at stake and its potential repercussions.

In this issue, together with the announcement of this year’s Best Digital Banks and the annual Best Innovation Labs selections, we are focusing on another vital issue. Our cover story on the US-China confrontation over artificial intelligence examines the critical and very current duel between the two superpowers, detailing the specific areas of confrontation and the different approaches the two nations are taking.

Our focus is also on the potential consequences of this AI competition; we offer potential scenarios for both the near-term and long-term future. Predicting a winner is of course more difficult, but clearly the issue will become more and more relevant worldwide. Overall, we offer a rare insight into what is often—and wrongly—considered primarily a commercial war between tech giants in the US. This duel has a global nature beyond ChatGPT and its competitors.

Andrea Fiano | Editor at Large
afiano@gfmag.com

This summer issue of the magazine coincides in many parts of the world with very high temperatures and the consequences of a long season of political elections that has touched India, many countries in Europe and the European Parliament, and in November will reach the United States. The political tension continues to rise in the US, especially since President Joe Biden’s withdrawal from the presidential race and his endorsement of Vice President Kamala Harris. All this, in turn, affects decision-making at every level. Major decisions in companies and financial institutions are on hold, awaiting election results. Needless to say, corporate life goes on.

This month’s cover story focuses on the future of banks, with an eye, as is our style, to the global picture, not just the regional one. Commercial banks’ traditional role faces challenges resulting from strict regulation and changing technologies, but this also represents an opportunity. The increasing role of nonbanks, digital-only banks, and different nonbanking intermediaries has forced many banks to change their priorities. And yet, this offers some of them, particularly in advanced economies, an opportunity to shine in different market segments.

In this issue, we also present two of our key awards: Treasury and Cash Management and Sub-Custody. There are some repeat winners and, as often is the case, some new names. There are winners for some categories reflecting recent trends and developments in a sector that deals with major developments in payments, supply chain diversification, inflation, and geopolitical risks.  

In addition, the sub-custody awards allowed us to look deeper into the changing role of corporates in dealing with their sub-custodians. The result of Anthony Noto’s research on the subject is quite surprising and interesting.

Andrea Fiano | Editor at Large
afiano@gfmag.com

Is there a link between freelancing or outsourcing and the world of innovation? This question came to mind after reviewing the two key topics in this month’s issue. And the answer is definitively “Yes.”

Freelancing and talent outsourcing—the topic of this month’s cover story—are growing, becoming increasingly global, affecting different sectors, occupations, and ranks. The growth of freelancing is happening in advanced and developing economies, small and large countries, and new and traditional jobs, and has attracted increasing attention from regulators. This trend, which is not new but has expanded enormously in the last few years, has been made possible by multiple innovations. It applies to traditional and nontraditional companies, even virtual ones, so much so that many of us will be surprised by some of the details and statistics offered in the story by Bill Hinchberger.

Our annual Innovation Awards, which we present in this issue, offer a preview of financial services’ present and future. We celebrate banks and fintech companies for their specific innovations, but also their comprehensive effort on innovation, and we also recognize the best in these areas region by region. Artificial intelligence (AI) is now and, for the time being, the dominating theme for all involved. However, the offerings presented here are all focused on solving specific problems, not potential ones. As a result, our awards selection presents some applications for AI in the supply chain, logistics, data science, machine learning, marketing and talent outsourcing. And solve specific issues related to cash flow, liquidity management, and supply chain efficiency.

Again, as in the case of freelancing, innovation is global in scope, but the winning solutions come from very different regions of the world and financial institutions or fintech companies of all sizes. It is worth repeating: innovation is key to growth.

Andrea Fiano | Editor at Large
afiano@gfmag.com

Foreign Direct Investments (FDI), the topic of this month’s cover story, is often an unreliable economic indicator. Data about FDI is reported usually with delay, and it is hard, if not impossible, to understand which specific sectors are receiving the investments in a given country. Add to that the distortions of investments moving from one country to the other, while the funds originally come from a third country that has initially invested— or “parked” the money— in the first country.

Having said all that, one wonders why these data are still interesting and offer many indications of economic trends worldwide. In the cover story written by Deborah Ritchie, for example, we see how nearshoring and friendshoring have caused some sizeble direct investments moves within Asia, from China to the Americas, and to Mexico. We can also see why there are some signs of recovery in certain countries and regions based on the recent global trend of decreased FDI. Or, in other words, we are offered some indications of economic trends that have just started to show concrete signs of relevance. FDI data often also reflects the effect of global geopolitical tensions better than many others and can become an early indicator of major economic transformations.

In this issue, we also recognize the Best Banks in the world with our annual awards. As usual, we celebrate big and small banks that outperformed their competitors in all countries and regions, no matter the economic conditions. This year, the global banking sector managed to overcome major contagion risks due to the failure of banks in Europe and the US, presenting record profits in many regions.  As a result, banks’ resilience and some significant M&A activity became one of the year’s key trends in the banking sector.

Andrea Fiano | Editor at Large
afiano@gfmag.com

One of the advantages of  being a journalist is the unique opportunity of spotting trends, even potential ones, before they become mainstream. In this issue, we bring to light two clear examples of often unnoticed trends. One pertains to the investment banking sector, and the other to the future of environmental, social and governance (ESG) regulations and new financial instruments.

A simple look at the situation around the world would miss significant details in each case. For investment banking, the analysis we did to assign our annual awards in the sector, according to different geographies and financial instruments, shows that while the market overall has a tough 2023, there are segments and countries where growth was significant. And there are—no surprise—outperformers among the banks. Add to that the emergence of some new players on the advisory side, and the strengthening of some existing players, and you understand that summarizing 2023 as simply “a poor year for equity issuance and M&A” is entirely inaccurate and incomplete.

In the case of ESG, the surprise presented in our cover story is different. We looked at Asia to understand whether the trends around ESG follow the political backlash registered in the US with a drop in issuance of specific sustainability financial products or follow the European lead,  where ESG criteria still top the agenda for many corporates. In Europe, specific sustainability product issuances are at record levels and keeps growing. And in Asia? Issuance is at record levels and grows probably more than in the rest of the world, and regulation is also growing fast in most Asian markets. Environmental, social, and governance issues are still at the center of corporate life worldwide, and there is no sign of political backlash outside the US.

Andrea Fiano | Editor at Large
afiano@gfmag.com

One of the not-so-secret dreams of journalists is to report trends before they become public knowledge. Our cover story on Silver Power this month may not represent a revelation, but it does offer an unusual look at an often-discussed social issue. The author, Charles Wallace, explores the demographic issue of aging populations around the world not just as a growing source of problems for many countries—as it certainly is—but also as representing new markets, new wealth, and an underutilized talent pool. This inescapable trend is forcing many corporate executives to revise their long-term strategies. Many companies around the world have already redirected production with the aging population in mind.

 After all, the members of the Silver Set hold huge spending power. The population over 60 will nearly double its size between 2015 and 2050, according to the World Health Organization, and some countries are already experiencing the over-80 cohort as the fastest growing population segment.

This issue presents a wealth of stories, starting with a rich supplement focused on Latin America that touches on the varying realities of South America, Central America and The Caribbean, along with a country report on Kuwait and one on Nigeria.

Many of this month’s stories can be seen through the “filter” of demographics: Nigeria has significant growth prospects, as do many Latin American countries, due to the relative young age of many of their citizens. Our report on private banking also touches on generations, the great transfer of wealth from the Baby Boomers to their progeny. What will it mean for the private banking industry? Last, but not least, in this issue we present our annual Sustainability Awards: a topic which tops interegenerational agendas worldwide.

Andrea Fiano | Editor at Large
afiano@gfmag.com

This issue reflects a different approach, and to some extent a different content, than usual. We decided to focus most, but certainly not all, of this issue on  trade finance. Not just for our annual Trade Finance and Supply Chain Finance awards but for much more. Trade finance is the subject of a lengthy interview with seasoned experts Michael Vrontamitis and Daniel Cotti of T3i, and our monthly Global Salon, which had another expert as a guest speaker: André Casterman. He is currently a consultant after having a long experience at Swift, and is involved in many key cross-border projects in this area.

This approach, the deliberate choice to focus even more than usual on a single topic, brought a first result for our editorial team and your editor: We did not simply learn much more about trade finance and the critical issues relating to the sector, but also saw how much this topic touches our other key areas of coverage. Trade finance is influenced by many external factors, and has a global relevance in many different areas. In other words, the present and the future of trade finance are strictly connected, to mention just a few areas, with its innovation and with regulation. At the same time, trade finance evolves and trasforms itself also as a result of geopolitical tensions and developments around the world.

This topic is tightly intertwined with digitalization and the increasing use of artificial intelligence. New technologies and applications could democratize trade finance, expanding the reach of small and medium enterprises (SMEs), which typically have had harder times getting their trades financed. That is why experts often describe the industry’s current state by talking about an upcoming disruption or massive transformation of this sector. We hope you will enjoy the deeper focus of this issue, and find it, as we did, both enriching and thought-provoking!

Andrea Fiano | Editor at Large
afiano@gfmag.com

The New Year starts with renewed geopolitical tensions and wars, as well as near-term uncertainty about monetary policies—despite these factors, not necessarily pessimism. Going over the forecasts from major financial institutions and listening to their presentations, your editor felt a sense moderate optimism. And yet, much has changed in just a year concerning interest rates and growth predictions.

For example, the new reality of high-interest rates is still setting in for many businesses, even if 2024 could sign the beginning of lower growth in some key advanced and developing economies. The cost of debt for companies and sovereign governments is still high, and there is not a clear idea when—or how much—this may change.

This month’s cover story on private lending shows a booming industry attracting more interest from commercial banks. It focuses on the upcoming and growing risks for borrowers due to higher interest rates—and by extension for the lenders that serve them. Two other stories in this issue, with different angles, deal with specific niches within the financial sector: Gilly Wright’s on AI in Finance and our Salon with Sonny Singh, executive VP and general manager at Oracle Financial Services. Each story offers insight into key areas of growth (and risk) for financial services in the years to come, and on the ever-growing role of technologies like AI.

This issue includes also our annual Foreign Exchange Awards, named in honor of our late colleague Gordon Platt, who was our in-house expert on the sector for many years. The shifting winds of globalization make this a a very dynamic sector—trading solutions were key for most of our winners—while technology has evolved into a more precise tool for handling currency fluctuations and given a rocket boost to speed and capacity of executions.

Andrea Fiano | Editor at Large
afiano@gfmag.com

Traditionally year-end comes with major forecasts for the new year by economists and other prognosticators,often upended by events. This year is no exception, and even if we still have two ongoing wars in Ukraine and the Middle East, we can safely say that—from an economic point of view—2023 has outperformed most expectations, with inflation coming down significantly.

And yet there is a major paradox in the data, one that is the focus of our cover story. Despite the dollar’s strength, growth is surging in the US, while China’s juggernaut economy is slowing, and Europe is in a temporary recession. Ironically, the US and China showed the same GDP growth in the last quarter: 4.9%. For the US, it represents growth over the prior year, while for China it represents a drop from previous quarters.

This month we also present three significant awards programs, dedicated to three of the fastest-growing areas in financial services. The private banking awards honor the most successful private banks in the world. They also recognize this business line as an area of growth for many banks—a growth that often seems recession-proof. As wealth grows on many continents, so do the demands of the expanding clientele, for better service and technology.

The SME awards likewise celebrate a crucial growth line of for financial services, in both advanced and developing economies. Servicing small and medium enterprises, has been turbocharged by technology developments. At times, SMEs can take advantage of solutions built for larger clients, but in other cases smaller enterprises need services and solutions that meet their specific needs, and banks worldwide are making great strides in this area.

Finally, our digital bank awards honor excellence globally, which in no small part means heralding the achievements of big banks. Still, we also recognize the small and agile newcomers who bring exceptional technology advancements. Digital innovations remain critical to strengthening financial services and broadening their reach—for all lines of business.

Andrea Fiano | Editor at Large
afiano@gfmag.com

At the IMF/World Bank gathering in Marrakesh, Morocco last month, finance ministers and central bank governors were grappling with a new war in the Middle East and an economic outlook already clouded by multiple uncertainties, including the war in Ukraine, persistent inflation and growing debt woes among advanced and developing economies. The developments in the Middle East were so dramatic and recent that they negated many of the economic forecasts, which, as one western central banker confessed in a briefing, had been “elaborated well before.”

Despite the somewhat somber mood, this magazine did celebrate the world’s best central bank governors and the safest banks in a beautiful ceremony. The central bankers honored as tops in the class this year represent very different economies and operate with different mandates. Yet many were recognized for the courage and the timing of their monetary policy decisions—despite many uncertainties.

Andrea Fiano | Editor at Large
afiano@gfmag.com