JP Morgan and Citibank earn top rating for competitive pricing and strong ties with banks

JP Morgan and Citibank emerged as the most frequently-used international banks in the TABInsights Asia Pacific Financial Institution Satisfaction Survey 2023 based on overall transaction banking relationship, the degree of satisfaction with services and their choice of FI partner

  • JP Morgan and Citibank received the highest scores for competitive pricing, responsiveness, and quality of services from respondents in the TABInsights Asia Pacific Financial Institution Satisfaction Survey 2023.

  • Citibank outperformed JP Morgan as the most preferred global transaction bank, while JP Morgan received the highest satisfaction marks for the sixth consecutive year.

  • Citibank announced its exit from consumer banking in several markets to focus on corporate and institutional customers

JP Morgan and Citibank received the highest scores for competitive pricing, responsiveness, and quality of services from 100% of respondents from financial institutions (FI) in the TABInsights Asia Pacific Financial Institution Satisfaction Survey 2023.

The survey ranks the most frequently-used international banks for transactional services in the region.

The most frequently-used parameter assesses international transaction banks’ interaction or partnership with regional and domestic banks. JP Morgan saw a 9% improvement in ratings compared to the previous year’s survey, while Citibank’s rating surged to 27%.

About 89% of respondents voted Standard Chartered Bank on the same assessment, up from 73% in the last survey. The most frequently-used parameter ranking data is published in full as apart of The Asian Banker’s annual trends report.

Even as JP Morgan and Citibank shared the top position in the most frequently-used parameter, Citibank outperformed JP Morgan in the category of the most preferred global transaction bank. In this parameter, domestic banks were asked which international transaction banks have the strongest overall relationship with them in terms of transaction volume and services pertaining to cash management, currency and payments, trade finance and credit.

As part of its strategy, Citibank has announced its intentions to exit consumer banking business in 14 markets across Asia, Europe, Middle East and Mexico to focus on serving corporate and institutional customers. It recorded a growth of 30% across intra-Asia trade corridors that support local corporates, multinational companies (MNC) and institutional customers in the region.

A shift in consumer behaviour, along with the proliferation of instant payments and new business models have moved treasury to make working capital decisions in real-time.

Citibank launched 7-Day Sweeps—an automated cash concentration that helps customers optimise interest income and reduce interest costs across accounts. The industry-first solution provides round-the-clock USD clearing capabilities and enables instant payments in 33 markets. The Sweep can also be executed during weekends and holidays.

Citibank also introduced an integrated payment and collection solution, Spring by Citi, that offers a wide range of online payment methods and accelerates sales conversion for its internet-economy customers such as Singtel, LINE and ShopeePay.

In terms of the satisfaction scale parameter, however, respondent banks gave JP Morgan the highest marks for the sixth consecutive year, scoring three out of three. Citibank, on the other hand, ranked first as the most preferred international FI with a score of 35, but achieved a satisfaction scale score of 2.75 out of 3.00, placing it fifth in the parameter.

JP Morgan’s dominance is further exemplified by the fact it is the largest USD clearing bank by volume, with over $2.8 trillion in wires moved around globally, processing $9.8 trillion in payments. Responding to increasing demand, JP Morgan extended its USD clearing to six days in the third quarter of 2022.

Along with Temasek Holdings and DBS Bank, JP Morgan co-founded Partior, an interbank network supporting multi-currency payments starting with USD and SGD, with six more currencies onboarding by 2023. Partior is engaged with 60 banks across 15 jurisdictions with Standard Chartered joining as an investor in November 2022. Deutsche Bank and Sumitomo Mitsui Banking Corporation became its latest members.

To address payment returns and fraud risk resulting from incorrect account information, JP Morgan launched Confirm as a part of Liink, its peer-to-peer blockchain network for sharing payments-related information. Confirm enables FI to pre-validate account information before funds are transferred. Customers use Confirm to validate a first-time beneficiary, or a new supplier or vendor receiving a high-value payment.

Deutsche Bank retained its second-place ranking, achieving a satisfaction scale score of 2.88 out of 3.00. BNY Mellon came in third, slightly behind Deutsche Bank with a score of 2.80. However, when compared to the 2022 survey, BNY Mellon jumped by five ranks.

Deutsche Bank is undisputedly the world’s largest EUR clearing bank based on combined volumes processed via Target 2 and EBA/EURO1. With over 1,200 correspondent banking relationships, the bank has a book transfer ratio of greater than 50% across both USD and EUR clearing services, and as an intermediary bank, processes approximately 50% of cross-border transactions in under five minutes.

After a successful pilot, it is the first institution to go live with a Swift Beneficiary Account Validation service, ensuring real-time pre-validation of payment information to minimise delays and costs. Deutsche Bank also went live with Swift Go, a low-value cross-border payment initiative as an intermediary bank for EUR clearing.

The survey also assessed a ‘strength’ parameter highlighting the importance of a feature provided by an international transaction bank to domestic and regional FI customers.

As their own customers in corporate, small and medium-sized enterprises and MNC expand overseas due to shifts in supply chains, domestic banks noted the importance of strong global network support backed by swift responses from relationship managers as key features. In the assessment, they emerged as primary features that banks consider when partnering with global-transaction banks. Competitive pricing moved up by three ranks as customers become more cost-conscious in a fintech-induced competitive environment.

The survey is conducted each year between February and May as part of The Asian Banker Transaction Finance benchmarking programme. The detailed analysis is published in the TABInsights Annual transaction finance trends report. The findings published as a part this article is a precursor of an in-depth analysis covering cash and liquidity management, trade and supply chain finance and currency clearing capabilities of global transaction banks. 

by : on 2023-06-30 09:48:00

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