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RBS’s Carole Berndt shows way forward for the cash management & transaction banking business

Giving the lead sponsor opening address at EuroFinance conferences is dangerous. You can send the audiences to sleep by being too serious, but on the other hand you’ll also lose them by being too entertaining, i.e. not to be taken seriously. It’s a delicate balance. RBS are good at it - they’ve had plenty of practice. 

Last year the RBS address was good, with a memorable story of sitting next to Posh Beckham on a flight from Stockholm chatting away while not knowing who she was, and some, less memorable, sweeping comments about trends in the business. This year Carole Berndt, the Head of Global Transaction Services at RBS, went one better as she managed to keep the levity, while making some important and memorable comments on the tensions in the cash management and transaction banking business, and the future. What she said has implications for other cash management banks and for their corporate clients.

What does disruptive technology mean?

Berndt described how, “the definition of disruptive encompasses everything from a mild disturbance, to complete derailment and disarray.”

She continued, “For each of you, and your companies, this means different things, but for banks we see this challenge coming from new competitors, new technology, increasingly broad and complex regulations and the uncertainty of an increasingly volatile world, the geo political risk.

And, “While technology lowers the barriers to entry for alternative payment and currency providers, the need to implement increasing regulatory and operational risk controls requires massive investment in systems, that is unlikely to realise a return in the foreseeable future.” …. “Hence our focus this week, on ensuring that we get on the right side of disruptive innovations. To adapt, survive and thrive.”

The future

She then went on to say that the industry as a whole is  only at ‘base camp’ and is planning for a big push up the mountain. She expects / predicts:

  • new entrants, along with external factors such as volume of regulation and geopolitical risk, will have a fundamental impact on the shape of bank-corporate relationships in the future. It's the economic reality of the theory of evolution 
  • “Aspirations of global supremacy and one-stop corporate and investment banking shops are starting to give way to the reality of what is possible given the constraints of returns, regulations and resources.”
  • “banks are centring themselves on geographic and product areas of speciality; doing less, but doing it better. Not spreading themselves too thin.”
  • “Most banks will emerge from this detox fitter and healthier, with fewer clients, but deeper relationships.”
  • “our new reality will see us each centre our expertise and partner more, to ensure the client's need for global banking is still delivered. These won't be the basic partnerships of the past, they will be truly integrated. We don't have to look further than the airline industry to see how this will play.”

Berndt explored the airline analogy to show the important choices that corporates will have to make in the future with these new alliances, and what questions it will raise about their banking strategy:

  • “which airline will you fly with, and with which alliance will you build your loyalty? Is it best to just get the best price, or go for reliability, service, and punctuality? Do you build loyalty with one and enjoy the benefits of Platinum, or do you play another game?”
  • “What will your bank strategy be? Will capital continue to drive relationships, or will capability prevail? Is it about price or performance? How will you balance operational risk, regulatory risk and financial risk?”

Berndt finished with, “Disruption can and does lead to good outcomes.”


CTMfile take: The two key thoughts here, ‘As banks adapt, survive and thrive they will have to do less, while doing it better’ and that ‘bank alliances won't be the basic partnerships of the past,’ are important for all banks and corporates. This change is inevitable as the age of the global utility bank ends. Banks and corporates will have to adjust to the new normal.


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Cash & Liquidity Management
Global Cash & Liquidity Management
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