The role of banks in facing geopolitical changes

As a traditional relationship bank, we work closely with our customers. It comes as no surprise therefore that I am intensively dealing with the topics and issues that will be of crucial importance to our customers in the coming years. In my view, there are three megatopics: the green transformation of the economy, digitalization, and the new geopolitical environment. We aim to offer our customers convincing product and consulting services in these areas.

We must not neglect any of these megatrends - especially as they cannot be viewed in complete isolation from one another. If I had to pick one of these megatrends, I would say geopolitics due to current events. In this context, the realignment of global supply chains is a key challenge for companies and banks. The Covid pandemic has already demonstrated their vulnerability. At that time, the main issue was supply chain bottlenecks due to factory closures in Asia. The military threat to important trade routes has now added another dimension. More than ever, companies need to ask themselves whether their supply chains are robust, whether they need to diversify them more than before and whether they should consider nearshoring key components of their supply chains.

The continuous analysis and assessment of these risks must become an integral part of the management of globally oriented companies and banks. Traditionally, banks are very well positioned when it comes to assessing economic risks. They can draw on a broad pool of data and experience. We banks have a very good idea of what it means for an industrial sector when certain macroeconomic indicators deteriorate. In future, we need to understand even better which geopolitical developments could threaten our customers' supply chains. What's more, we need to actively support our customers in diversifying their supply chains. For example, by financing new production facilities. As a bank, we do not have to be present in every country where our clients want to produce in the future, but we must develop suitable and flexible trade and export finance instruments and have correspondent bank relationships with trustworthy local banks - even before our clients expand there. In the words of Canadian ice hockey legend Wayne Gretzky: “We have to skate to where the puck is going to be, not where it has been”.

As RBI, we are building the bridge for companies investing in our home region of CEE, as well as for companies from our home region that want to expand into the wider world. I believe that CEE continues to be an attractive investment location with a high level of competitiveness. In particular, the EU's eastward expansion 20 years ago gave many countries in the region an enormous boost. However, the region has not yet fully exhausted its potential and may even become more attractive due to geopolitical developments. Keyword “nearshoring” with the associated positive effects on the employment of local employees and suppliers.