GTR gathered its Americas editorial board in New York in June to discuss the way economic headwinds are forcing corporates to focus on efficiency, creating opportunities for the financial sector.

Roundtable participants:

  • Chris Bozek, global head of trade and supply chain products, and North America trade head, Bank of America Merrill Lynch
  • Jonathan Richman, head of trade and financial supply chain Americas, Deutsche Bank
  • Rolando Perez-Elorza, head of global trade solutions Americas, BNP Paribas
  • Richard Abizaid, (formerly) head of credit and political risk Americas, Zurich
  • Jim Thomas, head of credit and political risk, Everest Insurance
  • Melodie Michel, editor, GTR Americas (chair)


GTR: What has been the impact of the low commodity price cycle on North America and South America and on your individual institutions?

Richman: The effects are quite varied, but certainly, in many parts of Latin America that are commodity-dependent, it has had a very adverse economic impact. In addition, in the energy segment in North America it has also had a similar impact. For some countries like Brazil, it has created a bit of a crisis. The implications are that we need to watch credit risk much more carefully – including operational risk in the letter of credit (LC) business relating to spurious discrepancies.

However, it’s also created some interesting opportunities. What we have seen is a big split between the haves and the have-nots or the ability for investment-grade-type clients to be able to access credit as freely as ever – in fact even more so since for many banks there is a flight to quality – so there is a lot of excess capacity in our industry and we are focused very much on these high-quality names where there is a great deal of liquidity.

Then there are the have-nots, which include the lower-rated entities that are in the commodity or energy space and for them, accessing liquidity has become very challenging. The opportunity for us is to try to bridge that gap through different types of trade finance structures, often financial supply chain in the form of confirmed payables or receivables purchase but also even in LC-type structures. We are seeing a lot of opportunities to bridge the arbitrage that exists between the very creditworthy and the less so – this creates a win-win helping major companies and supporting their supply chain partners… and is an avenue for trade banks to grow and contribute.

Bozek: Volumes are down, the value of transactions is down and therefore revenue is down. Increasingly we are seeing energy-related projects being deferred or cancelled altogether, creating even further headwinds. Jonathan raises a good point; financial institutions are taking this opportunity to conduct a deep dive into their commodity books to understand the differential quality of these exposures. We also have experienced an uptick in technical disputes specific to commodity LCs, due in part to pricing volatility.

Thomas: I agree with Jon’s comment about the bifurcation of the market into better credit quality and lesser credit quality. An issue that we have discussed previously in this forum is the lack of access to finance for smaller companies. We discuss it every year too, so it’s clearly an issue we’ve yet to solve or adequately address, but I think it’s never been more prevalent or obvious as now. We just see this growing gap between the better credits and the worse credits and also the smaller companies.

Separately, from a technical standpoint, certain aspects of transactions or structures that we may have taken for granted previously – disputes clauses, things of that nature – are, I think, under more scrutiny, for good reason. The word ‘spurious’ jumps out at me because I think it certainly describes some of the problematic transactions and losses that are coming through the market, with some spurious issues there being used as an excuse for non-payment in some cases.

The price increase that some of us were expecting is really not materialising across the board. Rolando Perez-Elorza, BNP Paribas

Perez-Elorza: Indeed, the market has become very uncertain on the structuring which also presents some challenges, in addition to the new capital requirements. The fact is that there is some flight to quality but there are also opportunities to have more structure in some of our transactions. That structure can also help on the capital treatment and to sometimes have better profitability on the capital.

The effect is different in each country. In particular, Brazil has been massively affected. There are some other countries in which the impact has been mitigated in part due to the diversification of the country itself from commodities. Even in countries that are heavily dependent on commodities, like Chile for instance. Indeed, the impact is still very limited. And in this flight to quality, sometimes it is surprising to see some of the pricing still available for some of these counterparts. But the reality is that, while some banks have left a void in that space, there is still plenty of liquidity. Furthermore, the anticipated price increase that some of us were expecting is really not materialising across the board in all the countries and for all the counterparties.

Richman: I think it’s just lower levels of economic activity. There is still a great deal of liquidity out there and companies have at least in the past been able to access capital markets.

Perez-Elorza: Yes, and it’s liquidity withless needs. Earlier, there was a mention in terms of the lower size of transactions; clearly financing a shipment of oil at US$100 per barrel is different from financing it at US$40. Also, when some companies have been looking at liquidity, some others started looking at financial or risk management. This resulted in some companies within the credit limits having more risk tolerance for their own clients due to the exposure. So at that moment, there are also fewer opportunities for us in terms of risk mitigation which leads to more competition for some of the transactions.

Abizaid: Given our strong focus on sovereign risks in Latin America, we really don’t have a great deal of private corporate credit exposures where the market has experienced a lot of late payments and losses. The reduction in commodity prices has created opportunities to support sovereign and sub-sovereign risks that in the past either have not been in the market, such as Codelco, Ecopetrol or Brazil’s ministry of finance, or have been in the market but pricing was very low, such as Petrobras and Pemex. For the most part, the commodity price drop has created opportunities for us to do more in Latin America and at better pricing.


GTR: What do you see for the future of supply chain finance in the region?

Richman: I think the way we define supply chain finance or financial supply chain is supplier finance programmes, receivable purchase programmes and distributor finance and they’re all growing, for the reasons that you just mentioned: this widening arbitrage that exists between what I’ve referred to before as the haves and the have-nots, and that is making the opportunity greater. You have oilfield services companies that have great quality receivables with investment-grade buyers, so they’ll sell some receivables. Then there are many major companies who are still very creditworthy, who want to run a supplier finance programme so they can improve their own cashflow, which they use for capex or acquisitions or dividend payments; however, they also want to make sure their suppliers are well supported.

There is a greater acknowledgement that these solutions need to be win-win, with the need for their suppliers to also get something out of it. Otherwise the programmes do not work. The obstacles that existed five to 10 years ago that slowed the growth of these programmes, like accounting issues, onboarding processes, structuring options and technology, have largely been addressed and that is creating a very big uptick in activity.

It’s become very rare for me to go out and talk to a corporate client where this topic doesn’t come up. They usually already have a solution or they are at
least actively exploring one, otherwise they are leaving a lot of value on the table, not only for themselves but for their trading partners.

With the stress in emerging markets, a lot of North American companies that are looking to expand their sales in emerging markets need these kinds of programmes to support that risk that they take, so that they can grow their top line as well as support their suppliers.

Bozek: The future of supply chain finance is bright. Having experienced the true value proposition of SCF, suppliers themselves are increasingly launching programmes for their own downstream suppliers. In addition, companies are taking their regional programmes and launching them in new geographies, fuelling further growth. Today, I think we can say that the value of SCF is recognised across all industries and has become a mainstream working capital tool. As a result, I expect we’re going to see double-digit growth for many years to come. However, that growth will require all of us to sustain our investment in the product in order to keep pace with market needs. Global SCF programmes are significantly more complex and, as a result, they are more costly to administer.

Perez-Elorza: That’s exactly how we see it. It probably started as a support for suppliers when companies were looking at the arbitrage in borrowing costs between suppliers and better-rated buyers – more as support to the supply chain rather than a pure term extension solution. I agree that we are probably moving towards truer optimisation of working capital. I think along payables, receivables and inventory as well. It is also a fact that now more and more companies are shifting their priorities towards cash conversion. Indeed, cash is king again and the good thing is that it is not only the treasurers who are looking at ways of optimising working capital but operations and procurement divisions as well.

We are seeing more and more specific KPIs towards optimisation of working capital, which is really helping to create opportunities for us.

Richman: That’s certainly the biggest tailwind we have in our business; the focus by our clients on working capital efficiency and how that’s become pervasive in the treasury department.

That’s a big change from 10 years ago, and despite all the many headwinds that people have touched upon, this is still what’s propelling the business forward and what makes it attractive.

Many C-level executives have a cashflow metric as part of their performance plan, to the benefit of SCF. Chris Bozek, BofAML

Bozek: That is a great point. As a result of the global financial crisis, senior leaders at companies both large and small have recognised the importance of cashflow and visibility into their liquidity. In fact, many C-level executives, including the treasurer, actually have a working capital or cashflow metric as part of their performance plan and compensation package. This has been to the benefit of SCF, since C-level support and sponsorship of SCF programmes is critical to a programme’s success, given all the participants who need to be on board, such as technology, procurement, treasury and accounts payable.


GTR: How do you tackle the challenge of the multiplicity of technological platforms?

Richman: I don’t see technology as the major differentiator for most of our clients. In very select cases it is – maybe there is a particular type of functionality like dynamic discounting or a desire for neutrality across their banks.However, a lot of our clients still would prefer not to see a third-party intermediary between them and their bank.

I do acknowledge that in select cases where there is value to my corporate client in having a different type of functionality that a third-party platform might offer, or because they really do need that neutrality or a single platform to reach multiple banks, then we’re prepared to work on that basis and we do. I think it’s important for banks to be able to partner, not just with technology companies but across other areas as well.

Bozek: This is where we have to have the right conversations with the client and ask them what their goals are, and how we can help. Each party involved in the transaction needs to earn their place, since each once adds another layer of complexity and potential point of failure in addition to getting paid for their share of services. Therefore, we need to ask what the additional party – whether a fintech or financial institution – can offer that another can’t deliver and how that will help the corporate optimise their programme. For example, if a financial institution has all the local expertise to onboard new vendors, manage and grow the programme in each new market, and can efficiently sell the risk when that programme outstrips internal capacity, the corporate should challenge the value that other parties to the transaction are delivering. At the end of the day, we all take our lead from our clients.


GTR: What challenges do banks face when it comes to reaching the lower levels of the supply chain?

Perez-Elorza: It really depends on the set-up or the footprint that you have in each country or region. At least for some of the banks that are not truly regional or lack a large retail network, it is very expensive to onboard these suppliers and it’s not only the fact of the negotiation of the documentation, it is the KYC and additional compliance requirements that we are all facing. And even if we acknowledge – and we all do – that it would be very important to tap this smaller supplier base, it may not be economical for every single bank to actually pursue that route.

Bozek: Our main goal is aligned with the corporate’s, which is to maximise Days Payable Outstanding and this is accomplished by onboarding the largest, most strategic suppliers. Except in rare occasions, 20% of a buyer’s suppliers drive 80% or more of total spend.

Setting aside the one-off exceptions for a strategic supplier with low volume, both the corporate and the provider need to be disciplined in focusing on onboarding suppliers that will have the biggest impact on their programme’s goals.

Richman: I completely agree. I think that most of the major trade banks are focused on the strategic suppliers and that is kind of where our models are built, but what links this to your earlier question around technology service providers is that there are a number of these dynamic discounting and other types of service providers who focus on indirect spend; the less core trading partners of our clients, whether it’s through a P-Card mechanism or a dynamic discounting, and I think that is where that spend is being captured. And there are some banks who are playing in that space as well.


GTR: How do you see the relationship between banks and fintechs evolving?

Richman: Clearly there is already a lot of activity and there are a lot of avenues being explored, especially with regards to blockchain. We are seeing many initiatives that work to better define the problem that they are trying to solve, and I think it’s very early stages for many of them, whether it’s invoice validation, initiatives like this for second or third-tier suppliers, or data-matching in order to maybe help banks reduce their costs in LC processing. There are many, many things. But there are still industry standards, technology and rules to be defined, and the actual problem and business models are still to be defined.

Do I think developments will come out of all this? I absolutely do, but it will take time for adoption to become pervasive.

Bozek: Technology is only one part of a complex set of services and capabilities that must be developed and seamlessly delivered. One example Jonathan just referenced is related to second and third-tier suppliers. To successfully onboard these companies, we need to make sure that regulatory, KYC and other requirements are executed in compliance with the relevant country’s jurisdiction. This is one example of the obligations required to manage a successful supply chain finance programme.

Perez-Elorza: I think there is a significant opportunity for co-operation. Not all fintechs are addressing the same needs, there are different spaces. If we collectively can use opportunistically the information that is provided by some of these fintechs, there will be interesting opportunities in the near future.

Do some of these fintechs compete directly with the platforms that the banking system has? Definitely. Jon was addressing the point of the neutrality that some of the clients are looking for to diversify and not rely only on one provider, especially if, after a couple of years, it decides to exit the market or merge with another institution and therefore change its position vis-à-vis the client. We have to learn to co-operate with the client and use the platforms we know in the best possible way.

Richman: There will be partnerships, and I think some of the winners in the fintech space will definitely offer services that would be better in the clients’ eyes than a single bank might be able to offer. At the highest level, I think there are really two spaces there. One is the existing technology service providers in the financial supply chain, and the other includes the upstarts who are trying to solve broader problems. I think there are more likely to be partnerships and collaborative-type opportunities than competitive ones, but they run the gamut and trying to sort the winners from the losers is very difficult for us to do.

The way banks are approaching it right now is by experimenting, and with enough good experiments out there I’m sure some things will work.


GTR: Moving on to services trade – why is it so difficult to finance that sector?

Bozek: I do not see expanding supply chain finance to the services sector as overly complex. In fact, we are already seeing SCF used for this purpose, specifically with regards to software licensing agreements and distribution rights, and freight services, etc. The early adopters of supply chain finance were manufacturers and retailers with very large, chunky raw materials and finished goods transactions. Extending SCF programmes to the services sector requires a revision to the structure and supporting documentation, but neither of these are showstoppers.

Perez-Elorza: It depends on the type of services. For example, we all have clients in the engineering and construction sectors. They provide services that we already finance. Basically, we have a buyer and a seller and the service creates a receivable. At some point you can always discount a receivable for a service, and clearly on the topic of documentation or the specific underlying asset, there is no specific link to any good. However, once the service has been performed, I don’t see why we cannot provide working capital solutions to those companies.

I think maybe it has just been the natural evolution from the industrial segments that have been traditionally for trade, retail, food and beverage, etc, that services are available. But I don’t necessarily believe that they have been completely abandoned by the industry.

Richman: I agree. The focus historically may not have been on the services sector, because the working capital cycle has probably been shorter so the need was less than it is now. With the focus on working capital management, there is now a recognition of the value that this would provide.

We have seen a lot of uptake in the technology sector, where we’re monetising long-term contracts or software licensing and that sort of thing. We have seen a lot of take-up in the transportation sector and the construction and infrastructure sectors. There are some sectors that don’t lend themselves very well to this service where you have such a diversity of obligors, very inconsistent payment type patterns or behaviour where you have a lot of dilution. But in many sectors, it is straightforward and now with the increased focus of all corporates on working capital management, including those of the service sector, we are seeing an uptick and we see this as another growth avenue to pursue.

Some of the more successful fintechs will find and create access to supply that meets the demand in the service sector. Jim Thomas, Everest Insurance

Thomas: This dovetails well with the development of fintechs, in that we spend a lot of time talking about the ‘Uberisation’ of various industries. It’s not a phrase that I particularly like, but people tend to know what you mean when you say it. And given the diversity of the service sector and the many different underfinanced or even emerging businesses that make up the holistic service sector, I think there are a lot of opportunities for blockchain or the real-time meeting of supply and demand. This is an area where some of the start-up fintechs, some of the more successful fintechs, will emerge, finding and creating access to supply that meets the demand for financing in the service sector.

That’s if they can overcome some of the challenges like KYC considerations and if they can create a nexus with the more traditional business models that will allow them to tap into a wide range of traditional clients. That is when we will see more wide-scale financing of the service sector, but I do think three years from now we will likely have seen fintech solutions to broaden access to financial services. I think if you look at any success in the e-commerce sector or in bringing technology to a solution, it’s with the underserved niches within an industry, and as we speak this is what we are seeing within the services sectors; there is an underserved niche where there is an opportunity to provide efficiency.


GTR: What is your view on the situation in Brazil? Are we on the verge of a structural change that will make Brazil easier to handle in the future?

Abizaid: I think one of the positive things about the crisis has been the corruption investigation and how widespread it has really been. I am happy to see that powerful influences have not been able to stop the investigation from reaching some of the most influential and wealthy people in Brazil. In fact, as you have seen, very prominent business and political figures have been arrested and indicted. The Car Wash scandal still has a long way to play out, and the economy will continue to suffer because of the resulting political uncertainty. However, at the end of the day, the corruption investigations will have a positive effect on Brazil’s long-term political and economic health and stability.

Perez-Elorza: It is showing that the institutions and legal systems actually work. Some of the announced measures from the new Brazilian government are also positive. Brazil is a country that still has a very difficult system to understand, especially on how it operates domestically. For some of the Brazilian companies, the level of efficiency that will be achieved in simplifying the regulatory framework is something positive. But it will take some years to modernise or to bring it more to the standard of some countries that have made efforts to reduce internal barriers such as Colombia or Mexico. I think it is unfortunate that we are seeing this shock in Brazil, but ultimately it is a good opportunity for new reforms in order to make the country more efficient.

Thomas: To make the most of this crisis or to find that silver lining and take advantage of it, we need to see a class of effective and legitimate leaders emerge, and the emphasis is on legitimate. With so many of the senior political class across many parties under a cloud of suspicion or under indictment, I think in the near term it will be very difficult for real structural reforms.

It is no small thing that the democratic process is functioning well and I don’t think we can take that for granted. I would go so far as to say that 25 years ago we would likely be having a legitimate conversation about whether or not the military would remain in the barracks, and now that is not even crossing our minds. It is a non-issue because the democratic process is firmly entrenched in Brazil and the processes work. However, we are seeing a series of ineffectual leaders and a huge amount of disillusion among the population with politics and political plans, and they need to transcend this to make the most of this crisis, which is profound.

Bozek: Brazil is in a deep recession with no near-term relief in sight. Imports are down more than 20% year-over-year, and I’ve read reports saying that imports into the country have declined for 20 straight months. The consensus appears to be that we have not seen the bottom yet, and unfortunately the sovereign ratings are impacting some very well-run, diversified corporates that happen to be domiciled in the region. Each of us is evaluating which companies are going to emerge as opportunities near-term and long-term.

Richman: There’s nothing like a crisis to be able to effect change, which is what is likely to happen, and there are signs for optimism. I would be long-term bullish, but there are a lot of near-term issues. However, there are pockets of the economy that are actually doing pretty well, especially those that are competitively advantaged because of lower-cost production, with the US dollar exports, such as certain types of agribusiness, pulp, paper, etc. And of course the banks are flocking to those better segments. There are the winners of other segments where there really isn’t a liquidity issue and where there are opportunities for more supply chain finance when organisations do need to support their trading partners.


GTR: What is your view on Argentina? Are you optimistic?

Bozek: I would say cautiously optimistic. I think we are seeing some early encouraging signs such as the settlement with the international creditors after a prolonged stalemate, new tax incentives for agri exports, and other initiatives. These are all positive development but it’s still early days.

Thomas: Based on the demand we are seeing from banks and exporters lending and selling into Argentina, I think many are bullish and many are optimistic, however cautiously. I think many of us are just happy to be able to contemplate deals in Argentina. And while there is still some residual uncertainty, we are seeing some very good structures. We are seeing the continuation of offshore collection accounts, which I think are serving as the bridge to what we hope is the future, a more stable and more sustainable economy.

Capital markets are loosening in Argentina, which is already bringing down the cost of funds. It’s had a very good effect and I am surprised at how quickly this opening is taking place but I am optimistic and I’d say there are some good transactions taking place.

Perez-Elorza: The starting point was clearly very low in Argentina, so any change is welcome. There are very good companies in Argentina. But the assessment of sovereign risk was so critical that it was difficult to do business with many of them.

Abizaid: Argentina and Brazil are facing similar challenges with regard to implementing fiscal and economic reforms. Both the Macri and Temer governments need to implement economic reforms to address long-standing systemic concerns in their respective economies and restore the trust of investors. So far, both governments have provided the right signals to the market by appointing qualified people to cabinet posts and by pushing forward expected reform legislation. However, the question is whether they can garner the support needed to continue to push these reforms through.


GTR: What about Chile?

Abizaid: As I mentioned earlier, the low copper prices have actually created opportunities for the insurance market in countries such as Chile. In the past, banks did not require non-payment cover for loans to Codelco or ENAP (Empresa Nacional del Petroleo). Now that both are seeking additional capital from the international markets to supplement their cashflow deficiencies, we are starting to see an uptick in demand for these risks. Despite a deterioration in their credit risk profile, they are risks the market is happy to take on.


GTR: In Latin America we have seen the withdrawal by some of the large international banks. What are you seeing as a result of that?

Bozek: There are still too many banks chasing a limited amount of deals. While we might be seeing select banks withdrawing from certain markets in the region, there is still an adequate supply of capital for the right deals with the right counterparties. More broadly, we have seen an uptick in trade flows to certain countries in Central America due to near-sourcing decisions stemming from the overall political and economic instability.

Richman: I agree. I think the impact of banks withdrawing from specific markets is probably not as great as the headlines indicate. It’s not that many. There’s still plenty of capacity relative to the level of demand. Because of lower commodity prices there is less economic growth, demand is suppressed, and a lot of these big banks can still support higher-end business locally through hubs, as we do, covering most of the region.

Perez-Elorza: Some of the local banks have left the region and have an orientation more towards domestic second-tier companies in terms of size. I would say that in the high-end segment where BNP Paribas operates, we can still have significant presence and we have not seen a dramatic change in product offering or in the supply of financing to the counterparties. We continue to see the same players.

Thomas: That corresponds exactly to what we’re seeing with a wide range of banks, whether they be local subsidiaries of European banks, whether they be Japanese banks, which have certainly become more active and aggressive, or even local banks. While some of the foreign banks have reduced operations and headcount, it seems that they have become more focused on relationships, ie, the better accounts, and of course that is exacerbating the bifurcation of the haves and have-nots. The good names are overbanked, as they have been for many years, and the lesser names are underbanked, as they have been for the last couple of years, but I have not seen a great deterioration or lack of access to financing.


GTR: What do you see as your main focus in the upcoming year and what are the main challenges?

Richman: With the international stress that does exist, especially in some emerging markets, the need to have solutions that support your supply chain is greater than ever, whether for sourcing or distribution. The awareness and need is greater than ever for trade banks to be able to facilitate large-scale programmes that require a lot of balance sheet or distribution capability and a lot of cross-border onboarding capability of trading partners. That is a great tailwind for the business and we as trade bankers should be very proud that we support the real economy, and the real trade, economic growth and prosperity for the wider world.

Abizaid: We are definitely operating in a high-risk environment so we are very selective regarding the risks we want to take; more selective then we were last year at this time. But with risk comes opportunity. We still believe there are good sovereign, sub-sovereign and corporate credit risks out there in the commodity space, we just have to be extra diligent in our underwriting and strategic in selecting the transactions we want to support.

Bozek: Building on Jonathan’s comments, despite the macroeconomic challenges there is significant opportunity. We support our clients to run a more efficient supply chain, by helping them optimise working capital and manage increasingly complex risks – the value of which is more important than ever. Part of the advisory trade discussion must include currency management and FX strategies since all are critical to managing current and forward positions that directly impact bottom-line performance. Another dimension of the discussion is helping our clients understand the timing, importance and potential impact of the many new and emerging technologies, whether it be blockchain, digitisation, etc. Putting all this together, the advisory role we play today is more important than ever.

Thomas: We’ve been discussing the need to diversify in Latin America in terms of the export base and by and large, Latin America is still a commodity export-driven region. But we are seeing that the winners that are emerging are those that have started to diversify their economies and it’s no surprise that those are some of the bright spots. I’m thinking of Mexico and Colombia, who have made tremendous gains in diversifying away from commodities.

In these challenging times, I often find that we go back to our basic tenets and that’s never been more so the case today when we’re looking at the types of structures, the types of transactions that are attractive, which are based on three simple things: it’s quality of structure, strength of documentation and simply picking the right partners. Those sound very, very basic and I think in the good times we can sometimes lose sight of those basic tenets. That is what will separate the winners and losers in these challenging times.

Perez-Elorza: I agree on the working capital and the need to source additional opportunities for the future. I also agree that many of the solutions that we provide are not needed at the same levels by all clients. There is still a high level of customisation, and the advice that BNP Paribas is giving is clearly a differentiator in the industry. We cannot say that the same solution can be replicated or adopted by all clients. Having global expertise is also very important and global banks continue to have an advantage over some of the smaller local and regional institutions.

Having said that, there seems to be a disconnect in the application of global capital rules by some of our regional competitors, so sometimes I think in terms of the pricing that is required for specific transactions, perhaps there is some asymmetry in the use of capital and return models. But eventually we will all get there. Doing trade finance and doing banking in general is becoming more expensive.

Richman: I would agree with you. We didn’t mention the regulatory challenges that we all face, whether it’s on the capital side, the lack of harmony across different jurisdictions or the AML and KYC-type requirements that have increased the cost of doing business significantly and that has created a number of challenges for all of us.

Bozek: Regulatory compliance, including KYC, AML, etc, continues to evolve, and are non-negotiable, taking up an increasingly larger piece of our collective mindshare and investment. The challenge for all of us is to maintain compliance with the changing regulatory landscape without impacting our ability to deliver the next generation of innovative products and services.