Deutsche Bank’s Daniel Schmand is the new chair of the International Chamber of Commerce’s (ICC) Banking Commission, which is responsible for the globalisation and standardisation of trade finance rules and practices. Here he speaks to GTR about his thoughts and hopes for the years ahead.


GTR: There are a lot of challenges facing trade finance, but what is the current stand-out concern for you?

Schmand: The stand-out concern is the one we can least influence, which is geopolitical risk. It is certainly the biggest threat to the trade finance system. In terms of banking regulation, Basel III looms largest. Yet, here we are making progress – especially with respect to leverage ratios, the treatment of export credits and contingent funding liabilities.

Money laundering legislation is also a challenge. Here, we need to be more precise, improve our communication with the regulators and help them avoid unintended consequences, particularly in terms of potentially harming SME businesses. Our aim is to work with all stakeholders in making the banking industry a better place, with the ICC’s role one of guidance in order to sharpen the rules.


GTR: The 2014 ICC Survey found a global shortfall in available trade finance. Is this situation changing?  

Schmand: There is a lot of liquidity in the market, with new pools of liquidity looking for yield. Certainly, there is no shortage in this respect: it is a question of putting the liquidity together with the opportunity. New players are creating new partnerships – generating opportunities for both themselves and banks. Meanwhile, the constraints within banks are more likely to be caused by the unintended consequences alluded to earlier.

It is certainly true that the cost of entering into new relationships has increased. So while it is possible to make finance cheaper, if the unknown costs are too high, banks will remain cautious when evaluating new countries and industries.


GTR: As chair of the ICC Banking Commission what is your attitude to the alternative financiers entering the market in increasing numbers?

Schmand: I welcome them. The more new or alternative financers entering the market, the better it is for the client and the established players. Innovation benefits the system and makes the market more interesting for all players. So I want to see newcomers with new ideas help to drive the industry.


GTR: The ICC has been a force for cross-border standardisation and facilitation for decades. Where should it be focusing to ensure this continues?

Schmand: We have come a long way but there is more to do, on supply chain finance for example, or anything around open account with respect to payables and receivables. Trade finance should be standardised as much as possible. In this respect the ICC Academy is a major step – helping create globalised standards in education, a common understanding of trade finance and educational transparency. The ICC Academy creates a common language, which can generate huge benefits.


GTR: How do you see the role of the ICC evolving going forward? And what are your ambitions in this respect?

Schmand: The ICC is an important platform for the trade finance industry. It’s for all stakeholders to understand the value, challenges, pros and cons of trade finance. That is the role of the ICC: to develop from a rule-writing body to become the body that addresses the industry’s key challenges. As for me, I hope I can add value by helping to rekindle the banks’ contract with society, so banks are no longer being penalised for being banks.

There is a long way to go. Yet ICC can lead the way. Banks are keen to write more business, of course; and their clients want to do the same. That means more jobs and more prosperity in a controlled environment – and this is where I hope I can add value. It’s certainly where I intend committing my energy.


Daniel Schmand took up his three-year term on May 1. He succeeds Tan Kah Chye, who had chaired the commission since 2010.

Schmand is managing director and head of trade finance and cash management corporates for Europe, the Middle East and Africa at Deutsche Bank’s global transaction banking (GTB) division. He is also responsible for the global co-ordination of the bank’s trade finance activities.

Schmand was appointed vice-chair of the ICC Banking Commission responsible for supply chain finance in 2012.