Network Forum captures industry mood

The first Network Forum conference certainly provided industry participants with food for thought.

By Richard Schwartz editors@globalcustodian.com 
Over the past two days, the inaugural Network Forum (NeFo) held in Warsaw from 28-29 June has already established itself as a necessary fixture in the industry’s calendar. The decision to invoke the Chatham House Rule for selected discussions has had the effect of freeing up panellists from the constraints of remaining entirely on-message. In addition, the conference was preceded by a network-managers-only day, which made explicit from the outset some of the alignment challenges between network managers and their providers in individual markets.

One discrepancy that has become evident during the Forum is the difference between buyers and sellers on how to streamline the due diligence process. While there is consensus that the AFME Due Diligence questionnaire offers great promise in reducing the collective burden, a fault line appears to be opening up on the question of charging for aspects of the due diligence process. A number of service providers have indicated over the past two days that they will be looking to invoice for work required to customise responses to due diligence enquiries, while network managers have made it equally clear that they have no intention of paying providers to answer questions about their service.

An additional issue raised was the future of existing processes that some providers have established to streamline the due diligence information flow. Some have, for example, established delivery channels that allow potential clients to download the requisite information. However, as Max Notarianni, global head of network management, Societe Generale, pointed out to Global Custodian, this may put an unwelcome onus of interpretation on the client.

Such industry deliberations are taking place against a backdrop of considerable geopolitical uncertainty. On the opening morning, John Hulsman of German-based political risk consultancy John C. Hulsman Enterprises focused on two issues: Brexit and Donald Trump. On the former, he noted that, “The British have a transactional view of Europe and always have had.” At the time of the first membership referendum, he observed, Europe was growing, while the UK wasn’t. That dynamic is no longer so clear. Hulsman envisages what has come to be termed a “hard” Brexit. At the end of the process, he predicted, “a deal on goods is possible; services not.”