A Transatlantic Partnership

by Martin Marsmann, Head of Global Transaction Banking Americas, UniCredit

Although UniCredit is well known for its depth of presence and solutions in Europe, the bank also has an extensive international network, with branches in key financial centres such as New York where it can accompany European customers as they expand across the Atlantic, and build headquarter-level relationships with US customers doing business in Europe. In this article, Martin Marsmann discusses how customers across a variety of segments benefit from access to expert services through UniCredit’s New York branch.

Diversity and cohesion

One of the most significant challenges faced by companies expanding across continents is to understand, comply with, and achieve cohesion across countries with quite different legal, tax and market environments. This is a key area in which UniCredit plays a role, sharing our expertise, offering cohesive solutions across borders, and highlighting best practices based on the experiences of other customers. When a company takes its first steps in the United States, for example, it has no local track record. This can make it difficult to establish key business infrastructure: opening a bank account, establishing a credit line, providing company credit cards or leasing premises, for example. By offering account services, as well as trade finance solutions such as stand-by letters of credit, the US equivalent instrument to European guarantees, we give companies starting out in the US the help they need to establish their business quickly and start generating revenues.

From a payments and collections perspective too, there are considerable differences in the culture and instruments used in the US compared with Europe. Customers entering these markets from across the Atlantic need support in understanding the payment and collection culture, and building their cash management structures accordingly. For example, paper-based cheques still account for around 70% of all payments, which can be quite a surprise for European businesses. Formats for electronic payments are also different from those in Europe, such as the ACH CTX format. We help customers to identify the most suitable payment and collections solutions for their business from the start, and align processes, instrument types and formats with those already in place in Europe as far as possible. Similarly, we work with US companies to identify differences in payments and collections in Europe, and help to deliver integrated solutions. Companies value not only our experience, network and depth of solutions in our traditional home markets in Europe, but also the important markets of Central and Eastern Europe where the diversity of payment and collection instruments is greater.

Specialist financing solutions

Some of these challenges are more significant for smaller European businesses that are entering the US market (or vice versa) for the first time. However, larger multinationals that have operated on a trans-Atlantic basis for decades also benefit from UniCredit’s unique value proposition. It is not our intention to try to replicate the activities of a local bank across the US, but we fulfil a key function for these customers by offering an optimal level of support in critical areas such as trade and supply chain finance, structured finance solutions and services such as providing US companies with access to European capital markets.

An issue affecting corporations of all sizes is the need to maintain liquidity and working capital. Many of our European customers need the support of our trade and supply chain finance solutions to leverage opportunities as they expand their business in the US. This is a key area of focus for our New York branch and we offer considerable expertise to European customers gained from many successfully run US local programmes.

Similarly, US multinationals have, or are establishing, European subsidiaries. This allows them to build a local presence and develop a detailed insight into the market and regulatory environment of the country in which they are located. However, the scope of activity for these subsidiaries is rarely restricted to a single European country, and appreciating the differences across European countries can be bewildering, even for large, well-established treasury centres.

Not only do companies need to comply with regulatory and cultural requirements in each country, but they also need to develop pan-European solutions for centralising and optimising liquidity, and support purchasing programmes across the continent. At UniCredit, we have very successfully implemented programmes across Europe for subsidiaries of US and Mexican customers to provide their European suppliers with a beneficial funding source. US companies doing business in Europe are keen to replicate the success of alternative financing solutions that they have achieved in the US and rely on UniCredit to build on their relationships with suppliers of all sizes in Europe to build successful supply chain finance programmes with a high level of supplier adoption. Some of these programmes started as domestic solutions but quickly expanded into substantial cross-border networks reflecting our customers’ and their suppliers’ specific value chains. 

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Gateway to Latin America

Supporting trade flows between Europe and North America is a key element of our value proposition. To further complement our customer offering, however, we are constantly building and expanding relationships with leading Latin American correspondent banks and developing strong trade finance capabilities. For example, we are working with European customers to support local issuance of guarantees, performance bonds etc. as well as providing local and cross-border receivables purchase programmes.

Bridging the Atlantic and Pacific

We also play a growing role in facilitating the relationships and expansion of our European and US customers into Asia and vice versa. We have a regular, proactive dialogue with our colleagues in Asia to discuss our customers’ pan-regional needs, particularly as supply chains become longer and more complex.

In reality, our proximity to US clients’ headquarters, and European clients’ subsidiaries, and access to specialist expertise across product, competence lines and customer segments has allowed us to deliver value to our customers. In particular, customers value our ability to be nimble and responsive in understanding and meeting their needs, and our ongoing desire to exceed their expectations. 

New York branch

UniCredit’s concentrated but highly efficient New York branch serves all of our key customer segments, from financial institutions and non-bank financial institutions through to US and international corporations of all sizes. What characterises these customers is the trans-Atlantic reach of their operations. European corporations and institutions rely on us to accompany them as they develop their business in the Americas, while US businesses seek UniCredit’s solutions and expertise in optimising their business in Europe.

We offer a comprehensive range of services through our New York branch, reflecting the breadth of the bank’s portfolio. Global transaction banking is key to our value proposition, and we have experienced significant growth over the past two years. This includes trade finance, as customers build their import and/or export business to meet their international aspirations, but also payments and liquidity management, to support critical business functions overseas and facilitate the efficient use of cash across the group.