Published: September 01, 2010
Transactional banking is important for us at UniCredit because it is important to our customers. Moreover GTB business is highly relevant because it is a growth business and involves few risk-weighted assets (RWA).
The core strategy in GTB is to serve customer commerce in the heart of Europe across a number of different product ranges. As one of the largest banks in Europe, our objective is to be the bank of choice for clients doing business in Central, Eastern and Southern Europe as well as in the Russian-speaking countries (Russia, Ukraine, Kazakhstan). We have several unique and innovative solutions already fully used by many of our international clients. Our depth of experience, our proximity to clients in the 22 countries in which we operate and our ability to integrate solutions across the product set are key to our success. Our aim is to keep building on this reputation and continue to grow.
GTB businesses have experienced a ‘renaissance’ of focus and investment across all client segments and business partners within the bank. This acknowledges that working capital management is a key client issue in need of servicing and development from a product point of view. Customers and Relationship Managers are enthusiastic about the necessity for these core operating products and additional investments are an organisational priority.
Transaction processing volumes for the most part have proved quite resilient through the crisis, with some variations from product to product in different geographies. Trade Finance in particular has experienced more reliance on traditional trade finance mechanisms such as documentary letters of credit to finance trade flows, some of which were done on an open account basis in the pre-crisis environment. Also ECA (Export Credit Agency)-covered finance came back into fashion.
The crisis certainly underlined the importance of transaction banking business. Client supply chains are focusing more on risk and access to working capital. In this environment transaction banking products which offer clients end-to-end solutions which address their financial supply chain needs are experiencing growth in business and customer demand. For example, UniCredit´s Trade Purchase product and forfaiting of receivables have seen increased customer demand. Likewise, control of working capital makes customers emphasise cash management solutions such as cross-border Cash Pooling, which consolidate and report cash positions. Since the beginning of 2010, clients have begun to revisit their processes and re-invest in solutions that specifically target the processes which affect liquidity.
GTB offers a wide range of different cash management services with state-of-the-art features.
Our recipe for success is the unique combination of local know-how and global expertise, together with our IT systems to develop innovative solutions that are specially tailored to our customers - no matter what language they speak.
GTB is a global product line with fully dedicated GTB teams in almost every country in which we are present, so our clients can take advantage of a set of common international products in cash management and e-banking, trade finance and supply chain management, as well as in structured trade and export finance. From international liquidity management and cash pooling services, to forfaiting, export credit agency covered loans and commodity trade finance and securities services in CEE countries, we offer our corporate clients the full range of global transaction banking services to maximise their potential. This holistic approach is important to really understand our clients’ needs and develop targeted solutions for them.[[[PAGE]]]
GTB offers a wide range of different cash management services with state-of-the-art features. Some of the newest trends are secure communication services like SWIFTNet for corporates, seamless SAP integration and cash pooling mechanisms with status information. Given the different front-end applications, our services can be highly customised using parameters. We are already running 1,000 cross-border cash pools in continental Europe, supported by more than 100 parameters to tailor our services to our clients’ needs.
Via SWIFTNet we are also able to support different payment formats such as FIN services, as well as proprietary payment formats forwarded via FileAct, such as EDIFACT, SAP i-doc and SEPA XML. We then forward and convert such formats into the local format of all the target locations where UniCredit is present. In addition, customers receive a status message telling them which payments have already been processed or have had to be rejected.
Doing the basics well and constantly improving customer services and satisfaction levels is always our main focus. Beyond that, there are a number of value-added services across the spectrum of GTB products which improve our value proposition to clients who are striving to improve working capital efficiency and extend their trading capabilities. Such innovative products include the web-based form of cross-border supply chain financing Trade Purchase, the multi bank web-based platform solution @Global Trade for handling all processes related to Trade Finance Business, the service brokering insurance coverage for transport risks called CargoDefence, New eBanking, the cash management software designed completely in-house, the web-based document exchange service InvoiceComm. Our services EuropeanGate, the single point of entry for payments and collections and Cash Pooling across our CEE footprint remain top priorities for investment.
Despite current weakness CEE should not be treated as a “second rate emerging market” for a variety of reasons: relatively diversified economies, high education levels, social structures, relatively low tax, largely satisfied investors, and rise of SMEs in different sectors all provide sustainable long-term foundations. What is more, public debt on average is better than in Western Europe and traditional drivers of growth will gradually return.
Eastern Europe was one of the regions hit hardest by the financial crisis. However, with the support of the EBRD and banks such as UniCredit, the lifeblood of trade was kept flowing, enabling also one of the quickest recoveries, especially in some sectors – such as metals – although many challenges still remain.
UniCredit could leverage on its strength across the region and has played a positive role over the past year.
In Central Europe, trade volumes have not generally returned to pre-crisis levels yet. Exports, however, have started to gain momentum as business is picking up again. Russia and the CIS is a different story. Russia, in particular, is growing strongly once again. Turkey is another very bright spot due to strong trade with both Western Europe and into the Middle East.
Depending on the mechanics of the local environment, UniCredit can provide local tailor-made solutions.
The major challenges will mostly be regulatory, particularly with respect to Basel II and Basel III, but also technological. For example, the growth of the web is widening the space in which our clients buy and sell, thereby changing the nature of their day-to-day business banking requirements.GTB evolves together with these innovations by working closely with its customers. Depending on the mechanics of the local environment, UniCredit can provide local tailor-made solutions. The benefit of our group is that we then integrate these local capabilities into wider, global client solutions.
For the future of transaction banking I see innovation and deeper involvement in customer value chains as key topics. Our goal at UniCredit is to be perceived by our current clients and prospects as what we already are: the transaction bank of choice for any company doing business in the heart of Europe, known for the quality of our seamless customer services across all 22 of our home markets in which we operate.
I think that's evident! Can you name me a bank with a larger coverage in continental Europe and a more deeply rooted presence? Who else has about 10,000 branches and subsidiary banks in 22 countries in Europe? And that is just the tip of the iceberg. Global Transaction Banking Business at UniCredit can combine unique, profound local know-how with global expertise to provide cutting-edge solutions. In addition, these solutions are supported by IT systems designed specifically for our customers, whatever their language.
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