No banks are truly global – all form partnerships to deliver local services to corporates, and how those partnerships are constructed is critical.
Corporate treasurers are under pressure to reduce costs, improve efficiency and enhance visibility and control across their global operations. One straightforward way to do this is by consolidating banking services to a handful of international network banks, which enables cash management-related processes to be standardised, and eliminates the need to maintain multiple local bank relationships. But finding the right banks for the job can be tricky. To evaluate banks, corporates need to consider the risk profile of potential partner banks; the extent of their product standardisation globally (and the pricing benefits this delivers); their technological security; and the level of service they offer.
One additional factor, which is sometimes overlooked by corporates, is the approach taken by international banks to local markets. As they are unlikely to have an extensive branch network to service their clients’ needs adequately in every country, international and multi-regional banks must find ways to extend their coverage and capabilities. Different operating models come with various advantages and disadvantages; understanding the implications of these models can be critically important.
There are two main types of alliance model:
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Standard CharteredAutomationCash ManagementEnterprise Resource Planning (ERP)