Bank of the West partners to navigate complexity in commercial banking markets

Amid uncertainty, businesses are looking to banking partners to help them more nimbly navigate the complexities and regulations of international markets

 
Bank of the West meeting
 

Today’s business landscape is increasingly complex, with ongoing uncertainty in financial markets and the global economy, escalating geopolitical tensions, and a constantly evolving regulatory backdrop. According to PwC’s , 78 percent of CEOs across 77 countries say they are concerned about over-regulation. Complicated and stringent regulatory requirements, which vary widely across regions and countries, are making it more difficult for companies to do business across international markets. In this respect, globalisation has taken a step backwards.

Complexity is not only a difficulty for businesses, it can also stifle growth. Research from management consulting firm Bain & Co revealed companies with the lowest complexity grow 30 to 50 percent faster than their average competitors. In today’s marketplace, those companies that are able to persist, flourish and profit are ones that can effectively manage and reduce complexity. These companies successfully adapt to the world they operate in, while nimbly and strategically navigating markets with good growth prospects, and using innovation to increase efficiencies and gain a competitive edge.

Navigating local markets
In order for a company to drive growth in evolving international markets, working with a bank that delivers smart, global banking solutions backed by a robust infrastructure, including international cash pooling and an expansive global trade network, is necessary.

78%

of CEOs are concerned about over-regulation

However, not many banks do this, and that alone is insufficient. To genuinely add value, a bank needs to have an established local presence in order to help a company understand the nuances of the operating environment of a particular country, as well as the protocols of its operating and regulatory environment.

Ideally, a banking team should accompany your business around the world, with highly responsive, on-the-ground bankers based in the local markets that matter to you, offering seasoned and specific guidance on the best approach and strategy to use in a particular market, before discussing the products and solutions to implement that strategy.

A bank should also serve as a simplifying one-stop shop, helping your business maximise efficiencies by reducing geographical and organisational borders, minimising touch points, streamlining business processes, and seamlessly delivering specific banking solutions across all of the markets where you do business.

For instance, a leading US-based healthcare information technology company was seeking a banking partner to help centrally manage its treasury operations out of the US. The business had solutions licensed across 30 countries, including multiple entities in the Middle East, and was also seeking a full range of domestic and international banking solutions. and our parent company, BNP Paribas (BNPP), mobilised a global team across four countries to discuss the company’s operations, needs, and overall strategy in the US and Middle East. Working as a single, cross-market team, we helped centralise the company’s treasury functions in the US, managing all of its global cash and liquidity, and delivered payments and collection solutions across markets, as well as cross-border balance optimisation across currency accounts.

Bank of the West’s global trade solutions team centralised a guarantee facility for the company in several countries

The healthcare company also needed to put guarantees in place in its Middle Eastern markets quickly and efficiently, a requirement for any company operating in foreign countries. Bank of the West’s global trade solutions team centralised a guarantee facility for the company in several countries, coordinating with BNPP branches and affiliates, and drawing on their in-depth knowledge of local laws, banking practices, and regulations. Our team helps businesses manage their worldwide trade needs, including guarantee facilities, delivering smart and swift solutions with greater control over transaction execution.

Our trade experts also help multinational companies cohesively manage working capital and concentration risk across markets, enabling them to sell more to single customers and grow sales. Being part of BNPP’s global network increases our flexibility and agility when we help companies mitigate risks as their international customer base changes or expands. Our team can monetise receivables paid by a company’s foreign customers, using the BNPP network to access relevant intelligence about the credit profile of an international business that may be an existing BNPP client or commercial partner.

Helping businesses meet the needs of their international customer base is another important way a banking partner can reduce complexity and increase competitiveness. In an industry like equipment manufacturing, where companies need to deliver innovative and competitive equipment financing solutions to customers, a one-stop-shop banking partner is essential.

Consider an agricultural equipment company, whose market has been under stress due to commodity price declines. Bank of the West’s equipment finance division team partnered with BNPP’s leasing solutions team to deliver state-of-the-art financing solutions to thousands of the company’s customers based in eight countries, enabling it to compete with peer companies’ captive finance businesses. Working with our well-coordinated banking team, the company drew from our on-the-ground presence and deep local market experience to offer competitive financing to its customers worldwide.

Succeeding in growth markets
As global economic uncertainty abounds in the wake of the Brexit vote, across economies including Japan, Europe, and emerging markets, the US continues to be a compelling market for companies. It offers relatively good growth, political stability, and a manageable regulatory environment. Recent US economic reports have been positive, showing moderate growth, including strong employment and retail numbers.

For companies looking to tap into US growth prospects, working with a bank that has a strong presence across the market is imperative. A banking partner with a robust US presence can help a company understand the significant differences between the US and global regulatory environment, while also delivering regionalised products, including integrated payments, comprehensive accounts receivable solutions, fraud mitigation services and commercial card solutions. Driving efficiencies while understanding the complex regulatory environment is vital to a successful growth strategy.

Collaborating closely with our BNPP colleagues, Bank of the West’s One Bank for Corporates team can be your company’s single entry point to the US. Serving 500 multinational companies across the country, we practically apply our strong understanding of the needs and challenges of companies moving into or expanding in the US.

Our One Bank team has specialised knowledge of specific industries, including wine and other innovative companies, to help businesses position themselves competitively in the relevant US sector.

For example, we recently worked with an Asia-Pacific-based global winemaking and distribution business on their expansion to the US. The business, which sells wines in more than 70 countries and recently acquired US operations to grow in the region, was looking for a line of credit and a suite of domestic cash management solutions to accelerate brand growth. Our parent company, BNPP, which had a long-standing relationship with the winemaker in their home market, referred them to Bank of the West, so they could benefit from our strong beverage sector expertise and local presence in Napa Valley – essential attributes to help the company achieve success in the US market.

Competitiveness through innovation
In an increasingly complicated business landscape with mixed economic conditions, companies across industries are searching for ways to gain an edge by being more innovative across their footprints. A thoughtful banking partner should help your company identify and drive forward cutting-edge innovations that can help you be more efficient, forward-looking and competitive.

Low-complexity companies can outpace rivals by up to

50%

As a commercial bank headquartered in San Francisco, one of the world’s leading innovation hubs, Bank of the West is well positioned to tap into the ecosystem of ideas at our doorstep in Silicon Valley and the Bay Area. In 2015, we partnered with L’Atelier BNPP North America to launch Finlab, the first innovation lab launched by a commercial bank in the US in partnership with a dedicated innovation firm.

Finlab’s goal is to identify the best ideas and start-ups that can help our clients drive growth by implementing new and faster ways to innovate. For example, Bank of the West is exploring solutions, such as automating payments, that help clients improve their treasury operations.

Financial institutions also have a responsibility to help push forward industry innovations that will benefit all market participants, including the clients they serve. As market demand for faster payments increases, Bank of the West is implementing Same Day ACH. As an owner bank of the Clearing House, we have also participated in the development of the TCH Real-Time Payments initiative, an industrial strength clearing and settlement system that will transform the US payments landscape by enabling consumers and businesses across the country to send and receive payments instantly, directly from their accounts at financial institutions.

In a world of mounting uncertainty, one thing is certain: working with a banking partner that delivers in-depth local knowledge and international banking solutions through a responsive, on-the-ground global team is essential for any multinational company looking to reduce complexity, increase efficiencies and drive growth.