Building a true global trade business model

Banks have aspired to globalize their trade business for more than 20 years. However, building a true global trade business model involves more than just offering trade products globally. Most banks already do this. Instead, it means to run a trade business worldwide as one holistic and integrated business function.

Typically, trade products are offered globally through a bank’s international network, but those networks are often fragmented. Each international branch/subsidiary independently manages its own trade business. Likewise, these locations have their own trade technology, often using the trade module of their branch banking system or a standalone system.

In short, the existing structure and technology of many banks do not support the true globalization of their trade business. As a result, they face the challenges of a lack of strategic alignment, inconsistent customer service, inconsistent and untimely reporting, disparate trade systems and more.

For banks looking to grow their trade business, building a technology infrastructure to support their global trade business is crucial. Here are just a few of the advantages of such a model:

• Consistent customer service everywhere
• Availability of all trade offerings everywhere
• Instant visibility for bank management at every level into global operations (visibility for customers as well into their business with the bank across the globe)
• Easy expansion into new markets
• One IT system that operates globally, instead of a myriad of fragmented systems
• Central control of policies, regulatory compliance and risk management while adapting to local requirements

To transform a fragmented trade business into a truly global business, banks should start by developing a high-level, end-state global vision. This vision should, first and foremost, be customer facing, with the following goals:

• Deliver consistent, superior service everywhere: Give customers a world-class portal. Provide competitive pricing. Respond to questions immediately. Exceed expectations.
• Provide customers full visibility and control of their global business in real time: Provide local to global real-time reporting and queries. Allow customers to set workflows and processes and support those.
• Innovate to meet evolving customer needs: Provide customer solutions rather than sell products. Help customers optimize their financial supply chain. Increase the time-to-market of new offerings.

Second, the vision should focus on the bank’s organization and delivery model. In this respect, its main goals should be the following:

• Organize as one global business: Establish global management roles. Drive local alignment with the global vision. Redefine roles and responsibilities. Stay responsive to local market needs.
• Ensure full visibility of the global business in real time:  Ensure senior management, processing centers, local business units and customer service centers have the critical business information they need.
• Build highly efficient service delivery and operating models: Implement integrated customer service, processing and full service centers well connected by workflows and processes.
• Build a culture of innovation and growth: The demands of trade banking have exploded. It is not enough to be great at what you do today. You must also anticipate what you will need to be great at doing tomorrow.
• Invest in global technologies that enable transformation: Implement a truly global technology platform that operates 24/7, has one global database, is accessible from anywhere, offers multi-time zone, multi-bank, multi-currency, multi-language capabilities, and is highly flexible and easily configurable, among other key traits.

As second and third steps in building a true global trade business, banks should pursue a phased rollout strategy and secure the buy-in and funding of senior management.