Pub. 9 2021 Issue 1

ISSUE 1. 2021 11 By Jay Kenney, SVP and Southwest Regional Manager, PCBB Jay Kenney SVP and Southwest Regional Manager for PCBB pcbb.com | jkenney@pcbb.com Dedicated to serving the needs of community banks, PCBB’s com- prehensive and robust set of solutions includes cash management, international services, lending solutions and risk management advi- sory services. What International Business Customers Want From Their COMMUNITY BANK W hile the coronavirus had origi- nally affected international trade, it seems to be normaliz- ing to an extent. It could be a good time for community banks to prepare to serve those customers with internation- al trade business. Firms that import or export goods want banks to understand their particular busi- nesses, along with dedicated expertise in international trade. Proficiency in just one or the other may not be enough. International presence in multiple mar- kets. These companies will likely choose financial institutions that can facilitate in- ternational trade deals. This means unless an entrepreneur can choose a community bank with a direct presence in all inter- national markets to which they intend to export their goods, a correspondent bank relationship is vital. Full-service expertise. These same cus- tomers want holistic banking relationships. They want to rely on a single financial institution to fill as many of their needs as possible and reap the benefits of readily available international services tailored to their specific circumstances. To start, importers will want their finan- cial institutions to offer a variety of prod- ucts and services designed to ease inter- national trade. A community bank might add value to import/export transactions by matching purchase orders against invoices and settling the transaction between buyer and seller. The transaction can then be reviewed, and a receivables program can be used to offer financing. International business clients also appreci- ate financing that helps them offer more aggressive terms and manage cash flow, especially in this competitive marketplace. Faster international payments. Faster international payments are also vital these days. Being able to quickly make payments and receive funds is critical when business- es are tightly managing their cash f low. One recent innovation in faster payments is a global payments initiative from the Society for Worldwide Interbank Finan- cial Telecommunications, called SWIFT gpi. SWIFT gpi allows you to send and receive funds fast and securely worldwide for your international customers, with full transparency. Forty percent of payments sent through the SWIFT gpi network are credited within five minutes. Managing risk. Customers also benefit when their community banks work with counterparties to manage risk. The Export-Import Bank of the United States (EXIM) is a clear candidate, but it’s not the only choice. The U.S. Small Business Administration may provide export sup- port on deals that EXIM declines to han- dle. Private-market insurance companies are sometimes willing to take positions in trade finance, as are non-governmental investors, such as insurance companies and pension funds. As a correspondent bank, we can make it easy to support your customers with inter- national services, including SWIFT gpi. If you would like to continue the discussion or need additional information, contact Jay Kenney. n